With friends like these…

1BIKER

A sixty-nine cent dollarette. Oil at thirty. Bay Street down 12% in twelve months. The feds mulling a rate cut. Predictions of $16 crude. The Donald’s big caucus. Canadian Press running a cauliflower story (wonder where that came from?). Less Bowie. More Adele. Are these the end days?

Well, the advice from yesterday stands. Read it again. The best course of action is probably no action. Which means we have other things to worry about. Like Colin.

“Hey Garth, I am a long time reader of your blog and thought I’d come to you (and maybe the group if this turns into a post) for advice. Here’s the deal, I am 40, wife 31. We have been happily renting in Vancouver waiting for prices to hit a point where it makes sense for us to buy. We have good paying jobs, save diligently and have about 250k between us with zero debt. So here’s the issue.

“Her grandfather passed away recently leaving the parents with an East Vancouver special. Her parents listed it at 1.6mil trying to cash in on the housing craze.. No bites and 2 showings. Their realtor suggested dropping it to 1.4 mil and ‘it will sell’. So they came to us and asked if we’d be interested in coughing up 700k to purchase half the home and live there and take care of it. So my question to you is, is this a deal that’s too good to pass up? Or is 700k still way too much? I am leaning towards the latter, but my wife is leaning towards the former. Mostly, I’m confused.”

Before we all pile on, a few words on co-ownership. My guiding rule here, of course, is simple: never buy real estate with anyone you haven’t slept with.

This hallowed principle is being broken routinely now in crazed Vancouver, where the most aggressive local mega-lender, Vancity, has been pumping its “Mixer Mortgage,” aimed at letting people who can’t afford a house get one by teaming up with another wretched soul. “If you’re a first-time homebuyer who wants to share the cost of buying a home with one or more friends, roommates, co-workers, or family members, take a closer look at our Mixer mortgage,” says the carnivorous credit union. “Sharing property costs and home ownership among two or more individuals gives you more options for purchasing the home you want in the neighbourhood you want.”

A lot of people opting for this legal and emotional quagmire are parents and adult kids, as in Colin’s case, but there are also a slew of unrelated house hornies who have taken the plunge. This is an arrangement – two families living in and owning a single dwelling – that seldom ends well. Like with the Belbens and the Veroni-McKays who lived in a North Van house as co-owners for eight years before realizing they hated each other.

The two couples paid a million for the place in 2008 with a 60/40 ownership split after meeting at a mom-and-baby group. (Principle # 38: Never buy a house when you have too many hormones.) When the couples became emotionally estranged, it was time to split. Their agreement said the deal could be terminated by either party with reasonable notice if one offered to buy the other’s interest, or sell it to them. If no agreement, the property would be listed.

So now the place is worth more – between $1.25 and $1.36 million, they allege. Nobody wants to sell or buy. Plus there’s a fat mortgage. Both couples have hired lawyers and now the Belbens have filed suit in the BC Supreme Court to force the others to liquidate for $210,000 or be forced to put the property on the open market. So as the legal bills mount, and the tensions escalate, imagine how chance encounters on the driveway are going?

This demonstrates why co-ownership is a major financial and legal risk. Things change. People have babies. They get divorced. They die have rabid heirs. They change their minds. They lose jobs. They get into financial trouble. They reach middle-age, weird out, get a realtor’s license and lease an R7. You just never know. Meanwhile do you really want to be building equity, sharing debt and running a house with people you can’t control and don’t really know? Even if they’re your in-laws?

Well, back to Colin.

The offer he’s being made is to cough up $700,000 in cash to hand over to his wife’s parents so he can move into a house they own and paid nothing for, and which they’ll retain a 50% interest in. Yes, they’re also being asked to do this at the apex of the housing market, and probably for an unrenovated beater in the wrong part of town. Doing this will involve wiping out their savings and putting them at least $450,000 in debt – all to own half a house while being responsible for 100% of the costs.

To summarize: the old people get a windfall $700,000 and have no costs while retaining co-ownership. The kids get reamed and take on big debt, plus overhead. Maybe they can sell down the road, but only if the parents agree – or the kids hand over another seven hundred grand.

Remember my guiding rule, Colin? Being screwed by a whole family doesn’t qualify.

294 comments ↓

#1 Doug on 01.12.16 at 5:38 pm

This sounds like a good idea…

http://www.cbc.ca/news/canada/british-columbia/condo-sales-with-no-cash-down-payment-proposed-by-b-c-developer-1.3400084

#2 Cici on 01.12.16 at 5:38 pm

I pity Poloz right now…if I were him, I’d be training to outrun the evil masses ;-)

#3 Jeff on 01.12.16 at 5:41 pm

Oil is not gonna stay long at this price. Expect a recovery starting in june-july. Oil will be at 50$ at the end of the year.

#4 zedgt87 on 01.12.16 at 5:44 pm

How is this even a question for Colin? I see nothing advantageous about this situation for him.

#5 Lulu on 01.12.16 at 5:44 pm

NEVER EVER buy with anyone beside your spouse or you know your parents well, otherwise is an accident waiting to happen. If I were Colin, I’ll wait and save more bullets for later. The market is on the breaking point now, hang on a bit more and got a big reward later.

#6 For those about to flop... on 01.12.16 at 5:46 pm

Good to see Rupert Murdoch and Jerry Hall are going to get married after a short romance,when your 84 you don’t have time to play games!
Murdoch is worth around 13 Billion dollars USD ,or as the Liberals would say he is worth around 6 payoffs to countries in South East Asia…

M41BC

#7 pathcontrolmonk on 01.12.16 at 5:47 pm

You forgot to mention Colin’s in-laws obviously perceive him as a half-wit, mouth-breathing, knuckle-dragging, chowderhead. Most normal people would be insulted. Colin, tell your in-laws to go toss themselves off the Lion’s Gate.

#8 Leo Trollstoy on 01.12.16 at 5:49 pm

why does colins parents hate him?

#9 Stephen Harper on 01.12.16 at 5:49 pm

First

#10 Why Why Jay on 01.12.16 at 5:50 pm

So you’re advising Colin to sleep with his mother-in-law before buying?

I kid, I kid. That being said, sleeping with the MIL is less of a quagmire and a lot more fun than owning part of an east Van special.

#11 Andres on 01.12.16 at 5:50 pm

Colin could come out a big winner if the parents die before they move or get divorced. They get the whole house plus whatever is left of the $700k they handed over. Of course that’s a big if.

Not really. If it’s not a principal residence, it is a taxable asset. — Garth

#12 MunEcon on 01.12.16 at 5:54 pm

FIRST ——- Delete this baby!!

#13 Fine Wild Roasted Gonads on 01.12.16 at 5:54 pm

Yeah that’s an easy one..

Ok back to something more interesting like the price of cauliflower … housing crap is sooo boring, it’s so simple.. don’t buy too much house, but people are nutz.

#14 Tree on 01.12.16 at 5:55 pm

Hopefully not first, second is always the safer path

#15 Bram on 01.12.16 at 5:56 pm

I agree, a bad idea.
But are you sure you interpreted Colin correctly?

I read that as Colin + wife living there by themselves, no in-laws. They get to use the un-owned 50% as well, in exchange for doing the maintenance and lawn mowing?

But yeah, if you don’t own all, legal troubles could arise.

May I suggest a better division:
Parents keep ownership of land.
They sell the building (East Van beaters are assessed at $25k typically) plus a 30yr lease of land for $250K.

Problem solved: no mortgage req’d.
They own the complete house. Just not the land.

#16 saskatoon on 01.12.16 at 5:56 pm

#273 Gulf Breeze

ah yes, because it benefited YOU…the government force must be fine!

lol.

any moral individual would feel shame–forcing money from strangers…and redistributing it to themselves.

you, on the other hand, celebrate!

additionally, you don’t even have the gumption to take this money by force yourself.

you get the government to do all the dirty work for you.

how weak is that?

typical rationalization for those without semblance of guiding moral principles.

#17 Tom63 on 01.12.16 at 5:59 pm

Latest household credit numbers for Canada (to the end of November, 2015):

http://credit.bankofcanada.ca/householdcredit

Latest business credit numbers for Canada (to the end of November, 2015):

http://credit.bankofcanada.ca/businesscredit

#18 Mocha on 01.12.16 at 6:04 pm

I’d still never do it because I wouldn’t pay 700k for a (complete) house but perhaps the unspoken idea is that the “kids” will inherit the other half when the time comes.

#19 BigCheese on 01.12.16 at 6:05 pm

FIRSTS!!!

#20 Herb on 01.12.16 at 6:05 pm

Hey, Garth, how much are you contributing to Kevin O’Leary’s “Retire Rachel” Fund?

#21 S.Bby on 01.12.16 at 6:05 pm

Now when a couple shares a house, who gets to be on top?

#22 TheTurp on 01.12.16 at 6:06 pm

Colin is gonna get reamed by his in-laws. It’s gonna happen, resistance is futile, poor guy.

#23 Heisenberg on 01.12.16 at 6:06 pm

At least grandpa’s house should be made of solid old-growth lumber. I went to check out a “luxury” estate in East Maple Ridge (yah) that is listed for 1.7 mill. Nothing but chipboard (OSB) as far as my rolling eyes could see…it’s like they’re building new houses for failure.

#24 Nanaimo Bar on 01.12.16 at 6:07 pm

Review of my Private Client Services list from my Realtor. I am interested in seeing if there is a stampede for new buyers trying to get into the market before the new mortgage rules take effect in February 2016. My criteria is single family homes in the price range $300,000 – $500,000.

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

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

House sold Oct. Nov. Dec. Jan to date
13 16 10 1

No stampede yet.

My personal disclosure is that I do not own Canadian Real Estate nor do I plan on purchasing Canadian Real Estate in the future. I’m just the scorekeeper.

#25 Michael on 01.12.16 at 6:07 pm

Great post Garth and an excellent rule which could be used for more than just the purchase of a property!

Having lived in Ireland during the big boom of early 2000’s so much of what is happening in Vancouver right now (and I can only assume Toronto as well?) was happening there and it’s really quite funny how history just repeats itself and nobody cares to take note.

Zero down payment (the place in Port Moody)
Shared mortgages
Everyone running around thinking that property prices would always go up!

I left Dublin in 2006 and was back during the summer of 2009 and the pain of what had happened was in full site all over the city…Even to this day there are areas which will never recover from what happened. Is Vancouver different will it avoid a Dublin style property melt down?

#26 My dog has issues on 01.12.16 at 6:07 pm

How about they let you live there rent free minus utilities and you can “take care” of the house for them. That way you both win and you can save more money for investing. Or go half a mil in debt and say no to so many things.

#27 GS in T.O on 01.12.16 at 6:08 pm

Simple answer: don’t even think of it
Simple question: is he crazy?
Blood is thicker than water and it’ll be Colin versus the entire household when disputes erupt

#28 Oh Colin... on 01.12.16 at 6:08 pm

I have only one advise for you. Pretend you’re a closet alcoholic and in now way, shape or form responsible at this time to make a huge financial decision.

Moving far away from this side of the family is probably a good idea. They won’t stop talking about it and asking you for your hard earned savings until you finally give in.

The irony is that Colin and others are working their butts off already to support their parents generation over 20 years of retirement.

Entitlement didn’t start with the Millenials.

#29 Nanaimo Bar on 01.12.16 at 6:09 pm

There seems to be no end to oil production.

According to the EIA’s Short-term Energy Outlook (issued on December 8, 2015), 12 oil-producing projects are scheduled to come online in the Gulf of Mexico in 2015-16.

Iraq is producing oil at record levels.

Then there are those who argue that oil can’t go any lower because the Canadian Oil Sands would have to shut down. Remember, Uncle Sam does not care what happens to Canada. Never has, never will. The U.S blames that Alberta oil is “dirty oil” and that is the reason there is no Keystone Pipeline. They never mention Saskatchewan oil as being dirty. North Dakota oil is the same as Saskatchewan oil. What oil is not dirty? Wow, my cloths are clean after working all day said no Rig Pig ever. You only get a free ride from Uncle Sam until they don’t need you anymore.

http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf

Where does that leave the Canadian Dollar? I was thinking before that USD/CAN would go to $1.4700 or so and I would bail and put it in the win column. But now, who knows, especially with a potential BOC rate cut next week. $1.5000? $1.5200? 1.5500? I don’t think a BOC rate cut is priced in at this point.

Then there is the FOMC meeting on March 18th. Another Fed rate hike?

One last rant.

Gas prices $2.09 per gallon Costco Seattle, Washington USA.

Gas prices $1.09 per litre Costco Vancouver, BC, Canada

Converted is 1.09 x 3.785 per gallon = $4.12 per gallon.
Canadians pay $4.12 per gallon

Come on Canada, at least make an effort to help the Canadian consumer.

#30 Learner on 01.12.16 at 6:11 pm

Sorry that my first post does not fit today’s topic. I am no longer in the house buying mania – a huge thanks to Garth. Now I just want to focus on building an balanced investment portfolio. So here is my question.

I understand preferred is the fixed income portion in a balanced portfolio, meant to be held long term. I got that and actually plan to get more in the recent sell off. Garth told us the preferred share is something between stock and bond, it pays you dividend and is less volatile than stocks. In an interest rate dropping environment such as Canada, a rate reset type of preferred will be dropping in price. However, can anyone please explain why recently the preferred ETF, in particular CPD, is dropping so much? I mean I expect it to drop, but why so much? For example today, as well as in past week, the CPD dropped much more % than the TSX did. Is there any other factors than the Canadian interest rate speculation in the play?

Appreciate your insight!

#31 cendrine on 01.12.16 at 6:12 pm

I am sure there are plenty of property maintenance companies that would be happy to take care of the house while it is up for sale. For that matter, a small investment in cosmetic improvements and professional staging might improve saleability. What is the problem with following the realtor’s advice?
I’m with Garth, this is a situation that will lead to much unhappiness or the furthest reaches of hell, depending on how polite your in-laws are.
Own your own home, paddle your own canoe.

#32 For those about to flop... on 01.12.16 at 6:13 pm

It’s a sad day for all the “firsters” when they get beat by a guy who types like a chicken ,aka Tommy Two Fingers..
Hang your heads in shame!
Either that or I’m getting better with all this practice…

M41BC

#33 mishuko on 01.12.16 at 6:13 pm

Rules 1-37? I have been reading for a few years and only can call a few…. my favourite is if you can’t pee in it don’t put a downpayment

#34 robert james on 01.12.16 at 6:13 pm

Never, Never, Never, Ever own anything in co-ownership.. It does not work.. Things change.. Quite a few years ago I had a Cessna,, my young brother got his license and instead of renting a plane decided that buying 50% of my Cessna would be a good idea,, share costs,, the annual C of A,, etc.. Seemed like a good idea,, but it just does not work.. My Cessna was Mickey Mouse compared to a house in Vancouver.. Mind you,, I was dealing with a young brother but still I would not advise anyone to do co-ownership..Not bad until the wives got into it.. Life is too short for that crap..lol

#35 Relater ® on 01.12.16 at 6:19 pm

There was some discussion in the comments about CMHC covering Port Moody Strand Townline Condo’s with 0% down. If you look at the website it looks like a done deal:

http://www.townline.ca/en/homes/new-homes/strand

But according to the CBC the CMHC is still considering the request:

http://www.cbc.ca/news/canada/british-columbia/condo-sales-with-no-cash-down-payment-proposed-by-b-c-developer-1.3400084

Interesting, no?

#36 Bobs ur uncle on 01.12.16 at 6:20 pm

Why not just rent the place?

Then you get to keep your 700K.

I also like that they are asking for 700, IE based on the higher price they can’t get on the market. If it had sold for 1.4, this discussion wouldn’t be happening.

Nothing good would come of shared ownership, other than parental intrusion into your business (which they will now see as their business).

#37 Bobs ur uncle on 01.12.16 at 6:24 pm

Sorry based on 1.4 which is lower. My bad.

Still a horrible idea tho…. :-)

#38 Godth on 01.12.16 at 6:28 pm

There’s elderly abuse (seen it my own family) and there’s child abuse (seen it too) – moral of the story; people are self interested scumbags. The strong will eat the weak one way or another.

#39 Tree on 01.12.16 at 6:29 pm

Long time reader, second time poster. My first was immaturely and dubiously clever you’ll see,.. dare I say millennial?

I am a GenXer who leased a beautiful Kerrisdale 1920s craftsman back in the mid 2000s (essentially in the heart of Vancouver for those unfamiliar; 20 minutes to everywhere). Made a play on the place with an ask from Dad for help with the 50k downpayment (I was saddled with some student loan debt). Offer? 650k. Counter? 700k. Result? Dad balked.

