The revolt

MOVING TO CANADA

July’s usually a yawner. Not this time.

On the heels of Brexit comes the ascent of Trump, the wounding of Clinton, more hurt from the ISIS nutjobs and, weirdly, Scottish independence. In two weeks American Republicans gather in Cleveland for a convention that could be the most troubling since the 1960s (Google,“The whole world is watching”). A week later Democrats do the same. Then for four months it’ll be a presidential race for the ages. A 68-year-old millionaire establishment career pol ex-first lady with tons of baggage under FBI investigation against a 70-year-old Muslim-baiting, misogynist, anti-immigration billionaire bombastic populist iconoclast.

What’s at stake is the system. Middle-class people everywhere are in a mood. It brought the Oxi vote in Greece last year, and Brexit this year along with the totally unexpected rise of Trump. Everywhere are degrees of disrespect for governments, 1%ers, central banks, elites and trade deals. A new class warfare has broken out based on the fact wealthy people seem to be getting wealthier and middle-class families are getting screwed.

Blame is thrown around loosely, but certainly sticks to politicians, banks and immigrants. Brexit has a lot to do with older voters trying to turn back the clock to simpler days when a working family could live well in a more homogeneous society. They fell for the demagoguery which portrayed foreign trade and foreign people as the reasons for middle-class decline. And they were partially correct.

The famous ‘elephant’ chart below has been making the rounds in financial circles since Brexit as people try to understand why Britons would ever vote to go backwards, likely triggering a recession and reduced standard of living. It shows the winners and losers of globalization over a decade – those whose incomes have risen the most (the bottom 65% and the top 1%) and those who have paid the price (the middle class – the 75% to 90% income brackets).

ELEPHANT CHART

This explains a lot. Brexit. Oxi. Trump. In Canada, like the US and Britain (and much of Europe) middle-class people have seen cheaper consumer goods because of globalization, while lower-value-added jobs have migrated offshore to lower-value-added countries. So people don’t make televisions or hubcaps in southern Ontario any more. And with the commodity price decline, they’re not fabricating pipe or turning out conveyors belts, either. China dominates the manufacture of steel, heavy equipment and all the crap you buy at Wal-Mart.

The loss of higher-paying, often-unionized lifetime jobs with corporate pensions has thrust the middle class into a tough world. Incomes have been stagnant for decades, so in order to maintain that middle-class lifestyle, families have had to borrow. When rates collapsed, excessive borrowing followed, plumping asset values and making real estate a one-asset strategy in Canada.

It’s dangerous and unsustainable, which most people get. They also see wealth pouring into their communities from places like China (where the jobs went), while the gap between the 1% and the 99% yawns as never before. A lack of economic opportunity means 27-year-old children routinely fail to launch, putting more pressure on family finances. Corporate pensions are gone for more than 70%, and investing in RRSPs and other financial assets has plunged as people are overtaken by property porn.

So, being human, they look for solutions. And there she be – populism and protest.

This is probably the beginning of a powerful trend, not something that would end with a Trump or gutting the EU. The creation of the middle class was one of the greatest triumphs of modern capitalism. The erosion of it seems to be the next unstoppable chapter, in a world where operating a drill press for thirty years no longer gets you a new Chevy, a stay-at-home wife, a bung, cottage and a pension. So a lot of Canadians voted last time to tax the rich more, the middle less, to neuter a tax shelter, increase public pensions and move left.

The common wisdom is Trump will fail. But nobody saw Brexit coming. How could the Greeks last year have voted for their own economic destruction? Don’t they understand? How can anyone take seriously a guy saying he’ll build a 1,989-mile-long wall?

This will likely be a summer of volatility, market swings and surprises. Money has fled into safe assets, like bonds, driving prices up and yields down to insane levels. Central banks will be working overtime to prevent fallout, with the Bank of England set to cut rates after revving up the printing press. Politics will be a mess for months more. Years, maybe. But despite however much moaning and bitching takes place, the past ain’t coming back.

Global stock markets, hating surprises, plunged after Brexit. But the recovery was dramatic. The day before the vote the Dow sat at 18,011. On Friday it had recovered to 17,949. The investors who ignored it, sticking with their balanced portfolios, ended up winning. Equities were back to near-record levels. Bond values popped. And those who bought on weakness and middle-class angst, got even wealthier.

There’s a lesson in here somewhere.

THANKFUL

219 comments ↓

#1 Blaynie Sturgeonson on 07.03.16 at 3:24 pm

First!

#2 jimmy on 07.03.16 at 3:25 pm

Whew. Thought the blog was all over.

#3 Kevin on 07.03.16 at 3:32 pm

Great post, thanks for writing this, Garth!

#4 I'm stupid on 07.03.16 at 3:36 pm

What makes me laugh is that the people protesting the 1%ers are actually 1%ers. To be apart of the global 1% your income must be greater than 40k a year or have a net worth of 700k. But I guess all those poor bastards living on less than $1 a day count.

#5 I'm stupid on 07.03.16 at 3:37 pm

Don’t count

#6 BOOM! on 07.03.16 at 3:43 pm

Well, it would appear in our new face-paced cell phone and the internet of all things at your collective finger tips, we can ascertain the answers to everything!

Were it ever SO easy… The answers ARE there, but who do you trust?

Answer me this:

How does the just launched twenty something with student loan debt, credit card debt, and a newly minted degree which garnered a starting wage job of $30 grand in a fairly high priced place make it?

How does that 50 year old couple with 2 kids in college, and a car payment, college help, ailing parents, and a fairly dead end job, feed their retirement kitty, and do ALL that is expected?

How about that retired couple, who awake at 65 and say “SHAZAAM we’re broke” because they never bothered to adequately feed their retirement, and now, though debt free find they have a measly 100 grand in retirement, beside the gov’t pogey -which is NEVER going to be there in 20 years at its present value.

Yeah, lots to look forward to. Read, listen, and DO carefully!

#7 Metaxa on 07.03.16 at 3:45 pm

I have a question.

When every doomer, gold bug and prepper’s wet dream comes true how go you get change after offering a wafer or Krugerrand for a loaf of bread.

I mean right now in a functioning economy there are lots of retail places that won’t take a $100 bill so how will it work when you need a tank of gas at $200 but only have $1,000 gold pieces?

#8 Samson J. on 07.03.16 at 3:46 pm

****How can anyone take seriously a guy saying he’ll build a 1,989-mile-long wall?****

How is this hard to take seriously, anyway? Are folks unaware of the six THOUSAND km “no-go” zone between Canada and the USA? Yes, it’s not a wall, but it’s nigh impenetrable, lined with drones, underground sensors, and other wizardry. A wall would be just as feasible; perhaps even easier.

#9 Fed-up on 07.03.16 at 3:48 pm

No one has yet to explain why the vast majority of western nations were happier, more tranquil, significantly more prosperous and dramatically more peaceful and unified places to live 30 and 40 years ago. Don’t like your wages and cost of living? Don’t like how your neighborhood has changed? Don’t like the traffic and astronomical cost of housing in your major Canadian city? Feel forgotten, unappreciated and disenfranchised? Tough, then move, right?

And have a look at the chart that Garth posted today. Anyone want to take a wild guess at what changed all that was stated above?

People (mainly the middle class) are fed up and have had enough. And they are tired of being shamed and apologetic for feeling this way.

#10 Regal Delrow on 07.03.16 at 3:50 pm

Gold has been up huge lately and this year, best performance since 1980. But no mention. Garth, can you please share some insight on the allure of the precious metals to investors in this environment? Or is there possibly a gold bubble too like a housing bubble?

#11 Smoking Man on 07.03.16 at 3:52 pm

Ahhhh no one saw it coming huh?
It’s all in the archives of this pathetic blog.
Someone did and said it loudly.

I should approach a leading university and offer to teach Herdonomics. Just don’t know how to explain the UCC.

Bad idea.

#12 Victoria Real Estate Update on 07.03.16 at 3:57 pm

House for sale in Victoria.

932 Tattersall Drive

Realtor: “You’ll be impressed w this wonderful character home…”

Downtown is only 5 minutes away, rental suite…

“PRICE REDUCED”

I don’t have the exact numbers on this listing, but I’d be willing to bet a significant amount of money that the “price reduced” sign in front of this house has been up almost as long as the 23 days that the realtor claims this house has been on the market.

The price has been reduced, but that hasn’t brought about a sale.

Where are all of those Vancouver buyers who are, according to the local media, buying in Victoria and commuting to Vancouver for work via floatplane? If all the realtor/media hype was true, you’d think this house would have been snapped up “with multiple unconditional offers on day 1”.

Apparently Victoria’s housing market isn’t performing as the realtor hype suggests, but that shouldn’t be a surprise to anyone.

If you recently bought a house in Victoria based on the hype, you will realize some day how big of a mistake you’ve made.

Each month that goes by brings us that much closer to falling prices – again.

As I’ve said many times, there is a 100% chance that current market conditions (supply/demand) will change and we could have conditions favouring buyers within a matter of months. We’ve seen the market change like this in Victoria twice since 2008. The result was two falling markets which resulted in many Victoria families (who had to sell) losing significant amounts of money on their properties.

Note that neither of these two falling markets (2008, 2010) began as a result of rising rates .

(To view this listing, simply google the complete line below and then select one of the first search results.)

932 Tattersall Drive for sale

#13 Shawn on 07.03.16 at 3:59 pm

The Chart…

So, there’s never been a better time to be in the bottom 65% of the income distribution then?

In part this reflects how well seniors are doing. Even seniors relying totally on the old age pensions and supplement are seldom in poverty.

We may have a whole new group in the bottom 30% now. 50 years ago, seniors, especially widows may have OFTEN been in poverty or close to it.

Today those senior widows are further up the income percentile.

The 20 somethings of 1966 could get a job placing them well up the percentile curve. Today they are often at the low end of the scale. And if being at 20% on the scale today gets you a living that is a lot better than 20% was forty years ago, that is cold comfort to the 20 somethings that years ago would have been at the 50% level but now are at 20%.

We are a people that has an economy, not the other way around.

If income distributions are deemed unfair by enough people then the distribution must change.

I always say the United States has an economy that many of its poor people view as unfair. And there a lot of them. And they have guns, most of them. And more than a few have machine guns (I mean assault rifles). Yeah it could continue to get interesting.

Look to Warren Buffett for the solution. He said raise the earned income tax credit, tax the 1% at a higher rate and get trade in balance. He is perhaps the greatest and clearest economic thinker in history. He supports Hillary. Enough said.

#14 Arfmooocat on 07.03.16 at 4:19 pm

Sure Saddam was a tyrant, but it was more peaceful and the people were better off when he was around.

Every time US and NATO interferes in a country saying they’re doing it to liberate the people, the more f’d up it becomes.

Baghdad attacks kill 126, including 25 children; ISIS claims responsibility

http://www.cnn.com/2016/07/02/middleeast/baghdad-car-bombs/

#15 waiting on the westcoast on 07.03.16 at 4:22 pm

That should create a few jobs for the Boston Dynamics production of robots. ;-)

Well – the dream is ending for Iceland today… why not the rest of us?

North American and Western Europeans are discovering that they are going to have raise their game to compete. If unable (or make likely… unwilling), it is going to be a rough few years.

#16 Scumop on 07.03.16 at 4:34 pm

Can we build a wall to keep Trump and his minions out of Canada?

The hollowing out of the middle class has been going on for a long time. Many decades ago 1 person could support an entire family on a 40 hour work week. With technology, we were told that the work week would decline to 35, 30, or even fewer hours and the middle class would grow and thrive. Instead, it now takes 2 or more people working 40 hour (or more) weeks to stay in place.

If people are complaining, no surprise. The starry-eyed futurists lied to us. The economic reality of higher efficiency = less jobs was never mentioned.

China has all that mfg because of the unmentionable tariff-like wall called 3rd world wages. This is pure poison to first world citizens, pure gold to the Apples of the world. Trade agreements are built by big biz via gov representatives (their proxies). Don’t count on any changes.

So present trends will continue undisturbed by the mere noise of Brexit, Oxi, or even Trumpist elections.

The only strategy available is to buy into the companies profitting on the middle class collapse. Hint: etfs/stocks, not houses.

#17 There’s a lesson in here somewhere on 07.03.16 at 4:46 pm

So, being human, they look for solutions.

===

What is the “non-populist” solution, Garth for migrated jobs, increasing wealth gap, lack of economic opportunities?

What is the lesson to learn? How is the “non-populist” solution supposed to change the current situation without protest?

I thought the lesson was obvious: protest’s a waste. Spend the time making better decisions for yourself. — Garth

#18 AB Boxster on 07.03.16 at 4:51 pm

Thanks for the good post Garth.

While many in the horrible Canadian media (G & M and CBC ) can only write nonsense about racism and xenophobia, there are some valid concerns about the globalization of everything.

I think that the refusal to acknowledge these issues is a strong reason for voter pushback. The well known definition of ‘insanity’ being a strong theme.
As the middle class continues to feel these challenges, and the experts and politicians continue to tell them that it is their own fault if they are not getting ahead or that they have no pension savings, and that continuing to bang their head against the globalization rock is certain to have a better outcome the longer they do it, voters are waking up.

Much like the real estate bubble in Canada.
Whether its artificially low rates, unethical realtor practices, unchecked billions coming from offshore, the politicans response is essentially to do nothing, and hope it will go away.
No ackowledgement of an issue, or conerns or intelligent solutions.

And the electorate then turns away from the ‘trusted’ leaders.
And the media and the experts wonder, Why?

#19 crowdedelevatorfartz on 07.03.16 at 4:53 pm

I hate to admit this but…..
That “elephant” chart isnt the most obvious chart I’ve ever viewed.
Perhaps its my Canada Day hang over?

#20 Wet Coast on 07.03.16 at 4:53 pm

The change Garth has spoken to at least one is automation. Many regular jobs for regular people are disappearing at an astonishing rate. How do I know? Well I have put robot after robot in to replace people. We don’t need China anymore. The hubcaps can be made here cheaper than China. Take a look on You Tube at Baxter. It can bought for $27,000 USD. Forget about instrument mechanics or programmers. The new automation is simple to “teach” and reliable. I sat across the table from union leadership that doesn’t understand and politicians that don’t see it yet. From self driving trucks to automation of every simple manual task the Brave new world is here. I’ll keep putting the robots in as I have no choice, but I have no idea how our civilization is going to cope.

#21 The real Kip on 07.03.16 at 4:54 pm

Two weeks ago you said Trump could not win no matter what, today you’re not so arrogant. There is easily enough disconnected Americans to put Trump in The White House.

But not enough EC votes. — Garth

#22 crowdedelevatorfartz on 07.03.16 at 4:55 pm

@#17
The lesson?

Wants vs needs.
Live within your means.
Save for the future.
The sooner you start, the more you’ll have.
Its never too late to start saving/investing.

#23 BOOM! on 07.03.16 at 4:56 pm

So Canada, the U.S. and the U.K. have lost some good paying jobs with benefits overseas…

Yeah? Tell me something that has NOT been going on since at least the 1960’s.

We lost the major radio and television manufacturers in MI, IL and WI starting in those 1960’s. We got better products, for less money.

Get to the 1980’s 1990’s we lost some of those car manufacturing parts components as well as one manufacturer American Motors in kenosha & Milwaukee.
We got better Japanese cars for less dough! They even put manufacturing plants here in the states & Canada, right?

So, we lost, BUT we also gained! Those clunky Zenith tv’s replaced. Those crappy Javelins and Ambassadors replaced by more fuel efficient Japanese and Korean offerings. Who lost, besides the greedy autoworkers (from my perspective anyway).

Now we are replacing bank workers, accountants, etc with overseas white collar workers. Quality work, lower costs. Business is happy, the consumer is happy.

Now, if we can replace those state & federal elected officials with TFW who will work for half the salary we could really make some progress! Oh, they are already privatizing the federal workforce here for some time. Lower cost, but not yet, any discernible gains in quality or efficiency.

