Spawn

SPAWN

A third of all real estate buyers in the godless GTA will be virgins, says a local broker who just did a survey (so it must be true). The average they’ll spend, with closing costs, will be half a million. The average downpayment (thanks, Mom!) will be 22%, or about a hundred grand. The average age, assuming these are Millennials, will be 26.

And thus it begins. A lifetime of managing debt.

Of course, half a mill doesn’t buy a whole hell of a lot in Toronto these days. The average detached is over a million, and even a slanty semi on a street where small rodents go to die is at least sevenish. Condos in 416 average about $420,000, and if you want a townhouse for under five, you have to travel to a place like Milton, where the Internet’s not hooked up yet. But you can keep a cow.

Prices are high because rates are low. And people are nuts.

Did you catch those two scary polls yesterday? Manulife released  an “investor sentiment survey” which showed how much we suck at being investors. Over a third (34%) think it’s a good time to invest in cash. Cash. Seriously. With a bank savings account paying 0.6% (on a minimum $5K balance), the interest fully-taxable, and inflation at 1.5%, this is a formula for losing money.

Americans get it. Only 13% of them think cash makes sense.. But then, 60% of US investors are confident investing in equities, while here that number plunges to 44%. Of course, above all, people here want a house. The homeownership rate of 70% should be pushed to 72.5%, says our prime minister, while in the States it has dropped to a 40-year low of 63%. Even scarier, with real estate values at record levels, most of your neighbours, colleagues and confused family members swear this is “a good time” to take the plunge into real estate.

Which brings us back to the moist Millennials and their average $400,000 mortgages, taken out at the lowest five-year fixed rate ever.

Here is the second survey, this one from BeeMo. Just in time for Hallowe’en and the new series of Walking Dead. The bankers found if monthly mortgage payments were to increase by $500 that 16% of people would be utterly screwed, another 27% would be somewhat screwed and a further 26% would worry about being screwed. In short, about 70% of everyone owning a home would be negatively impacted.

In practical terms on that $400,000 moist Millennial mortgage, that would mean a change in the fixed-term five-year rate from the current 2.5% to a little less than 5%. Is it possible for rates to do that within the next five years? You bet, kids. In fact, most economists I hang with fully expect when the Fed starts moving that rates will increase 1% a year for at least the next couple, with Canada following along.

Even if you don’t actually believe it, you should probably get ready when the cost of money’s at an historic low. Which ain’t happening. Says the bank:

“Statistics have shown that debt service rates have not changed very much from the early 1990s, when interest rates were much higher. It appears that many Canadians have used low interest rates to get larger loans on more expensive houses rather than to aggressively repay their debt.”

Well, there ya go. What else are we to expect when we’re breeding a culture of indebtedness into all that spawn? The deadly combination of the Bank of Mom (providing kids with money they neither earned nor deserve to buy an asset they could not otherwise afford) plus financial illiteracy (houses good, other stuff risky) is setting us up for a giant societal surprise.

Most people are unbalanced in their financial lives, and totally undiversified. They have embraced that one-asset strategy that’s concentrating most of their net worth in a house, and at the same time have snorfled debt which will certainly reset at higher rates. They have zero Plan B. Worse, they think houses have increased in price because they’ve grown more valuable. In reality, houses trade for more because carrying costs have fallen. Once that changes, so does everything else.

Sadly, the men running to be prime minister would rather pander to the house lust than help families become financially secure. If they understand what they’re doing, God help them. If they don’t, she’d better help us.

182 comments ↓

#1 West Coast on 10.06.15 at 4:54 pm

jeez and I thought I had funny looking legs…..made my day

#2 TurnerNation on 10.06.15 at 4:54 pm

TSX set to rally. Dollarama stock not so much (a fright-to-quality).

#3 Harry on 10.06.15 at 4:58 pm

Harper government partnered with industry group fighting CRA over KPMG case

Minister championed ‘collaboration’ with CPA Canada as organization was battling tax investigators

“The Harper government forged a partnership with a major Canadian accounting association, formalizing it as an adviser to the Canada Revenue Agency, at the same time as the group was fighting the CRA in court to shield the files of multimillionaires who had stashed money offshore.”

http://www.cbc.ca/news/business/harper-government-partnered-with-industry-group-fighting-cra-over-kpmg-case-1.3257994?cmp=rss

#4 Silent the people on 10.06.15 at 5:02 pm

She???

#5 Silent the people on 10.06.15 at 5:03 pm

Elizabeth May?

#6 zedgt87 on 10.06.15 at 5:13 pm

“Over a third (34%) think it’s a good time to invest in cash. Cash. Seriously. With a bank savings account paying 0.6% (on a minimum $5K balance), the interest fully-taxable, and inflation at 1.5%, this is a formula for losing money.”

Maybe so in the long run.

That said in 2015 a cash position (USD) has been the winner.

http://www.marketwatch.com/story/in-a-quarter-century-cash-had-never-beaten-stocks-bondsuntil-now-2015-09-25

If this correction continues (it will its not over yet) Holding cash will be a very profitable position for 2015 going into 2016.

#7 gil on 10.06.15 at 5:13 pm

Politicians and corporations always look for short term gain, no one is looking at the big picture.

#8 Mark on 10.06.15 at 5:20 pm

Demographically the young’ins will probably enjoy much better jobs, over time, than the boomers did. But they will probably face a higher overall long-term debt burden on account of paying excessively for RE and for education.

So for a select group of the young’ins, those who saved, those who avoided the housing bubble and invested in the relatively cheap and undervalued businesses that comprise the Canadian economy, there are excellent times likely ahead.

Still, I don’t understand why the “interest rates are going to rise soon” narrative keeps coming back. There is no evidence whatsoever to support it. The yield curve continues to flatten and the long end is well anchored with basically non-existent inflation expectations. The short end, especially in the USA, is foretelling explicit deflation and even negative policy rates. With the Canadian dollar surging as of recent, and soon to go much higher, deflation is likely to be explicit in Canada.

But for the homeowners, even 2.5% is an awfully high rate of interest to pay if the asset is losing 5%/year (or more) which is now a very likely scenario. A 7.5% spread between the cost of finance on the asset and the return on the asset. If Japan is any roadmap, with a similar demographic quagmire as faced in Canada, it could take a generation to fully liquidate the housing bubble and revert the excesses it has created.

#9 Mf on 10.06.15 at 5:21 pm

Well said Garth. Like I’ve mentioned a few times on here, everyone my age (32) thinks rates will never go up and have no intention on paying off these mortgages (sooo 1980’s to do that). Nobody trusts the stock market or understands it. Tons of fear out there with regards to stocks/bonds/ETFs etc.

Heck, the majority of the population that has ridden this housing market (gen x, boomers) are also pretty bad. Most I talk to are Scared of a repeat of the dot com Nortel bust and 2008 financial crisis. Many people think the market is a no win scam.

#2 TurnerNation on 10.06.15 at 4:54 pm

Had a co worker recommend Dol.to. PE is 35 according to my iPhone. I couldn’t believe how high it’s gone. There’s a Dollarama at every corner here in the Gta. Hard to believe they can maintain this expansion. The stores are nothing special to me. I didn’t buy in.

Any etf’s you are watching on the tsx?

Mf
Thanks for the blog again.

#10 Drill Baby Drill on 10.06.15 at 5:23 pm

Garth you have bunnions on both feet !!

#11 Fuzzy Camel on 10.06.15 at 5:39 pm

Sold, pocketed $200k, invested it, renting, no longer stressed about losing my job/house.

Garth, you were right about renting being better than being a debt slave. My job isn’t stressful at all anymore, I don’t have to worry about a mortgage payment. If I can’t make rent, I’ll just give the tribunal a hard luck story and drag out the eviction for indefinitely.

Screw it, I am opting out, no longer playing the governments extortion game. Housing can go to the moon, I refuse to buy based on principle now.

#12 broader mind on 10.06.15 at 5:39 pm

Oil (the real currency ) is set to take off.War’s will start given low or high oil pricing. Oil’s return to the mean will make it impossible for the fed to increase rates.America can’t frack their way out of this.Loonie will strengthen as America falters. Consider returning to Maple (energy).Free oil has been more damaging than free money.Canada will still have it’s day.Politics,Smholitics not really important. Unfortunately low oil didn’t stick around long enough to deflate our housing bubble. I guess I can only dream about that.Right Garth ?

#13 common sense on 10.06.15 at 5:53 pm

#8 Mark

I second your comment fully.

Mr. Turner, for the love of god, please share what your economist friends know that we don’t know about rates rising the next 5 years by perhaps 1% per year…

I KNOW they should, I want them too but our demographics say otherwise..it is the logical decision but with the abnormal conditions the past 81 months, what will make it different? Pretty please.

#14 MF on 10.06.15 at 5:54 pm

#12 broader mind on 10.06.15 at 5:39 pm

Looks like it, but not everyone is convinced.

“Why the worst commodity collapse in a generation is nowhere near hitting bottom yet”

->http://business.financialpost.com/investing/market-moves/why-the-worst-commodity-collapse-in-a-generation-is-nowhere-near-hitting-bottom-yet

As for our housing bubble, it will deflate under it’s own bloated weight when mortgages get so big they are impossible to service. I think we are nearing that point now. All the people thinking rates will NEVER go up need to remember that forever is a long time. Most mortgages renew every 5 years. A lot can change in 5 years.

MF

#15 Goldie on 10.06.15 at 5:55 pm

Many of the blog commenters use information such as what you cited today to make the argument that rates will be intentionally kept low long-term due to fear of creating a catastrophe for the indebted masses (of voters) should rates rise to a more “natural” rate. They also mention that low rates help the government service it’s debt as well.

I used to dismiss such claims, but as we look at the spectre of a decade of super-low rates for a recession that supposedly ended years ago, I’m starting to wonder…

If the US continues to surprise everyone by keeping rates low when there is really no reason to do so, I might start to take the arguments made by those commenters more seriously. I already have such little faith in these leaders that it wouldn’t really be that much of a stretch.

#16 Nagraj on 10.06.15 at 5:57 pm

What in the world has spooked who – that today the US 3mo T-bill yield closed a tad BELOW ZERO?

I associate this sort of thing with – other countries. Strikes me as Unamerican. (As does a continuation of ZIRP.)

People are willing to suffer a guaranteed loss to park their money safely in US T-bills.
What do they know the rest of us don’t?

