No reprieve

1COOKIES

Yesterday I told you this post would be about ponies and sunshine. I lied. Get over it. Moreover, what would you expect from a blogger who several times this week was accused of being misogynistic, gender-exploitive and suggestive? Clearly I’m a politically-incorrect, sex-blind, insensitive fossil, which makes me the perfect financial guy. Take your emotional baggage elsewhere. Unless you’re a border collie with dreamy eyes, I’m immune.

Okay, so the next time Canadian interest rates might change is in exactly three weeks, on December 2nd. Unless oil goes to thirty bucks or Justin joins the Chippendales, expect no change. The economy may be dragging, but a rate cut will murder the dollar and send a distress signal to markets coming just two weeks before the Fed’s expected to raise rates (now a 70% probability).

Besides, the expectation of higher interest costs is already out there. Many mortgage rates increased Monday by ten basis points or up – not a huge amount, but certainly a move in a direction most people thought was impossible. There’s more to come, as Canadian bond yields continue to slowly swell in expectation of the Fed move and in response to the US debt market.

Speaking of the yanks, the 30-year fixed mortgage rate there is now at 3.83%, a rise of 17 basis points (almost a fifth of a per cent) in a week. Big move.

Says Zillow: “Mortgage rates moved decisively higher last week as the commentary of several Federal Open Market Committee members and an exceptionally strong jobs report solidified expectations for a December Fed rate hike. Markets will look for further signals about the strength of the economy in inflation and consumer confidence data.”

US rates have more of a regional bias, so it’s interesting to see the increase was larger (a quarter point last week) in hot housing markets like New York, Chicago and Texas. The next big day is December 16th, when the Fed actually announces its decision. Given job creation of 271,000 last month – blowing past all expectations and forecasts – this is looking increasingly like a done deal.

And make no mistake about what this means. The significance is not just a quarter-point move higher after emergency rates being in effect since the Great Financial Crisis. Rather it is the end of overly-accommodative monetary policy. First the massive monthly government bond-buying program ended a year ago (the basement-dwelling macroeconomists who read this pathetic blog said it would never happen), and now cheap rates will end (they’re saying the same thing).

The Fed does not raise once and stops. Or twice. Or thrice. The average number of increases is 10. Between the summer of 2004 and the autumn of 2007, in fact, the Fed raised them 17 times. The average duration of rate increase cycles has been just under two years. And investors, by the way, should know that during these periods the stock market gained an average of 23%. So higher rates may be a death rattle for real estate, but that’s hardly the experience with equities.

This is exactly why these guys (and Mrs. Yellen) have been so anal about starting, and have shown such concern for economic data, both American and global. Once they get going, in other words, they keep going. The goal this time will be the normalization of rates – which is about 3% higher than now.

Yeah, it will take time. A few years. But that’s the path lying ahead. It’s just too bad so few people understand that.

Also weird is the sentiment routinely seeping out of the steerage section that “the government” will move in and rescue fools who bought slanty, bug-infested Leslieville semis for $900,000, or shaggy Vancouver Specials for $1.2 million, with mortgage forgiveness, 40-year amortizations or homeowner grants. Ain’t gonna happen.

The feds, in case you missed it, are broke. Even before the Liberal spendathon begins. We’re looking at years of double-digit deficits just pouring cement and creating temporary jobs, without bailing out any idiots who bought houses they couldn’t afford. Second, this is why you have tax-free capital gains on real estate – because nobody’s going to move in and save your ass when when things go sideways. Suck. Blow. Pick one. Third, everybody has been told and retold that low rates cannot last. If you didn’t listen, tough.

Anyway, I apologize for my maleness. It’s just so awesome.

260 comments ↓

#1 Ski BUM on 11.11.15 at 6:03 pm

This is a first

#2 BobC on 11.11.15 at 6:03 pm

First paragraph is exactly why I can’t stop reading this blog. I’m not even Canadian!

#3 broader mind on 11.11.15 at 6:08 pm

Yeah, it will take time. A few years. But that’s the path lying ahead. Current rates to be decreased or maintained. It’s just too bad so few people understand that. ———————————————————————-Unless that’s the sunshine you promised , I believe rates will be increasing not decreasing.

#4 AB Boxster on 11.11.15 at 6:09 pm

Well, the first step is always acknowleging the problem.

On behalf of any underqualified but nonetheless female liberal cabinet ministers (especially the new science minister – Kirsty Duncan) apology accepted.

#5 tom black on 11.11.15 at 6:10 pm

A great blog post! exciting, if somewhat depressing times..

#6 Gord In Vancouver on 11.11.15 at 6:13 pm

Also weird is the sentiment routinely seeping out of the steerage section that “the government” will move in and rescue fools who bought slanty, bug-infested Leslieville semis for $900,000, or shaggy Vancouver Specials for $1.2 million, with mortgage forgiveness, 40-year amortizations or homeowner grants. Ain’t gonna happen.
___________________________________________

Absolutely, if homeowners who were hammered in 1980 got nothing, then why should those who will get pummeled when rates go up soon get any relief.

#7 conan on 11.11.15 at 6:14 pm

(now a 70% probability).
LOL

The current odds on the Street, according to Bloomberg’s survey. Show us yours. — Garth

#8 All together now on 11.11.15 at 6:16 pm

NO RATE HIKE

#9 Johnny D on 11.11.15 at 6:18 pm

So is the TSX in a temporary correction right now or is this gonna be a long painful slide in Canadian equities as money moves south?

It will recover with commodities. — Garth

#10 Mark on 11.11.15 at 6:28 pm

The deflationary pressures are accelerating in both the US and Canadian economies. I don’t see how this translates to increased policy rates on either side of the border. The Fed runs a good propaganda campaign, but at the end of the day, they have to act upon the data that is before them, and that data is not improving in any meaningful way. Notwithstanding the extremely over-optimistic interpretation of the ‘financial press’ that seems to persist in exaggerating certain comments of Fed officials, while downplaying others such as the members of the FOMC who believe that additional accommodation in the form of NIRP is required.

“First the massive monthly government bond-buying program ended a year ago (the basement-dwelling macroeconomists who read this pathetic blog said it would never happen), and now cheap rates will end (they’re saying the same thing).”

The re-investment of coupons and matured proceeds of existing assets on the Fed’s balance sheet never ended. And this ‘rates will rise imminently, the economy is getting better’ narrative has been stated, in more or less the same form, for a few years now. It hasn’t happened. Meanwhile capital misallocation continues unabated as there has been no meaningful structural reform in the US economy that has shut down the mal-investment and over-stimulation of capacity in sectors already suffering from severe overcapacity (such as the FIRE sector).

Add to that, the tech sector is now in the process of rolling over in early 2000s style. The upstream energy sector is in shambles. The public sector is on the brink of significant defaults, particularly in Chicago and Puerto Rico, amongst other places. The employment situation hasn’t meaningfully improved. And the strong dollar is decimating exports and making the trade balance significantly worse than projected.

“Also weird is the sentiment routinely seeping out of the steerage section that “the government” will move in and rescue fools who bought slanty, bug-infested Leslieville semis for $900,000, or shaggy Vancouver Specials for $1.2 million, with mortgage forgiveness, 40-year amortizations or homeowner grants. Ain’t gonna happen.”

At least we agree on something! Actually the real travesty of home ownership will be the substantial opportunity costs of having one’s capital tied up in a negative returning asset, while other asset classes power forward. The experience in the 1990s was that GAAP earnings didn’t really grow by much in that decade (on account of, amongst other factors, a significant downturn in the resource sector), but there sure was a lot of multiple expansion. As the wrinklies give up on the delusion that they can retire through home ownership, they’re going to direct their investment prowess (or what remains of it) elsewhere, and that ‘elsewhere’ is likely to be equities, with probably a deeply undervalued sector in the mix or two receiving the bulk of enthusiasm.

#11 Love my Kia on 11.11.15 at 6:28 pm

Male awesomeness.

Excuse me while I reach for my Advil.

#12 old gringo on 11.11.15 at 6:29 pm

But garth, isn’t CMHC going to have to cover any short fallings when the herd sells?
Is that not the gov’t covering those losses?
How or where does JT find the taxes to cover potentially hundreds of millions of losses?
This seems like the old “savings and loan” mess the USA had.

Nobody (me included) is forecasting waves of mortgage defaults. Just the slow elimination of net worth. — Garth

#13 saskatoon on 11.11.15 at 6:29 pm

garth,

ALL 271,000 jobs were taken by those OVER 55 years of age.

young demographic LOST thousands and thousands of jobs–esp. dudes.

mining LOST.

manu. LOST.

transp. LOST.

perhaps the FED will raise, but this ain’t a bustling economy.

it’s geriatric.

Yes, 271,000 geriatric waitresses hired in a month. You’re a riot. — Garth

#14 James on 11.11.15 at 6:29 pm

Garth
Given the global economic climate the past 6 months or so, should a properly diversified and managed portfolio targeting conservative growth be down 1-2% over that same time period?
What are 1 or 2 good questions I can put to my financial advisor?

A property balanced and diversified portfolio is up about 2% ytd, which is fine considering the rough year (Greece, China, oil, Fed). If you’re negative, ask why. — Garth

#15 OXI in GREECE !! on 11.11.15 at 6:31 pm

Phoney fake Mc Job and war mongering economy sucking the life out of taxpayers….

No Rate Hike……again…….

#16 Rainclouds on 11.11.15 at 6:39 pm

The gingerbread “figures” contain gluten! Have you not heard? 12 people in

Unacceptable to the small percentage of whiny, navel gazing, self appointed arbiters of society who apparently cannot comprehend how messy it can get in the real world…………

#17 young & foolish on 11.11.15 at 6:40 pm

I want a pony …. Damn it!

#18 db on 11.11.15 at 6:43 pm

First time poster and FIRST!

#19 Rockylal on 11.11.15 at 6:48 pm

Looking forward to interest rate increases to bring the housing market back down to earth.

#20 jess on 11.11.15 at 6:50 pm

“the overconfidence effect”?

Economics and the brain: how people really make decisions in turbulent times
February 20, 2012 8.31am EST
http://theconversation.com/economics-and-the-brain-how-people-really-make-decisions-in-turbulent-times-5445

“Commercial space is emptying out because so are the jobs.”

office space converted to luxury apartments?
residential rents are surpassing office rents
med- wage in cleveland 26k?
the landlord plans to charge as much as $2,575 a month for a two-bedroom unit
http://www.wsj.com/articles/SB10001424052702303626804579506073419741570

———————————
where’s the unicorns?

San Francisco’s Luxury Condo Bubble Turns into Condo …
investmentwatchblog.com/san-franciscos-luxury-condo-bubble-turns-int…
2 days ago – San Francisco’s Luxury Condo Bubble Turns into Condo Glut… Bottom Falls Out Of Luxury Real Estate. Even Houses. Submitted by IWB, on ..
http://www.businessinsider.com/ipo-market-material-weaknesses-2015-10
http://www.paragon-re.com/3_Recessions_2_Bubbles_and_a_Baby

#21 Rainclouds on 11.11.15 at 6:52 pm

The gingerbread “figures” probably contain gluten!

First the faux feminists, now the idiots…err individuals with “special dietary requirements” will be plugging your Harley pipes with potatoes. Oh god, the humanity…..

As Lou Reed once said ” give me an issue. Ill give you a tissue, then wipe my ass with it”

#22 Gray Man on 11.11.15 at 6:54 pm

http://www.zerohedge.com/news/2015-11-11/its-bloodbath-here-biggest-casualty-canadas-recession
Its going to get interesting soon Me thinks .

#23 Gray Man on 11.11.15 at 7:00 pm

This is a good interview about PM fraud and Fed rate hike or not !

#24 ROCK BEATS PAPER on 11.11.15 at 7:01 pm

#13 saskatoon

I am in agreement with you. The 25-55 demographic has had amemic job growth for several years, and the jobs they get are leisure (bar-tending) and part time while the job losses are the kind that families can be built on. That is probably why they are reluctant to leave the nest.

Garth probably doesn’t shop at Walmart in the States and so will overlook the geriatrics forced to work (mostly part time) at the checkout etc….

#25 Gray Man on 11.11.15 at 7:01 pm

Woops sorry
http://usawatchdog.com/huge-fraud-at-comex-covering-up-huge-demand-for-gold-craig-hemke/

#26 Ontario's Left Coast on 11.11.15 at 7:06 pm

A cruel trick, Gartho! I thought you were going to tell us the $10K TFSA contribution limit was a lock for 2016. What’s next, Santa?

#27 oh the irony on 11.11.15 at 7:08 pm

Moving after the owner sold, lucky bastards right before a 20.000$ assessment showed up miraculously on strata minutes. Poor new owner. While looking for a new place I called a guy that turned out is the strata building manager for my current high-rise, he owns 2 apartments in this building and one in a nearby one. I declined his offer ’cause he was not sure to keep one or sell it, but he was renovating it regardless. One day ago ironically I found a notice in the hallway that the building manager was axed, no 50.0000$ job anymore but 3 mortgages…
All this in YVR.

#28 Smoking Man on 11.11.15 at 7:12 pm

Today was remembrance day, an anniversary that celebrates the sacrifices young men give to defend our freedom. Today watching TV they’re asking little kids what it means, they say “Honouring men who gave up there lives for our freedom”

The little shits, including their parents and teachers don’t even know what bloody freedom is. Let me educate you bastards.

Freedom is the right to be offensive, the right to piss people off with your opinion, to say un popular things without the fear of persecution. Is that the world we live in now? Hell I smoke out of shear protest, I know its killing me, I know I’ll die an early death, but fk it.

It royally pisses off soft lefty politically correct bastards I despise the most. Should change my name to Smoking Jesus.

Exhibit A
“Organic genderless gingerbread figures $2.50 Vegan”

So the same educators who celebrate this day with kids, don’t realize they are the biggest pushers of tyranny around.

Political correctness, sensitivity to other people’s felling’s is the slippery slope to the destruction of freedom. Free unrestricted debate must win vs the science is settled. Or all those deaths in the big wars would be for nothing. Think about it.

And if we go down that baby oil laced freeway of sensitivity. We will all end up in a heaping smoldering pile of buffalo shit.

I salute the vets, sorry about your insane kids and grand kids who don’t get it, or lost what you fought for.

Dr. Smoking Man
PhD. Hedonomics

Proudly saying it like I see. And yes I’m a bit of a misogynist, tough shit.

#29 Retired WI Boomer on 11.11.15 at 7:14 pm

No sunshine? No unicorns? Suck. Blow. Pick one.
Eloquent, the warning time is apparently getting short now. Investing has been a ‘meh’ thing this year. Not much return for risk.
Could rates finally get off the mat? I dunno, I am just the idiot bystander. I think the economy kind of sucks myself. I go with suck.

#30 Fuzzy Camel on 11.11.15 at 7:18 pm

Aw c’mon Garth, Canadians will fund the country with political correctness! Canadians are the largest produces of political correctness in the world, Toronto is the manufacturing plant.

LOL, ok in all seriousness, the PC idiots on this forum hassling you are a perfect example of why I hate them. You are on here trying to save Canadians from suffering catastrophic bankruptcy, and all they do is pick apart anything non-PC you say, ugh the stupid hurts!

He is trying to help you people! And you friggin’ PC morons are mad that he uses grown up language, ugh! Get over it! People of high intelligence like to be edgy, it stimulates our brains. If you want PC drivel go take a gender studies course!

#31 oh the irony on 11.11.15 at 7:20 pm

50.000$ job and the rents are not covering the mortgages.
The rental market is tight in YVR now, but signs are that will be better next week. Example: in Metrotown area are 11 high-rise in construction, finishing now or next year, do a simple math conservative… 11 x 30floors x 8 apt x 3 ppl avg family = 8.000 peoples right there, and the migration in province is 20.000, bring them Syrians all here and still you will have space!!!
11 high-rises in 2km by 2 km area, I am kidding you not, and I didn’t count coquit’am and surrey that have way more construction underway than Burnaby.

#32 Patrick on 11.11.15 at 7:27 pm

Turdeau and Putin should do a boxing match. Justin’s got the experience and is undefeated, Putin is Putin. I’ll give ya -200 on Putin and +150 for Trudeau. Any takers? Winner moves on to the winner of Hilary vs Trump. World Leader Fantasy Fights.

#33 Ray Skunk on 11.11.15 at 7:29 pm

#27

Moving after the owner sold, lucky bastards right before a 20.000$ assessment showed up miraculously on strata minutes.

Great lawyer the buyer has there. I expect the Realtor(R)(TM) to be effing useless, but the lawyer should be all over the strata business. $20k/unit special assessments don’t just up out of thin air, something is fundamentally screwed with the building and/or its reserve fund.

Seller may still be stuck with the unit, albeit with a deposit cheque in hand to help cover the assessment, if the buyer backs out.

#34 Alberta wing-nuts on 11.11.15 at 7:31 pm

“The goal this time will be the normalization of rates – which is about 3% higher than now”, Notttttt….. I’d say the normalization of inflation plus an added couple of percentage points is where The FED is going…. Raising interest rates ain’t gonna happen…. The US dollar would only get stronger where they currently need the opposite…. And the 10 rate hikes during a stronger and growing economy that you mentioned between 2003 to 2007 cannot happen in the economy of 2015…..

