Strong & free

FLATBED modified

Sit down. Somewhere in the world it’s sundown. So pour a scotch. This is thick.

While everything will turn out okay in the long run (I have no doubt), it now seems certain we’re entering a period of confusion (unless you read this pathetic blog daily) and volatility. As you know, the Chinese stock market laid another egg, despite the fact they’ve done everything there but shoot people who are selling. That robbed the commodity market for technical reasons (money being pulled out to cover margin loans) and economic ones (a slower China means less demand for copper and oil).

  • So, on Monday crude prices cratered a little more, and at $47 it’s likely on the way to a new cyclical low. The bottom was $45 back in January, and one year ago a barrel was worth $101. Canadian crude is way sicker – at the $30 mark. The normal discount for the oil sands stuff has widened dramatically, which is about the worst news possible for Alberta.
  • The Canadian dollar is sitting at 76 cents US, on its way to 74, analysts say. This is because of oil, natch, but also because while there’s a 50% chance our central bank will cut rates again, there’s a 100% chance the US will raise them. Goodbye, loonie.
  • Even gold can’t catch a break, which matters because mining and refining is a giant industry in Canada. The latest forecast for the yellow stuff is down to just $800 an ounce – a 27% dive from the current level, and 58% lower than four years ago.
  • And then there’s the Dipper factor. Yikes. A Globe/Nanos poll just published found 47% of people think a federal NDP government would be positive for the economy as opposed to 31% for the Cons and 41% for the Libs. But while citizens of the Socialist Republic of Canuckistan might embrace Muclair, just like the collective known as Alberta did with Rachel Notley, currency markets want none of it. Down she goes again
  • All this has the Toronto stock market bleeding. The composite index is barely above 14,000 now, giving investors a 6.75% loss year/year and a decline of 2.7% so far in 2015. (In contrast, the S&P is up 6.6% in the last 12 months.) Hard hit, as you might imagine, are energy and miners, with even financials slagging. Why? Read the four bullet points above. Commodities. Currency. Rates. Regime change.
  • Jobs numbers are due out after the coming long weekend, and are expected to be ugly. Canada lost 6,400 positions in the last period, and since then the economy has continued to weaken. We’ve had five months of negative growth and the mother of all trade deficits. So it’s a fair bet the unemployment rate of 6.8% will be heading higher now that oil is testing its recent lows.

Now every time I chronicle what’s happening to our economy, some redneck dork from Airdrie calls me a traitor. But this is the world in which Canadians find themselves, so it’s wise to adapt. As I’ve told you, a profound home country bias has persuaded 70% of all investors to keep 100% of their assets in maple – which is also the overwhelming bias of most bank-owned brokerages (someday I’ll tell you why). What a stinker that’s turned out to be.

Of course, investors with a nicely-diversified (40% safe stuff, 60% growth stuff) and globally-diversified portfolio (15-20% Canadian, the rest US and international) need not fret a lot. Sure, monthly valuations will bounce around, but you have exposure to lot of markets that are inflating, protection from rising rates and even a special anti-NDP secret sauce.

But that’s a minority of us. Most people have most of their net worth in a single asset, sadly. With a soggy labour market, a pop in inflation thanks to a tanking dollar, and the certainty of rising long-term fixed mortgage rates, the next year or three will not be the sunshine and ponies they expected.

There you go. Personally I think we should have stayed with puppies.

254 comments ↓

#1 Love my Kia on 07.27.15 at 6:43 pm

Can’t blame the Dippers for this one, this is on the Cons watch.

See Ollie run!

#2 North Burnaby on 07.27.15 at 6:43 pm

Garth~~! Traders keep on pushing the interest rates to record lows! I’m afraid that the bond market crash will bring the global stock market with it! Is this a good time to be hoarding cash? Will the interest rates in the US go below zero?!

#3 Love my Kia on 07.27.15 at 6:44 pm

At least houses haven’t gone down in value yet ;-)

#4 zedgt87 on 07.27.15 at 6:45 pm

Shits getting real

#5 Honey Dripper on 07.27.15 at 6:48 pm

All these parties are brutal, the cons have done zip to help this economy, time to help yourself, there is no alternative in voting or investing. Stay diversified my friends!

#6 eatfresh on 07.27.15 at 6:48 pm

Hey garth…about how much would that plenty of fish guy pay in taxes to the government for selling his business? I think he is getting 575 million for it.

#7 Leroy Washington on 07.27.15 at 6:49 pm

This is Leroy. I have told you time and time again that Canadians are stupid when it comes to financial matters (except Garth that is, which makes me think that really he is probably an American). Canadian homeowners will suffer the consequences.

Loonie at $0.58 before year end. Mark my words.

AmeriCUH!!!! Woo hoo!!!! God bless the U. S. of A.!!!!

#8 mitzerboy aka queencity kid on 07.27.15 at 6:52 pm

lotz of redneck dorkz out here too …..

once aroundz I call em …only here once ..what a shame

#9 JSS on 07.27.15 at 6:52 pm

I will commence purchasing shares of the Big-six Canadian banks, as well as utlities, pipelines, and some REITS. Blue chippies that have continued to pay dividends throughout the GFC, and raised in the last five years.

And if I become brave enough, maybe some energy stocks in about six month’s time.

#10 Steve French on 07.27.15 at 6:52 pm

I still think staying in cash is not a bad option for the next few months.

There are always assets that perform better than cash. — Garth

#11 Herf on 07.27.15 at 6:54 pm

“So, on Monday crude prices cratered a little more, and at $47 it’s likely on the way to a new cyclical low. The bottom was $45 back in January, and one year ago a barrel was worth $101. Canadian crude is way sicker – at the $30 mark. The normal discount for the oil sands stuff has widened dramatically, which is about the worst news possible for Alberta.”

So, you’re saying that a move back to the New Socialist Republic of Alberta from the Corrupt Socialist Republic of Ontari-owe would be a bad move for the foreseeable future?

Are there any economically viable places to live, grow old and die in this country any more? It seems all the politicians and bureaucrats want the citizens to do the latter (while bypassing the two former).

#12 Mike on 07.27.15 at 6:54 pm

I wonder when everyone’s severance cheques are going to stop flowing in Alberta with all the layoffs that happened in the spring? It must have begun by now (I know mine has stopped flowing in). I wonder how they’re all going to pay for all those big houses, new vehicles, and home reno bills that don’t just stop b/c you stop working? I’ve got savings which i’m already tapping into which I hate to do, but at least I can.

#13 IHCTD9 on 07.27.15 at 6:55 pm

Yes, back to the puppies…

#14 waiting on the westcoast on 07.27.15 at 6:55 pm

Everyone is looking for a Messiah…

#15 crowdedelevatorfartz on 07.27.15 at 6:57 pm

Hmmmm,
Perhaps Chinese investors will look back at this year as their version of 1929…….Aiiiiiiii yaaaaaa!

#16 Ole Doberman on 07.27.15 at 6:58 pm

Gartho how long do you think this correction in the TSX will last?
Do you see another 2008 unfolding?

#17 Frank on 07.27.15 at 6:59 pm

Haven’t rebalanced since April. Obv my CDN portion is way down due to a drop. Should I rebalance now or wait a bit longer?

Also my ‘safe stuff’ is all a CDN bond index fund. Should I diversify that?

#18 sideline sitter on 07.27.15 at 7:04 pm

Scotch? Yes please!

#19 Randy on 07.27.15 at 7:04 pm

It’s OK..Still love my pups.

#20 sideline sitter on 07.27.15 at 7:05 pm

If Harper calls an election, how does he get around the Fixed Election Date law?

#21 takla on 07.27.15 at 7:05 pm

sure the S&p is up 6.7% in the last yr but for the last month -1.24/ last 3 months -1.28 doesn’t exactly inflate confidence at this point.
Going back the last yr and beyond Garth {aka nostradomus} you’ve been forecasting a surging U.S economy which argueably has sputtered since the end of QE even tho some believe there is “stealth QE still happening.
You’ve ended many of your blogs with somewhat cryptic messages..ie.. “not paying attention,you will soon” in your recent blog….
Lets have it ,would love to hear your 1 yr from here outlook!

The US is doing fine. — Garth

#22 Internal Auditor on 07.27.15 at 7:07 pm

Well put Garth. For those with a long term investment horizon the upcoming dips and current dips could make for great buying opportunities. The Canadian banks are near 5% dividends which is well above the inflation rate. For the few of us that are precious metals as a part of their investment thesis, be careful not to go on a shopping spree right now. It’s important to keep balance and to not be swayed my volatility (I.e IAMGOLD common shares). Invest wisely, truly understand your real risk appetite and buy some pepto if your stomachs already starting to turn when checking indexes!

#23 Kilby on 07.27.15 at 7:10 pm

And then there’s the Dipper factor. Yikes. A Globe/Nanos poll just published found 47% of people think a federal NDP government would be positive for the economy as opposed to 31% for the Cons and 41% for the Libs

“I think the problem with China is so many investors have put a lot of eggs in that one basket — needing China, really depending on China for growth and China for returns and China for overall appreciation,”

Hasn’t our Dear leader been putting all our eggs in the China basket?

#24 Got a Question on 07.27.15 at 7:10 pm

Doom and gloom everywhere…when does the great Canadian housing bubble finally pop?

#25 The Wrong Choice on 07.27.15 at 7:13 pm

A 50% potential for another BOC rate cut? Seriously?

I picked the wrong profession 10 years ago and made the wrong choice about real estate.

I should have become a realtor. While everyone else suffers from stagnant wage growth, or minor CPI increases (yeah…1.5%), realtors saw their commissions double and triple as house prices doubled and tripled. Every rate cut means more dollars in their pockets.

Imagine 10 years of sitting back and riding the gravy train where houses sold themselves and all you had to do was click a button for the house ad to show up on MLS, take a few photos, and then show up to an open house with line-ups of eager buyers.

Meanwhile, the patient and financially prudent keep waiting, and waiting, and waiting, as the price to rent ratio for 5 to 10 years of renting starts to weight in favour of the buyer.

And that will not change for the next 5 years as those same patient and financially prudent ‘future buyers’ will have to wait until prices drop enough to justify having rented all those years.

Oh, what a ridiculous situation.

#26 Greg Willams on 07.27.15 at 7:13 pm

The TSX will be 13,500 by August and 13,000 by or near Labor day.

Another 7% drop and almost 14% down! China’s Shanghai is going back to the 2,000 to 2,500 level in 2015.

As the Dow Jones, Nasdaq, S&P 500 and most world stock markets fall, bond yields will fall again. Anyone ready for 1.5% to 1.7% 10 year, 2.25% to 2.4% 30 year U.S. bond yields.

#27 Robbie on 07.27.15 at 7:13 pm

Just read the returns for the BC Teachers’ Pension Plan. Money is, of course, prudently invested in a balanced portfolio! Returns of 11.6% for 2014 and 5 year annualized rate of 9.8%. Investment Management Cost (think MER) of only 0.2%…compare that to Mutual Funds MER!
The current Asset Mix includes 12% Canadian Equities, 25% Global Markets and 8% Emerging Markets. Bonds and Mortgages are 23%, Real Estate 18% (likely none of it in SFD), Private Placements 6%, Infrastructure and Renewable Resources 8%. Sounds pretty close to what Garth recommends! :)

#28 Gonkman on 07.27.15 at 7:15 pm

Garth.. thanks for the heads up a few months back.

You made my decision easier when you said US/Int going up and CAN Going down.

I dropped my Canadian Index ETF down to 20% a few months back and upped my US/International ETF’s to 50%. Also upped my Bond ETF’s to 30%.

My US Index Funds are bought in Canuckistan Bucks so they are way up since I bought them while the CAD was higher.

Bonds are bumping up and down but churning out monthly distributions in my TFSA. :)

Yes I do have a big “asset” of a house but it is paid for and I am debt free. My house could go down 50% in value and I wouldn’t care because maintenance/taxes are still less than renting for me.

I think after October if Captain Hair or Angry Tom win things will just get even uglier for the Canadian Economy.

I actually hope stocks “go on sale” for the next 2 years as I am accumulating for the next 7 before I FIRE.

Keep up the brilliant posts! Enjoy reading daily!

#29 Ronaldo on 07.27.15 at 7:20 pm

I was sitting back having a cool one and thinking about the labour market in Canada and the 6.8% unemployment rate. Not sure how they measure this but was wondering if it is based on the number of bodies that are unemployed (except those not looking for work) not taking into account the dollars that are earned by these people.

For example a waitress vs. an oil patch worker where the wage difference is many times more for the person in the oil patch. So given this difference, and the numbers of people that are being laid off in that industry, looking at the dollar value of these jobs would be huge.

One laid off oil worker could equal maybe 5 hospitality type jobs. The amount of taxes that the government would lose would also be huge on top of having to pay them at the highest EI rate.

Am thinking that it would be interesting to see the unemployment rate expressed in dollars instead of just body count to see just how bad the unemployment situation really is. Just my thoughts on this.

#30 Chris in Nanaimo on 07.27.15 at 7:22 pm

Canada’s ON SALE….yippee….let’s all pile in…

So are we expecting to see gas prices going up/down/nowhere? I guess the drop in crude is cancelled out by the tanking loonie.

#31 Harbour on 07.27.15 at 7:23 pm

Love it !!!

When China tanks, that means the world is tanking cause they make everything in the world. Except for Apple which sells most of their phones to Chinese.

As for Canuckistan, we lead the tank barometer cause we sell the commodities to the the China’s that make everything.

#32 mishuko on 07.27.15 at 7:24 pm

I think you should dedicate 1 day a week to dog blogging.

I know quiet a few people who want to vote ndp…. I’m scared if they get elected

#33 Realtor007 on 07.27.15 at 7:27 pm

DELETED

#34 ShawnG in TO on 07.27.15 at 7:29 pm

I don’t know if we are ok for the long run, if the long run is less than 2 generations.

If you can’t afford a mortgage renewal at higher rates in a few years and forced to sell at a loss then that debt is financially crippling.

for the young, they would have a significantly cut back their spending. for the older with kids, their retirement is ruined, and their kids would suffer because they can’t help with tuition, etc.

the Canadian housing bubble is a significant crisis. It does hurt in the long term.

#35 Mukadi on 07.27.15 at 7:30 pm

To be honest, I’ll be able to buy my retirement home in Canada when the loonie hits the 1.56 level of 1999 vs USD. So I’d better support the incompetent officials in Ottawa so that I can also be called PATRIOT!

Garth, don’t be offended if those who think with their pants call you traitor. They live on a different planet, created for them by the global illusionists who want to enslave them and as you can see, they’re fighting you because you want to set them free- What a contradiction!

#36 Rodthebod on 07.27.15 at 7:30 pm

I totally agree with all of this but I can’t see the NDP doing any worse for our economy than the Cons. Talk about all eggs in one oily basket, and tanking our dollar so bozos who bought a zillion dollar home can enjoy increases for another two months before they lose their shirts after the election. My lazy limping dog could do better than the clowns we’ve had in power for the last decade.

NDP ‘fix’ is simple: increase spending and taxes. — Garth

#37 Blobby on 07.27.15 at 7:32 pm

@#20 : sideline sitter

The election date is fixed as in it cannot happen any later than that fixed date. The PM is free to have it earlier, and imho will probably move it to just before the CBC debate dates.

#38 Greg Willams on 07.27.15 at 7:33 pm

I would not be surprised that Oil will be 60 to 70 U.S. dollars per barrel by Thanksgiving.

If this happens and we get a 70 cent of lower Canadian dollar, $1.45 to $1.55 per liter gas.

