2016

CAT ATTACK

Ten days before Xmas and throughout the house, all were freaking, except the mouse. Hmm. So’s the rodent the smart one? Let’s assess…

Last week the dollar lost almost 3% against the greenback. Oil shed an astonishing 12%. In just five days. Then on Friday, tougher rules arrived for real estate down payments. And on the weekend, a climate change agreement. Now the odds favour the first US interest rate hike in a decade to occur on Wednesday. Poor Alberta. But is YVR impervious? How about 416?

For months this blog has been yammering about oil creep, and the fact no Canadian will be immune from what’s happened, in 2016 or beyond. Published examples have included the shuttering of manufacturing plants in Ontario that supply the energy sector, with the permanent loss of jobs. There’s no escape from the wider impact of this change. The fact Canada’s stock exchange has lost 12% in 2015, now among the world’s worst performers, should be a hint. Take it. Maple’s a dangerous place.

Canada is still a rocks-and-trees kinda nation. Until this year oil was our biggest export. The energy business made up a tenth of the economy. Alberta was the awesome job creator, the magnet for young people wanting $75,000 pickups and had the hottest housing market. That’s gone.

Energy companies will lose more than $2 billion this year. Capital investment budgets have been slashed. Shell walked away from a project after spending two billion on it. Over 80,000 jobs have been erased in Alberta in 2015, most in oil and construction. Crude’s below the cost of production, so most companies lose more daily. Sucking oil from dirt is a messy, expensive, complicated business – and already Canadian output is labeled as ‘dirty’ by the growing US environmental lobby.

Speaking of that, the politics of climate change is a kiss of death. Alberta’s socialist government has already introduced a carbon tax which will jack gas prices, add hundreds to a family’s annual overhead and is intended to dampen carbon consumption. With a Paris agreement in hand, expect the same from the T2 government in Ottawa. Carbon-based fuels of all kind are the enemy. The tainted stuff from the Canadian west, even worse. This may well be the end of the oil sands business.

Meanwhile global commodity prices are at 16-year lows and going lower. Tepid demand and slow growth have combined with new oil-extraction technologies to flood the earth with crude. We’re swimming in it, while OPEC keeps the taps on full and new output is coming online. So prices may not hold, even at $35 – which is 40% lower than in the summer.

As the Fed raises rates in the US – however gradual and tentative the ascent may be – the American dollar will strengthen further. So ours goes lower and commodities, priced in American bucks, erode more. Higher rates there mean rising bond yields here, which should up fixed-rate mortgage costs, regardless of what the Bank of Canada does. That is unhelpful for a real estate market already coping with a moribund economy. And those higher down payment are widely expected to sucker-punch Calgary.

CIBC economist Benny Tal estimates the effect there will be four times worse than in Vancouver, because Cowtoen has a lot more high-ratio mortgages under the $1 million mark. Buyers in that category will feel the graduated increase the most – at a time when sales are awful and big price reductions are in the offing.

But you say you live in Mississauga or Burnaby and feel smug?

Don’t. Canada – under dismal leadership – has allowed the economy to become overly dependent upon two pillars. Real estate, financing and construction now equals 15% of our GDP. Energy and mining is another 9%. Remember that there are 130,000 realtors alone in our delusional nation, plus 20,000 mortgage brokers and 281,000 bankers. In fact, bank employees have bloated by 27% in the past ten years. This is the essence of a condo economy, where more and more activity is generated from people selling real estate to each other, rather than products to the world.

The result of this has been over-reliance on commodities, which are in reverse at the moment, and housing, supported by a towering, teetering structure of personal debt. This is why $35 oil, higher down payments and whatever the Fed does are more far-reaching that most suspect. Calgary, of course, is hooped for a while. But nobody stays unscathed. We should expect 2016 to bring more taxation, a still-lower dollar, price inflation, job stress and increased danger as real estate values jump (in select areas) before February 15th, then decline afterwards. As energy plops and housing stalls, national tax revenues fizzle, just as spending ramps up. Ouch.

So contain risk.

Ensure a minority of your growth assets are in maple. Keep 20% of so of your portfolio in US$. Eschew individual stocks (too volatile) and mutual funds (too expensive). Chase balance – with 40% of your holdings in boring bonds and dividend-spewing preferreds (now on sale). Embrace global diversification, with two-thirds of your growth in US or international assets. Remember my Rule of 90 – this is not the time to have the bulk of your net worth in real estate. If you’re getting a mortgage, lock in. The spread between variable and fixed ain’t worth the gamble. If you have to buy a house, wait until summer. And practice tax avoidance, especially if you earn over two hundred grand and have a big, red target on your rump. Finally, prepare for T2 to blow up small business rules and carry on the war against successful people. It’s coming. Along with the carbon crusade.

In short, the more you have, the more proactive you need to be.

It’s why the mice suspect nothing.

327 comments ↓

#1 TurnerNation on 12.13.15 at 1:38 pm

UCC said early blog lol.

New King St. West kando went up. Appears 91 units for rent on Kijiji? Around the corner (Adeliade/Bathurst) there’s another huge building maybe 6-8 mos to completion. What could go wrong.

Renters rule:

http://www.kijiji.ca/b-apartments-condos/city-of-toronto/thompson-residence/k0c37l1700273?ad=offering

61 listed on CL:

http://toronto.craigslist.ca/search/apa?query=thompson+residences

#2 bdy sktrn on 12.13.15 at 1:40 pm

how could anyone in mississauga ever feel smug??

#3 common sense on 12.13.15 at 1:41 pm

Thank you for the specific advice..

As the great Howard Stern taught me about finance…

“For anyone who thinks your career and the high income days are going to last forever aka stocks and housing rising always, etc it’s not. And if your not prepared (aka heeding the advice of this blog, etc) your in for a world of hurt…nothing lasts forever…”

#4 How long will it last on 12.13.15 at 1:46 pm

thanks for the advice Garth. Any positive news to give us hope in riding out this scenario?

#5 Gary on 12.13.15 at 1:56 pm

http://www.salina.com/ap/washington/more-than-half-of-us-renters-and-older-study-says/article_1e992fe8-546e-5b59-9409-ba7af67eb970.html?utm_medium=social&utm_source=facebook&utm_campaign=user-share

#6 Sideshow Rob on 12.13.15 at 1:56 pm

Blatant repost. Sorry I put this one in Fridays blog instead of today…
Next week is setting up to be a real barn burner. Fed meeting followed by triple witching options expiry. S&P broke support and is on thin ice. Oil and commodity currencies are in free fall. Plus year end tax loss selling is hitting the tape too. I wouldn’t be surprised if grandma Yellen punts on the rate increase. They want it but they know it could blow up debtors and derivatives across the globe. I wouldn’t want to be in her shoes right now. She has no good option.
I’m seeing a week filled with very violent swings. Down then a massive short squeeze after options expire. Everyone and his cousin is long $US and short $Cdn, oil, gold, copper etc. When everyone gets on one side of the boat it won’t take much to tip it. Be careful out there!

#7 growing gap on 12.13.15 at 2:05 pm

In my simple world, it’s so easy to bring a win win win situation to this real estate mess. With so many smart Caribbean countries that have a foreign buyers tax on RE. It seems our governments are too weak to implement this. If they did almost everyone wins. All the whiners here including myself would benefit from the extra tax dollars. I know most of the foreign buyers wouldn’t even blink at 20% to 50% tax on their money flight to safety.
Yes, tax the hell out of RE, just don’t increase income tax.

T2 can start implementing a surtax on any single family house that’s not a primary residence. He has to if he wants to balance the budget.

RE is the root of all evil, it is the base of all costs. Higher commercial and residential rent drives up cost for everything we touch, eat, smell, smoke…bahh forget it, all we need is just a nice little reset button.

#8 HJD on 12.13.15 at 2:07 pm

“Finally, prepare for T2 to blow up small business rules and carry on the war against successful people. It’s coming. Along with the carbon crusade.” Garth

Garth, You should move south and join forces with those crazy Republicans. You’re living in the wrong country.

#9 OK on 12.13.15 at 2:10 pm

Ok, it’s all sh!t, we get it.

How do we profit from it?
That’s the only thing to focus on.

#10 Felix on 12.13.15 at 2:17 pm

Garth, I know you’re in bed with the dog lobby, but could we get some cat coverage in a positive light?

I mean, if cats and dogs were portions of our population, you’d be accused of some -ism, no? :)

-Felix

Dogs personify goodness. Cats don’t. — Garth

#11 Crowd sourcing on 12.13.15 at 2:19 pm

Let’s get the wisdom of he crowd, in the most practical terms.

Talking politics, ideology is a nice time-waster hobby, but it doesn’t make a penny right now for most people:

A practical To-do list:

– what’s your preferred way to short CAD?
– what’s your preferred way to short energy?
– what’s your preferred way to short TSX?
– what’s your preferred way to short Canadian real estate?
– what’s your preferred long play?
– what’s your preferred “cheap” opportunity to pick up?

Thanks!

#12 BC Guy on 12.13.15 at 2:20 pm

” … Canada is still a rocks-and-trees kinda nation.”

Canada has a lot of smart, well-educated people and could be a leader in high tech, manufacturing, and other value-added industries.

However, successive governments have watched as high tech gets taken over by Americans or goes bust(Nortel, Corel, Blackberry, Spar Aerospace …)

http://www.theglobeandmail.com/report-on-business/economy/canada-competes/canadas-vanishing-tech-sector/article4396596/?page=all

They’ve watched as manufacturing gets outsourced to Mexico, China, Taiwan.

They’ve watched as Telus and other companies outsourced their tech support to the Phillipines.

They’ve watched as the big banks outsourced the IT to India, Pakistan and the US.

Now they want to impose the TPP on us.

Why go to university or college and $50,000 debt to take an Engineering, Science or Technology Programming degree or diploma to work under constant threat of being layed off, outsourced, downsized?

No wonder there are 130,000 realtors in this country. For 3 months of study and $10k in up front costs, you can be a realtor and within 5 years make double or triple what an average tech person would.

#13 waiting on the westcoast on 12.13.15 at 2:24 pm

It seems like everyone is taking a beating against the US$… Is there anywhere that is holding its own? How long before Canada and other dropping currencies Wilkinson bottom and make a reversal?

We complain about our governments but read up on the stuff Christina did just prior to the handoff to Macri in Argentina. Basically, she has put the government in near insolvency.

This is the challenge with politics. Too many self interested politicians who put their needs/campaigns ahead of the national interest.

#14 For those about to flop... on 12.13.15 at 2:29 pm

Ab boxter wrote:
Alberta is down right now for sure.
It’s obvious that you don’t live in this province.
Abertan’s are some of the most inventive, self sufficient and ‘old stock’ persons in this country.

//////////////////////////////////////////////
I have been living here since January 2002 and more importantly from the goverments side ,have been a Canadian taxpayer since this date.
How long do I have to be here before I’m considered “old stock” ? 14 years good enough or am I still fresh meat?

#15 TRT on 12.13.15 at 2:30 pm

Thanks for the Sunday morning read.

Posting early these days. Too much Scotch last night ?

#16 BC Guy on 12.13.15 at 2:35 pm

” … war on successful people …”

Call it what you like. But is it morally correct for someone who invents a coffee brewing machine (Keurig) to reap a billion dollar payout and be in a similar tax bracket as a nurse working the grave-yard shift Friday and Saturday nights delivering babies, administering pain medication to your mom who is dying of cancer, helping your loved ones die in peace?
Is it OK for the Keurig guy to buy a 10,000 acre ranch in Costa Rica and never have to work another day in his life, while the nurse works 14 hours shifts for the rest of her days? Is taxing the Keurig guy at a much higher rate considered a “war” or is it just common sense?

Is it morally correct for someone who makes a line of woman’s yoga clothes (Lululemon) to buy up a large estate and mansion on BC’s coast and never have to work another day in his life while a policeman or soldier puts his life on the line every minute of the day for 20 years to serve his or her country? Is it “war” to tax the Lululemon guy at a much higher rate or is it just common sense?

The Keurig co-founders are American. Thus irrelevant to Canadian taxation. Chip Wilson pays half his income in tax while his dumb real estate escapade has so far pumped $57 million of what he has left into the local economy, so all those downtrodden drywallers and electricians can support their families. You’re such a riot. — Garth

#17 D-RAD on 12.13.15 at 2:36 pm

#3 common sense on 12.13.15 at 1:41 pm
Thank you for the specific advice..

As the great Howard Stern taught me about finance…

“For anyone who thinks your career and the high income days are going to last forever aka stocks and housing rising always, etc it’s not. And if your not prepared (aka heeding the advice of this blog, etc) your in for a world of hurt…nothing lasts forever…”

Baba Booey!

#18 Yuus bin Haad on 12.13.15 at 2:37 pm

Boy, did I make a killing a couple of weeks ago. I sold all my carbon credits to a couple of COP21 delegates.

#19 TRT on 12.13.15 at 2:38 pm

Rich nations to pay developing nations $136 Billion CDN per year with deal.

Because of Canada’s Oilsands and the intent to develop LNG, we will have to pay about $5-10 Billion annually.

Where is this money going to come from? Guess.

T2 looking like a 1 term prime minister.

#20 Randy Randerson on 12.13.15 at 2:41 pm

Oh crap, what are the T2 and gang going to do to small business? I’ll hazard that they’ll kill of the small business tax deduction, or prevent professionals from incorporating and defer tax, unless said professionals employ a few employees.

#21 Millmech on 12.13.15 at 2:47 pm

Everybody just start up a carbon footprint consulting business,all levels of govt will love you,get access to special carbon grants for your studies etc.Then there is all the tax avoidance that can be taken to reduce your tax burden.

#22 Herf on 12.13.15 at 2:52 pm

“Sucking oil from dirt is a messy, expensive, complicated business – and already Canadian output is labeled as ‘dirty’ by the growing US environmental lobby.”

But, but . . . the oil sands industry was cleaning up the dirty prairie dirty, returning to the earth clean dirt, while providing a valuable energy source and base substance used to produce other necessities (e.g. plastics, medicines, lubricants, etc.) needed by society. How in their right minds can the environmentalists argue against that, especially when they’re jettin’ around the globe and putterin about in their Audballs, Escargoes. Indefinites, Mercenaries, Scummers and BUMRs? Hypocrites.

I think the whole political/envirowacko ethos is aimed at forcing the common folks to fork out more money for everything, upon which they also have to pay taxes (a lot of them hidden), under the guise that they’re helping save the planet and social programs. And its accelerating as our bloated, indebted governments desperately try to extract revenue from where-ever they can find it.

#23 Retired Boomer WI on 12.13.15 at 2:54 pm

Next week will be interesting. Will she, or won’t she? Can oil win the limbo contest? “How low can it go?” My personal bet is $24 but… with new supply $18 would not be too surprising.

That will choke a lot of the markets, and kill the seriously wounded in oil. So… when did anybody say it was a ‘fair’ game? Seen corn and grains at the farm they are low!!

My numbers presently look like crapola, but they have before, they will again. At least, there are some things to be thankful for, as there always are if we care to look.
Delightful 50 degree December weather, a stable economy here, gas under $2 a gallon (.50 a liter), an upcoming federal election, so we might avoid the error of the neighbors, see… so much to be thankful.

#24 For those about to flop... on 12.13.15 at 2:55 pm

The Keurig co-founders are American. Thus irrelevant to Canadian taxation. Chip Wilson pays half his income in tax while his dumb real estate escapade has so far pumped $57 million of what he has left into the local economy, so all those downtrodden drywallers and electricians can support their families. You’re such a riot. — Garth

//////////////////////////////////////////
I didn’t work on the last one ,I believe it is in Point Grey but I did work on the one before that.
4 months wages ,thank you Chip.
For what it is worth since April I only worked on two houses this year when people are spending this much on their houses I spend a long time there.
If you’ve got the money ,I’ve got the time.

#25 speaking of cats on 12.13.15 at 2:55 pm

Dogs personify goodness. Cats don’t. — Garth

—-

Not that cats need any advocate, but…

– cats bring the beauty of tigers, leopards, lions in our environment
– they remind me of the values of individualism, self-direction – all needed for a complete universe
– there is beauty and value in refusing to obey blindly any master
– there is goodness in cats, but in way more indirect way than in dogs

#26 Interesting Times on 12.13.15 at 3:04 pm

The next three days will be interesting. The thing folks never talk about is the available liquidity when investors want to go to cash or cash equivalents.

The Fed will announce a rate hike, barring a thousand point Dow drop over the next few days. However, if junk bond contagion grows, all bets are off.

Subprime is contained – Ben Bernanke, 2007

#27 kc on 12.13.15 at 3:11 pm

Your comment on being a banker is funny….

I was in the bank yesterday to ask about what is needed to close 2 accounts i have with a substantial amount of emergency cash. I wanted to know where my household stands in case we go NIRP in canada and I am paying to hold cash.

The gal (under 30) said you cvan close accounts in the same day… I said really? she said yes we give you a cheque I said no i want cash, she checked the balance and sdaid it would take at least 5 business days, then she asked why i want that much cash.

I commented that if we (Canada) goes negative I refuse to pay you blood suckers more than you deserve.

She had ZERO idea what i was talking about, however an older gentleman behind me gave me the smile as I left.

Garth, If canada does go negative, do you see a bank run on cash? and will there be in the cards an all out assult on owning cash?

#28 gut check on 12.13.15 at 3:12 pm

@ #16 BC Guy on 12.13.15 at 2:35 pm

is it morally correct?

Would you elaborate on why you believe it to be morally INcorrect? Whose morals are in question?

Moreover, what’s stopping you from inventing something people want?

Be careful what you wish for.

sheesh.

#29 such a riot on 12.13.15 at 3:14 pm

#16 BC Guy on 12.13.15 at 2:35 pm

Is it morally correct for someone who makes a line of woman’s yoga clothes (Lululemon) to buy up a large estate and mansion on BC’s coast and never have to work another day in his life while a policeman or soldier puts his life on the line every minute of the day for 20 years to serve his or her country? Is it “war” to tax the Lululemon guy at a much higher rate or is it just common sense?

Chip Wilson pays half his income in tax while his dumb real estate escapade has so far pumped $57 million of what he has left into the local economy, so all those downtrodden drywallers and electricians can support their families. You’re such a riot. — Garth

——

Garth is looking at this strictly in economic values, BC guy is talking about “moral” values.

It is comparing apples to oranges. Two parallel universes. They cross almost never.

There is no monetary value for creating and maintaining peace, there is profit to be made on developing, manufacturing, selling missiles.

#30 prairie person on 12.13.15 at 3:16 pm

It has begun. A friend of mine lost her job a year ago. Two kids. She’s looked everywhere, applied everywhere and has only got temporary work for a few weeks at a time. The bank has sent her a notice of foreclosure. She’s tried to pay what she could but most months there isn’t enough money for food, heat, gasoline for the vehicle so she can take the part time jobs that are offered. She’s not lazy and she’s not dumb. Neither are all those people with large mortgages who are running out of EI, severance pay, etc. A lot of people are going to be hurt, not just in Alberta, but across the country as jobs disappear. Having said that, there are so many people shopping at the local malls that it is nearly impossible to find a parking space. I’ve been told that during the Great Depression, if you had a job, life was good. Regular income and everything was cheap. The unemployed? Well, that was a different story.

#31 Frank on 12.13.15 at 3:19 pm

Is it morally correct for someone who makes a line of woman’s yoga clothes (Lululemon) to buy up a large estate and mansion on BC’s coast and never have to work another day in his life while a policeman or soldier puts his life on the line every minute of the day

Want to know why your populist bullshit is wrong? Becasue you don’t understand risk. For one if you wanted to pick dangerous jobs you should have gone for logger or fisherman, not ones that are popular to worship in the right wing. Second, both cops and soldiers have good, ensured pay, benefits and a life time pension. Starting a business means putting thousands of your own money on the line knowing that there’s a greater than 50% chance you fail. The cop just has to show up to work, he risks nothing. It’s a safe job. Chip Wilson bet more than you ever will. That’s why safe union workers don’t deserve to be wealthy, they took the safe way.

#32 Burton on 12.13.15 at 3:22 pm

#16. BC Guy, what do socialists know about morals? Bringing in twenty-five thousand migrants while veterans live on the street.

#33 Karl hungus on 12.13.15 at 3:22 pm

Where do you recommend buying ETf’s ? Through your bank? If your only contributing a little bit at a time, should you only buy ETf’s if they are free to buy?

#34 jack be nimble on 12.13.15 at 3:24 pm

“dividend-spewing preferreds (now on sale)”

but also losing value everyday. will this be a traders ‘sale’. CPD for example down from 13.63 nov 6 to 11.92 today

#35 ROCK BEATS PAPER on 12.13.15 at 3:26 pm

“tepid demand…. this may well be the end of the oil sands business..”

Garth this is irresponsible hyperbole from you. Demand is at an all time high of 94 million barrels and going to 96 million in 2016. Tepid indeed! This is quite unlike 2009 when demand was falling and oil dropped to the low 30s. What is about to fall is supply as 200 billion in capex is pulled from the market. In fact, US franking is down 500k barrels since spring and the decline is accelerating!

Actually, low oil prices are the kiss of death for uneconomic green energy which cannot compete with sub $2 nat gas or sub 40 oil. That is the irony. The oil sands are 50 year mines and the costs of those already built are sunk. It is new oil sands projects that are uneconomical, not what Suncook already has in place. In fact, the cheap dollar and now cheap labour are keeping the stock price high.

No Garth, you advise is for Lemmings to sell at the bottom ( except for real estate and prefs) and buy at the top: boring bonds which have been anything but lately. You probably would have characterized prefs as boring last year.

#36 inventions on 12.13.15 at 3:27 pm

#28 gut check

Anyone can check out what Lululemon invented and make their own assessment of the value those inventions brought to mankind.

https://www.google.ca/?tbm=pts&gws_rd=cr,ssl&ei=asVtVvWAMoW2ygP-p7W4Cg#q=lululemon&tbm=pts&start=0

#37 Patrick on 12.13.15 at 3:33 pm

This is the essence of a condo economy, where more and more activity is generated from people selling real estate to each other, rather than products to the world.

I wish manufacturing was as sexy as condos and banking. Or paid as well as the govt.

#12 BC Guy on 12.13.15 at 2:20 pm

BC Guy is the end result of the ‘everyone gets a medal’ generation. We get it, you hate competition. The world doesn’t care.

TPP gives us access to a huge chunk of the world. We’re starting in a very strong position relative to them. If you can’t keep up with a huge head start you better sit on the sidelines. There’s no more participant trophies. Sorry buddy.