#24 salonist on 07.03.16 at 4:57 pm

“Whew. Thought the blog was all over”

nah and never

mr turner woul rather be in the parade then serving cider on the side

#25 joblo on 07.03.16 at 5:01 pm

“Global stock markets, hating surprises, plunged after Brexit. But the recovery was dramatic. The day before the vote the Dow sat at 18,011. On Friday it had recovered to 17,949. The investors who ignored it, sticking with their balanced portfolios, ended up winning. Equities were back to near-record levels. Bond values popped. And those who bought on weakness and middle-class angst, got even wealthier.”

Right but for how long? Holding on is akin to holding a lit match.

#26 Blair on 07.03.16 at 5:09 pm

Love the pic!

#27 Rexx Rock on 07.03.16 at 5:13 pm

11.7 trillion in negative yield debt bonds.When will it end?https://www.youtube.com/watch?v=OyapOtD4msY

#28 Godth on 07.03.16 at 5:15 pm

Sensational Alex Harvey band-Man in the jar
https://www.youtube.com/watch?v=cutbD7Eb-Lo

#29 Shawn on 07.03.16 at 5:15 pm

A False View of History

#9 Fed-up on 07.03.16 at 3:48 pm said:

No one has yet to explain why the vast majority of western nations were happier, more tranquil, significantly more prosperous and dramatically more peaceful and unified places to live 30 and 40 years ago

**************************************
Really, were you even alive then or old enough to observe the world?

In 1986 the Canadian economy was still recovering from a brutal recession of the early 80’s

Alberta house prices were hitting the bottom after the National Energy Program and the decline in oil prices.

Many people in Alberta had lost their jobs and their houses.

Thousands of people in Ontario also lost their homes in the wake of the early 1980’s recession.

Unemployment and interest rates and inflation were all far higher than today. Engineering graduates mostly had difficulty finding “permanent” jobs. I was there. Were you?

The Cold war was still on.

Living standards were quite a bit lower than today. Notice the chart today shows that real incomes have increased by over 50% for about half the population since 1988.

Unified? Heard of the Quebec referendums to SEPERATE from Canada and the debates over free trade?

What about 1976 then?

The Vietnam War was just over. Memories of the second world war were still extremely fresh for those who lived through it.

We had something called stagflation which was extremely high inflation coupled with high and rising unemployment rates. Interest rates were also far higher than today. Again, I was there.

Trudeau was Prime Minister – okay some things have not changed.

You are describing a world that simply never existed.

The fact is that the world today is more peaceful than at any time in the last 1000 or so years. It is certainly more prosperous than at any time in history.

Are people happier? Probably not, human nature has not changed.

Unified? Hard to say, people have an ingrained tendency to support their own tribe and relatives but this is changing as we make racism and various forms of discrimination socially unacceptable.

One thing that is different today is that anyone can post their views and these can be seen by many people with no filter. No editor to stop nonsense views from being spread.

The western world still holds great opportunity for enterprising people. As always there will be winners and losers in the game of life.

#30 pinstripe on 07.03.16 at 5:18 pm

Excellent commentary today.

Fourteen old geezers met for brunch today and we finalized a plan to end ALL the ills for us old geezers in Canada and the World.

Our plan is to act NOW. We will be disposing ALL assets held and make the money invisible by keeping the loonies and toonies in a jam can out of reach of the tax man and any beaucracy. Going onto the welfare system will be very easy step for a senior. tapping into the jam can for a loonie will put the icing on the cake to maintain the pre-welfare lifestyle.

No need to fight the system, joining the system is a lot easier.

#31 Nelley on 07.03.16 at 5:20 pm

The loss of overall prosperity over the last 40 years has been due to protecting sectors other than manufacturing from global competition. In fact, if any sector should have had tariff protection, it would be manufacturing first and foremost as all major wealthy and growing economies are based on a foundation of manufacturing. Sectors such as government, education, and healthcare have been almost totally shielded an protected from both international competition and automation and thus things are sliding. The huge public school system (as one example) was designed for the world of 1916, not 2016 and could easily be almost totally automated (internet based) with tutors as supplements,not the huge money suck it currently is.

#32 Future clear but it will rollback on 07.03.16 at 5:23 pm

#15 waiting on the westcoast
That was insightful and I agree, until recently teaching Mgmnt. Info. Services and have been warning of this coming in the not too distant future…surprised it is already here. Everyone asleep at the wheel about this…as always.

But nowadays, there is a mood in the middle class and it will come to the US to rollback to the past, Clinton will lose for not capturing this, and Trump will win because of it. Poorer country labour migration in the EU is a real problem and Brexit was the right thing to do (e.g., locally here in NE Italy, Romanians work for 50% less than local Italian labour at a huge structural steel mfg. plant, all those savings go to the wealthy).

#6 BOOM!
All that you crow about from Asia can be wiped out with tariff legislation in a day…I would lay low if I were you with your rhetoric especially if Trump wins. Besides, if #15 waiting on the westcoast is correct, cheap accountants, blue collar labour etc. from Asia will be eventually replaced by those technologies.

Garth your elephant chart probably does not exist in Canada. As I have posted to you before, 86 people in Canada earn the same as the sum total of 1/3 of Canadians…our chart will look like the seat and back of a chair instead.

#33 Future etc. error on 07.03.16 at 5:30 pm

Sorry that was

#20 Wet Coast

that was correct about automation.

#34 Smartalox on 07.03.16 at 5:30 pm

The wealth that used to provide blue-collar workers with homes, cars and cottages went to lower-cost producers in Asia.

Losing that wealth had knock-on effects, as money that had been spent by middle class workers in North America, now gets spent by workers in Asia. Or as is more likely the case, the owners of the factories in Asia, who take home a larger portion of the costs of goods produces in their factories, paying their drill-press operators far less than their North American counterparts.

Then the wealth that had belonged to North Americans, became concentrated in the hands of elites in Asia, is then returned to North America in the form of HAM, buying homes in Canadian cities from the families of un-skilled drill-press operators who bought them 30 or 40 years ago.

#35 JacqueShellacque on 07.03.16 at 5:31 pm

“It’s [real estate bubble and debt] dangerous and unsustainable, which most people get.”

Are you sure, Garth? I don’t think most people (in Canada anyway) get this at all. Suggesting houses may not be a great investment is still blasphemy here in the 905. And Mme Shellacque and I combined gross around 140,000/yr, which on paper should be higher than average, but we live much more modestly than most here. Why should people live within their means, and hedge their future bets, when those who govern them haven’t done so in decades? If the bubble pops here, people will realize that their gov’ts have thrown away the future, and they followed suit by sinking money into housing. Think we’re immune from a Trump here? Think again.

#36 Victoria the original on 07.03.16 at 5:39 pm

In whistler at the moment. There is so much building going on. Beautiful but crazy expensive homes. I wonder who buys all these homes? Do they sit empty? Are they bought just for investment?

#37 Sebew on 07.03.16 at 5:42 pm

You know what I wish you would comment on Garth? Automation. Self driving taxis. Self driving cars, trucks, buses. Robo-baristas with voice recognition, or GPS triggered by proximity from an app on your device Electric cars made in China in bulk that hardly require a visit to the shop once a year if that. How will that impact the economy? …since it is clearly coming.

#38 Victoria the original on 07.03.16 at 5:44 pm

My husband who is a finance guy thinks housing decline is going to be a long slow process over 10 to 15 years. I would be happy to sell my large house that needs a new roof and Windows them rent and wait. Even get a manufactured home on a rented lot until property goes down. He again thinks it is going to take 10 or 15 years. By then we will be too old to care :). Any thoughts?

#39 Dellane Selwood on 07.03.16 at 5:54 pm

Can someone please explain the “bond bubble” phenomenon that I have been hearing lately? I’ve also heard housing and stocks could be in a bubble too? Can cash ever be in a bubble? Bubblenomics could be a new class in U of T.

#40 Randy on 07.03.16 at 5:58 pm

I’ll support Trump for being in favour of borders, language and our culture. Political Correctness must DIE.

#41 Shawn on 07.03.16 at 6:07 pm

Banking

#236 Blacksheep on 07.03.16 at 4:23 pm
Shawn,

“When a bank attracts a deposit, it owes that deposit to the customer. When you attract something from someone but you owe it back to them that can be called “borrowing”.”

“Hence we can say banks must borrow deposits (savings) from customers in order to continue to fund their loans.”
—————————————–
“Rather than banks receiving deposits when households
save and then lending them out, bank lending creates
deposits” – BoE.

The Bank of England language, 100% degrees with what your claiming Shawn.

Maybe you could e-mail them and straighten them out….

*******************************************
It’s not the Bank of England that needs straitening out.

The bank article you misunderstand is referring in that particular sentence to commercial banks collectively.

But each individual bank needs to attract deposits which is in substance and in legal terms a borrowing from customers in order to continue to fund its loans.

I have explained it all in the previous thread at 233,
221 and 163.

Every individual bank knows that it must compete for deposits in order to fund its loans.

I prefer to state things in my own words and do my own thinking. But since you like the Bank of England paper, you may wish to read the following paragraph from your Bank of England article that talks about how individual banks must attract deposits. And you may wish to consider if an attracted deposit owed to a customer is a form of borrowing from a customer. Notice how they describe deposits as “savings accounts”

From the bank of England Article:

“Banks therefore try to attract or retain additional liabilities to accompany their new loans. In practice other banks would also be making new loans and creating new deposits, so one way they can do this is to try and attract some of those newly created deposits. In a competitive banking sector, that may
involve increasing the rate they offer to households on their savings accounts. By attracting new deposits, the bank can increase its lending without running down its reserves, as shown in the third row of Figure 2. Alternatively, a bank can borrow from other banks or attract other forms of liabilities, at least temporarily. But whether through deposits or other liabilities, the bank would need to make sure it was attracting and retaining some kind of funds in order to keep
expanding lending. And the cost of that needs to be
measured against the interest the bank expects to earn on the loans it is making, which in turn depends on the level of Bank Rate set by the Bank of England. For example, if a bank continued to attract new borrowers and increase lending by reducing mortgage rates, and sought to attract new deposits by increasing the rates it was paying on its customers’ deposits, it might soon find it unprofitable to keep expanding its lending. Competition for loans and deposits, and the desire
to make a profit, therefore limit money creation by banks.”

Does most of the above sound familiar? It should.
I laid it all out step by step in my posts and leave it to any intelligent readers to think for themselves whether what I describe is correct and fully consistent with the Bank of England paper.

Deposit creation and lending and banking has several steps and you remain fixated on step one.

#42 Herb on 07.03.16 at 6:11 pm

Well, a possible lesson from 1968 is that, if you piss off enough people, they will turn out to “vomit on the politics of joy.”

There were grounds for “populism and protest” then. There would seem to be now, and there is more at stake than stock markets.

#43 JO on 07.03.16 at 6:12 pm

Middle class destruction due to:
– junk monetary policy of influencing rates to encourage unproductive, short term increase in debt fuelled spending- blame of BofC
-out of control government spending and borrowing with high staffing costs thanks to corruption between ps unions and politicians
-other forms of manipulation designed to make debt cheaper such as CMHC which has helped inflate the cost of shelter for those least able to afford it
-out of control bank and RE executives looking to make their next big bonus
-trade deals designed to gut wages
-dumb masses who took the BofCs and banks offering of cheap debt – like financial crack cocaine
-add your income, property and other taxes and insurances and divide by your gross income – who is taking most of your income ? The house and government of course . The rate of growth in housing related taxes and costs continue and will continue to escalate much higher than the median wage
-tbe elite have used a debt counterfeiting operation to redirect a greater and growing portion of the economy’s productive income to their own pockets
– use of government as a tool to extract money / economic rents from the masses and their posterity
– the sum of the above is neo-liberal economics
The worst of fascism and socialism blended together
You ain’t see nothing yet – look to Illinois and Chicago for a taste of what GTA homeDEBTRENTERS will be living through in 2-3 years
JO

#44 Sideshow Rob on 07.03.16 at 6:14 pm

Sometimes societies just have to crash and burn. This is one of those times. The next 5 years will try us all. Time to live out of the city and avoid crowds. None of us are as dumb as all of us. Good luck to you all.

#45 Smoking Man on 07.03.16 at 6:22 pm

How long can I keep doing this. I’m getting old.

Happy 4th of July my Americans.

http://dyslexicsmokingman.blogspot.ca/2016/07/happy-4th-of-july.html

#46 Tony on 07.03.16 at 6:24 pm

Re: #10 Regal Delrow on 07.03.16 at 3:50 pm

Read this and note the date in the top right.

http://thenewsdoctors.com/the-silent-scream-of-crashing-stocks-dave-kranzler/

#47 White Crock BC on 07.03.16 at 6:27 pm

Wet Coast on 07.03.16 at 4:53 pm

I’ll keep putting the robots in as I have no choice, but I have no idea how our civilization is going to cope.

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

Absolutely right.

There are already too many people in the world for the number of jobs available and it’s only going to get worse. Much worse.

#48 Say What? on 07.03.16 at 6:42 pm

Trump, a misogynist? No. Don’t think so.

Trump is anti-immigration. Maybe. Or, maybe, mostly anti-illegal-immigration.

Trump is a populist. Oh my Gosh. He is. Definitely.

Yeah. Put a label on someone and then dismiss him. Age-old technique.

I labelled her, too. — Garth

#49 C2URBACK on 07.03.16 at 6:46 pm

Elephant Chart:

[effort X ingenuity / (tax & regulation)] vs [% global income distribution]

#50 ROTFL on 07.03.16 at 6:50 pm

I dug around in the dataset that Branko Milanovic used to make the famous elephant chart. Here’s income growth for the US and the UK.

Growth in income from 1988 to 2008, in real, purchasing power parity adjusted dollars (meaning it also accounts for being able to buy more cheap stuff from China at Walmart and Dollarama).

Growth in PPP income, USA, 1988-2008
Lowest income decile 24.5%
2nd 20.7%
3rd 20.8%
4th 23.4%
5th 26.9%
6th 29.3%
7th 31.2%
8th 35.2%
9th 39.6%
Highest income decile 68.5%
The average income in the tenth decile in 1988 was 59% higher than in the ninth decile, but by 2008 it was 92% higher.

Growth in PPP income, UK, 1988-2008
Lowest income decile 190%
2nd 111%
3rd 111%
4th 112%
5th 111%
6th 110%
7th 111%
8th 112%
9th 115%
Highest income decile 135%
The average income in the tenth decile in 1988 was 62% higher than in the ninth decile, but by 2008 it was 78% higher.

Canadian numbers are here.

#51 Nelley on 07.03.16 at 6:53 pm

Japan is working overtime on the Sexbots-probably 15 more years until a superb model hits the market but when it does-look out. All hell is going to break loose-and lots of money to be made.

#52 For those about to flop... on 07.03.16 at 6:55 pm

I haven’t done one of these for a while since some people complained about people on the blog becoming friends, but screw if I’m going for it.

In honour of Independence Day.

Hey Boom,check out these two charts of America the broke.

One is the biggest companies in each state and the other is the most Googled company in each state.

Apparently Google ,googles Google…

http://imgur.com/a/3VQ5e

M42BC

#53 Fed-up on 07.03.16 at 6:58 pm

#29 Shawn on 07.03.16 at 5:15 pm

A False View of History

——————————————————————————–

Good God you are complete idiot. There are more than a dozen intelligent retorts to refute every point of your inane rhetoric, but none of them should be wasted on someone who is as intellectually lost as you are.

#54 Smoking Man on 07.03.16 at 6:59 pm

For a true writer to find his voice, shit, sorry ladies I should have said there voice. I momentarly forgot that you existed, because I’m conncentrating on this post and not worried about the small stupid shit.

You need to take risks in life, you need to hob knob with the rich and famous, and share drinks and cigarettes with bums going through your recycle bin looking for things to sell. Gives you range to work with. Don’t matter that your spelling and grammar is shit, you can pay a schooled minion to fix that that for next to nothing.