#35 Tom on 11.11.15 at 7:34 pm

JAMES ALTUCHER: This is why owning a home is financial suicide

https://www.quora.com/Real-Estate-Investing/Is-it-ultimately-better-to-rent-or-own-a-home/answer/James-Altucher?srid=dsym&share=1

#36 Goldie on 11.11.15 at 7:36 pm

Any of you 1%ers leave your vaults long enough to attend any of the ceremonies today?

Of course. — Garth

#37 Edward on 11.11.15 at 7:37 pm

The Fed probably will raise rates in December. They may even do it again in the spring. The problem is the US dollar. Most other top economies are either easing or providing stimulus. If and when the US buck rises, it will really bite into the earnings of multinational US corporations & manufacturing in the US. That may effect stocks. The fed is watching this carefully.

#38 Arfmooocat on 11.11.15 at 7:41 pm

The wing nuts that say normalization of interest rates won’t happen are the ones the would be f…..ked when it happens.

#39 kommykim on 11.11.15 at 7:43 pm

RE:

#18 db on 11.11.15 at 6:43 pm
First time poster and FIRST!

You’re out by a factor of 50.

#40 common sense on 11.11.15 at 7:44 pm

#28 Smoking Man

Great post…

Freedom is never free.

Spend a minute in Cuba with a native and ask them to openly speak out loud how they feel about their gov’t…

Silence…

My grandfather got heavily mustard gassed in WW1 and told me often as a child…I’m lying in this bed so you can speak your mind and tell the truth…

Rest in peace Grandpa and everyone else that fought and put their life on the line for EVERYONE’s freedom.

#41 ole Doberman on 11.11.15 at 7:47 pm

Gartho do you see large sums of money flowing out of bonds and into stocks as rates rise?

#42 TurnerNation on 11.11.15 at 7:49 pm

Speculation is taut with greed right now:

http://www.bnn.ca/News/2015/11/11/What-I-learned-from-Canadas-runaway-housing-markets.aspx

““You’re living here anyways, you might as well make some money while you’re doing it,” went the oft-repeated argument to me by local real estate boosters (the sort you can easily find in every major Canadian city).

“For a $300,000 condo (roughly the average in Calgary) that would be a $15,000 profit after just one year! I’d have been crazy to resist an opportunity like that.

Then the price of oil crashed, tens of thousands of Calgarians lost their jobs (and those that did not started to fear for their livelihoods all the same). The city became a buyer’s market as the boom times went bust and a sense of fear swept the city. I was forced to sell for a loss when I moved back to my hometown of Toronto last month.”

#43 gut check on 11.11.15 at 7:50 pm

thought those of us priced out or unwilling to mortgage themselves stupid might enjoy this a little because it’s sort of funny.

https://www.youtube.com/watch?v=f-_hsdRALiE

#44 Jeff Gauld on 11.11.15 at 7:56 pm

Hello world!

I’m renewing in Q42015 on a 350k mortgage. I’ll be able to get one last taste of cheap rates for a 5 year fixed taking me to 2021.

Do I look into 10 year fixed with higher interest rates? Or do I acting like a @#[email protected]#, be a dude, go variable and ride the wave?

#45 Sheane Wallace on 11.11.15 at 7:59 pm

Yes, 271,000 geriatric waitresses hired in a month. You’re a riot. — Garth
————————————-
250 k full time jobs lost. Replaced by 520 k part time jobs, working at 1/2 of the time with no benefits.

Great report. But will do the job and rates will rise.

#46 BC Guy on 11.11.15 at 8:00 pm

Since there’s no sunshine and ponies today, I’ll settle for moonshine and peonies.

#47 RayofLight on 11.11.15 at 8:03 pm

We used to have a Border Collie with big brown eyes. “Queenie”. On our first house, we had a carpenter over to work on our kitchen. During his lunch break, Queenie just quietly sat in front of him watching him eat his sandwich. He ended giving her at least a third, said he couldn’t resist the eyes.

#48 Gulf Breeze on 11.11.15 at 8:04 pm

Idiots who bought houses they can’t afford, has to represent at least 10% of the population? Why would the govt. deficit spend to create jobs, while the bank of Canada raises interest rates, forcing huge numbers out of their homes, while torpedoing the F.I.R.E economy? That’s the main engine driving Canada right now.

Makes zero sense. Nor does Yellen’s supposed interest rate hike. She’s going to risk stalling out their incipient recovery? She is going to risk a global fiasco, by doing this? Doubt it.

Perhaps incremental hikes for the next few years, but no no no no-rmalization.

#49 Babblemaster on 11.11.15 at 8:09 pm

Millions of people in the states had their loans readjusted and much of what they borrowed was forgiven. The US is also very steeped in debt. So, I say, more likely than not, the same would happen in Canada.

Not a chance. — Garth

#50 Freedom First on 11.11.15 at 8:13 pm

My name is Freedom First, and I endorse all of today’s Blog messages.

#51 Musty Basement Dweller on 11.11.15 at 8:14 pm

“Also weird is the sentiment routinely seeping out of the steerage section that “the government” will move in and rescue fools who bought slanty, bug-infested..”
From the heart of the steerage section I think you are right. Awesomeness and great post today Garth. Thanks for your ongoing and entertaining help!

#52 Mark on 11.11.15 at 8:19 pm

“JAMES ALTUCHER: This is why owning a home is financial suicide”

Would certainly explain why almost none of the world’s really rich people got that way through real estate. And why most of the population, which overwhelmingly carries on the typical one-asset strategy so decried by Garth, ends up not accumulating any particularly significant amount of wealth.

RE creating ‘rich’ masses of people in Canada is a historical anomaly. The stock market experiencing negative cumulative index level returns for the past 8 years is also historically abnormal. Abnormality is usually resolved by, you guessed it, abnormality, and positioning oneself on the right side of such can keep you out of the poor house (pun intended!).

#53 warren - the lagging indicator on 11.11.15 at 8:19 pm

Since Bill Morneau left his million dollar job under his own free will, I assume. Does it not imply that at least he thinks there are more perks, value or benefit in some way in this new one that trumps his previous one?

Also, Forget about appointing the most qualified people for positions. Lets accuse Garth of sexism for remarking on it while completely missing his point.

Man it is cold and scary out here in the cabbage patch…

ps – Freedom First has got it figured.

#54 conan on 11.11.15 at 8:21 pm

#7 conan on 11.11.15 at 6:14 pm

I did not know your 70% number was based on a survey I thought you were adding some insurance into your articles and I thought that funny considering your recent musings on this topic.

My number is mine alone and it’s low, less then 5%.
IMHO the fed floats an idea about raising rates and if the market sells off then they back track. This has been going on for years.

#55 RW_Z on 11.11.15 at 8:21 pm

Post made me smile. First time in a while.

#56 JamesA on 11.11.15 at 8:25 pm

This is a econ 101 redux of what is often discussed here:

http://www.investopedia.com/articles/investing/092415/how-us-interest-rates-move-world-economy.asp

about the connection between the US rates are the affect it has on the rest of us (pretty much 1to1 with the Garthanator’s thinking)

I hope this is it, so sick of waiting for the correction. Its going to suck, lets just get it over with.

#57 kommykim on 11.11.15 at 8:25 pm

RE:

#35 Tom on 11.11.15 at 7:34 pm
JAMES ALTUCHER: This is why owning a home is financial suicide

Pretty good read. That guy is almost as good as Garth.

#58 Sherry M. on 11.11.15 at 8:28 pm

I’m not sure if I agree Garth. You have only the US economy doing OK right now. The OECD is pretty pessimistic about world growth. If the States buck rises too much, it may affect stocks. It aleady is.

Markets have shown robust growth during tightening cycles, and I expect the same this time. As for the OECD, the current forecast is global growth of 3.1% – three times that of Canada. — Garth

#59 Rexx Rock on 11.11.15 at 8:34 pm

I get it, interest rates are going up in the USA,maybe how many years have they be saying this?As for Canada we will follow the Japan way and just let our dollar tank.Canadians will adapt to a very low dollar just like Japan does.I know it will be very painful but we can’t have housing correction,I think its against the law now?

#60 cory on 11.11.15 at 8:36 pm

this article is hilarious.

http://www.calgaryherald.com/news/world/young+women+living+with+parents+relatives+rate+seen+since/11509020/story.html

I love the comments to justify failure, entitlement, arrogance, coddling, helicopter parenting…whatever:

“There was that element of frustration and feeling like a failure,” she says about returning home. “But then the logical side of me kicked in and said ’It’s just fiscally responsible.”’ 9she’s not a faiure, she’s “fiscally responsible”…..HAHAHA!!! justify it however you need to to feel good about yourself.

“There are bumps, like when she fails to tidy up or check in with her parents regularly. But otherwise it’s a comfort to be with her family.” – good God…..she’s 26, lives at home, and has to check in with her parents???!!

It’s no wonder North American birth rates are abysmal with this happening. I’ve watched this for long time, women/ girls walking down the street and CANNOT take their eyes off their phones and CANNOT put them down…forget AA, phones will be the newest and biggest addiction to ever hit mankind that will be relatively untreatable. what a completely dysfunctional generation. Marriage rates falling (well, between people anyway, soon marriage will be with a smart phone)…it’s no wonder.

If I was single, I would rather date a smoker and drinker than a woman who can take her eyes off of her “Stupid” phone.

#61 Edward on 11.11.15 at 8:37 pm

Edward died tonight. RIP. But before he did, we were able to clone him. Long live the many aliases of Edward.

Cin cin!

#62 ed on 11.11.15 at 8:37 pm

I think those in the “steerage section” are also responsible for the anti-foreigner dribble. It looks like they are preparing a script, complete with a scapegoat (rich Chinese), when the dung hits the fan and they are left shirtless.

#63 Darren on 11.11.15 at 8:37 pm

I’ve always wondered what Mrs. Yellen looked like when she was younger….well, here she is!

http://vignette4.wikia.nocookie.net/peanuts/images/a/a0/1107charlie_brown_lucy_football.jpg/revision/latest?cb=20100523172400

#64 Tony on 11.11.15 at 8:38 pm

One thing I know for sure is if the impossible happens and rates do go up it will end up being nothing but a short lived pipe dream when the rates crash soon enough to less than what they are today. In the real world I have to believe this is the only possible outcome.

#65 lee bow on 11.11.15 at 8:38 pm

Hard to imagine that government is going to be as immune and vulcanianly logical as Garth.

Both banks and the Leslieville folks will be there (with border collie-like dreamy eyes) knocking at the door. Plus, they can vote and do donations. That may be almost as important for the Dauphin as the dreamy eyes and the border collie-like appearance.

Border collies can be a hassle.

#66 Patrick on 11.11.15 at 8:39 pm

#53 warren – the lagging indicator on 11.11.15 at 8:19 pm
Since Bill Morneau left his million dollar job under his own free will, I assume. Does it not imply that at least he thinks there are more perks, value or benefit in some way in this new one that trumps his previous one?
_________________________________________

I think high-profile MP cabinet position is usually a good career move.

#67 nonplused on 11.11.15 at 8:39 pm

Looks like Vancouver is about to be washed out to sea:

http://www.theweathernetwork.com/alerts/high-alert/canada/british-columbia/vancouver

Thankfully it’s coming from the North so it shouldn’t have to much Fukashima brand seasoning sprinkled in.

Garth, I don’t think it’s fair to describe capital gains on housing as tax free anymore, at least in certain jurisdictions where there are substantial land title transfer taxes. If house prices even just stabilize, after a few transfers most of the gains will end up with the city. The tax rate on further gains from here could very well be more than 100%. And like realty fees we can argue all day who pays it the buyer or the seller but it doesn’t matter it has to be paid.

#68 IHCTD9 on 11.11.15 at 8:42 pm

I think a clearer future is starting to develop. No mass mortgage defaults, but a steady grind south, and maybe not too slow either. Fed rate hike combined with job losses here in Canada resulting in increased costs of everything and less money to pay for it. Wallets start closing up and slowing down non luxury home sales in the hyper markets. GDP shrinkage becomes resilient. Government revenues continually take a hit with less income taxes, and corporate taxes coming in, while more safety net payments go out. Commodities stay flat, manufacturing needs a sixty cent Loonie for a comeback. Federal and provincial debts and obligations climb adding more fees and taxes, eventually effecting public service job holders.

Cliffs:

Government spends more while taking in less and slowly goes broke

Canadians spend more and take in less and slowly go broke

What’s the fix? Once the housing market, energy sector, and consumer spending stops feeding the GDP, what is left?

#69 james on 11.11.15 at 8:47 pm

#28 Smoking Realtor

Wow, dude, you are so incredibly lame, unoriginal and badly schooled by too many stupid and deservedly unviewed internet sites.

Your commentary is so backward, so tea-party retarded, plagiarized and unoriginal, it’s hard to kow where to start.

But you are an uneducated misogynist, so congrats on that little bit of honesty on your part.

Good luck pumping the real estate bubble to the herd, you uber-schooled goof.

#70 Bram on 11.11.15 at 8:47 pm

On YVR housing market: I don’t think anyone is selling yet:

“Vancouver property listings for October 2015 are the lowest they have been for this time of year, going back to 2005. Average Days on the market is 30 and haven’t been this low since 2010,”

No sellers, but still plenty buyers, means more up before going down.

#71 Joseph R. on 11.11.15 at 8:51 pm

#49 Babblemaster on 11.11.15 at 8:09 pm

Senator Warren introduced a loan forgiveness and refinancing bill but it targeted student loans, not mortgage loans:

The Bank on Students Emergency Loan Refinancing Act

https://www.congress.gov/bill/113th-congress/senate-bill/2432

Over 90% of Students loans are federal government loans through banks (Sallie Mae) or the Department of Education.

Students loans in the USA have skyrocketed in the past decades as tuition are out of whack with inflation:

http://trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fees-and-room-and-board-over-time-1975-76-2015-16-selected-years

Indeed, the student debt situation, over 1.2 trillion in debt, will be a serious problem with the incoming rates increases and many economists fear it will the next bubble to burst and cripple the economy.

Worse, In the US, student loans cannot be discharged through bankruptcy:

http://bankruptcy.lawyers.com/consumer-bankruptcy/debts-you-cannot-discharge-in-bankruptcy.html

#72 amazon girl on 11.11.15 at 8:52 pm

What a night!

Two great post ,at one hand the maleness man ,hairy
and a nice tie…awesome
the other hand , a man a bit of misogynist,free ,bald who wear only the tie…tough

I salute you both

#73 Tom jones on 11.11.15 at 8:53 pm

Garth – you can’t believe the Fed and I’m surprised you do. If anyone’s broke, it’s the Fed themselves . …and the US is on life support. No way they raise rates – no matter what the street thinks.

The US liquidity bubble is about to pop. Maybe in December when the viel is lifted…

Riddle me this – what has structurally changed in the US since 09? Nothing but more paper money

#74 Mark on 11.11.15 at 8:53 pm

http://business.financialpost.com/news/property-post/it-is-a-bloodbath-calgary-office-towers-are-about-to-fell-the-full-force-of-the-oil-crash

Major stress on office tower REIT distributions ahead!

#75 james on 11.11.15 at 8:54 pm

#28 Smoking Man

Such an unoriginal and lame post by you, yet again. You let yourself be so badly schooled by tea-party stupidity and really dumb websites, and come here to spout such derivative nonsense. Originality? Courage? Insight? Naahh, those things take some actual intellectual effort. It’s too easy for you to cut and paste nonsense. At least you admit you’re not well educated and disrespect women – good for you.

#76 zee on 11.11.15 at 8:55 pm

As for govt not rescuing Canadians from their high debt, what do you think the BoC did with its rate cut. It was of no help for the oil sector. Even your buddy, Benny, said that rates can go to minus 10 and it wont help the oil/gas sector.
It was to help families cope with their debt during job losses and encourage others to take on more debt.

Did you not say when Trudeau became PM, that he was looking at bringing back 40 year amortization?

#77 Drill Baby Drill on 11.11.15 at 8:58 pm

The low oil price is forcing many in Alta including the producers to recalibrate their costs and the way they do business. This is a good thing a natural thing a necessary thing. The oil business will be much healthier because of this downturn. I know it is not fashionable to state that the oil business is not done but it is not done. The largest money maker in Canada is the oil business. The politically correct crowd all want to do away with this industry but they do not realize that their lattes, vespas, scrunchies and metro sexual clothing are all derived from oil.

#78 Marco on 11.11.15 at 9:02 pm

Thanks Garth, great read as usual.

Found this to be a good little primer on how the Fed and Banks control interest rates and money supply.

https://www.stlouisfed.org/in-plain-english/a-closer-look-at-open-market-operations

Cheers.

#79 Tony on 11.11.15 at 9:03 pm

Re: #44 Jeff Gauld on 11.11.15 at 7:56 pm

It also depends on how many years are left on your mortgage.

#80 Julia on 11.11.15 at 9:03 pm

#12 old gringo
“But garth, isn’t CMHC going to have to cover any short fallings when the herd sells?
Is that not the gov’t covering those losses?”

CMHC insures the Bank against losses if the Bank has to enforce on the mortgage and sell the house. If the herd sells at a loss it’s their own loss, they remain on the hook with the bank for unpaid balances.

