Bait & switch

CASH MONEY modified

LIKE THIS IS A SURPRISE

They’re called yield hogs. As opposed to HAM or piggy banks. YHs are people who think investing is too hard and scary, and would rather save. But in a low-yield world, where central banks everywhere have crashed the price of money and (in so doing) blown some mothers of an asset bubble (hello Vancouver), saving is also hard.

Interest rates are astonishingly skinny. The good news is you can now get a fixed-rate, five-year mortgage for about 2.5%. The bad news is your “high-interest” savings account pays 0.55% and a five-year GIC returns 1.5%, unless you choose the Wawa Disabled Ukrainian Veterans Credit Union, Online Division. Of course, no matter how risk-averse you might be, this GIC thing is nuts. You will earn less than inflation. You get no actual income until five years from now. However (if outside an RSP or TFSA) the phantom interest is taxable. And at your full marginal rate. Completely nuts.

Even worse is an interest-bearing investment held inside a TFSA. No tax on the few pennies you earn, but you’re throwing away the benefit of an outstanding tax shelter. These accounts are for your juiciest long-term growth assets, the ones with the greatest upside potential. They are not intended (as the government suggests) as glorified savings account for your next Aruba romp, or bamboo flooring.

Anyway, stupidity and the misinterpretation of risk have led Canadians to hold about $400 billion in accounts that pay nothing, or next to it. In fact, 80% of all TFSA money now sits in HISAs or GICs. Oh, the agony. This, I guess, is why the EQ Bank made such a splash a few months ago.

As this pathetic blog, which saves absolutely nothing, told you, the Equitable Trust guys were able to offer a rate through their digital, no-branches, no-advice bank that almost made saving make sense. Three fat per cent. No minimum balance. No required period of deposit. No gimmicks or time limit. Until this week.

As a result tens of thousands of people who should know better snorted and hooved their way over to the EQ Bank site and opened accounts. So many, in fact, the bank quickly established a moratorium on new customers since its robots couldn’t cope with the load.

By the way, how could EQ pay out 3% on deposits when giant Tangerine could muster only 2.4%, PC Financial 0.8% and the mighty Royal Bank 0.6%?

Simple. Equitable is a Canadian subprime mortgage lender (in this country we call them “Alt A” or “B” borrowers). It assists the poor schmucks who cannot afford to buy a house but nonetheless get a mortgage broker to fluff them up with very expensive high-ratio debt  so they can become over-financed homeowners and end their productive financial lives. Naturally these subprime loans cost a lot more than conventional ones, so EQ has access to an enhanced spread between loan interest and savings account yields.

Anyway, it’s over. That 3% rate has been sliced by about a third, and EQ now pays 2.25%. There is no guarantee how long this will last, and the bank joins the ranks of other classic bait-and-switch marketers.

Granted, this is a better return than the big banks pay. But isn’t it ironic where people terrified of risk will put their money?

FOMO IS THE NEW MOFO

If you believed that silly story in the HuffPost the other day – extrapolating recent house price gains into the future – you know all about FOMO. The conclusion was the average Van house will cost $5.1 million by 2026, if trends evident over the last three years hold. Which, of course, they won’t.

However, we have no shortage of morons in the country who have enough Fear Of Missing Out that they’ll panic-buy right now, seemingly at any price. The parallels with the dot-com frenzy are, well, staggering. The trouble is, most of the FOMOers were 12 years old when Nortel peaked and the Nasdaq exploded. So they think it’s different this time. So cute.

SCARE ME!

TD surveyed folks a few days ago, and found 20% of people suffer from FOMO, especially in poor YVR and the entire GTA area. These people confessed to “rushing” a buying decision in order to lay claim to a house. That is more than enough moist new buyers to have a profound impact on the market in general. As I mentioned here recently, higher prices beget even higher prices, as emotion becomes the dominant motivator – as opposed to affordability, economic conditions, employment security or personal finances.

Hard to imagine a scenario in which risk builds faster. Oh, and TD found 40% of buyers worried they don’t quite understand the cost of owning a home. Yikes.

Did I ever mention how this ends?

141 comments ↓

#1 Randy on 04.21.16 at 6:50 pm

Don’t care about crappy GIC rates. I’m not paying any taxes more for interest income. Would rather let me money sit and rot…..or spend it…

#2 db on 04.21.16 at 6:55 pm

I own in the GTA! YAY!

#3 crowdedelevatorfartz on 04.21.16 at 6:55 pm

FOMO
Fools On Mortgages Overextended

#4 HD on 04.21.16 at 6:59 pm

Greeting blog dawgs/dogesses,

Haven’t commented in a while but been reading religiously and following along.

I’m wondering if some of you guys/gals can impart some wisdom on me…

My balanced portfolio sits at around 240K; DB plan value is around 90K; 32 yrs old; no debt; no real estate; single/not planning on having kids or getting married ever(wink wink FF*).

The first 100K was really challenging to attain and took a lot of frugality and discipline to accomplish. 100K to 200K was a little bit easier and still required a lot of work. Granted, I was lucky enough to start investing right in the beginning of a bull market so the return on investment looks pretty good on paper.

However, 200K-300K seems much harder and I’m not sure why.

Markets not as bullish as before? Lifestyle inflation? Frugality sucks and grew tired of it?

I suspect that it is a little bit of everything. I was very aggressive when I started to save money and went mustachian for a while…..but the older I get, the less I can save that aggressively. But as the portfolio gets bigger, it should be able to grow faster…..right? Or maybe I’m doing just fine and the impression that something is wrong is all in my head?

Anyway….did someone out there run into similar concerns and have something interesting to say about it?

Don’t get me wrong. I am well aware that these are first world problems but why not ask if there is a platform for it?

On another note, I’m giving a stab again at the Vancouver Marathon next week. Goal is under 3 hours 30 minutes.

Hold me accountable.

Wish me luck and maybe see you at the finish line.

Best,

HD

#5 Jacko on 04.21.16 at 6:59 pm

Just flew to Whitehorse on business from Toronto. Lucky me to sit beside a Vancouver resident on the trip. When I asked her about the housing market in Vancouver, she explained she was from North Van and was lending her children money to buy their first home before prices get crazy?? I said don’t you think they are crazy already? She said yes, but if we don’t act now, we will never be able to afford a house for the kids. So true Garth….sad, but true! When will it end?

#6 MF on 04.21.16 at 7:00 pm

#136 NoName on 04.21.16 at 2:12 pm

I can actually visualize your wife’s look when you told her things looked bad in 2008. Saving for the family must involve a whole other level of stress. For me it’s just money to spend on girls (not serious)…..

(Semi serious)

MF

#7 paul on 04.21.16 at 7:00 pm

It’s official thay are all nuts they are holding back offers In f’ing Bowmanville , Won’t look at BULLY offers lol and it’s working some places selling 40 to 70k over list.

#8 first on 04.21.16 at 7:01 pm

HAM, Toronto houses average 1 mil….who cares, when you are FIRST!!!!!!

#9 We're all millionaires in yvr :s on 04.21.16 at 7:03 pm

Thanks Garth! So if ETFs are really the only way of growing wealth, how ’bout you give us average folks a “good one” to get into in this crazy market. I have a few stocks and etfs but have room to purchase more.

#10 Vancouver Stock Exchange on 04.21.16 at 7:03 pm

Just to understands how all started and where all realtors are coming from … check the index error of VSE

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

The history of the exchange’s index provides a standard case example of large errors arising from seemingly innocuous floating point calculations. In January 1982 the index was initialized at 1000 and subsequently
updated and truncated to three decimal places on each trade. Such a thing was done about 3000 times each day. The accumulated truncations led to an erroneous loss of around 25 points per month. Over the weekend of November 25–28, 1983, the error was corrected, raising the value of the index from its Friday closing figure of 524.811 to 1098.892.

#11 Frank on 04.21.16 at 7:03 pm

It’s been ending badly for a decade now.

Bubbles usually float for about 15 seconds before being popped by a cruel world. Ever seen a bubble last a decade?

#12 understood by few on 04.21.16 at 7:03 pm

Did I ever mention how this ends?

——————–
Kerplunk?

Kerplooey.

#13 Brian Ripley on 04.21.16 at 7:05 pm

“…average Van house will cost $5.1 million by 2026…” Garth

Ludicrous… but one has to be awed by the animal spirits in Vancouver; they are about to double average single family detached housing prices since April 2008…. sometime later this year if they keep the pace up.