#17 Ex-Cowtown on 10.06.15 at 6:01 pm

#12 broader mind on 10.06.15 at 5:39 pm

Oil (the real currency ) is set to take off.War’s will start given low or high oil pricing. Oil’s return to the mean will make it impossible for the fed to increase rates.America can’t frack their way out of this.Loonie will strengthen as America falters. Consider returning to Maple (energy).Free oil has been more damaging than free money.Canada will still have it’s day.Politics,Smholitics not really important. Unfortunately low oil didn’t stick around long enough to deflate our housing bubble. I guess I can only dream about that.Right Garth ?
++++++++++++++++++++++++++++++++

Interesting comment. If ISIS and/or Iran manage to engineer a coup in Saudi Arabia (looking increasingly likely) oil will look cheap at $100/bbl. Not a shoe-in, but not that long of a shot either.

#18 Freedom First on 10.06.15 at 6:03 pm

Debt is a lot like smoking. If you’re stupid enough to smoke, when you get cancer/emphysema/heart attack/stroke/etc. you yourself will shoulder all of the blame/consequences. All fingers will point at you saying-you did it. The profiteers don’t care about you.

With debt, when you lose everything, and I mean everything, the consequences fall on you. Witness the hundreds of millions of people world wide. financially ruined by their recent RE crashes. Garth added a new word today. Not only are people who, by their own actions, put themselves in these ludicrous vulnerable financial positions, Dickheads or Idiots, they are also Nuts. This is the truth. Trust me.

#19 NextYear on 10.06.15 at 6:07 pm

Garth,Garth,Garth, don’t you get it yet? Interest rate will not go up. Bernanke even said it himself that they would not go up in his lifetime. Everyone know it except economists… and so far we right. Rates cannot go up without pricking all bubbles everywhere so they won’t go up. Simple

For economist it is all about drinking the Fed Koolaid and now it has been pushed to next year… maybe even 2017 according to goldman sachs… then when we reach 2017 it will be 2018-2019. It’s been like this for the last 5 years.

#20 conan on 10.06.15 at 6:08 pm

” when the fed makes the move.”

monkeys fly
cows come home
blue in the face
a cold day in hell

years it is going to be years.

#21 Freedom First on 10.06.15 at 6:15 pm

#11 Fuzzy Camel

Congrats Fuzzy. You are beginning to feel the joy and on your way to total freedom. When you can live on passive income alone, you will be all the way there.

RE can be good. I have found when it drops 40-60%, the #s have worked and it paid me to own. I am a #’s man. A building is only a building. Home is wherever I live.

#22 paul on 10.06.15 at 6:22 pm

#11 Fuzzy Camel on 10.06.15 at 5:39 pm

Sold, pocketed $200k, invested it, renting, no longer stressed about losing my job/house.

Garth, you were right about renting being better than being a debt slave. My job isn’t stressful at all anymore, I don’t have to worry about a mortgage payment. If I can’t make rent, I’ll just give the tribunal a hard luck story and drag out the eviction for indefinitely.

Screw it, I am opting out, no longer playing the governments extortion game. Housing can go to the moon, I refuse to buy based on principle now.
———————————————————-
I thought you were a dead beat.
You just proved it!!!!

#23 Smoking Man on 10.06.15 at 6:22 pm

God damn, I love Boston..

I showed my hand too early, was even playing stupid on purpose, looks like I’m opening an office in Toronto.

Who needs a six figure job. Only open to hot female applicants.

Don’t worry, this old geaser will only be mind fk you. Is that a crime yet.

But I need some ladies that can sucker in old boomer managers who are dumb enough to still think they got it.

#24 Harbour on 10.06.15 at 6:27 pm

Chinese are now the top foreign buyers of domestic properties in the U.S.

http://finance.yahoo.com/news/chinese-money-flows-us-housing-182614144.html

#25 Smoking Man on 10.06.15 at 6:35 pm

The day you know you’re a lush.

You put your new Scottish billionare partner in a cab, he can’t walk.

You go back to the bar. Have a few more.

You wake up only to notice your 26 ounce of JD that you bought in the morning is empty.

Oh man…..

How do I keep functioning.

I’m definitely from another planet..

#26 Mf on 10.06.15 at 6:36 pm

#17 Ex-Cowtown on 10.06.15 at 6:01 pm

Possible but I don’t think it is too likely. That threat to SA has been around for a long time. ISIS is just a splinter of Al Quaeda with a new name. Lots of folks believe the Saudis also fund these groups to weaken their enemies and buy protection for the regime. The conflict in Syria diverts attention from the home front.

From what I have read, the fundamental change is large quantities of US oil, which is the new player in the market. For that reason alone 100$ oil is a little far fetched.

Mf

#27 Brunett43 on 10.06.15 at 6:37 pm

Today in Market Watch there was an article stating that 62% of Americans have less than $1000 in savings and 21% don’t even have a savings account. I wonder how bad it is here knowing that we are house horny and owe $1.62 for every dollar earned. (not me of course debt free with only a piddly mortgage) :o)

BTW…those are the ugliest feet I’ve ever seen, (grossed me out when I signed in) but the paws are quite cute.

#28 Eyes wide Open on 10.06.15 at 6:37 pm

Why does everyone think that only the Fed and BOC can raise interest rates. Rates for corporate bonds, and many non-sovereign government bonds (states and territories, etc..) have been going up for a while now. Just google some of the stories on companies hoping to issue debt at 6 or 7% only to be stuck issuing their bonds at 10% or more. This is also a sign of rising interest rates and there’s no reason why we won’t see financial institutions start doing this in 2016 which will also increase all the fixed rate mortgages they issue.

#29 Shop Guy on 10.06.15 at 6:42 pm

Note to all Metrosexuals out there: this is what wearing funky-looking, elf-like pointy shoes all day long will do to your feet (and it ain’t pretty!!) Best be wearing steel-toe boots like real men do….

#30 paul on 10.06.15 at 6:47 pm

#21 Freedom First on 10.06.15 at 6:15 pm

#11 Fuzzy Camel

Congrats Fuzzy. You are beginning to feel the joy and on your way to total freedom. When you can live on passive income alone, you will be all the way there.

RE can be good. I have found when it drops 40-60%, the #s have worked and it paid me to own. I am a #’s man. A building is only a building. Home is wherever I live.
———————————————————-
A numbers man ?
Like this
https://www.youtube.com/watch?v=d8Oe9SteE3M

#31 Smoking Man on 10.06.15 at 6:48 pm

BOC is cutting, gift to my favorite swaps traders. Going to miss you boys.

Brutal trade balance report, as oil ticks up hard.

Glad I rotated big chunk of my Usdcad bet into crude.

Archives from a few days ago.

Read it and bark my dogs.

#32 Steve French on 10.06.15 at 6:53 pm

Eek.

Those are some butt ugly toes….damn…

#33 Steve French on 10.06.15 at 7:06 pm

Report from Down Under:

My colleague just mentioned he transferred AUD $80,000 to his son to help pay for a downpayment on a house in Melbourne.

Said this is why he is still working in his 60s.

Bank of Dad indeed.

This is what keeps the Aussie real estate bubble going.

Sad.

And doomed.

#34 Mark on 10.06.15 at 7:25 pm

“Had a co worker recommend Dol.to. PE is 35 according to my iPhone. I couldn’t believe how high it’s gone. There’s a Dollarama at every corner here in the Gta. Hard to believe they can maintain this expansion. The stores are nothing special to me. I didn’t buy in. “

I don’t want to make a ‘prediction’, but Dollarama has an excellent retail platform with which they can get into the banking and pharmacy businesses. Both sectors of Canada’s economy that are ripe for low-cost competition.

Do they deserve P/E = 35? Maybe. Probably more deserving of that P/E than the Canadian housing market is, that’s for sure.

#35 Daisy Mae on 10.06.15 at 7:26 pm

“Sadly, the men running to be prime minister would rather pander to the house lust than help families become financially secure.”

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

Harper (the ‘economist’) led us down this path. He has zero concern for Canadians.

#36 Interstellar Old Yeller on 10.06.15 at 7:26 pm

a street where small rodents go to die

LOL. You nailed it. I cannot believe what semis sell for, nowadays.

#37 Porsche on 10.06.15 at 7:27 pm

Tax his land,Tax his bed,
Tax the table at which he’s fed.
Tax his work,Tax his pay,
He works for peanuts anyway!
Tax his cow,Tax his goat,
Tax his pants,Tax his coat.
Tax his tobacco,Tax his drink,
Tax him if he tries to think.
Tax his car,Tax his gas,
Find other ways to tax his ass.
Tax all he has then let him know
That you won’t be done till he has no dough.
When he screams and hollers;
Then tax him some more,
Tax him till he’s good and sore.
Then tax his coffin,Tax his grave,
Tax the sod in which he’s laid.
When he’s gone,Do not relax,
Its time to apply the inheritance tax.
Accounts ReceivableTax
Airline surcharge tax
Airline FuelTax
Airport MaintenanceTax
Building PermitTax
CigaretteTax
Corporate IncomeTax
DeathTax
Dog LicenseTax
Driving PermitTax
EnvironmentalTax (Fee)
Excise Taxes
Federal Income Tax
Federal Unemployment (UI)
Fishing License Tax
Food License Tax
Gasoline Tax (too much per litre)
Gross ReceiptsTax
HealthTax
Hunting LicenseTax
HydroTax
InheritanceTax
InterestTax
LiquorTax
LuxuryTaxes
Marriage LicenseTax
MedicareTax
MortgageTax
Personal IncomeTax
PropertyTax
PovertyTax
Prescription DrugTax
Provincial Income and sales tax
Real EstateTax
Recreational VehicleTax
Retail SalesTax
Service ChargeTax
SchoolTax
Telephone FederalTax
Telephone Federal, Provincial and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Vehicle License Registration Tax
Vehicle Sales Tax
WaterTax
Watercraft RegistrationTax
Well PermitTax
Workers CompensationTax

Not one of these taxes existed 60 years ago, & our nation was one of the most prosperous in the world. We had absolutely no national debt, had a large middle class, and Mom stayed home to raise the kids.

Ironic to see an Alberta tax-and-spend NDP supporter rip off and post U.S. Tea Party crap. — Garth

#38 MD on 10.06.15 at 7:29 pm

If FED are worried when to raise the rates by 0.25 how come economist have already predicted they will go up 1 percent a year.

#39 Daisy Mae on 10.06.15 at 7:31 pm

#4: “She???”

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

Having fun with a fictional character….

#40 paul on 10.06.15 at 7:35 pm

Nice legs
https://www.youtube.com/watch?v=HfEsmXbjcy

#41 Smoking Man on 10.06.15 at 7:35 pm

#30 Daisy Mae on 10.06.15 at 7:31 pm
#4: “She???”

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

Having fun with a fictional character….
….