#38 Randy Randerson on 12.13.15 at 3:35 pm

The Keurig co-founders are American. Thus irrelevant to Canadian taxation. Chip Wilson pays half his income in tax while his dumb real estate escapade has so far pumped $57 million of what he has left into the local economy, so all those downtrodden drywallers and electricians can support their families. You’re such a riot. — Garth

Oh how I love to see GT dishes out straight dope to ignorant fools. No vitriol from GT, just facts and facts to make idiots appear, well…more like a stupid idiot. Maybe BC guy just smokes way too much wacky tobaccy in the BPOE to realize that he’s an idiot. The west coast tends to do that.

#39 poorcat on 12.13.15 at 3:38 pm

Morals, I’m getting sick of all these yuppies that hate the rich! There are rich people in this world that have contributed more to society then the average guy ever will. Ya there not all perfect I get that but some of them became wealthy because they worked hard and took risk your not rich “deal with it” don’t blame the rich. Be accountable for your own actions! I’m far from rich, who do I blame? Me!

#40 Randy Randerson on 12.13.15 at 3:40 pm

#31 Burton on 12.13.15 at 3:22 pm

Or leaving all the First Nation communities living in abject poverty with no clean running water. I bet BC Guy must be a preacher in his previous life, using the bible to push his own agenda. Get a job, invent something, so you can be rich, see if you’d like to donate all your money to the benevolent government.

#41 gut check on 12.13.15 at 3:46 pm

@ #35 inventions on 12.13.15 at 3:27 pm
#28 gut check

Anyone can check out what Lululemon invented and make their own assessment of the value those inventions brought to mankind.

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

You want a world that is all about you, do you?

Personally, I wouldn’t put a dime into lululemon’s cash registers. Stupid trendy bullsh!t IMO. that’s my choice. that’s my power.

But for the clearer perspective on making morals subject to groupthing instead of an individual matter, see answer #31 above, by Burton.

#42 morals on 12.13.15 at 3:47 pm

#31 Burton on 12.13.15 at 3:22 pm

#16. BC Guy, what do socialists know about morals? Bringing in twenty-five thousand migrants while veterans live on the street.

How did veterans living on the street help bringing in 350.000 temporary foreign workers (if I remember well) ) by the Conservatives?

#43 ANON on 12.13.15 at 3:51 pm

Cats vs Dogs: Fight!

I’ll say that cat do know how to domesticate humans into good doggies. :)

#44 TurnerNation on 12.13.15 at 3:53 pm

Why our society is so sick:

I went to my local Groceteria – owned by one of Canada’s richest families – and you know what those billionaires have their cashiers asking? For donations to a food bank.

Now that’s rich. Me, living in my tiny Agenda 21 approved rental sky box vs. These owners of palatial home around the world.

The same owners who’ve replaced some cashiers with self checkouts, where a consumer paying premium pricing still must sort, weigh and enter their own goods! Where are the laid off cashiers from this exercise? In a food bank line perhaps?

I’d go somewhere else but next nearest food store owners are billionaires from other side of Canada.

#45 AB Boxster on 12.13.15 at 3:54 pm

#14 For Those about to flop
________________________________
‘Old Stock’ in my mind exemplifies a state of mind.
People I characterize as ‘old stock’ are those that exemplify a spirit of
‘can do’ and ‘self sufficiency’ ,’community support’ and individual freedom and reward.
It has nothing to do as to your race or how long you have been a resident or citizen of the country.

Strong countries and societies are built by those who exhibit these characteristics.
The ‘old stock’ Albertans that built this province over the past 100+ yers were immigrants from all over he world.

One can exhibit the traits of these ‘old stock’ individuals, or one can rely on the largesse of others, whine and complain when the world is mean to you, and believe that the most pressing issue today is how important your ‘rights’ are.

If you think this term refers to your racial heritage or the length of time you live in Canada then you are drinking the Kolaide of the uber left.

#46 Herf on 12.13.15 at 3:58 pm

#12 BC Guy

I don’t think government is really (or totally) the problem. I think business itself, is the problem. Canada doesn’t produce very many competent managers and venture capitalists that can run and/or fund small, medium and large (>$1 Billion) technology-based enterprises (e.g. Nortel (and more recently, RIM) were mismanaged). Also, it seems the Canadian mentality is for the company owners and/or share-holders to grow the business to a certain size and then sell it off to foreign interests (particularly if the company is privately held).

Thirty years ago, I worked at then high-flying high-tech wonder (and competitor to Northern Telecom (Nortel)), Mitel. They went from 0 to $250 Billion in annual sales within their first ten years of existence, before running into trouble developing their new telephone switch (the SX-2000). They were in partnership with IBM, who eventually walked away from the arrangement when Mitel failed to deliver the product and/or its software on time. Mitel stock that had been trading at >$40.00/share (after it had already split), began to fall until the company got bought up by one of it’s main customers, British Telecom (BT). BT subsequently sold off this division years later to some other company. Last I heard, in the past few years Mitel co-founder, Terry Matthews, bought back whatever Mitel had morphed into. I believe it is now known as Mitel Communications.

In the meantime, Matthews and his partner and other Mitel co-founder, Mike Cowpland, had gone on to found many other companies, including some high-profile ones such as Corel, Newbridge Networks and March Networks. As far as I know, those companies no longer exist or are just shadows of their former selves.

Meantime out in BC, in the 1980s and ’90s there was a fledgling high-tech/electronics industry. Companies such as Mobile Data International (who developed the mobile computer terminal the cops and fire departments use in their vehicles); Microtel Pacific Research (former R&D branch of BC Tel); MacDonald, Dettweiler & Associates (MDA) (the satellite imaging guys who now own Spar Aerospace); Glenayre Electronics (pocket pagers); Anatek (power supplies); Nexus Engineering (satellite receivers and components); Norsat (satellite receivers and components), Ballard Power (fuel cells) and a slew of other small, promising businesses. Most have all disappeared or morphed into other entities, leaving behind perhaps a handful of companies (e.g Sierra Wireless, PMC Sierra, MDA, Glentel, Norsat, Ballard Power). The BC business mentality seems to be for a high-tech company to grow to a certain size, then sell itself out to foreign interests and leave the province/country (particularly if the company was privately owned), or leave just a remant of its former self (e.g. Glenarye/Glentel).

Read JimmyK’s comment (4th one down) following this Globe & Mail article. I think he nailed the real problem with Canada and tech:

http://www.theglobeandmail.com/globe-debate/james-dyson-canada-has-a-serious-shortage-of-engineers/article10969556/

Also read the following report about Nortel’s demise and reasons therefore:

http://sites.telfer.uottawa.ca/nortelstudy/

I think government has a role to play in helping Canadian businesses get started, but at some point, businesses have to be able to stand on their own two feet. Otherwise, we perpetuate a culture of “corporate welfare” to particular businesses and industries (e.g Bombardier, the auto sector). I don’t think government should be choosing winners and losers, or distorting the market by needlessly interfering with it. At the same time, I don’t think government should burden or discourage businesses (e.g. excessive regulatory burden, taxes and other (think “green energy”) operating costs) such that they can’t function and compete in the society and with the world.

#47 Dominoes Lining Up on 12.13.15 at 4:06 pm

Something’s up, or so it seems.

I was in a mall today in Toronto, midtown, prosperous area of $800,000 semis and up, around noon.

The food store was almost empty. No wait at all for any of the seven cashiers open. The food court was quiet save for the usual seniors hanging out, no lines at any of about a dozen food retailers. The Toys R Us store was also very quiet, no lines at any registers.

Sundays used to be a super busy time, even in the summer.

Meanwhile, a friend who operates a small shop in the city for some specialty kids/family items tells me that Black Friday and onward has been very slow and they are lowering expectations dramatically for this season.

With this warm weather, you’d think more would be drawn out to shop…?

Anyone else noticing this kind of thing, two weeks before Christmas?

#48 YVR is still hot on 12.13.15 at 4:17 pm

#33

but also losing value everyday. will this be a traders ‘sale’. CPD for example down from 13.63 nov 6 to 11.92 today
/////////////////////////////

What do you mean by a “traders sale?” I see some volume with CPD over the last couple sessions..This seems like a sure thing. Am I crazy to put a few K into this during the week?

#49 Caught In The Grip on 12.13.15 at 4:20 pm

Canadian investors should own $0 (zero) Canadian investments. I was fortunate and sold the last 10% of my Cad investments (mostly XIU) in 2013. My largest positions are QQQ, VUN & VXF.

A one equity portfolio for Canadians would simply be to buy VXC. Bonds are extremely overvalued so I would avoid them.

Real estate will be dead $ for 2 decades.

US stocks are the new bonds.

#50 Leo Trollstoy on 12.13.15 at 4:22 pm

I commented that if we (Canada) goes negative I refuse to pay you blood suckers more than you deserve.

Dumbest comment on today’s blog so far.

#51 Mark on 12.13.15 at 4:24 pm

“the American dollar will strengthen further”

There have been many Fed tightening cycles where this has *not* been the case. In the short-term, sure, speculators sometimes will ‘chase higher interest’, but over the long term, money chases value creation. And at extremities of P/E ratios, an economy extremely levered to excesses in finance and asset prices, federal/state/local governments almost mathematically unable to fund themselves if rates were ever to revert to ‘normal’, it does seem that a higher USD$ is probably not that much in the cards.

If canada does go negative, do you see a bank run on cash? and will there be in the cards an all out assult on owning cash?

In a negative rate environment, the banks can turn into trustees of your money (ie: it goes into their vaults, and is physically held there, “in trust”), rather than being counterparties/borrowers of money — which obviously a bank wouldn’t do at a positive rate unless it was otherwise their lowest cost of funding.

At minorly negative rates (say, -0.25 to -0.50%), banks would still act as counterparties, as banks naturally pay a spread over the ‘risk-free’ rate to borrow. And ‘borrowing’ even at 0% from a retail customer (ie: paying no interest) is still an attractive proposition.

The real ‘trouble’ starts to occur when/if rates are suppressed beyond what would be the bank’s borrowing spread, ie: under -1% rates. The more negative you get, the more significant the cessation of lending in the economy would be. Negative rate policy, in that sense, may actually act to re-inforce deflation, from which extrication is very difficult. After all, why would anyone actually ‘lend’ money to a bank at a negative rate of interest, or why would a bank actually borrow money from a customer at a zero or positive rate of interest if the central bank has suppressed policy rates substantially beneath zero? And guess what a lack of borrowing (shorting) does to a currency!!

Where would I want to be invested in such a scenario? In monetary instability hedges.

#52 espressobob on 12.13.15 at 4:25 pm

#32 Karl hungus

A little info on how to buy ETFs.

http://www.blackrock.com/ca/individual/en/learning-centre/etf-education/how-to-buy-etfs

Discount brokerage accounts for example,

https://www.rbcdirectinvesting.com/investment-choices/etfs.html

https://www.td.com/ca/products-services/investing-at-td/index.jsp

http://www.scotiabank.com/itrade/en/0,,3527,00.html

And this last link for some humor. Good luck.

https://www.youtube.com/watch?v=qPzKntJo-IY

#53 MDQ on 12.13.15 at 4:32 pm

Garth, you mention “Keep 20% of so of your portfolio in US$”. Are you referring to investing in US stock market or to actually hold investments in US$? I find really confusing all those ETFs that are double listed, hedged, etc.

#54 Only-inflation-to-reduce-debt-burden on 12.13.15 at 4:34 pm

“Canada is still a rocks-and-trees kinda nation”. Sorry but water is a big thing in this game we call life and so is global warming…. These 2 factors along with the fact that we have a rule-of-law-respect make Canada the envy of all nations…. We manage well where others do not….

Alberta’s is the old economy of fossil fuel where the new economy of renewable energies is just beginning….

Perhaps we’ve shrunk a great sector which was once known as Manufacturing but the lower CDN-$ will help restore some of this….

Finally as Poloz mentioned sub-zero CDN interest rates I suspect many will transfer out of the conventional mortgage vehicle and instead use lines-of-credit which are based on CDN interest rates….

I doubt we’ll see the real estate crash many here are waiting for…!!!!

And, finally the world will eventually turn more Keynesian as these austerity wing-nuts are giving ample example of their failed experiments…. Again, good for real estate….

#55 Only-inflation-to-reduce-debt-burden on 12.13.15 at 4:36 pm

The world is want for relief of debt and the answer is inflation….

#56 windows on 12.13.15 at 4:41 pm

garth wrote: “Maple’s a dangerous place.”

Catching a falling knife is hard, but maybe we should remember Buffet’s famous words that one should be greedy when people are fearful…

Buy Canada when it’s cheap?

#57 Mark on 12.13.15 at 4:42 pm

“The commodity, gold and silver bubbles were largely driven by widespread anticipation of inflation which obviously never occurred. Peter Schiff at one time was predicting a valuless US Dollar and $7000/Toz. gold.”

The problem with Peter Schiff over the past 7-8 years is that he basically insists that inflation exists, even when the facts basically tell him that he’s wrong (John Williams of “Shadowstats” does the same). Even starting a radio show for a while, where he basically placated to callers who insisted that the US was in hyperinflation on account of their one-item-in-a-basket anecdotal experience of rising prices.

However, he’s not completely wrong on his calls for much higher gold prices. He just doesn’t seem to understand that not only can higher gold prices be achieved through inflation, but they can also be achieved through deflation. As people seek out gold as a refuge against monetary instability and defaults.

Central bankers strive to maintain inflation in the 2-3% range, normally being able to raise or lower short-term policy rate targets to achieve such. However, it is the environment in which they can’t meaningfully hold it in that range, where gold really shines. Schiff overly obsessed with a scenario in which inflation was 10%, and central bankers wouldn’t, on account of ideology, raise rates. Obviously a scenario proven to be false. He never really has ever discussed nor acknowledged, a scenario in which inflation = -2%, and ZIRP/NIRP is already in place. This is closer to the scenario I believe exists in the USA at the moment (and sooner or later, Canada), and is why gold should start to do better imminently. Especially as the wave of defaults gets underway in earnest in the energy, student loan, public, and auto loan sectors.

#58 saskatoon on 12.13.15 at 4:42 pm

#352 JimH on 12.13.15

here is one of hundreds of links to verify that…

YOU ARE WRONG.

http://www.economist.com/blogs/economist-explains/2015/03/economist-explains-5

“To carry out QE central banks create money by buying securities, such as government bonds, from banks, with electronic cash that did not exist before. The new money swells the size of bank reserves in the economy by the quantity of assets purchased—hence “quantitative” easing.”

p.s. you really should work on your reading comprehension skills.

#59 For those about to flop... on 12.13.15 at 4:50 pm

Reminiscing about some of the houses I have worked on reminded me of something an electrician told me on Friday.
I have not verified this yet but this is what he told me.
A certain Canadian singer bought 4 lots on a certain millionaires row and was given permission to build a 35,000 sq ft. house.
This is where to story gets stupid apparently there is a stop work order on the house because they have overbuilt ,because 35,000 is obviously not big enough.
Just when I think the housing insanity can’t get any worse I hear crap like this.
The only thing left to figure out is if we are in a housing bubble or is it a housing bublè?

#60 Retired Boomer WI on 12.13.15 at 4:58 pm

It could be a very long winter. “Oil Creep” has idled many sand mines here, with resulting spin off effects.

Fram commodity prices: milk, corn, grains are low from a great crop (always the case, right?).

Now, do we have to contend with “funny money” accounting as well with oil fracking ‘reserves’ based on a 2009 law change. 2015 should mark the first full year of this law, and I will assume the impact to be felt prior to 1/1/2016. Could be wrong, I’m not an accountant.
See link.

http://www.bloomberg.com/news/articles/2015-12-10/billions-of-barrels-of-oil-vanish-in-a-puff-of-accounting-smoke

And I thought just RE had sub-prime practices…silly me!

#61 Huit on 12.13.15 at 5:03 pm

I did a thought exercise on all going on dollar tanking people up to eye balls in debt ..carbon agreement signed…socialist green fed gov in control. In coming yrs expect the price on all you see to double…food electricity books papers video games whatever it is all going up. Oil and emissions are now the enemy….gas stations will have to close….internal combustion egine will have to go…car plants will be shuttered thousands of job losses….many businesses will go belly up with people not able to travel or buy things as too expensive. Unions will start strikes demanding much higher pay to offset the above…governments already not able to fund many things will collapse from all the demands.. aging society continues drain on all things to point health care costs exceed all budgets. There will be no money for retirement eaten up by all the above costs. Canada is to turn into a have not second or third rate country. Meanwhile the USA will snub any attempt to lower standard of living or tax increases and will continue to prosper.

#62 Alberta Blue Blood on 12.13.15 at 5:04 pm

I wish everyone would just calm down. There is nothing wrong with becoming a second world country with a collapsing real estate market, expansive debt, and high unemployment with no way out.

Just ask Greece, Spain, and Italy how it worked for them. People still visit, lots of wine to drink, and no one lost an eye.

Geesh.

#63 Form Man on 12.13.15 at 5:09 pm

142 Ronaldo on 12.11.15 at 9:38 pm

“You’ve been away for awhile. Missed your duking it out with DA.”

Yeah, after DA was banned, and Smoking Man showed up with his penchant for over-riding his spell-checker in order to post deranged rants, I kind of lost interest……

#64 Cloudy on 12.13.15 at 5:13 pm

#12 BC Guy on 12.13.15 at 2:20 pm
“Canada has a lot of smart, well-educated people and could be a leader in high tech, manufacturing, and other value-added industries”

You’re right and wrong. Canada has lots of smart well educated people but its well documented they are not studying in disciplines that will give them good high-paying jobs. Our young are going into student debt and coming out with mostly degrees in humanities and basket weaving. Not that these don’t have to purpose, but that purpose isn’t strengthening our economy or output. Universities have become radicalized to left.

#65 pinstripe on 12.13.15 at 5:24 pm

The commentary today is describing Alberta to a T.

What is seen today in Alberta is the consequence of the policies brought about 5-10 years ago by the AB PCs and Fed CPC. In AB, the apprentice saw the writing on the wall and threw in the towel on election night, whereas harpo is coming and going using the back door.

Things are tough in AB and 2016 is pointing towards tougher times. OTOH, the pubs, bars, drug lords, pimps and liquor store sales are doing great.

#66 Chris on 12.13.15 at 5:24 pm

That is a scary picture. That is what 2016 would be. We’d better be careful. The oil sands business may be over. Not sure when oil would come out of the current trough. Expecting to buy a electric or at least hybrid car for next vehicle for our family.

#67 Ryan on 12.13.15 at 5:27 pm

#7

What a superb trap the gov’t has. So much money has come in and continues to do so. Tapping into that would be a slamdunk, it mostly hurts foreigners who can’t vote. It calms the hot markets. It has public appeal since it shows a fight against wealthier nations taking from Canadians. It looks like an easy win.

#68 2016 | Realties.ca on 12.13.15 at 5:32 pm

[…] Source: http://www.greaterfool.ca/2015/12/13/2016/ […]

#69 ben on 12.13.15 at 5:34 pm

CAD at 0.72. How are those boomer savings looking now? Your nest-egg was supposed to last 20 years now it’ll last 17. And this is just the start!

An untrue statement, of course. Most retirees live in C$, and while a lower dollar will inflate the price of imports, the impact will not be of this magnitude. — Garth

#70 Mark on 12.13.15 at 5:37 pm

” If your only contributing a little bit at a time, should you only buy ETf’s if they are free to buy?”

Ever heard the saying, “there’s no such thing as a free lunch”? Most of the “free to buy” ETFs have higher embedded fees that, over time, easily eclipse a $5 (or even $1) ETF trading commission at a discount brokerage for lowest cost-in-class ETFs (ie: XIU/VCN, etc.).

If you have access to them, TD’s e-Series funds can be a low cost way to accumulate funds before you convert them to ETFs.

It is new oil sands projects that are uneconomical, not what [Suncor] already has in place. In fact, the cheap dollar and now cheap labour are keeping the stock price high.

Keep in mind that Suncor is a lot more than just oilsands upstream production. They have one of the most substantial refining and even retail marketing businesses in Canada. Which, in the current environment, should be enjoying significant prosperity.

Compare the balanced portfolio of Suncor (upstream, mid-stream, and retail), with that of a pure upstream oilsands producer such as MEG Energy or even Canadian Oilsands Limited (partial owner of Syncrude). There’s a reason why the latter two stocks have been pounded to smithereens while Suncor is actually in a position to add assets to its portfolio.

#71 Mark on 12.13.15 at 5:41 pm

“An untrue statement, of course. Most retirees live in C$, and while a lower dollar will inflate the price of imports, the impact will not be of this magnitude. — Garth”

If the lower CAD$ persists, retirees with Canadian investments in the exporters/multinationals (ie: a good chunk of the contemporary TSX index) should also benefit from higher realized CAD$ pricing on exports and overseas operations.

As usual, its the people with one-asset (or worse, no-asset) strategies who suffer.

#72 ben on 12.13.15 at 5:42 pm

Hey Garth – really? They saved in the 0.90 or greater range and now we are down to 0.72. Most retired will be paying out food (certainly sensitive to CAD), heating and electricity.

I think this is going to hurt. Our food bill is way up. I think it will make a big dent.

#73 TurnerNation on 12.13.15 at 5:45 pm

Posted in the wrong blog day but you get the idea..,

Funny, Kanada dabbled with first world technology in 1970 – a bullet train. You know like real first world countries have. Would make sense given our land mass.

Guess how it worked out. Buzzt…stuck in the 2nd world. Our taxes go to where?

http://spacing.ca/toronto/2015/12/09/53711/

Remembering the ill-fated CN Turbo train
“Now, almost 50 years after the debut of the Turbo train, it actually takes longer to get between Toronto and Montreal. Via Rail allows 4:45 for a one way trip”

..
Meanwhile, Alberta Venture magazine has report on last year’s bumper wheat crop going largely to waste due to this country’s railroad duopoly holding it ransom with car shortages. What is it with Kanada and duopolies? I wonder how many former politicians get board seats, at CNR and CP.

#74 Mark on 12.13.15 at 5:47 pm

“Canada has lots of smart well educated people but its well documented they are not studying in disciplines that will give them good high-paying jobs”

Its also well documented that when Canadians do study “disciplines” that are highly technical, that they have very poor labour market outcomes.

Per this study of the OSPE:

http://c.ymcdn.com/sites/www.ospe.on.ca/resource/resmgr/DOC_advocacy/2015_REPORT_Underemployment_.pdf

Only 29.7% of Ontario’s degreed engineers actually are able to find jobs in the engineering profession. With similar statistics across Canada.

Find a way to get that number up to 70-80%, and I can bet you that Canada will have a far more vibrant/prosperous/modern economy. I believe monetary/economic policy and government has a lot to do with such a severe mis-utilization of such vital Canadian resources.