#81 Smoking Man on 11.11.15 at 9:11 pm

Hey commies freedom lovers are organizing..

The right to not be offended
https://www.youtube.com/watch?v=2bwGsOBTlhE

More
https://www.youtube.com/watch?v=F_fDIsGufPY

#82 Shawn on 11.11.15 at 9:19 pm

Hi Garth,

After the last commodity (i.e. oil) collapse (beginning in 1980) the $CAD and other commodities meandered for 20 years. Oil remained in a downtrend and finally bottomed at $10 in 1999 – it only briefly spiked during the Gulf War in 1991. It was a long way down from the early 80s peak. I think this collapse is worse due to the influence of alternative energy technology. What do you think?

The TSX will eventually recover due to growing strength in other sectors in the economy but I’m not sure about the $CAD and commodities. This kind of secular trend often runs for 10-20 years.

Shawn

#83 Mark on 11.11.15 at 9:22 pm

“CMHC insures the Bank against losses if the Bank has to enforce on the mortgage and sell the house. If the herd sells at a loss it’s their own loss, they remain on the hook with the bank for unpaid balances.”

Technically they are on the hook to the CMHC for the balance that the CMHC has to pay out. Not the bank. But in the practical sense, the usual consequence of defaulting on a CMHC insured loan is also filing for personal bankruptcy. And the claim of the CMHC is dealt with and typically discharged according to the usual process of bankruptcy as an unsecured creditor. Alongside all other creditors. The only way a CMHC debt would fail to be discharged is if CMHC could prove the debtor obtained the insurance on account of fraud.

The CMHC would receive a pro rata share of the payments made into the bankrupt’s estate, but probably a mere pittance compared to the face value of the deficiency. Its bankruptcy, after all.

#84 IM in C on 11.11.15 at 9:22 pm

Also weird is the sentiment routinely seeping out of the steerage section that “the government” will move in and rescue fools who bought slanty, bug-infested Leslieville semis for $900,000, or shaggy Vancouver Specials for $1.2 million, with mortgage forgiveness, 40-year amortizations or homeowner grants. Ain’t gonna happen.

If it has to , Oh yes! it will !!

#85 Smoking Man on 11.11.15 at 9:23 pm

#75 james on 11.11.15 at 8:54 pm
#28 Smoking Man

Such an unoriginal and lame post by you, yet again. You let yourself be so badly schooled by tea-party stupidity and really dumb websites, and come here to spout such derivative nonsense. Originality? Courage? Insight? Naahh, those things take some actual intellectual effort. It’s too easy for you to cut and paste nonsense. At least you admit you’re not well educated and disrespect women – good for you.
…..
Fking commies everywhere.

They cant differentiate Education vs Schooling

Being an old school man by definition makes you a misogynist, you cant get away from it. So why deny it.

Having responsibility, going solo in taking care of my family, making lots of loot is a crime to tree hugging, pink shirt, cycle riding puffs.

People like you are always pissed at something. Cause you have no imagination, absolutely no business sense.

Hope you enjoyed the above vids I posted jimmy boy.

#86 saskatoon on 11.11.15 at 9:24 pm

#30 Fuzzy Camel

unfortunately, all “courses” now are gender studies:

https://www.youtube.com/watch?v=iKcWu0tsiZM

#87 When will they raise rates? on 11.11.15 at 9:24 pm

Nice post tonight Garth. I hope you’re proven correct on all counts, especially this part:

“the government” will move in and rescue fools.. ..Ain’t gonna happen.

#88 Lea on 11.11.15 at 9:27 pm

Ponies and sunshine…

Disclaimer: I’m an American living in Canada so I might not get “it”.

Anyway, it seems to me that you have a country with a solid infrastructure and an educated population. If you could shift all the energy directed into the pursuit of real estate and redirect it into new ventures you might come up with some really good stuff.

Back in 2006 in the U.S. everybody and his/her brother was going to “flip” a house. It was monomania and too many resources were flowing into real estate. It was ridiculous. Following the crash, people went back to more diverse pursuits.

It may be rainbows and unicorns, but I hope you guys come up with some really good stuff.

#89 Victor V on 11.11.15 at 9:31 pm

http://news.nationalpost.com/news/canada/donald-trump-trashes-justin-trudeaus-gender-equal-cabinet-pledge

WASHINGTON — Critics of Justin Trudeau’s guarantee of a gender-equal cabinet have found a famous ally south of the border: Donald Trump.

The billionaire politician was asked Wednesday in an interview about imitating the new Canadian prime minister’s half-male, half-female cabinet — and he said no.

An MSNBC interviewer brought up Trudeau’s stated rationale for the move — “because it’s 2015” — and she asked the Republican nomination contender whether he’d follow suit.

Trump replied that he has many, many women working for his companies. Perhaps even more than 50 per cent, he said. But he said he’d make cabinet appointments based exclusively on merit, not quotas.

#90 Millenial on 11.11.15 at 9:34 pm

Wow, a real blog posting on Remembrance Day? Garth, you must be really convinced a rate hike is coming soon.

My parents have their moneys with some Nesbitt Burns guys, met a few weeks ago, even they admit the US is in a manufacturing recession right now. Looking at the stats it’s impossible to suggest otherwise. I can’t imagine how much a strengthening US dollar will exacerbate that situation.

The ONLY reason the feds will start a tightening cycle is to maintain credibility, or to try to get some ammo to use in the next full out recessionary period. Although i don’t think reducing interest rates from say, 0.75% to 0% will do much good the next time things take a dive, which i fear will be soon. Nobody will be spared, God help us.

#91 Nagraj on 11.11.15 at 9:36 pm

Gingerbread people make me think of Hansel&Gretel.

As I recall, the second sentence of Hansel&Gretel reads “Eine grosse Teuerung kam ins Lande” meaning “a great expensification came into the land” meaning they was hit with a inflation crisis.
The poor but honest and hard-woikin woodcutter’s family was starvin’ because prices in the stores was jes goin’ up and up and up!

Thusly the economic catalyst of the Hansel&Gretel epic – is political mismanagement at the palace; obviously the minister of finance was a Chippendale favourite of the king (or a favourite of the Chippendale king) (or whatever) and the result was the worst sort of inflationary price instability.

You can clearly see how gov’t can cause trouble.

Now, you will recall that the witch had poor eyesight.
So to see how her fattening skinny Hansel in a cage was comin’ along, she made him stick out a finger and she would feel it.
Clever Hansel however stuck out a little twig, causing the impatient cannibal witch much consternation, and so she plied him with more and more and even more goodies to get him good and fat.

Obviously sometimes a twig is not a twig.

And to all a good night.

#92 IHCTD9 on 11.11.15 at 9:40 pm

#80 Julia on 11.11.15 at 9:03 pm
#12 old gringo
“But garth, isn’t CMHC going to have to cover any short fallings when the herd sells?
Is that not the gov’t covering those losses?”

CMHC insures the Bank against losses if the Bank has to enforce on the mortgage and sell the house. If the herd sells at a loss it’s their own loss, they remain on the hook with the bank for unpaid balances.
——————————————

Yes, full recourse in all Provinces except Saskatchewan and Alberta I think. No jingle mail here for the most part. Even in those two provinces where you can still throw your keys at the bank, I believe you could still get sued by the CMHC for losses if they have to cover the bank. Mortgage defaults in Canada are extremely rare historically.

Not saying that can’t change though…

#93 Daisy Mae on 11.11.15 at 9:41 pm

“The feds, in case you missed it, are broke…”

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

And this, of course, is Harpers’ fault…

#94 Smoking Man on 11.11.15 at 9:43 pm

#88 Lea on 11.11.15 at 9:27 pm
Ponies and sunshine…

Disclaimer: I’m an American living in Canada so I might not get “it”.

Anyway, it seems to me that you have a country with a solid infrastructure and an educated population. If you could shift all the energy directed into the pursuit of real estate and redirect it into new ventures you might come up with some really good stuff.

Back in 2006 in the U.S. everybody and his/her brother was going to “flip” a house. It was monomania and too many resources were flowing into real estate. It was ridiculous. Following the crash, people went back to more diverse pursuits.

It may be rainbows and unicorns, but I hope you guys come up with some really good stuff.
………….

Not a chance with the Canadian herd.

Entrepreneurship is an evil in the minds of many Canadians. That mind set starts in kindergarten.

Canadians are kiss ass-ing followers, we are still a colony god damn it. It is what it is.

This place hates new ideas, greed, risk, fun…..

#95 For those about to flop... on 11.11.15 at 9:49 pm

#29 Retired WI Boomer on 11.11.15 at 7:14 pm
No sunshine? No unicorns? Suck. Blow. Pick one.
Eloquent, the warning time is apparently getting short now. Investing has been a ‘meh’ thing this year. Not much return for risk.
Could rates finally get off the mat? I dunno, I am just the idiot bystander. I think the economy kind of sucks myself. I go with suck.

/////////////////////////////////
You chose to skip the anal?

#96 Paul F on 11.11.15 at 9:50 pm

What #77 said.
I agree with you Garth on a lot of things but i don’t see a rate hike in the US in December.

What boggles my mind is that you’re able to see past the BS and nonsense in Canada but you eat up this phoney recovery in the states.

If the rates do go up i will wash your Harley while wearing a thong in the middle of december.

#97 Smoking Man on 11.11.15 at 9:53 pm

#86 saskatoon on 11.11.15 at 9:24 pm
#30 Fuzzy Camel

unfortunately, all “courses” now are gender studies:

https://www.youtube.com/watch?v=iKcWu0tsiZM
………………………

Great clip, made my day

#98 Holy Crap Wheres The Tylenol on 11.11.15 at 9:59 pm

#28 Smoking Man on 11.11.15 at 7:12 pm
Today was remembrance day, an anniversary that celebrates the sacrifices young men give to defend our freedom. Today watching TV they’re asking little kids what it means, they say “Honouring men who gave up there lives for our freedom”
————————————-
Yep and you can thank the Veterans For the right to do what ever you like. They fought for you along time ago.
Otherwise you may not have had the freedom to smoke, drink or make money and own a home. You could have been a slave in a factory starting off every day by saying Zieg Hiel!

#99 young & foolish on 11.11.15 at 10:04 pm

The is no “correction” coming, just an adjustment. Oil went up, oil went down, preferreds went up, preferreds went down, Nortel went up, and Nortel went down, RE went up, RE is going back down … and TSX continues to go nowhere.

Meanwhile, you need cash flow …

#100 Holy Crap Wheres The Tylenol on 11.11.15 at 10:05 pm

#94 Smoking Man on 11.11.15 at 9:43 pm

Speak for yourself buddy. I was born in Canada, raised in America, educated in America, fought in an unpopular war for America, came back from overseas worked for a large Defence firm in SoCal and my lights want on inside my head and said build your own company. That’s what I did right here in Oakville. So the entrepreneur is in all of us just like you, some people have and some don’t. Many of my best friends started their own corps here.

#101 young & foolish on 11.11.15 at 10:07 pm

“Entrepreneurship is an evil in the minds of many Canadians. ”

Hmmm, don’t really think so. And not much happens is America either, without government money or R&D either.

#102 WallOfWorry on 11.11.15 at 10:10 pm

I hate to say it Garth but I now agree that this is a pathetic of blog. For you to suggest that the Fed does not raise rates once without any critical thinking of your own is irresponsible. You are comparing a pattern of behaviour to a time when GDP growth exceeded 3% and government debt was a quarter of what it is today? If the Fed doubles interest rates (as you suggest) over the next few years and GDP growth is still sub 3% the US would be no different than Italy, or Spain, or Greece. Until their is a fundamental change in the macro economic conditions, what you suggest refutes logic. If we are experiencing such robust economic growth to warrant tighter fiscal policy why aren’t we seeing inflation, increased wage growth and accelerating GDP growth? Pathetic.

#103 joblo on 11.11.15 at 10:10 pm

#71 Joseph R.

“Worse, In the US, student loans cannot be discharged through bankruptcy:”

Student loan repayment is needed to pay for Social security promises.

#104 Mark on 11.11.15 at 10:11 pm

“Yes, full recourse in all Provinces except Saskatchewan and Alberta I think.”

Full recourse across Canada actually, per the Bank Act which is federal legislation. Non-recourse in Alberta (and Saskatchewan?? not sure about that) only applies to a very small number of provincially-regulated institutions (ie: Credit Unions).

Mortgage defaults in Canada are extremely rare historically.

They’re rare, historically, because policy makers have traditionally had a decent slate of tools to use in order to prevent defaults. Such as lowering policy rates. Demography, particularly, the trend towards smaller family units has also created additional demand that pulled Canada out of past RE slumps in relatively short order.

This time around, however, there are a number of factors which imply it might be different this time. For instance, demographic tailwinds are likely to be minimal at best (and a poor economy, as seen in the US, may even drive family sizes to get larger on account of attempting to save money and achieve efficiencies). Interest rates pretty much have a limit at 0%, below which lending is likely to be substantially impaired (lenders will simply hoard cash in their vaults rather than lend at negative interest!). And there is very little room to drive ownership rates higher than the historic high of 70% ownership that we have today.

So basically, prices need to fall. Defaults need to happen. The financially responsible people in society will take over the assets and rent them back to the former owners who were financially irresponsible. Ownership rates will mean revert to beneath the long-term averages. And those who own productive businesses that comprise the economy that actually employs people and produces goods/services will be resume being far wealthier/better off in the long run.

#105 Smoking Man on 11.11.15 at 10:12 pm

#100 Holy Crap Wheres The Tylenol on 11.11.15 at 10:05 pm
#94 Smoking Man on 11.11.15 at 9:43 pm

Speak for yourself buddy. I was born in Canada, raised in America, educated in America, fought in an unpopular war for America, came back from overseas worked for a large Defence firm in SoCal and my lights want on inside my head and said build your own company. That’s what I did right here in Oakville. So the entrepreneur is in all of us just like you, some people have and some don’t. Many of my best friends started their own corps here.
…..

Had you never left Canada, that entrepreneur bug would never have bit you….

You were bit in the USA….

Plus when we went to school it was different, Not like it is today.

#106 Smoking Man on 11.11.15 at 10:14 pm

#101 young & foolish on 11.11.15 at 10:07 pm
“Entrepreneurship is an evil in the minds of many Canadians. ”

Hmmm, don’t really think so. And not much happens is America either, without government money or R&D either.
……………………

No it starts with door knocking and builds from there.

#107 William of the North on 11.11.15 at 10:14 pm

Garth…..

It’s not Manly………. to apologize for being Manly.

#108 fishman on 11.11.15 at 10:20 pm

West side Van still holding up! 30’x120′ run of the mill lot”tear down” 2.4 mil. Hot off the press. There aren’t any of us regulars I know still in the game (other than mortgage brokers doing bridge financing short term) Don’t know any “old stock” builders, speckers, tradesman. Cashed out, gone to the Island, laying low,scared, who knows? Gone. New money, new players, new game in town. Expensive restaurants for the right people are packed. I think that big money from all over is looking for safety & low profile . Just one example is an acquaintance that put his two kids in school for a year for the same cost as their 24 hour bodyguards back home. Maybe it’ll bust like the old days, but right now Vancouver is playing out like “London on the Pacific”

#109 The Other Chris on 11.11.15 at 10:27 pm

I don’t think that Canadians see entrepreneurship as evil, but I definitely think two things are true: (i) there is a kind of unfortunate but growing perception here that entrepreneurship is not worth it versus the alternatives (why would you when you can get a gig at Hydro One paying $120k/yr with just a BA, like that guy in the news recently?), and (ii) there is often a sense of resentment against successful people in Canada, which discourages entrepreneurship. It’s a very different attitude than in the US, where being successful in business is seen as something to admire.

#110 young & foolish on 11.11.15 at 10:29 pm

One day, it will look barbaric …. raising animals for food. Pity the poor hogs, the cattle, sheep, chickens, and all other unfortunate creatures.

In big farming, like with most human endeavors, people go to the extremes for higher “productivity” … usually resulting in profit for the few.

#111 CaliforniaDreaming on 11.11.15 at 10:32 pm

OECD forecast of growth for USA as of Nov 2015:

2015 = 2.4%
2016 = 2.5%
2017 = 2.4%

Sure looks to me like the Fed will be having a series of slow and steady rate hikes over the next 3 years. Inflation is benign, and wage growth is non-existent.

#112 james on 11.11.15 at 10:35 pm

#81 Smoking Realtor

There you go again, trawling the internet for more sludge on the bottom with your comments and vaguely relevant videos.

I met Penn and Teller a couple of times, had some nice chat time with them a few years back. They were more astute in the 1990s, now more of just an act catering to dudes like you drunk in Vegas. Not exactly leading edge, or anywhere close to it, anymore. Your other video was just lame too, no heroes of truth anywhere there, just bizarre ranting.

Again, Smoking Man, why are you so lazy, so derivative, so lame? Didn’t you post a year or two ago that your persona was actually just a college writing class project or something? Well, it shows, or at least that should be what you are. I’d give it a D-, and suggest you switch classes, maybe train to be a PSW changing thirsty underwear.

You truly are so fully schooled, manipulated by those who don’t care about you seeking after truth, but want you to lap up their predigested, simplistic versions of it.
And you are lazy enough, and dumb enough to buy it all. Dude – can I sell you some duct cleaning!?

