Worse than zero

WIND

It was a landmark week. Not just for the brutality in Nice. Or the Donald Trump veepstakes. Or stock markets hitting new record highs. Or a coup in Turkey. All that mattered. But so did the continuing global collapse in the cost of money.

In the last seven days, for the first time since sex was invented, a majority of the $47 trillion in investment-grade debt in the entire world is paying 1% or less. More awesome, half of those bonds – from national debt to mortgage-backed securities – are yielding less than zero. Never before had Germany, for example, auctioned off a 10-year sovereign bond with a sub-zero yield. But it did this week. Japanese bonds are under water. And the first non-financial company a few days ago joined the club, selling negative-yielding bonds. Yes, there were buyers.

NEG RATES

Chart: Barclays, via Bloomberg

So why would someone give the German government, say, a million bucks so they could collect slightly less a decade later? Simple. Safety. Sovereign bonds are secure. Countries like Germany and Japan do not go bankrupt. So in a volatile world, investors at least know all their capital is secure. Well, almost all.

Of course bonds paying nothing, or less than nothing, are also powering the stock markets, shoving REITs higher and making preferreds look winsome. As the yields on fixed income assets plumb new depths, investors flock to dividend-paying stocks and other securities with a far fatter distribution. As I mentioned here yesterday, Canadian preferred shares are currently handing over a yield of slightly more than 5%, plus a tax credit making it even sweeter. As a result, demand is huge.

Bu why have rates collapsed? Why did the European Central Bank slash its deposit rate below zero two years ago? Could this spread to Canada? Does it mean the Royal Bank might have to pay people every month to have a mortgage, and Vancouver houses will soon average $12 million?

The world is trapped in a slow-growth vortex, for many reasons. We’ve never fully recovered from the 2008-9 credit crisis. Europe and Japan have been quasi-deflationary for years. Rapid technological advance has boosted productivity and lowered prices. Globalization has hacked away at labour costs and drastically altered employment. The income of the poorest has risen, and the living standard of the middle has dropped. Hence the rise of rightist movements, giving us Brexit and Trump. Those social upheavals themselves are fueling bond prices (safe havens) and pummeling yields.

Low rates breed asset bubbles. Some argue that’s the case with stocks, but it’s more directly seen with real estate. Families employ epic amounts of leverage to buy ever-more-expensive digs, so household debt bloats with every tick lower in the cost of money. The inverse relationship between interest rates and house prices is stunning, and right now the global epicentres of this are Vancouver and Toronto.

Will negative rates come here?

Bank of Canada boss Stephen Poloz told the Wall Street Journal on Thursday just because YVRers have sautéed themselves in debt, and real estate in 416 prices are insane, is no valid reason not to cut rates again (from the current 0.5%). Seriously. He said that. As you know, the bank already adopted a policy change (last year) which allows it to utilize negative rates, should the world start falling apart.

This kind of talk makes Bay Street economists apoplectic and head straight for that new mega-bar with the great hookers in the bottom of Scotia Plaza, where I have an office (but know nothing of what happens downstairs). They point out any rate cut might cause more moisters to ignite, push the debt needle further and send house prices into a zone from which the fall back to earth will be lethal.

But Poloz considers the housing market to be road kill on the larger journey of rescuing the economy from the kind of no-growth scenario now plaguing Europe (we’re close). So, anything could happen. Having said that, negative consumer loans or mortgages are a virtual impossibility in Canada. A negative-yielding federal bond might be another thing entirely.

Of course, the Big Bank boss talks out of both sides of his mouth. Two days ago he said this of the GTA and Van markets: “prices appear to be outpacing anything you can write down as fundamentals.” And Poloz knows there’s a newly-minted federal task force hard at work on ways to douse housing’s heated loins. So what’s the dude up to?

He’s selling. The Bank of Canada next adjusts rates on September 7th. After that on October 19th and December 7th. At one of those it appears the current rate will be dropped by half.

Now I need a drink.

219 comments ↓

#1 JSS on 07.15.16 at 5:38 pm

The only “sub-zero” I’m aware of is the fridge.
And i’m definitely in favor of it.

#2 C on 07.15.16 at 5:41 pm

First again today… :)

#3 ADC on 07.15.16 at 5:44 pm

First!

#4 C on 07.15.16 at 5:45 pm

I need a drink too. Crazy times on the planet these days.

#5 bertvl on 07.15.16 at 5:49 pm

Where exactly are these great hookers that you don’t know about? It’s for a friend…

#6 mark on 07.15.16 at 5:52 pm

Geez Garth, didn’t you rubbish talk about the negative rates last year? You sound almost resigned now.

#7 manderson on 07.15.16 at 5:59 pm

first?

#8 understood by few on 07.15.16 at 6:00 pm

So Garth, are you a Bluffington post “editor” now? (i.e. one step above a Redditor). No pay, but great “exposure”.

I’m surprised at the quality of the comments there. I guess lack of anonymity has an impact. I expected CBC mouth-breather-level excrement. Instead it’s your honest average idiots (“real estate always goes up!”).

As someone with USD income I’m drooling over a rate cut. That’ll plunge the CAD nicely. Some serious steps had better be taken to calm the realty markets though. The vacancy tax in Van isn’t going to do poop.

#9 TurnerNation on 07.15.16 at 6:01 pm

Speakeasy: this weblog tests all spirits.

(18 year old Scotch, especially.)

Bringing the mullet back one business party at a time.

#10 mitzerboy aka queencitykid on 07.15.16 at 6:01 pm

Now I need a drink.

i’m with ya garth… cheerz

#11 Pepito on 07.15.16 at 6:02 pm

“The inverse relationship between interest rates and house prices is stunning,…” – Garth

Really? Then pray tell why Germany with negative rates doesn’t have a housing bubble?

German consumer loan rates are not negative. And, evidently, Germans are a lot smarter. — Garth

#12 earthboundmisfit on 07.15.16 at 6:05 pm

Highland Park. Tres nice.

#13 Millenial on 07.15.16 at 6:08 pm

Why would someone give the German government a million bucks so they could collect slightly less a decade later?

It’s cause people buying the bonds think there’ll be a greater fool to buy the bond at a higher price later. And let me tell you, it’s likely: central banks will unleash even more QE soon – it’s a mathematical certainty.

#14 Vancouverman on 07.15.16 at 6:08 pm

Considering Dropping Rates?! Is Poloz out of his mind? with US going in the opposite direction, the CDN dollar will get murdered, houses in Vancouver will be 5 million dollars, rent will take 125% of the family income and I will be living on the street with wife and kids.

#15 Mr. Frugal on 07.15.16 at 6:08 pm

Stock dividends used to be higher than bond yields. Maybe we are just reverting to the norm. Tom Lee says that stocks are the new bonds. If you want yield buy stocks.

#16 Bill Gable on 07.15.16 at 6:13 pm

Mr. Turner you always manage to give us a lot to think about. This, from today’s post, just about made me spit up my over priced Latte.

To whit:

“In the last seven days, for the first time since sex was invented, a majority of the $47 trillion in investment-grade debt in the entire world is paying 1% or less”.

HOLY CANOLI!!!!

p.s. COUP and Gunfire in Ankara. This is really on the edge of a civil war. Police are with the Government, and the Army, wants to take over. The gunfire, as I write this…is deafening…and now Tanks, are in the streets.

#17 Johnny D on 07.15.16 at 6:14 pm

This rhetoric of dropping or raising interest rates seems to see-saw on a monthly, if not weekly basis. I’m sure something will change again come September. Say, a military coup in Turkey that disrupts shipping routes out of the Middle East and sends oil prices skyrocketing. Maybe when Eastern Canada stops getting a steady flow of Saudi oil and gas prices spike to over $4/litre, we’ll be forced to actually build a pipeline in this country, heaven forbid. The Canadian economy will benefit of course.

#18 Margaret on 07.15.16 at 6:22 pm

# 11 Pepito…Most Germans don’t buy their homes, they rent.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

#19 Brian Ripley on 07.15.16 at 6:25 pm

“…Vancouver houses will soon average $12 million?” Garth

According to my doubling chart of Vancouver SFD prices…

http://www.chpc.biz/vancouver-housing.html#Double

…. at the present rate of price increase (12% per year) over the last 8.4 years when prices doubled since April 2008… A house in Vancouver will indeed cost $12 million in 2034 (in 18 years)

Although in the last 42 months, these same prices have been rising at 1.7% per month (20.4%/yr) … and if that arc can be maintained, then an average $12 million house in Vancouver will be found in 2028 (in 12 years)

I may have made some arithmetic errors… but you get the idea… the rate of house price increases in Vancouver is historic and only sustainable if all the actors continue to agree that. “we can buy a house today and it will be worth more tomorrow”.

As long as there is indeed a greater fool.

#20 TurnerNation on 07.15.16 at 6:26 pm

Same old…elites remaking country after country using Shock Capitalism, Terrorism, invasions and coups.
You watch, 1001 new laws passed against us every year.

#21 steerage steward on 07.15.16 at 6:31 pm

Fewer than one in three millennials are optimistic about the performance of the Canadian economy over the next five years.

http://kitchener.ctvnews.ca/millennials-afraid-of-risk-when-investing-their-money-survey-1.2987341

So they think now is the time to buy a house? Need a drink as well, happy Friday.

#22 young & foolish on 07.15.16 at 6:33 pm

Yikes …. our currency is morphing into Monopoly Money!

#23 ROCK BEATS PAPER on 07.15.16 at 6:39 pm

“So why would someone give the German government, say, a million bucks so they could collect slightly less a decade later? Simple. Safety. Sovereign bonds are secure. Countries like Germany and Japan do not go bankrupt. So in a volatile world, investors at least know all their capital is secure.”

Germany has gone bankrupt in the past; think Weimar Republic. Japan is already bankrupt. 100% of Sovereign bonds in Japan are being bought by the Bank of Japan. It is not investors like you buying these bonds, not even in an ETF. It is central banks and government regulated entities that force buying (pension and insurance companies).

Drowning in the coolaid!

Only a fool would buy an asset like sovereign bonds at multi century highs no matter the reason. Even Gold is getting rich. Probably the same fools who were shunning these bonds when Volker begged them to buy at 15% plus yields.

#24 TCContrarian on 07.15.16 at 6:40 pm

The big question for me is: why are they trying to prevent the natural cyclical patterns exhibited by economies since Biblical times?

Instead, they’re hyper-extending the mispricings (read: asset bubbles), that will inevitably end up doing more harm than if left alone (ie. probably wiping out a lot of people, financially speaking)

My conclusion? Either they’re simply ‘nuts’, or it’s all ‘by design’. Perhaps a bit of both?

Any other opinions out there?

#25 young & foolish on 07.15.16 at 6:41 pm

“Your cash ain’t nuthin’ but trash”

—– Steve Miller

#26 S.Bby on 07.15.16 at 6:43 pm

If it doesn’t work, then try more of it.

#27 Brett in Calgary on 07.15.16 at 6:43 pm

I bought a used Xterra a month ago (I know, big spender), and I tried persuading the car dealer with “I’ll pay cash” for a lower price. I got the lower price, but because the economy sucks, not because of the cash. He said, “I don’t care where the money comes from, these days financing is everywhere for people with all sorts of credit”. Foolish me to think I would be rewarded for my financial discipline.

#28 NoName on 07.15.16 at 6:46 pm

“Now I need a drink.” -GT

may i suggest St. Bernardus Abt 12, dark beer very rich flavour bit on sweet and hint of bitter after taste and packs a whoping 10% per volume.

#29 not 1st on 07.15.16 at 6:51 pm

I would rather hold land, gold, guns, canned beans and TP before I would ever give my money to the govt in a loser bond. $47 trillion worth of morons across the globe.

BWY, how do companies pay their preferred yields when they are defaulting on their corporate bonds.

Who is defaulting? — Garth

#30 young & foolish on 07.15.16 at 6:52 pm

Hold on folks … we’ve had low rates everywhere for years, now even negative rates, and still no “growth” in sight. Are all those intelligent and educated people running central banks not taking notice? Does anybody really believe lowering rates here again will make a difference?

Not to sound like a conspiracy theorist, but one can be forgiven for thinking some other, and unspoken, reason is at work here.

#31 Freedom First on 07.15.16 at 6:54 pm

Man’s inhumanity to man. Throughout history. Sad. Very sad.

My only answer, that helps keep me sane in an insane world run, is to practice the Golden Rule the best I can, and to help others. Not to enable, but actually help. And on a daily basis.

Of course, to do this, I must look after myself in every way.

Part of this, as we do live in a physical world, is to always be prepared for any one of these scenarios: Bull markets, Bear markets, Deflation, Stagnation, and Inflation. This is another must, as I see how often throughout history, the media, politicians, and the majority of people say the words “nobody saw it coming”.

Things can, and do, change in the blink of an eye. Recency thinking can destroy your life.

It is why there is a 1%, 10%, 20%, etc…….plus, of course, the bottom 50%. The degree of the difference in lifestyle in each category, may vary from country to country. The degree of difference can change in any country too, even Canada.

#32 Brett in Calgary on 07.15.16 at 6:54 pm

@ #24 young & foolish

“Take the money and run”

— Steve Miller

#33 jess on 07.15.16 at 7:01 pm

#21 steerage steward on 07.15.16 at 6:31 pm

http://www.orangeskylaundry.com.au/

#34 Doghouse Dweller on 07.15.16 at 7:03 pm

Rates collapsed ! Not for the plebs.

