Contagion

Comments temporarily disabled. Sorry. Stand by!

kids-lol-modified

While we all wait with baited (sic) breath for that moderate correction in the Toronto real estate market (I believe that is what you are calling for) do you have any comments on what may be far more important – the decline of Deutsche Bank? You spent a fair bit of time clarifying the bail in clause for Canada…but what about Europe as Merkel stares down the barrel of whether to bail-out or kill the Euro? Regardless….if Deutsche goes down the contagion into the financial system will be severe. — Blog comment

So many doomers. So much angst. Such quivering. So much to go wrong. Decline, collapse & contagion. The comments section of this pathetic blog is a Greek chorus of despair some days, scaring the poop out of innocents who wander in here just looking for a tummy rub.

This Deutsche Bank thing is a great case in point. Germany’s an over-banked place, and DB is not a superbly-run company. Worse, its knickers got caught in the US justice system and American regulators have been mercilessly pursuing it to settle charges related to bad mortgages. Between higher state-imposed capital standards and runaway legal bills, DB’s stock has lost half its value. Finally, with a market cap of about $14 billion (what all the shares outstanding would sell for), the bank was staring at a fine of exactly that amount – effectively wiping its equity out.

Meanwhile tough-gal Chancellor Angela Merkel, facing an election and Trumpian forces, had made it clear Germany wouldn’t be bailing out bankers. So the stock sank further. The GreaterFool steerage section wailed piteously. Breasts heaved. And we got dark warnings of a contagion in the financial system that would surely punish your portfolio. Worse than Bear Sterns, baby, they cried. This sucka’s goin’ down.

Well, not so fast. The latest news is DB will owe US regulators about $5 billion, not fourteen. “Deutsche Bank is not Lehman,” a fancy Wall Street strategist commented, stating the obvious. After all, eight years of increased regulation, higher capital requirements and international controls have hardened all big banks against barbarians. This is not 2008.

Well, DB stock soared Friday. Up about 6.5%, with stock markets following. The S&P is ahead 6% this year while Bay Street has added 13%. Preferred ETFs are up 16% since January and even bond funds have gained three times more than a GIC, while being liquid and less taxed.

In short, Investors 1, Doomers 0. The same happened with Brexit, and it’ll occur again with Trump. Ditto for Deutsche Bank, ISIS attacks and even next week’s four sold-out Adele shows in Toronto. Balanced portfolios are designed to withstand whatever horrors modern life can throw at them, and stay standing. Ignore the fools telling you to go to cash before the US election, for example, which would do nothing except waste time and create anxiety.

History proves that missing the best days in the market is far more consequential than avoiding the worst ones. But fear’s the most dominant of emotions, so many people would rather hide from danger than build a logical portfolio and ignore volatility. Worse, the financial landscape’s full of questionable advisors who truck on trepidation. They tell clients market-timing works, they can avoid unforeseen declines and that it’s prudent to sit in cash.

Some of them keep people on the sidelines for months, or even years, while markets move to new highs. All the while, they collect fees. Sad.

Timing markets really doesn’t cut it. Over 90% of mutual funds which pay managers big bucks to add ‘alpha’ end up crapping out. Just buying an index fund gives you a far better chance of making money, especially when the 2%+ mutual fund MER is stripped away.

Similarly, stock-picking advisors, financial cowboys and suspender-snapping, bow tie-twiddling Bay Street dandies are in the same game. They use fear of loss and greed for gains to lure people into believing they have a special insight and can outperform the rest of humanity, plus high-frequency-trading algos. But they can’t. It’s all guesswork. And meanwhile decades of experience show a balanced and globally-diversified portfolio, rebalanced once or twice a year, keeps investors on an upward path.

As a rule, actively-managed funds suck. So do alpha-seeking equity flippers. Most DIY market timers drown. And at the bottom of the pond live the doomers.

The most valuable asset you have is time. Don’t let some insecure flake – or insincere fake – steal it from you. Invest carefully, then take your dog out. Don’t look back.

92 comments ↓

#1 bdwy sktrn on 09.30.16 at 6:29 pm

OMG .

i can’t believe this.

the skinny 25’lot on kitchener st i mentioned here previously that just sold (in one wknd) and was asking a bloated, peak-plus-plus, ambitious 1.85 million here in Vancouver’s post-tax smoking ruin of a RE market has a new market price.

i was assured by someone here that 1.4 was the correct value. (s.bby is that you???)

here , in a market that’s as bad as it has been in decades, where prices are ‘dropping’ by thousands per day, this 1.65m peak price (in spring 2016)house, just sold (in early fall 2016) for -2-Million-Dollars, less a used kia. (1.99m)

perfect liquidity. even in a ‘frozen’ market.

hoooo-leeeee-sheeet.