We all have fantasys, mine would be a gorgeous hot young blond or brunette with a tong stud…

Not for what comes to your mind first mind you.

How do I dislodge this smokers plack from my teeth.

#42 Daisy Mae on 10.06.15 at 7:38 pm

#18: “If you’re stupid enough to smoke, when you get cancer/emphysema/heart attack/stroke/etc. you yourself will shoulder all of the blame/consequences….”

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

Except the associated costs on health care….which affects us all.

#43 BC Guy on 10.06.15 at 7:39 pm

The extreme housing bubble is due to the following factors:

– most high-paying jobs are located in the large city areas
– Canada has a very generous immigration policy, and the vast majority of the immigrants move to the GTA and GVA and other major centres
– Canada has a large land mass, but most land is unavailable for purchase: Canadian land is divided into three categories: crown land, private land and Indian reserve land: the provincial governments are sitting on vast tracts of “crown” land, making it unavailable for purchase; the large tracts of private land are bought up by large multi-national corporations and turned into cattle ranches or hay producing properties used to feed cattle and the land owners pay a tiny fraction of the taxes that you or I would pay if we bought a piece of the land to build a house
– all three levels of government don’t want you to buy land cheaply, they want “density”, they want people to live in dense urban areas, in high-rise condos or cramped suburbs, they want debt-slaves, tax-slaves

There needs to be a complete rethink of how land is allocated in this country, we need land reform, discourage the large multi-nationals from buying up vast tracts of land – make more land available in 5 acre lots to the average Canadian instead of forcing them to become indentured servants in a tiny condo or city lot. But as long as people keep voting Conservative, land reform will never happen.

#44 Godth on 10.06.15 at 7:41 pm

Those feet are a good advertisement about the dangers of high heels.

#45 TurnerNation on 10.06.15 at 7:43 pm

The rich love giving/tax writing off to charities…as long as those damn poor people stay out of sight and mind!

http://www.postcity.com/Eat-Shop-Do/Do/October-2015/Notices-for-homeless-shelter-on-Bayview-get-chilly-reception-from-Leasiders/

Residents of Leaside received a surprise this weekend when hoarding and notices went up at 1591 Bayview Ave. alerting the community to a homeless shelter that would be coming to the area near Bayview and Manor Road. **What many did not know, was that it was all a fabrication and cameras were rolling. **


The campaign, social experiment, or hoax — whatever you want to call it — was worked on in partnership with the advertising agency Leo Burnett Toronto and the production company Skin and Bones, who offered their services to the organization pro bono.

Leasiders’ reactions were filmed and a short digital film made from the footage is set to be released on YouTube next week, prior to the federal election on October 1

#46 Jeff in Moose Jaw on 10.06.15 at 7:44 pm

Looking around and found a couple NFB movies about Toronto in the 1950s. If I could only let these people know everything will be okay, these places will be worth a million dollars or more:

Toronto Boom Town: the contrast between the sedate Toronto of the turn of the century and the thriving, expanding metropolis of 1951. 10min
https://www.nfb.ca/film/toronto_boom_town

Farewell Oak Street: dingy flats and ramshackle dwellings on a crowded street in Regent Park North; now they have access to new, modern housing developments. 17min
https://www.nfb.ca/film/farewell_oak_street

#47 paul on 10.06.15 at 7:44 pm

#35 Daisy Mae on 10.06.15 at 7:26 pm

“Sadly, the men running to be prime minister would rather pander to the house lust than help families become financially secure.”

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

Harper (the ‘economist’) led us down this path. He has zero concern for Canadian.
———————————————————-
Sounds like you are/were on the path. Maybe Canadians should and can think for them self.
What the hell do you know about Mr. Harper’s concern for Canada ? Must be a troll

#48 Vancouver Troy on 10.06.15 at 7:48 pm

MF
I am buying XEI-T, XRE-T and XQQ-T.
I’m looking for a good preferred share ETF.

#49 Smoking Man on 10.06.15 at 7:54 pm

#42 Daisy Mae on 10.06.15 at 7:38 pm
#18: “If you’re stupid enough to smoke, when you get cancer/emphysema/heart attack/stroke/etc. you yourself will shoulder all of the blame/consequences….”

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

Except the associated costs on health care….which affects us all.
..

In my case, I’m not amining for the finish line.. I’ve seen with my own eyes what longevity does to loved ones.

I wish that pain on know one I know, especially my kids.

Shit we do for love…

#50 Edward on 10.06.15 at 7:55 pm

This analyst believes that stocks will only return about 4% a year for several years – as opposed to the typical 7%. He says bonds will perform even worse. He foercasts that investors with a typical stock/fixed income portfolio will only be able to generate 3% per year for several years to come.

http://www.cnbc.com/2015/10/06/cliff-asness-has-seriously-bad-news-for-investors.html

Meaningless, unless you have a portfolio of US-only assets. — Garth

#51 PeterfromCalgary on 10.06.15 at 7:59 pm

Anything above the level of a savage’s precarious, hand-to-mouth existence requires savings. Savings buy time.
Ayn Rand

I am voting for my TFSA.
Peter from Calgary

#52 Mr. Reality on 10.06.15 at 8:07 pm

Those who are horrible at math and understanding risk (the majority of Canadians) will suffer greatly. Those of us who understand math and mitigate risk through diversification will profit handsomely.

By the way the former are called Sheeple and they are your family, friends and coworkers!

Mr. R.

#53 conan on 10.06.15 at 8:08 pm

Just so you know blog dogs. Bathing with an unwrapped Egyptian mummy is against the law.

Do not try in Egypt!

#54 BC Guy on 10.06.15 at 8:09 pm

Harper to allocate billions of tax dollars for dairy and auto sector to compensate for the TPP. Hey all you Conservative supporters: who’s wasting our tax dollars now?!

Meanwhile, with all the previous trade deals that Harper signed, the Canadian trade deficit has gone up, exports are down, the Canadian dollar is down, food imports are up, groceries more expensive. And with the so-called free trade deal he signed with Korea, they won’t buy any of our beef because there was one case of mad cow in Alberta. Great trade deal huh!

Harper’s plan for Canada: export all our natural resources raw and unprocessed, import the value-added products, gut the middle-class by making it easier for corporations to outsource middle class jobs to 3rd world countries, turn us into minimum-wage retail workers.

#55 Millmech on 10.06.15 at 8:14 pm

#11 Fuzzy Camel
Sit back relax and keep adding to the pot every payday(30% net pay)you will be surprised how quick it compounds.Everything else that’s left over after rent and bills is to be spent guilt free.

#56 BC Guy on 10.06.15 at 8:15 pm

True story:

Went to the supermarket frozen section to buy some fish. Got some East Coast cod. Looked at the label: “Product of China”.

Fishermen off the east coast catch the fish, sell to fish conglomerates, who freeze the fish, transport to Chinese food processing plants, where the fish is thawed, processed, re-frozen, packaged, shipped back to Canada.

I always try to avoid buying food from China, and most food from China used to be labelled “Product Of China”. But the Harper government is making it easier for companies to omit the China label. Now it just says “Packaged by or produced for CompanyA in Burnaby”. More and more of your food is coming from China without you even realizing it. Chinese food takes on a whole new meaning.

#57 Gary on 10.06.15 at 8:25 pm

Danny Williams Says Harper’s Tactics boarder on Racism

http://www.cbc.ca/news/canada/newfoundland-labrador/danny-williams-stephen-harper-election-1.3256756

#58 Retired WI Curmudgeon on 10.06.15 at 8:27 pm

Another day, another story of confusion. Getting older really sucks! The good news, there is enough money to last until I hit room temperature.

Re is the least of my worries. I have a piss pot, a bed, and a place with no mortgage. The record collection and my few duds are housed.

Trying to generate retirement income these days isn’t as easy as it used to be. Bonds suck as interest is low and likely going lower. REITS are marginal. Dividend paying stocks, and utilities are OK. Still have 100k sloshing around looking to be invested well.

A problem? Not really. I’ll watch what develops over the times. We will never raise rates until we meet the horizon (think years off here) despite Yellen’s BS. The US is deeply in debt, traded off mfg for cheap, debt incurred imports. Someday, some fool has to pay for this BS. Canada the same way, but neither can see the end game yet.

Some day some 20 year old will say, “what the hell were you thinking?” THAT will be the oh shit moment. higher tax rates, and curs to Geezer largesse. If you didn’t save it, invest it, you will lose!

Smokers have the advantage here, they need not worry about a long time line -thankfully!

In the meantime eat, drink, smoke, and be – a Boomer’s job as was made to be!! Sorry, I don’t give a dam about tomorrow!

#59 Gary on 10.06.15 at 8:28 pm

Harper partnered with an accounting firm at the same time the firm was fighting the CRA in court to shield the files of multimillionaires who had stashed money offshore.

http://www.cbc.ca/news/business/harper-government-partnered-with-industry-group-fighting-cra-over-kpmg-case-1.3257994

Is there no depth this guy can sink to?

The federal government did not partner with KPMG. Read the story. — Garth

#60 Dwilly on 10.06.15 at 8:30 pm

It’s entirely plausible that rates never go back to the old “normal”.

Don’t get me wrong. I believe in balance, like Garth’s rule of 90. I don’t think it’s ever a good idea to have so much debt that you’d be screwed if rates go up 2 pts, regardless of the starting point. And I’m not betting on low rates forever.

However, realize that anyone that says rates must go up is no more clairvoyant than anyone else. Things always mean revert…..until they don’t. Everything that is today had a first time too. People have been saying since 2010 that rates are about to go up imminently. Despite 7 years of emergency low rates and massive govt money, global growth is completely “meh”. This could very easily be the new norm.

Even still, I wouldnt spend 1.7m in Vancouver.

#61 j of c on 10.06.15 at 8:35 pm

The new reality is not reality at all.

#62 Granite_counters on 10.06.15 at 8:40 pm

House prices in ottawa are stagnating or lowering in my area.

People are reselling a couple months after buying new home construction for $30000 ish less than they paid…

Will builders bail if the market flips and houses aren’t worth as much?…

#63 Lee bow on 10.06.15 at 8:41 pm

They gotta dance, what can you do. That’s a shortcoming of democracy. Unfortunately, politicians have a time horizon just a week longer than that of a turkey.

On the good side, the cheap debt can be used wisely to further *improve* wealth inequality. Not that I claim to know how. I am sure Garth does.

#64 Gary on 10.06.15 at 8:42 pm

Harper sells out to the farming industry at the expense of Canadian consumers with the TPP. So much for the dairy monopoly. We’ll have to continue going across the line to buy cheese, thanks to Harper for not looking out for interests of Canadian consumers.