By the way, get ready to pay an extra 20 cents a liter gas tax if the NDP does a bluff and gets in.

Down cry for me Canadatina!

#39 Joe Schmoe on 07.27.15 at 7:34 pm

Haha!

I lived in Airdrie and was a redneck dork.

I am now a redneck dork from parts unknown.

Traitor!

My wife and did a house porn tour this weekend in Calgary.

False hope is at new levels here.

2.7M for a beautiful view of the new overpass into the Foothills.

2.375M for 3600 sqft 2 storey (nice house, really good builder) but on a 50ft x 120ft “huge” lot.

Oil is done until 2017. some operators will be busy, but the market will still only be at 15% of 2014 levels.

Curious where the provincial government is going to find people who make $300k to tax?

#40 No Canada, No on 07.27.15 at 7:41 pm

Apparently fixing Greece didn’t help much, did it?
And “Markets in China” sounds to me exactly like “Best Gluten Free Dumplings in North Battleford, SK”. Get one now or never!

#41 Ronaldo on 07.27.15 at 7:49 pm

Methinks that anyone thinking of selling recreational property in the sunny Okanagan ought to be listing it real soon as I believe that we are going to enter a period similar to the early to mid 90s where prices went comatose and never recovered for almost 12 years.

This market is extremely reliant on the oil patch dollars as it has been for as long as I can remember. Some of the prices that I see being asked in a particular development that I am very familiar with are truly out of this world and due for a major correction. The only thing keeping prices up right now are the extremely low interest rates and the availability of “greater fools”. When this changes, it will be rapid as it was back in the 70sm 80s, 90’s.

#42 Not Eve Adams on 07.27.15 at 7:55 pm

Who will be watching Shanghai tonight? Another -8-10% performance?

Really, if you just keep your portfolio allocations at their correct %, whatever they may be, it matters not what the $ value is. That is true diversification. And yes, I think it is prudent to have some liquid cash to top up the levels like having some window washer fluid in the garage when you need it for your Kia or Hummer.

#43 Jimmy on 07.27.15 at 7:55 pm

Nothing better than Airdrie in your rear view mirror.

#44 Obvious Truth on 07.27.15 at 7:55 pm

Cmon. The ‘SRC’ had a good ring to it!

#45 Don on 07.27.15 at 7:57 pm

NDP ‘fix’ is simple: increase spending and taxes. — Garth

I’m not sure it is so simple. The government has been doing everything it can for years now to keep the gasbag inflating, and you’ve been documenting it step-by-step. How can you still be critical of a (theoretically) Tax and Spend party when we’ve witnessed so many years of Don’t tax, Spend anyway – of a government refusing to let gravity do its economic work? Just through the past few months, you documented the fake budget balancing, the irresponsible tax cuts benefiting the wealthiest, and the politically-motivated interest rate drop. If the NDP is as bad as you imagine, for Alberta or for the entire country, Conservative parties that were unwilling to step up and do their jobs honestly and responsibly can look in Jim Prentice’s mirror when it comes time to assign blame.

I’m more optimistic, though. I read something today (too lazy to find the source) arguing that left-wing governments have been more successful at budget balancing because they’re more sensitive to the perception that they’re irresponsible with budgeting. And I think that’s going to be particularly true in Alberta, where the NDP have their eye on ruling forever, just like the last bunch.

Mulcair’s not perfect, but given the field, I’d vote for him twice if I could.

#46 CREIT on 07.27.15 at 7:58 pm

How important is it to have a portion of your portfolio in U.S dollars?

Your thoughts

#47 Greg Willams on 07.27.15 at 7:58 pm

So why did the simple fix NDP in Ontario, spend more, tax more, increase debt more, was such a disaster.

Yes, your right, it is easy to destroy then to build up.

#48 Mister Obvious on 07.27.15 at 7:59 pm

There are days when I honestly do miss Jim Flaherty.

#49 Ronaldo on 07.27.15 at 8:00 pm

#22 Internal Auditor on 07.27.15 at 7:07 pm
”For the few of us that are precious metals as a part of their investment thesis, be careful not to go on a shopping spree right now. It’s important to keep balance and to not be swayed my volatility (I.e IAMGOLD common shares). Invest wisely, truly understand your real risk appetite and buy some pepto if your stomachs already starting to turn when checking indexes!”

IMG trading at .19 of book would seem to be a good buy. I did buy a few last friday at $1.53. I expect it may drop further but it is one of the better companies in that sector. It is part of my play money portfolio which is a small percentage of the total. In for the long term and wait for the double.

#50 CP on 07.27.15 at 8:04 pm

“NDP ‘fix’ is simple: increase spending and taxes. — Garth”

The Democratic Party in the states is in large part responsible for fixing the Republican single asset housing disaster, which has led to the good investing climate there. Could be a Democratic Party here could help diversify the Canadian economy. Come on Garth, a little trickle-up economics would be good for 99 percent of the population. It is certainly better than being pissed on by Harper and his cronies.

#51 will on 07.27.15 at 8:05 pm

Loblaw issued a new preferred recently. Series B. The series A will be redeemed the end of the month. Stable company with improving fundamentals. Redeemable in 2020. I loaded up today.

#52 Smoking Man on 07.27.15 at 8:07 pm

Been studying the machine and how it backs our leaders..

I’m sort of in shock. The NDP is getting help from high level machine operators. Huh.. Perhaps he just has a commie mask, underneath, he’s another con…

Time will tell.. But he’s going to win.

Who knows… Who cares.. Im calling it a day on Friday..

Freedom 56. I over shot by a year… Hopefully I can restrain the drinking.. Keep it from 9pm to midnight.

I need to focus on my writing…

Wifee poo don’t want to go to USA. She’s afraid of guns and phyco paths.

Had to turn down 3 amazing gigs…

Shit we do for love…..

#53 crowdedelevatorfartz on 07.27.15 at 8:07 pm

@#2 North Burnaby
“Is this a good time to be hoarding cash? Will the interest rates in the US go below zero?!….”
+++++++++++++++++++++++++++++++++++

Hell hath frozen over.

Actually N.B.
I think its time for YOU to finance another condo…..because they always go up!

#54 JSS on 07.27.15 at 8:08 pm

Who was that guy that said “Be fearful when others are greedy and greedy when others are fearful”.

Get buying. Lots of sales on the TSX these days.

#55 Cici on 07.27.15 at 8:09 pm

…a profound home country bias has persuaded 70% of all investors to keep 100% of their assets in maple – which is also the overwhelming bias of most bank-owned brokerages (someday I’ll tell you why).
_____________________________________________
I know why.

#56 Mark on 07.27.15 at 8:10 pm

That US rate hike nonsense is still sticking around? Sheesh. Even the US economy is rolling over and the numbers make it increasingly obvious.

“Doom and gloom everywhere…when does the great Canadian housing bubble finally pop?”

2 years ago.

#57 JSS on 07.27.15 at 8:13 pm

Re. #12 Mike on 07.27.15 at 6:54 pm

Allright Mike, here’s how it goes:

1) Use up severance. Wife is still working
2) Severance finished. Use EI cheque for a year, around $1,800/month
3) EI done. Start dipping into RSP’s, TFSA’s, non-registered accounts
4) Accounts cleared up…now use the HELOC. So, what you do is login to your online banking account. Move around $2,000 every two weeks from your HELOC into your SAVINGS account. Keep doing this until you find another job
5) HELOC all used up…you’re in deep shit buddy.

This process from 1) to 5) should last you around 1-3 years, enough time to get another job.

Unless you live in Alberta.
MUAHAHAHA!!!

#58 fred on 07.27.15 at 8:13 pm

Diversify into what?? ALL of Europe is down, China(going) down, CA down, USA down, Australia down. That leaves Russia, South America(The Argentinian stock market is doing great!! Hyper Great!!) India?? Stick with MONEY I.E. the stuff that breaks your foot when you drop it. That’s it. There will be PLENTY of time to move asset classes once this all shakes out. Gold and Silver have been a store of value for 3000 years- and many more to come!

#59 old gringo on 07.27.15 at 8:15 pm

Whatever you do, please DO NOT believe the hogwash the politicians are spewing to cover the next few months before the election.
As Warren Buffett say’s”when the tide goes out , you see who is swimming naked”.
The best is yet to come!
WE are living in interesting times.

#60 Cici on 07.27.15 at 8:20 pm

#29 Ronaldo,

Smart observation.

#61 Smoking Man on 07.27.15 at 8:21 pm

And then there is this.

A long branch resident. Telling the hood is going main stream, Also he’s been seen and many TV commercials.

A beer drinking buddy in the hood.

Jimbo plays the real estate agent…. Does fine job.

https://youtu.be/NSzXor3U4r8

Before you dwellers bust his chops… He’s a part time actor.. And has a IT consulting practice..

#62 Llewelyn on 07.27.15 at 8:21 pm

We must acknowledge that China is not the only government trying to pull policy levers in an attempt to stimulate economic growth. Unfortunately all governments seem oblivious to the simple fact that the levers are not actually connected to their economy anymore.

The global economy is run by financial institutions through their full control over the movement of money. A wide range of derivatives to have been introduced to influence; foreign exchange rates, interest rates, mortgage rates, the rise and fall of corporate stocks, bond rates etc. etc.

Stock markets may have started as a source of capital to support businesses but in 2015 their primary function is to generate wealth for financial institutions through the use of derivatives.

A good comparison would be to view Stock Markets around the world as athletic games and the derivatives set up by financial institutions as the betting industry. Lots of winners and losers betting on the result of each game but the house always wins.

Over the past 20 years we have accepted scandal after scandal initiated by financial institutions and yet their control over our lives has grown stronger. The virtual extinguishment of democracy in Greece by the IMF, World Bank and central banks in Europe occurred without any suggestion that Canada could suffer the same fate.

If bond rates in Canada were to increase substantially over the next five years the debt service obligations of all levels of government would consume a substantial portion of our GDP. Who knows what our creditors might demand.

I have little confidence in a system that I have absolutely no ability to influence and I fear that the Government of Canada will soon share my concerns.

We need alternatives and we need them now!!

#63 Realtor007 on 07.27.15 at 8:22 pm

Garth, you have some issue with the truth?

Nope. Just spammy, ethically-challenged people who try to turn this blog into a commercial. Get lost. — Garth

#64 spaceman on 07.27.15 at 8:23 pm

came back from a US holiday, almost crapped my pants, tsx plummeting, dollar hosed, gold up…

Portfolio, nicely balanced in US Equity, GLL, a pile of US cash, some bonds and short term T-bills, all hedged the loss of the Can Equity stocks and Funds…

Balance is good, oh and we are going into recession…

put that in your pipe….

#65 spaceman on 07.27.15 at 8:23 pm

gold up? no sorry GLL up gold plumetting….

#66 Murphy on 07.27.15 at 8:28 pm

#7 Leroy

What is the meaning of “Who hoo” where you come from?

#67 Steve on 07.27.15 at 8:31 pm

So reading your blog in 2007 i sold my house in Ancaster and moved to Owen Sound / no regrets however my house in Ancaster double in value / so of course i feel sick / so when will the real-estate crazy end ? All the people i grew up with that had $15 an hour juobs and bought houses are rich now ahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

And what would it have cost you to own the house for 9 additional years? How did you invest the house money for that decade? — Garth

#68 Zorba on 07.27.15 at 8:34 pm

NDP ‘fix’ is simple: increase spending and taxes. — Garth
That “fix”is the norm in Scandinavian countries,who have more productive and competitive economies than any US state,or Canada, for that matter.

Plus 25% HST and punitive income taxes. — Garth

#69 Retired Boomer - WI on 07.27.15 at 8:36 pm

The market up-chucks on a Chinese hairball. The Chinese govt interfered with a markets normal operations. A never never! Distorts other things, and one is never quite certain where that distortion will appear. While the S&P year 2015 to date is up .42% let’s call that ‘flat.’

Oil down, might set a new low. (Do I smell $42)??

Just remember, this, too shall pass… The trouble is unless your portfolio took into account these troubled moments with balance, it could be an oops moment.

At least there has been no changes in liquor prices.

Do I believe Sept. will be the golden month for that .25% goose in rates? Naw, politics trumps common sense here.

#70 BUY MY VOTE on 07.27.15 at 8:36 pm

I got my perfectly timed $840.00 vote buying cheque today from our good guvmint!

Just like a third world dictatorship handing out sacks of rice for votes. I got my First world equivalent, a cheque for $840.00.

This represents (not unintentionally) the retroactive child care increase that starts in January of this year.

How funny that the Government could not have started giving us the pathetic $60.00 per kid in January.

Well that would not give us the big bang that a huge sack of rice in a hungry village would give Right?

#71 Hicksville Alberta on 07.27.15 at 8:38 pm

Ever since the ZIRP interest rate policies have been put in place i have gone to a ZIP spending and consumerist policy and have advised all to do the same for the sake of self preservation.

The great thing about that is it has shown how much dumb and useless or unnecessary consumerist claptrap that i never needed in the first place and as time has gone on it feels nice and gives more time and freedom for a simple lifestyle.

The one piece of advise i can give to anybody and everybody is neither a borrower nor a lender be and if you have any consumerist or even ” investment ” debts through credit cards, car finance loans or lines of credit, work hard to pay them off and get rid of them forever.

Rest assured, the lifestyle we think we all are working for sure ain’t living to work and having more stuff that we never ever needed in the first place.

Another great place of cutting are in things like cable and telecomm services as these guys are thieves and bandits charging a lot for much more ” service ” than most of us need by a mile.

#72 joblo on 07.27.15 at 8:38 pm

“There you go. Personally I think we should have stayed with puppies.” – Garth

I don’t always post here, but when I do I prefer puppies!
Stay liquid my friends.

#73 earthboundmisfit on 07.27.15 at 8:44 pm

Why wait for sundown? Somewhere in the world, the sun is always over the yardarm.

#74 Realtor007 on 07.27.15 at 8:48 pm

Nope. Just spammy, ethically-challenged people who try to turn this blog into a commercial. Get lost. — Garth

————————————

Spamming? unethical? there was none of that in my comment but of course since you didn’t print it you can accuse me of anything, talk about unethical.

Bye. — Garth

#75 Ronaldo on 07.27.15 at 8:51 pm

#61 Llewelyn on 07.27.15 at 8:21 pm

”I have little confidence in a system that I have absolutely no ability to influence and I fear that the Government of Canada will soon share my concerns.

We need alternatives and we need them now!!”

Good post. I too have little cofidence in a system whereby the politicians only can see 4 years into the future and make spending decisions of our tax dollars based on their being re-elected. Sometimes I think that democracy begins and ends at the ballot box. After that, they pretty much have a free reign on what they are going to do except when the really tough decisions have to be made then it goes to referendum. Like whether we want Quebec to remain in Canada. Remember? This may pee Garth off.

#76 Andrew Woburn on 07.27.15 at 8:52 pm

The highly indebted US shale industry is facing two big hurdles this fall. One is the semi annual review of financial capacity by lenders. The other is the end of $90 per barrel hedge contract payments arranged in 2014. Many operators gained a third of their first half revenues from hedges but these one-year contracts are now tapering off. In 2016 operators will have to live with $50 hedges or worse.

The industry has been built on cheap debt. If the Fed raises rates in September, it will be a double whammy because the US dollar will almost certainly rise and so drive down oil priced in USD even more. We can expect bankruptcies and takeovers to accelerate.

However the industry is incredibly resilient and production costs, particularly in Texas are relatively low. Texas also has the lowest well decline rate. The stronger operators will survive and are already recapitalizing with a better debt/equity ratio.