Department Store Card 29.99%
Standard Credit Card 19.99%
Credit card debt as of October 2015: $77 billion
Average credit card debt as of Nov. 18, 2015: $3,745 up 3.04 per cent

Polozo talks out of both sides of his mouth to a brain dead audience.
Gotta love those MSM pictures of him, I wonder how long it takes him to pose for those visions of scholarliness.

#35 Andrew Knapma on 07.15.16 at 7:07 pm

Garth always loves quoting heads of banks when they support his theories, but when they come out and say foreign money is fanning the flames in the housing market, not a peep!

I give you the BMO Chief Economist…

http://www.huffingtonpost.ca/2016/07/15/vancouver-toronto-home-prices-foreign-money_n_11004592.html

#36 Craig Stephenson on 07.15.16 at 7:13 pm

Everything will crash and 2008 will look like a picnic and we all wish we were back in 2008.

Great Depression 2.0.

#37 conan on 07.15.16 at 7:16 pm

This should be no surprise to anyone who understands basic economics. Business’s need customers. If economic policy is reducing the middle class or devastating disposable income , then guess the F what.

Money is pouring into negative rate bonds because of safety and a strong mantra among the non believers of buy and hold investment philosophy that the market is going to reverse soon and create a ginormous buying opportunity. Can’t guess what date this will be, for now I will say October 2016.

#38 wallflower on 07.15.16 at 7:16 pm

I am drinking.
McClellands. Straight. Speyside. Best Value. Lowlands was the last bottle.

#39 F.dover on 07.15.16 at 7:17 pm

I have been reading this type of news at David Stockman’s Contra Corner for a very long time. The hows and the whys of this great deformation. So now for many months I have monitored The Greater Fool to get some opposing bullish talk for balance.

The bottom fell out of the bull and the balance.

‘magine if ‘ol Ben had decided high interest would be the cure all back in ’08 so idiots would stop levering up on stuff they could never pay the principal off on with cheap money, and the whole situation we are now in would be the polar opposite of this.

Would it all have been this bad, as in no graceful ending possible in a world with out such total debt?

#40 Sunshine on 07.15.16 at 7:18 pm

Hi Garth,
Thanks for all free advice you are sharing with us. I am regular reader and always look forward to your new post.
With possible rate cut what would be impact on preffered shares, for example CPD.
Thanks in advance.

#41 BOOM! on 07.15.16 at 7:20 pm

The more things change, the more they stay the same.

Yeah, we have all heard this tired old cliche. Except it is largely true in life. Today, tired of the market antics, and watching peeved people doing the unthinkable to their fellow creatures, including the human ones too. Now a military coup in Turkey?

The cause? Unknown, except that many are living a lesser dream than they lived before. That causes envy, jealousy, senseless violence, even Trump voting. Strange, the two US major parties seem prepared to offer ‘factory seconds’ to the voters, while the minority Green, and Libertarian offer more trustworthy, and sane choices. This probably will not end well….. Oh where have I heard THAT one before?

We will endure to our end.

M64WI

#42 Olive on 07.15.16 at 7:23 pm

Incredible !!!

Poloz said a numbers of months ago that since T2 has a huge spending budget…there is no need to lower rates…since this was the cure to stimulate the market.

Something stinks in Canada…it’s dirty Poloz. Finance Minister Morneau needs to kick some hard boot sense into has friend.

#43 [email protected] on 07.15.16 at 7:26 pm

The old saying ” be careful what you ask for ” but just wondering what the dogs think about my portfolio with [email protected] TSX year to date up approx 11.5 %. My mutual fund rich portfolio at the bank down 1.5%.

Garth, you can start it off with ” I told you so ”

Just a note, my ” greater fool tfsa ” up 9% year to date.

Who is the greater fool!

#44 Winston Smith on 07.15.16 at 7:29 pm

Central Bankers are economic terrorists.

#45 Patrick Ma on 07.15.16 at 7:32 pm

Brand new Vancouver Special in 1969 was $18000. Mortgage was $16000 and seemed like it would take forever to pay off. Nowadays people carry a $16000 credit card balance. Every interest rate cut devalues the dollar. Every QE money print devalues the dollar. In the end assets rise so much that the original debt seems insignificant. I dont agree with this way of world economics as bubbles will form. I’d rather have normal rates but this isn’t a normal world anymore.

#46 Nelley on 07.15.16 at 7:32 pm

#30Young-most don’t understand how economic “growth” is measured. GDP is a measure of consumption/spending-if I lend you 1 million dollars and you spend it-GDP increases by 1 million dollars-magical economic “growth” out of thin air. Strip away all the increase in debt/lending over the last 40 years and actual economic “growth” is meagre. Why lower rates you ask? Because after decades of this Ponzi scam, the size of the debt in relation to the size of the underlying economy to service the debt is at an ALL TIME HIGH. They don’t feel that have a choice-they could raise rates if they would like to blow the whole thing to smithereens.

#47 macroman on 07.15.16 at 7:38 pm

For those who need a drink….

https://www.youtube.com/watch?v=1iAYhQsQhSY

#48 John on 07.15.16 at 7:39 pm

Garth needs a drink. Smoking man better show with some suggestions. So with low interest rates fuelling the home purchasing craze in Van and 416, when is someone going to point out the obvious, that no amount of cheap money is igniting home sales in PEI, Saskatoon, Calgary and even many spots with an obvious job base? Sales suck.

#49 John on 07.15.16 at 7:45 pm

Don’t understand why folks have this love affair with granite anyway. I have first hand proof that that vast majority of these square foot gourmet pumping owners have almost no food in the fridge, pantry or cold cellar. Is that what living is all about? Sick.

#50 TurnerNation on 07.15.16 at 7:49 pm

On a (darker) note underscoring that this world always has been ruled via violence not democracy.
Why they suspended stuff our grandparents for so fought: Habeas Corpus. Geneva Convention.
Gonzoed by the stroke of a pen. (Our governments.)

Van housing bubble and AB wildfires: our Shock Capitalism. Throw into the mix that Parliament hill and NB shooters and they have us running scared?
Emoting PM. Teaching drama.

Actors all of em.

#51 Doug t on 07.15.16 at 7:57 pm

I’ve said this before

We are coming off a commodities supercycle and heading to a zero growth period. China failed in the experiment with capitalism. Europe is going to be ripped a new one – and borders back up. The U.S. Is becoming a police state – the risk of civil unrest grows and grows. Canada has always been nothing much more than exporters of resources so we are hooped. Learn to live with less and spend less people – it’s gonna be a tough couple of decades ahead

#52 tkid on 07.15.16 at 7:59 pm

would be no valid reason not to cut rates again from the current 0.5%.

I hate it when someone uses a double negative. Frequently, they do not know they have done so. But if you believe another cut is coming, I believe you.

So, the CDN dollar is currently headed back to 80 cents. If Poloz cuts the rate the dollar will fall. If the real estate market takes any kind of a hit before the December, the fall in the dollar will be breathtaking.

Does opening a US bank account seem to be an outrageous activity, and will I need to file US taxes if I open one?

#53 Brazil ex-pat on 07.15.16 at 8:04 pm

Yup…..time for an Old Fashioned.

Anyone here want to put up that there will be zero rate hikes this year by the FED?

#54 Brazil ex-pat on 07.15.16 at 8:11 pm

#20 TurnerNation on 07.15.16 at 6:26 pm
Same old…elites remaking country after country using Shock Capitalism, Terrorism, invasions and coups.
You watch, 1001 new laws passed against us every year.

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

And what are YOU doing about it? Exactly? Nothing…..everyone just keeps spinning this “Support Our Troops” BS. Umm……Canada was invaded by which country again?

#55 F.dover on 07.15.16 at 8:14 pm

Paulson, Giethner and Bernanke were boys crying wolf.

now it is a wolf pack, and it walks among us!

#56 tkid on 07.15.16 at 8:15 pm

Coup in Turkey. Erdogan has fled the country.

Horrible news out of Paris.

If the markets don’t puke on Monday, I might. A drink at Speakeasy looks mighty good right now, even if it costs 6 times a drink at my local.

#57 acdel on 07.15.16 at 8:19 pm

Surprise, No, a number of poster have been saying since the New Year that interest rates were not going up but down, all were ridiculed..

It’s all a sham, including the U.S. economy..

Not sure if I was allowed to say that without offending who ever out there that gets offended.

#58 BOOM! on 07.15.16 at 8:20 pm

#34 F.Dover

Hey Dover,

Your rant to Bernancke is somewhat misplaced. Don’t you remember the ‘Greenspan Put’ who lowered rates to 1% well before ol’ “helicopter Ben” ever brought his talents to the Federal Government.

While rates were already at 1% Bernanke lowered them to zero to a .25% AND we have had one giant .25% goose upward since then! (Greenspan created the housing crisis in the US…in my opinion) and many bought the toxic lending.

Greenspan has shown he was an utterly clueless maestro, along with the totally mis-named crew ‘the committee to save the world’ the picture featuring Greenspan, Larry Summers, and Robert Rubin on Time magazine.

If you ever needed more proof that “Bankers” are the very last authorities one should listen to, I am hard pressed to find any. ZIRP and QE has fixed nothing!

-BOOM!!- ……. and then it was all fixed!

M64WI

#59 inflate - inflate on 07.15.16 at 8:28 pm

So everybody’s growing debt: Governments, Businesses & Households… Solution, 50% forgiveness of debt for all… Now everything becomes manageable again… Oh, and helicopter drops of cash or governments build, build, build (roads & bridges) cities in turn growing economies and reliving debts…..

#60 protea on 07.15.16 at 8:29 pm

One of my pet peeves with this blog is the folks who get their daily jollies by trying to be first on the comment section. Get yourselves a life or at least lets hear your opinions occasionally.

#61 Setting the Record Straight on 07.15.16 at 8:32 pm

Your tax dollars at work!

CBC blames truck

https://mobile.twitter.com/CBCNews/status/753750957637459968?ref_src=twsrc%5Etfw

Was it a rogue truck?
Are these trucks, trucks of peace?

#62 SWL1976 on 07.15.16 at 8:38 pm

All this talk of negative rates here at the GF is a sure sign you are coming around to the new reality Garth.

I am just at the bank transfering the last of my mutual fund RSP’s into my self directed account. A brush with bankruptcy got me started investing late, and only set up my self directed account a few years ago. Anyways, I passed the test with my self directed, and wouldn’t have done it without sage advice found here Garth.

Thanks for the blog, and big thanks to all the blog dogs out there who take some time out of their day to pass on tidbits of information for those of us who are willing learn with an open mind.

Despite popular belief… Investing is fun

Have a good weekend all, and cheers for making this comments section what it is

#63 AK on 07.15.16 at 9:00 pm

“He’s selling. The Bank of Canada next adjusts rates on September 7th. After that on October 19th and December 7th. At one of those it appears the current rate will be dropped by half.”
====================================
That makes a lot of sense.
The U.S. may be raising 2 times and Canada going to negative rates. We are screwed.

#64 TRT on 07.15.16 at 9:01 pm

I need a drink too after this week.

#65 Doghouse Dweller on 07.15.16 at 9:01 pm

#40 Sunshine
With possible rate cut what would be impact on preffered shares, for example CPD
—————————————
The last time Poloz cut rates , preffereds took a severe beating and Garth was livid. So I would expect more of the same.

What concerns me is this quack is destroying our currency . It just cost me $6 in bacon for my BLT sandwitch. Inflation is rampant and everywhere and these bankers are willfully blind to it and talking negetive rate crazyness. One might lend to a friend for zero, but who
in their right mind would willingly pay to lend their money. The whole concept is as insane as the Banksters who discuss it.

We will soon see the consequences when people can no longer afford to eat and pay the monthly bills. Its already happening in many countries and even in industrialized France. Sticks and stones Canada is not immune.

#66 Etobicoke Pete on 07.15.16 at 9:04 pm

Erdogan is paying the price for flirting with Jihadists and his complicity in destabilizing Syria and all of Europe.

Godspeed to the secular Kemalist military.

#67 Say What? on 07.15.16 at 9:05 pm

So Garth, you finally, finally admit that negative rates are coming to Canada! Just say you were wrong. We’ll understand.

Where did I say that? — Garth

#68 Linda on 07.15.16 at 9:10 pm

So, given the post does that mean Canada is going to see deflation strike any time soon? Or ‘just’ negative interest rates if the trend to cut the rate continues? How long can the market go up under these conditions?

#69 Andrew Woburn on 07.15.16 at 9:28 pm

#11 Pepito on 07.15.16 at 6:02 pm
“The inverse relationship between interest rates and house prices is stunning,…” – Garth

Really? Then pray tell why Germany with negative rates doesn’t have a housing bubble?

German consumer loan rates are not negative. And, evidently, Germans are a lot smarter. — Garth

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

Germans are a lot smarter. They hate debt and many won’t even use credit cards.

#70 genbizx on 07.15.16 at 9:30 pm

i guess deflation avoidance is the name of the game when debt levels are insane.

Most would concede that we would be in a massive depression right now if not for the fiscal and monetary measures taken.

Problem is, it’s uncharted territory.
Like nosing an airplane down hard to avoid a stall we’re in a huge dive and we all hope the engine catches before we run out of altitude…maybe we’re just delaying a necessary reshuffling…maybe we’re trying to put out a big fire by dumping on a massive amount of wood in hopes of smothering it but really are setting up for disaster….