#2 bdwy sktrn on 09.30.16 at 6:30 pm

kahlid is probably a billionaire by now.

#3 crowdedelevatorfartz on 09.30.16 at 6:32 pm

Unlike Donald Trump.
I have nothing to add.

#4 bdwy sktrn on 09.30.16 at 6:35 pm

and fyi for you easterners , kitchener st is in east van , which is without question “the wrong side of the tracks” to vancouvers west side snobs.

this house last sold in 2012, for 886k

almost 1 million tax free win in 4 years.

#5 Smoking Man on 09.30.16 at 6:36 pm

The most valuable asset you have is time. Don’t let some insecure flake – or insincere fake – steal it from you. Invest carefully, then take your dog out. Don’t look back.-Garth

Time on earth for humans is short in the grand scheme of things. Why be afraid of anything? Fear is a devil in disguise that keeps you from enjoying life to it’s fullest.

Humans think they actually chose their own path, the fork in the road, do I go left, right, backward or stand still.

Thoughts and actions are driven by electrons and the electric universe. You may think you made a conscious decision but it’s the atoms and electrons and photons that actually control the outcome and the next thought and move.

Your body is in a driverless car controlled by universal energy, the brain thinks it’s driving but it’s not.

Why not have fun and enjoy the view. Drink Hard, Smoke Hard, in the end when we are all worm food, none of us will remember a damn thing.

Humans worry too much….

Dr. Smoking Man
Phd Herdonomics

#6 bdwy sktrn on 09.30.16 at 6:41 pm

so by not selling in the spring, i figure i’m up another 300k+, or about 50k/mo. oh well.

there must be alot of easy money around for prices to keep spurting so hard.

#7 Wrk.dover on 09.30.16 at 6:44 pm

Garth likes Garth too. He should, for consistency if nothing else.

#8 Braj on 09.30.16 at 6:45 pm

Is there any point of holding preferred shares in addition to a small portfolio (<$50k-$100k) consisting of VAB, XAW, & VCN?

#9 espressobob on 09.30.16 at 6:45 pm

Analysis leads to paralysis. Over thinking is one of the major flaws individual investors suffer while ignoring an unloved quality asset class.

Hindsight has perfect vision even though that view made no sense.

Just saying.

#10 macroman on 09.30.16 at 6:50 pm

I wanna be last!

#11 Vancouver Langara on 09.30.16 at 6:59 pm

So I spoke with my neighbor’s spouse – married to a realtor. What the realtors at the Vancouver westside office are being told to say:

(i) to sellers: this is the best time to sell, as the market is at the peak and may continue to decline.

(ii) to buyers: this is the best time to buy, as the market is at the bottom and will only rise in the new year.

#12 crowdedelevatorfartz on 09.30.16 at 7:00 pm

@#143 Barb
https://en.wikipedia.org/wiki/Alexander_Fraser_Tytler,_Lord_Woodhouselee
+++++++++++++++++++++++++++++++++++

Ok, so you linked me to a biography of a man from the 18th century who stated his philosophical vision of what makes a “true democracy”.
Never mind the socialist “utopia’s”
.
I just want to know what other democracies OTHER than the US have lasted 200-300 years before they failed………
’cause I cant think of any democracies that have lasted 200-300 years and then failed
Examples?
And please dont say ancient Greece (slaves werent allowed to vote) or 17th century France ( Off with her head).

The US was the first nation on earth to have a peaceful transition of leadership based upon popular consent…..( although this type of transition had never occured before and the President’s staff who were….essentially now unemployed….drank all the booze, stole anything of value and , as an added bonus, shat on the floor before leaving).
The outgoing President left in a horse and buggy, with absolutely no pomp, ceremony, or fanfare and rode home.
One can only imagine what the new President thought of that “gift”
Not bad for a bankrupt, 3rd world nation 230 years ago.
And judging by the latest gene pool vying for the White House keys…..not much has changed.