Still the coming wave of defaults will likely frighten many current investors away from funding new wells. Unfortunately for Alberta, the inevitable fall off in shale output is likely to be grindingly slow.

http://wolfstreet.com/2015/07/23/energy-junk-bond-defaults-are-coming/

#77 Metro Van Observer on 07.27.15 at 8:52 pm

Should we not be buying on this weakness…buy low? Valuations on banks and certain REITs seem very reasonable at this time not withstanding the headwinds Garth notes. For long term investors is this not a good time to invest? Other markets like the US seem lofty compared to us so home country bias isn’t necessarily bad at the moment IMHO. I’ve been buying and will continue to.

#78 earthboundmisfit on 07.27.15 at 8:53 pm

@42 Jimmy …..Yes there is. Prince George, B.C.

#79 Drill Baby Drill on 07.27.15 at 8:57 pm

That truck is the US economy carrying the Canadian economy.

#80 Canned Goods and Buckshot on 07.27.15 at 9:01 pm

Well, that column makes me feel a little less apprehensive. After the puppy dog column I was worried your “jumping the shark” moment had come.

#81 jerry on 07.27.15 at 9:02 pm

Snowbirds would wise or unwise to buy USD now at 75 cents or “wait” for things to improve in October?

#82 Drill Baby Drill on 07.27.15 at 9:03 pm

“redneck dork from Airdrie”
Dear Pathetic Blog : please do not insult redneck dorks by saying they are from Airdrie

#83 Henry on 07.27.15 at 9:04 pm

One thing about puppies is that if things get really bad, you can cook and eat them like the Inuit used to do with their sled dogs!

#84 omg the original on 07.27.15 at 9:05 pm

57 Fred

Stick with MONEY I.E. the stuff that breaks your foot when you drop it. That’s it. There will be PLENTY of time to move asset classes once this all shakes out. Gold and Silver have been a store of value for 3000 years- and many more to come!
—————

You mean like all those people who bought gold over the last 5 years only to “watch it down” 70% while the S&P and TSX are up 70%.

#85 Ken Nash on 07.27.15 at 9:10 pm

The daily news is getting dreadful. It’s not all just economic but society is screwed up too. The dichotomy between public sector and private standards of living are out of wack. To many 20 somethings with no prospects, little hope and despondent. There is way too much in common with 2014-15 and 1914 in some parts of the world. Like Canada.

I cannot believe how from the 1980s until now Canada was neutered from being a manufacturing power house. All that work to break free from the ups and downs of natural resources. All trashed in the name of boomer standard of living.

It’s really sad.

As for Mulclair being scary. I don’t think so. The alternative sure isn’t working.

If people vote for something, instead of against the other things, we might get somewhere. — Garth

#86 Westcdn on 07.27.15 at 9:10 pm

I guess I am a sneaky cat person (I haven’t owned a dog since moving to the cities). Actually, I don’t have any pets currently – turns out that I am allergic to dander so more house pets in my future. I didn’t know until my last cat of 22 years died and I noticed my sinuses cleared up a couple of weeks later. I only suffered during the 8 months of cold weather we have in Alberta. Nonetheless, she was great to me, as far as cats go, and I miss our play times. Besides, I can play with other people’s pets.

I have been acquiring the occasional FixedReset preferred shares for my nonregistered investment account when I think the price is right and cash is available. I will take risk head on but only when I think it is worth the chance – sharpens the wits. Here is an example of the risk in FixedReset preferred shares in which I have been dabbling and this only one aspect of many to consider.
(Quoting from website): “EMA.PR.A is a FixedReset, 4.40%+184, announced 2010-5-25, which commenced trading 2010-6-2. Therefore, the reset dividend of 2.555% represents a cut of 42% in the rate. Ouch!”

What happened? The preferred initially came with an annual rate of 6.24% (4.40+1.84) for the first 5 years. Then the preferred would reset or be recalled (at the $25 issue price) at the discretion of the issuer. The 4.40% was a proxy for the Government of Canada 5 year bond rate. The 184 (1.84%) is a premium over the 5 year bond rate as an enticement. Most FixedReset preferred shares use the current 5 year Canada bond rate plus the premium to determine the new rate to be paid on “redemption/reset” date.

Almost all preferred shares have a 5 year “redemption/reset” clause. The Issuer announced they will not recall (redeem) these preferred shares and on August 25, 2015 – the then current 5 year Canada Bond rate will be used to reset the rate payable. The 5 year Canada Bond rate should be in the 0.7% range therefore the new annual rate will be about 2.54% (0.7 + 1.84) on these preferred shares.

Currently these preferred shares trade in the low $15 range. However these preferred shares also have a “quarterly floating rate period” option which is why I am kicking tires. Basically, the holder/owner may elect to convert (under certain conditions) to a new class of preferred shares which be based on 1 year Canada treasuries plus the 1.84% premium. Let’s just say I am interested.

This post is getting too long besides thinking about the nuances of preferred shares should be left to the experts. I don’t advise anyone to follow me into heavy traffic; I just like finding my own way – DNA.

#87 JacqueShellacque on 07.27.15 at 9:11 pm

Just finished Hilliard Macbeth’s ‘When the Bubble Bursts’. Eye opening and recommended for anyone who’s interested in the sort of things that Garth expounds on. One thing he says that disagrees with Garth – he thinks REITs should be avoided as the big institutional investors will probably want to reduce their exposure to any real estate. Garth thinks holdings of REITs somewhere in the 12 to 15% range should be fine. Garth?

Incorrect. I have suggested less than 10% holding of REITs, and the author is wrong. A residential real estate correction will make REITs more valuable, not less. — Garth

#88 will on 07.27.15 at 9:11 pm

NDP ‘fix’ is simple: increase spending and taxes. — Garth

Mulcair said he would try to market our companies abroad. Harper is more interested in doing global politics than doing global business. He claims to be an economist, or maybe more accurately his supporters would have you believe he is an economist, but really he is just a politician with a very (VERY) narrow vision.

If Mulcair stands by his statement and even if that goes by the name of socialism, then I’m all for it.

Being conservative (as I am) doesn’t necessarily mean voting for a party that claims to be conservative. It means voting for a party that may in fact be conservative and promises to be.

#89 sockeye sam on 07.27.15 at 9:12 pm

$10.00 OIL ?
I was listening to Harry Dent back in 2007 before things took a dump. I went cash to gold/silver and did well.Sold the gold and got back into the market.Four weeks ago I started having the same feelings as I did in 2007. I started listening to Harry again and went Cash.Harry along with others are predicting shit to hit the fan in the fall of 2015.Harry has a good track record.
I won’t be buying into gold. YET.
https://www.youtube.com/watch?v=D6NZWzCtF1Q

You are better informed watching squirrel patterns. — Garth

#90 Andrew Woburn on 07.27.15 at 9:15 pm

Speaking of shale oil hedge payments, I kept wondering who was on the wrong side of these payment contracts, like banks or hedge funds, and when they would blow up.

I think I have figured it out and there may not really be much of a problem. The typical hedge contract is called a “collar” consisting of at least two options. Assume oil prices are expected to be $60 per barrel. The well operator gets an option to sell to the funder at $45. The funder gets an option to buy from the operator at $70.

At any price between $46 and $69 the contract is inoperative. At any price under $45 the operator is protected. At any price over $69, the funder takes the additional profit.

The deal is not actually risky for the funder if they are a heavy consumer of oil such as a refinery or an airline. Whatever they have to pay the operator is balanced by the fact they get to buy cheaper than expected oil for their own consumption so it is essentially a wash.

If anyone who actually deals with this stuff wants to correct me, I would be pleased to be educated.

#91 Grantmi on 07.27.15 at 9:16 pm

I’m short Bios, TSX, Russell. Long gold miners now… #JNUG

#92 bigtown on 07.27.15 at 9:18 pm

The fixer over at Rio Can is a smooth operator alluding to the very unwanted departure of our dearly departed TARGET in the most flattering terms …apparently our TRAIN WRECK known on the street as the retail sector will need one or two smooth operators to keep this carnival on the road to success.

Being your typical Wal-mart shopper is now a very unhappy experience I can attest. Target was so not Wal-Mart. As a boomer I really loath shopping in Canada. This is why the net retail in Canada will win because boomers like me don’t want to traipse through five foot-ball fields to find the only size they have is XTRA LARGE and the one salesgirl can’t speak English.

The Oil Sands needs an image that sells to the Global Market using a name change to Aboriginal Oil Sands and make sure 25% of the jobs go to our First Nation’s People so we can put a clean face on our oil and a national identity which shows our best and most valuable face.

Some very charming behemoths are on sale i.e. VZ and OXY but NOTE OF CAUTION as of late the Buy the Dip Crowd have been crushed.

A lot of Canadiana we jest can’t put out the door due to the fact they would have to rewrite the history books all the way back to 1812…ya knowd what I mean

Nothing wrong with Canada except we are politically incorrect in our face to the world.

#93 iRent on 07.27.15 at 9:24 pm

Hi Garth,
Please don’t use “Canukistan” in the articles. What you write has high probability of being true. :) Let’s stay secular in this country forever.

#94 Capt. Obvious on 07.27.15 at 9:27 pm

We should have definitely stayed on puppies. Dawg days of summer indeed.
Balanced portfolio is doing relatively ok. Stay calm and steady on.

#95 Sosuke Aizen on 07.27.15 at 9:29 pm

Stock brokers like Garth want to maintain the illusion that everyone in the market wins. They don’t want you to know that in order for some to win, others must lose. Even if you bought the Dow at the Grexit bottom (July 8), you would still lose. The Dow closed below the Grexit bottom today, and all the stock markets in the world are headed in the same direction. Still want to sell your home, throw money into the market, and hope for a 7% before-tax return while paying your landlord a 6% cap rate? That 7% return is uncertain and never on time, but your rent is absolutely certain and must be on time. If you own your home, your rent savings are an absolute certainty. That’s like a 6% guaranteed return on capital. If you still want to give up that certainty for a roll of the dice in the markets, well then, as they say on Archer, welcome to the danger zone!

I am not a stock broker, and sell nothing. You are reading a free blog, financed by me, for your benefit. Over the last half-century financial markets have outperformed residential real estate, and this pattern will continue. Having said that, everyone should have a balanced approach to their finances. Putting it all in the markets or all in a house is not the definition of balance. If you choose to post again, try to be less of a shill. — Garth

#96 Paul on 07.27.15 at 9:30 pm

#69 Buy My Vote

Did you cash the check? Before the whine !

I did not receive a check so if you like I’ll take yours.

#97 Ronaldo on 07.27.15 at 9:32 pm

#65 Murphy on 07.27.15 at 8:28 pm
#7 Leroy

”What is the meaning of “Who hoo” where you come from?”

Don’t know about Leroy but where I came from it usually meant that there was an owl in the hayloft. If we asked my father “who?” he would jokingly say, “who who, un hibou”

#98 kommykim on 07.27.15 at 9:40 pm

RE:NDP ‘fix’ is simple: increase spending and taxes. — Garth

Well, I guess that’s not as bad as the CONs increased debt from cutting taxes. At least the NDP intends on raising revenue to pay for the spending.

#99 Zorba on 07.27.15 at 9:41 pm

Plus 25% HST and punitive income taxes. — Garth. If you don’t implement those”punitive taxes”,you end up with the kitchen soups and the food banks. You can ask Albertans,Garth.

#100 Bytor the Snow Dog on 07.27.15 at 9:43 pm

If people vote for something, instead of against the other things, we might get somewhere. — Garth

So just what, or who, in your estimation, should people vote “FOR”?

#101 Bugsy Carlos on 07.27.15 at 9:45 pm

#138 Keith in Calgary on 07.27.15 at 1:53 pm
#1217 Econoom…….

“………….when you live in a tropical city that is like Rio or any other place down south, you don’t need anything fancy because all you do is sleep there. The rest of the time you are out in the street doing things……or at least we are.”

Think you have been watching too many movies. In that area of Rio, by 9pm all of the local retirees are usually back locked inside their Copacabana retirement pods near the beach , because it is too dangerous to go outside, due to muggings and crime….if you like that go for it!

#102 Warren Hullwin on 07.27.15 at 9:47 pm

To those that think gold is going to $800..are you shorting?

If you are not then you really don’t think it’s going there, or you don’t want to make money, or just like saying things to look like you know what is really going on.. Agree or disagree?

#103 will on 07.27.15 at 9:56 pm

“So just what, or who, in your estimation, should people vote “FOR”?”

Vote for a party that has conservative values. In my view that excludes the incumbents that are conservative in name only.

#104 Doug in London on 07.27.15 at 9:56 pm

@Metro Van Observer, post #77:
My thoughts exactly, there are a lot of good deals out there right now.

#105 Bugsy Carlos on 07.27.15 at 9:58 pm

#104 neo on 07.27.15 at 8:32 am

“Exposure to China in a balanced portfolio is about 1%. Meanwhile the Chinese market is still up year/year 78.4% and 16.8% YTD. Exaggerate much? — Garth”

Garth,

Boxing promoter Dong King might call this trickeration….by selectively locking in a favourable start point you can make any return look positive….for instance my time frame on China started last month….what is my YTD return?? See what I mean? To be fair you should always qualify these statements like an accountant or lawyer would and also provide comparatives for the last 4 quarters, not just the rosiest starting point.

Giving 12-month and 6-month returns is reasonable in this context. The most important fact is the first one – exposure to any emerging market should be miniscule. — Garth

#106 whitehorn on 07.27.15 at 9:58 pm

#84 Ken Nash “The daily news is getting dreadful. It’s not all just economic but society is screwed up too. The dichotomy between public sector and private standards of living are out of wack. To many 20 somethings with no prospects, little hope and despondent. There is way too much in common with 2014-15 and 1914 in some parts of the world. Like Canada.

I cannot believe how from the 1980s until now Canada was neutered from being a manufacturing power house. All that work to break free from the ups and downs of natural resources. All trashed in the name of boomer standard of living.

It’s really sad.

As for Mulclair being scary. I don’t think so. The alternative sure isn’t working.”

Really have to wonder, why Canada’s economy has been so stagnant since the financial collapse in 2008. Also, markets on the TSX are scary – in fact 7 consecutive down days not seen since 2011. Many blue chip companies in the resource sector at historic low levels i.e. 10-30 year lows. There are many countries in the world that are doing significantly better and you have to wonder why? Canada interest rates are at .5 percent, another rate cut and this will be at close to 0. My biggest worry at this point when the housing sector bursts and it will, the effects could be significant. Scary times at the moment, and witnessed a few downturns but it seems this one could be a messy one if it continues and could last a few years. I agree many Canadians agree the PC party mandate, plans and agenda are not working; and time for change. On another note, everyone says invest outside Canada which is correct at the time, but in essence were killing off our own country. So basically invest in the USA and another facility gets shut down in Canada and moves out. It seems all the experts are telling to do this but economically the country suffers.

#107 Randy Randerson on 07.27.15 at 10:00 pm

#71 Godbye Realturd007, you won’t be missed.

#108 BS on 07.27.15 at 10:00 pm

Who was that guy that said “Be fearful when others are greedy and greedy when others are fearful”.

How about the the guy that said “Don’t catch a falling knife” and “The trend is your friend”. I think I will stick with him for now.

#109 Bugsy Carlos on 07.27.15 at 10:01 pm

#93 iRent on 07.27.15 at 9:24 pm
Hi Garth,
Please don’t use “Canukistan” in the articles. What you write has high probability of being true. :) Let’s stay secular in this country forever.”