Question is, is perpetual growth (and an economic system predicated on it) really the best way to go? Are we grinding to the end of an economic paradigm? Seems to me that if we want to be a global economy we need global rules – too many cheaters, currency manipulators etc…The eu is a failure because it wanted to be a union but still maintain individual state sovereignty, banking , taxation…Britain is right to leave and will be better off in many ways. Framing Brexit as a right wing, anti-immigration reaction shows true ignorance of just how deeply failed the whole thing is. Break up the whole thing and make it a simple free trade zone only. Or go all the way to a true union..

Same thing here and south. We’re globalizing but we let lots of countries cheat and steal to the detriment of our own middle class people. The message from policy makers above becomes clear: “What you think doesn’t matter, we are smarter and know what’s best. Our lives are fine and you will just have to accept less” Then people are shocked when someone who promises to care, like Trump, comes along.

Lots of cheerleading of the economy going on every quarter and that’s a sure sign that people are hoping it all works out but underneath it all know that nothing has fundamentally changed for the good since 2007…

#71 AK on 07.15.16 at 9:30 pm

Can somebody on this Blog explain how Panda Bonds work? And why are the only available in BC ?

Google is not giving a clear explanation.

#72 Freedom First on 07.15.16 at 9:30 pm

I love being me. I’m just so awesome.

#73 Andrew Woburn on 07.15.16 at 9:31 pm

#61 Setting the Record Straight on 07.15.16 at 8:32 pm
Your tax dollars at work!

CBC blames truck
==================

Further proof of what eating celery does to the brain.

#74 Freeman on 07.15.16 at 9:32 pm

Don’t worry everyone, soon the average price of a detached Canadian house will be $87 Trillion dollars. SWEET !

#75 Newcomer on 07.15.16 at 9:37 pm

@52

Any Canadian bank will set you up with a USD account.

#76 Smoking Man on 07.15.16 at 9:56 pm

The world sure is a fkd a place these days, MSM in synchronized fashion blaming Nice on a rouge truck. Don’t these morons realize that very few of us rely on MSM for the real news. I would be humiliated if my occupation was that of a news director and was forced to drop to my kness with my mouth wide ten times a day.

I would be fired on the first day of the job.

I figured out why I’m addicted to casinos, other than poker I rarely put a cent in a machine. But I sure like the free booze, and that fact that I don’t need to talk anyone. I have a serious underling loathing for all humanity in general and it’s the perfect place to get blitzed in a crowd without needing to trade bull shit stories with anyone. I love it.

Look at Turkey, they channel Saudi loot and US weapons to ISIS to remove Assad. Not sure the Coup will work as I don’t see Turkeeans going out on a Turkey shoot.

But all the same I would give anything to be a fly on the wall at the next Devious or Builderburg after President Trump is inaugurated.

Billionaires and millionaires who have long forgot what it’s like to work having a hissy lesbonic tantrum.

Going to try and get up to the forks of the credit this weekend.

Dr Smoking Man
Phd Herdonomics

#77 Smoking Man on 07.15.16 at 10:00 pm

#72 Freedom First on 07.15.16 at 9:30 pm
I love being me. I’m just so awesome.
…………….
You are buddy. The fact that when you look in the mirror and like what you see, and are not assumed to be proud of that inspire of the social ramifications and judgment that comes from loving yourself first.

I welcome you to the 1%

#78 Poloz on 07.15.16 at 10:02 pm

DELETED

#79 Joe2.0 on 07.15.16 at 10:03 pm

Poor sheeple.

Low bank rates will continue to escalate housing prices.
Creating more fear amongst wanna be home owners as money sitting in their accounts continues to devalue.

It’s brutal, the banksaconda death grip.

#80 Joe2.0 on 07.15.16 at 10:06 pm

67 say what
Garth said negative interest rates would “never happen”

I’ll say it again. There will never be negative lending rates in Canada. — Garth

#81 Nemesis on 07.15.16 at 10:13 pm

“Now I need a drink.” – TipplerGT

#YourSoundtrack…

https://youtu.be/zXt56MB-3vc

[NoteToGT: Spring ’88… BarleyLuncheons @ TheWheatSheaf… late, late nights @ ElRancho and Bamboo… swaying with the crowd to the Neville Brothers’ live… and they say Toronto has no soul. Pish Posh.]

#82 Estrella on 07.15.16 at 10:24 pm

At 11 pm , it appears the turkey coup failed. The upstarts are being arrested and the president is on Terra Firma, and no longer skyping.

Be prepared for higher markers next week due to increased stability after this attempt. Markets will smile imo.

The question about the Canadian dollar …well according to this paris firm it will only crash in 2018. It follows a cycle. Someone better tell the bank of Canada.

http://www.theglobeandmail.com//globe-investor/investment-ideas/paris-firm-that-foresaw-2008-crisis-right-again-with-loonie/article30939951/?cmpid=rss1&click=sf_globe

#83 Blythe Barrington on 07.15.16 at 10:24 pm

#76 Smoking Man on 07.15.16 at 9:56 pm
The world sure is a fkd a place these days, MSM in synchronized fashion blaming Nice on a rouge truck. Don’t these morons realize that very few of us rely on MSM for the real news. I would be humiliated if my occupation was that of a news director and was forced to drop to my kness with my mouth wide ten times a day.

I would be fired on the first day of the job.

I figured out why I’m addicted to casinos, other than poker I rarely put a cent in a machine. But I sure like the free booze, and that fact that I don’t need to talk anyone. I have a serious underling loathing for all humanity in general and it’s the perfect place to get blitzed in a crowd without needing to trade bull shit stories with anyone. I love it.

Look at Turkey, they channel Saudi loot and US weapons to ISIS to remove Assad. Not sure the Coup will work as I don’t see Turkeeans going out on a Turkey shoot.

But all the same I would give anything to be a fly on the wall at the next Devious or Builderburg after President Trump is inaugurated.

Billionaires and millionaires who have long forgot what it’s like to work having a hissy lesbonic tantrum.

Going to try and get up to the forks of the credit this weekend.

Dr Smoking Man
Phd Herdonomics
_______________________________________

Dr Smoking Man. You have completely lost your mind, no longer is obviousness clear to you anymore. My summation is the excessive alcohol and over indulgences with who knows what substance you experiment with.

The entire coup in Turkey is a staged event to solidify Erdogan’s power and remove peoples rights, the free press as the end game is to challenge Putin’s dominance in the region.

They would laugh at you at Bilderburg.

Go to rehab.

#84 TRON on 07.15.16 at 10:26 pm

Anyone who’s gone bankrupt knows there is a long period of time where you believe you’re going to make it.

You rearrange your debtors, continue to borrow more and believe you’re going to make it.

You ignore the the advice from those who manage their money well because you believe you’re going to make it.

You convince yourself that more income, lower payments and more time is all you need because you believe you’re going to make it.

Then one day it hits you. You’re stuck and nothing you can do will get you moving forward. You blame the creditors, the economy and anybody else but yourself. You are now desperate with no way out. You now know you’re not going to make it and that happened in the blink of an eye.

Despite your best laid plans and intentions the world decided your time was up and either pay us or else. You no longer are in control because of your bad decisions.

Governments around the world are one by one getting to the point of ‘no control’. Negative interest rate bonds are on the rise and it’s happening very quickly. Germany and Japan can’t fail? Really? Their behavior has been so different than other countries that they have some sort of immunity?

The French government has just asked the world to email them suggestions on how to combat terrorism and keep France safe.

If you believe governments have a handle on the finances then remain in the security of the herd. Otherwise, open your eyes and prepare for what’s coming the best you can.

I’ve never been a doomer but I’m also not an idiot. Maybe I’m wrong but the odds seem to be tilting fast towards some real chaos on the horizon.

#85 Steerage Bilge on 07.15.16 at 10:36 pm

#76 Smoking Man on 07.15.16 at 9:56 pm

The world sure is a fkd a place these days, MSM in synchronized fashion blaming Nice on a rouge truck.
…………………
There was good agreement that it was a white truck…..

#86 Ronaldo on 07.15.16 at 10:37 pm

#29 not 1st on 07.15.16 at 6:51 pm

I would rather hold land, gold, guns, canned beans and TP before I would ever give my money to the govt in a loser bond. $47 trillion worth of morons across the globe.

———————————————————–
I would think that holding TP may be one of the better investments because once the stuff starts hitting the fan, there may be a shortage of the stuff. Imagine the profits you could make.

#87 Steerage Bilge on 07.15.16 at 10:51 pm

#83 Blythe Barrington on 07.15.16 at 10:24 pm

#76 Smoking Man on 07.15.16 at 9:56 pm
The world sure is a fkd a place these days, MSM in synchronized fashion blaming Nice on a rouge truck. Don’t these morons realize that very few of us rely on MSM for the real news. I would be humiliated if my occupation was that of a news director and was forced to drop to my kness with my mouth wide ten times a day.

I would be fired on the first day of the job.

I figured out why I’m addicted to casinos, other than poker I rarely put a cent in a machine. But I sure like the free booze, and that fact that I don’t need to talk anyone. I have a serious underling loathing for all humanity in general and it’s the perfect place to get blitzed in a crowd without needing to trade bull shit stories with anyone. I love it.

Look at Turkey, they channel Saudi loot and US weapons to ISIS to remove Assad. Not sure the Coup will work as I don’t see Turkeeans going out on a Turkey shoot.

But all the same I would give anything to be a fly on the wall at the next Devious or Builderburg after President Trump is inaugurated.

Billionaires and millionaires who have long forgot what it’s like to work having a hissy lesbonic tantrum.

Going to try and get up to the forks of the credit this weekend.

Dr Smoking Man
Phd Herdonomics
_______________________________________

Dr Smoking Man. You have completely lost your mind, no longer is obviousness clear to you anymore. My summation is the excessive alcohol and over indulgences with who knows what substance you experiment with.

The entire coup in Turkey is a staged event to solidify Erdogan’s power and remove peoples rights, the free press as the end game is to challenge Putin’s dominance in the region.

They would laugh at you at Bilderburg.

Go to rehab.
——

Talking to your self again!! Surely you address yourself as Herr Prof Dr. Dr. Smoking man… well as long you aren’t naked at the casino

#88 Ronaldo on 07.15.16 at 10:54 pm

#45 Patrick Ma on 07.15.16 at 7:32 pm

Brand new Vancouver Special in 1969 was $18000. Mortgage was $16000 and seemed like it would take forever to pay off. Nowadays people carry a $16000 credit card balance. Every interest rate cut devalues the dollar. Every QE money print devalues the dollar. In the end assets rise so much that the original debt seems insignificant. I dont agree with this way of world economics as bubbles will form. I’d rather have normal rates but this isn’t a normal world anymore.
—————————————————————–
Right. And back then a good wage was $8000/yr. for the main wage earner and the price of that home represented 2.25 that single income. The second wage earners income was not counted. Today that same wage would be around $60,000 so given the same formula, the house should only cost $135,000 but it’s probably around 1.4 million or 23 times that income. Something has gone seriously wrong along the way.
Back then 1 million would have bought 55 of those houses. Today, 1.4. A million doesn’t get you much today does it?

#89 Ronaldo on 07.15.16 at 10:59 pm

Correction to my previous post. ”Today 1.4”, should
read, Today .71.

#90 45north on 07.15.16 at 11:00 pm

But why have rates collapsed? Why did the European Central Bank slash its deposit rate below zero two years ago?

Bert Dohmen said Central Banks have no idea what they are doing. I think they’re scared. Really scared.

genbizx: Are we grinding to the end of an economic paradigm?

yeah we are

TTContrarian: why are they trying to prevent the natural cyclical patterns exhibited by economies since Biblical times?

there’s a lot at stake: prosperity, a society governed by rules, a sense of decency.

tkid: talking about Poloz: I hate it when someone uses a double negative.

me too

#91 Bram on 07.15.16 at 11:02 pm

Now I feel like a fool, paying four more years of 2.79% for my ING ‘unmortgage.’

I would love to pay 0.

The only solace is that the principle payment is quite a bit larger than the interest portion. But still…

You will never pay zero. — Garth

#92 Chuck Ashman on 07.15.16 at 11:10 pm

DELETED

#93 Chuck Ashman on 07.15.16 at 11:11 pm

Multiparty personalities tonight. Booze is what I’m thinking.

#94 Smoking Man on 07.15.16 at 11:13 pm

Note too self remove Ashman. Back to Smoking Man.

I have serious physiological problems that I can’t live with.

#95 ROTFL on 07.15.16 at 11:20 pm

Read ’em and bet. Read ’em and weep.

http://www.bankofcanada.ca/core-functions/monetary-policy/renewing-canadas-inflation-control-agreement/

#96 Freedom First on 07.15.16 at 11:21 pm

#77 Smoking Man on 07.15.16 at 10:00 pm

#72 Freedom First on 07.15.16 at 9:30 pm
I love being me. I’m just so awesome.
…………….
You are buddy. The fact that when you look in the mirror and like what you see, and are not assumed to be proud of that inspire of the social ramifications and judgment that comes from loving yourself first.

I welcome you to the 1%

FF007

Coming from you Mr. Smoking Guy, that means a lot. To celebrate my ascension to the top of the heap, I’m going to buy my teen girlfriend a crock pot!

