Misery 1

SEAT modified

Let’s summarize.

The regulator in Ottawa tells banks to stress test for a 50% property crash in Van and a 40% plop in Toronto. Meanwhile two major banks have already cut back on mortgage lending in YVR. Too much risk. The IMF, World Bank, Economist, Moody’s, Fitch and Standard & Poors all warn Canada has a real estate bubble. The federal government hastily organizes a housing task force to come up with solutions. The Bank of Canada warns household debt is off the chart. Bank CEOs start cautioning people to stop borrowing. They continue. Debt hits a new high. Bank of Montreal says incomes are being swamped by mortgages and house flippers are a plague.

Then the BC government shocks everyone with a massive tax on foreign buyers. In response, some Vancouver sellers increase their prices so they can offer the Chinese dudes a ‘discount’ equal to the tax. The land registry office is swamped ahead of tomorrow’s deadline.

Meanwhile Canada loses jobs in June, the economy plunges into negative growth in the latest quarter and Westjet’s profit declines 40%. More than 25% of the office buildings in downtown Calgary sit empty, where there’s a 15-year supply of space. The federal government prepares to spend $120 billion it doesn’t have, and the central bank is seriously considering cutting emergency interest rates while the US readies to raise them.

Now, what would prompt a sane person to buy property in this environment, when prices remain at the highest level in Canadian history?

But wait. Don’t slit your wrists or call your realtor yet. It gets worse. We just won the debt contest. No G7 country is more screwed. Officially.

When it comes to debt, we're No.1!

G7 DEBT RATIO

While all economists not directly employed by real estate boards or mortgage lenders are vexed, the biggest furrows have etched into the brows of Paul Ashworth and David Madani, property bears working for London, UK-based Capital Economics. Just as the oil crisis starts to dissipate, they warn, the Canadian housing crisis will commence.

In a new report, which chronicles the “ridiculous levels” of our mortgage debt they write: “Our bigger concern now is that the housing bubble will burst before the year is out… When the bubble bursts, residential investment will fall sharply, as falling home sales hit real estate commissions and new construction.”

Here’s why this matters so much: the oil and gas industry, which has been brutalized, accounts for 6% of the Canadian economy – about the same as in 2000. Meanwhile housing construction and real estate, which amounted to 17% of the national GDP in 2000, now account for 20% of it. Thus, imagine what a serious correction to real estate valuations might do to consumer spending, finance, homebuilders, mortgage lenders and granite salesguys.

So, Capital Economics predicts things will hit the fan by the end of 2016 and that the Bank of Canada will respond by cutting its key rate in half, down to 0.25%. In turn, the two events together should cream the Canadian dollar and send domestic inflation higher. Yes, we will be blogging next February (again) about $8 cauliflower.

Finally (if you’re waiting for a bus to lie in front of) there’s oil. Going a lot lower, says Morgan Stanley, which will certainly whack Canada a little more. The global oil market, it reports, “is severely oversupplied” with inventories at a five-year high, refineries turning out way too much gas and crude prices set to fall further. (Oil went under $40 on Monday – first time in half a year.) Already cruising towards an historic budget deficit, new taxes and way more spending, Alberta is seriously pooched. Calgary house prices have remained remarkably sticky so far. Count on that to change.

Well, make of this what you will. People horny for houses in the GTA or YVR will (of course) keep looking and offering, despite the clear risk involved. They can’t help it. Hormones.

Homeowners thinking of selling but afraid to do so because of (a) greed (our house keeps going up) and (b) fear (but where will we move?) will probably wait until they hear about the correction in the local media. Too late then. And for every scary report (like this blog post) there’s another one published by the mortgage brokers, Re/Max, the credit unions or Royal LePage saying no bubble exists and all’s good.

You’ll have to make up your own mind on this. If you decide to dial back on real estate for a while, seeking balance, expect to be lonely. Just remember nobody was ever crushed for bailing too early. Too late is another matter.

155 comments ↓

#1 TurnerNation on 08.01.16 at 5:55 pm

On the Least Coast (or buy 4 sht bungs in Long Branch):

http://www.cbc.ca/news/canada/prince-edward-island/pei-expensive-home-1.3702585

“It went for $3 million less than its original asking price, but a mansion on P.E.I. is now officially off the market.

The six-bedroom, eight-bathroom home — which features a whale watching tower — sold on Friday for a little under $4.7 million. In 2009, it was listed for $7.75 million and had the distinction of being the only home on P.E.I. listed through Sotheby’s in New York

“Poczynek said though the seller took a loss, he was happy to have it sold.

#2 Randy on 08.01.16 at 5:55 pm

Trump’s wife looks awesome. More nude pics please NYT

#3 TurnerNation on 08.01.16 at 5:58 pm

If housing outperforms show me who has retired early all over housing?
Doesn’t happen. People buy for 350k, sell for 550k.
Then buy for 900k. Than brag their house is worth 1m.

Poor Canadian sheep (not risk takers).

#4 Jackie and Johnnie on 08.01.16 at 5:59 pm

We are First!

#5 crowdedelevatorfartz on 08.01.16 at 6:03 pm

Crikey !
I dont know whats worse…. the looming economic middle class indebted “catastrophe” or that man’s shirt !

#6 crowdedelevatorfartz on 08.01.16 at 6:06 pm

@#1 Turner Nation

I was back east last summer and actually went and looked at that house…..Notice how close the beach is?………….if current levels of PEI erosion stay the same………That house wont be there in 20 years.

#7 Jackie and Johnnie on 08.01.16 at 6:08 pm

On July 30th Lewanza is bullish and on 1-Aug (it sounds like) Garth is bearish. At least when it comes to Canada.

Definitely a tough climate to invest in. Time to hold Gold?

Remember the correct weighting in Canadian, US and international equities. Makes all the difference. — Garth

#8 S.Bby on 08.01.16 at 6:10 pm

I’m calling the top for YVR real estate in 2016. I was not sure it would be this year, then the 15% tax came in, so no question it is all downhill from here for Vancouver.

#9 common sense on 08.01.16 at 6:19 pm

The Golden Rule:

I’d rather be WRONG, WRONG, WRONG, RIGHT than

RIGHT, RIGHT, RIGHT, WRONG.

Play Taps someone.

#10 Suede on 08.01.16 at 6:30 pm

Where’s the USDCAD going?

Oil is down, canadian economy doesn’t present optimistic stats, yet people in Toronto and Vancouver are spending cash on Vegas and Miami trips?

hmmm

#11 Julia on 08.01.16 at 6:34 pm

Visited The Belfountain General Store this afternoon for some ice cream. Busy place!

#12 common sense on 08.01.16 at 6:37 pm

#10 Suede…

Maybe some people are going as they are ADDING TO THEIR DEBT by charging it?

Just maybe?

#13 Brian Ripley on 08.01.16 at 6:38 pm

“Meanwhile Canada loses jobs in June”

I have the latest provincial earnings published now in 3 charts:

http://www.chpc.biz/earnings-employment.html

Average employment earnings in Alberta are 6% below their October 2014 peak, but are still:

14% above Ontario,
16% above the national Canadian average,
21% above BC and
26% above Quebec

#14 Context on 08.01.16 at 6:38 pm

Long Branch has very few homes listed to buy and those few offered to rent have popped recently close to the $3000 per month range. Not a bad area to own at all with the Go train there Turner Nation.

#15 ROCK BEATS PAPER on 08.01.16 at 6:38 pm

Garth,
Until you pull out Goldman Sachs’ “oil going lower” we cannot recharge. Ideally, they bust out the $20 target to give us the buy signal. JPM will just not do.

#16 Smoking Man on 08.01.16 at 6:45 pm

Yeah, A BOC rate cut later this year..

#17 the Jaguar on 08.01.16 at 6:46 pm

The Jaguar spied former Alberta Premier Jim Prentice in the Calgary Coop Grocery store today. The one in Mountview neighbourhood. Tempted to squeeze up close to him and whisper ” Crikey Jim! Did you ever dodge a bullit”! I respected his privacy, of course. A decent man, I think. Wearing a Liberal ‘red’ golf shirt with his flip flops, though. And a tan he could not have obtained in this neck of the woods given the July rains. I suppose Garth is right. We, the Albertans, are ‘pooched’ at the moment. Especially Ft. Mac that now endures floods after fire. The census confirms what real Albertans have known for some time. The carpetbaggers have left and gone to their home provinces as the crime surge statistics in those areas of the country confirm.
I figure we are about 50% of the way down to a hard landing. It will be worse for some. Others got liquid, valued flexibility, and put on the battle gear of mobility to ensure survival. The Jaguar is in that camp. Like the US marines say, ‘Adapt, Improvise, Overcome’. Almost sounds like an re-balancing investment strategy. Keep hope alive.

#18 Say What? on 08.01.16 at 6:51 pm

This message about bailing out of RE is the same as has been preached about the last years by this blog. Need I say more?

#19 Michael King on 08.01.16 at 6:52 pm

This home in Vancouver’s West Side has been listed since May 30th! There have been at least three weekends of open houses. Many more like it.

http://dexterrealty.com/officelistings.html/details-57668523

#20 WallOfWorry on 08.01.16 at 6:57 pm

Morgan Stanley says oil is going a lot lower and Goldman Sachs says that US GDP could be at 4% next year. Both highly laughable. Just like your assertion that the US is going to start that slow and steady climb in interest rates. I know you said it last year, but last week you really meant it.

Here is what is going to happen: Oil will finish the year somewhere between $40 – $60, the US will not raise rates, all nations will continue with stimulus measures including the US. We will see the propensity for negative rates to continue, and hard assets will be the place to be. Energy is a great sector to start positioning for, just as gold was last December.

Here is what the mainstream media hate to admit: All of the printing of money has not enabled growth….and the wealth effect hasn’t materialized. In this environment, the Canadian real estate market still looks like an OK for foreign investment, and for those that like B.C, the 15% tax won’t make them blink. Just wait until Trump wins the election.