#13 macroman on 09.30.16 at 7:03 pm

damn it, I thought I could trick ole Garth with some reverse psychology

#14 Trojan House on 09.30.16 at 7:04 pm

“There is no housing bubble” – Alan Greenspan

Of course there isn’t a problem until there is one. Of course they’re not Lehman Brothers or Bear Stearns but they could be? Whoever thought those two giants would collapse?

DB stock may have rebounded today at the announcement that they will only have to pay a $5B penalty out of their 14$B equity but apparently their liabilities amount to almost $2 trillion – yes that’s trillion with a T.

#15 the other white meat (pork) on 09.30.16 at 7:07 pm

I’m not a literary genius, but isn’t it “bated” breath?

The steerage section of the blog can be downright bizzare with the doom and gloom. I work with a couple of Zerohedge/Armstrong fans and they’ve been miserable and afraid for years while the rest of the crew bought houses, invested, and kept the faith. Guess who is better off and happier? The Zerohedge gang are good guys but they look at the world the way they think it should be instead of accepting how it is and working within that reality.

#16 Mark M. on 09.30.16 at 7:07 pm

Here’s a market timing tip form Ruchir Sharma, Chief Global Strategist at Morgan Stanley:

“Since the Fed began aggressive monetary easing in 2008, my calculations show that nearly 60% of stock market gains have come on those days, once every six weeks, that the Federal Open Market Committee announces its policy decisions.

Put another way, the S&P 500 index has gained 699 points since January 2008, and 422 of those points came on the 70 Fed announcement days. The average gain on announcement days was 0.49%, or roughly 50 times higher than the average gain of 0.01% on other days.”

Nothing to see here, right?

No rate hike in December.

#17 ANON on 09.30.16 at 7:14 pm

GARTH, I’D BE GREAT TO SEE A BLOG POST ABOUT WHAT TO DO FOR THOSE WHO HAVE LISTENED AND WAITED. WHO HAVE REALIZED THE INSANITY OF THE CURRENT MARKET, AND WERE GREAT LITTLE SAVERS; WAITING FOR OUR TIME.

IT COULD BE AN INFORMATIVE BLOG SERIES TO BREAK IT DOWN INTO SEVERAL SITUATIONS.
PEOPLE WHO HAVE 100K+ IN SAVINGS, NO PENSION.
SAME SAVINGS WITH A PENSION.
PEOPLE IN THE GTA OR VANCOUVER VS THE REST OF CANADA.

I THINK THE CORRECTION IS UNDENIABLE NOW, THE QUESTION IS HOW TO PREPARE TO MAKE SMART DECISIONS WHEN THE TIME COMES AND WHEN IT’S SMART.

KEEP IT UP!

WHAT? CAN’T HEAR YOU. — Garth

#18 TecFifty four on 09.30.16 at 7:15 pm

Over and over and over, they just won’t listen Garth!

#19 Felix on 09.30.16 at 7:16 pm

“Invest carefully, then take your dog out. Don’t look back.”

Finally, we agree, Garth.

But what took you so long?

Meow :)

#20 Nodebt on 09.30.16 at 7:17 pm

Air bnb is great! Go look at the rates for a hotel in van right now, who can afford that? Uber is great to, free enterprise! All the government does is blow money! Quit being jealous we all have the chance to make money! Quit being jealous of the people that succeed! Like I said Everyman for himself!
Nodebt

#21 Ledtygroove on 09.30.16 at 7:18 pm

Seriously… Wasn’t DB supposed to take down the financial universe today or something? No wait, September is a stock market bloodbath. No wait, fiat blah blah blah.

#22 Rational Optimist on 09.30.16 at 7:23 pm

I just finished reading “The Mandibles” on the recommendation of some blog dog or another. Thank you to whomever. It was doomer propaganda in novel format, but it was an entertaining read.

#23 A Yank in BC on 09.30.16 at 7:26 pm

Well said Garth. All great advice. I believe it was Jane Bryant Quinn who said that the market timer’s hall-of-fame was an empty room.

#24 LH on 09.30.16 at 7:32 pm

I need advice

Where to put January’s bonus?
More US stocks?
Or buy a bigger house and garden for wifey and the 4 kids?

Long term we all know the stocks will do better,
but the kids are growing fast and won’t be around forever.

Or just rent?

#25 Marcus on 09.30.16 at 7:36 pm

The European Central Bank (ECB), the US Federal Reserve and the Bank of Japan (BoJ) went on a stock-buying spree focused on Deutsche Bank (DB) stocks today, for the specific purpose of propping-up the failing bank. Public knowledge of Deutsche Bank problems has lead to a 92% DROP in Stock value over the past nine years, with the stock sliding below 10 EUROS per share for the first time ever, this morning.