Some might think I’ve spent 10 years crying in my cereal but what would be the point of that? Perhaps I’d still be in Kerrisdale fretting about when to sell, or I would have sold at the 900k it did 2 years later so someone could tear her down (travesty). What I do know for sure is that none of it makes any damn sense. I did the math prior to my offer and with 5 bedrooms rented out to students I would have paid about 800 plus upkeep to live in it (taxes in). Amortized that makes a good investment irrespective of capital gains but then there’s the whiny UV kids to think of. Either way, now? These houses at 2+ million just defy any sort of financial logic – everyone is simply hoping for more and more capital gains. And for what? Doing nothing. And that friends is the definition of a bubble. The only way they avoid bursting is if they stop growing and ‘hold out’ long enough for the rest of the economy to catch up (10-20 years if history is any guide).

Now I have 170 acres in the mountains overlooking Okanagan lake. Price? 650k. 10 years later :) I should get myself a Mastercard.

#40 Doug t on 01.12.16 at 6:30 pm

The only thing “joint” you want to share is some BC bud

#41 Fed-up on 01.12.16 at 6:30 pm

#3 Jeff on 01.12.16 at 5:41 pm
Oil is not gonna stay long at this price. Expect a recovery starting in june-july. Oil will be at 50$ at the end of the year.
——————————————————————————–

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ……

Wake me up when that dream is over.

One last rant.

Gas prices $2.09 per gallon Costco Seattle, Washington USA.

Gas prices $1.09 per litre Costco Vancouver, BC, Canada

Converted is 1.09 x 3.785 per gallon = $4.12 per gallon.
Canadians pay $4.12 per gallon

Come on Canada, at least make an effort to help the Canadian consumer.

—————————————————————————–

Nope sorry, in Canada we just to reap the downside of cheap oil prices. Didn’t you know that???

#42 Buystander on 01.12.16 at 6:31 pm

The temptation of housing…

https://www.aei.org/publication/the-temptations-of-housing-finance-bubbles/

#43 Why Why Jay on 01.12.16 at 6:33 pm

@#24 Nanaimo Bar

The benchmark house in Victoria (proper) is $613K. The majority of SFH selling in the areas you listed (and greater Victoria in general) are over 500K. You are left with a myopic view of what is happening filtering to the 300-500 range.

Might be able to get something decent in Nanaimo for that much, but not Victoria. 500K is a fixer upper in any decent neighbourhood. Heck, many bad areas are selling over 500K.

Why not look at everything under $1Mil? Plenty of middle class families stretching themselves into 700K homes with “income” suites.

#44 Freedom First on 01.12.16 at 6:37 pm

Yes. I have seen and heard it many many times over the years. When you marry someone you are not just marrying them. There is all of their family and friends and co-workers involved. A lot of crazy to deal with. I’ve seen women still being controlled by others outside of their marriage as well as men still being controlled by others outside of their marriage. While marriage is, of course, much more dangerous for a man, and for obvious reasons, to anyone who is sane, if I was a woman I would still be living single. My life. My Principles. No need for #38. I always think with the big head. Includes avoiding any kind of family orgies.

#45 Fine Wild Roasted Gonads on 01.12.16 at 6:41 pm

#30 Learner on 01.12.16 at 6:11 pm

Sorry that my first post does not fit today’s topic. I am no longer in the house buying mania – a huge thanks to Garth. Now I just want to focus on building an balanced investment portfolio. So here is my question.

I understand preferred is the fixed income portion in a balanced portfolio, meant to be held long term. I got that and actually plan to get more in the recent sell off. Garth told us the preferred share is something between stock and bond, it pays you dividend and is less volatile than stocks. In an interest rate dropping environment such as Canada, a rate reset type of preferred will be dropping in price. However, can anyone please explain why recently the preferred ETF, in particular CPD, is dropping so much? I mean I expect it to drop, but why so much? For example today, as well as in past week, the CPD dropped much more % than the TSX did. Is there any other factors than the Canadian interest rate speculation in the play?

Appreciate your insight!

Because the poodle is gonna cut BoC rate….. down down down go preferreds.. gonna be a long time before they reset higher in canuckistan

#46 nubbers on 01.12.16 at 6:42 pm

Colin is heading into a world of pain.

Buying from an in-law is how I came to grief many years ago. Total and utter lack of due diligence. Was so pleased to avoid the estate agents fees, I didn’t spot the fact that house prices were already plummeting like a stone through a wet paper bag.

There has got to be a better solution. Challenge them to try selling it at 1.4 million. Maybe some fool will let you off the hook. Offer to rent it for a year or two, to see if it actually suits you. By that time the real value might be more apparent.

#47 Mean Gene on 01.12.16 at 6:43 pm

If it were Point Grey, then the family should figure out a way to keep the house, East Van is a $hithole and the ugly house should go.

#48 Bottoms_Up on 01.12.16 at 6:45 pm

Co-ownership is a non-starter. Who decides on repairs, maintenance? Do you go with a high-end or middle of the road toilet? Who calls the plumber…if you buy grass seed, does you in-laws owe you half the cost of the bag?

In terms of a $700k abode, well, ok, but only if you make $200k combined and have no children?

#49 common sense on 01.12.16 at 6:48 pm

BLOG HOUNDS :

A question:

As a Canadian resident working in the USA, I have a ROTH (like TFSA) and a SEP (like an RRSP). Because I am NOT residing in the USA, by rights I cannot actively trade on either account. However, an advisor has found a way to do so….here is my question and Mr. Turner feel free to chime in…

I called him last week and said, don’t buy anything Canadian and hold off on oil for a while. His response “I don’t take any advice from my clients and already bought EXXON and POTASH. Both are up today and an expert said OIL has met it’s FINAL SUPPORT PRICE.”

Before I state my opinion, I’d love any of yours.

Thank you.

#50 ender on 01.12.16 at 6:48 pm

Do nots:
– don’t hire family
– don’t invest with family
– don’t let family do daycare (ie/ grandparents)
– make sure your parents have an iron clad will

#51 Tim Tanken on 01.12.16 at 6:49 pm

When the loonie hits 61 cents and oil is back at $60 barrel, expect gas prices to hit $2 / litre

#52 Gulf Breeze on 01.12.16 at 6:50 pm

#16 Saskatoon,

You do the Stephen Colbert thing pretty well! For the longest time I thought you were serious.

The great thing about having a keyboard and a great sense of irony, like you, is you don’t have to apply for a government grant to be hilarious…make that hiLARious!!

Note the way I capitalized part of that word for inflection? Stick around , you old Pinko, and I’ll teach you all the tricks I learned in funny school!

#53 Fine Wild Roasted Gonads on 01.12.16 at 6:52 pm

#6 For those about to flop… on 01.12.16 at 5:46 pm

Good to see Rupert Murdoch and Jerry Hall are going to get married after a short romance,when your 84 you don’t have time to play games!

That is disturbing, weird and nutz.

#54 Godth on 01.12.16 at 6:54 pm

#16 saskatoon on 01.12.16 at 5:56 pm

You are a retarded savage.
https://www.youtube.com/watch?v=AwQEgOKEEXI

Read a damn book or something.
http://www.amazon.ca/Theory-Moral-Sentiments-Adam-Smith/dp/1614279985

#55 pinstripe on 01.12.16 at 6:56 pm

things are getting ugly in Alberta with the O&G bankruptcy situation.

http://www.cbc.ca/news/canada/calgary/redwater-energy-bankruptcy-1.3394177

#56 FormerSaskie on 01.12.16 at 6:59 pm

Colin, tell your wife that you willconsider buying this 1/2 house only if your wife will agree that there will be 0 (zero) dollars spent fixing it up ;)

But really, do not buy this house it is incredible how badly family deals can go sideways.

#57 gulnar on 01.12.16 at 6:59 pm

Canadian Press running a cauliflower story (wonder where that came from?)

They have echoing your thoughts for months in different ( a.k.a Polite words) so as not to offend their MASTERS

#58 pinstripe on 01.12.16 at 7:01 pm

just when the market is going to hell, the news does not get better.

Many in alberta are very worked up on how things are working out. The AB PCs betrayed many Albertans.

http://www.cbc.ca/news/canada/edmonton/fox-creek-fracking-operation-closed-indefinitely-after-earthquake-1.3400605

#59 Kreditanstalt on 01.12.16 at 7:02 pm

Indeed. 1/2 a C$1,400,000.00 house is half a very, very expensive house.

And people say there’s “no inflation”.

#60 Gulf Breeze on 01.12.16 at 7:02 pm

Tree, wise words. “Coulda, woulda, shoulda,” is a soul destroying exercise. I can’t begin to describe to you how weird and up and down and all over the place my life has been.

But, like you I’ve never gone the, “what if” route. If things had been different, I may have been run over by a truck. If things had been different, I could have had good health but been born in Syria and lost my kid at sea.

Yes we have the power of choice, but only to a certain degree. Some life events seem to be set in stone. There is nothing we can do.

That is where compassion towards self, others and a citizen oriented society come into play — not to mention Okanagan acreages!

#61 Ronaldo on 01.12.16 at 7:03 pm

Colin, no, no, no, no, no. Run away from that deal or any other like that as fast as you can. A recipe for disaster.

#62 Ronaldo on 01.12.16 at 7:05 pm

#3 Jeff on 01.12.16 at 5:41 pm

I agree.

#63 Grey Dog on 01.12.16 at 7:06 pm

Yea, it will sell at 1.4, just like agent thought it would sell at 1.6. They could still be dreaming about the price. Is it close to work for one of you? I’m from 905 and can’t pretend to know the area, however, is it close to amenities, public transit, etc? Or is the entire area being torn down and built up? Do YOU want to put up with the mud and noise?

At first glance it appears to be a good deal, but, giving it some thought, plus reading Garth’s advice, any way I look at it YOU lose. Wife, MIL, FIL, Grandparents sentimental old home, all blood. In many families BLOOD RULES , you will lose every time. Remember these folks REALLY DONT KNOW WHAT it is worth. Home beside me listed for 2M, after 6 months sold for 1.75 for months, they were convinced it was worth 2. Let them sell it when the offers come in, they will be more realistic about its value. Meanwhile let your balance compound.

#64 Irish Stew on 01.12.16 at 7:15 pm

I believe Colin’s in laws should be ashamed of themselves.
This is a self serving offering w/ no gain by Colin and their daughter.

Brutal.

#65 Daisy Mae on 01.12.16 at 7:18 pm

#11: “Colin could come out a big winner if the parents die before they move or get divorced. They get the whole house plus whatever is left of the $700k they handed over. Of course that’s a big if.”

Not really. If it’s not a principal residence, it is a taxable asset. — Garth

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

These arrangements are not simple…lots of legal implications.

#66 Scumop on 01.12.16 at 7:22 pm

Colin should take the deal. Then in every part of the house they won’t live in, on the roof, and in the yard, grow cauliflower all year round.
Should be able to get two crops a year.

#67 palebird on 01.12.16 at 7:32 pm

#29 Nanaimo Bar “Gas prices $2.09 per gallon Costco Seattle, Washington USA.

Gas prices $1.09 per litre Costco Vancouver, BC, Canada

Converted is 1.09 x 3.785 per gallon = $4.12 per gallon.
Canadians pay $4.12 per gallon

Come on Canada, at least make an effort to help the Canadian consumer.”

Are you aware of the fact that Vancouver consumers pays approx. .30-.40 cents more per litre than Alberta or Sask ? That additional surcharge has little to do with Canada, more to do with the cost of doing business in the lower mainland. I believe one of the recipients of this money is called Translink.. It is outrageous.

#68 tkid on 01.12.16 at 7:34 pm

Dear God, Colin, no.

This is a disaster. The parental units can’t sell it to anyone else (translated: no one else will buy the damn thing). Tell the wife you’d rather go for cookie cutter $450,000 than a $1.4 million teardown.

Parental units need to keep lowering the price until it sells. Why would you buy the house for more than what its market value is? No, the in-laws are not offering a 50% discount.

#69 For those about to flop... on 01.12.16 at 7:36 pm

#45 Fine Wild Roasted Gonads on 01.12.16 at 6:52 pm
#6 For those about to flop… on 01.12.16 at 5:46 pm

Good to see Rupert Murdoch and Jerry Hall are going to get married after a short romance,when your 84 you don’t have time to play games!

That is disturbing, weird and nutz.
///////////////////////////////////////
Hey Roastie,I’ll give you another example of weird and nuts…
His given name was Keith ,who in their right mind chooses Rupert over Keith!
The dude left Australia a long time ago but maybe at 84 he still knows how to mix it Down Under…
Maybe,just maybe he knew he couldn’t compete with Keith from Calgary! Boom! …shoutout!

M41BC

#70 jess on 01.12.16 at 7:40 pm

Are these the end days?

If you listen to Ted Cruz speeches …then yes. But, if you listen to Bernie burn into Greenspan it was the beginning!

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

Watch Bernie Sanders tell (yell) Alan Greenspan, in 2003, that Americans are not living the way that Mr. Greenspan imagines they are.
Then just 5 years later Alan Greenspan, former Chairman of the Federal Reserve, admits that there is a flaw in his ideology.

https://www.youtube.com/watch?v=WJaW32ZTyKE&feature=youtu.be
=========

#71 John Dimajo on 01.12.16 at 7:40 pm

All my friends are savers and some are investors having no debt, no mortgage, no credit cards, no car, auto loans etc. etc.

We have no money in the major Canadian banks for 20 years now and never will.

Just don’t be a debt moron and you will be ahead of the numbers game for decades.

The Liberal governments will make unemployment worse and financially indebted Canadians be financial basket cases and those in debt will be back to square one left with no money they never had in the first place.

#72 Daisy Mae on 01.12.16 at 7:41 pm

#32: “It’s a sad day for all the “firsters” when they get beat by a guy who types like a chicken ,aka Tommy Two Fingers.. Hang your heads in shame!”

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

You’re a complete ass….

#73 JSS on 01.12.16 at 7:42 pm

OMG

Notley body slams Kevin O Leary! Hilarious!

#74 Rick on 01.12.16 at 7:44 pm

Nanimo Bar: Canadians pay $4.12 per gallon.
Finish the calculation $4.12 Canadian is $3.01 USD.
Still more, but …..

#75 james on 01.12.16 at 7:44 pm

#3

“Oil is not gonna stay long at this price. Expect a recovery starting in june-july. Oil will be at 50$ at the end of the year.”

Oh yes, how convincing

I could believe some anonymous internet guy with no data to back up his claim.

Or I could believe economists and industry experts from OPEC, the USA, etc.

Hmm, tough choice.

#76 joblo on 01.12.16 at 7:46 pm

Maybe Smoking Man is genius.

To my ‘selected’ strange-minded friends: If you can read the following paragraph, forward it on to your friends with ‘yes’ in the subject line. Only great minds can read this. This is weird, but interesting!

If you can raed this, you have a sgtrane mnid, too.

Can you raed this? Olny 55 people out of 100 can.

I cdnuolt blveiee that I cluod aulaclty uesdnatnrd what I was rdanieg.�� The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno’t mtaetr in what oerdr the ltteres in a word are, the olny iproamtnt tihng is that the frsit and last ltteer be in the rghit pclae.�� The rset can be a taotl mses and you can still raed it whotuit a pboerlm.�� This is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the word as a wlohe.�� Azanmig huh?�� Yaeh and I awlyas tghuhot slpeling was ipmorantt!�� If you can raed this forwrad it .

FORWARD ONLY IF YOU CAN READ IT..

#77 Love this Blog on 01.12.16 at 7:46 pm

#3 Jeff. Put the pipe down

#78 Love this Blog on 01.12.16 at 7:49 pm

#62 Ronaldo . Then I guess you and Jeff are sharing a pipe?

#79 I'm stupid on 01.12.16 at 7:50 pm

It’s just greed. The parents want their cake and eat it too. They want the money and the increase in property value without having to pay a dime of expenses. That’s the problem with bubbles, people in them can see them. These people inherited a small lottery and instead of helping their children or enjoy a nice retirement they’re looking to increase the size of the lottery and indent their offspring. SMH Collin you should run!

#80 Brian Ripley on 01.12.16 at 7:50 pm

“Principle # 38: Never buy a house when you have too many hormones.” Garth

I have updated my chart with overlays of Canadian Household Debt, GDP, Foreign Direct Investment and Balance of Trade http://www.chpc.biz/household-debt.html

Q3 2015 (latest data) Household Debt and Mortgage levels continue to reach new levels.

Principle #38 has been ignored since the dotcom bust.

