Confused

1CONFUSED

On Tuesday, while the CEO of the CIBC suggested Canadians have been spoiled by cheap rates and swelling real estate, we got the latest from America. The growth rate there is now more than twice ours, real estate prices are rising in 20 major cities (not one-and-a-half), unemployment is falling and wages increased by more than a hundred billion in the last three months.

So, Canada lags. Look at the TSX. It’s down a withering 9% this year, while the S&P is slightly positive and European markets are 12% higher. Investors in maple have seen their portfolios nibbled away by rabid beavers, while those with globally diversified accounts are cool. The big banker knows this isn’t going to change anytime soon as commodity prices stay in the trash. He also knows his bank has too much exposure to energy and housing.

If the Fed delivers on the rate increase slated for December 16th (current odds are 70%), then expect another kick. That will boost the US dollar, drop ours, depress oil and copper further and make people spending $1 million for beater houses in East Van look even more ridiculous.

So it’s a confusing world. Investing is scary. Most people don’t go near it. But on this pathetic blog we are, as your mom always told you, special. Every day I get questions about what to do next. So let’s answer a few. Here’s Carol:

Hi Garth, long time blog dog, first time writer here. I’ve come into a sizable chunk of change, and plan to invest it (we’re happily renting for now, so it’s not going into a down payment). I have a fee based bank adviser, and I want to go in prepared when I meet up with him to decide how to best invest this new wad of cash. My portfolio is mostly preferreds and ETFs, not a single mutual fund in sight so he seems legit, but he seems to have a strong pro-Maple bias. When I asked why, he said that when he invested my money, Canadian assets were cheap and US/global assets were expensive (I transferred the funds to him very recently).

I understand why you warn against overexposure to Canadian assets, seeing as how they likely haven’t found a bottom yet (especially with the US rate hike coming), but my question is, where’s the inflection point? When do Canadian assets get too juicy and cheap to pass up? Should I be less hesitant about just continuing with my adviser’s Maple-heavy strategy, given things will inevitably recover well within my time horizon of 30-35 years?

Thanks again for all the work you do Garth, your blog has really helped me and probably countless others.

The home-country bias among Canadians and their advisors is stunning. Over 70% of investors here have 100% of their stuff in maple. Amazing. Canada, as you may know, accounts for 3% of world markets – so this is a myopic lack of diversification. Nowhere have I seen this bias more pronounced than among those who work for bank-owned brokerages – the same guys who often underwrite domestic securities. Incredible coincidence.

Anyway, you’re allowing a mistake to occur, since there’s no floor evident for commodity prices, the oil sands, canoe futures or companies that dig stuff up. Yes, these things (oil, copper, grain, aluminum, nickel) will rebound at some point, but why would you wallow around with them for even a year or two when your money could be growing in a balanced fashion? Having one-third of your growth assets (or about 15% of your total portfolio) in maple is plenty. If that makes you feel guilty, download some of Justin Bieber’s latest crap.

Here’s young John, in Vancouver:

Hi Garth: We are just over 1 year married in our mid-20s, living in an eastern suburb and earn modest incomes (combined $100k+). We are renting a house and are happy to do so for eternity if necessary. I also have monthly income from an investment condo (bought with some help from parents) that more than covers the costs.

Despite your blog constantly pointing to a looming housing correcting in YVR (and I sure hope it does come so that I can “swoop in” on good deals), I am finding it increasingly difficult to resist house lust and fear. It seems even if there is a correction, it will only make a small dent on singe detached houses. I find it extremely tempting to invest in another investment property, either a condo or a house further out east – thinking that it may be better to hold on to more land?

So my question is, in our situation, should I even consider owning another property? If so, what type? At this rate, it seems like prices will not come down significantly within the next 5-8 years. On the other hand, should I be ashamed that people like me are possibly contributing to the skyrocketing prices in YVR? Am I just super greedy and should stop being influenced by all the real estate talk in YVR?

Yes. Get a life. For a couple of twenty-somethings to be lusting after a detached house in a city where one costs well over a million is insane. Give your head a shake. Get your priorities straight. More consequential should be your careers, your mobility, flexibility and the freedom you’ll only come to value and understand later in life. There will be time enough for you to accumulate both stuff and debt, to crave capital gains and covet wealth. But this ain’t it.

Meanwhile anyone who thinks Vancouver is immune from a price correction is as screwed up as you. So I suggest you get new friends. Perhaps even parents.

Let’s see if Jeff is less weird:

I ‘m switching investment companies and looking at where to invest next. I am looking at bond ETFs and Preferred shares like you have advised. But I also see the US market going up and have heard commentaries say it’s overpriced due to Price to Earning ratios being at unsustainable levels. Is there a counter point to this argument? To me it makes sense that when all other investments are giving poor returns, due to the manipulated interest rates, that people will disproportionately invest in stocks. And that the time of manipulated monetary policy (at least in the US) will be coming to a close, slowly but surely. Is the understanding correct? I am not a doomer, I think that US will continue to grow but may see a correction in the near term as monetary policy starts to normalize.

An argument oft made, Jeff. Some people look at an index number (like the Dow at 18,000) see that it’s close to record levels, thus conclude stocks are expensive. But a better way of judging is to contrast valuations with the money corporations are earning. Right now the P/E of the S&P 500 (the broadest measure of large cap stocks) is about 19 – a five-year high (which reflects the US economic recovery that’s happened since 2010).

Is this expensive? Well, the average P/E since the 1870s has been around 17, and during bubbles it’s bloated to far higher levels – like the 30 hit during the dot-come days or the 100+ during the turmoil six years ago. By historic measure, equities still seem reasonable. But they’re also essential holds for anyone looking to build their wealth in an era of slow growth, low rates, low inflation and yet rapid technological advance.

If you believe the world will continue to inch ahead, then you need growth assets. The best choice are index ETFs, along the lines of the weightings this blog has previously recommended. As for rates rising, this is ultimately an affirmation of a strong US economy. Stocks will not crumble as a result. Ignore it.

Finally, here’s Joanne’s question:

I have been reading your blog for a while now and I want to start off by saying thank you for taking the time to do what you do. We actually spoke briefly over the phone a few years back about my financial situation. You provided great high-level advice. The purpose of my email is that we have been talking and we have come to the conclusion that we won’t make any significant gains in improving our financial situation if we don’t aggressively set aside funds to invest. In order to execute this we are considering the strategy of selling our home, investing the proceeds, renting a similar home and make regular capital contributions to our investment portfolio. We believe that by selling our home and harvesting the equity we will be able to save at a rate that would not be possible should we continue with home ownership. Does this make sense?

You can borrow up to 65% of your home equity in the form of a HELOC, make interest-only payments and deduct 100% of those payments from your taxable income if the money is used to invest. Sure, Joanne, you can sell, rent and invest if you wish – but perhaps a less radical action is to use existing equity without exiting the real estate market. That’s your choice.

Nonetheless, borrowing at prime plus a half (3.3%) to invest in a portfolio that could average 7% over five years (as a 60/40 has done) and writing off up to half the interest means you’re absolutely gaining ground. But, like selling and putting the proceeds into a portfolio, there’s always a downside. If you panic at any losses and sell, you lose. If you invest badly, risk swells. You should ensure your money’s properly managed by a guy who is no cowboy and keeps you liquid, so if things turn south you can always bail.

Finally, pit this risk against keeping all your net worth in real estate. No contest.

Meanwhile, in Alberta...

NOTLEY modified

224 comments ↓

#1 bdy sktrn on 11.24.15 at 6:46 pm

#3 will suprize some hard liners here!

#2 Bananasan on 11.24.15 at 6:47 pm

Hey Garth, I used to read the comments and find some nice bit of info quite often. These days, the comments are unreadable as the forum has been invaded mostly by rightwing nutbars. You have the utmost collection of dumbs here. If that is a goal in life, you made it….

#3 Alberta wing-nuts on 11.24.15 at 6:52 pm

Sure let’s blame Notley for the downturn in energy stocks and let’s blame her for the filthy-dirty-oil reputation too….

#4 hightway61 on 11.24.15 at 6:54 pm

terry’s a moron who spends way too much time on social network. no change in Edmonton/Calgary RE prices until interest rates change (never).

#5 Victoria Real Estate Update on 11.24.15 at 6:56 pm

This chart plots the price performance of single family homes in Oak Bay against SFHs in Vancouver.

. . . . . . . . . . . .House Prices. . . . . . . . . . . . . .
. .Percent Above/Below March 2010 Price Level. .
. . . . . . . x = Vancouver, * = Oak Bay. . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+15%. . . . . . . . . . . . . . . .x. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . x. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
….0%. . . x*. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . *. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . *. . . .
—————————————————————————–
. . . . . . March . . . . . . .March. . . . . .January. .
. . . . . . .2010. . . . . . .. 2012. . . . . . .2014. . .

(sources: Victoria’s R/E board, Vancouver’s R/E board)

We can safely assume that Oak Bay’s 10.6% price plunge was actually more than that (perhaps 15% or more) since the information comes from the Victoria board’s frankenumber price index.

SFH prices in Vancouver increased 12.1% over the same period of time. Vancouver’s housing market did what it should have done, posting a price gain as interest rates fell (second chart). Falling interest rates create a highly stimulative environment for a housing market. That’s fact. Rising rates create an environment that is the opposite of stimulative.

Houses in Vancouver maintained their value against falling interest rates by increasing 12.1% from 2010 to early 2014.

Houses in Oak Bay failed to maintain their value against falling interest rates by not increasing 12.1%.

How much value did houses in Oak Bay lose over that period of time? Prices fell at least 10.6%, add that to how much prices should have increased (12.1%) and the total value lost was 22.7%.

That 22.7% of value lost against interest rates didn’t show up as that much in house prices because interest rates fell from 2010 to early 2014.

In other words, if interest rates hadn’t fallen as much as they did from 2010 to early 2014, we would have seen house prices in Oak Bay fall a lot more than they did.

If interest rates had increased from 2010 to early 2014, house prices in Oak Bay would have fallen even more.

How long does it take for a major national (country) housing bubble to deflate? This chart clearly shows that it takes only 3 to 6 years for major price corrections to play out.

House prices crashed in Victoria, Vancouver, Edmonton and Calgary in the 1980s and in Toronto in the 1990s.

Houses in Victoria have lost a lot of value in relation to interest rates since 2008-09. That lost value will show up in actual house prices as interest rates move back to their long-term levels (normalize).

Basically, Canadian 5-year fixed mortgage rates have already begun moving higher.

Falling house prices will put even more near-peak buyers in Victoria into negative equity for many years. They will learn, as Americans did, that buying real estate at highly inflated prices is always a bad idea.

#6 Chopper on 11.24.15 at 6:59 pm

Where are all the American bashers that troll this blog? I know where they are but I wouldn’ t say. Ah well going to Orlando for a month check on my two houses collect the rent then go fishing life is good.

#7 Patrick on 11.24.15 at 7:01 pm

“So I suggest you get new friends. Perhaps even parents.”
______________________________

If you’re adopting I’m in.

#8 Saskgirl on 11.24.15 at 7:04 pm

Hello Garth,, long time reader, first time post. A wholesome thank you for your continuing blog despite the sometime blockhead comments you receive.
I have utilized your advice while building my portfolio and can say that you have relieved my inhibitions by both providing sound advice and the use of fee based advisors.
Also, I dearly appreciate your wit..keep up the good work and I will keep on reading…

#9 Armando on 11.24.15 at 7:05 pm

Hi Garth, Regarding your P/E analysis of US Markets: Sorry to burst your bubble, but P/E ratios based on last year’s earnings (or even worse, next years supposed earnings) are balderdash and have demonstrated zero capability to predict future US market returns over the short or long term. However, other metrics like Shiller’s CAPE and Total Market Cap/GDP do have excellent track records for predicting market returns over longer periods of time (i.e. 8-12 years). BTW – even “good” valuation metrics have demonstrated no ability to predict market returns over shorter periods (i.e. 1-5 years). So don’t even bother to use valuation as a way of justifying what is going to happen 1, 2, or 3 years from now. What are the empirically valid metrics I mention above telling us about the US stock market? That we are severely overvalued and that a decade from now you can expect the S&P 500 to be exactly where it is today – in other words, zero return over the next decade. This by the way is exactly where we were in the year 2000, and guess what happened afterwards….

#10 HD on 11.24.15 at 7:07 pm

#236 saskatoon on 11.24.15 at 5:52 pm
#228 HD

“1. they have already escaped. none of these refugees are actually coming from syria…but from neighbouring countries”

—————-

So Syrian refugees are not coming from Syria. Can you please elaborate on that?

Best,

HD

#11 Questions on 11.24.15 at 7:08 pm

European markets are 12% higher? Is there an ETF that reflects this?

#12 MSM-Free Zone on 11.24.15 at 7:14 pm

Actually, Terry Paranych, shame on you for allowing the legacy of four decades of narrow-minded, non-diversifying, Alberta (C)onservative rule kill your one-trick economy. Myself, having lived in AB from 1980-2000, I personally witnessed the incredible bloat and Conservative waste during half that period. Rachel only recently inherited your mess.

But don’t let the facts interfere with your pathetic, self-serving, conflict of interest. How stupid can you be?

#13 espressobob on 11.24.15 at 7:15 pm

Investing is a thick subject. Why not go global?

Why do Canadians think our economy is the center of the investing universe? Actually it’s 4%. Oh shit! Not that the oil sands could be circling the drain? No Way!

Supply and demand, it’s how business is done. Kill the competition and profit from the carnage. Common practice. Saudis?

Global investors are on both sides of the trade, good, bad or ugly.

https://www.blackrock.com/ca/individual/en/products/239697/ishares-msci-world-index-etf

#14 Mark on 11.24.15 at 7:16 pm

The attack on the NDP seems to be very misguided. Alberta RE prices were already in decline even before the oil prices fell apart on account of overcapacity, declining availability of subprime credit through the CMHC and uncertainty concerning new oilsands projects. And certainly its pretty ‘rich’ to be accusing the NDP of being responsible for global commodity prices.