#65 BobC on 10.06.15 at 8:46 pm

“Ironic to see an Alberta tax-and-spend NDP supporter rip off and post U.S. Tea Party crap. — Garth”

My only connection is I looked up the tea party web site once.
What is it that they stand for that is bad or wrong to get people to make fun of and be against them?
Or it just being a part of the liberal PC group?

#66 SAM on 10.06.15 at 8:48 pm

yuck! dog and a human in the same tub of water. white man is crazy.

#67 Mf on 10.06.15 at 8:48 pm

#48 Vancouver Troy on 10.06.15 at 7:48 pm

Cool. I suppose xiu is a decent buy now as well.

For preferred’s I have CPD. Gone down like crazy since I bought but might be a good deal now!

Mf

#68 TheAwakenedOne on 10.06.15 at 8:48 pm

” She’d better help us ” – Garth

As some of yo are confused why Garth used a She-God nomination, he’s just being cryptically funny:

She = Janet Yellen = the Goddess of green.

#69 rk usa on 10.06.15 at 8:48 pm

nice bunions

geeeee-ross

#70 Freedom First on 10.06.15 at 8:49 pm

#52 Mr. Reality

Well said. Going to pi$$ a lot of people off. Truth hurts.

There is no avoiding consequences. Trust me.

#71 Smoking Man on 10.06.15 at 8:57 pm

Difference between America and Canada.

Canada, dog I want your idea… Here’s a crumb.

America, dog give me your idea, you’ll be rich.

Something to do with loyalist ass kissers, vs rebels.

I love America.

I’m with my oun kind.

#72 A roving we will go on 10.06.15 at 9:06 pm

#71 Smoking Man on 10.06.15 at 8:57 pm
Difference between America and Canada.

Canada, dog I want your idea… Here’s a crumb.

America, dog give me your idea, you’ll be rich.

Something to do with loyalist ass kissers, vs rebels.

I love America.

I’m with my oun kind.

—–
Lots of truth. Lived there for quite a few years. Great independent psyche. So why you so keen to return to TO already!

#73 Edward on 10.06.15 at 9:09 pm

“Meaningless, unless you have a portfolio of US-only assets.” — Garth
……………………
Thanks for your take Garth!

#74 Mf on 10.06.15 at 9:18 pm

#34 Mark on 10.06.15 at 7:25 pm

Haha the PE of housing should be 250 ish for the Gta and 300 in Vancouver lol.

I don’t know. Individual stocks can be dangerous and dol.to has been going up straight for years. It’s tough to buy something that has been going up none stop for that long.

You may be correct about the expansion into other sectors but doesn’t Walmart and Costco do the same thing? I’m rarely in both those stores. They make me drowsy for some reason.

Mf

#75 Tony on 10.06.15 at 9:19 pm

Re: #12 broader mind on 10.06.15 at 5:39 pm

As long as there’s talk of a interest rate hike in America the monthly jobs reports will be progressively lower there. That’s a fact but oil will hit a brick wall at the 60 dollar U.S. mark. The U.S. dollar will fall but longer term commodities will make new lows.

#76 Metro Van Observer on 10.06.15 at 9:22 pm

The FED has chickened out yet again on even making the first incremental move up. If a tiny 1/4% increase frightens them, there is no way they will be moving at the 1% annual increase pace your economists predict Garth.

This economy is apparently too fragile to even absorb the first increase let alone multiple ones in a year.

So, the asset bubble will grow larger yet…

#77 common sense on 10.06.15 at 9:25 pm

#71 Smoking Man

I’m a dual citizen and consult Stateside…

In Canada “How much will this cost?”

In the USA “How much can I make?”

#78 Tony on 10.06.15 at 9:31 pm

Re: #2 TurnerNation on 10.06.15 at 4:54 pm

The market (TSX) will probably go up on Alcoa’s earnings report though no one will believe it. The American market should fall for the 2 weeks following that. The gold and silver shares should keep rallying but of course the FED will put a beatdown on gold at some point in time probably below the U.S. 1,200 dollar mark.

#79 TCContrarian on 10.06.15 at 9:34 pm

Freshly-minted tenant here, as mentioned previously (from home/mortgage owner). Deal closed late September and plunged into the Energy/Commodity sectors. Already ‘up’ 1/2 year’s rent in the profits…LOL
Nothing about my ‘new’ TH to fall in love with – but I’ve got granite counters!! But I’ve got my heart set on acreage some day – with chickens, pigs, and a tractor to hobby-farm organic. With $500k and a 30-50% correction/crash in RE (YVR), totally do-able in 3-5 years, methinks.

#80 Smoking Man on 10.06.15 at 9:36 pm

#77 common sense on 10.06.15 at 9:25 pm
#71 Smoking Man

I’m a dual citizen and consult Stateside…

In Canada “How much will this cost?”

In the USA “How much can I make?….
…..

Bingo

#81 Spawn | Realties.ca on 10.06.15 at 9:36 pm

[…] Source: http://www.greaterfool.ca/2015/10/06/spawn/ […]

#82 Mark on 10.06.15 at 9:47 pm

Will builders bail if the market flips and houses aren’t worth as much?…

Eventually, but as prices decline, they should be able to lower other elements of their cost structure and continue to build houses. The cost of trades labour has been a big deal over the past number of years, and between the deceleration in the housing market, as well as in the O&G industry, costs are coming down rapidly. The Chinese slowdown will also serve to lower the cost of many of the commodity inputs to housing.

Additionally, land prices will likely fall quite considerably. So builders can bring new supply to market at considerably lower prices than experienced at the peak of the bubble.

These factors will serve to bring even more supply to market and suppress prices on an ongoing basis. Those hoping for a quick reflation of the housing bubble are likely to be disappointed as it can take quite a lengthy period to fully liquidate the supply chains, inventories, etc. associated with the RE supply sector.

#83 common sense on 10.06.15 at 9:55 pm

Smokey..

Enlighten me…why will oil go on a tear up now?

Weakening USD ? Less supply ? Syria noise?

All of the above?

#84 Caught in yvr on 10.06.15 at 9:58 pm

Yvr is a sh!t show, toyota and subaru car dealers are calling me to customer appreciation event to try to replace my 3 & 5 year cars. Regular Malls dont have the volume and traffic of 2014, a lot of SALE signs everywhere and on the other hand the new outlet mall at yvr has record sales. High end is doing exclent, middle class not so much, you can go to any open house in the 400-700k price range and will see a lot of traffic, and mainly locals. Too much quantitative easing and low rates have created a monster, people are in debt to their eyeballs, paying minimum on their credit card, consolidating om line of credits and renovating on helocs
We as canadians are doomed sooner than u think

#85 TurnerNation on 10.06.15 at 10:13 pm

Some high yield funds (8+%) I bought in TFSA near bottom.
For the faint of heart.
BBO, PGI.UN.
CCI.UN (I was following a bunch of debentures and convertibles anyway. Known universe to me).

#86 Bottoms_Up on 10.06.15 at 10:14 pm

#62 Granite_counters on 10.06.15 at 8:40 pm
——————————–
What area of Ottawa? The CMHC numbers that just came out showed decent sales and modest price increases year-to-date.

#87 broader mind on 10.06.15 at 10:15 pm

#75 Tony,you may be right but there are plenty of pesos to take from the casino between now and $60.The U.S. is chugging hard on the oil bottle and putting on a brave face for now.You can always leave the game when the next shift comes.

#88 Leo Trollstoy on 10.06.15 at 10:25 pm

#31 Smoking Man on 10.06.15 at 6:48 pm

You got balls of steel man.

Balls of Steel. Smoking man.

#89 lliberaci on 10.06.15 at 10:29 pm

thank you trudeau our lord and saviour

#90 Leo Trollstoy on 10.06.15 at 10:30 pm

Of course, half a mill doesn’t buy a whole hell of a lot in Toronto these days. The average detached is over a million, and even a slanty semi on a street where small rodents go to die is at least sevenish.

Toronto real estate prices are an unsustainable fantasy.

How much of a fantasy?

Even condo prices in the big smoke have outpaced the index over the last 10 years.

http://www.macleans.ca/economy/money-economy/theres-no-love-lost-between-canadians-and-the-stock-market/

And town homes, semis, and detached have done even better.

Insanity can’t continue.

Getting stupid.

#91 tundra pete on 10.06.15 at 10:33 pm

Intrerest rates don’t need to go anywhere for problems to start and housing to tank. Wait till the boomers start to unload the love shack. There are millions of them in this country. Just wait.

A majority will require thirsty underwear and someone to tuck them in. Soon. That ought to seriously overwhelm the virgins sooner than most would like to admit. Then what?

Good luck on the 750 000.00 mortgage when that unravels. I wonder what granite and stainless steel taste like?

#92 Chris on 10.06.15 at 10:33 pm

The world is in flux. Nobody knows anything anymore. Except houses in durham region, ontario are hot right now. The guy down the street bought the house at 524k last year is now listing for 615k. It helps that the construction around the corner starts at 600k and go up to 800+k. People have too much money these days.

#93 For those about to flop... on 10.06.15 at 10:35 pm

#67 Mf on 10.06.15 at 8:48 pm
#48 Vancouver Troy on 10.06.15 at 7:48 pm

Cool. I suppose xiu is a decent buy now as well.

For preferred’s I have CPD. Gone down like crazy since I bought but might be a good deal now!

Mf

————————————-
I am an investment hack Mf but are you investing or gambling .
Every time I read one of your posts you seem to be looking for the hot new thing .
I don’t have a clue what I’m doing but I’m only down 2.3% this year.
I’m keeping the rest in cash until next year as I don’t want to make move for the sake of it .
Good luck.

#94 DisgustMadeMePost on 10.06.15 at 10:43 pm

Yikes,

Scary picture.

#95 Sheane Wallace on 10.06.15 at 10:48 pm

#78 Tony

It seems LBMA is running out of bullets. How long will they last?

#96 For those about to flop... on 10.06.15 at 10:48 pm

#92 Chris on 10.06.15 at 10:33 pm
The world is in flux. Nobody knows anything anymore. Except houses in durham region, ontario are hot right now. The guy down the street bought the house at 524k last year is now listing for 615k. It helps that the construction around the corner starts at 600k and go up to 800+k. People have too much money these days.

—————————————-
People have too much DEBT these days .

#97 Mf on 10.06.15 at 10:57 pm

#93 For those about to flop..

