Dog mail

BARKS modified

Trump. The Fed. China. Hillary. ISIS. Poloz. Brexit. Screw it – let’s talk about you.

I’m an avid reader of your blog!  I wanted to get your opinion on the viability of the federal government pension plan for federal employees…specifically, do you think that it will still be solvent for someone who won’t start drawing on it for another 20 years and might draw on it for 20-30 years after that?

My wife and I are both senior federal civil servants ($275K combined income, I’m 38 with 15 years in, she’s 42 with 13 years in, and we have three young kids, none in school yet).  We aren’t currently saving anything due to child care costs ($4K a month) but I keep telling myself that’s ok due to our federal government pensions (which together we pay in to around $24K a year for the employee contribution portions).  So is this a foolish move, putting all of our eggs in to this single pension basket at our age?  I figure if the federal government can’t pay its pensioners down the road then economic collapse across the board might be the reality anyway, in which case any other investments I make might be hooped anyway.

We also own a $1M dollar home in Ottawa (overlooking the Rideau Canal near downtown) and owe around $400K on it…I’m also hoping/assuming that due to the location that in a housing downturn it will have minimal reduction in value…also, in general, Ottawa hasn’t had any major price corrections since WW2. So am I an idiot or not so bad? Thanks, Colin.

Idiot, actually. Yes, the federal government pension plan is strong, well-funded and backstopped by all the other jealous taxpayers who don’t have one. But that’s today. Forty or fifty years from now there could be a radically different economic and financial environment. The odds of a pension plan collapse are probably zero. The odds of seeing benefits reduced are not.

In a low-growth, low-inflation, low-yield world where some bond yields have gone negative, with life expectancy shooting higher, pension plans are destined to struggle. Especially one as rich as Ottawa’s.

You two earn almost $300,000, live in a million-dollar house, have saved nothing and are gambling your entire future on political whims. Now you’re asking a pathetic blog if you’re okay? Please tell me you’re not a deputy minister.

Hi Garth, I had a question which you could use for your blog if you see fit as long as you use a pseudonym. Like Rufus. I’m 40 with a house in the 416 that I bought 8 years ago as a rental property. My wife and I live in the top floor, and we rent out the main and basement. It’s worked out very well, and we now have about $300k in diversified, liquid investments with $200k combined. House is about $900k with $350k remaining on the mortgage.

But now we have three rugrats and a dog and need more space. I proposed selling and renting, but the spousal acceptance factor is low. So the options are move (with $100k of transaction costs) or renovate and take over the whole house (with $100k of renovation costs).

I could liquidate TFSAs to do this, or take out some combination of home equity loan and HELOC. My questions are, how stupid is it to plow more money into residential real estate, and if I accept this stupidity, how should I finance it? If I use TFSA money to do the reno, can I top them back up on Jan 1 of next year using HELOC money and write off the interest?

Rufus? Seriously? This is a simple one. If you’re happy there, stay there. Obviously you and your wife find it a romantic, productive spot. Besides, the dog has friends in the hood. So why not just take over the main, remodel the upper and keep the moldy person in the basement?

Financially, if you’re remodelling the entire house to retain an income-producing component, there’s an argument for saying the loan interest can be deductible from your hefty income. In that case, borrow the money instead of draining out those valuable TFSAs. With more than $500,000 in equity, you can easily draw on a secured LOC at prime plus a half point – 3.2% – and then write off half the interest, taking it down to just 1.6%. Damn near free money.

I’m a lowly software developer and have no economics background so perhaps factor that into this equation, which kinda goes like this:  why are interest rates near zero and stagnant?  Why the need to go so low for so long, and the mere discussion of raising them is causing so much fear.  When I succumbed to the house lust myself in 1999/2000 rates were just over 8%.  My old man instilled the fear of God in me about tales of the ’80’s and double digit rates, so I had my bank give me a chart showing the prime rate since, well, ever.  It showed a few bulges (short-lived) and a few dips and averaged out to about 7%.

Can you explain for us wide-eyed, panting, pathetic bloggers how central banking works, and why rates are what they currently are?  And why, in some European countries they are actually negative?  And, oh yeah, Poloz mentioned a potential plan for negative rates himself. Dana in Alberta

The worst economic crapstorm since the 1930s took place in 2008-9 when the US economy and financial system imploded, triggering a global credit crisis. The fix was a coordinated effort by central banks to flood the system with liquidity, bail out shocked industries, crash borrowing costs and hope like hell cheap money would stimulate demand, encourage consumer spending and business investment – leading to job creation.

It worked. We narrowly avoided deflation, and worse. But this has been the slowest recovery in economic history and central bankers have been terrified of normalizing rates for fear of dampening demand and starting the show again. The downside is cheap money has created asset bubbles, like YVR real estate, since people have no discipline. Meanwhile trillions in worried money has flowed into government debt, pushing prices up and yields down. The whole Brexit thing is now exaggerating it, as you can see with negative German bond yields.

However, we’re near an end. Rates will stay low by historic standards, but they’ll continue to creep up in the US, and eventually here. Far more worrisome is the epic overhang of debt that’s been created. We have just raised a generation of people who fear it not. What a surprise lies ahead for them.

BAD 1 modified

As a 30 year old living in Toronto with just my income, I probably already could afford a townhouse out in Oshawa or a condo in the city downpayment wise, and it would stretch my monthly budget to cover mortgage and costs but would be doable. Yet,  I am paralyzed with fear against jumping in at the wrong time due to the many reasons you point out. And its not that I am crazy about houses as an investment. I just want to live on my own. Ive had enough of roommates who leave puddles of water in the bathroom, throw out my orange juice because they want fridge space etc. But it allows me to pay rent and save money.  Renting my own place within a reasonable commute time, saving would be tough. And while i can stomach the thought of paying a higher portion of my monthly budget to build my own assets, stretching my budget to pay rent and not be able to save or build net worth, I cannot.  So i think i can stand roommates for a while longer.  Thoughts? Jen.

There’s a big space between rooming with ignorant, puddly people who throw out your food, and jumping into home ownership with a mortgage. Just rent a place on your own. Way cheaper than owning, with lots of flexibility, no condo fees or property tax, no closing costs, no debt. Sounds like you can’t afford to buy, anyway. But you can probably afford your own fridge. Start there.

My wife and I are late 20s. Our household income ranges from 70-90k, with very secure jobs now, both with defined benefit pensions. We bought a house nearly 4 years ago for $259k with 5% down and 25yr amort. When I renew at the 5 yr mark, I’d like to amortize at 18 years rather than 20. We’re about 90 mins southwest of the GTA. When the bubble bursts like I expect it will, do you think we’ll be up shit creek or will it be less of a hit out here in the boonies? I never thought about getting out of the market until I began reading your stuff. I follow what’s going on in the marketplace mostly as a hobby but I’m no finance major.

We’ve discussed upgrading to a place with an in-law suite to consolidate with my folks, who are definitely lower income. But it would help both us and them long term, I would think. Any thoughts on this situation? Thank you. Ryan.

There’s a two-region bubble in Canada – the Lower Mainland in BC and the Golden Horseshoe – but beyond that, it’s mostly crickets. Halifax, Montreal, Edmonton, Ottawa, Calgary, Winnipeg are all stagnant, despite insanely-low mortgage rates. Ditto for most rural areas, small cities and towns, which means if the GTA blows up, you’ll be largely (but not entirely) immune. If you like it there, relax. If you’re looking to sell and take in the parentals, then best go to market now. The issue in rural Ontario is not whether prices move much, it’s finding a buyer. Your enemy is illiquidity.

As for shortening the amortization, you’d be better to take your extra money and invest it for growth. That way you use the bank’s cheap money, achieve more diversification and have a larger lump sum to put against the mortgage when it renews. A one-asset strategy makes even less sense in Hicksville than it does in the Smoke.

Hey Garth, thanks for the ongoing financial education.

We live in a small community north of Vancouver seeing unprecedented housing price increases in the last year, and although we were highly leveraged (10% down), we decided to buy a new townhouse last year when rent prices leaped above mortgage costs.  We will take possession next month and the value is up 200k.  If we sell, we will still need to find a rental that will likely cost as much as servicing our mortgage, including strata fees. I departed from your advice on housing when I saw the local conditions forming, but unsure what to do now.  We have a moderate household income of 90k/year, growing small business investment, no real liquid assets, but no real debt. Kids, dog.  Thanks, Tyson.

So you’ve made $200,000, tax free, for doing nothing. And this is equal to three years of working, right? And you’re wondering if you should take this once-in-a-lifetime windfall, or move in and shoulder a mortgage equal to rent. Are you nuts?

Take the money, put half in your TFSAs, and don’t look back. In two decades of sitting in a balanced portfolio it will turn into about eight hundred grand, and form the nucleus of your future financial security. Or, you could have a 20-year-old townhouse. Duh.

Emotions modified

We currently live in a two-bedroom apartment in Toronto, paying about $1,700/month.

Recently, my beau started his research and raised the idea of moving to a house in Hamilton, Ontario. From his perspective, based on the size/price of house that we would aim to purchase (around $200,000), the carrying costs for a mortgage on a fixer-upper in the Hammer would be around $1,000/month at current interest rates.

We are both employed full-time, one of us with a defined benefit pension and the other with employer-matched RRSP contributions. Our combined gross annual income is about $115,000. Total savings/RRSP are around $50,000. Debt is minimal (one very small monthly car payment).

He believes that we can buy a place that needs a little work, renovate it and possibly rent out apartments in the house to tenants to help cover the mortgage payments. Beyond the fact that the areas we could afford wouldn’t really be attracting Hamilton’s finest, I am hesitant on what purchasing a house now, just as interest rates are set to rise, will do to our bottom line. There seems to be a general belief amongst many friends, colleagues, etc. that Hamilton is on the up-and-up and that investing in property there will yield profits down the road.

I can also see how, from his perspective, $1,000/month in mortgage payment is FAR LESS than what we pay for our place in the Big Smoke. I need some advice on how to break down the true risks of housing as an investment in a way that dries up the HGTV-related moistness and allows for thoughtful, balanced and pragmatic discussions about our future housing. Any ideas on how to engage in this conversation without coming off as an asshole? Thanks for all you do! Susan.

What a plan… move from safe rented digs in metrosexual hipster-haven T.O. into a broken, beater house in a dodgy part of Steel City where you can rent rooms to losers who’ll share your bathroom and sleep a few feet from you. What could possibly go wrong?

Besides possible death and dismemberment, remind your squeeze that with a total net worth of $50,000 you two can’t really afford a nice garden shed from Rona, let along spending $200,000 on a house that will end up eating money. Oh, and have you ever tried commuting from Hamilton to Toronto? Being killed by a vagrant in your shower is slightly preferable.

170 comments ↓

#1 Mr. Nirp on 06.15.16 at 6:26 pm

USA might even go negative interest rates soon.

http://business.financialpost.com/midas-letter/how-negative-u-s-rates-would-boost-the-tsx-venture

Not gonna happen. — Garth

#2 WallOfWorry on 06.15.16 at 6:41 pm

Isn’t doesn’t seem that long ago that you posted mocking all of the “doomers” unabashedly proclaiming how interest rates would go up twice this year with increases on a steady pace in 2017? It is starting to look like the Fed did in fact embrace a one and done approach? The odds for one hike this year are now below 50%? While you singularily focus on jobs what you are missing is the decline in corporate profits, the fact that the jobs are in the service industry and part-time jobs are counted twice (a person looking for full-time work but can only find two or more part-time jobs). Although your last two posts seem to finally be acknowledging that not all is right in the economy and a nation that is experiencing GDP growth at < 1% simply cannot afford to raise interest rates in a material way as they can't afford to service their own government debt.

