Gravity

SLOW modified

Time for a little year-end reality check, here on GreaterFool – where we have a surfeit of 1%ers surrounded by hungry, huddled, masses with their Whole Foods bags and selfie sticks, yearning to eat them. We also have Kory and Leanne. There but for the grace of God, go we.

“Got caught in the last round of layoffs at Telus,” he says.  “Could have been a bad situation.  Been reading your blog for around five years now, so we are well prepared.  If we were a typical Canadian family I don’t know how we’d survive the stress. As it is, we’re liquid, diversified, pay $1650/mo for a three story townhouse in downtown Calgary (my brother and his wife live with us and cover $700 of that).  Otherwise the only other thing we’re on the hook for is one year left on a Hyundai @350/mo. We went and splurged instead of one of those rotten Kias!”

Yes, they still have a modicum of taste.

“Anyways, instead of being caught up in the fear, we quickly settled our affairs (I took my lump sum in 2016), and we bought tickets to Mexico for two months. Not sure how 2016 will unfold but I think it might be best to pack up and head down to the US for a bit on the TN visa program.  My wife is an RN, and I work in computer network engineering.  I looked at the wages in several areas and if our luck holds out, we can both earn around the $100k region…easily $250k CDN per year with current exchange rates. But we are doing very well thanks in part to your advice, and no declining house!”

They also have freedom, flexibility and mobility. It’s a lesson a lot of people in Cowtown, Edmonton, Grand Prairie, Fort Mac, Saskatoon and Regina are learning. For example, there are about 5,000 houses for sale in Calgary today, and just over 800 monthly sales. And while that might suggest a buyer has to endure six months to sell (as opposed to the 49 days the realtors suggest), the wait for higher-end properties can be even longer.

Tough to put your life on hold for months just to try and figure out what comes next. But a renter can move in a relative flash. No realtor. No listing. No open houses. No vultching buyers. No commission or mortgage discharge penalty. You just split.

This is one of the first rules the huddled masses need to learn: real estate can be an anchor. Nobody needs to own a house to live in a home. When you strip away the emotional baggage (that nesting instinct, the visceral desire to have a cave of your own), it makes little sense to own in a major Canadian city. Especially now. The days of windfall gains are over, and only varying degrees of risk lie ahead.

Besides, from a cash flow standpoint, renting beats owning ten times out of ten. Only a year or two ago this blog was punctuated by comments from cowboys who decried Calgary rents and claimed it was cheaper to own. Well, with prices dropping and buyers evaporating, all those myths have been blown up. Imagine losing your gig at Telus and driving home to a $400,000 mortgage and property tax bill in a town where jobs are rarer than people admitting they voted NDP. #sucks.

Of course, every property market is local. Oil down at $36 suggests in all of Alberta and Saskatchewan things are about to get worse in 2016. But even in BC’s Delusia or the Kingdom of 416, where the metrosexuals herd, the new year will bring some serious real estate challenges. For most people, it’s all about debt.

BUBBLE BURSTS Top Canadian money managers were just asked what most keeps them up at night. Sixty-three per cent said the same thing – household debt. No wonder. Mortgage borrowing alone has hit a new peak of $1.23 trillion (that’s 1,230 times a billion). We have another $700 billion in lines of credit and personal loans. The serious part of this debt orgy is that most of it’s been taken out when interest rates were at historic lows and the world’s biggest economy had a zero-rate policy.

No longer. That ended on December 16th. And while the Canadian economy may be too weak for our central bank to follow suit immediately, that alone should worry you. The longer rates stay low, the greater the stress over job loss. So, back to Leanne and Kory.

Canada’s rock star money managers vex more about debt than falling house prices – although those will inevitably, inexorably come. Because Canadians have (apparently) no self-discipline when it comes to snorfling borrowed money, any downturn – whether from higher rates, less work, the commodity price mess or an earthquake in the Lower Mainland – will be neither shallow nor short. Mortgage debt is decades long. The rash, irresponsible borrowing decisions that millions of us have taken recently will be around to haunt the next generation.

So, what’s the No. 1 new year’s resolution for Canadians (at least according to a major bank)?

Yep, paying down debt. But don’t get too excited. That was picked by just 26% of folks in a recent CIBC poll. A close second was “keeping up with bills/getting by.” The third major selection was “don’t have a financial priority.” Sigh.

In 2016 this blog resolves to be less cheerful.

242 comments ↓

#1 DM on 12.30.15 at 6:03 pm

There is a doomer by the name of Hilliard MacBeth who thinks housing could drop 50% off peak. Do you share the same views Garth? 50% off is kinda Doomie.

Not a chance. — Garth

#2 Vacation on 12.30.15 at 6:05 pm

How does a RN (assuming employee) take 2 months vacation?

#3 Jimmy on 12.30.15 at 6:11 pm

Do you guys think a DRIP is smart?

#4 MSM-Free Zone on 12.30.15 at 6:11 pm

“…Nobody needs to own a house to live in a home…..”
___________________________________

Probably my favourite quote of 2015.

#5 Alberta Guy on 12.30.15 at 6:12 pm

Kory, TN status requires a job offer first. Have you got one?

#6 Joe Schmoe on 12.30.15 at 6:13 pm

#2

Many operate as ‘contracters’. Don’t have to work weekends or nights this way

Others work for a Union. Efficient, hardworking unions.

#7 Paully from MTL on 12.30.15 at 6:14 pm

Merci Merci Merci!

Without having stumbled onto your blog more than 2 years ago I would now be in terrible financial shape.
I’m 28, have 34,000 in my tfsa, 5000 savings, no property and ZERO DEBT. And my sisters are now following my/your path.
You saved a young boy and his sisters.
If ever you are in Montreal and need anything please just email me.
My empire is small but all it’s resources are at your disposal.
Again Merci beau coup and THANK YOU VERY MUCH!

#8 Mean Gene on 12.30.15 at 6:15 pm

Viva Mexico, buen viaje!!! Maybe time to learn some Spanish and see what kinds of adventures one can find.

#9 Godth on 12.30.15 at 6:15 pm

“In 2016 this blog resolves to be less cheerful.”

Oh, wow – what a revelation! Like you’ll have a choice. Worldwide debt is an anchor…and then there’s the rest.
http://www.paulcraigroberts.org/2015/12/28/why-wwiii-is-on-the-horizon-paul-craig-roberts/

https://www.youtube.com/watch?v=4a5Y5QxO6zM

http://thearchdruidreport.blogspot.ca/2015/12/too-little-too-late.html

#10 rk usa on 12.30.15 at 6:16 pm

re: Imagine losing your gig at Telus and driving home to a $400,000 mortgage and property tax bill in a town where jobs are rarer than people admitting they voted NDP. #sucks.

I betcha most mortgages are for a heck of a lot more than that, try 6 or 700K, many did not settle for just average houses but HGTV porn

#11 paul a on 12.30.15 at 6:17 pm

feels like 1989 over again 30% haircut in RE values very probable in 2016 what say you Garth ?

#12 Leo Trollstoy on 12.30.15 at 6:17 pm

IT and nursing power couple. I like it.

#13 IHCTD9 on 12.30.15 at 6:18 pm

Really, for those Canadians drowning in debt, it’s a bit late to be finally donning sackcloth and heading out to the ash pit.

If I was up to my neck in mortgage (or any) debt, with shaky employment prospects, I’d stock up on Valium and call ReMax…

#14 Top Canadian money managers on 12.30.15 at 6:20 pm

“Top Canadian money managers were just asked what most keeps them up at night. Sixty-three per cent said the same thing – household debt.”

If the top Canadian money managers were more worried about the unhealthy, non-diversified structure of the Canadian economy, they would have to worry less about household debt.

Strangely, you can hardly ever hear about it.

#15 james on 12.30.15 at 6:23 pm

“I think it might be best to pack up and head down to the US for a bit on the TN visa program. My wife is an RN, and I work in computer network engineering. I looked at the wages in several areas and if our luck holds out, we can both earn around the $100k region”

Save for the fact that you are hardly the only ones. An RN might be an easy sell, but engineering is starting to get saturated. You are competing against H1Bs, other TNs, numerous students converting from their visas, etc. For every job in engineering in Seattle or Silicon Valley there are MANY applicants. 3 years ago it was a bit better.

Speaking of which, I recall talking to a person at RBC USA around 3 years ago who was telling me that petroleum engineers and the like were starting to move down from Alberta to Texas. The exodus was happening before the oil price collapsed, probably people who (unlike the idiots in the Alberta government) saw it coming.

You’ll also find 100k doesn’t go far in many places such as Silicon Valley. Given high taxes and high living costs, it is not exactly a pot of gold. However, probably better than what Canada has to offer.

#16 Kenchie on 12.30.15 at 6:25 pm

#2 Vacation on 12.30.15 at 6:05 pm
“How does a RN (assuming employee) take 2 months vacation?”

It’s called quitting and getting a new job when she’s back, or when they move to the US.

#17 Johnny D on 12.30.15 at 6:25 pm

…”one year left on a Hyundai @350/mo. We went and splurged instead of one of those rotten Kias!”

Bad news… Hyundai and Kia are the same company. Same parts, same everything. Worse yet, Kia is considered the higher end of the brand… Kinda like Buick is higher than Chevrolet, so if you “splurged” on a Hyundai, you really got screwed.

Too bad capitalism only works when the consumer uses discretion and does some research.

#18 DM on 12.30.15 at 6:25 pm

Today live in Alberta. I have lived stateside when the booms died in Houston, Portland and Boise. In the states property dropped as much as 50% when the boom collapsed. However, in Etown during the 80’s property values declined by 15% +or – 2%. I know the CMHC propped up the market the market at the time by refusing to post foreclosed houses into a falling market. My question Garth is: Does the CMHC have a strong enough balance sheet to pull of the same kind of Wheelie (geezer talk) today?

#19 espressobob on 12.30.15 at 6:27 pm

#1 resolution for 2016 is a diversified global portfolio, way less TSX.

And don,t do drugs. Doesn’t pay any dividends.

#20 RayofLight on 12.30.15 at 6:28 pm

The pic looks like Arizona. The “Washes” are bone dry 99% of the time, and overflowing 1% . Something like an pilots job, 99% boredom and 1% panic !

#21 Van real on 12.30.15 at 6:29 pm

Ok. First of all Calgary is a one trick town. Oil. No diversity and no desirability beyond its oil. It’s a frigid little town without one redeeming feature. Without oil, it’s a nothing hole. Toronto and Vancouver however are very different. They both have much about them that is desirable. Toronto has its sheer size and diversity. Vancouver has its beauty and climate.

On my block in Vancouver there are five properties that have recently sold for north of a million and all are being redeveloped. No shortage of money on someone’s part and I find it hard to believe that a few basis points increase in rates is going to stop this beast.

#22 Kenchie on 12.30.15 at 6:30 pm

Well, on the bright side, when the brain drain ramps up over the next few years, housing will inevitably be cheaper because there will be less competition for rentals and owner-occupied housing.

#23 rainclouds on 12.30.15 at 6:31 pm

Greetings from San Fran

Was whacked at T 2.5 yrs ago.

Showed up 10 min fashionably late to my execution

The best part was AFTER the “Telus is going in a different direction” scripted bs.

Quick glance at (the envelope) then my now former boss. Then the beaten down HR whacking “professional” who clearly had had many crying jags already visited upon her that sunny April morn.

My parting comment?. “You just made me a millionaire!”
I left happy. not so sure about the folks sitting dumbfounded in the rather stuffy and tiny exiting room.

Stay liquid my friends ……..

#24 JO on 12.30.15 at 6:31 pm

The most probable path remains a devastating collapse of the debt bubble
I don’t think most people understand how bad things are. I work in banking and can tell you the majority of the recent buyers are broke. On a macro level the situation is a complete farce. We have deluded ourselves into thinking debt is wealth. I have taken much flack and been mocked for being too early on a housing bust call
But sadly for these financially illiterate and mostly broke
they they are the ones who are, along with all levels of government , insolvent.
The wild debt bubble temporarily increased spending and therefore income /GDP along with asset prices
The rate of growth in junk debt was about 2-3 times nominal GDP which itself was inflated due to the debt bubble
We are Beth likely going to experience a rapid and violent resolution of this debt bubble. No one can time it but odds are very good we will see this come down sometime between 2017-2020
JO

#25 tundra pete on 12.30.15 at 6:32 pm

I think its time to open a payday loan business. With bailiff services on the side. Of course I wont forget evictions and a small pawn shop to go with that. Yes, 2016 should be a great year.

#26 TCContrarian on 12.30.15 at 6:33 pm

“There is a doomer by the name of Hilliard MacBeth who thinks housing could drop 50% off peak. Do you share the same views Garth? 50% off is kinda Doomie.”
*************
Not a chance. — Garth

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

I don’t get you Garth. Historically, the affordability ratio for RE is 2.5-3.5 times gross family income…
so, using a (high) $100k for simplicity, this would indicate $250-350k as an ‘affordable’ range.
We’re witnessing numbers 3x and 4x this in Vancouver/Toronto, so why do you think a 50% drop is impossible in these markets?

Florida, Arizona, and SF saw these (and greater) ‘corrections’ – are we that different?

#27 Van real on 12.30.15 at 6:34 pm

I’m also wondering why they’re so quick to pack up and move. His wife is a nurse and is employed. He might have a hard time finding anything in the US on the TN visa program. IT professionals are not that rare a bird.

#28 Jonathan on 12.30.15 at 6:35 pm

@Jimmy: I DRIP in registered accounts… DRIP in regular account could be interesting as you would need to do a bit more math to calculate the cost base

#29 Mark on 12.30.15 at 6:38 pm

“There is a doomer by the name of Hilliard MacBeth who thinks housing could drop 50% off peak. “

Easily, if the reference is to other assets, such as stocks.

“TN status requires a job offer first. Have you got one?”

Indeed. The problem with IT, especially network engineering, is that the field is severely glutted with even minimally advertised jobs receiving hundreds of very qualified applicants. Canadians, once favoured, fell out of favour in the US IT sector roughly at the turn of the century when it was widely realized that foreign nationals from other, less expensive countries could be hired, and subjected to even more significant ‘lock-in’ than possible on the TN visa. Additionally, “$100k” might seem like a good salary, but remember that such workers tend to be disproportionately concentrated in the high cost of living areas of the country.

Still, worth a try, but given the glut on both sides of the border, success is far from being a slam-dunk.

“Do you guys think a DRIP is smart?”

Diversification tends to suffer when people only choose a small handful of securities. Rebalancing is more difficult. Brokerage commissions are so low these days, and another poster a few weeks ago indicated that there’s even a brokerage in Canada that offers all ETFs (including the low-cost ones like XIU or the Vanguard ones) on a no-commission basis for purchase.

#30 BC Guy on 12.30.15 at 6:39 pm

I’ve been hammering away on this blog that Telus has no loyalty to Canada. They’ll use any excuse to fire a Canadian and offshore or outsource the job.

Telus is a hugely profitable company, the senior execs get paid enormous sums of money, stock options, gold-plated pension plans, gold-plated golden parachutes. But the people who actually make their system work, the IT workers, get laid off. Is Telus customer base shrinking? In such a vast company that spans two large provinces, it’s unbelievable they couldn’t find work for Kory somewhere in their network. Telus will probably shift his former job to somewhere/someone in the Phillipines who’ll get 1/3 of his former salary.