#75 Nanaimo Bar on 12.13.15 at 5:50 pm

I have been reading a lot of articles about what effect the new mortgage rules will have on the Canadian Real Estate market. Some analysts believe that the new mortgage rules will have no effect on houses under $500,000. Others believe that new rules will have a negative effect on prices under $500,000. Some believe that new mortgage rules will increase house prices for this range. So who do who believe? My Victoria BC Real Estate Agent continually emails me about updates to my Private Client Services. Below is my criteria for Victoria houses between $300,000 and $500,000. Will there be more house listing or fewer going forward? Will there be price increases or decreases? Will there be a flood of sold houses in January before the new mortgage rules take effect? Or will the housing market fizzle leading up to new mortgage rules? And what happens after the new rules come into effect in February. Interesting times for sure. Below is the stats for activity.

MLS activity – Victoria, Saanich East, Saanich West, Esquimalt, View Royal,

Criteria – Single Family Home, Price Range $300,000 – $500,000

December Activity to date December 11, 2015

9 New House listing
2 Houses Sold
2 House Price Changes

November Activity
32 New House Listing.
19 Sold Houses
4 houses were taken off the market.

#76 For those about to flop... on 12.13.15 at 5:51 pm

#44 AB Boxster on 12.13.15 at 3:54 pm
#14 For Those about to flop
________________________________
‘Old Stock’ in my mind exemplifies a state of mind.
People I characterize as ‘old stock’ are those that exemplify a spirit of
‘can do’ and ‘self sufficiency’ ,’community support’ and individual freedom and reward.
It has nothing to do as to your race or how long you have been a resident or citizen of the country.

Strong countries and societies are built by those who exhibit these characteristics.
The ‘old stock’ Albertans that built this province over the past 100+ yers were immigrants from all over he world.

One can exhibit the traits of these ‘old stock’ individuals, or one can rely on the largesse of others, whine and complain when the world is mean to you, and believe that the most pressing issue today is how important your ‘rights’ are.

If you think this term refers to your racial heritage or the length of time you live in Canada then you are drinking the Kolaide of the uber left.

//////////////////////////////////////////////
For what it is worth,probably very little judging by the way you finished I simply copied and pasted your piece as an example ,because when I saw it I wondered”am I old stock?”
I consider myself as old school,but am not to sure if iam old stock.
You are entitled to your opinion ,but I can’t be bothered arguing with you.
Next time I will talk to myself,then I know I will win!

#77 mark on 12.13.15 at 5:52 pm

How does one track institutional buying and to find out what percent of a ETF does institutionals have, i know you can screen for stocks like this, does anybody know about ETF’s. In particular curious about how much institutional ownership for ZPR Preferred share ETF with the current slaughter in price?

#78 gut check on 12.13.15 at 5:57 pm

#70 ben on 12.13.15 at 5:42 pm
Hey Garth – really? They saved in the 0.90 or greater range and now we are down to 0.72. Most retired will be paying out food (certainly sensitive to CAD), heating and electricity.

I think this is going to hurt. Our food bill is way up. I think it will make a big dent.
**********************************

And not just for seniors.
At least seniors CAN move their wealth out of CDN. Younger folks without any savings or investments are stuck continuing to earn the devalued dollar.

#79 ben on 12.13.15 at 5:58 pm

Nanaimo Bar – it will effect all prices. If 600k houses are brought down 50K then less attractive houses at 550K will have to reduce their price. And on the ripple goes.

House prices are after all relative. It’s not like it’s the sum cost of the land and bricks. It’s a bidding war set by available credit.

#80 pinstripe on 12.13.15 at 6:00 pm

This is common throughout Alberta.

http://www.cbc.ca/news/canada/edmonton/truck-drives-through-gas-station-wall-thieves-steal-atm-1.3363296

#81 ben on 12.13.15 at 6:05 pm

gut check – yes but wages will rise after devaluation whereas those who are in CAD (most boomers will be in their native currency / investments in Canada) will be hit. Many will be on pensions which will not adjust sufficiently.

Good to see them finally getting hit instead of just the kids. Now they can have a good stretch out in the bed they made.

#82 Freedom First on 12.13.15 at 6:06 pm

Wow! Today’s Blog mood is eerily similar to the conversations now going on among the Alberta populace. Not happy and positive. Albertans are now wide awake and fully aware of what is going on. Denial is dead.

I am stunned by the number of people who are openly revealing how they are now cruising on credit cards to make ends meet, and how much they owe on them. The numbers are frightening. Well into 5 digits. Some of these people were supposedly high rollers until this downturn. Flipping with leverage, their words.

Yes, Preferreds are on sale. I shared here recently that I bought them, among other ETF’s and Bonds I own. I am reminded today just how important it is for me to be diversified and have 0 debt.

I remind myself today, stay calm, no fear, no greed, enjoy life.

I have been living my Freedom First lifestyle for decades, and Garth has helped me refine my financial acumen, but even more importantly, provided me with an oasis of financial sanity in a one asset financially insane world of brainwashed idiotic house lusting lunatics. And all being done with knowledge, wit, humour, and a very interesting and much appreciated wide variety of fabulously entertaining blog dawgs.

I must be nuts.

#83 Pure Wild Roasted gonads on 12.13.15 at 6:08 pm

#78 pinstripe on 12.13.15 at 6:00 pm

This is common throughout Alberta.

http://www.cbc.ca/news/canada/edmonton/truck-drives-through-gas-station-wall-thieves-steal-atm-1.3363296
—-
nonsense.. well maybe where you live. I believe you said you were a drug lord and a pimp in a previous post.

#84 RayofLight on 12.13.15 at 6:08 pm

#27 kc on 12.13.15 at 3:11 pm
Your comment on being a banker is funny….
I was in the bank yesterday to ask about what is needed to close 2 accounts i have with a substantial amount of emergency cash. I wanted to know where my household stands in case we go NIRP in canada and I am paying to hold cash.
The gal (under 30) said you cvan close accounts in the same day… I said really? she said yes we give you a cheque I said no i want cash, she checked the balance and sdaid it would take at least 5 business days, then she asked why i want that much cash.
I commented that if we (Canada) goes negative I refuse to pay you blood suckers more than you deserve.
She had ZERO idea what i was talking about, however an older gentleman behind me gave me the smile as I left.
Garth, If canada does go negative, do you see a bank run on cash? and will there be in the cards an all out assult on owning cash.

—————————————————————-

In my opinion, I believe most people do not understand risk. Yes taking the amount out in “cash” could save you from a potential “negative Interest Rates “, but what are the odds, and what could be the real financial impact. If she thought in terms of ‘Expected Values” the value of the odds times the potential value of something happening, I t would most likely be very, very low. Counter that with the “Expected Value “of being robbed by someone in the bank seeing this transaction, or the expected value of loss through storing or transporting this amount of cash around, it might be better to keep the cash in the bank . The same thinking goes to stock values. I think in terms of “Expected Values “of a stock price 1, 2 3 years out. I base it on regression analysis, the earnings growth rate and the price earnings to growth ratio. The volatility is annoying, but it can also be an opportunity to purchase a stock on the cheap. There is an Opportunity Cost Lost by investing in “safe “low volatility stocks. It is the return you will not realize because of playing it safe. The risk of running out of money can be higher than the risk of losing the money. Quotes from Warren Buffett come to mind about his definition of risk. But in general, risk appraisal, to me, is the most important aspect of investing. Rant Complete!

#85 Suede on 12.13.15 at 6:11 pm

Rhyme & Reason 101

New downpayment rules won’t affect 99% of people buying RE in Vancouver.

The Bank of Mom and Dad will gladly make up for it.

They’re bigger RE pumpers than CTV, Rennie, Global and the Free Daily papers combined.

If US rates rise, the Canadian ones may follow. But the herd is a bit smarter than 2 years ago and realize the “rise in CDN rates” brings a 5yr fixed still around the 2.69% mark.

AKA, cheapo mortgages still available everywhere.

What they see are SFH’s that have risen by 10% a year and their BIL who sold a house and make $250k for signing papers.

The party is not over.

The housing speculators – all around us – have not finished selling to each other.

And the boomers are only getting richer. They’re working well past 65, making more money than they ever did. That money ain’t going into the TSX. It’s going into YYZ and YVR real estate.

It may slow down one day.

Too bad there isn’t a RSI index on RE. It has been “overbought” for 8 of the last 9 years. Yet still continues to climb.

Check out AAPL stock and how many times its been overbought, yet continues to defy expectations and climb higher.

Apples and oranges (pun intended), but anyone can pick data and make it somewhat fit an intended message.

http://stockcharts.com/h-sc/ui?s=AAPL&p=D&yr=3&mn=0&dy=0&id=p23412363871

#86 Gregor Samsa on 12.13.15 at 6:11 pm

#47: Look up what CPD is made of. CPD is brimming with the very thing that Garth Turner is saying will tank: Canadian stocks, Candian banks, Canadian oil companies, etc. Preferred or not, CPD will have the same fate as the rest.

The only play there is to ASSUME that CPD will eventually, someday, go back up (probably after going down a lot more) and in the meantime it pays dividends.

Or you can buy something instead that actually has a positive return…

You have no idea what a preferred share is, do you? Read this. — Garth

#87 IHCTD9 on 12.13.15 at 6:12 pm

#52 Only-inflation-to-reduce-debt-burden on 12.13.15 at 4:34 pm

Alberta’s is the old economy of fossil fuel where the new economy of renewable energies is just beginning….
—————-

Renewables have been “just starting” for decades. They couldn’t compete when oil was $100.00/bbl, no chance in hell for them now. The whole ethanol fuel industry would collapse without subsidies. Look to Ontario, all those windmills and solar panels sent hydro costs up near 100%, in a little over a decade, and apparently, that is still not enough money to cover it.

Looks like the rest of Canada will also be indoctrinated by fire before too long.

#88 Suede on 12.13.15 at 6:13 pm

Forgot to add…

with the USD now climbing higher each week and Smokie making more and more millions,

YVR and YYZ housing has become 30% cheaper to the Yankees.

That’s how you buy a Vancouver SFH for 780k.

Give me one reason an American would buy in Vancouver. — Garth

#89 Scott on 12.13.15 at 6:13 pm

#46 Finally a comment about an actual observation. Too bad Galbraith isn’t writing anymore.

#90 Timing is Everything on 12.13.15 at 6:14 pm

…the ‘war’ against successful people. – Garth

Lighten up Francis.

http://tinyurl.com/d3og9x6

#91 gut check on 12.13.15 at 6:18 pm

#79 ben on 12.13.15 at 6:05 pm
gut check – yes but wages will rise after devaluation…

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

Wages don’t rise. Not in these oddball times we live in.

#92 BS on 12.13.15 at 6:20 pm

BC Guy on 12.13.15 at 2:35 pm
” … war on successful people …”

Call it what you like. But is it morally correct for someone who invents a coffee brewing machine (Keurig) to reap a billion dollar payout and be in a similar tax bracket as a nurse working the grave-yard shift Friday and Saturday nights delivering babies, administering pain medication to your mom who is dying of cancer, helping your loved ones die in peace?

If someone gets a billion dollar payout they will pay at least 25% of that in tax all at once. That is about $250 million over and above the taxes they already pay. On the other hand a Nurse may pay $20K in tax in the same year. They both use similar services. So yes this is unfair to the Keurig founder who will pay well over 12,000 times more tax than the Nurse while receiving the same services.

#93 ben on 12.13.15 at 6:21 pm

#87 – it’s anecdata. I went out today in Montreal and there were many people out buying stuff. Now it’s 1-1. How to decide? Decide not to believe anecdata if I were you.

#94 When will they raise rates? on 12.13.15 at 6:24 pm

Hilsenrath:
Fed Officials Worry Interest Rates Will Go Up, Only to Come Back Down
More than half of economists polled predict federal-funds rate back near zero within next five years

http://www.wsj.com/articles/fed-officials-worry-interest-rates-will-go-up-only-to-come-back-down-1450034022

#95 jess on 12.13.15 at 6:25 pm

The rule of 90ty?

NEW YORK – This week, Angus Deaton will receive the Nobel Memorial Prize in Economics “for his analysis of consumption, poverty, and welfare.” Deservedly so. Indeed, soon after the award was announced in October, Deaton published some startling work with Anne Case in the Proceedings of the National Academy of Sciences – research that is at least as newsworthy as the Nobel ceremony.
Read more at https://www.project-syndicate.org/commentary/lower-life-expectancy-white-americans-by-joseph-e–stiglitz-2015-12#0ChG7Wefszv97BFT.99

#96 jess on 12.13.15 at 6:25 pm

David Danon, a former Vanguard tax lawyer who is now a whistleblower
filed formal complaints with the Internal Revenue Service and many state taxing agencies claiming that Vanguard’s low fees are an illegal tax dodge. … underpaid its federal and state income taxes since its founding?
http://articles.philly.com/2015-11-19/business/68386489_1_david-danon-new-york-state-

Vanguard Whistleblower Could Get Billions in Tax Dodge Complaint
By David Cay Johnston 12/3/15 at 4:56 PM
http://www.newsweek.com/vanguard-whistleblower-tax-dodge-complaint-400901

#97 stats freak on 12.13.15 at 6:31 pm

North Shore Newspaper today, Sunday Dec 13th….

“2016 Assessments going up – Way up”…
This week BC Assessment sent early notices to more than 2,130 property owners on the North Shore, warning that their assessment will be significantly more than the average for their area. 37,000 early warning notices have been sent across the province of BC. 10 to 25% will be the norm it seems.

#98 Ruskie Ryan on 12.13.15 at 6:31 pm

20% in US$? You mean literally US$ or 20% in US growth asset, or both? So I should have 20% US$ and buy US listed etf’s for my US growth portion of my portfolio? Owning something like VUN is not enough?

US$-denominated assets. — Garth

#99 waiting on the westcoast on 12.13.15 at 6:32 pm

Mark says “The problem with Peter Schiff over the past 7-8 years is that he basically insists that inflation exists, even when the facts basically tell him that he’s wrong (John Williams of “Shadowstats” does the same). ”

You tell’em Mark… What does Peter Schiff know compared to the deflationary genius?… Sorry – couldn’t resist. ;-)

With respect to engineers working as engineers… I don’t think it refers to them being blocked out of their chosen profession… I know many engineers working in businesses and not in their fields of education. They basically can do any role they want due to being in such high demand.

Hey – based on my international relations degree, I should be in the foreign service instead of being an entrepreneur. I feel so unfulfilled. :-(

#100 BS on 12.13.15 at 6:41 pm

BC Guy on 12.13.15 at 2:20 pm
” … Canada is still a rocks-and-trees kinda nation.”

Canada has a lot of smart, well-educated people and could be a leader in high tech, manufacturing, and other value-added industries.

However, successive governments have watched as high tech gets taken over by Americans or goes bust(Nortel, Corel, Blackberry, Spar Aerospace …)

Government does not create industries or tech jobs. It gets in the way of such industries and jobs. The US has a smaller government than Canada but they lead in tech. Can you connect the dots?

The government did not start Microsoft, Apple or Google. These were started by smart entrepreneurs who did so because the government was not in their way. They were started in basements and garages. They have continued to be successful because they can attract top talent from around the world. You know, that talent you feel should be taxed to death in Canada.

A perfect example of government getting in the way is Uber. A budding tech company that wants to come into Canada, create jobs, improve transportation and lower costs for average Canadians but you have government regulation at every level trying to stop it.

Bigger government, more regulation and carbon taxes that comes with the Liberals and NDP make things worse. Higher income taxes make top talent unavailable in Canada and all we have left is people like you who can do nothing more than complain.

#101 Trojan House on 12.13.15 at 6:44 pm

#16 BC Guy on 12.13.15 at 2:35 pm

Spoken like a true socialist! Hate everyone around you that has more than you. Perhaps if you were innovative and entrepreneurial you wouldn’t be whining about other people’s money…or trying to steal it for yourself.

#102 Trojan House on 12.13.15 at 6:46 pm

And by the way, there is no such thing as man-made climate change!

#103 Leo Trollstoy on 12.13.15 at 6:51 pm

What is seen today in Alberta is the consequence of the policies brought about 5-10 years ago by the AB PCs and Fed CPC.

Give it up already.

The NDP and Libs need to embrace their failure.

It will be epic.

#104 Washed Up Lawyer on 12.13.15 at 6:53 pm

Garth:

I am doubtful that Canada Post could get my seasons greetings to you from the banks of the mighty Athabasca to 416 on time so I deliver them via electrons. I owe you a debt for your efforts that I cannot repay. Just like the rest of my debts.

I hope you, Dorothy and Bandit have a swell solstice in about 8 days and that when the calendar turns to 2016, you find yourself in a climate that is balmy but not 2 degrees overheated.

Yours,

WUL

#105 When will they raise rates? on 12.13.15 at 6:53 pm

#90 BS
If someone gets a billion dollar payout they will pay at least 25% of that in tax all at once. That is about $250 million over and above the taxes they already pay. On the other hand a Nurse may pay $20K in tax in the same year. They both use similar services. So yes this is unfair to the Keurig founder who will pay well over 12,000 times more tax than the Nurse while receiving the same services.
—————–
You just destroyed that guy’s argument like a boss.

Lol nice… I’m going to file that one away for the next time my lefty friends try to make that argument!

#106 Keith in Calgary on 12.13.15 at 6:53 pm

#60

The only problem with what you said is that it is warm in those countries.

#107 Jim Bentein on 12.13.15 at 6:55 pm

I agree with almost everything you write. Obviously Canadians’ obsession with housing will not end well. History repeats itself.
But, as someone who writes about the energy industry (I live in Mexico and have become one of the few Canuck journalists writing about the dramatic oil and gas and electricity reform here) I know a thing or two about the sector.
While the various climate plans and taxes will trim the growth of the oil sands, it won’t stop it in its tracks, as you imply. That’s because 800,000 barrels daily of new oilsands production will come on line by 2018. That’s an increase of about 30 percent. Can’t be stopped. And the Alberta NDP’s new climate plan allows for about another 30-40 growth. It’s still a very large industry. Despite the abundance of oil, the oilsands producers have a ready market on the U.S. Gulf Coast, where refineries are designed to process oilsands bitumen.
Yes, things are bad. But there’s still growth.
And the new NDP climate plan, by forcing coal-fired power plants to close, creates a market for Alberta’s natural gas.
Also, don’t forget that Alberta still has the Heritage Fund, no provincial debt and no sales tax.
That doesn’t mean Canada’s economy won’t be hit by the collapse in resource prices, nor that real estate in Alberta won’t be hit – and already has.
And those equalization payments that the Feds have been able to make, thanks to the Alberta “boom”. Say adios.

#108 Ronaldo on 12.13.15 at 6:58 pm

#86 Suede –

”YVR and YYZ housing has become 30% cheaper to the Yankees.

That’s how you buy a Vancouver SFH for 780k.”

Funniest post so far today. Why would an American buy a house in Canada for $780,000 when he could buy 3 back in his own country for the same price. And, not teardowns either.

#109 ALBERTASTROPHE on 12.13.15 at 6:59 pm

Speaking of that, the politics of climate change is a kiss of death…… This may well be the end of the oil sands business.

——————————————–

Exactly what I have been saying since the fall of 2014.

The plug has been pulled on old Alberta, and a DNR order has been issued.

But way too many people just don’t get that.

While there is still confusion, anyone who might remotely want to sell their Alberta homes would be advised to do so immediately, undercut other sellers by 10-20% and get a deal done quickly.

It’s now too late to expect prices similar to what applied before November. But at least you can stave off a 30-40% loss in 2016 if you act swiftly now.

This will get much worse. You don’t want to be holding on to any real estate in Alberta in 2016 onwards unless you plan to leave it feet first.

#110 BS on 12.13.15 at 7:01 pm

I have been reading a lot of articles about what effect the new mortgage rules will have on the Canadian Real Estate market. Some analysts believe that the new mortgage rules will have no effect on houses under $500,000. Others believe that new rules will have a negative effect on prices under $500,000. Some believe that new mortgage rules will increase house prices for this range. So who do who believe?

The realtors will always try to come up with a reason why you need to buy now. Ignore what they say.

I doubt there will be much difference between sub $500K and above $500K because the increase in DP is gradual. The difference between $500K and $550K is $2500. Not much to impact the market.

When CMHC capped insurance at $1 million that made a big jump for DP requirements over $1 million ($150,000+ extra) so that did have an impact on houses over $1 million until people discovered private sub prime lending to increase the DP.

#111 [email protected] on 12.13.15 at 7:04 pm

Hey Garth (or interested blog dogs),
What about US Bond or Preferred etfs? I should be filling up on Canadian pref etfs but why not US versions?

No dividend tax credit. — Garth

#112 nnso on 12.13.15 at 7:08 pm

” … war on successful people …”

Taxes should not be based on the amount of income. It should based on moral code. ill-gotten gains deserve 100 percent tax rate.
Former President Reagen advisor Dinesh D’sousa 1.33 to 2.33 on the video
https://www.youtube.com/watch?v=Hu7f16vhmBU

#113 common sense on 12.13.15 at 7:12 pm

Can we have a rate raise or no rate raise poll for this week just for giggles sake?

#114 kommykim on 12.13.15 at 7:15 pm

RE:

#27 kc on 12.13.15 at 3:11 pm
I commented that if we (Canada) goes negative I refuse to pay you blood suckers more than you deserve.

There won’t be negative rates at the consumer level. It will be negative for when a bank wishes to park cash at the central bank.
But then service charges on a 0% banking account effectively are NIRP at the consumer level. Just like a 0% car loan is not really 0% when the dealer offers a $3,000 cash incentive.

#115 For those about to flop... on 12.13.15 at 7:15 pm

#91 ben on 12.13.15 at 6:21 pm
#87 – it’s anecdata. I went out today in Montreal and there were many people out buying stuff. Now it’s 1-1. How to decide? Decide not to believe anecdata if I were you.

///////////////////////////////////////////
Went to the same supermarket ,at the same time and the place was empty compared to normal yesterday.
I said to the wife ” where is everyone?”
Her reply “at the mall!”
So I said “yeah coz no one has to eat at Xmas time!”
I think in hindsight it was a combination between holiday shopping and the fact that it was a filthy day in the Couv yesterday .

#116 Stoopid Idiot on 12.13.15 at 7:17 pm

http://business.financialpost.com/news/economy/major-economic-shock-needed-before-bank-of-canada-implements-unconventional-monetary-policies-poloz-says

This is of course an article to ‘tenderize’ us a bit in advance before the actual event, lol. If you are following what is going on in some European countries…some of the serfs who have money at any bank many be on the edge of a new discovery….their money, instead of earning a minuscule rate of interest, are to be charge with negative interests (and increased banking fees).

As this comes into reality, governments globally are speeding up the process as fast as they can through a series of ads, campaigning and paper money slandering to get the peons used to the fact that paper money is on the verge of disappearing. Banks and Governments do not wish you to pull out cash and store it at home… Governments globally want digital money only so it can be traced, tracked and taxed. Banks want it so they can continue to skim your accounts and there is nothing you can do about it.