Educated, you say? The word in latin refers to leading oneself out, out of the darkness.

You are the opposite, and so are your fellow travellers, here and elsewhere.

You seek dark comfy spaces to lead yourself into, like back to mommy’s womb or, more aptly, daddy’s butthole, where you can feel safe to flick little turds at others, like your conspiracy theories, misogyny, gambling stupidity, half-assed mystical beliefs, because you are too afraid to leave the warm spot, escape the herd and search for what might actually be true.

So you end up being the one to submit yourself to the schooling of anyone who promises you the comfort of never having to ask truly tough questions, like the little boy in diapers that you choose to remain. As long as you don’t have to really make any effort at it, so trolling the internet for tall tales comes in very handy for you.

Smoking Realtor, trolls like you are among the biggest turds, the worst underachievers of the internet age.

You are just so lame, so schooled, such a complete fraud.

#113 The real Kip on 11.11.15 at 10:46 pm

#63 Darren on 11.11.15 at 8:37 pm
“I’ve always wondered what Mrs. Yellen looked like when she was younger….well, here she is!”

http://vignette4.wikia.nocookie.net/peanuts/images/a/a0/1107charlie_brown_lucy_football.jpg/revision/latest?cb=20100523172400

Best laugh I’ve had in a while and so true. There will be no rate hike in December.

#114 John on 11.11.15 at 10:49 pm

After multiple years of excuses why rates aren’t going up, it’s sorta like the guy who yelled….’wolf’…. Seeing is believing or something like that……. As for Canada, all of that commerical real estate idling in Cowtown ain’t a pretty sight. But, who’s paying attention? I mean really?

#115 Mark on 11.11.15 at 10:55 pm

Sure looks to me like the Fed will be having a series of slow and steady rate hikes over the next 3 years. Inflation is benign, and wage growth is non-existent.

With those low growth rates (if they even pan out to be that high), why would policy rate increases even be
necessary?

Why tinker with something that’s not broke? Without wage inflation, consumer price inflation is quite improbable. In fact, debt repayment associated with an increase to the savings rate is likely to truncate consumption for many years to come keeping a lid on CPI. An increase in loanable funds in the banking system is likely to keep interest rates abnormally low, if not near zero as well. Just like as seen in Japan for the past 20 years.

#116 Smoking Man on 11.11.15 at 10:57 pm

#112 james on 11.11.15 at 10:35 pm
#81 Smoking Realtor

There you go again, trawling the internet for more sludge on the bottom with your comments and vaguely relevant videos.

I met Penn and Teller a couple of times, had some nice chat time with them a few years back. They were more astute in the 1990s, now more of just an act catering to dudes like you drunk in Vegas. Not exactly leading edge, or anywhere close to it, anymore. Your other video was just lame too, no heroes of truth anywhere there, just bizarre ranting.

Again, Smoking Man, why are you so lazy, so derivative, so lame? Didn’t you post a year or two ago that your persona was actually just a college writing class project or something? Well, it shows, or at least that should be what you are. I’d give it a D-, and suggest you switch classes, maybe train to be a PSW changing thirsty underwear.

You truly are so fully schooled, manipulated by those who don’t care about you seeking after truth, but want you to lap up their predigested, simplistic versions of it.
And you are lazy enough, and dumb enough to buy it all. Dude – can I sell you some duct cleaning!?

Educated, you say? The word in latin refers to leading oneself out, out of the darkness.

You are the opposite, and so are your fellow travellers, here and elsewhere.

You seek dark comfy spaces to lead yourself into, like back to mommy’s womb or, more aptly, daddy’s butthole, where you can feel safe to flick little turds at others, like your conspiracy theories, misogyny, gambling stupidity, half-assed mystical beliefs, because you are too afraid to leave the warm spot, escape the herd and search for what might actually be true.

So you end up being the one to submit yourself to the schooling of anyone who promises you the comfort of never having to ask truly tough questions, like the little boy in diapers that you choose to remain. As long as you don’t have to really make any effort at it, so trolling the internet for tall tales comes in very handy for you.

Smoking Realtor, trolls like you are among the biggest turds, the worst underachievers of the internet age.

You are just so lame, so schooled, such a complete fraud.
……

You said.
I met Penn and Teller a couple of times, had some nice chat time with them a few years back.

Bahaha

Why would you admit that…

Now if you’ve met God, or an Alien, that would arrousre an interest in me.

#117 ROCK BEATS PAPER on 11.11.15 at 11:01 pm

So the FED raises over the next couple of years a couple hundred basis points. Over time that will mean the US government will need to pony up several hundred billion per year in interest payments. I do not think this is the same environment the FED faced in previous cycles.

#118 squidly77 on 11.11.15 at 11:02 pm

It wouldn’t be right to say the collapse of oil prices has turned Canada’s once-thriving oil capital of Calgary into a ghost town.
http://oilprice.com/Latest-Energy-News/World-News/Oil-Price-Pain-Spreading-To-Calgary-Real-Estate-Market.html

This was never rocket science.

Anyone notice how the 54,000 layoffs that occurred in the Calgary concrete towers never made into the initial EI claims or statscan unemployment rate?

Think 12 months severance pay.

#119 betamax on 11.11.15 at 11:08 pm

>The Fed does not raise once and stops….The average number of increases is 10.

What’s the average got to do with anything?

Education. — Garth

#120 Millmech on 11.11.15 at 11:15 pm

#93 Daisy May
You must have a real simple life,rainy day it’s Harpers fault,toast blackened,Harpers fault,stubbed toe,Harpers fault.You can relax your new Trubeau is going to give it to us financially so good that we won’t ever need it physically for a long time!

#121 espressobob on 11.11.15 at 11:16 pm

Much thanks to the vets who fought for our freedom. It’s hard to fathom the sacrifices these individuals made for us!

Without their efforts our world could be quite different.

Imagine this comment section?

#122 Two sense on 11.11.15 at 11:17 pm

#40 common sense

My world is not as black and white as yours.
I was in Cuba Dec. 2014 and had a long and frank conversation with a Cuban about the government there.
It is also interesting to note that the child mortality rate is lower and longevity longer in Cuba than the US.
During Batista’s time before the Castros people did not have enough to eat so I guess they had the freedom to starve to death.
I am not an apologist for the Cuban regime, they have many problems including human rights and the inability to serve warm food to guests at their resorts. There are problems with every system.

#123 BlackDog on 11.11.15 at 11:18 pm

“50 per cent female cabinet appointments lead to 5000 per cent increase in guys who suddenly care about merit in cabinet.”

http://www.huffingtonpost.ca/elizabeth-may/gender-balance-cabinet_b_8472966.html

#124 Nodebt on 11.11.15 at 11:19 pm

#112 James

LMFAO!! Ur right there CLOWNS

#125 TRT on 11.11.15 at 11:20 pm

Mortgage forgiveness will happen if there is a housing downturn.

The majority can make it happen.

That is democracy.

Not a chance. — Garth

#126 Cici on 11.11.15 at 11:22 pm

#28 Smoking Man

Not to add fuel to the gender fire, but…could we please just commemorate all the individuals who have fallen in war, from soldiers to nurses to doctors and peacekeepers, etc.?

#127 Cici on 11.11.15 at 11:23 pm

#123 BlackDog

LoL, excellent ;-)

#128 TRT on 11.11.15 at 11:26 pm

“One and done!”

Plus, Negative rates during next downturn. We are due.

#129 Smoking Man on 11.11.15 at 11:26 pm

#124 Nodebt on 11.11.15 at 11:19 pm
#112 James

LMFAO!! Ur right there CLOWNS
..

I made a celebrity out of the bastard just by talking to him..

Free speech alive and well on Greater Fool..

#130 S.Bby on 11.11.15 at 11:28 pm

#82 Shawn on 11.11.15 at 9:19 pm

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

You have not commented here for a while.
Busy decorating your mcmansion in Lillooet?

#131 economictsunami on 11.11.15 at 11:35 pm

It appears the liquidity juiced commodity debt party caused many of the smartest guys in the room to heavily invest in over capacity, scant years prior to the uber finance dudes at GS trumpeting the end of the commodity supercycle.

Now commodities face a triple whammy: higher USD, weaker/ slowing global economy and increasing production coming on stream; especially in: King Oil/ Dr Copper and Bobby Ore.

They’re caught in a classic Catch 22: prices are depressed but we need to keep over producing (adding to over supply) to meet their large debt obligations.

Presently in multi year price lows; just like Calgary commercial RE…

Empty Floors, Shadow Vacancies New Norm for Calgary Tower Owners

http://www.bloomberg.com/news/articles/2015-11-10/empty-floors-shadow-vacancies-new-norm-for-calgary-tower-owners

Commodities keep falling as major mining projects come into production

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/commodities-keep-falling-as-big-mining-projects-come-into-production/article27218760/

#132 TRT on 11.11.15 at 11:36 pm

Some Math on rate hike:

70% for Dec, 40% for spring.

If Dec happens, Spring goes down to 10%.

get it?

#133 Smoking Man on 11.11.15 at 11:39 pm

#125 Cici on 11.11.15 at 11:22 pm
#28 Smoking Man

Not to add fuel to the gender fire, but…could we please just commemorate all the individuals who have fallen in war, from soldiers to nurses to doctors and peacekeepers, etc.?
….

How about the buggers that where lucky enough not to fall but endured, brains im thinking. three stints in German labour camps, two failed escape attempts, the last escape got him to Canada.

He’s a classic..

Love you pops.

Here he is..click my name to see a Serbian Nazi killer.

He got lots of em….

#134 boigameister on 11.11.15 at 11:40 pm

#152 Bottoms_Up on 11.11.15 at 2:28 am
#105 Terrence Bumbleford on 11.10.15 at 10:05 pm
——————————
You are cheapskate. Do everyone a favour and never visit a restaurant again.

People that work as servers may be putting themselves through school, or trying to raise a child…they are paid less than minimum wage and you are advocating to not tip??? Get a life my friend!”

Why should people who have made their own choices in life be subsidized by others?

Why don’t the people at BK and the Golden Arches merit tips, or the guys who drive snowplows, or zambonis, or guys who climb telephone polls? I’ll tell you why! These are all honourable people who work their buns off and do not believe in a false sense of entitlement like you seem to.

Now hurry up and get my burger, the fires are getting cold!

#135 ANON on 11.11.15 at 11:48 pm

Yesterday I told you this post would be about ponies and sunshine. I lied. Get over it.

Fair enough. A bit disappointing, though, as I was hoping for some solar cooked pony steaks, sun-dried unicorn jerky, maybe even some mustang charcuterie, but I’ll stick to the old tried and true squirrel recipe collection. :)

#136 boigameister on 11.11.15 at 11:49 pm

#121 Ferdinand Flyers on 11.10.15 at 11:04 pm
#108 Mark on 11.10.15 at 10:15 pm
“C series is almost certified, competitors can’t touch it.

Agreed. A few uninformed people in the media seem to think that Airbus and Boeing are ‘in competition’ with Bombardier. But their offerings are completely and utterly uncompetitive in the market segment targeted by Bombardier. …..”

Take off the blinders, the Japanese and Chinese are coming
http://finance.yahoo.com/news/mitsubishi-jet-1st-flight-step-005852451.html

Well put, I hate to kick Mark while he’s down on the mat, but this from WSJ..

http://www.reuters.com/article/2015/11/11/us-mitsubishi-airplane-idUSKCN0T02A820151111

The unit of Mitsubishi Heavy Industries (7011.T), which built the World War Two-era Zero fighter, is hoping the $47-million regional jet will help it oust Canada’s Bombardier Inc (BBDb.TO) as the world’s second-biggest maker of smaller passenger jets behind Brazil’s Embraer SA (EMBR3.SA).

The first MRJ is slated for delivery in June 2017 to Japan’s biggest carrier, ANA Holdings (9202.T). Mitsubishi aims eventually to sell more than 2,000 aircraft in the competitive 70-90-seat mini-segment, currently led by Bombardier.

So far it has secured 223 firm orders, most recently in January when Japan Airlines (9201.T) asked for 32 planes. The biggest single order, for up to 200 aircraft, was from U.S. regional airline group SkyWest Inc (SKYW.O).

#137 milla on 11.11.15 at 11:50 pm

#94
Not a chance with the Canadian herd.

Entrepreneurship is an evil in the minds of many Canadians. That mind set starts in kindergarten.

Canadians are kiss ass-ing followers, we are still a colony god damn it. It is what it is.

This place hates new ideas, greed, risk, fun…..
……….
Canada is a great place. Try Ukraine, not talking about Eritrea and you will cry to come back and kiss Canadians. Yes, it is hard time now here, but it is bearable. And Canadians are good people. Whatever happens we’ll take with dignity.

#138 ludachris on 11.11.15 at 11:53 pm

Moreover, what would you expect from a blogger who several times this week was accused of being misogynistic, gender-exploitive and suggestive?-Garth”

LOL, Garth you’ll know you have become a hero of the great unwashed Feminazi masses when they refer to you are gender bending, rather than gender exploitative….a quick turn of phrase and you are all good again….

#139 ludachris on 11.12.15 at 12:00 am

#122 Two sense on 11.11.15 at 11:17 pm
#40 common sense

My world is not as black and white as yours.
I was in Cuba Dec. 2014 and had a long and frank conversation with a Cuban about the government there.
It is also interesting to note that the child mortality rate is lower and longevity longer in Cuba than the US.
During Batista’s time before the Castros people did not have enough to eat so I guess they had the freedom to starve to death.
I am not an apologist for the Cuban regime, they have many problems including human rights and the inability to serve warm food to guests at their resorts. There are problems with every system…”

What about the gulags, lack of human rights, and government confiscation of private property, you okay with that?

#140 Terry Statsmonster on 11.12.15 at 12:03 am

#122 Two sense on 11.11.15 at 11:17 pm
#40 common sense

My world is not as black and white as yours.
I was in Cuba Dec. 2014 and had a long and frank conversation with a Cuban about the government there.
..”

You spoke with one guy and came to all of these conclusions??????sample size was a bit small don’t ya think?

#141 bsallergy on 11.12.15 at 12:06 am

All this has happened before (80’s) and will happen again.

I remember apartment buildings sitting unfinished for 10 years or more. Houses that could not be sold. Thousands of people moving back from Alberta. Tar ain’t worth the expense.

#142 Terry Statsmonster on 11.12.15 at 12:08 am

#59 Rexx Rock on 11.11.15 at 8:34 pm
I get it, interest rates are going up in the USA,maybe how many years have they be saying this?As for Canada we will follow the Japan way and just let our dollar tank.Canadians will adapt to a very low dollar just like Japan does.I know it will be very painful but we can’t have housing correction,I think its against the law now?
Whoops…the Japanese use the yen not the dollar, and for many years during the 20 years of recession and low rates it was 30-40% higher than it is now….Abenomics is totally different, so don’t confuse ideas….Canada many in the end copying this though…

#143 Holy Crap Wheres The Tylenol on 11.12.15 at 12:10 am

Sorry Smoking Man my entrepreneurship beginnings were grown in Canada. I made a trip back to Ontario for a job and an old buddy I knew talked me into just doing it myself. He was a Canadian and I was an young recently discharged Air Force pilot. When I quit my SoCal company I found an opening in Canada. The pay was OK and my wife and children felt very safe and comfortable here. She was happy so I was happy. It was literally a coming home time for me, first time back since I left in the early sixties. Canada was a great place to start up a company back in the day. It can still be done here today.

#144 Smoking Man on 11.12.15 at 12:14 am

#137 milla on 11.11.15 at 11:50 pm
#94
Not a chance with the Canadian herd.

Entrepreneurship is an evil in the minds of many Canadians. That mind set starts in kindergarten.

Canadians are kiss ass-ing followers, we are still a colony god damn it. It is what it is.

This place hates new ideas, greed, risk, fun…..
……….
Canada is a great place. Try Ukraine, not talking about Eritrea and you will cry to come back and kiss Canadians. Yes, it is hard time now here, but it is bearable. And Canadians are good people. Whatever happens we’ll take with dignity.
…..

Seriously,

Canadians are good people by your definition. Being bent over, an elephant behind you, and you say thank you. Go Canada go..

School made you think that’s a good place to be.

Lucky I’m around to point this Shit out from time to time.

Perhaps I can save 1% of then people.

#145 kommykim on 11.12.15 at 12:17 am

RE:

#132 TRT on 11.11.15 at 11:36 pm
Some Math on rate hike:
70% for Dec, 40% for spring.
If Dec happens, Spring goes down to 10%.
get it?

Show us the “math” that you used to arrive at these numbers.

#146 Sheane Wallace on 11.12.15 at 12:23 am

All bubbles are ultimately based on irrational and/or criminal behavior, whether exemplified by junk bonds, Savings & Loan frauds, dotcom stock hysteria, “Dow 30,000” exuberance, “the end of the business cycle” nonsense, gorging on unsustainable debt, runaway greed (without any corresponding desire to produce anything of value) or dishonest financial engineering, but the most recent subprime-financing/ loan-fraud bubble was even more abnormal than usual, because it was fueled by large numbers of buyers purchasing homes that they clearly couldn’t afford (liar loans, deceptive teaser rates and the abysmal decline in underwriting standards) with no actual investment in the properties being bought (no down payment, 100%+ loans).