Chart of the century: http://www.chpc.biz/vancouver-housing.html#Double

Double double. toil and trouble

#14 Forzudo on 04.21.16 at 7:07 pm

Today Minneapolis lost a great musician, and Ottawa re-gained a senator.

#15 Bank of Millennial on 04.21.16 at 7:07 pm

Did I ever mention how this ends?

Sparkles and Confetti.

#16 the greater stool.ca on 04.21.16 at 7:07 pm

Yeah you did. It ain’t gonna end well. Amen

#17 Buy Low Sell High on 04.21.16 at 7:09 pm

Lending off of EI is a sound business practice. Guaranteed government dole albeit for a certain length of time, why not lend off it. More certainty than commission income.

#18 james on 04.21.16 at 7:14 pm

Garth, do you agree, from your experience with Harper, with the judge’s characterization of Stephen Harper’s PMO today?

“The political, covert, relentless unfolding of events is mind boggling and shocking,” Justice Vaillancourt told the court.

“The precision and timing of the exercise would make any military commander proud. However, in the context of a democratic society, the plot that is revealed in the e-mails can only be described as unacceptable.”

http://www.theglobeandmail.com/news/politics/duffy-aquitted-of-all-31-charges-in-senate-expenses-trial/article29706093/

I wrote a book about it. — Garth

#19 For those about to flop... on 04.21.16 at 7:18 pm

Following the bosses advice to get a medical degree ,I thought of what I should do whilst hanging off a chimney
(Fixing a case of leaky condo) and I arrived at this conclusion.

I want to be come a specialist in Yoloism ,fixing people with Yoloritis.
It has reached pandemic proportions …you know the people…You only live once…lets get into dept up to our eyeballs.

Needless to say Yoloism affects your vision ,critical thinking skills and in the worst cases you have to cut off the sense of entitlement that has attached itself to the patient.

There is some medicine to fix this called financial planning, but it tastes like Buckleys and has some nasty side affects.

Some patients even reported having a erection lasting more than 4 hours but did not worry about this ,as at least one of their heads was getting blood flow.

I won’t have to travel far for my case studies as Vancouver is a world leader in people with Yoloism.
It seems to have begun in the early 2000,s and has been rampant ever since.

It will take me a long time to become a specialist and I hear there is a guru out there that can help me , I will search for him on the ocean, I will search for him in the desert and finally I will search for him in the jungle, and upon meeting him I will utter the words” Dr Turner ,I presume”…

M41BC

#20 Irent on 04.21.16 at 7:20 pm

5 million by 2026.

It’s interesting how the Realtors will earn a living when the price gets so high no one can buy or sell. Perhaps they will induce some selling frenzy then.

#21 Chaddywack on 04.21.16 at 7:22 pm

Talk about FOMO. One of my wife’s coworkers (specialist physician) is rushing to buy a house out in Abbotsford/Mission (about an hour outside of Vancouver). He works out there so that’s cool, but he refuses to rent after his landlord kicked him out of his place because it’s being sold. Looking to buy a townhouse out there for $700,000. His exact words were “My realtor told me that if I don’t buy now, next year prices will be $100,000 higher!” He also said “This market will NOT correct, there are millions of millionaires in China who all want to live in Vancouver.” He cited the recent sale of a downtown apartment building that was assessed at 15 million and sold for $68 million.

Very educated guy, he might be right, but my wife and I are holding off betting he’s wrong. We’re already “priced out” so I don’t understand why we would buy something and take on extra risk.

#22 Doug t on 04.21.16 at 7:26 pm

Garth don’t blame the average person – blame the system and the media. It’s no wonder people are afraid to do anything except lock whatever they have into something “secure” – the financial system is skewed to drive billions into the hands of the ultra rich and corporations while leaving crumbs (if your lucky) for the masses. Any trust Canadians had in the financial institutions of this country,or the world for that matter, have been constantly eroded over decades – safe is safe – rolling the dice is betting

#23 TRT on 04.21.16 at 7:34 pm

I disagree with your Vancouver analysis.

I just sent some Visitor Visa sponsorships for relatives overseas to attend a function here in Vancouver. If approved, the people are approved for 10 year visas.

They can come and go as they please.

Many people use these opportunities to assess Canada and to see if they would like to send their kids to Canada in the future. And as everyone in Asia now knows, the foreign student route is easiest way to enter.

Since the explosion of this 10 year visa, Foreign students and the Supervisa program, demand has increased exponentially.

Suffice to say that my relatives coming here will scout for their kids and the first thing they will buy is a detached house.

Whats that?

Good luck getting a visitor visa in Asia unless you have Real Estate assets worth big money. If you have no real estate, no visa.

#24 Looking for GIC over 3% on 04.21.16 at 7:36 pm

I’m interested in the offers available at Wawa Disabled Ukrainian Veterans Credit Union. I have one leg and fought Putin in Crimea. No joke, true story. Do you have a contact there Garth?

Also, when are you going to chime in about the criminals, oops I mean realtors, at new coast realty in Vancouver. The stories coming out of there are unbelievable.

#25 Walmark of Sadkatoon on 04.21.16 at 7:38 pm

insane to extrapolate YVR house price increases for another 10 yrs. stupid

#26 Randy on 04.21.16 at 7:39 pm

I guess that the Millennials that voted for Trudeau are very generous or they are not good at math. Reducing the OAS eleigibility age back to age 65 costs an extra $11 Billion per year. Thanx for giving the old farts more money..haha

#27 Henry Olivere on 04.21.16 at 7:46 pm

Canadian Direct Financial’s 5 year 2.72%, 2.47%+0.25% bonus interest until April-30-2016 is the highest out there.

Over 5 years compound interest is 14.3602%. This is a TFSA equivalent rate of 25% or 5% per year me being in the 42.55% income tax bracket.

You really want to give your money to Western Canadian Bank? — Garth

#28 crossbordershopper on 04.21.16 at 7:52 pm

so buying an income property in small town sask for $65000 with a 900 month rent roll and they pay utilities doesnt sound that big of a deal then.
why work all your life for real estate, i have been to vancouver a number of times, its ok, i guess compared to china its wonderland.

#29 Jake Stephenson on 04.21.16 at 7:57 pm

Henry Olivere, a Newfoundland 2033-October-17 zero coupon bond has a yield to maturity of 3.82%.

However, over 17.49 years, 93% is the total interest accumulated or 5.318% average per annum.

In a TFSA, this is equivalent to average 9.26% per annum in your case and others with high tax brackets of 42.55%.

#30 Network Admin on 04.21.16 at 7:57 pm

> giant Tangerine could muster only 2.4%

FYI, they are also offering 3% until the end of June, see https://www.tangerine.ca/en/landing-page/springsavings2016/234.html

#31 Tom from Mississauga on 04.21.16 at 7:57 pm

Payday loan stores will a killing on the Canada Child Benefit too…

#32 Bat Flipper on 04.21.16 at 7:57 pm

EQ Bank never meant for this rate to be around for long.
When discount bankers offer these rates, they get a huge influx of cash and they know most won’t leave. This allows them to leverage the money to get more mortgage business.

If its mortgages, loans, credit cards, lines of credit, etc. the amount of competition will continue to swell.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/eq-banks-3-per-cent-savings-account-offers-attractive-but-temporary-return/article28326447/

#33 bigtowne on 04.21.16 at 7:59 pm

CP Rail announced big layoffs and the stock did a nice I think I can; I think I can out of the gate today.

CP Guru Hunter Harrison is finishing up his long tenure with the train trax but any hobos out considering jumping on a boxcar with yields hovering around 1% would have to tramp through town and beg for food at the missions.

My mom told us stories about the tramps back in the ’30’s who rode the rails due to high unemployment in Canada and it was common for the vagabonds to stop and knock at your door for a crust of bread. Hunter Harrison and crew are surely behaving in a pecuniary fashion when it comes to rewarding shareholders.

That spirit of meanness and hardbitten economy seems to be on display at CP.

#34 RayofLight on 04.21.16 at 8:00 pm

22 Doug t on 04.21.16 at 7:26 pm
Garth don’t blame the average person – blame the system and the media. It’s no wonder people are afraid to do anything except lock whatever they have into something “secure” – the financial system is skewed to drive billions into the hands of the ultra rich and corporations while leaving crumbs (if your lucky) for the masses. Any trust Canadians had in the financial institutions of this country,or the world for that matter, have been constantly eroded over decades – safe is safe – rolling the dice is betting

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

This is a copout mentality. Go to the library, or Google “investing”. You have to educate yourself, and take responsibility for your own financial well being. Do something other than whine in vague generalities, blaming the “system”.