This negative interest rate is a collaboration of global central banks and their respective users…ie. governments. So much debt is out there now that there isn’t a government (or a nation’s people) that can ever pay it off…the net debt just keeps getting rolled over at lower and lower rates. The debt cannot be paid and the low to negative rates insures (at least for now) that the debt can can be continued to be kicked down the road for a bit longer.

Here in Canada…I was so happy to hear Puppet Trudeau (you know…as opposed to former Puppet Harper, lol)…that his plan was to increase the deficit for the next 3 years….

#117 Mark on 12.13.15 at 7:21 pm

“How does one track institutional buying and to find out what percent of a ETF does institutionals have”

(Other) mark, if the ETF offers an institutional discount on management fees, or fee rebates, you might be able to look at the financial reporting for the fund, and reverse-engineer the magnitude of these rebates or discounted fees as a percentage of the fund accordingly.

XIU, Canada’s largest ETF, once claimed that it had approximately $7B of its fund owned by institutional clients:

https://web.archive.org/web/20130224075031/http://ca.ishares.com/resources/basics.htm

In terms of real-time information, I’m not aware of any sources. XIU itself may be the subject of certain arbitrage strategies involving listed futures and options, so the true net position exposure of institutions may not be captured simply by outstanding unit issuance numbers.

#118 earthboundmisfit on 12.13.15 at 7:21 pm

With ZPR off 28.55% (my time frame) it’s increasingly hard to remain faithful. But I do.

#119 Mark on 12.13.15 at 7:29 pm

“You tell’em Mark… What does Peter Schiff know compared to the deflationary genius?… Sorry – couldn’t resist. ;-)”

He refuses to acknowledge the deflationary thesis, or even that the Fed could, at least for the medium term, achieve monetary stability (which they obviously have, since we’ve had ~2% inflation for the past 4-5 years and little instability until quite recently!). That’s the problem, which is why his gold and resource-stock heavy portfolios have been decimated and the people investing with or alongside him have experienced dramatic losses.

He’ll probably be right in the long term, just like he was in housing. But didn’t someone famous once say, “the market can remain irrational longer than you can remain solvent”?

“With respect to engineers working as engineers… I don’t think it refers to them being blocked out of their chosen profession… I know many engineers working in businesses and not in their fields of education. They basically can do any role they want due to being in such high demand.”

If you read the OSPE study, that was proven not to be the case, with engineers working in non-engineering roles not even earning as much as engineers working in the scarce engineering roles. And a significant number of engineers not even able to find employment in occupations that even require post-secondary education. So much for ‘high demand’.

#120 Sam the Sham on 12.13.15 at 7:30 pm

OK Garth, you’ve shown us the shit, now where’s the pony? (to paraphrase Ronald Reagan)

#121 For those about to flop... on 12.13.15 at 7:31 pm

#80 Freedom First on 12.13.15 at 6:06 pm
Wow! Today’s Blog mood is eerily similar to the conversations now going on among the Alberta populace. Not happy and positive. Albertans are now wide awake and fully aware of what is going on. Denial is dead.

I am stunned by the number of people who are openly revealing how they are now cruising on credit cards to make ends meet, and how much they owe on them. The numbers are frightening. Well into 5 digits. Some of these people were supposedly high rollers until this downturn. Flipping with leverage, their words.

Yes, Preferreds are on sale. I shared here recently that I bought them, among other ETF’s and Bonds I own. I am reminded today just how important it is for me to be diversified and have 0 debt.

I remind myself today, stay calm, no fear, no greed, enjoy life.

I have been living my Freedom First lifestyle for decades, and Garth has helped me refine my financial acumen, but even more importantly, provided me with an oasis of financial sanity in a one asset financially insane world of brainwashed idiotic house lusting lunatics. And all being done with knowledge, wit, humour, and a very interesting and much appreciated wide variety of fabulously entertaining blog dawgs.

I must be nuts.

/////////////////////////////////////////
Well at least you got one thing right!

#122 Brian Ripley on 12.13.15 at 7:34 pm

“Over 80,000 jobs have been erased in Alberta in 2015, most in oil and construction. Garth”

The erasure began with the plunge into the 2009 pit of March 2009 according to my Canadian Employment Rate Chart:

http://www.chpc.biz/earnings-employment.html#Rate

The employment rate rallied for a couple of years after that but since then it has been downhill with lower highs. The Ontario Employment Rate only recently turned down after an awesome rally in 2015 as labour shifted out of Alberta and into Ontario. The BC Employment Rate is still rallying in 2015.

More smoke than mirrors I bet.

#123 Blobby on 12.13.15 at 7:36 pm

I’ve said it once, i’ll say it again. I’m convinced the Conservatives saw this coming (how could they not?) – and lost the election on purpose.

#124 betamax on 12.13.15 at 7:39 pm

#35 inventions: “Anyone can check out what Lululemon invented and make their own assessment of the value those inventions brought to mankind.”

Lululemon popularized the wearing of women’s yoga pants outside of the yoga studio.

That’s extremely high value to me. Right up there with the printing press, the airplane, and lobster bibs.

#125 Nanaimo Bar on 12.13.15 at 7:40 pm

# 77 Ben and #108 BS

Thanks for reponding to my post.

Ben voted that new mortgage rules will have no effect on prices in Victoria for houses priced under $500,000.

BS voted that the new mortgage rules will an negative effect on Victoria house prices.

I do not own Canadian Real Estate nor do I plan on purchasing Canada in the future. I’m just the scorekeeper.

#126 Carlitos El Magnifico on 12.13.15 at 7:43 pm

“Dogs personify goodness. Cats don’t. — Garth” — Precisely why I have four.

#127 Nagraj on 12.13.15 at 7:45 pm

The road was a ribbon of moonlight up to the dismal Inn on the Moor, where only two travelers lay lodged this Night Before Ratemas.

One, Sir Turner, slept soundly snoring, Fidelio his faithful hound, curled up at the foot of the plain wooden bed.
Shadows of clouds racing past the full moon played freely on his dream-free night-capped head.

The other guest, silk-gowned Lord Doomergloomer, in a cherub-carved and crimson velvet-draped four poster, lay tensely awake, aided by candlelight and Port, memorizing “The Highwaywoman”. Repeating “riding riding riding by” for his celebratory recital of it the next day – Thursday.

Twas Wednesday night, the Night Before Ratemas, and Sir Turner and Lord Doomergloomer had made a fateful wager as to the arrival, at the Inn on the Moor, of this daring Lady Ellen – would she or wouldn’t she?

The wind was a torrent of darkness among the gusty trees, the moon a ghostly galleon tossed upon cloudy seas, the road still a ribbon of moonlight over the purple moor – will Lady Ellen come riding riding riding up to the old Inn door? Or ride by?

[with grateful acknowledgement to Alfred Noyes]

#128 BC Guy on 12.13.15 at 7:48 pm

Can a European law solve Canada’s housing problem?

http://globalnews.ca/news/2398391/has-europe-found-a-fix-to-b-c-s-housing-crisis/

Vacant houses are taxed 10 to 25% per annum.

This forces the owners to offer the properties to rent for as little as $200 Euro/month.

Love it.

You would. — Garth

#129 Register This on 12.13.15 at 7:50 pm

Hey Garth (or interested blog dogs),
What about US Bond or Preferred etfs? I should be filling up on Canadian pref etfs but why not US versions?

No dividend tax credit. — Garth

——-

What if it’s in a registered account?

#130 Inflation Nation on 12.13.15 at 8:01 pm

@ #55 Mark

You mentioned Peter Schiff and how he’s been saying there is inflation, but you think he’s wrong. Well I think you’re wrong. Take a look at the stock market, housing prices (yes, even in the US). Take a look at borrowing for car loans, borrowing for school to the point tuition prices are insanely high. Yeah, no inflation in your book. Cheap money causes inflation and it can be defined to certain sectors like housing, tuition, and the auto market (funny how you can now get an 8 year car loan now). Look outside of food and energy and you will see lots of inflation propped up by cheap money. Take that away and the hot air cools.

#131 Scott on 12.13.15 at 8:03 pm

#91 Guess I’m just a sucker for ancedotes.

#132 small minds, big mouths on 12.13.15 at 8:15 pm

#103 When will they raise rates? on 12.13.15 at 6:53 pm

#90 BS
If someone gets a billion dollar payout they will pay at least 25% of that in tax all at once. That is about $250 million over and above the taxes they already pay. On the other hand a Nurse may pay $20K in tax in the same year. They both use similar services. So yes this is unfair to the Keurig founder who will pay well over 12,000 times more tax than the Nurse while receiving the same services.
—————–
You just destroyed that guy’s argument like a boss.

Lol nice… I’m going to file that one away for the next time my lefty friends try to make that argument!

—-

Taxation is not based on the provided services.

Even if it did, the CEO does not earn his money as a sole proprietorship.

There is huge infrastructure investment in all modern economies to support the growth of companies.

The CEO of Coca Cola may not use more the roads, built from public funds than a nurse, but the Coca Cola trucks will use them “12,000” more than all the nurses in the country.

No country will ever start a war for a nurse, but history is full of wars, defending economic interests, owned by private investors.

#133 common sense on 12.13.15 at 8:15 pm

#119 Flopper.

Beautiful, just beautiful…..

#134 not 1st on 12.13.15 at 8:20 pm

2016 will be the year Garth eats crow on the US.

Every single country in the world is in either slowdown or outright recession or has lowered rates or devalued currency or implemented QE.

So one country out of 200 is going to buck the trend? Not a chance. The fed raises, the market rallies out the year but its all given back and more in Q1. Book it

It’s not a Garth thing. Current odds of a hike among US experts and market participants is 76%. — Garth

#135 Smoking Man on 12.13.15 at 8:25 pm

HI USD hurting cross boarder shopping.

Amazing Deals at Van Huson
3 dress shirts
3 sweaters
1 Hat

$35.00

Took this photo at noon today.

http://dyslexicsmokingman.blogspot.ca/2015/12/outlet-mall-niagara-falls-ny.html

#136 Daisy Mae on 12.13.15 at 8:29 pm

“Canada is still a rocks-and-trees kinda nation. Until this year oil was our biggest export.”

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

So….thanks to the inept ‘Harper Government’ we’ve put ‘all our eggs in one basket’. Is that what yer sayin’? Disgusting performance.

#137 Mark on 12.13.15 at 8:31 pm

“It’s not a Garth thing. Current odds of a hike among US experts and market participants is 76%. — Garth”

The 2-30 year portion of the US Treasury yield curve has actually fallen month over month. On account of duration, those participants have a lot more ‘skin in the game’ than the short-term money market traders.

Inversion is almost always a slam-dunk recession, so how much room is there really to hike?

#138 For those about to flop... on 12.13.15 at 8:32 pm

#133 common sense on 12.13.15 at 8:15 pm
#121 Flopper.

Beautiful, just beautiful…..

///////////////////////////////

He’s gonna write back calling me a D.H.
But that’s o.k I’m alright at being the Designated Hitter!

#139 preferred question on 12.13.15 at 8:34 pm

Garth, you write “the issuer can, at their option, “call” them back from investors at par in exchange for cash.”

Can in this environment the price of preferred shares decline to a point where the issuers are tempted to buy them back, making investors to hold the bag for the value of the price drop, especially if it is bigger than the dividend?

#140 Smoking Man on 12.13.15 at 8:35 pm

It’s not a Garth thing. Current odds of a hike among US experts and market participants is 76%. — Garth

Fed credibility on the line, absolutely insane to spike right now.

Just one and done, then reverse.

Did you see the pic from my previous post.
Have you seen the Eur get totally sloghtered by the USD

#141 Leo Trollstoy on 12.13.15 at 8:37 pm

The U.S. economy is the best. I’m lovin it.

#142 TurnerNation on 12.13.15 at 8:37 pm

Say where are those fancy pants hedge fund sonofabitches who are short selling Canada?

Well done boys.

Soon, certain Prarie subdivisions to resemble Syrian refugee camps. No fault of the Syrians. No, Canadians will living three families to a house, 800k Mcmansions banks can’t unload for half as much due to massive tax and utilities bills due monthly
Food inflation will make plain rice seem luxurious.

Yes we are a 2nd World country now. Lil T just gave billions of our cash away to prove it. Global agenda.

#143 inventions on 12.13.15 at 8:41 pm

#122 betamax on 12.13.15 at 7:39 pm

#35 inventions: “Anyone can check out what Lululemon invented and make their own assessment of the value those inventions brought to mankind.”

Lululemon popularized the wearing of women’s yoga pants outside of the yoga studio.

That’s extremely high value to me. Right up there with the printing press, the airplane, and lobster bibs.

===

Imagine if you signed up for class.
It might shake your weak ego.

#144 BS on 12.13.15 at 8:41 pm

The CEO of Coca Cola may not use more the roads, built from public funds than a nurse, but the Coca Cola trucks will use them “12,000” more than all the nurses in the country.

We were talking about an individual’s taxation on the sale of a company. The company already pays many layers of taxes to cover the cost of the infrastructure to support it. Coca Cola for example pays billions every year in corporate tax, fuel tax, property tax, etc. The sale of the company or its shares requires no additional infrastructure and is a paper transfer of ownership. The government gets the $250 million (or what ever the tax is) for free and provides nothing directly to facilitate this that is already more than paid for in other taxes.

#145 David McDonald on 12.13.15 at 8:44 pm

Climate change is real but is it even possible to sustain our standard of living without burning hydrocarbons? Our electrical power generation capacity doesn’t come close to our power needs for transportation. I doubt the oil industry is finished unless somebody succeeds with nuclear fusion technology.

#146 For those about to flop... on 12.13.15 at 8:49 pm

I’m not really a Xmas person but a new trend that I have noticed catching on this year is people instead of getting up on ladders and hanging Xmas lights and all that physical stuff are simply installing a green and red bulb on the main exterior lights of their houses.
Not to sure if I would put a red bulb out the front of my house, in some parts of Vancouver that could be an invitation for a bit of extra curricular activities if you know what I mean!

#147 GB on 12.13.15 at 8:49 pm

You’re such a riot. — Garth (In response to BC guy post #16)

That’s a tad harsh in my opinion. BC guy was simply laying out the simple fact that prosperity always…always runs straight through the security of the middle class.

In recent years in Canada we have witnessed a shocking divide between the wealthy and the rest. The middle class has been shrinking to the point that had the trend continued…there would not be a middle class in Canada anymore.

A recipe for disaster.

History demonstrates that economies do better with a well paid, secure middle class. Over the years, the “wealthy” kind of understood this and tended to do the right thing knowing that they would prosper.

Somewhere along the way, the wealthy got greedy and started to find ways to undermine the average worker.

Trudeau’s “tax the rich” idea may be short sighted and ultimately unsuccessful…but it’s at least tilting the wheels of disparity back in a direction that is better for the economy writ large.

If you don’t see that Garth…I find that shocking actually.

I see a middle class making myopic, self-destructive decisions, embracing debt and blaming others for the inevitable outcome. What, exactly, did you think this blog was about? — Garth

#148 common sense on 12.13.15 at 8:52 pm

#135 Smokie

I cross the border 5 times a week and honestly have not seen it so slow in years….traffic on the bridges, at the malls, restaurants, etc…absolutely errrrriiiieee.

Is it everyone finally feeling a Leahy moment aka SHIT STORM acomin’ or simply debt ladden tapped out consumers?

Of my clients in gas retail, retail, fast food and beverage centers, the only business UP this year across the river is the beverage centers…beer, wine and alcohol sales doing well…it will be curious to see who or what closes in Jan 2016.

#149 BS on 12.13.15 at 8:53 pm

So….thanks to the inept ‘Harper Government’ we’ve put ‘all our eggs in one basket’. Is that what yer sayin’? Disgusting performance.

And thanks to the T2 Liberals and Alberta NDP we are putting our eggs where? What is the plan exactly other than to shutdown oil?

Better to invest and promote energy than do what? Spend and tax, suppress investment in energy, force out talented people from Canada through taxation? Make it harder to start a small business? These governments have no plan for anything other than to borrow money and spend it. Much of that spending in third world countries to reduce carbon. I hope you do know they can only borrow so much money and that money has to be paid back?

Four years from now people will be begging for the Conservatives to come back in power in both Alberta and federally.

#150 booyaa on 12.13.15 at 8:57 pm

Work for an equipment rental company with branches throughout canada. Things turned to poopoo the last few months to say the least. Tonnes of trade guys trying to stay afloat with cash jobs – went from making 200K per year to 20K next year if they are lucky. Was heavy in maple so have been sufficiently bruised thus far and more pain to come i’m sure. Don’t really feel like buying US stocks at 73 cent dollar. Where’s that scotch again?

#151 Someone from Scarborough on 12.13.15 at 8:59 pm

Just wondering, If I want to invest right now or early Jan 2016 – where should I invest?

From this blog, I understand that self directed ETF seems to be a good idea.

Then where do I start?

What ETFs follow a great Index?

I can see Questrade Managed ETFs – conservative, Balanced, Growth and similar. I see US exposure probably is around 13%, Canada might be similar

Should I be worried about Exchange Rate? My funds are in CDN$. The exchange rate will cause some loss I assume (i.e. I have to pay more for the same asset now than if I bought in the past (if priced in US$ and US ETF)- it may seem to be right and wrong).

I do not have mention able experience in investing.

Assume I am planning 35K as investment for now on the personal side – to start with.

Thinking should I invest more from my independent consulting business? Does it work well?

Also, is it better to buy a car (from corporations side) priced 31.5k+hst in cash?

or pay $0 downpayment -> finance the rest at 0.99 or 0.49%

or pay 10k down and finance the rest :

finance available: 0% for 24 months, 0.49 for 36 months, 0.99 for more than that.

what makes the best financial sense?

#152 Daisy Mae on 12.13.15 at 9:01 pm

“This is the essence of a condo economy, where more and more activity is generated from people selling real estate to each other, rather than products to the world.”

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

What a disaster. What foolish decisions the former government made. How vulnerable we are.

Canadians actually have it all here in Canada. I suppose there’s a reason to rely on the global economy but actually we have it all — fuel, forestry, agriculture, manufacturing. Oh well, I guess I’m being naïve….someone please tell me where I’m wrong?

#153 saskatoon on 12.13.15 at 9:02 pm

#16 BC Guy

ALL taxation is unethical–unless voluntary.

it is theft; it is the initiation of force.

#154 waiting on the westcoast on 12.13.15 at 9:03 pm

“Lululemon popularized the wearing of women’s yoga pants outside of the yoga studio.That’s extremely high value to me. Right up there with the printing press, the airplane, and lobster bibs.”

+1 – Lululemon has contributed more to world peace than the thin blue line. Men can only focus on one thing at a time…. Once attention is captured, we have lost our will to fight. CIDA should be sending these outfits outfit globally as part of it foreign aid packages. ;-)

#155 Smoking Man on 12.13.15 at 9:05 pm

Damn, 2016

Nectonites to be outed Washington posts says.

https://www.washingtonpost.com/lifestyle/style/ufo-truthers-want-to-make-roswell-an-issue-for-2016-meet-their-lobbyist/2015/12/11/391c9542-9ab0-11e5-8917-653b65c809eb_story.html

#156 old gringo on 12.13.15 at 9:09 pm

Latin American country to get record payout from crude hedge
Mexico locked in 2015 oil sales at $76.40 a barrel with banks

Mexico is set to get a record payout of at least $6 billion from its oil hedges this year, according to data compiled by Bloomberg.
The Latin American country locks in oil sales as a shield against price declines through a series of financial deals with banks including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. For 2015, Mexico guaranteed sales at almost $30 a barrel higher than average prices over the past year.
The 2015 payment, due next month, is set to surpass the record from 2009, when the Mexican government said it received $5.1 billion after prices plunged with the global financial crisis. The country’s crude has fallen by almost half over the hedging period so far this year. Crude sales historically cover about a third of the government budget.
“The windfall is huge,” said Amrita Sen, chief oil analyst at Energy Aspects Ltd., a London-based consulting company. “This gives Mexico breathing space.”
The hedge, which runs from Dec. 1 to Nov. 30, covered 228 million barrels at $76.40 each for the Mexican oil basket, according to government documents and statements. With less than two weeks to the end of the program, the basket has averaged $46.61 a barrel over the period.

#157 Mark on 12.13.15 at 9:11 pm

“Can in this environment the price of preferred shares decline to a point where the issuers are tempted to buy them back, making investors to hold the bag for the value of the price drop, especially if it is bigger than the dividend?”

Boards of Directors are always comprised of people who own (or represent) the interests of common shareholders. So if there is cash available on the balance sheet after all non-discretionary dividends are paid and appropriate reserves/liquidity, generally they would initiate common share buybacks or dividends. And let the investors in the corporation determine if they want to own the more senior form of securities (ie: preferred shares).

Now, some preferred share issues may have restrictive covenants which either require the issuer buyback of the preferred shares (sometimes called a retraction right). But many don’t. The existence of a restrictive covenant essentially forcing the matter would be the only reason I’d imagine why a corporation would want to buy back already-issued preferred shares in a rising rate/falling preferred price environment.

#158 the Hammer on 12.13.15 at 9:11 pm

Regarding bcguy
I am a life long member of the proliteriate who knows where his bread is buttered. I have just waved my magic wand and you shall soon be transported to a totalitarian Marxist utopia of my choosing…say…Ukraine circa 1932? How ’bout it Mr. Too-tight-suit? What a maroon.

#159 Paul on 12.13.15 at 9:11 pm

#136 Daisy Mae on 12.13.15 at 8:29 pm
“Canada is still a rocks-and-trees kinda nation. Until this year oil was our biggest export.”

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

So….thanks to the inept ‘Harper Government’ we’ve put ‘all our eggs in one basket’. Is that what yer sayin’? Disgusting performance
——————————————————————–
Daisy,Give it an F’n Rest Justin won didn’t you know?
He got wheel now I’m sure it will end well.

#160 GB on 12.13.15 at 9:12 pm

I see a middle class making myopic, self-destructive decisions, embracing debt and blaming others for the inevitable outcome. What, exactly, did you think this blog was about? — Garth

Hard to disagree with that for sure. I never said the average “middle classer” was fiscally intelligent.

Although a valid point, that was not the central point of my comment.

The point was to say that taxing the wealthy is probably a fine thing to do seeing how they have lost sight of how prosperity tends to work.

That being…pay your workers appropriately, give them some security and benefits, and the bottom line will take care of itself.

The “wealthy” seem to have lost sight of this fundamental economic concept. Frankly, if the wealthy are unable to control their own greed, then it makes good sense economically for a government to force them to pay more.

As much as you appear to dislike Trudeau’s plan to help the middle class (and I agree it’s probably not going to do much of anything), at least the narrative has changed in a positive direction.

But ya…people in general are fiscally inept. Wealthy, middle class or lower class.

If I see one more dork driving a F-250 around on a 60K salary…geesh.

financial ineptitude has been consistent through the ages though. That will never change.