I mean look at me, Alien calls and predictions, accuracy out of the universe. Where are the accolades? No where, they even have a anti smoking man script that blocks what this amazing brain passes through his thumbs to educated you ungreatful bastards.

Fear and loathing, Hunter got that right..

Think about. this, you all live in fear of judgment from other dog to say, Smokey you get it. You are always right.

Your typing with a fake name, not your real one, and you are still scared to feed an ego maniac fearing the wrath of other fake names.

I should be a writer.

I blame your teachers.

Dr Smoking Man
Phd Herdonomics

#55 Herb on 07.03.16 at 7:08 pm

“Human Resources” being what it is to-day, that “Be thankful for your job” poster no doubt is someone’s idea of increasing the productivity of Permacorp’s human resources/employees.

Sadly, I would put it in the category of “Flogging will stop when morale improves.”

#56 Josh Lipton on 07.03.16 at 7:11 pm

The TSX 300 is 5% lower than 1 year ago, July-30-2015 to June-26-2016.

The Dow Jones is about flat 1 year comparison too. Yes there are dividends but there are annual fees too.

Most longer term bond prices are up 10% to 15% with 1 year comparisons and add interest it makes it closer to 20%.

Everyone keeps saying those rock bottom interest rates were the last we would see of them but they keep on coming.

Ever heard of rebalancing? — Garth

#57 Josh Lipton on 07.03.16 at 7:12 pm

It is June-30-2015 not July 30-2015 looking at my record numbers.

#58 Ronaldo on 07.03.16 at 7:15 pm

#7 Metaxa on 07.03.16 at 3:45 pm

”I have a question.

When every doomer, gold bug and prepper’s wet dream comes true how go you get change after offering a wafer or Krugerrand for a loaf of bread.

I mean right now in a functioning economy there are lots of retail places that won’t take a $100 bill so how will it work when you need a tank of gas at $200 but only have $1,000 gold pieces?”

Back in January of 1980 when silver was rising and heading to $50 per oz. gas stations were offering to take your silver coins in exchange for gas at 10 cents a gallon. Everyone and his dog were setting up shop to buy precious metals. Never a problem exchanging silver and gold for paper. They have international acceptance. And the economy was functioning at the time as well. The best performing asset class in 2016 and the companies producing the stuff are up 400 to 500% since January 20th bottom. It was a no brainer and most people have missed out once again. Mark was right on the money on that one except that the rush of money into precious metals stocks had no effect on the prices of houses in Vancouver dropping. Obviously still tonnes of money for those as well.

#59 BOOM! on 07.03.16 at 7:16 pm

#32 Future Clear but will rollback
While import tariffs could be used to limit the playing field as you claim, they might well spur another recession / depression as a result of the ‘protectionist’ Smoot-Hawley tariff which was all designed to ‘protect’ America. Well, that didn’t work, but by the time they tried to undo the thing, the damage was done.

What could have happened, perhaps tax incentives to build updated factories HERE, rather than tax incentives that existed, and still do that PAY manufacturers to relocate abroad! Did you think for a minute that the government really gives a dam about you? Only at re-election time. Then they care only minimally.

I see no future change with either Trump, or, Hillary. Maybe less damage with Hillary, but no great revolutionary legislation there. Same, same….

You may see another move to privative social security, and some changes at the margin with medicare, medicaid etc. as trust funds are nearer extinction. I will laugh at the day when those benefits suddenly drop 25% even after 30 years of warnings! Seniors vote, yes, but they don’t pull money from their rear-ends.

#60 Oot of the Hoos on 07.03.16 at 7:20 pm

Free trade is good but you are perpetuating the central bank economic theories, which have demonstrably failed.

Here is the missing puzzle piece, which says let prices of those globally sources products fall and let CPI go negative. That globlisation was good deflation.

Instead, the central banks insisted 2% inflation is good. They are wrong. It is not stimulative. They damaged the structure of the economy by achieving it; eg. house inflation.

excerpt from Doug Noland:

“For decades now, the U.S. and UK became accustomed to exchanging IOUs for goods and services. It has worked miraculously, or seemingly so. Consequences have included deep economic maladjustment and a world inundated with debt/financial claims. Look no further for the root cause of endemic financial instability and serial boom and bust dynamics that now afflict the entire world.

I wish to be clear: I am not arguing for barter between individual nations. Trade deficits and surpluses can exist between individual countries. But overall, countries should avoid running persistently large overall Current Account Deficits. Deficits with some countries should be offset by surpluses with others. Persistent trade deficits should be countered with tighter monetary policy.”

TIGHTER MONETARY POLICY, not looser.

http://creditbubblebulletin.blogspot.ca/2016/07/weekly-commentary-greenspan-on-bubbles.html

#61 S.Bby on 07.03.16 at 7:23 pm

Realtor Keith Roy says realtors need more education:

http://www.news1130.com/2016/07/03/education-real-estate-industry-realtor/

That Burnaby tear down that was up for auction last week (that then failed to sell) is now listed with a regular agent.

#62 For those about to flop... on 07.03.16 at 7:26 pm

Imgur overloaded this weekend.

Here is a map of the biggest companies in each state…

http://imgur.com/9BpUcvm

#63 For those about to flop... on 07.03.16 at 7:28 pm

This is apparently the most googled brand in each state…

M42BC

http://imgur.com/RAHrf9u

#64 Josh Lipton on 07.03.16 at 7:31 pm

Ever heard of the trend is your friend. Interest rising is a mere dream and nobody wants to admit it.

The world economies are in a slow, tortuous, malaise and job growth and pay are dismal. The more debt piles and taxes grow keeping wages low as desperation of workers having little to no wage pricing power.

#65 Interstellar star stuff on 07.03.16 at 7:32 pm

#54 Smoking Man on 07.03.16 at 6:59 pm
For a true writer to find his voice, shit, sorry ladies I should have said there voice. I momentarly forgot that you existed, because I’m conncentrating on this post and not worried about the small stupid shit.

Where the hell is this damn book??? How many years! To be a writer don’t you have to write.. Fear of judgement and failure I’m guessing

#66 Smoking Man on 07.03.16 at 7:37 pm

DELETED

#67 Cory on 07.03.16 at 7:46 pm

That sign says it all. I worked in oil for a long time and I never became complacent or entitled. I knew it would end eventually. I recently hired one of those 27 year olds you speak of… I know of many living exactly as you describe. However they have a very skewed sense of the working world.

Massive unemployment in Alberta, him included, I hire him but I did all of the work and sometimes he literally sat and watched me. So that was one day but the last one too. He will go back to the basement play games and smoke weed all day because parents do everything for him…..I mean everything except wipe his ass. But that’s likely not far off.

They’ve been led to believe they are the greatest thing since sliced bread and as a result are not prepared for the real world. Canada is all about the employees, forget the business and why it exists. No wonder we are no longer competitive and are stagnant in this country. Sad. Very sad.

#68 Vampire Studies GMST 454 on 07.03.16 at 7:47 pm

13 Shawn – not sure what seniors have to do with the chart.

It is for Global income distribution.

What I see is that the bottom 70% (more specifically the 15-65% group) globally have increased. Not that they have done particularly well – they may have gone from $1 a day to $1.50 or $2. That 75-90% group which probably contains most of the working class in many of the industrialized nations has stayed the same or lost a bit. The upper middle class has increased some.

#69 July 4th, protest on 07.03.16 at 7:52 pm

DELETED

#70 common sense on 07.03.16 at 7:53 pm

Nice article Garth…

I recall 3 years ago talking to upper mgmt at a major fast food chain I was consulting for and made the big mistake of saying..”Where is your future growth coming from? the middle class is dying if not already dead.” which went over like a lead balloon.

Funny how 90% of the population can’t stand to hear the truth.

#71 mouldy in YVR on 07.03.16 at 7:56 pm

https://www.theguardian.com/uk-news/2016/jul/03/prince-andrew-broker-crown-property-kazakh-oligarch
‘jolly good, Andrew, old boy!’

#72 For those about to flop... on 07.03.16 at 7:57 pm

Sorry about the re posts but with it being a long weekend I guess the image sharing site is having trouble keeping up ,but as Janet Yellen likes to tell Common Sense when he asks her to raise interest rates…good things come to those who wait and wait and wait.

Speaking of Common,his team Germany will meet Garth’s Les Bleus after they beat up on Iceland in one semi on Thursday.

Ace Goodhearts Wales and Portugal/ Brazil expat go the day before.

As I said yesterday Merkel and Hollande seem to enjoy each other’s company and I’m sure they will have a little chat about to goings on in Britian in an informal fashion.

I don’t think David Cameron is dumb enough to go to the Wales game …then again he did call a referendum in the middle of summer…..in the middle of Europes biggest sporting event…..around the time of their biggest music festival.

See you Wednesday ,David…

M42BC

#73 Brazil ex-pat on 07.03.16 at 8:01 pm

#21 The real Kip on 07.03.16 at 4:54 pm
Two weeks ago you said Trump could not win no matter what, today you’re not so arrogant. There is easily enough disconnected Americans to put Trump in The White House.

But not enough EC votes. — Garth

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

Do you really want to be a forecaster again Garth? Trump will NEVER become the Repub nominee right?

Trump crushed it in Florida. A large EC state. And the bombs have only just begun to drop on Billary…….

Trump 2016!!

#74 Smoking Man on 07.03.16 at 8:07 pm

DELETED

#75 crowdedelevatorfartz on 07.03.16 at 8:08 pm

@#58 Ronaldo
Gas was not 10 cents a gallon in 1980.
Try roughly 60 cents a gallon.
http://www.google.ca/url?url=http://www.parl.gc.ca/Content/LOP/researchpublications/prb0755-e.htm&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiyloe7vtjNAhUHHGMKHaJLAOYQFgggMAI&usg=AFQjCNEzucdFAmn3EzytSQ7U_ACpFBpfog

And that was when interest rates were about 17% and climbing

http://www.google.ca/url?url=http://www.theglobeandmail.com/real-estate/the-market/remember-when-what-have-we-learned-from-80s-interest-rates/article24398735/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiY05SEv9jNAhVX5mMKHZdGCogQFggTMAA&usg=AFQjCNH2fHbsRi7ye9pUX08CJdQ3rQbFXA

and average “boomer” salaries were about $3000 a month before taxes…..

#76 Smoking Man on 07.03.16 at 8:29 pm

Is this the real life?
Is this just fantasy?
Caught in a landslide
No escape from reality
Open your eyes
Look up to the skies and see
I’m just a poor boy, I need no sympathy
Because I’m easy come, easy go
A little high, little low
Anyway the wind blows, doesn’t really matter to me, to me.
…….
I secured the rights to those words on Nictonite.
I’m going to be rich if I ever decide to go home.

Humans are much more interesting.

#77 Smoking Man on 07.03.16 at 8:41 pm

The band is playing. Got this on the buds.

https://youtu.be/8xnax0u03Ew

And this. For my late nephew mark. Just short of PWC partner.

https://youtu.be/SqYG3f4PaWc

#78 Long Branch Apprentice on 07.03.16 at 8:44 pm

Bought some ABX at $7, and some at $14.

A healthy part of a balanced portfolio, right Garth?

#79 Smoking Man on 07.03.16 at 8:52 pm

Such amazing posts in the comments section of gf.

The day you desire acceptance is the the you don’t count any more.

Dr Smoking man
PhD Herdonomics

#80 pete on 07.03.16 at 8:52 pm

#23 BOOM & #37 Sebew
You should read my favourite poem “The Gods of the Copybook Headings” by Kipling.
One of the best lines is “if you don’t work you die”. And in Kipling’s time work=producing tangible goods (not today’s casino economy and wasteful government jobs).
So Boom, once every job is offshored and therefore every product ‘improved’, what will we be left with? I guess we all will need replacing too.
Sebew, where we are heading is not looking too good. If I were giving advice to a young man just starting out I would tell him to leave the Western world and establish himself in Singapore, Chile, Hong Kong, an independent Western Cape (although they would be fools to let us in), etc and only ever return if the west re-establishes itself along the guidelines that made it safe/prosperous in the first place.

#81 Squad on 07.03.16 at 9:04 pm

Re. Brexit. One of the reasons for the vote to Leave was so that Britain could take back control and be able to govern its own country and stop the self-appointed, unelected heads of the EU regulating Britain on what it can and cannot do.

Members of the European Parliament, representing the UK, are elected by British voters. At last get the basic facts straight. — Garth

#82 the Jaguar on 07.03.16 at 9:04 pm

Says something about how low things have sunk when the choice in front of people ( the American people ) is a ‘whom do I despise more’ scenario. We should not engage in schadenfreude here in Canada as we have our own issues.
What is interesting to me is that five years ago I would have said all the pain and suffering to come will be on the backs of north American workers…but now I see the tide turning. Is it robotics? Instability in areas that jobs were ‘shipped to’ these past twenty years or so faltering due to issues unrelated to economics.. ? Dunno. I feel we are turning the corner in some way. In a way we didn’t forecast. Like we missed the signs about the collapse of oil, or USA striking a deal with Iran, or Brexit. We are about to slam head first into opportunity. Who would have ‘thunk it”? Only the financially vigilant will take advantage of the opportunity. Those who made the choice to wrap the anchor of mortgage and consumer debt around their necks might not be able to climb out of the ‘pit’ in time. Unfortunate.

#83 WULsson on 07.03.16 at 9:06 pm

My frostbitten lads from Iceland hit the Maginot Line. ‘twas to be expected. They exceeded expectations.

We sure are entering a polarized political situation. Could we decamp from extreme positions, meet somewhere in the middle and find opposing yet intelligent and moderate political leaders like Lester B. and Robert Stanfield or are we stuck with sadsacks like T2, Harper and Jason Kenney? Or am I just a nostalgic and doddering old fool?

In my opinion, this is partly the unfortunate result of the rise of the professional career politician with a singular career aspiration to be a politician and a politicians only (from the age of 17 onward). A good gig if you can drift in any direction the wind will take you and like Sheila Copps, conduct a poll before you decide what your ethical stance should be.

Canadian Millenials, there is great hope for you. Even with your heads perpetually facing down looking at your gadgets (*), you too can be like Brooke Henderson. 18 years old. Three LPGA titles (including one Major). $1MM in the bank account and the RBC logo emblazoned on her shirts.

Go Brooke.

* Gadgets = drivers, 5 irons, wedges and putters.

#84 'berta on 07.03.16 at 9:07 pm

If that’s an actual verified picture that employees are PermaCorp have to see then there are some bright management staff that make great decisions regarding the company’s public image.

I would make it a case to boycott their products.

The points on that board should be very much understood if you live in ‘lberta; no need to state the obvious and look like a bunch of unprofessional bastards.

Simply give them the package, shake the hand if given the opportunity, and let them out the door. No need for this type of provocation.

#’bertastrong

#85 Nelley on 07.03.16 at 9:08 pm

Sweden was the best example of an advanced, successful socialist country 40 years ago-now it is basically the rape capital of the world and quickly sliding right down the tubes-that is what happens when the most powerful, richest citizens of your country can make more money wrecking the place than they can from having it prosper. Sweden won’t be alone in this regard.