We are screwed, but the Canadian real estate market will seem so inconsequential in the bigger picture.

#21 BOOM! on 08.01.16 at 6:57 pm

So, is the Canuckistan real estate worm finally turning? I can only hope so, kit would be good to see Toronto prices back to their historical norms of 200% of Buffalo prices.

Somebody’s gonna have skid marks in their shorts when they find their castle isn’t worth what they paid for it, but hey it happens to every KIA buyer, and Truck Nutz Ford owner, too.

In the meantime, that preferred I own has done nothing, but spit cash, and march higher all year. I have a few dividend payers too same problem. Oil, well, back in hurt city, but that was expected. Those long bonds have delivered quite nicely, too.

Life is good, what can I say? Fun, watching the illiterate financial ruin their lives betting on ‘the house.’ Next up, the whining from the ‘why didn’t I sell at the top’ crowd.

Always something for the financial advisors to help the clowns save their bacon. The saga continues…

M64WI

#22 Rexx Rock on 08.01.16 at 7:01 pm

A continued strong growth and consumer confidence in Ontario and BC will lead Canada for this year and the next year.Live and invest where this happens and life is much better.

#23 not 1st on 08.01.16 at 7:02 pm

Talk about a cherry picked chart. everyone knows that Japan and Italy and others have total debt to GDP over 200%.

Put that chart up and canada looks like a saint because we didn’t need stimulus or bails outs, well until T2 got in.

#24 robert james on 08.01.16 at 7:03 pm

Well.. here we go again.. Us Canookies must be some of the most greedy and dumbest people on the planet…Most people should have seen this movie before.. It is a re-run of the USA crash.. I remember reading about some ****ing con man that broke his parole in Denver ,,got thrown in jail and bought 2 more houses from jail to bring his total up to 5 houses.. Then when the crash happens the scum bags running for the exits saying,,DUH,,didn`t see it coming!! Greenspan included .. And when our wipe out happens which will probably be very soon ,,our bankers ,,our realtards and the morons that got conned will say the same, Didn`t see it coming!! Blinded by stupidty and greed!! There is no excuse..

#25 Simple on 08.01.16 at 7:07 pm

Canada is in a long term low growth period.

Vancouver is different because of foreign money inflows.

Please don’t insult your readers. We all know it’s not local money buying homes in Vancouver.

#26 Andrew t on 08.01.16 at 7:10 pm

#18 Say What? on 08.01.16 at 6:51 pm
This message about bailing out of RE is the same as has been preached about the last years by this blog. Need I say more?

Yes please, say more. There’s gotta be some gems rarin’
to go.

#27 WallOfWorry on 08.01.16 at 7:13 pm

So many on this blog keep pointing to this apparent crash in Canadian real estate. Guess what folks…until interest rates can rise it ain’t going to happen. Sales may slow, maybe even a healthy pullback but face it: The major disruption in the oil patch has already occurred, Ontario is producing well paying jobs by incubating new industry, and we have a government at the Federal level who isn’t afraid to spend money. So…people will continue to pay their mortgages and status quo will remain…we may continue to see foreign investment that keeps the real estate market primed. Use your common sense, until interest rates rise there is no significant correction. And guess what….those of you who believe that the US is actually going to start that ascension of interest rates have been reading this blog too long.

#28 Shawn on 08.01.16 at 7:16 pm

Again, there is no “we”

Wall of Worry concluded:

“We are screwed, but the Canadian real estate market will seem so inconsequential in the bigger picture.”

****************************************
Sorry but here is no “we”. There are no average families with 1.2 kids.

Canada is a nation of individuals. Not a collective. Some will win and some will lose.

You are on team “you”. There is no team Canada when it comes to financial success. Sorry, you are all on your own.

#29 it’s only Trump and coal (but I like it)…. on 08.01.16 at 7:16 pm

“The land registry office is swamped ahead of tomorrow’s deadline.”

uh, what’s up with that….
I thought the foreign buyers were a non issue….

back to the tv….

#30 cecil1 on 08.01.16 at 7:19 pm

The low oil price will bring many economic and political consequences:

‘Now, things are spinning out of control for OPEC, big oil, Russia — all the corrupt and violence-promoting petrostates and cartels. Capitalism in flyover country is knocking dictators, kings, fat cat oil executives, and investment bankers off their pedestals.

This combination of opportunity only exists in a very few parts of the world. For all their faults, the Anglosphere and Europe are the best incubators for the disruptive innovations that will open the door to an abundant and expansive future that the world is likely to see.

But will they fall before they spawn the singular emergence into an abundant and expansive future — the next level — or will they drown under a flood of dysgenic immigration, ideological Idiocracy, and a corrupt authoritarianism bleeding out from Russia and China at accelerating rates?’

US Shale Kicks Putin, OPEC, in Teeth

https://alfinnextlevel.wordpress.com/2016/08/01/us-shale-kicks-putin-opec-in-teeth/

#31 Etobicoke Pete on 08.01.16 at 7:22 pm

Garth, I WANT TO BELIEVE.

But I’ve seen 7 years where these clueless, real-estate buying loan cuckolds were making better returns, doing nothing, with no knowledge or special skills, than people with high-end post-secondary certificates in the equities markets.

Will this even ever happen?

#32 Chaddywack on 08.01.16 at 7:25 pm

It’s true sellers in Vancouver are willing to lower their prices by 15% for foreign buyers only (Canadians pay full price). Apparently if enough of them do this it will keep the market going up.

Will be interesting to see how this plays out. Strategic voting got us Trudeau in the last election so it just might work!

#33 aerozone on 08.01.16 at 7:25 pm

Been waiting a long time for this one.
I’ll be relaxing somewhere with a perfect ‘spro
watching the sharks default on their Audi leases and cue up in the soup line.
…They won’t see me…

#34 dogman01 on 08.01.16 at 7:35 pm

Wow – Smoking Man and Garth concur on a rate cut by BOC…I am going “all-in”

Turner Nation – Yes Social Media has been “weaponized” ; I get more then financial insight on this blog. I quite appreciate your observations.

In the Infantry we had a concept of the “FNG” – the friendly “New Guy”. A test of sorts to determine his character. Garth – I like your FNG, good to hear both his thoughts and his replies. Good move to bring in the FNG’s.

Went for a bike ride in Chestermere yesterday (outside Calgary) some really nice houses for sale, but still the listed prices just make no sense. I can get $200K of debt for mehaps a $1000.00 a month…but cripes it is $200K of debt for a slightly nicer house then the one I have.

#35 bigtowne on 08.01.16 at 7:46 pm

Mr. Turner is full of good cheer at the end of our long Civic holiday week-end. Like we need a reason to find a bus to heave ourselves under after our Ontario guvment turfs us all “off the grid”meaning how are we to survive without that big Ford F-250 or that mega GM Yukon.

What will life be like with the shiny new big green machine?

Eating twigs will make us hungry and after we donate all our tax dollars to the UN we can ask them to spare us some corn flour which we can grind into flour using bricks from the abandoned condo towers as we all live in outdoor tents supplied by the UN due to the daily hydro outages. Now I know why T2 is always so cushy with the UN prior to election and post election.

We got through the dirty 30’s and my mother had seven kids and there is no doubt Canada will get through this 21’st century fox baked but not broiled.

Gee I luv u kidz. Happy Ontario Day y’all.

#36 We are/headed for Recession on 08.01.16 at 7:47 pm

Interest rates will just worsen matters…polishing the portholes on a sinking ship.

Over the past 35 years, large RE Price Index drops were ALL due to RECESSION not the other way around.

No job, no payments. Indebted people bail, prices drop. Bad economy, few buy or speculate – prices drop…sticky or otherwise. Crash Tax means fewer foreign buyers – prices drop.

July Job numbers this Friday. GDP and Jobs abysmal past 6 months. All major GDP sectors negative, save RE et al, in last report.

Thus, we are either in recession or it is starting…then the misery begins.

This recession ought to be severe.

#37 cramar on 08.01.16 at 7:50 pm

“Homeowners thinking of selling but afraid to do so because of (a) greed (our house keeps going up) and (b) fear (but where will we move?)”

————

Answer: Where home ownership is far cheaper! From what I hear the house across the road was bought (in $150k range) by a boomer couple from Kitchener. Makes another K-W family moving to the area. Can’t wait to meet them.

A friend was talking to his R-E agent who said she has never had so many listings in her long career—and they are selling! People are moving here from everywhere.

The wave could become a tsunami when the word really gets out. Maybe the Harley owners will put us on the map:

http://www.am800cklw.com/News/Headlines/Leamington-Mayor-Applauds-Hogs-For-Hospice-Event

http://windsorstar.com/news/local-news/bikers-rally-for-health-care-in-leamington

#38 acdel on 08.01.16 at 7:51 pm

Excellent Pathetic Blog! I will give you a 4 out 5 star; I’ll give you a 5 out of 5 when you finally realize the U.S. economy numbers are nothing but a joke. :)

#39 Happening now on 08.01.16 at 7:53 pm

#27 WallOfWorry on 08.01.16 at 7:13 pm
So many on this blog keep pointing to this apparent crash in Canadian real estate. Guess what folks…until interest rates can rise it ain’t going to happen. Sales may slow, maybe even a healthy pullback but face it: The major disruption in the oil patch has already occurred, Ontario is producing well paying jobs by incubating new industry, and we have a government at the Federal level who isn’t afraid to spend money. So…people will continue to pay their mortgages and status quo will remain…we may continue to see foreign investment that keeps the real estate market primed. Use your common sense, until interest rates rise there is no significant correction. And guess what….those of you who believe that the US is actually going to start that ascension of interest rates have been reading this blog too long.

100% correct !!! and we’ll said, time will tell, but GT has been on the wrong end of this call for how long now !!!!

#40 dan barrett on 08.01.16 at 7:54 pm

#27 Wall of Worry

I disagree….have you ever heard of “peak debt” , wages not increasing, inflation, zero growth and abnormally high House prices?