#161 Bottoms_Up on 12.13.15 at 9:14 pm

#27 kc on 12.13.15 at 3:11 pm
———————————
As Garth said the banks will never go negative. But also you’re forgetting the negative rate is for between bank lending, that doesn’t mean rates on personal accounts would be negative?

#162 Sean on 12.13.15 at 9:19 pm

“They went from 0 to $250 Billion in annual sales”

Guessing you meant “million” :)

#163 Dirty Debtor on 12.13.15 at 9:23 pm

Agree with you on all points Garth – Except this being the end of the oil sands business.

The Paris talks were a great photo op, but when oil does rebound (even if it takes a decade), Money will still talk. They’ll be sucking that juice out of the ground if a profit can be made, carting it to the ports by train, and though some may slander it, the majority won’t care where it came from.

#164 paul on 12.13.15 at 9:23 pm

#123 Blobby on 12.13.15 at 7:36 pm

I’ve said it once, i’ll say it again. I’m convinced the Conservatives saw this coming (how could they not?) – and lost the election on purpose.
————————————————————-
Lol

That thinking means the Liberals didn’t see it coming and went out and won.
If that’s the case they are not smart enough to run the country and should not be in power.

#165 Howl at the moon on 12.13.15 at 9:24 pm

#155 Smoking Man on 12.13.15 at 9:05 pm
Damn, 2016

Nectonites to be outed Washington posts says.

https://www.washingtonpost.com/lifestyle/style/ufo-truthers-want-to-make-roswell-an-issue-for-2016-meet-their-lobbyist/2015/12/11/391c9542-9ab0-11e5-8917-653b65c809eb_story.html
—–/
Yeah ok… Are u invited?

#166 BobC on 12.13.15 at 9:30 pm

#58 Saskatoon

I’m asking because I like to try to understand people. I appreciate it when I’m corrected or debated with. You could have said what you did in many different ways.
Do you feel big? Smart? Or just wanted to be an a$$hole?

#167 Smoking Man on 12.13.15 at 9:30 pm

Sherly Valentine

This pilot saw the orange plasma ball. Looking at our logs from back then

Barrington, took one of his students for a flying saucer ride… They’re getting married in three years.

This guy use to Fly Obama around, he saw Barrington machine.

https://youtu.be/om7hGG-49wA

#168 Renter's Revenge! on 12.13.15 at 9:31 pm

#150 booyaa
Don’t really feel like buying US stocks at 73 cent dollar.

Do it anyway. Whatever your feelings are, when it comes to investing, they’re wrong. You’re suffering from “anchoring”. You didn’t buy US stocks when the cad was at par, and now you want to wait for it to go back before buying. Don’t wait.

#169 Mark on 12.13.15 at 9:32 pm

“what makes the best financial sense?”

That’s a lot of questions you’ve asked there. The first thing I’d tell a businessperson like yourself to do is to understand your cost of and available sources of capital. Whether it be your personal investment, various sorts of bank loans, etc.

Once you understand what your true costs are, you can approach decisions in your business somewhat analytically, seeking out positive NPV’s for your business decisions, and rejecting decisions which do not meet the NPV > 0 criterion.

As far as car loans go, typically those advertised “0%” deals are really 4-5% deals, as one is required to forego a large cash discount. And on cars specifically, you have to be very careful to delineate deductible business expense, with personal use as your business would need to issue a T4 as a taxable benefit if a business car is used for personal business. Sitting down with a suitably qualified accountant and having a discussion of your affairs, tax optimizations, investments, and these matters is well worth your time and money.

#170 JimH on 12.13.15 at 9:39 pm

#58 saskatoon on 12.13.15 at 4:42 pm
#352 JimH on 12.13.15
” here is one of hundreds of links to verify that…
YOU ARE WRONG.
http://www.economist.com/blogs/economist-explains/2015/03/economist-explains-5
“To carry out QE central banks create money by buying securities, such as government bonds, from banks, with electronic cash that did not exist before. The new money swells the size of bank reserves in the economy by the quantity of assets purchased—hence “quantitative” easing.”
=================================

Several faults in the Economist’s article which you failed to either comprehend:

1. in an asset swap, banks in the USA did in fact see their reserves swell in proportion to the bonds removed from them and handed over to the Fed. This “Inside Money” transfer did not in any way increase the dollars in circulation. The Fed auctioned the Bonds and the proceeds went to the Treasury.

2. Banks do not lend out reserves. (this is why the ‘money multiplier’ is a myth and why QE did not result in inflation in the USA.)

3. QE as is now employed in the EU is very much more like fiscal policy than was QE in the USA, and the writer if the Economist piece should have known better and pointed out the differences in various forms of QE. They are passing on their ignorance to you.

4. As for reading comprehension, can you understand “Asset Swap” as opposed to simple bond purchases? Do you begin to comprehend at all why QE in the USA did not result in runaway inflation??? According to your simplistic and dead wrong model, it most certainly would have.

I included a link for you to examine in my previous post. It will stain your intellectual abilities, I know, but give it an honest try. Cullen Roche has been way ahead of the curve on this one. Also, Krugman and the Bank of England have published several papers and articles on money creation and QE.

Try to keep up.

#171 Trading Naked on 12.13.15 at 9:45 pm

#27 kc on 12.13.15 at 3:11 pm

She wasn’t hired for her understanding of central bank shenanigans. She’s being paid to smile, say your name three times during the transaction, and upsell you a full-fee banking package. I was hired as a teller a few years ago and I used to butt heads with management about this kind of thing (naive as I was) before I learned to fall in line. Normally they prefer to hire people with no prior banking knowledge because those employees are easier to indoctrinate. Not sure how I slipped through the cracks – I didn’t play dumb at the interview so I guess they underestimated me.

#172 Ole Doberman on 12.13.15 at 9:51 pm

Gartho – as usual I’m confused.

Why 40% in bonds, if rates go up bond prices go down.

Also if a company on a CAD exchange is earning USD – then wouldn’t this be the place to concentrate capital?

Thx bro

I agree. Confused. — Garth

#173 wade on 12.13.15 at 9:58 pm

Im just in the hong Kong airport and its making me more than a little concerned about there economy. ….I simply put my head down to temporarily rest after an expensive meal an someone stole my water…..what’s worse is that the women indigenous to this local have flat bums….

#174 Panhead on 12.13.15 at 9:59 pm

#115 For those about to flop… on 12.13.15 at 7:15 pm

I think in hindsight it was a filthy day in the Couv yesterday .

Yeah … and that’s putting it mildely.

#175 Love my Kia on 12.13.15 at 10:00 pm

Dogs are dumb.

If there was a contest of who is better at investing, cats would definitely be the better investor of the two species. Cats do nothing unless it is advantageous for them. Shrewd, and very smart indeed. Dogs are like people, play and eat and never think about tomorrow.

I love my cat!

#176 SWL1976 on 12.13.15 at 10:05 pm

Everyone I know who works or lives in Northern Alberta says…

If this is global warming – bring it!!!

It’s a little short sighted from my point of view, but I know not to argue as I’ve read the comments section here and do know how fast a conversation about climate change can can turn against anyone. Anyone. Sadly I do spend half my days here these days and have not seen it colder than -16 yet, and that was only for 1 day. To deny climate change at this point is the equivalent of taking a shower and saying you didn’t get wet.

Now that being said, I know full well and understand the global agenda that is at play here folks, and if you think things are going to get better by voting for change you’re a dinosaur.

News flash; those days are long gone… We have now entered the 21st century where we are owned by the state, and our thoughts will be monitored and could be considered crimes…

Also… Pay up for everything. Everything.

I know a few people here in Alberta who recently locked into houses, and I can tell by the look on their faces that the honeymoon is over and reality is setting in. Not only are they locked into a depreciating liability, their house, but with that they also locked into a declining and ever more depressing job market. Some of us seen it coming long ago; others not so much.

Navigating the coming years is going to take some unconventional thinking. With all the lies, deceit, deception and misinformation of disinformation; denial will soon no longer be an option. The herd will soon have accept their fate…

No matter what that fate may be…

Maybe that’s the plan.

#177 Tom on 12.13.15 at 10:06 pm

I’m glad the Govt is introducing a carbon tax. Maybe the new regime will take global warming seriously. The govt is not a socialist govt. The last govt ruined Alberta by creating overdependence on oil at the expense of other industries and was too stupid and short sighted to charge more for oil leases until it was too late. They also blew the Heritage Trust fund, this could have been a huge contributor to the province but that is what happens when you get a right wing conservative corrupt government running the province for 30 years.. But maybe the “socialist government” will hand out welfare and unemployment insurance checks to all the unemployed–or is that socialism?

#178 Suede on 12.13.15 at 10:09 pm

“Give me one reason an American would buy in Vancouver. — Garth”

Because they might love to burn money.

There’s no reason to buy in Vancouver, but they can.

#179 Gen X Confessions on 12.13.15 at 10:13 pm

64 Cloudy on 12.13.15 at 5:13 pm

You’re right and wrong. Canada has lots of smart well educated people but its well documented they are not studying in disciplines that will give them good high-paying jobs. Our young are going into student debt and coming out with mostly degrees in humanities and basket weaving. Not that these don’t have to purpose, but that purpose isn’t strengthening our economy or output. Universities have become radicalized to left.
—————————————————-

Well documented where?

2011 National Household Survey Stats (if anything arts have become less popular since then):

Top university degree fields of study

1. Business (18%)
2. Education (13.8%)
3. Engineering (10.5%)
4. Health (10%)
5. Social sciences (7.5%)
6. Psychology (3.4%)
7. Computer sciences (3.4%)
8. Liberal arts (3.1%)
9. Biomedical sciences (3%)
10. Visual and performing arts (2.9%)

http://www.canada.com/Education+statistics+glance/8580700/story.html

#180 Cory on 12.13.15 at 10:13 pm

#46 Herf on 12.13.15 at 3:58 pm #12 BC Guy

I don’t think government is really (or totally) the problem. I think business itself, is the problem. Canada doesn’t produce very many competent managers
——————————

Agreed!!. I have noticed this close up this year more than previous years. Business has turned all about the ever entitled employees (same as BC Guy who feels entitled to other peoples money). I read an article the other day that was about businesses that talked about “firing” their clients and customers if they do not tow the company line. That sums up the attitude of most business I experience in Canada, especially in Alberta. It’s like you, the customer, are there to serve the business. It’s no wonder people are out of work and businesses are closing/leaving. Why would they stay? who would give their money to a business with such attitude like this?

I couldn’t believe the stupidity of these people commenting about their business practices and then putting their business and personal name to it. Glad they did though so I know where not to go.

I now do more business in the US since, quite simply, I get far superior service and treatment there than I do out my own back door USD/CAD or not. You’re paying USD anyway regardless if it is directly or indirectly so go to the source and save yourself some frustration.

#181 Allen on 12.13.15 at 10:13 pm

“This may well be the end of the oil sands business.”

Pure hyperbole . . . boom and bust goes the cycle with the net result long term result being more produced at lower cost . . . basic economics – rising demand encourages investment – high cost and marginal producers come into the field – then economic dislocation event (supply or demand) occurs – usually geopolitical events – prices drop due to oversupply – all producers including marginal cost producers produce (even at a loss) until they reach a price at which they are better off shutting down – Micro Econ 101 – consolidation occurs and net result is greater production overall and lowered costs (not discounting the dramatic shocks this has on society – just providing explanation).

As for the Carbon Tax – this is nothing to do with ‘punishing’ any industry – it is due to the concept of ‘Inelastic Demand’ – the tax is essentially one that applies to EVERYONE and it will generate substantial additional government revenues whilst minimizing and spreading the cost overall all of Albertans – essentially it is our new ‘PST’ – and it is more similar to the cigarette tax imposed by the PC’s / King Ralph in the 1990’s (albeit covering much more of society) – no BS my economics Prof worked as a high level government economist advising that group and he spoke of how they raised cigarette and liquor taxes to fill government coffers – due to inelastic demand for those items . . .

A chap as sharp as yourself Garth may espouse doom and gloom but surely Comparative Advantage will reassert itself – it always does . . . thoughts?

#182 Mark on 12.13.15 at 10:15 pm

“Also if a company on a CAD exchange is earning USD – then wouldn’t this be the place to concentrate capital?”

That’s generally the idea. However, USD$ earnings, on account of the high US dollar, could be deflating at the same time. It really depends upon the business itself, and to which sectors of the US economy it is exposed. And the manner in which such exposure occurs.

Nobody really knows, with any level of certainty, whether the current USD$ strength is sustainable. Evidence is significant that such strength is the derivative of a combination of a slowing US economy, and a ‘fear trade’ across the world seeking out a traditional bastion of stability. Awfully shaky factors alone to base an investment thesis upon.

This is why a balanced and diversified approach is more reasonable, and likely to deliver better long-term results. Unless you have the resources to examine, in depth, the balance sheets and businesses of a significant number of companies, the likelihood of a strategy of merely hand-picking stocks is likely to deliver sub-optimal results.

#183 saskatoon on 12.13.15 at 10:17 pm

#170 JimH

in order to create the “asset swap”…money was created out of nothing…just like the economist states.

the money DID NOT exist beforehand.

who said anything about dollars in circulation? inflation?

not i.

money can be “created”…but not circulated…at least not initially circulated.

i believe you are confused–that the money used to “swap” already existed…

it did NOT.

it was created electronically (though not “printed”) into existence.

#184 John in Mtl on 12.13.15 at 10:18 pm

Dang! I should have beleived Garth back in january and converted my pile of CAD$ to US$… Oh well, live and learn.

Is it “too late” to still buy US$, is it still worth it seeing the speculation around here our CAD may go as low as 0.60 ?

Where is the best place to buy US$ with CAD$, a bank, money store, etc?

Thanks ;)

#185 Raging Ranter on 12.13.15 at 10:27 pm

Only-inflation-to-reduce-debt-burden sounds an awful lot like Ralph Cramdown, only less interesting, if that’s possible. Not as articulate as old Ralphie, but like Ralph, he seems to have read just enough conventional economics textbooks to almost sound like he knows what he’s talking about. The naive belief in inflation is exposes both of these commenters as know-nothings.

We paid a hell of a price in the early 80s and again in the early 90s to get rid of the curse of inflation. We let it return in the past few years, but this time in the housing market, so it doesn’t show in the CPI. And we will once again pay a huge price to bring it to heel. And people like the afore-mentioned will continue to present the disease as the cure.

We can’t be too rough on Only-Inflation and Cramdown – even former Fed chair Bernanke and the current the Prime Minister of Japan believe that if we could just get some inflation going, all would be well again.

#186 Sebee on 12.13.15 at 10:27 pm

I’m no cat lover, but can I request a photo of a cute cat in the near future? Something on par with those cute dog photos? We need to balance the scale after past 2 days of angry pussy cats.

#187 Herf on 12.13.15 at 10:32 pm

#149 BS

“These governments have no plan for anything other than to borrow money and spend it.”

I think the following version is more correct:

“These governments have no plan for anything other than to borrow steal money and spend it.”

#188 White Crock BC on 12.13.15 at 10:34 pm

In Bellingham today.

No problem getting parking spots at Costco, two weeks before Xmas. Most cars (not all) Washington State.

Me thinks that Costco is regretting the decision to build the big new shiny warehouse just off of I-5.

Five minute line ups at customs both directions…on a rainy Sunday..two weeks before Xmas.

The plunging Loonie and strong USD is going to have lots of local ramifications.

Raise those rates Janet…because we’re all “looking forward to that day”

#189 Mark on 12.13.15 at 10:36 pm

” I think business itself, is the problem. Canada doesn’t produce very many competent managers”

You sure it isn’t merely a matter of the mix of Canadian economy being more exposed to highly cyclical industries than seen in the US?

The Canadian economy tends to be comprised of firms that do a lot better in a rising rate environment, than a falling rate environment. So a lot of Canada’s last 30-35 years of relative economic under-performance might give way to out-performance when rates eventually do start to rise again.

Is it “too late” to still buy US$, is it still worth it seeing the speculation around here our CAD may go as low as 0.60 ?

Everyone will have their own view on this, but with opinions so solidly and almost universally against the CAD$, a correction at some point is likely. Remember the 2008-2010 period where the CAD$ went from $1.1 to $0.80, and then back over $1 USD in a matter of 2 years. When you have so many shorts piling onto a trade, reversions can become quite violent.

#190 mark on 12.13.15 at 10:38 pm

“How does one track institutional buying and to find out what percent of a ETF does institutionals have”

#117 (other mark).
Thanks for the information, i figured when it did not turn up with several hours searching i figured it might not be a quick answer. The one thing in my mind is no one has a crystal ball, but institutional investors have more contacts, and resources than we individual investors will ever have, i am wondering if the big institutions are buying ZPR with all this selling and the slaughter in price ( of ZPR preferred) or is it all dumb money making purchases at this point (in the last several months/year? Too bad the info wasn’t more easy to access! Year to date slaughter of ZPR of over 20%? in price.

#191 Herf on 12.13.15 at 10:39 pm

#162 Sean

“Guessing you meant “million” :)”

Correct. My goof. As I was writing, I was thinking that at the time, they were looking at how to take the company from $250 million/year to >= $1 billion/year.

Thanks for the catch.

#192 Love my Kia on 12.13.15 at 10:40 pm

#31 Burton on 12.13.15 at 3:22 pm

#16. BC Guy, what do socialists know about morals? Bringing in twenty-five thousand migrants while veterans live on the street.
********************************
Veterans live on the street because Julian Fantino, Harper’s henchman put them there. Cuts to Veterans Affairs benefits and office closures put them in poverty.

Remember the veterans protests? Remember Harper having to hire vets to pose with him during the election because they wouldn’t freely want to pose with him?

You really do insult my intelligence.

#193 crowdedelevatorfartz on 12.13.15 at 10:44 pm

Went to Canadian Tire today.
Noticed a Keurig coffee machine for sale for $120.00. The sign next to the price tag ‘financing available”.
I laughed out loud and an employee walked past and we talked about it. She said people are asking if they can buy Christmas lights and finance them……..

Priorities.

Cats bury their poo. Dogs eat theirs.

#194 Allen on 12.13.15 at 10:44 pm

PS – Here’s a ‘Crude’ Supply graph ;)

| \ /S1/S3 /S2
| \ / / /
| \/ / /
P1| /*\/<<>>>>_____________________

Price / Demand

#195 Allen on 12.13.15 at 10:46 pm

Oh Shoot! – My graph :( it worked in the message box but when posted it looks like crap! It was such a thing of beauty . . .

#196 crowdedelevatorfartz on 12.13.15 at 10:48 pm

@#184 John in Mtl
“Where is the best place to buy US$ with CAD$, a bank, money store, etc?’
++++++++++++++++++++++++++++++++++++

North Korea.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjmyIfjqtrJAhUHy2MKHe_KAQkQFgglMAE&url=http%3A%2F%2Fwww.vanityfair.com%2Fstyle%2F2009%2F09%2Foffice-39-200909&usg=AFQjCNFcJsn3L6i8OICT18iQjR1bTIP9Wg&sig2=eVt7vkn_irVf-jYk7BQo5A

#197 Allen on 12.13.15 at 10:58 pm

#185 Raging Ranter

“We can’t be too rough on Only-Inflation and Cramdown – even former Fed chair Bernanke and the current the Prime Minister of Japan believe that if we could just get some inflation going, all would be well again.”

It called trying to stimulate ‘Aggregate Demand’ . . . the alternative – complete crash – would be worse . . . or not ;)

#198 Mark on 12.13.15 at 10:59 pm

” i am wondering if the big institutions are buying ZPR with all this selling and the slaughter in price ( of ZPR preferred) or is it all dumb money making purchases at this point (in the last several months/year?”

I believe the Canadian ‘institutional’ environment is heavily comprised of non-taxable investors. Such as pension plans. Don’t see them having a lot of interest in preferreds (or ETFs of preferreds), since they can’t use the dividend tax credit.

So my ‘guess’ (but not absolute assertion) is that you probably have mostly ‘retail’ money in an ETF like ZPR, and not a lot of institutional participation.

#199 Harbour on 12.13.15 at 11:02 pm

#184 John in Mtl on 12.13.15 at 10:18 pm

Where is the best place to buy US$ with CAD$, a bank, money store, etc?

…………………………………………………………………….

Open an online trading account with your bank and play the U.S. markets.

It’s like playing on a beach vs playing in a sand box anyways.

#200 Sean on 12.13.15 at 11:03 pm

“Thanks for the catch.”

All good. I’m a high tech cat in the area and always tried to avoid the various Matthews companies (he had quite a few at one time, not sure how many now), as they had a reputation for underpaying.

Lost in some of the talk about economic disaster is that due to the poor dollar, it’s a great time to work at an international company that bills in USD. For once people can outsource to us instead of the other way around.

#201 Sheane Wallace on 12.13.15 at 11:04 pm

An untrue statement, of course. Most retirees live in C$, and while a lower dollar will inflate the price of imports, the impact will not be of this magnitude. — Garth

——————————-

What I see in the grocery and department stores is very different.

Even at low cost stores prices of imported clothes, shoes have increased between 30-40 % in less than 2 years.

Prices of imported food also has increased and this is not a seasonal thing.

Importers buy on international markets so they need to pay in international currency (not in CAD)

Theoretically prices will stay low only for stuff that is produced locally and can not be exported (including in the states) and there are not many things in that list except energy – gas and oil. Gas is still around a dollar in GTA down from 1.34 at the peaks so not much.

Inflation is already rampant and that is evident everywhere.

Oils is going down, USD is going up and CAD will hit 60 cents.

This is not inconsequential, expect al the services and foreign products to go up.

What a responsible governor of BOC should do is jack up the rates to 3-5 % minimum, potentially to 6% to fight inflation in CAD. Oh, I forgot, we are so indebted so we can not really raise the rates like Russia or Brazil.

So we will simply pay for that indebtednesses with the destruction of the loonie.

What adds insult to injury is the contemplation of negative rates by the idiot at BOC.

Savers in CAD have lost probably between 40 and 50 % of their purchasing power due to under-reported inflation and zero interest rates. Proposing negative nominal rates is clear indication that this trend will continue. Driving the loonie to unseen and unpredictable lows, CAD to bellow .5 or even bellow .4 could become a reality.

The problem is that manufacturing does not seem to pick up (obviously we can’t compete with China in the cost of labour) due to the week dollar, on the contrary, due to underinvestment in manufacturing facilities (there is no slack in this but rather lack of capital) we are not competitive on the world stage.

Our only chance was commodities and it blew up.

People on fixed income will be creamed.

#202 Sheane Wallace on 12.13.15 at 11:09 pm

An actual raise in USD rates (80 % certainty at this point) could drive CAD immediately to the .65-.67 range. Without any further stupidity on BOC side which is a certainty.

So we have 2 days to save at least 10 % of the purchasing power of our savings.