#147 Smoking Man on 11.12.15 at 12:26 am

#141 Holy Crap Wheres The Tylenol on 11.12.15 at 12:10 am
Sorry Smoking Man my entrepreneurship beginnings were grown in Canada. I made a trip back to Ontario for a job and an old buddy I knew talked me into just doing it myself. He was a Canadian and I was an young recently discharged Air Force pilot. When I quit my SoCal company I found an opening in Canada. The pay was OK and my wife and children felt very safe and comfortable here. She was happy so I was happy. It was literally a coming home time for me, first time back since I left in the early sixties. Canada was a great place to start up a company back in the day. It can still be done here today.
….
Company today?

By who, these kids. Sitting ducks, no street smart.

Perhaps the woman can do something, cause the men have no balls..

#148 ANON on 11.12.15 at 12:31 am

RE: Mortgage forgiveness
It only gets you to debt deflation way faster, so, of course, it’s not going to happen. For sure, the proponents have some (make that a lot of) skin in the game, some righteous percepts about debt (I agree, better not to be bound by it, but since someone has to be bound, it is preferable first to check you’re not one of those, instead of crusading on white horses). Most importantly, the advocates are entirely clueless about how a world abruptly evaporating its promises really looks like (see intro to Road Warrior for a brief preview), and how much people will fight tooth and nail for that sudden stop not to happen.

#149 The Great Canadian Bubble Co. on 11.12.15 at 12:44 am

#35 Tom, we love Atucher, always a great source of wisdom. Different kind of humor from Garths, but similar in how they don’t sugarcoat things.

#150 waiting on the westcoast on 11.12.15 at 12:56 am

I do not usually come to the defence of others but James… chill out man… SM is just some dude who likes to push buttons and get a rise out of people. He also throws in some interesting insights and fun comments now and then. There are others here that cause far more damage to our collective soul but in a more sophisticated manner.

#151 Derek R on 11.12.15 at 1:06 am

Organic? Good.
Genderless? Right on!
Gingerbread? Uh oh, derogatory to redheads. Try spice bread
Figures? Nope, too late now. You already blew it.

#152 BigDaddy on 11.12.15 at 1:13 am

For Vancouver the spigots are about to be turned wide open. A full flood of Foreign Currency will befall the Lower Mainland and drive property values to the stars above.
Ride it to the moon and sun while everyone watches in utter amazement. Unstoppable…

#153 Please answer on 11.12.15 at 1:27 am

casey research may be a much of fear mongers but is this true?

Americans Now Legally “Piggybacking”
“Canadian Social Security”
… And Collecting Extra Monthly Checks
From $400 to $4,700

#154 Babblemaster on 11.12.15 at 1:44 am

#71 Joseph R.

I just don’t know this is not common knowledge, but this bit of information is from Wikepedia regarding the Homeowners Affordability and Stability Plan.

“On 18 February 2009, U.S. President Barack Obama announced a $73 billion program to help up to nine million homeowners avoid foreclosure, which was supplemented by $200 billion in additional funding for Fannie Mae and Freddie Mac to purchase and more easily refinance mortgages. The plan is funded mostly from the EESA’s $700 billion financial bailout fund. It uses cost sharing and incentives to encourage lenders to reduce homeowner’s monthly payments to 31 percent of their monthly income. Under the program, a lender would be responsible for reducing monthly payments to no more than 38 percent of a borrower’s income, with government sharing the cost to further cut the rate to 31 percent. The plan also involves forgiving a portion of the borrower’s mortgage balance. Companies that service mortgages will get incentives to modify loans and to help the homeowner stay current.”

I say this same kind of nonsense could easily happen in Canada.

#155 M on 11.12.15 at 1:53 am

Gringos job report was actually HORRIBLE. ..and expect to revise downwards again…which will make it even more miserable.
Kanukistan will leave rates alone-agree with Gartho baby for once (babe- u still should pay ur respects with 3 bottles of vodka now… re my beautiful rate interest fcst both here and south superbly given here in the last 8 months).
Interest rates will move ballistic when the market will move against the maple bonds…and this is around the corner

#156 cynically on 11.12.15 at 1:57 am

#94 SM – Finally a posting with some real truth about Canada, especially the colony comment and Holy Crap probably has been successful because he spent the years he did in the US. I know the feeling when you come back.
It takes the experience and pace of living there to see the difference between the two countries. However Canadians are the more deferential of the two groups – perhaps too much so for their own good.

#157 Milla on 11.12.15 at 2:14 am

#144
Seriously,

Canadians are good people by your definition. Being bent over, an elephant behind you, and you say thank you. Go Canada go..

School made you think that’s a good place to be.

Lucky I’m around to point this Shit out from time to time.

Perhaps I can save 1% of then people.

……..
Lack of beer or woman or both? What kind of mood is this?

#158 The original dave on 11.12.15 at 2:19 am

My point in yesterday’s comment section about women being the more important gender in the pro-creation process…..

The point is, if there’s 2 men and 20 women, the possibility and likelihood is greater than a situation where there is only 2 women and 20 men. Even if, as someone suggested, humans tend to pair up, the possibility to expand in a two woman setting is only 2 new people in a nine month span. The other scenario has the potential expansion of 20 people in a 9 month span.

My non-expertise opinion on this really awkward subject still stands. Apologies to those that had to read it

#159 MF on 11.12.15 at 2:24 am

#134 boigameister on 11.11.15 at 11:40 pm

-Wow we have a new low here everyone.

What are you a socialist? Something against people making money by selling a product?

Where to start?

Your angle is weak. Serving is sales buddy. Those guys driving zamboni’s and working at mcdonald’s are not selling (pushing) anything. Although they provide a service they require zero personality and minimal interaction with the public (that’s the selling part in serving. That’s the hard part).

Does the car salesman deserve a commission? Of course he does. RE agent? Same. Why not servers then?

That’s the point of sales = easy money IF you are good IE if you possess the skill of selling..that’s the SKILL you say these “entitled” people lack.

You’ve clearly never worked as a server. It’s okay, not everyone possesses 1 a personality 2 good manners and tact 3 ability to work long hours on your feet 4 be organized

I worked as a server and put myself through school. Was a great job that enabled me to work off hours and make enough money to survive. The tips were the only reason why I did it, but I also learned a ton of people skills, organizational skills, etc.

These skills transferred into other areas of my life as well. Most of my co workers have moved on to other jobs as well.

I’ve worked in office settings before (I now work in healthcare). You want to talk about entitlement? The servers I worked with were ten times the worker of some of the people I’ve came across. Some of those people make 100k/year. Servers make an average of 40k/year.

Whether you like it or not, tipping after good service is the customary thing to do. It should make you feel good. It should make you look good to everyone around you. And you should be happy to do it.

MF

#160 Basil Fawlty on 11.12.15 at 2:24 am

The normalization of interest rates in the US without a massive cut in spending would bankrupt the country. Not to mention, the trillions in interest rate derivatives that will go south with higher rates.

#161 Smoking Man & Detractors...Give it a Rest, Please on 11.12.15 at 4:13 am

Smoking Man:

Your past posts have been humorous about living the good life etc. but today you have used bigoted and vulgar terms that are insensitive (e.g., pink shirt, puff, elephants from behind). Entrepreneurs are rare true, 85% fail the first time out, 55% succeed second time around – you are that 7% that made it, excellent – Canada needs more like you. But the fact that you can write a few more 0’s on a cheque and have years of life experience vs. others does not make you the intellectual luminary of our times, and even if you are, it give you the right to write about your detractors and youth in the manner you did today.

Detractors:

Give it a rest as well please. Agree to disagree but calling others, such as Smoking Man, names and demeaning them is not a nice thing to do, all it does is anger those you demean. Treat others as you would want to be treated, with dignity and respect.

I learn a lot from the different viewpoints of others about Garth’s posts, but today and the above was a bit much even for me. It would be nice to just to read opinions about the economy and wealth generation and not the frequent character assassinations today – even scanning the posts you could not avoid it.

#162 Re: Smoking Man & Detractors...Give it a Rest, Please on 11.12.15 at 4:17 am

That was, does not give you the right, Smoking Man…then again, I’m sure you understood the error.

#163 maxx on 11.12.15 at 8:59 am

#13 saskatoon on 11.11.15 at 6:29 pm

….”ALL 271,000 jobs were taken by those OVER 55 years of age.”

Taken??! Individuals, not the “boomer hoard”, applied for these jobs and got them.

“young demographic LOST thousands and thousands of jobs–esp. dudes.”

And this is the fault of………….boomers? Please…..the younger demographic was simply out-competed by other applicants.

“mining LOST.

manu. LOST.

transp. LOST.

perhaps the FED will raise, but this ain’t a bustling economy.

it’s geriatric.”

Here are a few points about boomers:

-The average boomer did not cause today’s fiscal mess and (prepare yourself) many of these problems are exacerbated by younger cohorts;

-Boomers have equal rights to jobs or anything else in society;

-Boomers exist, they’re living far longer and healthier than ever and they’re NOT just going to shrivel up and disappear;

-Boomers vote and spend and “do” in society – for the most part, they don’t sit around in thirsty underwear at retirement homes;

-Some of the comments on this blog vis-a-vis boomers are borderline criminal;

-Boomers are NOT going away anytime soon;

Get used to it.

#164 jess on 11.12.15 at 9:09 am

71 Joseph R. on 11.11.15 at 8:51 pm

…and the deducted from one’s future (social security )

#165 IHCTD9 on 11.12.15 at 9:16 am

#93 Daisy Mae on 11.11.15 at 9:41 pm

And this, of course, is Harpers’ fault…
____________________________________________

I couldn’t get on the network this am – BLOODY HARPER!

Clutch in my old beater started making noise on the way to work – DAMN YOU HARPER!!

Job I need to ship this am, file not on the rack, couldn’t find it, had to steal the shop copy – NOT AGAIN HARPER!!!

It’s going to be fun a year from now blaming the same problems – probably even bigger problem on JT. Sure it’s bullshit, but now you’ve opened the door no?

#166 maxx on 11.12.15 at 9:24 am

#20 jess on 11.11.15 at 6:50 pm

“the overconfidence effect”?

Economics and the brain: how people really make decisions in turbulent times
February 20, 2012 8.31am EST
http://theconversation.com/economics-and-the-brain-how-people-really-make-decisions-in-turbulent-times-5445

Excellent article- explains a lot with regards to re mania. I would add that people base their decisions on emotion much of the time. Our own fallibility can be a strong ally – if we let it.

#167 Julia on 11.12.15 at 9:29 am

#83 Mark
“Technically they are on the hook to the CMHC for the balance that the CMHC has to pay out. Not the bank. ”

Only if the Bank sells the house at a loss, which they claim to CMHC and in which case rights are subrogated for CMHC to become the unsecured creditor instead of the Bank.
If the house owner sells the house themselves they have to pay the Bank the shortfall for the mortgage to be discharged and title passed to the new owner, unless the Bank agrees to continue to finance the unsecured portion which, by definition of being unsecured, is no longer guaranteed by CMHC.

“But in the practical sense, the usual consequence of defaulting on a CMHC insured loan is also filing for personal bankruptcy.”
No necessarily. Agreements can be made to repay either outside of a bankruptcy or in a proposal (which is voted against by the creditors would ultimately result in a bankruptcy). Repayment agreements remain the preferred route, enforcement is only a last resort. If it is a CMHC insured loan then it’s a mortgage against the house held by the Bank and by definition is not unsecured. If there is a family living in the house the house will not and cannot be sold in a bankruptcy while there are minor children living there.

“And the claim of the CMHC is dealt with and typically discharged according to the usual process of bankruptcy as an unsecured creditor. Alongside all other creditors.”

Again, CMHC is only unsecured to the extent of the shortfall after the Bank has sold the house at a loss or CMHC has after the loan has been assigned to them. If it’s a mortgage, it’s not unsecured and does not fall in the same category as unsecured creditors.

“The only way a CMHC debt would fail to be discharged is if CMHC could prove the debtor obtained the insurance on account of fraud.”
If there is proof of fraud, or even just the Bank not having respected CMHC rules, the claim may be denied by CMHC and the debtor would remain indebted to the Bank for the shortfall after the sale of the house. CMHC would be off the hook and it would remain an unsecured debt. The debt is not discharged but CMHC would be.

#168 fancy_pants on 11.12.15 at 9:33 am

Garth, I am really hoping that they do pull the trigger on a rate increase, as small as it may be. If it is another balk, perhaps it is time to entertain the idea that ZIRP and QE are the new norm. With massive debts, the game has changed. 7 years and counting

http://www.tradingeconomics.com/united-states/interest-rate

If they don’t, what conditions are they waiting for and will it ever arrive?

recommended read for blog dogs: https://en.wikipedia.org/wiki/How_an_Economy_Grows_and_Why_It_Crashes

#169 Julia on 11.12.15 at 9:35 am

#92 IHCTD9 “Yes, full recourse in all Provinces except Saskatchewan and Alberta I think. No jingle mail here for the most part. Even in those two provinces where you can still throw your keys at the bank, I believe you could still get sued by the CMHC for losses if they have to cover the bank. Mortgage defaults in Canada are extremely rare historically.”

I thought it was just Alberta but maybe Saskatchewan as well. What I understand though is the ones that remain non-recourse are older mortgages, the new ones are not.
I suspect that default rates may be lower thanks to home equity lines as people only have to pay interest and have been able to refinance as values have been rising as opposed to a true mortgage payment reducing principal and that when there is no more room to refinance they will hit the wall.

#170 crowdedelevatorfartz on 11.12.15 at 9:36 am

@#152 BigDaddy
“Ride it to the moon and sun while everyone watches in utter amazement. Unstoppable”
+++++++++++++++++++++++++++++++++++

I guess you missed the anti corruption drive in China where the rich and their ill gotten gains are being scooped up. ( interesting stat…more billionaires in China now than the US). Local media now jumping on the “ban foreign money’ bandwagon.
Canadian economy slowing down.
Interest rates about to pop.

Bought a few houses on “spec” did we?
A serial flipper?
Mortgaged to the max?
Good luck with that

#171 crowdedelevatorfartz on 11.12.15 at 9:41 am

@#161 Give it a rest….
“I learn a lot from the different viewpoints of others about Garth’s posts, but today and the above was a bit much even for me…..”
+++++++++++++++++++++++++++++++++++

Yer stealing my thunder from yesterday.
But I like it and I agree 100%

#172 David on 11.12.15 at 9:45 am

What is your definition of ‘normal’ rates?

Because rates that are in line with stable prices seem to be the current norm to me.
http://krugman.blogs.nytimes.com/2015/10/28/check-out-our-low-low-natural-rates/
http://krugman.blogs.nytimes.com/2015/11/01/natural-confusion/
Larry Summers on raising rates too early:
http://larrysummers.com/2015/10/07/pre-emptive-war-on-inflation-is-error/

But hey if your ‘normalization’ argument is based on some bankers demanding higher spreads that makes sense.

Krugman and Summers – that’s your idea of diversity? — Garth

#173 Holy Crap Wheres The Tylenol on 11.12.15 at 9:50 am

#147 Smoking Man on 11.12.15 at 12:26 am
#141 Holy Crap Wheres The Tylenol on 11.12.15 at 12:10 am
Sorry Smoking Man my entrepreneurship beginnings were grown in Canada. I made a trip back to Ontario for a job and an old buddy I knew talked me into just doing it myself. He was a Canadian and I was an young recently discharged Air Force pilot. When I quit my SoCal company I found an opening in Canada. The pay was OK and my wife and children felt very safe and comfortable here. She was happy so I was happy. It was literally a coming home time for me, first time back since I left in the early sixties. Canada was a great place to start up a company back in the day. It can still be done here today.
….
Company today?

By who, these kids. Sitting ducks, no street smart.
Perhaps the woman can do something, cause the men have no balls..
_____________________________________________
Smoking Man street smarts are about know how to gather knowledge and use it accordingly. Not hanging out with your friends shooting shit when you were kicked out of school for being unruly. You generalize kids today with that statement. Not everyone has the inclination to be self employed and that’s is OK. So get over it already. Just because you’ve made it, lost it and made it doesn’t give you the right to constantly blast kids here for being sitting ducks. These times are different than my early years as a youth. I will tell you your kids are a reflection of the parenting skills of the mother and father. So teach them well.
I don’t know what kids you are talking about, however my children are “2” self employed engineers started their own successful companies here the the GTA, “1” taking over my company at my hedging (I had to get him to leave his old company where he was very successful as a CA), “1” my oldest a daughter is a chief cardio vascular surgeon in Toronto. My daughter is dedicated to helping people. She is the best at what she does, who know perhaps she will be looking down at your face one day soon as she makes the first chest incision?

#174 the Jaguar on 11.12.15 at 9:53 am

#12 Old Gringo

Are you serious? Do you know what happens on distress property sales where the mortgage was CMHC insured ? What province you live in also has an impact.
Never underestimate the banking system in this country.