If anything, the Realtor should be blaming the previous Tory governments that basically presided over Alberta’s economy chasing out a good chunk of its inversely correlated industry.

The irony is that while this Realtor is complaining, he and his friends in the RE business actually benefit significantly from the economic turbulence. That is, of course, if they stuck to being Realtors and not being RE speculators themselves. Its been my experience that most Realtors actually “eat their own cooking” so to speak, owning multiple rentals.

“Nonetheless, borrowing at prime plus a half (3.3%) to invest in a portfolio that could average 7% over five years (as a 60/40 has done) and writing off up to half the interest means you’re absolutely gaining ground. “

If one shops around, one can borrow at significantly lower rates. I basically do as you describe, and my blended rate is well under 2%. 150bp of additional return on such an arrangement can add up to quite a chunk of change over time, especially if the realized equity risk premium is minimal. Pays to shop around, that’s for sure.

#15 TRT on 11.24.15 at 7:22 pm

Vancouver rea estate is on fire.

House on Maple street went $1 million over asking.

Another with 5 bids was won by 22 year old international student who’s parents live in China.

Damn CMHC and locals.

http://www.vancouversun.com/touch/story.html?id=11541248

#16 TRT on 11.24.15 at 7:24 pm

“and make people spending $1 million for beater houses in East Van look even more ridiculous.”

Dream on Garth. Approaching 2 million now in The lowly east Van.

The GVREB average is $1.1 million. — Garth

#17 ROCK BEATS PAPER on 11.24.15 at 7:27 pm

Garth,

Housing:

Are you cherry picking the data? While case shiller is up, that is following 3 months of declines. Moreover, the National Association of Realtors (NAR) reported the 4th month in a row of declines.

Growth:
GDP is up because inventories are at massive levels. New orders and backlogs are shrinking. You always seem to drive while looking only in the rearview mirror.

Speaking of rearview, employment is up, but you forgot to mention today’s Richmond FED showing a dramatic decline in wages!

US $
Probably the funniest is the idea that the US$ will continue up due to a 0.25% hike. Since the employment report the USDX has surged 5%. Talk about a massive over reaction. The commercial traders have picked up on this and are massively short the USD against most currencies and at a record against the Ausie.

You will probably need to add confirmation bias to your recency bias.

#18 TRT on 11.24.15 at 7:28 pm

It’s official. Only the 1% can afford to migrate to Metro Vancouver from within Canada now. Wow.

Wonder if the Liberals will entertain the idea of seniors living overseas and still able to get paid medical treatments overseas, and GIS

Gonna fire off an email to the Snowbird association. Lol

#19 stage1dave on 11.24.15 at 7:28 pm

Apparently Mr. Paranych is referring to the 40+ yrs of prudent financial & resource mgt by his esteemed PCs…everything was rosy until June, & then POOF! Luv that mentality…

On a constructive note, we’re renting in a small city just outside of Edm, & I conducted a “street level” assessment of rental vacancies in our building(s) last nite…in a snowstorm haha.

4 bldgs; 96 suites (1 & 2 BR) 12 total vacancies…and 4 moveouts scheduled for Dec 1.

18 mos ago there was TWO vacancies, no MO’s scheduled.

Rent has dropped $200/mt. in these buildings btw.

On a sadder note, I didn’t see a single stray cat…there’s usually 3-5 making their rounds every day n nite around our scrap food dish, but they were probably havin’ a tuff time gettin around last nite. Wife built a shelter today on our UEDO (that’s an un-earned day off…haha) so we’ll see what happens tonite.

Priorities…

#20 Keith in Calgary on 11.24.15 at 7:30 pm

That realtor is a Canada Grade AAA certified idiot.

No provincial government can make the price of oil go up, nor did one make it go below $40…………..and if he wants to imply that one did, then that has to fall on the PC’s shoulders because they were in power when it tanked.

But I overstate the obvious, for realtor = idiot.

#21 JG on 11.24.15 at 7:31 pm

Paranych must be from Edmonton.

Calgary language is much more bourgeois.

#22 Canadian on 11.24.15 at 7:32 pm

Nice one on baiting the NDP TRUE-BELIEVERS. They mostly vanished after you stopped posting about the election. I see a couple have already scurried out from under the refrigerator to insult you, I anticipate many more.

#23 Fluorine on 11.24.15 at 7:41 pm

From Edmonton.
Pretty happy so far with the NDP.

Paranych is an idiot, most famous for the moustaches and dicks drawn on his ubiquitous bus stop bench-adorning face. I think he is being investigated for shady RE practices of something in his spare time.

#24 Smartalox on 11.24.15 at 7:45 pm

Saw an appeal from a food bank in Calgary on my facebook feed the other day. Calgary’s Food Bank has to feed 10 000 more people per month, and almost half of those are children. That’s notwithstanding the food bank’s baseline clientèle, the structurally poor, who are more likely to rent shelter, instead of own it.

These new clients are those who’ve recently seen their circumstances change, and who find themselves forced to forego food, for themselves and their children, to pay for their real estate fantasies.

#25 Imalwaysright on 11.24.15 at 7:50 pm

Which is more harmful?Taking oil from the sand and putting the sand back in place or pumping unknown toxic chemicals deep in the ground and blowing the undergound rock to smithereens? If the USA had the oilsands it would be green.

#26 paul a on 11.24.15 at 7:52 pm

heads up on the current emerging issue: carbon taxation coming to a province and something near and dear your pocket book ,not debating the moral correctness here, but that time worn saying: the road to hell is paved with good intentions,defiantly comes to mind. this program will likely cost you(us) more for just about everything you consume from gas to groceries not to mention hydro costs,a sore point for anybody living in Ontario land of some of the highest kwh rates in north america- consider manufacturing, high teck,automotive these factories consume plenty of juice,a major consideration from a operating cost point of view,in the eyes of the owners and or shareholders in these companies,whom have many jurisdictions competing for there plants and the jobs that come with them, in short buyer beware on this scheme, the timing is terrible with our economy on life support,probable major real estate correction, and recession in the cards, monopoly money dollar and no evidence that it is helping exports. in short this darling issue of carbon taxation could turn us into carbon ashes and is likely a big lump of coal in the average Canadians over extended proverbial Christmas stockings coal is also a carbon fuel, you light it,it burns

#27 Tudor on 11.24.15 at 7:53 pm

CAPE ratios for the S&P 500 do a fairly good job of predicting future returns (given a long enough time horizon). Is anyone updating a CAPE for the TSX so we can gage how ‘cheap’ it is?

#28 zedgt87 on 11.24.15 at 7:55 pm

“Is this expensive? Well, the average P/E since the 1870s has been around 17, and during bubbles it’s bloated to far higher levels – like the 30 hit during the dot-come days or the 100+ during the turmoil six years ago. By historic measure, equities still seem reasonable. But they’re also essential holds for anyone looking to build their wealth in an era of slow growth, low rates, low inflation and yet rapid technological advance.”

PE ratios did not peak until well after the GFC had set in during the last debacle.

In July of 2007 when the S&P 500 was near its all time high of around 1550 the PE ratio was only 18.36. It was not until almost 2 years later that PE ratios peaked due to an earnings recession, and at this point stocks had already corrected a lot.

>Right now the P/E of the S&P 500 (the broadest measure of large cap stocks) is about 19 – a five-year high (which reflects the US economic recovery that’s happened since 2010).

Actually its closer to 23 today, according to the wall street journal. So at this point we have a higher S&P 500 PE ratio than we did during the S&P 500 peak of 2007. And you claim stocks are reasonably priced right now?

http://www.wsj.com/mdc/public/page/2_3021-peyield.html

So yes, objectively stocks are expensive today and more expensive than they were during the peak of 2007 if based on PE ratios.

#29 not 1st on 11.24.15 at 7:56 pm

P/E inflated by QE – thats all you need to know

#30 turn of the tide on 11.24.15 at 7:58 pm

Hey Garth, thanks again for the free, fun, empowerment blog!!

I’d like to better understand your statement from 2 days ago:

“Remember to keep bond durations short, as they will be minimally impacted when the cost of money increases.”

What would you classify as “short duration”? 12 months? I am still learning and last month I thought VAB etf would be a good call but I notice it has 7.5 year average duration and comprised of mostly government bonds. So I am thinking of switching to something more appropriate, with lower average duration and a wider basket of corporate + govt.

I think I get it. When new bonds are issued, they typically carry coupon rates close to the prevailing market interest rate, so the trick is to buy short duration bonds as often as possible to “ride” with the rate hike, rather than waiting for the longer durations to eventually cycle and catch up?

Thanks so much!

* Hey blog dawgs, any suggestions on screening for low duration bond ETFs? Man, there’s a sea of EFTs out there… so much to learn! Now I’m off to study what real return bonds are :)

#31 Freedom First on 11.24.15 at 8:00 pm

Terry Paranych sounds angry. Isn’t he one of the most well known Real Estate Pushers in Alberta?

Terry, lots of people mad at you too?

#32 zedgt87 on 11.24.15 at 8:01 pm

“You can borrow up to 65% of your home equity in the form of a HELOC, make interest-only payments and deduct 100% of those payments from your taxable income if the money is used to invest. Sure, Joanne, you can sell, rent and invest if you wish – but perhaps a less radical action is to use existing equity without exiting the real estate market. That’s your choice.”

Your telling people to use their homes as collateral to leverage up and buy stocks at all time highs ?! Wow.. Irresponsible at the very least

No recommendation given. And where did I mention stocks? — Garth

#33 Smoking Man on 11.24.15 at 8:01 pm

#2 Bananasan on 11.24.15 at 6:47 pm
Hey Garth, I used to read the comments and find some nice bit of info quite often. These days, the comments are unreadable as the forum has been invaded mostly by rightwing nutbars. You have the utmost collection of dumbs here. If that is a goal in life, you made it….
…..

So left wing nutbars are OK in your books.

How about just a nutbar, my category, are you are ok with that.

Its a democracy here, calling people dumb is your right.

My dad always told me, you pick up shit to through it at someones face, sometimes you hit the target, some times you miss.

But you will always smell like shit…

Dr. Smoking Man
PhD Herdonomics.

#34 MSM-Free Zone on 11.24.15 at 8:03 pm

#14 Mark on 11.24.15 at 7:16 pm
________________________

Nicely (and far more eloquently) stated than my attempt.

#35 Paul on 11.24.15 at 8:11 pm

Well Justin says we will get 35,000 Syrians now not the 25,000 we can’t handel.

#36 Demanda on 11.24.15 at 8:13 pm

I am heartened by the few posts (so far) about Paranych’s incredibly unprofessional and ignorant post. Can someone please report him to the appropriate association for conduct unbecoming a licensed, ‘professional’ realtor?

#37 John Dimas on 11.24.15 at 8:17 pm

Canadian and U.S. bond yields are not rising anymore. What is going on. They are actually 10 to 15 basis lower over the last 2 to 3 weeks.

If the U.S. Federal Reserve is going to finally increase interest rates and continue increasing them over the next year, government bond yields should be higher then they are today.

We should have at least a 2.0% 10 year Canada bond yield, 2.6% U.S. bond yield and 2.55% Canada 30 year bond yield and 3.25% U.S. 30 year bond yield.

Something is not right here. It looks like another cried wolf on rising interest rates.

#38 Leo Trollstoy on 11.24.15 at 8:19 pm

Garth is spot on. The U.S. economy is booming.

It’s fantastic to be invested in the U.S.

Seriously.

Canada is a wasteland of expensive real estate, useless gold and oil, and bad whiskey.

#39 Brian Ripley on 11.24.15 at 8:22 pm

The Canadian Consumer Credit chart that I mashed up with GDP data last week does show a marked slow down in borrowing since early 2014 and advances in mortgage creation hit resistance in Sept, 2015:

http://www.chpc.biz/history-readings/worried

This winter might be a nice break from the real estate mania.

#40 Doug t on 11.24.15 at 8:22 pm

If you think the U.S. Dollar is strong now just wait till things really heat up in Europe and the Middle East – 2016 is going to get ugly fast – buckle up

#41 tim on 11.24.15 at 8:25 pm

Hi Mark,

How did you achieve that blended rate of 2%? Thanks

#42 common sense on 11.24.15 at 8:25 pm

#38 Leo

Where is the USA “booming”? Please advise.

#43 bdy sktrn on 11.24.15 at 8:27 pm

#15 TRT on 11.24.15 at 7:22 pm
Vancouver real estate is on fire.

House on Maple street went $1 million over asking.

Another with 5 bids was won by 22 year old international student who’s parents live in China.

Damn CMHC and locals.
http://www.vancouversun.com/touch/story.html?id=11541248
———————————-
ha! i uesd to live in the house next door – it was the first place i ever lived in bc, 1991.
it sold in that year, 430k to some guy from china, never saw him once.
2.9m – i would have guessed kits point would fetch more.

#44 Mark on 11.24.15 at 8:28 pm

“P/E inflated by QE – thats all you need to know”

How do you know this? Perhaps earnings have been deflated by QE on account of so much credit being made available to firms that are not profitable. At the expense of profitable large-cap firms.

For instance, Amazon. Doesn’t earn a GAAP-compliant profit. Has presented relentless margin-sapping competition against other big retailers on account of selling goods and services for the cost of acquisition (ie: no net margin). Enabled by ZIRP (why else would investors tolerate funding a company that doesn’t make money!). In such case, it could be said that ZIRP and QE has actually destroyed earnings.

Similar arguments to be made for other sectors. QE is sure looking to be deflationary (profit-killing), rather than inflationary (profit-enhancing). But then again, I’m sure you could construct arguments for both. The question is, which is more dominant? Since the stock market hasn’t really gone anywhere since 2008, except kept up with inflation, despite years of buybacks and retained earnings, it seems more likely that QE has damaged US stock market investors rather than helped them.

Then again, the argument that the US is excessively financialized and losses in long-term bonds will damage the financial sector severely in a rising long-term rate environment is also quite compelling as well.