#203 Smoking Man on 12.13.15 at 11:14 pm

#177 Tom on 12.13.15 at 10:06 pm
I’m glad the Govt is introducing a carbon tax. Maybe the new regime will take global warming seriously. The govt is not a socialist govt. The last govt ruined Alberta by creating overdependence on oil at the expense of other industries and was too stupid and short sighted to charge more for oil leases until it was too late. They also blew the Heritage Trust fund, this could have been a huge contributor to the province but that is what happens when you get a right wing conservative corrupt government running the province for 30 years.. But maybe the “socialist government” will hand out welfare and unemployment insurance checks to all the unemployed–or is that socialism?
….

Was it a concusion? a fall? over use of drugs that fryed you brain?

We’re at the door of world war 3 because the east and the west are fighting for access to sell energy to Europe. Syria being the access point.

What our phycopathic Communist regime the liberals and Alberta’s NDP are doing is equivalent to put a gun barrel to the temple and pulling the trigger.

Never trade or invest without an advisor..

#204 Sheane Wallace on 12.13.15 at 11:15 pm

Mark,

The commodity cycle is over. At least for a decade. CAD is derivative of commodities so it will stay low for a very long time. The brain drain south is a given.

#205 RM on 12.13.15 at 11:15 pm

For the 20% in USD, would an unhedged ETF in Canadian dollars count (like XUS) or do you need to buy an ETF in US dollars?

#206 Doug in London on 12.13.15 at 11:18 pm

@Daisy Mae, post #136:
My thoughts exactly. We’ve read over and over on this blog the importance of a diversified economy. Shouldn’t the same be true of a national economy? The previous Conservative government went out of its way to deny climate change. Instead they should have seen that sooner or later the world would get on board with taking climate change seriously and how it could affect us and our so called dirty oil. Instead of being builders of houses and drawers of oil, we should have been putting more effort into building an economy built on new economy technologies like renewable energy.

#207 Hope & Ruin on 12.13.15 at 11:22 pm

#163 Dirty Debtor on 12.13.15 at 9:23 pm
Agree with you on all points Garth – Except this being the end of the oil sands business.

The Paris talks were a great photo op, but when oil does rebound (even if it takes a decade), Money will still talk. They’ll be sucking that juice out of the ground if a profit can be made, carting it to the ports by train, and though some may slander it, the majority won’t care where it came from.

I agree that Paris was a photo-op. From what I read there is no way to sanction countries that don’t follow it. Another useless Kyoto. BUT the other countries have real leaders and understand that Paris was a photo-op. Butts is at the helm here in Canada and he has a mandate to execute his ideology and carbon taxes. Regardless of the costs to our economy.

#208 Kenchie on 12.13.15 at 11:23 pm

“Is it morally correct for someone who makes a line of woman’s yoga clothes (Lululemon) to buy up a large estate and mansion on BC’s coast and never have to work another day in his life while a policeman or soldier puts his life on the line every minute of the day for 20 years to serve his or her country?”

Yes. It’s morally correct that Chip Wilson doesn’t have to work another day in his life. A policeman or soldier doesn’t have to put their lives on the line. It’s the career path they chose. So yes, everything you’ve listed is morally correct.

#209 waterlooD on 12.13.15 at 11:29 pm

A person was going door to door asking people in my neighbourhood if they were looking to buy a house and handing out flyers about a first time home owner seminar and she said tons of easy ways to get into the market….. must be tough out there.

this wont end well

#210 Kenchie on 12.13.15 at 11:32 pm

#27 kc on 12.13.15 at 3:11 pm
“Your comment on being a banker is funny….

I was in the bank yesterday to ask about what is needed to close 2 accounts i have with a substantial amount of emergency cash. I wanted to know where my household stands in case we go NIRP in canada and I am paying to hold cash.

The gal (under 30) said you cvan close accounts in the same day… I said really? she said yes we give you a cheque I said no i want cash, she checked the balance and sdaid it would take at least 5 business days, then she asked why i want that much cash.

I commented that if we (Canada) goes negative I refuse to pay you blood suckers more than you deserve.

She had ZERO idea what i was talking about, however an older gentleman behind me gave me the smile as I left.

Garth, If canada does go negative, do you see a bank run on cash? and will there be in the cards an all out assult on owning cash?”

Absolute mularky. Banks won’t pass on negative rates onto consumers. They haven’t done this for retail banks in Europe. And Canada’s in a much better position than the Eurozone at the moment. So don’t worry about it.

http://www.bloombergview.com/quicktake/negative-interest-rates

#211 Allen on 12.13.15 at 11:33 pm

“As the Fed raises rates in the US – however gradual and tentative the ascent may be – the American dollar will strengthen further. So ours goes lower and commodities, priced in American bucks, erode more. ”

Yes our dollar is headed south . . . obviously devalued to stimulate demand for our manufacturing exports . . . the “interest rate rise” cry of fear is somewhat like ‘Chicken Little’ running around screaming ‘ . . . the sky is falling, THE SKY IS FALLING!!!’

Lower dollar = demand for our exports

To say ‘we’re hooped’ or “Maple is dangerous” is to fall into the doomer trap . . . Canada has a comparative advantage and if it erodes in one area it will rise in another . . .

This blog eschews the idea of “this time/place it’s different” in regards to real estate – yet it seems that somehow a crash in oil and devaluation of the dollar is the end of life as we know it. Oil will recover – those in the energy industry who believe(d) that things will always be sunny and rising in a resource based economy such as ours – like their ‘real-estate-always-rises’ friends – will learn that booms go bust and cyclical economic trends will occur . . . to act like this is a surprise is to be naive . . .

#212 Hotdogs from Heaven on 12.13.15 at 11:37 pm

#184 John in Mtl on 12.13.15 at 10:18 pm

Dang! I should have beleived Garth back in january and converted my pile of CAD$ to US$… Oh well, live and learn.

Is it “too late” to still buy US$, is it still worth it seeing the speculation around here our CAD may go as low as 0.60 ?

Where is the best place to buy US$ with CAD$, a bank, money store, etc?

Thanks ;)
———————————————

Why not just buy the etf DLR on the tsx? It holds U.S. cash and cash equivalents like T-bills. It goes up when the U.S. dollar goes up against the CDN dollar and falls when the CDN dollar increases against the U.S. dollar.

Should you ever want to cash it in for real U.S. dollars it has a twin fund, DLR.U that trades in U.S. dollars and stays stable at approximately U.S. $10.00. Then you can transfer that U.S. cash to your U.S. cash bank account or get a U.S. cheque.

#213 Mark on 12.13.15 at 11:39 pm

An actual raise in USD rates (80 % certainty at this point) could drive CAD immediately to the .65-.67 range. Without any further stupidity on BOC side which is a certainty.

And you really think the market, with its thousands, if not millions of participants, hasn’t already thought of the potential impact of the BoC and the (US) Fed’s actions in the future? And bid prices accordingly?

Besides, what if the Fed doesn’t do what people are universally predicting? Remember this time last year when practically nobody in the professional ‘economist’ community thought that the next policy move at the BoC would be rate cuts? Who knows, maybe there are some more tricks up their sleeves that few have contemplated. I wouldn’t personally run around speaking with 100% certainty that there will be a six sigma move in one direction, when easily the opposite could be the case.

#214 Hope & Ruin on 12.13.15 at 11:41 pm

#54 Only-inflation-to-reduce-debt-burden on 12.13.15 at 4:34 pm
“Canada is still a rocks-and-trees kinda nation”. Sorry but water is a big thing in this game we call life and so is global warming….

Alberta’s is the old economy of fossil fuel where the new economy of renewable energies is just beginning….

Perhaps we’ve shrunk a great sector which was once known as Manufacturing but the lower CDN-$ will help restore some of this….

I’ve always assumed that water scarcity issues would be solved with technology. Not by Canada selling/shipping our water. Seems inefficient.

Just because Notley says Alberta will build a “green energy” economy does not make it true. Just ask McGuinty.

A shitty dollar is not a long term answer to reviving manufacturing in Ontario. We need to be able to compete.

#215 Kenchie on 12.13.15 at 11:42 pm

Dear BC Guy,

Chip Wilson made the greatest female behind-boosting invention the world has ever seen. And thus created Vancouver’s best cultural export (yoga pants) which is now seen all over the world. Because of his inventions, nearly every university class I was in, there would be several fit chicks wearing Lululemon pants for me to chat up.

Thanks Chip!

#216 John in Mtl on 12.13.15 at 11:50 pm

#199 Harbour on 12.13.15 at 11:02 pm in response to #184 John in Mtl on 12.13.15 at 10:18 pm:

…”Open an online trading account with your bank and play the U.S. markets.”

I don’t yet have enough knowledge to play around this way and feel that I at least partially know what I’m doing. The last thing I want to do is blow money away by making a costly mistake. Unfortunately, time is limited, many obligations to tend to so I can only slowly inch toward getting confident in managing my money in a trading account. Much to learn. Not yet enough dough to pay an advisor either.

#217 Kenchie on 12.13.15 at 11:53 pm

#55 Only-inflation-to-reduce-debt-burden on 12.13.15 at 4:36 pm
“The world is want for relief of debt and the answer is inflation….”

Or defaults.

#218 kommykim on 12.13.15 at 11:55 pm

RE:

#139 preferred question on 12.13.15 at 8:34 pm
Can in this environment the price of preferred shares decline to a point where the issuers are tempted to buy them back

One can only hope. I wouldn’t mind if the issuer bought back at par ($25) some of the preferreds that I paid $16 for. Then I could go out and buy similar shares at $16 again and cross my fingers that the other issuer does the same. While I await this fantasy, I’ll continue to collect the 6% (based on $16 price) that they are paying.

#219 kommykim on 12.14.15 at 12:00 am

RE:

#205 RM on 12.13.15 at 11:15 pm
For the 20% in USD, would an unhedged ETF in Canadian dollars count (like XUS) or do you need to buy an ETF in US dollars?

XUS will give you exposure to the USD. It actually just holds the IVV etf which trades on the NYSE.

#220 profit on 12.14.15 at 12:07 am

#208 Kenchie on 12.13.15 at 11:23 pm

“Is it morally correct for someone who makes a line of woman’s yoga clothes (Lululemon) to buy up a large estate and mansion on BC’s coast and never have to work another day in his life while a policeman or soldier puts his life on the line every minute of the day for 20 years to serve his or her country?”

Yes. It’s morally correct that Chip Wilson doesn’t have to work another day in his life. A policeman or soldier doesn’t have to put their lives on the line. It’s the career path they chose. So yes, everything you’ve listed is morally correct.

How much money Chip Wilson or other entrepreneurs make has nothing to do with morality.

It is determined entirely by rules, create by people.

It is arguable that those rules are based on a world with smaller local markets.

When the same rules are applied to fully open, worldwide markets, made possible by technology and systematically eliminated trade tariffs, the windfall for individual entrepreneurs can balloon to insane level, which no longer make sense for the society that creates the rules.

#221 Kenchie on 12.14.15 at 12:10 am

#103 Leo Trollstoy on 12.13.15 at 6:51 pm
“What is seen today in Alberta is the consequence of the policies brought about 5-10 years ago by the AB PCs and Fed CPC.

Give it up already.

The NDP and Libs need to embrace their failure.

It will be epic.”

Lol. dumbass comment of the day.

#222 Ponzius Pilatus on 12.14.15 at 12:12 am

As I predicted, the Krampus rally fizzeled out and we had 5% declines across the board last week.
And sorry to say, no Santa rally this year.
Get used to it.

#223 Shirley Valentine on 12.14.15 at 12:13 am

Dear Studly smoky alien man,
what’s a gal (on the right side of 40) got to do to get a ride on that spaceship of yours and place in the romance novel that will take the universe by storm.
You studly beast of a man (I promise not to notice the missing tooth – maybe it be an advantage!)

#224 John in Mtl on 12.14.15 at 12:16 am

#212 Hotdogs from Heaven on 12.13.15 at 11:37 pm

… “Why not just buy the etf DLR on the tsx? It holds U.S. cash and cash equivalents like T-bills.”

Thanks for your answer Hotdogs; as I answered in #216 John in Mtl on 12.13.15 at 11:50 pm to “Harbour”, I dont feel I have the knowledge and confidence to get into this trading stuff yet.

#225 The American on 12.14.15 at 12:21 am

At #88: Suede, Americans are not buying, nor do they care to buy, property in Vancouver. They would by FAR sooner buy in Seattle or San Francisco before they’d ever *think* about Vancouver. They’d even consider Portland before Vancouver. Why? Because Seattle and San Francisco offer far more in things to do, real culture, far better infrastructure, more stability, real economies (even in spite of failing infrastructure, its still considerably better than Vancouver… Hell, the YVR airport is a compete shithole for example. Also, in the U.S. we have these things called stop lights at four-way intersections, unlike Vancouver). EVERY American, and I do mean every, I know who owned property in Vancouver sold that shit over three years ago. To top it off, I’ve yet to hear of a SINGLE person who churned some incredible profit from his/her so-called investment. Additionally, the canadian government held the small proceeds for over SIX MONTHS in every case before release those profits back to my friends. It’s a HORRIBLE investment in Vancouver. Period. Americans, in case you missed it, got burned already in the ol’ real estate shamble. They’re a lot wiser today and wouldn’t put themselves in such a ridiculous situation.

#226 Mark on 12.14.15 at 12:24 am

“One can only hope. I wouldn’t mind if the issuer bought back at par ($25) some of the preferreds that I paid $16 for.”

Not a chance of that happening. Unless the market price of the preferreds goes significantly over $25 and they have the right to purchase them back at par. Which is exactly what has been happening in the long-term falling rate environment. But the other way around (ie: rising rate environment), and essentially you’ll be holding those preferreds for a long time (unless you sell at a heavy discount).

Similar logic with options in favour of the issuers on coupon bonds. I remember owning some BC Hydro debt (at YTM of low double digits) in the mid 1990s that got called because financing conditions had loosened enough for them to refinance. Sucked that my upside was truncated, but the options were clearly disclosed in the prospectus.

#227 mousy on 12.14.15 at 12:35 am

Dogs personify goodness….and cats do not?????? Really? Too bad Noodle died 8 years ago, because even the neighbours said she was Gandhi reincarnated. You just haven’t grooved to cats. Hubby found her in a box abandoned on the BC Ferry. She was tattooed and when we called in they asked if we could keep her (it was the second time she had been left in a box). She slept on hubby for every night for 20 years and when I developed allergies, hubby said I would have to go before Noodle would be kicked to the curb. And she did circus tricks….. can’t describe…nobody would believe me and there was never a reward beyond a little scratch behind the ears. I don’t need to slap dogs down to elevate cats; they each have their qualities. Cats are cool in every sense and dogs are all in and each have their place. There is no good or bad – just different…thank god.

#228 Kenchie on 12.14.15 at 12:36 am

#123 Blobby on 12.13.15 at 7:36 pm

“I’ve said it once, i’ll say it again. I’m convinced the Conservatives saw this coming (how could they not?) – and lost the election on purpose.
————————————————————-
Lol

That thinking means the Liberals didn’t see it coming and went out and won.
If that’s the case they are not smart enough to run the country and should not be in power.”

Let me guess, you both thought that Harpo saw the GFC coming and went out and tried to lose the election, but won because Dion did see it coming too and said “fuck this sh!t”…

#229 45north on 12.14.15 at 12:46 am

Herf: from your link to the study on Nortel: In winding up BNR, Nortel effectively lost the ability to see and understand longer- term needs. Furthermore, the limitation of the amount of time that technology personnel spent with customers and the limitation of attendance at conferences resulted in the company losing an understanding of the current and medium-term needs of customers.

to summarize “the company lost the ability to see and understand”

a very interesting study

#230 Poster on 12.14.15 at 12:58 am

160

… The bottom line will take care of itself.

Ya, just sprinkle some pixie dust on there and you’re good to go.

#231 Kenchie on 12.14.15 at 12:58 am

#220 profit on 12.14.15 at 12:07 am
“#208 Kenchie on 12.13.15 at 11:23 pm

Yes. It’s morally correct that Chip Wilson doesn’t have to work another day in his life. A policeman or soldier doesn’t have to put their lives on the line. It’s the career path they chose. So yes, everything you’ve listed is morally correct.

How much money Chip Wilson or other entrepreneurs make has nothing to do with morality.

It is determined entirely by rules, create by people.

It is arguable that those rules are based on a world with smaller local markets.

When the same rules are applied to fully open, worldwide markets, made possible by technology and systematically eliminated trade tariffs, the windfall for individual entrepreneurs can balloon to insane level, which no longer make sense for the society that creates the rules.”
—————————————————

Morality is, inherently, subjective. The flaw in BC Guy’s question is he is expecting other people to have the same morals as him. Clearly, many people disagree with BC Guy’s moral code.

However, if we use the “rules, created by people” as a benchmark for a morality “norm”, Chip Wilson, and any other law-abiding citizen with capital and an idea, did act morally correct since the absence of immoral actions must be at least morally acceptable by the norms of the populace, as enshrined by the rules, created by people.

Arguing that rules should be different based on the size of the “windfall” already happens via progressive taxation. I don’t see the size of the market as important in talking about rules since the rules are based on principles. It is unfair to those who are more monetarily successful than the next person to overly tax them just because they achieve a certain level of windfall. Hence, people find it morally repugnant to tax income over 50%. But that might not be immoral in BC Guy’s subjective moral code.

#232 45north on 12.14.15 at 1:04 am

Last week the dollar lost almost 3% against the greenback. Oil shed an astonishing 12%. In just five days. Then on Friday, tougher rules arrived for real estate down payments. And on the weekend, a climate change agreement. Now the odds favour the first US interest rate hike in a decade to occur on Wednesday. Poor Alberta. But is YVR impervious? How about 416?

two years ago the oil and gas industry were huge assets that Canada had. Now because of a conference in Paris and Middle East politics we’re going to throw it away?

back up the train!

our political leaders have no idea how to replace fossil fuels. There is such as thing as being more efficient and more environmentally friendly but it’s quite another thing to scorch and burn our oil and gas sector.

let’s start with what we have – oil and gas. My plan would build refineries in Alberta to input the oil sands and output products needed by modern society. There would also be a publicity campaign that would make it clear to the American population that refineries in Alberta were chosen only after the pipeline to the Gulf was cancelled.

Peak oil is real.

#233 Ex-Cowtown on 12.14.15 at 1:06 am

#177 Tom on 12.13.15 at 10:06 pm

I’m glad the Govt is introducing a carbon tax. Maybe the new regime will take global warming seriously. The govt is not a socialist govt. The last govt ruined Alberta by creating overdependence on oil at the expense of other industries and was too stupid and short sighted to charge more for oil leases until it was too late. They also blew the Heritage Trust fund, this could have been a huge contributor to the province but that is what happens when you get a right wing conservative corrupt government running the province for 30 years.. But maybe the “socialist government” will hand out welfare and unemployment insurance checks to all the unemployed–or is that socialism?
++++++++++++++++++++++++++++++++

Global Warming is real. So is Global Cooling and Global Not-So-Much of Anything. At this point we are in the Not Much of Anything stage as temperatures have not increased in 18 years and 9 months.

It’s plainly obvious to every thinking person (my MIL included ?????) that the climate has fluctuated naturally between tropical and Ice Ages. The question that no “climate scientist” or political hack wants to address is: What % of Climate Change is natural and what % is man made?

The Alarmists will scream that it is 100% man made, but that is unmitigated BS, as clearly, the climate changed before, many, many, many times. The question then is it 90% natural, 10% man made?

50-50?

75-25?

The reality is that no one knows this answer, but from what we can tell, CO2 plays virtually no role. How can we say that? The levels of CO2 have climbed since 1996 but temperatures have not. The hypothesis that CO2 is a controlling factor in climate change is false. End of Story. If Einstein looked at those data, he wouldn’t lose a wink of sleep over it.

So spending even $1 on “Fighting Climate Change” is nothing more than empty sloganeering.

If you think Notley doesn’t understand the family farm, just wait until you see how much she doesn’t understand utilities, electrical generation, and the oil patch.

We’ll all get a front row seat to the debacle. I find it ironic that Venezuela, Brazil and Argentina are all staging conservative revolutions to oust their socialist governments after decades of corruption and mismangment. Yet in Canada and the US, we’re heading down the path that these and every other country that experimented with socialism has found to be a disaster.

But don’t worry, T2 says “Sunny Days”.

#234 prairie person on 12.14.15 at 1:24 am

Interest rates are at rock bottom yet businesses are still failing. There obviously many reasons for this but one is surely incompetence. e.g. I needed a new element for the oven in my stove. I believe in buying locally. I went to a number of businesses. Nope, they don’t carry much stock anymore. Didn’t have what I needed. Weren’t interested in ordering the part I needed. One place sold me a piece that not only was wrong but turned out to be dangerous. I finally gave up on local. Ordered the part over the internet. Even with US prices, the cost was reasonable. The part arrived in three days. I put it into t he stove. Works great. Who is to blame if those local businesses go out of business? The govt? Really? The banks? Really? I don’t think so. Blaming interest costs instead of looking at business practices is avoiding many other real problems connected to running a business. Problems created by poor management.

#235 juno on 12.14.15 at 1:31 am

A smart man once told me years ago there is no such thing as a recession.

During tough time if you working every is smooth sailing
But if your un-employed or under employed. Its a depression and not a recession.

Most companies mandate is to cut cost and contract everything offshore to cheaper labour such as India or China. Yes jobs are disappearing and eventually we will reach equalibrium and be paid the same wages as India or China just to compete.

Therefore a lower dollar means a lower standard of living for us Canadians. But our high taxes kill us until eventually we will have to give that up. Unless we get a government which has the balls to place restrictions on foriegn ownership or keep even out the playing field of foriegn labour.

#236 Linda on 12.14.15 at 1:36 am

I find it difficult to believe there are 130,000 realtors in Canada. Presumably they are not all of them practicing at the same time? Because unless I punched the wrong buttons on the calculator, that is one realtor for every 269 people in Canada based on a population of 35 million, all inclusive regardless of age or gender. I have an even more difficult time believing that there is enough activity to support so many realtors. Yes, some make out like bandits (no pun intended) but i’d expect the vast majority are lucky to score a couple of sales per year.

All such speculation aside, have to say that 2016 is certainly shaping up to be a challenging year. 2015 has not been without its challenges either. One hopes that things will begin to turn around sooner rather than later, because got to say it is pretty darned depressing hearing nothing but doom & gloom.

#237 Thelma on 12.14.15 at 1:37 am

I was in Wally Mart the other day and they had a huge pile of Keurig’s on for $63. A couple Boomer types were loading one into their cart. I had to say something, couldn’t let it happen. You know, I said two friends of mine had first gen Keurigs and bought this new one only to find you have to order pods from them online or they wont brew. No way the guy said. Yes they will give you a coupon code for all the boxes you bought but you must order from them. Talk about greedy. My first gen machine broke but refuse to order coffee from them online. Funny they don’t mention it on the box. If I were going to buy another pod type machine (I wont) I’d go with another brand. The couple put the machine back onto the pile, said thanks and left.