I think the actual term was “Soviet Canuckistan”, at least as used by that extremist US blowhard politician Pat Buchanan…

#110 Dominoes Lining Up on 07.27.15 at 10:03 pm

Against all of this backdrop, household debt remains at historic highs, making many vulnerable to even slight shifts in the economy and house prices.

But some, it appears, have suspiciously little debt – which, surprisingly, may also be a very bad sign, meaning their incomes may be too little to even qualify for any.

http://www.theglobeandmail.com/globe-investor/personal-finance/millennials-lack-of-debt-a-sign-of-trouble/article25714750/

This looks like the oxygen fuelling the real estate fire is being turned off in front of our eyes.

At about the worst time for those who are counting on their “equity” to bail them out.

#111 Washed Up Lawyer on 07.27.15 at 10:06 pm

The recent Rachel Rebellion in Alberta and the upcoming Federal election are making my porous mind wander in nostalgic ways.

I am taken back to those long days on the ranch packing fence posts, stretching barbed wire, stooking hay bales, putting up stink weed infested barley sileage and then having to trim the horses feet.

At the end of the day we would treat ourselves to an ice cream float with your choice of pop. The overwhelming choice was Orange Crush. Fanta was a pretender.

Try Orange Crush. It is refreshing and soothing.

#112 Joisey Brown on 07.27.15 at 10:07 pm

Garth,

Now that the big boys are acknowledging this, it is probably politically correct for some firebrand politico in Canada to take a stand on this!

“http://www.bbc.com/news/uk-politics-33684098
Cameron in foreign home-buyers warning

A 2014 report by anti-poverty organisation One said an estimated $1tn (£600bn) a year was being taken out of poor countries because of corruption, warning of the use of phantom firms and money laundering.

And last week the National Crime Agency said foreign criminals were pushing up house prices in the UK by laundering billions of pounds through the purchase of expensive properties.

Homes in the UK are being bought by foreigners with “plundered or laundered cash”, David Cameron is to warn.

#113 Joisey Brown on 07.27.15 at 10:13 pm

Garth,

I had to ashamedly google your “natch” word as I am not up on the latest lingo….according to the urban dictionary
there are a few meanings, including “naturally”, along with a few less savoury ones. Please clarify how to use this, so I can avoid being punched in the nose, if I make a mistake.

#114 DON on 07.27.15 at 10:13 pm

#74 Ronaldo on 07.27.15 at 8:51 pm

#61 Llewelyn on 07.27.15 at 8:21 pm

”I have little confidence in a system that I have absolutely no ability to influence and I fear that the Government of Canada will soon share my concerns.

We need alternatives and we need them now!!”

Good post. I too have little cofidence in a system whereby the politicians only can see 4 years into the future and make spending decisions of our tax dollars based on their being re-elected. Sometimes I think that democracy begins and ends at the ballot box. After that, they pretty much have a free reign on what they are going to do except when the really tough decisions have to be made then it goes to referendum. Like whether we want Quebec to remain in Canada. Remember? This may pee Garth off
*****************************

Perhaps we should have controls put in place that can never be subverted…hold referendums on all major decisions that affect our social and economic future. All both parties to debate their sides in full view of public scrutiny. Who cares if it is expensive or too timely at least we would limit the crap decisions.

How did we get into this mess?
Who put us here?
What is coming that we don’t know about?
Why are we here?
How do we get out of here?

Logically we know the answers to these questions. It definitely wasn’t the NDP but yet they are the scary ones. I prefer independents that live and represent the based interests of their communities and general well being of their constituents. This orange, red, blue thing is ridiculous and severely dated. Perhaps it is time to put the scare into the millennials get that herd to vote and change the system up. Perhaps their willingness will be increased in the next few years as things unfold.

#115 BS on 07.27.15 at 10:14 pm

RE:NDP ‘fix’ is simple: increase spending and taxes. — Garth

Well, I guess that’s not as bad as the CONs increased debt from cutting taxes. At least the NDP intends on raising revenue to pay for the spending.

There is a difference between increasing taxes and raising revenue. Raising taxes does not necessary mean more revenue for government. Often when taxes are increased revenue decreases as it strangles the economy. That is why the NPD usually only last 1 term. Within 4 years taxes are higher but government revenue is lower due to a shrinking economy. With the NPD you get the worst of both worlds.

#116 Victor V on 07.27.15 at 10:14 pm

http://www.thestar.com/business/economy/2015/07/27/consumer-sentiment-hits-two-year-low-after-rate-cut.html

OTTAWA — Canadians aren’t taking much comfort from the Bank of Canada’s efforts to stimulate the economy.

Consumer confidence fell to its lowest in more than two years as the economy struggles with a downturn that prompted Governor Stephen Poloz to lower interest rates this month. The Bloomberg Nanos Canadian Confidence Index fell to 53.4 in the week ended July 24, the lowest since May 2013.

Heightened levels of anxiety are one of the unintended consequences from policy action to spur the economy. Both of Poloz’s rate cuts this year were followed by sharp reductions in sentiment, the data show.

#117 Frank on 07.27.15 at 10:18 pm

Talk about all eggs in one oily basket

Actually our economy is more diverse from energy than it was 30 years ago. However we have been a resource country since fur trapping in the 1700’s so that takes a while to change.

and tanking our dollar so bozos who bought a zillion dollar home

Believe it or not rate policy isn’t all about people and mortgages, that’s more of a side effect.

My lazy limping dog could do better than the clowns we’ve had in power for the last decade.

No he couldn’t and neither could you. This oil glut had nothing to do with us and would have kill our economy no matter who was in charge. Tom Mulcair wouldn’t have seen it coming, neither would you nor your dog. The point isn’t ‘Vote this person to save the economy’, it’s ‘you can’t tell the future so diversify your portfolio to minimize risk’. It’s hard for a country as small as Canada to instantly diversify our economy. We don’t have enough people to challenge Asia countries for making goods. We don’t have enough arable land or people to challenge the US etc. It takes generations but it only takes you a few mouse clicks to diversify your portfolio.

Harper is a knob for other reasons but stop blaming him because your coffee didn’t have enough cream this morning.

#118 gut check on 07.27.15 at 10:20 pm

“If people vote for something, instead of against the other things, we might get somewhere. — Garth”

I agree, which means the only one worth voting for is Mulcair (even though I wish it were Jack Layton, may he rest in peace)

Surely you don’t have a different candidate in mind.

Anyway I doubt I’ll vote. Complete hor$e$hit at this point. Votes mean nothing – it’s all about hitting the corporations who rule us in the pocketbook (or share price)

HEY – isn’t Canada a corporation??? Don’t they have a duty to provide value to the shareholders ? Who are the shareholders?

#119 Freedom First on 07.27.15 at 10:21 pm

Yes. Very interesting. Lots happening in the world. Looks normal to me. Live debt free, keep it simple with sound financial principles, remain calm, stop fear or greed from entering my mind, enjoy every day, and help others. Check.

Life is very very good. I am grateful. I’ve been blessed. I am one happy dog.

Will you vote for me………in the next election?

#120 Smoking Man on 07.27.15 at 10:25 pm

World wide Heavy machine sales down huge….

Damn.. Let’s hope Yellen don’t see that.

#121 Goldie on 07.27.15 at 10:25 pm

#89

lol
Harry Dent. His parents had a sense of humor, but sadly at the expense of their kid.

#122 Randy Randerson on 07.27.15 at 10:25 pm

Looks like the Shanghai stock exchange is following yesterday’s trend, down another 3% or so after its opening.

#123 Ronaldo on 07.27.15 at 10:29 pm

#111 Washed Up Lawyer on 07.27.15 at 10:06 pm

”At the end of the day we would treat ourselves to an ice cream float with your choice of pop. The overwhelming choice was Orange Crush. Fanta was a pretender.

Try Orange Crush. It is refreshing and soothing.”

Ah Ah, another farm boy. Did you ever try Cream Soda?

#124 rainclouds on 07.27.15 at 10:34 pm

Perhaps one of the other parties can accomplish what Tubby/The elf(RIP) OWE/and The poodle HAVE been unable to do in 9 years ….REDUCE THE DEBT and stop running DEFICITS

why can’t conservatives/republicans/reform weanies DO BASIC MATH?

WHYYYÝYYYY………

#125 Zorba on 07.27.15 at 10:36 pm

#115 BS on 07.27.15 at 10:14 pm
RE:NDP ‘fix’ is simple: increase spending and taxes. — Garth

Well, I guess that’s not as bad as the CONs increased debt from cutting taxes. At least the NDP intends on raising revenue to pay for the spending.

There is a difference between increasing taxes and raising revenue. Raising taxes does not necessary mean more revenue for government. Often when taxes are increased revenue decreases as it strangles the economy. That is why the NPD usually only last 1 term. Within 4 years taxes are higher but government revenue is lower due to a shrinking economy. With the NPD you get the worst of both worlds.
…… or,you can try to balance the books,and kill the economy in doing so….
Angela Merkel medicine, I guess. :)

#126 Vanecdotal on 07.27.15 at 10:38 pm

#45 Don

Great post. Agree, (except for the “voting twice” part).

#85 Ken Nash

Also good post.

Re: GT’s comment: If people vote for something, instead of against the other things, we might get somewhere. — Garth

Dude, Where’s My Centrist/Common Sense/ Sacred Commerce/”Conscious Capitalist”) Party? Still waiting… cobwebs forming…

Would LOVE a party to actually vote FOR, however, given the choice of incumbent, or CHANGE, well, what’s the definition of insanity again…?

#127 Obvious Truth on 07.27.15 at 10:46 pm

I vote for no fees when I use my bank card at other bank machines. Talk about a tax break. That could put millions into the pockets of Canadians. No burocracy needed.

I was hit with a $3 charge at a big 5 bank last week!

The no name cash machines only charge $1.75.

I vote for the party that lets us have way more bank competition. Canada is dying because of dinosaur banking. It would fix the $3 problem instantly. Along with many others. Let’s end this financial socialism they enjoy in Canuckistan.

I think the people could get behind this. It’s the forced productivity we need. And it’s a good time for it. Along with teacher bashing.

Instead we get mindless taxation by fee raising and devaluation.

#128 Obvious Truth on 07.27.15 at 10:50 pm

Saw the kid last year a political function. He’s smooth and drew the crowds. Great hair for sure. I figured he was an easy winner. Mulcair caught me by surprise. Nagraj gets props for being first on that. Still think the kid wins.

Does anyone else feel like they are watching a weird canadian version of coronation street during the slag Justin commercials? I’m always expecting the song to come on thinking it’s a promo.

#129 Leo Trollstoy on 07.27.15 at 10:53 pm

Which will happen first?

sub-$1000 gold

Or

sub-$0.70 CADUSD?

Win win

#130 TurnerNation on 07.27.15 at 10:56 pm

New bump ‘er sticker:
In case of rapture this blog will be unmanned.

#131 WiseGuy on 07.27.15 at 11:25 pm

I like eggs!

#132 dh on 07.27.15 at 11:27 pm

Smoking man,
Your wife is correct. I spent just over 10 years in the US. I was accidently shot at once by someone with no concept of firearm safety. Witnessed a guy waving a gun at his father. Had a motorcycle stolen off me. Had a car alarm barely foil a thief. Had a battery stolen from a car from someone too cheap to get a new one. Had too different apartments broken into. Land of the free, but also violent and criminally slanted. And for all those who are thinking of retiring in the sun belt, goggle police abuse first and don’t do anything to upset an oficer of “the law”.

#133 Ray Skunk on 07.27.15 at 11:35 pm

Huge layoffs at Allstream, according to a pal of mine, double-digit percentage of workforce.

Just started a new GRRSP at work. I foresee a heavy US weighting in my portfolio…

#134 saskatoon on 07.27.15 at 11:38 pm

#45 Don

Don’t tax?!?!?

What planet are you livin’ on, buddy?

Political parties: different sides of the same coin.

Try to think outside the box.

#135 will on 07.27.15 at 11:41 pm

“Please don’t use “Canukistan” in the articles. ”

Well, #93 iRent, let’s analyze this usage of the “stan” suffix.

The so-called “stans” are the sovereign nations that form the southern border of the former USSR. Uzbekistan, Kazakhstan, Kyrghizstan, Turkmenistan, Tadjikistan. I can’t name them all.

These nations together are where a ton of business is happening and is about to happen. to the unitiated, they are “communist” countries. Key point: they are NOT communist. They are business oriented. It’s where the big business party is happening in the world. and you know what? We Canadians are not going to that business party. It’s not like we’re not invited. the problem is that our phony government is, in a Cyclopean way (that is – the Cyclops!) has only one eye to focus – and that is on the so called real estate “industry”, which, in my view, is no industry at all.

you don’t believe me? stop reading the MSM and start reading intelligent media.

so at the end of it all Garth, I agree with #93 iRent. Please cease using the term Canuckistan if you are using it in such a way as to equate Canada with socialism. we Canadians will take the good parts of socialism, but we are business people. Unlike the pretenders in Ottawa who would sacrifice good business to ideology.

#136 muchomacho on 07.27.15 at 11:42 pm

Garth

Many have asked about how to short the Canadian real estate market….is this dude onto something?

http://www.theglobeandmail.com/report-on-business/economy/housing/californian-short-seller-targets-home-capital-group-canadian-real-estate/article25715455/

#137 Landon Tribute on 07.27.15 at 11:45 pm

Garth, why is there all this panic and turmoil around China stock markets “crashing” when their Shanghai index is UP 14% YTD..how is that a crash exactly?

#138 saskatoon on 07.27.15 at 11:49 pm

#88 will

orwellian much?

#139 West Coast on 07.27.15 at 11:49 pm

#111 Washed Up Lawyer
I don’t know about Orange Crush…..I always preferred 7 Up……….

#140 Hawk on 07.27.15 at 11:51 pm

The TSX is indeed down compared to the US markets but the one funny thing is that when I compare the dividend yields of most US heavy established blue chips to the good Canadian stocks, the Canadian ones all seem to be a better value proposition, in the sense that they deliver far better dividend yields.

It therefore almost seems that nonwithstanding the weakening Canadian economy at lower prices the TSX seems to be a pretty good buy, particularly for the long term since even if the price plummets further, the income streams provided are quite good.

Who agrees with this?

#141 Obvious Truth on 07.27.15 at 11:52 pm

#111 WUL

‘Try Orange Crush. It is refreshing and soothing.’

When I was a young man an aspiring politician named Robert, and his wife knocked on our door. My dad answered and invited them in for a coffee. They obliged. Interestingly they both had great hair. Long was in.

That same Robert Rae would one day ‘be ready’. But unfortunately he inherited a mess. Not sure anyone in ‘Orange’ would or could do much soothing this time around either.

Unless of course there was a competent one two punch leading the way. Perhaps like Shanahan/Elway or Boehiem/Melo.

But I suppose this would be true for any party.

#142 debtified on 07.28.15 at 12:03 am

#102 Warren Hullwin on 07.27.15 at 9:47 pm
To those that think gold is going to $800..are you shorting?
***********************************************

Yep! I believed gold was history since 2011 and started actively shorting it since 2012. Using only JDST as the vehicle. In and out, in and out, using macro-economics and technical analysis for timing. I know this is probably the most dangerous way of shorting gold but that shows how confident I am that gold is going to $800. I have not had a losing trade. If I timed it wrong, I just hang on or double down to average down. Longest wait was less than 2 months (decay sucks, though). Made enough money that at this point I am only gambling with profit.

Obviously this is only using my gambling portfolio. The balanced porfolio I have is doing good but too boring for me.

