The Donald wins. As with Brexit, markets never imagined voters could be that thick. Volatility envelopes the globe, unfortunately inflated by concern about a European banking contagion. The US dollar soars as money flees into to safe havens. Commodity prices drop. Oil sinks. The Canadian dollar and economy along with it.
Suddenly spending $1.2 million on a semi with a crappy reno two blocks from a homeless shelter doesn’t look that swift. With the foreign-buyer tax in place in both Vancouver and the GTA markets were rolling over anyway. Now sales swiftly decelerate. The financial mood changes as abruptly as the weather. Your spouse get a layoff notice. And you’ve got a mortgage renewal. What now?
Hmm. While the above is fictional, it’s not out there. The anti-establishment, anti-bank, anti-corporate, anti-global, anti-trade, anti-foreigner meme swirling around western society these days is enough to propel a German Shepherd into high office. People do dumb things just to spite others, or to see what happens. This may be one of those moments.
Anyway, what could a mortgaged homeowner whose equity is starting to melt away expect? Did you see the following comment posted here last night from a banker blog dog?
“We started pulling bureaus on all mtg renewals 2 months ago. If your beacon is under 600 you pay .25 extra so this has already started to increase rates only in a very small number of cases but as we begin the inevitable sharp increase in unemployment and losses, the number of mtg renewals needing the extra charge will increase dramatically.
“If you do not have at least 20% equity at renewal time and a good credit score you can be asked to make a lump sum payment to reduce the mtg principal down and/or increase the mortgage payment to shorten the amort, and if you cannot do either, then die. Those dumb enough to have bought with 20 down you will be sent a letter asking to find another lender and you pay a high open mortgage rate until you do.”
Seriously. Have all those Millennials (and others) gobbling up houses and condos over the last three years with 5% or 10% down and mortgages they didn’t lock up for five years considered what might lie ahead? Of course not. Real estate always goes up and makes everybody rich, plus ‘the government’ would never let interest rise because we’d all be screwed.
In reality, your lender has no obligation to renew any home loan once the term expires. Nor is it required to renew under the same terms and conditions. Our banker dog’s quite correct – the institution can demand a lump sum payment, more interest, higher monthlies or slash the amortization period, murdering your cash flow. If this happens during a market correction, you might end up being not only underwater (owing more than the property is worth), but required to find a pile of cash so the mortgage will be renewed – at that higher rate.
And what if you decide to walk?
That’s a really bad idea. Miss a payment or two and the bank will call you. Miss one or two more and you’ll get a demand letter from the lender’s lawyer, telling you to immediately cough up the money, plus some extra for the letter. If you don’t, the bank can foreclose, seize the property then sell it for market value. If that doesn’t cover the outstanding mortgage amount, you’ll be responsible for the shortfall, plus the bank’s costs.
But wait, I hear the moisters cry, isn’t that why we paid all that money for mortgage insurance? To insure us?
Nope. All those premiums forked over by homeowners went to finance insurance which protects the bank against a default. It does not benefit the person in financial distress – who’s still liable for the mortgage amount, plus costs. The lender will come after you first before it files a claim.
(By the way, did you know it’s possible to default on a mortgage even while you’re making payments? If you let your house insurance lapse because you can’t afford it, or skip property tax payments or even let the place run down since you lack the dough to maintain it – you’re likely in default. Check that mortgage doc you never read.)
As I said, the scenario above is fictional. But you can be sure there will be something that comes along which causes Canada’s two remaining delusional housing markets to roll, leading to a meaningful correction and banker repression.
For example, did you see what TD said the other day in its quarterly economic forecast?
“Our baseline forecast is for a gradual softening in overall Canadian housing activity over the next two years. To the extent that yields stay at current levels, or decline further, upside risks to our baseline forecast would materialize.”
Now, combine a Trump win with his repeated calls for the Fed and Janet Yellen to jack interest rates (which will begin happening anyway on December 14th) and there’s something else to worry about.
The point is, the status quo may not be for much longer, if America is Great Again. Just sayin’.
159 comments ↓
Let’s make Canada great again and build a wall around Long Branch.
Rates will go up in December…Yeah right!!! We have not heard that before.
Maybe couple more years of rates hikes just around the corner until people finally realized rates are not going up… Well, not until they are forced up and the Fed loses control.
First Comment ~ Great Entry Garth! Volatility is certainly coming and I am nervous about it but this post helped me with a plan for the upcoming months.
Gartho further to ole 2348 Oliver Cres.
http://www.darylgrimson.com/Properties.php/Details/338
I pranked the RE agent replying to this ad for $3.8 M
asking if it was still available
His response:
“Yes, price is reduced to $3.688m
Want to make an offer?
Best,”
——————————————————
So what do you blog dogs think, should I play along and tell him I’m afraid due to the foreign tax?
See what he says….heheheh
The anguish that started organically in late spring and accelerated with the 15% tax will last for a decade. when the punishment from the tax begins to subside the slow crushing pain created by interest/mortgage rates going up will ensure that there are no price gains for many many years.
Pandering to people’s baser instincts ….. no so far removed from 30s Germany, is it?
@Ole Dobbe
Haha! I wonder if they get a lot of this? I am looking forward to hearing about the outcome!
Hillary Clinton is very ill and in all likelihood she has Parkinson’s Disease. She is medically unfit for Office….claims Dr Dave Janda.
“Hillary’s Health and Our Wellbeing”:
http://www.davejanda.com/operation-freedom/hillary's-health-and-our-wellbeing
(worth listening to)
Who is Dr Dave Janda?
http://www.davejanda.com/about
Hope Hillary can turn it around. Otherwise we won’t stop hearing about it from SM ;)
Hilliard Macbeth on how far Vancouver real estate could fall.
http://www.howestreet.com/2016/09/25/this-week-in-money-71/
nice pic…the green eyed fat cat looks mad! is its name Donald by any chance?
#1 TurnerNation on 09.27.16 at 5:26 pm
just as long as smoking person pays for it…
All these houses on the market in Coquitlam with ‘sticky’ prices are going to wish they chased down the market a bit faster.
This one has been on the market since February under a few different Realtors. Prices have been $803K, $768K, $699K, and now $735K… in that order. That’s right, a lower price point didn’t work after 2 weeks so the price went back up only after adding more stainless, Formica counter tops, a $10K deck, and several staging elements.
It’s a sign of the times – The FOMO is gone, daylight savings is over on Nov 6th, and rates go up Dec 14th. Get out NOW!!
http://fw.to/YEKGE9
Is this a typo? with instead of without?
“Those dumb enough to have bought with 20 down you will be sent a letter asking to find another lender and you pay a high open mortgage rate until you do.”
Garth for you – http://www.visualcapitalist.com/real-estate-bubbles-6-cities-top-list/
garth who do you bank with?
do you own any property in Vancouver may i ask?
and finally, do you think trump was on coke last night?
yours truly,
senator G
Looks like a LEGO minifig, that cat.
I’m a RE bear, but come on. Anyone that bought a house in Vancouver 2-3 years ago with 5 down is 25-40 up, and likely has significant income/earning potential. They can make their payments. What incentive does the bank have to take a home from a borrower that can make the payments, in a down market?
A good friend of my went through bankruptcy in 2012 when the market was on fire and the bank bent over backwards to make terms work. Believe it or not, banks are not interested in owning homes in Coquitlam.
Yes, people will lose their jobs and their homes. That happens in any market.
So unless the banks decide they want to be in the RE biz, the economy tanks AND rates rise to a point that homeowners can’t make payments we are likely in for a correction that will only put the most recent of buyers in an underwater position.
Maybe I just hang with the right people but the folks I know have 50 percent equity, very good paying jobs and can weather a 20-30 percent correction without missing a holiday. I’m 38 and can’t think of one person in my large network that would be crushed by a correction.
If the market drops by half, all bets are off though.
This ‘fictional’ scenario should have been posted a long time ago. It paints a scary picture that many of us may soon encounter. Also….first.
I noted that post with interest yesterday. Some terminology left my puzzled, however:
“If your beacon is under 600 you pay .25 extra…” does Beacon in this context mean if the principal left on the loan? Do mortgages above this number not get the 25 bps increase? Why only lower amounts?