I’m using something similar to the millennial portfolio recommended on here and a few other sources a while ago, but with a few tweaks. It’s a 60/40 split and all etf’s. I have some money that I like to play with though. I trade more frequently with that bit. Some individual stocks and some more exotic ETF (leveraged, volatility etc.). Interestingly, I’m actually up much higher with that lot versus the buy and hold stuff. Not enough to offset the losses on the main chunk though.

Still finding my preferred strategy with it all. I know it takes time and patience and tons of learning.

Unfortunately I think I just happened to start at a bad time. Started investing in April of this year. Most things are down since then, even my bonds. It’s okay though. Means nothing in the long term.

Like Retired Boomer said “This too will pass”

Mf

#98 Mf on 10.06.15 at 11:06 pm

Meant to say “I’m actually up” with the exotic stuff.

Mf

#99 omg the original on 10.06.15 at 11:09 pm

60% of US investors are confident investing in equities, while here that number plunges to 44%.
————–

I never talk to people about equites anymore. Too many people burned by dot.com, financial crisis, and negative return mutual funds. And after all, since houses in Canada ALWAYS increase in value who needs anything else. In their eyes equities are just WAY too risky when you have a sure bet like a house.

Back when I was FOOLISH enough to talk, people thought I was nuts putting ALL proceeds from my 2007 home sale into stocks. I still get friends and family asking whether I regret selling in 2007 given how houses have continued to go up in Victoria since then. And these are educated people – some with multiple degrees in economics.

Lets see now – average house prices in Victoria up maybe 10-15% since 2007. (Average property taxes and fees up 80%)

My equities portfolio, which I averaged in from 2008 to 2012 – up over 100% not counting all the dividends I have pulled out to pay my rent, go on vacations, eat at good restaurants…..

But people do not think in those terms – its pretty rare that anyone sitting on a mortgage free $900k house in Victoria ever considers the opportunity cost of that dead money.

Over the past decade property appreciation in Victoria has not even kept up with inflation.

I think this is your future YVR, TO, YYC and ultra delusional S’toon, Regina and Winnipeg. Your houses will not really go down in dollar value – they will just be a crappy investment – with inflation slowly eroding their value.

#100 My Life is a Pile of Shit on 10.06.15 at 11:09 pm

“In fact, most economists I hang with fully expect when the Fed starts moving that rates will increase 1% a year for at least the next couple…”

The last US employment report was disappointing and previous numbers were revised lower. Zero rate hike this year is all but certain; the market rallied because a rate hike is no longer on the horizon. The Fed’s rate hike strategy is conditional on recovery as expected; there are too many reasons for the Fed to be on hold. It’s not too late to switch camps, Garth.

#101 Nemesis on 10.06.15 at 11:10 pm

“How do I dislodge this smokers plack [sic] from my teeth.” – HommeDuTabagisme

https://youtu.be/XB7R0ZxNgC4

#102 Ronaldo on 10.06.15 at 11:11 pm

#92 Chris

”People have too much money these days.”

It’s not that they have too much money Chris. The problem is that people with ‘no money’ have access to too much money and this is what is causing this whole mess with real estate in this country.

#103 45north on 10.06.15 at 11:18 pm

Jeff in Moose Jaw: Toronto Boom Town

thanks for that

#104 lee on 10.06.15 at 11:25 pm

#92, Chris

You do realize that after commissions, LTT, legals and other incidental closing costs, not to mention CMHC premiums he may have paid he’s only made about $20000 which is about 4 percent if he lived there a year? That’s if he gets his price.

#105 S.Bby on 10.06.15 at 11:30 pm

#48 Vancouver Troy
I’m looking for a good preferred share ETF.
—————————————–
XPF works for me. And it’s at a good entry point.

#106 Paul Bunyon on 10.06.15 at 11:38 pm

Nasty bunyons….but nice paws!

#107 omg the original on 10.06.15 at 11:40 pm

AND SPEAKING OF THE MOST DELUSIONAL MARKET IN CANADA

And the award for the most delusional market goes to the S’toon and Regina condo market.

I started looking at this a couple weeks ago, my interest peaked by some relatives’ recent house purchases around S’toon. The prices for detached homes seemed astonishingly high.

But that was nothing compared to the condo market in both S’toon and Regina.

Now for example for $600 or $700K you can buy a nice 2 bedroom condo in a higher end building in downtown S’toon. Now admittedly these are nice condos with a couple of indoor parking spaces.

But for the same amount you can get 2 bedrooms in Victoria’s Songhees development (a pleasant walk to downtown even in January) or and equally nice condo up on the Saanich peninsula on a golf course. And let’s not even talk about Bear Mountain options – where you get even more for less.

Now I do not want to be one of those the coast is the best b*stards, so I will also point out that you can get some pretty nice stuff in downtown Cowtown for the same price (and no prices have not come down much there).

Or head down to neighbouring fracking states like North Dakota or Montana – you’ll have a hard time finding a house for over $700K in Minot ND or Helena MT, let alone a condo – and when you do find a $700k house it will have 6 bedrooms, an indoor pool and riding stables.

I do feel bad for Regina and S’toon since I have so many relatives back there that have been suckered into the great prairie housing delusion.

#108 Entrepreneur on 10.06.15 at 11:41 pm

Having most people in debt with housing is not economy savvy; it would be better if in debt (short term) with a small business (which moves the economy). I agree with #54 BC Guy about the TPP will eliminate the middle class. Tom Mulcair is worried about small businesses (like restaurants) attached to the dairy farmer. So am I!

Who do I want to represent Canada? Who is approachable, will allow debates, discussions, promote small businesses, middles class, the environment, will not muzzle scientist? The only one is the NDP, Tom Mulcair. I would like to see Tom Mulcair and Alexander Morton, a biologist on the northern end of Vancouver Island, get together and raise our concerns. Tom Mulcair is a fighter for us Canadians.

Conservatives and the Liberals talk the same (voting for the Liberals is about the same as voting for the Conservatives).

#109 cfa 4 eva on 10.06.15 at 11:54 pm

Did you catch those two scary polls yesterday? Manulife released an “investor sentiment survey” which showed how much we suck at being investors. Over a third (34%) think it’s a good time to invest in cash. Cash. Seriously. With a bank savings account paying 0.6% (on a minimum $5K balance), the interest fully-taxable, and inflation at 1.5%, this is a formula for losing money–Garth”

I think you got it wrong here….even expensive portfolio managers sometimes increase their exposure to cash……the “least worst” scenario as it were

It wasn’t a survey of portfolio managers. — Garth

#110 A Yank in BC on 10.07.15 at 12:16 am

It’s astonishing to think, that if the Fed does not raise interest rates next year either (as some here are suggesting), an entire U.S. Presidency (8 years – Obama) will have run it’s course with the Fed funds rate at zero percent the whole time he was in office. Just imagine the odds you could have gotten on that happening.

#111 Rexx Rock on 10.07.15 at 12:20 am

The bankers and goverment both want most Canadians highly indebted.Its part of our culture now.Saving is passe thanks to 7 years of zirp.Canada will follow the way of Japan,get used to it.We won’t see 5 year fixed rates above 3% in our lifetime Garth.
One of the party leaders should step up to the the plate and stop the BOC from robbing a nation of savers and pensioners.Jail these bankers for theft and tyranny,for all of what they have done.Canadians retirement will always be the house until divorce happens and then they do it by themselves for fear happening again.I know alot of guys who don’t marry because they have some wealth and don’t want to lose it after a few years of marriage.Lets all sing Oh Canada.

#112 OttawaGuyRenting on 10.07.15 at 12:34 am

#62 Granite_counters on 10.06.15 at 8:40 pm
———-
Ottawa?
Feels like builders are about to take a bath! Houses in Riverside South-Findlay Creek,Arnprior, trimm and elsewhere are being built and inventory stacking..
You watch-
The Dip is coming…it will plow 10%

#113 Great Canadian Bubble Co. on 10.07.15 at 12:35 am

“The data examined by The Globe suggest the foreign buyers have a significant, disproportionate impact on home prices.”

http://www.theglobeandmail.com/news/british-columbia/foreign-investors-avoid-taxes-by-buying-real-estate-in-canada/article26683767/?utm_source=twitter.com&utm_medium=Referrer:+Social+Network+/+Media&utm_campaign=Shared+Web+Article+Links

Care to comment?

#114 FormerSaskie on 10.07.15 at 12:48 am

I googled Milton to see if cows were actually allowed in town and they are! You can have 2 restricted animals, such as cows, goats sheep etc. Crazy, crazy. Your blog is a wealth of interesting info Garth as well as some scary stuff.

#115 ozy: finally a smart guy : #19 NextYear on 10.07.15 at 12:49 am

finally a smart guy : #19 NextYear

you are perfectly right- rates will not raise in next years

of course rates will float a tad up 0.25-0.5% to scare people to jump into new mortgages then down again 0.25-0.5% (banks do that when they see buyers sitting on sidelines since they want mortages NOW)

it has happened every year under various pretexts and of course it will be played again

tell the truth Garth…. do you even know WHO is running this country????

#116 ozy: OK I wil vote NDP #108 Entrepreneur on 10.07.15 at 12:57 am

since mr hrapon managed to eliminate the middle class to the benefit of his loyal upper class making $$$ with little work, I, as a member now in low-middle class I have to vote my SOCIAL CLASS PARTY = NDP

come to vote if you make under 120000 per family and vote NDP to improve your future

if you make 120-500K per family vote liberal to improve only the present a bit

if you make 1/2 MIL to 300 MIL vote to CONSERVE the system, make 1% richer and put you in bankruptcy sooner or later

Ameno ! :)

thanks #108 Entrepreneur

#117 ozy: OK I wil vote NDP #108 Entrepreneur on 10.07.15 at 12:59 am

since mr hrapon managed to eliminate the middle class to the benefit of his loyal upper class making $$$ with little work, I, as a member now in low-middle class I have to vote my SOCIAL CLASS PARTY = NDP

come to vote NDP if you make under 120000 per family and improve your future

if you make 120-500K per family vote liberal to improve only the present a bit, buy yourself 1-2 years of dreaming

if you make 1/2 MIL to 300 MIL vote to CONSERVE the system, make 1% richer and put you in bankruptcy sooner or later

Ameno ! :)

thanks #108 Entrepreneur

#118 Calgary Mark on 10.07.15 at 1:16 am

I could be completely off base, but doesn’t Warren Buffett have massive cash holdings… like over $50 billion?

#119 Smartalox on 10.07.15 at 1:20 am

Breaking News from the West Coast:

http://www.theglobeandmail.com/news/british-columbia/foreign-investors-avoid-taxes-by-buying-real-estate-in-canada/article26683767/

I’ve never believed all the rhetoric about HAM, but this story describes a lot of smoked pork.