Last trade just recently I was in at $10.20 – out at $16.61. Made more money in less than two weeks than I would have working for a couple of months. I am currently waiting to get back in again. I will stop once gold reaches $800. By then most of the existing juniors are probably out of business anyway.

The world has moved on. Gold is so medieval.

#143 one mill is nothing on 07.28.15 at 12:03 am

#57 JSS
Thats the same strategy that everyone tried in the US in 2008. It didn’t work there and here…… The problem is everything falls apart at the same time.Your RSSP goes down, your house goes down, the banks cut off your loans and you can forget about ever finding another job. Canada is a one trick pony that really doesn’t need all the people it currently has now that manufacturing has disappeared. And everyone’s leverage with dissappearing income streams. The solution, as i posted a year ago – cdn $ in the .30s US, then your TO house is still worth a mill, cause a mill truely is nothing in cannuckistan – like most third world countries.

#144 debtified on 07.28.15 at 12:06 am

Correction on my previous post…I got the years wrong by a year.

#145 Kaganovich on 07.28.15 at 12:09 am

“While everything will turn out okay in the long run (I have no doubt), ”

When were dead?

#146 Tim on 07.28.15 at 12:19 am

The problem is the cash account. You don’t want foreign stocks in a taxable account so you are forced to buy Canadian stocks. If you buy the index, half of it is oil and banks, which aren’t good places to be right now.

#147 ryan on 07.28.15 at 12:27 am

Down the road the western provinces like Alberta and bc will end up joining the usa or form their own country. Quebec will separate too. We ain’t recovering from this like the early 90s. This place has gone totally whack.
http://www.nationalpost.com/m/wp/blog.html?b=news.nationalpost.com//news/canada/canadian-politics/why-leaving-canada-makes-sense-for-alberta-and-u-s-would-likely-welcome-a-new-state

#148 Westerman on 07.28.15 at 12:28 am

Well, well, well – if you think it’s bad now just wait till the Communist party of Canada … oops, I mean the NDP gets elected… although it will look good on you Socialist cheerleaders as you watch your taxes go through the roof and productive business shut down as your standard of living drops like a rock… good on you dummies…
And Garth, as I has told you time and time again there will be NO rate increase – it’s the old rock and a hard place and the Smarmy, self important Canadian is about to meet reality head on…

#149 Tim on 07.28.15 at 12:30 am

“NDP ‘fix’ is simple: increase spending and taxes. — Garth”

Under Harper, the Cons have racked up the biggest deficit in the history of any PM. Instead of investing in education and productivity, they come up with the home renno tax credit which just gave temporary work to wrench bangers. They’ve under invested in manufacturing and gave tax breaks and subsidies to big oil and created a big mess. How can it be worse under the NDP? At least we will have access to information, debates, and no denial of climate change. Besides, the Cons have ruined our international reputation.

#150 Tim on 07.28.15 at 12:38 am

” Bugsy Carlos o”

I went to Rio last winter and never felt so unsafe. Of all the countries I’ve traveled to, I think Brazil is the most F*&#ed up. Most of the people I met were nice, but I’ve never seen so many cops in my life. It is not a place to go and relax. People getting mugged in daylight in Rio. No one goes to the beach at night because it is too dangerous. That’s what you get in a country with massive inequality.

#151 DON on 07.28.15 at 12:39 am

#128 Obvious Truth on 07.27.15 at 10:50 pm

Saw the kid last year a political function. He’s smooth and drew the crowds. Great hair for sure. I figured he was an easy winner. Mulcair caught me by surprise. Nagraj gets props for being first on that. Still think the kid wins.

Does anyone else feel like they are watching a weird canadian version of coronation street during the slag Justin commercials? I’m always expecting the song to come on thinking it’s a promo

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

I had the same feeling, very corny trying to relate to the average boomer. But then again.

#152 John Prine on 07.28.15 at 12:45 am

NDP ‘fix’ is simple: increase spending and taxes. — Garth

3 billion just sent out to parents who don’t need it……….

#153 Panhead on 07.28.15 at 12:48 am

#123 Ronaldo on 07.27.15 at 10:29 pm
Ah Ah, another farm boy. Did you ever try Cream Soda?

———————————————————
Yeah I remember that stuff was good … they still make it?

#154 Bob Santarossa on 07.28.15 at 12:52 am

Garth my solution to the falling dollar:

1. Move to Italy, convert next week large chunk of cash to Euros and open an account at UniCredit a subsidiary Fineco – they passed the European Stress Tests.

2. Watch dollar fall to 75 cents, some now saying maybe as low as 70 cents (now I will have made 4 to 8%).

3. IMF today says Italy, Spain and Portugal in recovery after 3 to 4 years of recession, means Euro will strengthen (add at least a few % for that)…well, provided Greece continues with the illusion.

Basically, leave money in Euro account, do nothing and yet earn from 5 to 10% for this year…not bad. Plus, the bank gives interest at 1%/year with their “Cash Park” program, so make that 6 to 11%.

I still remember in 2010 exchanging $1.84 for 1 Euro at Frankfurt Airport. If it returns back to that level, well then, make that at least 25% by doing nothing.

And I don’t get a brain aneurysm trying to strategize about ETFs, Canadian vs. offshore diversified investments etc.

I like that – especially in my retirement (60 yrs old) that does not rely on early CPP or later OAS to make ends meet.

Plus, I avoid the economic angst that is to come which will probably last 2 to 5 years…will be living near Venice.

Will continue to read your well written blog from Harry’s Bar or Caffè Florian, depends on the time of day. Ciao Garth.

#155 Carousel on 07.28.15 at 12:52 am

The way events are heading we should not worry about real estate costs, cos the demand will not be there. Employment and just keeping our heads above water will be our survival. Yes, turbulence times are ahead, but life goes on and continues. Heaven forbid if the Federal NDP are elected in, look at the disaster when the provincial NDP shammed BC. My, what are people thinking, more taxes! Universal child day care at the tax payer’s expense! We don’t want to look after someone else’s kid!

Plain and simple!

#156 Nagraj on 07.28.15 at 12:55 am

The typical Canadian workin’ family is sittin’ around the kitchen table, havin’ supper. There’s Mom (Jane) and Dad (Richard) and the kids, Susie, 9, and Wilberforce, 5.

Jane: It now seems certain, Fred, that we’re entering a period of confusion and volatility. As you know
Richard: MY NAME’S NOT FRED!
Jane: Whatever. As you know, the Chinese stock market
Richard: It’s DICK!
Jane: laid another egg despite the fact that
Wilberforce: Eggs come from chickens.
Richard: DICK! DICK! DICK! DICK!
Susie: Tock tock tock the mouse ran up the clock!
Jane: despite the fact they’ve done everything over there but shoot people. That robbed
Wilberforce to Susie: Stick ’em up or I’ll shoot you!
Susie: He poked me!
Richard: Don’t you go pokin’ Susie with a fork.
Jane: and that robbed the commodity market for technical reasons, money
ENTER Smoking Man: F**K! I got caught in the f*****g HGLBTQOV lane! Damn!
Jane: Watch your language in front of the children.
Richard: The HGLBTQOV lane? Heh heh.
Jane: AS I WAS SAYING it now seems certain we’ve entered a period of confusion and volatility
Smoking Man: Whazzup with her?
Richard: Nuthin. She’s been readin’ that dog blogger again.
Susie & Wilberforce: We want a puppy! We want a puppy!
Jane: We can’t afford a dog.
Smoking Man: Stop wailin’, I’ll get yas a dog.

#157 TRT on 07.28.15 at 12:55 am

These are the best of times and the worst of times.

Volatility brings lots of risk…which brings lots of profits….but don’t get too greedy!

For people that shorted Canada, kudos to you. About a year or so to go….buy back in when main street is talking depression…hahaha

Cheers…having a London Dry.

Garth, I know your excited as well…you only mention the Scotch at these times.

#158 Puzni on 07.28.15 at 12:57 am

Garth, these pre-election pools have been wrong so many times! People will stick with the devil they know. I’m 99.99% sure that conservatives will win the next election again.

#159 Mister Obvious on 07.28.15 at 1:01 am

#117 Frank

Good comment, Frank. I tend to agree.

#160 Bob Santarossa on 07.28.15 at 1:01 am

And yes Garth, I know they have a GST/PST called IVA anywhere from 4% to 20% – depends on what you buy. That is already impounded in the price of things you purchase.

Cost of living less there vs. YVR where I live, a lot less. Just go to the Numbeo web site (Cost of Living) and compare YVR to say Pordenone, Italy and you will be in for a big surprise.

And the restaurant prices they post there are pure fiction for Italy and even if they were higher, I think I like their food better than MacDonald’s.

#161 Ronaldo on 07.28.15 at 1:15 am

#129 Leo Trollstoy on 07.27.15 at 10:53 pm

”Which will happen first?

sub-$1000 gold

Or

sub-$0.70 CADUSD?

Win win”

Who knows? When the TSX hit its low on March 9/09 gold was $895.00 us and $1163 cad. The dollar was pretty much where it is now. Gold is now at $1095 us $1425 cad. I can see it dipping below $1000 u.s. once our dollar hits 68 cents. So in answer to your question, I will guess 70 will come first. But, in CAD Gold would likely be around $1425 CAD which is where it is right now. Great for those in other than USD.

#162 kommykim on 07.28.15 at 1:27 am

RE: #125 Zorba on 07.27.15 at 10:36 pm
Raising taxes does not necessary mean more revenue for government. Often when taxes are increased revenue decreases as it strangles the economy.

Ah, the old Laffer curve! The one that has been proven to be BS peddled by the 1% to lower their own taxes? You make me Laugh.

#163 Cloudy on 07.28.15 at 2:30 am

I read an interesting article today (http://m.thespec.com/news-story/5753614-15-years-after-nortel-peaked-investors-are-still-making-the-same-mistakes). One thing that caught my eye was this:

Thomas Caldwell, who has had a long involvement with the Toronto Stock Exchange as the founder of Caldwell Securities, says he thinks the next crisis will come from “the ETF world” — exchange-traded funds that mimic market indexes like the S&P 500.

“You may have some heavy weightings in some big companies that just aren’t going to be there some years from now,” Caldwell says.

I know it’s just one man’s opinion but I share is thoughts that social media stocks are grossly overvalued. I would be interested to hear your thoughts on the ETF comment because I invested almost exclusively in ETFs as per your balanced portfolio (with the exception of a small amount of individual stocks that are making a handsome loss).

#164 BC Guy on 07.28.15 at 2:39 am

Oil can’t stay low for too much longer.

Yes, I know there is a temporary “supply glut”, however, oil companies started curtailing expansion plans last winter, so the supply will start to soften. Also, Saudi Arabia has been pumping for 70+ years. Their oil fields have hit peak and are in decline. Worldwide oil demand continues to increase and is currently around 95 million barrels/day or a billion barrels every eleven days. Oil is not only used for vehicle fuel but for plastics, paint, cosmetics, asphalt, vinyl etc. etc.

There have been no major disruptions of the global oil supply due to geopolitical events for some time. All it takes is one such even for the price to spike upwards.

The oil market has always been subjected to wild price-swings due to many complex supply-demand factors. The OPEC nations are now getting only $47/barrel too remember, so their oil-industry employees, contractors, management, executives and benefactors are also taking a major financial hit because of lower prices. So there is a strong incentive for all oil producing nations, even OPEC, to have prices rise. It will happen sooner rather than later.

#165 BC Guy on 07.28.15 at 2:45 am

And I’m voting Mulcair by the way.

#166 jane 24 on 07.28.15 at 3:15 am

I left Ontario and moved back to England in 1992 when the NDP won in Ontario. They are old style socialists, far more left than the Labour party in Britain. Bob Rae and his Red Floyd sidekick Treasurer were then determined to raise Ontario out of a global recession by both raising Ontario taxes to punish the rich and spending money on social programs and big capital projects. They borrowed heavily at high interest rates in a declining world and the rich left. Their text book perception of finance failed them and Ontario.

It didn’t work, the global recession won. Ontario was so broke that civil servants had to take unpaid days off work. These were called Rae Days. I couldn’t believe it when the idiot then came back from the dead into federal politics and people actually voted for him again. I believe that Ontario is still paying the bills of their 1992 socialist NDP govt today.

Human memory is short however and I believe that the NDP will indeed be elected as the new federal govt as folk want a change. The political and financial ramifications will sadly last a very long time. The dollar will indeed die. The recession which does exist in Canada but no-one will speak its name will be front page news. You can never spend your way out of trouble, global money doesn’t work like that.

Anyone who buys a house right now or continues spending borrowed money is a greater fool indeed or one without a memory for what is coming down the pipe.

#167 Leo Trollstoy on 07.28.15 at 3:15 am

If this article turns out to be correct, we’re getting a 70 cent USD loonie.

Inflation comfortably over 2% by the beginning of next year.

http://www.cnbc.com/id/102866622

#168 BillyBob on 07.28.15 at 3:42 am

#138 Keith in Calgary on 07.27.15 at 1:53 pm
#1217 Econoom…….

“………….when you live in a tropical city that is like Rio or any other place down south, you don’t need anything fancy because all you do is sleep there. The rest of the time you are out in the street doing things……or at least we are.”

Think you have been watching too many movies. In that area of Rio, by 9pm all of the local retirees are usually back locked inside their Copacabana retirement pods near the beach , because it is too dangerous to go outside, due to muggings and crime….if you like that go for it!

——————————————————————

What typically small-minded bs. I’ve been to Rio many, many times – the airline I work for has a daily flight there. Yes, there is crime in the city, particularly in the favelas, mostly drug-related. But Copacabana and Ipanema are no different from touristy areas in any Canadian city, except, the Brazilian city is insanely more beautiful as are the women.

Ironic, you speak of watching too many movies. You do realize “City of God” wasn’t a documentary, right?

#169 drydock on 07.28.15 at 4:08 am

#83 Henry on 07.27.15 at 9:04 pm

One thing about puppies is that if things get really bad, you can cook and eat them like the Inuit used to do with their sled dogs!
……………………………………………………………………….
This poor attempt at humor evokes images which i find extremely offensive.

#170 drydock on 07.28.15 at 4:12 am

#123 Ronaldo on 07.27.15 at 10:29 pm

#111 Washed Up Lawyer on 07.27.15 at 10:06 pm

”At the end of the day we would treat ourselves to an ice cream float with your choice of pop. The overwhelming choice was Orange Crush. Fanta was a pretender.

Try Orange Crush. It is refreshing and soothing.”

Ah Ah, another farm boy. Did you ever try Cream Soda?

………………………………………………………………………
The best cream soda i ever drank was called “Snow White” , it came in a clear glass bottle.

#171 gtrz4peace on 07.28.15 at 4:41 am

The “Socialist Republic of Canuckstan?” Right now your “Republic of Canuckstan” is looking pretty sad on things that really matter now all over the world, like combatting climate change by making the change to a renewable energy economy.

Having a functioning economy financially is crucial but there are things more important than money. Christy Clark in BC and Stephen Harper are destroying all those things people value that are more important than money. Bravo that they should pay the price, and hopefully the damage of the neocons to Canada can be reversed.

True democratic socialism actually allows for a better quality of life for most of the people, while there are still rich people. Perhaps you will not print this, but taking the neocons out of power is not a bad thing…

#172 Rick Danjamin on 07.28.15 at 6:56 am

People that choose the NDP are voting against something but are desperate too.

They want to believe that socialism and taxing and spending, increasing debt at the highest levels of all governments is going to bail them out.