#81 Linda on 01.12.16 at 7:50 pm

I like #26’s idea – pay utilities, take care of the place & otherwise live rent free until it sells. First, it is an inheritance, so no money was paid out to purchase it. Second, that keeps any squatters from taking over the empty premises, keeps the yard tidy & saves worrying about the pipes or other housing crisis from occurring w/o anyone being able to salvage it. Second, it keeps Colin & wife from taking on huge debt at a time when our economy (& maybe the world economy) is less than robust. The in-laws don’t really ‘lose’ since they inherited, plus they get tenants who presumably won’t trash the place prior to vacating it. Win-win all around (except for wanting them to cough up $700,000 up front).

#82 Love this Blog on 01.12.16 at 7:52 pm

#73. “OMG

Notley body slams Kevin O Leary! Hilarious!”

I guess that’s why she is destroying Alberta’s economy then?? Too much time spent in the wrestling ring.

#83 Mark on 01.12.16 at 7:54 pm

Glad to see an example presented here of what’s happening to real people when they try and sell their individual pieces of Vancouver real estate (Toronto is largely the same story, and the slide in Calgary began even earlier than 2013 albeit slightly covered up temporarily by the floods). Yes, the ‘headline’ Realtor transactional averages are up, up a lot over the past few years, but on individual, identical houses, there has been no appreciation, and has even been minor amounts of depreciation since the 2013 apex.

And people say there’s “no inflation”.

Inflation is based on rents typically, which haven’t been rising meaningfully. Not on asset prices. If you want to say there’s been ‘inflation’ based on rising house prices, then you need to acknowledge that there’s been deflation in the value of business assets on account of stock prices being basically at levels of more than a decade ago despite significant buybacks and retention of retained earnings.

#84 Nanaimo Bar on 01.12.16 at 7:55 pm

# 43 Why Why Jay

Might be able to get something decent in Nanaimo for that much, but not Victoria. 500K is a fixer upper in any decent neighbourhood. Heck, many bad areas are selling over 500K.
——————————————————————-

There has been 14 houses listed in this price range for the areas. So basically why you are saying is that anybody in this price range is toast because they will not be able to sell their house. So all the new home buyers just jump straight into the $700,000 to million dollar price range. Get the mortgage helper suite and everything will be fine.

#85 davikk on 01.12.16 at 7:57 pm

Canadian Stocks in Bear Market, Loonie Swoons, Crude Crashes to $16, Consumer & Business Confidence Dives…

http://investmentwatchblog.com/canadian-stocks-in-bear-market-loonie-swoons-crude-crashes-to-16-consumer-business-confidence-dives/

#86 46 and 2 on 01.12.16 at 8:00 pm

Strong possibility that Alberta will experience a bottom/correction like no other in it’s history. Perfect storm of high debt, high costs, single source economy, low revenues and clueless public that elected a clueless gov’t. O’Leary may well be correct when he states that Notley does not have the game to see her Province through what is coming.

#87 acdel on 01.12.16 at 8:00 pm

joblo,

forwrad it!

#88 Smoking Man on 01.12.16 at 8:01 pm

Oleary says he would invest in Alberta in Notary resigned.

Hey tree hugger, this clips for you

https://youtu.be/Vc6PK7aqTO0

#89 Gregor Samsa on 01.12.16 at 8:02 pm

>Oil is not gonna stay long at this price. Expect a recovery starting in june-july. Oil will be at 50$ at the end of the year.

Dead wrong Jeff. There is zero fundamental, economic reason for this to be true. Right now supply is outstripping demand because just like in Alberta, cheap credit and new technologies unlocked new oil supplies ALL OVER THE PLANET. They are getting oil from everywhere these days, from countries you’ve never heard of and cannot pronounce the names. New mega-projects are still coming online, putting more production into an already oversupplied market.

Meanwhile, there is zero evidence that any economic booms are pending on the horizon to drive up oil consumption. In fact, only the USA shows any signs of growth, and those are tepid at best.

I don’t think oil prices will rise (I don’t use the word recover since I think the current prices are still too high) until high-cost marginal oil plays get shuttered and production levels finally start falling again. That won’t happen in 2016.

In fact, the days when it makes economic sense to burn roughly one unit of natural gas to extract every 3 units of oilsands goop may be done forever.

#90 For those about to flop... on 01.12.16 at 8:05 pm

#72 Daisy Mae on 01.12.16 at 7:41 pm
#32: “It’s a sad day for all the “firsters” when they get beat by a guy who types like a chicken ,aka Tommy Two Fingers.. Hang your heads in shame!”

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

You’re a complete ass….

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

Dear Daisy,it’s 2016 it’s time you have your first laugh this century…

M41BC

#91 jaybee on 01.12.16 at 8:05 pm

Colin, I would not even consider this for a minute. The only thing dumber than buying real estate in Vancouver right now is entering into some sort of co-ownership of Vancouver real estate.

#92 acdel on 01.12.16 at 8:05 pm

OMG

Notley body slams Kevin O Leary! Hilarious!

Priceless, O’Leary, typical blowhard cashing in on his fees!
Not an NDP fan but I reserve judgment on Knotley for a short while longer.

#93 pinstripe on 01.12.16 at 8:10 pm

it keeps getting worse in AB

http://www.msn.com/en-ca/news/canada/alberta-conservatives-see-jason-kenney-as-best-chance-to-unite-the-right-and-beat-ndp-in-next-election/ar-CCs3PY?ocid=spartandhp

#94 macroman on 01.12.16 at 8:12 pm

Before we all pile on, a few words on co-ownership.

Colin been Dawgpiled.

#95 Joe2.0 on 01.12.16 at 8:14 pm

Bla bla bla…
Plenty of money to buy cdn RE just not from Canada.
Lots of landlords a coming.

#96 West Coast on 01.12.16 at 8:15 pm

http://www.theguardian.com/business/2016/jan/12/beware-great-2016-financial-crisis-warns-city-pessimist

The above makes very scary reading – is this why our Mr. Poloz is looking particularly ashen??

“The City of London’s most vocal “bear” has warned that the world is heading for a financial crisis as severe as the crash of 2008-09 that could prompt the collapse of the eurozone.

Albert Edwards, strategist at the bank Société Générale, said the west was about to be hit by a wave of deflation from emerging market economies and that central banks were unaware of the disaster about to hit them. His comments came as analysts at Royal Bank of Scotland urged investors to “sell everything” ahead of an imminent stock market crash.

In a note to its clients the bank said: “Sell everything except high-quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It said the current situation was reminiscent of 2008, when the collapse of the Lehman Brothers investment bank led to the global financial crisis. This time China could be the crisis point, RBS said.”

#97 Fine Wild Roasted Gonads on 01.12.16 at 8:15 pm

#76 joblo on 01.12.16 at 7:46 pm

Maybe Smoking Man is genius.

To my ‘selected’ strange-minded friends: If you can read the following paragraph, forward it on to your friends with ‘yes’ in the subject line. Only great minds can read this. This is weird, but interesting!

If you can raed this, you have a sgtrane mnid, too.

Can you raed this? Olny 55 people out of 100 can.

I cdnuolt blveiee that I cluod aulaclty uesdnatnrd what I was rdanieg.�� The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno’t mtaetr in what oerdr the ltteres in a word are, the olny iproamtnt tihng is that the frsit and last ltteer be in the rghit pclae.�� The rset can be a taotl mses and you can still raed it whotuit a pboerlm.�� This is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the word as a wlohe.�� Azanmig huh?�� Yaeh and I awlyas tghuhot slpeling was ipmorantt!�� If you can raed this forwrad it .

FORWARD ONLY IF YOU CAN READ IT..
—–
Everyone can read it.. even Nectonites… nicely shows why spelling doesn’t matter..

Comma’s do matter!

http://usvsth3m.com/post/71961429182/if-you-think-commas-dont-matter-these-11-pictures

#98 WUL on 01.12.16 at 8:15 pm

Hon. Oracle of Ontario:

A question. When the melt in Canuck real estate starts in earnest, in which class of housing will it show up first? The Fort McMansion December data indicates that the harsher rot hits condos before single family detached.

http://www.fmreb.com/sites/5098200ae7e1b41bc50042de/content_entry50bf9565e7e1b41bc501133d/56956c172c1cc4bd963e4900/files/December_2015.pdf?1452633111

#99 Millmech on 01.12.16 at 8:17 pm

Just get the inlaws to get Goebbel TV to do a story on their sad house,then one of the 100,000 Chinese billionaires will buy the house for 2 million in a bidding war for their kids who are going to school here.Basically it will be a 2 mill garage for the Lamborghini &Porsche.
Seriously Colin should run,
I was asked to do the same thing with a family member and declined,another family member “stepped up”and got hammered when the other party went into serious financial difficulty,took out a Heloc,blew the cash and left family member with a big bill both legally(no written agreement)and financially.
My statement to the family member who got screwed was”if your not good enough for your own family,your not good enough for anyone else”

#100 amazon girl on 01.12.16 at 8:18 pm

Garth @11
Not really,if is not a principal residence it is a taxable
asset. question ,if it is passed as gift can tax be avoided?
Thanks garth

Probably not. A gifted property that’s not a proven primary residence attracts cap gain tax for the person gifting. — Garth

#101 For those about to flop... on 01.12.16 at 8:19 pm

#90 For those about to flop… on 01.12.16 at 8:05 pm
#72 Daisy Mae on 01.12.16 at 7:41 pm
#32: “It’s a sad day for all the “firsters” when they get beat by a guy who types like a chicken ,aka Tommy Two Fingers.. Hang your heads in shame!”

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

You’re a complete ass….

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

Dear Daisy,it’s 2016 it’s time you have your first laugh this century…

M41BC

/////////////////////////
I’m sorry my joke mocking my typing skills offended you, next time instead of hanging shit on myself I will save it for the putz that talks about the sales mix all the time.
Why do you come here and read the comment section if you have no sense of humour?
Are you trying to learn how to get one ?

M41BC

#102 Strathcona on 01.12.16 at 8:21 pm

I’ve said it before, and I’ll say it again. Garth was right. Everything he predicted is coming true, starting here in Alberta. Home prices are down, asking prices are discounted severely on some homes.

Many are laid off, many more are leaving town. It’ll be later this year for the impact to be felt in the centre of the universe, a world-class city.

#103 Fine Wild Roasted Gonads on 01.12.16 at 8:22 pm

#88 Smoking Man on 01.12.16 at 8:01 pm

Oleary says he would invest in Alberta in Notary resigned.

Hey tree hugger, this clips for you

https://youtu.be/Vc6PK7aqTO0

Oleary is an ass….Notley is a pretty decent person, unlike Princess REDFRAUD, but yeah she’s totally hooped…

The rest of her party though are a bunch of crazy commies who have no idea what they are doing.. never done anything ….brutal.

Klein 2.0 in four years

#104 tundra pete on 01.12.16 at 8:24 pm

Oil at $30 will look like the best price ever come a few months from now. Oil is going to $10 and will not correct for a long spell, if ever. Albertistan is hooped. Thanks to fracking the US has gas and oil for the next 200 years. This will keep canucks buying it from them in US$ for the foreseeable future.

The only benefit we will see from a low loonie is exports. Good luck with that one as China has taken all that over years back. The TPP will finish of whatever may be left of our manufacturing and exports. The tree huggers are loving this one. No more protests required to stop the bitumen mess.

#105 Nanaimo Bar on 01.12.16 at 8:30 pm

#43 Why why Jay

Here are the stats for the last 4 months for unsold new listing.

Unsold new listing – oct , 9 unsold, nov, 4 unsold, dec, 10 unsold, jan, 11 unsold for Victoria, Victoria West, Oak Bay, Saanich East, Saanich West, Esquimalt, View Royal, in the $300,000- $500,000. So there is a total of 34 unsold new listing. So if these people can’t sell their houses in this price range, how can people move up the property ladder and buy your $700,000 house? I guess they can always foreclose and rent in your mortgage helper suite. Just mow their house down and build parks, I guess.

But I did find safe way to invest in Canadian Real Estate

http://www.amazon.com/How-Invest-Tax-Liens-Canadians/dp/1490387420

#106 X on 01.12.16 at 8:32 pm

Colin….

So you pay for half of the ownership, would potentially get half of the profits on a sale, yet pay all of the expenses, taxes, maintenance….that doesn’t seem fair does it.

I mean if the parents feel like they are giving you $700,000 this way, why don’t they sell for 1.4, give you half of their proceeds, and you buy your own place….

#107 salonist on 01.12.16 at 8:32 pm

us gallon 3.786 litres
british gallon 4.535 litres
The ratio is 1 gal(CAN) = 4.535 / 3.786 = 1.198 gal (US). Rounding this off to 3 significant figures, we find 1 gal(CAN) = 1.20 gal(US).

#108 Drill Baby Drill on 01.12.16 at 8:35 pm

“never buy real estate with anyone you haven’t slept with” or at least diddle on the side.
Very wise words. This Pathetic Blog does have many tidbits of wisdom interspersed with knarly chunks of nasty.

#109 conan on 01.12.16 at 8:36 pm

That oil sands investment that Harper brokered with the Chinese, the one with the guaranteed profit for decades?

It is looking like an over flowing cat box situation with no solution.

Anyone know the details on that deal? I only ask because there seem to be a lot of Conservatives here.

Come on ,,,,, spill the beans.

#110 Fine Wild Roasted Gonads on 01.12.16 at 8:36 pm

#67 palebird on 01.12.16 at 7:32 pm

#29 Nanaimo Bar “Gas prices $2.09 per gallon Costco Seattle, Washington USA.

Gas prices $1.09 per litre Costco Vancouver, BC, Canada

Converted is 1.09 x 3.785 per gallon = $4.12 per gallon.
Canadians pay $4.12 per gallon

Come on Canada, at least make an effort to help the Canadian consumer.”

Are you aware of the fact that Vancouver consumers pays approx. .30-.40 cents more per litre than Alberta or Sask ? That additional surcharge has little to do with Canada, more to do with the cost of doing business in the lower mainland. I believe one of the recipients of this money is called Translink.. It is outrageous.

yeah move to what used to be known as oilberta and not as big a diff.. under 80c ..

I can sell you my house if you are interested.. great deal!

#111 bdy sktrn on 01.12.16 at 8:37 pm

but on individual, identical houses, there has been no appreciation, and has even been minor amounts of depreciation since the 2013 apex.
————————————–
mark is blinded by some sort of twisted mindset to not see…

***100% gain*** since jan 2013 on LOT VALUE east van dirt.

worlds worst investor can’t see a burning red screaming double right before his eyes.

worlds. worst. investor.

go Mark!

#112 Smoking Man on 01.12.16 at 8:38 pm

#102 Fine Wild Roasted Gonads on 01.12.16 at 8:22 pm
#88 Smoking Man on 01.12.16 at 8:01 pm

Oleary says he would invest in Alberta in Notary resigned.

Hey tree hugger, this clips for you

https://youtu.be/Vc6PK7aqTO0

Oleary is an ass….Notley is a pretty decent person, unlike Princess REDFRAUD, but yeah she’s totally hooped…

The rest of her party though are a bunch of crazy commies who have no idea what they are doing.. never done anything ….brutal.

Klein 2.0 in four years
……

If your not into capitalism, you suffer from mental illnesses.

Its that simple.

#113 bdy sktrn on 01.12.16 at 8:41 pm

a friend has a place(wrecked but asbestos removed) in a less than nice area (but central-ish) off kingsway near knight.

last spring 850-900 was very best case estimate.

put out a feeler to a RE agent, it took all of 24 hrs for a 1.25m offer to come in

this is about the worst/lowest market in vancouver and is up 30% in 11 months.

#114 Chester McToss on 01.12.16 at 8:43 pm

The Trudeau led recession will see a 50 cent dollar before this gang of selfie obsessed incompetents is turfed in the next 18 months. With an economy in free fall can revolution be far behind?

http://www.vancouversun.com/business/money/loonie+unprecedented+plunge+cents+forecaster+warns/11647461/story.html?__lsa=2b76-9549

I’ll bet even the liberal whiners who shouted Hate Harper at every turn are secretly wishing for the strong capable hands of Stephen the Economist right now as hyperinflation sets in and their vacation dreams go down the toilet with their lay off notices.

#115 Bram on 01.12.16 at 8:44 pm

#102 Strathcona on 01.12.16 at 8:21 pm
Garth was right. Everything he predicted is coming true, starting here in Alberta.

He’s got a better than average score for his 2015 prognosis, but is hardly 100% as you can see here: http://www.greaterfool.ca/2016/01/01/el-predicto-3/#comment-421878

But yeah, 6 out of 8 is good.
Better than your average pundit, I would say.