Why isn’t THIS the real election issue?

#120 Salutations Sally on 10.07.15 at 1:22 am

#99, OMG the Original…. Liked your post, found it interesting. Loved your comment “when I was foolish enough to talk”, thought that was brilliant!

#121 Jon on 10.07.15 at 1:30 am

Trudeau for PM! Our Keynesian economic saviour! Deficit spending in a down economy. Lots of cheaper skilled workers to complete those infrastructure projects given the energy downturn.

#122 I am the Babblemaster on 10.07.15 at 1:42 am

It’s absolutely ridiculous to be predicting higher rates down the road. The many predictions of such the last few years have been monumentally wrong. If rates did go up significantly, it would be a disaster. On many levels. That’s why it won’t happen. That’s all I’ve got to say on that topic.

Figures. — Garth

#123 I am the Babblemaster on 10.07.15 at 1:45 am

“Sadly, the men running to be prime minister would rather pander to the house lust than help families become financially secure.” – Garth

———————————————–

Of course they are. Massive consumer spending is what’s keeping this whole game going. That’s why rates won’t go up.

#124 juno on 10.07.15 at 2:22 am

#8

My parents retired exactly at 60
Jobs at Mcdonald and other fast food chains were given to the young teens as first jobs

Today I see people in their 60 to 70’s taking on those job which were once given to the young

I personally see the generation whom are in university screwed. Once a university degree ment a guarantee to a management position, today, no guarantee.

People are just trying to survive, its rough out there, I don’t know how many will survive once they hit retirement working age

#125 John on 10.07.15 at 2:42 am

#9 Mf

Hey MF I’m also 32 and have the same kinds of friends. They all recently bought oversized houses they can barely afford and say things like “oh you never realize how much owning a house costs until you actually buy one”. Um, yes I do. It’s called math and a calculator.
Most of them also think the stock market is a casino.
I try to talk to my friends about ETFs and trading Options and they just get angry that I have disposable income and savings and they’re trying to keep up with the minimum payments on the lines of credit.
When long term plans come up in conversation it’s all about “we want to upgrade to this kind of house with a pool in 5-10 years”. Hey if you think houses are the best investment then why not get a bigger one? Nothing about building a real portfolio for long term wealth and retirement.

For Canadian ETFs I usally stick to CDZ or ZLB although ZLB has a heavy weighting in DOL at the moment. The good ol’ TSX index straight up will probably be good going forward since it’s still not even at it’s 2007 highs.

#126 Nagraj on 10.07.15 at 2:43 am

further to my previous post about the absurdly low, negative yield on US 3mo paper: Lee Adler at The Wall Street Examiner ascribes this silliness to a supply demand imbalance caused by the Treasury, and expects this silliness to end shortly. He makes a point of noting that the “whiff of panic” interpretation is quite mistaken. My take is that Adler is probably quite right. (I sure hope so.)

I find the idea of low rates forever ridiculous.

The recent US jobs report was “crummy but not catastrophic”. However, other macro data supports the view that the US Recovery is faltering. Be that as it may, ZIRP has not justified itself as anything other than THE driver for price distortion everywhere, stocks included.
(There is also the consequence of behavioural distortion, to which the Canadian housing and debt bubbles, not to mention utterly idiotic political cowardice, more than adequately attest, eh?)

#127 John on 10.07.15 at 3:13 am

#107 omg the original

Wow I didn’t know condo’s were going for $600s in Regina and Sasktoon now. Although the condo craze in those cities is just like it was in Winnipeg 2 years ago. Now that commodities are dead, they will have the same fate. The condo market is completely dead here Winnipeg now. Nobody is considering condos anymore. People jump from apartments straight into houses. Most people will tell you condos are a terrible investment but Houses are still solid! That will change soon enough too. Condo listings are priced way below 2013 levels and nothing is moving. For sale signs everywhere. Funny how quickly sentiment can change

#128 Grantmi on 10.07.15 at 4:17 am

Lots of tax evasion going on in Vancouver real estate market.

http://www.theglobeandmail.com/news/british-columbia/vancouver-real-estatetax/article26683767/

#129 Smoking Man's Old Man on 10.07.15 at 4:50 am

You could have said “Most people are unbalanced” in the second last paragraph, that covers all the bases financially and otherwise.

Wasn’t planning on voting, don’t really care for any of them, but as long as we have capitalism as our chosen system and have to play ball globally, I think Conservatives are the only choice. Doesn’t make any sense to me bringing a knife (Liberal or NDP) to a gunfight…

#130 slick on 10.07.15 at 6:31 am

#79TCContrarian;
farmland will not correct like housing will.
Lots of money floating around the countryside, and this TPP agreement will add even more.
$500 K will barely buy the land to put a house on
slick

#131 Londoner on 10.07.15 at 6:41 am

“It appears that many Canadians have used low interest rates to get larger loans on more expensive houses rather than to aggressively repay their debt.”

Unless you’ve taken this quote out of context BMO is discounting new entrants to the market with this statement. As you said, they represent a third of the market. New entrants can’t aggressively repay debt they don’t have. So low rates drive higher prices – yes, this is expected market behavior, but they can’t conclude that all participants had the option to repay exiting debts or take on new loans. Without new entrants the market would collapse, which is not what they’re predicting.

#132 Julia on 10.07.15 at 7:04 am

That was interesting Globe article.
Doesn’t it read like the real issue is tax avoidance rather than the impact on home prices?

Yup. Just like so many people in the Lower Mainland and YVR with rental suite income they do not declare. — Garth

#133 Concerned Senior on 10.07.15 at 7:32 am

I really hope this guy is wrong about interest rates. But he sure makes a compelling case. Garth, have you considered his arguments:
http://business.financialpost.com/personal-finance/family-finance/why-interest-rates-will-remain-low-and-what-that-means-for-your-retirement-security

Rates will remain low by historic norms. But they sure won’t stay at current levels. — Garth

#134 fancy_pants on 10.07.15 at 8:15 am

#131 Londoner on 10.07.15 at 6:41 am

it was quoted:
http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/nearly-one-in-six-canadians-could-not-handle-500-increase-in-mortgage-payment-poll/article26677221/

as I mentioned yesterday, perhaps BMO should have phrased it differently:
“It appears that as a result of low interest rates, many Canadians have to attain larger loans on more expensive houses (rather than to aggressively repay their debt).”

#135 H-8 Class Allegheny type on 10.07.15 at 8:40 am

‘…Sadly, the men running to be prime minister would rather pander to the house lust than help families become financially secure.’

Well. of course, Garth! These guys want to be prime minister and, as you’ve so well demonstrated although you’ve not actually come out and said, the average Canadian voter isn’t terribly bright, and doesn’t want to be confused with facts.

Growth industry of the future: Bankruptcy trustees. That will be the end result of this real estate foolishness.

#136 NotAGreaterFool on 10.07.15 at 8:40 am

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/foreign-investors-avoid-taxes-by-buying-real-estate-in-canada/article26683767/

Which leader has the political stones to touch this?

Ironically, this fits well with Harper’s priority of tax fraud. Price are not high because of Chinese buyers. Prices are high because your government allows this to happen by keeping loop holes open.

Talk to your MP, people.

Where is the tax fraud? — Garth

#137 HAM has been here a long time on 10.07.15 at 8:58 am

#128

HAM has been here a long time. Do keep in mind that one reason why monies have been moved out of that foreign land is that some are ill gotten. Every wondered how come a career in government bureaucracy becomes a path to being wealthy?
China’s currency flow controls are a big joke as ANYONE who has seriously visited there knows. Everyone there knows how to do it. The same algorithm used to acquire some this wealth there is being used to capture the benefits of Canada here….at the cost of “old stock”. Harper knows it but it would be political suicide to point it out and act on it.
The problem is this, the lefties do not think that new stock acts on winner takes all. So they all go soft…and then the winners do take all.

BTW it is not only from China. It is widespread. Canadian policies are no longer suitable for the REAL world and all governments choose to ignore it. They just want to kick the can down the road….at the expense of future generations.

#138 Holy Crap Wheres The Tylenol on 10.07.15 at 8:58 am

#23 Smoking Man on 10.06.15 at 6:22 pm
God damn, I love Boston..
I showed my hand too early, was even playing stupid on purpose, looks like I’m opening an office in Toronto.
Who needs a six figure job. Only open to hot female applicants.
Don’t worry, this old geaser will only be mind fk you. Is that a crime yet.
But I need some ladies that can sucker in old boomer managers who are dumb enough to still think they got it.
_____________________________________________
Hire your wifee poo, or should I say the hag! If your smart you could keep here wages in the family! The hot female applicants will get you a divorce and wifee poo gets half of your fortune. You loose she wins, hire her she wins, you win. She can fund her own Casino jaunts.

#139 Colin on 10.07.15 at 9:02 am

Speaking of crazy Toronto homebuyers…

Now you don’t even need to line up to buy something that doesn’t exist yet.

http://www.cbc.ca/news/business/real-estate-website-to-allow-new-home-purchase-online-with-credit-card-1.3257206

#140 Holy Crap Wheres The Tylenol on 10.07.15 at 9:02 am

Cause and effect Garth!

http://business.financialpost.com/news/property-post/dont-pull-the-plug-on-the-suburbs-just-yet

#141 dmer on 10.07.15 at 9:05 am

How does someone, even a couple, save $100,000 by the age of 26? Assuming one leaves university at 21, how does one save 10k a year? Furthermore, would $100k not be better invested in the stock market for the next 40 years of their life?

#142 Grantmi on 10.07.15 at 9:09 am

That was interesting Globe article.
Doesn’t it read like the real issue is tax avoidance rather than the impact on home prices?

Yup. Just like so many people in the Lower Mainland and YVR with rental suite income they do not declare. — Garth

Wrong + Wrong ≠ Right

#143 Holy Crap Wheres The Tylenol on 10.07.15 at 9:30 am

What the hell has Chairman Wynne got to hide now in her closet? What happened to her open society? Bullshit Wynne.

http://news.nationalpost.com/news/canada/canadian-politics/premier-wynne-to-hold-closed-door-meetings-with-chinese-officials-because-the-communist-party-asked-her-to

#144 Marie on 10.07.15 at 9:33 am

You can buy a home without getting off your couch!
http://www.cbc.ca/news/business/real-estate-website-to-allow-new-home-purchase-online-with-credit-card-1.3257206

#145 Holy Crap Wheres The Tylenol on 10.07.15 at 9:34 am

I don’t think the bank of Mom will help in Vancouver.

http://www.bloomberg.com/news/articles/2015-10-06/in-north-america-s-costliest-city-rich-chinese-face-backlash

#146 Daisy Mae on 10.07.15 at 9:34 am

The world economy coupled with this unnecessarily long and costly dragged-out campaign has added a depressingly low cloud that hangs over Canada. Everyone just waits for October 19th to be over. Sad. Thanks, Harper.