“If you do not have at least 20% equity at renewal time and a good credit score you can be asked to make a lump sum payment to reduce the mtg principal down…”
Will people need to add cash until they hit 20% equity? Makes sense, already on variable rates.
“Those dumb enough to have bought with 20 down you will be sent a letter asking to find another lender and you pay a high open mortgage rate until you do.”
Why would people that have 20%+ equity have to find other lenders? Isn’t that what the bank wants?
Cheers,
~Flu
Everything regarding the mortgage GT covered is correct.
However I wonder if at some future date there would/could be a class action against the banks for unconscionable and immoral conduct in offering loans that they know could not be repaid? Their actions in allowing people to borrow without examining capacity to repay would be a major factor.
I know it takes two to tango, but I am just saying.
SHIFT happens…
Learn to ride the tide.
Or Clinton wins and sentiment becomes bullish. The S&P500 continues to move gradually higher as US economic growth accelerates and a recession doesn’t materialize. Accelerating economic growth in the US strengthens the USD.
Oil remains about where it is or declines somewhat as supply remains high due to an ineffective OPEC cartel, increasing production in non OPEC countries and falling demand due to the proliferation of alternative energy sources. The commodity bear market continues and becomes boring. BNN stops covering commodities and starts covering more innovative technology, aerospace and industrial companies.
Economic growth in the US accelerates while Canadian economic growth remains stagnant. The trade imbalance widens. This further pressures the $CAD. The TSX significantly trails the S&P500.
The FED gradually raises rates while the BOC cuts or stands pat (in the short term). This will further pressure the $CAD.
If economic growth in Canada remains between 0-1% the BOC isn’t doing anything. Housing demand due to immigration & the enormous millennial generation will likely remain high – especially in the GTA and surrounding area where everyone wants to be. Perhaps prices flatten or decline but without a catalyst or economic shock in the US or globally, high prices could be here to stay for many years – remaining stagnant or declining very gradually seemingly forever…
Even in the scenario described….if there is financial contagion, the stock market will correct in a way that nobody will notice real estate. In fact, disruption to the financial system would further strengthen the argument to invest in hard assets. Probably what is closer to reality is we see Q3 come in with a lower growth rate (1% or so), there is greater volatility in financial markets, with negative rates continuing, all resulting in no interest rate hike. Let’s say a prayer that the Donald doesn’t win as that is probably closer to potential reality than anything else in your scenario.
There will be NO Fed rate hike in December and there will certainly be no Bank of Canada rate hike in all of 2017.
The best of the worst (Clinton) will win in November and the Ponzi will continue.
Really enjoyed the first two paragraphs of the blog…..
With the foreign-buyer tax in place in both Vancouver and the GTA markets were rolling over anyway
??????????????????????
GTA market rolling over??
You sure you meant that?
Hmm. While the above is fictional, it’s not out there.
Oh, I get it. Drama queen.
Apparently Trump prefers low rates. If he wins I doubt they will go up, especially if Yellen bails or is forced out.
Then maybe we will see a bond market revolt?
http://www.cnbc.com/2016/09/27/trumps-attack-on-yellen-fed-could-backfire.html
The American people are fed up with the status quo B.S. Like Trump asked Hillary “You’ve been there 30 years. Why should we believe you are going to do something about it now? Where were you 30 years ago?” paraphrased
And he’s right. Younger voters are fed up and they want change. They know the definition of insanity is to keep doing the same thing over and over again expecting a different result.
Hey I’m not a Trump fan. But Hillary or Trump? Seriously!?! What a pathetic list of options. Who will win? Tough call.
More important what will it do to real estate? Not likely anything that wouldn’t happen anyway.
Gath, glad to see you are finally coming around. We will save you a seat on the Trump Band Wagon.
#4 Ole Doberman on 09.27.16 at 5:30 pm
Gartho further to ole 2348 Oliver Cres.
http://www.darylgrimson.com/Properties.php/Details/338
I pranked the RE agent replying to this ad for $3.8 M
asking if it was still available
His response:
“Yes, price is reduced to $3.688m
Want to make an offer?
Best,”
——————————————————
So what do you blog dogs think, should I play along and tell him I’m afraid due to the foreign tax?
See what he says….heheheh
———————–
Tell him to take his client a verbal offer for $1.8M. It will piss them off… but quickly followed by an immediate chill. The hair will raise on their necks. Then, back to the sound of crickets.
Once Trump is elected, Yellen will finally get off her can and spike rates. She will probably raise a couple of times just out of spite. This is a good time to be long USD. Just waiting for the blue light special on the S&P 500. Go Trump Go!!!
8 years ago the real estate bubble burst right before the election and Obama was elected. 8 years before that the dot com bubble burst right before the election and Bush was elected. Now the doomers say its 8 years later and we have a financial bubble that will bust right before the election and Trump will be elected.
Do you think thats at all possible?
America great again?
Everytime they mention raising rates the market craps the bed.
Obamas crew injected way to much paper heroin into the markets.
Withdrawal inevitable.
hmmmm.
Perhaps Donald Trump is stupid like a fox.
Build a wall around the entire US.
Global warming floods the entire planet… drowning everyone except the US.
$18,000,000,000,000.00 Debt problem solved…….
The “status quo” has been a three ring circus for some time now – nuke it and let the reset begin – besides the establishment needs another kick in the n#ts after Brexit.
Rage against the machine
#1 TurnerNation on 09.27.16 at 5:26 pm
Let’s make Canada great again and build a wall around Long Branch
…….
As long as the Lcbo is in side the wall. I’m good with it, keep the lefty loons out.
I read our mortgage documents when we had a mortgage and technically we were not even allowed to do any reno’s unless we sought permission from the bank. I would assume this is standard. I guess this makes some sense since technically they own the house and the mortgagee is simply “renting” money until paid for in full.
The Banks want their monthly mortgage payments from the average Joe/Jane until the house is paid for, and, the longer it takes to pay it off, the better.
The Banks do not want to be in the house selling business.
That being said, if you don’t make your monthlies, for any reason, the Banks will be forced to foreclose. Nothing personal, it’s just business.
How many deals are solid transactions where at the end of the day a truck shows up and moves a family out, then another truck shows up and moves another family in?
The reason why sales prices haven’t declined further in the 604 is simply because the stats are manipulated. Deals that were assigned haven’t stopped. The banks have way too much to lose and the RE cartel knows this.
Don’t buy 604 RE. Period. There is no argument for a sizeable future price increase anylonger. Prices will stay where they’re currently at or worse, prices will decline as more inventory comes online and frustrated natives give up and move out.
The story that thousands are coming every month to live and work in the 604 is fiction. There is no economic boom to substantiate this. There is no “gold rush” in BC.
Same players that ventured in the former VSE are either running the RE shops or they’re behind the deals.
Such a small town, so much corruption and deception.
Ole Dobe,
Make an new inquiry in Mandarin using Goole translate and ask if the realtor knows of any way to circumvent the 15% tax.
Enjoy…
So if prices in Vancouver fall 30% for a $1,000,000 house and a person goes bust, how much money do they have to come up with? I’m not sure how to figure that out but it seems like it might be a lot, especially after tax. I don’t know too many people who have a mortgage and can come up with that kind of money. Maybe sell your kidney? Work at a brothel? Buy lottery tickets? I don’t think any of those can raise that kind of cash very reliably.
LOL! A quick look for homes in the $3.5M range gave me several of these dumps.
http://fw.to/inVOSAG
Days on Market: 85
Asking price: $3,688,000
Also, I noticed many luxury homes are sitting TRIPLE DIGIT days on market, and lots with high 6 figure price reductions. I think it won’t take long for the middle-class to smell this fear.
Vancouver is already tumbling… the rest of the burbs will be next in 2017.
Sales and inventory have dried up in YVR and surrounds as we head into Winter. Can we foresee some high end homes selling to some silly buyers with silly money in the dark of Winter and then averaged out over all homes to once again create some silly leap in average detached values to ignite our Spring market? Carousel anyone.
SM, re. The wall, don’t worry I can smuggle in some JD from Lakeview….
There is change in the wind; no question. And it was breezy in Burnaby today.