#86 It's not better here on 07.03.16 at 9:09 pm

“.In Canada, like the US and Britain (and much of Europe) middle-class people have seen cheaper consumer goods because of globalization, while lower-value-added jobs have migrated offshore to lower-value-added countries. ”
I keep hearing this over and over. How many IT jobs have left here and gone to places like India where they can pay someone $5 or less per hour ? The only decent IT jobs here are customer support and not development. Even customer support is being outsourced overseas. Pharmaceutical manufacturing is big in places like India where they can produce dirt cheap drugs and sell high here. Where do you think drugs sold in places like Costco ,Walmart come from? Or prescription drugs with generics ? These used to be high paying jobs in Canada.
As well, how about having lower value added jobs available for our young people starting out, to build experience?
Most jobs in this country are service industry, government, construction ( for the over priced homes) and health care. These jobs just suck money from either the tax payers or idiots who continue to buy houses.
Do any of these jobs contribute to a country’s growth?
Not all young people can be doctors and lawyers. There is nothing undignified with lower level type jobs.
At least we can have our young Canadians employed and not living in our basements.
I am a boomer professional and have had great opportunities. I also remember many people going to University in the 1970s , graduating with a bull sh..t degree in whatever. But they all got jobs in the end. ( many went into teaching and look where they are now)
Our young people do not have the same opportunities. They have many degrees, and yet they cannot find work.
For example, occupational therapists have Masters degrees, and there are few jobs for them here.
So, has globalisation helped us?
I am not so sure.
Perhaps, some of us may want to move to the USA if Trump gets in!

#87 Shawn on 07.03.16 at 9:09 pm

Stock and Bond Returns

#56 Josh Lipton on 07.03.16 at 7:11 pm said:

The TSX 300 is 5% lower than 1 year ago, Ju[ne]-30-2015 to June-26-2016.

The Dow Jones is about flat 1 year comparison too. Yes there are dividends but there are annual fees too.

Most longer term bond prices are up 10% to 15% with 1 year comparisons and add interest it makes it closer to 20%.

Everyone keeps saying those rock bottom interest rates were the last we would see of them but they keep on coming.

Ever heard of rebalancing? — Garth

**************************************
Stock returns are normally volatile and Buffett has pointed out that positive returns need not correlate to the time it takes the earth to circle the sun. So one should not judge a stock market by its most recent one year returns.

A Canadian government bond is interesting in that while it can experience capital gains and losses it WILL mature at precisely par.

On July 1, 2015, a 10 year Canada bond had a yield of 1.68%. That bond had made a capital gain as of now with 9 years left because the market yield on a 10 year (close enough to nine) is down to 1.12%.

But that capital gain is entirely temporary. We know of a certainty that this bond will mature at par and will deliver the 1.68% initially promised return.

To my mind there was no place in a portfolio last July for a bond that was known to earn precisely 1.68% over its life, unless that place was to speculate on interest rate movements. If that bond is held to maturity it will earn that paltry 1.68%. If it is sold now at a gain (and a price over par) the new owner will receive an even tinier 1.12% return over its life (consisting of 1.68% interest less a capital loss that is certain to happen). Even if there is deflation I would be most unhappy with 1.68%. I’d have rather kept the cash for spending or for potential other investments. If I expected deflation I would simply hold cash as opposed to bonds.

As for buying today’s 10 year bond paying 1.12%; why do that? You would be locking in a completely inadequate return. Your only hope of a decent return would be that rates fall further and some fool locks in an even lower return by buying it from you.

When it comes to Balance I would choose equites including dividend payers as well as preferred shares and certain high yield entities including the restaurant royalty units. (all this includes doing it via ETFs or for those inclined, individual securities) I would not bother with any bonds as the long term bonds pay inadequate returns and the short bonds actually pay less than you can get on a GIC or certain high interest savings accounts. In a world of near-zero interest rates, Cash is a reasonable holding to give stability to a portfolio, I’d use cash rather than bonds.

Basically, I would treat the long-term bonds like many here would treat houses. I’d avoid buying an over-priced house or an over-priced long-term bond. And all safe long-term bonds are over-priced as measured by the completely inadequate returns that they guarantee to deliver over their lives.

Cash has great utility and versatility. An alternative to cash that locks one in and exposes one to even temporary capital losses to my mind has to pay more than a paltry 1 or 2 or 3% to offset its other disadvantages compared to cash.

#88 not 1st on 07.03.16 at 9:19 pm

Garth, your post has a slight condescending tone, as if the middle class was responsible for gutting itself. You cant make that leap just because some cities got real estate crazy.

Look to the ivory tower egg heads. Sure some jobs arent coming back, but they never had to leave in the first place. Maybe some of them would have existed another 20 years here if we hadnt played free trade monopoly.

My apology. I meant to be more condescending. Too many people are reaping the consequences of their own actions. — Garth

#89 rainclouds on 07.03.16 at 9:19 pm

Every day it seems there is yet another negative article about scamcouver. Politicians are gonna have a hot summer putting out fires here. The unraveling is commencing

In this instance presumably CRA will be following close behind the city to get their pound of flesh.

http://vancouversun.com/news/local-news/vancouver-investigating-kitsilano-apartment-block-hosting-17-airbnb-units

#90 July 4th, protest on 07.03.16 at 9:20 pm

#69 July 4th, protest on 07.03.16 at 7:52 pm

DELETED

—-

That was quite a populist move, can’t argue, delete.

In the spirit of July 4th.

The next time you accuse me of sharing an attitude with those who slaughtered Jews in WW2, you will be more than merely deleted. — Garth

#91 Shawn on 07.03.16 at 9:24 pm

Jobs Dearth

Unemployment remains below the average that it has been during the last 40 years or so that I have been aware of these figures. Yeah that’s the official number but I prefer to believe Statistics Canada as opposed to various doomers, but that’s just the way I think.

Most of the people posting here that unemployment is so high simply are not old enough to recall 18% official unemployment in Newfoundland or about 11% nationwide. I believe those were the approximate numbers circa 1980. And combine that with inflation around 10%, interest rates around 15% and wage gains well below inflation.

I don’t know how exactly what jobs the robots and automation will displace…

But I would think that many trades like carpentry and plumbing and electrical will be hard to automate. In my experience it costs a LOT to get a tradesperson to come and do anything. I’d advise young people to consider the trades. Often protected by license requirements. Sometimes supply managed. Requires skills. A recipe for decent compensation, no?

And what about elder care? A$$ wiping and diaper changing is not likely to be automated for a while yet.

If the old people have the wealth, then young people need to be prepared to provide the goods and services that will cause the old people to part with their wealth.

#92 Smoking Man on 07.03.16 at 9:25 pm

For my millennials

MF for you.

https://youtu.be/iPKTQkkK3YM

#93 basic facts on 07.03.16 at 9:34 pm

Members of the European Parliament, representing the UK, are elected by British voters. At last get the basic facts straight. — Garth

===

There is a bit more to the “basic facts”, of course.

http://www.economist.com/news/briefing/21602200-european-elections-will-neither-lend-new-credibility-european-parliament-nor-give

Unlike the case with national parliaments, voters seldom know who their MEP is.

In part this is because in many countries constituencies are vast and parties run a “closed list” system in which their leaders, not voters, choose who gets seats.

Elections to the parliament also rarely change anything: whereas a national election can kick out an unpopular government, the European Parliament barely changes course regardless of whether the centre-right European People’s Party (EPP) or the centre-left Socialists and Democrats (S&D) is the largest group. The election does not even determine the parliament’s president: by common accord, this job is split, one term apiece, between the leaders of these two blocks, much to the irritation of the liberal ALDE group in the centre.

The fact remains that an “unelected” EU parliament is a myth. — Garth

#94 Nelley on 07.03.16 at 9:38 pm

#91Shawn-I have been reading your comments-perhaps you could take your own advice and sign up for one of those A$$ wiping careers. Cheers.

#95 ROTFL on 07.03.16 at 9:42 pm

#80 pete — “And in Kipling’s time work=producing tangible goods (not today’s casino economy and wasteful government jobs).”

Who shall doubt “the secret hid
Under Cheops’ pyramid”
Was that the contractor did
Cheops out of several millions?
Or that Joseph’s sudden rise
To Comptroller of Supplies
Was a fraud of monstrous size
On King Pharaoh’s swart Civilians?

Thus, the artless songs I sing
Do not deal with anything
New or never said before.
As it was in the beginning
Is to-day official sinning,
And shall be for evermore!

— from ‘A GENERAL SUMMARY’ by Rudyard Kipling

#96 ROTFL on 07.03.16 at 9:50 pm

#91 Shawn — “And what about elder care? A$$ wiping and diaper changing is not likely to be automated for a while yet.”

The Japanese have about the oldest population, high wages and lots of experience with automation. Either they develop robots or they bring in immigrant ass-wipers. And they’re really not keen on immigration. I’d bet on the robots.

#97 Gordon Parsons on 07.03.16 at 10:01 pm

“So people don’t make televisions or hubcaps in southern Ontario any more. And with the commodity price decline, they’re not fabricating pipe or turning out conveyors belts, either. China dominates the manufacture of steel, heavy equipment and all the crap you buy at Wal-Mart.”

Globalization was first called ‘sustainable development’. It was created in the ’70’s specifically to ship jobs oversea’s by neo-convict Liberals like Pierre Trudeau who was the second in line to sign up to gut manufacturing in Canada…..quite purposefully.

It was the ‘Idiot Age’ of Neo Liberalism in Europe and the then PM of Norway created a document as treacherously insidiously insanely as stupid as the Leap Manifesto ‘ our wacko liberal are promoting today. Canada Idiot King Pierre Trudeau thought it was a great idea to send Canadian jobs to people who deserved them more than the people who voted in Canada. And since Canadians weren’t voting for him in droves he grew to hate them. Instead he created the block immigration scheme to airdrop mass numbers of newly dependent immigrants into specific constituencies to upend traditional opposition.

Look up the liberals grand plan for Canada and the world in The Brundtland Report….and stop wondering why the jobs market fell apart and why and how Liberals use immigration as a weapon in the UK, Canada and the USA

#98 conan on 07.03.16 at 10:02 pm

I totally get what is going on. Without a middle class we do not have a society. It will be gated communities and the rest. Society will be crawling along, waiting for the next Spartacus to show up.

People are doubly pissed off because they have seen this economic shift for the last 3 decades. People that were voted in did nothing. if politics got tense….then discontent was shooed away with the xenophobia or worse accusation.

Will it allow Trump to be victorious? Nope…. he is a dangerous moron.

#99 F.dover on 07.03.16 at 10:02 pm

Central banks can print money to buy stocks to keep appearances up that the market is fine, but it would kill ‘them’ to print money to reward savers with a little interest now and then (which would pour right back into the economy with head spinning velocity.)

Uh huh.

#100 earlybird on 07.03.16 at 10:12 pm

Service economy is where we are heading. It will reflect in the economy soon enough. Prices need to come down or wages need to catch up…too much labour chasing too few jobs. In Alberta, rents are falling fast and minimum wages are going to be…liveable. The government delivered what the market couldnt..interesting times..

#101 Apocalypse2016 on 07.03.16 at 10:16 pm

Very true, but even worse, Mr.Turner.

The Summer of Hell is now upon us.

Chaos in Cleveland.

Massive outbreaks of global terrrorism.

Stock market meltdowns.

Canadian real estate starts to tank.

War as Putin exerts his power.

Drought and health crises like never before.

Brexit, migrant – Europe wll be a disaster!

In the future, the summer of 2016 will be seen as the beginnng of the end of the ‘sort of good times’.

This season wll lead us into war and depression that we will not see the end of until the 2030s.

Brace yourselves everyone.

Prepare.

#102 Smoking Man on 07.03.16 at 10:17 pm

My life
https://youtu.be/HNzmrEgz_GI

#103 For those about to flop... on 07.03.16 at 10:18 pm

#96 ROTFL on 07.03.16 at 9:50 pm
#91 Shawn — “And what about elder care? A$$ wiping and diaper changing is not likely to be automated for a while yet.”

The Japanese have about the oldest population, high wages and lots of experience with automation. Either they develop robots or they bring in immigrant ass-wipers. And they’re really not keen on immigration. I’d bet on the robots.

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

Two weeks ago the house I was working on had one of them state of the art toilets with bum wash seat warmer and remote.

The cost of this contraption ,allegedly 5k…

M42BC

#104 AK on 07.03.16 at 10:21 pm

“But nobody saw Brexit coming. ”
==============================
That’s because the younger generation who are benefiting the most by working and moving freely around the 28 countries , forgot to vote for some reason.

#105 jay on 07.03.16 at 10:22 pm

Don’t worry Garth, the 1%er’s are doing just fine in jolly old England, just like Trump said they would. https://www.rt.com/business/349113-ftse-jumps-despite-brexit/

#106 Mean Gene on 07.03.16 at 10:23 pm

Walmart prices and longshoreman wages, an ideal combination that doesn’t work.

#107 July 4th, protest on 07.03.16 at 10:25 pm

The next time you accuse me of sharing an attitude with those who slaughtered Jews in WW2, you will be more than merely deleted. — Garth

==

I was arguing against an ideology that ignores greater historical forces and claims that whatever happens to an individual is solely the result of the decisions that an individual makes.

I listed several historical events where it is absurd to say that individual’s own decision was the reason what happened to entire group of people, including their own destruction.

Historical events are emerging even today, we need to realize when making a better decision to yourself is beyond an individual’s ability to make a “better” choice.

I am not alone who finds that “your post has a slight condescending tone, as if the middle class was responsible for gutting itself.”

Just apologize. You lost it. — Garth

#108 WalMark of Sadkatoon on 07.03.16 at 10:25 pm

wonder how trump is gonna handle the EC

they know it’s a big problem. wonder what they’re doin about it

#109 BS on 07.03.16 at 10:35 pm

An annual income of $32,400 USD a year puts you in the top 1% of income earners worldwide.

A net worth of $770,000 USD puts you in the top 1% of worldwide wealth and includes home equity.

Lots of Canadians making both of those cuts.

As they say you are richer than you think.

http://www.investopedia.com/articles/personal-finance/050615/are-you-top-one-percent-world.asp

The term “top 1%” of global income may sound like an exclusive club, but it’s one to which millions of Americans belong. It’s a reminder of just how prosperous developed countries are compared to the vast majority of other people who share our planet.

#110 John in Mtl on 07.03.16 at 10:35 pm

#96 ROTFL on 07.03.16 at 9:50 pm

#91 Shawn — “And what about elder care? A$$ wiping and diaper changing is not likely to be automated for a while yet.”

The Japanese have about the oldest population, high wages and lots of experience with automation. Either they develop robots or they bring in immigrant ass-wipers.

They already did that, there’s even an app to monitor your poop!

Quote:
” Increasing complexity brings increasing risk, with toilets as with everything else.

The Japanese company Lixil developed the Satis line of luxury toilets. They feature automatic everything — flushing, bidet sprays and air drying, fragrance release, and music to cover the natural sounds of what’s going on. The Satis line retails for US$ 2,385 to 4,657. But wait, there’s more… The toilet can be controlled by an Android app called My Satis.”

http://toilet-guru.com/japan.php (scroll down to 2/3-rds of the page.

#111 John in Mtl on 07.03.16 at 10:36 pm

Oh, it also has a remote control!

#112 Steerage Bilge on 07.03.16 at 10:49 pm

#103 For those about to flop… on 07.03.16 at 10:18 pm

#96 ROTFL on 07.03.16 at 9:50 pm
#91 Shawn — “And what about elder care? A$$ wiping and diaper changing is not likely to be automated for a while yet.”

The Japanese have about the oldest population, high wages and lots of experience with automation. Either they develop robots or they bring in immigrant ass-wipers. And they’re really not keen on immigration. I’d bet on the robots.

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

Two weeks ago the house I was working on had one of them state of the art toilets with bum wash seat warmer and remote.

The cost of this contraption ,allegedly 5k…

M42BC

Did it work well?

#113 TRUMP on 07.03.16 at 10:49 pm

Be fearful when others are gready…

Be GREEDY when others are fearful…..

Bon Appetit!!!!!

#114 David McDonald on 07.03.16 at 10:50 pm

#13 and #19
Yes the elephant graph is a bit unclear. I assume it is based on incomes worldwide. It would have helped if the income associated with each decile were added.

#50 ROTFL showed UK income increases were fairly flat across all income percentiles in the UK but all these incomes are probably in the top two deciles of worldwide incomes. I guess the 85th percentile is the group of manual labours and factory workers in the advanced economies that Garth spoke about; I.e. Those who lost ground. The bump on elephant is the Chinese middle class.