Bram

This blog is rolling history, with colour commentary. Come to your own conclusions. — Garth

#116 blobby on 01.12.16 at 8:46 pm

Got to love these well reasoned scare stories! EVERYONE SELL WHILE IT’S GOING DOWN!!!

I’ll hold thanks RBS…. It’ll recover.. But I might buy over the coming months while it’s low..

http://www.theguardian.com/business/2016/jan/12/sell-everything-ahead-of-stock-market-crash-say-rbs-economists?CMP=share_btn_fb

#117 Kamilapea on 01.12.16 at 8:48 pm

I wish I could have no-brainer “tough” decisions.

#118 My dog has issues on 01.12.16 at 8:49 pm

ETF XTR is looking pretty juicy right about now. Trading at a 52 week low and yielding 7% paid monthly instead of quarterly. Any thoughts?

#119 No seems to notice no one seems to care on 01.12.16 at 8:53 pm

The American dream you have to be asleep to believe it ! -George Carlin
Perhaps the best 4 min on youtube of how it is in the land of the free.
Bawawawha .

#120 Fine Wild Roasted Gonads on 01.12.16 at 8:55 pm

#112 Smoking Man on 01.12.16 at 8:38 pm

#102 Fine Wild Roasted Gonads on 01.12.16 at 8:22 pm
#88 Smoking Man on 01.12.16 at 8:01 pm

Oleary says he would invest in Alberta in Notary resigned.

Hey tree hugger, this clips for you

https://youtu.be/Vc6PK7aqTO0

Oleary is an ass….Notley is a pretty decent person, unlike Princess REDFRAUD, but yeah she’s totally hooped…

The rest of her party though are a bunch of crazy commies who have no idea what they are doing.. never done anything ….brutal.

Klein 2.0 in four years
……

If your not into capitalism, you suffer from mental illnesses.

Its that simple.

Yeah we’re pretty screwed here in oilberta, no longer commie free – still rat free though.

Hey we’ll be as bad as Owetario in a couple years…

You might want to pick up the slack and start building stuff again now that ya got yer dollarette

#121 Chaddywack on 01.12.16 at 8:55 pm

Anyone need some frozen cauliflower? It’s offered at $8/100g. Accepting offers tomorrow at 5pm PST in Vancouver. No subjects. No agents.

This is not a cauliflower blog. I think. — Garth

#122 For those about to flop... on 01.12.16 at 8:58 pm

#307 New to the Game on 01.12.16 at 5:23 pm
Looking to get into the game and am looking for a fee based adviser to work with in the GTA. Don’t really know where to start and thought the blogdogs would have some ideas…

/////////////////////////////
Looking for a fee based advisor in the GTA you say?
Hmmm…can’t think of one off the top of my head,do you know one Garth?
Relax Daisy,that was a joke…

p.s Welcome to the blog “new to the game”

M41BC

#123 BG on 01.12.16 at 8:58 pm

“Remember my guiding rule, Colin? Being screwed by a whole family doesn’t qualify.”

Garth I rarely smile or laugh just by reading something, but this line did it!

#124 Nanaimo Bar on 01.12.16 at 8:58 pm

#74 Nanimo Bar: Canadians pay $4.12 per gallon.
Finish the calculation $4.12 Canadian is $3.01 USD.
Still more, but …..
———————————————————-
When did Canadians start getting paid in USD? I did not know that.

#125 rawdiswar on 01.12.16 at 9:00 pm

The bloke who cuts what left of my hair is from Ireland, and recalls the RE bust there fondly.

He said the way young Toronto hipsters throw money around is pretty much the way the Irish threw money around right before the crash. I guess when you are brainwashed into “owning” an overpriced condo, you really do think you’re rich.

Borrow your way into prosperity seems to be my generation’s motto.

Just got a Boston Terrier back in the fall, the little guy is almost 5 month old. A common question I get when walking him is, “how much did he cost?”. As if how much you paid for a dog is a status symbol for these hipster swine.

#Embracecapitalism

#126 Bookmaker on 01.12.16 at 9:02 pm

Taking bets on UFC Canada: Notley vs O’Leary

Giving:
-300 O’Leary, +205 Notley.

if Notley tags in Joe Ceci (he can’t fight a girl…):
-500 O’Leary, +330 Ceci**

**If Ceci hides behind Notley and O’Leary physically eats both of them, we will payout double with help from our sponsors: Shell Canada, the Alberta Taxpayers Federation and every sane taxpaying citizen in this country.

#127 bdy sktrn on 01.12.16 at 9:04 pm

#107 salonist on 01.12.16 at 8:32 pm
———————-
math fail.

why don’t ppl who can’t do math just shut up about it?

#128 bdy sktrn on 01.12.16 at 9:05 pm

imp gallon is irrelevant.

#129 Squish on 01.12.16 at 9:05 pm

Think of it this way…

If that house was not inherited or family related in some way, but was simply listed by a stranger, for 1.4 million, and your in-laws came to you and wanted to go halvsies to buy it together, would you?

Dear god let the answer be a clear, resounding NO, and realise that the situation that’s being proposed is irrational, horribly-timed madness. You don’t even actually know the market value of this house, the value is simply based on a realtor’s guess. Absolute madness.

#130 No seems to notice no one seems to care on 01.12.16 at 9:06 pm

#114 Chester Mc Tossoff
The Trudeau led recession will see a 50 cent dollar before this gang of selfie obsessed incompetents is turfed in the next 18 months. With an economy in free fall can revolution be far behind?
/////////////////
Really ! T2 has been in power for 3months and you think this is all his fault wtf , this economic collapse was set in motion a long time ago when Nixon ended the gold standard and the world went fiat.
Fiat always goes to its intrinsic value ———$0

#131 TRT on 01.12.16 at 9:14 pm

Everyone stop overanalyzing!

What led to this mess in Canada was a downturn in Commodities and the Gov’s willingness to keep the RE bubble inflated at all cost. (Low rates/High Immigration).

The Commodities downturn (including the laggard Oil) is a direct result of the hard landing China is going to experience this year. Demand increase goes down to zero this year.

Canada in order to keep the RE bubble inflated will keep lowering rates and killing the dollar. I have no faith in Poloz…he will cut. banana republic central banker.

#132 Lorne on 01.12.16 at 9:20 pm

#114 Chester McToss
I’ll bet even the liberal whiners who shouted Hate Harper at every turn are secretly wishing for the strong capable hands of Stephen the Economist right now as hyperinflation sets in and their vacation dreams go down the toilet with their lay off notices.
…………………….
You would lose that bet!!

#133 Drill Baby Drill on 01.12.16 at 9:24 pm

Gasoline in South Calgary today is $0.79/litre. I remember 15 years ago gasoline being $0.77/litre in Calgary.

#134 Drill Baby Drill on 01.12.16 at 9:25 pm

“Remember my guiding rule, Colin? Being screwed by a whole family doesn’t qualify.”
Even if it is the Kardashian sisters?

#135 TRT on 01.12.16 at 9:26 pm

And China IS going to have a hard landing. here’s why:

1) Commodity prices down. Bloomberg Commodity Index at levels seen in 90’s. No demand growth in China.

2) Electricity usage up less than 1% in China year over year.

3) Shipyards are becoming graveyards in China. Exports/Imports anticipated to decline.

4) Gov of China trying to prevent stock market from crashing by buying stocks. WTF?

Low commodity prices, low electricity prices, abundance of labour, and high debt loads means deflation and crises coming to China. Good luck trying to steer the economy into a consumer driven one. Lol

#136 Leo Trollstoy on 01.12.16 at 9:27 pm

almost never agree w left wing obama but he’s right

http://fortune.com/2016/01/12/obama-us-economy/

it’s not even close. booming

#137 SWL1976 on 01.12.16 at 9:28 pm

I’ve hit a lot of jumps on many different bikes and experience tells me that the one in that pic is not going to end well.

Like over priced housing… it seemed like a good idea at the time

The fire is also a nice touch

#138 Leo Trollstoy on 01.12.16 at 9:31 pm

Can you raed this? Olny 55 people out of 100 can

typical clickbait sentence structure. if u actually read any more of it then you’re sheep not special. sorry

#139 salonist on 01.12.16 at 9:32 pm

109 conan

http://thetyee.ca/News/2015/06/22/China-Trade-Deal-Tough-Questions/

#140 Mr. Pink on 01.12.16 at 9:32 pm

“The top forecaster of the Canadian dollar said the currency will fall to a record 59 U.S. cents by the end of the year as further weakness in the energy sector saps growth in an economy already stretched by a heavily indebted consumer and the Bank of Canada cuts interest rates for a third time.”

http://www.bloomberg.com/news/articles/2016-01-12/canada-dollar-falls-below-70-u-s-cents-recalling-pre-oil-boom

#141 Leo Trollstoy on 01.12.16 at 9:33 pm

no deflation in Canada anywhere

#142 Vancouver..centre of he universe on 01.12.16 at 9:36 pm

69c dollarette……hmmm
If you lemmings think you’ve HAM you jut wait now.
40% plus gains are on the way in Van city by the time looooooonie gets to 66c.
Happy renting to all of you here….LOL

#143 mark on 01.12.16 at 9:36 pm

BMO laddered preferred ZPR etf lost 2.8% today.
Now at a 52 week low.

http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=ZPR-T

#144 Conrad on 01.12.16 at 9:47 pm

#118
top 2 holdings are high yield bond funds. I would be very careful with that one, its going to have a lot of toxic energy bonds

#145 David Traveler on 01.12.16 at 9:48 pm

I’m just listening to Obama’s speech. He’s crowing about regenerating America’s energy industry. The US companies and their proxies were very effective in crushing Canada as a competitor by using Canadian proxies to tie our country up in knots while the yanks went full steam ahead.

http://www.albertaoilmagazine.com/2014/07/vivian-krause-great-green-trade-barrier/

The LNG industry and oil drilling shale in the US has exploded while our American paid native bands, Suzuki’s, Green Peacers, Tides, dopey rockers shouted down Canadian aspirations. America used Canadians to fight Canada and Canadians should be ashamed of themselves for letting it happen. Boy are we ever stupid. It looks like Buffet and the Rockefellers money paid to the right ‘protestors’ has achieved what they wanted using Canadians and Canada’s media as a dumbfounded patsy.

So, while America’s petroleum energy industry booms and becomes a huge exporter, Canada’s energy industry is shuttered and our children and seniors will starve under the complacent Trudeau regime.

“We’re back”, says Trudeau. We’re back to a Canada that is on it’s knee’s for American tourists and our young people have nothing but low paid service jobs to pay the rent. It’s OK though , Trudeau can pay $2500 a night in the Caribbean, paid for by a coal fortune his grandfather amassed and Junior can spend at his leisure without ever having earned a dime.

#146 Topsy-Turvy on 01.12.16 at 9:48 pm

#76, “Dyslexia Signs and Treatment”

#147 Leo Trollstoy on 01.12.16 at 9:49 pm

wow tech is growing in Alberta.

“Anything related to technology is definitely the direction to go in. Something like coding, or programming, or development, or even sales within a technology area – that’s going to be a growth market in the long term,” Massie said.
http://globalnews.ca/news/2447619/new-set-of-job-skills-in-demand-during-albertas-economic-downturn/

i knew tech was booming in bc, on, and qc but never guessed ab. of course the caveat depends on the employability of the candidate. reality punishes the dumb so don’t expect a job if you’re unemployable.

#148 Keith in Calgary on 01.12.16 at 9:49 pm

#99 Millmech…….

ROTFLMAO……..”Goebbel TV”………made spit a mouth full of coffee all over my laptop.

Comment of the year !!!!

#149 Smoking Man on 01.12.16 at 9:57 pm

#76 joblo on 01.12.16 at 7:46 pm

Speed reading for me.

The commas are a problem

#150 JeffN on 01.12.16 at 9:59 pm

Colin.
Dont do it.
What happens if she decides to split?
You think SHES going to move out ??
Be smart and think with your brain.
Not your heart, not any other organ.
Or risk losing BIG.
If she really wants to live there for whatever reason just rent it from the inlaws.

#151 Smoking Man on 01.12.16 at 10:13 pm

DELETED

#152 AfterTheHouseSold on 01.12.16 at 10:15 pm

#256 Sean (yesterday)
“TSX 60-its well off its highs, is it not a good idea to start buying for someone in their late 20s?”

Have a look at Garths post on 15 May 2014 “The Millenial Portfolio”. It provides the weightings for your portfolio which includes Canadian. Yes, it is well off its highs, might go lower, might go higher, who knows. Garth advises us not to try to time the markets.

In other posts Garth has laid out ‘example’ portfolios using iShares ETFs:
Equities 60%
XIU (Canadian)
XSP (US)
XIN (International)
XRE (Reit)

Fixed 40%
XSB (Bonds)
XPF and CPD (Preferred)

Use the weightings from the above post.
My two millenials, also in their late twenties have this portfolio. Global exposure bought with Canadian dollars.

For newbies, read ‘The Millionaire Teacher’ by Andrew Hallam. Easy to read and understand, will help to build confidence to invest.

#153 TurnerNation on 01.12.16 at 10:20 pm

Ok I’m forecasting 500 Dow points up from here then Whomp.
#treasuryblondes

#154 Polina on 01.12.16 at 10:23 pm

Why is it that nobody sees any benefits in Colin’s in-laws offer and some even see some kind of malice? Or is it the market downfall that makes people here so angry today?

Assuming that $1.4m is the actual market value of the property, and that Colin’s in-laws have their own home (how is your comparison to the other co-ownership arrangements is relevant here, Garth?) here is how I see the deal:

– Colin gets to use his in-laws half of the property rent- free! Of course, the devil is in the details, but sounds like his in-laws may let this continue indefinitely until their death at which point Colin’s wife will inherit it fully or partially depending on whether there are other siblings, etc.

– Instead of cashing out the full value of the house and possibly spending it away, Colin’s in-laws are only taking out a half, leaving the other half locked in the assets that will be passed down to the next generation.

– Colin’s risk of buying in this real estate market is reduced. By assuming only a 50% ownership, in case of property values meltdown, the potential loss he would incur would be lower than if he went out and bought a similar home at full price.

– Colin’s in-laws seem to have a much better trust in him than he has in them. They take a considerable risk by letting their son in law to have a rent free use of their $700k property and trust him that he maintains it properly.

– I would get more details on how they want to treat improvements to the property versus maintenance in case they need to sell in the future. Maintenance (cutting the grass, small repairs, etc.) are always your expenses when you live in a house rent free – it is outrageous that some suggest it’s unfair that Colin should be responsible for them! However, if he improves the property (new roof, windows, doors, etc.) these would be recovered in case of sale and the in-laws may have to reimburse Colin his half – just a point to consider.

Dear Colin, I don’t know you or your wife or your in-laws, but if you do decide to turn down the offer, I hope you don’t make the deal sound like a rip off – this may greatly damage your relationship and marriage.

Good luck!

#155 BS on 01.12.16 at 10:30 pm

ETF XTR is looking pretty juicy right about now. Trading at a 52 week low and yielding 7% paid monthly instead of quarterly. Any thoughts?

7% is not the real yield. It it is paying you with capital. Probably half that 7% is taken out of the capital. Just add up the yield on the underlying funds to figure out what the yield is. A fund like this is only good if you need that 7% to spend monthly.

In addition buying an ETF (or stock) hitting a 52 week low is a sure way to lose money. Usually they are going lower, at least short term.

#156 BS on 01.12.16 at 10:43 pm

Leo Trollstoy on 01.12.16 at 9:49 pm

i knew tech was booming in bc, on, and qc but never guessed ab. of course the caveat depends on the employability of the candidate. reality punishes the dumb so don’t expect a job if you’re unemployable.

LOL…why work in tech when you can make a killing on forex…unless of course you get the trade exactly backwards.

#157 45north on 01.12.16 at 10:46 pm

Her grandfather passed away recently leaving the parents with an East Vancouver special.

an inheritance is of interest, but you shall not covet!

http://www.merriam-webster.com/dictionary/covet

you could offer to help spruce up the house. You know sort out the junk and paint. For free. That would establish your claim to being a committed family man.

No this is a transaction between your wife’s grandfather and her parents. Leave it that way!

#158 ministry of selfies on 01.12.16 at 10:48 pm

WOW those parents must really hate their child.

1. They want to jeopardise his financial security
2. They named him Colin

Poor guy….

#159 Yuus bin Haad on 01.12.16 at 10:49 pm

Had to search Smokey’s Mulroney twroll – hilarious (“got your attention, that was too damn easy” – HA!). Hey Smoke, why don’t you pick on someone of your own intellectual stature?