Shame on Telus. A bloody monopoly that loves firing Canadians.

#31 Paul on 12.30.15 at 6:40 pm

Every New Year starts off with RE bubble talk. Check Jan – Mar news the last few years. Not saying it’s not possible 2016 could be the year but people are locking in their mortages pushing renewal at higher rates down the road. RE is not coming to a grinding halt but a rather slow motion stop before it reverses. Maybe another year or two. What I wonder is when it starts to slide downhill how quickly will it pick up momentum.

#32 winners on 12.30.15 at 6:40 pm

There are two winning tiers in this economic system:

1) successful entrepreneurs, top professionals of selected fields
2) senior management employees (CEO, CFO, etc.)

For the rest ,it is is basically scraping the leftovers off the floor.

#33 Victor V on 12.30.15 at 6:42 pm

Paying down debt remains top priority, but many Canadians making little headway, poll finds

http://business.financialpost.com/news/economy/paying-down-debt-remains-top-priority-but-many-canadians-making-little-headway-poll-finds

#34 BG on 12.30.15 at 6:43 pm

#173 BlackDog on 12.30.15 at 3:10 pm

I am not expecting anyone here to solve my problem. I already have my particular game plan worked out. My goal is to educate and inform fellow Canadians, and hopefully to garner some support for the 2016 Supreme Court Challenge which Canadians must pay for themselves, whilst our government uses taxpayer dollars for its defense.
—————————————————————

I see.
Then it worked for me because I did not know of this issue.

#35 Jeff on 12.30.15 at 6:44 pm

Hi Garth,
You have constantly mentioned earning returns of 7%/year investing. Can you tell me the risks involved to achieve such returns? Since the TSX and Dow (unless you look at the US dollar performance) have both either lost or stayed status quo this past year, how do you maintain such high returns? Thanks, Jeff

Google ‘average’. — Garth

#36 TN status on 12.30.15 at 6:54 pm

#5 Alberta Guy on 12.30.15 at 6:12 pm

Kory, TN status requires a job offer first. Have you got one?

Chances are, they have not discovered that fine print yet.

#37 Randy on 12.30.15 at 6:58 pm

What’s a mortgage ?

#38 Greg on 12.30.15 at 6:59 pm

Tried to go for dinner at 445pm yesterday in NW calgary. The Keg had a 2 hour wait and the parking lot was full. People everywhere spending like crazy! It was like something out of 2007.

#39 waiting on the westcoast on 12.30.15 at 6:59 pm

I am learning Spanish. I think a sabbatical in Uruguay might be a good idea for the latter half of 2016… ;-)

#40 MEANWHILE IN FRANCE on 12.30.15 at 7:00 pm

Happy New Year. May 2016 be everything you want it to be.

Now that things go south in Canada, come and visit Europe.
Might as well. Wine is cheaper here than San Pellegrino at Earl’s

#41 BG on 12.30.15 at 7:01 pm

#3 Jimmy on 12.30.15 at 6:11 pm
Do you guys think a DRIP is smart?
——————————————

Have you ever tried calculating your Adjusted Cost Base on some ETF for tax filing?
It can get really annoying especially when using DRIP.

I use DRIP only on registered accounts where I don’t have to calculate the ACB.
For unregistered accounts, I let the dividends accumulate until the next time I rebalance.

#42 Internal Auditor on 12.30.15 at 7:01 pm

Good for them, playing it smart and hopefully they can land work in the US rather quickly. Although might be easier to hit Caymans or Bahamas, I’ve had coworkers go there to work in professional services while their wives worked in health care. Food for thought but good luck none the less.

#43 Doug t on 12.30.15 at 7:12 pm

I remember my grandmother had players tobacco tins stuffed with silver dollars, fifty cent pieces and quarters – she had these all over the house tucked away. I learned something from her frugal ways thank god

#44 26% on 12.30.15 at 7:17 pm

I bet that there are plenty of sophisticated finance professionals today in Alberta, who similarly can’t find much room to debt repayment, they are happy to stay above the water in their oil production financing obligation, that did not seem to be a problem to service just a year ago.

Probably for less than 26% is the priority of paying off the debt.

If they go under, the banks and lenders are hit maybe even worst than in case of the household debt.

#45 Gonkman on 12.30.15 at 7:21 pm

Garth…

Thanks for providing all the insight over the past year.

We paid off our mortgage last year and paid off our last car loan just 2 weeks ago.

We are now debt free and own owe nothing. I don’t care if my home value drops. I am not in TO or YVR so it won’t be as bad here.

Property taxes, insurance and utilities are less than $1000 a now for us.

We could live on a 1/2 a salary if needed but luckily we still have 2.

Going to keep working on Maxing the TFSA’s which should be done by end of 2017. $80K to go in over 2 years with annual allowance. But it WILL get done!

Would be sooner but a little goes to the Ankle Biters RESPs and RRSP’s to ward off the CRA if needed.

Your insight into the US situation was also helpful. I dropped a chunk of my Maple ETFs into the US S&P unhedged ETF before the Dollar and TSX Drop.

So I did over 13% on one of my Equity only Accounts and just over 6% on another.

A lot of which was because of our Dollar dropping but hey I’ll take it as I don’t see the Kanuck Buck going close to par anytime soon.

Not looking forward to T2 raising HST and whatever other lunacy Heir Winnie the Pooh has in store for Ontario but… hey that’s a Fiberals for you.

Keep up the great posts and advice and all the best in 2016!

#46 waiting on the westcoast on 12.30.15 at 7:22 pm

If Telus is losing customers and making less money, they will eventually fire their fat cats (but don’t worry, they will get amazing severance packages).

If you want to make their money, join them and get it. I find most people would not want to work an exec’s job.

It’s easy to complain… Much harder to go out and do their roles.

I never worked at a company larger than a few hundred million because it is seriously difficult to lead and manage a massive organization.

#47 ROCK BEATS PAPER on 12.30.15 at 7:22 pm

“Not a chance. — Garth”

There is a small chance of a 50% haircut if real estate prices revert to their historical mean prices. Setting aside emotions, that can be calculated for north american residential real estate fairly easily.

One way is to take the neighborhood’s average household income and multiply by 4 to get what the average home price should be.

Another way id to take an approximate rental to asset value of 7.5%. So, a $500,000 house should get a rent of $36,500 per year ($3000 per month).

My $3500 rent gets me a $2 million dollar house in the GTA. So, I agree with Garth that rent beats ownership right now.

Florida was a great example of a bubble, where the rent to value went to 2%, then the crash brought it to 11% and now it is closer to 7%.

#48 Bytor the Snow Dog on 12.30.15 at 7:28 pm

No recognition for pointing out the faux pas….sniff sniff.

You want a treat for finding a typo? — Garth

#49 MF on 12.30.15 at 7:29 pm

#168 pinstripe on 12.30.15 at 2:48 pm

haha. Yeah I wouldn’t put too much stock in us either.

Btw, anyone notice that CPD was up 2% today. Feeling good about my rebalance early this month (right before the FED meeting)

MF

#50 Mark on 12.30.15 at 7:30 pm

“One way is to take the neighborhood’s average household income and multiply by 4 to get what the average home price should be.”

4 is pretty aggressive. 2-3 is more historically normal, and overshoot to the downside is usually a part of the process of ‘mean reversion’.

Thus, the prices that Canadian RE will eventually come to trade at will likely be quite shockingly low. Yet few will be able to take advantage because of the necessity of servicing all of the previous debt.

Volatility in the upside is usually associated with volatility in the downside.

#51 Bytor the Snow Dog on 12.30.15 at 7:32 pm

No recognition for pointing out the faux pas….sniff sniff.

You want a treat for finding a typo? — Garth

Yes please

#52 mark on 12.30.15 at 7:37 pm

Wait till he finds out Hyundai owns part of Kia and they share designs and tech.

#53 johnyk on 12.30.15 at 7:38 pm

$100K a year is chump change in Silicon Valley. No guarantee anyone will match the Canadian salary, lots of really smart qualified people there. Its a magnet, doncha know. Housing costs are nuts in any part of the SF-SJ area you would want to live ( you dont want to live in Fremont).

#54 common sense on 12.30.15 at 7:40 pm

Just back from 2 weeks of sun and 32C weather on the south coast of Cuba….

What did I miss?

And even Janet’s interest hike made Cuban national news!

#55 MF on 12.30.15 at 7:41 pm

#9 Godth on 12.30.15 at 6:15 pm

Thanks for the link. I would hope any country, powerful or not, has its own interest at the heart of its foreign policy. Is that not the point of foreign policy?

You think Canada doesn’t have doctrines with different names that serve to protect its interests abroad and at home?

MF

#56 Freedom First on 12.30.15 at 7:45 pm

They also have freedom, flexibility, and mobility. – Garth

…………………………………………

I love this Blog. As always, my personal Freedom First.

#57 the Hammer on 12.30.15 at 7:46 pm

BG

I want to say I’m sorry for being snarky the other day. I’m old and cranky and I got a large blue collar chip…on the shoulder. We can have different opinions about things. That’s OK. We all have different experiences, but I don’t come here to be snarky. I come here for other reasons. Probably the same as you. There are some smart people who comment here. The author is pretty smart about some stuff too. Anyway, sorry. JT

#58 Vivek on 12.30.15 at 7:46 pm

“…might suggest a buyer has to endure six months to sell” – what?

#59 OXI in GREECE on 12.30.15 at 7:48 pm

#2 Vacation on 12.30.15 at 6:05 pm
How does a RN (assuming employee) take 2 months vacation?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

By threatening to strike unless the bully union that represents them with “Tax Dollars” get their way.

#60 dividends on 12.30.15 at 7:48 pm

#19 espressobob on 12.30.15 at 6:27 pm

#1 resolution for 2016 is a diversified global portfolio, way less TSX.

And don,t do drugs. Doesn’t pay any dividends.

Depends on the individual.

Steve Jobs have found it quite beneficial and a scientist got a Nobel Prize for discovering the DNA structure during a trip. Freud’s mind was opened up to the method of psychoanalysis, just to name a few.

There are much more to the topic, but you probably should stick to coffeine, which seems to be the best fit to your brain. Not sure how much dividend it pays. I don’t follow it and I don’t claim to know a thing about it.
It is hard principle to live by, I know. Probably not for you either.

#61 observer on 12.30.15 at 7:48 pm

yep heard it for quite some time. All my buddies says they will pay down on their mortgage debt of credit card debt But year after year they are barely able to survive.

Can barely put food on the table and living paycheque to paycheque.

Dream on Canadians, you can bring a horse to water but you can’t make them drink. Until Canadian do start paying down their debt, then ” I will believe”

But until then they are great at making excuses.

#62 Habs 76-79 on 12.30.15 at 7:48 pm

There are only a few things in life that progress in a straight line including one in perpetuity.

A: One’s own life. From the minute we are born the time line moves forward and only forward in one direction, until we each meet our end.

B: Time itself, in perpetuity only moves forward and never deviates or cycles back.

All other things in life and our society tend to work or skew in some for of cycle.

Economies which are the driving force in many ways of life and living from each of us to all in society are cyclical. Things do not move up and up forever. They do kick back around. Yes, inflation can pull up all parts of an economy higher but each sub set in said economy will not expand beyond inflation forever.

Bubbles happen, people are often like sheep and jump on said bubbles, many buy the snake oil peddled to them. In time bubbles BURST! NO THEY DON’T JUST SLOWLY DEFLATE EITHER!!! Show me any bubble in our economic system that just slowly and less painfully deflate? You won’t, ALL BUBBLES POP!

Economies as a whole can due to many factors go POP! or can slowly deflate. They may not go back to zero as I said natural inflation does rise all boats so to speak.

Can some people make money if they read bubbles correctly? YES! But most wont. Just like gambling at a casino. Most if they get on a roll of winning will likely NOT take their winnings and run. All too many players will keep playing the “rigged” game until they lose all their winnings and maybe even more.

So it does not matter exactly the time, day, date a bubble bursts. In this case real estate will burst if it’s in a bubble. It could be Jan. 1 2016- July 1 2016-Jan. 1 2017 or HELL say even July 1 2020. If you are caught on the bad side of said bubble at any of these times you will be SCREWED!

But dammit I don’t want to read, hear or see any of you CRY “I’M A VICTIM!” unless you say your are a victim of your own greed and stupidity.

#63 Sam the Sham on 12.30.15 at 7:49 pm

The guy looses his job at Telus so they decide to celebrate by having the gal leave her nursing job and the two go on a two month vacation to Mexico. No explanation about paying the rent or the car payments ($2000 per month). Staying liquid and flexible. Sound like a plan. What could possibly go wrong?

#64 Victor V on 12.30.15 at 7:53 pm

#38 Greg

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/calgarys-fine-dining-restaurants-the-latest-victims-of-oil-price-collapse/article27946636/

Osteria De Medici has hosted celebrities and former U.S. presidents, has a long list of loyal, moneyed customers and has been a go-to restaurant for Calgary’s corporate parties for almost three decades.

But when owner Maurizio Terrigno describes the outlook for Calgary’s high-end dining scene, he has a sombre assessment.

“It’s a disaster,” Mr. Terrigno says, fizzy water in hand at his family’s imposing Italian restaurant just across the Bow River from downtown.

Corporate diners account for about 70 per cent of his business, and Osteria De Medici’s total year-over-year sales were down about 35 per cent. Christmas party bookings were down by half.

While Mr. Terrigno says Osteria De Medici is established enough to weather the downturn – and will even open an on-site private club in 2016 – the collapse in the price of oil and the resulting job losses in Calgary have hammered the city’s swank restaurants.

“There’s going to be a lot of blood on the streets,” he says.

#65 espressobob on 12.30.15 at 7:57 pm

#35 Jeff

Check this out.

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

And that’s in CAD.

#66 Bob Brincher on 12.30.15 at 7:57 pm

Reverse mortgages will eat away most equity of many Canadians so Justin Trudeau’s comments are as useful as a dull knife for cutting meat.

#67 RayofLight on 12.30.15 at 7:59 pm

#35 Jeff on 12.30.15 at 6:44 pm
Hi Garth,
You have constantly mentioned earning returns of 7%/year investing. Can you tell me the risks involved to achieve such returns? Since the TSX and Dow (unless you look at the US dollar performance) have both either lost or stayed status quo this past year, how do you maintain such high returns? Thanks, Jeff
Google ‘average’. — Garth

———————————————–
There is an article to-day in Business Insider that explains the probability of actually obtaining the markets average .It goes on to explain that it almost never happens.

http://www.businessinsider.com/average-returns-almost-never-happen-in-markets-2015-12

Well, that was a useless read. — Garth

#68 Mark on 12.30.15 at 8:00 pm

“( you dont want to live in Fremont).”

I’ve personally spent months living in Fremont/Newark hotels and never once feared for my safety. The housing stock looked perfectly fine to me, and there are some nicer areas. What exactly is the problem with living there? Its no worse than living in most of Calgary (and far better than most of it), and its just a quick drive across the Dumbarton bridge and wham you’re right in the heart of Palo Alto, Menlo Park, etc.

I find San Jose proper to be a lot more run down. Especially looking off south of US-101 and the shantytowns by Moffet Field.

No guarantee anyone will match the Canadian salary

The problem isn’t finding a salary like that. The problem is actually getting hired. The SFBay area is a poster child for the ills of firing large numbers of Americans and replacing them with foreign guest workers.