#97 Freedom First on 07.15.16 at 11:29 pm

#83 Blythe Barrington on 07.15.16 at 10:24 pm

#76 Smoking Man on 07.15.16 at 9:56 pm
The world sure is a fkd a place these days, MSM in synchronized fashion blaming Nice on a rouge truck. Don’t these morons realize that very few of us rely on MSM for the real news. I would be humiliated if my occupation was that of a news director and was forced to drop to my kness with my mouth wide ten times a day.

I would be fired on the first day of the job.

I figured out why I’m addicted to casinos, other than poker I rarely put a cent in a machine. But I sure like the free booze, and that fact that I don’t need to talk anyone. I have a serious underling loathing for all humanity in general and it’s the perfect place to get blitzed in a crowd without needing to trade bull shit stories with anyone. I love it.

Look at Turkey, they channel Saudi loot and US weapons to ISIS to remove Assad. Not sure the Coup will work as I don’t see Turkeeans going out on a Turkey shoot.

But all the same I would give anything to be a fly on the wall at the next Devious or Builderburg after President Trump is inaugurated.

Billionaires and millionaires who have long forgot what it’s like to work having a hissy lesbonic tantrum.

Going to try and get up to the forks of the credit this weekend.

Dr Smoking Man
Phd Herdonomics
_______________________________________

Dr Smoking Man. You have completely lost your mind, no longer is obviousness clear to you anymore. My summation is the excessive alcohol and over indulgences with who knows what substance you experiment with.

The entire coup in Turkey is a staged event to solidify Erdogan’s power and remove peoples rights, the free press as the end game is to challenge Putin’s dominance in the region.

They would laugh at you at Bilderburg.

Go to rehab.

FF007

I love your outfit Blythe!

#98 The Wet Coast on 07.15.16 at 11:30 pm

Operators of trucks need to be licensed and have extensive training. There needs to be extensive background checks into the operators of trucks. Trucks with more than 5 hp engines and capable of more than 10 km/hr need to be banned. Trucks should not be allowed anywhere near schools or major public areas. The police should have access to larger trucks than everyone else. Military trucks are bad and need to be restricted. Trucks don’t kill people, people do. On and on…it sounds dumb ’cause it is.

#99 Smoking Man on 07.15.16 at 11:34 pm

#96 Freedom First on 07.15.16 at 11:21 pm
#77 Smoking Man on 07.15.16 at 10:00 pm

#72 Freedom First on 07.15.16 at 9:30 pm
I love being me. I’m just so awesome.
…………….
You are buddy. The fact that when you look in the mirror and like what you see, and are not assumed to be proud of that inspire of the social ramifications and judgment that comes from loving yourself first.

I welcome you to the 1%

FF007

Coming from you Mr. Smoking Guy, that means a lot. To celebrate my ascension to the top of the heap, I’m going to buy my teen girlfriend a crock pot!
…..

A crock pot without grandma’s recipes is useless.

A life without dad’s wisdom is also unless.

Boomers so underrated.

#100 ROTFL on 07.15.16 at 11:35 pm

#24 TCContrarian — “The big question for me is: why are they trying to prevent the natural cyclical patterns exhibited by economies since Biblical times?”

Because they sucked. You can’t finance and build huge, long-lived assets like railroads, steamship lines and automobile factories if there’s a 1 in 5 chance that the economy is going to contract by 10% next year.

#101 Freedom First on 07.15.16 at 11:36 pm

#71 AK on 07.15.16 at 9:30 pm

Can somebody on this Blog explain how Panda Bonds work? And why are the only available in BC ?

Google is not giving a clear explanation.

FF007

A Panda bond is when 2 pandas are spooning.

#102 millmech on 07.15.16 at 11:42 pm

Forty Creek Whisky Double Barrel Reserve on the rocks

#103 Entrepreneur on 07.15.16 at 11:46 pm

Why are we as a nation like ours not growing? We have the people. So, what is the problem? Have the leaders forgot about the people of the land, forgot that the people are the foundation of a nation, forgot the importance of businesses.

TGF

#104 bram on 07.15.16 at 11:55 pm

You will never pay zero. — Garth

Indeed, I doubt I ever will.

But can you explain why Canada is different from Europe?
Some Dutch people get paid for their mortgage by their lender(!)
(They had to sue the bank to get their money, but still: they got it: negative interest on their mortgage.)

I heard similar stories from some Scandinavian countries.

Is it because Canadian lenders never do contracts with ‘prime+x %’ clause?

http://www.news.com.au/finance/economy/world-economy/mortgage-borrower-to-be-paid-by-bank/news-story/c8c6697a488e981c5c523a995185b28f

#105 Vancouver Renter on 07.15.16 at 11:55 pm

He is selling? Poloz is selling his house?

#106 Metaxa on 07.16.16 at 12:20 am

A drink or three sounds perfectly delightful.

My father and I used to sit in his back yard and enjoy brazen Stingers by the pitcher full. A Stinger is brandy and white creme de menthe either shaken and poured or just built on the rocks.
Brazen is heavy on the brandy, light on the menthe, sultry is opposite.

When I was hiring back of house staff, kitchen managers, chef, sous chef, I’d arrange to have my vehicle up the road a bit at a garage. At the end of the interview I’d ask the prospect to give me a lift to my vehicle.

You can tell a lot about a person by how they keep their vehicle and how they drive.

My father told me that, sitting in his back yard, drinking Stingers.

Conversely, if I was hiring front of house, host or hostess, public barkeep, lead waiter, etc I’d make sure the interview process included going out to a busy place for lunch, sometimes dinner.

You can tell a lot about a person by how they treat the service staff.

My father told me that also, sitting in his back yard, drinking Stingers.

Although I haven’t had a Stinger in years I think I may just get me some white creme de menthe tomorrow and sit in the back yard, see what comes about.
If I come up with anything important I’ll be sure to let you all know.

#107 WUL on 07.16.16 at 12:40 am

For those with a sense of humour that are following the election of the Prez in the US of A, have not cut the cable and have the Golf Channel, Trump will be interviewed by David Feherty on his show “Feherty” on Monday night.

Yes, while it will likely be sycophantic (Doc. Smokes spells it “phycofantastic”) and flattering to the guest, it will likely hit my funny bone.

Feherty self described the launch of his pro golfing career as a pimply 17 year old with a 5 handicap telling his father he was going to pursue a career on tour. His Irish father promptly and properly called him an idjit.

On one of the ads (I’m watching the Open Championship) for the show he calls Trump an “asshole”. Trump agrees. Could be fun.

#108 HH on 07.16.16 at 12:41 am

It’s all about real (inflation adjusted) rates folks. I’d take a 1% bond when inflation is zero over a 5% bond when inflation is 6% anytime. And history is full of the latter too uniformed to know it.

#109 David Barnes on 07.16.16 at 12:56 am

Poloz’ blubbering is sweet news to anyone long on the markets. All the boring divvie payers are rocking.

But, RE facts are going to turn HAM Deniers into road kill, as the political winds are shifting away from the politically correct towards survival.

http://vancouversun.com/business/real-estate/examine-links-between-income-tax-and-real-estate-title-david-eby

#110 Brazil ex-pat on 07.16.16 at 1:26 am

#80 Joe2.0 on 07.15.16 at 10:06 pm
67 say what
Garth said negative interest rates would “never happen”

I’ll say it again. There will never be negative lending rates in Canada. — Garth

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

Garth is probably right. when the bond market collapses this fall……rates will go up pretty fast….

#111 Graeme on 07.16.16 at 1:35 am

#52 Tkid. “I hate it when people use double negatives. Frequently they don’t realize they are doing it.”

I dislike it when people don’t criticize others for the same reason.

#112 nonplused on 07.16.16 at 2:14 am

At first negative interest rates really confused me because I thought “why wouldn’t people just stuff cash under the mattress? Or buy real-estate? (ok they are doing that.)” But then a financial guy explained to me how Pimco has managed to crank out 5-6% returns in bonds throughout this period. It’s pretty simple: They count both the interest they receive and the capital appreciation of the bonds as their return. So as interest rates have fallen, the value of the bonds they hold have risen. They are betting on the trend. They were happy to buy bonds at 3% because they forecasted rates would head even lower and the price of the bonds would go up. And that’s why these crazy people that run the bond funds are buying at negative yields. They think the yields will go even more negative and they will make a fortune. For example if you buy a bond at -0.25% and the interest rate set by the central bank goes to -1%, you’ve made a fortune. On paper anyway, you have to be the first one out when the trend reverses.

If this financial guy is right, then the bond market is also truly a bubble, because people are buying bonds in the expectation that they will increase in value because interest rates will continue to drop, not because the yields are acceptable.

In fact I think it’s possible that the real bubble is in bonds, government bonds in particular, and that is what has driven the disaster in YVR.

If it is a bond bubble, and it is being driven by the general belief rates will continue to fall even through the “zero boundary”, then it raises a question: How negative can rates go? In the same way that 18% interest rates were as high as they could go back in the 80’s, there must be some number that is as low as they could go.

Back in the 80’s if you had $500,000 ($1,000,000 now) in bonds at north of 12% you could theoretically retire comfortably. In this new mixed up world we live in if banks ever started paying you to borrow, at 12% you could just borrow $1,000,000 and retire comfortably. Of course that won’t ever happen, so the real “zero boundary” may not be zero but it’s a lot closer to zero than the upper boundary is.

So my point is that even if the “zero boundary” doesn’t hold at zero and rates can go negative, they probably can’t go too negative, and when we get to the actual boundary and people start to realize it’s time to get out, it’ll be a blood bath.

I’ve seen this myself trading natural gas years ago. When something happens in the market that makes it clear to everyone that there is more supply than demand, a market can literally go “no bid”. In the case of the natural gas market I am talking about (Alberta) day gas prices actually went negative for a brief period. You had to pay someone to take your gas. It didn’t last long only part of a day but it was something to behold.

In a similar way it’s strange that people are paying to have their money held by a bank. It means there isn’t much demand for capital. In the old days of gold of course you had to pay for the bank to store it unless they were allowed to lend it out at interest. But in today’s world you have to store your electrons in the bank and they do lend it out and they still charge you. It’s crazy.

#113 Freedom First on 07.16.16 at 2:44 am

#77 Smoking Man

Thanks Smokey!

I must humbly admit my “Freedom First Impersonator Fan Club” has helped me somewhat in elevating my Ego, Confidence, Self Respect, Self Importance, and Self-Esteem to a newer, higher and extremely well deserved acme.

Fan #33

#114 YVRee on 07.16.16 at 3:24 am

I had been successful in convincing my wife to sell our alberta properties and rent (2013 and 2014). Good decision in hindsight, because it allowed us to move to the west coast with no attachments, money in our pockets and realize gains and not the likely losses staring many people down today.

But even with solid portfolios and relatively low rents, I have forsaken you Mr Turner and succumb to my wife’s pressure to buy in vancouver (north shore). Consider, 200k income gross, government, and any reasonable (small) 2bdrm rents now for 2300 a month (we pay 2600 right now). Purchased a 600k condo, 20% down, at 2.44% 5yr from a bank….sorry sir, I’ve let you down (she won’t leave, she won’t invest a large chunk of cash, and she is very persistent). I’ve accepted a possible 20% drop in value in the near future, but it is definitely slowing down (parents touring their adult kids through condos in the last few months…2+ weeks on the market, etc). Plus, my experience with the banks getting a mortgage was super easy (90 history of my assets to put on the house, and that is really it).

My personal tipping point, brexit and the words (silence) and action (inaction) of poloz (overnight staying put for the next year…longer?).

No question, just sharing (hi, my name is bill and I am a home owner…’hi bill’). Good luck to those that don’t clear 10k a month in this city. This market is an addiction. We need a 12 step program for the masses.

#115 $12 million or a collapse... on 07.16.16 at 3:49 am

Well Garth, thanks for the “cheery” yet honest news.

If YVR homes go to $12 million, then it is surely off-shore money that has funded the YVR RE market as it has in London, UK. Having said that, PRC is clamping down on foreign capital flight…London UK and NYC have already noticed a drop in this off-shore money source for their RE (for the last 4 months or so at least as prices are dropping, i.e., pre-Brexit).

If not off-shore money, then it is a locally funded bubble indeed and likely to burst very soon as the Cdn. economy and jobs creation have been dismal over the past 6 months. A job loss recession will surely collapse that bubble and easily so. In as many words, this is what you forecast – a recession or at best, 0 growth.

Only time will tell if YVR RE is off-shore funded or locally funded.

Either way, it is bad news for YVR RE.

#116 betamax on 07.16.16 at 5:38 am

#11 “pray tell why Germany with negative rates doesn’t have a housing bubble?”

Real estate sold in Germany is subject to progressive capital gains tax if the property has been held less than 10 years.

http://www.globalpropertyguide.com/Europe/germany/Taxes-and-Costs

#117 David W on 07.16.16 at 5:51 am

Garth,

Reg post #11, according to the IMF, German home price to income and rent vs price are even worse than Canada. Would this mean they have a potentialy worse bubble (and are slightly stupider than us)?

http://www.imf.org/external/research/housing/

#118 Franco on 07.16.16 at 7:18 am

So all that talk about rates normalizing was just talk. We will long be gone before rates ever hit 5% again. The demographics, wealth distribution of the world is changing and technology is taking jobs away and killing consumer spending. I am amazed that house prices in Toronto and Vancouver keep on rising under these conditions.