I must note Garth you are correct if they default and we sell at a loss. Some will say so what we will claim bankruptcy but they just don’t appreciate what that means especially as credit tightens up over the next few years…as they use to say: bankers give you an umbrella when it is sunny and take it away when it rains
I disagree with some of these practices and do advise applicants to prepare for higher rates and that a market correction will happen one day and I do genuinely care about my clients but I am the minority – the majority of us who work in the front lines are in the same financial position as our clients ( I am not) . The system is simply broken and the horses have left the barn long ago
While some of us try to educate these applicants many are simply deluded and not strong willed to avoid following the herd – when a borrower defaults they essentially lose much of their rights – a contract is a contract regardless of your circumstances
Tell your kid to learn bankruptcy law – what a bull market coming this way in financial sector law work
Its always the fine print that gets you. Garths fiction may soon morph into non-fiction.
The last housing crash in GTA was in the 90″s and even with houses at 250k. People lost everything
The banks are getting worried with so many people over stretched if they miss one or two paycheques its over
“And what if you decide to walk?
That’s a really bad idea. Miss a payment or two and the bank will call you. Miss one or two more and you’ll get a demand letter from the lender’s lawyer, telling you to immediately cough up the money, plus some extra for the letter. If you don’t, the bank can foreclose, seize the property then sell it for market value. If that doesn’t cover the outstanding mortgage amount, you’ll be responsible for the shortfall, plus the bank’s costs.”
**********************************************
That’s why I think the fractional reserve banking system is a fraud.
The bank ‘creates’ money via debt (a mortgage); the financially illiterate (>80%) gobble up way more debt than they can afford (whilst using up all their savings in the process); the ‘real’ assets are transferred to the banksters upon foreclosure.
If that’s not a racket, I don’t know what is!!
BTW….
A return to a more equitable money system is on the horizon:
http://www.marketwatch.com/story/goldmoney-announces-acquisition-of-schiff-gold-inc-and-formation-of-joint-venture-with-renowned-gold-investor-peter-schiff-2016-07-08-71604529
This is the Trump you’ll see at the next debate. Or mabey he will save it for the last one.
http://www.breitbart.com/video/2016/09/27/watch-live-donald-trump-melbourne-fl/
Mexican paso is going to get crushed. 5g bet at 400 to 1 margin will make you a millionare over night on Nov 8th
Look at speech and bet accordingly. CNN MSM will pump Hillary to the end to no avail.
Dr. Smoking Man
PhD Herdonomics
Vancouver is the world’s most risky housing bubble in a financial centre according to CNBC.
http://www.cnbc.com/2016/09/27/vancouver-named-as-the-financial-center-with-the-worlds-riskiest-housing-bubble.html
Cash might actually be worth something again. Crazy world eh?
Who knows? Thrift, hard work, resourcefulness and looking out for each other might actually become Canadian values again.
I don’t see a problem here.
I’d like to see Wall Street cleaned up if Trump wins. As we sit back and watch the October jobs figures in America come in at 300,000 plus and then see the November jobs figures in America come in at minus or negative as in they lose 100,000 jobs in the month of November this year something serious has to be done about Wall Street!!
Calgary is REALLY paying for our provincial mistake while T2 revenges his Dad, too! I wonder how the spiteful others think of what’s happening to their province now!?
I’m buying a U.S. $ ETF to hedge the outcome of the Donald = should help soften the effect of Polozitization!
#4 ole Doberman
I’m going to pretend to be a rich guy from China, since it was make believe anyway, and tell him I don’t care about the new tax and I want to buy the house for over asking.
Re: #25 The real Kip on 09.27.16 at 6:45 pm
The odds of a rate hike when Hillary wins are more than a million to one. Negative rates around the middle of 2017 look like a certainty both in America and Canada. The ponzi has to implode soon after the election as even the dopiest person in America knows Wall Street is rigged and the bankers can’t sell everything amongst themselves. No matter who wins the stock market has to drop more than 50 percent.
GT sayeth: “the institution can demand a lump sum payment, more interest, higher monthlies or slash the amortization period, murdering your cash flow. If this happens during a market correction…..”
====================================
Of course this will happen during a market correction. When the prices are going up the banks want to lend you MORE money because they’re risk ratio is dropping and an easy way to boost profits is to get YOU to take more risk (not them). When the market drops, you’re left holding the bag and they want their $$ back to keep their bonuses and dividend streams whole.
Always remember Ex-Cowtown’s Golden Rule of Banking:
“When bankers asks you for lunch, it’s really just a few hours away from them having you for dinner”.
BTW anyone notice the 10 yr Canadadstan bond yield print just under .97 ? This is surreal
And no that is not good … The long end of the curve is sniffing out some further economic problems for us Canucks …. Quite ominous
Still waiting for prices to drop in van to chilliwack. Anything under one million is still going up. Dont know where these stats are coming from? Prob only applies to luxury sales.
By the way., 15% chinese dude crash tax is a good thing. Its just what vancouver needed. Stop making it sound so bad. Its a good chance for our local millenials to get a foot in the door as well as prove your predictions to be correct.
DELETED
#18 Mattl
“If the market drops by half, all bets are off though.”
=====================================
Were it so simple. In the U.S. only 10% of the people got into trouble and that almost nuked (or maybe it actually did) the U.S. economy. You don’t need everyone getting in trouble. Why do you ask, only 10%? Simple.
This 10% ratio is brought to you through the miracle of fractional reserve banking, where the bank only needs to have reserves of …. wait for it…. 10% to cover loans it makes. The rest is conjured up from them creating what is in essence a liability on their own books to create a mortgage. When things go well, hundreds of years of money lending experience shows that this 10% ratio works fine. But when things go wrong, they go wrong 10X faster than most people expect. Hence only 10% of the mortgage holders in the U.S. getting in trouble almost brought the system down.
10X leverage on the way up is a wonderful thing. 10X leverage on the way down is a death sentence, even to a well capitalized bank.
@
#6 earthboundmisfit on 09.27.16 at 5:36 pm
Pandering to people’s baser instincts ….. no so far removed from 30s Germany, is it?
Lebensraum or saving Syria, Ukraine, and Libya by destroying them.
People supporting Ms. Clinton have lost their moral compass.
Trump did not win yesterday, he looked like a fool. Hilary was calm and played him like a toy puppet every time he exploded.
Also I do not believe every bank will call all sub prime mortgages as you stated above in a down market, when houses are not selling.
In arrears, yes but not if you’re making payments or re-amotize to afford, it makes no sense to pull the rug out.
That bears no relation to what I wrote. — Garth
Re: #59 Bk on 09.27.16 at 8:39 pm
The problem in Canada is the Millennials copying what the Chinese do. This is how the market ended up so out of kilter in Vancouver.
http://www.cnbc.com/2016/09/27/vancouver-named-as-the-financial-center-with-the-worlds-riskiest-housing-bubble.html
http://www.news1130.com/2016/09/27/homemakers-students-own-107-million-in-one-vancouver-neighbourhood/
The boom and bust cycles were best portrayed in an NFB documentary series entitled “Reckoning: The Political Economy of Canada”. Watch it.
#8 Mel in Victoria on 09.27.16 at 5:40 pm
Since when is an orthopedic surgeon qualified to diagnose Parkinson’s Disease when there is no specific test to do so and this doc doesn’t have Clinton’s medical history?
Maybe he can also diagnose your naivety.
http://www.mayoclinic.org/diseases-conditions/parkinsons-disease/basics/tests-diagnosis/con-20028488
Since. T2 and the Green Taliban will not let any pipelines be built to tidewater, Alberta needs to secede.
Oh come on, Mr Turner. It’s the same Ford and Trudeau common sense (quote it if you will) wave. Or, as a former politician, may be you can admit all politicians are the same no matter what they pretend to be?
Btw, got interested in the Queenstown heights battle and where did Brock fell. Are you, by any chance, related to Wesley Turner? And, I believe, I saw Turners in one of the historic NiagarA area documents. Any relation?
One unique Canadian element of the housing bubble is the limited urban options for making a living and a career in this country. Until a year ago there were three. Toronto, Calgary and Vancouver. With the oil bust, also a function of low interest rates ( over investment in the sector) we now have only two major cities and both are unaffordable.
If two or three cities in the US go into bubble territory its much less serious for the economy.
Any sensible young person is trying to make their way to the US or elsewhere.