#3 Hoping for increase on 06.15.16 at 6:42 pm

I was really hoping the feds would increase the rate today. Is this ever going to happen in this lifetime ???

#4 Jimmy on 06.15.16 at 6:47 pm

Golly Garth!
That has to be your longest in a long long time.

#5 Suede on 06.15.16 at 6:48 pm

Few notes of note today…

FOMO in full effect in YVR housing.

I’m going to go out to this famous Long Branch in July to see what those bungs and streets are all about.

No rate hike today, USD beat down after Old Yellen’s announcement.

#6 Stocks with negative return? on 06.15.16 at 6:48 pm

Warren Buffett’s favorite investment tool says stocks will have a negative return over the next decade

http://www.businessinsider.com/warren-buffetts-favorite-investment-tool-says-stocks-will-have-a-negative-return-over-the-next-decade-2016-6

#7 Big English on 06.15.16 at 6:55 pm

Garth, you are on fire today! Keep it up.

#8 mortgage broker ontario on 06.15.16 at 6:55 pm

have a client who bought in that cheap part of hamilton, buy her place she is selling… says she can’t handle the neighbours kids yelling at all times of day and night. the cheap part of hamilton is brutal.

#9 Caught on 06.15.16 at 6:58 pm

Garth I was wondering if you could talk a bit about borrowing to invest in the stock market and the tax benefits / implications (i.e. break down the interest deduction and yield math). Assuming one has no mortgage and is otherwise debt free. Thanks.

#10 Cottingham a bargain on 06.15.16 at 6:59 pm

Holy S$&t that last piece of advice you gave Susan was funny Garth. Rip her a new one , why not ..lol.

Anyway, I continue to hold my properties in “Richman ” Hill and encourage others to do the same .

If you have the price of entry to buy along Yonge corridor( west side preferable south of major Mack) then do so without hesitation

#11 Mr. Nirp on 06.15.16 at 7:00 pm

Woah! I am first! Unbelieavable!

I am sure Japanese, and European didn’t think it was going to happen either. NIRP is here to stay.

#12 A Yank in BC on 06.15.16 at 7:02 pm

My Father’s generation enjoyed their retirement years with 30yr treasuries paying as high as 15%. (Admittedly, inflation was a good deal higher then.) Now, 8 years into my retirement, I wonder if I’ll ever see 4%. Currently 2.40%

#13 conan on 06.15.16 at 7:09 pm

I am leaning towards the NIRP as well. Bonds will do well over the next year or two as we settle into the new reality.

I predict that will see the introduction of Innovation Funds. Made up of new companies that survived their embryonic stage. There will still be failure, but they should crank out more return then bonds will. Pensions will buy them out of necessity.

#14 ROCK BEATS PAPER on 06.15.16 at 7:10 pm

Not gonna happen. — Garth

Odds of a rate hike this year less than 50%. Odds of a rate cut are rising now!

Negative real rates = rock licking!

#15 common sense on 06.15.16 at 7:13 pm

Well, well….one and done I guess?

#16 Shellaq on 06.15.16 at 7:13 pm

Canada’s Best Places to Live 2016

http://www.moneysense.ca/canadas-best-places-to-live-2016-full-ranking/

#17 NorthOf49 on 06.15.16 at 7:16 pm

“What a plan… move from safe rented digs in metrosexual hipster-haven T.O. into a broken, beater house in a dodgy part of Steel City where you can rent rooms to losers who’ll share your bathroom and sleep a few feet from you. What could possibly go wrong?

Besides possible death and dismemberment, remind your squeeze that with a total net worth of $50,000 you two can’t really afford a nice garden shed from Rona, let along spending $200,000 on a house that will end up eating money. Oh, and have you ever tried commuting from Hamilton to Toronto? Being killed by a vagrant in your shower is slightly preferable. ”
———————————————-

Awesome response Garth….comical and accurate!!

Susan, don’t do it! Tell hubby to “research” some more. Being from Hamilton and renting in Ancaster, I completely agree with Garth’s assessment. Cheap housing in Hamilton (if there is any!) is cheap for a reason, the neighbourhood will have its challenges, lots of unemployment, many halfway houses, auto thefts, break-ins, etc. Livable Hamilton housing stock is in short supply and is seriously overvalued currently so good luck finding something decent for a good price. Take a look at the high loan-to-ration graph in yesterday’s blog post. Notice Hamilton? People have been going nuts over-borrowing to buy Hamilton real-estate and that’s been driving prices up and supply low. Fundamentally, there’s been no recent boom to Hamilton’s economy so I expect prices to revert to the mean when the low interest rate punchbowl is removed from the party. My advice, park your money, save some more and watch the RAHB monthly sales figures. When you see the average prices in the neighbourhood you want to live in start to drop, you’ll know you’re on the right path.

#18 Grey Dog on 06.15.16 at 7:30 pm

Oh, to be young again, when one believes nothing bad ever happens to you, illness…long term illness, best jobs, most secure employment in the world NEVER has had layoffs b u t t h e n l i f e has a fork in the road for you!

Spoke to my new neighbour today, wealth is money and more money she said. “No, I don’t agree, wealth is having your health and PEACE in your heart. You are living in Canada now, look around you here, the freedom, that is wealth.” We are standing in our Unionville back yards, we’ve lived here over 30 years and yet to build a fence to keep out the neighbours on either side, we back onto a ravine. There was some translating going on so maybe something has been lost?!

Live within your means. Read Garth, put his wisdom to work in your lives. I enjoy the ‘Dear Garth’ days. Renos and lines of credit can ruin you. (Mind you I’m just NOT ready to sell my home to fit into your rule of 90, mind you, no debt, and a few income streams happening come retirement, and if that happens tomorrow, that will not be a bad thing either.)

#19 dosouth on 06.15.16 at 7:31 pm

CBC pushing the REmax study on cottage renter’s in BC as a great opportunity today . Secondly On the Coast program encouraging your kids to move back home as your parent’s miss you. So being 50k in debt for that degree of nothing will allow you to understand the value of family and learning how to budget…ugh

Remax plug and hype:

http://www.cbc.ca/player/play/2690433361

#20 conan on 06.15.16 at 7:33 pm

Anyone else a posting refugee from CBC? You have to use your real name now and it’s only stories about cooking and lame ass shit that you can comment on.

Maybe later they might open things up, but does anyone really want to post up something nasty about ISIS using your real name………nope.

CBC website just went into Huffington Post mode : (

Rant over….

#21 Carla Sangina on 06.15.16 at 7:42 pm

You all know negative interest rates is a sign of a depression coming.

I hope you enjoy being right about something be negative.

Unlike a test for cancer or some other devastating disease, negative is not good in this case.

#22 rick on 06.15.16 at 7:43 pm

30% of all government rates in the world are now negative. You a fool if you think it can’t happen here!

#23 Silent the people on 06.15.16 at 7:49 pm

Government employees and their gold plated pensions should keep their mouth shut! The only way they are going to keep them is if the silent majority don’t know! Make your money as everyone else and you won’t have to worry about it!

#24 Shawn on 06.15.16 at 7:54 pm

Do Not Worship False Idols (False Warren Buffetts)

#6 Stocks with negative return? on 06.15.16 at 6:48 pm said:

Warren Buffett’s favorite investment tool says stocks will have a negative return over the next decade.

**********************************
Ya might want to check with Warren before you believe those who dare to suggest what Warren thinks.

In actuality he recently said on CNBC after his annual meeting something to the effect that if people really believed that interest rates would stay this low then the P/E ratio on stocks would be a LOT higher.

He also noted that his will puts his wife’s inheritance almost entirely into the S&P 500.

Listen only to Warren not to those who pretend to know what he thinks.

#25 Mark M. on 06.15.16 at 7:56 pm

One month ago Garth made fun of the “steerage section” of this blog for continuing to doubt the likelihood of any rate hikes this year. We were told there would be two for sure. The “smart people” on the Fed were certain to hike. What could the “geniuses” on this blog know anyway?

Well, as it turns out, what we’ve known all along. The “recovery” is a sham, built on free money. The US economy is rapidly decelerating, thus rate hikes are out. Yes, we did get December wrong, Yellen saved face by raising rates once. Garth had multiple hikes forecast by now, the “steerage section” deserves credit for seeing past the hype and realizing the Fed has done nothing but make the problems that caused the 2008 crisis worse.

So let’s look forward. Garth says the Fed’s next moves are hikes, the “steerage section” knows cuts are the Fed’s next move.

Garth says 2008 will never happen again. The “steerage section” knows the next crisis will be worse and is right around the corner.

Garth says negative rates can’t happen here. But never tells us why. Why can it happen in Europe and Asia and not in America? The “steerage section” knows it can happen here, and probably will.

Garth says “gold sucks.” The “steerage section” knows that gold is the only real form of money and that fiat sucks. By the way, gold and mining stocks are killing the balanced portfolio this year, now that the narrative of the US recovery is finally breaking down.

Garth I respect your blog, but you need to give the “steerage section” credit for seeing what you and the “experts” missed.

#26 For those about to flop... on 06.15.16 at 7:59 pm

Brexit /Euro 2016 update.

Well the host nation and our host Garth’s team punched their ticket through to the next round with a game to spare when the defeated Lee’s Albania.

As relating to England and Brexit VREU and her full of gas Russia were pumped by IHCTD9’s freewheeling Slovakia and now if England wins tomorrow everything will be rainbows and butterflies in the land of the deep fried Mars Bars.

In the other game of the day Freedom First’s neutral Switzerland couldn’t put the bite on Toothless Measures blood thirsty Romania and it ended up a draw.

Remember this for Brexit if England lose tomorrow God save the queen…

M41BC

#27 Darren on 06.15.16 at 7:59 pm

A discussion of the 3 most overvalued cities.
Spoiler, Toronterrible did not make the cut.

https://capitalistexploits.at/2016/06/wow-15-june-2016/

#28 Andrew Woburn on 06.15.16 at 8:02 pm

Here’s a little history that might shed some light on real estate values. It’s a picture of the interest rate on 10 year UK treasury bonds since 1729.

https://gallery.mailchimp.com/451473e81730c5a3ae680c489/images/7b48db94-fa04-4f1c-b0ab-ccb0fa726a1d.jpg

You will notice that they open up at around 3.5-4%, and apart from a little nastiness with the French Revolution and Napoleon, that’s about where they stay until a bit of a hiccup in World War One. Even Hitler doesn’t rock the boat much.

Then in around 1950 rates start going nuts until they peak out at 16% in 1985 followed by a long slow descent until now. Gold bugs should note that this rate climb started long before Nixon closed the gold window in 1973. You could say rates since 1985 were reverting to the mean until the central banks got involved to drive them even lower.

One oversimple theory for the astonishing peak in rates is that the up slope was a period of high wage inflation. Economists say you can’t have real inflation unless you have wage inflation and, in that pre-automation period, labour was in high demand and unions were prevalent. There was constant wage pressure driven by a boom in world demand for everything after the shortages of WWII.

The down slope coincides with the reorganization of business around computers and the slow decline in the value of labour.

So if Grandpa bought a house for $10K in 1955 with an $8K mortgage, by 1985 he probably had a mortgage free property worth say $80K and felt like a financial genius. He probably hadn’t really even kept up with inflation especially since potential buyers now had to carry a mortgage at 14-16% and couldn’t bid up prices very much. Still he won bigtime in nominal dollars and probably told his boomer kiddies that houses only go up.