#119 Madcat on 07.16.16 at 7:36 am

Citizens’ group rises up for Vancouver real estate reform
http://www.theglobeandmail.com/real-estate/vancouver/citizens-group-rises-up-for-vancouver-real-estate-reform/article30937362/

#120 Pepito on 07.16.16 at 7:39 am

#69 Andrew Woburn on 07.15.16 at 9:28 pm
#11 Pepito on 07.15.16 at 6:02 pm
“The inverse relationship between interest rates and house prices is stunning,…” – Garth

Really? Then pray tell why Germany with negative rates doesn’t have a housing bubble?

German consumer loan rates are not negative. And, evidently, Germans are a lot smarter. — Garth

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

Germans are a lot smarter. They hate debt and many won’t even use credit cards.
__________________________________________

And the prize for the correct answer goes to #18 Margaret on 07.15.16 at 6:22 pm …”Most Germans don’t buy their homes, they rent.”

And why do they prefer to rent? Because Germany has a rational, effective housing policy which ensures that ordinary folks do not need to worry about a roof over their heads.

So can we now stop blaming the Canadian public for the housing bubble and place it squarely on the shoulders of a long term government policy which rewards speculators, developers and banking with no thought whatsoever to providing stable, affordable housing for ordinary, working Canadians?

#121 AK on 07.16.16 at 8:15 am

#115 $12 million or a collapse… on 07.16.16 at 3:49 am

“Only time will tell if YVR RE is off-shore funded or locally funded.

Either way, it is bad news for YVR RE.”
===================================
How does a family earning $90K annualy able to qualify for a $1.7 Million dollar home?
Unless they have $1 million down payment.

The average family does not buy $1.7 million home unless they are moving up with windfall equity. How hard is that to grasp? — Garth

#122 Herb on 07.16.16 at 8:16 am

Some dogs are nosing for the scent trail of why there is no housing bubble in Germany.

Believe me, most Germans would love to be able to live “in their own four walls” (as the ideomatic in den eigenen vier Wänden puts it). It’s just that house ownership always has been too expensive for the earnings of the largest slice of the population that is not in business or the professions.

#123 Moron Face on 07.16.16 at 8:17 am

ap·o·plec·tic

– adjective informal
– overcome with anger; extremely indignant.
“Mark was apoplectic with rage at the decision”
dated
relating to or denoting apoplexy (stroke).
“an apoplectic attack”

Good word.

#124 Basil Fawlty on 07.16.16 at 8:49 am

Funny, but George Carlin, in his later years, has to be my favorite Economist. He had to be the world’s best bullshit detector.
People here discuss negative interest rates as a safe place to park capital? This is absurd, these sovereign bonds are continually in default, if the inflation rate is deducted. We are stupid enough to listen to complete Buffon’s such as Poloz, Carney, Yellen and Draghi? It’s a flim flam folks, just like the Wizard of Oz. “It’s a big club, and you ain’t in it” GC

#125 Dallas Allen on 07.16.16 at 9:08 am

Rate cuts makes Gold an even more attractive asset? Central Fund!!

The opposite. Rate cuts means mean the threat of deflation is very real. Deflation makes money more valuable, and commodities less so. You guys are so ill-informed it’s tragic. — Garth

#126 BOOM! on 07.16.16 at 9:08 am

#106 Metaxa

Good advice. Way back when, we owned a duplex. I used the same tactic (seeing how they kept their vehicle) as the final guide in selecting renters. Didn’t really matter what their FICO score was, this showed me how they lived.

Enjoy the Stingers!

#127 ROTFL on 07.16.16 at 9:13 am

#117 David W — “according to the IMF, German home price to income and rent vs price are even worse than Canada. Would this mean they have a potentialy worse bubble (and are slightly stupider than us)?”

That dataset isn’t showing what you think it is. It shows CHANGE in price/income and price/rent since 2010 for each country.

#128 ROTFL on 07.16.16 at 9:21 am

It appears you can get somewhat more useful data on price/rent and price/income here:
https://stats.oecd.org/Index.aspx?DataSetCode=HOUSE_PRICES
…if you chose “standardised price-income ratio” and “standardised price-rent ratio”
Canada is tops in price/rent and in 5th place in price/income, with Germany well down the list on both measures. This confirms my prejudices.

#129 Zen Headspace on 07.16.16 at 9:59 am

All of this economic turmoil is caused by human greed. We have only ourselves to blame for the confusion and uncertainty now before us. By grasping, clutching, craving, wanting, yearning, desiring, and pining, we continually dig ourselves deeper into a pit of suffering. We are all shameless materialistic whores.

Why not embrace the Tao and end the suffering? Study the wisdom of Lao-Tzu:

“What is dearer, name or life? What means more, life or wealth? What is worse, gain or loss? The stronger the attachments, the greater the cost. The more that is hoarded, the deeper the loss.”

“Know what is enough, be without disgrace. Know when to stop, be without danger. In this way, one lasts for a very long time.”

People who are materially oriented – those who identify and define themselves in terms of their possessions – have no real purpose other than to shuffle matter from place to place.

Materially-minded people can’t evolve intellectually because their attachment to and hoarding of matter trains the mind to view reality as fixed. This view is in harmony with dying, not growth, and so they cannot connect with the larger meaning behind consciousness.

Taoists know they are in a more powerful position when they are mobile, unburdened and independent. For them, excessive possessions are seen as ballast; something to be released in order to achieve greater buoyancy.
Just as air rushes in to fill a vacuum, more things will come into and out of such lives. Most importantly, the capacity to need less and pass things on brings enlightened people closer to themselves and to the continuous unfolding of reality.

The power in needing less – the less you have, the less you will be blinded to the subtle existence of the Tao by the material possessions you do have. And the more possessions you have, the harder you have to work to maintain them and guard them against those who want to take them from you. All of that leaves you less time and inclination to work at being in harmony with the Tao.

Material possessions are not of themselves bad, it is that they have the potential to blind people to the reality of the Tao unless that person takes positive steps to avoid being blinded.

Animals and plants show the power in needing less. They have little except their lives and the environment in that they live. They are in harmony with the Tao and usually need nothing more for their survival. Humans, with our highly developed conscious minds, have the ability to change our environment, to craft things that increase our chances of survival. The tendency to avoid is when those survival accessories become an end in themselves. As long as we see them as a means to an end (our continued survival with a degree of comfort) and not an end in themselves, we can avoid being blinded by materialism.

This is ancient wisdom is not from my own simple mind. It is from the Tao Te Ching.

Heed Lao-Tzu and Garth.
Be Balanced. Be Diversified. Be Liquid.

Be Water.

#130 Basil Fawlty on 07.16.16 at 10:36 am

Garth, allow to apologize if recent comments have been too fiesty. I had a quadruple bypass on Monday and have on a different plane

#131 Bonhomme Carnaval on 07.16.16 at 10:42 am

This blog post can be summed up in one word: ‘liquid’ (cash and/or liquor).

Have a a great weekend!

#132 MF on 07.16.16 at 10:50 am

#100 ROTFL on 07.15.16 at 11:35 pm

Yeah yet “they” couldn’t stop 2008 (and solved zero).

This money “experiment” will blow up. Nothing makes any sense. A negative bond is a joke and so is the current market that depends on “stimulus” to lurch forward.

MF

#133 MF on 07.16.16 at 10:53 am

Just saw how my comments about the changing state of families spurred some discussion the other day. Great to see.

MF

#134 For those about to flop... on 07.16.16 at 10:56 am

Some people have been getting an eyeful when researching their new P.M in Britain apparently.

Theresa May is the new P.M.

Teresa May is an adult actor.

One deals with members of parliament, and the other deals with members of the public…

M42BC

#135 ROTFL on 07.16.16 at 11:02 am

#129 Zen Headspace — “All of this economic turmoil is caused by human greed. We have only ourselves to blame for the confusion and uncertainty now before us. By grasping, clutching, craving, wanting, yearning, desiring, and pining, we continually dig ourselves deeper into a pit of suffering. We are all shameless materialistic whores.”

Turmoil? In the long march of history, we’ve got it pretty good. No need to have seven children because two will die in infancy and two more in war or misadventure, leaving three to support you in your meagre agrarian old age. Western man spends more years in education, leisure and retirement, and a smaller fraction at hard labour than any generation before him.

The result of mass adherence to the Dao are easy to see:
https://en.wikipedia.org/wiki/List_of_famines_in_China
https://en.wikipedia.org/wiki/Thomas_Robert_Malthus
https://en.wikipedia.org/wiki/Down_to_the_Countryside_Movement
It is easy to be a lone ascetic in a society full of greedy strivers. Live on a bit less than your share of the great wealth that society produces, and try daily to contain your smugness. But if many consume less than they produce, we get overproduction, deflation and depression. Keynes pointed out that typical advanced economies can run for long periods at either full capacity, or at far less than full capacity, with misery for all, and it is that second state which corresponds to the Daoist ideal of producing and consuming less.

“It took a lot of money to keep Gandhi in poverty.”

#136 ROTFL on 07.16.16 at 11:04 am

“The average family does not buy $1.7 million home unless they are moving up with windfall equity.”

https://www.youtube.com/watch?v=FHDwRECFL8M

#137 Renters Remorse on 07.16.16 at 11:16 am

A definite changing of the tone…

An interest rate cut was inconceivable – now a done deal.

US interest rates to rise 4 times this year – now no increase for this year and probably next

Seems some of the bloggers here called it with more rate cuts and a move to negative interest rates.

Oh well, another decade of cheap rates and higher real estate prices. Renting has been for the last several years, and looks like for the foreseeable next, to be a fools errand.

#138 Doghouse Dweller on 07.16.16 at 11:19 am

Rate cuts means mean the threat of deflation is very real. — Garth
———————————————————————

Rate cuts also mean currency devaluation is very real . -35% since Carney left town. When Poloz is done we will be at par with the Ukrainian hryvnia.

Real assets are going up up and away. What if its not that houses , land
,pork bellies and silver are more valuable but that the money is becoming worthless. Now that`s traglc.

SLW— http://tinyurl.com/h6whp5d
CEF.A—- http://tinyurl.com/gqhfxre
COW —– http://tinyurl.com/zdotfc4
DIR.UN — http://tinyurl.com/j9x56ln

#139 MF on 07.16.16 at 12:09 pm

#138 Doghouse Dweller on 07.16.16 at 11:19 am

Not to mention all of us who bought these preferred’s like CPD that get creamed every USELESS rate cut these morons do. It’s hard to care about yield when 1) it gets reset lower 2) your principle is hammered.

Is that the only thing thing the BOC can do with all their endless vast knowledge?? Show up once every few months and say whether or not rates will be cut? Can someone tell me what good cutting rates to zero has done?

Why cant we: Raise rates, give people money from interest bearing investments which they will turn around and spend? This would actually send a signal that the economy is healthy. Is this so hard to comprehend? Anyone take our “expert” economists seriously? I don’t. Useless.

Hopefully if Trump is elected a new era is ushered in where this complete failed strategy of cut rates and print money is ended.

MF

CPD has a distribution yield of 4.99% and a 12-month trailing yield of 5.24%. If you bought the preferred ETF for anything other than a great, tax-efficient yield, you are confused. Capital values will rise and fall with rates. Did you not know that when you purchased? — Garth

#140 MF on 07.16.16 at 12:33 pm

#140 MF on 07.16.16 at 12:09 pm

“CPD has a distribution yield of 4.99% and a 12-month trailing yield of 5.24%. If you bought the preferred ETF for anything other than a great, tax-efficient yield, you are confused. Capital values will rise and fall with rates. Did you not know that when you purchased? — Garth”

Capital value will rise and fall with rates. Exactly. I, like a lot of us, had faith that rates would rise. This was because we saw that the low rate environment had not resulted in any real growth and we had faith in our experts. Your post said it. Asset bubbles everywhere, tons of debt, no growth or results to show for it.

MF

If you bought a fixed income asset for capital gains, it was an amateur mistake. – Garth

#141 Andrew Woburn on 07.16.16 at 12:35 pm

THE L.E.D. QUANDARY: WHY THERE’S NO SUCH THING AS “BUILT TO LAST”

“The first international academic conference on product durability took place last year, in Nottingham, England; also in 2015, a consortium of environmental organizations, ranging from the California-based repair wiki iFixit to European government agencies, issued a joint call for longer-lasting goods. Sustainability thinkers increasingly recognize that the efforts of industrialized nations to “decouple” economic growth from its environmental impacts have not succeeded. Despite a conspicuous boom in energy-efficient, recyclable, biodegradable, and nontoxic products on the market, resource exploitation continues to intensify—the footprint of annual global consumption now exceeds the replacement rate of the planet’s resources by one and a half times. (It would be four times if everyone on Earth consumed like the average American.)”

http://www.newyorker.com/business/currency/the-l-e-d-quandary-why-theres-no-such-thing-as-built-to-last

#142 Alex n calgary on 07.16.16 at 12:35 pm

I wish we had a rogue Realtor with access to housing market real data (does this exist?) who could give us real numbers. I always make a point of asking businesses around Calgary about how its going, they all say economy is bad (is this relative to boom time though? I think still bad) we often wonder if the houses we see selling, how close to asking is that? I think lots of people who are cut off from data on jobs (stats can doesn’t count contractors, high % here) You know the data seems to support housing\construction collapse here in Berta, can negative interest rates even keep housing going? How long can they goose it? What is the point where the Gov steps in, (we know Harper didn’t care, keep it all rolling, make them look good, damn longterm) is it all down to personal responsibility? At least we finally have a longer term rental in CowTown, I think any rememnert of house lust got burned out of me many years ago.