#115 TurnerNation on 07.03.16 at 10:53 pm

Toronto life magazine this month has 30-something couple exhausting “all available sources of financing” doubling their budgeted amount into a 1.2m SFH. Both inlaws ponied up funds.

Till they part, (financial) death.

Their middle class job titles sound relatively useless. (Thankfully not “Diversity Coordinator”.)

#116 mouldy in YVR on 07.03.16 at 10:55 pm

https://www.theguardian.com/cities/2016/jul/01/canadexit-escape-donald-trump-nigel-farage-brexit-move-to-canada

…more fun…how others see us….

#117 common sense on 07.03.16 at 10:56 pm

Smokie…

Was that you marching down Yonge street today with T2, Wynne and Ford? Suspicious looking guy in glasses nearby…

Just curious?

#118 TurnerNation on 07.03.16 at 10:58 pm

Prophetic: “Drove my Chevy to the levee but the levee was dry”

#119 David McDonald on 07.03.16 at 11:04 pm

There is an interesting interview with the British philospher George Steiner in elpais.es:
http://cultura.elpais.com/cultura/2016/06/29/babelia/1467214901_163889.html
He doesn’t think Trump will be elected but doesn’t look forward to Clinton’s election either. He thinks Hilary Clinton is exhausted.

He means spiritually exhausted from the continuous attacks on her and her husband. Whatever one’s politics one would never say that about Justin Trudeau. In Canada we turned a page and have a fresh new team.

#120 Brian on 07.03.16 at 11:05 pm

So ultimately the 2nd world countries are going to spoil the party happening in the first world spots. Everything levels out.

#121 My Life is a Pile of Shit on 07.03.16 at 11:12 pm

“…70-year-old Muslim-baiting, misogynist, anti-immigration billionaire bombastic populist iconoclast.”

Trump is not a misogynist. He is known for insulting only two women, Rosie O’Donnell and Megyn Kelly. He insulted the 2nd woman only because of her remarks about his feud with the 1st. He doesn’t hate women in general. Ironically, his feud with O’Donnell was over Trump’s leniency on Miss USA after she was arrested for DUI. O’Donnell complained that was setting a bad example, but she was furious that pretty girls get all the breaks (and she doesn’t).

Also, Trump is not against immigration, only illegal immigration, and immigration from countries unfriendly to USA (and if that means Arab countries, then so be it).

#122 Metaxa on 07.03.16 at 11:17 pm

@ #97 Gordon Parsons

Boy Howdy! You have a lot going on in that post of yours!

It, however, leaves me wondering a couple of things.

Do you know what the term neo-liberal actually means?

Secondly why did your boy Stephen Harper, formerly the leader of Stephen Harper’s Conservative Party of Canada not undo any of this bad, awful stuff inflicted on us by a Prime Minister decades ago?

Or Mulroney?
Or Joe Clark?
Kim Campbell?

I’ll give you a hint on neo-liberal…on his best day Harper was way closer to being a neo-liberal than T1 ever was on his worst.

#123 MF on 07.03.16 at 11:19 pm

“Central banks will be working overtime to prevent fallout, with the Bank of England set to cut rates after revving up the printing press.”

This paragraph is telling. These central bankers will be “revving” up the printing press and cutting rates.

Is that ALL these idiots know how to do? Cut rates? What has that accomplished so far?

#99 F.dover on 07.03.16 at 10:02 pm

EXACTLY. Raising rates would send a signal that the economy is healthy and people would be more likely to spend. The extra yield will be put to use. How smart do you have to be to understand this?

It’s easy to see why more and more people are fed up.

MF

#124 July 4th, protest on 07.03.16 at 11:19 pm

#107 July 4th, protest on 07.03.16 at 10:25 pm

The next time you accuse me of sharing an attitude with those who slaughtered Jews in WW2, you will be more than merely deleted. — Garth

==

I was arguing against an ideology that ignores greater historical forces and claims that whatever happens to an individual is solely the result of the decisions that an individual makes.

I listed several historical events where it is absurd to say that individual’s own decision was the reason what happened to entire group of people, including their own destruction.

Historical events are emerging even today, we need to realize when making a better decision to yourself is beyond an individual’s ability to make a “better” choice.

I am not alone who finds that “your post has a slight condescending tone, as if the middle class was responsible for gutting itself.”

Just apologize. You lost it. — Garth

====

The idea that my people’s historical faith would have had a different outcome if they made a better individual decision is losing it.

“The opposite of love is not hate, it’s indifference.”
Elie Wiesel

#125 For those about to flop... on 07.03.16 at 11:24 pm

#112 Steerage Bilge on 07.03.16 at 10:49 pm
#103 For those about to flop… on 07.03.16 at 10:18 pm

#96 ROTFL on 07.03.16 at 9:50 pm
#91 Shawn — “And what about elder care? A$$ wiping and diaper changing is not likely to be automated for a while yet.”

The Japanese have about the oldest population, high wages and lots of experience with automation. Either they develop robots or they bring in immigrant ass-wipers. And they’re really not keen on immigration. I’d bet on the robots.

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

Two weeks ago the house I was working on had one of them state of the art toilets with bum wash seat warmer and remote.

The cost of this contraption ,allegedly 5k…

M42BC

Did it work well?

///////////////////////////:

Didn’t use it ,but I won’t be asking the landlord at my place for an upgrade.

I see John in Mtl had more details, I just asked the plumber the price and it’s features.

I’m not sure you need the remote…what are you scared of touching ….you’ve had your bum on it ,you should be best buddies by now…

M42BC

#126 Blacksheep on 07.03.16 at 11:28 pm

Garth, excellent post today, nice well rounded perspective, thanks.

Shawn # 41,

Supplies the following irrelevant, long winded info from BoE pdf:

“Banks therefore try to attract or retain additional liabilities to accompany their new loans. In practice other banks would also be making new loans and creating new deposits, so one way they can do this is to try and attract some of those newly created deposits. In a competitive banking sector, that may involve increasing the rate they offer to households on their savings accounts. By attracting new deposits, the bank can increase its lending without running down its reserves, as shown in the third row of Figure 2. Alternatively, a bank can borrow from other banks or attract other forms of liabilities, at least temporarily. But whether through deposits or other liabilities, the bank would need to make sure it was attracting and retaining some kind of funds in order to keep
expanding lending. And the cost of that needs to be
measured against the interest the bank expects to earn on the loans it is making, which in turn depends on the level of Bank Rate set by the Bank of England. For example, if a bank continued to attract new borrowers and increase lending by reducing mortgage rates, and sought to attract new deposits by increasing the rates it was paying on its customers’ deposits, it might soon find it unprofitable to keep expanding its lending. Competition for loans and deposits, and the desire
to make a profit, therefore limit money creation by banks.”
—————————————-
No one is claiming banks do not need customer deposits to facilitate cash flow or to make a profit, or even to allow banks to continue creating new $’s via the customers John Henry.

But your attempt to distract by sighting operational issues banks face is disingenuous.

Unfortunately for you, the above BoE details are 100% irrelevant to the fact that:

$’s deposited by one customer, are NOT lent out to other customers. Period.

So…..

Mark said: “Remember that every dollar lent by Canadian banks must have first been borrowed from the banks from savers.”

I then called him a liar.

Shawn, you said: “Therefore Mark is quite correct”

I then called you a liar, also.

Until you show me a legitimate source that contradicts what the BoE actually said relevant to new money creation, I stand by my comments.

#127 Ponzius Pilatus on 07.03.16 at 11:31 pm

#53 Fed-up on 07.03.16 at 6:58 pm
#29 Shawn on 07.03.16 at 5:15 pm

A False View of History

——————————————————————————–

Good God you are complete idiot. There are more than a dozen intelligent retorts to refute every point of your inane rhetoric, but none of them should be wasted on someone who is as intellectually lost as you are.
————
Completely agree.

#128 MF on 07.03.16 at 11:32 pm

#119 David McDonald on 07.03.16 at 11:04 pm

Speak for yourself. Our guy is an embarrassment and great at lying.

-quiet military deal with Saudi Arabia where gays are stoned to death.
-pretends to care about gays during gay pride.

Typical for him.

MF

#129 bill on 07.03.16 at 11:38 pm

#7 Metaxa on 07.03.16 at 3:45 pm
if things are really tough i hear its kind of straight across… a wedding ring gets you that weight in chicken,bread or what have you. the old Hungarian refugee who told me this said tobacco and alcohol
were much sought after trade items.
apparently the gold and silver disappeared pretty quick….

#130 will on 07.03.16 at 11:45 pm

#65 Interstellar star stuff on 07.03.16 at 7:32 pm

Where the hell is this damn book??? How many years! To be a writer don’t you have to write.. Fear of judgement and failure I’m guessing
______________

Hahahaha! I’ve been wondering the same thing. Where the hell is this damn book of yours Smoky? Hahahahaha!

#131 Ponzius Pilatus on 07.03.16 at 11:57 pm

Shawn,
In the good old days, banks used to lend based on their deposit base.
Nowadays, they issue bonds to finance their long term mortgages.
Hope this ends the discussion.

#132 Charles Ponzi on 07.04.16 at 12:01 am

Voters in Australia have just shown that they too are pissed off with their politicians. The Australian politicians got exactly what they deserved.

http://www.dailyreckoning.com.au/they-australian-politicians-got-what-they-deserved/2016/07/04/

#133 ROCK BEATS PAPER on 07.04.16 at 12:13 am

Garth,

You have gone too far in this post. You suffer from the same misconception as those “horny” for real estate, by writing “safe” in the same sentence as bonds. I suspect you expected ROR for “safe” bonds is less than 2% p.a. but what is the drawdown risk now for this class?

Moreover, surely writing “protest’s a waste” is antithetical to democracy.

Brexit was only a surprise to those with hubris. The polls clearly indicated a tight race for weeks before the polls closed. Only the very shortest term of traders were whipsawed.

#134 jay on 07.04.16 at 12:16 am

Eat your heart out Vancouver realturd’s , how’s this for a world class city. http://www.techinsider.io/china-is-building-the-worlds-largest-city-2016-7

#135 Victor V on 07.04.16 at 12:27 am

Former finance minister Joe Oliver is selling his Wychwood house for $4.5 million

http://torontolife.com/real-estate/houses/former-finance-minister-joe-oliver-selling-his-wychwood-house-for-4-5-million/

#136 NEVER GIVE UP on 07.04.16 at 12:32 am

REALTOR.CA and ICX.CA dont even have all the listings. There are at least 30% more signs on the street in Langley than there are listings on the sites.

If you really want to see the properties you have to do what we did in the 70’s. Drive around.

So much for technology!

#137 NEVER GIVE UP on 07.04.16 at 12:34 am

Why does the government tolerate the monopoly of REALTOR.CA?

Where is the competition? Trulia and others?

We are being shafted! Well… what else is new?

#138 RayofLight on 07.04.16 at 12:36 am

I don’t think it will be too long before a completely automated fast food restaurant is the norm. You start at a computer kiosk, or use your smart phone app. to order the meal. Drones could deliver the food to your table. The funds could then be automatically electronically transferred from your phone. The meals would most likely be quicker, fresher, cheaper and healthier ( all food contact surfaces would/could be sterilized between cycles).It’s a brave new world!
http://www.eater.com/2016/7/1/12077990/robot-burgers-san-francisco-momentum-machines

#139 NEVER GIVE UP on 07.04.16 at 12:40 am

#121 My Life is a Pile of Shit on 07.03.16 at 11:12 pm
Ironically, his feud with O’Donnell was over Trump’s leniency on Miss USA after she was arrested for DUI. O’Donnell complained that was setting a bad example, but she was furious that pretty girls get all the breaks (and she doesn’t).
————————————————————-

Hey PILE:

Did you just say Rosie was ugly there?

You ought to go to an old white man’s re-education camp.
You ought to know you cannot tell the truth anymore!

#140 Gordon Parsons on 07.04.16 at 12:49 am

“I’ll give you a hint on neo-liberal…on his best day Harper was way closer to being a neo-liberal than T1 ever was on his worst.”

Still sucking up the CBC bathwater spillover from the Hate Harper Campaign?

So…the Bruntland Report on how Pierre Trudeau systematically gutted the manufacturing industry in Canada and used ‘sustainable development’ to create ‘carbon taxes’ to pay for that long-con liberal crime against western civilization is too long a read for you?

No clue on the Trudeau Liberals using immigration as a weapon against opposition? Keeping screaming at the liberal bugaboos….Harper Bush Harper Bush…..hypnotic….and stupid.

The fact is that Pierre Trudeau was hated far worse by Canadian workers than Harper ever was.

#141 Jenmick on 07.04.16 at 1:19 am

Will it ever end ?????

Markets – Bloomberg
http://www.bloomberg.com/news/articles/2016-07-04/realtors-pitch-vancouver-to-soak-up-capital-flight-from-brexit

#142 Mark on 07.04.16 at 1:20 am

“Until you show me a legitimate source that contradicts what the BoE actually said relevant to new money creation, I stand by my comments.”

Shawn has probably given you way more of his time than you really deserve (but thanks Shawn for sticking up for the truth!). However, as he explained to you (and I will repeat), the systemic effect of the borrowing/lending cycle is that money effectively multiplies itself as it moves from being an asset of the bank, to a liability, and vice versa.

If confidence is lost in that process, for whatever reason, and there is a “flight to real assets”, then asset prices that are supported on account of the expansion of assets and debt must fall until such a point that the monetary base, as it exists at the time, bears some resemblance to the pricing of assets.

Hence, in a hypothetical “flight to real assets”, real estate would fall in nominal price merely because credit to buy (and prop up prices) would become non-existent.

In extremus, ie: hyperinflation, housing doesn’t tend to keep its value all that well. In Weimar Germany’s hyperinflation, for instance, a single ounce of gold could be exchanged for an apartment block. Productive capacity for the essentials of life, such as food and water, was far more valuable. Only during the deflation that proceeded the hyperinflation, did housing eventually regain value.

We’ve seen deflationary tendencies in the economy for the past 30-40 years. RE prices have risen for the past 30-40 years on account of what can best be described as a bond market bubble, or a bubble in lending confidence. The next 30-40 years, with the collapse of RE prices, demography punishing the baby boomers in their retirements, etc., promises to usher in quite a different era. All part of a longer-term cycle.

#143 Metaxa on 07.04.16 at 1:27 am

@ # 128 MF

Speak for yourself. Our guy is an embarrassment and great at lying.

-quiet military deal with Saudi Arabia where gays are stoned to death.
-pretends to care about gays during gay pride.

Typical for him.

So who was it that originally entered into the binding agreement?
Hint: it wasn’t T2 and/or any Liberal government.

If Justin had abrogated the deal put in place by Stephen and then was forced to pay the immediate and ongoing price for doing so, you probably would have castigated him for that as well.

#144 Joseph R. on 07.04.16 at 2:01 am

If you REALLY want to get your blood boiling, here is a paper from the Economic Policy Institute on the gap between Worker’s productivity and worker’s wages, from WWII to 2014 :

http://www.epi.org/publication/understanding-the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-and-why-its-real/

#145 'berta on 07.04.16 at 2:10 am

#121 My Life is a Pile of Shit 2

& I concur.

Most of the people that believe these negative things about Trump believe everything the main stream media puts out, rather then listening to his message and forming their own opinion.

Listening to Clinton on the other hand is like swallowing vomit. It’s hard to do with a straight face.

#146 Dan from Richmond Hill on 07.04.16 at 2:30 am

#32 Future clear but it will rollback on 07.03.16 at 5:23 pm

Poorer country labour migration in the EU is a real problem and Brexit was the right thing to do (e.g., locally here in NE Italy, Romanians work for 50% less than local Italian labour at a huge structural steel mfg. plant, all those savings go to the wealthy).