#160 Team OMG on 01.12.16 at 10:50 pm

Colin would be best served hiring a competent family law lawyer: when the parents kick the bucket, the wife might inherit the 700k he paid for his share of a matrimonial accommodation, plus 50% of the share the parents leave behind. The inheritance is not a matrimonial asset, so if he splits with the wife down the road, she keeps the entire 700k, as well as the 50% share the parents may have also left her, and then he would be forced to split the remaining half he “co-owns” MINUS and mortgage and legal costs. He could be left with less than 25% of the liquidated value of the house, and no cash. NOT COOL. Perhaps alimony and child support payments garnished from his paycheque too . . .

Basically, I see Colin begging at the side of a roadway or offering to squeegee windshields at some point in the future. The trigger for divorce being financial stress.

#161 BS on 01.12.16 at 10:53 pm

When you hear about parents handing their kids a downpayment it is sad. They are setting their kids up for financial ruin by trying to help them.

Then there is Colin’s wife’s parents who want to sell them a house they got for free for full price at peak bubble prices after they can’t sell it on the market. Nice in laws Colin! Your wife must be proud.

#162 Nagraj on 01.12.16 at 10:54 pm

re “Goebbel TV” (comments #99 and #148)

There were six Goebbels children (and a seventh, Harald, the oldest, from a previous marriage).
Magda Goebbels herself poisoned the six, in the Berlin bunker, rather than have them live in a non-Nazi world. Then she and Joseph went outside, Joseph shot her in the chest, and then himself in the head. As per their wishes, their bodies were promptly doused with gasoline and burnt.

[Harald survived WW2 and died when his private plane crashed in Italy in 1967.]

The role of propaganda in the rise of Nazi Germany is wildly overrated. As Hannah Arendt points out, for the lie to be believed, there has to be a predisposition to believe it.

#163 Paul on 01.12.16 at 10:59 pm

House prices are being slashed in this hood.
No takers !!
http://www.cnet.com/news/silence-of-the-lambs-house-gets-price-sliced-almost-to-the-bone/

#164 Not tonight honey on 01.12.16 at 11:00 pm

Cowtown mall IS dead. I’ve lived near chinook mall for 12 yrs. Xmas traffic used to line up for blocks & blocks, not this year-not even close. I didn’t wait in line to check out once over Xmas and parking seemed available at all times. Valet guys had lots of smoke break time on their hands.
Walked the mall today for 2 hrs with the kidlets (yah, that was me rockin’ the sketchers and sensible backpack) barely a soul and only 1 nordstrom bag floated by. Many folks with no bags at all, mostly senior roamers and mommy strollers abound. Usually the mall is still busy this time of year with xmas gift cards burning holes in pockets…..
Told the mini-me’s we we’re going to the bank and one piped up “Yaay, the bank, that’s where we buy money” she’s 3 and knows the situation better than most adults.
The Only hopping spot was Starbucks, I guess if you can no longer Amex that $800 nordy scarf you can try to drink your shop til I drop tears away in a venti.
Btw, TD did not have 1 customer, not ONE…..usually I’m thrilled when there is less than 10 lined up. We were also the only kids in American Girl (you know, the $200+ creepy dolls that promote 1950’s style ideas about being female) and we were there a loooong time, playing-NOT buying. One one boy doll, wtf?

Definitely sleepless.

#165 Smoking Man on 01.12.16 at 11:15 pm

#159 Yuus bin Haad on 01.12.16 at 10:49 pm
Had to search Smokey’s Mulroney twroll – hilarious (“got your attention, that was too damn easy” – HA!). Hey Smoke, why don’t you pick on someone of your own intellectual stature?

….

Hard to find a challenge.

The planet fagatron.too old for this shit in my state.

Sobar for a day, I will own the world.

Not happening anytime soon.

#166 Polina on 01.12.16 at 11:29 pm

How can letting the kids use a $700k property (half of $1.4m) completely rent free with the potential of inheriting it afterwards be a bad deal ????? The parents have an option to sell it and spend it away or invest in a rental property and make tens of thousands a year in rental income – instead they let it be used by Colin and his wife!
How more fair can it get? It’s completely irrelevant whether the parent paid for it or had a windfall – it is their property and they let it be used FOR FREE

#167 A box in the Sky on 01.12.16 at 11:30 pm

In-laws are being ruthless here, getting it in with by far the best of it to their own daughter no less.

What selfish baby boomers these people are. Truly odious.

If you’re the one being asked to come into an agreement you shouldn’t even think about it unless you’re getting a steep discount for doing so.

Going 50/50 in this spot is brutal.

#168 Herf on 01.12.16 at 11:39 pm

#107 salonist

“british gallon 4.535 litres”

Correction: one imperial (British) gallon = 4.546 litres.

#169 jane 24 on 01.12.16 at 11:43 pm

Colin’s in-laws should sell that house for whatever they can get – nice and clean. End of story. Or if they own their own house and are not in need simply make it over to their children. You can’t take it with you. Their proposal is indeed trying for a double win at their kid’s expense.

Wow Cdn $ at 69 cents or $2.08 per GBP. This will make for seriously cheap Timmys when I am home this Spring. Still kicking myself for not collapsing my RRSPs last April. Live and learn.

#170 Herf on 01.12.16 at 11:48 pm

#119, #130 No seems to notice no one seems to care

Do you know how to spell your own screen name?

#171 A box in the Sky on 01.12.16 at 11:53 pm

#118 My dog has issues on 01.12.16 at 8:49 pm

ETF XTR is looking pretty juicy right about now. Trading at a 52 week low and yielding 7% paid monthly instead of quarterly. Any thoughts?

—————————————-

XTR is trash. Just bring up a chart of XTR vs XIU and you will see why.

XTR is a synthetic product to generate that 6-7% distribution, a good 2-3% of which is just capital being recycled.

It offers almost no upside/capital appreciation, yet it will fall with the market.

It’s pretty much the worst of everything, it doesn’t have downside protection like a bond, but its upside is severely capped. You’ll never smash it for a 15%+ return in a given year the way a stock market index can, yet you’ll have years where you’ll get a 10% drawdown. Over the long run this sucks.

Buy a mix of bonds & stocks through ETF’s but don’t buy these synthetic products.

I also seriously question the advice that preferreds are “like bonds”. I call bs on that. A preferred ETF like CPD has a beta of 0.3 ….. that’s not a bond.

#172 Olivia on 01.12.16 at 11:58 pm

Knowing that you recommend investing in ETFs and using TFSAs, I have a quick question. I recently came into about 150k CAD (which isn’t worth much in USD anymore unfortunately), and before coming across your blog, I probably would have put it into my mortgage on my condo (220k left of mortgage). No TFSAs or RRSPs yet (I’m 25 so thought I would have time to catch up on that later) but my question is, with the dollar tumbling weekly if not daily, putting money into “non-maple” comes with a hefty price tag (my 150k is worth about 100k usd now). Is it still worth it if you’re getting into the game now? What would you suggest?

#173 Turtle on 01.13.16 at 12:02 am

Colin…

The deal is NO good.
Tell your MIL that you gonna wait till prices come down.

Also … it is very important! … make sure your wife is playing for your team. If not… than tell your Father-in-Law face to face that you have to sleep with his wife first if they want you to buy RE with them… Also tell your FIL that you don’t have to sleep with him if he doesn’t want it. (You have to draw a line somewhere.)

#174 A box in the Sky on 01.13.16 at 12:04 am

#147 Leo Trollstoy on 01.12.16 at 9:49 pm

wow tech is growing in Alberta.

i knew tech was booming in bc, on, and qc but never guessed ab. of course the caveat depends on the employability of the candidate. reality punishes the dumb so don’t expect a job if you’re unemployable.

——————————————–

Leo, you’re a savage :)

I have no sympathy for Mark though … him coming on here and saying prices have been falling for 2 years in TO is getting annoying

#175 Pierre on 01.13.16 at 12:20 am

I tried to put an offer on a quick-possession house put for sale by a developer in a new community south of Calgary. The offer was within 2% of asking price, but with a possession date in June. I was told by the sales rep not to submit the offer because it wouldn’t be accepted!

I’m wondering if these guys got the memo about the current state of the economy in YYC…

#176 With friends like these… - Realties.ca on 01.13.16 at 12:32 am

[…] Source: http://www.greaterfool.ca/2016/01/12/with-friends-like-these/ […]

#177 Bobs ur uncle on 01.13.16 at 12:42 am

44 Freedom First

“While marriage is, of course, much more dangerous for a man,”

Dude sometimes you make some sense, but a lot of times, I kinda feel sorry for your strange, skewed view of the world:

“About half (49%) of all female murder victims in Canada are killed by a former or current intimate partner. In contrast, only 7% of male murder victims were killed by intimate partners. ”

http://www.canadianwomen.org/facts-about-violence#MALES

#178 kommykim on 01.13.16 at 12:48 am

RE:

#16 saskatoon on 01.12.16 at 5:56 pm
#273 Gulf Breeze
ah yes, because it benefited YOU…the government force must be fine!

I’m going to get a government job and pension just to piss you off.

#179 David on 01.13.16 at 12:58 am

Albert Einstein was reputed to have said always choose the most elegant solution.That mixer mortgage sounds like a recipe for convoluted court room proceedings and a whole lot of tears.
It is worrisome how bad the Canadian economy is these days. The thoughtless anti Alberta NDP rants make me shake my head at times.

http://wolfstreet.com/2016/01/12/canada-stocks-in-bear-market-loonie-swoons-western-canada-select-crashes-to-16-consumer-business-confidence-dives/

#180 Team OMG on 01.13.16 at 1:15 am

said by
“11 Andres on 01.12.16 at 5:50 pm

Colin could come out a big winner if the parents die before they move or get divorced. They get the whole house plus whatever is left of the $700k they handed over. Of course that’s a big if.”

———

ABSOLUTELY NOT. The wife inherits an asset that is not subject to matrimonial dissolution :( Colin is not at all in a happy place if he pulls the trigger on a stupid move.

God forbid the wife has siblings who are legally entitled to an equal share of an estate: Colin would be funding his wife’s sibling’s future fortunes.

Say that real slow three times.

#181 Paul H on 01.13.16 at 2:16 am

Colin, as many have mentioned run run away. Why?

1. Crap house in crappy part of town for $1.4M – enough said.

2. Encourage them to sell and then the whole family benefits from the timing of the old guys passing. Your wife’s parents get rescued from any retirement planning issues they didn’t sort out, and eventually unless they live the life of the rich and famous, the money comes to your wife.

This is an opportunity for the family to amass more wealth than many will in several generations. Invested in a balanced portfolio they could pull in 100k a year over the next 10 or so years. That’s 2.4 mil that could be eventually coming your way with a little luck.

Seems people can’t do math any more. Housing has killed that part of most peoples brains in Vancouver. Unbelievable.

#182 Jack Soo on 01.13.16 at 2:28 am

Will Trudeau formally apply to change the name of Canada to add a ‘stan’ ? From what we are experiencing in nationwide starvation due to government incompetence we can expect Baby Doc to make the announcement soon.

Lower- and middle-class people — many “who can’t find a job that will pay them enough to ensure that they can afford a healthy diet for their families” — also feel the pinch of rising food prices, said Bronson.

“It’s students. It’s senior citizens. It’s the working poor. It’s new immigrants,” she said, adding that aboriginals and visible minorities are disproportionately impacted.

When fruits and vegetables rise in price, it makes it more difficult for these groups to buy enough to get their daily fruit and vegetable intake.

“The wrong kind of food is cheap, and the right kind of food is still expensive,” said Bronson. She hopes the new Liberal government’s promised national food policy will address this imbalance.

#183 Buy? Curious? on 01.13.16 at 3:47 am

Why do you pity this guy? I wish there MORE turnips like this one! “Colin, do it! Have kids. You don’t want to be alone anymore, do you?”

Bwahaha!

#184 Freeman on 01.13.16 at 3:52 am

The Royal Bank of Scotland has just advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.

The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.

Andrew Roberts, the bank’s research chief for European economics and rates, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs.

“China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous.

http://www.telegraph.co.uk/finance/economics/12093807/RBS-cries-sell-everything-as-deflationary-crisis-nears.html

#185 Lolo on 01.13.16 at 3:57 am

A renovated Vancouver special in an E Van neighbourhood (Norquay-definitely not a gentrified area) was listed for 1.688M. After a month or so, price dropped to 1.498M. It sold within a week (though i don’t know the price, I imagine I must have been more than 1.4M. ) Crazy times.

I agree w/ the majority…Don’t do it Colin. My inlaws offered us something, and neither I nor hubby wanted to take them up on it. They own a Van special, no mtg, and offered to move to the downstairs suite and have us live upstairs rent-free. This way we would save on the rent we currently pay, and they get to see the grandkids all they want. Um, no thanks.

#186 Vangrrl on 01.13.16 at 4:58 am

Colin- go with your gut. They are being really selfish, or like everyone in Van, completely delusional (prob both). My first thought was ‘rent it’ as others have noted. Why the hell would you go into debt when you both currently have none, have some savings and the freedom of renters? Because your in laws are saddled with a house instead of 1+ mill they’d rather have?
Not your problem!!!

#187 family beagle on 01.13.16 at 5:19 am

The in-laws probably feel they’re being gracious offering the ground floor opportunity. I wouldn’t, given the market timing. The parents are asking for a 700k front with half a house as collateral? Maybe, if they covered the interest cost. But then why not go to a bank? Cause this way the kids cover the loan interest, half the fees, and split any reno costs. The parents are ahead by 1/2.

I’d tell my wife I’ll lend her my half of the nest egg, but she does the deal on her own while I pursue my dream of renting an apt in Mission and riding the WCE half asleep. (My in-laws had to accept me as is, no warranty expressed or implied.)

#188 fancy_pants on 01.13.16 at 7:52 am

Colin!
Hi, welcome! its 11:59. but ya, sure, come on in. Cauliflower shooters are on the table. help yourself. The party ends at 12:00 and everyone turns into pumpkins but it will be the most adrenalized minute of your life.

#189 Chris on 01.13.16 at 8:28 am

Totally agree. Never buy a house on a “house share” basis with other people. It will pretty much always degenerate into a battle of some sort.

Fortunately, as I have been saying for years (and continue to say), when “they” tell you that you need a million dollars to buy a detached house in Toronto, or $750,000 to buy a semi, “they” are lying.

Semis can be had for $350,000 to $400,000. Detached are available for under $500,000, south of highway 401, in the City proper.

Where are these houses? Go on MLS right now and you will find about 25 of them. They are NOT in “prime neighbourhoods” (so nobody wants them). They are not being snapped up in “bidding wars” (many have been for sale since 2015, a couple since the summer of 2015). They are not in coveted school zones.

However the ones I was looking at this morning just before coming on here had driveways, there was a nice detached three bedroom with a long driveway and a garage located near a park. There are a lot of those little two bedroom jobs with a garage in the laneway out back, that people like to build second levels on top of. Most of them were detached. All under $500,000.

None of them are located remotely close to a Starbucks. But you can walk to a TTC bus stop from all of them and one was walking distance to a subway stop. So you wouldn’t even need a car for your driveway.

So word to all the hipsters: You don’t need to live in a prime neighbourhood. You really don’t. I’m not kidding. I grew up in a crappy middle class neighbourhood in Oshawa of all places, went to a crappy elementary school, even worse high school, and I managed to get into University and get a good career. Your children will too. Prime neighbourhoods and award winning elementary schools are not necessary (and not worth the money).

#190 Cosworth on 01.13.16 at 8:55 am

Colin, don’t do it. I borrowed $10k once from my inlaws and they acted as if they owned EVERYTHING in my life. When I tried to pay them back they were more than happy to say no, it was a gift, but still to this day act as if we owe them money. “Oh, you’re going to NY? Isn’t that expensive?”

Obviously I do not know your inlaws, they may be great people, but as Garth mentioned you’re essentially renting to own a house, without a fair mark of what the worth would be (1.4 still seems high) and if they don’t want to sell in the future, you’re stuck at this place ‘renting’ while owing $450,000.

#191 Estrella on 01.13.16 at 9:08 am

http://www.ctvnews.ca/mobile/business/bring-it-on-notley-responds-to-kevin-o-leary-s-1m-offer-to-step-down-1.2733809?hootPostID=0addc9e0213c546e1e44416fb80f7666

I think Kevin reads your blog Garth. Or else maybe he’s your lost twin….

#192 saskatoon on 01.13.16 at 9:24 am

#52 Gulf Breeze
#54 Godth
#178 kommykim

thanks for proving my point.

you are incapable of rational discourse.

you have addressed none of my arguments.

you apparently cannot understand the difference between charity and forced involuntary association.

when you run out of untruths to spew…the ad hominem attack begins.

logical fallacy abounds in the unhinged liberal mind.

sad + dangerous + LOW IQ

#112 Smoking Man

they suffer from mixture of two things:

1. psychological illness (often associated with early childhood trauma, narcissism, sociopathy, etc..)