#143 baratjarter on 07.16.16 at 12:45 pm

Garth after all of the pounding you took over being sexist on the CBC, am shocked you would use such an outdated and sexist term as “hooker”…..plus use the more PC “bio-facilitators”….unless one of your esteemed and learned commenters comes up with a better handle…..

#144 Stan on 07.16.16 at 12:46 pm

What’s the matter Garth? You’ve been saying that interest rates were going to be going up for years now.

I said US rates would rise. They will. — Garth

#145 TurnerNation on 07.16.16 at 12:47 pm

Prescient advice from this full service weblog.
In Yorkville last night I met a gold digger.
My first impression was be careful maybe a Pro. Not so much in the end. My balance won out.

#146 Freedom First on 07.16.16 at 1:36 pm

Smoking Man

I only Posted twice today. The Post #97 Freedom First is not mine. Only an idiot would diss you. And takes an even bigger idiot to do it in my name Neither is the teenage crock pot one my Post. My FF Fan club can be a bit
over the top, and while I appreciate their adoration, and their humour, none of them are all that bright. Keep in mind, they are all “Freedom First wannabe’s”.

I know you will appreciate this, Smoking Man, as you also float above the crowd.

fan #33

#147 Lorne on 07.16.16 at 1:37 pm

Interesting take on so-called racism and real estate:

http://vancouversun.com/opinion/columnists/douglas-todd-vancouvers-housing-debate-not-about-race-its-about-public-policy

#148 MF on 07.16.16 at 1:43 pm

#146 TurnerNation on 07.16.16 at 12:47 pm

Age: 27+ with one or more children out of wedlock significantly reduces the risk of gold digging IMO since most quality men have already categorized these women as for fun and nothing else. Doesn’t matter how much sephora they wear or gym squats are done.

Any Tattoos are a overt giveaway and red flag for trash.

MF

#149 Doghouse Dweller on 07.16.16 at 1:44 pm

The opposite is true. GRA and Van houses are an anomaly. — Garth
————————————————————-
The anomaly has reached the edge of Niagara Falls . HAM have the mayor and Wynne on board (or in their pocket) to build a Venetian city within a circus ghost town. This is fueling a speculation frenzy until we all go over the falls in a barrel.
http://bulletnewsniagara.ca/index.php?p=Sections&id=5913

#140 MF
I`m guessing the BOC et al just help keep the ponzi going . They obviously don`t care if you loose your shirt investing , starve from inflation or are enslaved in a deflationary collapse.

If you invest in preferred shares you had better know what your doing.
Warren Buffet calls the shots when he orders his.

#150 Victor V on 07.16.16 at 1:51 pm

http://www.wsj.com/articles/as-rates-sink-housing-bubbles-rise-1468661400

“The risks are clearly rising,” Mr. Poloz said, when asked if Vancouver’s and Toronto’s housing markets are in a bubble. “I just don’t know how big the risks are.”

#151 BS on 07.16.16 at 2:00 pm

#142 Andrew Woburn on 07.16.16 at 12:35 pm

THE L.E.D. QUANDARY: WHY THERE’S NO SUCH THING AS “BUILT TO LAST”

Products not being ‘built to last’ has less to do with companies creating products that will require a consumer to buy a replacement regularly and more to do with consumers demanding and buying the lowest priced products. The LED bulb is a perfect example. Even though it is cheaper to use and lasts almost forever people still want to buy the incandescent light bulbs because of the lower price point. So much so the government has banned them.

as of Jan. 1, 60- and 40-watt incandescent light bulbs can no longer be manufactured or imported into Canada, an extension of the ban on 75- and 100-watt bulbs that came into effect a year earlier. These were moves made by the federal government to cut energy consumption.

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/canada-dims-the-light-on-the-incandescent-light-bulb/article22739434/

#152 Fed-up on 07.16.16 at 2:46 pm

CPD has a distribution yield of 4.99% and a 12-month trailing yield of 5.24%. If you bought the preferred ETF for anything other than a great, tax-efficient yield, you are confused. Capital values will rise and fall with rates. Did you not know that when you purchased? — Garth
========================================================

This is somewhat confusing. Someone buys 200,000 after tax dollars of preferred shares in his or her million dollar portfolio 2 – 4 years ago, is down 25-35% in capital value in a dead rate environment, so they can get a 4-5% yield with lower resets on the horizon?

Capital values will come back? What are you basing this on? Negative, dropping and stagnant interest rates the world over going into their 9th year with no end in sight? Your calls for rate increases for the past 5 years have been 100% incorrect.

Sorry Garth, I know you mean well and and love to stick to your guns but for the last few years, preferred shares have proven to be a poor investment. They will probably continue to suck wind for quite some time as well.

I know, I know we are being to paid to wait, think long term etc etc…

If you bought preferreds for capital gains, you bought in error. Anyway, $200,000 in CPD five years ago, at $17 a unit, with a 5% yield would mean (if reinvested) about $55,000 in cash flow while the capital loss was $53,000 (CPD now just under $13). That loss is deductible from capital gains. So a sale today could well put you in the black. Stop whining. — Garth

#153 Andrew Woburn on 07.16.16 at 2:55 pm

#120 Pepito on 07.16.16 at 7:39 am
And the prize for the correct answer goes to #18 Margaret on 07.15.16 at 6:22 pm …”Most Germans don’t buy their homes, they rent.”
And why do they prefer to rent? Because Germany has a rational, effective housing policy which ensures that ordinary folks do not need to worry about a roof over their heads.
==========================

Actually about 53% of Germans own their own home, well below Canada’s 70%, but not nothing.
https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

I would be the first to agree that Canada’s housing policy, if there really is one, is a disaster, but I think the damage it has done to working people came mainly from unintended consequences. Also it is not clear the happy German situation was really designed to help the common volk.

When East and West Germany reunited in the early 90’s, it created a huge burden on the economy as it tried to absorb so many unproductive people and Soviet era factories. The solution agreed to between government, business and organized labour was to power their way out by developing an export economy. One of the tools to this end was to suppress consumer spending to allow savings to build up in export businesses. The EU is still paying for this decision in the form of the huge trade imbalances ripping it apart. In any case, the last thing the German government wanted to do was encourage domestic mortgage debt so housing prices have remained more stable than in many other countries.

Germans don’t feel like losers because they rent but that was true of most Europeans until recently. When I was in high school in Britain in the 60’s, most of my friends had no thought of ever buying a house. It wasn’t until Margaret Thatcher decided she should encourage property ownership among the lower classes that the British property boom took off. Similarly the US and Canada decided it was good policy and only fair to assist their less well off citizens to become homeowners by lowering down payment and extending mortgage terms. It seemed like a good idea at the time.

In 1970 or so, decent rental accomodation was readily available, even in Toronto, but houses were also available at three or four times annual income. The decision came down to a non-urgent lifestyle choice. Since then, the Canadian population has about doubled but the continuous concentration of jobs and workers in urban areas has accelerated and driven the scarcity value of housing within feasible commuting distance from work to a degree no one could foresee. This helped drive the notion that real estate always goes up and renters are fools. It was happening anyway even before mortgage rates became negligible.

I doubt there was any specific rental accommodation policy Canada could have adopted since you can’t sell what people won’t buy. They used to buy it because they were saving for a down payment. Maybe when the Bank of Mom and the CMHC runs dry, we’ll see more rental property on offer but getting back to that point is going to be painful.

#154 Mr Happy on 07.16.16 at 3:09 pm

…trapped in a slow-growth vortex….never recovered from the 2008-9 credit crisis….Europe and Japan have been quasi-deflationary….lowered prices…hacked away at labour costs…. living standard of the middle has dropped…. Brexit and Trump…..

wait….. hookers?????

#155 Where's The Money Guido? on 07.16.16 at 4:07 pm

Re: #27 Brett in Calgary on 07.15.16 at 6:43 pm
I bought a used Xterra a month ago (I know, big spender), and I tried persuading the car dealer with “I’ll pay cash” for a lower price. I got the lower price, but because the economy sucks, not because of the cash. He said, “I don’t care where the money comes from, these days financing is everywhere for people with all sorts of credit”. Foolish me to think I would be rewarded for my financial discipline.
So I just bought a new truck and had an offer of 0% for 6 years but when I read the purchase agreement I couldn’t believe my eyes. It stated that I have agreed to cede ALL my civil rights to Ford Credit and it has any means to collect off me. WTF? I give up all my rights to purchase a vehicle? There’s no way I would have signed that, even mentioning that to the finance manager about the civil rights and they took that paragraph out immediately. So that got me curious about what else they were hiding in this agreement.
After further reading I also noticed a part that stated Ford was offering more than 10% discount “incentive” to purchasers.
I asked about this part and got lied to by the salesman when he stated that this was the delivery charge that they were waiving, which they had done already. I then brought this up to the finance manager, he came clean and said that was an incentive if you paid cash. WTF? So hidden in the financials is this little blurb saying you will be charged no interest for 6 years but if you pay cash, they’ll knock off 10+%.
What a scam!!!!!
So it was obviously worth it to me to read the purchase agreement, I saved ~$4k and now don’t have to cede all my civil rights.
Please take the hour or so out of your life and READ all purchase agreements because you never know what these bastards will throw in the mix.
That was just 2 items I’m mentioning. I got them to change the contract 4 times before reaching the pay cash rebate. They were severely pissed at me for taking so much of their time, I guess nobody reads these contracts and I surprised them by doing just that and catching them in lies, though they all played dumb and surprised when I brought it up. I could tell they were so pissed at me, costing them another $4+k..
Never trust someone who’s selling you something and READ ALL CONTRACTS from beginning to end, you’ll never know where you can get a better deal.

#156 robert james on 07.16.16 at 4:27 pm

More BC real estate sleeze… http://vancouversun.com/news/local-news/b-c-company-benefits-from-quebec-cash-for-visa-program

#157 Souvereigninternational on 07.16.16 at 4:41 pm

“Sweet, actually. It’s up a little over 7.2% on an annualized basis YTD, sailed right through the whole UK vote fiasco and proved the power of balance. So far this year the REIT fund has added 22%, the Canadian stock ETF is ahead 13%, the US stock equivalent up 7% and the emerging market ETF positive by 13%. All bonds (government, corporate, high yield, real return) are also in positive territory.” ☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆☆
It might have paid handsomely to be diversified in the precious metal sector since last December. But you are stubborn and hate yellow and silver rocks.

This is not a gold blog. PMs are so wholly speculative and volatile they are unsuitable for almost all investors. — Garth

#158 Ronaldo on 07.16.16 at 4:52 pm

Here’s an interesting little program called Inflation Calculator. For example you plug in your annual salary in any particular year or price of a house and it calculates what the inflated value should be in any other year. For example a Vancouver Special at $18000 in 1969 should be valued at around $120,000 if it had just kept up to inflation. Instead you are looking at a value that is over 10 times. This program is based in USD.

http://www.dollartimes.com/inflation/inflation.php?amount=1000000&year=1969

#159 Pulp Faction on 07.16.16 at 5:32 pm

One of our largest customers….in the building supply and renovation sector…..reports sales down 30% over last year. Yikes !!

#160 Smoking Man on 07.16.16 at 5:33 pm

#144 baratjarter on 07.16.16 at 12:45 pm
Garth after all of the pounding you took over being sexist on the CBC, am shocked you would use such an outdated and sexist term as “hooker”…..plus use the more PC “bio-facilitators”….unless one of your esteemed and learned commenters comes up with a better handle…..

……….
Sort term rentals.

#161 Cloudy on 07.16.16 at 5:37 pm

#135 ROTFL on 07.16.16 at 11:02 am
“Turmoil? In the long march of history, we’ve got it pretty good. No need to have seven children because two will die in infancy and two more in war or misadventure, leaving three to support you in your meagre agrarian old age. Western man spends more years in education, leisure and retirement, and a smaller fraction at hard labour than any generation before him.”

I really agree with this point (I’m on the older end of Millenial generation) except for maybe my parents generation had lots of leisure time depending on their career and degree financial conservatism or liberalism.

People now are so complacent and entitled with how easy life is. I used to work the most dangerous job in my province, if not the whole country, as a sub contractor. If you weren’t working, you weren’t getting paid, whether it be your choice or the contractors. No calling in sick. Manage your own books, company finances and personal finances. A few years ago I undertook a career change and I now have a very enjoyable job with a pension and benefits and will always be thankful and never utter a complaint or drag down co-workers with whining.

#162 Ronaldo on 07.16.16 at 5:59 pm

Off topic but interesting to see how far we’ve come with computer power. However, it has had an effect on our markets as well with HFT and all of that. It was said that HFT may have been partly responsible for the 1987 stock market crash.

http://www.zmescience.com/research/technology/smartphone-power-compared-to-apollo-432/

#163 TurnerNation on 07.16.16 at 6:20 pm

54 Brazil ex-pat why should I continue the cycle of violence? They are bigger than me. Would not end well.
The real battle is for our minds. I’ll defend mine till the end.