Then, suddenly, DB stock began to rise. A RUMOR said the DB was negotiating a settlement with the US Justice Department of $5.4 Billion in fines for market-rigging as opposed the the $14 Billion previously made public. But the US Justice Department refused to comment; as if they were told to keep their big mouths shut or face destroying the largest bank in Germany and taking worldwide markets with them.

Later today, the RUMOR was published by Agence France Presse (AFP) and like magic, DB stock began to rise, significantly!

Seemingly confirming the rumor, Agence France Press reports that Deutsche Bank is nearing a $5.4 billion settlement with the US Justice Department. This catalyzed another leg higher in Deutsche Bank stock and lifted the whole market as it would appear that unconfirmed sources have ‘fixed’ the world’s most systemically dangerous bank (despite the fact that short-dated counter party risk is soaring).

And now AFP is walking back their comment…

DEUTSCHE BANK SETTLEMENT MAY BE ANNOUNCED COMING DAYS – AFP

We look forward to the 1605 ET denial from The DOJ. (i.e. 4:05 PM eastern US time on a Friday, after markets close)

Once again we remind readers that Monday is a bank holiday in Germany.

For now, the professionals know exactly what is afoot – anything to slow the outflows of cash… and counter party risk hedges are soaring…

Put simply, what the world sees taking place right now is the deliberate manipulation of share prices for DB, by government entities, for the sole purpose of fooling the public!

#26 conan on 09.30.16 at 7:36 pm

When the next banking crisis hits we will see where the bad paper is hiding.

I thought it through and the answer is obvious. This one I am going to keep to myself. But think like a bankster…… how did they do it in 2008?

#27 Doug t on 09.30.16 at 7:37 pm

Cliodynamics – look it up – math has the answer

Rage against the machine

#28 Cory on 09.30.16 at 7:38 pm

I think preferred shares (etfs) could be a front page storyeventually. The demand for new issuances is huge. Td did one earlier this year for $300MM and the demand was so large that they increasd it to 1billion. Others have done similar. They were the minimum yield rate resets that if interest rates rise the yield will be beautiful.
Once the new resets eventually replace the “old” resets and buying at these levels it should work out very nice. I believe some preferreds are being called as well due to some OSFI? regulatory changes for insurance companies and preferreds earlier this year which means capital gains to be had from beat down preferreds. Should be a win win in yield and capital gains as time goes on.

I’ve been loading up of them since January. All financials seem to be perking up maybe factoring in higher odds of a Fed hike. Up 15% on td alone this year not including dividends. All in all it seems like a great time to be in the markets.

#29 jess on 09.30.16 at 7:39 pm

un-greating of america

Among types of offenses, the largest penalty total comes from cases involving the packaging and sale of toxic securities in the period leading up to the financial meltdown in 2008. The top-ten primary case types are as follows:

1. Toxic securities abuses: $68 billion

2. Environmental violations: $63 billion

3. Mortgage abuses: $43 billion

4. Other banking violations: $18 billion

5. Economic sanction violations: $14 billion

6. Off-label/unapproved promotion of medical products: $12 billion

7. False Claims Act cases: $11 billion

8. Consumer protection violations: $9 billion

9. Interest rate benchmark manipulation: $7 billion

10. Foreign Corrupt Practices Act cases: $6 billion

database updated

http://www.goodjobsfirst.org/news/releases/violation-tracker-expansion-highlights-fraud-healthcare-companies-and-banks

===============
morgan stanley since 2010 Violation Tracker Parent Company Summary
Parent Company Name: Morgan Stanley
Ownership Structure: publicly traded (ticker symbol MS)
Headquartered in: New York Industry:
financial services
Penalty total since 2010: $4,964,904,275
Number of records: 21

Violation Tracker Parent Company Summary
Parent Company Name:
Deutsche Bank
Ownership Structure:
publicly traded (ticker symbol DB)
Headquartered in:
GermanyIndustry: banking & securities
Penalty total since 2010: $4,552,134,403
Number of records: 13

#30 Questions on 09.30.16 at 7:44 pm

In a 20 year, warren buffet style, this sounds sensible…but then again, if that’s what you’re about, then just drop every dollar into the sp500, and look at it again in 20 years. That kills any 60/40 portfolio by good margin, and is effortless. Tax optimization and all that crap…

Now more than ever, this is the globally diversified expression of the market, and bonds serve no purpose to you, only to the advisor who would fend off your phone calls when things are swinging too much.