Then came the 30-year down slope as boomer kiddies coasted into lower and lower mortgage rates and new buyers could carry higher and higher house prices. Now everybody is a real estate genius and millennials know how to be just as clever as their parents.

Will rates keep going down forever or will they revert to the mean as they seem to have been trying to do for decades? Place your bets.

#29 For those about to flop... on 06.15.16 at 8:05 pm

Sorry,Garth’s team is the host France.

Also LP ,I see you changed your GAP code.

Happy belated birthday…

M41BC

#30 Ret on 06.15.16 at 8:09 pm

Did not JT reverse some of the cut backs to federal benefit plans that Harper had started to initiate?

Nothing like buying votes with thousands of civil servants with taxpayer money. They know where their bread is buttered.

The link:
https://www.liberal.ca/open-letter-to-canadas-public-servants/

#31 Brian on 06.15.16 at 8:16 pm

Sat on a townhouse in port moody for a decade and it went up 30K. Sold it last year. And of course it shoots up 100K after I sold it. CAN NOT WIN. I absolutely loathe this housing market, whats the point anymore?

I go to work, pay the bills, everyone around we with houses continue to laugh. Is this the beginning of a new societal segregation? Owners vs non owners?

We are in uncharted waters here folks, Garths conventional advice may no longer apply.

#32 Entrepreneur on 06.15.16 at 8:16 pm

Problems: Do what is affordable, inexpensive, and within reach.

As for what will happen in 10 or 20 years from now, who really knows.

We use to live for the day, save a little, enjoyed life but now everything cost so much!

As for the man-made lake in Florida with the alligators in it: Since it is in the kiddie side of attraction I would suggest to build a fence, a high one. BTW, alligators etc. are alerted by the splash in the water, it is called prey/food for them. A “no swimming sign” is not good enough.

#33 jess on 06.15.16 at 8:17 pm

“secular stagnation”
Updated 2 hours ago
Yellen Says Forces Holding Down Interest Rates Are Here to Stay

http://www.bloomberg.com/news/articles/2016-06-15/yellen-seems-to-sign-on-to-summers-view-of-lingering-low-rates

#34 LP on 06.15.16 at 8:27 pm

#29 For those about to flop… on 06.15.16 at 8:05 pm
******************

Thanks Flopper! Think good thoughts please..the day after my b-day I got a cancer diagnosis.

#35 Mark on 06.15.16 at 8:27 pm

Civil Servants’ pension and pay are a lot more correlated to interest rates than people believe. What happens if we see 3-5% rates a decade from now? There’s gonna be an awful lot of pressure to cut compensation down to size, and senior civil servants, often highly paid merely because they’re “senior”, are convenient targets.

At some point, the country is going to need to rationalize the compensation gap between public “servants” and everyone else. And barring a major revival of the Canadian economy, or massive foreign investment inflows, it seems likely that it will probably be huge reductions in public sector compensation. After all, most public sector positions, when advertised, receive hundreds, sometimes thousands of applications. Any reasonable labour market economist would tell you that this is a prime recipe for slash and burning compensation.

#36 John DiAngelis on 06.15.16 at 8:35 pm

To Yank in BC

We live in a global economy and what my uncle and aunt did in the 6 years of their current retirement is they bought 80% of all our money in U.S. bonds and strips in the 4.25% to 4.5% in 2010 and 2011 with 2040 to 2041 maturities. This brings in total $100,000 a year split 50% each.

They have a $38,000 a year financial cushion a year from this in annual savings. They don’t have any debt and one modest $255,000 house.

The other 20% is in foreign bonds in 20 different countries ranging from 5% to 12% net annual yields.

This is bringing in $42,000 year but in different currencies that vary year to year but they just keep reinvesting at higher rates in these various countries.

Even so rates have fallen in these countries they are still in quite good. Any new money that they don’t need they just reinvest it and negative rates in Europe and lower rates in U.S. is a non worry for them.

#37 charles on 06.15.16 at 8:39 pm

In another alleged lone wolf attack a child fell victim to what major news organizations referred to as an accident.
The perpetrator known to his circle as Ali Gator struck at nightfall which during Ramadan is what is called chow time. Rumors of other members of the Gator sect were reported active in the area. According to authorities the suspect was investigated previously but allowed to continue to secretly associate with like minded Ali Gators.
More news at 11.

What too soon?

#38 Aggregator on 06.15.16 at 8:40 pm

POLOZ: INTEREST RATES GOING TO BE LOWER FOR A VERY LONG TIME

Here comes $2 million average home prices for Van. This thing ain't ending anytime soon.

Poloz did not say that. If you mean ‘Yellen’, she didn’t, either. — Garth

#39 Smudgekin on 06.15.16 at 8:42 pm

Software developer I think that’s on the Globe’s list today for automation job loss.

#40 Smudgekin on 06.15.16 at 8:48 pm

Worth a look if you’re going for big debt.

http://www.theglobeandmail.com/report-on-business/economy/jobs/what-risk-does-automation-pose-to-your-job/article30434394/?service=mobile

#41 For those about to flop... on 06.15.16 at 8:50 pm

#34 LP on 06.15.16 at 8:27 pm
#29 For those about to flop… on 06.15.16 at 8:05 pm
******************

Thanks Flopper! Think good thoughts please..the day after my b-day I got a cancer diagnosis.

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

Linda ,that has to be the worst birthday present ever.

You know I’m not religious but I am sending you nothing but my best wishes and positive energy.

Be brave Linda….you got this…

M41BC

#42 Adam on 06.15.16 at 9:06 pm

#39 Software developer I think that’s on the Globe’s list today for automation job loss.

———

Actually, it’s everybody else’s jobs that software dev’s are automating, not their own.

#43 S.Bby on 06.15.16 at 9:16 pm

These FED folks are the most chicken shit people around. Things are going pretty good for some time now so they get ready to raise, then a bit of negative but not really bad news and they stall yet again. Are they waiting for hell to freeze over? There will never be a perfect time to start raising so they should set a schedule and publish it and then stick to it so everyone knows what to expect. This constant delaying and dithering makes them look like fools and it does not instill any confidence that they have any clue what to do or when to do it.

#44 conan on 06.15.16 at 9:17 pm

RE: #37 charles on 06.15.16 at 8:39 pm
Yep, too early. The signage was terrible. There should have been an alligator avatar on them.

Instead the signs read “Steep drop- off. Deep water. No swimming.

Big huge law suit…… crocodilian in nature. If I was an awesome lawyer and Disney approached me to help them in this case, I would refuse.

#45 droitwich on 06.15.16 at 9:20 pm

Long-time reader, first-time poster. I’ve resisted the urge to buy property here in K/W for the last several years, waiting for the frenzy to die down. I’ve been renting a lovely home for a very reasonable price (price/rent ratio of 21), and the landlords own the place next door as well. Young couple live there, newborn, another on the way.

Just yesterday I was informed that they want to buy the house out from under me. I’ve been in here 3 months. They are ‘scared to get priced out of the market’ and want a larger home. The landlords turned them down to avoid bad karma.

The house horny are closing in, and now I understand what it means to have no security as a renter. Whether that’s worth paying through the nose is another matter…

#46 John in Mtl on 06.15.16 at 9:21 pm

#40 Smudgekin on 06.15.16 at 8:48 pm

Worth a look if you’re going for big debt.

http://www.theglobeandmail.com/report-on-business/economy/jobs/what-risk-does-automation-pose-to-your-job/article30434394/?service=mobile

Biggest BS list I ever saw!! some jobs, its obvious but others like elevator mechanic, farm worker, heavy duty machinery mechanic, hotel front desk clerk, janitors, plasterers, etc. haha, unlikely IMHO.

#47 Bond Junkie on 06.15.16 at 9:24 pm

Let’s just call a spade a spade here folks. 2s 5s is practically inverted, 5s are flat to overnight, June 23s yield 75bps and 10s are flirting with 1%. What is the term structure telling is?

A) Kanada is heading for a recession whether you like t or not, the end.
B) rate cut coming by fall.
C) with 10s at 1% the forward curve in Kanada is effectively pricing in TWO rate hikes for the next 10yrs!

TEN YEARS!!!! These facts that are irrefutable. Check your yield tables in the post tmrw.

BJ

#48 Not from here on 06.15.16 at 9:27 pm

This is all so depressing. Glad I am just visiting.

#49 Andrew Woburn on 06.15.16 at 9:30 pm

The sound of Freedom … is gunshots

In the US there are:

– 14,350 McDonalds

– 64,747 Licensed gun shops

https://gallery.mailchimp.com/451473e81730c5a3ae680c489/images/4432239e-969a-453d-934b-e38bf67d44ad.jpg

#50 Joe2.0 on 06.15.16 at 9:34 pm

U.S. can’t raise rates much for many many years.
To much money/derivatives affiliated which would dramatically compromise the system.

That’s why every time there’s talk of a rate hike the DOW craps the bed.

As long as this cheap money circulates RE prices are going to continue to inflate all over the planet in certain desirable markets.

#51 TurnerNation on 06.15.16 at 9:41 pm

Today’s post serves as a reminder – please remember to spay or neuter your blog dogs.

#52 Smoking Man on 06.15.16 at 9:44 pm

#5 Suede on 06.15.16 at 6:48 pm
Few notes of note today…

FOMO in full effect in YVR housing.

I’m going to go out to this famous Long Branch in July to see what those bungs and streets are all about.

No rate hike today, USD beat down after Old Yellen’s announcement.
…….

Be sure to stop by and say hello.

#53 Joe2.0 on 06.15.16 at 9:45 pm

#45 droitwich
Same scenario played out in my hood.

Much of my neighbourhood (N Van) has been bought up in the past two years by foreigners (9 houses)

The house I’m in and am soon leaving was bought by foreigners who knocked on the door and made an offer my Chinese landlord couldn’t resist.

So now comes the big 6000.00 $ move.

We bought on the Sunshine Coast 3 months ago and our RE agent has buyers willing to pay 55k more then we paid.

It’s ridiculous what’s happening.

#54 Freedom First on 06.15.16 at 9:47 pm

Hey, ever notice the many different ways that so many people make their lives more complicated, more difficult, and way harder, all on their own?

Of course, for decades, I have been perfecting the # of ways in which I can make, and keep, my life not only easier, but way more enjoyable. Freedom. Priceless.

#55 gladiator on 06.15.16 at 10:04 pm

LP: sorry to hear about your diagnosis, but I would encourage you to think positively: there are many types of cancer that are treatable to the point of complete recovery. My thoughts are with you. Stay strong!

In terms of automation: this is exactly what I was tell my coworkers: automation is good but it also means that many people doing routine work will lose their jobs. This is the time to be or get into IT.

#56 WallOfWorry on 06.15.16 at 10:06 pm

“Poloz did not say that. If you mean ‘Yellen’, she didn’t, either. — Garth

What Yellen actually said was that turmoil in global markets and a sluggish US economy will likely keep rates low in the near future.

#57 Smoking Man on 06.15.16 at 10:09 pm

You hunanions are good. Barrington sent me a text.

Your species had finallly found Right Chiral Molecules on space.

#58 ed on 06.15.16 at 10:15 pm

..deputy minister…
Probably of finance…

#59 Bottoms_Up on 06.15.16 at 10:27 pm

Felt only the need to comment on the Hamilton dilemma–don’t do it!! What Garth said. Imagine moving to a dodgey area of Scarborough….or Jane/Finch. Your rental crop is going to be crap…the aim would be uni students or young professionals working at the local hospitals, but these areas do not cost $200k.

If you end up doing the Hamilton thing, for Gods sakes go there and rent first for a year or two. You’ll be back in the big smoke before you know it….