#69 Ogopogo on 12.30.15 at 8:01 pm

My fave part of tonight’s post:

The serious part of this debt orgy is that most of it’s been taken out when interest rates were at historic lows and the world’s biggest economy had a zero-rate policy.

No longer. That ended on December 16th.

I bet Garth’s stunningly accurate prediction still rankles US-haters, doomers, goldbugs and other assorted pessimistic cockroaches. These are the same vermin who foamed at the mouth about it’s-different-here-Calgary oh so recently. Where are they now?

Last time I challenged these vermin to publicly come out and humble themselves before the blog I still had a mentally-challenged poster mumbling some drivel about the instability of the US recovery. No shame these maggots.

Disclaimer: getting all the anger out before the new year. 2016 is looking great… for renters!

#70 Bucky on 12.30.15 at 8:07 pm

#5 Alberta Guy
Kory, TN status requires a job offer first. Have you got one?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Pretty straight forward. He interviews for a job, if he is accepted he gets a written job offer, which is in turn used to get a TN Visa. I have probably written a dozen job offer letters for TN visas. If successful in the job hunt advise the prospective employer to be careful on the language and the letter must meet some key criteria. I confess I used information from an immigration web site when drafting the first letter.

#71 Panhead on 12.30.15 at 8:08 pm

A bud of mine used to work for Telus. Lives here in 604land. Has 2 kids attending university. Worked there about 40 years. One day his whole department (10 or so employees) was called into a meeting. The whole department was cut but they told him they would guarantee him a job … but … it might be climbing poles in Fort Nelson. He took the offer …

#72 OXI in GREECE on 12.30.15 at 8:09 pm

http://www.europarl.europa.eu/news/en/news-room/20131212IPR30702/Deal-reached-on-bank-%E2%80%9Cbail-in-directive%E2%80%9D

Bail Ins in the EU….but don’t worry. There is no way that will ever happen here.

#73 Arb Watson on 12.30.15 at 8:09 pm

Interesting.Faber thinks US is going into recession.

#74 espressobob on 12.30.15 at 8:13 pm

#60 dividends

Do your lines well. Ever lost someone in your family? Pointless drivel.

By the way ‘moron’ it’s spelled “caffeine”! Get a Job!

#75 For those about to flop... on 12.30.15 at 8:17 pm

#187 JimH on 12.30.15 at 6:51 pm
#162 cramar on 12.30.15 at 1:44 pm
#166 For those about to flop… on 12.30.15 at 2:21 pm
#169 SWL1976 on 12.30.15 at 2:52 pm

Re: The CF 105 (Avro ‘Arrow’)

Wow! It’s a testament to the tremendous impact that the cancellation of this program had many in Canada that today, some 55 years after the fact, it still stirs strong emotions among Canadians of all political, social and economic leanings!

First, let me be clear; There is no doubt that the CF 105 in it’s final prototype configuration was a fine interceptor, with an estimated service ceiling of 60,000 feet ASL.

The cancellation of the project did, indeed, sound the death knell of Avro Canada, and the exodus of many highly skilled engineers and technicians from Canada.

Many today cannot understand why such a promising project was cancelled. Perhaps some context might help.

1. The Arrow was designed and developed as a long-range interceptor of Russian bombers attacking the North American continent. There is little doubt that with a proven top speed of mach 1.7, it could have fulfilled this role.

That said, the Russian launch of Sputnik and their manufacture of Thermonuclear weapons (hydrogen bombs) now made it clear that they had the capacity to deliver these weapons via intercontinental ballistic missiles. The Arrow offered no defense against this new threat, of course.

2. The Arrow’s first flight in it’s ‘final’ configuration took place in March 1958. In the case of virtually ALL military aircraft, the transition from ‘first flight’ stage to full production takes from 3 to 4 years, and is very expensive. So, in all probability, the first fully acceptable versions of the Arrow would not have been ready for delivery until into 1962.

This of course, begs the question of delivery where and to whom?

While the USAF had expressed mild interest, and had exchanged some notes of possible intent with the Liberal Government, it is extremely rare for branches of the US military to adopt aircraft from other countries. When they do, as in the case of the Hawker Siddeley Harrier, the aircraft is produced in the USA; in this case by McDonnell Douglas, who named it the AV-8B Harrier II.

Avro Canada did try to solicit orders from both the USA and Britain, but there were no takers.

3. There was deep disagreement within the Canadian Military establishment as to the necessity and feasibility of the program, as it was draining large sums from the army and the navy.

4. There is widespread mythology in Canada that the Arrow was somehow light-years ahead of the competition. While it was superior (in my opinion) to the F 102 Delta Dagger and the F 104 Starfighter, it is questionable whether it’s broad functionality would have approached that of the fabled F 4 Phantom. (We don’t have the blueprints for the Arrow, but it’s difficult to imagine its lighter airframe managing carrier take-offs and landings without extensive re-design.)

In any case, the F 101 Voodoo, the F 106 Delta Dart, the F 105 fighter/bomber (we affectionately referred to it as “the Thud” due to it’s ability to unload up to 18 750lb bombs per sortie), and other fighter/bombers like the A 6 Intruder and the development of the A 7 Corsair were already straining the budgets of the US military.

In other words, the Arrow had stiffer competition than many realize.

What truly is unfortunate is the sad fact that the design and manufacture of 5 aircraft (the 6th was 90%+ completed) so stressed Avro Canada that the cancellation of the project resulted in the company’s demise.

When all the eggs are in one basket, and when nobody really wants the eggs, there is always a huge increase in risk. On that we can all agree.

///////////////////////////////////////
Hi Jim ,I just wanted you to know that I just read this and appreciate the effort in helping me understand some of Canada’s history.

M41BC

#76 Sunny on 12.30.15 at 8:19 pm

Hi Garth,

Are mortgages backed securities a good investment, even if mortgages default?

#77 Smoking Man on 12.30.15 at 8:19 pm

So I’m driving with my youngest son to the LCBO, out of nowhere this six figure IOS baby developer goes “Dad; If I wanted to make more money than you one day what should I do?”

“It’s imposable, you’re not a Sociopath.” I said
While I’m in the store stocking up for the weekend he googles it. Read below.

I get back in the car and say, “There is one way, find something to exploit the Man Made Climate Change Bullshit, governments are going to through away billions at it. Come up with a bull shit concept, product, or Idea and line up like all the other rabid dogs for your free ride.

The kids a bit slow, he’s looking at a job board, on his iPhone he comes across a World Wild Life Job Add, He reads it. Near the end dealing with the desired personality type, must be active in social justice.

I said “Bingo my theory is correct, they entire movement is hard core Communists masquerading as tree huggers, if you’re an insider, you will be farting gold. Now what the hell are you doing reading job boards, have I taught you nothing.”

Sociopaths

#1) Sociopaths are charming. Sociopaths have high charisma and tend to attract a following just because people want to be around them. They have a “glow” about them that attracts people who typically seek guidance or direction. They often appear to be sexy or have a strong sexual attraction. Not all sexy people are sociopaths, obviously, but watch out for over-the-top sexual appetites and weird fetishes.

#2) Sociopaths are more spontaneous and intense than other people. They tend to do bizarre, sometimes erratic things that most regular people wouldn’t do. They are unbound by normal social contracts. Their behavior often seems irrational or extremely risky.

#3) Sociopaths are incapable of feeling shame, guilt or remorse. Their brains simply lack the circuitry to process such emotions. This allows them to betray people, threaten people or harm people without giving it a second thought. They pursue any action that serves their own self interest even if it seriously harms others. This is why you will find many very “successful” sociopaths in high levels of government, in any nation.

#4) Sociopaths invent outrageous lies about their experiences. They wildly exaggerate things to the point of absurdity, but when they describe it to you in a storytelling format, for some reason it sounds believable at the time.

#5) Sociopaths seek to dominate others and “win” at all costs. They hate to lose any argument or fight and will viciously defend their web of lies, even to the point of logical absurdity.

#6) Sociopaths tend to be highly intelligent, but they use their brainpower to deceive others rather than empower them. Their high IQs often makes them dangerous. This is why many of the best-known serial killers who successfully evaded law enforcement were sociopaths.

#7) Sociopaths are incapable of love and are entirely self-serving. They may feign love or compassion in order to get what they want, but they don’t actually FEEL love in the way that you or I do.

#8) Sociopaths speak poetically. They are master wordsmiths, able to deliver a running “stream of consciousness” monologue that is both intriguing and hypnotic. They are expert storytellers and even poets. As a great example of this in action.

#9) Sociopaths never apologize. They are never wrong. They never feel guilt. They can never apologize. Even if shown proof that they were wrong, they will refuse to apologize and instead go on the attack.

#10) Sociopaths are delusional and literally believe that what they say becomes truth merely because they say it!

#78 nonplused on 12.30.15 at 8:28 pm

I don’t see what the difference is between a Hyundai and a Kia. Both are relatively cheap, reliable cars that expire as planned on year 10 after manufacture. So you get 4 free years after you pay it off with both brands. That’s better than a Chevy or a Ford, which you can drive straight from the dealer to the junk yard.

#21 Van real

Have you lost it? The only difference between Calgary and Vancouver is the proximity to the ocean. BC is entirely resource dependant just like Alberta. Sure Alberta is more oil dependant but I don’t know if you checked but your logs and aluminum aren’t worth anything right now either. And Alberta at least has some geoscience and oil services expertise it can export, BC does not. Safety Boss was not born in BC. Nothing is born in BC but mining and socialism. Tourism? Banff is in Alberta. Nobody flies from Europe or China or Japan to see the Okanogan. It’s just a desert with a lake. They go to the Mayan or something like that if they want sunshine. So when Alberta goes broke the Okanogan does too, and then the rest of BC. Whistler is still an attraction but I understand they are pricing themselves out of the market much to the benefit of the resorts located in the Banff National Park, which is in Alberta.

Even the booming BC oil patch, which has been the source of all recent strength in the BC economy, is dead now as all that oil and gas must flow to Alberta before it moves to further markets and all the investment capital came out of Alberta. BC is an oil economy too. Sure, BC also has wine and apples, which Alberta does not, but that isn’t going to float the boat.

#79 SWL1976 on 12.30.15 at 8:29 pm

In 2016 this blog resolves to be less cheerful.

Funny I was thinking of going in the other way. Basically I know and understand that the system is rotten to the core and need no further proof of it. I no longer feel the need to study the root of the problem which in turn engages my energy into the madness.

2016 for me is no longer going to be focusing on who did what or who is doing what, but where do we go from here?

Perhaps we can reach a critical mass of critical thinking and a mass awakening

#187 JimH – Great points about the AVRO. You certainly know about aviation and its history.

My biggest question still remains though. If it wasn’t political why was everything scrapped?

#80 For those about to flop... on 12.30.15 at 8:33 pm

#54 common sense on 12.30.15 at 7:40 pm
Just back from 2 weeks of sun and 32C weather on the south coast of Cuba….

What did I miss?

And even Janet’s interest hike made Cuban national news!

//////////////////////////////
Welcome back Common,I’ll sum it up for you.

The young folk don’t like the old folk.

The old folk don’t like the young folk.

Leo still doesn’t like Mark.

Mark still doesn’t like Leo.

Freedom First still doesn’t like anyone that doesn’t have meat and two vegetables…

That’s about it… Oh I put a code in the bottom of my posts now with my gender,age and province.So people know where I’m coming from with my points of view.
It looks just like this…

M41BC

#81 Leo Trollstoy on 12.30.15 at 8:35 pm

I think this is the first sensible couple that Garth has profiled in a long time. They must be rare. Established, easily employable, sensible and ambitious. They’re awesome. Best wishes to them.

#82 Gravity | Realties.ca on 12.30.15 at 8:36 pm

[…] Source: http://www.greaterfool.ca/2015/12/30/gravity-2/ […]

#83 boopsie on 12.30.15 at 8:41 pm

done. 1.7 MER notwithstanding. When you are 70 yrs old, you just leave the rebalance to them.

#84 pwn3d on 12.30.15 at 8:43 pm

#78 nonplused on 12.30.15 at 8:28 pm
“The only difference between Calgary and Vancouver is the proximity to the ocean.”
————-
Hey Garth, how about handing out annual awards to special bloggers? This is my nominee for the mark77 award of excellence, given to the dumbest blog comment of the year (not written by mark).

#85 Love my Kia on 12.30.15 at 8:47 pm

Had my KIA Sorento 2 years now and no recalls. First car I ever owned without one.

It came decently equipped for 27K including taxes. The extra money I could have spent on something ‘better’ went into my TFSA instead.

Not into car/bike porn, although I built a small 2 bed place back in ’08. Not a McMansion, but I do like to nest and small equals cozy for me.

#86 Octopus Prime on 12.30.15 at 8:47 pm

#47 ROCK BEATS PAPER “rental to asset value of 7.5%”

That means the semi detached that I rent in Mississauga for $1650 is worth 264K – A near 50% correction of todays market value.

I could afford that.

sad face.

#87 pwn3d on 12.30.15 at 8:49 pm

Btw, those honestly thinking a housing crash of 50% will happen in YYZ and YVR, is that after they go up more, or starting when exactly?

Expect another good year for those two markets in 2016. I haven’t seen anything yet that will not give us another good spring and fall market. Of course I said the same last year when many were saying, ok now it’s definately going to drop 50% and it tacked on another 10% instead.

Personally, if it dropped even 40% I would buy a rental without thinking twice. It may be hard to get where you think it “deserves” to go.

#88 common sense on 12.30.15 at 8:50 pm

#80 Flopper

Thank you…looks like I didn’t miss much…

#89 joblo on 12.30.15 at 8:51 pm

I’m goin Klinger in 2016
https://www.youtube.com/watch?v=IkJilrxuHSY
I’ll never get laid off.

#90 45north on 12.30.15 at 9:00 pm

JO: The most probable path remains a devastating collapse of the debt bubble

I don’t think most people understand how bad things are. I work in banking and can tell you the majority of the recent buyers are broke.

okay JO according to the Canadian Bankers Association, 0.15% of mortgages in Ontario are three months in arrears

http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf

I mean that’s like zero.

but someone said don’t expect the bankers to announce the collapse. ( actually the someone was a poster named Aggregator ) Mark Hanson says that a rising market hides all problems.

I’ve pointed out that as the American market collapsed the American Government reduced interest rates from 5% to 0% as opposed to the Canadian situation where the rates will be increasing. That standard American mortgages are 30 years as opposed to Canadian which are 5 years.

from reading this blog I do get the feeling that most of the recent buyers are broke

#91 rockbeatsscissors on 12.30.15 at 9:02 pm

Anybody notice that the American stock market indices in 2015 are flat as is the Fed’s balance sheet? If you map out the “phenomenal” recovery since the depths of 2008 you will see that the stock market has mapped to the same growth trajectory as the Fed balance sheet?

#92 Mark on 12.30.15 at 9:03 pm

“easily employable, “

Definitely not the IT guy. Even nursing has, over the past few years, gotten a lot softer (I have quite a few nurse friends!). A lot of new grads these days are increasingly being forced to take marginal nursing jobs (ie: casual positions in long-term care homes, for example) instead of the high quality full-time positions in hospitals. Unlike a decade ago, walking in, getting a really good position, and being able to get into specialty fields (ie: endoscopy, OR, etc.) is not a slam-dunk. Nursing training seats have grown dramatically. The nursing profession is starting to look a lot like the IT sector did circa the late 1990s-early 2000s — very close, if not slightly past its peak, with employers looking to relentlessly push down costs and huge pipelines of people in the training pipeline.