So what’s the truth? All I am certain of in the future is that the economy will probably value the truly important things more than it values the fluff. And there’s sure a lot of fluff out there right now, that’s for sure.

#45 Retired WI Boomer on 11.24.15 at 8:28 pm

#23 Demanda

Blow it out your…nose. Mr. Paraynch was merely exercising his rite to “Freedom of Speech” a rite we Amerikan’s enjoy.

I trust you still retain the rite as well. Remember, a rite does not necessarily reflect generally accepted good taste, or YOUR preference, my friend.

Try to understand.

#46 Retired WI Boomer on 11.24.15 at 8:30 pm

whoops…slipped to #36. how is that possible?

#47 common sense on 11.24.15 at 8:31 pm

#23 Flourine..

A RE agent being investigated for “shady” RE dealings…

Never!

#48 AB Boxster on 11.24.15 at 8:36 pm

There is little doubt that the Alberta PC’s,at least the last 3-4 leaders, severely dropped the ball in Alberta.
While oil revenues rolled in it was good times for all in Alberta.

While the PC’s lined the pockets of themselves and friends, and couldn’t figure out how to run a health care system, Albertans rarely felt that it’s government was actively working against them.

Its fairly pathetic that the current NDP government under Notley really seems to care F ‘All’ about current circumstances in this province.

Alberta needed to address carbon emissions but the Notley plan will not do anything in this matter.
It will cost Albertans far more to heat their homes. (I guess we can just burn cow sh!t in our wood burning fireplaces to save on gas costs)
We will shut down coal and electric power using coal, which will put more Albertans out of work.

We hear more about what a wonderful thing the new policy will be for the environment, yet most agree that this will not reduce CO2 emissions in a meaningful way. But why should facts get in the way of a bad policy.

It is, however, guaranteed to take another 3 billion dollars from taxpayers, in a province going through some very tough times.
That’s so helpful.

With government like this the NDP had better push as much junk legislation through as possible, as they will not exist in 3 years.

#49 Daisy Mae on 11.24.15 at 8:37 pm

‘Terry’ and his comments? Stupid bugger. Not impressed.

#50 bdy sktrn on 11.24.15 at 8:42 pm

The GVREB average is $1.1 million. — Garth

———————–
nicer comm drive hoods beaters start at 1.2m
liveable places 1.5ish
new/nice approaching 2m (very rare), new on 25′ lot 1.4m, even 1 block off hastings

main and 20ish area is even hotter.

still a few lots for 900k in more distant areas.

Heck they are now tearing down many 3/4 story apt blocks (affordable) to put up towers near metrotown way out in burnaby.

#51 piccaso on 11.24.15 at 8:45 pm

Just lost my 100K a year job in Edmonton today

#52 Ronaldo on 11.24.15 at 8:47 pm

#2 Bananasan on 11.24.15 at 6:47 pm

”Hey Garth, I used to read the comments and find some nice bit of info quite often. These days, the comments are unreadable as the forum has been invaded mostly by rightwing nutbars. You have the utmost collection of dumbs here. If that is a goal in life, you made it….”

So what’s your claim to fame?

#53 warren- the lagging indicator on 11.24.15 at 8:48 pm

Hey Mark, kommykim made a good point “Considering that both sides of the Canadian RE debt balance sheet are internal, and thus BOTH held in Canadian dollars, your point has no validity.” and you veer off talking about consumption which may have some merit, but was not your original intent that the massive demand for Canadian dollars to repay this debt would decrease the money supply and be deflationary thereby increasing the Canadian dollar? Your response sounds like someone who has trouble admitting he is not always correct and searches for an angle to justify his position. I am just trying to find out the truth and this type of argumentation just seems to obfuscate it. Is her point valid or not, with respect to the original intent of yours and not some new reincarnation of it?
ps- You sound like a really smart guy. So why are you doing that?

#54 Leo Trollstoy on 11.24.15 at 8:51 pm

At this rate, it seems like prices will not come down significantly within the next 5-8 years.

How do people figure numbers like these?

5-8 years? Seriously?

No credibility.

#55 Bytor the Snow Dog on 11.24.15 at 8:55 pm

I don’t notice any more right wing nutbars here than usual.

Carry on.

#56 Ed on 11.24.15 at 9:00 pm

I’ve been in Vegas this last month…this place is one big construction site…roadwork,site development,acres of spec houses and condo’s, mothballed projects all on the go as well as 5 billion of Macau money being spent next to the Stratosphere.
Ya….the US is booming.

Cant wait till oil recovers & I can quit lying that I’m from Montana down here.

#57 Leo Trollstoy on 11.24.15 at 9:01 pm

#3 Alberta wing-nuts on 11.24.15 at 6:52 pm

That’s exactly how the NDP will be remembered in Alberta.

History’s a b**ch

#58 crossbordershopper on 11.24.15 at 9:01 pm

All the poor people are heading south, a few friends are leaving this weekend for a few months in the south. Cuba, and DR. They have absolutely nothing to their name, but have all the time and resources to travel to the islands and on the canadian goverment minimum cheque they live very well. I have no idea why people bother with anything that 99% of this blog talks about. real estate, diversification, taxes, bla bla bla, i mean my friends have never worked, once recieves a cpp cheque if you can beleive it at 12.52 per month. thats a lot of working, but with the gis, and trudeau top up coming, and of course a little cash on the side, its a great life in canada except one thing. dont participate in the system and leave for months on end in the winter. Best advice i can give anyone. education means nothing, my degree means nothing, school debt is a joke, they lie to kids for the business of education, no jobs when they come out, and then wow, 500 grand start houses, what a racket this country is.

#59 Retired WI Boomer on 11.24.15 at 9:01 pm

Numbers and others’ whose opinions shape this self-titled pathetic blog are usually welcome. A few get DELETED with no doubt just cause.

Isn’t it great that a place where your opinions, no matter what shape they are, in appropriate good taste, are published. Free to read, free to agree, or disagree.

The advice is free, and it is quite good -if used- is free as well. Think of it as a free education into the possibilities for your investment money. Of course, you are always at your liberty to invest in what you deem most appropriate for you, and your family.

So it goes.

I read with wonder at some who ask an opinion, and second guess myself at times. We takes our chances and pays our dues, but this place has removed much of the uncertainty, and confusion about investing over the years for me. I do go back, and have read most all of the posts, and comments from day one. Fascinating times they were, scary at moments of utter uncertainty!

Thus will ever be the case, but I feel more certain that despite today’s stupidity, tomorrow may well be wiser.

Can it get better than that?

#60 steerage steward on 11.24.15 at 9:02 pm

“Over 70% of investors here have 100% of their stuff in maple.”

Knew home bias was a problem, but wasn’t aware it was that high. Anyone have stats to back that up?

An infograph from Vanguard says 60% of Canadian equity portfolios are in Canadian securities:

https://www.vanguardcanada.ca/advisors/articles/research-commentary/investing/home-bias-canadian-investor.htm?lang=en

#61 OXI in GREECE on 11.24.15 at 9:05 pm

#42 common sense on 11.24.15 at 8:25 pm
#38 Leo

Where is the USA “booming”? Please advise.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Its not. Unless you work for Govt. This includes Raytheon, Lockheed Martin or any other Defense (its actually Offense as the US is never “invaded”) company…..

#62 espressobob on 11.24.15 at 9:05 pm

#30 turn of the tide

Some examples of short term fixed income.

http://www.blackrock.com/ca/individual/en/products/239492/ishares-canadian-short-term-corporate-maple-bond-index-etf

http://www.bmo.com/gam/ca/advisor/products/etfs/product?fundId=83027

These are a bet on higher interest rates. Or not?

Yield to maturity rates speaks volumes.

#63 Randy Randerson on 11.24.15 at 9:05 pm

#209 Millmech on 11.24.15 at 3:52 pm

I think a REALLY smart man would have an ironclad prenup that would prevent any spousal support. Still, it is not clear if judges and courts in the future will still view prenups as a contract between two consenting, and competent, parties, or will they disregard it and always lean favorably towards the woman’s side.

Still, in a western society that favors a woman in any sort of marital dispute, and their view of no fault divorce, it is not easy for a man.

#64 OXI in GREECE on 11.24.15 at 9:07 pm

#38 Leo Trollstoy on 11.24.15 at 8:19 pm
Garth is spot on. The U.S. economy is booming.

It’s fantastic to be invested in the U.S.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Just got back from a 5000 mile drive. Ghost town after town. Sales everywhere. Cheap cheap cheap. Everything on sale. Yeah…..sure is booming…..

#65 Patrick on 11.24.15 at 9:09 pm

#48 AB Boxster on 11.24.15 at 8:36 pm

With government like this the NDP had better push as much junk legislation through as possible, as they will not exist in 3 years.
___________________________________

The NDP are like a third strong goalie, not even the back-up.

The one chance they get to see some pucks, they screw it up so badly, we all remember why they don’t even dress. Send ’em back to the minors, they ain’t ready for the big leagues.

#66 Leo Trollstoy on 11.24.15 at 9:09 pm

The attack on the NDP seems to be very misguided.

Misguided or no, the inheritors of decline are painted with the failure of decline.

Perfect timing for the PC to get out of the disaster that is Alberta.

#67 Leo Trollstoy on 11.24.15 at 9:12 pm

#17 ROCK BEATS PAPER on 11.24.15 at 7:27 pm

I agree with your read on the currency.

#68 P/E on 11.24.15 at 9:15 pm

Many analysts have pointed out that in the US P/E is augmented by furious stock buy backs, using cheap money, in order to make up for declining revenues and profit margins.

#69 CalgarianOutWest on 11.24.15 at 9:19 pm

That screen capture of Terry Paranych’s Facebook message is just hilarious.

Gotta love how he blames the NDP for a predicament that is largely out their control. Now before I get typed aggressively at for being a ‘dipper’ in Garth’s parlance, read my words….

Alberta needed a change in government. So many people were invested so long in the PCAA, that they don’t feel it’s fair to give Mrs. Notley and company a fair shake at running our province.

I’d be nice if Alberta a would back off a little and see what actually comes from the policies of our current government. The PC’S liked to govern like it was still the 20th century. The world is changing, and it’s good to see a government who’s willing to toss aside the old heat, and do something new, in line with modern day realities.

#70 Leo Trollstoy on 11.24.15 at 9:21 pm

#42 common sense on 11.24.15 at 8:25 pm

Everywhere.

http://www.bloomberg.com/news/articles/2015-11-10/macquarie-10-charts-that-show-the-u-s-economy-is-still-underestimated

http://money.cnn.com/2015/11/24/news/economy/us-gdp-third-quarter-second-estimate/

http://mobile.nytimes.com/2015/11/25/business/economy/us-economy-q3-growth-gdp-revision.html

#71 Mean Gene on 11.24.15 at 9:22 pm

Had to look up the name Terry Para-whatever, hmm just another
bandwidth wasting real estate agent.

#72 Bottoms_Up on 11.24.15 at 9:22 pm

#26 paul a on 11.24.15 at 7:52 pm
————————-
You talk about ‘cost’ from increased carbon taxes. What has been the ‘cost’ to date of spewing carbon into the air? What is the ‘cost’ of doing nothing?

#73 joblo on 11.24.15 at 9:25 pm

Garth not withstanding your advice, tons of boomers need income. Steady monthly cash flow to meet expenses.
So Maple efts spitting out regular distributions fit the bill.
Tax efficient, relative stability, and no need to sell in correction. I Shares have a few, CPD, FIE, XTR work well.

#74 Bottoms_Up on 11.24.15 at 9:27 pm

**Note, the answer to what this is costing us is contained in the following article:

Weather-related disasters such as floods and heat waves have occurred almost daily in the past decade, almost twice as often as two decades ago, a UN report said on Monday.

http://www.cbc.ca/news/technology/weather-disasters-un-1.3331354

#75 Linda on 11.24.15 at 9:30 pm

Meanwhile in Alberta, the neo-cons happily blame the NDP gov’t (elected just 6 months) for the woes of the economy. The 40 plus years of Conservative fiscal mismanagement, which wasted the opportunity to build a truly diversified economy, not to mention a trust fund to rival Norway’s is suddenly yesterday’s news. Not to mention pork barreling (anyone remember the Sky Palace? Flying on gov’t jets to party functions? Mr. Duckett & the cookie? & while we are at it, all those health boards who got incredible raise/packages every time yet another reorg occurred). But no, it is all of it the NDP’s fault. You wish. Of course, the NDP are here & OPEC (whose policies began this whole toppling deck of cards) isn’t. The NDP inherited this economy, they did not create it. And while no one wants the debt to swell, the fact is that if we must spend money to stimulate the economy at least it will be less expensive than doing nothing will be – & I’m pretty sure whoever else might have been elected would be trotting out the same ideas.

#76 likeyouknow,whatever. on 11.24.15 at 9:32 pm

#45 Retired WI Boomer
An american (atleast portrayed to be) lecturing people on civil liberties. laughable.

#77 omg the original on 11.24.15 at 9:32 pm

the massive demand for Canadian dollars to repay this debt would decrease the money supply and be deflationary thereby increasing the Canadian dollar?
——————————

People borrowing or retiring mortgages are the flea on gnat on the butt of the Canadian currency market.

Has absolutely no implications for the relative value of the CDN vs other currencies.

Things like comparative interest rates, commodity prices, federal/provincial/corporate borrowing and interactions with other currencies swamp any impact from more people retiring mortgages.

Let’s move on.

#78 Butcher on 11.24.15 at 9:35 pm

Does anybody have any experience with
Canoe EIT.UN closed-end ETF that pays 10%
yield?

#79 turn of the tide on 11.24.15 at 9:41 pm

#62 espressobob

Thank you so very much. I appreciate your post.