#60 TurnerNation on 06.15.16 at 10:28 pm

Perfect meme for today’s entry:

http://i3.kym-cdn.com/entries/icons/original/000/007/447/hello-yes-this-is-dog.png

#61 I Commute To Niagara Falls on 06.15.16 at 10:30 pm

Oh, and have you ever tried commuting from Hamilton to Toronto? Being killed by a vagrant in your shower is slightly preferable.

I heard that!

P.S. Software Devs are being outsourced to India. Dunno if they’d ever be automated.

#62 Life among the Stars on 06.15.16 at 10:34 pm

#57 Smoking Man on 06.15.16 at 10:09 pm

You hunanions are good. Barrington sent me a text.

Your species had finallly found Right Chiral Molecules on space.


We are supernova star stuff borrowed for a few blips of fun. Awesomeness.

#63 Ret on 06.15.16 at 10:38 pm

“Recently, my beau started his research and raised the idea of moving to a house in Hamilton, Ontario.”

You now have reasonable grounds to:
a) have him committed
b) start divorce proceedings
c) both of the above

There are no good areas in the lower city and that includes the area around McMaster. Lots of downtowners have moved into the student rooms in the area around McMaster and criminality is on the increase.

Lots of rental opportunities for investors but low quality renters who don’t/won’t pay the rent and can cost you thousands in lost rent as they trash the place. It is a stacked deck in their favour.

They know more about the Landlord and Tenant Act than most lawyers.

#64 Smoking Man on 06.15.16 at 10:39 pm

I reported from Camp Slong Branch that Trump is going to get the huge support from the LGBT community. Boy was I right, over night since Orlando they are trading in the Hillary tee shirt for a red Donald Cap.

This community has enormous power to influence.

All because of this man, a gay man, on his North American tour called The Dangerous Faggots tour. Twitter @Nero.

I can honestly say I am no longer a Homo-phobe, and I use to be, and I never thought I would change.

Go figure. Love the Don’t tread on me log on a rainbow flag.

http://www.breitbart.com/milo/2016/06/15/gay-conservative-milo-yiannopoulos-suspended-twitter-ahead-orlando-meetup/

It’s all about Freedom Dogs. Freedom

Milo for Trumps Press Secretary. Bit of a long shot but I may even go to the gay pride parade this year and show my support, only if I sense they are done with the stupid lefty shit.

#65 Fortune Faded on 06.15.16 at 10:39 pm

Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link

#66 TurnerNation on 06.15.16 at 10:40 pm

# 20 conan no but occasionally glancing at other comments sections occasionally I spot ersatz or erstwhile blog dogs, expounding and elucidating on tired canards.

#67 Balmuto on 06.15.16 at 10:41 pm

#47 Bond Junkie

“What is the term structure telling us?”

It’s telling us global bond markets have lost their collective minds. The real bubble, the main event, is the global bond market bubble, underpinned by central banker cowardice. The Canadian RE bubble is just a side-show product of this insanity.

#68 Andrewt on 06.15.16 at 10:42 pm

Just to clear things up:

“Federal Reserve policymakers still expect to raise interest rates twice this year, the same expectation they had in March, despite a recent slowdown in hiring. But they foresee fewer interest rate increases in 2017 and 2018 compared with three months ago. That suggests they are less worried about the economy overheating and pushing inflation higher.

Fed officials now expect they will raise the short-term interest rate they control three times next year, compared with a forecast of four in March. And they will raise rates three more times in 2018, compared with a previous forecast of four. They foresee the short-term rate reaching 2.4 percent by the end of 2018, still quite low by historical standards.”

http://finance.yahoo.com/news/latest-stocks-rise-ahead-fed-rate-decision-comments-090740241–finance.html

#69 For those about to flop... on 06.15.16 at 10:48 pm

Well my Europe fund is down6% for the week.
It was closer to 8 but there was a bit of a rebound today.

I prefer to holiday in Europe than invest in it as at least holidaying I have some fun with my money.

Ladbrokes has Brexit currently at 62%stay and 38 %leave.

Or as Mark would say, a dead heat…

M41BC

#70 cat lover on 06.15.16 at 10:56 pm

Hey Jen, you might not know about housing co-ops in Toronto. This is an affordable way to rent, while living in a community environment that is so much nicer than a typical apartment existence. Though most have waiting lists, the trick is to take a bachelor unit, then get on the internal waiting list for a larger place, which gives you priority over the external waiting list. Flexibility is the key during this process. I live in a wonderful co-op in midtown Toronto, 2 minutes from the subway, super affordable, with amazing neighbours. And yes, I have a balanced portfolio, organized along Garth’s metrics even though my take home pay is quite modest compared to many of my fellow blog dogs. Meow. Effing MEOW!

#71 cat lover on 06.15.16 at 10:58 pm

Jen, forgot to post a link for more info about co-ops in Toronto:

http://www.chfcanada.coop/eng/pages2007/about_3a.asp?prov=on&region=gta1

#72 conan on 06.15.16 at 11:10 pm

RE: #65 Fortune Faded on 06.15.16 at 10:39 pm

I don’t mind Smokin Man……even when he gets deleted it is still entertaining.

Mark has a hazmat writing style. So, looking at your program : )

#73 TurnerNation on 06.15.16 at 11:18 pm

As this is a Boomer’s music blog…the four best opening chords I know of…put first 10 seconds onto a loop if you must.

– AC/DC Back in Black.
– Alice Cooper’s No More Mr. Nice Guy.
– Stevie Ray Vaughan ‘The sky is crying’.
– (Carlos) Santana on: Everybody’s Everything.

#74 TurnerNation on 06.15.16 at 11:26 pm

Addendum: ZZ Top’s Jesus just left Chicago.

(Five posts today? I’m feeling okay.)

#75 Brazil ex-patc on 06.15.16 at 11:26 pm

As usual…the 1% bragging about their taxpayer funded salaries on this blog….

#76 Smoking Man on 06.15.16 at 11:35 pm

#65 Fortune Faded on 06.15.16 at 10:39 pm
Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link
…..

Communist.

#77 SWL1976 on 06.15.16 at 11:46 pm

Just watching a documentary on the Knowledge network titled ‘The Party’s Over: How the West Went Bust’ fitting title really. Nothing new for a guy like me, but may be very educational for many out there.

It’s funny how we live in a time of unlimited information, yet the important speeches or information tends to only reach those who already know about it???

All bets are off come this fall, but for now I am going to watch my no registered account swell while I contemplate what the next move might be by the real crazies who are calling the shots and attempting to cull the herd.

I’m not happy with the way things are going in this world, but at least I am not crazy.

My tinfoil is serving me well

Give a man a gun and he may rob a bank. Give a creepy bloodline control of the banks and they have, will and are robbing the world

The funny money is just a fairy tale… Now its all about total and complete control

#78 Capt. Serious on 06.15.16 at 11:56 pm

I know those houses of which the civil servants speak. I always assumed those houses were owned by old money, doctors, judges, or tech money. Wow, civil servants. The world astounds. And they’re hung up about their first world 1% problems. JC, with that income and mortgage situation you can invest barely taking any risk and still amass enough to have a brilliant retirement.

#79 Mark on 06.16.16 at 12:05 am

“B) rate cut coming by fall.”

Recall that my ‘prediction’ (recorded by this blog for all to scorn) for this year was NIRP in the USA (-50bp), and ZIRP in Canada (0bp). And strong returns to the precious metals sector.

I think I’m actually doing quite well this year on that front. Lol. Even WalTroll doesn’t make fun of me for hyping the metals as much as he did at the beginning of the year.

#80 Balmuto on 06.16.16 at 12:13 am

Aussie bond yields also just hit historic lows, in case anybody’s counting:

http://www.bloomberg.com/news/articles/2016-06-16/aussie-bond-yields-drop-to-record-low-below-2-amid-brexit-fears

Are we getting the picture yet?

#81 Ace Goodheart on 06.16.16 at 12:13 am

STILL do not care what our house is worth. I feel like those stupid doctor commercials.

We bought it, we own it. It is very nice. Likely the next time it will be sold, will be when both of us are dead.

We still don’t consider it either an asset or an investment. I can’t explain it. Thinking of this old pile of bricks as an investment or an asset seems to cheapen it and make it dirty somehow.

We view it as a present, that we bought for ourselves. Not an asset. Thinking of our paid for house as an asset would be like thinking of my wife’s wedding ring as an asset. It would just be wrong.

I understand where you’re coming from with this blog, but man, it is our house. We live there. All our stuff is there. We have no idea what it would sell for and we don’t care.

#82 bdwy sktrn on 06.16.16 at 1:02 am

#76 Smoking Man on 06.15.16 at 11:35 pm
#65 Fortune Faded on 06.15.16 at 10:39 pm
Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download …
…..

Communist.

—————————
souonds like a capitalist to me. he saw a problem, and took it upon himself to invent a product to solve it.

his product gives people choices.

free market thinking right there.

#83 ZZ Top Cat on 06.16.16 at 1:04 am

TurnerNation, I might add that my favourite ever rock seque is from Waitin’ For The Bus into Jesus Just Left Chicago. And one of the best guitar intros ever is on the same album (ZZ Top, Tres Hombres)… La Grange. Outstanding really. Rock on.

#84 WUL on 06.16.16 at 1:06 am

#78 Capt. Serious on 06.15.16 at 11:56 pm

I know those houses of which the civil servants speak. I always assumed those houses were owned by old money, doctors, judges, or tech money. Wow, civil servants.

&&&&&&&&&&&&&

Judges are civil servants. With no-cut, no-trade contracts until the age of 75. And, former union members (Law Societies).

#85 jefferson on 06.16.16 at 1:15 am

thanks Garth lol few times there …haven’t read the comments tonight,… but you’ve been hilarious lately

#86 Sydneysider on 06.16.16 at 1:32 am

The letter from the public servant… not writing because he is worried about Canadian pensioners, but to further line his own pockets. What kind of image of govt does that project?

#87 Damifino on 06.16.16 at 1:36 am

#65 Fortune Faded

Thanks very kindly for the script. I’ve installed it in Firefox and it’s working perfectly for me. This is the filter I’ve been waiting for. Can’t wait to add my own entries.

You are a fine gentleman, and all around boffo guy!

#88 Milk in the Cowtown on 06.16.16 at 1:40 am

RE: Colin…two mid level bureaucrats (plus their bank) own a $1,000,000 home. You should have ended the post right there.

As a similarly aged adult, with wife and kids, is there any industry other than government I should direct them into, or is this the only growth industry forseeable in our country’s bleak future?

#89 Fortune500 on 06.16.16 at 2:03 am

So Colin and family have $600,000 in net worth in their home alone, and gold-plated federal government pensions on a combined salary of $275,000 and they have something to worry about? Really? Where does that leave the other 99.99% of the country?

Sure, some small changes may happen to their pension plan, but let’s be honest, the Federal government is not going to do much to their own, and certainly not much to those who have been in for 15 years. It’s the newbies looking now who may feel a bit of a pinch.

They have a huge amount of safety built in. Truthfully, I would rather be them then a couple with $1,000,000 at their age in a diversified portfolio that lacks inflation protection and tax-payer guarantees.

#90 Metaxa on 06.16.16 at 2:18 am

Almost bed time out here, instead of a bed time story tonight, I’ll share a little prayer I found online .

Dear God
Last month you took my favourite musician, Prince.
Last week you took my favourite sports hero, Muhammad Ali.
This week you took my favourite hockey player, Gordie Howe.

I just want you to know that my favourite political candidate is Donald Trump.