2. vast overestimation of their own intellectual ability; a.k.a., the dunning-kruger effect.

#193 Sonny on 01.13.16 at 9:37 am

Top-selling Vancouver realtor’s licence cancelled after allegedly doing business while under suspension

http://www.theprovince.com/business/selling+vancouver+realtor+licence+cancelled+after+allegedly+doing+business+while+under/11647443/story.html

#194 Julia on 01.13.16 at 9:56 am

#189 Chris
“Semis can be had for $350,000 to $400,000. Detached are available for under $500,000, south of highway 401, in the City proper.”
MLS shows 2 properties between $300,000 and $400,000 in the entire City of Toronto, at $399,000 and $400,000, both SFH, both steps for each other in one of the most crime ridden neighborhood of the City.
Nothing under $500,000 south of the 401 between Caledonia and the DVP, most in high crime neighborhoods. Some are even prices for land only.
I would say don’t bother and rent in a better neighborhood.

#195 Canadian on 01.13.16 at 10:17 am

Between Prime Minister Selfie, Premier Tumblr, and Mayor Twitter Calgary is in a serious heap o’crap right now!

#196 JimH on 01.13.16 at 10:22 am

#74 Rick on 01.12.16 at 7:44 pm
“… Nanimo Bar: Canadians pay $4.12 per gallon.
Finish the calculation $4.12 Canadian is $3.01 USD.
Still more, but …..
================================
here’s a handy-dandy tool for comparing gas prices on up to 3 locations you chose in $CAD and over different time frames. You can even through in the price of WTIC.

http://www.vancouvergasprices.com/Retail_Price_Chart.aspx

Have fun!

#197 AB Boxster on 01.13.16 at 10:33 am

Kevin O’Leary on CBC Calgary radio this morning…

Blasted Notley govt. on incompetence over handling of Alberta economy.
Though O’leary can be pompous, his points today were bang on.

Despite losing 100’s of thousands of jobs in Alberta the Notely gov’t can’t seem to say or do anything to at least pretend that they give a shit.

Her response to economic mess is to:
Implement a carbon tax.
Raise corporate and personal taxes.
Increase minimum wages.
Implement a never ending Royalty review.

Perhaps all things that, at $100 per barrel oil, and a healthy economy, make some sense.

But as the pain in Alberta continues, the best Notley can do is express ‘disappointment’.

She is a pathetic joke.

#198 Julia on 01.13.16 at 10:33 am

Gas price war in Ottawa over the last few weeks. 77.6 yesterday at certain stations.
GasBuddy app comes in handy.

#199 I like Kevin on 01.13.16 at 10:34 am

I like Kevin if it wasn’t for him the The show would be boring and that’s a fact whether u like it or not! another fact that Colin has to ask proves he’s an idiot!

#200 LP on 01.13.16 at 10:41 am

#177 Bobs ur uncle on 01.13.16 at 12:42 am
44 Freedom First

“While marriage is, of course, much more dangerous for a man,”
*******************

Hey Bob, I think FF meant that marriage is financially more dangerous for a man. He’s statistically misinformed but there’s no arguing with the guy.

#201 JimH on 01.13.16 at 10:48 am

#192 saskatoon on 01.13.16 at 9:24 am
@ #52 Gulf Breeze
#54 Godth
#178 kommykim
“… thanks for proving my point.
you are incapable of rational discourse…”
================================

Wait just a second! You, of all people accusing others of being incapable of rational discourse???

You have less understanding of “rational discourse” than the average New York City cab-driver!

#202 NorthOf49 on 01.13.16 at 10:51 am

Calgary’s RE market has Mr. Soper in a tizzy. Can’t tell whether he’s coming or going!

“It’s really hard for homeowners to get their head around the fact that their home might be worth less than they thought,” Mr. Soper said. “People just said I’m not selling at a discount.”

http://www.theglobeandmail.com/report-on-business/economy/housing/alberta-housing-market-braces-for-painful-year/article28140866/
‘Mr. Soper expects that sales will rise in Calgary this year even as prices fall as move-up buyers opt to take a hit on selling their homes in hopes of getting a good deal on a better property.’

#203 TRT on 01.13.16 at 10:55 am

Post 197 AB Boxster.

You live in a democracy. Your province elected the NDP. Get used to it and suck it up.

Your previous governments were all for free trade, globalization etc. Now oil has tanked (like a provincial gov could prop it up haha), there is going to be a reset in Alberta.

Oh, BC doesn’t want tankers of its coast and I’m sure the US Oil industry doesn’t want oil pipelines. And a pipeline east? Well the democracy just voted to limit climate change (who cares if real) so less demand for the tar sands.

O Leary just lost a boatload of money in energy. That’s why he’s crying.

#204 Dups on 01.13.16 at 11:08 am

Do not do it !!!

You will end up not talking to your family, over too many issues that can come up. 700K is not pocket money.

#205 Noel on 01.13.16 at 11:12 am

Apex of the housing market? Your advice has always been not to try and time the market – why should the housing market be any different?

#206 AB Boxster on 01.13.16 at 11:37 am

Re: Preferred Shares and Preferred ETF’s
—————————————————–

So as Rate Reset shares continue to be the dominant preferred shares issued, these continue to make up more and more of the shares in Canadian Preferred ETF’s (Eg. XPF, CPD)

And as the Canadian economy continues poorly and rate cuts are threatened, these shares prices continue to fall and the ETF’s lose value.
Ok, this makes sense.

However, with an individual preferred share, as the share price falls, the dividend rate rises.
For example a share issued at $25 with a $1.30 per year dividend ($1.3/25) the issue dividend rate is 5.2%.

And if the individual share can today be bought for $20, the annual dividend rate for that share, bought at $20, becomes ($1.3/$20) or 6.5%.

So my question is, although Canadian preferred share ETF’s are falling in value due to these rate reset share values falling due low BOC 5 year rate, why is the dividend rate of these ETF funds not increasing?

So with CPD falling from around $16.5 per share to $11.65 (today’s price) or a decline of around 30%, the dividend of CPD hovers around 5.4%.

With the value of CPD falling, due to individual rate reset share values, should the overall dividend rate for CPD not be increasing correspondingly?

#207 For those about to flop... on 01.13.16 at 11:37 am

Hey ,don’t they smoke a lot of pot in California as well?

M41BC

http://www.dailystar.co.uk/travel-news-cheap-uk-holidays-luxury-breaks-more-daily-star/487033/Are-aliens-real-NASA-UFO-sightings-America

#208 Paul on 01.13.16 at 11:38 am

#201 JimH on 01.13.16 at 10:48 am

#192 saskatoon on 01.13.16 at 9:24 am
@ #52 Gulf Breeze
#54 Godth
#178 kommykim
“… thanks for proving my point.
you are incapable of rational discourse…”
================================

Wait just a second! You, of all people accusing others of being incapable of rational discourse???

You have less understanding of “rational discourse” than the average New York City cab-driver!
———————————————————-

Wait a New York minuet, that should be ‘Uber’ driver!!!

#209 IHCTD9 on 01.13.16 at 11:39 am

Colin,

Simple solution – if you want to own a house, move to where you can get one for 3-4X the combined income achievable in that area, and keep your savings intact.

As perspective, you are about the same age as I am, and I actually did do the small town house/job thing. I’m sure my paycheque falls well short of your big city one. But – I have a nice place and it is paid for, even so my savings well exceed what you’ve managed to sock away. This was achieved while raising a couple kiddies to boot.

You’d best keep renting and keep saving. You are risking what little you’ve managed to achieve thus far. If you stay in Van – just get used to renting for life. Otherwise if home ownership is a big deal – move to where you can actually afford to own.

Imagine being 65 at the tail end of a housing slump while still expensing 6K+ a month to own half a house with squat saved over a lifetime of work!!

You are too old to play games like this, no chance to recover! Common sense says you can’t afford the risk (despite what the bank may say…).

#210 For those about to flop... on 01.13.16 at 11:44 am

203 Trt.
Oh, BC doesn’t want tankers of its coast and I’m sure the US Oil industry doesn’t want oil pipelines. And a pipeline east? Well the democracy just voted to limit climate change (who cares if real) so less demand for the tar sands.

//////////////////////////
I specifically asked for no wankers in B.C,not tankers.
Ah well,I guess I will have to live with a mix of both!

M41BC

#211 Mike in Edm on 01.13.16 at 11:49 am

I saw an electronic billboard today for a local Edmonton Realtor team saying that 1 in 20 of their clients will ‘win’ $5000 from them if they decide to sell their house with this team. Yippee! The competition for clients must be getting tough.

#212 Panhead on 01.13.16 at 12:16 pm

From the trenches in 604land …
I have never seen the border line-up into the US this long – not even at Xmas. Point Roberts that is. Not for gas, beer, or even cheap chicken. Powerball man … that’s how to get ahead. Saw a “news flash” saying it is illegal to cross the border (either way) with a lottery ticket. Coming from a local station I wouldn’t put any winnings on it though …

#213 Smoking Man on 01.13.16 at 12:22 pm

S&P 500 just breached the old Camel toe. Look out below. If no 3:30 plunge protection team.

It’s going to get ugly!!!!!

#214 Alistair McLaughlin on 01.13.16 at 12:23 pm

There are some family dynamics at work here that Collin has (wisely) chosen not to mention. Specifically, I’m betting that two conditions are either implicit or explicit in the deal.

A) The carrot: They will be willed the other half of the house. The parents have either built this expectation into the deal as an inducement, or the couple – at least the wife – is assuming this.

B) The stick: In-laws may have hinted – or perhaps silently left the couple to conclude – that they won’t will it to them if they do not accept this deal.

If my assumptions above are correct, Collin`s dilemma becomes much clearer: Accept the Trojan horse of an in-law veto over every major life decision he and wife make until both parents pass (don`t kid yourself, that`s what co-ownership of a $1.4 million asset will entail), or accept a much-reduced inheritance.

Collin, consider this: If they were really interested in helping you out financially, they would sell the place, then gift their daughter some cash. This deal is all about what works best for them. Politely refuse, and do so TODAY.

#215 misstiss on 01.13.16 at 12:33 pm

I was browsing the changes RBC is making to their online banking interface..

talk about pervasively normalizing debt;

the section that highlights accounts summary shows a mortgage of just over $400k , lines/loans with a $7800 balance and investments totaling just under $5k. Granted, these are fictitious summaries, sadly however there are likely many truths involved.

#216 maya on 01.13.16 at 12:34 pm

Colin dont do it. If you do, i can see you getting divorced, alone, broke within next 10 years. Please dont do. One of the most important things I have learned about relationship with in-laws is having a good boundry. If you take this offer, you will lose that boundry. They will walk all over you. Dignity is more important. Please dont dont take this offer.

#217 bdy sktrn on 01.13.16 at 12:36 pm

s&p, tsx are in trouble.

i’m dumping half of everything today for cash.

pls god let the (rest of the) crash hold off till after close today.

#218 Sean on 01.13.16 at 12:38 pm

RBC is offering an RRSP loan … 5k for 2.7%

Would you do it?

#219 Reflections on 01.13.16 at 12:56 pm

isn’t this basically the first attempt to cycle treasury yields back up since the early 1980s?

will be interesting to see how keen other countries are to part with precious valuable goods for “fiat” USD i.e. “confidence paper” , particularly with increasingly expensive USD debts to service.

#220 For those about to flop... on 01.13.16 at 12:59 pm

Dog says Cheese
Take 9 seconds to have a laugh…

M41BC

https://m.youtube.com/watch?v=2jmGGN-JZl0

#221 saskatoon on 01.13.16 at 1:00 pm

#201 JimH

logical discourse:

what EXACTLY did i say that YOU think is incorrect?

what RATIONAL reasons can you provide explaining WHY you think this?

perhaps it is not possible for you to respond without either lying, spewing ad hominem, misdirecting, employing logical fallacy, or becoming emotionally manipulative.

go for it: if you are so smart and noble, prove to everyone here that you can do this.

otherwise, the dogs will assume you got the dunning-kruger BAD, buddy.

wow!

#222 Bram on 01.13.16 at 1:09 pm

So Teranet House Price Index for dec’15 is out:
http://www.housepriceindex.ca/default.aspx

For YVR, nov-to-dec saw +1.1%, which is lower than oct-to-nov of +1.35%
But this may be a seasonal thing?

Any ways, +1.1% per month still constitutes a +14% on a yearly basis, if it holds steady.

Bram

#223 For those about to flop... on 01.13.16 at 1:14 pm

Well I guess if Ted Cruz fails in his bid to become the most powerful man in the world ,he could always come back”home” and try to become the 3,684 most powerful man in the world via the next election here…

M41BC

#224 young & foolish on 01.13.16 at 1:17 pm

As we all claim to know but seldom accept, things tend to go to the extremes …. doubling up on housing, or $10 oil …. from irrational exuberance to doom & gloom.

People have no sense of measure.

#225 JimH on 01.13.16 at 1:24 pm

Re: Royal Bank of Scotland’s “advice”…

Canadians seem to put way, way too much emphasis on “arguments from authority” and seem to lack confidence in their own ability to do research and employ some critical thinking!

The Royal Bank of Scotland was once upon a time one of the world’s largest banks. Perhaps even the largest, depending on criteria.

During the GFC, this huge bank stood on the brink of total failure and bankruptcy. Only a huge, multi-billion pound bailout of taxpayer money saved this miserable excuse for a bank’s sorry ass.

In 2011, a full investigation of the bank’s failure concluded that the Royal Bank of Scotland had made not just one, but a full series of atrocious and imprudent investment decisions, resulting in complete collapse.

Now, do you want to exercise investment decisions by implementing advice from this “authority”? I hope not.

Better instead to ask, “What is the track record of this bank?” and “Is this advice timely for my investing style, risk tolerance and time horizon?” and also, “Where have the markets come from and what seems to be their most probable direction moving forward?”

The whole sorry history of this inept and incompetent bank can be found here in this primer:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8496654/Royal-Bank-of-Scotland-investigation-the-full-story-of-how-the-worlds-biggest-bank-went-bust.html

Personally, I wouldn’t trust this outfit of clowns with YOUR money, yet alone mine!

#226 young & foolish on 01.13.16 at 1:26 pm

“I would say don’t bother and rent in a better neighborhood.”

EXACTLY …. why do you have to “own”? You can live in a great hood, close to all amenities, if you are willing to rent.

#227 Sheane Wallace on 01.13.16 at 1:28 pm

As I said BEFORE macquarie:

It is going down baby!

http://www.msn.com/en-ca/money/economy/canadian-dollar-will-drop-to-59-cents-us-in-2016-macquarie-forecasts/ar-CCuTcE?li=AAggNb9&ocid=mailsignoutmd

#228 BS on 01.13.16 at 1:33 pm

With the value of CPD falling, due to individual rate reset share values, should the overall dividend rate for CPD not be increasing correspondingly?

No, because the shares that are resetting are resetting at a lower dividend rate. The blended dividned is dropping and then that is relected in the ETF price. Until the reset rate starts to beome higher than the expiringing rate the etf will continue to drop. With the BoC set to drop rates prefs likely have further to fall as the resets will continue to be lower further eroding the blended dividend. Once the BoC is set to increase will be the time to buy reset prefs.

#229 DJIM on 01.13.16 at 1:41 pm

Tell the in-laws you will rent the house for a dollar a month, and throw in your time and effort to maintain it. There’s a win-win. But paying half the price to live under your in-laws’ collective thumb, not a good move.

#230 JimH on 01.13.16 at 1:41 pm

#210 For those about to flop… on 01.13.16 at 11:44 am
“… I specifically asked for no wankers in B.C,not tankers.
Ah well,I guess I will have to live with a mix of both!

M41BC
==================================
Wow! Brilliant! Congratulations!

After more than 25 years of investigations, studies and theories, you have single-highhandedly (so to speak) finally uncovered the REAL reason behind the ‘Exxon Valdez’ disaster! Wankers and Tankers definitely don’t mix!

For those who don’t know about the 1989 environmental disaster quaintly referred to as the “Exxon Valdez oil spill” you can read about it here:

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

#231 bdy sktrn on 01.13.16 at 1:45 pm

nasdaq pounded 2+%

#232 bdy sktrn on 01.13.16 at 1:46 pm

short : tesla amzn aapl but not goog

#233 Aggregator on 01.13.16 at 1:53 pm

Canadians Are Going Loonie on Social Media About Skyrocketing Grocery Bills

Alas, the reality of the Canadian dream begins to sink in: Owning a $600k home and not being able to afford putting food in the table.