#80 wade on 11.24.15 at 9:43 pm

Sold my place in leduc and now I live in a work camp near the mac….gonna quite my job soon and go to thialand…..would love to see a correction in housing but I’ve been hearing about a housing correction for over 10 years now….not gonna hold my breath….enjoy the winter bitches

#81 omg the original on 11.24.15 at 9:44 pm

ROCK BEATS PAPER on 11.24.15 at 7:27 pm
Garth,

US $
Probably the funniest is the idea that the US$ will continue up due to a 0.25% hike. Since the employment report the USDX has surged 5%.
———————

You are looking at it in a Canada-centric way.

The US dollar does not go “up or down” against the Canadian dollar. It is the world benchmark, the CDN is rounding error.

The way to think about CDN/US exchange rates is ALWAYS that the Canadian dollar moves against the US behemoth.

Will CDN$ go down if the US raises rates in December.

Without a doubt.

#82 Washed Up Lawyer on 11.24.15 at 9:44 pm

Retired WI Boomer:

Hey partner (or as we say in Calgary – pardner), I wish you and all of youse folks carrying a passport issued by Uncle Sam that follow this quaintly Canadian blog a very Happy Thanksgiving.

All in all, we did fairly well on the whole neighbour (sp?) lottery. A long undefended border.

#83 Mark on 11.24.15 at 9:46 pm

“Has absolutely no implications for the relative value of the CDN vs other currencies.”

Of course it does. Especially when everyone basically adopts the same strategy, of decreasing their consumption and increasing their savings (or debt repayment) at once in response to common economic conditions.

I think there’s plenty of reason to believe that the Canadian housing market is significantly and highly correlated to itself, and to overall consumer consumption. So as RE prices go down, so too does consumer consumption. Particularly of discretionary imported consumer goods and services.

#84 Smoking Man on 11.24.15 at 9:48 pm

#72 Bottoms_Up on 11.24.15 at 9:22 pm
#26 paul a on 11.24.15 at 7:52 pm
————————-
You talk about ‘cost’ from increased carbon taxes. What has been the ‘cost’ to date of spewing carbon into the air? What is the ‘cost’ of doing nothing?
…….

Big fat healthy crops that eat CO2

#85 Old man too on 11.24.15 at 9:49 pm

Why is Terry Parynych complaining? His business is booming because people who could’t afford their house are trying to sell it. Or has he cut his commission in half to help out?

#86 Bottoms_Up on 11.24.15 at 9:50 pm

#42 common sense on 11.24.15 at 8:25 pm
———————————
Creating 3,000,000 jobs in a year in an economy that has what 100,000,000 jobs is not bad (3% job growth)

#87 P/E - take 2 on 11.24.15 at 9:50 pm

The latest figures reveal something new, too. Sales are now dropping in the US as well as overseas.

US corporate profits have also begun falling. And earnings per share (EPS) – a key measure of profitability that looks at the portion of companies’ profits allocated to each outstanding share – are falling too.

Average third-quarter EPS for S&P 500 companies has fallen by over 2% from the same quarter last year. And this figure would be even more disappointing if it weren’t for their massive share buyback binge (which, by reducing the number of outstanding shares, increased the earnings that accrue to each share).

According to Citi Research, since 2004, S&P 500 companies have spent 2,848% more money buying their own shares than investors have moved into the stock market.

With corporate debt levels now more than double their pre-crisis levels, this all could have a big impact on corporate bond default rates… especially if the cost of carrying all that debt goes up.

http://www.businessinsider.com/global-downturn-is-approaching-2015-11

#88 common sense on 11.24.15 at 9:50 pm

Thanks Leo and Oxi..

Leo I cannot even begin to argue how wrong the Bloomberg article misrepresents reality.

3.9% growth first quarter vs 2.1% 3rd quarter. Booming?

Home renovations, and FB, AMZN, GOOGLE, NETFLIX basically all the US growth. Notice anything similar between these names? ALL are home focused as the US consumer is basically tapped out due to low wage growth and lack of jobs. Those who HAVE a home are making it more comfortable to watch Netflix, talk on FB, buy on AMZN and Google info. Everyone else as OXI said is in trouble except for perhaps Defense mfgs.

USA BOOMING? I respectfully disagree and side with OXI.

Same story from you, month after month. And the U.S. continues to grow. You should worry about Canada. — Garth

#89 espressobob on 11.24.15 at 9:51 pm

Those needing cash flow from ETF’s like CPD, FIE, or XTR for income purposes really should consider the advice from a fee based pro at this point.

There’s more to this picture. Just sayin!

#90 Old man too on 11.24.15 at 9:52 pm

Just think, we in Alberta wouldn’t be where we are today if it hadn’t been for the PC’s…sorta like Canada because of Harpo

#91 common sense on 11.24.15 at 9:52 pm

For SMOKING MAN and a nice ending for Garth..

http://www.zerohedge.com/news/2015-11-24/its-fake-fake-fake-america

#92 Chris in Nanaimo on 11.24.15 at 9:57 pm

Well looks like Turkey is trying to start WWIII.

I say sell everything and get as far away as possible…say the Moon…..

#93 Mark on 11.24.15 at 10:00 pm

“Will CDN$ go down if the US raises rates in December.
Without a doubt.

Funds are already net longest the USD$ as they’ve been in a long time. And shortest the assets that are significantly CAD$ correlated as they’ve even been.

What could possibly go wrong with everyone positioned on one side of the trade? Its kind of scary, yet full of opportunity because history doesn’t present too many opportunities to trade against the herd with such high potential payoffs.

#94 Millmech on 11.24.15 at 10:02 pm

#63
You just don’t get married,my divorce made my retirement.This is how I turned a negative into a positive;figured that spousal(tax deductable),claiming kids as equivalent to married and putting $10,000/yr into RRSPs gave me a tax refund which was more than enough to cover a full year of spousal support.Did this for twelve years and continue to put that much away and more($20,000/yr).My divorce enabled me to retire at 55 with more money than I make working,getting divorced was the best thing for me,but would never ever get married again.
Regards Millmech

#95 Timmy on 11.24.15 at 10:03 pm

Amazing how these right wing simpletons blame a new Premier who has only been at the helm less than a year, while the Cons had more than 20 years to screw up the economy through corruption, short-sightedness and mismanagement. The price of oil is what is causing real estate to crash in Calgary, not Notely’s forward-thinking policies.

#96 Alberta Blue Blood on 11.24.15 at 10:04 pm

Agreed, NDP have no control whatsoever over oil price crashing. Agreed, they inherited somewhat of a mess, reflected in the PC party leadership.

They do have, however, control over the royalty review, carbon tax increase, corporate tax increase, and other blunders that are keeping continued and fresh investment out of Alberta. Not to mention hammering the investments that are here and trying to stay afloat.

They have scared away the goose that laid the golden egg – outside investments. One thing the PC’s did do right was install a stable investment environment.

NDP can’t seem to get it through their thick skulls that businesses employ people, not politics. And you can’t tax your way to prosperity. This is not going to end well for Alberta nor Canada.

Why don’t you check last time oil dropped to these levels? I’ll help you – it was during the 08/09 crisis. Did the bottom drop out of Alberta? How did Canada do? A speed bump if anything in Alberta. People kept their jobs and homes because there was confidence in the government (after Stelmach got his hands slapped for a royalty review).

Yes, the NDP are not to blame for the price of oil but the current status of investment and businesses closing up shop is directly their doing. Or you get to pat the back of the PC’s for directing Alberta through the last commodity slump. You can’t have it both ways.

#97 Smoking Man on 11.24.15 at 10:08 pm

I give you MSM

Putin is Bad
Man man Climate Change Real
Real Estate always goes up

enjoy the clip dogs

https://www.youtube.com/watch?v=kip2w-DceV0

#98 espressobob on 11.24.15 at 10:10 pm

#78 Butcher

Canoe? Concentration risk dude. Individual stocks can put one in a world of hurt! Why?

http://www.google.ca/finance?cid=667104

Diversification across many asset classes geographically, Mitigates risk.

Why pile into a individual stock?

http://www.google.ca/finance?cid=667104

#99 common sense on 11.24.15 at 10:11 pm

No worries about Canada at all Garth…

It is what it is as you write…Housing bubble, too much dependence on an oil economy. Simple

Compare to the rest of the world, the USA looks great in your eyes and booming in others. 4 stocks drive the S & P 50% in the past 5 years with Apple being 20% of the gain?

That’s the booming USA economy? 4 stocks?

Debating you wastes my time. — Garth

#100 Cory on 11.24.15 at 10:11 pm

Speaking of fluff, unicorns, butterflies, delusional, credit lines are income, 30+ year old jobless basement dwellers, and failed generations…..this was a great article. Very true.

http://nymag.com/scienceofus/2015/11/being-an-optimistic-young-person-will-haunt-you.html#

This is a very weird world today. An entire generation cheers about carbon taxes while at the same time they can’t figure out why they can’t find meaningful work and are stuck with their parents at 30+ years old with a curfew.

I love Canada. I wish our leaders?? did too.

#101 TurnerNation on 11.24.15 at 10:21 pm

Funny I read an Alberta Venture magazine spread on him last month. Click on my name for link to it.

That and BC Business and Atlantic Business (free) magazines round out my coverage. Nothing like leafing though data printed on processed dead trees. (Take that greenies.)

#102 Cory on 11.24.15 at 10:26 pm

“Why don’t you check last time oil dropped to these levels? I’ll help you – it was during the 08/09 crisis. Did the bottom drop out of Alberta? How did Canada do? A speed bump if anything in Alberta. People kept their jobs and homes because there was confidence in the government (after Stelmach got his hands slapped for a royalty review). ”

08/09, oil recovered quickly because the Saudis cut production, the Fed printed money, weakened the USD, lowered interest rates thus spurring a frenzy of financial engineering and asset bubbles all of which caused the shale boom. Nothing to do with Stelmach or Alberta. This time, the printing is over, the Fed is about to raise rates, and Saudis are pumping at full speed and shale is dead and dying never to return. Different circumstances. Opposite. It is a tightening cycle, not loosening.

I could care less about the oil industry. But do not be surprised when an oil shock happens and oil spikes to absurd levels again. It is easy to shelve projects and development, but it takes forever to start them again.

And the shale scam?? forget it. It’s over. Prepare for the pain.

#103 Smoking Man on 11.24.15 at 10:28 pm

#91 common sense on 11.24.15 at 9:52 pm
For SMOKING MAN and a nice ending for Garth..

http://www.zerohedge.com/news/2015-11-24/its-fake-fake-fake-america

That’s funny I was looking for clips on you tube for my up coming Essay and Theseus for you blog dogs.

I didn’t see your link or the Zero Guys article.

Yet I found the one in the above post, same one in the zero guys story.

This is the UCC at work. we are all connected via waves of electrons and shit like that.

By the way, that article just about sums up my belief system of the day.

Thanks

Dr. Smoking Man
PhD. Herdonomics
Dyslexic Gonzo Journalist
Ex-poser of Paternalism

#104 Washed Up Lawyer on 11.24.15 at 10:29 pm

Re my comment #82. Crap. Now the grammar cop, Nagraj, will show up and point out that quaintly is an adverb and not an adjective. Why didn’t you edit that Garth? Some liberal arts degree you earned!!

#105 RyDogg on 11.24.15 at 10:32 pm

Similar to a question posed in the blog, I live in suburb of Van City and find myself in a house that has effectively doubled since I purchased in 2011. My wife and I are 30 with two young kids and have been approached by several developers in the last month to sell. We are 50/50 on the fence… Take the money and run or hunker down for the long haul. Though the house is a tiny rancher and not somewhere we would want to stay forever, the thinking of friends and family is that we’d likely be priced out forever if we sold. Any advice? Anyone been in a similar situation to ours before?

#106 Retired WI Boomer on 11.24.15 at 10:32 pm

#82 Washed Up Lawyer

Hey, Thanks for the “Thanksgiving Day” good cheer. Yes, both countries (founded in essence by the same) have long been ‘good neighbors’ and I estimate that will continue.

Despite our tendency to firmly place our feet in our pie hole at times, the US isn’t the ‘worst’ place, nor the ‘best’ place one could live. I just happened to be born here, from people who either were here, or came here. That matters not to me. What matters, is I AM here now.

Yup, have a card that says I can go & return, as I please.

Still waiting for that first snow…. what happened???

Birthday Saturday, the cake an official FIRE HAZARD!!

#107 espressobob on 11.24.15 at 10:38 pm

#78 Butcher

Sorry, I F**fed up on the link.

http://www.blackrock.com/ca/individual/en/products/239843/ishares-sptsx-capped-reit-index-etf

A better play?

#108 JSS on 11.24.15 at 10:38 pm

For those who have the money and a long-term investment horizon, this is an opportunity to buy some Canadian dividend growth blue chip stocks at a good “beaten-up” price. Eg) RBC, TD, BNS, CIBC, BMO, National Bank, Canadian Western Bank, Fortis, Telus, Emera, Canadian Utilities, BCE, Metro, Enbridge, Trans Canada Pipelines, to name a few.

DRIP the stocks and reinvest the dividends. The compound growth over the long run should be quite decent. When it comes time to use the dividends as monthly cash flow, turn off the DRIP.

As they say, when people are fearful, become a greedy b&$^&#d.

#109 Leo Trollstoy on 11.24.15 at 10:45 pm

People borrowing or retiring mortgages are the flea on gnat on the butt of the Canadian currency market.

Nice visual.

I agree.

That’s why his prediction on CAD vs USD has been completely wrong for the last couple years.

#110 common sense on 11.24.15 at 10:45 pm

#102 Smoking Man

Anytime…For some the truth is just hard to take.

Try a little Lucinda Williams with your Leonard Cohen as well. A good friend a no BS lady. One of the good ones.

#111 Leo Trollstoy on 11.24.15 at 10:47 pm

Same story from you, month after month. And the U.S. continues to grow. You should worry about Canada. — Garth

Some people enjoy being poor.

#112 Renting in Sherwood Park (formerly Edmonton) on 11.24.15 at 10:48 pm

First, the last government that i think will help Alberta is the NDP. Their carbon tax amounts to a 3% PST. Climate change is a nice excuse to introduce a tax and spend policy.