This toxic cocktail is Jackson Browned…

Running on empty.

#41 rainclouds on 08.01.16 at 8:00 pm

#17 pussycat
“The census confirms what real Albertans have known for some time. The carpetbaggers have left and gone to their home provinces as the crime surge statistics in those areas of the country confirm.”

More self serving Yee Haww bullsh#t from the Wild Rose moron faction.
Blockheads like you are the reason people flee the first chance they get……..

Do you have ANY data to back up your rediculous assertions ?

#42 Smoking Man on 08.01.16 at 8:07 pm

Cohen highly respect dude on Russian studies..

Listen to him carefully. MSM taken us to all out nuke war.

https://youtu.be/mCMyHJJrdDw

#43 Ray Skunk on 08.01.16 at 8:09 pm

#11
Mrs. Skunk and I made the trip up too.

A delicious experience (mint choc chip/waffle cone), only somewhat stained by my car I spent all weekend polishing getting rained on during the drive home. Still, at least I wasn’t riding a Harley.

I counted three ice cream outlets in Belfountain… how much of the Canadian economy does this account for?

#44 hope & ruin on 08.01.16 at 8:11 pm

Bet it was those good looking newlyweds that put you in such a cheery mood today. Gotta stomp out the joy and optimism.

#45 conan on 08.01.16 at 8:23 pm

RE #23 not 1st on 08.01.16 at 7:02 pm

Italy is the next crisis. Have your magnifying glass on Italy and as soon as you see any kind of bank wobbly woo…. sell sell sell.

Japan has debts. but Japan assets. Lots, all over the world. Don’t have the numbers, but trust me on this ; )

#46 Smoking Man on 08.01.16 at 8:27 pm

If Killary wins… Ww3

Putin will do a first strike.. His only option… Cause he knows it’s coming.

Kiss your kids and dogs every night because there could be no tomorrow.

https://youtu.be/0EGBOMvBrZw

#47 Kilt on 08.01.16 at 8:35 pm

Any ETF suggestions to take advantage of a falling Canadian dollar? Or just buy $US stocks?

Kilt

#48 WalMark of Sadkatoon on 08.01.16 at 8:36 pm

All good. Except trump can’t win

#49 WallOfWorry on 08.01.16 at 8:43 pm

#39…Dan…”I disagree….have you ever heard of “peak debt” , wages not increasing, inflation, zero growth and abnormally high House prices?”

Fair enough. But what has changed? We have so many here proclaiming that this is the top? I think we heard the same last year and the year before that. If interest rates decline further, if government further intervenes in the markets, provides more stimulus….why would we expect anything to change? Are you suggesting that the factors that you raised or going through some sort of shift? Nope….I don’t think so.

#50 Jim Santos on 08.01.16 at 9:00 pm

If RE prices in Toronto start going down..
..won’t the people who’ve been waiting on the sidelines jump in?

I’m glad I invested in Hamilton real estate a few years ago. Bought house for 275K with 20% down, brings in $1900 in rental income. they pay the utilities. Appraised for 425K 3 years later. Could easily rent for 2200/month but my tenants will never leave.

#51 Tony on 08.01.16 at 9:04 pm

Re: #8 S.Bby on 08.01.16 at 6:10 pm

Is that you Richard Scott?

#52 common sense on 08.01.16 at 9:05 pm

#42 Ray Skunk

Is Belfountain the new Niagara on the lake for Toronto hipsters to be seen at? I hope so.

#48 Wall o’ Worry

Simply too high of prices, peak debt levels and the lenders are getting worried too = peak, then fall.

#53 Tony on 08.01.16 at 9:08 pm

Seems the entire world knows about the end of 2016. The election will be over in America the 70 to 90 percent crash in American stocks will just be beginning. I’ll be shorting Teck Corporation at the end of this September when it all starts to unravel for the markets and the base metals will get cement overshoes.

And I thought I was depressing. You are a bottomless black hole. — Garth

#54 not 1st on 08.01.16 at 9:14 pm

Garth, next time on your lunch break, go up to some millennials and ask them about YOLO. Its a much more powerful force than FOMO.

Then head straight to your office and pour a stiff one.

Sha-na-na-na-na, live for today. So old. — Garth

#55 Tony on 08.01.16 at 9:15 pm

Re: #49 Jim Santos on 08.01.16 at 9:00 pm

They’ll be jumping alright you’ll see them on the tops of bridges with the banks holding the keys to what used to be “their” house. The greatest fool buys at the peak and all the relatives of the greatest fool buy just when the market starts to turn downward for the ten bells.

#56 salonist on 08.01.16 at 9:21 pm

went to school to study politics.graduated,knew the game was fixed.
found work in my minor, computer science.

ground control calling nigel

trump was baited
didn’t back down

the dude that baited him

http://www.washingtonexaminer.com/khan-specializes-in-visa-programs-accused-of-selling-u.s.-citizenship/article/2598279

#57 Allan on 08.01.16 at 9:30 pm

Unfortunately, Garth is right:
http://www.nytimes.com/2016/07/17/upshot/why-land-may-not-be-the-smartest-place-to-put-your-nest-egg.html?_r=0

#58 Funny Scenario on 08.01.16 at 9:31 pm

Gov is busy appeasing the plebes with stats on chineses. I have friends who on 60k wages are owning 3 houses, leveraged as in a good ole forex account. Except the posibillity of a stop loss order. Why does the gov not so stats on average multiple mortgages? That would be more telling and more rigurous.

#59 DON on 08.01.16 at 9:40 pm

#18 Say What? on 08.01.16 at 6:51 pm

This message about bailing out of RE is the same as has been preached about the last years by this blog. Need I say more?
**************

Yup…things take time. The big difference this year: Everyone is now focusing on the bubble.

#60 WillD on 08.01.16 at 9:41 pm

#41 Smoking man

Cohen highly respect dude on Russian studies..

Listen to him carefully. MSM taken us to all out nuke war.

https://youtu.be/mCMyHJJrdDw

____________________________________

Cohen is very well spoken. The interviewer had no substantial rebuttal. I wish they gave him more time.

#61 Aggregator on 08.01.16 at 9:45 pm

Japan Pension Whale's $52 Billion Loss Tied to Passive Ways

See what passive investing does. Same thing will happen to 60/40 portfolio strategies as lower yielding bonds lose their hedging capacity against equities under economic shocks. Bond yields can ony drop so much before a cash arbitrage appears below the negative bound.

This is why a 60-40 portfolio has a slim bond exposure. Surprised you believed otherwise. — Garth

#62 Xi Liang Bo on 08.01.16 at 9:54 pm

Whats the multiplier effect when just one crooked HAMSTER steals 70 MILLION USD and pours it into Vancouver real estate?

http://vancouversun.com/news/local-news/wanting-qus-vancouver-success-now-a-point-of-criticism-for-chinese-netizens

China recently announced that 46% of it’s TOP 100 Wanted For Corruption are living in Canada and thousands lesser crooks have bid up property to launder the money ( some much larger amounts in the hundreds of millions).

No HAM you say? Gufffawwwwwww I say back. Listen up deniers, we aren’t all crooks. Your denial of the problem is allowing ignorant perceptions to paint us all with the same brush. Arrest the crooks, leave the rest of us in peace. Frankly, I don’t have a million.

#63 Shone of the dead on 08.01.16 at 9:54 pm

#30 cecil1 on 08.01.16 at 7:19 pm

https://alfinnextlevel.wordpress.com/2016/08/01/us-shale-kicks-putin-opec-in-teeth/
“or will they drown under a flood of dysgenic immigration”

The adjective “dysgenic” is the antonym of “eugenic”.
I’m not sure overt racism adds to their arguement, what do you think?

#64 Funny Scenario on 08.01.16 at 10:00 pm

I cannot say this to wife or friends. The risk is more matrimonial winter or drinking alone for the immediate future. But I can say it here with impunity. When one says “it went up steadily , so it is highly probable to keep at it”. Look at how a turkey sees life. For three years he’s been cared for and fattened by the farmer. The quality of life keeps raising , no clouds on the horizon. Then, Thanksgiving.
The allegory is from Taleb. And I think he stopped at how recency bias kills. But I am also thinking of intent. The Farmer has plans…

#65 TurnerNation on 08.01.16 at 10:03 pm

Also watch out for the food. 2nd ingredient in major brand cream mushroom soup is (GMO) Canola oil.
That sesame sauce at sushi? It says canola oil too.
Ditto margarine (horrible stuff)….which most major baked goods use instead of real food – like butter.

First or second ingredient in any sauce or ketchup or most any bottled good or juice is high fructose corn syrup, modified GMO natch.

Everybody’s smoking, no one’s getting high. All fatter. Can you say weaponized?

#66 TurnerNation on 08.01.16 at 10:11 pm

Call it the Fatter and Dumber Administration (FDA) approving all of this. Walk though your local mall of a weekend – ever see such a bewildered desperate crowd? Seeking corporate solutions.

#67 Post on 08.01.16 at 10:16 pm

And don’t forget that just today Jeffery Gundlach, Peter Boockvar and Goldman says the the stock markets are greatly over extended and the bond markets are un investable.

So, take your pick what assets are safe.

#68 dosouth on 08.01.16 at 10:27 pm

Ah yes oil…going much lower, at the investor’s level and the wholesale level and the retailer’s uptake level but certainly NOT at the CONSUMER’S level…

Profits still being made on the back of more profits. Wonder why we have less disposable income. Real Estate debt is only one of the reasons.

Yet no gov’t intervention on the monopolization of gas pump pricing….huhh?

#69 Chris in Nanaimo on 08.01.16 at 10:29 pm

#2 Randy. “Trump’s wife looks awesome. More nude pics please NYT”

Thanking the gods that Clinton never did a nude photoshoot……..

Or did she????

Wikileaks still has some more dirt to dish on her.