With the heavy unionization of nursing, re-employment isn’t all that easy either. Leave one hospital system, start at another, and you’re basically back to the bottom of the seniority list.

#93 BG on 12.30.15 at 9:05 pm

#57 the Hammer

Thank you and no worries.

I find Internet makes it easy to get carried away.

#94 Peppy sue on 12.30.15 at 9:09 pm

I hold a few mutual funds and want to switch to etfs but my financial advisor is not being helpful in aiding the switch because, well, it’s not in his best interest obviously. How do you break away from your advisor after a long relationship and go it alone? Are there advisors out there who i can switch to that would support my not holding any mutual funds – is fee based management the only answer? Thanks Dawgs.

#95 Sheane Wallace on 12.30.15 at 9:09 pm

Poloz sees no inflation

Edmonton grocery shoppers seek out produce bargains as vegetable prices skyrocket

https://ca.finance.yahoo.com/news/grocery-shoppers-seek-produce-bargains-150000489.html

The blind led by the one eyed.

#96 Mark on 12.30.15 at 9:19 pm

Garth (or anyone else who knows), is howestreet.com / talkdigitalnetwork.com dead? No new interviews in weeks, some of the graphics don’t load properly, and the articles appear to be gleaned automatically from other websites.

I know they had previously relied significantly upon advertising from junior miners, most of whom are significantly distressed these days, but I did find the interviews, especially with guys like Bob Hoye, to be quite intellectually stimulating and thought provoking.

#97 Rexx Rock on 12.30.15 at 9:20 pm

Stay 3 months in Mexico where a couple can live very comfortable for $1300 a month.Take a break and don’t help finance a incompetent wasteful government.The freedom of not owning a home can sometimes be rewarding like not coming back to be slave all year long but on your own time.Good luck and enjoy paradise and laugh at those poor souls slaving away in Canadian Siberia.

#98 Nemesis on 12.30.15 at 9:24 pm

#IsThereLifeAfterTelus?… #OrchestralLightElectric… #Circa1976…

https://youtu.be/w1iRhy7Rl8E

[NoteToGT: I am reliably informed that their first annual report was remarkably well illustrated…]

#99 Kenchie on 12.30.15 at 9:39 pm

#26 TCContrarian on 12.30.15 at 6:33 pm
““There is a doomer by the name of Hilliard MacBeth who thinks housing could drop 50% off peak. Do you share the same views Garth? 50% off is kinda Doomie.”
*************
Not a chance. — Garth

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

I don’t get you Garth. Historically, the affordability ratio for RE is 2.5-3.5 times gross family income…
so, using a (high) $100k for simplicity, this would indicate $250-350k as an ‘affordable’ range.
We’re witnessing numbers 3x and 4x this in Vancouver/Toronto, so why do you think a 50% drop is impossible in these markets?

Florida, Arizona, and SF saw these (and greater) ‘corrections’ – are we that different?”

———————————————–

The 3.5x price-to-income ratio for housing is irrelevant without adjusting for interest rates changing.

Florida and Arizona had many, many subdivisions that were sold to investors who planned on flipping them, which is not applicable in Van/TO. Many of these subdivisions were never occupied nor completed because the builders went bankrupt.

It’s a totally different world.

#100 Panhead on 12.30.15 at 9:41 pm

#94 Peppy sue on 12.30.15 at 9:09 pm
I hold a few mutual funds and want to switch to etfs but my financial advisor is not being helpful in aiding the switch because, well, it’s not in his best interest obviously. How do you break away from your advisor after a long relationship and go it alone?

Get a divorce …

#101 Y m o 3 on 12.30.15 at 9:43 pm

The days of windfall gains are over, and only varying degrees of risk lie ahead.’

I agree. But this is also my fear with regards to financial markets…

Are you comparing houses in East York with the Japanese equity market? See how silly and provincial that sounds? — Garth

#102 Greedy Developers? on 12.30.15 at 9:44 pm

Turned on the TV today to BNN to check out the business news and I heard that because interest rates aren’t expected to go up until late 2017 in Canada at the earliest (don’t know how they deciphered this), the Condo developers are expecting prices to rise another 40% over the next 3 years in Toronto ??? Enough comedy for one day in about 2 minutes, so I shut the idiot box off and went out for a run.

#103 Linda on 12.30.15 at 9:47 pm

#24 Jo: Thank you for sharing. Your comments validate what I’ve been seeing from clients – growing desperation to reduce their lines of credit & an even more telling reluctance on the part of their lenders to process the reductions. Further, I have also noticed the addition of more restrictions & caveats in performance securities provided by said lenders on behalf of their clients. I can truthfully say what I’ve been seeing is worse than 2008. If you are correct & the fallout is just beginning, can’t say I’m looking forward to 2016.

#104 squidly77 on 12.30.15 at 9:47 pm

There is a doomer by the name of Hilliard MacBeth who thinks housing could drop 50% off peak.

Well lets do some math. That’s not hard.

If you borrowed $500,000 for 5 years @ 2.5% your monthly nut would be $2,240

If you borrowed $450,000 for 5 years @ 3.5% your monthly nut would be $2,247

If you borrowed $400,000 for 5 years @ 4.5% your monthly nut would be $2,214

If you borrowed $350,000 for 5 years @ 5.5% your monthly nut would be $2,136

If you borrowed $325,000 for 5 years @ 6.5% your monthly nut would be $2,177

So if you believe rates will rise, that’s a 35% drop in property values simply do to the normalization of interest rates.

http://www.canadamortgage.com/calculators/amortization.cgi

Just sayin.

#105 the Jaguar on 12.30.15 at 9:51 pm

#78 Non Plused.

You are so right. But they (BC people) never get it. They are polar opposites to their eastern neighbors. Even in the Okanagan all the successful people are from elsewhere (mostly Alberta, Saskatchewan, etc). They, (BC people) have a different mindset. I’m sorry to be so hard on them, but it’s true. No work ethic. (Vancouver Island is the same, by the way) They seem oblivious to the fact that without Hong Kong and mainland Chinese immigration and money they would be the same pot smoking backwater they always were… Their biggest cash cow is of course BC Bud. And never mind their wine. It’s just average and way overpriced. Only Alberta has real wine selection because we are the only true democracy in this country.
That’s probably why Billy Bob cut loose. He got tired of being a bush pilot with limited horizons. But he is lonesome for the homeland.

#106 Smoking Man on 12.30.15 at 9:56 pm

This is war…bastards.

http://www.dailymail.co.uk/health/article-3377811/Britain-s-largest-sperm-bank-bans-men-dyslexia-autism-ADHD-donating-triggering-outrage-eugenics.html

#107 AisA on 12.30.15 at 9:57 pm

OK, haven’t commented in eons.

The way you get a MORE than 50% correction without much effort is simple. The currently overleveraged will get slaughtered by a 30% plop, the leveraged but not so badly leveraged crowd will swoop in thinking they are the ones doing the vulching and end up becoming the new overleveraged. As the economic situation deteriorates (it bloody well will) and rates slingshot to where they should be to restore balance to the force (they bloody well will), BAMM! there’s your other 30%. Easy 60% off the top over the next few years. I may have oversimplified but that’s the jist.

#108 squidly77 on 12.30.15 at 10:02 pm

I always had a mortgage when my kids were growing up, they needed stability. But as soon as the eldest left for university (@18), that was it, we sold. That was in 2002 and I believe my mortgage at the time was about 6%.

We have rented ever since. This accomplished two things, it set my kids free to live their lives and it freed us up from the endless hassles of home anchor ship and the endless trips to Revy and the like.

I have no intention of ever owning a mortgage obligation again with the possible exception of a very high interest rate environment which would cause rents to skyrocket and prices to plummet.

To this day only one of my kids owns a mortgage obligation, she lives in Florida and I believe her and her husbands mortgage is locked in at 3.23% for 30 years, her principle owing is under $130,000 In Homestead Florida.

#109 Lucky Sometimes on 12.30.15 at 10:04 pm

Went to see The Big Short which aside from being a terrific movie, that shows the 2007/8 GFC in understandable terms that even non Bankster type like me can understand. Also shows similarity to Canada’s sub-prime mortgage bubble nicely exemplified by an interview with a stripper about her horniness of owning 5 rental properties.

#110 Sam on 12.30.15 at 10:15 pm

LOL! Yea, Garth. I’ve always thought you were too cheerful. Happy new year!

#111 Mark on 12.30.15 at 10:15 pm

“That means the semi detached that I rent in Mississauga for $1650 is worth 264K “

A rule of thumb for RE investors is that one should never pay more than 100X monthly rent for a residential property, and 80X is more desirable. Using such, the semi is only ‘worth’ between $132k and $165k.

If you work back to a stock market equivalent P/E ratio, this works out to a ratio of approximately 8-10. The contemporary TSX trades at 12-14X earnings (with most cyclicals beaten up pretty heavily), but has greater earnings growth upside. When compared to most other asset classes, Canadian RE, even though its dropped slightly over the past 2 years, remains absurdly expensive.

#112 Sam the Sham on 12.30.15 at 10:18 pm

#76 Sunny

“Are mortgages backed securities a good investment, even if mortgages default?”
———————————————–
Go see the current movie “The Big Short” for your answer.

#113 Nemesis on 12.30.15 at 10:20 pm

#TheWayBackMachine… #VisitsTheBomarc… #ForAvroFans&AeronauticalHistoriographersEverywhere…

https://youtu.be/qQplkS4az6M?t=1m30s

https://youtu.be/uzhkMujY4AQ?t=16m36s

[NoteToGT: Plus ça change, plus c’est la même chose.]

#114 Leo Trollstoy on 12.30.15 at 10:36 pm

Whether you believe you can find a job or not, you’re probably right.

Same works for almost everything in life.

#115 Pelican on 12.30.15 at 10:37 pm

Please leave Mark alone. Also Black Dog with the U.S.A thing. If you think they’re wrong, then just tell us why. Don’t try to personally degrade them for their opinion or thoughts.

Most of you posting here have your strong opinions on things and I don’t know if you are right or wrong. I look at how you consider others and if you express yourself in a respectful manner. I’m just trying to look at all the information that people post and really don’t want to read disrespectful garbage.

I read about the Avro Arrow posted by Cramar, I believe, and had the same emotional reaction. My father worked for Avro and I’ll never forget the day he was laid off. I was very young and the emotional impact of that day laid the framework for my need to save for that rainy day.

These incidental thoughts that occur on this blog keep me coming back.

#116 prairie person on 12.30.15 at 10:40 pm

Mr. Berg, himself a U.S. citizen, also said that racking up $50,000 in penalties is easy, with fines in the tens of thousands even for just failing to notify U.S. authorities about Canadian accounts such as tax-free savings accounts or registered education savings plans.

#117 Smoking Man on 12.30.15 at 10:43 pm

Are you a Chimp or a Bonobo.

Something tells me some diabolical femanizi is behind this sunmersive mind fking.

Thinking cowboys are chimps, and city slickers bonobos.

You desire.

Dr Smoking Man
PhD Herdonomics.

https://m.youtube.com/watch?v=Q_izpq0Ar-Y

#118 Shawn - Need stock picks on 12.30.15 at 10:44 pm

Hey Shawn, if you’re out there, do you have any recommendations on stock picks for the new year?

I know in the past you mentioned how you continue to hold: STN, CTC.A, CNR, CWB, MRD, ATB.D, FSV, WFC, CSU

Still holding those today and in the future? Thanks in advance.

#119 hoping on 12.30.15 at 10:46 pm

Consider:
etfs:
XMI, CWW,XWD,XEU,
Good luck!

#120 Millmech on 12.30.15 at 10:47 pm

#109
Seen the trailers,looks interesting.Another good one to watch is “How to Win the Losers Game”on Youtube,eye opening.

#121 snowbugz on 12.30.15 at 10:50 pm

#21 Van real on 12.30.15 at 6:29 pm
…… Vancouver has its beauty and climate. ”

Sorry run that by me again????6 months of cold rain and grey skies, 4 months of cold grey skies with intermittent showers, 2 months of summer with 10-20 good days…. I fail to see the climate attraction there!

#122 Setting the Record Straight on 12.30.15 at 10:53 pm

@#52 mark on 12.30.15 at 7:37 pm
Wait till he finds out Hyundai owns part of Kia and they share designs and tech.

———-

He was making a joke! Geez!

#123 learningfromyou on 12.30.15 at 11:00 pm

Thank Garth for your post.

#30 BC Guy
It’s not only Telus, the big players have their customer support in India, call Microsoft as an example. I think you’ll start getting answer by somebody in the USA when your problem is level 3.

Working remotely make anybody around the globe to be at your company anytime, data entry, where they are ?(India), programmers (India, Pakistan, etc), slowly make think if it will make sense to graduate that many people here when it will be cheaper offshore. Sad feelings come from these thoughts, it sucks.

#130 InvertedYieldCurve
http://www.greaterfool.ca/2015/12/29/big-things/#comment-421340

http://www.greaterfool.ca/2015/12/29/big-things/#comment-421350

Thank you for the mentioned posts, I read some books and watched some videos about options, sometimes people bragging about why and how they were doing it.

I hasn’t been able to grasp the logic behind it,

1-I understand that having some indexes in my portfolio provide me some dividends periodically that I can account for, always for sure with the risk of see the change in that number, the same with certain well established stocks knowing that they are riskier than indexes.

2-I understand that with options you get the right, not the obligation to buy and sell, also that you could “control” more shares without paying directly for them because it’s cheaper to buy options than the shares.

But I’m far away to understand the options logic to be able to use it in my advantage. I’d like to learn it,

for example
-you do not get dividends for having options related to one stock or index.
-analysis behind the decisions of buying puts and calls and what price and terms.

I gonna stop here the queue of questions in relation to these subjects.

#124 Smoking Man on 12.30.15 at 11:00 pm

Why is the r so close to the d on the possessed key board.

Desire should have been Deside on my last post.

Sherly Valintine, I know you love my posts, sorry about the big fat thumb typo.

I’M not even going to talk about my shoe size?

Those gigantic snow shoes always get me back to the room hours after I’ve lost consciousness.

#125 CalgaryCarGuy on 12.30.15 at 11:01 pm

Re #38 Greg
“Tried to go for dinner at 445pm yesterday in NW calgary. The Keg had a 2 hour wait and the parking lot was full. People everywhere spending like crazy! It was like something out of 2007.”
——————————————————————
I’ve resisted posting what I’m about to say because I imagine most won’t believe it but here goes. I work at an import car dealership in Calgary. In the service department. We have consistently been one of (and often the top) dealership for our brand in all of Canada for many years now. Especially in the Service department. As we are about to finish 2015 in the abysmal Calgary economy we are about to record our very best year ever in the service department at our dealership. To this day we are the busiest, most profitable service department for our brand in all of Canada! Right here in Calgary. Several of us even got nice Christmas bonuses this year which is a rare thing indeed for our industry even in average great years. Yes, the sales department is struggling but the service department is holding up the store pretty well. Many (most?) other dealerships are having a hard time in service and sales. Why are we different? I’ll tell you. It is absolutely because of the reputation of integrity and honesty with customers that we have worked very hard to achieve through many,many years of hard work, that’s why. Our customer base is very strong and they trust us. Trust is everything and when times are tough like they are in Calgary these days, a good reputation will pull you through. I’m expecting the coming year to be ugly for sure but I am sure glad that I work at the dealership I am at. No doubt about it.