Go ahead Poloz. Cut rates again.

#234 Always the optimist on 01.13.16 at 1:56 pm

‘Mr. Soper expects that sales will rise in Calgary this year even as prices fall as move-up buyers opt to take a hit on selling their homes in hopes of getting a good deal on a better property.’

Mr. Soper, get a clue. How many Calgarians are thinking about “moving up” as opposed to downsizing or have gone into plain survival mode?

#235 You're Nuts on 01.13.16 at 1:59 pm

*** GARTH re: #183 You’reNuts on 01.12.16 at 7:32 am

“All reasonable points. All irrelevant. Current government policies appear destined to exacerbate the situation. Don’t be a political apologist. Demand better. — Garth”

Agreed – let’s hope the Tories stop mimicking their right-wing counterparts to the south (i.e. behaving like redneck xenophobic nuts). Then maybe we’ll see a return to reasonable political discourse in this country.

#236 AB Boxster on 01.13.16 at 2:04 pm

#203 TRT

You live in a democracy. Your province elected the NDP. Get used to it and suck it up.

——————–
Actually it has nothing to do with democracy fool.

Many voted against the PC dynasty because they were corrupt.
However, as least the PC’s did not actively work against the working people of the province.

If what you are saying is that because Alberta voted in the NDP, that they don’t have any responsibility to actually work on behalf of the people they elected, fine.

While Alberta may have voted for change, they did not vote for stupidity.
The NDP’s absurd policies, in the face of massive economic challenges, all but guarantees that they will be slaughtered in the next provincial election.

And at that time all of the carbon taxes, tax increases and other stupid NDP policies will be overturned, reverses, deleted, deprecated, terminated, etc.

That’s the thing about democracy that the NDP has not learned. Governments may have political and social ideals, but you have to take care of the voters that put you there.
Pragmatic government is what voters want.
Not ideological BS.
Whether it comes from the right or the left.

Ontario experimented with NDP in the 90’s and what a mess was made. Alberta experimented in 2015 and what a mess is being made.

It’s ok though. Democracy will solve this problem too.

#237 For those about to flop... on 01.13.16 at 2:09 pm

#221 JimH on 01.13.16 at 1:41 pm
#210 For those about to flop… on 01.13.16 at 11:44 am
“… I specifically asked for no wankers in B.C,not tankers.
Ah well,I guess I will have to live with a mix of both!

M41BC
==================================
Wow! Brilliant! Congratulations!

After more than 25 years of investigations, studies and theories, you have single-highhandedly (so to speak) finally uncovered the REAL reason behind the ‘Exxon Valdez’ disaster! Wankers and Tankers definitely don’t mix!

For those who don’t know about the 1989 environmental disaster quaintly referred to as the “Exxon Valdez oil spill” you can read about it here:

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

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

Hey Jim,yeah that one was a rough one.
It was the lead story on the news for along time even where I come from ( Tasmania)
I still have some of the images in my head now…

M41BC

#238 Fine Wild Roasted Gonads on 01.13.16 at 2:13 pm

#233 Aggregator on 01.13.16 at 1:53 pm

Canadians Are Going Loonie on Social Media About Skyrocketing Grocery Bills

Alas, the reality of the Canadian dream begins to sink in: Owning a $600k home and not being able to afford putting food in the table.

Go ahead Poloz. Cut rates again.

Our in-house financial wizard known as “Mark” will be communicating with each and every one of then individually to inform them that they are wrong and that CDN has not actually decreased and is actually poised to increase because.. well for no reason other than he says so.

#239 Aggregator on 01.13.16 at 2:20 pm

*TRUDEAU: CANADIAN GOVT CLOSELY MONITORING DROP IN CURRENCY

These are the type of headlines you see for emerging markets, not developing economies. I won't go as far as predicting this outcome, but there's a real chance of collapsing confidence in the currency as more Canadians begin exchanging their loonies for greenbacks. 

This could be the catalyst that tips Canada's great credit bubble. You thought there would be a housing crash only to learn it's a currency crisis. This is the nature of bubbles.

#240 Sheane Wallace on 01.13.16 at 2:25 pm

#233 Aggregator on 01.13.16 at 1:53 pm
Canadians Are Going Loonie on Social Media About Skyrocketing Grocery Bills

Alas, the reality of the Canadian dream begins to sink in: Owning a $600k home and not being able to afford putting food in the table.

Go ahead Poloz. Cut rates again.

—————-
That is Mark’s ‘deflation’ in action.

The problem is that Poloz is even more incompetent.

Scary times

#241 The Other Chris on 01.13.16 at 2:28 pm

@233 Aggregator on 01.13.16 at 1:53 pm

That’s pretty much the perfect capsule summary of the situation. $600k homeowners who can’t afford groceries.

And the BoC seems to want to keep lowering rates to keep those house prices high. It’s a game that cannot continue indefinitely without an outright revolt among low income earners.

#242 Testing the Lows on 01.13.16 at 2:34 pm

My balanced and diversified portfolio will now be below the September 2015 lows at the day’s close. My five years of ‘paper profits’ will soon be liquidated. Its going to be very very hard to make those gains back.

Capital preservation, not growth, may be the new meme this year. I have been keeping my cash in the kitty since July as opposed to regular contributions to the portfolio. That is because in the last year, any pre-existing portfolio cash has been deployed three times when the Dow was near the all time highs of 18,000.

I despise saying this, but I think this volatility will simply drive more investors into Canadian real estate – despite how overvalued and bubbly it has become. It happened after the tech bust of the early 2000s – market investors found safe heavens in RE, and by 2003 prices were heading up in what has become a 13 year bull run in many parts of the country.

I am hoping that my cash reserve will help me recoup some of those ‘paper gain loses’ once the market stabilizes.

We’re certainly awash in short-term thinking today. — Garth

#243 AB Boxster on 01.13.16 at 2:36 pm

#228 BS on 01.13.16 at 1:33 pm
—————————–
Yes, you are right of course.
I forgot that these shares were resetting at lower rates.

I find it kind of odd that these types of shares are still being issued. They were supposed to be a hedge against higher rates and have turned out to be a disaster.

There are some reset shares trading at $10 now, originally issued at $25.

I had some BNS perpetuals that paid 5.5% that I bought pre 2008. Even during the depths of the financial crisis these shares only dropped to $20, and now trade over $25.

The rate reset nature of these new issues have made preferred shares more volatile than the actual common stock of many companies.

So while GT is right that there is a consistent dividend being paid, the potential capital loss risk on these shares is now quite high, but the upside limited.

They are on sale now, and the upside for those with strong constitution.

But the rate reset nature of this investment now seems to make it riskier than the companies common stock, which is not where preferreds historically have been

Having them be part of the Fixed income portion of a portfolio may now be a mistake given this new volatility.

Short-term thinking by people who bought fixed-income assets for the wrong reason – capital value. The preferreds will, of course, come back in value as the rate environment changes over the years to come, and will pay you handsomely in the meantime. Plus a dividend tax credit. Chill. — Garth

#244 Rexx Rock on 01.13.16 at 2:37 pm

TVIX AND UVXY.TAKE PROFITS ,YEAY BABY!!

#245 Sheane Wallace on 01.13.16 at 2:39 pm

This is worth publishing:
FX from today:
CAD / USD 0.6965 -0.0041 -0.59%
CAD / EUR 0.6405 -0.0054 -0.84%
CAD / GBP 0.4822 -0.0032 -0.65%
CAD / CNY 4.5764 -0.0304 -0.66%

#246 Sheane Wallace on 01.13.16 at 2:42 pm

two minutes later:

CAD / USD 0.6956 -0.0051 -0.72%
CAD / EUR 0.6397 -0.0062 -0.95%
CAD / GBP 0.4817 -0.0037 -0.76%
CAD / CNY 4.5739 -0.0329 -0.71%

#247 TRT on 01.13.16 at 2:46 pm

69.63 and falling. Even when Oil is up.

Can you say ‘Canadaistan?’

Justin Quick..’approve more Refugees and Grandparents!’, and give away another $3 Bilkion for climate change.

Dorks don’t know when to raise rates to protect the countries currency. Traitors.

I’ve been shorting the loonie for over a year now since I found out these people (Poliz et al) are in bed with each other.

#248 Sheane Wallace on 01.13.16 at 2:46 pm

another 2 minutes later:

CAD / USD 0.6955 -0.0051 -0.73%
CAD / EUR 0.6391 -0.0068 -1.05%
CAD / GBP 0.4817 -0.0037 -0.77%
CAD / CNY 4.5734 -0.0334 -0.72%

Look at the yuan/CNY gaining against CAD.
Note: We are G7 country! Not a third world country…

Poloz? Increasing rates to 10 % to maintain currency stability as the Russians did?

Hello? Poloz?

#249 Smoking Man on 01.13.16 at 2:49 pm

Ha
two more new millionaires emailed me…

Your welcome………

UP UP and Away USDCAD

S&P 500
Timber!!!!!!!!!!!!!!
Batman breaches Camel toe

#250 Trey on 01.13.16 at 2:50 pm

Garth the DOW is in melt down are you still sure equities are the place to be?!

I’m scared.

If you have a balanced and diversified portfolio, stop looking. — Garth

#251 TRT on 01.13.16 at 2:51 pm

PPT team getting ready to battle on the Dow and S&P.

If this ship stays where it’s at, Shanghai will break thru 52 week lows. Let’s see if the PPT can prevent that. The Billionaires can’t have the stocks values go down. Lol

#252 pinstripe on 01.13.16 at 2:53 pm

I wonder if some clients are getting grumpy holding any investments with kevin.

In this economic downturn many Albertans are most pleased to have Rachel as Premier. she has a helluva mess to clean up after the PCs.

http://www.cbc.ca/news/canada/edmonton/kevin-o-leary-tries-to-trump-rachel-notley-saying-she-s-bankrupt-of-ideas-1.3402091

#253 Sideshow Rob on 01.13.16 at 2:55 pm

#213 Smoking Man

“S&P 500 just breached the old Camel toe. Look out below. If no 3:30 plunge protection team.
It’s going to get ugly!!!!!”
///////////////////////////////

Agreed. This waterfall has to stop right here, right now. 1880 is critical support. If that goes it’s an Alaska Airlines air pocket all the way to the 2008 lows.

#254 BlackDog on 01.13.16 at 2:55 pm

“The Adesinas are looking at a four-bedroom townhouse in the southwest community of Glamorgan. It’s one of about 70 foreclosure properties in the Calgary area listed on MLS right now.

Realtor Kelly Kernick says he compared the last 90 days with the first three months of 2015 and noticed foreclosures have jumped about 30 per cent.

“Well, I think it’s part and parcel of people losing jobs,” said Kernick, adding he expects the trend will continue upward this year.”

http://www.cbc.ca/news/canada/calgary/calgary-foreclosures-spike-alberta-economy-1.3400803

#255 Smoking Man on 01.13.16 at 3:07 pm

#253 Sideshow Rob on 01.13.16 at 2:55 pm
#213 Smoking Man

“S&P 500 just breached the old Camel toe. Look out below. If no 3:30 plunge protection team.
It’s going to get ugly!!!!!”
///////////////////////////////

Agreed. This waterfall has to stop right here, right now. 1880 is critical support. If that goes it’s an Alaska Airlines air pocket all the way to the 2008 lows.
……………

Plunge protection team bidding up the market… HA

I’m so good

#256 Why Why Jay on 01.13.16 at 3:08 pm

@#84 Nanaimo Bar

“So basically why you are saying is that anybody in this price range is toast because they will not be able to sell their house”

Did not say anything of the sort. My point was you have selection bias that is not representative of the market as a whole. Just as looking strictly at houses over 1 mil (in Victoria) isn’t representative of the market. They are the outliers.

Your logic is the same as saying, “I’ve been watching used cars under $1000 and most aren’t selling! How can people move up to a better car if they can’t sell their current car?! The car market is doomed!”

$1000 doesn’t buy you much of a car. It buys you a subscription to mechanic’s bills. Just as <$500K doesn't buy you much of a house in greater Victoria. There is a limited market for both. That is what you are witnessing.

#257 jess on 01.13.16 at 3:11 pm

Obama :”Food Stamp recipients didn’t cause the financial crisis; recklessness on Wall Street did,” he said. “It’s sure not the average family watching tonight that avoids paying taxes through offshore accounts.”
===============
…”Overall, the more than 10,000 subsidiaries of the four largest finance institutions contribute to the concentration of assets in the financial sector. Last week, I blogged about my concern that the five largest U.S. banks5 – JPMorgan Chase Bank, Bank of America, Citibank, Wells Fargo Bank, and US Bank – control $6.9 trillion in assets, nearly half of all assets in the U.S. banking sector. The financial holding companies – or finance institutions – that own these big banks, along with over 1,000 smaller banks and other companies each, are even larger. The Big Four U.S. finance institutions hold $8.1 trillion in assets, making up 42 percent of total financial industry assets and 15 percent of the total assets for U.S. multinational enterprises across all industries. This number is increasing year by year as these massive institutions continue to grab larger shares of industry assets.”
http://politicsofpoverty.oxfamamerica.org/2016/01/a-hidden-network-of-hidden-wealth/?utm_source=oxf.am&utm_medium=Znso&utm_content=redirect

” They use tax havens to sidestep all sorts of financial regulations too…”
The story trawls through a lot of colourful detail, including the work of an activist JP Morgan Vice President known as “Loophole Leslie” Seidman

“Gensler often told people how, at the Treasury, he was stuck with the task of briefing then-Treasury Secretary Robert Rubin about Long-Term Capital Management in 1998. The Connecticut hedge fund collapsed under $1.2 trillion in swaps booked to a post office box in the Cayman Islands.”
http://www.taxjustice.net/2015/09/03/why-tax-havens-will-be-at-the-heart-of-the-next-financial-crisis/

==
Tax adviser to the stars jailed for five years for tax evasion (12 Jan 2016)

has been jailed for five years yesterday after being found guilty of evading more than £6m in tax.
http://www.accountancyage.com/aa/news/2441456/taxman-to-the-stars-jailed-for-five-years-for-tax-evasion

New lease accounting rule brings $3trn onto company balance sheets

by Calum Fuller
13 Jan 2016
http://www.accountancyage.com/aa/news/2441603/new-lease-accounting-rule-brings-usd3trn-onto-company-balance-sheets

US counterpart FASB is set to announce its own standard on leases in the coming weeks,

http://www.taxjustice.net/2016/01/05/global-automatic-exchange-of-information-a-trove-of-relevant-new-data/

#258 Sheane Wallace on 01.13.16 at 3:13 pm

#247 Trey on 01.13.16 at 2:50 pm
Garth the DOW is in melt down are you still sure equities are the place to be?!

I’m scared.

If you have a balanced and diversified portfolio, stop looking. — Garth

———————
Try to hedge it as we could easily go down further 20 % /for stocks. Cut EM/emerging markets.

Bonds and preferreds in USD would be fine.

#259 bdy sktrn on 01.13.16 at 3:15 pm

looks grim out there.

is a recession in china big enough to cause another 2008?

#260 For those about to flop... on 01.13.16 at 3:17 pm

The Metrosexual Messiah is human like the rest of us and deserves a holiday like the rest of us but …
Only after the last dollop of Spf 40 is used…
Only after the last grain of sand is rinsed off…
Only after the last Piña Colada is consumed …
Will he realize his country needs him,more than he needed a holiday.

#261 Trey on 01.13.16 at 3:20 pm

If you have a balanced and diversified portfolio, stop looking. — Garth
—————————————————
Didn’t Buffet make the real money by buying individual stocks?

Actually he buys companies. Go ahead. — Garth

#262 conan on 01.13.16 at 3:29 pm

Markets are free fallin….

https://www.youtube.com/watch?v=20Ov0cDPZy8

It will be over soon……….

#263 Keith on 01.13.16 at 3:31 pm

I don’t get Colin’s in-laws. If they want to help, they’d simply offer the place for a fair or even favourable rent to Colin and their daughter. Why would they ask for $700k?

Because they want $700,000? — Garth

#264 bdy sktrn on 01.13.16 at 3:42 pm

why isn’t doug in london here cheering on the 52wk lows on cpd again?

#265 Rational Optimist on 01.13.16 at 3:42 pm

248 Sheane Wallace on 01.13.16 at 2:46 pm

“CAD / EUR 0.6391 -0.0068 -1.05%”

That’s fairly depressing.

“Poloz? Increasing rates to 10 % to maintain currency stability as the Russians did?

Hello? Poloz?”