#175 Holy Crap Wheres The Tylenol on 11.12.15 at 9:58 am

Okay, so the next time Canadian interest rates might change is in exactly three weeks, on December 2nd. Unless oil goes to thirty bucks or Justin joins the Chippendales, expect no change. The economy may be dragging, but a rate cut will murder the dollar and send a distress signal to markets coming just two weeks before the Fed’s expected to raise rates (now a 70% probability).
_____________________________________________
Here’s hoping the rates go positive.
Justin already has done the strip routine, it getting old!
Rate cut is like middle ages blood letting.
The economy is weak so lets make a move on it. Invest!
Weak dollar equals a weak country!
Well good luck to all of us.
By the way one Bahamian dollar equals one US dollar, its fine at 0.70 to 0.75 but below that I hear all sorts of rumblings here from Canadians retired here on the edge. Weak dollar cuts into their discretionary spending.

#176 Musty Basement Dweller on 11.12.15 at 10:05 am

I think this a great article that says it all regarding impact of foreign money. Most of this in Vancouver probably comes via family members not the much maligned “foreign ownership”. Anyone close to the real estate industry in Vancouver knows it is having a massive impact. The more interesting point is that what happens when inevitably this current investor interest wanes?
Watching with interest from the steerage section,
When foreign buyers abandon Canadian housing: Don Pittis
http://www.cbc.ca/news/business/cmhc-foreign-ownership-real-estate-canada-1.3313928
Shared via the CBC News Android App

#177 Pullman-Standard on 11.12.15 at 10:08 am

‘… that “the government” will move in and rescue fools…’

Isn’t it rather hard to argue this when ‘the government’ bailed out Chrysler and General Motors and is now preparing to bail out Bombardier? Oh, I forgot – all those union jobs in the former and Quebec politics – and union jobs, again – in the latter. Makes no difference – the Liberals will blame everything on Harper >sigh<, jack up taxes and create a new government 'program' to 'help' over-indebted homeowners.

The problem with getting older is all this stuff becomes so obvious, yet the voters keep falling for it.

#178 bdysktn on 11.12.15 at 10:19 am

WASHINGTON, Nov 12 (Reuters) – St. Louis Fed President James Bullard, a prominent hawk who is ready to raise interest rates, said the United States and other industrial nations may nevertheless be entering an era of permanently low rates and inflation that will require a rethink of monetary policy.

#179 Ole Doberman on 11.12.15 at 10:21 am

Gartho – what are your thoughts on gold over the next few years? Do you see a bottom coming soon?

Will the crumbling government debts and bond markets chase smart money into gold?

Thx bro

#180 Broke Dick on 11.12.15 at 10:43 am

Well compared to most days this post was sunshine and lollipops.

#181 pbrasseur on 11.12.15 at 11:21 am

Anyone notice how the 54,000 layoffs that occurred in the Calgary concrete towers never made into the initial EI claims or statscan unemployment rate? Think 12 months severance pay. #118 squidly77

Very good point. What I did notice is a notable tendency in the Canadian medias to underestimate the impact of the oil collapse on the Canadian economy. Maybe because as you day a lot of the impacts have not been felt yet. I think oil can be viewed as a buddle just like RE can. Clearly it has popped but we’re still in the early phases.

https://people.hofstra.edu/geotrans/eng/ch7en/conc7en/stages_in_a_bubble.html

I think there was a period of denial, things were bad all right but that was temporary, then the «technical recession» ended and a new government arrived so we expect a recovery / «return to normal». Not a chance IMO, the next phase are fear followed by capitulation.

#182 Patrick on 11.12.15 at 11:22 am

#81 Smoking Man on 11.11.15 at 9:11 pm

Political Correctness:

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

#183 MF on 11.12.15 at 11:27 am

#158 The original dave on 11.12.15 at 2:19 am

Again, mathematically your numbers add up.

But real world application? Not so much.

Tell me what reproductive value women 45+ have?

2 men and 18 women over 45 means zero children.

Freedom First is still correct.

MF

#184 Broke Dick on 11.12.15 at 11:44 am

#159 MF on 11.12.15 at 2:24 am
#134 boigameister on 11.11.15 at 11:40 pm

Whether you like it or not, tipping after good service is the customary thing to do. It should make you feel good. It should make you look good to everyone around you. And you should be happy to do it.

MF
+++++++++++++++++++++++++++++
MF, I understand tipping and the need for it in regards to the current restaurant environment. And I am not here to argue if it is the perfect system or not.
But I highly disagree with your above statement.
Tipping is NOT about making you feel good.
Tipping is NOT about making you look good to others.

I enjoy some of your comments but when you come up with stuff like this it is apparent to me that you look to the machine to tell you how to think.
You have to get out of that habit if you want to be successful. Critical thinking! Man up!
(Man up! is not intended to start any gender thing, it’s just a term)

#185 ALBERTA IS TOTALLY FINISHED on 11.12.15 at 12:25 pm

NEP 2.0….finish off those knuckle draggers….carbon taxes to the max.

http://www.theglobeandmail.com/news/politics/entire-liberal-cabinet-responsible-for-climate-change-agenda-dion/article27224782/

#186 Vundo on 11.12.15 at 12:28 pm

#6 Gord: you ask why we should bail out homeowners when it was not done last time. Garth says it ain’t going to happen based on rational and logical reasons. But how can we be sure that it won’t happen in defiance of logic, reason, and fairness? If there are enough people in crisis and the money is there to be borrowed, the temptation will be immense. Who would say no to a guaranteed majority government?

I want to build a solid financial future without owning a mortgage (pretending I own a house) but it would be rather sour if I got the snot taxed out of me to bail out all those homeowners being courted for votes. Do we have any reason to believe that a government that is eager to please would stand their ground, act rationally, and let the million dollar mortgage owners scream into the wind? I really hope so, but I am having trouble seeing it right now.

#187 MF on 11.12.15 at 12:28 pm

#184 Broke Dick on 11.12.15 at 11:44 am

haha We definitely need something more gender neutral. Maybe hu-man up or gear up?

After all, “it’s 2015”.

Anyhow, working as a server is kind of sticking it to the machine.

Let me explain.

You work flexible hours and make your own schedule. You control how many shifts you want to work.
You can control how much money you make via how many tables you take
You can easily move between one establishment and another with minimal training

Because of all those reasons, you have lots of entrepreneurs working as servers on the side. People tired of the corporate charade. People who have been laid off etc. People plotting the next move.

There is lots of critical thinking in that!

MF

#188 Sheane Wallace on 11.12.15 at 12:30 pm

Horrible debt picture.

Let’s not forget who got us into this mess and that the Harper government (with disgraceful rule anyway accorging to GT) proclaimed that housing is a great success story in its election campaign and wanted to encourage Canadians to go ever deeper in debt.

The very first thing a new government should do is to assess the magnitude of the damage already done and be very open with the Canadians on where we are heading and whose fault it is, if they don’t, the disgraceful one will try to come back and blame all his mess on the new government.

https://ca.finance.yahoo.com/news/canadians-
burdened-hefty-debt-worry-100000893.html

For seniors, the amount of debt they’re carrying continues to climb. In the late 1990s, about a quarter of people over 65 had some kind of debt. According to the latest Statistics Canada report from 2012, that number is up to more than 40 per cent.
“The highest increase in bankruptcies right now is seniors,” says Laurie Campbell, chief executive officer of Credit Canada.
Sudden illnesses often ruin the best financial plans. Plus, Campbell says, Canadians just living longer, so they’re outliving their savings.
If you think your home is a safe retirement plan, Campbell says you should think again.
“Your house should not be your retirement plan because most people don’t want to leave their homes.”
As well, many seniors don’t have their mortgages fully paid off. A recent joint study by HomEquity Bank and Equifax Canada found people over 70 have, on average, a mortgage balance of $140,000.
Big debt, little savings
Catherine Burden admits she’s fortunate when it comes to her mortgage. Her uncle passed away and left her enough to help pay it off. But any savings are going to that hefty line of credit.
“I don’t know what the answer is really. Unless we do something drastic literally and sell our house, that would be the only way we could get out of debt,” she says.
CBC News explained her situation to Toronto-based personal finance expert Bruce Sellery, who says the family should go to a mortgage broker and get a mortgage that eliminates the line of credit.
“If it’s a mortgage, it’s going to take, say 10 years. But that’s the plan …. pay it off for 10 years.”
Children also in need
An increasing challenge for empty nesters is adult children who are struggling financially. Burden’s daughter, Constance, recently moved back home after graduating from university.
“You go into it thinking ‘Oh, everyone is going into university. I’m going to get a job, I’m going to make money,'” says Constance.
“But I’m 23 and I’m $50,000 in debt. That’s scary.”
Parents may feel pressure to help, but experts warn they must strike a balance with their own financial needs.

#189 bdy sktrn on 11.12.15 at 12:39 pm

#184 Broke Dick on 11.12.15 at 11:44 am
#159 MF on 11.12.15 at 2:24 am
#134 boigameister on 11.11.15 at 11:40 pm

Whether you like it or not, tipping after good service is the customary thing to do. It should make you feel good. It should make you look good to everyone around you. And you should be happy to do it.

MF
————–
yeah, that’s a bit weird.
wtf do you still pay w cash? or do you wave the card reader around after entering your tip?

i’ve always considered it a somewhat private transaction.
if , in a rare case with someone who might not know better, and they have the machine, i will peek to make sure they leave something decent or better. but otherwise its private.

and otherwise to all

GGGGGGGGGGOOOOOOOOOOOOOODDDDDDDDDDDDDD
MORNING GREATER FOOL!!!

This could be the best day you ever have. Have a blast today.

And thanks again GT for letting us play here.

carry on.

#190 Mark on 11.12.15 at 12:55 pm

“Only if the Bank sells the house at a loss, which they claim to CMHC and in which case rights are subrogated for CMHC to become the unsecured creditor instead of the Bank.”

No loss to the bank = no CMHC insurance claim. And its fairly unusual for a property in which equity exists to actually be ‘foreclosed’ (or power-of-saled) upon as the owner would likely just call a Realtor and sell it him/herself instead of taking the severe hit to one’s credit record by actually defaulting.

“If it is a CMHC insured loan then it’s a mortgage against the house held by the Bank and by definition is not unsecured. If there is a family living in the house the house will not and cannot be sold in a bankruptcy while there are minor children living there.”

I’m pretty sure your latter sentence isn’t true. But if you have any reference material, please enlighten us. I’ve never heard that having minor children in a house is a bar to secured creditors in the bankruptcy process exercising on their security interest.

“If it’s a mortgage, it’s not unsecured and does not fall in the same category as unsecured creditors. “

Actually once the security interest has been exercised on, the deficiency arising from the sale of such is unsecured debt. What is it secured against? The security is gone.

The nature of nearly all Canadian mortgages is that they exist of both a charge/obligation against property, as well as a personal obligation to make up for any deficiency arising from the forced sale of such property in the event of a default. The latter being considered unsecured in the insolvency process.

#191 Toronto_CA on 11.12.15 at 12:57 pm

Bernake now coming out and saying Canada is at risk because of the housing market.

http://www.theglobeandmail.com/report-on-business/economy/canada-has-tools-to-cope-with-overheated-housing-market-bernanke/article27226247/

The media is really softening the tone of the remarks though.

#192 jess on 11.12.15 at 12:58 pm

166 maxx on 11.12.15 at 9:24 am

yeah, especially when one is hungry even bears eat their own kind.

#193 Lorne on 11.12.15 at 1:00 pm

#165 IHCTD9

#93 Daisy Mae

And this (the government is broke), of course, is Harpers’ fault…
____________________________________________

I couldn’t get on the network this am – BLOODY HARPER!

Clutch in my old beater started making noise on the way to work – DAMN YOU HARPER!!

Job I need to ship this am, file not on the rack, couldn’t find it, had to steal the shop copy – NOT AGAIN HARPER!!!

It’s going to be fun a year from now blaming the same problems – probably even bigger problem on JT. Sure it’s bullshit, but now you’ve opened the door no?
…………..
Not a particularly solid defence of your friend…in fact, makes no sense at all! If any party is in charge for 9 years and leaves the country with a larger deficit and debt….well, who should get the blame???

#194 Nagraj on 11.12.15 at 1:18 pm

Garth Cassandrus Turner?

As you all know – Cassandra was a clairvoyant and prophetess whom nobody believed.

She told ’em, Hey lookee here folks, the Greeks is hidin’ in that big wooden horse! But nobody believed her. Oh she’s off her rocker again, they said.

So she grabbed an axe and a torch and and ran toward the Trojan Horse meaning to whack and burn the sneaky Greeks out of it (the Greeks hidin’ in the horse got real nervous) but the townspeople thought she was nuts and stopped her. (You all know what happened next.)

How come nobody believed Cassandra, you ask.

Well, Apollo had given her the gift of prophecy in exchange for sex. BUT she wouldn’t put out! So Apollo got real mad and spit in her mouth.
And that divine spitting qualified her gift of prophecy: she could still prophesy BUT with the qualification that nobody would believe her.

So, Gartho, who spit in your mouth and why?

[People thought of Cassandra as cuckoo. She did get kinda hysterical a lot what with everybody tellin her she was out to lunch alla time. She came to a bad end.]

This blog is scary place. Verily. — Garth

#195 common sense on 11.12.15 at 1:38 pm

Just wonderin…

How much security does Bernake travel with these days?

I hope it’s more than a President’s detail…

#196 Mf on 11.12.15 at 1:40 pm

#189 bdy sktrn on 11.12.15 at 12:39 pm

No you are right it is a private interaction.

Whenever I received a good tip i always let the patron know that I was thankful. Nothing boisterous just a gentle smile at times. Tips are not guaranteed and when someone gave me their hard earned money i was always grateful (and at times even flattered). I imagine that came through to the table at least a little.

Lol I often would see girls on dates checking their guys tipping. Business associates would use it as a way to show how successful they were. I have other examples but you get the idea.

Mf

#197 IHCTD9 on 11.12.15 at 2:02 pm

#193 Lorne on 11.12.15 at 1:00 pm
…………..
Not a particularly solid defence of your friend…in fact, makes no sense at all! If any party is in charge for 9 years and leaves the country with a larger deficit and debt….well, who should get the blame???
___________________________________________

I guess you’re correct – there could never be any forces beyond the PM’s control working against the best of intentions. So blame Harper, after all, ’twas never a ripple in the Global economic waters while his hand was on the rudder.

On that note, I’ll be back next year to blame Trudeau for everything, and I’m sure by then you will have thought up many things to blame other than Trudeau – even though… well, he was in charge.

If that sounds presumptuous, you’ll have to forgive me. I live in Ontario where I am still listening to folks blaming Harris for every problem in the universe, even after 13 consecutive years of Liberal government.

#198 S.Bby on 11.12.15 at 2:12 pm

I have seen several examples of this type of thing, where a house appears on MLS with pictures, then disappears from MLS and then appears on Craigslist for rent with the same pictures that were used on MLS. My guess is the house was bought by a realtor and they just reused the same pictures. Look at this place, in the one pic you can still see the realtor sign in the front yard.

http://vancouver.craigslist.ca/pml/apa/5283274711.html

This house was listed for sale in October for $800,000 and was on MLS for about a week.
The asking rent is $2,300/mo which would only cover about $500K of mortgage so the owner is subsidizing the tenant for half the cost of owning when taxes and other costs are added in.

#199 IHCTD9 on 11.12.15 at 2:26 pm

#188 Sheane Wallace on 11.12.15 at 12:30 pm

For seniors, the amount of debt they’re carrying continues to climb. In the late 1990s, about a quarter of people over 65 had some kind of debt. According to the latest Statistics Canada report from 2012, that number is up to more than 40 per cent.
“The highest increase in bankruptcies right now is seniors,” says Laurie Campbell, chief executive officer of Credit Canada.
____________________________________________

Paid off the Mortgage a while back, while chit-chatting with [email protected], she mentioned many of her clients who are retiring still had a mortgage. Of course, I had to do a little data mining, and mentioned that they must be pretty small amounts soon to be vanquished.

No.

#200 The Other Chris on 11.12.15 at 2:32 pm

@185 ALBERTA IS TOTALLY FINISHED on 11.12.15 at 12:25

Pretty brutal news that Trudeau intends to tighten the noose around all the oil producers. I kind of expected that to happen, knowing Gerald Butts’ leanings (he sees green issues as more important than any other issue).

The sad thing about Butts/Trudeau is that they really don’t appear to have any other plan. Once all the high paying jobs in Alberta get kneecapped, something is going to have to step in and cover all the lost tax money. It’ll probably be the rest of us.

I see a never-ending stream of tax and fee increases in the future.

#201 fancy_pants on 11.12.15 at 2:42 pm

#185 ALBERTA IS TOTALLY FINISHED on 11.12.15 at 12:25

yeah, the whole carbon tax thing is bs. the real elephant in the room is livestock, not fossil fuels. They produce methane that is far more potent in terms of their greenhouse warming effect compared to carbon dioxide. The burning of fossil fuels makes up half the greenhouse gases at best. Want to save the planet? stop eating beef.

I am being facetious as we are nearing the tipping point anyways. The permafrost is melting and the carbon and methane being released self propels further global warming. Even if we stop burning fossil fuels and become vegans, it could already be too late. And the oceans are absorbing much of the carbon dioxide as forests are being cleared. It’s almost game over for this planet. No kumbya songs will save it.

on the bright side, a good portfolio will yield 7% returns.