Otherwise… straight up… this is the worst time to enter the markets. Entrance point matters, don’t let anyone tell you it doesn’t. And right now, on this day in particular, is gambling. Got cash? Nice, chill and watch. Then do enter.

#31 B$14 vs B$5 on 09.30.16 at 7:44 pm

The discrepancy between these two numbers alone indicate a colossal BS in our world that’s the basis of losing any trust, respect in the system and the leaders of all stripes.

#32 Basil Fawlty on 09.30.16 at 7:48 pm

The reduced settlement amount for Deutsche Bank is an unsourced rumour. A second rumour circulating is that Central Bank buying today increased the value of their shares.
Investors 1, Doomers 1

#33 Randy on 09.30.16 at 7:48 pm

Since I don’t believe that there will be a rate increase in my lifetime I plan to have, practice tax avoidance eliminate stress and spend everything within the next 20 years.

#34 45north on 09.30.16 at 7:51 pm

pork: I’m not a literary genius, but isn’t it “bated” breath?

it is bated breath:

What should I say to you? Should I not say
‘Hath a dog money? is it possible
A cur can lend three thousand ducats?’ Or
Shall I bend low and in a bondman’s key,
With bated breath and whispering humbleness, Say this;

http://www.phrases.org.uk/meanings/bated-breath.html

#35 Bram on 09.30.16 at 7:55 pm

#1 bdwy sktrn on 09.30.16 at 6:29 pm

$2M… damn.
I looked up the zoning: RT-4, meaning zoned for two families.

Maybe the 2M bought them two houses on 24ft each?
Although the listing does not show that.
Laneway maybe?

#36 Lefty on 09.30.16 at 8:11 pm

Jared Dillian, The 10th Man – Article on his recent visit to Toronto. Could we experience “Death by Real Estate”?

http://www.mauldineconomics.com/the-10th-man/at-home-in-the-skydome

#37 Victor V on 09.30.16 at 8:19 pm

Time for the Liberals to take initiative on Toronto’s housing market: Cohn

https://www.thestar.com/news/queenspark/2016/09/29/time-for-the-liberals-to-take-initiative-on-torontos-housing-market-cohn.html

#38 The real Kip on 09.30.16 at 8:22 pm

The Deutsche Bank mess is not over yet, they’ve peen playing in a house of cards for a long time now and how is a 5B$ fine a good thing?

#39 TheUnhealthy on 09.30.16 at 8:27 pm

Re:SmokingMan

Here’s a lil’ something to chew on over the weekend. The “those in need of microbes” hyperlink is really interesting, too.
http://vegetablepharm.blogspot.ca/2016/05/are-microbes-in-charge.html

Eg. Adelle’s 4 sold-out concerts = bacterial/microbial orgy.

#40 Smoking Man on 09.30.16 at 8:28 pm

After a grueling day at the office, I decide its time for a drink at the elevator bar at Seneca, these chicks come up to me, “Hey Smokey, do you remember talking to us last night” “No” I said, it was a defensive maneuver who the hell knows what I said to them last night while looking over my shoulders trying to figure out where the wife is.

The moment passed, then time for dinner in the Chinese place here, this is where things got weird for me. An old lady sitting next to us, I’m thinking she’s no more that 120 lbs. She devours plates and plates of food using chopsticks masterfully. She wasn’t arrogant about it.

But the dude to the right of me, it was was like he was gloating, and he’s playing drums with the chopsticks, the working them perfectly getting tiny beans with them, showing off, bastard/

I’m working a fork, the shakes are bad, I haven’t had a drink yet.

I need to learn fork sticks…..

#41 ROCK BEATS PAPER on 09.30.16 at 8:30 pm

…companies that dig up shiny doorstoppers…YTD

#42 liquidincalgary on 09.30.16 at 8:31 pm

and even next week’s four sold-out Adele shows in Toronto

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

got a floor seat, didn ‘cha

#43 drydock on 09.30.16 at 8:31 pm

Here you go Smoking Dude.
Some Hunter S. Thomson on elections and evil.