#126 Shirley Valentine on 12.30.15 at 11:02 pm

#117 Smoking Man on 12.30.15 at 10:43 pm

Are you a Chimp or a Bonobo.

Something tells me some diabolical femanizi is behind this sunmersive mind fking.

Thinking cowboys are chimps, and city slickers bonobos.

You desire.

Dr Smoking Man
PhD Herdonomics.

https://m.youtube.com/watch?v=Q_izpq0Ar-Y
——————

Wow, Cowboy Smokey man …. who’s the chimpess in your world!.. you studly alien beast of a man

#127 Kenchie on 12.30.15 at 11:11 pm

#94 Peppy sue on 12.30.15 at 9:09 pm
“I hold a few mutual funds and want to switch to etfs but my financial advisor is not being helpful in aiding the switch because, well, it’s not in his best interest obviously. How do you break away from your advisor after a long relationship and go it alone? Are there advisors out there who i can switch to that would support my not holding any mutual funds – is fee based management the only answer? Thanks Dawgs.”

Open a Questrade account, tell him/her to liquidate your holdings and do a EFT to your bank account. Then move the money from your account to questrade. Buy the ETFs yourself in the account.

#128 learningfromyou on 12.30.15 at 11:17 pm

“( you dont want to live in Fremont).”
I’ve found these types of statements really relative to each person.

I used to live in Scarborough, every day somebody died in the are according to the news, the neighborhood was crowded but everybody was polite and silent (There was a cemetery in the area). :)

But honestly I consider that corner where I used to be a very peaceful one, a lot different than Montreal North, you feel the “environment heat” in some places there.

#129 Smoking Man on 12.30.15 at 11:17 pm

DELETED

#130 Mr. Wrong on 12.30.15 at 11:20 pm

First time posting – few months new reader here. Always an interesting read – thanks for your thoughts Garth.

There’s been many talks about the downfall of RE prices to come in the YVR & 416… since I’m in the 416 crowd, it’s hard to say… we still got immigration of people coming in, you got the people from refugee places and you still got Mainland Chinese (not the HKer’s) who seem to be filthy rich and buying property since the RMB rate has gone up and our loon has lost a wing. I still see many people buying property despite it being slower (due to XMAS?).
Will the market really slow? there seems to be increasing demand versus increasing supply.
There’s a project called the observatory (16th Ave & Bayview) that’s coming up that I’m interested in… but of course, I’m priced out… seriously…
Rear Lane Towns from $900000*
Semis from $1100000*
36′ Singles from $1300000*
45′ Singles from $1700000*
50′ Singles from $1900000*

It’s outrageous! but does say something about where the market is heading… these are preview pricing for spring 2016… So…. they think these will sell for that price; what is the market telling us?

As with OIL prices; there’s so much CAPEX cuts, prices will bound to go up eventually… but by that time, so have most of the jobs in the oil patch.

my CDN$0.02

#131 Mr. Wrong on 12.30.15 at 11:22 pm

“Open a Questrade account, tell him/her to liquidate your holdings and do a EFT to your bank account. Then move the money from your account to questrade. Buy the ETFs yourself in the account.”

Problem with Questrade or any financial institution, they make it hard for you to take the money out. Personally, I’d just leave it in your existing account and just buy ETFs there… but careful with ETFs, they depreciate.

You should explain that comment. — Garth

#132 Pierre on 12.30.15 at 11:32 pm

Ok. First of all Calgary is a one trick town. Oil. No diversity and no desirability beyond its oil. It’s a frigid little town without one redeeming feature. Without oil, it’s a nothing hole. Toronto and Vancouver however are very different. They both have much about them that is desirable. Toronto has its sheer size and diversity. Vancouver has its beauty and climate.

Have you ever lived in Calgary to say such things? I actually lived for 6 years in Vancouver and moved to Calgary about a year ago. You can’t be more wrong about this the City. It’s very young and dynamic,I find people to be much friendlier and open than in Vancouver. In terms of environment, the Mountains are absolutely beautiful around here and, in terms of climate I would choose Calgary over Vancouver any time. It’s very sunny and not that cold, and with the Chinook, we get very warm days even in the middle of the winter. I remember my first winter in Vancouver: 20 consecutive days of pouring rain… so much for a great climate!

One last thing. In Calgary, you can own a very nice house (not a Vancouver special) for $400k and be within 15-20 minutes of downtown… try that in Vancouver. At least here, I can raise my family happily in our own home without mortgaging my life away.

PS: I did love my time in Vancouver, and love to go back there for a few days. But as a place to live, I much prefer Calgary… as for Toronto, i’m not quite into wasting my life in traffic, and I like mountains, but to each his own.

#133 Mac on 12.30.15 at 11:36 pm

I use Questrade and have had zero issues getting money out and into my chequing account. Same with my Forex account for that matter.

#134 Smoking Man on 12.30.15 at 11:40 pm

Deleted;

bastard….. hate you gartho.

obviously Garth has researched brain on urban dictionary, just trying for a Sheryl Valintine oh, ahh.

So she sleeps good tonite thinking about a nectointe.

Your a fantasy killer. The old protective grandmother at the dance.

Ass hole.

#135 Shirley Valentine on 12.30.15 at 11:46 pm

124 Smoking Man on 12.30.15 at 11:00 pm

Why is the r so close to the d on the possessed key board.

Desire should have been Deside on my last post.

Sherly Valintine, I know you love my posts, sorry about the big fat thumb typo.

I’M not even going to talk about my shoe size?

Those gigantic snow shoes always get me back to the room hours after I’ve lost consciousness.
—-
Oh I think Smokey man had desire on his mind!

#136 Vampire Studies GMST 454 on 12.30.15 at 11:51 pm

175 When (from last blog) – as I said, the idea has been around in various forms for decades and was well covered in my first year economics text oh so long ago. I believe one reason that it comes up every few years is that our current system is just getting too complex and expensive, and already has many “leaks”. Can you elaborate on any of the “unintended consequences” that concern you?

#137 cyclist on 12.30.15 at 11:56 pm

Hey that picture is NOT funny…..

#138 CalgaryCarGuy on 12.31.15 at 12:00 am

Re #132 Pierre

THANK-YOU. Calgary is a GREAT city to live in for sure. Although it is very nice to be so close to the mountains and all that beauty and recreation Calgary’s greatest attribute is it’s people. The strength of heart and its resiliency in tough times is unmatched. Happy New Year!!

#139 hoping on 12.31.15 at 12:04 am

More ETFs to consider:
ZLU , XMU

#140 Mark on 12.31.15 at 12:07 am

Woah Smokin Man, are you on the gorilla biscuits tonight? Can you hook the rest of us up? Its pretty hard to find good supplies these days.

#141 For those about to flop... on 12.31.15 at 12:09 am

#125 CalgaryCarGuy on 12.30.15 at 11:01 pm
Re #38 Greg
“Tried to go for dinner at 445pm yesterday in NW calgary. The Keg had a 2 hour wait and the parking lot was full. People everywhere spending like crazy! It was like something out of 2007.”
——————————————————————
I’ve resisted posting what I’m about to say because I imagine most won’t believe it but here goes. I work at an import car dealership in Calgary. In the service department. We have consistently been one of (and often the top) dealership for our brand in all of Canada for many years now. Especially in the Service department. As we are about to finish 2015 in the abysmal Calgary economy we are about to record our very best year ever in the service department at our dealership. To this day we are the busiest, most profitable service department for our brand in all of Canada! Right here in Calgary. Several of us even got nice Christmas bonuses this year which is a rare thing indeed for our industry even in average great years. Yes, the sales department is struggling but the service department is holding up the store pretty well. Many (most?) other dealerships are having a hard time in service and sales. Why are we different? I’ll tell you. It is absolutely because of the reputation of integrity and honesty with customers that we have worked very hard to achieve through many,many years of hard work, that’s why. Our customer base is very strong and they trust us. Trust is everything and when times are tough like they are in Calgary these days, a good reputation will pull you through. I’m expecting the coming year to be ugly for sure but I am sure glad that I work at the dealership I am at. No doubt about it.

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

I like reading posts like yours,instead of people boasting how much money they are worth,but the one thing that stuck out for me as you told your story and I’m not saying you guys aren’t doing a good job is that maybe the service department is busy but the sales are slow is because people are looking after what they’ve got as opposed to trading up.
If money’s tight your gonna stick with what you got and head off a major expense ,like a transmission or something like that.
That’s my take anyway.
Good luck.

M41BC

#142 Shirley Valentine on 12.31.15 at 12:13 am

#129 Smoking Man on 12.30.15 at 11:17 pm

DELETED

Oh Smokey man .. was that for me! Host Garth must have quite the vault of DELETEs from the one and only Smokey man…. Hopefully he uses your full proof alien encryption !!

#143 westcoast Woman on 12.31.15 at 12:23 am

To #94 Peppy sue on 12.30.15 at 9:09 pm – I use Scotia iTRADE, through Scotiabank. I approached my advisor at Scotiabank to move my mutual funds, bought years earlier from a different advisor, into Scotia iTRADE.

The advisor was very helpful, and shared that he too used iTRADE. I find it fairly easy to use, and have bought ETFs based on recommendations shared by other Dawgs. I only wish that I’d moved out of the mutual fund years earlier

F48BC (trying out this new protocol!)

#144 willworkforpickles on 12.31.15 at 12:26 am

I don’t have debt or equity here in my bunghola in world renowned Detroit City friends.

#145 paul on 12.31.15 at 12:28 am

#125 CalgaryCarGuy on 12.30.15 at 11:01 pm

————————————————————-
The cream always rises.

#146 Van real on 12.31.15 at 12:42 am

#132 Pierre.

Yes I’ve lived in Calgary. Grew up there in fact. BTW I think you doth protest too much.

#147 JS on 12.31.15 at 12:51 am

@96 Mark https://www.youtube.com/user/talkdigitalnetwork/videos

#148 syke-ology on 12.31.15 at 1:34 am

#38
Tried to go for dinner at 445pm yesterday in NW calgary. The Keg had a 2 hour wait and the parking lot was full. People everywhere spending like crazy! It was like something out of 2007.

The first signs of depression.. Custer’s last stand.. the Brave face.. we’re doing fine, thankewvury much!
before the lights go out.

#149 Ponzius Pilatus on 12.31.15 at 2:06 am

The Shirley and Smoky tet a tet is grossing me out.
Please, put a stop to it.

#150 JimH on 12.31.15 at 2:47 am

#79 SWL1976 on 12.30.15 at 8:29 pm
Re: scrapping the Arrow

My biggest question still remains though. If it wasn’t political why was everything scrapped?
—————————————————–
I’m not sure how you’re using the term “political”. After all, every decision any government makes is “political”, or at least has a political dimension!

1. When top secret military, government funded projects are cancelled, there follows a great deal of “scrapping”.
Avro Canada dutifully destroyed much, but the entire nose section of the last prototype (206) was saved and can be seen in the museum. (Continued funding permitting)
Two sections of wing also survived, as did numerous parts and pieces from many non-Avro suppliers. Some drawings and spec sheets also survived.
You have to remember that there were miles of drawings for the various configurations of this aircraft. There were no digital files you could load onto a memory stick and throw into a drawer.
One of the biggest problems of the Arrow program was its cost. The government of the day wasn’t about to throw money into the program to store the mountains of paper, the production jigs, and all the toolings left lying around after cancellation.

2. We were in the early days of the Cold War. There were deep suspicions that there was a Russian mole at Avro.

3. Deifenbaker and Gordon, the CEO at Avro hated each other with a passion. There is no hard evidence that this influenced the final decision, but I am sure Deif didn’t lose any sleep over Gordon’s demise.

4. In short, I see no great conspiracy at all here. The design concept and basic configuration of the Arrow is well-known. The advanced avionics and fire-control systems on the Arrow were proprietary to Huges Aircraft in the USA, and the Arrow’s engine performance was not unique to fighters of the early 60’s.

The Arrow was a great aircraft in terms of speed, ceiling, manouverability and handling. Russian bombers would have been no match for it.

The American F4 Phantom was developed at the same time. Canada couldn’t sell the Arrow. The US produced almost 6,000 Phantoms, selling them all over the non-communist world. Israel used them for years, and Germany finally retired them in 2013!

The Phantom could fly at mach 2.2 and carry 18,000lbs of ordinance, and could operate off carriers. The Arrow could carry 4,000lbs and was limited to a combat radius of less than 400 nautical miles.

The Arrow was indeed a beautiful, sleek bird. But it was far from being the only petunia in the onion patch.

#151 Sugarlips on 12.31.15 at 3:25 am

Re: Love My Kia
Great that you’re happy with the $27k Kia however the smarter buyer would have bought a low KLM 2 year old one for half the price you paid and still have 5 years trouble free motoring – remember they have 7 year warranties but depreciate hard when new..
Happy new year y’all

#152 stage1dave on 12.31.15 at 4:05 am

Strange to see the Arrow saga popping up so often on this forum; it seems to have grown over the last 30 years, or maybe it’s just the ‘net?

Regarding the “political” aspects of the project, the end of it certainly was! As the politicians were the ones ultimately in charge of the purse strings, it couldn’t be any other way. The estimable Dave MacIntosh has some great insights into some of these personal/political relationships in his book “A Funny way to run a Country”; and they’re interesting because they usually don’t form much of the discussion during any post-mortem about A. V. Roe.

Regardless, it’s important to remember the Arrow was conceived & designed for the uniquely Canadian envioronment. The RCAF laid down a list of pipe-dream specs for the time (all easily google-able btw, so I won’t list them here) and suffice it to say they wasn’t an A/C extant anywhere, or even on a drawing board, that met them.

The fact that the 105 managed to attain most of them BEFORE the installation of the Iroquois engine was what made the project such a political football, and so bloody memorable; especially considering it’s sad demise. Combine the above with rapidly escalating costs that were, uuummm…not eating into, but DEVOURING the inter-branch military budgets and you have a recipe for disaster. Plus, these damned citizens want stuff…like roads…schools…hospitals…social security, y’know?

It’s interesting to note that the Orenda Iroquois engine was just as much as a groundbreaking technological achievement as the airframe itself. The costs here too, were thru the roof. As several writers have noted in the aftermath, developing an aircraft/engine combo from scratch is an expensive (and VERY risky) proposition.

(the reason for developing the Iroquois was the cancellation of compatible engines for the Arrow being developed in the US & Britain, btw)

Developing 25,000+ lbs/thrust in a 2500lb package required the use of titanium, a new metal of light weight; and lousy scuff characteristics. Kind of a problem when you’re building to tolerances of thousands-of-an-inch. Mr. Charles Grinyer did note (during our brief correspondence in the mid-eighties) that the only spec not met by contractual deadline was overall gross thrust rating; it was dialed back 1500lbs or so because turbine blade cooling was behind sched; the p/w performance was still years ahead of anything extant.

Another “political” point here would be that Avro & Orenda had pretty much locked up the world supply of titanium (contractually) thru 1964…perhaps a potential irritant to timely construction of the SR-71; which was going to need a ton of it.