#202 Canada is Doomed on 11.12.15 at 2:45 pm

So..Sweden is the latest country to close their borders….the most liberal country in the world has decided they can’t pay for Obama’s refugee crisis out of tax payer coffers.

meanwhile Trudy and the Turds are going to squeeze Canadians for higher taxes to play God and snuggle up to Obama while hundreds of thousands of Canadians are ‘up shit creek’.

I’ve noted that the only people pushing for additional Canadian largesse are the civil service unions who have no fear of going broke or losing a fat paycheque…even when seniors are starving.

Wasn’t it sickening that the spin from our Hate Harper media was that some kind of’ love fest’ ( I lost count of the gushing superlatives and accolades finding a Kennedy Camelot Quality to it all…I stepped away to puke) happened at Rideau Hall ….when only 2 thousand insiders and party workers showed up at Trudy’s Coronation? The leftist CBC tried to count to 4 thousand…but no one could confirm that….but I bet the RCMP would have done a head count…..except they never said a peep. In other words…the reporting was a propaganda exercise and Trudy is a flop protest vote organized by a leftist media campaign worthy of the ‘Joesph Goebbels’ Big Lie Award’….

Canadians showed their true feelings for a cause when 40 thousand people showed up in Ottawa to honour the veterans……let the media report on that.

When will Mansbridge be announced as Canada’s new GG for his years as the face and voice of Hate Harper?

#203 IHCTD9 on 11.12.15 at 2:59 pm

#185 ALBERTA IS TOTALLY FINISHED on 11.12.15 at 12:25 pm
NEP 2.0….finish off those knuckle draggers….carbon taxes to the max.

http://www.theglobeandmail.com/news/politics/entire-liberal-cabinet-responsible-for-climate-change-agenda-dion/article27224782/
____________________________________________

They want to lower carbon emissions 30% by 2030? It will happen by itself, thanks in large part to Ontario.

Hooray for us, manufacturing is leaving in droves causing a marked reduction in CO2 emissions, with a big corresponding drop in energy consumption.

Once we are all broke, we will collectively cease spending which will bring another marked reduction in emissions generation and energy usage.

Finally, the very large polluters like Stelco and Algoma steel mills are currently on their last legs, just in time to eliminate steel production and all that nasty Rail and Laker fuel use – not to mention all the ore they will no longer need to dig out of the ground.

Hopefully this unwitting C02 reduction program will generate billions in revenue for Ontario’s half starved broke ass unemployed Citizenry.

#204 Daisy Mae on 11.12.15 at 3:11 pm

#165: “It’s going to be fun a year from now blaming the same problems – probably even bigger problem on JT. Sure it’s bullshit, but now you’ve opened the door no?”

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

I made a simple remark. You’re the asses running off at the mouth…..lighten up.

#205 Broke Dick on 11.12.15 at 3:20 pm

#196 Mf on 11.12.15 at 1:40 pm
#189 bdy sktrn on 11.12.15 at 12:39 pm

No you are right it is a private interaction.

Whenever I received a good tip i always let the patron know that I was thankful. Nothing boisterous just a gentle smile at times. Tips are not guaranteed and when someone gave me their hard earned money i was always grateful (and at times even flattered). I imagine that came through to the table at least a little.

Lol I often would see girls on dates checking their guys tipping. Business associates would use it as a way to show how successful they were. I have other examples but you get the idea.

Mf
===================================

I would consider it rude if the server “checked” their tip while still around the table.

And MF, my previous point was not a slant against servers.
It was referring to your reasons for tipping.

#206 Holy Crap Wheres The Tylenol on 11.12.15 at 3:26 pm

#203 IHCTD9 on 11.12.15 at 2:59 pm

#185 ALBERTA IS TOTALLY FINISHED on 11.12.15 at 12:25 pm
NEP 2.0….finish off those knuckle draggers….carbon taxes to the max.

http://www.theglobeandmail.com/news/politics/entire-liberal-cabinet-responsible-for-climate-change-agenda-dion/article27224782/
____________________________________________
They want to lower carbon emissions 30% by 2030? It will happen by itself, thanks in large part to Ontario.
Hooray for us, manufacturing is leaving in droves causing a marked reduction in CO2 emissions, with a big corresponding drop in energy consumption.
Once we are all broke, we will collectively cease spending which will bring another marked reduction in emissions generation and energy usage.
Finally, the very large polluters like Stelco and Algoma steel mills are currently on their last legs, just in time to eliminate steel production and all that nasty Rail and Laker fuel use – not to mention all the ore they will no longer need to dig out of the ground.
Hopefully this unwitting C02 reduction program will generate billions in revenue for Ontario’s half starved broke ass unemployed Citizenry.
____________________________________________
We will still need the Lakers and rails to bring in our clean energy cheap steel from China! Oh sorry what the F$%K was I thinking why would we need steel, we wont have any manufacturing. But we will have to be making respiratory masks for all the pollution coming in from China!

#207 Victoria Real Estate Update on 11.12.15 at 3:36 pm

# 146 Sheane Wallace

Canada’s “subprime financing / loan fraud bubble” has been inflating since 2000 with liar loans, teaser rates, a deterioration in mortgage lending standards, etc. , making it, perhaps, the biggest housing bubble the world has seen.

Then there’s the industry’s frankenumber to hide the truth about how much house prices have fallen (in those cities with falling prices).

#208 Holy Crap Wheres The Tylenol on 11.12.15 at 3:38 pm

Well the English are very humorous but also this is spot on for political correctness. Whats good for the goose is good for the gander.

http://patriotsbillboard.org/london-cab-driver-spot-on-and-politically-correct/

#209 Paul on 11.12.15 at 3:40 pm

#204 Daisy Mae on 11.12.15 at 3:11 pm

#165: “It’s going to be fun a year from now blaming the same problems – probably even bigger problem on JT. Sure it’s bullshit, but now you’ve opened the door no?”

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

I made a simple remark. You’re the asses running off at the mouth…..lighten up
*********************************************
Nothing is as bad than not being happy with your lot in life , other than blaming a politician a former one at that.
But that’s the Daisy May entitlement way. Bitched during the election and pot shots after.
Plus Justin will do no wrong in her eyes as long as he takes from her perceived betters and hands it to her.

#210 Shameless Truth on 11.12.15 at 3:40 pm

#201 “on the bright side, a good portfolio will yield 7% returns.”

– a good portfolio will return an ‘averaged 7% over a longer time, not annually. Nobody is making 7% this year…the best and brightest are deep in the red.

#211 213comm on 11.12.15 at 3:41 pm

“#198 S.Bby on 11.12.15 at 2:12 pm
I have seen several examples of this type of thing, where a house appears on MLS with pictures, then disappears from MLS and then appears on Craigslist for rent with the same pictures that were used on MLS. My guess is the house was bought by a realtor and they just reused the same pictures. Look at this place, in the one pic you can still see the realtor sign in the front yard.

http://vancouver.craigslist.ca/pml/apa/5283274711.html

This house was listed for sale in October for $800,000 and was on MLS for about a week.
The asking rent is $2,300/mo which would only cover about $500K of mortgage so the owner is subsidizing the tenant for half the cost of owning when taxes and other costs are added in.”

Another explanation to this “phenomenon” is when houses sit on the mrkt forever and can’t sell, come fall/winter (usually slower time) sellers take them off the mrkt and put them up for rent. Come spring same house re-appears on mrkt as brand new listing. It kills two birds: one – ‘days on mrkt’ are re-set, two – at least it will generate some cash flow to cover carrying costs (in full or partially) during the slow winter months. Seen this trick done over and over again.

#212 Holy Crap Wheres The Tylenol on 11.12.15 at 3:43 pm

The feds, in case you missed it, are broke. Even before the Liberal spendathon begins. We’re looking at years of double-digit deficits just pouring cement and creating temporary jobs, without bailing out any idiots who bought houses they couldn’t afford. Second, this is why you have tax-free capital gains on real estate – because nobody’s going to move in and save your ass when when things go sideways. Suck. Blow. Pick one. Third, everybody has been told and retold that low rates cannot last. If you didn’t listen, tough.

Anyway, I apologize for my maleness. It’s just so awesome.
_____________________________________________
Well JT and his liberals got what they wanted, “power”, power is nothing without money, ha,ha,ha. Oh and the woman! All of you who voted for him keep on keeping on! Your going to have to support his delusional misguided objectives through some rough seas.

https://www.youtube.com/watch?v=XJ7HZATMKBY

#213 Holy Crap Wheres The Tylenol on 11.12.15 at 3:46 pm

Oh God it was just a matter of time, I saw this coming.
He does not deserve any slanderous racist comments, he is a Canadian War vet for gods sake.

http://www.msn.com/en-ca/news/canada/racist-post-about-defence-minister-harjit-sajjan-sparks-military-investigation/ar-BBmVscg?li=AAadgLE&ocid=mailsignout

#214 Sheane Wallace on 11.12.15 at 3:47 pm

#203 IHCTD9 on 11.12.15 at 2:59 pm
#185 ALBERTA IS TOTALLY FINISHED on 11.12.15 at 12:25 pm
NEP 2.0….finish off those knuckle draggers….carbon taxes to the max.

http://www.theglobeandmail.com/news/politics/entire-liberal-cabinet-responsible-for-climate-change-agenda-dion/article27224782/
___________________

Carbon tax could easily absolutely and utterly destroy any value left in the glass condos and wooden particles houses that we ‘enjoy’.
The heat signatures and insulations of everything built in the last 20 years is horrific beyond imagination and without exaggeration the worst in the world considering the specifics of the weather conditions.

I would bet that in 5-10 years a small, cold, noisy glass condo (2 bedrooms, 800 sqft) in Toronto/Vancouver build in 2014-2015 could demand monthly north of:
– 800 $ for maintenance and heating, excluding electricity.
– 150-200 in electricity bills (Hydro One would be privatized.)
– 300-400 for climate/emission tax due to poor insulation, that can’t be fixed (buildings need to be demolished and rebuilt to better standards).
– 200-300 in property taxes and garbage collection taxes.

Which totalled could be much more then any meaningful rent that can be received for the place. So after paying the mortgage and all the interest the owners could sill be paying more then the equivalent apartment rent just to maintain the place.

I am absolutely convinced that there would be buildings where we will see future negative condo prices, people would gladly be paying to get rid of the obligations associated with such currently ‘trendy ownership’. Not to mention that eventual buyers would be deemed certifiable for mental illness.

Pay 450 k for the condo, with the interest 750 k, then 1.7 – 2 k (if lucky) in monthly costs.

Where do I sign?

#215 copy paste on 11.12.15 at 3:48 pm

copy paste from the comment section of
http://www.theglobeandmail.com/report-on-business/economy/canada-has-tools-to-cope-with-overheated-housing-market-bernanke/article27226247/comments/

To make my point, here are a few ideas which – if implemented – will cool down the housing market:

1/ Get mortgage originators (i.e. banks and credit unions) to have some skin in the game by removing the 100% guarantee on the principal. If banks will take the hit on the first 10 to 20% of any mortgage they underwrite, you can bet that they will stop giving mortgages to any guy who can fog a mirror.

2/ Do not provide CHMC insurance to people buying a second house / or their first cottage.

3/ Mandate market transparency – at the end of the day we have better info about the auto market than we do about the RE one. Set up an agency to collect and make public information about RE activities. I do not trust the RE cartel to represent the public’s interest because of their conflict of interest (have you ever heard a RE agent telling anybody that they shouldn’t buy a house at this time – ever in your life)?

Sale price history (going back at least to the previous 3 sales), number of days on the market, info on unsuccessful sales attempts (dates, prices the property was listed at, number of days on the market before the property was taken off the market), are not offered to the Canadians – when they make “likely one of the largest purchase in their lives”… this info is crucial for an efficient market. Not having it, puts the buyers at a disadvantage and it’s likely one of the reason why we see bidding wars.

4/ Ask that the banks consider the overall level of debt of those who ask for a mortgage – and the likelihood (which can be determined using actuary methods – of cash flow negative life events (the first child, the second child, disability, unemployment, etc). The current models used are simplistic and don’t work quite well.

5/ limit the tax free status of capital gains on housing to something that it’s reasonable given the period the house has been owned, and the inflation rates during the period.

6/ Limit the HELOCs amounts to something reasonable (say a year of living expenses). Parents have been drawing money from their HELOCs to help their kids buy overpriced houses…

7/ increase CPP contribution to force people to save more for retirement. Every day there’s a new article with a sob story about yet another boomer who didn’t save enough for retirement…

I am sure a lot of people will not like any of these ideas, and almost certain we will run out of time before any of them will be implemented… but then who said this was going to be easy?

#216 Patrick on 11.12.15 at 3:51 pm

#187 MF on 11.12.15 at 12:28 pm
#184 Broke Dick on 11.12.15 at 11:44 am

You guys should actually go to south america. Service in restaurants is far superior to anything I have gotten in Canada. And they don’t expect tips. Half the time they thought I didn’t understand the currency and was overpaying. So they followed me outside to give it back!

In Canada, a tip is an expectation and it shows in the service you receive. I base tipping on the service, like you are suppose to. Really good service I easily give 20%. But by the same token I have no problem leaving as little as 5% for crappy service.

Long term average I would say I give approx. 15% tips everywhere. But bad servers make less, good ones more. You really wanna see good service, go to the southern US.

#217 lawboy on 11.12.15 at 3:51 pm

“We are having hard time staying in apartment with two kids and no washer dryer. It takes three hours of weekend time for using downstairs laundry. We thought of renting another place as my husband is following your advice.

This is a quote from Carmen, subject of a post from two weeks ago. Garth indicated she had no concept of closing costs. She also has no concept about laundry. Laundry takes LONGER when doing it in-house, because you can only do one load at a time!

#218 Holy Crap Wheres The Tylenol on 11.12.15 at 3:53 pm

And as I said yesterday what about our aboriginal people here? Nothing, not a word, nope, in the eyes of the government they don’t exist. Thanks again government assholes. You don’t have to look 5700 miles to the east to help people in need. Just drive 300 miles north.

http://www.msn.com/en-ca/news/canada/canada-forges-ahead-with-rapid-refugee-resettlement-plan/ar-BBmVMMH?li=AAadgLE&ocid=mailsignout

#219 Paul on 11.12.15 at 3:59 pm

#211 213 comm on 11.12.15 at 3:41 pm
Another explanation to this “phenomenon” is when houses sit on the mrkt forever and can’t sell, come fall/winter (usually slower time) sellers take them off the mrkt and put them up for rent. Come spring same house re-appears on mrkt as brand new listing. It kills two birds: one – ‘days on mrkt’ are re-set, two – at least it will generate some cash flow to cover carrying costs (in full or partially) during the slow winter months. Seen this trick done over and over again.
———————————————————-
Seen this “trick” done over and over again? if that what it takes to trick you? I wouldn’t broadcast it you giving Forrest Gump competition.

#220 S.Bby on 11.12.15 at 4:12 pm

#211 213comm on 11.12.15 at 3:41 pm

My guess is it sold right away. $800K is “cheap” for that area and SFH in Coquitlam is moving quickly.

#221 family beagle on 11.12.15 at 4:13 pm

A couple of buddies and I built a CNC machine in the garage. We used scrap aluminum, plywood, bolts, and bearings we scrounged. Then we ordered controllers, power supplies, and the circuitry from the US. We set up a pc and tweaked some open source software to loft drawings and started test runs. The machine uses interchangable bits on a router to carve 3D objects out of wood and plastic. We’re into the machine for about $500 and it runs beautifully–a marvel to watch. As a test, we ran some drink coasters with intricate designs to demonstrate the precise tolerance capabilities.

This is three guys, starting from scratch, and we were excited to show our first product samples. My wife didn’t unbox hers, and forgot them in her car. My Mom didn’t believe we made them. Friends were happy to receive, but wouldn’t purchase. And a local retailer said we’d have to offer for $5 below our cost to compete with imports.

We’ve started to run other products: chess boards, signs, cookware, component parts, novelty items, guitar parts, lots of things typically imported. Interest has been flat. We can take a 2×4 and turn it into a replica winchester in one hour using robotics, all in a suburban garage.

We’d like to start a little factory line and rent a shop, but feedback has been disappointing. Nobody cares and we can’t compete with dollar store imports. Larger, more profitable products would require upgrading and there’s no guarantee they’ll sell.

One friend has bailed on the project. The main dude has taken the machine apart for retooling, and after three months in an online sales venue we sold 0 units with 20 people interested. We are priced too high.
There are no business mentors in our circle. We invited some local kids to see/learn how a computerized CNC machine works, but nobody was interested (partying is the popular pursuit here). My time is tapped and I have to move on with my wood furniture business, also struggling due to high cost. It’s been a grand experiment , but I wonder if we should have tried to set up in Washington State where costs are far less.

We may try another go when the machine is back together. Just some insight into local entrepreneurs. It’s a lonely road.

#222 Sheane Wallace on 11.12.15 at 4:13 pm

#207 Victoria Real Estate Update on 11.12.15 at 3:36 pm
# 146 Sheane Wallace

There is no need for ‘perhaps’ in your statement.
It is the biggest property bubble in history by far.

That’s what amateur ‘economists’ who never worked real work in their life, the likes of F, H, O can get a country into.

While piling 170 billion in public debt on top of the huge pile of private debt, guaranteed by the government.

#223 Freedom First on 11.12.15 at 4:29 pm

#174 The Jaguar

My name is Freedom First, and I endorse this comment.