As for Paranych, i sold my home on Comfree in 2010. I had 5 realtors come in and give me their “house appraisal” and then i used that to come up with a selling price. Four of the realtors gave me listing prices between $295,000 and $309,000 based on comparables they provided. Realtor number five was from the Paranych team. His suggestion was to list the house at $265,000 with his comparables. I asked him if these comparables are accurate and the only homes recently sold and he said yes. Insert vulgar insults here.

Paranych calling out the NDP is basically stupid calling out stupid.

#113 ROCK BEATS PAPER on 11.24.15 at 10:50 pm

#81 omg the original on 11.24.15 at 9:44 pm

I am talking about the DXY, a basket of currencies comprised of the Euro, Yen, Pound etc… The DXY MOVED 5%. The COTs report showed commercials wildly short USD$ against Euros, Australian $ etc…

Having said that, commodities are negatively correlated to the DXY, so when it moves down, oil etc… will move up. That should drag the C$ up as well.

#114 };-) aka Devil's Advocate on 11.24.15 at 10:50 pm

Yes. Get a life. For a couple of twenty-somethings to be lusting after a detached house in a city where one costs well over a million is insane. Give your head a shake. Get your priorities straight. More consequential should be your careers, your mobility, flexibility and the freedom you’ll only come to value and understand later in life. There will be time enough for you to accumulate both stuff and debt, to crave capital gains and covet wealth. But this ain’t it.

Meanwhile anyone who thinks Vancouver is immune from a price correction is as screwed up as you. So I suggest you get new friends. Perhaps even parents. – Garth

As surprising as it may seem… I am, for the most part, in total agreement.

Life is about “experiences”.

Material possessions (hardwood, stainless, granite, bmw…) aren’t it.

New friends? How do you evaluate a “friend”. Friends just; are. And so too are they an integral experience that formulates the track of your life. You can’t just ‘dismiss’ a friend because they don’t ‘fit’ your agenda. They are ‘friends’ or they are not. They are what creates your agenda. Sink into it and bask in their… friendship. A true friend is the greatest gift.

Back to material things… houses have become so… coveted for their ‘social statement’. But sadly, so too has most everything else become so. A house should be a ‘home’ and a home is without pretense. A home is where you can be you, relax and be with… ‘friends’ who know you and accept you for you as do you them. It’s not a competition. It’s a collaboration.

In my business I serve many who long for the granite island they can entertain around… entertain friends around… to show off the hardwood, granite and stainless… that which, it seems they hope, others (their guests) might envy. Sadly each misses that which they most genuinely seek,,, the friendship of the other. They’re to wrapped up in the “I have it too… if not I have more than you.” It’s not a competition. True friendship is collaboration.

In the words of Dr. Stephen R. Covey “find your voice”.

Find your voice.

SHIFT happens… learn to ride the tide. };-)

#115 Leo Trollstoy on 11.24.15 at 10:50 pm

#105 RyDogg on 11.24.15 at 10:32 pm

If it’s not obvious as day that you should take the money and run, then there’s no hope for you.

#116 Asthesheepsleep on 11.24.15 at 10:53 pm

Garth is both right and wrong on the US.

#117 Bram on 11.24.15 at 10:54 pm

The relative P/E’s between NYSE and TSX is not as important as you may think.

The truth is: on both markets, there are stocks that are undervalued, and there are stocks that are overvalued.

So just buy the cheap stuff on both markets, as I did. Also note that there is plenty of stuff on TSX that is neither a resources corp, nor caters to resources clients.

#118 Victor V on 11.24.15 at 10:54 pm

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com//news/energy/laid-off-calgarians-losing-hope-as-prospects-dwindle-and-money-runs-short

Earlier this month, the Herald asked people to share their stories about being laid off. We received dozens — each heartbreaking in its own way. Some wrote of worsening financial hardships. Others wrote of desperately trying to sell homes in a bad real estate market because they could no longer pay the mortgage. Others were stunned to find themselves at the food bank. New graduates fear they will never get a job in their field. Some fear they are slipping into depression

#119 Blobby on 11.24.15 at 11:01 pm

Terry needs some educating. But I fear the same will happen federally when all this kicks off, Conspiracy minded me thinks the tories lost on purpose knowing this was all about to happen.

(Thus the hanging out with the fords)

#120 Mark on 11.24.15 at 11:10 pm

“Any advice? Anyone been in a similar situation to ours before?”

If you’re truly worried about being ‘priced out’ why not trade your house for one of the development’s condo units on the same property, and a cash top-up?

Developer gets to make some money delivering completed units to market. You get a brand new unit in a condo complex and some cash to build a balanced/diversified portfolio with. And you probably end up creating a lot more value for yourself than you would have with just the house. Presumably the developer is offering a premium, since Vancouver housing prices have gone up minimally, if at all, since 2011.

Just a suggestion of something to consider. Not advice. Seek proper legal advice particularly with respect to protecting yourself against developer default. Detractors, fire away.

#121 OXI in GREECE on 11.24.15 at 11:13 pm

#86 Bottoms_Up on 11.24.15 at 9:50 pm
#42 common sense on 11.24.15 at 8:25 pm
———————————
Creating 3,000,000 jobs in a year in an economy that has what 100,000,000 jobs is not bad (3% job growth
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

That’s assuming you believe govt phony baloney job stats which are mostly part time McJobs and Govt jobs that don’t count as they only SUCK taxes from the economy.

You can stop now. All doubt about you evaporated 12 posts ago. — Garth

#122 saskatoon on 11.24.15 at 11:20 pm

#10 HD

this is correct.

syrian migrants are being flown into north america from neighboring countries: mostly from jordan and turkey.

they are NOT being rescued from syria directly; they have already escaped.

check out the geneva convention on refugees for clarification.

#123 TurnerNation on 11.24.15 at 11:25 pm

There’s no broke renters.
Only, rent brokers.

#124 Charles de la Boeuf on 11.24.15 at 11:33 pm

#113 omg the original on 11.24.15 at 12:00 am
To have a GFC type US correction we would need a massive economic upheaval like the US experienced in 2007-09.

Say something like;
– failure of major Canadian banks – no chance
– civil or world war – seriously?
– massive and abrupt interest rate increases – very, very unlikely
– US scale mortgage fraud – nope – our fraud is very Canadian – polite and cautious
– or a government fiscal crisis – nope sorry”

I think the world war scenario is very likely, the major powers need one every few years to use up their weapons, and to have somewhere to send all the unemployed youth….the pre-text for starting one is easy…..

ww1 assassinate unknown euro “nobility” and trigger a bunch of agreements/accords guaranteeing war
ww2 get fake polish soldiers to fire at germans, so they invade and then trigger a bunch of…(see above)
ww3 lots of easy scenarios here…Turkey shoot down fighter jet, China sinks Japanese ship in Spratley’s, India invades Pakistan….pick which ever one you like and then, guess what …trigger a bunch of….(see above)

#125 Charles de la Boeuf on 11.24.15 at 11:36 pm

Sorry, I should have also added that blaming global warming on China, N Korea or some other country could be a politically correct way to start WW3…after all, all those munition factories, and soldiers farting must be generating lots of greenhouse gases…let the games begin!

#126 common sense on 11.24.15 at 11:38 pm

#103 Smoking Man

Your welcome…The article sounded like you wrote it. Nice touch about dogs as well.

As Bruce Cockburn sang “Some people don’ see the light, til it shines thru bullet holes…”

Add a little Lucinda Williams to your Leonard Cohen for your listening enjoyment. You be glad you did.

#127 Nagraj on 11.24.15 at 11:41 pm

#104 WASHED UP LAWYER

“quaintly Canadian” is perfectly correct in that the adverb “quaintly” modifies the adjective “Canadian”

no wonder I didn’t notice anything amiss when I first read it

yer confessing a non-sin

self-doubt is the work of the devil

“quaintly Canadian” is actually better form than “quaint Canadian” which in context assumes an “and” or comma

[I was taken with GT’s use of “engulf” in his last post, but I don’t have all the time in the world – ]

P.S.
I know you’re as worried about NORA LENDERBY as I am. The last time she took a leave of absence was because one of her mother’s dachshunds met his end. Hopefully NORA is all right. Her absence diminishes this blog. (I actually learned a bunch of new words from her, coxbox toff and ponce, among others.)

#128 Drill Baby Drill on 11.24.15 at 11:41 pm

The Edmonton realtor is a moron. Conducting an IQ test on him would insult all realtors from Edmonton. That takes some effort.

#129 common sense on 11.24.15 at 11:42 pm

#116 Asthesheepsleep

Well said…Like I too am wrong and right on the US market.

I work in the USA, in 4 states and nothing would please me more than a strong US economy…

#130 Smoking Man on 11.24.15 at 11:53 pm

This man is a disgrace to any man that ever played hockey. Any man that just wanted a pat on the head once in a while for putting food on the family table.

He better die in the next four years, cause after the hurt these idelogs put on real Canadian families, and the govt changes..next election cycle

We are talking lynich mobs..

http://www.macleans.ca/politics/ottawa/david-suzuki-compares-oil-sands-industry-to-slavery/

#131 Big Dipper on 11.24.15 at 11:57 pm

Garth, Is the Paranych screen shot just a useful tool to get your own ideological views across? If so, you got a number of articulate responses identifying just how ludicrous Paranych’s statement is.

Notley did not cause the drop in oil prices which is the reason for the Alberta job loss and subsequent real estate retreat. Aggravating the current pain is 40 years of Tory mismanagement leaving Alberta with no savings and, with the help of the federal cons, an international reputation as an environmental pariah.

This reputational loss is the reason for the carbon tax. You might have noticed that the carbon tax is supported by industry and even the Fraser Institute. The carbon tax will bring Alberta back in the environmentally responsible community where it belongs. This is a business friendly move aimed to insure the long term sustainability of Alberta industry. Do you have a problem with that?

#132 Willy's Whiskers on 11.24.15 at 11:59 pm

#38 Leo Trollstoy on 11.24.15 at 8:19 pm
Garth is spot on. The U.S. economy is booming.

It’s fantastic to be invested in the U.S.

Seriously.

Canada is a wasteland of expensive real estate, useless gold and oil, and bad whiskey.

Agree that most of that Canuckistan Crye whiskey grog is undrinkable, except for the one that just one the world’s best whiskey award!

#133 Willy's Whiskers on 11.24.15 at 11:59 pm

that’s be rye whiskey folks…sorry just had a bit too much single malt and am faltering…

#134 Ralph Cramdown on 11.25.15 at 12:02 am

Well, there’s some things you can always count on from the commenters here: US stocks are expensive, and WWIII is starting this week or next… For about four years now. Me, I agree with #108 JSS (though maybe not about BCE, mine just got called away, replaced this AM with Telus as the “oh, crap” crowd panicked about the Russian Turkey shoot).

Is it my imagination, or are the people who say stocks are expensive the same ones who won’t touch the stocks that are cheap, because they’ve got hair on them? And who jammed their hands into their pockets in August when all kinds of stuff was on sale?

Food for thought: Would Turkey be crazy enough to shoot down a Russian plane over Syria? Or without checking whether NATO has its back? You need to answer the question two ways: What do *I* think is the answer, and what does Russia think is the answer?

We all just watched a little history being made. A Russian warplane was shot down, not by accident or mis-identification, and Russia will do nothing about it. Looks good on ’em.

#135 kommykim on 11.25.15 at 12:09 am

RE:

#98 espressobob on 11.24.15 at 10:10 pm
#78 Butcher
Canoe? Concentration risk dude. Individual stocks can put one in a world of hurt! Why?

EIT.UN is not a single stock. It is an income trust made up of mostly Canadian and US stocks:
http://www.canoefinancial.com/eit-income-fund/

I agree with you that EIT.UN is not diverse enough to be held on it’s own and I doubt that it’s dividend yield is sustainable over the long term.

#136 OXI in GREECE on 11.25.15 at 12:10 am

#132 Willy’s Whiskers on 11.24.15 at 11:59 pm
#38 Leo Trollstoy on 11.24.15 at 8:19 pm
Garth is spot on. The U.S. economy is booming.

It’s fantastic to be invested in the U.S.

Seriously.

Canada is a wasteland of expensive real estate, useless gold and oil, and bad whiskey.

Agree that most of that Canuckistan Crye whiskey grog is undrinkable, except for the one that just one the world’s best whiskey award!
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Ah yes…….the olden days…..when we young boys put our marbles in Dad’s Crown Royal bags.

#137 Spectacle on 11.25.15 at 12:13 am

#51 piccaso on 11.24.15 at 8:45 pm
Just lost my 100K a year job in Edmonton today
——————–
I wish you well. Retrain before the funds all run out. There are new gigs for even an old dog, or pup! Not sure of your age.

It’s the hollowing out of Western civilization Piccaso, so don’t go into anything that is an old school career that can be taken away from you again.

Best

#138 Spectacle on 11.25.15 at 12:17 am

Regarding:

Bottoms_Up on 11.24.15 at 9:27 pm
**Note, the answer to what this is costing us is contained in the following article:

Weather-related disasters such as floods and heat waves have occurred almost daily in the past decade, almost twice as often as two decades ago, a UN report said on Monday.

http://www.cbc.ca/news/technology/weather-disasters-un-1.3331354
—–response——–
Important to mention,
1) it’s admittedly weather and water damage, and
2) 90% of it happened in the Asian countries .

I’d love to own waterfront property in Vancouver, not going to happen due to rising water levels in Northern Americas! Ice age will come again before that.

#139 Kenchie on 11.25.15 at 12:21 am

#15 TRT on 11.24.15 at 7:22 pm
“Vancouver real estate is on fire.

House on Maple street went $1 million over asking.

Another with 5 bids was won by 22 year old international student who’s parents live in China.

Damn CMHC and locals.”

When pricing an asset, look at a) price per square foot relative to other transactions, b) cap rates relative to other transactions, c) replacement costs.