#91 Love My Kia on 06.16.16 at 2:40 am

#70 Cat lover
====================
I wish Garth would cover this topic of ‘co-operative’ housing. I am not familiar with it and the differences between apartment renting and this.

It sounds promising, I would like to learn more.

#92 Love My Kia on 06.16.16 at 2:45 am

#76 Smoking Man on 06.15.16 at 11:35 pm

#65 Fortune Faded on 06.15.16 at 10:39 pm
Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link
…..

Communist.
=========================
Communist? That makes no sense!

People have the right to express their opinions just as much as they have the right to ignore them as well.

Gotta love freedom!

#93 TRT on 06.16.16 at 3:43 am

Like i”ve been saying for 7 years…no interest rate increases in canada.

The gov will let the loonie fall.

Then, the world will inflate its way out as debt keeps rising. The 1% have to stay where they are at.

Thats all you need to know.

The rest of the forecasts all have an agenda.

#94 TRT on 06.16.16 at 3:50 am

And a global recession is a given…..

self fulfilling prophecy now.

Psychology.

#95 BillyBob on 06.16.16 at 4:03 am

#65 Fortune Faded on 06.15.16 at 10:39 pm
Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link

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

Or you could just stick your fingers in your ears and go “Nyah Nyah Nyah Nyah” over and over.

That would be about as mature a response to viewpoints you don’t agree with.

If you were five.

#96 Dumb blind luck... on 06.16.16 at 4:37 am

Hard to believe the 1% vignettes today…some pretty dumb people, financially (dumb blind luck people is the only explanation). Embarrassing to read Garth’s advice…like an adult talking to 2 year olds crying in a grocery store because they can’t have their candy.

Agree with the Bond Junkie, Canada is headed for a recession – I believe it started in February.

I read the GDP and Labour Force surveys dispassionately followed by the press/bank economist analysis and scratch my head wondering if I received a different report. Even Stats Can spins the data, hard to believe.

Will Roger’s had it right:

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

#97 Kalergie on 06.16.16 at 6:44 am

Garth, this was a great post. You should do more of those Q&A type posts. Very relatable and informative.

#98 Fortune Faded on 06.16.16 at 7:16 am

#87 Damifino

Glad I could help.

#82 bdwy sktrn

Amen to that. All about giving people choices. This is a fantastic blog Mr. Turner provides, sometimes I just want to drown out the unnecessary noise.

#99 AfterTheHouseSold on 06.16.16 at 7:18 am

Meanwhile back in Windsor Ontario, Fiat Chrysler receives a government grant of up to $85.8 million. Not to worry, Kathy assures us the grant which is to ” … support production of a plug-in hybrid electric minivan is not corporate welfare.”

http://business.financialpost.com/news/transportation/ontario-to-give-chrysler-85-million-to-safeguard-minivan-plant-in-windsor-sources-say

This on the heels of the GM Canada photo-op in Oshawa to announce the hiring of over 700 engineers to develop self-driving software. The expansion ” … will have little impact on the uncertain future of the company’s manufacturing plant in Oshawa Ont … ”

http://business.financialpost.com/news/transportation/general-motors-of-canada-ltds-rd-expansion-wont-help-secure-manufacturing-jobs-exec-says

So there you have it. The Ontario government has staked its claim on electric and self-driving vehicles.

While sales of trucks, SUVs and minivans have been doing well in Canada, car sales have not. Labour contracts at the Brampton and Oshawa car plants are upcoming. Concessions may grant them a reprieve of another contract, but the direction of the Ontario government is clearly R&D.

#100 Jonathan on 06.16.16 at 7:31 am

#65 Fortune Faded

Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link
—————————————————————

Thanks very much for this! I was thinking the same thing. The blog comments are much more productive and useful when the idiotic crap from Smoking Man is deleted.

I also gloss over any comments that respond to Mark or Smoking Man – there’s an odd cult of sycophantic bootlickers in the comment section, people who are sadly very schooled to look up to pathetic losers like these.

Makes for a much smarter and even useful read!

#101 crowdedelevatorfartz on 06.16.16 at 8:04 am

@#75 Brazil ExPatsy
As usual…the 1% bragging about their taxpayer funded salaries on this blog….
+++++++++++++++++++++++++++++++++++

Jealous? :)

P.S.

I’m likin your new “name”

#102 fancy_pants on 06.16.16 at 8:04 am

to the servant of the govt. business as usual. if it looks suspect when you are 49, flip them the bird and commute/yank your pension and do something you really want to do. you’re richer than you think.

#103 Chaddywack on 06.16.16 at 8:07 am

@20 Conan

Yes, I used to post on cbc, but I found a massive liberal bias with their screener. It seemed anything I wrote critical of Justin Trudeau was banned and for the record I did not swear, threaten, or make idiotic comments. My opinions were right wing yes…..but did not break any of their guidelines. I think cbc must hire student pinks who voted for Trudeau as their screener or something.

Garth may not always agree with my opinions (e.g. my belief that it is mostly mainland chinese driving up the vancouver market, or that we need a foreign ownership ban in Vancouver) but he has never censored me or my opinions to date anyway…….good riddance to the cbc forums.

#104 Jock McJandy on 06.16.16 at 8:18 am

I work internationally and needed a ‘storage locker’ in Richmond BC 11 years ago so the kids could have a university flop and we’d have a pied a terre the rare time we came to Canada. With the most current sales in my complex I see we’ve made $51,000 a year each and every year on average. Conundrum is, we still need a family flop……and some place to store the family photo albums. The strata fee and prop tax combined is less than $300 a month….and I own clear title. A new development two blocks away had people lining up to pay 1.4 million . I’m two blocks from the new downtown development and city hall . I figure in another ten years I’ll be sitting on a flat in the middle of an urban center that could be worth much more. What would you do?

#105 fancy_pants on 06.16.16 at 8:26 am

i’ve said the same thing for 7 years that rates are going nowhere in a hurry. but i locked in a 5 yr last november on the basis that the spread between fixed and variable was less than 1/2% and maybe, just maybe, at some point they will have to curtail the inflation. inflation can be ‘hidden’ for quite some time but for how long? stagflation next on the menu? nah. silly thought really but a small hedge against such possibility.

The reality is that QE, the giant debt eraser, is the go to tool. one day you will realize you just walked out of the grocery store paying $12 for a loaf of bread and a carton of juice. but that’s ok b/c leaving it in the bank will cost you more.

goodnight Irene.

#106 Bytor the Snow Dog on 06.16.16 at 8:33 am

The “recovery” is slow because there are no longer any low skilled high paying manufacturing jobs. Everyone’s getting squeezed.

PS- Change a few details and Colin in the first scenario above could almost be me.

#107 Mike in Toronto on 06.16.16 at 8:39 am

About renting in Ontario…

Something not mentioned here often (if at all) is that if you’re a renter, and your place is built after 1991, thanks to a certain politician responsible for the megacity, 407, subway line cancellations, etc, etc, you have no protections.

Nice rental properties built before 1991 in downtown Toronto are becoming rare.

Without the protections, your landlord can arbitrarily boot you at the end of your lease or do whatever they want to your rent. This power also means they can put arbitrary discriminatory restrictions on you and your lifestyle.

Condos in particular are horrible because the small landlords are prone to random inspections or raising hell over a countertop scratch, a broken faucet, stain in the fridge or other evidence that you’ve lived in their space.

They also have a tendency to flip properties (booting you out), or move relatives or themselves in (booting you out).

So with kids on the way, I’m moving to a larger well maintained older downtown building, but it was not easy to find. We’re clean, honest, hardworking people who don’t want some asshole interfering with our lives.

But this shortage of pre-1991 housing is becoming an issue. Soon people will have to buy just to keep away from powertripping amateur landlords with few legal restrictions on their actions.

#108 Alan Tomlin on 06.16.16 at 8:43 am

Have a daughter (part-time professional) & son-in-law (full-time in private professional practice), both mid-40s with teen-aged daughters in Kits hood of YVR in a beautifully renoed (to architectural standard) & maintained lot on a great street with great location. Place is tiny, but has helper apt in basement. They bought the place & renoed for about $825k 10 years ago (mortg bal ~$450K) for what I thought was an outrageous price at the time. Now I am trying to get them to at least consider selling (may be able to get as much as $2.8M or more right now), and banking the proceeds until the inevitable storm and its aftermath passes over the coming months or so. Daughter is having difficulty “seeing” what a golden opportunity this would be to set up financially for the rest of their life, and that the window could close very soon. I have pointed her to your blog…..what more can I tell her?

#109 Bottoms_Up on 06.16.16 at 9:29 am

#78 Capt. Serious on 06.15.16 at 11:56 pm
———————————–
Most are. But keep in mind this person started with the feds age 23 around 2001, and by the sounds of it likely started fairly high on the salary scale. And all before a fairly large run-up in prices in Ottawa. Timing (and good job) is everything…

#110 Mark on 06.16.16 at 9:36 am

“I have pointed her to your blog…..what more can I tell her?”

Although definitely they’ll be in for a windfall if they sell, there is somewhat of an exaggeration of prices in the media. As much as 30-40% of the alleged prices at this point simply are not available to outsiders.

Now, that doesn’t mean that they won’t do very well. They probably could walk away with $1.2-$1.5M or so (a realistic transaction price + paying the mortgage off), which still would be a giant windfall considering they did nothing other than live in it and a few improvements. But is it enough? There doesn’t seem to be an explosion of listings in Vancouver despite the alleged higher prices (which really aren’t higher on individual properties than 3 years ago) for precisely the reason that many judge it not to be worthwhile.

The “recovery” is slow because there are no longer any low skilled high paying manufacturing jobs. Everyone’s getting squeezed.

“recovery”? For many there never was a ‘recovery’, even out of the mess of the early 2000s. Canada’s tech sector and workers associated with that sector never recovered, that’s for sure.

I figure in another ten years I’ll be sitting on a flat in the middle of an urban center that could be worth much more. What would you do?

I’d re-examine your thought process. Basically, by your numbers (which, like the other poster I responded to, might have a slight element of exaggeration), you were ‘paid’ a professionals’ salary, after-tax, to merely ‘own’ a single piece of real estate in Vancouver. Not only is that unsustainable, that is, the current price, but gains atop of that are even more unsustainable.

#111 Brazil ex-pat on 06.16.16 at 9:40 am

#101 crowdedelevatorfartz on 06.16.16 at 8:04 am
@#75 Brazil ExPatsy
As usual…the 1% bragging about their taxpayer funded salaries on this blog….
+++++++++++++++++++++++++++++++++++

Jealous? :)

P.S.

I’m likin your new “name”

+++++++++++++++++++++++++++++++++++

Why would I be jealous of a group of people who live off the work of others through high taxes, get paid more than any other group of people in Canada and are the most in-efficient workforce anywhere in the world? Do you sacrifice cats on the weekend too?

#112 Bond Junkie on 06.16.16 at 9:43 am

Gotta love it!!

Former Fed Insider Kocherlakota Says He’d Push for Rate Cut

(Bloomberg) — “If I had been at the meeting, I would have argued for cutting rates this time,” says former Federal Reserve Bank of Minneapolis President Narayana Kocherlakota.

Says inflation expectations are low and global risks are “just much more manifest” since the Fed raised rates in December

“I think the way that you’d want to proceed at this point is try to defend your inflation target from below and also take out insurance against those global risks by lowering rates”

“Why should we treat the interest rate increase in December as a given? I just see no reason to do that. And I think, in fact, when you do that, you make it harder to raise rates ever”

#113 tkid on 06.16.16 at 9:48 am

Jen, have you thought about buying your own fridge? Not a giant fridge, but one of those tiny fridges you can find in Walmart for under a hundred bucks. You can tuck the thing in a corner, or under a desk in your room, and anything in there is safe.