I noticed a poster mention the F4: the politics of that airplane are interesting as well…one of the reasons for its initial domestic sales “success” was it’s imposition on US Air Force inventory, after the failure of the AF’s F-100 Super Sabre (turned out the “super” part was somewhat of a misnomer) Anyway, that episode is still reverbrating interbranch in US Military procurement circles; that’s why they got an F-22 for the AF, and an F-35 for everybody else. Politics indeed, and LONG memories…

(despite the tired adage of “being living proof that a garbage truck will fly if ya stick enuff engine in it” the F4 in all it’s multiple variants proved to be a remarkably adaptable design, successful in many roles; hallmarks of an aeronautical success story. I know the “wild weasel” variants were still flying front line combat trips during Desert Storm in ’91, almost 35 years after it first flew)

I doubt the Arrow ever would have been considered for carrier duty, btw; it would have been the equivalent of trying to park a Lanc in your backyard.

It’s worth mentioning at some juncture that Canada’s trade balance might look better if there had been some more effort put behind the Jetliner, instead of just scrapping it to get on with 105 production. (that’s worth googling too) And it would have preserved some measure of the design and engineering teams.

Where politics truly intruded was in the Arrows’ destruction (well, most of ’em, anyway) to alleviate what was sure to be considerable embarrassment if these things were just allowed to fly off into the sunset, so to speak…out of sight, out of mind. Plus, there was undoubtedly “security” concerns…can’t have one just showin’ up in Russia, can we?

My dad told me on several occasions that the general opinion in the officers’ mess was that Dief had been tricked by the Americans into proceeding with the project up to the point of inevitable financial unaffordability, at which point all the technological and personnel benefits would flow south…which they did. There’s some truth in this scenario, as there is in the always present business truth of getting rid of a competitor. (or a potential competitor)

In the end result, Murray Peden was on the mark in saying that although we demonstrated success, we were never able to reap the benefits. Even Jacques Parizeau thought cancellation was an error; he figured production should have been cut to 100 units & slowed down to preserve the engineering and production talent. Not to mention the manufacturing abilities…

Instead, unfortunately; we have left a cottage industry of unending autopsy, and a never-ending funeral procession for something that has spent a lot longer dying than it it ever did living. (except when unexplainable body parts show up on ebay UK, for astronomical sums)

It seems like a typical Canadian pastime, now that I think of it…necrophiliac navel gazing, if you will. Kind of like this stupid housing situation. Only it’s like watching a funeral in slow motion…

#153 Van Real is Correct on 12.31.15 at 4:41 am

#78 nonplused, #105 the Jaguar – learn to do some basic research.

BC has a diversified economy in jobs and typically investment into those sectors (e.g., 2014 Oil and Gas BC GDP = $12,284 Million of a Total = $203,067 Million or 6%, All Goods [excl. Oil and Gas] accounted for 19% of all BC GDP and Total Services accounted for 75% of all BC GDP with Tourism 2.8% of that).

Per BC Stats – 2014 British Columbia Employment by Detailed NAICS Industry you will find few jobs in oil and gas and tourism (‘000s of jobs, rounded):

Total = 2,278.4

Mining and Oil and Gas Extraction = 28.7 or 1.3% of all jobs
Forestry, Logging, Fishing, Hunting, Trapping = 21.2
Agriculture = 24.3
Construction = 200.5
Manufacturing = 161.4
Total Services = 1,828.5 (of that: Finance/Insurance/Real Estate/Leasing = 137.2 or 6% of jobs, Accommodation and Food Services = 185.3 or 8.1% of all jobs)

It will take a broad based job loss recession to bring BC to its knees and clearly, you are both wrong about oil/gas/tourism being the big economic engines of that province, clearly they are not (8.8% of Total BC GDP).

#154 happy new year on 12.31.15 at 5:47 am

Propaganda Games: Sesame Credit

https://www.youtube.com/watch?v=lHcTKWiZ8sI

#155 Buy? Curious? on 12.31.15 at 6:06 am

Garth, last night, at a party, I overheard something I never heard of before. Some woman was telling people how she was negotiating her rent DOWN!!! Holy crap, you can do that? She sited all the crime there was in the neighbourhood, the schools weren’t that good, etc and she got a 10% reduction. Obviously it was because they were good tenants but I think the Canadian economy is beginning to circle the drain.

I love it.

#156 Ontario's Left Coast on 12.31.15 at 6:55 am

Was down in the GTHA for Christmas and was blown away by how busy it was everywhere we went. This is just anecdotal, but the malls and restaurants were jammed and the movies were completely sold out every night. If there’s a debt crisis looming, nobody is sweating it right now, I’ll tell you that.

Anyway, the wife and kids are happy and EVERYTHING was paid for with real money. I do feel sorry for all those poor souls who will open their bloated credit card statements three weeks hence. Cheers to all and Happy New Year!

#157 Dispatches from Under the Bridge on 12.31.15 at 7:32 am

Given that the title of todays post is gravity, I think Pye Dubois said it best even if Kim Mitchell sang it he wrote it for Max Webster.

what do i know / i sat under a cloud / i looked up / ‘fraid to look down
i knew i’d cry if i didn’t clear / i knew i’d die if i didn’t hear you say

forget that fear of gravity
you take that dream away from me / i’ll have trouble getting through the day
get a little savagery in your life
i’ll have trouble tying my shoes
forget that fear of gravity
i’ll laugh when it rains and dampens my hair
get a little savagery in your life

in my cloud / i walk close never fearing the edge
never waiting at the bend / never two-faced at a crossroads
never wanting the edge of my cloud / tender is the night–C

forget that fear of gravity gravity gravity

forget that fear of gravity
and i’ll sit in the window without a cigarette
get a little savagery in your life

I miss the ’70s I knew everything then when I was young.

#158 crowdedelevatorfartz on 12.31.15 at 8:16 am

@#33 BC Guy
“Shame on Telus. A bloody monopoly that loves firing Canadians
+++++++++++++++++++++++++++++++++++

Yep , an uninformed socialist that spews forth misinformation.
Perhaps you should review the definition of a monopoly. A company that has complete domination of a market or product. Fortunately this isnt 1960.
Telus has something called “competitors” a la Shaw, Rogers, Bell, Virgin, Skype, and on and on and on.
As for the 1/3 salary phillipino workers. Nah. Probably India. More engineering graduates in one year than all of Canada.
Blame the internet for enabling them to be able to take our jobs away not Telus. Kinda like surly taxicab employee drivers assaulting Uber cars.
Blaming everyone but themselves for their failing companies when they only have themselves and their outdated business models and their crappy curtomer “service”.

#159 Mark on 12.31.15 at 8:21 am

“@96 Mark https://www.youtube.com/user/talkdigitalnetwork/videos

Oh broken website then, as the YouTube videos appear to be up to date. Well hopefully they get their website back on its feet soon!

But on that note, the disappearance of media devoted overly to a certain investing theme historically is a decent sign of a bottom (or its over-prominence is the sign of a bubble). For instance, in the 1990s, the street-side boxes were filled with publications such as the “Toronto Computer Paper”. Today, its Realtor-sponsored material.

Thanks!

#160 crowdedelevatorfartz on 12.31.15 at 8:26 am

@#78 Nonplussed
Re “Van Real” Have you lost it?
++++++++++++++++++++++++++++++++++++

I’m pretty sure he’s a realtor. After that nonstop jingoistic Van tripe he spewed forth.

Yo! Van Real you left out Vancouvers never ending rain, ICBC, anti everything Gregor Robertson, bike lanes, and the potential of an earthquake that will make Japans’ look like a fart in the wind.
Dont be too smug about a ridiculously inflated housing market cause that when it’ll pop.

#161 crowdedelevatorfartz on 12.31.15 at 8:36 am

BC Taxpayers about to get a “happy” New Year.
ICBC rates going up.
Medical Premiums going up.
Property taxes going up.
Fuel levy’s going up
BC Hydro rates going up.
I’m sure Ive forgotten a few others. But the govt can only squeeze the taxpayers for so long before something gives.
Gotta raise revenue somehow since the natural gas prices are in a prolonged slump and BC Hydro is building multi billion dollars dams no one wants and only industry needs.
The “pro business” “fiscally responsible” govt here hasnt balanced a budget in years if ever.
But ” I studied at the Sorbonne ( for a 2 week vacation) premier Christy Clark and perpetual rumours of offshore money will save us…………

I guess the economic slowdown in China is no biggie eh Van Real?

#162 young & foolish on 12.31.15 at 8:46 am

“When you strip away the emotional baggage (that nesting instinct, the visceral desire to have a cave of your own), it makes little sense to own in a major Canadian city.”

So, if you don’t own a place, wait or just rent, and if you do, then sell it because it’s all downhill from here (ala TSX in 2015). Should anybody own RE then, or should all urban dwellings belong to REITs to “make sense”? Is this generalization the same as saying “balanced & diversified” average 7% annual returns (I know, historical average, so patience needs to be exercised … maybe 2017?).

If everybody in the nation read this blog and adhered to it, maybe. But apparently that’s not the case. When you grown facial hair you’ll understand broad, uninformed generalizations are best left for children and arts majors. — Garth

#163 lee on 12.31.15 at 8:59 am

Is this bad news Garth?

http://business.financialpost.com/news/energy/china-investment-corp-retreats-from-canada-after-mining-energy-investments-sour

#164 BlackDog on 12.31.15 at 9:10 am

@Pelican #115 re: ” Please leave Mark alone. Also Black Dog with the U.S.A thing. If you think they’re wrong, then just tell us why. Don’t try to personally degrade them for their opinion or thoughts.”

Good point. Thanks. I rarely mention the USA thing anymore. Only if someone else makes a related comment that I have something to add to. Even then there is always someone who takes offence to my even bringing it up. You have to have thick skin to continue to try to educate people when you know you will be attacked for doing so, right Garth?

#165 China out of TO on 12.31.15 at 9:57 am

http://business.financialpost.com/news/energy/china-investment-corp-retreats-from-canada-after-mining-energy-investments-sour

maybe HAM money out of RE is next…

#166 paul on 12.31.15 at 10:03 am

#158 crowdedelevatorfartz on 12.31.15 at 8:16 am

Blame the internet for enabling them to be able to take our jobs away not Telus. Kinda like surly taxicab employee drivers assaulting Uber cars.
Blaming everyone but themselves for their failing companies when they only have themselves and their outdated business models and their crappy curtomer “service”.
———————————————————-
The cab/Uber thing is different Cab plates have been selling for up to $300,000 each with the blessing of the Metro licensing dept. plus the cabs go through safety checks and pay huge insurance fees and basic testing in order to drive a cab, Wait till you are in a uber car and get in an accident and find out there is no insurance coverage, If you think the real-estate business is not regulated for Uber all you need is a cell phone and a bucket of bolts. Yes some cabbies are a pain in the ass.

#167 poundingsandin Peachland on 12.31.15 at 10:16 am

I miss the ’70s I knew everything then when I was young

#168 Rockbeatsscissors on 12.31.15 at 10:19 am

Uh oh…..don’t look here:

http://www.nasdaq.com/article/chicago-business-barometer-drops-to-sixyear-low-in-december-20151231-00176

#169 Not tonight honey on 12.31.15 at 10:21 am

#149 Ponzius Pilatus on 12.31.15 at 2:06 am

The Shirley and Smoky tet a tet is grossing me out.
Please, put a stop to it.
================================

Ponzius, I suspect Ms. Valentine has a wee secret to confess to Mr. Smokey…..

#170 Mark on 12.31.15 at 10:22 am

Big PMI miss. LIBOR and short-term treasuries beneath the rate even implied by Fed Funds. US economy decelerating rapidly.

US policy rate cuts dead straight ahead! Might even go significantly negative this time around!

#171 Economic collapse on 12.31.15 at 10:32 am

All you dommers, have you stopped and used your head?
If there is a major housing correction and people loose their jobs it Might just push Canada over the edge. If I remember my old economics it’s better to be in debt then paying rent. Why do you think governments do not care about debt because……. They inflat it away. History has proven savers are the losers. If I recall people paid 30 or 40 dollars a month in rent back in the 50s and look what you pay know. Yet that debt has been inflated to nothing. Debt is king !
Garth cannot argue any side of the coin.
otherwise the alternative is currency collapse. So it’s either inflate debt to nothing or currency collapse. Nothing in between.

#172 Mark on 12.31.15 at 10:51 am

“maybe HAM money out of RE is next…”

Did it ever exist?

Evidence for such is scant, if not non-existent.

#173 gut check on 12.31.15 at 10:51 am

#38 Greg on 12.30.15 at 6:59 pm
Tried to go for dinner at 445pm yesterday in NW calgary. The Keg had a 2 hour wait and the parking lot was full. People everywhere spending like crazy! It was like something out of 2007.
_________________________________

belt tightening + gift certificates = busy Keg
It’s a go-to gift for the couple who has already charged everything else. :)

#174 Danforth on 12.31.15 at 10:51 am

Hi Garth,
Just a thought for a future column, which is timely as we start a new year and people set financial goals.

Its difficult to get a handle on calculating a portfolio’s rate of return when you’re making monthly contributions (during earning years), or draw-down (during retirement).

Its not difficult to calculate your growth in dollars, but the principal against which that growth is earned is a moving target due to the contributions or deductions.

Tx!

#175 For those about to flop... on 12.31.15 at 10:54 am

#143 westcoast Woman on 12.31.15 at 12:23 am
To #94 Peppy sue on 12.30.15 at 9:09 pm – I use Scotia iTRADE, through Scotiabank. I approached my advisor at Scotiabank to move my mutual funds, bought years earlier from a different advisor, into Scotia iTRADE.

The advisor was very helpful, and shared that he too used iTRADE. I find it fairly easy to use, and have bought ETFs based on recommendations shared by other Dawgs. I only wish that I’d moved out of the mutual fund years earlier

F48BC (trying out this new protocol!)

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

Thanks west coast Woman for your support.
Don’t feel obliged ,I just thought it would help especially like for the weekend when the boomers and the Millie’s we’re going for it.
It only takes a few seconds but I think it helps.
Have a good day.

M41BC.

#176 gut check on 12.31.15 at 10:54 am

#171 – yeah, well that’s why ‘they” are freaking out that we aren’t producing an inflationary environment.

#177 Kenchie on 12.31.15 at 10:58 am

“Best and worse of the US economy in 2015”

http://www.bloomberg.com/news/articles/2015-12-30/the-best-and-worst-of-the-u-s-economy-in-2015

#178 Leo Trollstoy on 12.31.15 at 11:13 am

Hope everybody listened to Garth and got rid of gold.

http://www.reuters.com/article/global-precious-idUSL3N14K1ZW20151231

#179 Leo Trollstoy on 12.31.15 at 11:17 am

PhD vs MBA

http://www.businessinsider.com/how-mbas-and-phds-perceive-the-economy-2015-12

#180 JimH on 12.31.15 at 11:27 am

#152 stage1dave on 12.31.15 at 4:05 am

Good points! Thanks!

Worth noting that so many of the engineers and technicians that left Avro Canada went on to become essential for the success of NASA’s Mercury, Gemini and Apollo programs!