#1 TurnerNation on 09.27.16 at 5:26 pm
Let’s make Canada great again and build a wall around Long Branch.
LOL
If you said “FIRST”, this would have never been posted .
I had a good laugh . Thanks
#20 Fluorine on 09.27.16 at 6:37 pm
I noted that post with interest yesterday. Some terminology left my puzzled, however:
“If your beacon is under 600 you pay .25 extra…” does Beacon in this context mean if the principal left on the loan?
—
It’s a credit score. Below 600 is fairly bad. I’m surprised that they weren’t doing that before.
Establishment is getting scared of Trump. MSM attacks him. This blog attacks him.
Go Trump! Silent majority supports him.
I love that in Garth’s scenario the USD rises. Of course right, the USD always goes up.
As for the December rate hike? No, not a chance. There’s no “second half recovery” coming either. That economy is headed for recession, and the equities, bond, dollar and housing bubble will all burst simultaneously.
Then the Fed will finally be forced to abandon this ridiculous eight year long recovery narrative, stop pretending they’re going to normalize rates, and begin cutting rates.
When it happens, the explanations provided on this forum will be epic.
Trump might win after all. Time to get out of the S&P?
Telling moment at the debate: Trump’s snarky comment “That’s because I’m smart”, when Clinton said that some tax returns showed he paid NO taxes.
That remark should have been political suicide, right up there with “Let them eat cake”. Today, with Trump, I think his supporters actually swoon with admiration for it.
He obviously doesn’t give a crap for the little guy, never has, doesn’t even care to hide it, and they STILL love him. Because he’s a Superstah.
A win for Trump would be vindication for America’s school system. Who needs education, when you have reality TV?
#4 ole doberman, raise the bar on your prank by stating that the full offer is conditional on the agent getting the house on one side or the other with it for that amount doubled, so you can pull them down to go mcmansion there.
It’s a slow night, bs hangover from debate as predicted.
The problem with Canada isn’t just the greed of borrowers, but also the unbelievable nonsense that banks are allowed to get away with.
Let’s make some comparisons with America:
1. In America 30 year mortgages are quite common ensuring stability for the borrower without holding them hostage to market conditions.
2. Banks in America don’t get CMHC protection paid for by the borrower (something really insane and unique to Canada). Where else in the entire world does a client pay to insure, the interests of his supplier.
3. In America there are many non-recourse states, in Canada only one. A bank by definition, is a “merchant” in the business of lending money and assessing risk. Why should they be allowed to access any individual’s private wealth beyond the equity invested in the underlying asset itself? Short Answer: they shouldn’t, they have a responsibility to assess both the value of the collateral and the borrower’s ability and nothing stops them from demanding more skin in the game from the borrower upfront.
Canadians are stupid to borrow beyond their means, but they are even more stupid in letting the banks have this absurd amount of unregulated power as they now have.
When the shit hits the fan, I hope the public will finally wake up and demand changes to banking more in line with US practises.
Buying a home is now financially unattainable for most single Australians.
http://www.allhomes.com.au/news/buying-a-home-when-single-is-unattainable-in-most-of-australia-data-shows-20160928-grohal/
LOL.. and look at what they recommend in order to get on the “property ladder”
1. Team up with siblings or close friends and buy a property together
2. Ask your parents to go guarantor
3. Avoid rent by staying at home with your parents, house-sitting or moving into a sharehouse to reduce rent costs.
4. Increase your income with a second job, additional training or sideline business.
aaaahahahahaha.
Australian property is going to crash so hard.. it’s going to be fantastic to watch this.
In addition to Hillary’s shimmy and Donald’s sniffles, this was also on TV last night. An interview segment on The Agenda in which many of the themes of this blog are discussed:
Conventional wisdom says that if you can afford to buy a home, you should. Renting, it’s thought, is simply paying someone else’s mortgage, and leaves you with nothing to show for it. CIBC real estate analyst Alex Avery tells The Agenda that in many cases, people are better off sticking with a rental.
http://tvo.org/video/programs/the-agenda-with-steve-paikin/rent-dont-buy
If the American voters put the Grandmother Hillary in as their President it will give women of a certain age and attitude a more appropriately positive key woman to emulate and hopefully replace Beyonce.
#38 smoking man
As long as the Lcbo is in side the wall. I’m good with it, keep the lefty loons out.
One of the most lunatic leg tie loonies I know lives right at long branch. You may want to deport him to Torona before.
Why I like Trump.
Consistency
https://youtu.be/OCabT_O0YSM
Next to imposable to have a 7 year old to 30 year old get this. 20 years of brain washing being sold culture Marxism and socialists ideals by teachers.
Which fails every time it’s embraced and adopted.
Just look at Venezuela. USSR to name a few
#81 Lee bow on 09.27.16 at 9:28 pm
#38 smoking man
As long as the Lcbo is in side the wall. I’m good with it, keep the lefty loons out.
One of the most lunatic leg tie loonies I know lives right at long branch. You may want to deport him to Torona before.
……
I may have to move soon, there are tones on low rise town houses going up all over the place. Young millennials, there was a line up a few weeks ago stretching two blocks. All young. And you know they like bikes and Wynee.
Place is going to shit. Going to check out Hamilton. Those streets have soul.
For this evening’s multiple choice exam, choose the correct answer from the following (more than one answer may be the correct answer):
Donald Trump
Making America ________-ate Again
a) hate
b) irate
c) stagnate
d) constipate
e) section eight
f) segregate
g) suffocate
h) decelerate
i) degenerate
j) depreciate
k) deteriorate
l) devaluate
m) dilapidate
n) disintegrate
o) evaporate
p) eviscerate
q) exterminate
r) humiliate
s) illiterate
t) incapacitate
u) inebriate
v) infuriate
w) obliterate
I must admit I didn’t watch much of the debate last night.
Instead I chose to watch Berind Sea Gold and flicked over a few times during commercials.
For those that don’t watch this show it features divers who go under the ice to dredge gold.
One show had a guy that was having trouble breathing,putting himself in harms way and flapping around like a fish out of water.
And the other show was Bering Sea Gold…
M42BC
RE: “If you don’t, the bank can foreclose, seize the property then sell it for market value. If that doesn’t cover the outstanding mortgage amount”
In Ontario we don’t have “foreclosure”. We have something called “power of sale”. Basically, in every mortgage contract (that you never read at the lawyer’s office when you were signing all that paperwork the night before closing day) there is a “power of sale” provision. This provision gives the bank the right to apply for a seizure of the property (which they always get) and to evict you. They then sell the property. It is listed as “power of sale” in MLS.
Essentially the same process. — Garth
Also note garth, the beginning of next year the banks will have some skin in the game
Before the could loan as much as they wanted. Note they have to have some financial backing mean simplely put
Loans x 0 = banks don’t have to put a cent in so they can have infinite loans
next year
Loans x 10% = banks have to have cash to make a loan. Which mean the have to be selective. Some banks don’t have the back so they have to reduce the number of loans
Also supply and demand the banks will probably want higher rates because the can only loan a finite amount of loans
This will be interesting what is your take on this garth?
Trump said that the stock market was in a bubble because of the low interest rates and if she raises the rate the markets would crash.
Is that true? He rich, he should know…
Got to love the fear-mongering.
Banks want to be paid, they don’t want to own houses. Besides, there are plenty of banks and institutions lining up to lend people money. Competition for credit is too high. Banks apply pressure and they will lose customers.
Kilt.
A good interview on This Week In Money…goto 18:37 mark and Garth is mentioned regarding the potential drop in prices in housing.
http://www.howestreet.com/2016/09/25/this-week-in-money-71/
Prostate cancer and the value of rub and tugs.
You don’t use it you lose it.
I’m long on lung cancer or a heart attack. 2 packs a day now.
Just Imagen losing the prostate before the lungs or heart.
The horror. Orgsmesn less till death.
Excersising every part of your body so under rated.
On my second Micky of Honey Jack Daniels. Cracked opened number 3. I know the next one Garth gets to push the big red delete button.
I know we’re the edge is.. Good night puppies.
#59 Debtslavecreator on 09.27.16 at 8:36 pm
BTW anyone notice the 10 yr Canadadstan bond yield print just under .97 ? This is surreal
And no that is not good … The long end of the curve is sniffing out some further economic problems for us Canucks …. Quite ominous
————————-
<1 % on 10 years bonds based on literally melting currency. Idiocy at it's best.