#35 Ha ha on 04.21.16 at 8:05 pm

@Randy,
No problem …an ” I’m all right Jack ” tax on Boomers born before 1958 should do the trick. Ouch.

In reality, by the time the Millennial age angst manifests itself in policy, it will be the Gen x and early Millennial cohorts that get screwed….Just like Harper tried with the OAS roll back.

#36 LJ on 04.21.16 at 8:14 pm

RE: #19 For those about to flop… on 04.21.16 at 7:18 pm

Yoloism.

Love it!!!

Keep up the great work.

However, I don’t think that it’s curable without that “strong medicine.”

So, when does the cure get delivered?

#37 IKnow on 04.21.16 at 8:15 pm

#5 Jacko

when will it end

———————-

Will end when price per sqft for a Hong Kong suburb flat equals that of an average single family house in Vancouver

#38 Tom from Mississauga on 04.21.16 at 8:18 pm

Trusts are good in a TFA as well. I’ve got MRG.UN and BIP.UN in a DRIP. Nice yields compounding. Americans aren’t allowed Trusts in their ROTH IRAs (their TFA equivalents) as neither company or investor pays any tax. It all comes to me. Nice!

#39 Interstellar Old Yeller on 04.21.16 at 8:18 pm

#4 HD on 04.21.16 at 6:59 pm

Nice to see a comment from you, HD. I understand what you’re feeling. 2015 and this year our investments have been flat, so the only growth in NW has been the actual cash we save and invest. One really notices if the assets themselves do some heavy lifting… Or none at all. Faster progress would be more exciting but it only matters, at the moment, because I pay (too much?) attention to it. Just stick with it. Good years, bad years, and boring years are all to be expected. Your bigger portfolio will show bigger $-value growth when there’s meaningful positive returns to observe.

Good luck at the race. Hope they haven’t gotten cheap at the Vancouver events like they did in Toronto (no more bagels at some… Or cookies!)

#40 PeterfromCalgary on 04.21.16 at 8:21 pm

We need to start teaching about asset bubbles in high school.

#41 Bram on 04.21.16 at 8:23 pm

#27
You really want to give your money to Western Canadian Bank? — Garth

Why not?
Fundamentals look pretty good, I would say:
https://www.google.com/finance?q=TSE%3ACWB&fstype=ii&ei=t20ZV9GgJK3BiwL3zZzwCQ

A low debt-to-assets ratio.

Underwater mortgages in Alberta are a threat to the insurers, not to the bank.

Also, $100K deposits are guaranteed anyway: https://en.wikipedia.org/wiki/Canada_Deposit_Insurance_Corporation

Bram

#42 BS on 04.21.16 at 8:29 pm

Frank on 04.21.16 at 7:03 pm

It’s been ending badly for a decade now.

Bubbles usually float for about 15 seconds before being popped by a cruel world. Ever seen a bubble last a decade?

Actually most housing bubbles go on for more than 10 years. That is normal. Japan, Phoenix and Spain examples below. All well over 10 years. You could overlay any of these charts to Vancouver and they would be near identical on the way up. They will look the same on the way down too.

Here is a chart of Japan’s bubble.

http://www.oftwominds.com/blogoct06/japan-bubble.html

Here is a chart of Phoenix which went up for 20 years before popping.

http://www.aboutinflation.com/glossary/real-estate/us-real-estate-index-long-term-charts/us-real-estate-index-long-term-charts-az-phoenix

Here is a chart of Spain which went up well over 10 years before popping (scroll down).

http://www.marketoracle.co.uk/Article39314.html

#43 Lee bow on 04.21.16 at 8:36 pm

Garth, when did you start doing product placement (the Wawa thing)?

#44 nonplused on 04.21.16 at 8:48 pm

The only way I can see average house prices in YVR going to $5mil in 2026 is if the dollar craters. Even then I think it would be unlikely as one thing that usually happens when a currency collapses is that most people don’t have any money. Most people don’t see the logic in this but it’s been proven time and time again. When a currency collapses the price of daily necessities goes through the roof leaving people unable to pay for their daily bread let alone take on $5mil mortgages.

Normally I would agree with Garth that a collapse of the Canadian dollar is not on the table but with the likes of Nutley and Glamboy running things I fear anything is possible.

#45 Lee bow on 04.21.16 at 8:54 pm

Garth, what do you think about the Chinese debt situation? Does it bother you at all?

#46 WalMark of Sadkatoon on 04.21.16 at 9:08 pm

Actually most housing bubbles go on for more than 10 years.

this is true. YVR and YYZ have been going up for much longer than 10. 10 is actually a short period of time when talking about re

#47 WalMark of Sadkatoon on 04.21.16 at 9:17 pm

Lending off of EI is a sound business practice. Guaranteed government dole albeit for a certain length of time, why not lend off it. More certainty than commission income.

I agree. it’s an assured and knowable payout

#48 WalMark of Sadkatoon on 04.21.16 at 9:19 pm

go ontario liberals!

http://www.cbc.ca/beta/news/canada/toronto/rental-changes-1.3546107

#49 april on 04.21.16 at 9:21 pm

Google: Ross Kay – Toronto and Vancouver: Smoke and Mirrors?

#50 Doug t on 04.21.16 at 9:27 pm

#34 – lol I’m 59 – been around long enough to know “educating” yourself in this area might seem like your taking control but come on we know better – if you believe what you are saying then you have drank the koolaid too many times

#51 TRT on 04.21.16 at 9:28 pm

http://www.cknw.com/2016/04/21/the-lynda-steele-show-7200-seconds-to-60-million-vancouvers-craziest-real-estate-deal-2/

$44 Million over asking. Not even going to mention who bought it. Not a local working stiff though.

#52 TRT on 04.21.16 at 9:30 pm

Thos who sold for $60 million will probably buy in valley and push prices up there.

All a foreign money laundering ponzi scheme endorsed by government and the financial industry in Canada.

#53 Doug t on 04.21.16 at 9:31 pm

#34

Oh and I forgot – been in GIC’s for a decade – still have all my cash plus a bit more – which is plenty for my comfortable retirement

#54 TRT on 04.21.16 at 9:33 pm

Apparently, corporation (that only owns this RE) changing hands multiple times. 1 month after $60 million sale, flipped for $68 million.

CRA? alseep or in on it.

#55 BOOM! on 04.21.16 at 9:43 pm

Garth good post as usual. I have no dog in RE fight north of the border, so have nothing to add.

#4 HD

Good to see your monicker again.

Well, the last couple of years have not been “great” in terms of total gain.
There is an ebb and flow to the ETF’s and funds. Some some people tend to “harvest gains” when they accrue, by selling off a portion when things are “high” to restore values to the beginning (of the year).

Should the same holding lose, then you stand pat. Should the same holding gain, consider a 2nd “harvest.”

Some call this re-balancing…. I call it “retirement cash.”

Numbers tell the tales. S&P 500 hasn’t done much overall the last couple years, but had decent “harvest” periods.

REITS did pretty well.

Bonds, not much, long term seems to gave done best with the melt in interest rates.

If you held you always got the dividend yields from your respective holdings, pls the “average for the year.”

M64WI

#56 Investx on 04.21.16 at 9:44 pm

Garth,
Yesterday, you left out the cost of ETF MERs when dealing with 1% fee-based advisors. Or are those costs included in the 1% fee?

Answered. — Garth

#57 RayofLight on 04.21.16 at 9:51 pm

50 Doug t on 04.21.16 at 9:27 pm
#34 – lol I’m 59 – been around long enough to know “educating” yourself in this area might seem like your taking control but come on we know better – if you believe what you are saying then you have drank the koolaid too many times

//////////////
I fired my Mutual Fund Salesman (Aka..Financial Advisor), in Nov 2008,(not the best of times), because I realized it was his interests that was the most important to him. I was 58.

#58 DON on 04.21.16 at 9:55 pm

3 TRT on 04.21.16 at 7:34 pm

I disagree with your Vancouver analysis.

I just sent some Visitor Visa sponsorships for relatives overseas to attend a function here in Vancouver. If approved, the people are approved for 10 year visas.

They can come and go as they please.

Many people use these opportunities to assess Canada and to see if they would like to send their kids to Canada in the future. And as everyone in Asia now knows, the foreign student route is easiest way to enter.