I know it sucks to share digs, but you are doing the financially savvy thing by doing so. Keep saving your lolly and one day you’ll be paying cash for your condo!

#114 Neil Armstrong on 06.16.16 at 10:20 am

#100 Jonathan
A few years ago I was inspired by something Smoking Man had said and it changed my entire life outlook. No joking… .Yes, you rightfully criticize the majority of his truly unnecessary posts, but the gems are to be found. scattered here and there.

#99 Afterthehousesold
You will continue to see investment of this type into:
– Solar and wind power generation
– Battery storage
– Electric vehicles
– Autonomous vehicles
The incumbents like Chrysler are light years behind companies whose names you will not recognize and invest in until it’s too late. Toyota had to beg Tesla to electrify their fleet. Soon, Ford has said, they will not even make cars! How can you compete with a $1000 Electric Vehicle that has ZERO fuel costs and ZERO maintenance?
– Neil Armstrong (John Lear)

#115 Neil Armstrong on 06.16.16 at 10:38 am

http://www.ctvnews.ca/business/four-out-of-10-canadian-jobs-to-be-lost-to-technology-report-1.2947847?

We are witnessing DISRUPTION. Most reviewed item on Amazon ever:
https://www.amazon.com/Amazon-Echo-Bluetooth-Speaker-with-WiFi-Alexa/dp/B00X4WHP5E/ref=sr_1_1?ie=UTF8&qid=1466087830&sr=8-1&keywords=echo

#116 ulsterman on 06.16.16 at 11:00 am

Tyson:We live in a small community north of Vancouver seeing unprecedented housing price increases in the last year, and although we were highly leveraged (10% down), we decided to buy a new townhouse last year when rent prices leaped above mortgage costs. We will take possession next month and the value is up 200k. If we sell, we will still need to find a rental that will likely cost as much as servicing our mortgage, including strata fees.

OK Tyson, so you’ve made a good purchase in Squamish, nice timing. Other things to consider before you take Garth’s advice to sell, rent, and invest the proceeds:

1) He may have mistimed the call like he and most bears have for pushing on 10 years.
2) Prices in Squamton may just keep on truckin’ higher for years to come
3) Interest rates may continue to flatline for another decade. No one though they’d get this low or stay this low – NO ONE.
4) There’s the risk you’ll put your 200k in a 0% account inside your TFSA/RRSP “just until you think of the right plan” and that will turn into years of 0% returns. Many, many people do this but don’t want to admit it. You’ll worry you’re about to buy the stock market at the top and do nothing
5) If you now have an affordable mortgage with your new property, move in and relax – stop reading this crap. Enjoy your outdoorsy life in Squamton and start your family, or whatever are your plans.
6) If you rent you’ll inevitably have a wife who hates the inability to make a nest, design to her specs, put down some roots. It may not make financial sense all the time but it is a powerful draw for both women and men.
7) If you rent you’ll be worried about renoviction. It sounds from your story that prices would need to correct about 30-40% just for you to back at even, so you are very well protected from negative equity. The odds of this happening are probably low.
8) Take your new house, move in, life your life, and stop reading this shite.

#117 Neil Armstrong on 06.16.16 at 11:05 am

To be fair, Mark unleashes thought-provoking jewels from time to time, if you are patient enough to sift through. You can’t get it right all the time… But I prefer the old standard Mark that isn’t fazed by his detractors (like WalMark who offers nothing). Gimme some gems once again, Mark.
– John Lear

#118 Caught on 06.16.16 at 11:19 am

What is going on with preferred shares? CPD & ZPR. Why is the market so volatile?

#119 SWL1976 on 06.16.16 at 11:20 am

#117 Neil Armstrong

To be fair, Mark unleashes thought-provoking jewels from time to time, if you are patient enough to sift through. You can’t get it right all the time… But I prefer the old standard Mark that isn’t fazed by his detractors (like WalMark who offers nothing). Gimme some gems once again, Mark.
– John Lear

————————-

I’ll second that
– Scott Longyear

#120 WalMark of Sadkatoon on 06.16.16 at 11:25 am

was talking to a few tech sector buddies over suds about the slow economy. they had no idea what I was talking about lol

https://www.roberthalf.ca/sites/roberthalf.ca/files/rht-pdfs/robert_half_technology_2016_salary_guide.pdf

http://content.randstad.ca/hubfs/STEM_2015/Randstad_STEM_WP_EN.pdf

#121 Brazil ex-pat on 06.16.16 at 11:26 am

#88 Milk in the Cowtown on 06.16.16 at 1:40 am
RE: Colin…two mid level bureaucrats (plus their bank) own a $1,000,000 home. You should have ended the post right there.

As a similarly aged adult, with wife and kids, is there any industry other than government I should direct them into, or is this the only growth industry forseeable in our country’s bleak future?

+++++++++++++++++++++++++++++++++++

You need to ask yourself, if everyone “worked (inefficiently)” for the govt…..where exactly would the tax revenue come from? I see everyone still forgets Canada has a 300 billion dollar Govt Worker pension shortfall right now. There is no money in the bank to pay those pensions. I wonder when that bomb will drop.

#122 WalMark of Sadkatoon on 06.16.16 at 11:27 am

YVR and YYZ home prices are crazy high and climbing faster. I’m getting tired of this movie and want to see the ending

#123 JSS on 06.16.16 at 11:32 am

i need to direct my kids into some profession. something that can get them a job.

is Optometry any good of a profession, or is it a dud?
Do they make any good money?

#124 Bytor the Snow Dog on 06.16.16 at 11:41 am

John Lear sez:

“How can you compete with a $1000 Electric Vehicle that has ZERO fuel costs and ZERO maintenance?”

————————————————————

1) What kinda dreamland are you livin’ in?
2) Apparently good drugs are not hard to find.

#125 IHCTD9 on 06.16.16 at 11:54 am

How can you compete with a $1000 Electric Vehicle that has ZERO fuel costs and ZERO maintenance?
_________________________________

It’ll be easy since cars like that will never exist.

#126 IHCTD9 on 06.16.16 at 11:57 am

#20 conan on 06.15.16 at 7:33 pm
Anyone else a posting refugee from CBC? You have to use your real name now and it’s only stories about cooking and lame ass shit that you can comment on.

Maybe later they might open things up, but does anyone really want to post up something nasty about ISIS using your real name………nope.

CBC website just went into Huffington Post mode : (

Rant over….

__________________________________________

CBC is hardly worth looking at since T2 got in.

Full blown degeneration into ensuring we don’t forget what Trudeau looks like, or how popular he is.

#127 Noel on 06.16.16 at 11:58 am

#31 Brian on 06.15.16 at 8:16 pm
Sat on a townhouse in port moody for a decade and it went up 30K. Sold it last year. And of course it shoots up 100K after I sold it. CAN NOT WIN. I absolutely loathe this housing market, whats the point anymore?

I go to work, pay the bills, everyone around we with houses continue to laugh. Is this the beginning of a new societal segregation? Owners vs non owners?
___________________________

There has always been a huge wealth gap between homeowners and renters, always will be.

What are the chances that your average renting investor plows ALL the money the save by renting into their investments? With a mortgage, if you’re going to be coming up short on a payment, you sacrifice other things to get the mortgage paid, but if you’re renting and are pinched, you’ll take money that you would have otherwise invested and pay the rent, groceries etc..

Forced savings – probably the most important factor in building wealth for the average schlub like me.

#128 crossbordershopper on 06.16.16 at 12:02 pm

garth, shame on you. Hamilton’s north end, right by the 403 exit has a long history of hard working primarily italian and other nationalities coming to Canada in the 50’s and building the country, they all worked at stelco and dofasco. like my father and uncle and cousins. yes technology and off shore producers have taken there bite but as an area goes and people. I believe you are wrong, i drive back to the hood every week for church and yes i see the boarded up shops along barton and see the bumbs and prostitutes. they are there. they have always been there, i remember as a kid in the 70’s and i didnt know what these girls were doing just standing around the street corners, i remember befriending one, i was 12, what did i know about life.
yes, everyone who is anyone will move out of the area, and we all did, and we live in nice neighbourhoods in neighbouring cities, guelph, burlington, ancaster, waterdown. etc. but these are the cornerstone immigrants, they come to a depressed area, buy in to the canadian dream of home ownership, sure its a dumpy house, but you live, and build equity, and hopefully your kids get educated and move out to a nicer neighbourhood. sometimes i wish i was still a kid and remember all the good times i had there.
and economic and social analysis of the north end of hamilton is incorrect and obviously should be studied before you use it as a place you wouldnt want to live in.

#129 Damifino on 06.16.16 at 12:02 pm

#95 BillyBob

Or you could just stick your fingers in your ears and go “Nyah Nyah Nyah Nyah” over and over. That would be about as mature a response to viewpoints you don’t agree with. If you were five.
—————————————

Or… you could use some of that “tech savvy” stuff those millennials are all born with to blank out proven blog hijackers who consistently post inane, off-topic rantings twenty times a day. If you knew what you were doing.

#130 Smoking Man on 06.16.16 at 12:06 pm

#100 Jonathan on 06.16.16 at 7:31 am
#65 Fortune Faded

Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link
—————————————————————

Thanks very much for this! I was thinking the same thing. The blog comments are much more productive and useful when the idiotic crap from Smoking Man is deleted.

I also gloss over any comments that respond to Mark or Smoking Man – there’s an odd cult of sycophantic bootlickers in the comment section, people who are sadly very schooled to look up to pathetic losers like these.

Makes for a much smarter and even useful read!
……………………….
Knock yourself out
Bloody Lefties everywhere….

Enjoy your safe space princess.

#131 Dan on 06.16.16 at 12:11 pm

http://www.richmond-news.com/news/richmond-developer-gives-in-to-lineup-again-1.2279190

“Why not! I have a friend who bought a townhouse (elsewhere), an end unit, and it’s gone up $200,000” in a short period of time, he said.

#132 Shawn on 06.16.16 at 12:13 pm

Attracting Economic Development

Chrysler gets $86 million in government money…

****************************************
In an ideal world governments would never subsidise business and they would locate wherever it was most economic for them to do so.

But we don’t live in that world.

Most economic activity follows simply from higher populations. Give a population freedom, education and the rule of law and economic activity just happens.

But are there some real pump-priming businesses that can be attracted (with subsidies) that grow a local population? Surely retail and services just to the local population don’t qualify. It seems to require attracting something that brings in money from outside whether than be manufacturing goods or providing services. Yet the earth itself exports nothing.

The notion of attracting a business to a particular location is a zero-sum game. Yet it benefits the winning City or area if the price of attraction was not too high.

Better that governments focus on things that grow the entire economic pie of the world rather than just trying to grab a bigger slice of the same pie? Governments might focus on research and development and education and infrastructure? Things the private sector can’t deliver?

In the end, I can’t say if giving Chrysler $86 million is good or bad for Ontario. But it’s clearly bad for the earth’s population as a whole if it causes Chrysler to build cars in a higher cost jurisdiction than it otherwise would.

#133 Rexx Rock on 06.16.16 at 12:17 pm

Thanks to massive qe and nirp the EU hasn’t imploded.The good old USA qe and zirp helped but at what cost.19 trillion in debt and everythings okay.Whats next,can this be the new normal like Japan for 20 years?

#134 bdwy sktrn on 06.16.16 at 12:20 pm

#104 Jock McJandy on 06.16.16 at 8:18 am
I work internationally and needed a ‘storage locker’ in Richmond BC 11 years ago…. What would you do?