#181 cramar on 12.31.15 at 11:33 am

It’s been interesting reading the comments re. my posting about the cancellation of the Avro Arrow. Feb. 20, 1959 was known as “Black Friday,” a term we should have copyrighted to keep it out of the hands of the Americans.

The plane was definitely in many areas way ahead of its time. For example the first aircraft to use fly-by-wire. It was never designed to be flown off a carrier, so I don’t know why this was even mentioned. One of the prototypes was flown at Mach 1.98 with the old engine. Fitted with the Iroquois, we will never know what it would have done. The World Encyclopedia of Aircraft states it was a Mach 2.4 capable aircraft.

The main point is “What if?”

What if the Arrow was never cancelled? What if the Gov’t. said that, “Sure the development costs are horrendous, but Canada will be better off economically in future decades because of what we are doing today!” What a novel idea, that politicians should actually have a long-term vision to grow Canada into an technological/aviation superpower, instead of short-term thinking. The Gov’t. then purchased useless Bomarc missiles. It is fascinating to speculate on the economic benefits 70 years later.

– The Arrow would have evolved just as other aircraft did and hopefully Canada would still be on the cutting edge of military/commerical aircraft. Last I saw, jet intercepters are still a needed valuable commodity in this world even today.

– What Bombardier is doing with its commercial aircraft would have been accomplished many decades ago (see history on the Avro Jetliner). Perhaps Canada could have played a world alternative to the Americans long before Airbus got into the act. The Avro Jetliner was the second jet airliner in the world. We beat the Americans on that one too!

– What non-aerospace spinoffs would we have now many decades later? With tens of thousands of skilled machinists and toolmakers, it is interesting to speculate. Canadians have a history of innovation and development. Tim Cook says one the reasons Apple employs a million workers in China is because they have vast numbers of skilled toolmakers and the U.S. doesn’t.

One could go on and on, but the bottom line is that we needed (and NEED) a Government with a vision of where Canada could be and what we could become, plus willing to lead on a generational journey in that direction. A PM taking selfies is a poor substitute.

#182 Uber on 12.31.15 at 11:37 am

The cab/Uber thing is different Cab plates have been selling for up to $300,000 each with the blessing of the Metro licensing dept.

There is zero economic value behind the $300K cab plate license, it is a misplaced investment.

It serves one purpose, limiting competition artificially, anti-Capitalist concept to the core. Should have been outlawed long time ago.

#183 tkid on 12.31.15 at 11:41 am

Hey Blog Dogs, howsabout a poll? What was your rate of return on your investments for 2015?

I made 8.5%.

It’s not a race. Comparing portfolio returns only is to look at a small portion of one’s financial life. For a lot of wealthy people, for example, tax avoidance may yield a bigger net gain. — Garth

#184 Ponzius Pilatus on 12.31.15 at 11:50 am

My faith was so much stronger then
I believed in my fellow men
I was really so much older then
When I was young
When I was young

#185 Mike in Edm on 12.31.15 at 11:57 am

Reading some of these posts about foreclosures jogged my memory. I forgot about part of the discussion I had a couple weeks back while visiting friends at a house party in Calgary. They were saying people are skipping 1 or 2 mortgage payments because everyone knows the banks aren’t going to do anything about it. I don’t know how long that strategy will last, but I guess that’s just another way some Calgary folks chose to kick the can down the road a little further.

#186 tkid on 12.31.15 at 12:05 pm

It’s not a race. Comparing portfolio returns only is to look at a small portion of one’s financial life. For a lot of wealthy people, for example, tax avoidance may yield a bigger net gain. — Garth

Sounds like a good future column.

#187 Ogopogo on 12.31.15 at 12:07 pm

#162 young & foolish on 12.31.15 at 8:46 am

Dude, I hope you’re not a Gen Xer, but if memory serves you are. Stop embarrassing our generation with grossly uninformed comments!

#188 JimH on 12.31.15 at 12:14 pm

#170 Mark on 12.31.15 at 10:22 am
“… Big PMI miss. LIBOR and short-term treasuries beneath the rate even implied by Fed Funds. US economy decelerating rapidly.
US policy rate cuts dead straight ahead! Might even go significantly negative this time around!”
===================================
Like the rest of your silly predictions, Mark, they add no value!

What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”??????????

#189 Nodebt on 12.31.15 at 12:18 pm

#182 tkid
8.5% return u say on how much invested? Thx

#190 Ponzius Pilatus on 12.31.15 at 12:22 pm

#182 tkid on 12.31.15 at 11:41 am
Hey Blog Dogs, howsabout a poll? What was your rate of return on your investments for 2015?

I made 8.5%.
——————–
And now go and shove it. Bragger.

#191 Aggregator on 12.31.15 at 12:23 pm

#90 45north

CBA's arrears data is a lagging indicator. In fact if there was a crash, it wouldn't show up until 6-12 months later.

A better measure of financial stress is consumer proposals, also know in the industry as 'work out' deals, which by the looks of Alberta's situation seems to be already taking off. Chart (as of September)

#192 JSS on 12.31.15 at 12:24 pm

RIP Howard Pawley – former Premier of Manitoba.

#193 Renter's Revenge! on 12.31.15 at 12:31 pm

“They were saying people are skipping 1 or 2 mortgage payments because everyone knows the banks aren’t going to do anything about it.”

They are doing something about it:

https://www.tdcanadatrust.com/m/mortgages/mobile-td-mortgage-payment-vacation.jsp

“Flexible Mortgage Payment Features will result in interest capitalization.”

…cue diabolical laughter…

#194 MF on 12.31.15 at 12:43 pm

#182 tkid on 12.31.15 at 11:41 am

Jealous!

Okay I started in April and I’m down about 4%. Kind of sucks but it is what it is.

More importantly, do you use a buy and hold strategy or are you more active with your picks?

Good job by the way.

MF

#195 Leo Trollstoy on 12.31.15 at 12:43 pm

What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”

Can’t buy without any money and invested in gold, Blackberry and Barrick

#196 Bram on 12.31.15 at 12:47 pm

#165 China out of TO on 12.31.15 at 9:57 am
mlogaybe HAM money out of RE is next…

I see this term ‘HAM’ a lot, but only here.

What does it mean?

Is it an acronym?

bram

#197 Leo Trollstoy on 12.31.15 at 12:48 pm

I made 8.5%

Probably over 20% because that’s how much my FL properties increased in CAD as the USD shot up. And rent on top of that. Speaking of which, came in today. An arousing year.

#198 OXI in GREECE on 12.31.15 at 12:57 pm

#172 Mark on 12.31.15 at 10:51 am
“maybe HAM money out of RE is next…”

Did it ever exist?

Evidence for such is scant, if not non-existent.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

It’s comical how people say there is “no evidence” yet professionals in the field continually “tell all” on this blog the mountains of evidence of HAM.

There is no “official” evidence because the govt allows this money laundering to continue which official records being kept of foreign buyers.

So to say there is “no evidence” also implies “no records” which means to Yes and No side are both correct. But it is only the yes side that shows evidence as the bankers, brokers and inspectors on this blog have shown now for years with their in the field evidence.

#199 tkid on 12.31.15 at 1:03 pm

8.5% return u say on how much invested?

All of it ‘cept the emergency fund. First year I did so well (yes Ponzius, I guess it was a brag). I’m never giving up the ETFs and going back to GICs. I’m also never giving up this blog.

#200 SWL1976 on 12.31.15 at 1:03 pm

Thanks tocramar, JimH, andstage1dave for your thoughts and insights into the AVRO. As always I learned a lot here at the Greater Fool.

As always, a big thanks to our host and everyone here who make this comments section what it is.

Happy New Year!!!

#201 RockbeatsScissors on 12.31.15 at 1:03 pm

#179….Leo Trollstoy…interesting and what does that tell you? The people looking on the right will only see headwinds as they make investment decisions for a strong US dollar, rising interest rates etc does not work well for manufacturing…and with the rest of the global economy struggling with generating growth?

#202 Senta on 12.31.15 at 1:05 pm

Garth – they say no one rings a bell at the top but you have been ringing the bell for some time now (as far as RE is concerned). Don’t forget to ring the bell at the bottom too, for the sake of the unwashed moist ones.

Every market is different. But few dings yet. — Garth

#203 Mark on 12.31.15 at 1:08 pm

“What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”??????????”

Sticking with my balanced portfolio. As always.

Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.

#204 For those about to flop... on 12.31.15 at 1:19 pm

It’s not a race. Comparing portfolio returns only is to look at a small portion of one’s financial life. For a lot of wealthy people, for example, tax avoidance may yield a bigger net gain. — Garth

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

People will brag when they do better than average but you hardly hear from anyone who lost their pants.
I heard a few squeals from the CPD crowd that about it but if you didn’t sell no biggie.
The main number I am interested in this regard and Garth posts it occasionally is what his b and d portfolio is doing.
I don’t want to compete with this number just use it as a benchmark as am a investment hack and if I can stay within a % or 2 then I will give myself a pass until I grow my portfolio so it is big enough to consider handing off to someone else.
How I am rating this year is not in percentage gains alone but in taxation and future planning.
Differences from the start of the year for my wife and I are substantial.
80k in TFSA about to be 90k invested.
Wife’s RRSP now has way less maple due to my prodding with Garth’s guidance …a few negative returns didn’t hurt to reinforce this point.
We were saving for a deposit on a condo but have decided to run in the opposite direction of the herd.
Maybe one day ,maybe not ,but at these prices they are not getting one cent of our money.
Been in the Couv since 02 and the city has been drunk on real estate ever since I got here so it will be refreshing to go to a party one day when real estate is not the number one topic brought up.

M41BC

#205 David on 12.31.15 at 1:23 pm

“Got caught in the last round of layoffs at Telus,”
////////////////////////////////////////////////////////
Yes they have off shored a pile of work to where ever. The Philippines, India, Central America ect.
They have been handed FREE money from the Gov year after year. (“Go BC” is one of the projects) Yes your tax dollars to build cell sites along selected routes.
They don’t want employees they want contractors that will do the job and leave. So no employee liability
(Pensions, sick time, decent pay ect)
…..But they want you to purchase their services.
Yes “The Future is friendly” if your a shareholder.
As for Canadians you do the math. If you think this downturn and Commodities crash is like the past think again. Where are the paying jobs for the middle class in the future?! Good paying jobs are way in the review mirror.
Canada is screwed in my personal view for so many folks….
Someone enlighten me on a more optimistic view PLEASE!??

#206 Smoking Man on 12.31.15 at 1:27 pm

In Defiance of Gravity

http://www.news.com.au/technology/science/space/whats-going-on-in-south-america-two-ufo-incidents-cause-panic-in-different-countries/news-story/9170adb1ba6641c3c75089952b9d2e70

#207 Mark on 12.31.15 at 1:29 pm

“CBA’s arrears data is a lagging indicator. In fact if there was a crash, it wouldn’t show up until 6-12 months later.”

I do wonder, from the point of view of the CBA, is it a default or arrears if the CMHC steps in and either makes the payment, or pays on a defaulted loan?

Might be something worth looking into. I don’t know the answer. But if the US ‘experience’ is any indication, the industry will collectively move heaven and Earth to downplay deterioration in the state of outstanding credit.

#208 Kamilapea on 12.31.15 at 1:29 pm

I want the rights to that Cowtown couple’s story for a feature film called “Escape from Twerpistan” (can you believe some Harlequin hack already came up with Twerpistan?!).

#209 Retired Boomer WI on 12.31.15 at 1:30 pm

Well the last trading day of the year!

Cleaning up my portfolio a bit today. Sold a few things that were up, even bought a little more oil (with a lower bid on a 60 day limit order). Yes, oil is down, but not as far as I think it can do over the next 2 months (sorry).

Final numbers aren’t in yet, but I can tell you it is NOT going to be a banner year. Yes, did make some good money buying some stuff at the market break last August and early Sept. SLW, FCX, JNJ, HSY, CHD,PG. Still holding some of the better dividend payers, dumped some of the oil metals things on a nice oil bounce.

The rest, the index funds, bond funds…’meh.’

Overall, looks like a less than 1% change (down ~$5100) from last Year’s end. So, we got our annual withdrawals, made a bit, lost a bit, and came within 1% (including fees) of where we started.

Not finalized, but close enough for ‘government’ work.
Not a thriller, but not the end of the world either.

#210 For those about to flop... on 12.31.15 at 1:36 pm

#202 Mark on 12.31.15 at 1:08 pm
“What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”??????????”

Sticking with my balanced portfolio. As always.

Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.

/////////////////////////////////////
You of all people calling someone out for a prediction that hasn’t happened ( yet)
You are too much sometimes !
Check that, you are too much ,always!

What a character you have created…

M41BC

#211 Tkid on 12.31.15 at 1:51 pm

MF, buy and hold and rebalance. My first year I went down 10%.

#212 conan on 12.31.15 at 2:22 pm

Will 2016 be the year of the bail in?

http://bmgbullionbars.com/bail-ins-may-undermine-confidence-in-banks-bank-of-italy/

Tick Tock, perhaps.

Diversifying into other savings institutions, that are not as exposed to “bail in”, is prudent right now IMHO.

Never a bail-in in Canada. — Garth

#213 drydock on 12.31.15 at 2:23 pm

#149 Ponzius Pilatus on 12.31.15 at 2:06 am

The Shirley and Smoky tet a tet is grossing me out.
Please, put a stop to it.
================================

Ponzius, I suspect Ms. Valentine has a wee secret to confess to Mr. Smokey….
0101010101010101010101010101010101010101010101

A few years back it was Beach Girl, i suspect Smokey and Ms.Valentine are one and the same.

#214 conan on 12.31.15 at 2:34 pm

Interesting link to what is happening in Italy.
Seems to be localized to small regional banks but this should be blinking a warning light on your investment dashboard.
http://news.yahoo.com/rescuing-banks-italy-moves-bail-savers-233710826.html

#215 For those about to flop... on 12.31.15 at 2:47 pm

#195 Bram on 12.31.15 at 12:47 pm
#165 China out of TO on 12.31.15 at 9:57 am
mlogaybe HAM money out of RE is next…

I see this term ‘HAM’ a lot, but only here.

What does it mean?

Is it an acronym?

bram
/////////://///////////////////////

Bram this should help out.

M41BC

http://www.dailystar.co.uk/news/weird-news/484372/Barking-mad-photo-dog-ham-face-Facebook-viral-burns-post

#216 Darryl on 12.31.15 at 3:07 pm

#149 Ponzius Pilatus on 12.31.15 at 2:06 am

The Shirley and Smoky tet a tet is grossing me out.
Please, put a stop to it.
—————————————————————

I second .
Besides they are probably the same poster under different names .

#217 Marvin on 12.31.15 at 3:11 pm

Garth – how do you calculate household debt-to-income ratio? See different formulas on google so… want to know what you’re using when giving stats. Want to calculate my own as well :)
Thanks!

#218 waiting on the westcoast on 12.31.15 at 3:20 pm

#202 Mark on 12.31.15 at 1:08 pm
“Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.”

I guess the CDN$s collapse from over parity to its current levels doesn’t constitute a “demise” in your mind…

#219 Not 1st on 12.31.15 at 3:44 pm

Van real, in case you didn’t notice Calgary was about 1000 kms away from that 4.5 the other night. The seismologist that was on the news says it’s just a matter of time. There have been major quakes on all points of the pacific rim except the pacific nw. One day Surrey might be shaking in the slurry.