Since the explosion of this 10 year visa, Foreign students and the Supervisa program, demand has increased exponentially.

Suffice to say that my relatives coming here will scout for their kids and the first thing they will buy is a detached house.

Whats that?

Good luck getting a visitor visa in Asia unless you have Real Estate assets worth big money. If you have no real estate, no visa.
************************

I remember people telling the same stories in Vancouver, but it was the Japanese families/students back then. Like all things, they end. So many assumptions are involved with prices rising forever. All it will take is for public opinion to organize misguided or not – doesn’t matter when emotion is involved and people are looking for someone to blame – then change is forced. The priced out of Vancouver movement will be resurrected – could become a Provincial election issue. Right or wrong obviously doesn’t matter when emotion is dominant factor.

#59 Ronaldo on 04.21.16 at 10:05 pm

#52 TRT

”All a foreign money laundering ponzi scheme endorsed by government and the financial industry in Canada.”

We have not heard the end of this one. This is one major scam.

#60 For those about to flop... on 04.21.16 at 10:06 pm

#36 LJ on 04.21.16 at 8:14 pm
RE: #19 For those about to flop… on 04.21.16 at 7:18 pm

Yoloism.

Love it!!!

Keep up the great work.

However, I don’t think that it’s curable without that “strong medicine.”

So, when does the cure get delivered?

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

Hey LJ ,I’m not sure if we have talked before.
If you are newish to the blog ,then welcome and I’m glad that I made you laugh.

Also as a few others said ,good to see HD doing a post.
I remember when I first came to the blog HD you were helpful and friendly to me and also good luck in the marathon.

M41BC

#61 God Emperor Trump on 04.21.16 at 10:10 pm

Garth, bamboo flooring has been out of fashion for at least 3 years now. The newest catchphrase being peddled on Dr. Oz is “formaldehyde”, which is pretty common in anything that uses industrial resin used to bind wood derivative products.

Apparently this formaldehyde is “bad” and should be avoided. Ignore the fact that you have potentially ionizing radiation sources in your cement and basement, and the constant chromosome damage done to us by things like the Sun… No. Chinese flooring is bad, especially bamboo.

You need grass-fed, organic, Dolphin-safe hardwood raised here in Canada by the northwest lesbian pacifist co-op.

BTW, how does a Canadian small fish investor short mortgage backed securities?

#62 No debt on 04.21.16 at 10:19 pm

Not lillooet or spuzzem, I live in one of the best rental markets in canada!

#63 MF on 04.21.16 at 10:30 pm

#4 HD on 04.21.16 at 6:59 pm

As others have said, great to hear from you. I remember the advice you gave me when i started last year, it was always appreciated.

At 32 with 200k plus in the bank and no debt you are doing far better than almost all of us our age, and represent a position to strive towards.

As for the lacklustre gains, many of us are in the same boat. Misery loves company i guess.

Good luck on the marathon and Dont forget your gels :)

MF

#64 Observer on 04.21.16 at 10:32 pm

Trudeau Liberals awful quiet, following their ineffective change of mortgage rules….the bubble inflates seemingly unabated….meanwhile, the Prime Minister never fails to impress with his knowlege of quantum computing.

#65 Randy Randerson on 04.21.16 at 10:33 pm

#21 Chaddywack on 04.21.16 at 7:22 pm

I actually hope more physician will blow their brains out by buying a house in this environment. This will ensure they’re trapped and anchored when this RE bubble goes tits up. I’d like my physicians to stay put so I can visit them for the next 20-30 years.

#66 Keynes on 04.21.16 at 10:33 pm

#61 God Emperor Trump
BTW, how does a Canadian small fish investor short mortgage backed securities?

——–

They don’t.

Markets can remain irrational longer than you can remain solvent.

#67 MF on 04.21.16 at 10:36 pm

#60 For those about to flop… on 04.21.16 at 10:06 pm

I second that. HD was the same to me.

MF

#68 liquidincalgary on 04.21.16 at 10:38 pm

Did I ever mention how this ends?

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

24 / 7 ball gags, brownie mix, and clown porn??

#69 Boomer Death Counter on 04.21.16 at 10:43 pm

Farewell Prince, who would have been 58 in a few weeks. One of the youngest cohorts of the boomers born between 1946 and 1960. Too young, many song left to sing.

Yet another sign of the boomer generation’s fast-fading influence. Politically, boomers will be irrelevant by 2019, maybe even sooner.

By 2025, most of them will be deceased or infirm. Even our beloved host will be almost 80. Hope he is still around.

What’s worse is that increased longevity is now reversing. Shocking but true.

http://www.techtimes.com/articles/151956/20160420/this-is-why-life-expectancy-for-white-american-women-sees-rare-decline.htm

Yep, bad habits, obesity and more increased suicide among boomers over recent years has reversed the long cherished idea of living longer and longer.

Millennials may face even worse numbers, but probably won’t – this is exactly what is fuelling the soon to be revolutionary overthrow of boomer power and privilege. It’s exactly why Trump and Sanders draw such crowds. It’s why enormous changes to our tax codes and politics will happen, destroying all those privileges enjoyed by the few.

Goodbye Prince, and thank you.

You are part of a stunning trend, accelerating so dramatically this year, of high profile boomers hitting the exits.

Bowie, Shandling, Prince, just a few of the dozens of famous boomers who will be gone by year end, and many more next year.

Big, big, big changes are coming folks.

Prepare. And boomers – don’t put off that visit to your doctor.

#70 Bottoms_Up on 04.21.16 at 10:47 pm

#4 HD on 04.21.16 at 6:59 pm
——————————-
I’m not that much older than you but I think you’ll find your outlook on life experiences changes, and this can result in being a little looser with spending. You’ll appreciate time more; perhaps rent that hotel room for one more night, or make a greater effort to enjoy the company of family and friends (entertaining). Or buy a more comfortable and reliable car, or higher quality household items. You may be more health conscience and buy healthier foods/eat less fast food.

#71 Bob loblaw on 04.21.16 at 10:53 pm

Garth, home prices in the GTA would have to correct 80% just to sell at a reasonable price to rent ratio. Do you see this happening in your lifetime?

#72 Ronaldo on 04.21.16 at 11:01 pm

#62 No debt on 04.21.16 at 10:19 pm

”Not lillooet or spuzzem, I live in one of the best rental markets in canada!”

Saguenay?

#73 NEW WEALTH IS DEBT. on 04.21.16 at 11:01 pm

DELETED

#74 Jamal on 04.21.16 at 11:02 pm

“Anyway, stupidity and the misinterpretation of risk have led Canadians to hold about $400 billion in accounts that pay nothing, or next to it. ”

If all this money was to somehow move to TSX overnight, just wondering if it will actually create any real value or just bubbleTSX, only to crash later and cause misery. Financial advisers on commission or fees will definately benefit though.

#75 WUL on 04.21.16 at 11:05 pm

Ya know, I am very fond of this internet blog joint. All this financial advice is lost on me but the banter is “scintillating” as D. Gallivan used to say.

Somehow and inexplicably, Fort McMurray has wormed itself into my heart and I could easily wind down my years here. Where else can one go where behind the office of a major oil sands company there is a “Bear Warning” sign at the Smoking Pit?

My retirement will be OK. All I will need from time to time are guitar strings and some saddle soap.

M60(Surprisingly Youthful Looking – Sparkling Personality – Always Irrelevant)AB.

#76 sockeyemoon on 04.21.16 at 11:14 pm

All over Vancouver Island gas stations are closing down. Meanwhile, more people here than before. Go figure!

#77 cramar on 04.21.16 at 11:16 pm

FOMO!?

Whomever is the Gate Keeper for the GarthFAQ should add this.

Sheesh Garth! I thought the U.S. Military was bad with their acronyms.

#78 WUL on 04.21.16 at 11:24 pm

Garth, if I may, as I hit the Submit button before I finished my eloquence.

Mr. Gallivan won the Maritime Intermediate Baseball Championship in 1937. Gallivan started the deciding game against the Pugwash Maple Leafs in the best-of-three series and pitched a three-hit gem while striking out 11 batters in the game.

I was a big fan of the Pugwash Maple Leafs.

OK, now I will leave you alone.

WUL

#79 april on 04.21.16 at 11:27 pm

Google – BC Real Estate Probe Too Weak by Ross Kay. You must hear. What a crooked industry.