….hmmmm???

#70 JR on 08.01.16 at 10:33 pm

Looks like the smoking man is right again!

Garth, would you be willing to send me a document containing all the posts smoking man has ever made on this site? Something tells me that there’s gold in them hills!

#71 WUL on 08.01.16 at 10:48 pm

Ahhh, August 1. Only 66 comments at 8:42 MDT. Yet the ambient light, the scent in the air and the temperature have switched to an autumnal feel up here in the Taiga.

As a big fan of the comment kennel here, I am feeling ebullient. In three months when we are all cabin bound in this frozen wasteland, at this hour MST, there will be ~ 320.

Makes life in Ft. Mac bearable.

#72 Ray Skunk on 08.01.16 at 10:48 pm

#51

Is Belfountain the new Niagara on the lake for Toronto hipsters to be seen at? I hope so.

I didn’t get that impression. It was more of the motorbike and weekend car crowd… hipsters rarely possess either, their choice of transport being the humble bicycle (as close in form factor to the original Penny Farthing, the better).

Besides, unless I wasn’t looking hard enough, I didn’t see a Starbucks there.

#73 El Presidente Trump on 08.01.16 at 10:50 pm

#69 JR on 08.01.16 at 10:33 pm

Looks like the smoking man is right again!

Garth, would you be willing to send me a document containing all the posts smoking man has ever made on this site? Something tells me that there’s gold in them hills!


I’ve already asked my buddy Putin to dig up all the DELETES…

#74 stage1dave on 08.01.16 at 10:54 pm

JHC, The Grass Roots?

Now I know the end is near…

On an even more depressing note, I noticed today whilst completing the month end that between the wife & I we are smoking enuff to pay the rent…and that doesn’t include the Starbucks!

That would top up her TFSA, and then some…time to find cheaper bad habits!

#75 NoName on 08.01.16 at 11:02 pm

now that canola oil is mentioned, post from few yrs back.

http://www.greaterfool.ca/2012/02/21/the-last-suckers/#comment-153244

“Canola oil is a slow poison, an industrial oil that does not belong in the body. It contains “the infamous chemical warfare agent mustard gas”, haemagglutinins and toxic cyanide-containing glycosides; it causes mad cow disease, blindness, nervous disorders, clumping of blood cells and depression of the immune system.”

Lady that i used to worked with told me she worked on canola oil thingy years back , i could not believe when she told me that plant is poisonous.

http://www.omafra.gov.on.ca/english/livestock/horses/facts/info_plantpois.htm

“Wild mustard and canola have the potential of being poisonous to horses. Cattle in Canada were reportedly poisoned after they ingested hay containing large quantities of wild mustard seed. Wild mustard and canola contain glucosinolates similar to other Brassica species (kale, cabbage). Glucosinolates are chemicals that can inhibit the function of the thyroid gland. Reports indicate that cattle initially salivate excessively, after which they stagger, collapse and die.”

#76 45north on 08.01.16 at 11:05 pm

Meanwhile housing construction and real estate, which amounted to 17% of the national GDP in 2000, now account for 20% of it. Thus, imagine what a serious correction to real estate valuations might do to consumer spending, finance, homebuilders, mortgage lenders and granite sales guys.

okay the major banks, the Federal Government, the Bank of Canada and the rest are frightened but the average guy doesn’t see a thing and I’m thinking he’s not going to. I mean sales peak in May, so they peaked, maybe September is going to be a little off but the real estate boards can spin that. Sales declines October, November and December are perfectly normal. As I said the average guy just doesn’t see a big significant decline and here’s Steve Poloz with a big announcement! Steve says there’s a big emergency and he’s here to help. Steve is going to lower interest rates and everything you buy at Walmart is going to cost more. Not only that if you live in Ontario, electricity is going to cost more and so’s gasoline.

I can see Donald Trump: “I didn’t want to do it but Canada has asked me to be the Governor General. I’ve always loved Canada and Crown Royal so I going to say yes.”

#77 Smoking Man on 08.01.16 at 11:08 pm

For those that can’t make it.
My Eulogy for my dads funeral tomorrow.

My up bringing was blessed, My dad and mom constantly doted on me and loved me to pieces.

I remember onetime he was out of work as a factory floor sweeper, but I really wanted a bike, this special bike for my birthday, was about 100 bucks back in 67. He took a job as worm picker, worked all night, excused to pieces.

Well I got that elusive Fast-Back 100 for my birthday. Wow what a bike. I became famous in the neighborhood popping wheels on this thing. I used to see him looking at me preform from the window with a huge smile on his face.

He never pushed me hard in school or worried about what I ended up becoming as an adult.

Money, appearance, and things that people are generally obsessed with was not a big priority in my fathers world.

He taught me to love the skin I was in, and not worry about what others might think, celebrate everyday your on gods earth. what a gift. I can’t even describe it with words.

A happy son was all that mattered to him. In fact I remember far-away voices taking badly about him, he’s slow. He’s different. Well 3 stint’s in a Nazi concentration camp might make anyone look a little different, those kinds of challenges typically would make any mortal man completely insane. I never saw that in my dad.

My dad was perfect.

I know all my cousins felt the same way about him as I did. What a loving gem he was.

He would say find your own voice, find your own happiness, don’t worry about what others think.

Well I became a father and applied the same techniques on my boys which is insane in today’s hyper consumer world of competitiveness.

It’s all I knew about fatherhood. Perhaps I could have pushed them harder, forced disciplined and hard work on them. But in my mind and my fathers mind, you got find your own voice, your own creative spirit , do what you love doing. Write your own script, never follow some one else’s like I did.

Look at those beauties, I think my sons turned out alright, they may not have the pin up jobs that will net them a daughter of rich bastard on Post rd. But they will all find true love.

They saw it in my mom and dad.
They see it with me and my wife.

They are blessed but don’t know it yet.

In life we have phases of good luck and bad luck, hardship and utopia, and if you love the skin your in, knowing you have a doting loving parents in the background somewhere in the universe, you can survive the good and the bad times with out going off the rails.

My sons and my family, today we bury a great man that know one really knew that well but me, who’s spirit resides in all your hearts.

We are all truly blessed to have met him.

Rest In Piece my beautiful Dad.

#78 El Presidente Trump on 08.01.16 at 11:09 pm

#68 Chris in Nanaimo on 08.01.16 at 10:29 pm

#2 Randy. “Trump’s wife looks awesome. More nude pics please NYT”

Thanking the gods that Clinton never did a nude photoshoot……..

Or did she????

Wikileaks still has some more dirt to dish on her.

….hmmmm???

Just wait for the naked Bill pics!! bidding my time for those

#79 DisgustMadeMePost on 08.01.16 at 11:16 pm

Confusing Van real estate market…

What offer would you give? Why would anyone offer the full price if a 15% reduction is being offered to ‘foreigners’?

This whole market is ridiculous. Pumped up asking prices, fake discounts… Not sure why anyone would get involved right now.

http://bc.ctvnews.ca/mobile/foreign-buyers-get-15-off-home-sellers-look-to-beat-new-tax-1.3010180

#80 Doug t on 08.01.16 at 11:18 pm

Zzzzzzzzzzzzz – wake me up when something significant happens – meanwhile zzzzzzzzzzz

#81 Blobby on 08.01.16 at 11:20 pm

@#32

Why would people lower their prices 15% to save people money on a 15% tax?

Are Canadians mathematical skills that bad?

Try it.. Take $100, remove 15%, then add 15%

#82 Subprime Sam on 08.01.16 at 11:39 pm

Aggregator on 08.01.16 at 9:45 pm
Japan Pension Whale’s $52 Billion Loss Tied to Passive Ways

See what passive investing does. Same thing will happen to 60/40 portfolio strategies as lower yielding bonds lose their hedging capacity against equities under economic shocks. Bond yields can ony drop so much before a cash arbitrage appears below the negative bound.

This is why a 60-40 portfolio has a slim bond exposure. Surprised you believed otherwise. — Garth

The challenge that all of these pension plans have is not in chasing yield but affecting legislation to change solvency funding rules, especially here at home.

The biggest elephant in the room is the liabilities that a pension plan carries. Let me explain.

If you give me $100. and interest rates are at 10% then I can easily promise you $10./ yr. for your retirement. If interest rates drop to 5%…guess what the pension plan’s liabilities double. This is a little simplistic but it is very true. You can chase as much yield as you want but you’re not making up for that hit.

Now you know the dire situation our many plans are in, considering the length of time interest rates have been dropping. I don’t care what plan it is, the liabilities have been building up incredibly over the last several years.

Don’t ask your plan what their returns are, ask them where their liabilities are?

Maybe that defined pension plan isn’t the rock to build your retirement on.

#83 Fuzzy Camel on 08.01.16 at 11:59 pm

Canadian housing bubble = immigration + low rates.

It’s that simple. There is a huge demand for housing here, last apartment I rented had line up of 30 people trying to get it.

With 250,000+ people moving to the GTA each year, we have a healthy demand for real estate.

That said, if immigration stops, or the easy lending stops, this thing will grind to halt, then crash, and the economic immigrants coming here will flee to greener pastures.

Canada has juiced it’s economy with large numbers of economic immigrants and low rates. This will come back to royally screw the economy at some point, because economic immigrants cometh and goeth. And when they goeth, they leave behind a greatly overbuilt housing market that will deflate for decades.

I cannot stress enough, this is false economic prosperity and it’s time is quickly running out. Economic immigrants are a double edged sword, they move where the money is. And very soon, that will definitely NOT be Canada. Things boom when immigrants are coming in, it’s good, it’s enabled us to become a very powerful economy. But highly mobile immigrants will leave just as quick as they came.

#84 crdt on 08.02.16 at 12:10 am

Guy is discussing 100% mortgages as if they were the next great financial innovation as he thumbs his nose at the banks for not having the financial balls his “lenders” have.