……………………………………………………………….

http://www.zerohedge.com/news/2016-09-30/hunter-s-thomsons-prescient-1972-warning

#44 ROCK BEATS PAPER on 09.30.16 at 8:40 pm

Garth,

You make it sound like Deutche Bank is an isolated one off. It is down 90% from its peak, but so is number 2 German Bank, Commerzbank. And it is not just the German banks, the Italian banks are neck deep in it as well. They simply cannot grow themselves out of their balance sheet problems with net interest margins that cannot improve because of central bank’s NIRP.

Thus it is not a one off poorly run bank facing regulation and legal bills. This is systemic with NIRP, Greece, Brexit, Italian Banks etc… There are a lot of holes in the dam.

#45 Famine time for realtors on 09.30.16 at 8:44 pm

bdwy sktrn #1#2#3#6 are you off your meds realtor? You can delude yourself all you like. It’s going to get much worse for years to come. It’s famine time for a long time. :)

#46 Renter's Revenge! on 09.30.16 at 8:47 pm

#15 the other white meat (pork) on 09.30.16 at 7:07 pm
I’m not a literary genius, but isn’t it “bated” breath?

It doesn’t take a genius to Google “baited vs bated breath”. “Baited breath” always makes me think breath that smells like fish or worms.

#47 TCContrarian on 09.30.16 at 8:49 pm

“History proves that missing the best days in the market is far more consequential than avoiding the worst ones. But fear’s the most dominant of emotions, so many people would rather hide from danger than build a logical portfolio and ignore volatility. Worse, the financial landscape’s full of questionable advisors who truck on trepidation. They tell clients market-timing works, they can avoid unforeseen declines and that it’s prudent to sit in cash.” GT
—————————————————————-

Although ‘true’ for the vast majority who cannot tell the difference between a stock and a bond (or Mutual vs ETF, etc.), we all agree on the ‘buy-low, sell-high’ mantra – implicitly, a methodology that employs some form of ‘timing’ (or ‘discipline’, if you like).
Also, it cannot be denied that maybe 5% of portfolio managers (probably much less), consistently outperform the market.

BTW, being in a high ‘cash’ position during times such as 2008/9, allows one to deploy capital when there’s panic and accompanying undervaluations.

Nothing wrong with that!

#48 Smoking Man on 09.30.16 at 8:50 pm

The waytrises in sort skirts, so polite here at stir. They see me in my reserved booth, they bring a pino gresio without me asking. they know the drill, I give em a ten for a six dollar drink and say we’re good.

They bring the change knowing I don’t want it… I wave it off.

That’s respect.

#49 Smoking Man on 09.30.16 at 8:58 pm

#43 drydock on 09.30.16 at 8:31 pm
Here you go Smoking Dude.
Some Hunter S. Thomson on elections and evil.

……………………………………………………………….

http://www.zerohedge.com/news/2016-09-30/hunter-s-thomsons-prescient-1972-warning

Got it memorized, I did to him what he did to Hemmingway.. Type out the whole book.

If I never came across this pathetic blog, I would not know who Hunter or Hemmingway was..

The UCC and the electric universe has plans for all of us…. We have no control… Enjoy the ride is all I can stress.

#50 Steph on 09.30.16 at 9:10 pm

Amen. Take the dog out and enjoy life. That is a fun thing to do. Try it…

#51 mitzerboy aka queencitykid on 09.30.16 at 9:25 pm

where can we get the tummy rubs ?

#52 S.Bby on 09.30.16 at 9:26 pm

I see the huge billboard sign on the corner of Nelson and Imperial in Burnaby (Metrotown) that was advertising a new condo tower is now GONE. I’m assuming this development is now kaput.

Meanwhile in my South Burnaby area the houses for sale are piling up with 12 houses now for sale within a kilometer of my place. Nothing is selling and prices are dropping by $1,000 a day with no sales. It is shaping up to be a major financial disaster for these homeowners trying to cash out. There are no speculators left to buy these houses at their current asking prices.

#53 Smoking Man on 09.30.16 at 9:26 pm

Millennials learn our music if you want to succeed

https://youtu.be/m9BCpIm_P9Y

#54 common sense on 09.30.16 at 9:28 pm

Doom and Gloom?

Kate Bush is releasing a triple live CD.

All is right with the world.

#55 Smoking Man on 09.30.16 at 9:35 pm

Millennials question everything starting with building 7..

That was arrogant beyond belief. Justice is coming, I feel it..

https://youtu.be/-wDHvmCVRxU

#56 young & foolish on 09.30.16 at 9:40 pm

I know some actual doomers … they listen to programs on shortwave radio that proclaim how we are close to complete societal collapse and insidious take over by secretive elites. There are no unplanned events, everything is orchestrated from behind the scenes. Extreme.