#80 Bram on 04.22.16 at 12:00 am

#76 sockeyemoon on 04.21.16 at 11:14 pm
All over Vancouver Island gas stations are closing down. Meanwhile, more people here than before. Go figure!

Buy a bicycle, or a Tesla?

Maybe the Island is going Dutch?
http://www.sciencealert.com/the-netherlands-is-making-moves-to-ban-all-non-electric-vehicles-by-2025

Canada’s 0.35% electric is pretty appalling btw.
Bottom of the class. Even US is doing better than us.

bram

#81 Ontheledge on 04.22.16 at 12:18 am

Lots of ya want to know how to short the housing market in the same way the dudes did in the Big Short flick. You can’t. Watch the movie again, or even better read the book. Those guys convinced a whole bunch of Wall Street bankers create what is referred to as a OTC or “Over the Counter” derivative based on CDOs. They invented the product and convinced the money men to be the counter party to their short bet. You can’t do that. The best you can do is short the publicly traded lenders here..mostly MICs or Mortgage Investment companies. The most shaky big lender that I see is Antrim Mortgage. This thing is a piece of work. Lends exclusively on residential mortgages in the lower mainland of BC at rates of >10%/a. They’re an Alt-A lender. Their IR will tell you that that their average loan to value is 70%. Value is not recognized as a variable base on current market rates. Their average term to maturity is 1 year. Fast money, all spec. They originate loans through independent Mortgage brokers, incented shills. The lenders? Regular people sold on the 7% yield by investment advisors. Antrim funds are available only to accredited investors so they have to have means. But they really don’t and they’re I shorted a company called Country Wide back in 2007…this is our Country Wide.

#82 Not Bobby Axelrod on 04.22.16 at 12:20 am

“The bad news is your “high-interest” savings account pays 0.55% ”

Currently Tangerine is paying me 3% on my spare cash and Zag 2.5% . Both savings accounts. Not a bad place to park your spare cash until the next time the stock market takes a tumble. RIP Prince Nelson and Joanie Laurer.

#83 Foreign Owner on 04.22.16 at 12:36 am

Tax laws are designed to punish the middle class.

While the middle class pay property transfer tax, amongst other things, offshore investors can simply buy shares in a local company that holds local real estate assets. The government misses out on the tax, thereby forcing local people to actually subsidize the infrastructure necessary to sustain the investment.

People are so delusional in Canada to think this isn’t happening regularly, with the middle class squeezed harder and harder

#84 M on 04.22.16 at 12:56 am

“”Anyway, stupidity and the misinterpretation of risk have led Canadians to hold about $400 billion in accounts that pay nothing, or next to it. In fact, 80% of all TFSA money now sits in HISAs or GICs. Oh, the agony. This, I guess, is why the EQ Bank made such a splash a few months ago.””

Gartho baby.. if the population at large would not be as you suggest it is-and I agree it is,..how in the hell would we do our dough ? Investment is not for everyone. Requires a certain mind set, a good level of general knowledge and the ability to go against most of what is publicly propagated as “value”…

#85 Smoking Man on 04.22.16 at 1:29 am

Something went wrong. Fork in the road. Chose the wrong one on the quest to the elusive white picked fence, and that loving family.

I’m the only one that checked for a pulse after an hour of observation. He was somewhat ok.

Humans suck. Glad I’m from Nectonite

http://dyslexicsmokingman.blogspot.ca/2016/04/the-american-dream.html

#86 Frank on 04.22.16 at 1:36 am

It’s interesting how the Realtors will earn a living when the price gets so high no one can buy or sell. Perhaps they will induce some selling frenzy then.

Highest ever sales last month. Ever. Prices haven’t stopped people yet.

#87 Freedom First on 04.22.16 at 2:11 am

GIC’s & HISA’s? 400 Billion $? Wow! And there is so many fixed income investment ETF’s. Diversified and liquid too! Not to mention “Real Return Bonds”, bought outright, outside of an ETF holding them. Mind you I am thinking with a 40 year horizon.

Also, as for any debt, for anything? No, thank you very hard.

So much usury too. It’s a sin.

Lastly. HD, you’re rocking it! Relax, and keep it simple. Stay focused, and never forget, you are not only a target, it is you who is the prize. You are the only person who will look after you. Believe it. Just look at the laws. They are not on your side.

#88 It's all rigged on 04.22.16 at 2:54 am

Folks, in the day and age we live in, if there is money involved, it’s rigged. Has been since 1919.

The lottery is the best example of course, it’s not rigged towards the winners but towards the house, who gets 70% of the take.

Casinos are better but by skimming on average 3% per hand they get all your money most of the time. That’s why if you win big they fly you back out for free and put you in the penthouse. They want the money back and they will get it.

Panama papers? Really? Not one American citizen had an offshore account? Not one? Not even Donald Trump? Please. The Premier of Iceland, who prosecuted the corrupt bankers, had a small one and had to resign. Hitlery? No signs of corruption there.

Even in professional sports, which is just reality TV we can see it. Not one Canadian team made the NHL playoffs this year even though we were kicking but and taking names at the U18 international level on the same day. No Canadian tam has one the cup since 1993, the year of expansion, and none ever will again because the fix is in. Having almost a third of the teams, salary caps, revenue sharing, and a draft system that is supposed to strengthen weak teams, this is statistically impossible but it now goes on for one more season, they can’t even bother to allow even one Canadian team through because it isn’t in the interests of American advertisers.

This is one reason, besides the outrageous taxpayer expense for 2000 extra seats, the proposed new stadiums in Calgary are such a stupid idea. 10 years from now hockey in Canada will resemble the CFL, even if most of our best players are playing for Tampa or Boston. It will be a separate, junior league.

No worries though folks. If you have to deal with a rigged market, figure out who is rigging it, how, and why. Also calculate how far they can take it before nature takes it’s course.

As Garth has said time and time again, people buying in Vancouver or Toronto right now are screwed, it can’t last. But it lasted a long time and those who saw the bubble coming and cynically bought on speculation and are now selling doubled their money. Will it double again? Probably not, I think the bubble is long in the tooth.

Doug Casey made his fortune selling out of Bre-ex when it became clear to him that the whole thing was fraudulent, they couldn’t have that much gold. That’s the key. If the trend is unsustainable get out.

I have friends how are very rich on paper in commercial real estate, but the problem is they can’t sell and their tenants are all going broke.

Watch the trends folks. When the bubble is getting old, you have to be the first one out or you won’t get out at all.

#89 family beagle on 04.22.16 at 3:35 am

#37 IKnow on 04.21.16 at 8:15 pm
#5 Jacko

when will it end

———————-

Will end when price per sqft for a Hong Kong suburb flat equals that of an average single family house in Vancouver

….

Your comments helped me congeal some thoughts…

I’m curious what the outlying rural lands of Hong Kong are priced at. Houses in other parts of BC have risen substantially even though our density is only 4.3 per sq km. Between Vancouver and Penticton are 400 km of bush peppered with small hamlets that have also risen in price. Penticton lists many homes at $700k plus. Kelowna has unlimited room for expansion, yet prices mirror the density of Vancouver. A cute house in the interiorior on a nice lot surrounded by 3000 acres of unsurveyed rural land is selling for $800k. Yet, anyone can walk in the bush and build a cabin for free. The amount of raw land is difficult to comprehend. I believe there is more to current valuations than just foreign buyers in BC. There is an expectation. People are valuing their property at cost plus.

Hong Kong has connections to BC, but it is nothing like BC. I travel north and the province is not uninhabitable. There are lots with a view and convenience centers every 40 km or so, yet everybody wants half a mill for their shotgun shack. Why is a house just across the US border three times less than in BC? We are very similar in lifestyle, economies, and geography to our neighbours in WA State.

I believe prices are rising because of our own cultural desires and our societies changing measure of success. Many people depend on real estate having a return on investment. With volume of building permits kept slightly lower than immigration to the region, the density causes bubbles in select pockets. The elephant in the room is the extra 944,000 square kilometers available outside the GVRD.

I own a ranch in the interior. It’s notional value has gone up 60% in five years, but nothing has changed. There are no new neighbours. No development. There’s no interest expressed from foreign buyers. What made it go from 20¢ a sq ft to 32¢? The assessor? The exchange on our national script? If I’m going to get $500 sq ft soon, I’ll buy everybody on this blog here a new Tesla.