Personally I think Calgary is best city in Canada. Yes over reliant on oil but hopefully they get the message this time. It is unusually busy here given 30 dollar oil but that might be a testament to the strong willed prairie people who love here. We are not some soft Europeans or torontonians. Or it could just be people blowing ear severance chequer too and praying for a rebound.

#220 Sheane Wallace on 12.31.15 at 3:46 pm

#209 For those about to flop… on 12.31.15 at 1:36 pm

#202 Mark on 12.31.15 at 1:08 pm
“What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”??????????”

Sticking with my balanced portfolio. As always.

Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.

/////////////////////////////////////
You of all people calling someone out for a prediction that hasn’t happened ( yet)
You are too much sometimes !
Check that, you are too much ,always!

What a character you have created…

M41BC

————————————
CAD has declined from over parity to .71 since my prediction, losing 16 % only this year alone.

If this is not (not an eventual but a realized) demise of a currency I don’t know what is, just ask people on fixed income.

I continue to insist that we will see .5 and even .4 levels (.6 is a given)

Mark is clueless.

#221 Habs 76-79 on 12.31.15 at 3:54 pm

The AVRO CF-105 Arrow.

Technologically for its day was a superb machine. It would have served ably for the RCAF as an interceptor of what may have been Soviet long range nuclear armed bombers. It was an efficient air frame. had some great technologies but was not without warts.

It was becoming very costly. It did not have long legs and would have for the RCAF to have stationed Arrows over numerous bases to try to shield a against any possible Soviet bomber attack. It was a single purpose aircraft as well and looked to have found it hard to get foreign sales.

Sputnik changed everything. Sputnik led to ICBM’s and SLBM’s. The Soviet bomber force like the USAF one would have been mostly subjugated to a response to a first strike. What few that would have gotten into the air would have bombed what remained of ether the USSR and its satellites and the US and its satellites

But she was beautiful and would have served well.

That said Canada did replace what she would have done very well by getting 65 CF-101 Voodoos. The Voodoo did exactly what the Arrow would done for over 25 years. It had longer legs and was cheaper. Canada in agreement with the US built the Pine Tree Radar sites as a lower level line of eyes in Northern Canada, for that Canada received 65 CF-101A Voodoos. A few years later the (I recall 56) surviving CF-101A were returned to the US and Canada then received 65 more CF-101B. The B model had more air frame hours but did have more advanced fire and control systems.

The CF-101B was a great long range interceptor for the RCAF. The RCAF did not lose out by getting the CF-101B. Yes, pride would have seen the Arrow again serve well, but realty was that by the mid 60’s the CF-105 was equaled in most ways by numerous other aircraft world wide.

So yes the CF-105 Arrow was a great Canadian achievement, but her myth is greater that her reality.

FYI!
In the 1960’s until 1969 Canada was a nation that had an air force in the nuclear role.

1: CF-101B Voodoos carried (2) Genie 1KT nuclear tipped rockets along with 2 AIM-4 Falcon missiles. The Genie was meant to be shot into a Soviet bomber force at a distance while over Northern Canada and to explode via proximity to take out the bombers. Most Voodoo crews figured they’d get caught up in the blast as well.

2: The CF-104 Starfighter that was mostly used by the RCAF in its NATO role over in Europe was spec’d into two roles. The first was a tactical nuclear bomber platform. USAF nuclear bomb handlers would arm the CF-104’s with two tactical nuclear bombs each. The CF-104’s would be used to stop any large Warsaw Pact invasion into West Germany by dropping these nukes on their forces. The second role for our CF-104’s was tactical reconnaissance.

3: The BOMARC nuclear tipped surface tipped surface to missiles, the RCAF had at disposal for a while to a shoot at Soviet nuclear armed bombers as they flew over most of Canada.

So until 1969 for our CF-104 and Bomarc’s and until 1983 for the Voodoos Canada was a nuclear armed nation, even if the USAF spec’d personnel to handle the nuclear arms.

Huh, some interesting Canadian military history

Back to your regular money talks type programming here. :-)

#222 Sean on 12.31.15 at 4:09 pm

“Save for the fact that you are hardly the only ones. An RN might be an easy sell, but engineering is starting to get saturated. ”

Well… it’s the same old story. The supply of engineers who aren’t that good varies, but the demand for engineers who are really good is, and always is, high. Whether that person qualifies, I have no idea.

#223 Sean on 12.31.15 at 4:10 pm

“Same parts, same everything. Worse yet, Kia is considered the higher end of the brand… Kinda like Buick is higher than Chevrolet, so if you “splurged” on a Hyundai, you really got screwed.”

I love it when people shit on Hyundai, keeps the prices reasonable.

#224 OXI in GREECE on 12.31.15 at 4:16 pm

#202 Mark on 12.31.15 at 1:08 pm
“What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”??????????”

Sticking with my balanced portfolio. As always.

Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

So….$1.05 to .69 is not a drop? Mark……go back to bed and come back when the booze wears off.

#225 For those about to flop... on 12.31.15 at 4:19 pm

#219 Sheane Wallace on 12.31.15 at 3:46 pm
#209 For those about to flop… on 12.31.15 at 1:36 pm

#202 Mark on 12.31.15 at 1:08 pm
“What are you buying right now, today, to take advantage of “US policy rate cuts dead straight ahead”??????????”

Sticking with my balanced portfolio. As always.

Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.

/////////////////////////////////////
You of all people calling someone out for a prediction that hasn’t happened ( yet)
You are too much sometimes !
Check that, you are too much ,always!

What a character you have created…

M41BC

————————————
CAD has declined from over parity to .71 since my prediction, losing 16 % only this year alone.

If this is not (not an eventual but a realized) demise of a currency I don’t know what is, just ask people on fixed income.

I continue to insist that we will see .5 and even .4 levels (.6 is a given)

Mark is clueless.

#217 waiting on the westcoast on 12.31.15 at 3:20 pm
#202 Mark on 12.31.15 at 1:08 pm
“Which reminds me, where’s Sheane Wallace been lately? His predictions of the imminent demise of the CAD$ have proven to be unfounded.”

I guess the CDN$s collapse from over parity to its current levels doesn’t constitute a “demise” in your mind…

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

Yeah ,you got what I meant.My post was not well written maybe a few more question marks on the first couple of lines would have made more sense but ” waiting on the west coast ” helped me out with a better post.
I travel to the U.S roughly 3 holidays a year so I am devastated by the currency collapse.
I am a big guy so I buy all my clothing and footwear there as well.
Better selection, and even with the collapse picked up some clothing in late summer for half the cost here.
Tariff Smariff!

M41BC

#226 crowdedelevatorfartz on 12.31.15 at 4:20 pm

@#166 Paul
“The cab/Uber thing is different Cab plates have been selling for up to $300,000 each with the blessing of the Metro licensing dept…..”
+++++++++++++++++++++++++++++++++++
In Vancouver the taxi license can go for up to 850k thus the geniouses that “regulate” taxi licensing only listen to the cabbies…..not the public that have been screaming for YEARS about the lack of cabs in Vancouver..
Dont believe me? Try and catch a cab to the suburbs after a night of dinner and drinks…..They will outright refuse your ride or make some sort of BS excuse,”I’m just about off my shift” or “Ive got to fuel up”.
I’ve heard them all. So I take Skytrain downtown and home early. Thus the cabs lose, the bars lose, the restaurants lose alll because a few greedy taxi owners have the ear of the politicians.
Why?
Because in the “brilliance” of the closed shop Taxi cartel you can drop off customers in another cab companies’ “zone” but you cant pick up another fare to drive back downtown. For example, a drive from vancouver to burnaby ($40 bucks one way) will result in the cab “deadheading” back downtown empty…….
Hence the demand for Uber.
An actual service to its customers. thats unstoppable

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwj7ys2-gYfKAhVN7GMKHWOCDhoQFggjMAI&url=https%3A%2F%2Fvancouvertaxilicense.wordpress.com%2Fvancouver-taxi-iicense%2F&usg=AFQjCNFM5zkcR6gwVq5biSiGoa3-SeqcnQ&sig2=DRakShR5MMClf1WFzOtkuw&bvm=bv.110151844,d.cGc

#227 OXI in GREECE on 12.31.15 at 4:20 pm

3: The BOMARC nuclear tipped surface tipped surface to missiles, the RCAF had at disposal for a while to a shoot at Soviet nuclear armed bombers as they flew over most of Canada.

So until 1969 for our CF-104 and Bomarc’s and until 1983 for the Voodoos Canada was a nuclear armed nation, even if the USAF spec’d personnel to handle the nuclear arms.

Huh, some interesting Canadian military history

Back to your regular money talks type programming here. :-)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Much of what we are told about Canada is BS. Oh…..Canada is a country of peace keepers blah blah blah meanwhile guidance systems for missiles, M1 Abrahm tanks and Stryker killing machines are all made in Ontario….

#228 Macduff on 12.31.15 at 4:21 pm

If only collateralized debt obligations (CDOs) existed in Canada! This market is begging to be shorted.

#229 old gringo on 12.31.15 at 4:28 pm

Happy New Year to all in 2016.

Its fresh east coast lobster tonight for us ex-pats.
Canadian couple renting next door, have purchased a nice little place for $390K USD.
Said they are “getting out of dodge” before the SHTF.
Lots of action for the realtors they tell me.
Adios

#230 crowdedelevatorfartz on 12.31.15 at 4:29 pm

@#171 Economic Collapse

You should have stopped after “Economic Collapse”

#231 Calgary rip off on 12.31.15 at 4:32 pm

“Besides, from a cash flow standpoint, renting beats owning ten times out of ten. Only a year or two ago this blog was punctuated by comments from cowboys who decried Calgary rents and claimed it was cheaper to own.”

Im not and never have been a “cowboy”. I happen to live in Calgary, support Trump, support the pipeline and support marijuana legalization. Listen to scandinavian metal, lift weights, and play chess and Go. Have a wife and daughter. Other than that, I think that horses are a waste of space, dont like country music. So Im no cowboy, even if I did live in Texas for a time.

Rents are the same as a mortgage still in Calgary. And there are zero rent controls. Yes you can leave if your job quits. You can also leave your mortgage, but it is trickier. Is a mortgage a death sentence? No. If you have a job that is likely steady and you are likely to be there for over 10 years, does it still make sense to get a mortgage? Maybe yes, maybe no. These statements that renting applies everywhere or mortgages should be had everywhere are nonsense. Personal individual variables are what matter. Nesting? Hardly. Lets see my rent is $1700, and the mortgage is also the same and Im gonna be working til im 70 anyway. No, I’ll rent, its smarter, I will save more money being in early 40’s and renting until then. Please.

#232 Bram on 12.31.15 at 4:38 pm

#182 tkid on 12.31.15 at 11:41 am
I made 8.5%.

Strongly disapproved by Garth, but: 75% of my net worth is in an East Van detached, so I would say:

+20% ?

Bram

#233 MF on 12.31.15 at 4:39 pm

#210 Tkid on 12.31.15 at 1:51 pm

Awesome.

Congrats on the return again.

Happy new year to all the blog dogs!

MF

#234 Smoking Man on 12.31.15 at 4:42 pm

#212 drydock on 12.31.15 at 2:23 pm
#149 Ponzius Pilatus on 12.31.15 at 2:06 am

The Shirley and Smoky tet a tet is grossing me out.
Please, put a stop to it.
================================

Ponzius, I suspect Ms. Valentine has a wee secret to confess to Mr. Smokey….
0101010101010101010101010101010101010101010101

A few years back it was Beach Girl, i suspect Smokey and Ms.Valentine are one and the same.
………………….

Nothing wrong with wearing a tinfoil fedora, but your wrong on this one.

I suggest looking for clips of building 7 crashing to the ground at free fall speed.

I only Post as Smoking Man, occasionally Blythe Barrington, The brittish accents turns on Turner Nation.

I also once Posted as Charles Assman. But never as Jeremiah Jones.

Main characters in my book, I’m about to finish chapter six…Fking Maracle.

#235 BG on 12.31.15 at 4:46 pm

#218 Not 1st on 12.31.15 at 3:44 pm
[…]
Personally I think Calgary is best city in Canada […] We are not some soft Europeans.
————————————————————-

I have a couple of Polish and Irish friends who’d like to speak to you.

#236 Ronaldo on 12.31.15 at 4:54 pm

#178 Leo Trollstoy on 12.31.15 at 11:13 am

”Hope everybody listened to Garth and got rid of gold.”

As one who lives in Canada and does business in CAD, Gold is up 5.5% and silver is up 3.9% for the year. Now if you live in the U.S. and were buying in USD, gold would be down 11.5% and silver down 12.8%.

Leo, you do understand this, right?

How much are you down since 2011? — Garth

#237 For those about to flop... on 12.31.15 at 4:54 pm

Just more thing on the Avro,I inadvertently kicked this discussion off a couple of days ago when I disclosed that I was from oz and liked hearing about Canadian history.
( I learnt a lot from my citizenry test)
I didn’t want this to turn into a contest about who knew the most as I complemented the poster at the time.
I didn’t want library history just personal experiences about the Avro And manufacturing back in the day.
You guys have taught me a lot the last couple of days but I am not going to choose sides as no one in my mind is wrong or right, just a bunch of guys reminiscing .
Thanks to all ,may the best days be in the future.

M41BC

#238 Vundo on 12.31.15 at 5:03 pm

#230 Callaly rip off: you are right in that it is not one size fits all, but a mortgage that is the same as rent is still a more expensive place to live. Tenants don’t get invoiced for emergency furnace repairs. If your mortgage is significantly cheaper than rent, and you can save the difference for house emergencies, then maybe I would believe you are coming out ahead if house prices are relatively stagnant. Or you accept that owning costs more than renting, but have reasons that you are willing to pay that cost. The only way the same monthly mortgage payment as rent works out to a big profit is when house prices are quickly climbing, and that gravy train is braking hard.

#239 crowdedelevatorfartz on 12.31.15 at 5:18 pm

@#166 paul

In interesting news story comparing Calgary and Vancouver cabs…..

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=4&cad=rja&uact=8&ved=0ahUKEwj7ys2-gYfKAhVN7GMKHWOCDhoQFggpMAM&url=http%3A%2F%2Fbc.ctvnews.ca%2Freport-says-vancouver-has-fewer-cabs-pricier-rides-than-other-cities-1.1972627&usg=AFQjCNGi49i-jDiN52_NFWefg-Gq-e1y_g&sig2=0TdhPMO1qKF12QYJOcVS8A

#240 devore on 12.31.15 at 5:31 pm

#77 Smoking Man

You’ve spent literally years here desperately trying to make yourself believe this. But just like the girl telling everyone how pretty and cute she is, repeating it does not make it so.

#241 Ronaldo on 12.31.15 at 6:03 pm

”How much are you down since 2011? — Garth”

Zero. I own less than 1 oz. of gold. Every ounce of silver I own is zero cost. Last bought silver in Nov. 08 at 8.88 u.s. and sold 25% at 49.44 on May 1st 2011. Proceeds in USD which I still hold when the dollar was 1.06 to the USD. Those are up another 43% or so from that time. I will be selling the USD in the near future.

#242 Unzipped on 01.01.16 at 12:36 am

Last year, I had a naive 20 year old virgin in my bed.

This year, my boring ETFs gave me 3% or so.

Oh well.

M24AB