I would not touch that pile of crap with a stick.
They can get as much capital gains as they want (going into negative rates). It is a question of principles. Better buy real estate if you can (and I am serious here) than government bonds.
Let Poloz buy them.
People must be really upset with the current apparatus if they still favour Trump after last night’s poor showing.
He knew they would hit him on the taxes and his comments, and yet he did squat diddly to prepare. His answers were frankly embarrassing, pressed about his alleged racism:
“I own a night club and I let in some Blacks this one time”.
Ouch.
Mind you, the entire format of the debate was spring-loaded against him. Hillary is a vile war-monger who nearly openly sells her office and influence to the highest bidders.
He blew this one, I hope he actually prepares for the second one, instead of just stumbling on stage and winging it.
#90 Ronaldo on 09.27.16 at 10:24 pm
A good interview on This Week In Money…goto 18:37 mark and Garth is mentioned regarding the potential drop in prices in housing
………
Everyone is an expert at reading someone else’s script. The UCC is where it’s at.
Write your own script dogs. Pee on a tree of your oun choice, not the one you where told is worthy of a leg lift.
Garth…in your mind what would it take for the Fed not to raise rates in December? You speak so assertively that it is going to happen…just wondering what your shadow is saying?
#89, Competition for credit is too high. Banks apply pressure and they will lose customers.
If you bank on this, you, your property, and all your mortgage payments will soon part. Banks had absolutely no problems applying pressure the last time the real estate market took a downswing in Canada.
That is a cat plotting world domination.
Got a call from hydro. We’re billing you once a month vs every two months..
Yes my electrical bill cut in half.
Liberals
Aren’t you glad you have two whole airlines to choose from? You thought collusion was just reserved for cellphone companies?
#97 wait until they bill you weekly, you are going to feel like you hit the lottery
DELETED
Gee that was scary, read the blog thought I was transported to back to 1990.
Garth, this is already happening. It’s just not happening to that many people. Mortgages not being renewed or being renewed at higher rates. Added fees for renewing or ‘renewal taxes’.Requalify at renewal. Check credit at renewal, etc.
When things get tough, banks won’t let you renew just by signing. They will want to take it as an opportunity to get rid of the bad loans.
For those about to flop…. on 09.27.16 at 8:43 pm
DELETED
————————————
#91 Smoking Man on 09.27.16 at 10:40 pm
Prostate cancer and the value of rub and tugs.
You don’t use it you lose it.
I’m long on lung cancer or a heart attack. 2 packs a day now.
Just Imagen losing the prostate before the lungs or heart.
The horror. Orgsmesn less till death.
Excersising every part of your body so under rated.
On my second Micky of Honey Jack Daniels. Cracked opened number 3. I know the next one Garth gets to push the big red delete button.
I know we’re the edge is.. Good night puppies.
///////////////////////////
Boss, you said the other day some guy’s epiphany was poop.
This one come true…
M42BC
http://www.bloomberg.com/news/articles/2016-09-27/vancouver-london-top-list-of-cities-at-risk-of-housing-bubble
A bit late !!
Jules on 09.27.16 at 8:06 pm
Vancouver is the world’s most risky housing bubble in a financial centre according to CNBC.
Oh, so those bozos at CNBC actually know where Vancouver is? Canada does not even exist at CNBC.
Fortis increases dividend. Rub tummy.
* Q4 2016 dividend increased to $0.40 per share from $0.375 per share (+ 6.7% increase)
* Targeting average annual dividend per common share growth of approximately 6% through 20
http://in.mobile.reuters.com/article/idINFWN1C30LY
Whoever bought the view condos at Cambie and 29th is slowly losing their mountain views to the under construction Park Elise.
The grade of the road goes down 4 maybe 5 percent but whoever shelled out that money is going to learn a harsh lesson.
I’m sure if they asked a realtor if one day something might be built on the northern side of the intersection the answer would have gone something like this “It is possible that they could build there one day but it won’t block out your beautiful view of the mountains.”
Waterside at Coal Harbour is the only place to shell out for mountain views,otherwise you are just speculating on top of speculating…
M42BC
No one opposes trade, just trading with slave nations and calling it Free Trade. Canadians cant compete with slaves.
Smoking Man – Hoped you’ve switched to Belmonts, Canada’s ‘safest cigarettes’.
Are these the same people buying Canadian houses?http://www.zerohedge.com/news/2016-09-27/viral-surveillance-video-revels-shocking-scene-chinas-housing-bubble
Took pause as well yesterday reading the Antichrist of [email protected] posting…glad you took note as well.
Your fiction scenario happened in early 80s Calgary.
History repeats and it is not different this time, and the quote:
Same dung, different pile
will have renewed meaning in the months to come.
What also got me from the post was this comment:
“…as we begin the inevitable sharp increase in unemployment and losses.”
When you read all of [email protected] MSM postings of late, you realize they are lying thru their teeth and to give CDNs a false sense of security in the economy.
One thing about this Blog’s Commenters, they pull no punches and tell it like it is. I am glad for it and for your posting today warning of what WILL come, not may come.
bsant54
In early 80s Calgary, during the RE crash, BOM alone had 4,500 properties they had foreclosed and seized. They kept the properties off the MLS for fear they would create further price drops and erode their asset value.
The above from a RE Lawyer, my childhood best friend, that would before that do 1000s of legal RE deals per year with a large staff of paralegals just to keep up with the pre-crash business.
History merely repeats, for those of us old enough to remember.
bsant54
For all you bleeding heart liberals and your darling fast talking lawyer GFF Clinton, here is the EC No Tossups at RealClearPolitics today (Sept 28):
Clinton: 292
Trump: 246
Florida at 29 EC votes, and the above score includes Florida in Clinton’s ledger, has been see-sawing back and forth for the past few weeks.
Do the math.
Trump is smart.
Knows the bleeding heart liberals will never vote for him. During the debate he was after the SWING VOTERS.
“People talk with their hands on their hearts, but vote with their hands on their pocketbook.”
Very true in America (recall, “It’s the economy stupid.”).
In the past month, he has whittled away Clinton’s landslide EC count to the result today and after a lacklustre debate on his part [if you believe the Lefty MSM]…his message appears to be working with the SWING VOTERS.
41 days to go…and 2 more “save the bees, save the trees, save people from themselves” Clinton faerie dust debate rhetoric.
bsant54
#9 WalMark of Sadkatoon on 09.27.16 at 5:46 pm
Hope Hillary can turn it around. Otherwise we won’t stop hearing about it from SM ;)
————
Trump has global TV brand recognition, he’s a business celebrity. He is known for his bold statements, success and failure, and he speaks his mind (for better or worse) that imo is one off the main reasons he is growing in popularity – if only he had Trudeau’s hair.
Clinton is speaking the same politico talk, not addressing the root cause – mostly empty words.
Trump speaks to his audience, very easy for all to understand. Of course he lies, they all lie. Of course he tries to evade taxes who isn’t these days.
Clinton is trying to get the US to trust her in light of recent findings. I take it her or her advisers don’t read the news.
Trump interrupts…finally someone interrupts to call bull more people should. Impolite it making a reasonable person listen to jibber jabber. He told the public he would bring jobs home and ‘Make America Great Again’. All he had to do was say it with heart and he did.
He is the underdog of America’s past. He is almost seen as an independent as some Republicans have openly opposed him, but are now slowly falling in line. Coincidence or strategy?
My bet: Some people will vote for Trump just to hear him say “Your fired…Now we can make America great again”
I wish they had better candidates to choose from…the whole world is watching in awe, jaws are dropping world wide in utter amazement of this reality election.
The decline of an empire.
#34 BobC on 09.27.16 at 7:05 pm
8 years ago the real estate bubble burst right before the election and Obama was elected. 8 years before that the dot com bubble burst right before the election and Bush was elected. Now the doomers say its 8 years later and we have a financial bubble that will bust right before the election and Trump will be elected.
Do you think thats at all possible?
============
didn’t the UN just warn us about this.