Talking about “over asking” or “average house prices” makes no sense without context. There is no such thing as an average house since all real estate is unique and non-replicable. Average prices do not lend any value when talking about heterogenous assets. At least price per square foot makes things more comparable, as does price per bedroom/bathroom. $1.9 million seems low in the first place for that part of Vancouver, so it’s not surprising there were multiple bids and effectively makes “over asking by $1m” irrelevant.

And the one you say the 22 year-old chinese kid as the winner, how does that transaction factor into your concept of “Vancouver real estate on fire”? If it’s foreign funds driving price gains, then it’s generally not done by rational, profit-seeking actors (i.e. Rational Economic Man theory), and perhaps a one-off transaction rather than something that’s relevant to the whole market. In other words, unsustainable demand that shouldn’t be given too much weight (despite what the media wants you to believe). Furthermore, international capital is and can be “fleeting”, which can and will depress the market more than necessary on the way down.

#140 BS on 11.25.15 at 12:34 am

zedgt87 on 11.24.15 at 8:01 pm

Your telling people to use their homes as collateral to leverage up and buy stocks at all time highs ?! Wow.. Irresponsible at the very least

LOL…if you avoid equities when they are “at all time highs” you will never make money. You would be out during bull markets.

#141 Derek R on 11.25.15 at 12:36 am

#105 RyDogg on 11.24.15 at 10:32 pm wrote:
My wife and I are 30 with two young kids and have been approached by several developers in the last month to sell. We are 50/50 on the fence… Take the money and run or hunker down for the long haul. Though the house is a tiny rancher and not somewhere we would want to stay forever, the thinking of friends and family is that we’d likely be priced out forever if we sold. Any advice? Anyone been in a similar situation to ours before?

Sure. My family were in this position in Calgary in 2012. We sold the house for twice what we bought it for and used the money to invest along the lines that Garth suggests. We now spend the mortgage money on rent instead which gets us a very nice place to stay. We also invest the money that we used to spend on maintenance, insurance and renovation. So now our cost of accommodation is about the same but our house is nicer, our savings are growing and we are debt-free.

I don’t know if it will work out like that for you but at the least it’s worth doing the numbers to see how they would work out.

#142 BS on 11.25.15 at 12:39 am

Bottoms_Up on 11.24.15 at 9:22 pm

You talk about ‘cost’ from increased carbon taxes. What has been the ‘cost’ to date of spewing carbon into the air? What is the ‘cost’ of doing nothing?

The cost of ‘doing something’ like taxing carbon is the same as the cost of doing nothing except with the added tax.

#143 OXI in GREECE on 11.25.15 at 12:40 am

This reputational loss is the reason for the carbon tax. You might have noticed that the carbon tax is supported by industry and even the Fraser Institute. The carbon tax will bring Alberta back in the environmentally responsible community where it belongs. This is a business friendly move aimed to insure the long term sustainability of Alberta industry. Do you have a problem with that?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Many people especially those like me in BC have been saying for quite some time now that “Global Warming” was invented so that the Govt can tax the crap out of you. That is now starting to play out as Govt around the world is running out of options as to where to get their revenues from.

Too bad they are too stupid to cut the SIZE of govt. But that would be the smart thing to do and we are talking about Govt.

#144 BC Guy on 11.25.15 at 12:44 am

Garth, you’ve said constantly that Canadians love to buy things when they are dear and sell them when they are cheap (e.g. houses).

Wouldn’t the same advice apply to equities? Canadian stocks (oils, banks, preferreds, auto manufacturing ..) are dirt cheap, beaten up, unloved, shunned. Whereas American stocks are expensive, with P/E s sometimes double or quadruple Canadian stocks.

Saudi Arabia has signalled they will “stabilize” oil prices in the near future, which would give a boost to the beaten up Canadian sector. Meanwhile, the USA and Nasdaq are looking like bubble territory.

#145 Spectacle on 11.25.15 at 12:45 am

105 RyDogg on 11.24.15 at 10:32 pm
Similar to a question posed in the blog, I live in suburb of Van City and find myself in a house that has effectively doubled since I purchased in 2011. My wife and I are 30 with two young kids and have been approached by several developers in the last month to sell. We are 50/50 on the fence… Take the money and run or hunker down for the long haul. Though the house is a tiny rancher and not somewhere we would want to stay forever,……..Any advice?
————– advise————
Is it a part of a multi unit land assembly : then you’ve got levergage, string of units they are buying, or is it a currently valued single family unit for a tear down? Then begin friendly negotiations and take the money, but don’t be greedy. Unless it’s in Shaugnessy or kerrisdale it’s not going up much more. Run away with your once in a lifetime winnings and invest it all as per The world according to Garth. Or similar investment guru.

Or if you insist on real estate, do a development yourself if it’s that valuable a piece of land, say I Steveston.

By the very nature of your question, BAIL now, rent and secure your income !

#146 Spectacle on 11.25.15 at 1:05 am

Regarding :
#130 Smoking Man on 11.24.15 at 11:53 pm
This man is a disgrace to any man that ever played hockey. Any man that just wanted a pat on the head once in a while for putting food on the family table.

He better die in the next four years, cause after the hurt these idelogs put on real Canadian families, and the govt changes..next election cycle

http://www.macleans.ca/politics/ottawa/david-suzuki-compares-oil-sands-industry-to-slavery/

————–slavery, it’s called hard work—

This guy does far more damage than he or his company of campaigners, will ever let you find on the Internet.

Climate campaigner David Suzuki doesn’t know what the climate …
wattsupwiththat.com › 2013/09/24 › clim…

#147 Spectacle on 11.25.15 at 1:09 am

Smokey…

Climate campaigner David Suzuki doesn’t know what the climate …
wattsupwiththat.com › 2013/09/24 › clim…

Tryi this one for some reality…..

#148 Christopher Lackey on 11.25.15 at 1:18 am

Spare me all the “hard working families” garbage from Terry and Brad wall. The insinuation is that electing governments that do more than stick their head in the sand and say status quo gives them the right to paint themselves as smart ones and everyone else as irresponsible idiots for creating the situation. Guess what oil and potash prices are dictated by global markets not canadian politicians so enough with the interventionist bs

#149 Spectacle on 11.25.15 at 1:20 am

Sorry guys, Smokingman,
Here’s a link that might work.

Here’s something that speaks to myths of ecology and environment. Months believe all that you read/see in the media.

When David Suzuki Told Me To F**K Off – Rethink Campaigns
fairquestions.typepad.com › my-unexpec…
As we walked in to Cafe Crepe, I happened to notice Dr. David Suzuki sitting alone, having a bite to eat. For three years …

#150 Bubba on 11.25.15 at 1:20 am

Hey Terry Parasite,

People are losing their jobs due to the world collapse of oil prices. How stupid can you be?

Congratulations on all your new listings! Pity none of them are selling and you aren’t earning enough money to make the payments on your ill deserved Audi. Get an education, a real career and things will work out just fine.

Your pal,
Bubba

#151 John Prine on 11.25.15 at 1:33 am

#3 Alberta wing-nuts on 11.24.15 at 6:52 pm
Sure let’s blame Notley for the downturn in energy stocks and let’s blame her for the filthy-dirty-oil reputation too….

Agreed, how this moron got his bit here is beyond me. years of old boys mismanagement and “we get everything for free” are the reason for todays sad state of affairs in Alberta….And Notley does not have any control on world markets..

#152 observer on 11.25.15 at 1:38 am

FT Mcmurray down, Hows it working out for you guys you spent the last several years working in that hell hole just to go into deeper debt.

http://business.financialpost.com/news/energy/the-average-house-in-fort-mcmurray-has-lost-117000-or-20-of-its-in-value-in-one-year

#153 Tony on 11.25.15 at 1:42 am

Re: #108 JSS on 11.24.15 at 10:38 pm

Telus will get pummeled to the downside over the next year that I can guarantee.

#154 Entrepreneur on 11.25.15 at 1:57 am

I think Terry, the realtor, hoping to bud up to another NDP basher so he can reel him in on a contract to buy a house. Ever notice how overly friendly realtors are before the house sells (act like your best buddy) then after, not a word.

#105 RyDogg…could write down the pros and cons of keeping it or selling it and whatever everyone else in family thinks. Or you “take the money and run” but would have to rent and where. Also, how much money do you owe on the house. Write this all down & anything else to draw on a conclusion.

#130 Smoking Man…Suzuki is right. Think about it. It is a form of slavery, using the oil industry as the only job for the mass.

#134 Ralph Cramdown…Turkey said the Russian plane was flying over Turkey so they took action (shooting the plane down?). I think they should have consulted the UN first and approached with less force. As far as Russia goes, Putin is playing and pushing his limits to see what he can do and cannot do. I would not turn my back on him. My thoughts.

#155 Leo Trollstoy on 11.25.15 at 2:11 am

Notley did not cause the drop in oil prices which is the reason for the Alberta job loss and subsequent real estate retreat. Aggravating the current pain is 40 years of Tory mismanagement leaving Alberta with no savings and, with the help of the federal cons, an international reputation as an environmental pariah.

Posters keep saying this, but history won’t care.

All history will care about in a couple years is that the Notley and the NDP will be presiding over one of the biggest economic disasters that Alberta has ever experienced as a province.

Stop trying to explain it. Nobody will care. Especially not history.

#156 Great Canadian Bubble Co. on 11.25.15 at 2:29 am

Looks like Saudi is ready to stabilize the oil market (only so far down they are willing to go before it starts hurting them and their own commitments). Any thoughts on how this might change things? I suspect they will try to manipulate a $50-60 price. It will keep them going but keep it too low for the likes of Canada.

#157 Not tonight honey on 11.25.15 at 2:31 am

#51 piccaso
Just lost my 100K a year job in Edmonton today
///////////////////////////////////////

So sorry to hear this Piccaso!
Very Best of luck to you!!

#158 lookoutbelow on 11.25.15 at 2:34 am

#11 Questions

Not sure what Garth is quoting BUT the two ETF’s I follow are the VGK (Vanguard Europe) down -8.2% and the Wisdomtree Currency hedged ETF HEDJ up +4.5% over the past 12 months.

#159 Kamilapea on 11.25.15 at 2:38 am

Paranych is part of that unique breed of realtor who feels the need to advertise his way to reputability (the same dork suspenders as 10 years ago doesn’t do it). What a Tarlek! He’s more a northeast Edmonton guy, Norm Cholak and his mustache dominates bus stop advertising in SE Ed and Kamloops, BC has Kirsten Mason.

#160 Bob Santarossa #97 Smoking Man on 11.25.15 at 4:40 am

You got that right.

Will Rogers 1920s Cowboy Philosopher Humourist:

All I know is just what I read in the papers, and that’s an alibi for my ignorance.

Times have not changed just the methods of news delivery.

Especially on climate change. How can they predict the future when their models cannot even predict past climate change?

Anyone having done research will tell you the models do not work then.

A good deal of Predictive Stastical models use modeling past events with a high degree of certainty as confidence for predicting the future.

Yet to read about this about for current climate change models.

Rogers was correct.

But then that makes me a right wing dumbo.

#161 liquidincalgary on 11.25.15 at 6:12 am

Imalwaysright on 11.24.15 at 7:50 pm

If the USA had the oilsands it would be green.

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

really?

check this out:

http://www.usoilsandsinc.com/index.php/about-us

(calgary based co. btw)

#162 liquidincalgary on 11.25.15 at 6:15 am

26 paul a on 11.24.15 at 7:52 pm

heads up on the current emerging issue: carbon taxation

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

another taxable carbon product?

https://en.wikipedia.org/wiki/Composition_of_the_human_body

(we are 18.5% carbon)

#163 Retired WI Boomer on 11.25.15 at 8:42 am

#51 Piccaso

Sad News, on losing the 100K job. Never fun, yet you’re never alone in that mess.

Next Question: What Next? …..

Best Wishes.

#164 Millennial Realist on 11.25.15 at 8:53 am

#130 Smoking Man

Suzuki is absolutely right. Climate change denial and promotion of the tar sands threatens us all.

Harper was a lying, cowardly idiot in a closet. Good for Suzuki for calling him out on it.

Smoking man, you are an illiterate ass, a schooled tool of the machine. Such a complete goof.

Albertans have chosen their path, though not all of them. There is still time for some to leave.

But if helping to save the earth for human habitation means that a backwards, inbred province that barely understands democracy (one neocon dictatorship for over forty years) must suffer substantial economic harm, then so be it.

Take solace Albertans. Your suffering, and it will be horrendous, will help the rest of the planet.

Your stupidity? Sorry, that’s all on you.

#165 Victor V on 11.25.15 at 8:58 am

BREAKING: Maple Leaf Foods slashes more than 400 jobs

http://globalnews.ca/news/2360689/maple-leaf-foods-slashes-more-than-400-jobs

#166 Millennial Realist on 11.25.15 at 9:12 am

To Smoking Man and all the climate change denial morons here:

This one’s just for you – start your bidding now!

http://www.cbc.ca/news/canada/ottawa/stephen-harper-nude-painting-kijiji-owner-1.3333650

(You know you want it !!)

#167 Leo Trollstoy on 11.25.15 at 9:13 am

Take solace Albertans. Your suffering, and it will be horrendous, will help the rest of the planet.

Lol

This comment is so outrageous I can’t tell if it’s a joke.

Happy Holidays Alberta!

#168 Leo Trollstoy on 11.25.15 at 9:17 am

David Suzuki is a slave to money.

Who cares?

#169 Todd on 11.25.15 at 9:35 am

#157 lookoutbelow on 11.25.15 at 2:34 am

Not sure what Garth is quoting BUT the two ETF’s I follow are the VGK (Vanguard Europe) down -8.2% and the Wisdomtree Currency hedged ETF HEDJ up +4.5% over the past 12 months

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

TDB911 TD INTERNATIONAL INDEX – E
YTD +16.71% trailing return

#170 Mr. Frugal on 11.25.15 at 9:38 am

#2 Bananasan on 11.24.15 at 6:47 pm
Hey Garth, I used to read the comments and find some nice bit of info quite often. These days, the comments are unreadable as the forum has been invaded mostly by rightwing nutbars. You have the utmost collection of dumbs here. If that is a goal in life, you made it….