#90 jane 24 on 04.22.16 at 3:49 am

A lot of ‘petrol’ stations closing down in my part of England as well. The problem is that the urban land is worth more for development than the owner makes in fuel sale profits. Starting to be quite a hike to fill up. Slowly urban services are starting to be based further and further out.

Bloody rain again today but my garden is so lush it looks like a scene from a seed catalogue. Did the front garden this Spring in shares of pink and the back in everything!!

#91 family beagle on 04.22.16 at 4:34 am

“40% of buyers worried they don’t quite understand”

This senior Dachshund I know was distressed because she maxed her credit card and “They” were phoning to collect. She was on income assistance and disability. Why? She had been prescribed drugs for a prior mental illness. Haha, I laughed, “Excellent, you’re insane! No legitimate creditor should have given you a loan. Reply to their claim with a note endorsed from your shrink saying you are unfit to drive, possess firearms, or have credit.” She did. $5k debt evaporated immediately. Never would have made it through a settlement conference.

Legal advice from a dog, ha.
Now I read one in five Torontans have similar problems…

http://news.nationalpost.com/health/one-in-five-toronto-area-workers-has-mental-health-issue-while-job-insecurity-is-making-it-worse-study

#92 Shagadelic Sam on 04.22.16 at 4:37 am

#4HD….get your head out of your arse and start investing in great stocks with great potential. As great as it may sound…with the balance and the safety and never lose a dime anytime sales pitch…and the heeminny and the humminny and the ho ho ho… a balanced portfolio will only make you a millionaire if you’re prepared to wait 40 years and never touch a dime along the way while continuing to max out contributions.

In the past I have listed dozens of issues on this site which have gone on to treble, quintuple and more. No, it’s not ‘hard’ to invest. They’re out there…waiting. Will people stop making phone calls…sending packages…buying snacks at the gas station….if the answer is no…buy stock in that company.

Don’t buy balance…buy value. Value stocks have been in a slump until very recently. You get the dividend for doing nothing…and that equals the balanced returns with no advisor fee.

Like the band Outcast sang..”Give it to me baby…ah huh ah huh”.

Making money is stupid easy.

#93 Ace Goodheart on 04.22.16 at 6:42 am

RE: “Granted, this is a better return than the big banks pay. But isn’t it ironic where people terrified of risk will put their money?”

The word “bank” gives an investment “bullet proof” status in Canadian street-speak.

Unlike the words “well run business” or “stock” or “bond” or “fund” which mean, in Canadian, “risky”, “not worth the risk”, “too unsafe” and “dangerous”.

Been capitalizing on this for years, ever since 2008 when everyone got spooked. Bought Canadian bank stocks for $20 per share with 8% yields, when everyone thought I was nuts and the world was going to end. I expect a “generation spike” in the value of stocks and bonds, which will occur roughly in 2022, which will be when babies born in 2008 reach “investing age” and children too young to remember the crash of 2008 get old enough to start investing.

Until then I continue to purchase good high quality companies and REITs for less than book value, with ridiculous yields, while everyone else puts their money into subprime mortgage lenders.

#94 TurnerNation on 04.22.16 at 8:20 am

In my TFSA I like CCI.UN – a straight maple convertable Deb. play – and Pimco’s fund -recently raised monthly distribution – PGI.UN. Hogging yields.

#95 Katrina Kashan on 04.22.16 at 8:27 am

You want a quick fix for TRT and others that want sky high residential real estate prices, just put a punitive real estate appreciation tax, (REAT).

Any gain over $250,000 per owner at 75% income tax rate. Monetary policymakers, central banks and governments don’t want much higher interest rates and mortgage rates that are needed for cooling real estate by at least 30% so get them on the back end.

Get rid of the complete tax free capital gains status for primary residences and make it to $250,000 per owner which is more than reasonable. This way average, more middle to upper income owner, Canadian does not get caught because of speculators and greedy real estate junkies.

Let it get to $5 or $6 million, they only get to keep no more than 25% of the capital gains, net appreciation.

#96 Noel on 04.22.16 at 8:37 am

Have fun with your rental suite and 2.25% returns. I’ve made over 10% a year for the last three years on my house.

You have made zero if you do not sell, less commission. — GarTh

#97 fancy_pants on 04.22.16 at 8:39 am

#85 Smoking Man on 04.22.16 at 1:29 am

Hope you wearing sunscreen, those are some bright lights beaming down on you.
And pay extra attention if you have a bottle of JD in one hand and the sunscreen in the other, Nectonites tend to have an above average adverse reaction to ingesting SPF 30

finally, offer Ollie sincere condolences from me if you see him… apparently his luck ran out at the last table. But tell the ba$terd I still expect a cheque to be in the mail.

cheers

#98 fancy_pants on 04.22.16 at 8:46 am

SM, you almost had me fooled. dagnamit, is that Ollie sprawled out there? Never mind the pulse, can you check his pockets for my investment $?

#99 Bottom Feeder on 04.22.16 at 8:48 am

Got a kick out of today’s photo. I recognize the location. In the background is the phrase “before your eyes” which is a trademark of Mr. Lube. The location is the intersection of Bow Trail and 37th st S.W. in Calgary where a KFC store shut down and a Cash Money store went in right next to a Mr. Lube.

Cash Money’s timing was perfect. The oil price collapsed and in went the store.

#100 NoName on 04.22.16 at 8:54 am

How can I get my hands on this beer in canada? anyone

https://www.youtube.com/watch?v=3V9QHBgrPNY

#101 Renter's Revenge! on 04.22.16 at 8:55 am

#89 family beagle on 04.22.16 at 3:35 am

A friend of mine listed his aging parents’ cabin on the east side of Lake Winnipeg a few years ago for $220k. The house has major mold problems because the well is in the basement and the walls have no vapour barrier (or insulation). He got two offers for around $150k, then crickets for a year, then a low ball offer for $60k from a developer last year, and nothing since. He hates the place but still hasn’t sold, because “real estate is a good investment”.

#102 Ace Goodheart on 04.22.16 at 9:21 am

RE: #101 Renter’s Revenge!

“He hates the place but still hasn’t sold, because “real estate is a good investment”.”

Real estate is like any other investment. You have to “bet” on something if you are treating it like a casino.

So many people either don’t understand this or don’t know what it means .

If you buy a house because you want to make money selling it later, then you are “betting” or “gambling”. This is not the same as buying a house because you want to live in it.

“Betting” and “gambling” requires there to be a “bet”. The most amateur gambler knows this. You are betting that something will happen, and if it does, then you “win”. This can be as simple as your lottery numbers coming up, but the “bet” always has to be there.

What the problem is right now is people are “betting” on house prices, with no “bet”. Ask most of them, what they think is going to happen, and they will say “the price is going to go up”. That is not a bet. You are not buying a lottery ticket because you think that the price of the ticket is going to go up (but you don’t know why). You know why it might go up (the numbers you picked, might be the winning numbers, if so the ticket is worth a lot more than you paid for it).

Understand these principles, and you are on your way to “gambling” in real estate. Don’t understand them, and you are on your way to disaster.

#103 HD on 04.22.16 at 9:25 am

#63 MF on 04.21.16 at 10:30 pm
#60 For those about to flop… on 04.21.16 at 10:06 pm
#70 Bottoms_Up on 04.21.16 at 10:47 pm
#87 Freedom First on 04.22.16 at 2:11 am
#92 Shagadelic Sam on 04.22.16 at 4:37 am

————————–

Thanks for the tips and the shout out guys.

Much appreciated it :)

Best,

HD

#104 HD on 04.22.16 at 9:30 am

#39 Interstellar Old Yeller on 04.21.16 at 8:18 pm

————

I appreciate the kind words.

Best,

HD

#105 Noel on 04.22.16 at 9:54 am

You have made zero if you do not sell, less commission. — GarTh

________________

I feel much richer though. And isn’t that what really matters?

#106 Mark on 04.22.16 at 10:11 am

“I’ve made over 10% a year for the last three years on my house. “

Good for you, but most Canadians (including those in Toronto and Vancouver) have not seen a return on their house ownership for the past three years except for imputed rent, minus their operating and long-term maintenance costs. Some are even down quite considerably from the 2013 peak. Only a small handful are up.

I expect a “generation spike” in the value of stocks and bonds, which will occur roughly in 2022,

Your post echoes most of my thoughts. And the housing bubble has left a lot of other investments cheap. Picking up railways, telecoms, mines, pipelines, etc., for significantly less than long-term replacement cost is an awesome thing. And given enough time, we’ll be able to pick up Canadian RE at less than depreciated replacement cost. RE bulls should “think about” what that really means price-wise.