Bank Vs Broker. Getting a Mortgage In Canada

https://www.youtube.com/watch?v=KEcF3z45bTQ&index=54&list=PLGWtMNRUHd9sHox0dDjAD21KppQRRvvcx

#85 Say What? on 08.02.16 at 12:24 am

#26 Andrew t on 08.01.16 at 7:10 pm

Yes please, say more. There’s gotta be some gems rarin’ to go.

———————————————————–

OK. During the last eight years that this blog has preached about the RE bubble, RE has in fact more than doubled in value in TO. Need I say more?

#86 Mark on 08.02.16 at 12:26 am

“Gov is busy appeasing the plebes with stats on chineses. I have friends who on 60k wages are owning 3 houses, leveraged as in a good ole forex account. Except the posibillity of a stop loss order. Why does the gov not so stats on average multiple mortgages? That would be more telling and more rigurous.”

Because its far more convenient for the government not to get to the truth, and even foment the whole nonsensical idea of aliens causing the housing market to be levitated. Rather than give up the golden goose of all the tax revenue they’re earning on the speculation including the spin-offs.

Besides, as we know, most politicians themselves have their fingers in the pie. In some provinces, politicians have to disclose their personal assets — in the one province I studied the returns of, an overwhelming number of them owned investment real estate other than their principal residence. ETF ownership was almost non-existent.

#87 Mark on 08.02.16 at 12:29 am

“Thanking the gods that Clinton never did a nude photoshoot……..

Or did she????

http://www.messynessychic.com/2013/11/12/that-time-harvard-and-yale-took-naked-photos-of-all-their-freshmen-students/

“Between the 1940s and the 1970s, several ivy league colleges had a very strange requirement for all their incoming freshmen students. Harvard, Yale, Wellesley College, Vassar as well as Brown University, were among the elite American colleges that asked all the young men and women enrolled in their first year, to pose nude. Thousands and thousands of pictures were taken of students, including such notable names such as George Bush, Diane Sawyer, Meryl Streep and Hillary Rodham Clinton.”

#88 Future Expatriate on 08.02.16 at 12:59 am

That fabric? Very close but not identical. And highly unlikely anyone would make a shirt out of upholstery fabric anyway.

Art director. Sue me.

#89 You describe the R word... on 08.02.16 at 1:44 am

The economic performance you describe is that of a recession.

Recessions lead to large drops in RE Price Indices always (and not the other way around) and since 1980 in Canada.

We are in it already or it has started.

Interest rate increases in the future will just make it worse.

It will be a bad due to the size of the current asset bubble and the historic indebtedness of Canadians.

By the end of this year we will instead be chronicling all of the misery.

#90 crazed and a little confused on 08.02.16 at 2:22 am

Hi garth
you said ” expect to be lonely”.
Haha
try deserted island lonely in yvr.

My landlord say it vrry tough for young people yo get into the housing market.

no kidding. I just told him I keep getting outbidded and smile politely

#91 The Last Post on 08.02.16 at 5:42 am

comment #3 TurnerNation

Boy, are you ever right !

I have an acquaintance doing just that in Toronto.
They cleared $ 2.2 million net (after a 12 year hold – paid $ 600 k , put in 100k improvements) and are looking to buy in the $ 4 million range, hoping to hold a year for personal residence and get $5 million plus.

They are not “wealthy” people (one income) and constantly complain about having to be “in the rat race” and wanting to retire.

#92 Bram on 08.02.16 at 5:46 am

Or that collapse could be a myth?

http://seekingalpha.com/article/3994084-canada-myth-epic-housing-bubble-next-great-housing-collapse?page=2

#93 The Last Post on 08.02.16 at 5:50 am

comment # 27 Wall of Worry

You don’t no much about market dynamics, do you ?

And , under your scenario, what would happen if rates increased and / or prices stagnated do you think ?

Do you really think that Canadian residential property pricing is working off basic economic fundamentals ?
Really ?

#94 The Last Post on 08.02.16 at 5:52 am

last comment to # 27 Wall of Worry

made a typo , should be “know” , not “no” in first sentence.

Too early in the morning for me !

#95 The Last Post on 08.02.16 at 5:59 am

comment #39 dan barrett

of course not, he is a “true believer” who thinks he is a genius for buying a house

typical Canadian

#96 The Last Post on 08.02.16 at 6:24 am

comment # 61 Xi Lang Bo

If I recall correctly, Canada and China ratified an agreement (under Harper) whereby if China presents credible charges against these “wanted” Chinese nationals, Canada will seize their assets on behalf of the the Chinese authorities and deport them.

It calls for Canadian authorities to liquidate the identified assets, retain 15 % of their value (in lieu of potential taxes owing) and forwarding the balance to the Chinese authorities.

Look at the significant reduction in Chinese nationals’ buying in Sydney, San Franciso, NYC, London and elsewhere recently.

The crackdown is happening now.
Imagine what that might do to lesser RE markets where they have been the biggest foreign buyers ?

Places like Vancouver …

#97 WallOfWorry on 08.02.16 at 6:54 am

comment # 92 Last Post

“You don’t no much about market dynamics, do you ?

And , under your scenario, what would happen if rates increased and / or prices stagnated do you think ?”

You obviously didn’t read my post or it is beyond your comprehension? My point exactly is that housing will correct when their is a series of interest rate corrections…just as Garth has hypothesized. Totally agree on that one.

Now…if you think that interest rates are going to correct any time soon then I would suggest that you are the own who clearly doesn’t understand market fundamentals. And, so many like yourself have been on this blog championing that the top is in in housing prices…yet remain so belligerent that you are right. You may be one day…but to date you have been dreadfully wrong! Just saying….

#98 Zen Headspace on 08.02.16 at 7:03 am

#31 Etobicoke Pete
“Garth, I WANT TO BELIEVE.

But I’ve seen 7 years where these clueless, real-estate buying loan cuckolds were making better returns, doing nothing, with no knowledge or special skills, than people with high-end post-secondary certificates in the equities markets.

Will this even ever happen?”
——————————————————————-
There are things in life that require more time than others. Time to blossom, to develop, to grow, to mature… And if we don’t learn the art of patience, by allowing life to follow its natural course, chances are that we will continue to force and resist the natural flow of things.

“Patience is the companion of wisdom.” ~ St. Augustine
One moment of patience may ward off great disaster. One moment of impatience may ruin a whole life.” ~ Chinese Proverb

“Patience is bitter, but its fruit is sweet.” ~ Jean-Jacques Rousseau

Every time a situation stretches your patience to dangerous thinness, just think of it as an opportunity to practice your patience. Because that’s what it take to become patient — practice, practice, more practice, and even more practice. And then some more. And the more you practice, the better you’ll get. So cherish these wonderful opportunities to practice.

Hang in there. Your day will come. You will reap the rewards of patience.

#99 Julia on 08.02.16 at 8:15 am

#71 No Starbucks and also no Mr. T serving ice cream himself.

I was also shocked at how many and how far from the big city these new residential developments are being built.

#100 common sense on 08.02.16 at 8:16 am

Smoking Man

Beautiful words for a beautiful person it seems….

All the best.

#101 crowdedelevatorfartz on 08.02.16 at 8:22 am

@#53 Not 1st
“go up to some millennials and ask them about YOLO. Its a much more powerful force than ….”
*******************************************

Apparently the boomers” beat the “hipsters” to the punch on that one as well……..
Thats why boomers have zero saved for retirement…..too busy buying jet skis and Harleys for the summer holidays…..

#102 TurnerNation on 08.02.16 at 8:24 am

#86 Mark – those likely were black mail pics for the kids of elites who would in turn become the same thing. Ever see movie ‘The Corporation’ with Tom Cruz?
Those elite schools are from which all the psychopaths are raised and groomed for high level govt, corp and Intel positions. Witness: our world.
(“We know he has Wmd”).
No wonder a smile always is plastered on their face.

#103 crowdedelevatorfartz on 08.02.16 at 8:41 am

@#17 The Jag
“given the July rains….”
*******************************************
aaaahhhhh yes the July rains…..

http://www.google.ca/url?url=http://www.fortmcmurraytoday.com/2016/07/31/heavy-rainfall-floods-parts-of-fort-mcmurray&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiz-OrK36LOAhUN5mMKHTPtAewQFggnMAU&usg=AFQjCNGTh6k8Kg2kLqlkGZ5KCMxeuCSgLA

Whats next for Alberta?
Famine? Plague? Pestilence?

Apparently its not just “carpetbaggers” that dont like your province……..

Repent! Ye carbon propagating sinner.

Not to worry. God wont smite you, but dropping oil prices certainly wont help……………

#104 crowdedelevatorfartz on 08.02.16 at 8:49 am

And mere days before the “Owelimpicks” begin we have THIS !

http://www.reuters.com/article/us-brazil-corruption-idUSKCN10D10A?il=0

Could it have been prompted by another venue that collapsed?
What an epic pr disaster the Rio Show is turning out to be.
Oh well, I guess the Olympic Committee’s “objective” choice of Rio for the site of the 2016 Olympics is finally going to bite those backhanding swine in the backside.

#105 Sponge on 08.02.16 at 8:56 am

#1 TurnerNation on 08.01.16 at 5:55 pm
On the Least Coast (or buy 4 sht bungs in Long Branch):

http://www.cbc.ca/news/canada/prince-edward-island/pei-expensive-home-1.3702585

“It went for $3 million less than its original asking price, but a mansion on P.E.I. is now officially off the market.

The six-bedroom, eight-bathroom home — which features a whale watching tower — sold on Friday for a little under $4.7 million. In 2009, it was listed for $7.75 million and had the distinction of being the only home on P.E.I. listed through Sotheby’s in New York

“Poczynek said though the seller took a loss, he was happy to have it sold.

——————————————————–

This Cottage will rent for 20 – 25k per week in the off season for anyone interested.