——————————–
our friends/neighbours here in east van sold in 2010 or 2011 (divorce) for 700k. (old tired house/decent lot)

the place just sold for 1.9.

expensive divorce.

#135 macroman on 06.16.16 at 12:26 pm

Hmmm, 6.16.16

What evil will the world experience today?

#136 jess on 06.16.16 at 12:27 pm

…”are accused of engaging in a fraudulent scheme over an 18-month period, using “fake” quotes from a broker
to hide the real value of at least 28 securities each month.

They used a personal cellphone or a flash drive that was delivered by courier to pass along the inflated price quotes. Their compensation was based in part on the valuation of these securities. In all, these inflated prices led to a $5.9 million payout of performance fees.

Visium

Wednesday, June 15, 2016
Hedge Fund Portfolio Manager Sanjay Valvani And Former Portfolio Manager Stefan Lumiere Charged In Manhattan Federal Court
Gordon Johnston, a Political Intelligence Consultant, and Christopher Plaford, a Former Hedge Fund Portfolio Manager, Have Each Pled Guilty and Are Cooperating with the Government

https://www.justice.gov/usao-sdny/pr/hedge-fund-portfolio-manager-sanjay-valvani-and-former-portfolio-manager-stefan-lumiere

The Scheme to Mismark Securities
The Scheme to Convert and Use Confidential FDA Information

====
the Company’s so-called “elite team,”

Between 2010 and February 2015, GASTA, SIMMONS, CLARK, and their co-defendants (collectively, the “defendants”) routinely attempted to trick and coerce thousands of victims throughout the United States into paying millions of dollars in consumer debts through a variety of false statements and false threats. The defendants, using a variety of aliases, falsely told victims, among other things, that: (1) the Company was affiliated with local government and law enforcement agencies, including the “county” and the district attorney’s office; (2) the consumers had committed criminal acts, such as “wire fraud” or “check fraud,” and if they did not pay the debt immediately, warrants or other process would be issued, at which point they would be arrested or hauled into court; (3) the victims would have their driver’s licenses suspended if they did not pay their debts immediately; (4) the Company was a law firm or mediation firm and that the Company’s employees were working with lawyers, a law firm, mediators, or arbitrators; and (5) a civil lawsuit would be filed, or was pending, against the victims for failing to pay their debts.

As a further part of the scheme, the defendants lied to victims by falsely inflating the balances of the debts so that they could collect more money from the victims than the victims actually owed, a practice known within the Company as “juicing” balances. “

#137 jess on 06.16.16 at 12:29 pm

net neutrality

http://fair.org/home/comcast-funded-website-plugs-comcast-owned-tv-show-promoting-comcast-backed-trade-pact/

On Tuesday, the Senate approved an expansive military policy bill that would for the first time require young women to register for the draft
http://www.nytimes.com/2016/06/15/us/politics/congress-women-military-draft.html?_r=0

#138 johnnny on 06.16.16 at 12:33 pm

Was I the only one disgusted & sickened by #37?
Poor child gets killed by an alligator and #37 looks to get a few laughs out of it.
Why don’t you go to Nebraska and fill the family in on the joke.Maybe you can put their reaction on youtube so we can have a few more laughs.

#139 Damifino on 06.16.16 at 12:45 pm

#104 Jock McJandy

“What would you do?”
——————————-

Recognize a bubble when you see one, then sell, pay the tax, and invest in a worldwide, diversified, balanced portfolio.

If my own investments are any guide, you could see 6% on average over the next 11 years. Of course its also taxable, but that’s life. Get some into a TFSA.

Create your personal “Richmond accommodation fund” and draw on it whenever you need to spend a few days near YVR during the year. It would also cover the cost of a very small storage locker to keep family albums.

Get liquid, get choices.

Unless of course, you’re not badly skewed on the rule of 90. If you are very wealthy with lots of other invested liquid assets, then keep the place.

#140 Bottoms_Up on 06.16.16 at 12:46 pm

#37 charles on 06.15.16 at 8:39 pm
—————————————–
And in related news, a “zoo” that caters to children of all ages that we shall call “Disney” harbours deadly reptiles throughout the grounds but lacks fencing or any sort of barrier to prevent human interaction with the “wildlife”.

#141 WalMark of Sadkatoon on 06.16.16 at 12:50 pm

This is my favourite quote from Jan 2014:

“new projects are costing 3-5X as much to build as they did a decade ago (largely because energy costs have gone up 3-5X, especially crude oil!). Effectively this should cause the value of existing projects to appreciate. Barrick, for instance, will probably end up spending $10B to get Pascua-Lama in production, to produce a mere 800k ounces/year in gold. Barrick’s production overall is roughly 8M ounces/year. So should Barrick’s enterprise value (equity + debt) not be approaching $100B? Instead of what, ~$25-$30B today? The firm is trading at dramatically less than the replacement cost of its assets. Remember the wise Warren Buffet who said that he wants to buy companies at dimes and nickels on the dollar — that’s what you’re doing when you buy many of the gold miners these days whose assets have not appreciated to reflect the reality of replacement cost appreciation”

2.5 years later and I think we’re at $32B market cap

almost approaching $100B!

lol

#142 WalMark of Sadkatoon on 06.16.16 at 12:51 pm

i do agree, however, that warren buffett is wise. the quote tho, is less so ;)

#143 jzzz on 06.16.16 at 12:54 pm

Problem with people like Garth is that his idea of normal interest rates are colored by the average during his adult lifetime.

What is the catalyst for bringing interest rates back up? So far the main argument for increasing interest rates is boils down to magical mean reversion. Will the birthrate magically mean revert too?

There isn’t enough debt repayment capacity in this world to pay a higher interest rate given the ratio of financial to human/physical capital in the world. The only way interest rates can go up is if some part of the principal on existing financial assets are written down. Unless you foresee a major boom in population growth or a technological breakthrough, where are the cashflows to pay a higher interest rate going to come from?

Today’s rates are an aberration. But, believe what you wish. — Garth

#144 bdwy sktrn on 06.16.16 at 12:57 pm

#110 Mark on 06.16.16 at 9:36 am

As much as 30-40% of the alleged prices at this point simply are not available to outsiders.
—-
and you are the only outsider. anyone with land to sell in the city gets full price+.

—–
Now, that doesn’t mean that they won’t do very well. They probably could walk away with $1.2-$1.5M or so (a realistic transaction price + paying the mortgage off)
—————–
HAHAHA

mark made a funny!

kits! HA! good one mark.

comm dr for 1.9 and kits for 1.8. hilarious. or delusional.

#145 Ponzius Pilatus on 06.16.16 at 1:04 pm

#104 Jock McJandy on 06.16.16 at 8:18 am
I work internationally and needed a ‘storage locker’ in Richmond BC 11 years ago so the kids could have a university flop and we’d have a pied a terre the rare time we came to Canada. With the most current sales in my complex I see we’ve made $51,000 a year each and every year on average. Conundrum is, we still need a family flop……and some place to store the family photo albums. The strata fee and prop tax combined is less than $300 a month….and I own clear title. A new development two blocks away had people lining up to pay 1.4 million . I’m two blocks from the new downtown development and city hall . I figure in another ten years I’ll be sitting on a flat in the middle of an urban center that could be worth much more. What would you do?
—————-
Learn Mandarin.

#146 604sam on 06.16.16 at 1:06 pm

Killed by a vagrant in your shower. Lol

I liked today’s post :)

#147 IHCTD9 on 06.16.16 at 1:44 pm

#84 WUL on 06.16.16 at 1:06 am
#78 Capt. Serious on 06.15.16 at 11:56 pm

I know those houses of which the civil servants speak. I always assumed those houses were owned by old money, doctors, judges, or tech money. Wow, civil servants.

&&&&&&&&&&&&&

Judges are civil servants. With no-cut, no-trade contracts until the age of 75. And, former union members (Law Societies).
________________________________________

Looks like RCMP just had all restrictions currently in place to “restrict collective bargaining” removed.

Now they’ll probably never sit at the bargaining table again, and let every contract go to arbitration, just like the OPP does. Gotta love rapid-fire raises to infinity and beyond.

In 10 years, an OPP officer married to an RCMP officer could move in right beside the Dukes and Barons.

#148 Adam on 06.16.16 at 1:57 pm

“Today’s rates are an aberration. But, believe what you wish. — Garth”

Every change is an aberration until it is the new normal. You can’t cannibalize your working class and the associated consumer demand that goes with them and still have things work out. Inflation is a result of increasing numbers of wealthy workers chasing goods and we seem to be permanently moving in the direction of having less and less wealthy workers.

When a job moves to China to be done by a worker for 1/8th of what the other person was making, that’s a 7/8th reduction in overall consumer demand.

Capitalism really got going under Fordism and its high wages. It won’t get going again until there are well-paid workers to buy things and THAT won’t happen again until the almost infinite cheap labour around the globe has been used up.

Much of the developing world got into the game by selling their goods to the rich developed world. But that developed world is now tapped out at every level except the very wealthy who simply cannot/will not purchase enough to maintain sufficient consumer demand.

So I guess the big question I would want to ask Garth is WHY would interest rates go up? These rates (hopefully) aren’t arbitrary, what changes are coming to the world economy that suggest greater buying power/more profitable investing opportunities in the coming days? I mean, they should be raised just because low interest rates are no longer doing their jobs and the only ones taking this money are doing so to speculate/gamble with. But is there any good news on the horizon that means they should be raised to prevent inflation?

And it’s worth remembering that US politicians used to talk about good jobs. Now they just talk about jobs. I don’t know if a nation of bartenders and fast food clerks can drive the world economy.

Central bankers will ease rates higher at the first opportunity because humans have no discipline, as has been proven by Canadian household debt levels. Excessive borrowing and the spending of unearned dollars leads to the creation of asset bubbles which central bankers understand always become unstable and collapse, leaving a residue of debt capable of creating social chaos. Rates will eventually rise. Count on it.

#149 BREAKING NEWS! on 06.16.16 at 2:05 pm

First Germany goes negative.. Now Swiss bonds go negative.. Now USA one or two and done..

US will go negative. Or maybe its different there?

US rates will rise in 2016. And 2017. And 2018. — Garth

#150 James on 06.16.16 at 2:15 pm

#76 Smoking Man on 06.15.16 at 11:35 pm

#65 Fortune Faded on 06.15.16 at 10:39 pm
Hey blog dogs,
Should you wish to hide the posts of certain users on this forum, I invite you to download my greasemonkey script from the url below. I have defaulted it to hide posts from Mark and Smoking Man, however you can extend it quite easily to include any posters you find annoying or rude. Enjoy!

github link
…..

Communist.
………………………………………………………………..
Spoken like a true Donald Trump supporter. If I don’t like it, agree with it or it is true and I can’t defend it with a good old verbal debate then Fuck it, I’ll just make something up or call them a Communist. Or just fill in the blank ______________
Did someone kick sand in your face at the beach Smoking Man?
Case in point,
After the Sunday shooting in Florida that left 49 dead and 53 wounded, Trump said President Obama either didn’t understand the radical Islamic terrorist threat or “he’s got something else in mind.” The presumptive GOP presidential nominee said the president either doesn’t get it, or he “gets it better than anybody understands.”
“We’re led by a man that either is not tough, not smart, or he’s got something else in mind,” Trump said earlier this week.
“And the something else in mind, you know, people can’t believe it, people cannot believe that President Obama is acting the way he acts and can’t even mention the words ‘radical Islamic terrorism.’ There’s something going on — it’s inconceivable. There’s something going on.”