So you want italian companies to sell their products free of any taxes in Romania but you do not want romanians to work in Italy? How could European Union work in your opinion?

#147 Ronaldo on 07.04.16 at 2:33 am

#75 crowdedelevatorfartz on 07.03.16 at 8:08 pm

”Gas was not 10 cents a gallon in 1980.
Try roughly 60 cents a gallon.”

If you re-read my post I said that gas stations were offering gas for 10 cents per gallon if you paid with silver. When silver hit $15.00 in the last quarter of 79 that made a dime worth 90 cents. I presume gas was near to that price at the time. I know that where I was working up north in 79 we paid $1.00 at the bulk station so it may have been a bit cheaper in town. The point I was making is that yes you could buy gas with silver because some gas stations were offering it for 10 cents a gallon if you paid with silver coins.

http://www.silverinstitute.org/site/silver-price/silver-price-history/1979-1980/

”And that was when interest rates were about 17% and climbing”

5 Year rates in January of 1980 when silver peaked at $49.45 after a 724% rise from the $6.00 level in 1979, were 13.26% (see chart). I built my home starting in March of 79 and had locked in my 4 yr. mortgage at 10.5%. Five year interest rates hit 17% in May of 1981 and peaked at 21.46% in September the same year.

http://www.bankofcanada.ca/wp-content/uploads/2010/09/selected_historical_v122497.pdf

and average “boomer” salaries were about $3000 a month before taxes…..

That would be about right because I was paying a carpenter $22.00 per hour in May of 79 to assist with the building of my home. My salary would have been slightly less. I recall those days very vividly as I’m sure you do as well.

#148 BillyBob on 07.04.16 at 4:08 am

Members of the European Parliament, representing the UK, are elected by British voters. At last get the basic facts straight. — Garth

The fact remains that an “unelected” EU parliament is a myth. — Garth

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

Hmmm. If my understanding of the broad strokes of the EU power structure is correct (unlikely, but hey at least I’ve tried to learn), those elected MEP’s do not have the power to introduce legislation or pass laws – a power that is reserved for the appointed European Commission.

So yes, it is incorrect to say that European members of Parliament are unelected. But it is disingenuous to not continue on to mention that they can be – and are – overridden by the unelected Commission.

I believe that this fact is what people are referring to when they decry the possible lack of democracy and elitism of the EU.

If I’m not mistaken in Canada it would be marginally like the (unelected) Senate exercising more control over major policy direction than the elected MP’s. As as former one of those MP’s, would this have been an acceptable form of government? (Honest question, not facetious. Tone is difficult in written form.)

The public chooses their MP’s, not their Senators. At least gives the semblance of democracy.

#149 #59 BOOM! You forget, Trump is nuts... on 07.04.16 at 5:48 am

All good and well but you forget, populism cares little for your pseudo leftist trade happy viewpoint when they have lost their jobs and have received no relief from Government.

That is what happened in Brexit – poorer EU country labour flooding in, bidding down wages and job loss because of this.

This is the same message that Trump will deliver and to do that, he will have dismember trade agreements which he has already said he would do.

So Asia and Mexico, cheap labour countries will undoubtedly be in his cross hairs in terms of tariffs.

The EU has tariffs in place, it is not trade happy like everyone thinks (e.g., sugar tariffs to keep French chocolate makers employed).

The US will do the same.

Your arguments will whither away if populism takes over the US election and Hillary will have to either offer to do the same or be defeated.

Trump may be nuts but he is a patriot and all for repatriating whatever jobs he can to America and not Asia.

I applaud him for that.

#150 Bob on 07.04.16 at 7:39 am

Now, back to real estate……

Homes still selling like hot-cakes here in Hamilton, especially detached houses on the mountain. Even townhouses are being snapped up quickly, depending on location. Anecdotal chit chat from acquaintances indicates the trip down the 403 to Steel Town is directly the result of the market being too expensive in Milton, Brampton, Mississauga, etc.

Some real estate agents are being reduced to sending out mass mailers locally imploring people to list/sell due to the lack of listings this spring/summer. A number of times recently an agent has knocked on our door with his/her calling card…have not seen that before especially in this town.

Hamilton? Who knew?

#151 MF on 07.04.16 at 8:10 am

#143 Metaxa on 07.04.16 at 1:27 am

What does it have to do with the fact that T2 panders for votes?

Harper is not in power any more and “it’s 2016”. T2 could have abrogated since he is PM. He didn’t have any trouble “abrogating” the TFSA.

MF

#152 crowdedelevatorfartz on 07.04.16 at 8:18 am

@#148 Billybob

Hmmmm.
Another Brexit “rat” has left the sinking SS Britannia.
Nigel Farage of the xenophobic UKIP party has announced his resignation. First Labours’ socialist Boris Johnson now Nigel.
Seems the “Trumps” of the world are good at tearing things apart but when they realize what they’ve done they dont want to “play” any more……

#153 crowdedelevatorfartz on 07.04.16 at 8:24 am

@#147 Ronaldo.
Yep. I remember 1980 in Calgary. The cheapest gas in town was 11.9 cents per liter at an independent gas station called Penguin gas.
A friend had just purchased a brand new Toyota 4wd truck for 10k and his financing from the bank was 24%.
The economy was spiraling down…wages were tanking…..oil rigs were leaving…..the boom was over.

#154 crowdedelevatorfartz on 07.04.16 at 8:32 am

@#127 Pontificating Pilates
“There are more than a dozen intelligent retorts to refute every point of your inane rhetoric”
********************************************
#29 Shawns. “inane rhetoric” seemed pretty accurate to me as I recall experiencing a similar timeline.
Two people experiencing the same “insane rhetoric?” hows THAT possible…..unless……..

#155 Lee on 07.04.16 at 8:38 am

I am sure you all read the story in the Star this weekend about the two couples who bought the same house together so they could own a sfh together they could not afford alone in Leslieville for about $750,000. If this catches on we will be at $2 Million for an average sfh in Toronto in no time. Then there is the article in the Post today about agents pitching Toronto housing as a safe haven for money to people in England after the Brexit vote. You see, there is an endless number of avenues to keep the 250,000 or so desirable sfhs in Toronto under upward price pressure forever. And of course, nothing from any level of government to ease the market except talk of “studies”. This is how polititions get people off their backs: studies. Let’s just study it. How is fence sitting working for some of you? Remember what King Lear said: nothing comes of nothing. Governments intuitively know this. Action is what got them elected. You have all been led down the garden path.

#156 BillyBob on 07.04.16 at 8:43 am

#151 crowdedelevatorfartz on 07.04.16 at 8:18 am
@#148 Billybob

Hmmmm.
Another Brexit “rat” has left the sinking SS Britannia.
Nigel Farage of the xenophobic UKIP party has announced his resignation. First Labours’ socialist Boris Johnson now Nigel.
Seems the “Trumps” of the world are good at tearing things apart but when they realize what they’ve done they dont want to “play” any more……

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

Nottttt really sure how that has eff all to do with what I was discussing (the finer points of how little power elected European Members of Parliament have over EU policy/legislation), but hey, whatev’s.

The word “xenophobic” is a tired cliche bandied about by people who need issues to be simplistic to understand them.

#157 crowdedelevatorfartz on 07.04.16 at 8:55 am

@#101 Apocalypto 1620

“The Summer of Hell is now upon us”
********************************************

I believe your same old song goes…….

“Hot town , summer in the city”
“Back of my neck getting hot and gritty”

get your Lovin Spoonful lyrics straight brudda

But then again….. your boringly repetitive, juvenile apocalyptic diatribe was never a pitre dish of originality was it.
So….continue with the plagerism……I believe the Bible also mentions Hellfire .
Yeesh.

#158 Nelley on 07.04.16 at 9:09 am

Read the comments-Trump is nuts-Trump is a moron-Trump is a monster. The MSM can literally pump out anything and the sheeple will swallow it. NEWSFLASH: Trump is really sharp-the guy is way more informed, cunning and of greater intelligence than 95% of the population-at least. Anyone that can’t see this, whether you hate the guy or not, is already not perceiving reality correctly on this topic.

#159 Randy on 07.04.16 at 9:31 am

When does the right-wing kickback start ?

#160 Jesse Harrison on 07.04.16 at 9:38 am

Looking at bonds this morning and Canada’s 10 and 30 year yields are 1.04%, 1.69%.

They just keep dropping day after day.

#161 Chris on 07.04.16 at 9:57 am

Brexit vote demonstrated the power of the democratic process. It demonstrates how the politicians elected fail the people they are supposed to represent. And the debate before the vote is even more valueable. If we can only have thar kind of debate on every issue and then decide. Can you imagine Canada holding a referendum on reducing TFSA, or caving into the Union’s latest demand, or on pay rates at Hydro One, …? People need to speak up and what better way to than a referendum.

#162 Tim Frederick on 07.04.16 at 10:06 am

Smart money is investing in Canadian Real Estate.

http://www.cbc.ca/news/business/house-prices-brexit-negative-interest-1.3659726

Not what the column (which is deeply flawed) says. — Garth

#163 };-) aka Devil's Advocate on 07.04.16 at 10:16 am

I hate it when the market gets like this. When house horniness reaches such peak levels it brings out the worst in people.

At the end of the day it’s shelter, a roof over your head, not a lot more.

If you have a problem with it you have only yourself to blame for turning it into something else.

#164 };-) aka Devil's Advocate on 07.04.16 at 10:24 am

More education needed within real estate industry

A relevant university degree and a two year apprenticeship would be a good start that would elevate the profession to a respectible standard.

#165 Tony on 07.04.16 at 10:29 am

Re: #162 Tim Frederick on 07.04.16 at 10:06 am

What happened to Japanese and German housing and real estate with negative interest rates?

#166 Who luvs ya Baby on 07.04.16 at 10:29 am

#164 };-) aka Devil’s Advocate on 07.04.16 at 10:24 am

More education needed within real estate industry

A relevant university degree and a two year apprenticeship would be a good start that would elevate the profession to a respectible standard.

TRUMP University!.. Respectable indeed.

#167 NoName on 07.04.16 at 10:31 am

Happy Independance Day to all Americans. I kind of wonder how British feel about it.

http://imgur.com/QmqmZF0

#168 Who luvs ya Baby on 07.04.16 at 10:33 am

So now pretty much every politician involved in brexit one way or another has bailed…. hilarious…a massive clusterf’ck for the ages.

#169 NoName on 07.04.16 at 10:33 am

#164 };-) aka Devil’s Advocate on 07.04.16 at 10:24 am

More education needed within real estate industry

A relevant university degree and a two year apprenticeship would be a good start that would elevate the profession to a respectable standard.

——

but “old” re agents would be grandfathered… lol

I SMELL BLOOD

#170 YVR YYZ Outright bubble! on 07.04.16 at 10:36 am

Rosenberg the latest to chime in….

https://ca.finance.yahoo.com/news/rosenberg-one-canadas-biggest-housing-175658561.html

#171 ww1 on 07.04.16 at 10:51 am

1 The real Kip on 07.03.16 at 4:54 pm
Two weeks ago you said Trump could not win no matter what, today you’re not so arrogant. There is easily enough disconnected Americans to put Trump in The White House.

But not enough EC votes. — Garth

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

For anyone interested, here’s some interesting scenarios on how those EC votes could play out :

http://www.usatoday.com/pages/interactives/electoral-college-2016/

#172 };-) aka Devil's Advocate on 07.04.16 at 10:58 am

#169 NoName on 07.04.16 at 10:33 am
#164 };-) aka Devil’s Advocate on 07.04.16 at 10:24 am

More education needed within real estate industry

A relevant university degree and a two year apprenticeship would be a good start that would elevate the profession to a respectable standard.

——

but “old” re agents would be grandfathered… lol

I SMELL BLOOD

With enough education, experience and a clean record; grandfathering would make sense. The real estate industry’s natural attrition rate at less than five years is huge.

BTW it would probably surprise you, as it did me, just how many REALTORS® have an undergraduate degree or higher.

#173 Blacksheep on 07.04.16 at 11:15 am

Mark/Shawn/Ponzius Pilatus/Anybody,

Please tell me where this BoE doc is incorrect.

The quote below is taken direct from first page of this Bank of England 2014 pdf.

“Rather than banks receiving deposits when households
save and then lending them out, bank lending creates deposits”

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
—————————————
When this BoE doc was released in 2014, it sent ripples through the internet for it’s straight forward disclosure on how banks create money, solely based on their customers promissory signature.

Why is this so god dammed hard to understand?

Mark, you posted the below irrelevant crap, cause you have nothing to say that can actually contradict the BoE statement.

“However, as he explained to you (and I will repeat), the systemic effect of the borrowing/lending cycle is that money effectively multiplies itself as it moves from being an asset of the bank, to a liability, and vice versa.
If confidence is lost in that process, for whatever reason, and there is a “flight to real assets”, then asset prices that are supported on account of the expansion of assets and debt must fall until such a point that the monetary base, as it exists at the time, bears some resemblance to the pricing of assets.
Hence, in a hypothetical “flight to real assets”, real estate would fall in nominal price merely because credit to buy (and prop up prices) would become non-existent.
In extremus, ie: hyperinflation, housing doesn’t tend to keep its value all that well. In Weimar Germany’s hyperinflation, for instance, a single ounce of gold could be exchanged for an apartment block. Productive capacity for the essentials of life, such as food and water, was far more valuable. Only during the deflation that proceeded the hyperinflation, did housing eventually regain value.
We’ve seen deflationary tendencies in the economy for the past 30-40 years. RE prices have risen for the past 30-40 years on account of what can best be described as a bond market bubble, or a bubble in lending confidence. The next 30-40 years, with the collapse of RE prices, demography punishing the baby boomers in their retirements, etc., promises to usher in quite a different era. All part of a longer-term cycle.”

No one cannot refute the BoE doc, because it IS fact.

Mark, why don’t you go back to telling us how Vancouver house prices have been falling for 3 years so someone else can call you liar.

THANKS for your tolerance Garth.

This ‘debate’ is over cause I’m done with these fools.

#174 Bottoms_Up on 07.04.16 at 11:22 am

#161 Chris on 07.04.16 at 9:57 am
——————————————–
The problem with referendums is that the ‘average’ citizen is relatively uninformed, and therefore if you get more uninformed (or spiteful) people voting than informed people, your ‘democracy’ becomes flawed and dangerous (kind of like trying to steer a ship without a rudder).

The ‘democratic winners’ of the Brexit vote appears to have boiled down to essentially older people wanting to limit immigration, rather than ‘groupthink’ attempting to steer the country toward a path of future prosperity.

Many smart people have come to the same conclusion, that democracy is not always ‘right’. That’s why having leaders that are elected by the citizens but that are left relatively free to make decisions is likely best for the betterment of the country. Not every decision should be left in the hands of a ‘democratic’ vote.

#175 Trojan Houae on 07.04.16 at 11:56 am

#174 Bottoms Up

Spoken like a true arrogant a-hole. Not all decisions made by so-called leaders are the correct ones. In fact an argument can be made that the opposite is true, that most decisions have been wrong or have been in their own interests or serve the interests of a select few.

But that’s just an opinion of an average citizen.

#176 Mr. Frugal on 07.04.16 at 12:00 pm

#174 Bottoms_Up on 07.04.16 at 11:22 am

Many smart people have come to the same conclusion, that democracy is not always ‘right’.
——————————————————–

What a pompous wind-bag.

#177 Nelley on 07.04.16 at 12:01 pm

#174Bottom-Countries and societies are not destroyed because their “leaders” are not “smart people”. Bernie Madoff is a lot smarter than anybody-there are many Bernie Madoffs out there with a lot of power over societies and their puppets/official “leaders”. If you see yourself as a global citizen with zero loyalty to any particular country (a description which fits a very high % of Canadians at this point) then anything which benefits you personally (i.e massive immigration) is good and anything that doesn’t is bad.