#164 Souvereigninternational on 07.16.16 at 6:32 pm

This is not a gold blog. PMs are so wholly speculative and volatile they are unsuitable for almost all investors. — Garth

So you don’t own Any? And what is the difference between investing and speculation anyway. Most are not concerned how the process they made the money in is called as long as it is not fraud. To exclude any asset class from consideration for diversified portfolio is not prudent as any of those markets may decrease the risk curve of the performance of your portfolio.

Owning the TSX is plenty of PM exposure. Over & out. — Garth

#165 Brazil ex-pat on 07.16.16 at 6:54 pm

#164 TurnerNation on 07.16.16 at 6:20 pm
54 Brazil ex-pat why should I continue the cycle of violence? They are bigger than me. Would not end well.
The real battle is for our minds. I’ll defend mine till the end.

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

we are not light beings….we are flesh and blood humans. My point was about how everyone complains about “their rights and freedoms” yet they do nothing about it. DO SOMETHING about it……and complain all you want. I personally attend rallies, writes Govt, post in blogs and give people information they may not have otherwise known about when it comes to the totalitarianism of most “modern” Govt’s including Canada. Everyone knows we have no rights. There is no democracy. They just do whatever they want no matter which party or the outcry. The only county with a true working democracy is Switzerland. We should all be trying to emulate them.

#166 Apocalypse2016 on 07.16.16 at 7:04 pm

Turkey is only the beginning, my friends.

Future historians, among a shrunken human population of fewer than one billion, will record that World War III began in 2016.

It is very wise to invest right now in rural accessible property and food stocks to last two years as well as gasoline for one year of reduced driving.

The Summer of Hell is here.

#167 D.D. Corkum on 07.16.16 at 7:33 pm

#108 HH on 07.16.16 at 12:41 am

“It’s all about real (inflation adjusted) rates folks. I’d take a 1% bond when inflation is zero…”


Long-term real return bonds recently dipped as low as 0.18%. That corresponds to being “fair value” if the odds of default is only 1 in 555. Multiply that by the 28 years until the current benchmark bond matures, and that translates to being “fair” if Canada will only default once every 15 thousand years.

Now I trust Canada to be a very responsible borrower, but surely even the Government will run into trouble many times over before the year 17000.

#168 Smoking Man on 07.16.16 at 7:35 pm

Paul Helier talks ufos, he’s former Canadian minister of defence. Death bed confession.

http://m.disclose.tv/action/viewvideo/229922/ufo_disclosure_eerie_death_bed_confessions_by_top_canadian_official/

#169 Doghouse Dweller on 07.16.16 at 7:38 pm

The opposite is true. GRA and Van houses are an anomaly. — Garth
—————————————————————
Please allow me to rephrase my comment to the apocalyptic corruption light version.

The anomaly has reached the edge of Niagara Falls . My cousin tells me a near by house in Grimsby just sold for an epic 500k. When asked why so much. She said the go train is coming. Searching the news find out GO might service the area in 2023 if Wynne still has any money in the kitty. Add to this the HAM city within a city stories and the Toronto to Niagara Falls realestate refugees are pricing us out tales and we have Delusia Niagara all orchestrated by the MSM, politicans, bankers and speculators.

The public is just cannon fodder in the great swindle.

#170 TurnerNation on 07.16.16 at 7:44 pm

#156 Where’s The Money Guido?

Ford has a history of doing just that. Like I Say…it makes the world go round. Nothing has changed:

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

“The Battle of the Overpass was an incident on May 26, 1937, in which labor organizers clashed with Ford Motor Company security guards

“News and photos of the brutal attack made headlines in newspapers across the country.”

– They’ll stone you just like they said they would.

#171 ROCK BEATS PAPER on 07.16.16 at 7:56 pm

Rate cuts makes Gold an even more attractive asset?

The opposite. Rate cuts means mean the threat of deflation is very real. Deflation makes money more valuable, and commodities less so. You guys are so ill-informed it’s tragic. — Garth

Both wrong, or perhaps only partly correct. Gold is only interested in negative real rates. If rates are less than inflation, Gold is going up. Besides, there is no deflation even with rates at the zero bound. Money is not being treated as valuable currently.

#172 TurnerNation on 07.16.16 at 7:56 pm

#149 MF sadly in my extended friend group and out there I see many 35yr old + women with no kids not married resign themselves to too much partying and over drinking when going out.

Also I know this girl the matchmaker in article:

http://www.theglobeandmail.com/life/relationships/business-of-friends-for-hire-by-the-evening-or-even-the-hour-is-booming/article30914063/

“Shannon Tebb and I have been at the bar for half an hour chatting like old friends about her job, my recent date and my plans for later that night. Except we’re not old friends. We’re not even friends. Shannon is a wingwoman I’ve hired for the night.

We’re in less-than-ideal conditions: It’s 5:30 p.m., people have just left work and they’re keeping to themselves. On top of that, the pub is primarily filled with older men and while Tebb looks young for her 37 years, our 13-year age difference is noticeable, making us quite the odd pairing.”


M40ON

#173 Vundo on 07.16.16 at 7:59 pm

#34 doghouse: why anyone would ever carry credit card debt at those rates is a mystery to me when you can get an unsecured LOC for a few thousand dollars at 7% if you have a pulse, any income, and a fixed address. If they’ve done that, maxed it out, and still carry credit card debt then they are already cooked regardless of rates. Are Canadians either that ignorant or that far gone?!?

#174 Doghouse Dweller on 07.16.16 at 8:09 pm

Sorry Garth ! I just noticed my previous comment . I thought I was back in the doghouse.

#175 Stan on 07.16.16 at 8:21 pm

Yes, US interest rates will raise. Nothing goes down forever. It will go up when the dollar is collapsing.

#176 ANON on 07.16.16 at 8:33 pm

Low rates breed asset bubbles

High rates breed asset bubbles, also. Shorter lived, yes, but the arithmetic is identical, does not care for the “r”. Medium rates do the same:
YO = PR × (1+r)n
YO=YouOwe (promise to give back)
PR=PRincipal (what exists on the negotiating table to be given)
r=annual Rate (the impression you made to the lender)
n=Number of periods (duh)

#177 Zen Headspace on 07.16.16 at 8:47 pm

#135 ROTFL
“Turmoil? In the long march of history, we’ve got it pretty good. No need to have seven children because two will die in infancy and two more in war or misadventure, leaving three to support you in your meagre agrarian old age. Western man spends more years in education, leisure and retirement, and a smaller fraction at hard labour than any generation before him”.
——————————————————————–
It’s all relative. Those times you reference are long gone. In the Western world today, Millenials consider the lack of having the latest version of an i Phone to be intolerable suffering. Seven figure portfolio holders cringe at the thought of a 3% market correction. Mortgaged homeowners are living on the edge of armageddon.
The masses currently buying into the Toronto and Vancouver real estate craze as a result of FOMO, “keeping up with the Jones’s”, and sheer materialistic frenzy will know “turmoil” in this lifetime, due to the inevitable default on the monumental debt that they are incurring to sustain an unrealistic and unnecessary lifestyle.
When the day comes – and it will come – that these dupes have to renew loans and mortgages at higher rates, they will know the meaning of turmoil.
Yes, we have been out of the dark ages for some time now, but by today’s standards, economic turmoil abounds. We just have more sophisticated ways of delaying the effects, and sweeping things under the rug. But it’s there, and it will rear its ugly head in due time. Many will be caught with their pants down, so to speak.

#178 tkid on 07.16.16 at 9:31 pm

An actual sighting of Smoking Man’s Herd:

https://www.youtube.com/watch?v=MLdWbwQJWI0

#179 The American on 07.16.16 at 9:36 pm

At #142: Andrew Woburn, so if it is four times the amount t if everyone consumed like an American, imagine what it would be if everyone consumed like a Canadian! After all, you all consume 20% more energy per capita than Americans. Another poor, misinformed, and delusional Canadian.

#180 ANON on 07.16.16 at 9:43 pm

Yes, we have been out of the dark ages for some time now.

Have “we”?
The current narrative is based on principles ( thermodynamics , calculus , scientific method ) which are clearly opposed to the narrative as it stands. Other narratives are at least not based on principles at all, just fantasies. Which narrative is more imaginative?

#181 acdel on 07.16.16 at 9:46 pm

#176 Stan

If it the U.S. interest rates do go it is strictly due political reasoning for the fact that an election is approaching; the fundamentals are not there; the truth will come out.

#182 WUL on 07.16.16 at 10:15 pm

#167 Apocalypse2016 on 07.16.16 at 7:04 pm

“Future historians,…, will record that World War III began in 2016.”
!!!!!!!!!!!!!!!!!

O.K. A doomer comment here. WW III began about 16 years ago. It just looks different these days. What, about 110 countries around the world in armed conflict as we comment?

Did you expect it to look like the last one? Battle of the Bulge? Monty chasing Rommel across North Africa? Patton and a tank battle?

So yesterday.

On a cheery note, a glimmer of hope for Ft. Mac real estate. Yahoo or Google FMREB.

#183 westcdn on 07.16.16 at 10:34 pm

I used to stop in a hotel washroom before work. I noticed a large crystal on the toilet dispenser. I was pretty sure it was crystal meth. I wrapped it in toilet paper and put it in my pocket. While I was washing up, a young guy charged in to search to the cubicle.

I asked what he was doing and he said he was suppling lawyers at the courthouse. He was friendly and forth becoming so I gave the crystal back. God forgive me.

#184 Herb on 07.16.16 at 10:50 pm

#148 Lorne,

did you read the link ROTFL had in his comment #109 on 07.08.16 at 11:39 pm? If you haven’t, it is

http://www.econ.yale.edu/~shiller/behfin/2012-04-11/Chinco_Mayer.pdf

Interesting study about bubbles and the influence of “distant speculators”. Two salient points: no mention of race since it was not a factor in any of the bubbles studied, and 5% participation by distant speculators was all it took to form bubbles.

Hence, one can ask if the Vancouver bubble is due to 5% of buyers being distant speculators without being accused of racism, or even being out of the ballpark of the 5% foreign involvement that was bandied about by VREB.

#185 YVR a memory on 07.16.16 at 10:51 pm

Very funny article in the Globe today of how Ham Deniers will have to defended by hate speech gag laws to keep the ‘no ham here’ slander alive into the future. Tongue in cheek as the article is on all accounts it does indicate that the political pendulum is swinging back hard against those who have staunchly defended the ‘rights’ of foreign national money launderers over citizens.

#186 JustinSaying on 07.16.16 at 10:52 pm

Lots of ill gotten money in the world happy to lose a point or two aka money laundering. We must remember not everyone treats worlds as capalist utopia

#187 ww1 on 07.16.16 at 11:11 pm

#135 ROTFL
“Turmoil? In the long march of history, we’ve got it pretty good.

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

#178 Zen Headspace
It’s all relative. Those times you reference are long gone.

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

Zen Headspace is missing ROTFL‘s point. Which you can’t simply blow off by saying “It’s all relative”. Being dead is very permanent and very unpleasant.

Everything else can be dismissed as “Rich People’s Problems”. Life these days is actually really good – sorry if any small amount of uncertainty upsets you.

#188 westcdn on 07.16.16 at 11:45 pm

My eldest daughter decided to take up rugby after softball. She would charge the line against monster women (relatively speaking). She got hit hard. She would say that I shouldn’t worry. I let her join a women’s league that held tournaments around the province. I don’t know what happened during those tours and don’t want to know.

#189 Renters Remorse on 07.17.16 at 12:52 am

#185 Herd
Interesting study about bubbles and the influence of “distant speculators”. Two salient points: no mention of race since it was not a factor in any of the bubbles studied, and 5% participation by distant speculators was all it took to form bubbles.

Hence, one can ask if the Vancouver bubble is due to 5% of buyers being distant speculators without being accused of racism, or even being out of the ballpark of the 5% foreign involvement that was bandied about by VREB.

————-

As has been noted here by the author and other posters, all it took was 8% of fringe buyers in the US to bring prices down 32% nationally.

If 8% can make that much of a difference on the way down, 5% of sales to foreign capital can unequivocally change the Vancouver market on the way up…

#190 Smoking Man on 07.17.16 at 1:32 am

Winning the lottery.
Not out living your kids.

Marks parents. Perfect lawn. Perfect bathroom. The shining star for family pride. His dad.

Not so good. His kid is dead.

I lose a kid I’m going to stop a go train with the middle finger.

Who can you live with losing a kid. I know it happens alot in Gaza. But they don’t count.

Only our loved ones rate.

You want to kill Alla Akbar. Give the pathetic Palestinians some real estate.

It’s as easy as that.

#191 Tccontrarian on 07.17.16 at 1:38 am

I have never bought preferreds, and now that everyone is chasing yield they’re probably overvalued and not a good investment due to capital loss risk.
Gold is not understood by the vast majority of investors but if ever there was a time to own it as insurance, I think it’s now. Central Bankers have made it clear that they’re prepared to print as much as necessary to keep the credit system alive, so inflation will eventually become a great concern.
I’m enjoying one of my best 6 month periods ever with heavy exposure to precious metals, copper and energy. I’m an active investor however, with 150+ trades/quarter…not everyone’s cup of tea.
One area to get into (eventually), is Futures Trading. That’s where the big $$$’s are. Too chicken right now. Playing gold is risk enough!