#151 Smoking Man on 06.16.16 at 2:15 pm

Ha

A 16 year old Black Trump supporter owns a deranged Hillary Supporter. Way to go kid. Bright future ahead for you. Clear mind is all you need.

https://www.youtube.com/watch?v=wAeB_yl2E90

#152 Bob on 06.16.16 at 2:16 pm

The adult conversation which we need to have is how do we plan to orderly write down outstanding debt? Rates cannot normalize, and the debt wraparound has kept going only because of rate suppression. The ability for people in positions of authority to ignore this reality is astounding, and disconcerting. That which cannot go on will not go on.

Own stocks in companies who provide really indispensable goods and services. Forget debt instruments; they have a claim on nothing but a promise to repay, predicated on a government’s ability to tax.

And make sure you can parse the GAAP measurements of these companies; the joke back in my accounting days is it takes 1 year to learn to be an accountant and another 5 to learn to cook the books.

#153 James on 06.16.16 at 2:20 pm

#138 johnnny on 06.16.16 at 12:33 pm

Was I the only one disgusted & sickened by #37?
Poor child gets killed by an alligator and #37 looks to get a few laughs out of it.
Why don’t you go to Nebraska and fill the family in on the joke.Maybe you can put their reaction on youtube so we can have a few more laughs.
…………………………………………………………………..
Nope, that was sick, in poor taste and thoughtless. Our thoughts and prayers should be with that poor family. How many of us parents would want that nightmare in our memories. We have all had close calls with children but this was ghastly.

#154 Dan Duran on 06.16.16 at 2:26 pm

I must say, I am addicted. This page is hilarious. The questions, the answers! Seems like nobody has any idea that we have no idea. Ms. Yellen said as much. Roll the dice!

#155 Blacksheep on 06.16.16 at 2:30 pm

TurnerNation # 73, ZZ Top cat # 83,

1) Steve Ray Vaughn – Texas flood
2) Nazareth – Bad bad boy
3) AC/DC – Shoot to thrill

Good stuff….

#156 Prairieboy43 on 06.16.16 at 2:40 pm

Oil show ⛓⚙⛽️in Calgary last week. Sad sight. Guess about 50% of attendance as two years prior. Noticed many more For Sale signs everywhere.
Had coffee ☕️with one my hunting buds. He purchased acreage outside Edmonton. Did not sell his other home (purchase height in 2007). Cannot rent his home to cover mortgage. I asked him, what about discussion we had last fall. Wifey (pressure), on him to buy. He caved. At least his employer, Dow Chem will not fold next week.
Discipline is hard! You have it or you do not.
PB43

#157 Paul on 06.16.16 at 3:15 pm

#138 johnnny on 06.16.16 at 12:33 pm

Was I the only one disgusted & sickened by #37?
Poor child gets killed by an alligator and #37 looks to get a few laughs out of it
————————————————————-
No you weren’t That guy is an azz whole. of all the post that get deleted that should have been top of the list!

#158 Freedom First on 06.16.16 at 3:27 pm

#139 Damifino

Great Post Damifino!

Freedom First. No exceptions.

#159 Brazil ex-pat on 06.16.16 at 3:29 pm

#147 IHCTD9 on 06.16.16 at 1:44 pm
#84 WUL on 06.16.16 at 1:06 am
#78 Capt. Serious on 06.15.16 at 11:56 pm

I know those houses of which the civil servants speak. I always assumed those houses were owned by old money, doctors, judges, or tech money. Wow, civil servants.

&&&&&&&&&&&&&

Judges are civil servants. With no-cut, no-trade contracts until the age of 75. And, former union members (Law Societies).
________________________________________

Looks like RCMP just had all restrictions currently in place to “restrict collective bargaining” removed.

Now they’ll probably never sit at the bargaining table again, and let every contract go to arbitration, just like the OPP does. Gotta love rapid-fire raises to infinity and beyond.

In 10 years, an OPP officer married to an RCMP officer could move in right beside the Dukes and Barons.

++++++++++++++++++++++++++++++++++

And people wonder why all the “good talent” bringing in technology and innovation are leaving Canada. The only smart people I know moving to Canada are doctors. And they are quasi public sector workers. Doctors do not create any form of wealth. Expect your taxes to go much much higher to live in the great cold north.

#160 There always is a greater fool. on 06.16.16 at 3:39 pm

I currently rent (with a roommate) in the 6ix and have been in the same place for over 3 years. A few weeks ago my landlord informs me she is putting the place up for sale. I knew I did not want to buy, not because of the place, I love it here, but because of the future of what I believe the Toronto condo market to be – dismal.

Long story short I buy a few drinks for a RE agent friend of mine to swing by and give me an honest appraisal. Needing all new appliances in less than 2 years, no work done anywhere in the condo other than a paint job, he states a fair price would be $385k – $400k (he just sold a very similar unit in this very building for $436k which was completely gutted and redone).

My landlord gets a RE who states the sale price at $495k and has a conditional offer within one week. I really thought I would be living here longer based on the fact the starting price point was far to high.

Disappointed yes, but surprised there is a GREATER FOOL out there… not so much.

#161 Aggregator on 06.16.16 at 3:41 pm

U.S. mortgage rates hit lowest in over three years

Interest rates on U.S. 30-year mortgages fell to their lowest in more than three years as benchmark U.S. Treasury yields sagged to their lowest in over four years due to intense demand for low-risk government debt, mortgage finance agency Freddie Mac (FMCC.PK) said on Thursday.

This is not a rising rate environment. Sorry. The punchbowl is bolted to the table and nobody is leaving the party.

#162 Fortune Faded on 06.16.16 at 4:02 pm

Damifino on 06.16.16 at 12:02 pm

Or… you could use some of that “tech savvy” stuff those millennials are all born with to blank out proven blog hijackers who consistently post inane, off-topic rantings twenty times a day. If you knew what you were doing.

——————————————————–

Representing Gen-X here :-)

#163 Blacksheep on 06.16.16 at 4:30 pm

“Today’s rates are an aberration. But, believe what you wish”. — Garth

“bankers will ease rates higher at the first opportunity because humans have no discipline, as has been proven by Canadian household debt levels. Excessive borrowing and the spending of unearned dollars leads to the creation of asset bubbles which central bankers understand always become unstable and collapse, leaving a residue of debt capable of creating social chaos. Rates will eventually rise. Count on it.”
———————————————
My two bits:

Deflation, will be avoided at all costs.

The system could have ‘slowed’, RE, Auto’s, Student loans, LOC’s, or plain consumer debt’s accent at any point via other tools, but chose not.

They simply….chose..not to.

Why? Cause growth plain sucks for lots of reasons.

New debt creation is required to stave off deflation via those shiny new $’s being created / added to the system. Until the Fed exceeds its 2 % GDP target, rates simply don’t need to rise.

Watch as Larry Summers becomes Hillary’s new economic czar. It sounds unbelievable but he’s already written to the C.F.R. about preparing the system to allow negative rates if required, to stave off a potential recession.

That “Inflate or die” axiom seems pretty fitting right about know.

#164 Metaxa on 06.16.16 at 4:32 pm

#123 JSS asks:

,i>

i need to direct my kids into some profession. something that can get them a job.

is Optometry any good of a profession, or is it a dud?
Do they make any good money?

HVAC. even in times of anquish the rich want to be kept warm…or cool.
In my little town all the HVAC guys are busy and are having issues with a workforce that is aging out with few youngsters coming up.

A skilled tradesman in any of the HVAC disciplines can make 6 figures as an employee, if you work, say yes to reasonable OT, etc.

Friend of mine is in year six of his own company, four trucks and a workshop/office/compound. He works on his business not in it now. 10 employees of both full and part time. I know for a fact he is over mid range 6 figures for the past 4 years with zero debt, zero mortgage, zero LOC.

#165 Eddie on 06.16.16 at 4:43 pm

Garth, you are betting big that interest rates will rise. So maybe they will, but maybe they won’t. How do we really know? 1mnth EURIBOR is now at -0,35% and you can get mortgages at 0.9%. Maybe that is the future?

Given Canada’s dependence on real estate, can rates even rise at all? Who is going to make that political suicide?

Most importantly, why bet so big on the fact that they will rise? I mean, I wouldn’t make that bet.

#166 Blacksheep on 06.16.16 at 4:57 pm

Now, not know.

#167 conan on 06.16.16 at 5:57 pm

RE: #123 JSS on 06.16.16 at 11:32 am

I think the topic of what professions are now toast is a good one. I have a few thoughts on that and I am hoping other people can chime in with their two bits of knowledge.

My take:

Optometrists are all freaking out. They have to go through a long schooling period and the rates they get from OHIP are not rich. For decades it was assumed that optometrists would invest in eye glass shops or pad their income with references to eye glass shops.

Well that is all effed now…….. people in great numbers are buying their eye glasses on line from places like Zenni eye ware. I would avoid being an optometrist.

I also have a few friends that are pharmacists. They are not happy either. Seems if there is one high paying position slated to be replaced by a robot … it is them.

Also, any sales that require you to deal with people, the do not call legislation , kills prospecting in a northern climate. People who had a big book of business before the change are unaffected. New people , it is a big ouch, unless you belong to many clubs and are pillar of community material. People like that usually go into politics….. right Garth?

#168 Toronto Dweller on 06.16.16 at 6:22 pm

I currently rent (with a roommate) in the 6ix and have been in the same place for over 3 years. A few weeks ago my landlord informs me she is putting the place up for sale. I knew I did not want to buy, not because of the place, I love it here, but because of the future of what I believe the Toronto condo market to be – dismal.

Long story short I buy a few drinks for a RE agent friend of mine to swing by and give me an honest appraisal. Needing all new appliances in less than 2 years, no work done anywhere in the condo other than a paint job, he states a fair price would be $385k – $400k (he just sold a very similar unit in this very building for $436k which was completely gutted and redone).

My landlord gets a RE who states the sale price at $495k and has a conditional offer within one week. I really thought I would be living here longer based on the fact the starting price point was far to high.

Disappointed yes, but surprised there is a GREATER FOOL out there… not so much.

——————————————————-

Gee, same thing happened to me. My landlord also gave us a notice to vacate within 3 months as she is selling..get this..in the up and coming Rexdale! The one that had 6-8 shooting in the last 2-3 months.
Oh well happily living in Oakville.
This s$%&show won’t end well.

#169 earlybird on 06.16.16 at 6:49 pm

So what will happen when the next crisis hits? No room to lower rates…Deflation? Even if they raise in the US a bit…the next crisis will be the one they cant control…its coming eventually…

#170 ulsterman on 06.16.16 at 11:21 pm

#160 There always is a greater fool & Toronto Dweller
The problem with terms like there is always a greater fool is that it is the renters generally who’ve been the greater fools. Sitting on the sidelines, certain that THIS is the peak. To frightened to buy because for years now they have been convinced that they’ll be buying at the peak. I’m one of them – i should know. But as we all know those foolish buyers have made out like bandits (sorry).

My lowly renter house in Burnaby, BC has doubled, yes doubled, since 2012. In 2012 people told me i should ask the landlord if he would sell to me. Firstly I couldn’t afford the $1.1m price tag, and secondly i was SURE the peak was in. Just like i was in 2007, 08, 09, 10 etc etc. Now the house across the street just sold for $2.3m after being listed for ONE WEEKEND at $1.9m. The owner bought my place in 1999 for $299k just for perspective.

As someone mentioned earlier on this thread, very few renters have the discipline to save the difference between owning and renting diligently and consistently – the forced savings of a mortgage is very good for the majority of people.