#107 For those about to flop... on 04.22.16 at 10:21 am

It seems I got things backwards the other day when I was speaking about Mike Duffy.

Some of you might recall I said that HBO was going to get Danny DeVito to play Mike Duffy in a movie but with his acquittal HBO have changed their minds.

Due to his lower wage demands and some free time on his schedule HBO is now going to get Mike Duffy to play Danny DeVito in a movie instead.

It seems like Mike Duffy has tried a lot of different things during his career and so I don’t think this will be a problem for the Ol’ Shuffle Bunny…

M41BC

#108 Lee on 04.22.16 at 10:27 am

Cameron Muir confirms Millenials are not leaving Vancouver in droves. All is well in BC. Keep dreaming for a crash property scavengers.

As for Garth’s comment at #96 – but he will make money when he sells, even if it is a bit off what he will make now.

#109 Doug in the USA on 04.22.16 at 10:33 am

Wow, today the time tunnel sucked me in not only shot me back to 2005 but also right into the heart of the USA. Then again, maybe it wasn’t the time tunnel but rather the TARDIS, short for time and relative displacement in space. I just heard on the radio today, on a station that has call letters starting with W, that some complete idiot in New York City is actually shorting the US housing market. Wow, how stupid can anyone get?

#110 Doug, still in the USA on 04.22.16 at 10:47 am

@TRT, post #23:
Good luck getting a visitor visa in Asia unless you have Real Estate assets worth big money. If you have no real estate, no visa.
——————————————————————-
Really? Despite the involved and time consuming process of applying for a visa to visit India, I wasn’t asked any questions at all about real estate ownership, not even about any REITs I own, and had no trouble at all getting a visa. Similarly, when I visited Thailand I got a visa on the spot in Bangkok at the airport on arrival and in Cambodia at the border crossing and was NEVER asked any questions about real estate ownership. I haven’t actually been in a geography class since 1979, but aren’t India, Thailand, and Cambodia actually part of Asia?

#111 Rational Optimist on 04.22.16 at 11:08 am

“The trouble is, most of the FOMOers were 12 years old when Nortel peaked and the Nasdaq exploded. So they think it’s different this time. So cute.”

I was 13 when Nortel peaked. That means, in the years I was taking my first tentative steps towards forming an understanding about the world around me, I heard a lot of vitriol from my old man about how stupid he and a lot of other Canadians were to buy that bastard “practically at the top” (I remember those words). He didn’t quite lose his shirt, but coming of age after the tech bubble burst and after so many of my friends’ parents had got clobbered trying to dabble in “day trading,” has made me wary of euphoria*. I find it boggling that anybody doing most of their learning right after 2000 could come to any other conclusion.

*For the record, “euphoria” and “exuberance” are bad things. So are “negativity” and “pessimism.” “Optimism” is the only way to be.

#112 LP on 04.22.16 at 11:10 am

#75 WUL on 04.21.16 at 11:05 pm

M60(Surprisingly Youthful Looking – Sparkling Personality – Always Irrelevant)AB.
**************************
Turn that into an acronym (S.Y.L.S.P.A.I.) and we all could spend a whole blog post supplying new and varied words to complete it.

f68ON

#113 For those about to flop... on 04.22.16 at 11:22 am

As a kid who grew up in Australia, it seems fitting to me that Cash Money has a kangaroo as a mascot.

You let your guard down for one second and these animals will kick you in the nuts…as for the kangaroos,well that’s another story…

M41BC

#114 TRT on 04.22.16 at 11:38 am

#110 Doug, still in the USA on 04.22.16 at 10:47 am
@TRT, post #23:
Good luck getting a visitor visa in Asia unless you have Real Estate assets worth big money. If you have no real estate, no visa.
——————————————————————-
Really?

Doug, it’s people coming to Canada. Not you going to Asia.

#115 Noel on 04.22.16 at 11:47 am

#106 Mark on 04.22.16 at 10:11 am

Good for you, but most Canadians (including those in Toronto and Vancouver) have not seen a return on their house ownership for the past three years except for imputed rent, minus their operating and long-term maintenance costs. Some are even down quite considerably from the 2013 peak. Only a small handful are up.

__________________

Railing against your lies and misinformation are the uniting factor between blog dogs of all political stripes.

The tripe you post on here is just fantastic, you deserve a lifetime membership on the panel of judges for the Bulwer-Lytton fiction contest.

The ‘information’ you post here is so backwards that Donald Trump’s speechwriters would sniff it out as being too far-fetched to believe.

Orwell’s Ministry of Truth would think your thoughts on Canadian house prices over the last three years are a little much.

10/10 trolling job!

#116 westcdn on 04.22.16 at 12:00 pm

I renewed my mortgage recently. 2.39 % fixed for 3 years. My [email protected] offered me 2.59% fixed for five years – tempting. I am getting long in the tooth so I prefer short loan agreements – but wow! Debt is cheap. I guess I could fight for a few basis points but I knew she was offering the best she was to give – I hate to destroy relationships when they cover my back although they clear my way ahead.
I still find life is funny. I find it is easier to make money than keep it. I have always believed I have to answer to a higher power so there are things I will not do to benefit myself-. I have failed many times. Let’s hope I get more backbone.

#117 Jacques on 04.22.16 at 12:27 pm

#85 Smoking Man on 04.22.16 at 1:29 am
Something went wrong. Fork in the road. Chose the wrong one on the quest to the elusive white picked fence, and that loving family.
I’m the only one that checked for a pulse after an hour of observation. He was somewhat ok.
Humans suck. Glad I’m from Nectonite

http://dyslexicsmokingman.blogspot.ca/2016/04/the-american-dream.html
………………………………………………………………….
If you check his pulse then you are human, that shows humanity mon amie.
You sure that was not a selfie? Like the guy says why did you not rent a V8? amusant à las vegas

https://twitter.com/SmokingMan?ref_src=twsrc^google|twcamp^serp|twgr^author

#118 But! on 04.22.16 at 12:32 pm

>>> “Expect no investing or tax advice, no management fees and to shell out ten bucks a trade.”

>> Even if you hire a fee-based advisor or a fee-for-service guy, you stil pay the ten bucks per trade.

> There are no trading charges with a fee-based advisor.

Respectfully, maybe you misunderstood the question. If I have an account with RBC DirectInvest, say, I pay 10$ each time I buy or sell, say, a batch of stock in a company. If I were to work with an advisor, who would pay those fees if the same stock were sold or bought? You suggest that, in case of an advisor who also manages ones account, that is absorbed by the advisor. But I take it the advisor himself needs to pay this same fee each time he or she trades. So, in short, the fee needs to be paid for each trade, whether I pay if myself or it is in some manner included in the advisor fee. That was my point.

A fee-based advisor should trade on your behalf and absorb all costs within the basic 1% management fee. — Garth

#119 TurnerNation on 04.22.16 at 12:41 pm

Liking USD / CAD long here. In sht FX account.

#120 TurnerNation on 04.22.16 at 12:53 pm

#99 BF re Mr. LUBE, DIV.TO owns some franchises. Recently rasied dividend. Yield is 9%. No position atm.

#121 Nemesis on 04.22.16 at 1:26 pm

#ForHD… #TheAnswersYouSeekAreHere…

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

#Alternatively,TheSuccinctVersion:

“Any man who has $10,000 left when he dies is a failure.” – Errol Flynn

[Aside: [email protected]!]

#122 Shecky Greene on 04.22.16 at 1:28 pm

@#80 Bram-

That’s because Canada’s like my ex-wife….cold, and large.

#123 trading fee on 04.22.16 at 1:41 pm

A fee-based advisor should trade on your behalf and absorb all costs within the basic 1% management fee. — Garth

===

The fee-based advisor with sufficient client-base can get better trading fee, due to the high overall trade volume.

#124 maxx on 04.22.16 at 1:54 pm

“Anyway, stupidity and the misinterpretation of risk have led Canadians to hold about $400 billion in accounts that pay nothing, or next to it. In fact, 80% of all TFSA money now sits in HISAs or GICs. Oh, the agony.”

If someone has enough (for a high quality life, inclusive of all bucket list items) cash (net, in future dollars, divided by # of years projected to end of life), then one may do whatever ones little heart desires.
Pejorative labels are purely and entirely irrelevant.

Money talks, as always and chooses whatever it likes.