How do you like your 200% higher electricity prices, 300% higher water rates, eco fees, smart meters, an extra 10 cents H.S.T per liter of gas, H.S.T. on everything now, double land transfer taxes, $300 to $900 health taxes, garbage fee increases of $120 to $250, etc. etc.

Ontario is going to really use revenue tools in coming years.

When you get taxed and fee to death so much that will in turn make more consumers and society more in debt.

Look at Canadians, seniors, retirees today, in real debt, lower income and reverse mortgages, payday loans, credit card debt, car loans etc.

#173 Bottoms_Up on 07.28.15 at 7:19 am

NDP ‘fix’ is simple: increase spending and taxes. — Garth
—————————————–
We’d also have an intelligent lawyer at the helm who has indicated he strives for a fairer Canada, and a Canada that is respected again on the world stage as supporters of peace. A welcome change from the current administration no?

I know Thomas Muclair and have worked beside him. Have you? — Garth

#174 Bottoms_Up on 07.28.15 at 7:33 am

#155 Carousel on 07.28.15 at 12:52 am
————————————-
That’s a great attitude, especially when that “someone elses kid” is the one that might end up footing the bill for your old age home. Be careful what you wish for…

#175 lee on 07.28.15 at 8:12 am

Article today in Financial Post by Garry Marr saying everything in Toronto real estate market humming along just fine for developers, with more condos, not less to come. So much for a Toronto slow down.

Poor Garry. — Garth

#176 Investorz on 07.28.15 at 8:32 am

When oil is $60, rigs come back online and the price of oil falls. So we’re stuck in a range of $50-60. Now if Iran’s tankers unload their oil barrels, it’s going to hurt. Already retirees calling BNN with trembling voices about their oil stocks. I feel for them.

Only Mother Nature is happy.

Since canadian oil companies need $70 to make enough money to grow, and CEOs need to see oil stabilize when it does finally go up, jobs are not coming back to Alberta for a long time. No snap back.

#177 bucky on 07.28.15 at 8:38 am

Cold water on the head prognosis. One iten I wonder about, with a Federal NDP government likely this fall, any chance the economic policy will resemble the Romanow government that saved Saskatchewan from a very near debt default under the previous Tory administration in Saskatchewan? Hard nosed austerity that set the province on a path for future stability and growth. Circumstances are looking a lot like today, major deficits and inflexible ideology against raising taxes in the face if reduced resource revenue and associates economic activity, i.e. bad bet on the price of oil.

#178 maxx on 07.28.15 at 8:47 am

#23 Kilby on 07.27.15 at 7:10 pm

“Hasn’t our Dear leader been putting all our eggs in the China basket?”

Absolutely. On a side bar, I know a couple that moved heaven and earth to avoid buying stuff made in China. In one instance, they searched for months to find a microwave oven NOT made in China and found it. Refused to leave it with the cottage upon selling. This was around 7 years ago.
We also avoid stuff made in China as much as possible as is a growing number of “consumers”.
Dependency, as it is unfolding, is a bitch.

#179 maxx on 07.28.15 at 8:53 am

#29 Ronaldo on 07.27.15 at 7:20 pm

“I was sitting back having a cool one and thinking about the labour market in Canada and the 6.8% unemployment rate.”

Only a bona fide blog dawg could post this! Excellent question that I also would love to get the answer to.

#180 Holy Crap Wheres The Tylenol on 07.28.15 at 9:01 am

#52 Smoking Man on 07.27.15 at 8:07 pm
Been studying the machine and how it backs our leaders..
I’m sort of in shock. The NDP is getting help from high level machine operators. Huh.. Perhaps he just has a commie mask, underneath, he’s another con…
Time will tell.. But he’s going to win.
Who knows… Who cares.. I’m calling it a day on Friday..
Freedom 56. I over shot by a year… Hopefully I can restrain the drinking.. Keep it from 9pm to midnight.
I need to focus on my writing…
Wifee poo don’t want to go to USA. She’s afraid of guns and phyco paths.
Had to turn down 3 amazing gigs…
Shit we do for love…..
_____________________________________________
I thought your children were all grown and gone and the wife didn’t have a job. So whats your excuse? Come on Smoking Man grow a pair. Shes afraid of guns and psychopaths. Jesus Christ man take her to Jane Finch and let her have a look around. You had better tell her you can’t take her to your Niagara Falls New York Casino because there’s too many guns and psychopaths. Ive lived all over the USA and its regional man, violence is regional. Compton CA, Baltimore MD, East St Louis IL, these are just some places to stay away from that are definitely violent. Yes its more violent than here but you can still find violence here in the great white north. Do your research and make the move. Or you could tell her to get a job and stay here if she loves you back!
Too many guns and psychopaths…………….that’s actually a typical dumb Canadian attitude towards the USA.
Good luck……………start drinkin buddy!

#181 West Jet Canary in Economic Coalmine? on 07.28.15 at 9:04 am

WJA West Jet just topped estimate earnings in the 2nd Quarter. Economic slowdown? Nope..earnings are up 19%..empty planes? Guess not compared to 2Q 2014. What a great hedge to oil..lower fuel costs for the airlines. Guess Joe O. really knew we are not in a recession after all!

#182 Holy Crap Wheres The Tylenol on 07.28.15 at 9:08 am

#120 Smoking Man on 07.27.15 at 10:25 pm
World wide Heavy machine sales down huge….
Damn.. Let’s hope Yellen don’t see that.
___________________________________________
This is what I have been saying. Sales are down all over for the USA and Europe for equipment. We have put major investments on hold due to the declining Canadian dollar. We probably will not purchase until next year third quarter. The lower Canadian dollar kills those of us that actual do manufacture here. The general masses think its all labor here and that the big savings is in our labor. They do not realize that the majority of processed materials come from the US and that most of the machinery used to process these materials also comes from the US. In the end it means everything we produce here is going to cost more to make. Believe me there is not that big of a savings in the labor portion of finished goods made here to make a difference.
So as I mentions to everyone get ready to pay more for everything soon!

#183 Axehead on 07.28.15 at 9:10 am

45 Don; 50 CP; all other supporters of socialism (NDP).

Once you realize that all politicians need to say what you want to hear in order to survive the vote, then you would be wise to look beyond the rhetoric and see the philosophy behind their decision making. The NDP are a socialist party and are philosophically naive in that socialism depends fully upon the honesty of the masses (including the rulers) in order to work – good luck with that. History shows socialism is a failed concept, in it’s extreme forms- i.e. communist regimes around the world and less harsh forms here at home (recent Ontario, BC, now Alberta provincial governments – to be seen).

I agree with Ronald Reagan, in that the best government is the least government. Socialism is the most government; it’s fundamentally flawed, regardless how impressive the rhetoric behind the talking heads. The NDP will, in the end, make us all more equally poor.

#184 Incubus on 07.28.15 at 9:23 am

“And then there’s the Dipper factor. Yikes. A Globe/Nanos poll just published found 47% of people think a federal NDP government would be positive for the economy as opposed to 31% for the Cons and 41% for the Libs. ”

Actually they are right, but not for the good reason because most of them would loose their job for lack of investment in Canada.

The winner would be Alberta because the toonie would crash to 50 US cents and oil and gas production would get more loonies for their product.

Bombardier would be also a winner.

#185 Internal Auditor on 07.28.15 at 9:28 am

@#49 Ronaldo
I’m all for buying, just not betting the farm (which you have wisely avoided). Play money is a good way to bet on the upswing, quite volatile last week which could have made for good profits. I bought XGD and am holding it in my RRSP. My holding period for the RRSP is ~30yrs but I’ve played short term mining stocks in my TFSA to bet on the movement. Happy trading sir!

#186 Victor V on 07.28.15 at 9:33 am

#149 Tim on 07.28.15 at 12:30 am

Besides, the Cons have ruined our international reputation.

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

Canada named the country with the best reputation by global survey — again

http://news.nationalpost.com/news/canada/canada-named-the-country-with-the-best-reputation-by-global-survey-again

#187 newtoETFs on 07.28.15 at 9:42 am

US and global exposure – hedged or non?

#188 Sideshow Rob on 07.28.15 at 9:56 am

Today Janet Yellen will get in front of a microphone and announce that higher interest rates are coming right on schedule. Blah blah blah. They truly would love that to be the case.
Don’t believe it. Behind the scenes interest rate and commodity derivatives are blowing smoking holes in balance sheets across the world. My sources are telling me that rate hikes are on hold indefinitely and QE 4 is on the table if not already on the tee.
And no, my sources are not the same clueless Bay street “outsider” economists who constantly get blindsided by reality. Things are getting serious again.

#189 John in Mtl on 07.28.15 at 9:59 am

#178 maxx on 07.28.15 at 8:47 am

We also avoid stuff made in China as much as possible as is a growing number of “consumers”.
Dependency, as it is unfolding, is a bitch.

Ditto here! It is hard however, to find quality stuff not made in China.

#190 Llewelyn on 07.28.15 at 9:59 am

Canada needs to define the role they wish to play in the avaricious chase for increased profits being led by multi-national companies and syndicates of extremely wealthy investors. Canada has morphed into a suzerainty and I can’t say I like our future under this arrangement.

There are dozens of very poor countries around the world that have become pawns in the global economy. They survive by pimping out their citizens as a source of cheap labour and agreeing to accept the political ideology of their feudal lords. Multi-national companies strut around bragging about how they are eradicating poverty by offering employment to the third world. Unfortunately history has no shortage of examples of what happens when exploited workers in underdeveloped countries demand a more equitable share of corporate revenues or elect a “left” leaning government to improve their quality of life. Ouch!!

Sadly the corporate elite view Canada as a market for their goods, as a source of convenient raw materials or as the location for branch plants supported by various concessions. Whenever Canadian governments and corporations have attempted to improve their balance of trade the bully next door donned their colours, revved up their motorcycles and reminded us who was in control.

The softwood lumber dispute, the Avro Aero, the auto pact, mandatory country-of-origin labeling to limit the export of livestock, the American Recovery and Reinvestment Act, the six-year delay in the international permit for KXL to cross the Canada-USA border, opposition to the Canadian Wheat Board, restricted access of Canadian pharmaceutical companies to US markets, etc. all reminded us of who was the top dog in the food chain. Even the Maple Leafs won the odd game.

My point is that our trade balance with the United States is declining with each passing year and our current government seems frozen in the headlights. When the leader of the opposition proposes a shift in direction to expand our international profile cheerleaders for our suzerains call him a socialist and trot out the specter of higher taxes and lower productivity.

Lets face facts. Sweden is Sweden, Norway is Norway, even Cuba is Cuba but Canada not so much. We have allowed our country to become far too focused on our neighbour (not neighbor) to the south and we are paying the price.

Our political autonomy is more imagined than real and it is definitely time for a paradigm shift.

Continuing to allow external forces to control our destiny should not be an option come October.

#191 cramar on 07.28.15 at 10:16 am

Recently got a brief visit from my son (and GF) who lives in Chicago. Conversation mostly on dogs and RE—in that order, in that amount! What else do you talk about?

He says Chicago RE prices are rebounding nicely. Seems any property that is priced below the market (beater) is snapped up within a week. He bought his first condo at the peak of the market only to have it lose 30% of it’s value. It is almost back to what he paid for it. The other two condos were bought distressed when the market was down so they have appreciated to compensate.

What I found interesting is that he decided to track all costs for the rental condos with a spreadsheet (what is an MBA for), with rents, mortgages, upgrades, maintenance, everything. He said he was surprised to finder he is realistically only making 4% a year! Then he said, “Maybe I should sell the rentals and just invest the money.” Thought I was listening to Garth!

Then he proceeds to tell me that a few years ago he put a bit of his investment capital into an index fund and in last two years it has returned 30-35% a year! He said his MBA prof said the best investment was to just buy an index fund and sit on it since over the last century the stock market (U.S.) has trended up.

Maybe selling the condos would be wise decision.

#192 cramar on 07.28.15 at 10:24 am

#169 drydock on 07.28.15 at 4:08 am

#83 Henry on 07.27.15 at 9:04 pm

One thing about puppies is that if things get really bad, you can cook and eat them like the Inuit used to do with their sled dogs!
……………………………………………………………………….

This poor attempt at humor evokes images which i find extremely offensive.

————

Amen!

To paraphrase George Bernard Shaw, “Dogs are my friends, and I don’t eat my friends.”

#193 Pete on 07.28.15 at 10:28 am

I know Thomas Muclair and have worked beside him. Have you? — Garth
————-
The scary thing about NDP governments is usually not so much the leaders, but the gaggle of crazies that come in behind him / her and get their hands in the cookie jar (meaning mainly their hands in your wallet) – usually a bunch of radical trade unionists, unreconstructed Marxists and an assortment of other looney leftist types. Rae seemed like a (relatively) moderate type, but the bunch he dragged in with him were certainly not. Same I suspect with Notley and Mulclair.

#194 IHCTD9 on 07.28.15 at 10:29 am

#162 kommykim on 07.28.15 at 1:27 am

Ah, the old Laffer curve! The one that has been proven to be BS peddled by the 1% to lower their own taxes? You make me Laugh.

Laffer curve is BS?

Would you go to work if you had to pay 100% income taxes?
How about 99%?
How about 98%?
95%?
90%?
How about 85%?
Would you go to work if you had to pay 80% of your earnings to the government?

The black market (in Ontario at least) is BOOMING – I mean EXPLODING . It’s actually hard to get 3 quotes on a new roof without at least one of them offering a side deal. Need repairs on your car? Drywall job? Deck built? Landscaping? Need a little backhoe or dozer work? Windows or doors installed? Need your Lawn mowed? Paint job for your car? Siding on your house? OMVIC has bots on KIJIJI trolling for curbsiders for crying out loud. Ontario Provincial government is loosing out BIG right NOW, and has been for a while – it was one of the things that Sousa wanted to crack down on.

The effect of abusively high taxes lowering government revenues has already been demonstrated in action. Folks WILL eventually choose government assistance, UTT work, curb-siding, side jobs, LT disability, and a myriad of other income supplements or outright replacements instead of working 4 days a week for the various governments the are subject to.

You seriously think the majority of folks would get up every morning to slave for 40-50/hrs a week only to give 80+% to the government? (LOL!!) Lay off the conspiracy websites…

#195 BS on 07.28.15 at 10:30 am

We’d also have an intelligent lawyer at the helm who has indicated he strives for a fairer Canada, and a Canada that is respected again on the world stage as supporters of peace. A welcome change from the current administration no?

Lawyer? Now that is a respected and honest profession isn’t it? You can always trust a lawyer.

Respected by who in the world? ISIS for not fighting back when they threaten Canada and call for terrorist attacks against us?

Fairer for who? Those that prefer not to work?

The NDP will be fair in that they will try to bring everyone down to the lower middle class. No reason to work hard because the government will take most of what you earn. Socialism is a proven failure. The 1% will just move because they can, business’ close up as the economy shrinks and leave those who remain with less. There are no winners with socialism.

#196 lola on 07.28.15 at 10:32 am

There are a lot of people on here crying that an NDP government will mean higher taxes and fees. I am a member of the working class in Metro Vancouver. We are already extremely overtaxed and user fees and tolls on everything. I really have to question: How much higher could they possibly raise taxes and fees??? We don’t have any more money for higher taxes and fees. You can’t get blood from a stone. We have ruled by right wing parties for the past 15 or so years and we have seen taxes and fees shooting up. People like me actually associate higher taxes and fees with right wing parties because that has been our experience.