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

Spoken like a true liberal. If someone’s idea differs from your own, they are immediately branded and silenced. I’ll wear my right-wing nutbar brand with pride!

#171 paul on 11.25.15 at 9:47 am

#163 Millennial Realist.
Harper was a lying, cowardly idiot in a closet.
————————————————————-And just where would you be hiding if someone came into your work and started to shoot it up after killing a soldier in the parking lot??
Under your desk sucking your thumb?????

#172 Apocalypse2015 on 11.25.15 at 10:10 am

A spark in the tinder box –

http://www.independent.co.uk/news/world/europe/vladimir-putin-warns-of-serious-consequences-following-turkey-shooting-down-russian-jet-a6746836.html

And if this one does not ignite and blow things up, there will be another, and then another, and then another…….

Such are the incredibly risky, precarious times we live in.

Russia describes Turkey as an “accomplice of terror”

Sounds like they are framing Turkey as deserving of any retribution.

Demonizing your opponents – that’s tried and true old school politics in the lead up to any war.

I am watching in real time, news alerts continue to cascade out of Russia and elsewhere.

The pace of change is really something.

So are you. — Garth

#173 liquidincalgary on 11.25.15 at 10:26 am

Bottoms_Up on 11.24.15 at 9:27 pm

**Note, the answer to what this is costing us is contained in the following article:

Weather-related disasters such as floods and heat waves have occurred almost daily in the past decade, almost twice as often as two decades ago, a UN report said on Monday.

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

and then there is this (evidence, from 2010, that the earth’s weakening magnetic field may be to blame):

http://www.cbc.ca/natureofthings/episodes/when-north-goes-south

#174 The Other Chris on 11.25.15 at 10:32 am

What are people’s thoughts on what fields to retrain in, for people who lose their jobs? Would your recommendation be different for someone who loses their job in their late 20s/early 30s than someone in their early 40s?

#175 Leo Trollstoy on 11.25.15 at 10:39 am

And the U.S. boom continues…

http://www.reuters.com/article/2015/11/25/us-business-spending-usa-idUSKBN0TE1MH20151125

#176 Kyla on 11.25.15 at 11:03 am

“You can borrow up to 65% of your home equity in the form of a HELOC, make interest-only payments and deduct 100% of those payments from your taxable income if the money is used to invest. ”

Garth, does this still apply when one invests within his/her TFSAs or RRSPs? Or is this strategy only relevant for non-registered accounts? I can’t find a clear answer. Thanks!

No interest-deductibility for non-registered accounts. But there is a way around that, of course. — Garth

#177 Smoking Man on 11.25.15 at 11:03 am

#163 Millennial Realist on 11.25.15 at 8:53 am
#130 Smoking Man

Suzuki is absolutely right. Climate change denial and promotion of the tar sands threatens us all.

Harper was a lying, cowardly idiot in a closet. Good for Suzuki for calling him out on it.

Smoking man, you are an illiterate ass, a schooled tool of the machine. Such a complete goof.

Albertans have chosen their path, though not all of them. There is still time for some to leave.

But if helping to save the earth for human habitation means that a backwards, inbred province that barely understands democracy (one neocon dictatorship for over forty years) must suffer substantial economic harm, then so be it.

Take solace Albertans. Your suffering, and it will be horrendous, will help the rest of the planet.

Your stupidity? Sorry, that’s all on you.
……………………………………………………..

Seams your entire generation is addicted to the tyranny of Paternalism with no concept of life without it. You don’t understand freedom or logic. You live and die by the group think, consumed with the pathetic adolescent need to fit in.

Little man, why don’t you go to Calgary, go to a union meeting and tell real men to take solace, you’re saving the planet. One moment, having a visual of you getting the shit kicked out of yourself.

We on the verge of world war 3, why, countries that have real men leading them, know how important selling resources is to the betterment of their societies.

Little emasculated turds like you are going pay dearly, when the Cultural Marxists destroy our economy, you think it’s tough for millennials to get a job now, wait till Wynne, Justina and Suzuki are done.
You will be eating out of garbage bins. And your parents won’t bail you out either, cause they will be broke.

#178 Dan on 11.25.15 at 11:28 am

Justin Bieber is good, you’re just an old fogey.

#179 The American on 11.25.15 at 11:32 am

At #64: Oxi in Greece, you said, “Just got back from a 5000 mile drive. Ghost town after town. Sales everywhere. Cheap cheap cheap. Everything on sale. Yeah…..sure is booming…..”

That’s pretty damned hilarious, and a really stupid comment on your part, being that you posted that very comment over a month ago as well. You must have “just got back” from a lot of 5,000 mile trips in the U.S. Also, if you were driving 5,000 miles through the U.S., I’d be curious to know what that course was. Hell, the country from coast to coast is 2,800 miles wide, and from top to bottom is 1,500 miles from the Canadian border to the Mexican border. Wasteland after wasteland you say? Really? Please don’t get me started on the towns in Canada outside of Victoria, Vancouver, Montreal, and Toronto.

We have metroplexes that dwarf the largest Canadian Cities, including Toronto. For example:

New York is over 20,000,000. Toronto is merely 5,600,000

Seattle is over 4,000,000. Vancouver is merely 2,300,000, about the same size as Portland. Why Canadians think Vancouver is larger is laughable, and we hear it all the time, but only from misguided canadians who refer to Vancouver as “the big city.” LMFAO I think I figured it out though… I flew on a shitty AirCanada flight from Vancouver to Toronto. The flight map on the plane showed the Metropolitan Statistical areas of the Canadian cities, but only the city limit populations for the U.S. cities. Biased much? Of course! Everything in Canada is government owned or subsidized, and therefore they must do anything to make you feel better about where you’re trapped.

Dallas is over 6,400,000. Calgaray is only 1,200,000

For ANY so-called similar Canadian city, the American equivalent (if you can even call it that) dwarfs it. Shit that’s some funny stuff, man. You should try harder than you already do.

#180 Bottoms_Up on 11.25.15 at 11:40 am

#176 Smoking Man on 11.25.15 at 11:03 am
—————————————————–
Garth, this exchange was worth the price of admission to your blog. LMFAO

#181 The Other Chris on 11.25.15 at 11:42 am

#176 Smoking Man on 11.25.15 at 11:03 am

It’s not often I agree 100% with Smoking Man, but I do think it’s borderline absurd to see underemployed and unemployed millenial activists complaining about their level of unemployment while simultaneously celebrating policies that will lead to unemployment for many other people.

#182 bdy sktrn on 11.25.15 at 11:46 am

You live and die by the group think, consumed with the pathetic adolescent need to fit in
————-
bingo!

sounds like 99% of climate alarmists

stupid child.

#183 James on 11.25.15 at 11:50 am

The CDN equity markets will turn once three things have occurred. 1. Oil Prices Bottom 2. The CDN dollar bottoms 3. The commodity cycle turns.
in the mean time there is value in Europe, Japan and Asia X China. The long run return on the MSCI index from inception is approx 6.4% in US $ terms or 6.8% in CDN. An active manager should add 200 – 300 bp on top. EM may be worth a small allocation but primarily to those economies that will benefit from the lows of commodity prices, NOT the commodity producers.

#184 noel on 11.25.15 at 11:57 am

I don’t think there will be an FOMC rate hike in December.

1) Underlying labour market conditions are still weak. The participation rate is at its lowest since the 1970s. The unemployment rate is decreasing because people are leaving the workforce. Also, the underemployment rate (U6) remains around 10%. In typical recovery periods this is around 7-8%, indicating that too many new jobs created this year are part-time.

2) China is decelerating. All previous hiking cycles in the US in the last 20 years were accompanied by double-digit growth in China. IMF predicts 6-6.5% growth over the next 5 years. Also, Brazil and Russia are in deep recessions. Emerging market growth matters to the US economy in a big way. Add in a very strong US dollar and you’re looking at export growth well below the levels seen in a hiking cycle.

3) No US inflation. Headline CPI has averaged 1% the last three years, core below was 2%. Well below previous cycles. This greatly reduces the need or desire for the FOMC to hike.

#185 juno on 11.25.15 at 12:05 pm

Alberta, don’t blame the NDP for your freefall problems

The conservatives made the bubble with their terrible fiscal policies that was aim directly at inflating the bubble more and more.

So when you over inflate the bigger the explosion once the bubble pop.

Too bad so sad that you choose to listen to CREA with 2 month certificate snake oil saleman vs a 5 year university degree financial adviser.

#186 Bill on 11.25.15 at 12:08 pm

If one would really to to see insanity you need to step out of the bubble head scociety leveraged to the hilt with crap you dont need. Visit south america.
We are on a bus at the moment in Ecuador ($4.50 for a 4 hr trip)
People buy things with money they have earned.
There is no house / granite / BMW pumping marketing at all. Things cant blow up here.
Its great to move away from a insane North American mentality. People are plenty happy without all the crap. And the governments arent meddling in every aspect of your life. In Canada they think they can man handle everything incl the economy. They are fricking cluless.
Thats taken our scociety down the wrong path in my book.

#187 Holy Crap Wheres The Tylenol on 11.25.15 at 12:16 pm

#180 The Other Chris on 11.25.15 at 11:42 am

#176 Smoking Man on 11.25.15 at 11:03 am

It’s not often I agree 100% with Smoking Man, but I do think it’s borderline absurd to see underemployed and unemployed millenial activists complaining about their level of unemployment while simultaneously celebrating policies that will lead to unemployment for many other people.
____________________________________________
Agreed this carbon taxing, anti oil-sands, anti petroleum, anti coal energy millennial group do not realize that until cleaner energy can be developed cheaply it will ultimately cost jobs. Hundreds of thousands of jobs. Perhaps their own? Perhaps the job they could of had? They don know the meaning of the lesser of two evils.

#188 Kenchie on 11.25.15 at 12:18 pm

Vancouver number of realtors per capita is worse than Toronto’s.

http://www.theprovince.com/business/everyone+wants+realtor+metro+vancouver+licensee+numbers/11541609/story.html

#189 LP on 11.25.15 at 12:18 pm

re #170 Paul

I heartily dislike(d) Stephen Harper. Nevertheless, I wish people would stop with the “hiding in the closet” story and somehow implying the man was cowardly for doing so.

He had a security detail. In the circumstances, those men – all burly sorts with backgrounds in protection techniques – would have grabbed him by his arms and hustled him with all speed into that closet. Though he may have objected or even struggled, they would have prevailed. He ceased to be their “commander in chief” to use an American phrase, and become instead an object to be protected at all costs, including their own well being.

So give the guy a break!

#190 Panhead on 11.25.15 at 12:22 pm

#133 Willy’s Whiskers on 11.24.15 at 11:59 pm
that’s be rye whiskey folks…sorry just had a bit too much single malt and am faltering…

That rye whiskey shure beats corn whiskey any day …

#191 bdy sktrn on 11.25.15 at 12:25 pm

#177 Dan on 11.25.15 at 11:28 am
Justin Bieber is good, you’re just an old fogey.
——————————-
yeah, if you are a 13yo girl.

if you are not, garth needs to ban you now.

#192 Holy Crap Wheres The Tylenol on 11.25.15 at 12:26 pm

#233 The real Kip on 11.24.15 at 5:25 pm

“#221 Holy Crap Wheres The Tylenol on 11.24.15 at 4:23 pm”

Have you been hitting the Tylenol a little too heavy of late? Head back down into your basement, the mold spores and pizza rats miss you!
____________________________________________
Woke up this morning its sunny and 81 degrees. The ocean breeze is really blowing hard today.
Sorry Kipper I missed your post last night I was too busy sitting here eating conch fritters and drinking Kalik beer. By the way Kipy we don’t have basements here in New Providence! Haven’t seen the pizza rat here but the god dam Bahamian land crabs are freaking terrifying when they pop out of their holes.

#193 Bill on 11.25.15 at 12:30 pm

Sorry for the typos. Old iphone 4. Hard to nav

#194 Holy Crap Wheres The Tylenol on 11.25.15 at 12:30 pm

If you panic at any losses and sell, you lose. If you invest badly, risk swells. You should ensure your money’s properly managed by a guy who is no cowboy and keeps you liquid, so if things turn south you can always bail.

Finally, pit this risk against keeping all your net worth in real estate. No contest.
___________________________________________
Smart words of wisdom Garth, with everything going on of late I would also caution it may be a good idea to stock up on can goods, water and bullets. Being liquid right now may also mean having access to a fast boat! Oh this thanksgiving is going to be a doosy.

#195 pinstripe on 11.25.15 at 12:49 pm

The alberta PC culture is being exposed by bits and pieces. The PC loyalists are using all avenues of that culture using tactics of fear mongering and besmirching Rachel.

http://www.cbc.ca/news/canada/edmonton/alberta-bureaucrats-knew-tobacco-litigation-consortium-less-qualified-1.3335691

#196 45north on 11.25.15 at 12:57 pm

Victoria Real Estate Update:

in your chart what does the x mean?
what does the * mean?

what does it mean that in March 2012 there is an x in the +15% row and an * in the -5% row?

. . . . . . . . . . . .House Prices. . . . . . . . . . . . . .
. .Percent Above/Below March 2010 Price Level. .
. . . . . . . x = Vancouver, * = Oak Bay. . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+15%. . . . . . . . . . . . . . . .x. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . x. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+10% . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
+ 5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
….0%. . . x*. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5%. . . . . . . . . . . . . . . . *. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10%. . . . . . . . . . . . . . . . . . . . . . . . . *. . . .
—————————————————————————–
. . . . . . March . . . . . . .March. . . . . .January. .
. . . . . . .2010. . . . . . .. 2012. . . . . . .2014. . .