Greetings. I am working hard to get the BDP built and was wondering with the TFSA full and DCPP at work should I have the self directed account registered as well? I have room. I am putting more preferred in it to get the juicy tax reduced dividends as well as the REIT’s but is this enough. Thank you in advance for you sage words. Save me a spot at the ashram.
#83 Smoking Man on 09.27.16 at 9:44 pm
#81 Lee bow on 09.27.16 at 9:28 pm
#38 smoking man
As long as the Lcbo is in side the wall. I’m good with it, keep the lefty loons out.
One of the most lunatic leg tie loonies I know lives right at long branch. You may want to deport him to Torona before.
……
I may have to move soon, there are tones on low rise town houses going up all over the place. Young millennials, there was a line up a few weeks ago stretching two blocks. All young. And you know they like bikes and Wynee.
Place is going to shit. Going to check out Hamilton. Those streets have soul.
…………………………………………………………
#97 Smoking Man on 09.27.16 at 11:04 pm
Got a call from hydro. We’re billing you once a month vs every two months..
Yes my electrical bill cut in half.
Liberals
…………………………………………………………………….
Move to Montreal where streets have more soul than any other city in Canada.
My hydro bill every two months is $60.00
I’ve lived in Vancouver and Toronto for years.
Both overated.
They suck.
Montreal rocks.
I advise selling now and cashing up for the scenario envisioned by ‘Garth the Mystic’ . When the scat hits the fan an old religion will reappear, money lending at exorbitant rates. It won’t be hard to scoop up those squeeze head millennial who need an extra 20 grand or so to re-up the mortgage with a third mortgage (that’s our que) at 20 percent. Happy days are near again. Now that’s how you cultch on real estate.
There’s a science to though. Pick your victims carefully, make sure they’re the kind who’ll get up at three am to deliver papers.
Predict a Trump Presidency but NOT an aficionado. Despite the lefty MSM falling over themselves in self-congratulation (incl. CBC), the debate poll results are 180 degrees from their truth.
Here is a righty take by Newt Gingrich, ignore his IYI paragraphs and begin reading AFTER you see debate poll results as follows:
Time: Trump 55 Clinton 45
Fortune: Trump 53, Clinton 47
N.J.com (New Jersey): Trump 57.5, Clinton 37.78
CNBC: Trump 68, Clinton 32
etc.
and peruse the link that he provides (yes, the left/right split personality Daily Mail, UK):
http://www.dailymail.co.uk/news/article-3809204/Most-snap-polls-Trump-winning-debate-landslide.html
Then read what Gingrich has to say…sobering.
Shoot me Garth for posting a lot today, but you have to admit that the above results will shake any lefty’s boots to the core.
bsant54
#77 Hawk on 09.27.16 at 9:17 pm
“When the shit hits the fan, I hope the public will finally wake up and demand changes to banking more in line with US practises.”
Yes, because if we learned anything from 2008, it’s that we should adopt US banking practices.
RE: #101 Paul:
“Gee that was scary, read the blog thought I was transported to back to 1990.”
No one remembers that. That is awesome. I suppose the “homeowners” of 2016 were in diapers back in 1992 when their parents lost their shirts in the great crash.
That is exactly how it happened though. Banks stopped renewing. People started fire sale-ing everything. Sooooo many rental buildings up for sale. I knew so many people whose net worth went to zero in those three years. Some still live with their parents today.
#50 TCContrarian should be deleted as gold nut/loon. As if we will return to bartering based on shiny objects dug up underground.
How come none of these internet wackos will give all their “debased” paper money? C’mon let’s have it over. I think in pre-Internet days these guys just sold Amway.
Good pic today. A helpful reminder that cats are always in charge, and we’re always watching.
You may have heard, we’ve hired Russian hackers to disrupt the American election.
You’ll love what we’ve got planned – very entertaining.
Meow :)
I know you all can Google “Gingrich IYI”. So to save you the search and apologize for my forgetfulness (and outright fear of the results):
http://www.foxnews.com/opinion/2016/09/27/newt-gingrich-trump-won-debate-dont-believe-intellectual-yet-idiot-class.html
Warning: Lefty’s need not read the IYI comments and self identify…could not resist.
SM must be just besides himself right now…
“As with Brexit, markets never imagined voters could be that thick.”
Not sure about “thick”. “Fed” up is more like it. Voters are beyond sick and tired of being gouged with increasing taxes and fees whilst their hard-earned investments yield practically nothing- all whilst being admonished that they must suck up “austerity” at the same time that civil servants are becoming more loud and shrill in their attempted justifications of “their entitlements”. Receipts plus “entitlement”? Why, yes!
Although voter reaction may not please “markets” nor perhaps be the wisest choice, it is certainly a healthy reaction to watching your quality of life crap out on a daily basis whilst government fills out allowance forms to the absolute max. Disgusting in the extreme, when so many need medical care, vets need support (hopefully new changes will get fast tracked) and people fall through societal cracks on a daily basis.
But wait!! We have infrastructure projects aplenty to spray cash almost everywhere we don’t need it.
“Markets” still don’t get it, so I’d say that “markets” are unequivocally and perhaps irretrievably thick.
Lucky for “markets”, government has their backs, unlike voters, so perhaps that is why “markets” just don’t get people.
Good, bad or ugly, I quite understand voter reaction.
There is no innocence in “markets”, no mark-to-market, no market force pricing without CB and government involvement.
Keeping interest rates at near zero has nothing to do with protecting people and their mortgages. It has everything to do with protecting “markets”.
Voters didn’t set out to dis nor dislike government and markets. They were taught to.
@
#84 MSM-Free Zone on 09.27.16 at 9:44 pm:
Yes, why vote for a psychopath indeed. Let’s be happy with our Establishment, traditional corrupt psychopath politicians.
T2, Hillary, Notley, etc: same gang.
Enjoy…
“The US dollar soars as money flees into to safe havens.”
In my Trump wins scenario…. investors flee the US.
Trump promises to bring manufacturing back to his country. He may try to achieve this through trade negotiations and tariffs but he ignores one salient point. Manufacturing is becoming increasingly automated. Fewer people are needed. Indeed, if you take out most of the wages paid to employees, other costs, such as transportation of the finished goods, become more important. So, worldwide, we are likely to see manufacturing plants located closer to their intended markets.
His promise is an empty one and an increase of the number of manufacturing plants in the United States is certainly nothing that he could take credit for although he will try.
#117 drydock on 09.28.16 at 4:15 am
Move to Montreal where streets have more soul than any other city in Canada.
My hydro bill every two months is $60.00
I’ve lived in Vancouver and Toronto for years.
Both overated.
They suck.
Montreal rocks.
——————————————————————–
If by ‘soul’ you mean corruption and decay, then yes. Seriously we keep deluding ourselves that the year is 1967 and we’re still #1 in Canada, let’s be real here. We operate like some third-tier city in russia in many many respects imho.
Also have to call it on your hydro bill. Unless you’re renting a basement 1 1/2 that the heat is included, there’s no friggin way it’s 60$ for two months. Yes Hydro is cheap(er) here, but not that cheap. Mine is anywhere from 200-400$ for every two months (actually 62-68 days).
Agreed Vancouver is overrated, it’s nice in a resort kind of way but there’s nothing there. T.O euhhh there’s pros and cons but certainly less cons than mtl. Got family and have done jobs in both, I only stay because for now it’s okay to be the ‘best of the worst’.
#129 mike from mtl on 09.28.16 at 9:31 am
#117 drydock on 09.28.16 at 4:15 am
Move to Montreal where streets have more soul than any other city in Canada.
My hydro bill every two months is $60.00
I’ve lived in Vancouver and Toronto for years.
Both overated.
They suck.
Montreal rocks.
——————————————————————–
If by ‘soul’ you mean corruption and decay, then yes. Seriously we keep deluding ourselves that the year is 1967 and we’re still #1 in Canada, let’s be real here. We operate like some third-tier city in russia in many many respects imho.
Also have to call it on your hydro bill. Unless you’re renting a basement 1 1/2 that the heat is included, there’s no friggin way it’s 60$ for two months. Yes Hydro is cheap(er) here, but not that cheap. Mine is anywhere from 200-400$ for every two months (actually 62-68 days).
Agreed Vancouver is overrated, it’s nice in a resort kind of way but there’s nothing there. T.O euhhh there’s pros and cons but certainly less cons than mtl. Got family and have done jobs in both, I only stay because for now it’s okay to be the ‘best of the worst’.