#106 Betamax Comptroller on 08.02.16 at 9:00 am

It looks like Gold is going up and oil is up and global stocks are down today. Who gets the win on this call? Canadian Stocks!! Lewanza gets the win for his 30-Jul call. Garth gets the short term humble pie. The great thing about teams that have different slightly opposing but generally complimenting viewpoints is that it makes the team as a whole always look right and look like they are factoring analysis. When of course they could be but in reality making calls takes a dosage of luck because sometimes markets respond positively to data, sometimes negatively to the same data.

#107 The Last Post on 08.02.16 at 9:15 am

comment #96 Wall of Worry

Go back and read my post again – it is you that can not only not comprehend, but fabricate and attribute concepts that I do not even mention. But, nice try.

Where in my post do I mention discuss my or anyone elses’ opinions on the direction or even level of interest rates ?

Where have I commented anywhere about it being a “top” in the Canadian RE market, or even mention it?

I merely suggest that other factors play into valuations and the market dynamics that may flow from those influences and that interest rate levels are not the sole determinant of prices.

Don’t attribute to others’ comments what is neither there nor implied.

I can’t imagine that you have a job that involves critical thinking, cause you sure don’t display it your postings.

Have a nice day in your blissful ignorance !

#108 Victor V on 08.02.16 at 9:27 am

Canada’s economy is growing at the slowest pace in 60 years and the only thing holding us up is housing

http://business.financialpost.com/news/economy/canadas-economy-is-growing-at-the-slowest-pace-in-60-years-and-the-only-thing-holding-us-up-is-housing

#109 James on 08.02.16 at 9:52 am

#72 El Presidente Trump on 08.01.16 at 10:50 pm

#69 JR on 08.01.16 at 10:33 pm
Looks like the smoking man is right again!
Garth, would you be willing to send me a document containing all the posts smoking man has ever made on this site? Something tells me that there’s gold in them hills!
_______________________________

I’ve already asked my buddy Putin to dig up all the DELETES…
…………………………………………………………………….

I have to say Donald Trump is the world’s best bullshitter and has balls of steel. Mr. Trump addressed the Veterans of Foreign Wars convention in Charlotte, N.C., last week. How he could stand in front of hundreds of veterans and talk about himself after he ducked out on the draft during Vietnam with four student deferments. Then when his last deferment was set to expire, Trump conveniently obtained a doctors certificate for bone spurs in his heal just at the height of the Tet offensive when tens of thousands of young Americans were sent to fight and die. I see a conspiracy here with dearest daddy paying off a doctor for the last letter giving him a 1-Y until 1972, when his status changed to 4-F. Trumps time during the war is drawing more scrutiny after the Muslim American parents of Captain Humayun Khan a soldier who was killed in Iraq publicly questioned whether Mr. Trump had ever sacrificed for his country. In an emotional speech at the Democratic National Convention last week, the soldier’s father, Khizr Khan, directly addressed Mr. Trump, the Republican presidential nominee, saying, “You have sacrificed nothing and no one. That is true Trump commuted from his parents’ home in Queens and played squash, football and tennis when he attended Fordham School then at Wharton, Mr. Trump began preparing in earnest for his career in real estate by buying and selling fixer-upper townhouses in Pennsylvania and driving home to New York on weekends to work for his father. During the Wharton years, he said, he had less time for sports but stayed physically active, playing pickup golf at public courses near campus, including Cobbs Creek. All of this while the war was raging. At the VFW convention Trump then went on a tirade about the parents trying to smear them and commenting about the wife probably wasn’t allowed to talk. Please Donald show us how your bullshit is going to get you out of this one with your gutless sniveling lying and incoherent non sequiturs. When questioned about anything that smacks of a hidden agenda about himself he always defers and goes after the nearest issue that has nothing to do with his own original question. Good luck to all of you drinking the Donald Kool-Aid, say hello to Beelzebub when you arrive at the gates of hell.

#110 45north on 08.02.16 at 9:54 am

Shared Services: The government’s bid to unify all of its departments under a Canada.ca web address is increasing workloads and pushing at least one federal department over budget, raising questions about the implementation of the project.

http://ottawacitizen.com/news/politics/federal-governments-canada-ca-one-website-project-proving-costly-and-confusing

bureaucrats love regulations. The more regulations the greater the cost.

I used to work for the Canadian Soil Information System. Here’s a regulation that pushes up costs. The urls have to be bilingual, it’s not enough that the page is bilingual the url has to be bilingual. So here’s a web page:
http://sis.agr.gc.ca/cansis/nsdb/index.html
and it’s bilingual:
http://sis.agr.gc.ca/siscan/nsdb/index.html

so what’s the problem? the url is not bilingual: notice nsdb in both urls? nsdb stands for national soils data base. It’s English and not French. The bureaucrats have threatened to take the site down over the last 16 years. once it’s down, it’s perfectly bilingual.

So costs go up, the web sites get dumbed down.

#111 prairiegopher on 08.02.16 at 10:00 am

It’s interesting how you keep saying Alberta is “pooched”. Alberta is a great place with some of the best people in the country. If we go down, the rest of Canada won’t be far behind. When some areas aren’t receiving their free money, then they will come to realize what Alberta represents!

#112 Tudval on 08.02.16 at 10:03 am

The debt to income ratio is a minor and almost irrelevant data point in a much more complex equation.

#1. Servicing that debt takes a lower percentage of the income that at any point in the last few decades. You can speculate all you want about interest rate hikes, but they’re not coming any time soon. And all that debt is being matched by assets, dollar for dollar. Even was mortgage debt is included, but home equity is excluded (real smooth way to distort the true picture)

#2. Let’s compare government debt to GDP numbers for the G7. Canada is way ahead. Especially since a more appropriate measure should be debt to (tax) income. Let’s be consistent here. While consumers own all their after-tax income, the governments don’t own all the country’s GDP (and have few assets to match their liabilities) and all G7 countries have reached the limits of how high they can tax their citizens.

#3 All these numbers are being used to force a parallel with the situation in the US before the financial crisis. Of course the analysts conveniently leave out crucial information, such as the fact that the US has enjoyed 17 consecutive rate hikes (yikes!) in the context of rampant fraud, speculation and overbuilding that led to every fearmongers’ most beloved event.

#4 The ONLY real concern in Canada is what current rate policy will mean for our dollar vs the USD. The fear there is that keeping rates low will cause a further drop in our loonie, with subsequent inflation, being that we import much stuff from south of the border. Yet every other currency in the world will suffer a similar fate and if somehow the US dollar can keep rising without regard to what that will do to their own trade balance and inflation targets, all other countries have the option to increase trade between themselves. Might take a period of adjustment, but it will be done.

#113 Tony on 08.02.16 at 10:21 am

Putting in a guess for the TVIX today 24.73 percent today (up). The Canadian holiday negated being able to buy the Canadian version so 24.73 percent for the TVIX today.

#114 Shawn on 08.02.16 at 10:56 am

Don’t Try Confusing People With Facts

#111 Tudval on 08.02.16 at 10:03 am correctly notes:

The debt to income ratio is a minor and almost irrelevant data point in a much more complex equation.

#1. Servicing that debt takes a lower percentage of the income that at any point in the last few decades.

***************************************
It’s useless to present such facts. People who are convinced (rightly or wrongly) that house prices will fall are not interested in ANY facts to the contrary.

It’s a survival mechanism.

If people had to re-evaluate their views with each new piece of data, that would take up all their time.

So people generally take a position and then avoid or ignore contrary evidence.

This is human nature and the fact is that it is very very difficult to change minds.

#115 bill on 08.02.16 at 11:08 am

#84 Say What? on 08.02.16 at 12:24 am
so then its a really big real estate bubble?

#116 Context on 08.02.16 at 11:15 am

Official real estate stats can be ignored as the speculators are on the run. Parts of the Toronto area are already blowing up but you won’t find this matrix with the MLS listings. They are working in the dark by the thousands and those high rise condos dotting the sky have hidden inventory that is not being listed; developers with projects other than condos have no buyers and are renting them out. The matrix is huge with sub-sections but you need the codes and estimate an additional 40,000 homes or units in the Toronto area can be bought or rented. Brampton is in big trouble for example. Lots of properties are empty hiding from the tax man.

#117 TurnerNation on 08.02.16 at 11:47 am

The Bloodening begins for Genworth and Home Crapital corp. On TSX.

Those BSD NY hedgies.
Now youse can’t leave? (Aggregator)

#118 fancy_pants on 08.02.16 at 11:51 am

nothing to see here as HAM is something you put in the oven.
http://www.bloomberg.com/features/2016-vancouver-real-estate-market/

#119 fancy_pants on 08.02.16 at 11:54 am

take off the short term glasses and put on the long term ones. alberta is not pooched, ontario is.

#120 fancy_pants on 08.02.16 at 11:56 am

Homeowners thinking of selling but afraid to do so because of :
(c) wife

#121 Context on 08.02.16 at 12:04 pm

I looked at the Toronto cottage country with MLS and one needs to adjust settings with care to look around. I did this the other day and at least 1000 legal listings. Just now went into the matrix looking for those hiding from the tax man without coding into sub sections. Deals are being made in the dark for sales or rentals directly with ownership and its huge, but need to spend more time tonight on this all. One might say they are just trying to save commissions, but maybe not.

#122 Ronaldo on 08.02.16 at 12:25 pm

80 Blobby on 08.01.16 at 11:20 pm

@#32

Why would people lower their prices 15% to save people money on a 15% tax?

Are Canadians mathematical skills that bad?

Try it.. Take $100, remove 15%, then add 15%
————————————————————-
Or you can take $100 and add 15% ten deduct 15% and see what you get.

#123 Shawn on 08.02.16 at 12:30 pm

Ignore the Official Data?

#115 Context on 08.02.16 at 11:15 am said:

Official real estate stats can be ignored as the speculators are on the run.

**************************************
Yes, of course, as I have been saying, any data, official or otherwise, that does not support whatever view you already hold can be ignored. It’s obviously manipulated if it does not agree with your views.