#197 turn of the tide on 11.25.15 at 1:05 pm

For those of you like me, that are learning about the financial universe, I found this article to be a great explanation of the correlation between bonds and interest rates, which helped me understand whyshort duration is important:

https://www.wellsfargoadvantagefunds.com/wfweb/wf/education/choosing/bonds/rates.jsp?BV_UseBVCookie=no

Thanks again to espressobob for his input. Bob, do you use any specific tools to screen for ETFs or just google?

#198 45north on 11.25.15 at 1:09 pm

Holy Crap: Oh this thanksgiving is going to be a doozy.

American?

#199 Doomers R us on 11.25.15 at 1:21 pm

#134 Ralph Cramdown on 11.25.15 at 12:02 am
Well, there’s some things you can always count on from the commenters here: US stocks are expensive, and WWIII is starting this week or next… For about four years now. Me, I agree with #108 JSS (though maybe not about BCE, mine just got called away, replaced this AM with Telus as the “oh, crap” crowd panicked about the Russian Turkey shoot).

Is it my imagination, or are the people who say stocks are expensive the same ones who won’t touch the stocks that are cheap, because they’ve got hair on them? And who jammed their hands into their pockets in August when all kinds of stuff was on sale?

Food for thought: Would Turkey be crazy enough to shoot down a Russian plane over Syria? Or without checking whether NATO has its back? You need to answer the question two ways: What do *I* think is the answer, and what does Russia think is the answer?

We all just watched a little history being made. A Russian warplane was shot down, not by accident or mis-identification, and Russia will do nothing about it. Looks good on ’em…”

Meanwhile tictoc tictoc,

http://www.valuewalk.com/2015/11/russia-vs-turkey-nuclear-war-likely/

maybe time to get working on a 60s style nuke bunker b4 the canuck tundra freezes over…snow forts are notoriously unreliable strctures unless at quebec winter carnival…..

#200 Doomers R us on 11.25.15 at 1:26 pm

#178 The American on 11.25.15 at 11:32 am
Wasteland after wasteland you say? Really? Please don’t get me started on the towns in Canada outside of Victoria, Vancouver, Montreal, and Toronto. ”

Hey, technically wasteland Scarberia is part of Toronto so feel free to take a few pot shots at Hogtown as well

#201 bdy sktrn on 11.25.15 at 1:36 pm

#195 45north on 11.25.15 at 12:57 pm
Victoria Real Estate Update:

in your chart what does the x mean?
what does the * mean?
—————————-
i think she labelled them but the charts are still undecipherable to me , whats with all the dots?
maybe her screen resolution/rendering/text size makes it look like something to her but it’s just a jumbled mess everytime on my 5 or 6 different screens , 4 operating systems and 3 browsers

i think her point is stay away from vic. at 250 a trip for the family on the boat i fully agree. however, real estate there will not go down much at all, even when rates rise, so if you are stuck there buying is the best option if you want to customize your house.

#202 pacific on 11.25.15 at 1:39 pm

Picasso:

You are a telcoms guy right? I would take the required courses for power cables, joining, testing etc. Get a rigging cert, working at heights etc. There is also fibre in the cables to control the turbines. Latest models out here are 8MW and blades are 150m tip to tip.

Crane ticket would be good to.

I work on offshore wind in North Sea, plenty of work here, but if Alberta goes gung ho with wind. It will be busier then oil. Enbridge has already invested out here as well. Check it out. Good luck

Check out DONG Energy, Seimens, Vesta etc.

#203 Vamanos Pest on 11.25.15 at 1:48 pm

P/E #68 & #87

You talk about share buybacks like they’re a dirty little trick, that simply massages the numbers but has no real world value or impact. This isn’t really true.

Share buybacks are simply a purchase of stock. Not much different than when you or I purchase stock. The only difference is that since the purchaser is also the issuer, they usually dissolve the purchased stocks and reduce the number of outstanding shares.

If a company increases their earnings per share with a stock buyback, it isn’t much different to other shareholder’s than increasing the EPS by increasing earnings. It’s a legitimate allocation of capital, and does truly increase the value of other outstanding shares.

So it’s ok if a company’s earnings per share have been augmented by share buybacks. In fact, as a shareholder, it’s good. I agree that it MAY be ominous that corporations are choosing to allocate capital to share buybacks vs investing in growth (of earnings). However, the explanation could be as simple as CEOs, collectively, think US stocks are undervalued making buybacks good value for shareholders. If they were to be right (stocks are undervalued), then being in US stocks is a good place to be.

#204 Ralph Cramdown on 11.25.15 at 2:00 pm

#185 Bill — “We are on a bus at the moment in Ecuador ($4.50 for a 4 hr trip) People buy things with money they have earned. There is no house / granite / BMW pumping marketing at all. Things cant blow up here.”

Perspective, dude. Of course there’s no BMW ads in a country so poor that the aspirational items are refrigerator, washing machine, and scooter.

And if you think a country whose exports are (were in 2013!) 50% crude oil can’t blow up. I got news for you: It already has. You are, quite literally, in the proverbial banana republic. ¡Buen viaje!

#205 hamncheesealert on 11.25.15 at 2:01 pm

Missing HAM alert

http://www.thestar.com/business/2015/11/25/mystery-of-missing-hong-kong-executives-worries-investors.html

#206 bdy sktrn on 11.25.15 at 2:06 pm

Former B.C. premier Ujjal Dosanjh, who was also a cabinet minister in the federal Liberal government, is calling out Ontario Liberal Premier Kathleen Wynne for characterizing opponents of Prime Minister Justin Trudeau’s rapid-intake refugee plan as closet “racists.”

Dosanjh made his moral outrage clear in a web posting headlined, “Premier Wynne, Did you just call me a racist and a xenophobe?”
http://blogs.vancouversun.com/2015/11/23/former-b-c-premier-calls-out-ontario-premier-for-abusing-racist-label/

——————————–
that woman is awful.

christy bubbles clark looks better and better every day.
the left won’t win bc for a long time, like 25 years.

#207 paul on 11.25.15 at 2:11 pm

187 Kenchie on 11.25.15 at 12:18 pm

Vancouver number of realtors per capita is worse than Toronto’s
————————————————————-
Must be a Typo surely you meant Better than Toronto?

#208 Mike in Edm on 11.25.15 at 2:22 pm

#96 Alberta Blue Blood on 11.24.15 at 10:04 pm
Agreed, NDP have no control whatsoever over oil price crashing. Agreed, they inherited somewhat of a mess, reflected in the PC party leadership.

They do have, however, control over the royalty review, carbon tax increase, corporate tax increase, and other blunders that are keeping continued and fresh investment out of Alberta. Not to mention hammering the investments that are here and trying to stay afloat.

They have scared away the goose that laid the golden egg – outside investments. One thing the PC’s did do right was install a stable investment environment.

NDP can’t seem to get it through their thick skulls that businesses employ people, not politics. And you can’t tax your way to prosperity. This is not going to end well for Alberta nor Canada.

Yes, the NDP are not to blame for the price of oil but the current status of investment and businesses closing up shop is directly their doing. Or you get to pat the back of the PC’s for directing Alberta through the last commodity slump. You can’t have it both ways.

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

Well said! Tons of left wing NDP supporters on here today! As a mild PC, yeah – the Alberta PC’s completely F***ed Alberta, and yes NOTley and her NDP were elected and are going to try and clean up the mess, but she is doing a PISS POOR job of it so far. That’s what none of you are understanding. No, $40 oil isn’t her fault, but everything above that Alberta Blue Blood said is her fault, plus her absolute outright refusal to lay off a single public sector employee because “laying off more people will hurt the economy”.

Funny (or truly devastating to many Albertan’s) how she’s protecting public sector employees yet completely throwing those working in the O&G industry under the bus (ie. Publicly speaking against Keystone, Northern Gateway, and even calling the oilsands an embarrassment). All the lost tax revenue is going to come from somewhere right? Oh right, cue the “Carbon tax” that is just a tax on life. It’s not going to reduce anyone from buying more gas or heating their home less. The only alternative people have are to walk more, or cover up under more blankets at home! She talks like there is an instant green energy that we should all be on right now, but there simply is not. It’s coming, but she should be pushing for it at a responsible rate, and not be rushing to get it done before the people of Alberta kick her stupid A$$ to the curb in 3.5yrs.

#209 Coming to a cul de sac near you on 11.25.15 at 2:26 pm

Reality is biting back against the PC goon squad. There’s only so much fire a propaganda campaign can smother.

http://www.dailymail.co.uk/news/article-3315739/The-tranquil-Swedish-village-living-hell-refugee-invasion-locals-migrants-throw-stones-children-aged-five-need-POLICE-ESCORT-school.html

http://www.nationalreview.com/article/427567/princeton-student-group-no-politically-correct-intimidation

#210 Ponzius Pilatus on 11.25.15 at 3:02 pm

#51 piccaso on 11.24.15 at 8:45 pm
Just lost my 100K a year job in Edmonton today.
—————-
Sorry, to hear.
Probably should sell some paintings.

#211 jess on 11.25.15 at 3:10 pm

http://www.accountancyage.com/aa/news/2436251/corruption-rife-among-accountants-says-survey-of-profession

“tokenism” ethics?
http://economia.icaew.com/news/november-2015/unethical-practices-rife-among-accountants

#212 IKnow on 11.25.15 at 3:29 pm

Garth, YVR gvreb average price if $1.1M includes Fraser Valley where few Chinese want to move to unless absolutely no choice.
Where Chinese want to be in, like anywhere north west of Surrey, average of $3N is totally conceivable.

That’s the East Van number. — Garth

#213 Big Dipper on 11.25.15 at 3:50 pm

“All history will care about in a couple years is that the Notley and the NDP will be presiding over one of the biggest economic disasters that Alberta has ever experienced as a province.

Stop trying to explain it. Nobody will care. Especially not history.”

————

Who is history?

Not everyone has the memory of a gnat. Give people some credit. As you might have noticed, not everybody is a climate change denying ditto-head con!

#214 JimH on 11.25.15 at 4:01 pm

#178 The American

Might as well save your breath, my friend!

For years many thoughtful Canadians expressed great concern regarding the ever-accellerating “brain drain” of gifted Canadians to the USA.

Those fears were well-founded, with the results you see.

#215 Joe Buzzkill on 11.25.15 at 4:02 pm

The small cap American stock indexes have doubled ( average 30% p/a) in the past 3 years…why would someone settle for 7% Canadian?

#216 S.Bby on 11.25.15 at 4:15 pm

#105 RyDogg
I live in suburb of Van City and find myself in a house that has effectively doubled since I purchased in 2011.

#120 Mark
Vancouver housing prices have gone up minimally, if at all, since 2011.

——————————————————-
How do we reconcile these two statements?

#217 Ralph Cramdown on 11.25.15 at 4:16 pm

#207 Mike in Edm — “Oh right, cue the “Carbon tax” that is just a tax on life. It’s not going to reduce anyone from buying more gas or heating their home less.”

Remedial Economics for Morons, Lesson 2

A change in price changes demand for the marginal buyer. Some will buy smaller houses, upgrade to high efficiency furnaces, buy smart thermostats, upgrade their windows or put plastic film on them, or put on a sweater. Others won’t. Some will buy vehicles with smaller engines, combine errands, carpool, take transit, live closer to work, or decide not to leave the car idling for ten minutes every morning to “warm up.” Others won’t.

Some things in economics are contentious and always debated. Price sensitive demand isn’t one of them. For the interesting exceptions to the rule, see Veblen goods and inferior goods.

#218 JTull on 11.25.15 at 4:25 pm

“wages increased by more than a hundred billion in the last three months”

Wow, what an utterly meaningless statistic. If we’re talking about a billion people, it’s a pittance. If we’re talking about a million people, it’s jawdropping. In other words, devoid of context (i.e. how many workers are we talking about? And perhaps more importantly, what are the numbers for previous quarters?) it’s just a “really big number” presumably meant to shock or impress your readers. But without context, it does neither.

U.S. WOrkers. Obviously. — Garth

#219 Freedom First on 11.25.15 at 4:32 pm

#176 Smoking Man

Zinger!

Millennial Realist. The real world will eat your lunch while
you starve in the streets and nobody will care. Grow up.

#220 Smartalox on 11.25.15 at 4:35 pm

@Mr. Frugal #169:

I think that most liberals would be willing to consider differing opinions, but most of that consideration relies on evaluating the credibility of one’s arguments, and the evidence presented.

It’s not about not wanting to hear the argument, but if the argument consists of “I heard it from a guy…” most people aren’t going to listen.

#221 espressobob on 11.25.15 at 5:49 pm

#196 turn of the tide

Actually, Garth provides good insight for DIY investors. Who do you think saved my sorry ass? It’s easier than most realize to get caught up in hype.

Index investing is a worth while study. Good luck!

#222 AfterTheHouseSold on 11.25.15 at 6:05 pm

#176 Smoking Man
“One moment, having a visual of you getting the shit kicked out of yourself”.

I was sitting by myself in a coffee shop today, when I read your post. Then I started laughing. Out loud, belly laughing complete with snorting. Crazy lady alone in coffee shop laughing. I will find a new coffee shop tomorrow.

#223 Luis on 11.25.15 at 6:34 pm

176 Smoking Man

Looks like you got your ass handed to you, SM.

You come off like such a dinosaur idiot.

And you call the PM “Justina” because that sounds feminine, and of course women to you are inferior trash.

You really are such a moron loser. Go away.

#224 Bill on 11.27.15 at 12:43 am

#204 Ralph Cramdown on 11.25.15 at 2:00 pm
Lol ya mean like Canada!?
At least their not buying granite they cant afford.
There pleanty of poor here.
But theirs more than pleanty in Canada that don’t even know it yet. Canada is the land of red neck idiots.
Ya see the middle class here are not blowing up like the so called middle class in Canada or at least Alberta…… so far. People are far more better natured here
Hey Ralf when was the last time you were down here!?
Canada without the imports buying houses will be the next Banana republic.
Grab a brain while your at it.