#238 ozy -TOLDya not to vote the xberals on 12.14.15 at 2:12 am

TOLD ya not to vote the xberals

you’ll be bankrupt by the time you can get rid of them /// tooo late

kids can’t drive…

#239 april on 12.14.15 at 2:31 am

#225 – The American.
I always like it the way you put Canadians in their place.
Don’t stop……..

#240 Carousel on 12.14.15 at 2:52 am

Have noticed in areas like Princeton, 100 Mile House and Grand Forks quite a lot of commercial businesses going up for sale!!! Very interesting, I say …. Difficult times ahead for B.C. and for the rest of Canada ……

#241 willworkforpickles on 12.14.15 at 2:55 am

You’re just so full of doom and gloom G.

#242 jane 24 on 12.14.15 at 2:59 am

I always judge the state of the Cdn economy on the number of comments on Garth’s blog at 6 am my time which is 2 am in TO time. Right now it is 226 posted which I believe is the highest number ever. Must check it again tonight!! I equate from this number that Cdns have stopped sleeping and have finally understood the shitstorm that 2016 will be.

There will be no RE bounce in the next 60 days. It is Winter and so much purchase demand has been brought forward that there is none left. There will be no Spring market either just too late in the cycle, the direction now is down.

Even the Toronto Star now publishes the occasional negative business article and that media outlet is always sunshine and ponies to support their advertisers. A real canary in the mine. The Financial Post is now 100% financial horror. Add in likely terrorism in all of the first world and you have a portent witches brew. I am so very sorry that I only removed 50% of my Canadian RRSPs and left the rest in to rot.

Garth I agree with Ben 72 that a much lower Cdn dollar will hurt Canadian seniors especially. So much of what they buy is imported and travel will become too expensive for them. Finally traveling after 40 years at the coal face is the main goal of all the Canadian retirees I know. You guys have such terrible holiday allowances during your working life. We have a big family event in England this July and Canadian family and friends are already bailing out due to expense.

Finally I never saw the point of lululemon yoga pants. The allow sights that should never leave the house to be seen in the mall. Most women look a right mess in them due to the lack of clothing structure and flimsy material.

#243 YVR WILL BE JUST FINE on 12.14.15 at 3:32 am

But is YVR impervious? How about 416?

SHOW ME THE .. 钱

#244 Leo Trollstoy on 12.14.15 at 3:39 am

Is it “too late” to still buy US$, is it still worth it seeing the speculation around here our CAD may go as low as 0.60 ?

Personally I wouldn’t screw around with buying US$ at this point. Most of the smart money has been made already.

The investors who amassed US$, did so back in 2009. Not today.

Here is how the CAD has done in the last 2 years:

https://ca.finance.yahoo.com/echarts?s=CADUSD%3DX#symbol=CADUSD=X;range=2y

Check out these predictions 2 years ago:

I wouldn’t view what’s happening as anything but short-term cyclical weakness. And of course, a great buying opportunity in the CAD$, and a great shorting opportunity for USD$ stuff. Take out some loans in USD$, and pay them back with more valuable CAD$ in the not-so-distant future.
http://forums.redflagdeals.com/hot-deal-canadian-dollar-loonie-sale-1434335/#post18149278

Fundamentally the Canadian dollar should be at least par, if not higher due to Canada’s robust export capacity and general state of trade surpluses. A slowing of or even cessation/reversal of expansion of credit in CAD$ terms, which appears to be in the process of occurring, is highly favourable to the Canadian dollar.
http://forums.redflagdeals.com/canadian-dollar-its-ups-downs-1442859/2/#post18304227

there’s plenty of evidence that the CAD/USD pair will go back to parity, and beyond in the not-so-distant future.
http://forums.redflagdeals.com/loonie-against-greenback-ever-going-par-again-1453861/2/#post18448377

#245 Leo Trollstoy on 12.14.15 at 3:47 am

The people who have made money on the US$ to CA$ conversion purchased their US$ when the CA$ was at par.

Even better, these people would have followed Garth’s recommendation to purchase investment properties in the U.S. back then. This has ensured a large and consistent monthly flow of US$ today.

Not only is betting on the US$ today far more risky, the potential for profit is far slimmer.

But again, those receiving monthly US$ rental cheques from their US$-denominated U.S. properties don’t care.

NB: The Canadians who screwed up on this opportunity, purchased U.S. retirement or leisure properties back when they should have purchased U.S. investment properties. Today, these leisure properties are producing minimal income and US$ expenses.

#246 #85 Suede...Try some math on 12.14.15 at 5:01 am

35% of RE market in YVR is between $500K to $1 million per BCREA.

$600K home DP increases $5K ($30K vs. $35K a/Feb 2016 = 16.6% increase).

$900K home DP increases $20K ($45K vs. $65K a/Feb 2016 = 44.4% increase).

CMHC base case scenario 5 yr fixed forecast 2016, Q1 to Q4: 4.70 to 6.00%.
CMHC base case scenario 5 yr fixed forecast 2017, Q1 to Q4: 5.10 to 6.50%.
BCREA Dec 2015 Mortgage Rate Forecast 5 yr fixed 2016, Q1 to Q4: 4.79 to 5.11% (of course these are Realtors here with a vested “interest” in forecasting the best possible scenario).

Average Cdn. mortgage amount, about $250K in late 2015. At a 25 yr amortization, the monthly payments are:

2015 4Q 5 yr fixed: $1400/mo (at 4.64% per BCREA)

2016 4Q 5 yr fixed: $1600/mo (at 6% per CMHC) or $2400 more per year, 14% incr. in payments
2017 4Q 5 yr fixed: $1675/mo (at 6.5% per CMHC) or $3300 more per year, 20% incr. in payments

These are forecasts of course but if they prove to be close to the truth, not good for YVR RE or anywhere else for those wanting to buy a home.

BTW, no number fixing here…just math using published numbers that 35% of the YVR RE market would calculate on their own.
____________________________________

Boomers:

Statistics Canada’s 2012 Survey of Financial Security (ages 55 to 64):

-70 per cent are still carrying debt, an increase from 61 per cent in 1999.
-Average debt level climbed to $107,900 from $60,600 in 1999, even after adjustment to constant 2012 dollars.
-33% still have mortgages, 38 per cent are carrying credit card debt and 29 per cent have vehicle loans.

Revenue Canada Income Tax Stats, 2013, 65 yrs and older:

-50% have income of $35k or less.
-34.5% have income of $50K or less.
-19% have income of $75K or less.

Bank of Ma and Pa doing OK at best, but not that good when you consider the 2012 debt stats and average debt has gotten worse since 2013.

Again, no number fixing here…just facts and some math.

#247 ANON on 12.14.15 at 7:44 am

Cru’ d’oil fell out of bed this morning while I was preparing the coffee: $34 handle and still looking for a bottom. Might as well start adding some of the Greater Fool approved gallon-type scotch in the mix.
Brent down 3% while typing…what the heck, better just pour the coffee into the scotch instead.

#248 Ontario's Left Coast on 12.14.15 at 7:54 am

So glad I stopped in for my daily cup of “This is how it is.” Garth, I’m starting to wonder why you don’t abandon our maple-scorched soil and set out for the land of guns and stupid. It might not have occurred to you that a Canadian media personality such as yourself might actually talk our country up once n a while.

Don’t you already have enough sunshine blown up your butt? Sounds like it. — Garth

#249 gut check on 12.14.15 at 8:25 am

#234 prairie person on 12.14.15 at 1:24 am
Interest rates are at rock bottom yet businesses are still failing. There obviously many reasons for this but one is surely incompetence. …..
Who is to blame if those local businesses go out of business? The govt? Really? The banks? Really? I don’t think so. Blaming interest costs instead of looking at business practices is avoiding many other real problems connected to running a business. Problems created by poor management.

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

Globalism makes old fashioned good management impossible.

Paying workers a decent wage? It means you aren’t competitive.

Keeping parts for your products on hand? Not when there are 30,000 varieties of kitchen ranges available (or 400,000 office printers) for example.

Sourcing locally to keep costs down? Businesses are up against the same problems you were.

Rents have gone up and commercial landlords tend to wait around for an offer from Starbucks instead of lowering their rents.

We’ve had the introduction of the GST / HST with its ever changing rules for collection and remittance – a mountain of paperwork like never before to take up precious time.

And finally there is the competition from the online selling world eating away at your customer base.

Low lending rates don’t make up for any of these.

I don’t have a physical store so I’m kind of guessing here. But these are the things I think about when I contemplate the romance of being a shopkeeper .. or when I have to go out there searching for something that I need.

#250 pbrasseur on 12.14.15 at 8:36 am

In fact by bringing in 0% down payments with 40-year amortizations a decade ago, the Harperites adopted a US-style, laissez-faire approach to housing that prepared the ground for our bitter harvest today. Garth (previous post)

Sorry Garth but you got it backward, having the governement insuring 0/40 is the opposit of «laisser faire».

And that’s precicely the problem we have in Canada, not enough laisser faire, not enough free market.

No, within the long-standing Canadian framework, I got it right. By failing to require adequate down payments and grossly extending debt repayment the Conservatives planted the seeds of today’s unaffordability. — Garth

#251 pbrasseur on 12.14.15 at 8:55 am

Garth – The conservatives have increased the role played by CMHC, a government entity, under their watch CMHC liabilities have exploded. I don’t dispute the fact that it’s the root of our problems, just that it represents a case of economic «laisser faire». Just the opposite, the conservatives may claim to be free marketers but they have massively increased the involvement of government in RE.

#252 fancy_pants on 12.14.15 at 8:55 am

Electing T2 was simply evidence the tipping point may have been reached where those bleeding public coffers > those feeding public coffers.

socialism constitutes legal plunder and it will accelerate in the years to come. you got $? you might as well spend it while it is still in your hands. Time to shame Canada for past progress. Get out your sackcloth and ashes.

#253 gut check on 12.14.15 at 9:15 am

@ #244 Leo Trollstoy on 12.14.15 at 3:39 am

Personally I wouldn’t screw around with buying US$ at this point. Most of the smart money has been made already.”

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

Sure, a much better outcome could have been had by purchasing USD ages ago, but you don’t think that in terms of simple value preservation it is worth it to convert CAD cash into USD even now?

Why not?
The argument that you could have made more by doing it sooner seems weak, when the CAD is headed so much lower.

#254 jess on 12.14.15 at 9:42 am

“Does the person create the times or the times create the person? ”

What You Don’t Know about the Federal Reserve
http://knowledge.wharton.upenn.edu/article/what-you-dont-know-about-the-federal-reserve/

#255 paul on 12.14.15 at 9:57 am

Don’t wait buy now
https://www.youtube.com/watch?v=O4ne13Zft9Q

#256 Bottoms_Up on 12.14.15 at 10:03 am

#233 Ex-Cowtown on 12.14.15 at 1:06 am
———————————–
I see you’re still not letting facts get in the way of your anti-climate change argument.

#257 JimH on 12.14.15 at 10:03 am

#183 saskatoon on 12.13.15 at 10:17 pm

The expansion of the Fed’s balance sheet did not “Create money” in any form whatsoever. Had it done so, runaway inflation would have occurred and we would still be in a commodity bubble.

You fail to understand that actions of the EU Central Bank are quite different than those of the US Fed when it comes to QE.

For the ECB to purchase Greek bonds for example, yes, the ECB must put actual euros into the Greek economy, just like Canadian equalization grants must provide actual dollars to the Nova Scotia Government. No such exchange ever took place with the Fed’s QE program in the US. (The TARP program did that, however)

And yes, the European Central Bank is hoping and praying that their version of QE will in fact goose inflation rates in the EU. In the meantime, the actions of the ECB are putting considerable strain on the euro, with the results you see.

All forms of QE are not created equal, and the US version of QE did not infuse dollars into the system! That is the reason there was no runaway inflation in the US, and why the commodity bubble that was produced by rampant speculation that it would do so, eventually popped.

The whole issue of Bank Reserves and the myth of the “Money Multiplier” can be found here:

http://www.federalreserve.gov/pubs/feds/2010/201041/201041pap.pdf

#258 paul on 12.14.15 at 10:05 am

Stay liquid

http://citywire.co.uk/money/us-funds-freeze-sparks-bond-market-panic/a867067

#259 jaybee on 12.14.15 at 10:18 am

I found a word that perfectly describes Mark:

“char·la·tan
ˈSHärlədən,ˈSHärlətn/
noun
a person falsely claiming to have a special knowledge or skill; a fraud.”

#260 Virginian Railway on 12.14.15 at 10:26 am

Garth –

Geez, what a gloom-doomer you’ve become, and not just recently. You sound like all the geeks who spend FAR too much time staring at their PCs, dreaming up conspiracy theories.

Time for contrariness! I’m going bull on Canada. Anybody else?

#261 White Crock BC on 12.14.15 at 10:48 am

Don’t you already have enough sunshine blown up your butt? Sounds like it. — Garth

Works for the Americans.

#262 Dups on 12.14.15 at 10:59 am

Canada string pullers do not like change, they like to complain too much and get nothing done.
We love self entitled unions and government jobs.
We discourage successful companies to stay here.
We underpay our engineers and overpay the factory assemblers.
We have spineless mediocre yes/sir managers and directors leading us.
We always think we are better than USA.
We only have one long major highway worth of mentioning 401. And boy is it boring and annoying to drive on it. Most of our cities do not have ring roads around them.
We are proud of our artists, but they all work and live in the USA.
Oh but we are different and better…..all talk and no action.

#263 fixie guy on 12.14.15 at 11:14 am

“Don’t. Canada – under dismal leadership – has allowed the economy to become overly dependent upon two pillars. Real estate, financing and construction now equals 15% of our GDP. ”

‘Allowed’ is certainly a kind and gentle way of saying ‘pursued relentlessly’. The Con-servatives implemented a policy of buying votes by making Canadians feel house rich while indebting them to banks, while backstopping the same bank’s mortgages with taxpayer dollars. Canadians got double-ended under Harper, there was no accident here.

#264 Ex-Cowtown on 12.14.15 at 11:16 am

#6 Bottoms_Up on 12.14.15 at 10:03 am
#233 Ex-Cowtown on 12.14.15 at 1:06 am
———————————–
I see you’re still not letting facts get in the way of your anti-climate change argument.
+++++++++++++++++++++++++++++++++

Here are the facts:

1. Temperatures have flatlined for 18 years 9 months despite increasing CO2 levels. This disproves the CO2 Catastrophic Global Warming hypothesis.

2. CO2 LAGS temperature increases, not leads them. This also disproves the CO2 CAGW.

3. UN temperature models do not even remotely reflect reality. Relying on them for guidance is worse than slaughtering a chicken to read the entrails.

4. All “climate scientist” agree that CO2 is too weak a greenhouse gas to directly change temperature by more than a small fraction of a degree. All “climate scientists” believe that CO2 somehow “forces” temperature changes, because their (fatally flawed) computer models tell them so.

5. No scientist, ever, anywhere in the world has defined this “forcing” mechanism. No one can prove it exists, what the limits are, how different gas mixtures effect it, whether it is affected by water vapour or other fundamental questions. Any scientist who answered these questions would heartily deserve the Nobel Prize.
Instead we have hundreds of poseur “climate scientists (including our own federal climate change minister) deceptively wrapping themselves in the cloth of a Nobel Prize winner, despite the Nobel Committee saying clearly, “No, you did not win”.

6. Polar bear populations have exploded over the past 30 years. They are not even remotely endangered despite what the Green Blob says.

Now, what facts do you have?

#265 economictsunami on 12.14.15 at 11:16 am

An oil glut to maintain market share is one thing but just to maintain cash flow, in order to keep the debt wolf at bay, smacks of desperation…

Never Mind $35, The World’s Cheapest Oil Is Already Close to $20:

” Western Canada Select, which is heavy and sulfurous, has slumped 75 percent to $21.82, the least in seven years. ”

http://www.bloomberg.com/news/articles/2015-12-14/never-mind-35-the-world-s-cheapest-oil-is-already-close-to-20

#266 saskabush on 12.14.15 at 11:21 am

Funny … # of comments says 262 but it ends at 12 this morning.

And as for ‘Mark’ … I particularly search out and read his comments.

Technical glitch. Working on it. — Garth

#267 Ole Doberman on 12.14.15 at 11:21 am

#10 Virginian Railway on 12.14.15 at 10:26 am

Garth –

Geez, what a gloom-doomer you’ve become, and not just recently. You sound like all the geeks who spend FAR too much time staring at their PCs, dreaming up conspiracy theories.

Time for contrariness! I’m going bull on Canada. Anybody else?
———————————————————
I agree, the TSX is corrected and ready to rock n roll.

Besides cheaper oil prices means everyone else wins, once the smart money re calibrates some sectors will be big winners!

#268 bdy sktrn on 12.14.15 at 11:25 am

250 comments missing?

262 listed but only last 12 showing.

pathetic blog ! ;)

My webmaster is currently looking into the issue. Obviously hacked by CREA. — Garth

#269 bdy sktrn on 12.14.15 at 11:27 am

India’s fuel demand rose 6.4 percent y/y in November
Reuters – 27 minutes ago

NEW DELHI (Reuters) – India’s fuel demand rose 6.4 percent in November compared with the same month last year, driven by higher sales of gasoline as discounts and festive season buying boosted passenger vehicle sales.
Consumption of fuel, a proxy for oil demand, totalled 14.8 million tonnes.

———————-
so maybe oil is not going to 0 after all

#270 bdy sktrn on 12.14.15 at 11:50 am

#14 Ex-Cowtown on 12.14.15 at 11:16 am
#6 Bottoms_Up on 12.14.15 at 10:03 am
#233 Ex-Cowtown on 12.14.15 at 1:06 am
———————————–
I see you’re still not letting facts get in the way of your anti-climate change argument.
+++++++++++++++++++++++++++++++++

Here are the facts:
——————————–
religion requires faith not facts.

the co2 scam is religion not science.

#271 fancy_pants on 12.14.15 at 12:02 pm

chaaarge!!!!

http://www.theglobeandmail.com/report-on-business/economy/canadas-household-debt-burden-hits-record-in-third-quarter/article27742769/

#272 For those about to flop... on 12.14.15 at 12:06 pm

Re : the missing postings.
Damn it man ,you’re killing me that was some of my best work!

#273 Bram on 12.14.15 at 12:08 pm

Teranet House Price Index for November is out:
http://calgaryherald.com/business/real-estate/repeat-home-prices-in-calgary-continue-to-slide

Many markets in Canada down, Vancouver still fast increasing.

#274 You're Nuts on 12.14.15 at 11:37 am

#14 Ex-Cowtown on 12.14.15 at 11:16 am
++++++++++++++++++++++++++++++++++

You’re out of your mind if you actually believe this is a conspiracy. What possible motivation could anyone have for fabricating such a conspiracy? Name a person, body or government, with sufficient influence to fabricate such a lie, who could possibly gain enough from such a conspiracy to warrant creating it. And don’t say green energy producers – if you actually think they convinced all the world leaders in Paris of this “religion” then you’re a tinfoil hat crackpot.

#275 cramar on 12.14.15 at 11:49 am

Question re. TFSA.

The current Liberal Gov’t. proposed to reduce the TFSA contribution back to $5,500 on Jan. 1, 2016. Since Parliament is now closed and will not resume until late Jan., is a proposal in a Throne Speech legally binding? Or can a proposal passed into law say in Feb., be retroactive back to Jan.1?

What I getting at is can Canadians fund their TFSA come Jan. 1 with $10,000 and get away with it?

#276 saskatoon on 12.14.15 at 12:00 pm

#7 JimH

again, you are only partially correct: likely a result of being duped by fed propaganda–which you sadly link to as “evidence”.

your argument is: “had the fed created money…there would be inflation…but since there is no severe inflation…money must not have been created…”

this is completely FALSE, and is exactly what the fed wants the gullible masses to think.

look at fed fomc minutes from 2009…this is explicitly and repeatedly stated.

in reality, the fed has created trillions of dollars (electronically) and used this money to buy treasuries and mortgage-backed securities from banks…

THEY CREATED THIS MONEY OUT OF NOTHING.

are you really that dense to think that banks were selling these assets for…NOTHING?

there is no inflation…YET…because the fed has been paying banks interest to hold onto excess reserves created by QE.

when this process stops (as it must, at some point) excess reserves will demand loaning out.

at THIS point, excess reserves will enter the general economy–most likely creating severe inflation.

in other words, saying that inflation isn’t happening short-term isn’t an argument that money wasn’t created to purchase bank treasuries and MBSs.

#277 Leo Trollstoy on 12.14.15 at 12:02 pm

Why not?
The argument that you could have made more by doing it sooner seems weak, when the CAD is headed so much lower.

It’s as weak as the argument to buy US$.

No meat left on the bone.

The time has passed. Move on.

#278 Angus on 12.14.15 at 12:05 pm

# 36 Inventions
Anyone can check out what Lululemon invented and make their own assessment of the value those inventions brought to mankind.

The vertical smile coming and going;)

#279 BobC on 12.14.15 at 12:08 pm

Looks like it doesn’t even matter. Just another big waste of time and money.

http://dailysignal.com/2015/12/11/john-kerrys-surprising-comments-on-international-regulations-and-climate-change

#280 Ole Doberman on 12.14.15 at 12:10 pm

Technical glitch likely happened cause everyone rushing to Garth’s comforting bosom for sound financial advice as Canada sinks into the abyss.

But wish he would be more clear about bonds/equities and certain sectors that might perform well – come on Garth throw us a bone.

#281 pinstripe on 12.14.15 at 12:12 pm

More news reflecting the policies by AB PCs and the Fed CPC.

http://www.cbc.ca/news/canada/calgary/encana-capital-budgets-cuts-dividends-1.3363820

#282 bdy sktrn on 12.14.15 at 12:31 pm

paris fraudsters “don’t look over here, please and thank you.”
Where 61 percent of all fresh water on the Earth is held, in the Antarctic ice sheet; record and growing land ice. record sea ice cover. thickest ever measured land ice cover. record mass of ice down there. on the largest permanent ice rink on the planet.
NASA study says IPCC is bullshit.
===============

A new NASA study says that an increase in Antarctic snow accumulation that began 10,000 years ago is currently adding enough ice to the continent to outweigh the increased losses from its thinning glaciers.

The research ***challenges the conclusions*** of other studies, including the (edit-*self-interested*) Intergovernmental Panel on Climate Change’s (IPCC) 2013 report, which says that Antarctica is overall losing land ice.
According to the new analysis of satellite data, the Antarctic ice sheet showed a net gain of 112 billion tons of ice a year from 1992 to 2001. That net gain slowed to 82 billion tons of ice per year between 2003 and 2008.