#147 The Other Chris on 10.07.15 at 9:38 am

@132:

It’s hard to say that the issue is tax avoidance rather than the impact on home prices, because the draw of home ownership here seems to be in part caused by the lax tax structure.

If we were more aggressive about applying the deemed resident test, no one with significant offshore income would be interested in Vancouver property. The 45.80% marginal tax rate in BC would make the place radioactive.

#148 Daisy Mae on 10.07.15 at 9:42 am

#102: “It’s not that they have too much money Chris. The problem is that people with ‘no money’ have access to too much money and this is what is causing this whole mess with real estate in this country.”

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

Was watching TV…young couple about to get married, looking a new houses, planning to purchase. But he couldn’t afford a ring for his girl….

#149 lala on 10.07.15 at 10:03 am

Meteorite “Lalarite” is coming to crash real estate in Toronto. Last night, Mark Knopfler said to say hi to all blog dogs. Tonight he is playing for french dudes, on my way to MT.

#150 James on 10.07.15 at 10:06 am

Garth,

After this article you are going to have to issue some sort of mea culpa to all of us… There was never any doubt that the Chinese were having a massive impact on the Canadian housing market. How else could Hong Kong & Vancouver have almost identical housing stats???

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/foreign-investors-avoid-taxes-by-buying-real-estate-in-canada/article26683767/

85% and 70% of the market?? C’mon…. We all know the top end drags up the bottom end. If a house two blocks away sells for $500/sq ft, you obviously increase the asking price of your place as well! This is the same thing happening in Toronto and all across the country! While real estate is definitely local, the markets are all somewhat related. When you see prices go up 15% a year in Van and Tor, realtors all tell you to up your price 5% in Winnipeg or Sask. That’s just the way it is!

“Land titles records on 250 houses bought in the past two years for more than $2-million in key Vancouver neighbourhoods indicate that 85 per cent of those new owners have Chinese names. There is no way to tell how many are Canadian. However, 2014 statistics from Macdonald Realty and ReMax show that 70 per cent of their clients were from mainland China. “

#151 MikeT. on 10.07.15 at 10:30 am

Oh my!

Some dummy inTO started a WEBSITE that allows people to buy new construction with a credit card

Holy ever stupid

That is dumber than the agent that tried to sell me the place i rent after it foreclosed on the dumb investment owner

I go to school, and work as a server……we can get creative he said!

The credit card thing is really really dumb.

#152 Retired WI Curmudgeon on 10.07.15 at 10:33 am

New Day.. better mood. That always helps.

Things around this part of the US (cow country) look to be slowing a bit. Car sales still holding up, strangely?

Not sure how to interpret the markets, but know what their inevitable direction will be, so why get your undies in a knot? Have that other cup of coffee, watch the parade, and think balanced portfolio, with dry powder cash ready for deployment on a silly day when bargains sprout.

Remember, markets will re-test those August lows. So, I will be better prepared.

Happy investing leads to a happy retirement.
NEVER bet the house!

#153 Paul on 10.07.15 at 10:40 am

#146 Daisy Mae on 10.07.15 at 9:34 am

The world economy coupled with this unnecessarily long and costly dragged-out campaign has added a depressingly low cloud that hangs over Canada. Everyone just waits for October 19th to be over. Sad. Thanks, Harper
————————————————————-
EVERYONE. That’s funny I will buy you a beer to cry in on the 20th.

#154 Jamie Dimon on 10.07.15 at 10:42 am

Is Garth’s rule of 90 only for if you absolutely must have a house or is it part of the game plan?

#155 Ronaldo on 10.07.15 at 10:49 am

#148 Daisy Mae

”Was watching TV…young couple about to get married, looking a new houses, planning to purchase. But he couldn’t afford a ring for his girl….”

Exactly Daisy. That is the insanity of it all and they try to tell us that we are different than what the Americans were doing a few years back before their market collapsed. Absolutely mind boggling. I can’t believe that it’s gone on this long. When this thing pops, it’s going to be very ugly.

#156 Nora Lenderby on 10.07.15 at 10:57 am

#124 juno on 10.07.15 at 2:22 am
…Jobs at Mcdonald and other fast food chains were given to the young teens as first jobs
Today I see people in their 60 to 70’s taking on those job which were once given to the young…

Sure, I have seen this but it’s not necessarily an economic decision for an older person to take a job like this. It might also be about getting out of the house.

Purely anecdotal, but I have spoken to a handful of women in their 60’s (and one who is 73) who work in coffee shops in my local area (Ottawa/Brockville/Cornwall Ontario).

Most are widows living alone. They are healthy and seem happy. Most don’t do it for the money. They like meeting people and being made to feel useful. Their bosses seem grateful for their efforts.

And there are a declining number of youth in the small towns around here. Someone needs to do the jobs.

#157 Daisy Mae on 10.07.15 at 11:21 am

#153: “EVERYONE. That’s funny I will buy you a beer to cry in on the 20th.”

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

Are you so sure of the outcome…whatever it will be? Maybe I’ll need to buy YOU a beer. ;-)

#158 IHCTD9 on 10.07.15 at 11:44 am

#127 John on 10.07.15 at 3:13 am
#107 omg the original

Wow I didn’t know condo’s were going for $600s in Regina and Sasktoon now. Although the condo craze in those cities is just like it was in Winnipeg 2 years ago. Now that commodities are dead, they will have the same fate. The condo market is completely dead here Winnipeg now. Nobody is considering condos anymore. People jump from apartments straight into houses. Most people will tell you condos are a terrible investment but Houses are still solid! That will change soon enough too. Condo listings are priced way below 2013 levels and nothing is moving. For sale signs everywhere. Funny how quickly sentiment can change
____________________________________________

Everything I’ve read about long term condo ownership tells me it is a suicide mission. Box in the sky with not a blade of grass underneath is a permanently depreciating “asset”, bound to go to zero, just a matter of time. Buildings just don’t have the staying power earth and rock does.

#159 Gulf Breeze on 10.07.15 at 11:51 am

#17 ex cowtown

“If Isis/ Iran manage to organize a coup in Saudi Arabia.”

LOL Dude….Follow the money and machinations. Isis IS Saudi Arabia and allied with the U.S, to some degree– or at least WAS.

Notice how ‘Al Queda’ a Sunni group also originating in Saudi, fell off the face of the earth, when the new improved ISIS appeared?

ISIS was originally tasked with toppling Assad ‘s Syria but that went sideways, when the only statesman left on this sorry freaking planet, Vladimir Putin, came to Assad’s defense.

In so doing he is placed a strong vote for a more stable Middle East. Whereas America loves the growth opportunity and pillage, creating total ongoing fluster clucks engenders.

Note that oil strengthened with Putin’s moves. Hmmm..Saudi Arabia has been given fair warning through the clamping down on ISIS that oil hegemony for Saudi Arabia isn’t in the cards.

If Saudi doesn’t tighten spigots…god help Isis. There will be nothing left of them and THAT may destabilize the Wahhabist Saudi zealots and money grubbing ptb over there.

Nothing is as it appears on the surface, politically anywhere in the world. This is doubly true in the Middle East. We see life through the simplified cartoon-iverse mainstream media feeds us, to our great detriment.

#160 IHCTD9 on 10.07.15 at 11:51 am

#152 Retired WI Curmudgeon on 10.07.15 at 10:33 am
New Day.. better mood. That always helps.

Things around this part of the US (cow country) look to be slowing a bit. Car sales still holding up, strangely?
___________________________________________

Girl here at work just bought a new GM. 72 month financing and 0% interest. Market can’t be that great if that is what is what it takes to move ’em off the lot!

That’s up here in Canuckland though…

#161 Ogopogo on 10.07.15 at 12:24 pm

RE news from the delusional Okanagan. Castanet reported this morning that “Single family home sales across the board were down 11.9 per cent compared to September 2014 (to 355 from 403).”

Of course, the news is buried under piles of realtor fudge. I’m basically convinced that we have the dirtiest realtors in the country in Kelowna and the South OK. Which is saying a lot, when you think about realtors enjoying a social status just a notch above brothel janitor.

http://www.castanet.net/edition/news-story-149206-3-.htm#149206

#162 Smartalox on 10.07.15 at 12:25 pm

Re: the Globe and Mail article on tax avoidance by foreign purchasers of Real Estate:

This explains a lot of things:

– That BC Real Estate agents are the only ones in Canada that have the right to conduct the sale of ‘businesses’ as well as homes. If you’ve got a multi-million-dollar ‘investment’ to unload, you can use a real estate agent to sell your shares in the corporation (whose sole purpose is to own your house), and avoid taxes.

– That the previously popular ‘immigrant investor’ visa was such a hit, but that foreign investment in conventional small businesses (dry cleaners, strip mall developments, tech start-ups) never reflected that popularity, nor did it contribute much in the way of job creation.

– That the median price for SFH on Vancouver’s West Site rose when the minimum ‘investment’ required from immigrant investors rose to $2M from $1.6M

Now, some new, unanswered questions:
– Do the sales of property masquerading as ‘corporations’ count towards the statistics compiled by CREA and REBGV? Given the amateurish nature of the stats compiled thus far, my guess is no. But it might explain why the HPI is so wildly inflated compared to local observations on the ground.

– Are these types of sales significant enough to affect the statistics reported by the real estate boards? Surely these ‘corporate’ properties are un-listed. Do they mask the numbers of unsold listings, days on the market, inventory?

– Are the rest of us suckers for buying and selling properties ‘the olde fashioned way’? I mean obviously, there’s no tax on the profits from the sale of a permanent residence, but for amateur landlords like ‘Fausto’ who builds and rents homes, is he running the risk of evading taxes, when he might instead be legally ‘avoiding’ them?

– Finally, if government somehow manages to close all these loopholes, and collect the taxes owed, how much more public transit can we get for that money?

#163 chapter 9 on 10.07.15 at 12:27 pm

#89 lliberaci
Thank you trudeau out lord and savior

That’s too funny! The name Trudeau is like a flashback from a bad acid trip!

#164 Investorz on 10.07.15 at 12:34 pm

Laurentian Bank getting rid of 14 high executives.
First National Bank, now this one doing cuts.

Looks like Toronto financials will be next.

Get your kids to learn how to write code, instead of how to do spread sheets…

#165 Investorz on 10.07.15 at 12:39 pm

“Over a third (34%) think it’s a good time to invest in cash. Cash. Seriously.”