#192 steerage steward on 07.17.16 at 1:59 am

We can be there

https://www.youtube.com/watch?v=fLj8Bp3wC80

#193 Bram on 07.17.16 at 2:42 am

#128 ROTFL on 07.16.16 at 9:21 am

Interesting link!
Yet, it shows Canada is nr1 rank in ‘change since 2010.’
I didn’t see absolute numbers, just rate of change.

All the numbers there are relative to 2010 which is set at 100.0

But w the fastest growth of price/rent gap, we are bound to be in top for absolute numbers too.

#194 Morgan Freed on 07.17.16 at 8:41 am

How is it the US can tell us exactly how many foreign buyers and the break down of their country of origin at the drop of a hat whereas Canada can’t tell you whether a single foreigner entered the country on any given day? There’s something about being too politically correct that can damage an entire economy.

http://www.cnbc.com/2016/07/06/foreign-buyers-flood-us-real-estate-but-buy-cheaper-homes.html

#195 rosie on 07.17.16 at 8:58 am

The question is, are we going to be in a low interest rate environment for the foreseeable future?

#196 Ret on 07.17.16 at 9:32 am

#171-The Battle of the Overpass
I have a friend in Hamilton who worked at Ford that very day and has perfect recall of what happened. He was an Armenian who worked in the core shop. He just had his 100th birthday in April.

He wants to know when he will get some Social Security cheques for his time spent working in the US. He hasn’t seen a dime out of Ford Motor Company.

#197 Zen Headspace on 07.17.16 at 9:43 am

RE: #188 ww1
“Life these days is actually really good – sorry if any small amount of uncertainty upsets you.”
——————————————————————–
I am not upset. I simply feel sorry for the financially ignorant masses who will be mercilessly slaughtered.

There is no doubt that “life is really good” these days.
That does not, however, mean that economic turmoil does not exist. Society today lives well because people live on debt. The “good life’ we lead is a Ponzi scheme. It is mostly financed by easily available credit with super – low interest rates. irresponsible lending combined with irresponsible borrowing in order to “live good lives”, by overspending on homes beyond what real incomes can sustain (along with the toys, cars, gadgets, and other consumer goods that fuel our shaky retail sales – based economic house of cards)is undeniably a form of economic turmoil. We live “good lives” perched atop a mountain of sand sitting on the economic equivalent of a geological fault line. The “good life” is an illusion. The quake will happen. No one knows precisely when, but it will happen. Materialism and greed fueled by easy credit is a recipe for economic disaster and financial ruin. We don’t have to go back hundreds of years for examples of how shitty life used to be. Remember the U.S.A. in late 2008? People who overborrowed to buy material goods that they could not otherwise afford got axed and are still suffering. We have not learned from our own mistakes because we still want to buy stuff that we can’t really afford. That is the point.

http://www.mrmoneymustache.com/2012/03/07/frugality-the-new-fanciness/

#198 ACDC on 07.17.16 at 9:45 am

#153 Fed-up

I know, I know we are being to paid to wait, think long term etc etc…

Would have not been easier to put your money into real estate?

#199 For those about to flop... on 07.17.16 at 10:18 am

With all the stuff going on in the world,U.S Vice President Joe Biden thought it was a good time to go to Australia and watch my team Carlton get beat in a game of Australian Football.

They brought in an American player to act as an interpreter,just in case he couldn’t handle the accents.

Thanks for the jinx ,Joe…

M42BC

http://www.afl.com.au/news/2016-07-17/us-vicepresident-joe-biden-at-mcg-for-carltonwest-coast-clash

#200 MF on 07.17.16 at 10:37 am

#191 Smoking Man on 07.17.16 at 1:32 am

They were given Gaza years ago.

Look how that turned out. Terrorist leadership and none stop attacks.

Hope he mourned the recent civilians from the “other side” who were hacked to death by some human garbage. One was a 19 year old girl. She was beautiful. How do her parents feel?

MF

#201 westcdn on 07.17.16 at 10:44 am

Reminiscing again, my mother was renting a townhouse in a condo development. I moved in to go back to school. Just after my arrival there was an outbreak of drugs in the neighbourhood. We were called to a neighbourhood out door meeting where they wanted to throw us out. They accused me of being a pusher. The leader was an RCMP officer who obviously did not like me. I was innocent.

The crowd decided to evict us lead on by the RCMP officer. I later learned it after eviction that it was his son that was the pusher. Oh well, life is not fair.

#202 crowdedelevatorfartz on 07.17.16 at 10:51 am

@#167 Apocalipto 2016
“The Summer of Hell is here.”
********************************************

Does that mean the weather is finally going to get warm?

#203 Damifino on 07.17.16 at 10:52 am

#192 Tccontrarian

“…inflation will eventually become a great concern.
—————————

When, pray tell… when!?

#204 crowdedelevatorfartz on 07.17.16 at 10:55 am

@#184 WestCdn
“asked what he was doing and he said he was suppling lawyers at the courthouse. He was friendly and forth becoming so I gave the crystal back. God forgive me.”
********************************************
God may not forgive you but I will.

And here I thought all those twitchy lawyers were after my money……..tweakers in suits. Who knew.

#205 Smoking Man on 07.17.16 at 11:14 am

I ain’t afraid of no ghosts.

http://www.breitbart.com/tech/2016/07/17/ghostbusters-opens-empty-theatres/

#206 Nelley on 07.17.16 at 11:16 am

#201MF-this isn’t rocket science-look at what has been happening over the last 40 years-cause trouble/fight with the middle east/third world, then import citizens from these areas-basically invade and invite. Eventually your society and country is gone-France and Sweden are the leading edge-even formerly liberal, politically correct French realize at this point that it is too far gone-they can emigrate somewhere else but French society is finished. Somehow pointing out that the Emperor has no clothes is frightening and forbidden.

#207 jess on 07.17.16 at 11:22 am

history rhymes – “waste people”

contrast and compare:
“In 2008 the billionaire Republican advised “pupils” at his now defunct business education company, Trump University, they could make a million dollars within a year by targeting vulnerable communities with individuals desperate to offload their properties. “Investors Nationwide are Making Millions in Foreclosures … AND SO CAN YOU!” he claimed in targeted newspaper adverts that carried photos of Trump staring sternly at camera with a slight smirk.
….trump mortgage offered subprime mortgages to customers through cold calls.
Become A Millionaire In A Year, Trump Promised In An Ad For Trump University
“BUY LOW, SELL HIGH, WALK AWAY RICH.”
posted on Mar. 14, 2016, at 11:59 a.m.
Andrew Kaczynski
https://www.buzzfeed.com/andrewkaczynski/become-a-millionaire-in-a-year-trump-promised-in-an-ad-for-t?utm_term=.feWqKeax6#.kbnvnjXwG
“I think it’s a great time to start a mortgage company,” Trump famously predicted to CNBC in April 2006. “The real-estate market is going to be very strong for a long time to come.”
http://www.rollingstone.com/politics/news/donald-trumps-13-biggest-business-failures-20160314

——————————–

Residents of the Mount Pleasant neighborhood in Cleveland, Ohio bike down a street littered with abandoned homes. Between 2000 – 2010, 17% of the people in Cleveland left and the city is slowly recovering.

EXPORTS —human “offscourings”
White Trash: The 400-Year Untold History of Class in America, recently in the Tyee. It’s an important book, he writes, “because it throws out the received wisdom of American egalitarianism and democracy, showing their 21st century country to be the creation of 16th century English social engineers.”
http://thetyee.ca/Video/2016/07/12/How-White-Trash-Became-an-Identity/

#208 Doug in London on 07.17.16 at 11:22 am

So why would someone give the German government say, a million Euros so they could collect slightly less many years later?
———————————————————
SUCKERS!!!!!!

#209 common sense on 07.17.16 at 11:23 am

#196 Rosie

Yes low interest rates until the BIG RESET .

Greedy stupid people have created this environment and they do not have the guts to raise rates.

Period.

#210 common sense on 07.17.16 at 11:28 am

#191 Smoking Man

Giving them some real estate would be too human of them.

What does EVERYONE on this planet want?

Food, shelter, safety.

And if they don’t get these necessities?

The haves with far more than they will ever need WILL be a target by the have nots til eternity.

Share and be safe. It’s all about balance people. Balance.

#211 Nelley on 07.17.16 at 11:58 am

#208Jess-Crooked Hillary only pulled in 16.46 from her university scam (somehow ignored by the MSM) http://www.breitbart.com/2016-presidential-race/2016/06/02/hillary-university-bill-clinton-bagged-16-46-million-from-for-profit-college-as-state-dept-funneled-55-million-back/

#212 MF on 07.17.16 at 12:00 pm

#211 common sense on 07.17.16 at 11:28 am

Correct. In Smoking Man’s example the have’s used to be the have not’s and fought for what they have now.

MF

#213 ww1 on 07.17.16 at 12:19 pm

#209 Doug in London on 07.17.16 at 11:22 am
So why would someone give the German government say, a million Euros so they could collect slightly less many years later?
———————————————————
SUCKERS!!!!!!

I don’t know why this is so hard for people to understand.

Negative rates are not about your average punter depositing $1000 in his local bank and getting less back later. And it certainly does not mean you will ever get a mortgage that pays you rather than you paying.

It’s about major institutions (and even country treasuries) needing somewhere safe to store their money! Where do you keep millions and millions of cash?

With [email protected]?

Remember – there is no deposit insurance for that amount of cash. If a deposit is made in an institution that goes bankrupt, the money is gone.

So if you are in Eastern Europe or Syria (for example) and need somewhere to put $10,000,000 then you might not want to use your local bank, which could go bankrupt at any time. German government backed bonds start to look attractive – even at slightly negative rates. At least you have some assurance your huge pile of money will not disappear.

#214 Freedom First on 07.17.16 at 12:42 pm

#167 Apocalypse2016 on 07.16.16 at 7:04 pm

Turkey is only the beginning, my friends.

Future historians, among a shrunken human population of fewer than one billion, will record that World War III began in 2016.

It is very wise to invest right now in rural accessible property and food stocks to last two years as well as gasoline for one year of reduced driving.

The Summer of Hell is here.

FF007

Summer of hell indeed. My BFF, Mr. Smoking Guy, didn’t respond to my last post. Mom said she’ll take me out to the Dairy Queen in town to try and cheer me up. :(

#215 JB Vancouver on 07.17.16 at 1:26 pm

Garth, You have been lecturing us for how many years about housing porn and no pensions.
Get a life Garth no-one is going to change. your daily posts and letters prove the point.

Garth you lecture us on House porn and that over 70 or 80 percent of Canadians have no pensions, have no saving and have all thier eggs in housing.
Okay got that

In the end who cares, we work, we live in a house and we enjoy life by borrowing against future income.

What I am trying to say all your posts are a waist of time because Canadians will not listen and will not change. So why lecture us daily about a pending housing collapse. Again so what, we will still pay the mortgages and still have no pensions. Nope we will not change.

The majority of people want to borrow money and buy bigger houses and more cars and all the tech gadgets.
its to late to change. We are a generation of we want it all and we want it now.

Personally I think you should shut down this blog and create a blog for 15 to 25 years olds and teach them about money. How to save and invest for the future, the rest of us are not going to change! Although it will make for good reading. Try Junior Achievers! great program.

At least save the next generation.
Because in the end you have great advice but again for the majority are not listening, we are already sucked into house porn and debt and basically so are governments around the world, You should be teaching young adults how to save themselves.

Love the pictures, tired of the daily housing collapse forecast, tired of the gold lickers and people who yell first. However, I like the investing posts.
Cheers, nothing personal just an opinion.

#216 Doghouse Dweller on 07.17.16 at 1:58 pm

#174 Vundo
doghouse: why anyone would ever carry credit card debt at those rates is a mystery to me when you can get an unsecured LOC.
—————————————————————–

The poor living hand to mouth live in a different reality . 20 hour Part time work, periods of no work, do I eat or pay the rent ? They might already have a loan and problems making payments or need a co-signer for a loan. [email protected] can have very nasty mood swings especially when your late on coughing up a payment.

In the olden days they used to have layaway plans where you paid a little at a time and collected the goods at final payment. Or direct credit with the corner grocery store or mom and pop clothes and hardware shops.
Now corporate finance rules and they are ruthless ,Canadian Tire Bank, Visa, Payday Loans ___ etc.

But don`t worry T2, Bill Morneau and Poloz have your back.
Need a joint ! There working on that too.

#217 Armando on 07.17.16 at 9:50 pm

Sorry Garth, but I find it hard to think you really believe the self-serving baloney you wrote:
“So why would someone give the German government, say, a million bucks so they could collect slightly less a decade later? Simple. Safety. Sovereign bonds are secure. Countries like Germany and Japan do not go bankrupt.”

You make it sound like this is totally normal and and NIRP is due to investors looking for “safety”. Such a crock! In a true FREE MARKET without Central Banks manipulating interest rates and debasing the currency, we would never have NIRP. By increasing base currency and pushing “extend and pretend” to avoid facing reality, Central Banks have been able to create this fraud, for now….

#218 https://betterdwelling.com/city/vancouver/chinese-media-now-warning-canadas-housing-crash-will-worse-us/ on 07.18.16 at 9:45 am

https://betterdwelling.com/city/vancouver/chinese-media-now-warning-canadas-housing-crash-will-worse-us/
Worse Than The 2008 US Crash

#219 Doug in London on 07.18.16 at 2:13 pm

@ww1, post #214:
Good explanation, now I understand quite well.