We’ll have our own versions of the ruble/Putin joke soon enough. Stephen Poloz is going to be turning 60 this year, and if we’re lucky the loonie will stop falling when it hits 60 cents.

#266 jess on 01.13.16 at 3:43 pm

…”America’s system for ensuring that medical devices are safe failed at every turn when dirty endoscopes began spreading deadly superbugs, according to a Senate investigation released today.

The report, from Senator Patty Murray, a Washington Democrat, blames device manufacturers, hospitals, and the Food and Drug Administration for infections that sickened at least 250 people worldwide since 2012 and that may have contributed to dozens of deaths.

http://www.help.senate.gov/imo/media/doc/Duodenoscope%20Investigation%20FINAL%20Report.pdf

http://www.bloomberg.com/news/articles/2016-01-13/senate-report-says-fda-fails-to-ensure-medical-devices-are-safe

#267 Vundo on 01.13.16 at 3:46 pm

#250 Trey: our two biggest enemies are fear and greed. Do not submit to fear. Doing so will make you into a Sue (see Garth’s aptly titled post Perspective, January 7).

#268 For those about to flop... on 01.13.16 at 3:50 pm

#264 bdy sktrn on 01.13.16 at 3:42 pm
why isn’t doug in london here cheering on the 52wk lows on cpd again?

/////////////////////////
If that guy is not a salesman then I’ve never met one…
I mentioned it once in conversation and he stalked me for four days trying to get me to buy some.

M41BC

#269 Keith in Calgaqry on 01.13.16 at 3:52 pm

If the US is doing it, why are we ignoring it ?

http://www.nytimes.com/2016/01/14/us/us-will-track-secret-buyers-of-luxury-real-estate.html?_r=0

Concerned about illicit money flowing into luxury real estate, the Treasury Department said Wednesday that it would begin identifying and tracking secret buyers of high-end properties.

The initiative will start in two of the nation’s major destinations for global wealth: Manhattan and Miami-Dade County. It will shine a light on the darkest corner of the real estate market: all-cash purchases made by shell companies that often shield purchasers’ identities.

It is the first time the federal government has required real estate companies to disclose names behind all-cash transactions, and it is likely to send shudders through the real estate industry, which has benefited enormously in recent years from a building boom increasingly dependent on wealthy, secretive buyers.

The initiative is part of a broader federal effort to increase the focus on money laundering in real estate. Treasury and federal law enforcement officials said they were putting greater resources into investigating luxury real estate sales that involve shell companies like limited liability companies, often known as L.L.C.s; partnerships; and other entities………………see the link.

#270 Retired Boomer WI on 01.13.16 at 3:54 pm

Sort of enjoy it when irrational FEAR grips the markets. When it decides to grip the Canadian Real Estate market, wake me up. Then it will be time to pop fresh popcorn and watch the U.S. RE crisis with Maple Flavor!

Glad i unloaded some equity stuff a few days ago. Dry powder now…

#271 Bobs ur uncle on 01.13.16 at 3:59 pm

Can almost taste the fear here today. Stuff goes up, stuff goes down. Best not to spend too much time emotionally attached to either. In 10 years time, no one will think twice about what happened today. As long as you have a sound plan and stick to it, you’ll be fine.

#272 jess on 01.13.16 at 4:08 pm

http://spread.co.jp/en/factory/

The new factory(underground) is designed to produce 30,000 heads of lettuce per day, or some 10 million per year. By comparison, according to National Geographic, the world’s largest indoor farm — also in Japan — was producing about 10,000 heads, daily, in 2014.
http://mashable.com/2015/11/16/spread-automated-agriculture/?utm_cid=mash-com-Tw-main-link#ryj1nzfiR5q0
============
http://www.farmfromabox.com/
Solar Powered ‘Farm from a Box’: Everything You Need to Run an Off-Grid Farm

#273 For those about to flop... on 01.13.16 at 4:15 pm

#270 Retired Boomer WI on 01.13.16 at 3:54 pm
Sort of enjoy it when irrational FEAR grips the markets. When it decides to grip the Canadian Real Estate market, wake me up. Then it will be time to pop fresh popcorn and watch the U.S. RE crisis with Maple Flavor!

Glad i unloaded some equity stuff a few days ago. Dry powder now…

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

Hey Boom,I’ve got 10k ready to invest in my TFSA …I’ve got some dry powder .
Knowing you,you’ve got a dry cannon!

M41BC

#274 Steerage Bilge on 01.13.16 at 4:16 pm

Sell everything……buy POWERBALL.

#275 JimH on 01.13.16 at 4:20 pm

#255 Smoking Man on 01.13.16 at 3:07 pm
“… Plunge protection team bidding up the market… HA
I’m so good”
=================================
Really?

Looks like the Plunge Protection Team suffered from a little bout of ADHD. They went home early?

#276 If the dollar falls to 60c US... on 01.13.16 at 4:28 pm

and if the present gold price in U$ does not change we will have the gold trading in Canada at a record high.

Take that Trollstoy!

#277 cramar on 01.13.16 at 4:31 pm

We just got the grocery flyers for next week. On sale, U.S. Cauliflower, two for $5!

That’s it! High food prices are over. Only lasted a few weeks. Recession averted. Nothing more of interest. Move along.

Now back to Canadians focusing on what matters—real estate investment.

Nothing but “Sunny Ways” ahead my friends!

#278 Philburt on 01.13.16 at 4:42 pm

Anyone interested I believe the Banks are breaking down.
Hopefully you can see my chart.
http://stockcharts.com/h-sc/ui?s=XFN.TO&p=D&yr=2&mn=0&dy=0&id=p60390359467&a=440613556&listNum=1

Then you should buy some. Otherwise, irrelevant. — Garth

#279 Aggregator on 01.13.16 at 4:50 pm

#240 Sheane Wallace

CPI is not a measure of inflation. Both StatsCan and the BLS have repeatedly admitted this. Rather CPI is the change in cost to keep up with a standard of living for a typical Canadian. The issue is defining what a 'standard of living' is and how substitution and hedonics are used to value goods and services that are based on consumer preferences, and more importantly, which cohorts are being polled in the expenditure basket.

#280 Trey on 01.13.16 at 5:04 pm

Calgary house prices expected to fall 3% this year?

That’s it after the epic crash in oil!

http://www.bnn.ca/News/2016/1/13/Alberta-housing-market-braces-for-worst-year-since-financial-crisis.aspx

You believe everything Royal LePage tells you? — Garth

#281 ROCK BEATS PAPER on 01.13.16 at 5:04 pm

Garth,

The negativity on the markets reflects the panic, but it is becoming medium term at this point, with the Russell 2000 trading at levels seen two years ago. Almost all major markets are down for the last 12 months, along with the “safe” stuff (bonds and prefs other than treasuries).

Gold was up last year for Canadians, and has had a good start, but that is only 5-10% of the portfolio.

#282 JimH on 01.13.16 at 5:15 pm

#264 bdy sktrn on 01.13.16 at 3:42 pm
“why isn’t doug in london here cheering on the 52wk lows on cpd again?”
=================================
Simple.

Because CPD.TO on my radar is now approaching something like its 430 week low! And, with a pattern of lower lows and lower highs seems to be telling us that the sellers, not the buyers, are in control?

The other reasons seem to be highly personal and confidential.

#283 AB Boxster on 01.13.16 at 5:19 pm

Garth

Short-term thinking by people who bought fixed-income assets for the wrong reason – capital value.
——————————————————–

I do agree that the yield is excellent and (hope) that preferreds will recover over the longer term. (assuming the BOC rate rises)

It’s just that while fixed income items are, as you indicate, bought for dividend, the capital value of the underlying security could at one time be understood based upon reaction to interest rates.

So while holding a 5 year bond that (once) pays 5%, should interest rates rise to 10%, well the market value of the bond will go down, but over the 5 years you hold this bond, you get 5%, and then the full value of the bond once redeemed.

Once upon a time, prior to rate reset preferreds, if you had a preferred which yielded 5%, and rates went down, then it was likely that the share would be called in by the company (usually at $25- original issue price) so the company would not continue to pay out 5% perpetually on the share.
They could then issue a new $25 share at the lower rate.

So in general, the preferred share would pay a set dividend, but it was unlikely to rise in value past $25 as it could be called.

With these new rate resets there the same upside limit, but there is a much higher volatility on the down side.

With a fixed interest investment like a bond, (say paying 5%) in a falling rate environment as we have today, the bond value itself will increase in value.

Fixed reset preferred with their reset rates now tied to the BOC rate, are plunging in capital value because they will reset at a lower rate than the original issue rate.
It’s a heck of a good deal for the issuer, but kind of sucks for the security holder.

Garth is correct that as rates stabilize these securities will normalize.

But today, the relationship between the security and rates is different due to the reset nature of the product. Certainly a great product in a rising rate environment.

I agree that the main reason for buying these items is for income, but again, the volatility in the product caused by the resetting of the rate seems to make the product more volatile than the corporate common share itself, which is less reliant on the underlying BOC rate, and more reliant on the performance of the company.

Makes buying preferreds and ETF’s more like trying to time the market, as in this case we are trying to time the BOC rate decisions.

Prior to rate resets, preferreds kind of fell in between bonds (as fixed income securities) and more volatile common shares.

Tying these new products to the BOC rate( and all the sorcery as to how this is set) effectively makes these reset products more volatile than they were in the past does it not?

#284 Ronaldo on 01.13.16 at 5:22 pm

#218 Sean on 01.13.16 at 12:38 pm
”RBC is offering an RRSP loan … 5k for 2.7%

Would you do it?”

If I was not able to save $5000/yr. from my earnings , I would not be buying RSP’s.

#285 Calgary Rip Off on 01.13.16 at 5:30 pm

It’s interesting reading some of the comments here from adults. Everyone has their point of view trying to find some comfort where there isnt any. All of you might as well enjoy your ride here, you and I wont be here in 100 years.

There isnt anything you or I can do about oil, housing prices, stocks, bonds, or anything else. You can change your reactions and thoughts though.

Couple of things that would help: Trump as president. Hillary Clinton is a criminal. Look up her track record, its an embarassment. Marijuana legalized for tax revenues and less law enforcement time wasted on policing an herb.

#234 Ive always just tried to get by, the state of the economy is overrated as most things mass produced are overpriced nonsense. Problem is in Calgary the rentals are as much as a mortgage. Sure there are people saying rentals are getting cheaper. Not by enough to justify renting long term when your job is relatively secure. Say you work in health care, what are you going to do, rent for another 40 years? Does that make sense? Renting for 10 years, sure, but 40? Of course someone out there has the definitive answer, and Im the first to admit I have only answers that work for me. That’s pathetic because like all adults I should know what is best for me and everyone else, I am after all an adult in my 40’s and it’s time to start acting mature!

Time to go lift heavy weights and study chess. I do ok. Deadlifts were this morning: Warmup with 335×8, then 405×4, 405×6, 425×4, 475×1. Snatch practice this evening: 85x5x4, front lunges 85-95x5x4, front squats up to 275-285 for a single, and front presses up to 215-225, followed by rows up to 295 supersetted with 65 laterals for sets of 10-12. Not bad for a guy in his 40’s. Then again, I should do what the majority of the populace does: Whine, complain and act/think old.

#286 The American on 01.13.16 at 5:38 pm

At #266: Jess, yes, improper cleaning of endoscopes is a terrible thing that needed addressing and new procedures put in place. Much like the 10,000 patients since 2012 at Prince George in Canada that underwent surgeries with improperly cleaned endoscopes. Seriously?!?! That’s just ONE PLACE. It is actually a phenomenon that is happening the world wide – not just the U.S.

http://www.cbc.ca/news/canada/british-columbia/improperly-cleaned-endoscopes-used-in-10-000-procedures-says-northern-health-1.2901895

#287 Bram on 01.13.16 at 5:41 pm

#233 Aggregator on 01.13.16 at 1:53 pm

Owning a $600k home and not being able to afford putting food in the table.

Go ahead Poloz. Cut rates again.

It is not a bad idea to cut again.
A 50¢ loonie helps out Canadian farmers that will see more domestic demand, and higher prices for their produce.

This in turn will lead to an increased agricultural output in Canada.

And that, my friend, will make Canada more self sufficient, which can’t be a bad thing. You need to think long term for the good of the country.

Bram

#288 DontHaveaMilinVan on 01.13.16 at 6:11 pm

Anyone else from BC read or hear about premier Christy Clark’s brilliant comments on how to deal with the housing affordability issue?

“Some of the proposals that the city has brought forward would be taking a bite out of the equity that people have already invested in their homes, and we don’t want to do that. That’s for sure,” Clark said.

“We have to careful about any solution that we come up with, while they help make housing more affordable particularly for people entering the market for the first time, that they don’t devalue the price of a home that somebody’s already in,” Clark said.

http://www.metronews.ca/news/vancouver/2016/01/12/bc-premier-does-not-support-actions-to-lower-housing-prices.html

“If somebody owns a $400,000 condo, and government makes a move that reduces the value of that, they’ve got a mortgage on $400,000, not on $350,000,” says Clark.

http://www.news1130.com/2016/01/12/affordable-housing-budget/

Translation: our wonderful premier will protect current homeowner’s interest and do everything in her power to prevent prices from falling. Anytime is a good time to get into the market because she will ensure prices never fall. WTF?!

#289 Steerage Bilge on 01.13.16 at 6:44 pm

#286 The American on 01.13.16 at 5:38 pm

At #266: Jess, yes, improper cleaning of endoscopes is a terrible thing that needed addressing and new procedures put in place. Much like the 10,000 patients since 2012 at Prince George in Canada that underwent surgeries with improperly cleaned endoscopes. Seriously?!?! That’s just ONE PLACE. It is actually a phenomenon that is happening the world wide – not just the U.S.

http://www.cbc.ca/news/canada/british-columbia/improperly-cleaned-endoscopes-used-in-10-000-procedures-says-northern-health-1.2901895

Good to see you are on top of that shit.

#290 Ulsterman on 01.13.16 at 11:58 pm

#26 Michael Is Vancouver different will it avoid a Dublin style property melt down?

Michael I watched the Belfast Bubble and 50-60% crash so i know of what you speak. It’s popular to say that no where is “different this time” and all markets revert to the mean over time.

However, I live in Vancouver an i have lost faith in this. Apparently TRILLIONS are leaving China and some is ending up in a little city called Vancouver. If their economy is doing well the pundits say they can afford Vancouver properties and if their economy is crashing then we’re told they are getting their money out. Either way i don’t see much relief.

Anyone who actually lives here can simply see with their own eyes the influence of Chinese money. Ireland didn’t have that. In boring Burnaby suburbs, old timer homes are leaping 25% in one year. $1m to $1.2m to $1.5m. That’s just my house and EVERYWHERE houses are being demo’d to be replaced by $2.5-3.0m homes. What local can afford this?

#291 Philburt on 01.14.16 at 1:28 am

#278 Philburt
Garth I don’t catch falling knifes.
Market needs to stabilize.
Everything I own is barily down and my Divs are 7-9% so Im getting paid to wait.
Most got killed 2015.

#292 Chris on 01.14.16 at 7:23 am

Julia: Maybe I am looking at a different MLS? I count 25 semis and detached, under $500,000, as of this morning:

https://www.realtor.ca/Residential/Map.aspx#CultureId=1&ApplicationId=1&RecordsPerPage=9&MaximumResults=9&PropertySearchTypeId=1&PriceMax=500000&TransactionTypeId=2&StoreyRange=0-0&OwnershipTypeGroupId=1&BedRange=0-0&BathRange=0-0&LongitudeMin=-79.56247329711918&LongitudeMax=-79.20919418334965&LatitudeMin=43.609233803934&LatitudeMax=43.730421681607865&SortOrder=A&SortBy=1&viewState=m&Longitude=-79.3858337402344&Latitude=43.6698583295497&ZoomLevel=10&CurrentPage=1

#293 Julia on 01.14.16 at 1:24 pm

#292 Chris
“Julia: Maybe I am looking at a different MLS? I count 25 semis and detached, under $500,000, as of this morning:”

We are looking at the same. You referred to semis available between $350,000 and $400,000 of which I said there were 2, as this map shows. Just change your search to a maximum of $400,000.

I said there was zero under $500,000 is a specific area: south of the 401 between Caledonia and the DVP. The larger core of the city I guess. You have to start moving out of the core to get anything under $500,000 and even then it’s in crime ridden neighborhoods.

#294 Investorz on 01.14.16 at 9:06 pm

Alberta just had it’s 10 minute of fame on our favorite website ZeroHedge.

http://www.zerohedge.com/news/2016-01-14/alberta-freezes-government-salaries-canadas-oil-patch-enters-second-year-recession