….
Potholes!!! A billion orange construction cones!!! Chicken wire holding up the bridges. Roads to nowhere. $700,000 gazebos. Still love the place!
Wow. Anyone see this gem?
http://www.cnbc.com/2016/09/28/trump-or-clinton-it-doesnt-matter-a-bear-market-is-coming-whoever-wins-commentary.html
-A surprisingly honest take on the whole US market and political situation. We are starting to see a few brave mainstream outlets acknowledging the changing sentiment.
Article states:
1) Doesn’t matter who gets elected. A bear market is coming.
2)This current bull run (2nd longest in history) is basically driven by CB stimulus and corporate profits are weak.
3) We are in the third asset bubble in the past 15 years and this one is the biggest one yet. Bonds especially since they have been manipulated beyond belief.
4) The US growth rate is still anemic despite it all. Stock declines among a ton of other factors can easily send us into panic mode.
MF
Very next article:
http://www.cnbc.com/2016/09/28/feds-janet-yellen-banks-well-capitalized-despite-weak-interest-income.html
“No timeline for interest rate increases”
Of course. That would jeopardize the fake Obama recovery. Thanks for lying to us all again.
“Rate increases depend on labour market improvement”
Haven’t we been told the US is booming for 8 years?
If anyone cannot see why Trump is popular, here is a good reason. These folks look increasingly incompetent.
MF
I remember a few blogs back just a few days ago that someone wrote that Canada 10 and 30 year bond yields were dropping fast.
At that point they were 1.00% and 1.66%, 10 and 30 Canada bonds.
Also, someone in another post stated that it maybe the bottom on bond rates.
Well, today the 10 and 30 year bond rate is 0.95% and 1.62%.
It looks like the bottom could be 0% or even below that.
Interesting quote on bcbusiness.ca
“People should not think single family home ownership is a right and … a young couple should not expect their first home to be like the one their parents had.”
Guess when this was said?
It is from:
–Vancouver Sun, April 2, 1981
Whoa!
Nothing new under the sun.
#131 MF
Bear market in stocks is not likely. If stock market crashes, it will reduce P/E ratio of stocks back to normal historical values and will make stocks much more attractive at which point ZIRP and NIRP in bonds will be absolutely impossible and central banks would need to buy all government bonds in less than 1 year. Total bond market meltdown.
The likely scenario (the gliding path?) is that stocks will stay high, rates – low, even lower and central banks will still end up buying all government bonds. But it will take them 4-5 years to get there.
In the process inflation will destroy all savings and at some point currencies will be so inflated compared to debt that rates will have to rise at which point the bond market will collapse, total collapse.
The fight here is to have the bond market going for as long as possible (and redirect as much money into real assets as possible to prepare for the post-bond-meltdown world), at any cost. Which of course will destroy the measure, the currencies. Then the bubble suddenly becomes smaller.
Hold your stocks, real estate (paid for), farmland, maybe even gold, some cash short term. Gamble on bonds if you like as the rates are definitely going lower short term and some nice profits (‘capital gains’) are possible.
But mid to long term…
Find quiet place 3-4 years down the road (back to the land if you can), open the bottle and enjoy the unraveling.
Canadians are just $200 away from being overwhelmed by debt, new survey finds
http://business.financialpost.com/personal-finance/debt/canadians-are-just-200-away-from-being-overwhelmed-by-debt-new-survey-finds
A new survey says 56 per cent of Canadians are just $200 or less per month away from being unable to meet their debts, but about half seem unconcerned by the problem.
The study by MNP Debt, part of the personal insolvency business of MNP LLP, surveyed 1,502 Canadians online between Sept. 6 and Sept. 12 and found 31 per cent are already not paying their bills on time which the firm says makes them technically insolvent.
The firm says there is positive news because the percentage of Canadians actually worried about their situation is climbing. Back in February, when the firm did the survey, only 43 per cent of those participating were worried about their debt problems. That number is now up to 52 per cent.
#121 Ace Goodheart
RE: #101 Paul:
“Gee that was scary, read the blog thought I was transported to back to 1990.”
No one remembers that. That is awesome. I suppose the “homeowners” of 2016 were in diapers back in 1992 when their parents lost their shirts in the great crash.
That is exactly how it happened though. Banks stopped renewing. People started fire sale-ing everything. Sooooo many rental buildings up for sale. I knew so many people whose net worth went to zero in those three years. Some still live with their parents today.
————————-
I’m gonna put on my old person hat here for a minute. Please indulge me.
I remember when things started going south in Toronto in 1990 or so, I thought, oh well, won’t affect us here in BC. In those dawn of the internet days it was a lot easier to think that.
We owned a small company and did 95% of our business with the US Federal government. Iron clad five year contracts as preferred suppliers, specialty manufacturing and no competition. Never a year we didn’t increase sales and make money. Things were humming along and we decided to ask the bank to increase the line of credit (seasonal business, manufacturing in the winter, selling in the summer) to increase production. Everyone dressed up, suits, ties, and went off to the bank with a spiffy business plan and rationale as to why the credit line was a good deal for everyone.
The woman behind the desk was from Toronto. Before anyone had a chance to present anything, she told us that she was pulling the existing line of credit on the business unless we signed over our houses as collateral. This was mid-December. Some choice – sign over the house as a guarantee, or twenty five people don’t get a paycheque before Christmas. And even at that she decreased the line of credit. So much for growing the company.
The reason she gave for this decision? Toronto head office was concerned about what was happening back east with real estate, and was tightening up lending across Canada. All lending, not just mortgages. When Olympia and York blew up it didn’t get any better.
It won’t just be real estate that is affected by the bubble bursting here in Vancouver. I hate the thought of anyone feeling like I did that Christmas, but I don’t think it’s avoidable now.
But the purchase of productive assets by central banks is the most worrying of all.
Let’s print some money and purchase stocks or bonds? Central banks were never meant for that. Some people have to actually work for that money.
Having children born with personal debt is the next thing coming:
Congratulation Sir/Madam on your new born son/daughter, as you an in debt and have nothing, please sign here (100k, 200 k) loan on behalf of your son/daughter so he/she can have a future (or at least pay for the diapers)
I am sure bankruptcy laws will be amended to allow passing the debt to the next generation (one way or another, through personal or public debt)
And some financial sector parasites who never worked in their life will end up owning everything.
Get central banks and governments out of the markets!
MAJ # 68
Because someone posts something you don’t agree with suggests naivety? I didn’t say Hillary has Parkinson’s Disease; however, there are many medical specialists who believe she’s suffering from that very terrible disease.
Saw a 2-hr Frontline presentation on PBS last night. Titled, “The Choice 2016.” It was a biography of Trump and Clinton. Now I know where the two are coming from and what make them who they are. Yup, Clinton is the ultimate establishment candidate—more of the same! But Trump is really scary to have as President.
Just got word that CREA is no longer allowing CMHC to publish summary tables that show monthly stats over the past year, thus preventing easy comparision of yoy data by month. This use to be a very handy tool for checking sales, listings and price data over the short-mod term.
They now only allow publication in graph format. Another attempt to limit transparency and obscure substantial changes in local housing markets.
some facts for trump vs hillary
https://www.youtube.com/watch?v=h1Lfd1aB9YI
#10 HoweStreet.com on 09.27.16 at 5:58 pm
Hilliard Macbeth on how far Vancouver real estate could fall.
http://www.howestreet.com/2016/09/25/this-week-in-money-71/
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While local Canadians dutifully pay capital gains taxes, The CRA tacitly allowed foreigners to flip houses without paying any taxes.
As I have reiterated many times before Canadians are soft touch.
People in other countries abuse tax law as a sport. It is understood that taxes are something to cheat on, not minimize.
Our T2 Gov. came around the coast photo-oping and claiming real estate is the number one issue they are concerned with.
Haven’t heard a peep from the T2 gang since. They left it all to the incapable hands of Christie.
https://ca.finance.yahoo.com/news/debunking-myths-about-the-canadian-real-estate-market-122619138.html
Idiocy of a [email protected]
and the proper comment:
Bob • 30 minutes ago Report Abuse
MYTH: Young people can only afford to rent
“Though renting is a young person stereotype for a reason…”
So it is true
MYTH: Single people can’t afford to buy on their own
“I do find there are young, single incomes [that are enough], but it’s rare,” said Chow.”