#197 Sideshow Rob on 07.28.15 at 10:37 am

#140 Hawk
Beware of chasing dividend yield. It seems like a good idea right until the company cuts it’s dividend. Canadian banks are safe enough dividend wise but the resource based companies not so much. Not only that but once a dividend gets reduced or cut completely, the share price ends up getting clubbed like a rented baby seal. Bad scene all around.

#198 Rational Optimist on 07.28.15 at 10:38 am

135 will on 07.27.15 at 11:41 pm

“to the unitiated, they are “communist” countries. Key point: they are NOT communist. They are business oriented.”

The Central Asian countries you mentioned have kleptocratic systems of government modelled on the Russian one. Uzbekistan’s president was the Secretary of their Communist Party before the USSR’s dissolution; Tajikistan has had the same leader for more than two decades now. It’s not entirely relevant, as these countries are controlled by oligarchs.

These countries are messes. No, they’re not socialist, they dropped “People’s” from their formal titles twenty-five years ago. But they are in plenty of ways command economies. Now, they are run for the benefit of only some of their people. I’m sure there bizniz party is going great, presuming you are one of the cronies. Just like before 1990.

#199 Mike on 07.28.15 at 10:42 am

“15-20% Canadian stuff”

I have been investing a long time and I am sorry to tell you that history does support investing so little in Canada. Back in the 90s and the early 2000’s, its was all about US market and global equities. You paid a heavy premium to get in and these investments simply did not perform. You started at huge disadvantage, 40% weaker dollar. Hard to make up the difference. You win buy investing in US and foreign equities when the dollar is closer to par. And no, hedging does not magically make the dollar par value, hedging is averaging in at current market prices. Our saving grace at the moment is that global currencies have all depreciated with the US dollar so you can invest in Europe at better rate than the US. So sure, invest in the global market place, but to sell your Canadian equities, REITS, ETFs, Dividend funds to invest in the US and Japan and wherever at such a low point in the Canadian Market because of our oil exposure is short-sighted , you just don’t know what can happen in the geopolitical world and how that can affect your investments. If you have a plan, stick with it, make slow changes. The US dollar is rolling over, so watch it closely, and then make incremental moves.

#200 JacqueShellacque on 07.28.15 at 10:48 am

It looks like the shortsellers on Wall Street clearly have Us in their sights: http://business.financialpost.com/investing/how-short-sellers-are-building-up-a-new-front-in-their-war-on-canadian-stocks. Bear (inverse) ETFs….is this just market timing, or a legitimate part of the balanced portfolio. Garth?

Stay away. Pure gambling. — Garth

#201 Edward on 07.28.15 at 10:51 am

Home ownership rates drop to 63.4%, lowest since 1967 – in the US.

http://www.cnbc.com/2015/07/28/home-ownership-rates-drop-to-lowest-since-1967.html

Folks learned a valuable lesson. Coming here. — Garth

#202 Daisy Mae on 07.28.15 at 10:59 am

#32: “I know quiet a few people who want to vote ndp…. I’m scared if they get elected.”

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

The pendulum swings, we overreact. Never fails. NDP on any level — provincially or federally — is disastrous. Can it get any worse?

#203 Look at this stat... on 07.28.15 at 10:59 am

And in Canada?? Complete buying chaos ….LOL

http://www.cnbc.com/2015/07/28/home-ownership-rates-drop-to-lowest-since-1967.html

#204 Ponzius Pilatus on 07.28.15 at 11:10 am

#29 Rinaldo
Am thinking that it would be interesting to see the unemployment rate expressed in dollars instead of just body count to see just how bad the unemployment situation really is. Just my thoughts on this.
——————————
Exactly my thoughts, too.
A good first step would be using the FTE (full time equivalent) concept.
Currently, a laid off part time worker is counted as full time.
As so many jobs are being down graded to part time, the actual unemployment rate is vastly understated.

#205 Edmonton Fool on 07.28.15 at 11:37 am

Hello Garth,

Can you please explain how is this going to affect the real state market?

http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-announces-new-rules-to-make-it-easier-for-homeowners-to-rent-out-property

#206 LL on 07.28.15 at 11:39 am

#9 – JSS
I will commence purchasing shares of the Big-six Canadian banks,…

I just read book on real estate in Canada and even if Canadian banks looks good, they are not in good standing as they want you believe they are.

Do some search first…

#207 Pre-Retiree on 07.28.15 at 11:51 am

#17 Frank: Haven’t rebalanced since April. Obv my CDN portion is way down due to a drop. Should I rebalance now or wait a bit longer?

Also my ‘safe stuff’ is all a CDN bond index fund. Should I diversify that?
_____________________________

Good question Frank. Now comes my yearly time to rebalance. So, the dogma says sell some of my well-performing US ETF to plunk it into my descending Canadian ones? Anyone?

#208 Republic_of_Western_Canada on 07.28.15 at 11:52 am

#197 Sideshow Rob on 07.28.15 at 10:37 am

#140 Hawk
Beware of chasing dividend yield. It seems like a good idea right until the company cuts it’s dividend. Canadian banks are safe enough dividend wise but the resource based companies not so much. Not only that but once a dividend gets reduced or cut completely, the share price ends up getting clubbed

More often than not, a substantial price spike upwards results when dividends are curtailed, as long-term investors believe value will accrue with the company when those are not paid out. It’s when business prospects continue to stink afterward that market prices crash.

If a company is built upon massive debt leverage however, like the hundreds of U.S. back-yard frackers are, dividend cuts are pretty much baked in the day you buy the stock. Debt is a risky business model, just like burning billions in venture capital was in dot-com era. Once the VC or present cheap debt is turned off, there goes your primary revenue.

I’d rather have the cash payout, but if that’s the difference between corporate survival to fight another day vs bankruptcy, I’d be willing to cut them some slack. Assuming they were any good to begin with.

#209 Jackie Stanford on 07.28.15 at 11:56 am

To Lola #196

Higher property taxes, garbage taxes, higher road tolls, higher sales taxes, new sales taxes, new income taxes, new tobacco taxes, new gas taxes, surtaxes, new land transfer taxes, higher transit taxes, fees etc.

For those that are renting and buying condos or living in condos, all this stuff raises your rent, condo fees, maintenance fees etc.

In British Columbia and Vancouver, there is Liberal and NDP in power of decades. They are not right wing.

In B.C.

#210 Chris on 07.28.15 at 12:01 pm

Is there really any difference between the Liberals’ proposed 4% tax hike and whatever the NDP are going to do? (The NDP haven’t even announced their tax policy yet, as far as I can tell.)

I mean, the Liberal plan will push the combined top marginal rate in New Brunswick to 58.25%. I think it’s a little crazy that no one in the media is willing to call them on how unrealistic that is. (Maybe it’ll work, but it pretty much strangles the province’s ability to raise taxes in the future, unless you think high earners will sit tight in the face of 60%+ tax rates.)

#211 Paul on 07.28.15 at 12:07 pm

#36 Rodthebod on 07.27.15 at 7:30 pm

Garth, NDP fix is simple, increase spending and taxes?

Could you provide a link to that? TIA.

#212 the Jaguar on 07.28.15 at 12:07 pm

#166 – Jane. I agree with you that the NDP has a very good chance of being elected. Given the results in Alberta it would seem we have finally arrived at a point in history where younger people (millennials?) are taking an interest in the voting process. If they can’t buy houses or find careers and are generally feeling the establishment has cut them out of their share of the pie, then what do they have to lose by voting for change? And some who have supported the Conservatives in the past on the basis of strong fiscal management are growing weary of watching Harper the war monger. Sending troops to the Ukraine, threatening world leaders (Putin “you better get out of the Ukraine”), standing back from supporting the Iran deal due to a too cosy relationship with Israel, etc. You were elected to give us good government Steve, not to posture around like Canada is a huge world power. Just take care of business at home.

#213 White Crock BC on 07.28.15 at 12:16 pm

#132 dh on 07.27.15 at 11:27 pm

“Land of the free”?

Get stopped by a cop for a burnt out brake lamp? Have, say $1 large or more on you? They’ll take it (legally) and good luck getting it back…

NSA listening to all your phone calls and reading your emails…

Hell, you’re not even allowed to play online poker in the “Land of the Free”

#214 Holy Crpa Wheres The Tylenol on 07.28.15 at 12:19 pm

I guess this wont hurt Walmart?

http://www.msn.com/en-us/money/markets/chinese-stocks-destroy-dollar398b-in-us-wealth/ar-AAdz2H0

#215 raisemyrent on 07.28.15 at 12:21 pm

loved the puppies piece. Too bad I couldn’t share puppy stories. Our boy lost 2 canines yesterday, and overnight, the adult tooth came through on the one side. He got some other dogs bloody at the park last night hehe. 55lbs at 5 months and counting (large bernedoodle).
sigh. in the mortal world things keep getting worse. A buddy who is the only one I know with a questrade portfolio (albeit 100% canadian stocks) took the plunge overnight (gf pressure) on this dump:
http://webcache.googleusercontent.com/search?q=cache:QLjU85wszWIJ:www.remax.ca/bc/north-vancouver-real-estate/na—202-444-lonsdale-av-na-wp_id118307003-lst/+&cd=3&hl=en&ct=clnk&gl=ca

I hope cache works as the listing doesnt work well. 202 444 lonsdale in North Van. built 1981 (before the last 2 seismic code updates). North Van, which always reminds me of Edmonton (he used to live there too yuck). 278k he offered, for shared laundry, 1 bedroom, less than 700 sq ft, shitty windows, no idea on reserve fund, etc…

never mind that, my girlfriend’s mum and sister (with a PhD each) just secretly took the plunge on THIS dump:

http://webcache.googleusercontent.com/search?q=cache:uj8ydP1EtmcJ:www.remax.ca/bc/victoria-real-estate/na-1736-emerson-st-na-wp_id119471850-lst/+&cd=2&hl=en&ct=clnk&gl=ca

it’s 1736 emerson st victoria, you might have to go for google cache as the listing is off.
474k for a 4,000 sq ft lot, a 1,200sq ft 100 year old egg (the size of our penthouse), and a healthy 25 year loan. bank of mum for the 20% down. I had done spreadsheets on another dump they were looking at to no avail. I told my gf to tell her mum she could’ve gifted her other daughter the money and she would have close to a million at the end of the term, as opposed to a dump that will be worth nothing, having paid loads of interest and committed to always living there. mum thinks the land has intrinsic value…

as I said, sigh. my gf feels almost deceived that someone in their family could do something so obtuse.
cue the Smoking Man but how can 2 PhDs not know any better? there should be some obligatory finance courses. Not that that would make any difference…
I have no hope for people left in me. I don’t know how you do it Garth. I keep asking myself, do I live in a world full of idiots? wait, I knew I did.

So I told gf to tell her parents this long weekend that we wanted help with the 20% down payment to buy this:
http://www.realtor.ca/Residential/Single-Family/15904047/-705-550-PACIFIC-ST-Vancouver-British-Columbia-V6Z3G2

it’s a block from our place, by our dog park, and payments with 20 down would probably be the same as our current rent (gotta sell the lie). The idea is that she will get roasted for it being such a bad idea, then she can expose the bluff, and flip the argument to the one terrible decision that has already been taken in the family. I’ll let you know how she pulls it off.

#216 Republic_of_Western_Canada on 07.28.15 at 12:34 pm

#183 Axehead on 07.28.15 at 9:10 am

45 Don; 50 CP; all other supporters of socialism (NDP).
[…] The NDP are a socialist party and are philosophically naive in that socialism depends fully upon the honesty of the masses (including the rulers) in order to work – good luck with that. History shows socialism is a failed concept, in it’s extreme forms- i.e. communist regimes around the world and less harsh forms here at home (recent Ontario, BC, now Alberta provincial governments – to be seen).

I agree with Ronald Reagan, in that the best government is the least government. Socialism is the most government; it’s fundamentally flawed, regardless how impressive the rhetoric behind the talking heads. The NDP will, in the end, make us all more equally poor.

That depends on how bad things got before socialists (or any alternative) came to power.

The situation before Cuba, Russia, China, Iran, France in the 1700’s, even Germany in the ’30’s, and present-day U.S.A. (think Trump) had their revolutions had become intolerable under an incumbent system.

Socialism was originally just the masses reacting under a system which had become simply an oppressive tool. Not the present metered comparator on some continuous scale. Supposedly a measure to predispose them to bicker about some solution in a particular direction.

Whether it was the National Socialists revolting against an intolerable ‘treaty of versailles’, or the french peasants on Place de la Bastille revolting against astronomical taxation, or a fed-up U.S. population revolting against massive unnecessary immigration and wealth concentration, or occupiers on the Pearl Roundabout protesting food prices, the main theme is system change based on pain. Not ‘left’ or ‘right’ or red vs blue.

It’s only after a system gets so bad that people know they have to bring in the heavy equipment do you get radical political change. Not because some disaffected sandal-wearer with an attractive personality, driving a bus or changing sheets in a hospital or working in a tractor factory, convinces the majority that Marxism is wonderful.

Depending on how bad excessive immigration has really gotten in southern Ontario, or urban dilapidation, or food prices, or personal indebtedness, or repugnant ‘political correctness’ or other corruption, you’ll either have radical socialism voted in or not. Not because people think they have something to gain by increased taxes and government spending.

#217 Bottoms_Up on 07.28.15 at 12:34 pm

I know Thomas Muclair and have worked beside him. Have you? — Garth
—————————————
So you agree then? Why be covert about this?

The liberal leader surely has his issues too. But the liberal party is likely a stronger overall machine than the ndp machine.

#218 IHCTD9 on 07.28.15 at 12:42 pm

Daisy Mae on 07.28.15 at 10:59 am

The pendulum swings, we overreact. Never fails. NDP on any level — provincially or federally — is disastrous. Can it get any worse?
____________________________________________

I wouldn’t sweat it too much, If Mulcair gets in, it will likely be with a minority government. This would result in nothing getting done as the Libs and Cons are much more similar to each other than either one is to the NDP, and they would be blocking every effort of Mulcair if he got too extreme left. In action, it might even start to look like we are being governed by a quasi Conservative majority if Mulcair has to bend to the oppositions wishes every time he wanted something done – just like Martin had to do with Layton’s “my support for your cash” style of getting his way.

If the NDP somehow gets a majority – then yes, buy a bicycle, grow a garden, and hide whatever cash you have left.

#219 Republic_of_Western_Canada on 07.28.15 at 12:52 pm

<i. #92 bigtown on 07.27.15 at 9:18 pm

[…]

The Oil Sands needs an image that sells to the Global Market using a name change to Aboriginal Oil Sands and make sure 25% of the jobs go to our First Nation’s People so we can put a clean face on our oil and a national identity which shows our best and most valuable face.[…]

Nobody needs to dress up in PC horseshit just to make you happy. Refineries on the gulf coast are just peachy with the idea of heavy crude feedstock at 30 bucks.

#220 Spectacle on 07.28.15 at 1:08 pm

Just a comment on your entry,
#215 raisemyrent on 07.28.15 at 12:21 pm

Those buildings you noted, for investments, are a sad entry point.

The condo is a typical ancient nightmare of ongoing maintenance…unless the individual is in to great expenses in upgrades. And those upgrades will be essential. Can they say water leaks and re-pipe? Much.

That old house seems like a typical prairies house, so quaint and romantic. But never an investment, and why didn’t she buy a working farm if she wanted good land? Buy land, not land with a maintenance rental hog.

Great learning curve for them. And as the previous owners Laurene, they would be much better to have never gotten involved in this type of money eater type of real estate.
Thanks for your input, certain some people will see the light of your examples.