What of that 400MMM on the sidelines – agonizing for whom?

#125 maxx on 04.22.16 at 2:09 pm

#4 HD on 04.21.16 at 6:59 pm

…..”The first 100K was really challenging to attain and took a lot of frugality and discipline to accomplish. 100K to 200K was a little bit easier and still required a lot of work. Granted, I was lucky enough to start investing right in the beginning of a bull market so the return on investment looks pretty good on paper.

However, 200K-300K seems much harder and I’m not sure why.

Markets not as bullish as before? Lifestyle inflation? Frugality sucks and grew tired of it?

I suspect that it is a little bit of everything. I was very aggressive when I started to save money and went mustachian for a while…..but the older I get, the less I can save that aggressively. But as the portfolio gets bigger, it should be able to grow faster…..right? Or maybe I’m doing just fine and the impression that something is wrong is all in my head?

Anyway….did someone out there run into similar concerns and have something interesting to say about it?”….

Yes. Exactly that. The very thing.
You’re still very young and what I ran to at that time of my life I labelled the “dead, or gray” zone of wealth building.
DO NOT, repeat, DO NOT let go of your vision. Keep with your program, no matter what.
Avoiding excess risk at this critical time whilst not going too “mustache” is essential – if you have no life, you’ll inevitably pull the plug to excess at some point. Besides, how are you going to know what adventures you wish to pursue when you hit complete freedom if you don’t sample some along the way?
The road to wealth seems interminable some days, but it is peppered with visible milestones and one day, sooner than you think, you’ll wake up to full ownership of your life. What a feeling!….and it doesn’t wear off, unlike the stuff that we buy.
Keep saving, investing wisely and living with balance.
You’ll make it.

#126 maxx on 04.22.16 at 2:16 pm

#13 Brian Ripley on 04.21.16 at 7:05 pm

…”Double double. toil and trouble”

How about: Bubble, bubble, foil and rubble. ;-)

#127 bdy sktrn on 04.22.16 at 2:23 pm

my job yesterday was driving to 14 locations from west side, dt, east side, out to the outer reaches of burnaby.

as hard as it is to believe, the pace of building everything is higher than ever.

saw prob 50 preloaded large commercial sites, endless condo buildings at all stages, went into a very impressive super high end brand new office tower – cool shit. video wall of stanley park seawall while you wait for the elevator.

3 mclarens, 2 with N stickers. only 1/3 of a million for a car for junior.

lots of people. lots. more than ever. everywhere. none of them looked like they wanted to move east. west coast re (dirt) is NOT going down anytime soon. in fact it will keep going up.

#128 espressobob on 04.22.16 at 2:40 pm

This is a list of a few ETF providers.

http://www.blackrock.com/ca/individual/en/ishares?shortLocale=en_CA

https://www.vanguardcanada.ca/individual/home.htm

http://www.bmo.com/gam/ca/advisor/products/etfs?ecid=ps-4910-JBDirect%20Access%20Digital28

In order to buy ETFs you need a discount brokerage account. Examples.

https://www.rbcdirectinvesting.com/

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

https://www.cibc.com/ca/demos/ie-demo-brk.html

There’s a learning curve involved here. DIY investing is harder than some realize.

A fee based advisor can take that burden off your shoulders, and set up, manage & personalize to ones needs at low cost.

Way cheaper than those crappy mutual funds the banks are pumping.

#129 For those about to flop... on 04.22.16 at 3:16 pm

#121 Nemesis on 04.22.16 at 1:26 pm
#ForHD… #TheAnswersYouSeekAreHere…

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

#Alternatively,TheSuccinctVersion:

“Any man who has $10,000 left when he dies is a failure.” – Errol Flynn

[Aside: [email protected]!]

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

Hey Nemesis,as someone born in Tasmania when asked who is the most famous Tasmanian,I say Errol Flynn.

A lot of younger people don’t know who he was but I tell them I always remember him as Robin Hood.

To be born in Tasmania and become a Hollywood actor was no mean feat especially back in them days.

Another thing that I share with Errol Flynn is that I reside in Vancouver where he died in 1959 and the same fate awaits me when my wife strangles me for spending too much time on the blog…

M41BC

#130 Mark on 04.22.16 at 3:16 pm

http://www.cbc.ca/news/business/inflation-march-cpi-1.3548174

” Canada’s inflation rate slowed to an annual increase of 1.3 per cent in March,”

So much for lower rates triggering currency devaluation or inflation. At 1.3% YoY CPI, and trending lower, the BoC almost has the all-clear for an additional policy rate cut at the end of May.

#131 A belieber on 04.22.16 at 3:29 pm

hey flopster

YOLO-ing isn’t the problem its the solution my friend!! If you want to specialize in something try tattoo removals.

#132 Freedom First on 04.22.16 at 3:30 pm

#113 Flop

Now, that is hilarious!
And, most unfortunately,very true.

007AB

#133 BOOM! on 04.22.16 at 4:33 pm

Am I missing something here?

It has always been my idea that “trading” was something to be kept to a minimum.

In a decently designed investor portfolio, trading is, well rather rare. Not saying never, just not ‘routine.’

Accumulating is more important.

#134 bobdog on 04.22.16 at 4:37 pm

In a country with less than 1% on savings and 25% inflation in housing I took a page from the movie “War Games”. Working for a living in Canada is like playing global thermonuclear war. “The only winning move is not to play.”

I am proud of the fact that I have spent 2 of the last 4 years collection maximum unemployment benefits. I call it reverse income tax. The alternative was to begin the systematic execution of bankers and politicians. Unfortunately the police still take a bad view of this strategy.

Im interviewing again but if rates don’t go up soon I will again be enjoying the sunshine while speculators and realtors pay my rent.

I refuse to pay income tax in a country with a government so corrupt and incompetent.

#135 Bobs Uruncle on 04.22.16 at 4:58 pm

HD,

Here’s your pat on the head. Good job you special snowflake.

Uncle Bob

#136 TCContrarian on 04.22.16 at 5:12 pm

“If you believed that silly story in the HuffPost the other day – extrapolating recent house price gains into the future – you know all about FOMO. The conclusion was the average Van house will cost $5.1 million by 2026, if trends evident over the last three years hold. Which, of course, they won’t.”

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

Ahhh, yes! Employing a linear outlook in cyclical markets! Will get you the wrong conclusion every time!

Oil to $20 (2016)
Gold to $2,000 (2011)
Oil to $200 (2008)

When will we learn? The 95% probably never! So, just make sure you’re in the 5%. Better still, be in the 1% (then 99% will hate you!)

#137 Aggregator on 04.22.16 at 6:20 pm

Toronto Condo Builder Urbancorp Files for Debt Restructuring

Urbancorp, one of Canada’s largest residential developers, has filed for a restructuring that includes selling off assets as the company seeks to dig itself out of debt.

The company has filed for the restructuring under the Bankruptcy and Insolvency Act and is seeking court approval to sell assets "to maximize real estate values for the benefit of creditors and other stakeholders," the Toronto-based firm said in statement Friday.

You've been warned many times about the shadowy presale market. It's subprime on steroids I tell you. Beware.

#138 espressobob on 04.22.16 at 6:30 pm

The majority of professional fund managers underperform. Where does that leave a DIY investor picking high beta stocks over a period of time?

If you can’t beat the index (benchmark) then why not own it?

Good luck. Enjoy.

#139 family beagle on 04.22.16 at 8:46 pm

#101 Renter’s Revenge! on 04.22.16 at 8:55 am

Sad owner’s expectations don’t align with decreasing reality. Alas. Hopefully a mass delusion comes around for him again.

#140 Tony on 04.22.16 at 9:18 pm

Re: #9 We’re all millionaires in yvr :s on 04.21.16 at 7:03 pm

Maybe one of AMD’s competitors whose first quarter earnings come out around the start of May. You have to guess which one.

#141 Foxy on 04.23.16 at 7:30 am

Just wanted to mention that last year I had a high savings account and gain a 41 $ on it for 3 months. When I did my taxes this year and I added this amount to my income the amount to pay raised with 90 $. So I lost 49 $ by investing 5000 $ in a high interest account how sick is that. Talking about encouraging people to save. Another issue people are not aware is that the conservators were giving people a 2000$ credit toward childcare and now the liberals took that away and raised the Child Care Benefit. With one hand they are giving and with two they are taking. I am sure more “surprises are on the way”. Good luck saving in this country.