#224 MF on 11.12.15 at 4:33 pm

#216 Patrick on 11.12.15 at 3:51 pm

I’ve heard the same thing about the service in the southern US. We could probably learn a few things from them.

And lol at the South American servers running after you to give back your money. That’s funny.

#205 Broke Dick on 11.12.15 at 3:20 pm

No I know.

On a macroeconomic level, this pathetic blog is the same thing. The machine wants us to buy houses and go into debt but we come here to learn otherwise.

MF

#225 Freedom First on 11.12.15 at 4:36 pm

#182 Patrick

My name is Freedom First, and I endorse this comment.

Enough. — Garth

#226 unbalanced on 11.12.15 at 4:37 pm

To # 210, Shameless Truth. I am up about 8% so far this year. This year isn’t over yet. Not bragging—just saying.

#227 family beagle on 11.12.15 at 4:38 pm

I want to add one thing, regarding my wood furniture business. Shipping costs are unsustainable. I can only sell in local market because crating and shipping beyond 100km almost triples the price. I have lots of interest in US. I’ve been featured in mainstream media for my innovative, natural wood designs. People call and get a price, then when shipping is calculated they bail. One retailer required my wholesale price be $150 in order to retail at $800. After cost, I would make $60 for labour even though customer pays much more. Retailer blamed high rent. I put some pieces in the store on consignment. The store next door caught fire. Those works are in insurance limbo with the retailer explaining he might not be as covered as he thought. For other crafters and designers, demand a rider on insurance before you leave your work on consignment. And so it goes.

#228 More than a lie on 11.12.15 at 4:49 pm

because nobody’s going to move in and save your ass when when things go sideways. Suck. Blow.

I think you are wrong — the feds will always intervene (especially a Liberal government) to save the masses.

All those people who cry about affordable housing — but the masses own houses, so it is not in the economy’s interest to pop it. Who cares if GM makes crappy cars, we’re going to bail them out.

There will be no significant mortgage defaults, and no bailouts. Get used to the idea of steadily eroding equity. — Garth

#229 More than a lie on 11.12.15 at 4:52 pm

And that Garth, is why you and your many of your readers (who think we know better than the rest) are actually not as smart as we think we are.

The social net that is the Canadian government will hurt the smart savers and investors to protect the lamb… I mean, the indebted consumers.

#230 Freedom First on 11.12.15 at 4:56 pm

#225 Freedom First

Enough.- Garth.
…………………………….

Okay. It won’t happen again.

#231 bdy sktrn on 11.12.15 at 4:57 pm

#192 bdy sktrn on 11.09.15 at 1:36 pm
Ms Y will back off the rate hike if the market swoons over the next 30 days.

look for 1500 to be shaved off the dow by santa day.
————————
400 down
1100 to go

#232 MF on 11.12.15 at 4:59 pm

#219 Paul on 11.12.15 at 3:59 pm
#211 213 comm on 11.12.15 at 3:41 pm

“– ‘days on mrkt’ are re-set, two – at least it will generate some cash flow to cover carrying costs (in full or partially) during the slow winter months. Seen this trick done over and over again.
———————————————————-
Seen this “trick” done over and over again? if that what it takes to trick you? I wouldn’t broadcast it you giving Forrest Gump competition.”

Lol that’s hilarious. Jennaay raid what this buoy is sayin

MF

#233 The Other Chris on 11.12.15 at 5:01 pm

#227 family beagle on 11.12.15 at 4:38 pm

If you’re shipping to the US, it pays to hire someone to take the goods over the border and ship from there. On this side of the country, Ogdensburg, NY has a whole cottage industry of Canadian companies that receive goods and ship from there. Much more cost-effective.

#234 I'm tripping liberal on 11.12.15 at 5:12 pm

DELETED

#235 I'm tripping liberal on 11.12.15 at 5:13 pm

#226 Unbalanced…what you’ve added through savings doesn’t count.

#236 Dr. Talc on 11.12.15 at 5:19 pm

This blog proves the point that if threads go on long enough, irregardless of the subject, someone will bring up Adolf Hitler. Anyway, I say he was a British agent, or at some point replaced by a dopelganger who was an agent.

#237 Sheane Wallace on 11.12.15 at 5:20 pm

There will be no significant mortgage defaults, and no bailouts. Get used to the idea of steadily eroding equity. — Garth
—————————————————————————-
If that can be pulled out I will eat my shoe like Charlie Chaplin in ‘Gold Rush’, tape it and upload it on YouTube.

There were bailouts in the past including the mass purchase of problematic mortgages by CMHC in 2009 that was in amounts that exceeded the capital of the lenders in question. If that was not bailout, I don’t know what is. (these were clearly sub-primes).

The only case for not having significant mortgage defaults in the current economic conditions would be the complete destruction of the loonie.

We will see severe stress in the housing market and in mortgage debt servicing, there is no question about it and nobody can convince me that the crappy bungalows (many unlivable) that I drove by in Toronto this morning are ‘worth’ $ 1.1 – 1.2 millions.

It does not matter what the politically correct label would be, I can sense high chance of rationalization of sales in the market, where houses will not formally be announced as foreclosure but kept for years in some limbo state as to hide the true severity of the crises (hiding is something that we are good at).

There was no bailout of homeowners in 2009, nor will there be in the future. Debt servicing pressures will lead to a slower market, distress sales and lower prices. They will not spark a default crisis. Anyone waiting for the government to forgive their mortgage is in for hurt. — Garth

#238 Sheane Wallace on 11.12.15 at 5:27 pm

There was no bailout of homeowners in 2009, nor will there be in the future. Debt servicing pressures will lead to a slower market, distress sales and lower prices. They will not spark a default crisis. Anyone waiting for the government to forgive their mortgage is in for hurt. — Garth

agree, the bailout was for lending institutions.

#239 Sheane Wallace on 11.12.15 at 5:31 pm

There was no bailout of homeowners in 2009, nor will there be in the future. Debt servicing pressures will lead to a slower market, distress sales and lower prices. They will not spark a default crisis. Anyone waiting for the government to forgive their mortgage is in for hurt. — Garth

agree with the ‘no bailout for the home owners in 2009’ part.

As for the ‘lack of defaults crisis’ in the future I am not so sure, I give it 70-80 % chance. Of course the pressure would be to hide and obscure the true number of defaults and foreclosures.

#240 Bby604 on 11.12.15 at 5:32 pm

http://www.cbc.ca/beta/news/business/cmhc-foreign-ownership-real-estate-canada-1.3313928

Guess you can’t ignore it , the rumbling is turning into a roar

#241 jess on 11.12.15 at 5:40 pm

KPMG’s 2011 Survey ‘Profile Of A Fraudster’ identified the following traits:

70% are between 36 – 55 years old (the peak earning years);

87% are male;

41% acted independently;

46% were senior management;

33% had worked for the company for more than 10 years;

Most worked in finance; and 50% of red flags were not acted upon.

Cressey’s Fraud Triangle shows three aspects that can lead to fraud:
http://www.acfe.com/fraud-triangle.aspx
The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, together, lead to fraudulent behavior:

Pressure / Incentive: A person may be under financial pressure.

Opportunity: There is a gap that can be exploited.

Attitude / Rationalisation: Research shows that most fraudsters rationalise their behaviour.

The Association of Fraud Examiners statistics show that in 81% of cases the fraudster displayed one or more behavioural red flags:

Living beyond his means;

#242 Smartalox on 11.12.15 at 5:42 pm

#198 Sbby:

I see this a lot too. Probably the house is an inheritance, paid off, so mortgage costs are no object. The kids want to get the best price for the property, and are in no hurry to sell. Willing to rent ‘until the market recovers’ but as landlords are complete amateurs.

The give-away is the antique furniture that looks like it hasn’t moved in 30 years.

If you’re interested in a place like this, get a long lease to insulate yourself from the potential that the house will be sold out from under you, pressure the ‘landlords’ to make important upgrades (plumbing, wiring, roof leaks), and then strike a deal to buy at a deeply discounted price, when the market begins to tank.

Focus their attention on the income, instead of the cost.

#243 BCD on 11.12.15 at 5:46 pm

#112 james on 11.11.15 at 10:35 pm

James, you must be fairly new here. I thought everyone just scrolls past Smoking Fool’s comments.

Everyone knows that Smoking Fool is the resident troll here. Most of the cryptic, chaotic posts under several different names are his. He even responds to his own posts using different pseudonyms in an effort to pat himself on the back and give him something to respond to. I’ve often wondered why he bothers, but Garth seems to tolerate him probably because he feels sorry for him.

Hang around for awhile and you will learn how to filter through the garbage.

#244 Lorne on 11.12.15 at 5:50 pm

#197 IHCTD9
…………..
Not a particularly solid defence of your friend…in fact, makes no sense at all! If any party is in charge for 9 years and leaves the country with a larger deficit and debt….well, who should get the blame???
___________________________________________

I guess you’re correct – there could never be any forces beyond the PM’s control working against the best of intentions. So blame Harper, after all, ’twas never a ripple in the Global economic waters while his hand was on the rudder.

On that note, I’ll be back next year to blame Trudeau for everything, and I’m sure by then you will have thought up many things to blame other than Trudeau – even though… well, he was in charge.

If that sounds presumptuous, you’ll have to forgive me. I live in Ontario where I am still listening to folks blaming Harris for every problem in the universe, even after 13 consecutive years of Liberal government.
……….
Now, if things had gone very well for your friend, and we were now out of debt, then I have no doubt who would be taking the credit. In fact, he tried to take credit for the fictional “balanced budget” just a few weeks ago!!

#245 Mark on 11.12.15 at 5:58 pm

“There were bailouts in the past including the mass purchase of problematic mortgages by CMHC in 2009 that was in amounts that exceeded the capital of the lenders in question. If that was not bailout, I don’t know what is. (these were clearly sub-primes).”

Of course they were subprime mortgages. And, if not for extraordinary policy action, they would have all defaulted and the CMHC would have been on the hook for them. So to call the deal concocted between the banks and the CMHC a ‘bail-out’ really is disingenuous. The banks could have exchanged those mortgages for 100 cents on the dollar by simply letting them default had the deal not been made.

Having said that, I don’t really agree with Garth’s implied claim that significant defaults are going to be avoided. It just seems implausible, especially at record debt ratios, that at least some of the debt won’t go bad. The question ultimately will be, will the government be able to get enough of the Canadian economy actually ‘going’ again to create some income growth to replace demand lost in the RE sector? Will the global economy cooperate in a way favourable to Canada? I’m not sure.

“I can sense high chance of rationalization of sales in the market, where houses will not formally be announced as foreclosure but kept for years in some limbo state as to hide the true severity of the crises (hiding is something that we are good at).”

The banks themselves will act rapidly to protect their legal right of repayment. However, there is nothing that stops the CMHC itself from taking a significant amounts of houses into their own inventory, and holding them. However, it is likely that the market would trade against the CMHC and its holdings. Therefore, the CMHC rationally should prefer rapid liquidation and price discovery to minimize its damages.

However, nothing says that CMHC will do anything rational to clean up the mess that is largely of their creation. Remember, we’re talking about an organization which exists by, for, and to the benefit of the FIRE industry, not for the common Canadian who just wants to affordably own their own home.

#246 unbalanced on 11.12.15 at 5:59 pm

To #235, I’m Tripping Liberal. I haven’t added anything to my savings,honest. Like I said this year is far from over. It could go up or quite possibly go down. Lately, i”m thinking its gonna go down.

#247 More than a lie on 11.12.15 at 6:04 pm


There was no bailout of homeowners in 2009, nor will there be in the future. Debt servicing pressures will lead to a slower market, distress sales and lower prices. They will not spark a default crisis. Anyone waiting for the government to forgive their mortgage is in for hurt. — Garth

I agree with you Garth — so maybe the term is “bailout”. The government will do everything it can, short of a bailout, to prop up housing prices. That to me is active intervention.

Even interest rates – cause vs affect…. which came first? Low interest rates –> leads to high housing price, or rather, indebted consumer (house being #1) being the engine of growth –> leads to stimulus and low rates.

to me, active intervention = bailout of the indebted… because they are the masses, and the “wealthy savers and investors” are not.

#248 Broke Dick on 11.12.15 at 6:16 pm

Sorry VREU-
There’s also Victoria, where prices climbed 0.3 per cent from September and 6.4 per cent from October of last year..

But we’ll always have Calgary.

http://www.theglobeandmail.com/report-on-business/top-business-stories/authorities-poking-into-facebook-accounts-of-hundreds-of-canadians/article27225904/

#249 Adam Smith on 11.12.15 at 6:18 pm

Well, it’s nice to be young with no debt and some funds in the stock market even if that isn’t playing well these days either.

What should my move be Garth? Fortunately I own almost no Canadian stuff but what should I be looking at getting more of? The fear of interest rate hikes has pushed down my emerging markets stuff so I’m considering picking up some more of that stuff. It’ll be at least 35 years before I need access to any of it so Eurasian integration should be completed by then and things like EEM worth quite a bit.

Or should I sit on cash and wait for a larger correction?

#250 Lea on 11.12.15 at 6:39 pm

#240 Bby604

Does a drop in the Canadian dollar mean a loss for foreign real estate investors?

#251 213comm on 11.12.15 at 6:39 pm

“Paul on 11.12.15 at 3:59 pm

Seen this “trick” done over and over again? if that what it takes to trick you? I wouldn’t broadcast it you giving Forrest Gump competition.”

I realize it must be hard for you. There is only so much ppl can do to help, otherwise it’s ‘stupid is stupid does’ :)

#252 Canadian on 11.12.15 at 6:42 pm

Is there an inverse Mark Index I can throw money into? I’m feeling like I need some guaranteed returns during this period of economic uncertainty. Doubly interested if its leveraged x2 or x3

#253 family beagle on 11.12.15 at 6:45 pm

#233 The Other Chris on 11.12.15 at 5:01 pm

If you’re shipping to the US, it pays to hire someone to take the goods over the border and ship from there. On this side of the country, Ogdensburg, NY has a whole cottage industry of Canadian companies that receive goods and ship from there. Much more cost-effective.

….

Thanks. Appreciate the confirmation on what I suspect must be done. I need a representative down there. There’s no tarrif or duty on my stuff because the US considers them ‘art’ and receives all foreign artifacts and cultural works. I drove one piece down to Seattle and the US border people said no problem.

#254 Lea on 11.12.15 at 6:45 pm

#94 Smoking Man

So no rainbows and unicorns or ponies and sunshine : (

Now that you mention it, my kids often come home from their Canadian schools saying that they learned how safe Canadian fill-in-the-blank is. Last week it was dairy, the week before it was an RCMP officer talking about never going to the U.S. because you could get shot because everybody has guns.

#255 213comm on 11.12.15 at 6:46 pm

http://www.ctvnews.ca/canada/vancouver-real-estate-bargains-for-sale-with-a-catch-1.2655124

#256 Bby604 on 11.12.15 at 7:10 pm

#249 Lea on 11.12.15 at 6:39 pm
#240 Bby604

Does a drop in the Canadian dollar mean a loss for foreign real estate investors?
————————-
Depends on the currencies involved

#257 Julia on 11.12.15 at 7:42 pm

Mark, the law may not technically prevent a house occupied by a family with kids from being foreclosed/power of sale but in a bankruptcy my experience is that a judge will not allow it. I’ve tried.

As for the rest of your answers, I am not quite sure how to respond as it I think you are saying the same thing I am just so convoluted I am not sure.

#258 DON on 11.13.15 at 12:55 am

“You might want to consider your legacy and reputation in terms of what you permit and, frankly, foster on here in terms of the many truly narrow and anti-woman comments.”

I find the above comment to be the opposite of its constructive intent. I would prefer constructive chats, more straight talk, less side insults etc…, but why hide the fact that people have different views and intents. Better to let each individual speak his/her mind and know where you stand, then to stick head in ground. Democracy without freedom of expression huh!

Garth draws a fair line in the sand, racism is out, freedom to say what you think…within reason. This blog offers the power of group think. All data is debated over and over and over and over again. Move aside wikipedia (in terms of financials).

This blog we be a required course in university in the near future.

#259 macroman on 11.13.15 at 2:11 am

Speaking of PC, what would the tirade be if McMankill had said “Women should just shut the hell up”?

http://www.zerohedge.com/news/2015-11-11/female-senator-says-men-should-just-shut-hell

#260 Gary on 11.13.15 at 12:37 pm

Garth, you´re a smart guy but I think you missed the obvious reason for all the backlash about sexism. It´s not about gender equality anymore. The pendulum has now swung past the middle and we are very obviously living in a gynocentric society. I now live in europe and am able to see the difference in how comments and gender stereotyping are treated in wider society. In Germany for instance, there is way more gender equality than in Canada and yet men don´t feel muzzled and shut down about expressing themselves as they do in Canada. Canadian men know in their heart of hearts, that politically correct now means honouring, admiring and hailing all that is feminine, and fearing, despising and dimissing as irrelevant all human attributes and qualities generally thought of as masculine. Men have become second class citizens in Canada, even to the extent that this very commentary is likely to be attacked as misogynist, anti-female and hateful. In other words, any pro-male commentary is automatically deemed to be anti-female in your warped society. Good luck to you all. I´ve left the country for a society where gender justice really means something.