#221 Everything goes up, when will it come down? on 07.28.15 at 1:10 pm

Housing prices rises and rent rises. Boy it’s great to be a vancouverite.

http://www.msn.com/en-ca/money/homeandproperty/barbara-yaffe-vancouver-rent-increase-%E2%80%98tsunami%E2%80%99-expected/ar-AAdzkDO?ocid=mailsignoutmd

#222 David on 07.28.15 at 1:15 pm

Here is an interesting blog post on the state of Calgary office space.

http://wolfstreet.com/2015/07/19/calgary-canada-office-market-gets-crushed-oil-china-blamed/

#223 Josh in Calgary on 07.28.15 at 1:21 pm

#207 Pre-Retiree,
“Good question Frank. Now comes my yearly time to rebalance. So, the dogma says sell some of my well-performing US ETF to plunk it into my descending Canadian ones? Anyone?”

Uggh. My heart says to put it off, my head says to trust your system and stay balanced. The name of the game is sell high and buy low because you never know when the commodity slide and canadian exchange is going to turn.

Personally I’d tolerate a lower % in Canadian assets for now, but definitely look to rebalance if they slide more.

#224 Mister Obvious on 07.28.15 at 1:22 pm

So the recent success of the Pan-Am games has encouraged Toronto to seek the hosting of some future Olympic spectacle.

Torontonians! Please listen carefully to your western brethren. The 2010 Vancouver Winter Olympics are now six years in the rear view mirror. We remember nothing about the games themselves but a faint odor of financial disappointment still persists. Especially down at city hall where they are still coming to grips with the fact they will never be paid the $170 million they were promised for the expensively detoxified land upon which the village now sits.

Let’s be honest. The Olympic Games are not an international celebration surrounding the pursuit of human physical excellence any more than Christmas is a day for holy reflection upon the birth of the saviour.

Call the games what they are: High performance fuel specifically designed to drive the engine of real estate speculation.

You may be inclined to call me a cynic but I would dispute that handle. I just don’t care much for hypocrisy. If they called it the ‘International Land Speculation Festival’ I would respect the honesty and be the first to say “let the games begin and may the best developers win”. Unfortunately, Vancouver’s speculative plans largely backfired thanks to the GFC. Oh well, you win some and you lose some. After all, we’re talking about world class competition here.

Today we are left an ugly stack of overpriced concrete honeycombs built to dubious ‘Green Standards’. It took forever to sell the majority of them. Some are still unsold. Dozens more equally unattractive and even more dubious cubes have subsequently been poured right beside them.

The entire west side of False Creek is now monotonous grey cement adorned with a few 1950’s style Plexiglas panels featuring 16 square-foot balconies suitable for a hibachi and two aluminum lawn chairs. They overlook picturesque West 2nd Avenue which is choked with traffic day and night. A fantastic sporting legacy.

#225 Republic_of_Western_Canada on 07.28.15 at 1:25 pm

#176 Investorz on 07.28.15 at 8:32 am

[…]

Since canadian oil companies need $70 to make enough money to grow, and CEOs need to see oil stabilize when it does finally go up, jobs are not coming back to Alberta for a long time. No snap back.

You seem a little naive on why/how the last wave of ‘Alberta jobs’ occurred.

That was engineering help, trades help, and logistics help to support the first two, so that plant expansions could take place. The majority of capex expansion construction has plateau’d, and resulted in new big production capacity.

We don’t need any more further construction/expansion, because production will proceed forward at substantially higher rates than before all the new plant was built. The construction & expansion slowdown was predetermined when those projects completed, regardless of oil prices.

Ongoing production & plant maintenance for the next decades needs only a few percent of the labor and engineering that construction did. Construction and expansion is not the same as production. Get it?

#226 Ret on 07.28.15 at 1:25 pm

I’ll vote when, “None of the above,” gets placed on the ballot.

Unbelievable. Canadians will vote for their leader based on getting home mail delivery. Will we be ripping out all of the community mail boxes that have been put up in new subdivisions over the last 15 years? Who will be paying for the hiring of another 10,000 postal carriers?

Dumb question. I’ve got a bathroom mirror.

#227 LL on 07.28.15 at 1:29 pm

#205 – Edmonton Fool on 07.28.15 at 11:37 am
Hello Garth,

Can you please explain how is this going to affect the real state market?

To my point of view, this is not a rule/change to stop/slow the RE market.
They just want we believe they are doing something about it (but anyway it’s late a bit)!

They don’t want the music stop…Too much $$$ makes for municipality (high evaluation/high taxes), realtors (high commission), banks/mortgage, etc….

#228 Rational Optimist on 07.28.15 at 1:45 pm

224 Mister Obvious on 07.28.15 at 1:22 pm

“So the recent success of the Pan-Am games has encouraged Toronto to seek the hosting of some future Olympic spectacle.”

It’s odd that I’m pointing this out to someone with your moniker, but the Pan-Am Games ended less than forty-eight hours ago. I would be suspicious of anyone who would claim them a “success” yet, since most of the promised benefits were long-term. Also, can someone point me to somewhere where the provincial government listed the criteria by which the Pan-Am games would be judged a “success” or not? No?

Thank you for your words of wisdom, though, about the “successful” games your city hosted. Most citizens of the GTA know that the Olympics is not something we would want. The “leadership,” however…

#229 Drill Baby Drill on 07.28.15 at 1:45 pm

#186 Victor V
“Canada named the country with the best reputation ”

The problem with this is the girl with the worst reputation is the one who gets asked to the dance.

Good girls go to Heaven. Bad girls go everywhere. — Garth (channeling Meatloaf)

#230 raisemyrent on 07.28.15 at 2:02 pm

#220 Spectacle on 07.28.15 at 1:08 pm

thanks for the input. I might pass it along. ironic, as bank of mum is run out of an actual working farm up island.

I also forgot to mention that my buddy proudly intends to spend $10k on the north van condo before moving in to make it liveable (still no washer and dryer though). I just sent him an updated spreadsheet showing his future losses. Had to walk him through it yesterday, he had all sorts of questions. I just said, these are all the things you would have been looking at before putting in an offer, should be no surprises (everything was a surprise).

updated a spreadsheet for gf’s sister. not sure what the point is. but maybe they will pass it along. I told my gf to start practising her “I told you so”s

ps Victoria Real Estate Update, I did compile a summary of your posts and sent them through. Not sure if they fell on deaf ears, but your work was valued at least by a couple of us at the time. Some people just never learn, though.
Even my friend who bought a bungalow in small town quebec who is deeply underwater on it now will not sell ‘to avoid losing money’. her plan is to make up her reno and mortgage loses $100 a month at a time…
sigh, now how am I to get through my day now? Puppies.

#231 dontcallmeshirley on 07.28.15 at 2:05 pm

Well Garth…you have to respond to the CMHC announcement to increase rental income allowed for debt service purposes. Don’t duck it. Step up.

A mere $300 / mth of extra rental income = $90k of borrowing power.

I shall be mentioning this later today. — Garth

#232 jess on 07.28.15 at 2:06 pm

layering
how to avoid residency audits
the use of limited liability companies to hide the identity of real estate buyers
http://www.nytimes.com/2015/07/21/nyregion/new-disclosure-rules-for-shell-companies-in-new-york-luxury-real-estate-sales.html?_r=0

#233 Obvious Truth on 07.28.15 at 2:18 pm

Bears are sweating. It’s hot out there!

#234 Danforth on 07.28.15 at 2:23 pm

Hi readers,

I’m looking to set up a HELOC, just in the rare case I need to mobilize money on very short notice. It might be quick down payment money if the right property comes along in a fast paced market.

My local branch where I do my day-to-day banking has advised me that there is a $485 set-up fee for this.

Does this sound familiar?

I want to do this where I do my regular banking, because I want to be prepared in the event of any urgent need to mobilize monies, and inter-institution transfers can cost several days, particularly with weekends.

Thanks for any guidance

#235 eddy on 07.28.15 at 2:31 pm

Now that cmhc has cracked down on fake letters of employment,
Its nice to see they will accept fake rental agreements. Party on.

#236 Daisy Mae on 07.28.15 at 2:32 pm

#226: “Canadians will vote for their leader based on getting home mail delivery…”

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

Yup! In which case, we’ll get what we damn well deserve.

#237 dontcallmeshirley on 07.28.15 at 2:36 pm

I shall be mentioning this later today. — Garth

Tell us who you think made the decision and who they’re beholden to.

#238 Janet Fusilli on 07.28.15 at 2:53 pm

DELETED (Anti-Chinese)

#239 kommykim on 07.28.15 at 2:55 pm

RE:#194 IHCTD9 on 07.28.15 at 10:29 am
Laffer curve is BS?
Would you go to work if you had to pay 100% income taxes?
How about 99%?
How about 98%?
95%?
90%?
How about 85%?

I see that you’ve failed to understand how progressive tax rates work. Understand that, and you’ll understand why the Laffer curve, trumpeted by Dick Cheney and Donald Rumsfeld in 1974 is bunk.

#240 Dale in Alberta on 07.28.15 at 2:56 pm

Does anyone know what happened to squidly77 and his bubble blog? I heard he got sued for defamation…anyone know anything about it?

#241 Victoria Real Estate Update on 07.28.15 at 3:04 pm

# 230 raisemyrent

What day did you send through a summary of my posts?

#242 lee on 07.28.15 at 3:05 pm

#231 shirley,

The new CMHC rules are yet another example of the fact the governments will do everything and anything to keep the real estate economy rolling especially now that oil and commodities and manufacturing have tanked. Next I expect we go back to longer amortization periods, using TSFA money for down payments and even allowing couples to have two tax free principle residences (that would be huge). You all keep waiting for Garth to pull the trigger and tell when the crash in Toronto will happen. It never will. At most we will see prices stagnate against inflation. No 750000$ Forest Hill properties to be had, not now, not ever. You can’t even find a decent property for that in Aurora forty kms to thee north. The government will always be on the side of money.

#243 Axehead on 07.28.15 at 3:28 pm

#216 Republic.

Your examples support my post: look at what socialism (when initially inacted) did for Cuba, Russia, Iran, and even France. I wouldn’t include the USA in this list…they went the other way – capitalism, after shaking the bonds of taxation from their British oppressors.

The direction towards socialism is always frought with more taxes, more wealth distribution, more government, more control, less freedom.

#244 Lisa Chardin on 07.28.15 at 3:37 pm

I find it sad how many Canadians have short memories. This is particularly true with people in Ontario and the NDP.

It was Dalton McGuinty and Buzz Hargrove who wanted Harper to have a low interest policy like Japan and a low Canadian dollar.

These guys, Liberal and NDP folks blamed Harper for not doing this.

This is just after the 2007 to 2008 world financial economic and financial crisis that they made these strong comments.

Now, we have almost Japan like interest rates and a $0.773 cent dollar versus a $1.10, almost 40% down from the peak, and going probably down to to 72 to 73 cents in coming months.

We now have what the Liberal and NDP big wigs mentioned above wanted and it is Harper’s fault again.

People are their worse own enemies. This is why credit card debt, payday loans, reverse mortgages, lines of credit, car loans and any other debt they can pile up on debt mountain, until the day they are no longer on this earth.

What a joke! People got so fooled with these low interest rates and low dollar policy. Now accept it and pay through the nose.

#245 Nosty, etc. on 07.28.15 at 3:48 pm

SMan — Yet again, it appears you are correct, but the morons that are in charge of this particular scare-mongering tactic have to keep the charade going at all costs, in order to support other parts of the world’s economy.

This “human caused climate change” is an easy scam to separate sheeples from their money via carbon taxes {privatize profits for the wealthy few, socialize losses for the masses} in this communist / socialistic-run world, and further evidence shows this is the reaction the hushed crowd gave Billary after her speech on said topic. Stunning!

#246 Holy Crap Wheres The Tylenol on 07.28.15 at 4:10 pm

#244 Lisa Chardin on 07.28.15 at 3:37 pm

100 #$^&*king % correct!

#247 Blaine Ridgecrest on 07.28.15 at 4:13 pm

On the subject of bringing back Mail Delivery, has something like this ever happened before? Some service has become outdated or no longer reasonably feasible and then it’s ended but brought back later through government? A question for the historians! What else could we ask to be brought back? Milk delivery?

#248 Shawn on 07.28.15 at 4:21 pm

Energy Sector Jobs

Republic of Western Canada at 225 said:

Ongoing production & plant maintenance for the next decades needs only a few percent of the labor and engineering that construction did.

*************************************
That is an excellent point and one seldom, if ever, mentioned.

Many large scale industrial plants operate with few employees.

The amount of capital spending in the oil sands in Alberta was enormous. I never saw the dollar figures compared to the Alberta budget for example but from the memory the total capex was quite large if compared to the Alberta government budget (like 50% or more I believe). One HAS to put numbers into context for them to have meaning.

The point is that once put in context it becomes clear that kind of capex never was sustainable for long. And if many of the energy sector jobs were dependent on that capex level then those jobs NEVER were sustainable at those levels.

#249 Entrepreneur on 07.28.15 at 4:33 pm

I laugh when someone mentions the NDP here in B.C. and how bad they were but no mention of the B.C. Liberals that have been in power for about 16 years now.

They are still in power and guess what? We, the taxpayers, get to find out the winning name of the ferries today. Oh what joy. BTW, we get to pay for the ferries built in another country. Liberal ex-premier Gordon Campbell has 3 ships built in Germany and Liberal Premier Christy Clark had ships built in Poland.

We have to move to another country to get work as our premiers are sending projects out of our province.

Had enough of this “slap in the face” here in B.C. Since we are talking parties we will never vote for the Conservative or Liberals provincially or federally. As for high taxes, our taxes are going through the roof and everything else plus less quality.

#250 raisemyrent on 07.28.15 at 4:38 pm

#241 Victoria Real Estate Update on 07.28.15 at 3:04 pm
# 230 raisemyrent

What day did you send through a summary of my posts?

May 12 or so, and the most recent post included was from May 10. They kept us in the dark since and had discarded the house for being too run-down, then surprise surprise the deal went through on another one.

#251 dontcallmeshirley on 07.28.15 at 4:39 pm

#242 lee

Lets see if Garth agrees with you.

CMHC’s blessing of 100% rental income will encourage a lot of mortgage application fraud. Mortgage brokers and bank mortgage specialists must be licking their chops.

The only thing required in a mortgage app to substantiate rental income is a copy of a lease.

#252 IHCTD9 on 07.28.15 at 5:05 pm

I see that you’ve failed to understand how progressive tax rates work. Understand that, and you’ll understand why the Laffer curve, trumpeted by Dick Cheney and Donald Rumsfeld in 1974 is bunk.

Sure no problem, but first you tell me you would carry on going to work even if through various means 90% of your pay ended up in the government’s hands.

Then you can explain to me how the massive and ever increasing underground economy in Ontario has nothing to do with overall taxation.

Then I’ll consider if it is worth putting any time into “understanding progressive taxation”…

#253 Blacksheep on 07.28.15 at 6:05 pm

Dontcall # 251,

“CMHC’s blessing of 100% rental income will encourage a lot of mortgage application fraud. Mortgage brokers and bank mortgage specialists must be licking their chops.”
————————————————
The RE bears have to realize the canadian economy is in some pretty deep shit, with manufacturing gone and commodities weak, what’s left?

The system is going to protect the only golden (tarnished?) goose they have left.

#254 Kev on 07.28.15 at 6:51 pm

Garth, when you talk about the NDP creating a 25% HST it absolutely destroys your credibility as an analyst. It’s just an absurd thing to say that I would expect from the comments section of the National Post.

Agreed. But I did not say it. — Garth