#178 Rick Stevens on 07.04.16 at 12:06 pm

Actually bond yields are lower than that now Jesse. Canada 10 and 30 year are 1.03%, 1.68% at this time.

I read an article that 40% of the time the U.S. enters a recession when there is a change in U.S.President’s in that final year.

#179 earthboundmisfit on 07.04.16 at 12:13 pm

@174 ….. “What a pompous wind-bag”. That’s a pretty good description of both Donald Trump and Kevin O’Leary.

#180 Old Dog on 07.04.16 at 12:16 pm

Do you really want to hitch your wagon to that ride: Years of stagnant growth, high unemployment, failing banks, several countries bankrupt and with negative interest rates, a currency you can’t control, unelected and unaccountable bureaucrats making all the rules. And you get to pay for it all. The pain and suffering of tens of millions of Europeans is bringing every fringe party into more powerful positions.
How’s that working out boys?
The European Union needs to change but seems unable to. One of the difficulties of having an unelected super government that is in the habit of telling, not listening.

#181 Mark on 07.04.16 at 12:18 pm

“No one cannot refute the BoE doc, because it IS fact.”

And nobody is attempting to refute the BoE document. We (or at least me and Shawn) don’t disagree with it. However, as he tried to explain to you many, many times, you need to understand the BoE document in context, for its description of the systemic effect of the credit expansion process. A process in which commoners lend their money, without collateral or security interest, to the banks, and the banks use such borrowings to fund the acquisition of assets, which in turn, is systemically recycled back into the banks (but not necessarily exactly the same bank).

If this process breaks down on account of loss of confidence, or termed another away, a “flight to real assets”, then there’s big-time trouble for people who make up the other part of the equation, the borrowers.

So long as RE, particularly in Canada (and yes, even in Vancouver, where credit purchases are dominant) is subject to being so heavily influenced by the availability of credit, the health of the credit marketplace will be critical to the pricing of RE assets.

#182 Ronaldo on 07.04.16 at 12:43 pm

Here is the former Fed Chair’s view on Brexit and what’s going on in Europe right now. Figures the EU was a failed experiment. The guy that never saw the housing bubble and created a lot of the problems we have today by his actions or lack thereof. He’s sees major inflation in our future.

http://www.marketslant.com/articles/greenspan-urges-return-gold-standard

#183 Jenmick on 07.04.16 at 12:48 pm

And you keep saying interest rates will rise…..

Markets – Bloomberg
http://www.bloomberg.com/news/articles/2016-07-04/bond-markets-have-a-message-about-the-economy-that-stock-investors-might-not-want-to-hear

Not likely !!!

#184 BOOM! on 07.04.16 at 12:52 pm

#109 BS said……

$32,400 income puts you in the top 1% on a worldwide
income scale.

$700,000 USD Net Worth gets you into top 1% worldwide on a total NET WORTH basis.

A few more years of declining middle class wages and we can get there….

Now: Tell me, how can Canada, UK, or US compete with countries whose residents aspire to the lofty levels of $30 grand?

Only by adding more VALUE than COSTS in our products.
Seems we ‘forgot’ that bit of the equation. Whether a human, or a robot consider all the other costs: location, taxes, overhead, wages, and profit derived.

Many manufacturers are quite portable…

Not saying I ‘like’ what has happened over the last 50 years, and has been accelerating the last 30. We need to understand our own ‘worth’ and ‘cost’ against our competitors -the world. When we fail to get this right, and real, we fail -completely.

Trump is NOT a saviour. Hillary is not one either.
Divided American politics is not getting our country moving forward. Partisan gridlock benefits the elected.

Only you, and me making smarter decisions of where to work, live, save and invest etc. will make the difference being (or staying) in that world-wide 1% or something less…

This subject has been beat to death already.

YOU are primarily responsible for your own success, or failure!!

M64WI

#185 Blacksheep on 07.04.16 at 12:55 pm

Re: Blacksheep # 173,

No one ‘can refute’, instead of ‘cannot refute’.

#186 Roial1 on 07.04.16 at 1:14 pm

I thought the lesson was obvious: protest’s a waste. Spend the time making better decisions for yourself. — Garth
——————————————————-

A very good comment.
However, one needs good information and specialized knowledge that is often NOT available to make good decisions.

That is the question!

How do we get that knowledge in an understandable format???????

#187 Nelley on 07.04.16 at 1:22 pm

#184Boom-the majority of the Canadian economy is shielded from foreign competition. Everybody here has to pay for that shield-it isn’t free. Exactly what is the global market value/value added of the average Canadian high school teacher? Maybe 2-3 grand a year, if that?

#188 Basil Fawlty on 07.04.16 at 1:23 pm

Does anybody else think that some thinking people in the UK voted to leave the EU based on Mario Draghi’s mad science of trillions in bonds at negative interest rates? Like lend me a grand and I will give you back $997 (the guy has made the Vegas Mob blush).
Another reason people for voting to split may be the ongoing corporate propaganda surrounding “free trade agreements”. We are continually told if you don’t support the EU, FTA, NAFTA, TPP, CETA etc then you are against trade. People are for trade, but not for corporate written documents that tie the hands of democratically elected governments.

#189 Brazil ex-pat on 07.04.16 at 1:46 pm

#171 ww1 on 07.04.16 at 10:51 am
1 The real Kip on 07.03.16 at 4:54 pm
Two weeks ago you said Trump could not win no matter what, today you’re not so arrogant. There is easily enough disconnected Americans to put Trump in The White House.

But not enough EC votes. — Garth

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

For anyone interested, here’s some interesting scenarios on how those EC votes could play out :

http://www.usatoday.com/pages/interactives/electoral-college-2016/

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

Garth how could you “possibly” know there are not enough EC votes unless you have a time machine? People are pissed off like they have never been before at the tired old establishment and young people are coming out in droves to VOTE out this old band of thieves made up of Clintons, Bushes and other career politicians that have never worked a day in their tax sucking lives……

Trump 2016

#190 Brazil ex-pat on 07.04.16 at 1:50 pm

#179 earthboundmisfit on 07.04.16 at 12:13 pm
@174 ….. “What a pompous wind-bag”. That’s a pretty good description of both Donald Trump and Kevin O’Leary.

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

How many countries have either of those two men invaded which has resulted in millions of deaths and displaced people? Lets see……how about ZERO.

#191 Balmuto on 07.04.16 at 2:15 pm

“Remember that every dollar lent by Canadian banks must have first been borrowed from the banks from savers.”

Not true. Simple scenario:

A bank starts the day with a perfectly matched balance sheet (Assets = Liabilities) and then receives two customers: Sally the saver and Bob the borrower. Sally makes a cash deposit of $100 into her savings account. Bob wants to borrow $900. The bank lends Bob $900, in the form of credit to his chequing account. Let’s look at the net impact on the balance sheet:

Assets = $100 cash reserves + $900 loan to Bob = $1,000

Liabilities = $100 credit to Sally savings account + $900 credit to Bob chequing account = $1,000

Assets ($1,000) therefore equal liabilities ($1,000) and cash reserves of $100 represent 10% of liabilities.

There is nothing stopping the bank from doing the above. By no means is the bank limited to lending to Bob only the $100 it received from Sally. Nor must the bank acquire an additional $800 in funding to make up the difference between what it lent Bob and what it received from Sally. The two transactions leave the bank’s balance sheet perfectly matched despite the imbalance between what was borrowed and what was lent. The bank could never receive another customer and there would be no deficiency. So regardless of whether you characterize bank lending as a transfer from savers to borrowers or not, there is simply no basis on which to assert that “every dollar” that was lent out by the banks must have been borrowed from savers. That’s not how fractional reserve lending works.

#192 TRT on 07.04.16 at 2:40 pm

The bottom 50% of the USA would be smart to vote for Trump if they know what’s good for them.

Problem is they are the chart that can be easily brainwashed/manipulated.

I’m hoping Hillary wins for my own personal portfolio gain (me being greedy lol). But Trump is better for those down and out.

They will be brainwashed by MSM like they always have. Haha

#193 IHCTD9 on 07.04.16 at 2:43 pm

#155 Lee on 07.04.16 at 8:38 am
I am sure you all read the story in the Star this weekend about the two couples who bought the same house together so they could own a sfh together they could not afford alone in Leslieville for about $750,000. If this catches on we will be at $2 Million for an average sfh in Toronto in no time…

____________________________________________

Was returning home on the Grizzly 700 yesterday after a superb long weekend finishing up about 150 km worth of trail riding. Excellent weather, beautiful forests with flowers everywhere, and a sweet smell in the air as I sped across the forest floor among the hardwoods.

I noticed the new young couple at the end of our road was out in their yard – they had used the long weekend to move into their new house. I decided to stop in and introduce myself.

Nice young couple, guy was 22, a welder and worked for a good local company owned by an excellent fellow I have known since I was a kid myself. First house, paid 123K for it and the monthly is 800.00. He was a little overwhelmed by the whole ordeal of being in so much debt all of a sudden. I reassured him saying “you’re young, and 800.00 is cheaper than rent.” Mid fifties bungalow on a half acre, corner lot, maintenance free exterior and new roof. Can’t go wrong kid I said, be glad you’re not one of those suckers in Toronto selling their souls for a place just like this.

Hey you watch, by the end of the year Trump will be running the show down south and tearing up every trade agreement in the filing cabinet. Those folks in the GTA are a hiccup away from a total garage sale – you’ll get by easy even if you and the wife have to work at Timmies. Give me a call if you need a hand with anything. “sure thing” he said, “nice meeting you – and nice bike!”.

I hit the starter button, and the Griz rumbled to life, thumping in a soft staccato as I motored away. The last couple minutes of my ride consisted of me thinking how great it was to see a young family getting started at such a young age, and how the tiny hamlet I live in was changing – getting younger, and all the kiddies that are now scampering about.

The above probably plays out every day in Canada outside GTA and Van – this is real life. The lunacy in Toronto will not end well because it’s totally insane, and some day, someone dead in the middle of it all will realize it, and this sentiment will become contagious…

#194 jess on 07.04.16 at 2:44 pm

Libor-rigging scandal: three former Barclays traders found guilty

Victory for Serious Fraud Office as trio convicted of conspiring to fraudulently manipulate global benchmark interest rates
Prosecutors rejected claims any of the bankers were naive or unaware their actions were deceitful

https://www.theguardian.com/business/2016/jul/04/barclays-libor-convictions-a-major-victory-for-sfo

=
The European commission, which is the enforcer of EU law, said football was an economic activity and that it had a duty to ensure a level playing field between sports companies.

“Using taxpayers’ money to finance professional football clubs can create unfair competition,” the EU competition commissioner, Margrethe Vestager, said in a statement. “Professional football is a commercial activity with significant money involved and public money must comply with fair competition rules. The subsidies we investigated in these cases did not.”

Spanish football clubs to repay tens of millions in illegal state subsidies

Real Madrid and FC Barcelona among teams Brussels finds guilty of unfair competition after receiving state finance
====
cash in plastic bags /vote buying etc

French billionaire Dassault on trial for tax evasion
http://en.rfi.fr/france/20160704-french-billionaire-dassault-trial-tax-evasion

#195 westcdn on 07.04.16 at 2:46 pm

My mother worked in Tungsten, Yukon until they closed the mine. She would visit me in Edmonton where I lived for a few years – trying to save a down payment for a house. She always brought me something. One year she decided on a box of meat. The box split coming down the airport convener. We had to chase them down for a few minutes.

My wife never liked her. It was an issue I had to deal with – but what the heck, it was not something new. I had several white shirts at the time. Yes I even used a pocket protector – we are talking old school. My mother washed them and then hung them on the close line in minus 40 weather. She claimed it was the best way to remove stains. When I took the shirts off the line, I could stand them up in the corner. It worked but I have no clue how she washed them.

We had a thunderstorm a couple days ago. I noticed the eaves were overrunning. So I grabbed a step ladder and rushed to remove the blockage to the drainpipe. Unfortunately, in my rush I did not set the ladder well. I fell about 4 feet – my butt and spine still hurt. It could have been worse if I landed on my head. Still I had to lie in a pool of water for a few seconds – just to add to my misery.

Last night we had another wicked thunder storm. The garage eaves were overrunning. I am thinking to myself it not a good idea to get up on an aluminum step ladder while the lighting is flashing. I set the ladder better so I got off safely. Thank God. It sucks to get old.

#196 ronh on 07.04.16 at 3:10 pm

Central banks will be working overtime to prevent fallout, with the Bank of England set to cut rates after revving up the printing press. The flip side if you are interested.

http://www.zerohedge.com/news/2016-07-04/brexit-proved-its-all-central-bank-funded-mirage

#197 WalMark of Sadkatoon on 07.04.16 at 3:17 pm

i notice that SM uses english in a certain way and makes a lotta money

others use more ‘proper’ english but have no money

its better to know how to make cash than talk about it lol

dont major in the minors kids

#198 TRT on 07.04.16 at 3:26 pm

Statscan workers in Surrey in disarray!

Just found out that thousands of foreign students/temps/people who overstayed visas are living in industrial units.

Scramble going on right now to count them in census. Owners of large industrial buildings won’t let them in.

Unbelievable.

#199 Shawn Allen on 07.04.16 at 3:33 pm

Blacksheep explains banking.

At 136 he quoted the following from his Bank of England paper:

“By attracting new deposits, the bank can increase its lending…”

(Maybe the bank of England was lying about that?)

So it is clear that the paper explains that the banks initially create new deposits by setting up a loan and a deposit. This first step does not involve customer savings as Blacksheep observes. And this is the process by which money is created as well. It has limits as explained by the Bank of England.

The paper also explained how deposits circulate and that each individual bank can make new and increase its loans by attracting its share of deposits. This is what I called the second step and most lending involves deposits recirculating through the system and being loaned out again.

A deposit once initially created always belongs to someone. That someone considers that deposit to be his savings.

It’s a matter of reading the Bank of England document fully and realising it is just a description of how banking in fact works.

It is also a matter of understanding and looking at the balance sheet of any bank whereby deposits owned by and owed to customers are what largely fund the loans. A typical bank balance sheet might show the loans assets supported by 85% deposits and 10% owners equity and 5% bonds which are also considered to be investor capital.

I have explained it as best I can. I have not disagreed with the bank of England but rather I learned from their paper to understand the initial creation of bank deposits. I added that to my knowledge of how banks must attract deposits to balance their loans as deposits otherwise flow away. The Bank of England also touched on that.

Some people can get beyond step one of the banking process and some apparently can’t.

Some resort to calling those with a different understanding liars.

Blacksheep’s name calling reflects badly on him.

Other also anonymous people chimed in. It’s nothing to be proud of.

You’re welcome though.

Well, tomorrow I leave for my second European vacation in two months. (Netherlands, Germany and Switzerland this time) So, I may not be posting much for a while.

Maybe I will report back on banking in Switzerland. After all, I will be in Basil and Zurick.

#200 Dan Duran on 07.04.16 at 3:52 pm

You left out a bunch. The mess in Eastern Europe from the crisis in Ukraine and NATO encirclement of Russia. Not going away anytime soon. The mess in South America and Asia has its problems too. By comparison, countries like Canada and Australia look serene. Our biggest problems are low oil prices (increasingly irrelevant in a world moving away from oil) and high detached home prices in high-end neighborhoods in the only two English speaking cities worth living in (surprise!).

Sooo, what are we to do? Should the governments crash the RE markets with punitive regulations, so that foreigners (and Americans too) can buy in cheaper? (Can’t restrict them, for ideological reasons). It seems it’s what many are wishing for, but I don’t think they’ll be lucky this time. It’s 2016, not 1989!

As for globalization, I say ‘whatever’. It’s a done deal and much of the damage has been done already. I opposed it when it was timely, but not fashionable, now it’s too late. I’m old enough to remember paying $600 for ONE patio chair. 10 years later you could buy 4 of them + table + umbrella for 50% less. Made in China, of course. Designed in California, for now. Then, the design dept. moved to China also and the money we kept sending them wants to move back here in RE. Sure, we’d want them to buy our products, spread it around in Nova Scotia and New Brunswick, but NO, they want to buy want they want and not what we tell them to.