Or… one could possibly consider whether the facts support their view… nah, that’s too much like work.

#124 Aggregator on 08.02.16 at 12:31 pm

Trump just said he will use Caterpillar to build the border wall.

Trump Win: Buy CAT

Hillary Win: Buy SWHC

#125 James on 08.02.16 at 12:31 pm

“I see some great polls — I see one from the Los Angeles Times, just came out, where were ahead by 4 or 5 points. I see one from CNN where we are down,” the Republican presidential nominee told the crowd at a rally in Ashburn, Va., on Tuesday.

“I think these polls, I don’t know, there’s something about these polls, there’s something phony.”

He went on to hammer CNN characterizing the network as “negative all day long” and said the network’s ratings will go down because he won’t sit for an interview. Trump said CNN is asking for an interview with him for a documentary it’s doing, but he will refuse.

Well Trump is correct about one thing, “I don’t know” Sorry Donald you don’t get to pick and choose the polls that you like and discard the ones that you don’t like. Suck it up!

#126 WallOfWorry on 08.02.16 at 12:46 pm

#106…the last post: “I merely suggest that other factors play into valuations and the market dynamics that may flow from those influences and that interest rate levels are not the sole determinant of prices”.

OK…you may be right. But I think that I addressed those key factors (you may disagree with the position) but please enlighten me. Other than economic disruptions (rampant job losses etc) and maybe demographic shifts that can affect market segments, what else is there? The RBC just came out stating that interest rates are the dominant factor. I have suggested that the economic disruption from oil has mostly been felt because I would argue oil is going to $50 before it goes to $30. And interest rates are not going up in the near to medium term.

What exactly are you saying?

#127 Neil Armstrong on 08.02.16 at 1:33 pm

#76 Smoking Man- Thanks. Very touching, “you’re on God’s earth”. Nice. Eyes watering, here’s to the Fast Back 100, cheers. Strikes a chord with me, what else does a father need but to see his son happy. Worth more than all the riches on God’s earth. Eyes still watering…dammit.

#128 Ronaldo on 08.02.16 at 1:40 pm

For the newbies and DIY investors who don’t have large portfolios and just starting out, you may want to have a look at this website. It offers tonnes of information and suggested portfolios depending on your risk tolerance. Mostly recommending ETF’s. I personally met with the person who was behind the launch of this service several years ago and found him to be a very knowlegable and trustworthy individual. You can sign up as a member on the website at no cost. Oodles of information. Enjoy.
http://www.investors-aid.ca/

Seriously? This site charges people $120 to recommend an advisor, who also pays the site to be recommended. Can you say “conflict of interest”? — Garth

#129 Roial1 on 08.02.16 at 1:45 pm

#123 Aggregator on 08.02.16 at 12:31 pm

Trump just said he will use Caterpillar to build the border wall.

Trump Win: Buy CAT
———————————————————–

I cringe every time I see D.T. doing his thing.

The reason being is that I saw a picture of him looking off to the right, and a picture of “Il Duce” (Mussolini) in exactly the same pose. They are both arrogant and display it.
The other thing about him is how much this situation is just exactly as was described in “1984” as the process for the rise of “Big Brother” (He also built walls)

(To keep the sheeple in.)

Some times I wish I had NOT read so much as a kid growing up.

#130 Blacksheep on 08.02.16 at 1:54 pm

James # 108,

“Trump conveniently obtained a doctors certificate for bone spurs in his heal just at the height of the Tet offensive when tens of thousands of young Americans were sent to fight and die.”
————————————————-
So…..you have a problem with the son of a wealthy man finding a way to not get killed or be forced to kill, in an unjustifiable war.

Because others couldn’t dodge, ‘literal bullets’, he should have died along side?

How about criticising those that sent the young men to die in the first place?

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

“Nick Turse, in his 2013 book, Kill Anything that Moves, argues that a relentless drive toward higher body counts”

“Air force captain, Brian Wilson, who carried out bomb-damage assessments in free-fire zones throughout the delta, saw the results firsthand. “It was the epitome of immorality…One of the times I counted bodies after an air strike—which always ended with two napalm bombs which would just fry everything that was left—I counted sixty-two bodies. In my report I described them as so many women between fifteen and twenty-five and so many children—usually in their mothers’ arms or very close to them—and so many old people.” When he later read the official tally of dead, he found that it listed them as 130 VC killed.”

Is Trump bullshitting, the un-‘Fortunate Sons’ (Vets) that were either too brainwashed or simply lacked the connections to avoid being forced to, kill, die, or both?

Of course, he’s a politian and he telling them what he thinks they want to hear to get their votes, but don’t kid yourself, I’m sure looking back, a majority of those Vets would gladly trade places with Trump, if for no other reason beyond the avoidance of nightmares….

If you’ve got issues with deceptive politian’s, you should check out this little Vid on what Billary has been up to while acting as, Secretary of State:

https://www.youtube.com/watch?v=7LYRUOd_QoM

It’s all theatre anyhow cause the fix is in via the electoral collage.

#131 Neil Armstrong on 08.02.16 at 1:54 pm

#118 fancy_pants

You’ve got it backwards. Unless Alberta begins in earnest to invest in solar and electric, it won’t go well for the long-term. Ontario is headed in the right direction.

“The Canadian Solar Industry Association now counts 263 corporate members, mostly in Ontario. Even as Ontario winds down its feed-in-tariff (at present Ontario is signing contracts to buy solar and wind for 29¢ kWh ), the solar industry is exporting Canadian know-how to the world.”

http://business.financialpost.com/investing/outlook-2016/ontario-solar-industry-finds-place-in-the-sun-after-green-energy-debacle?__lsa=d114-4f0a

#132 Waiting for the numbers on 08.02.16 at 1:59 pm

Ben Rabidoux
‏@BenRabidoux
Ouch! Vancouver home sales in July down big, led by steep drop in detached sales.

hearing from others … -19% Y/Y and -30% m/m, might be just the weather…

#133 Neil Armstrong on 08.02.16 at 2:01 pm

Alberta? Hellooo. Are you there? It’s time to wake up… The future is calling. And it’s not calling for oil.

http://www.nationalobserver.com/2016/03/28/news/solar-industry-says-70000-jobs-knocking-albertas-door

#134 Ernest on 08.02.16 at 2:04 pm

Garth,
What is going to happen to the Canadian dollar when the RE market crashes?
Thanks.

#135 Alex on 08.02.16 at 2:06 pm

No way the Toronto or Vancouver markets will crash. As inflated as they are, and as they reek of pure bubble. The govt will use every play to keep it going. Immigrants with money, low interest rates, lack of new low rise housing projects, and lack of regulation on RE agents keeps public having FOMO. As well, sellers are reluctant to sell so not a lot of supply on market because they would have to “buy high” or want to see equity “grow more”. As a result, Canadians paying more taxes to insure mortgages, and banks having so many dollars tied in outstanding loans. Real ugly situation.

#136 A Girl Who Invests on 08.02.16 at 2:25 pm

Does anyone invest in ZWB – BMO Covered Call Canadian Banks ETF? I like the distribution yield. Is this a sound ETF to invest in?

#137 Shawn on 08.02.16 at 2:28 pm

Alberta versus Ontario

#130 Neil Armstrong on 08.02.16 at 1:54 pm said:
#118 fancy_pants

You’ve got it backwards. Unless Alberta begins in earnest to invest in solar and electric, it won’t go well for the long-term. Ontario is headed in the right direction.

**************************************
It’s really nonsense to talk about an entire province being pooched or not or of an entire province investing in Solar.

It ought to be up to individuals and corporations to invest in solar or not.

Ontario had massive government subsidies for Solar. That is clearly poor policy. Not the job of government.

If solar is a good investment then funds will flow there.

Forcing funds to flow to solar before it was economic has made the Ontario government and the Ontario electricity rate payers less well off.

Just the other day we had a story here about seniors unable to pay their electric bills.

Again, in economics you are not on Team Canada or Team Ontario or Team Alberta. You are on Team You and you best look after yourselves.

I also read a lot about how “Canada” relied on the Energy sector. I don’t remember the Canadian government investing in the oil sands. Last I heard, they sold Petro Canada. No, it was oil companies that (over) invested in oils sands and it is mostly they that will reap the profits or losses. As it should be.

#138 James on 08.02.16 at 2:43 pm

#129 Blacksheep on 08.02.16 at 1:54 pm

James # 108,

“Trump conveniently obtained a doctors certificate for bone spurs in his heal just at the height of the Tet offensive when tens of thousands of young Americans were sent to fight and die.”
————————————————-
So…..you have a problem with the son of a wealthy man finding a way to not get killed or be forced to kill, in an unjustifiable war.
Because others couldn’t dodge, ‘literal bullets’, he should have died along side?
How about criticising those that sent the young men to die in the first place?

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

“Nick Turse, in his 2013 book, Kill Anything that Moves, argues that a relentless drive toward higher body counts”

“Air force captain, Brian Wilson, who carried out bomb-damage assessments in free-fire zones throughout the delta, saw the results firsthand. “It was the epitome of immorality…One of the times I counted bodies after an air strike—which always ended with two napalm bombs which would just fry everything that was left—I counted sixty-two bodies. In my report I described them as so many women between fifteen and twenty-five and so many children—usually in their mothers’ arms or very close to them—and so many old people.” When he later read the official tally of dead, he found that it listed them as 130 VC killed.”
Is Trump bullshitting, the un-‘Fortunate Sons’ (Vets) that were either too brainwashed or simply lacked the connections to avoid being forced to, kill, die, or both?
Of course, he’s a politian and he telling them what he thinks they want to hear to get their votes, but don’t kid yourself, I’m sure looking back, a majority of those Vets would gladly trade places with Trump, if for no other reason beyond the avoidance of nightmares….