Read more at: http://phys.org/news/2015-10-mass-gains-antarctic-ice-sheet.html#jCp

———————-
ipcc ‘religious science’ blind to 100 billions tons of fact.

#283 noel on 12.14.15 at 12:32 pm

“In fact, bank employees have bloated by 27% in the past ten years. This is the essence of a condo economy, where more and more activity is generated from people selling real estate to each other, rather than products to the world.”

How is this a bad thing? Oil patch job losses are bad, bank job gains are bad too? Silly argument.

The banks have gained employees through international expansion and consolidation, not through ‘selling real estate to each other’.

#284 april on 12.14.15 at 12:34 pm

Online – Martin Armstrong – Are Negative Rates Fueling Deflation.

#285 Victor V on 12.14.15 at 12:36 pm

Just received this email blast from a local mortgage broker in Toronto.

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

STOP SHOPPING AROUND FOR MORTGAGES

TALK TO US FIRST, WE ONLY NEED TO DO 1 CREDIT CHECK AND WE CAN TALK TO ALMOST EVERY LENDER ACROSS THE COUNTRY!

DOING MORE THAN 3 CHECKS IN A MONTH CAN HURT YOUR SCORE!

WE WILL PICK A LENDER WITH A LOW PENALTY IN CASE YOU LIFE CHANGES OVER THE NEXT FEW YEARS!

QUESTION:
Are you or a client having a mortgage problem?
Not getting the answer you want from your bank?
Ready for a second or third opinion?

Recent examples:
Situation 1: We had a client tell us they needed 20% down from their bank, we approved it in 48 hours with 5% down, and a lower interest rate

Situation 2: We had a client approved for purchase of 850,000, but they wanted to by 914,500; we made it happen!

Situation 3: Bank declined our clients mortgage, we re-structured the her package and sent it to another bank, and it was auo-approved with very few questions

Specialization:
Higher loan amounts, or turning declines into approvals with the right lender/bank.
Fast, easy, and senior level advice on the first phone call!
Summary of services:

• First Mortgages
• Second Mortgage
• Refinance
• Debt consolidation mortgage
• New Immigrant
• No Credit / Bad Credit
• Self Employed

Property Types:
• Commercial Mortgages (Best Rates Approved Guaranteed )
• Storefront apartments/mix use
• Houses
• Condos
• LUXURY HOMES AND CONDOS APPROVED WITHOUT SLIDING SCALE!

#286 SWL1976 on 12.14.15 at 12:38 pm

#277 saskatoon – I think many people, even smart people like Jim tend to over complicate the process which then in turn makes things sound much more complicated than they need to be.

QE is currency creation no matter which way one slices it. Currency that is ultimately craeted out of nothing.

The inflation argument is weak at best. Like you said the US does not have an inflation problem – YET – but soon they may. That is yet to be determined. Global dmand for their currency has also exported much of their inflation abroad. Should that global demand or confidence in the USD be lost – VERY possible – then we will see the real US inflation numbers and ultimately what happens to fiat currencies that get printed out of control.

It may be different this time, but history proves otherwise

#287 Ex-Cowtown on 12.14.15 at 12:49 pm

275 You’re Nuts on 12.14.15 at 11:37 am
#14 Ex-Cowtown on 12.14.15 at 11:16 am
++++++++++++++++++++++++++++++++++

You’re out of your mind if you actually believe this is a conspiracy. What possible motivation could anyone have for fabricating such a conspiracy? Name a person, body or government, with sufficient influence to fabricate such a lie, who could possibly gain enough from such a conspiracy to warrant creating it. And don’t say green energy producers – if you actually think they convinced all the world leaders in Paris of this “religion” then you’re a tinfoil hat crackpot.

++++++++++++++++++++++++++++++++++

I see that you don’t dispute any of the facts that I laid out. Not much more to say.

#288 gut check on 12.14.15 at 12:58 pm

#278 Leo Trollstoy on 12.14.15 at 12:02 pm
It’s as weak as the argument to buy US$.

No meat left on the bone.

The time has passed. Move on.
***********************

your crystal ball might have been made in China.
mine is showing a different future reality than yours

#289 No debt on 12.14.15 at 1:06 pm

Chip deserves to do whatever he wants, he put his balls on the line and produced a great product! I love looking at my wife’s ass when she’s wearing those lulu lemon pants! You guys ever been to a yoga class ? Wow wee! We all choose our own destiny……..

#290 saskatoon on 12.14.15 at 1:06 pm

#287 SWL1976

indeed.

there doesn’t seem to be an exit strategy–in fact, as much is said in the 2009 fomc minutes.

seems like a waiting game:

on the one hand:

will the banks loan out excess reserves? when will this happen? will the fed be able to keep paying them interest NOT to loan excess reserves?

and on the other:

when will the fed unwind its balance sheet? when/if this happens, how will this unwinding occur? what happens when assets mature and require payout?

either way…some such gross amount of money is coming down the pipeline.

here’s an interesting look at the situation:

https://www.youtube.com/watch?v=jt377DV2BKs

#291 Trading Naked on 12.14.15 at 1:08 pm

#276 cramar on 12.14.15 at 11:49 am

The CRA site says that the TFSA limit will be reduced to $5500 under “proposed” legislation. I think the word “proposed” just means “barring a black-swan-level revolt by MP’s, it’s basically a go”. In the same way, we all shoveled $10,000 into our TFSA’s when we heard the “proposed” legislation to increase the limit. We knew back then it was a go, too.

#292 conan on 12.14.15 at 1:09 pm

“Dogs personify goodness. Cats don’t.” — Garth

“A technical issue has temporarily blinded visitors to approximately 250 comments”

I think you have disturbed the balance in the Force.
You might need to say you are sorry to the poopers in the box. They run the whole shebang don’t you know.

#293 pwn3d on 12.14.15 at 1:09 pm

#50 Leo Trollstoy on 12.13.15 at 4:22 pm
I commented that if we (Canada) goes negative I refuse to pay you blood suckers more than you deserve.

Dumbest comment on today’s blog so far.

#51 Mark on 12.13.15 at 4:24 pm
——————-
2 minutes too early, lol

#294 Doug T. on 12.14.15 at 1:25 pm

2016 – Year of 66 cent dollar and less trips to Hawaii :(

#295 saskatoon on 12.14.15 at 1:25 pm

#275 You’re Nuts on 12.14.15 at 11:37 am
#14 Ex-Cowtown on 12.14.15 at 11:16 am
#288 Ex-Cowtown on 12.14.15 at 12:49 pm

cow:

you present facts…but the unhinged liberal r-selected nutjob doesn’t exist in reality.

consequently, facts do not matter.

don’t waste your time.

you are looking for empathy where none exists.

this trick spawns the downfall of many K-selected individuals.

the psychologically hollowed out neo-liberal mindset employs two powerful rhetorical weapons:

1. LYING
2. SLANDER

hence, why you were called a “tin foil crackpot”, and described as “out of your mind” and “nuts”…simply for expressing facts…or…at the very least, a differing opinion.

“when the debate is lost, slander becomes the tool of the loser”

– socrates

#296 cramar on 12.14.15 at 1:30 pm

#292 Trading Naked on 12.14.15 at 1:08 pm
#276 cramar on 12.14.15 at 11:49 am

The CRA site says that the TFSA limit will be reduced to $5500 under “proposed” legislation. I think the word “proposed” just means “barring a black-swan-level revolt by MP’s, it’s basically a go”. In the same way, we all shoveled $10,000 into our TFSA’s when we heard the “proposed” legislation to increase the limit. We knew back then it was a go, too.

——————–

Not quite the same. The raised limits were in a budget, which was according to Garth treated as a done deal by Revenue Canada, even though it was not passed into law by Parliament yet. This roll-back was a proposal from the Throne Speech. Apples and oranges. Or are they both fruit?

#297 Ronaldo on 12.14.15 at 1:33 pm

This is what was being said about Canada’s housing bubble in October 2009. Sure taking a long time for this mother of all bubbles to burst.

http://thetyee.ca/Opinion/2009/10/22/BubbleWillBurst/

#298 learningfromyou on 12.14.15 at 1:38 pm

#70 Mark
Please Mark help me out understanding you

>Ever heard the saying, “there’s no such thing as a free >lunch”? Most of the “free to buy” ETFs have higher >embedded fees that, over time, easily eclipse a $5 (or >even $1) ETF trading commission at a discount >brokerage for lowest cost-in-class ETFs (ie: XIU/VCN, >etc.).

>If you have access to them, TD’s e-Series funds can be >a low cost way to accumulate funds before you convert >them to ETFs.

My understanding is that while buying ETF (for example at Questrade) there is not cost from the broker doing that.
why I should buy TD’s e-Series funds before convert them to ETF.

I’m pretty sure there is something I’m not considering.

#299 jess on 12.14.15 at 1:41 pm

commodities

http://projects.thestar.com/human-sex-trafficking-ontario-canada/

#300 Trading Naked on 12.14.15 at 1:46 pm

#236 Linda on 12.14.15 at 1:36 am

You betcha there are 130,000 realtors in Canada…well, more like 130,000 people with active licenses. It seems like every [insert name of majority ethnic group here] guy in my city has a real estate license. It’s pretty funny. The two whom I personally know haven’t practiced in a couple of years at least.

#301 crossbordershopper on 12.14.15 at 2:11 pm

when the cdn economy really tanks next year with monthly job losses of 30,000 per month, from retail to manufacturing to everything in mining and o/g. you will see trudeau comng up with an estate tax, lottery tax, and a weed regulation.
as you max out on taxes of the people who actually get things done and pay serious over 50% tax, and a soon to be 62 cent dollar you end up with major brain drain. including myself, i am packed, ready to go.
why would anyone who makes 200k in ontario, pay 53% marginal tax and be paid in cdn dollars. and he will tighten the ccpc tax rate.
all canada is fast becoming is a 2nd hand flea market of ethnics, bringing down wages and maxing out benefits. oh, there are lots of low end ‘old stock’ canadians i know many of them,
i have had conversation with an east indian who said he didnt want to make over 50k cdn because he didnt want to pay more tax, cdn will be filled with a bunch of low hanging fruit people. single moms, people who dont work too hard, and i know for a fact candians are not as productive as americans, every american i speak to is juggling, these canadians are tommorrow, tomorrow.

#302 Mark on 12.14.15 at 3:05 pm

My understanding is that while buying ETF (for example at Questrade) there is not cost from the broker doing that.
why I should buy TD’s e-Series funds before convert them to ETF.

Okay, I stand corrected, all “North American” ETFs are apparently ‘free’ to buy at Questrade. Therefore, please ignore my comments concerning accumulating assets in low-cost (TD) funds and then switching to ETFs. If you’re not incurring commissions when buying ETFs, then I don’t see why a person wouldn’t directly accumulate in ETFs. Subject to one’s desired asset allocation, etc., of course.

#303 pwn3d on 12.14.15 at 3:08 pm

Even a uni student is smarter than your average liberal. It’s impressive and sad at the same time.

http://www.torontosun.com/2015/12/12/lights-on-nobody-home

#304 Borneo Eddie on 12.14.15 at 3:17 pm

I am predicting a basis point of half a point. Yup, super slow and careful..let’s not rush this one. so we will go from 0-.25 to 0-.25 +.05

Could it actually be true? Wednesday we will find out and see the markets MOOVE!

#305 Borneo Eddie on 12.14.15 at 3:18 pm

Edit: Maket that 0.005

#306 Felix on 12.14.15 at 3:25 pm

So how did you like today’s little hacking event here, Garth?

Mess with us again with your defamatory pictures, Garth, and we’ll take down your website for good. We’ll throw some kitty litter into the gears of your Harley for good measure.

You have been warned.

Pathetic dog lover. You disgust us.

MeeeeeeeeEEEEOOOOOOOWWWWWWWW!!!!!!!!

#307 Mark on 12.14.15 at 3:27 pm

“i have had conversation with an east indian who said he didnt want to make over 50k cdn because he didnt want to pay more tax”

Unfortunately a lot of people really don’t understand the difference between ‘average’ and ‘marginal’ or ‘incremental’ tax rates in our ‘progressive’ tax system. This gives rise to misunderstandings such as what your East Indian friend believes.

As for calling Americans far more productive, sure, they might work more, but is their work generating more output than input? I have my doubts. The country, despite this apparently higher productivity, has run trade deficits for the past few decades with very few exceptions. That means, Americans consume more than they earn.

On a micro-basis, think of a pizza driver who spends $5 worth of vehicle depreciation, maintenance, and petrol, to “earn” $4 worth of pizza delivery fees. Sure, the pizza driver is ‘working’, but they’d actually be better, in such instance, sitting on the couch and doing nothing. Perhaps Canadians, with Canada traditionally being a net exporter (except during times of severe commodity price distress) are more in-tune with whether or not their activities are creating value, rather than simply working for the sake of working.

#308 espressobob on 12.14.15 at 4:03 pm

This is one “lucky” feline.

https://www.youtube.com/watch?v=8dfXBy_JDFk

#309 Stark raving bonkers on 12.14.15 at 4:04 pm

#308 Mark on 12.14.15 at 3:27 pm

“i have had conversation with an east indian who said he didnt want to make over 50k cdn because he didnt want to pay more tax”

Unfortunately a lot of people really don’t understand the difference between ‘average’ and ‘marginal’ or ‘incremental’ tax rates in our ‘progressive’ tax system. This gives rise to misunderstandings such as what your East Indian friend believes.

As for calling Americans far more productive, sure, they might work more, but is their work generating more output than input? I have my doubts. The country, despite this apparently higher productivity, has run trade deficits for the past few decades with very few exceptions. That means, Americans consume more than they earn.

On a micro-basis, think of a pizza driver who spends $5 worth of vehicle depreciation, maintenance, and petrol, to “earn” $4 worth of pizza delivery fees. Sure, the pizza driver is ‘working’, but they’d actually be better, in such instance, sitting on the couch and doing nothing. Perhaps Canadians, with Canada traditionally being a net exporter (except during times of severe commodity price distress) are more in-tune with whether or not their activities are creating value, rather than simply working for the sake of working.
—————–
Are you trying to reach a new level of idiocy. The usual nonsense not good enough anymore.

#310 Steerage Bilge on 12.14.15 at 4:17 pm

Hey smoking alien man

It was dark matter that killed the dinosaurs apparently. were you part of this?

http://news.nationalpost.com/news/dark-matter-and-the-dinosaur-new-theory-challenges-notions-on-origins-of-human-life

#311 waiting on the westcoast on 12.14.15 at 4:17 pm

“As for calling Americans far more productive, sure, they might work more, but is their work generating more output than input? I have my doubts. The country, despite this apparently higher productivity, has run trade deficits for the past few decades with very few exceptions. That means, Americans consume more than they earn.”

Mark – higher productivity yields higher income yields higher levels of debt that can be levered.

Americans kick or collective assess because of your pizza delivery analogy. Maybe it’s better to be the pizza delivery guy, get some experience and then move up the chain to a better role that makes more money. Only a Canadian would advocate doing nothing is better than doing something to improve yourself.

#312 gut check on 12.14.15 at 4:25 pm

@ #302 crossbordershopper on 12.14.15 at 2:11 pm
” cdn will be filled with a bunch of low hanging fruit people. single moms, people who dont work too hard,”

WHAT THE F-CK IS THAT? If you were any kind of man you’d drive to my home and say that to my face. My home, which I purchased while a single mom working full time to save the down payment, without a penny of child support.

My home, which I kept clean and warm, in which I did laundry and cooked meals. My home, where I shoveled the snow and mowed the lawn in between studying for my degree and driving my child to her choir practices, Brownie groups and school plays.

Come to MY HOME and look me in the eye and say that again.

#313 S.Bby on 12.14.15 at 4:38 pm

#270 a technical issue…

That’s ok because I skip past Mark anyways.

#314 Nemesis on 12.14.15 at 4:51 pm

“And practice tax avoidance, especially if you earn over two hundred grand and have a big, red target on your rump.” – HonGT

#LikeFashionSanta?

http://www.yorkdale.com/fashion-santa/

#315 Leo Trollstoy on 12.14.15 at 4:52 pm

#289 gut check on 12.14.15 at 12:58 pm

This is definitely possible. Time will tell. I may change my outlook on the US$ in the future, but right now I just don’t see much more upside (we’ve had a great run already).

I definitely won’t be married to a losing bet. At least not 2 years anyway.

I’ve given a view of where the CAD/USD$ pair is going in the long term. Dramatically higher for the CAD$ as the US forced into a devaluation to correct the long-term trade imbalances that exist between it and the rest of the world. And as Canada’s consumer debt starts to slow and even contract.
http://forums.redflagdeals.com/canadian-dollar-its-ups-downs-1442859/2/#post18316586

Certainly trends like Canada cleaning up its balance sheet, Canada developing a solid export base through a recapitalized oil and gas sector, Canada being an attractive place to invest…
http://forums.redflagdeals.com/hot-deal-canadian-dollar-loonie-sale-1434335/3/#post18153678

#316 paul on 12.14.15 at 4:52 pm

#313 gut check on 12.14.15 at 4:25 pm

@ #302 crossbordershopper on 12.14.15 at 2:11 pm
” cdn will be filled with a bunch of low hanging fruit people. single moms, people who dont work too hard,”

WHAT THE F-CK IS THAT? If you were any kind of man you’d drive to my home and say that to my face. My home, which I purchased while a single mom working full time to save the down payment, without a penny of child support.

My home, which I kept clean and warm, in which I did laundry and cooked meals. My home, where I shoveled the snow and mowed the lawn in between studying for my degree and driving my child to her choir practices, Brownie groups and school plays.

Come to MY HOME and look me in the eye and say that again.——
———————————————————-
Man that reads like an ad on Plenty Of Fish.

#317 Doug in London on 12.14.15 at 4:54 pm

@The American, post #225:
Yes, thanks for clarifying this matter. If we Canadians really think Americans are flocking north to buy grossly overpriced houses in Vancouver area, it shows how delusional we are.

#318 Smoking Man on 12.14.15 at 5:04 pm

#313 gut check on 12.14.15 at 4:25 pm
@ #302 crossbordershopper on 12.14.15 at 2:11 pm
” cdn will be filled with a bunch of low hanging fruit people. single moms, people who dont work too hard,”

WHAT THE F-CK IS THAT? If you were any kind of man you’d drive to my home and say that to my face. My home, which I purchased while a single mom working full time to save the down payment, without a penny of child support.

My home, which I kept clean and warm, in which I did laundry and cooked meals. My home, where I shoveled the snow and mowed the lawn in between studying for my degree and driving my child to her choir practices, Brownie groups and school plays.

Come to MY HOME and look me in the eye and say that again.
…………………….

I love it. Go get him….

#319 Mark on 12.14.15 at 5:08 pm

“Mark – higher productivity yields higher income yields higher levels of debt that can be levered.”

The experience with the US economy is that they have all this ‘activity’ but it doesn’t amount to positive net output.

Canada, OTOH, has less activity, but a much greater net output over the past 40 years or so.

So who’s really more productive?


Americans kick or collective assess because of your pizza delivery analogy. Maybe it’s better to be the pizza delivery guy, get some experience and then move up the chain to a better role that makes more money.

I have to disagree here. Running chronic long-term trade deficits (ie: the country collectively consuming more than it produces) shows that they are not “moving up the chain to a better role”. A young person who destroys capital by delivering pizzas at a loss probably will find it harder to come up with the funds to attend college, for example, or to start their own business doing something more remunerative.

Only a Canadian would advocate doing nothing is better than doing something to improve yourself.

Destroying capital by consuming more than one produces it not ‘improving oneself’. If one cannot do something that produces more in outputs, than it takes in inputs, then its something not worth doing.

There’s a stat out there that states, simply, that most small businesses fail. The reason for this is almost always that the business owner fails to understand their cost of capital relative to the realistic returns on capital achievable.

#320 The American on 12.14.15 at 5:34 pm

At #308: Mark, you said, “That means, Americans consume more than they earn.”

If your logic is correct, then Canadians must REALLY be F&*KED! After all, Canadians have significantly more household debt than Americans. Clearly, Canadians are consuming more than they can afford or earn.

#321 Billy-Bob on 12.14.15 at 5:38 pm

#11 Crowd sourcing on 12.13.15 at 2:19 pm
Your investing in the review mirror.
Most of the fall is in…at least the easy money has been made. When its common knowledge its to late.
Yes there maybe more down side in the loonie..even a dime…But your way late…
CDP.TO broke to new lows…I wouldn’t even buy preferred for a bit. If one is planning to protect themselves its too late.
Try and dump you golden house in cow town now.
1.5 yrs ago was the time to adjust.
We are in for it for a while. I hope most are not working in the oil patch…
My wealthy buddy bought $3 mil in trucks in Berta and is dumping them for $15k profit in the US…
Unlike the blow out in the early 80s we don’t make much of anything anymore…all China. So If one thinks the stock market will perform the same as then…You better recalculate…
This country has VERY little diversification. We have a lot of Gov bureaucracy though. If housing blows…good luck…

#322 turn of the tide on 12.14.15 at 6:03 pm

Garth, could you please say a bit more about this? Or point to a learning resource on the topic online? I thought it was ok to get US bonds and prefs.. Much appreciated!

#111 [email protected]

“No dividend tax credit. — Garth”

#323 Burton on 12.14.15 at 6:06 pm

#192 Love My Kia. Sorry to insult your intelligence. So what has T2 done for the veterans? The LPC since his fathers time has a terrible track record concerning the CAF, if you think this bunch is going to be any better you are delusional. There are finite resources and T2 has already committed several billion to anthropogenic climate fraud and hundreds of millions to housing, clothing and feeding migrants. Do tell where you think veterans are on HIS priority list. By the way Kias are crap.

#324 Julia on 12.14.15 at 6:23 pm

#47 Dominoes Lining Up

Yonge and Eligible? Young professionals working daytime, shopping online maybe?

That said, I have noticed that malls in general are not as busy and sales with great discounts started earlier than usual. Watch for a few retailers shutting down or restructuring by the end of January.

#325 Tony on 12.14.15 at 6:40 pm

Re: #316 Leo Trollstoy on 12.14.15 at 4:52 pm

I told Mark a long time ago the Canadian dollar would fall short term and rise long term but he never read why it will rise long term. As I told Mark before Canada’s long term debt per capita is a lot lower than it is in America.

#326 Tony on 12.14.15 at 6:53 pm

Re: #302 crossbordershopper on 12.14.15 at 2:11 pm

The very first thing Trudeau would come up with would be a “gift tax” since Canada is still one of the few countries in the world where you can gift money tax free.

#327 John Ababii on 12.15.15 at 2:33 pm

Will the prices of the houses go down? No. Why? Because the CAD loses ground for them. That gives me the idea that the inflation will be so high that the houses just won’t have the space to go down in monetary value (even if now they are losing in real value).