Half of BNN guests for the last 3 months have said they are 20-50% in cash. If the canadians portfolio managers say that on the biggest canadian business network, then how can retail investors think any different. The problem is them.

BNN guests make money convincing the idiots who watch BNN they should be hiring BNN guests to time the market. — Garth

#166 Breaking on 10.07.15 at 12:39 pm

Can we delete post #150 by James?

Don’t even know how it made it thru the filters. We can’t let the secret out!

#167 MF on 10.07.15 at 12:43 pm

#159 Gulf Breeze on 10.07.15 at 11:51 am

Mostly correct, except that ISIS IS Al Quaeda. The same Al Quaeda but an even more extremist splinter of the original group. Still funded by the Saudi’s.

Your incorrect about Russia though.

“ISIS was originally tasked with toppling Assad ‘s Syria but that went sideways, when the only statesman left on this sorry freaking planet, Vladimir Putin, came to Assad’s defense.

In so doing he is placed a strong vote for a more stable Middle East. Whereas America loves the growth opportunity and pillage, creating total ongoing fluster clucks engenders.”

Lol stable middle east? What planet is that mid east on?

Putin the dictator is doing what he always does. I think he still thinks the cold war is on (it isn’t and Russia lost).

Remember the whole thing started with the Syrians rebelling against the Assad family after decades of tyranny. It actually started peaceful, sort of like Egypt. But then SA and Iran got involved and it spiraled out of control.

Reinstating Assad is maintaining the status quo and does nothing for the Syrian people and everything for Putin. It also doesn’t solve anything. You praise Putin, yet the Russian economy is doing terribly. Majority of businesses do not want to operate in a dictatorship. The oil drop is just rubbing it in.

The oil play by the Saudi’s is not only directed at Russia, but also to punish their competition from all over the world (the US and other OPEC nations included).

“Whereas America loves the growth opportunity and pillage, creating total ongoing fluster clucks engenders.”

Hey isn’t that exactly what you said Russia is doing? Like you said yourself, oil has recovered somewhat.

MF

#168 Breaking on 10.07.15 at 12:44 pm

Yup. Just like so many people in the Lower Mainland and YVR with rental suite income they do not declare. — Garth

@garth. Why doesn’t your favourite party give a tax credit for renters so they can avoid this? After all, your party had 10 years to do this.

The Progressive Canine party has decided to sit this election out, in favour of a tummy rub. — Garth

#169 MF on 10.07.15 at 12:45 pm

#125 John on 10.07.15 at 2:42 am

“For Canadian ETFs I usally stick to CDZ or ZLB although ZLB has a heavy weighting in DOL at the moment. The good ol’ TSX index straight up will probably be good going forward since it’s still not even at it’s 2007 highs.”

Just added to ZCN. Let’s hope we are correct.

MF

#170 45north on 10.07.15 at 1:05 pm

Great Canadian Bubble: The data examined by The Globe suggest the foreign buyers have a significant, disproportionate impact on home prices.”

Care to comment?

sure I’ll comment.

For sure, if someone brings $2.3 million into Canada and buys a house, that is going to have an impact on home prices. If a hundred do it then it’s going to have a significant, disproportionate impact. This is capital flight which benefits Canada – $2.3 million was injected into the Canadian economy, the owner has to pay property taxes. Maybe maintenance. My concern is if he feels the heat around the corner he will sell for $1.5 million.

from your link: The subject became an election issue when Conservative Leader Stephen Harper promised to collect data on foreign ownership of Canadian real estate and to consider new taxes and regulations to keep housing affordable.

if he wanted to keep housing affordable he would tighten regulations at CMHC. the low cost of money is the primary cause for the high cost of housing. Notice the modifier “primary”. A secondary cause would be money from China but only for certain neighbourhoods.

A well managed housing market is the main attraction for foreign money. We need to manage it well for our own sake. We don’t need to make it easier or harder for foreign money.

#171 Mike in Edm on 10.07.15 at 1:19 pm

I commented the other day about 100 abandoned vehicles at the EIAirport… Well apparently it’s actually 130 and still making the news daily.

A couple morning show radio DJ’s are PISSED that nutley hasn’t put out a budget yet (6 months and counting) to protect mulcair rather than help her own citizens.

And I know someone working for a recruitment firm in dtown Edmonton. They say they haven’t had any clients come in for meetings/work in ages, when they used to have several a day. They also just laid off a handful of employees themselves because there just isn’t any work. Companies are still hiring (I recently got a job after being laid off for 4 months and had another lowball offer come in this week), but it sounds like companies aren’t splurging on using recruiting companies to do their HR work anymore. And not just Edmonton. They’ve had to lay off in Calgary, Regina, and everywhere out west.

#172 paul on 10.07.15 at 1:46 pm

#157 Daisy Mae on 10.07.15 at 11:21 am

#153: “EVERYONE. That’s funny I will buy you a beer to cry in on the 20th.”

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

Are you so sure of the outcome…whatever it will be? Maybe I’ll need to buy YOU a beer. ;-)
———————————————————-
I sure don’t know the out come but when you say everyone I thought you did.
We may need a lot more than one to get over this!

#173 Ralph Cramdown on 10.07.15 at 2:04 pm

#170 45north — “For sure, if someone brings $2.3 million into Canada and buys a house, that is going to have an impact on home prices. If a hundred do it then it’s going to have a significant, disproportionate impact. This is capital flight which benefits Canada – $2.3 million was injected into the Canadian economy […]”

I’ve seen all kinds of poliicians support all kinds of economic initiatives, but I’ve never heard one say “We want to be a global centre of excellence in property flipping.”

Buying prime properties and under-occupying them or leaving them vacant effectively increases sprawl and reduces economic activity (compared to a baseline upper income family living, working and spending in the city). Encouraging the locals to become a population of property speculators, fixers, flippers and redevelopers is lousy economic policy: Credit fuelled booms are invariably followed by painful busts, and the ones that were torqued with foreign money inflows tend to bust spectacularly.

Vancouver cheerleaders seem to think their city is another Monaco — a permanently expensive destination for the global rich. I fear it may turn out to be another Miami:
http://ca.spindices.com/indices/real-estate/sp-case-shiller-fl-miami-home-price-index

#174 Nemesis on 10.07.15 at 2:04 pm

“The Progressive Canine party has decided to sit this election out, in favour of a tummy rub.” — Garth

#FunnyAuldWorld,Or… #MadameRoxy’sEroticEmporium… #It’sArt… #No,Really!

[UK Independent] – Madame Roxy’s Erotic Emporium, Lucy Sparrow: Meet the ex-stripper challenging porn censorship with a felt sex shop

”Dildos. I dunno. They might want a day off from dildos. But if they want to come in for a bit of light relief in between shifts then that’s great.”

http://www.independent.co.uk/arts-entertainment/art/features/madame-roxy-s-erotic-emporium-lucy-sparrow-interview-artist-behind-felt-soho-sex-shop-on-porn-a6684181.html

#175 cramar on 10.07.15 at 2:57 pm

Just did a search on Tom Mulcair re-mortgaging his house 11x. This article is 3 years old, and at the time due to his constant re-financing, he owed almost 5 times what he bought the house for!!

Thankfully I don’t have him as a financial advisor.

https://vreaa.wordpress.com/2012/05/28/ndp-leader-tom-mulcair-has-remortgaged-his-home-11-times-since-early-1980s/

#176 Smartalox on 10.07.15 at 3:08 pm

Some more thoughts on the article about tax avoidance by real estate investors:

I’m surprised that this isn’t more of a source of tension between various levels of governments; I mean, if you choose to sell your real estate investments as shares in a holding corporation, you pay (favourably treated) taxes at the federal level, but you avoid property transfer taxes and registration fees that are payable at the provincial and municipal levels. Why aren’t municipalities and provinces cracking down on this practice for the sake of their own skins?

Collecting and using data to leverage greater transfer payments out of Ottawa, if not actually closing the loopholes, as it was suggested has happened in Ontario, but apparently not in BC.

Are the local politicians too stupid to see the consequences of such a ruse (entirely possible, given its complexity) or is there a willing compliance, going along so as not to upset the electorate that actually profits from selling their houses to foreign buyers.

Corps buying property do not escape any closing costs. Think before you type. — Garth

#177 MF on 10.07.15 at 3:57 pm

#125 John on 10.07.15 at 2:42 am

Just read the rest of your comment. Exact same reality as I have!

NO ONE understands anything other than real estate. It really is sad. You can talk to them about stocks/bonds/etf’s etc. and everyone just rolls their eyes and talks about the next condo they are going to purchase. It’s a real problem with our generation.

Lol retirement savings? That’s what my house is for!

MF

#178 Doug in London on 10.07.15 at 4:36 pm

@Jon, post #121:
There’s actually a lot of truth to that idea. If there is an oversupply of skilled workers, there’s less likelihood of labour disputes, and materials will be cheaper also with commodities down. Too bad the other half of Keynesian economics wasn’t followed during the last 9 years, namely running up surpluses and building up the treasury to pay for such infrastructure projects.

#179 Doug in London on 10.07.15 at 4:46 pm

@Concerned Senior, post #133:
Yes, these low rates can be a problem for retirees if you don’t know how to work with them. Whatever you do, DON’T invest in GICs or put a large part of your money in money market funds. They pay paltry interest rates. Instead, use periods like now (up until recently) to buy investments that are on sale (so they pay a better yield) like REITs, utility stocks, or those badly beat up (and thus dirt cheap) preferred share ETFs. If you don’t mind taking on extra risk, get a margin account and use those low interest rates to your advantage to buy even more assets when they are on sale. Just don’t forget to sell them (for a profit) when prices recover to pay off any margin debt incurred. Don’t let those low interest rates get you down, fight back dammit, fight back!

#180 maxx on 10.07.15 at 9:03 pm

#37 Porsche on 10.06.15 at 7:27 pm

One more tax:

Way past time for licensing, tax and insurance on all bicycles using any public roadways.
Far too many aggressive and dangerous twits who need to be clocked and reported.
Minimum of $100 per bike, per year. Works out to less than one month’s parking charge in most cities.
Enormous municipal revenue potential.

#181 maxx on 10.07.15 at 9:13 pm

#71 Smoking Man on 10.06.15 at 8:57 pm

“Difference between America and Canada.

Canada, dog I want your idea… Here’s a crumb.

America, dog give me your idea, you’ll be rich.”

Yes…and they’ll also love you for it. Optimism floats there.

#182 Canadian on 10.08.15 at 5:47 pm

oh gross look at the bunions on that guy