If you’ve got issues with deceptive politian’s, you should check out this little Vid on what Billary has been up to while acting as, Secretary of State:

https://www.youtube.com/watch?v=7LYRUOd_QoM

It’s all theatre anyhow cause the fix is in via the electoral collage.
____________________________________________
I was merely pointing out that Trump is full of shit. All politicians are and we know that. You are correct that we should have criticized the politicians of the day and we did! My point was that Trump worked his way out of his military duty and that he touts himself as the greatest personal supporter of military on the planet. Which military? The Russian? He cant stand on any side of the fence when it comes to making a stable and believable statement regarding the military or its duties. I did not mention Hillary Clinton as that was not part of my statement. When I discuss her issues then you can step in and comment why I didn’t go ballistic on Lying Donald Oompa Loompa Trump. Do not worry I don’t trust any politician.
Try to focus on one thing grasshopper!

#139 Waiting for the numbers on 08.02.16 at 2:46 pm

now what Vancouver?
local realtor published the july stats:

http://www.yattermatters.com

#140 understood by few on 08.02.16 at 3:21 pm

#133 A Girl Who Invests on 08.02.16 at 2:25 pm
Does anyone invest in ZWB – BMO Covered Call Canadian Banks ETF? I like the distribution yield. Is this a sound ETF to invest in?

————

It’s actively managed, so that puts at least one strike against it for me. Passive takes out the human emotion and error.

CCP has an article talking a bit about it: http://canadiancouchpotato.com/2011/02/17/more-income-etfs-from-bmo/

Personally I’d just go with ZEB (for that exposure). Your upside isn’t limited and still has attractive dividends.

#141 Context on 08.02.16 at 3:24 pm

There appears to be a lot of home owners in Toronto have over extended themselves with too much debt. The family cottage will be the first to go and gave up looking at thousands of cash cows. They are being rented out anywhere from $600 a night; the average is $1,000 a week; and this includes four season for appropriate locations. Many condos were purchased as fulltime cash cows and they are booked so very little time to stay there. Of course this additional income is taxable, or is it being declared? Who would rent out their cottage property to strangers? I gave up looking north, east, and west of Toronto to the north and stopped at 5000 cottage properties.

#142 Shawn on 08.02.16 at 3:27 pm

Electricity and Solar Power

The Facts Madam, Just the Facts…

Unlike some regulars here, I always like to bring facts to the table.

It was mentioned at 130 above that

“at present Ontario is signing contracts to buy solar and wind for 29¢ kWh”

This was said in SUPPORT of solar power.

Meanwhile, in Alberta the wholesale price of electricity paid to producers in the past 30 days averaged 2 cents per kWh. Alberta has an open competitive market for electricity. Due to over-capacity prices are currently at rock bottom levels. Sucks to be a power producer right now. But it’s great to be a power consumer.

This 2 cents is the wholesale price before the cost of delivering the power to the customer and is comparable to the 29 cents mentioned.

Now, which province is going to be able to attract a power intensive manufacturer? The one where the distributor is paying 29 cents for solar power or the one where the spot price of power on the wholesale market has averaged 2 cents over the past 30 days?

Most consumers buy power at fixed prices but some Albertans (including me) buy at spot plus 1 cents. So I paid 3 cents per kWh in July.

We also have Wind Power in Alberta.

At the moment the installed 1445 MW of wind power are cranking out a measly 124 MW. Less than 10% of capacity. Wind producers are clearly losing money this hour with 91% of them getting NOTHING and the other 9% getting 2 cents unless that contracted with someone to pay more.

Wind power is both unreliable and uneconomic. But don’t tell that to a proponent of wind power. They won’t be interested in actual facts.

Solar power in Alberta is too tiny to be listed

http://ets.aeso.ca/ets_web/ip/Market/Reports/CSDReportServlet

#143 Nelley on 08.02.16 at 3:38 pm

135James-you are not thinking logically at all on this topic-Trump’s military record is every bit as impressive as Crooked Hillary’s or Obozo’s.

#144 jess on 08.02.16 at 3:48 pm

“frankenstocks”

http://www.macleans.ca/economy/economicanalysis/public-companies-in-canada-are-going-the-way-of-the-dodo/
=====
Buffet challenges Trump regarding his tax returns

#145 46 and 2 on 08.02.16 at 3:50 pm

#138 Shawn

Don’t worry Shawn, the Notley government has numerous plans and programs in place and positioned to shift Alberta’s reliance away from the O&G market and to support growth in the Province’s economy into the future.

Problem is I don’t think Rach has a clue how to diversify her own portfolio.

She does not have a clue and stands no chance.

The Alberta NDP is a train wreck.

I figure the top 2 tiers of smart money are long gone from the Province and the 3rd tier is working at it and they may never come back…..ask yourself this, why would they?

#146 Nemesis on 08.02.16 at 3:56 pm

“Thanking the gods that Clinton never did a nude photo shoot…”… – NanaimoChris

#BadNewsChris…

http://tinyurl.com/h8nubec

#147 Metaxa on 08.02.16 at 4:33 pm

Wow, oh wow.
What a comment section today!

Equating canola oil with mustard gas?
What about that proven killer dihydrogen monoxide that food processors are putting into almost everything?

What about that proven killer nicotine that is in potatoes, eggplant and many other human consumed vegetables?

And Nelly…
135James-you are not thinking logically at all on this topic-Trump’s military record is every bit as impressive as Crooked Hillary’s or Obozo’s.

Crooked Hillary and Obozo aren’t repeatedly and publicly ragging on a set of parents who lost their son in war.
If you can’t process that logic then you have zero ability to question Jame’s logic.

This comment section really needs the thumbs up/down button activated, eh?

#148 salonist on 08.02.16 at 4:41 pm

Detroit cycle pub

and others in Detroit

hook up several together
you’ve got a rolling block, pub party

http://www.detroitcyclepub.com/

#149 Context on 08.02.16 at 4:41 pm

I have an original Pamela Anderson 12 x 9 for sale which she signed in case anyone might be interested as picked it up 20 years ago. It was in the states and brought the photo back to Canada where it belonged.

#150 jess on 08.02.16 at 4:43 pm

loans between group companies
HMRC has defeated a tax avoidance scheme marketed by EY in 2003 protecting around £30m in tax.
while one company in a group got tax relief on interest paid to another group company without that other company paying tax on the income it received.
https://www.accountancyage.com/2016/08/01/hmrc-defeats-30m-ey-tax-avoidance-scheme/

========
True or False?
‘Walking dead’ on the TSX Venture Exchange: How are ‘zombie’ companies surviving?
Peter Koven | April 6, 2015
======

http://www.businessinsider.com/whats-a-buyback-and-why-do-some-investors-hate-them-2016-6

when profits become a company’s product
http://features.marketplace.org/priceofprofits/

#151 Domain on 08.02.16 at 4:45 pm

Hmm, so Canada #1 and the United Kingdom #2.

Has anyone noticed the pattern yet? Mark Carneys finest work, in that precise order. And since he is still actively employed by the UK Gov, I would expect to see him attempt to do an even better job at inflating the UK credit bubble.

Central bankers all drink the same coolaid and keep trying the same policies over and over again. When they fail, they are perplexed, and the only conclusion they can make of their failures are that they simply didn’t go big enough the first time.

When this all come crumbling down, I hope that people realize what snake oil peddlers these CBers really are, and finally lose faith in them.

#152 Moron Face on 08.03.16 at 12:33 am

The past 2 Canadian housing booms (early 80s & early 90s) got knocked down by recessions before they really got out of hand. This bubble has continued virtually uninterrupted for much longer and has grown much larger as a result of global macroeconomic factors & the commodity bubble. I think it will end simply as an extreme valuation bubble similar to the 90s tech bubble.

#153 Neil Armstrong on 08.03.16 at 8:48 am

Shawn,
As I expected, you are entirely missing the point of the article. I was anticipating the sticking point of 29 cents.

The article was dated last December, in those 8 months since, the cost of solar has decreased by about 50% and headed in one direction: to ZERO (maintenance costs notwithstanding). While dirty electricity costs continue to trend higher save for the current depressed fossil fuels prices, the long-term trend is upward and has been for a while now.

Subsidies from government bodies stimulate creation of industries that benefit us all long-term. The initial price agreements are intended to cover current costs and allow for profits, thereby ensuring future capital for future re-investment. A positive feed-back loop acting as the incentive to invest.

The point of the article was that many corporations in Ontario have seen the light, and that light is a solar future.

A lot of talk in the media on the price of oil. So, it’s important for me to keep you informed of the fact that oil is not going to recover. We just don’t need it like we used to, at a time of extreme over-supply. You might say PEAK OIL was in 2011. The emerging economies are going all-solar-electric. If you cannot see this, I cannot help you.

Yes, the smart money on the TSX is decoupling from oil. That is what is happening behind the scenes and the media would not ever allude to this. Like MBS in many pensions and hidden in the CPP portfolio, the exposure to oil is way too high still and the decoupling is secretly happening also in private equity funds and if it is not, then a lot of dumb people will get slaughtered by their clients. Perhaps literally.

Shawn, will you be one of these people?

#154 Hobo Joe on 08.03.16 at 9:38 am

New tax already having an effect:

http://www.cbc.ca/news/canada/british-columbia/real-estate-tax-new-15-metro-vancouver-foreign-buyers-1.3703987

#155 Pat on 08.03.16 at 4:17 pm

https://www.biv.com/article/2016/8/metro-vancouver-home-sales-plunge-july/

http://www.cbc.ca/news/canada/british-columbia/foreign-buyer-real-estate-tax-collapse-1.3705368

1st article says 3978 transactions took place in July 2016. 2nd article says estimated 3000-4000 deals will fall through because of non resident 15% tax.

This is def. not 10% non residents buying up our homes. Prob more like 30-40% but the govt is too afraid to tell the truth cause that would create mass panic.

I dont know one single local person that can afford a 1.5M tear down on a 33′ lot

This tax should be 15% on all homes under 1M and 30% on all homes over 1M. That should make a small dent in this insanity.