We did not oppose creating a new class of have-nots from the formerly employed low-medium skilled workers, we felt comfortable blaming them they are not able to get jobs in the new cutting edge internet, financial, fast-food or landscaping industries.

So now we are stuck in this paradigm, hoping that perhaps we may be able to exploit the coming technological revolution (in robotics, medicine, biotech etc..). But our governments seem to be preoccupied with every other issue, but.

#201 I'm stupid on 07.04.16 at 3:59 pm

That elephant chart shows how stupid people are. Look at major shopping centres, they’re full of really highend retailers. 20 years ago retailers like Prada or Gucci had stores in the most exclusive places on the planet or were sold in highend retail stores. The middle class didn’t save and invest to retain their living standard. They instead spent everything and borrowed to make up the shortfall. $800 shoes are a necessity now, just remember that if you’re wearing $800 shoes and you step in shit you still has shit on your shoes. It’s the middle class that gutted itself, asking for more money is difficult to do when you’re starving and can’t miss a pay cheque.

#202 NoName on 07.04.16 at 4:04 pm

#172 };-) aka Devil’s Advocate on 07.04.16 at 10:58 am
#169 NoName on 07.04.16 at 10:33 am
#164 };-) aka Devil’s Advocate on 07.04.16 at 10:24 am

More education needed within real estate industry

A relevant university degree and a two year apprenticeship would be a good start that would elevate the profession to a respectable standard.

——

but “old” re agents would be grandfathered… lol

I SMELL BLOOD

With enough education, experience and a clean record; grandfathering would make sense. The real estate industry’s natural attrition rate at less than five years is huge.

BTW it would probably surprise you, as it did me, just how many REALTORS® have an undergraduate degree or higher.

——–

interesting that you pointed out that there is many house salesmans with undergraduate degree or higher. I can tell you that i know/work lots of Engineering graduates or P.Eng. -s that do same job as a do.
People gravitate where a money is. But to assume that integrity kicks in with degree is funny. Thank yo for laugh.

Wally street always hired brightest, “most” educated and from best schools and we now know how thing played out before, during and after 2008 GFC.

I red a book, cant remember title but it talks about entitlements, so basicly gal was an enterpriseur and she had a donut muffin sale honor type thing business, (dont get to excited here) people where expected to place money in jar after picking up goods. so basicly she run a loss on higher floors where more educated/affluent where. I Get a picture, do you?

we all know where that under over graduate theory is going…

NoName

#203 Shawn Allen on 07.04.16 at 4:14 pm

Fractional Reserve Banking

#191 Balmuto on 07.04.16 at 2:15 pm …

Good example. I agree with it but not your end conclusion. Your example is what I call step one and it shows how the bank is funding Bob’s loan with Bob’s own deposit. All is in balance as you say.

Can you continue to show how the example works when Bob spends the $900 in the chequing and account assume whoever he spends it with deposits it in a different bank?

What will assets and balance sheet look like then?

Will the bank need to attract another $900 deposit from say Sue to replace the $900 Bob had on deposit as it has flowed away to a different bank?

What is then funding the $900 loan to Bob? Is it not the new deposit from Sue? (or whomever they attract the deposits from)

Thank you for adding to the discussion in a respectful way.

I have said before, I too can lend you a million dollars as long as you agree to let me hold the million I lend you. That is step one. Unfortunately I can not honor step two where you try to spend the million I lend you by taking the million out of my hands.

Thank you.

#204 j pea on 07.04.16 at 4:26 pm

Garth it may be true that the EP is made up of elected individuals from each respective party representing each country, however, it’s an oversimplification of the underlying mechanism of how laws are created to oversee British interests or any other country for that matter.
The reason the EU is ultimately undemocratic is because there are over 751 meps sitting in the EP and only 73 members from the entire UK which represents less than 10% of the vote when a law is passed and imposed on Britain. Therefore more than 90% of unelected officials unelected by the British people themselves are passing various laws for Britain. Would you not have taken the time to understand the mechanics of why it is ultimately undemocratic when officials that DO NOT have Britain’s best interest at hand are permitted to direct laws and policies affecting Britain?
Really, this discredits this idea that the laws imposed on Britain or any other country in the EU is surely Un democratic and clearly removes the sovereignty of every country in the EU.

Blah, blah, blah. I was correcting someone who said Britons were not represented democratically in the Euro Parliament. They are. — Garth

#205 Dogman01 on 07.04.16 at 4:41 pm

I have collected a number of pieces of wisdom from garth and the comments….a new one today:

“I thought the lesson was obvious: protest’s a waste. Spend the time making better decisions for yourself. — Garth”

On the same tangents are these pearls:

Millennials would be fools to expect their lives to unfold as carbon copies of their parents’. No profligate hippiedom, no finding-myself-in-Europe, no sha-na-nah for them. This is Darwin, baby. And you’d best know that now. – Garth Turner

Concentrate on using your life to achieve some good for yourself, and others. Railing against the gods wastes your most precious gift, while changing nothing. — Garth

“North Americans have to give up factory labour type jobs and get into the high paying, intellectual fields where we use our brain power to stay ahead of the rest of the world.”
Well, I’ve got some news for you – one heck of a lot of our citizens could not survive in this type of world. Many, many people are hard working but totally incapable of doing much more than the factory type labour that has given then a pretty good life style up to this point. Farming this type of work out to the other countries is depriving a large sector of our society of the ability to function in our brave new world.

The last quote is not mine. The others are brilliant. — Garth

#206 bank guy on 07.04.16 at 5:05 pm

Garth you banned the corporate IP domain for bmo. I couldn’t get on from work today! 198.x.x.245. we need you back! maybe you can update why! surely you can’t hate all us banksters.

Not me. The bank’s on to you. — Garth

#207 };-) aka Devil's Advocate on 07.04.16 at 5:19 pm

#202 NoName on 07.04.16 at 4:04 pm

I will agree that I’ve learnt a lot more through experience than all my formal education. That said a good education does most certainly, in my experience and most others, hone a person to be a far better contributing member of society than one without.

“If you think education is expensive, try ignorance.” Derek Bok

“Don’t let your education get in the way of your learning.” Samuel Clemens (Just in case the name escapes you NoName he went by the pen name Mark Twain)

“Education is the most powerful weapon which you can use to change the world.” Nelson Mandela

“Education is learning what you didn’t even know you didn’t know.” Daniel J. Boorstin

And here’s an especially good one for you NoName

“Education’s purpose is to replace an empty mind with an open one.” Malcolm Forbes

But I digress. Is what you are saying NoName that we should be satisfied with the current required level of education, or lack thereof, one must have to become a REALTOR® and handle what is probably the single biggest investment their client makes in a lifetime?

Now that said, the British Columbia Government made more money on PPT (Property Purchases Taxes) than it did from taxes on the forest industry, mining industry, tourism etc., etc. COMBINED!!! And all the while they have been cutting back on education!!! I’m guessing you would be in favour of all that too?

#208 Globalist on 07.04.16 at 5:23 pm

Garth

would you lend your money to Germany for ten years at minus -0.14% annualized rate?
Are government bonds some kind of ponzi scheme?

#209 Mark on 07.04.16 at 5:41 pm

“A bank starts the day with a perfectly matched balance sheet (Assets = Liabilities) and then receives two customers: Sally the saver and Bob the borrower. Sally makes a cash deposit of $100 into her savings account. Bob wants to borrow $900. The bank lends Bob $900, in the form of credit to his chequing account. Let’s look at the net impact on the balance sheet:

Assets = $100 cash reserves + $900 loan to Bob = $1,000

Liabilities = $100 credit to Sally savings account + $900 credit to Bob chequing account = $1,000

Assets ($1,000) therefore equal liabilities ($1,000) and cash reserves of $100 represent 10% of liabilities.

Doesn’t quite work that way. This is how it works. A saver decides to start a bank. They contribute $100 which is known as equity. This equity becomes a liability of the bank as it has been borrowed from the saver.

The bank uses this $100 in equity to ‘backstop’ borrowing an additional $900 from other savers. The bank uses the $1000 thus on the balance sheet to make a loan to a borrower.

Hence, the bank owes interest on the $900 borrowed at a contractual rate. It pays this interest using the proceeds of the $1000 loan it wrote, which is hopefully at a higher rate than the bank is obliged to pay on the $900 borrowed. Any leftover ‘residue’ accrues to that original saver who contributed their money as equity. If you’re been a Canadian bank shareholder over the years, you’ll recognize that this is actually quite a lucrative return over the long term, as people are willing to lend “$900” to the bank at fairly low rates in exchange for the security of a senior position in the capital structure of the bank.

Now, some of that $1000 will be returned to the bank by the borrowers or whomever the borrowers end up paying with the loan proceeds, in the form of additional deposits, in the form of equity, to make the balance sheet progressively larger. As this cycle occurs, there is a “money multiplier” effect such that lenders (ie: those who loan to the bank on an unsecured basis) disgorge their money in exchange for nothing but a promise. We know this as the concept of ‘confidence’, and this process is not constrained by the pool of available collateral as unsecured creditors of the banks do not receive collateral for their loans (ie: “deposits”) to the banks.

If this confidence is lost for whatever reason, then kaboom goes the banking system. As Shawn pointed out, watch “Its a Wonderful Life” for a few relevant classic cinematic scenes of bank runs happening. In such a scenario, the bank is forced to rapidly convert its asset base (ie: loans to customer borrowers) to cash to satisfy the bank’s creditors. The bank has not created any money — it is merely an intermediary between borrowers and savers who lend their savings to the banks.

If one owns an asset class, for instance, real estate in a highly leveraged market, that is dependant on credit, the worst thing that can possibly happen is the loss of this confidence. Hence, in a hypothetical “flight to real assets”, real estate prices fall until real estate (and other assets) are priced on the basis of a dramatically smaller money supply.

#210 salonist on 07.04.16 at 5:42 pm

coconut ash ice cream

https://mail.google.com/mail/u/0/?hl=en&source=navclient#inbox/155b7b83a90aba59?projector=1

#211 };-) aka Devil's Advocate on 07.04.16 at 5:43 pm

People are way too house horny, tramling one another to death like at door opening of a Walmart Tellytubbie sale. It’s absurd. And who’s laughing all the way to the bank? The BANKs are!!!

Real estate is a key economic engine. What’s been a major catalyst in that is the banks force feeding credit down peoples peoples (shepples) throats. And people are buying into it!!!

As Thomas Jefferson said more than 200 years ago; “I fear banking institutions more a threat to our civil liberties than standing armies”. Think about it…

#212 };-) aka Devil's Advocate on 07.04.16 at 5:55 pm

People are way too house horny, practically trampling one another to death like at the door opening of a Walmart Teletubbie sale. It’s absurd. And who’s laughing all the way to the bank? The BANKs are!!!

Real estate, like never before, has become a key component of our economic engine. What’s been a major catalyst in that is the banks force feeding credit down people’s throats. And people are buying into it!!! People are nothing more than Shepple to the banks who want to get you hooked on their drug of cheap credit. Once you are hooked… It’s become so big government can’t let it fail… “too big to fail”.

As Thomas Jefferson said more than 200 years ago; “I fear banking institutions to be more a threat to our civil liberties than standing armies”. Think about it…

It’s an opiate. You want it and then you want more and more. Before you know it you are a slave to it.

#213 Crowdedelevatorfartz on 07.04.16 at 5:56 pm

Yo Devil’s Advocate

Just read an article in last weeks Economist.

Probability of Jobs replaced by software
(where 1 = certain)

Dentists o.oo4
Clergy o.oo8
Firefighters o.17
Actors o.37
Pilots o.55
Typists o.81
Real Estate Sales o.86
Accountants and auditors o.94
Telemarketers o.99

Apparently there is a God and its Microsoft.

#214 RentYVR on 07.04.16 at 5:59 pm

Garth, you seem fixated on the belief that higher rates will burst this bubble. I disagree, rates are low and more likely heading lower. Instead, I think deflation will kill off the RE market especially those who are levered to the hills to pay for these crazy valuations. The central banks print like crazy but there’s no velocity; the cash just sits in bank/corp balance sheets. Wages are flat and prices (aside from RE) are stable or even declining (cabbage frenzies aside). Western gov’ts are trying to do the same thing that Japan has been trying for nearly 3 decades and it won’t work, you can’t print growth. Tokyo RE prices never recovered from their peaks and neither with YVR or YYZ.

#215 Metaxa on 07.04.16 at 6:00 pm

@ #140 Gordon Parsons:
Among other things you wrote
…Keeping screaming at the liberal bugaboos….Harper Bush Harper Bush…..hypnotic….and stupid…

Gordon, I am an old school, card carrying, dues paying Progressive Conservative. Until Peter sold out for a few helicopter rides and a hot wife. The reformacons certainly left me behind.

Now, I will cop to having voted Liberal Party in Federal elections now and then but I have never voted NDP, provincially or federally ever. When the Liberal Party of Canada melted down with scandal I certainly did not vote for them but was unable to vote for Stephen Harper’s Conservative Party of Canada either so I simply abstained.

History will not be kind to that man. You overlook faults endemic within the party at your own peril and that proclivity is why the Conservative Party of Canada will not form a government for the foreseeable future.

This is Canada, not what ever state exist in your mind. If you want the power, to be in charge you and your fellow seekers will have to tell your Party to get with the times.

As soon as they do, sans Harper, I will be back, my dues, my votes, my volunteer time.

as for the Bruntland Report, you are asking me to believe that a UN report, put together by a Norwegian in 1987 is responsible for Pierre Trudeau’s actions in doing exactly what to Canada?

#216 Dogman01 on 07.04.16 at 6:05 pm

#205 Dogman01 on 07.04.16 at 4:41 pm

The last quote is not mine. The others are brilliant. — Garth

Yes- sorry.

It was from the comments section and describes the dynamic I most worry about. There will be winners and losers (don’t get caught on the wrong side of that line)

Just for good measure this one is my all time favorite and echoed by my wife:

Of course, nobody listens to me. I’m like the guy who gives you the colonoscopy. You know when you hear the rubber gloves snap you should have eaten way more fibre. It’s the epiphany. – Garth Turner

#217 Raincouver on 07.04.16 at 6:57 pm

March Cohodes the ‘big Short’ genius who shorted US housing, says Vancouver RE is heading for a cliff. Says it is all Chinese Laundered money and laughs at out Premier’s actions. “Like pissing on a house fire”

that pretty much sums up our Premier alright

http://www.news1130.com/2016/07/01/former-hedge-fund-owner-vancouver-housing-market/

#218 crowdedelevatorfartz on 07.04.16 at 7:07 pm

@#156 BillyBob
“The word “xenophobic” is a tired cliche bandied about by people who need issues to be simplistic to understand them….”
*******************************************

bwahahahahahaha.
Apparently the Economist is too simplistic for you ?
….my apologies.

Ok.
We’ll just call Nigel Farage a race baiting theocratic fascist that resorts to lies and scare mongering to further his backward looking 1960’s white anglo saxon protestant populist myopic view of a Britain that never was.

Much easier than xenophobic.

#219 CTO on 07.05.16 at 8:29 am

Hey Garth
While I agree that for 2 or more decades people working in factories at assembly and / or labour type positions shouldn’t have been making the salaries that they were, these jobs still were the backbone of our economy and if they were able to stay here even making 2/3rds of the salary demanded, they would still be making twice the salary of a walmart employee and likely deliver a lot more self-satisfaction.
So when you say “low value added”, I beg to differ. We now have a very divided society, much closer to the third world economy which includes 10% of people in high paid professional positions and the rest in low paying retail and restaurant jobs.
We also have well educated kids growing up expecting to be in the 10%…good luck with that!
So…what is going to fill the void in this NEW economy we have created for ourselves.