So it is true
MYTH: Everyone is leaving the cities for the suburbs
““You can feel it,” said Chow.”
So it is true
MYTH: The suburban market is getting competitive because the cities are less affordable
” in the last couple years, the demand has skyrocketed and multiple offers are normal in these areas. ”
So it is true…
MYTH: You need a $100,000 salary to afford a house in downtown Toronto
“You would have to be making pretty much $80,000 to $100,000 to afford [one], plus a minimum 10 to 15 per cent down payment.”
So it is true…
Where are the myths??
http://www.theprovince.com/news/local+news/metro+vancouver+housing+prices+double+years+economist/12230723/story.html
So sick of these stories. This one front page today. Rinse repeat article with the same old fear tActics and baseless arguments , Garth nail this two bit bank economist in today’s post. these guys are fightin a propaganda war.
Totally unrelated. Take the time to read this one Garth, I think you would get along.
https://medium.com/@nntaleb/the-intellectual-yet-idiot-13211e2d0577#.sqcdrq8u2
Oil baby.
I’m way up but 60 is coming. Be patient.
This could have big financial reporcussions:
http://www.marketwatch.com/story/house-votes-to-override-obama-veto-of-bill-letting-911-families-sue-saudi-arabia-2016-09-28-159143
House votes to override Obama veto of bill letting 9/11 families sue Saudi Arabia
The House of Representatives voted Wednesday to override President Barack Obama’s veto of a bill that would allow families of the victims of the Sept. 11 attacks to sue Saudi Arabia. The House’s vote follows the Senate’s, marking the first time Congress has overridden a veto by Obama. Obama has said allowing private lawsuits against foreign countries would be detrimental to U.S. interests. Saudi Arabia has strongly opposed the bill and threatened to liquidate its holdings of U.S. Treasurys if the bill is approved.
140 Cramar, I totally agree,
PBS Frontline Biography of both Hillary and Trump, was absolutely fascinating, I thought I wouldn’t learn much…it was presented so well, I learned more than I thought I would.
Excellent Program.
RE: #145 Westvan
To some extent the writer of this article is right and to some extent he is not right. Demand itself cannot drive house prices higher beyond a certain point. Someone has to be able to afford the house. Beyond a certain point, that affordability drops off a cliff and only the top 1% of Society can actually purchase the houses.
However, Canada is going to be hit with a very significant devaluation in our currency in the next few years. There are a combination of factors which will create this, some of which include run away government debt, the results of the US presidential election (they are looking like they will vote in a person who will erect trade barriers, which will destroy Canada’s export industries). As currency is devalued, house prices will appear to rise. Really, they are not rising. They are just being inflated by a devalued dollar.
Re: Toronto real estate purchases: Yeah at the moment, forget about buying a detached house. It is just stupid here. Latest thing sellers are doing is setting an asking price, setting a date and time for offers and then rejecting all the offers (even those over asking) and trying for higher bids. It is getting ridiculous. There has never been a more clean cut sellers’ market than what exists right now in Toronto. It is just bloody for buyers, especially first timers. It is not a good time to buy.
140 cramar on 09.28.16 at 12:50 pm
Saw a 2-hr Frontline presentation on PBS last night. Titled, “The Choice 2016.” It was a biography of Trump and Clinton. Now I know where the two are coming from and what make them who they are. Yup, Clinton is the ultimate establishment candidate—more of the same! But Trump is really scary to have as President.
….
You don’t get more establishment than PBS
here is the immoral cess pool, soul less city that Van’s fast becoming..hope a goddamn major correction happens to level it all….bc ctv news expose:
“”hidden-cameras-catch-vancouver-landlords-asking-for-sex-not-rent”
http://bc.ctvnews.ca/hidden-cameras-catch-vancouver-landlords-asking-for-sex-not-rent-1.3091626
Before all the Trumpeters go placing too much veracity on that list of exit polls or online polls the Daily Mail had in the article, you need to find out what 4chan had to do with gaming those polls.
(soft paywall)https://www.washingtonpost.com/news/the-fix/wp/2016/09/27/no-matter-how-garbage-the-poll-if-it-shows-that-donald-trump-won-the-debate-hell-endorse-it/
And if you have never been to 4chan, well…wear your rubber boots.
Fluorine: Why would people that have 20%+ equity have to find other lenders? Isn’t that what the bank wants?
because they don’t have 20% equity
let’s take a specific case. Chaddywack gave us the case of a man who owned a house in Vancouver. He took out a mortgage on the house and bought another one. And another one. And another one. So he owned four houses. Suppose each house was worth $2 million. He owed the bank $6 million but the houses were worth $8 million. So at that point he had 25% equity and all was well.
But the market has fallen off since then. Really nobody knows exactly how much because the market just freezes up. Suppose as Ross Kay says it’s 20%. Take 20% off of $8 million and you get $6.4 million but the man still owes $6 million. That doesn’t change. Divide $6 million by $6.4 million and you get 1 %. He now has 1% equity.
If you’re the bank you’re not happy. You got $6 million in mortgages backed by $6.4 million in real estate. You’re definitely not happy. If the man took a 5 year mortgage then there’s nothing you can do but somehow I believe the man went with a variable rate mortgage which basically turns into a demand loan.
Fluorine: atomic number 9, symbol F
https://en.wikipedia.org/wiki/Fluorine
http://www.zerohedge.com/news/2016-09-27/viral-surveillance-video-revels-shocking-scene-chinas-housing-bubble
Reminds me of somewhere…..hmmmm….starts with a V…
#129 mike from mtl on 09.28.16 at 9:31 am
#117 drydock on 09.28.16 at 4:15 am
Move to Montreal where streets have more soul than any other city in Canada.
My hydro bill every two months is $60.00
I’ve lived in Vancouver and Toronto for years.
Both overated.
They suck.
Montreal rocks.
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If by ‘soul’ you mean corruption and decay, then yes. Seriously we keep deluding ourselves that the year is 1967 and we’re still #1 in Canada, let’s be real here. We operate like some third-tier city in russia in many many respects imho.
Also have to call it on your hydro bill. Unless you’re renting a basement 1 1/2 that the heat is included, there’s no friggin way it’s 60$ for two months. Yes Hydro is cheap(er) here, but not that cheap. Mine is anywhere from 200-400$ for every two months (actually 62-68 days).
Agreed Vancouver is overrated, it’s nice in a resort kind of way but there’s nothing there. T.O euhhh there’s pros and cons but certainly less cons than mtl. Got family and have done jobs in both, I only stay because for now it’s okay to be the ‘best of the worst’.
#130 Steerage bilge on 09.28.16 at 10:48 am
#129 mike from mtl on 09.28.16 at 9:31 am
#117 drydock on 09.28.16 at 4:15 am
Move to Montreal where streets have more soul than any other city in Canada.
My hydro bill every two months is $60.00
I’ve lived in Vancouver and Toronto for years.
Both overated.
They suck.
Montreal rocks.
——————————————————————–
If by ‘soul’ you mean corruption and decay, then yes. Seriously we keep deluding ourselves that the year is 1967 and we’re still #1 in Canada, let’s be real here. We operate like some third-tier city in russia in many many respects imho.
Also have to call it on your hydro bill. Unless you’re renting a basement 1 1/2 that the heat is included, there’s no friggin way it’s 60$ for two months. Yes Hydro is cheap(er) here, but not that cheap. Mine is anywhere from 200-400$ for every two months (actually 62-68 days).
Agreed Vancouver is overrated, it’s nice in a resort kind of way but there’s nothing there. T.O euhhh there’s pros and cons but certainly less cons than mtl. Got family and have done jobs in both, I only stay because for now it’s okay to be the ‘best of the worst’.
….
Potholes!!! A billion orange construction cones!!! Chicken wire holding up the bridges. Roads to nowhere. $700,000 gazebos. Still love the place!
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I rent a heated 41/2 first floor on the west island on Lakeshore Road and my hydro is $60.00 every two months.
You both think it’s better somewhere else then go.
Nobodies got a gun to your head.
And then, the debate.
Political harakari was never before SO entertaining.