But on the other hand, when the system stops working for the majority of the people, well then, some kind change is to be expected.

#57 Smoking Man on 09.30.16 at 9:41 pm

Started early today insuring an early night night. Meeting the God of dogs tomorrow. Want to be a bit presentable than what I show up to work too.

One more for the mind twisted millennials. Bet they never heard this one.

https://youtu.be/9WZZjXgJ4W8

#58 Blair on 09.30.16 at 9:41 pm

Garth putting out some solid posts these days.

Cheers

#59 Questions on 09.30.16 at 9:41 pm

@smoking man.

you can’t speak when you’re dead… you seem interesting, stick around a while.

#60 Sheane Wallace on 09.30.16 at 9:42 pm

#5 Smoking Man on 09.30.16 at 6:36 pm
Humans think they actually chose their own path, the fork in the road, do I go left, right, backward or stand still.
—————————-
They do.

—————————–
Humans worry too much….

—————————–
They do.

#61 Steve French on 09.30.16 at 9:45 pm

I used to adhere to the Smoking Man philosophy.. work hard, drink hard (although never smoked hard).

Then I turned 40, realised hangovers suck, people who hang out in bars are drunken bores, and I grew up.

Now i do yoga for 1 hour every morning, eat healthy, bike to work, and do another hour of exercise in the evening.

Feels fantastic. I’m in the best shape of my life.

Don’t get me wrong, I still need my once per 6 month booze up to release some steam.

But you really start to notice who takes care of themselves after 40, let me tell you.

#62 Jules on 09.30.16 at 9:46 pm

For the price of a tired little bungalow in Leaside, in August the Clintons bought the house next door.
http://www.zillow.com/homedetails/33-Old-House-Ln-Chappaqua-NY-10514/33065661_zpid/

#63 DYI Meow on 09.30.16 at 9:56 pm

Garth,
Your topic couldn’t have come at better time. There is so much fear and doubt out there. Your insight provides some calm amidst all the speculation. I *have* been sitting on the sidelines wondering if I should wait until the next dip before making additional contributions. In the past my portfolio planner use to like to wait until an anticipated event is about to occur before investing if I had a lump sum. There seems to be more volatility now than ever before. In any case, I’m using limits but I seem to be setting them too low as the market dips only just a bit before heading back up.

I’d really like to hear your thoughts on what one should do for investing non-reg accounts if registered are maxed.

#64 Smoking Man on 09.30.16 at 10:05 pm

DELETED

#65 Smoking Man on 09.30.16 at 10:08 pm

#61 Steve French on 09.30.16 at 9:45 pm
I used to adhere to the Smoking Man philosophy.. work hard, drink hard (although never smoked hard).

Then I turned 40, realised hangovers suck, people who hang out in bars are drunken bores, and I grew up.

Now i do yoga for 1 hour every morning, eat healthy, bike to work, and do another hour of exercise in the evening.

Feels fantastic. I’m in the best shape of my life.

Don’t get me wrong, I still need my once per 6 month booze up to release some steam.

But you really start to notice who takes care of themselves after 40, let me tell you.

Light weight, Dudest don’t do yoga. I’m disappointed.

#66 Self Directed on 09.30.16 at 10:11 pm

#1 bdwy sktrn on 09.30.16 at 6:29 pm
————————-
With the disappearance bidding wars, all offers should be under asking and with subjects. Don’t assume they got the asking price.

MSM has been pumping out fears of a collapse since the new foreign buyers tax. Anyone knows over asking is not necessary anymore… unless you’ve been under a rock these past few months.

Check http://evaluebc.bcassessment.ca/ on Jan 1st… it’s below asking price.

#67 Smoking Man on 09.30.16 at 10:19 pm

Not mine but it’s good for a share.

“The Story In Your Eyes”

I’ve been thinking about our fortune
And I’ve decided that we’re really not to blame
For the love that’s deep inside us now
Is still the same

And the sounds we make together
Is the music to the story in your eyes
It’s been shining down upon me now
I realize

Listen to the tide slowly turning
Wash all our heartaches away
We’re part of the fire that is burning
And from the ashes we can build another day

But I’m frightened for your children
That the life that we are living is in vain
And the sunshine we’ve been waiting for
Will turn to rain

Listen to the tide slowly turning
Wash all our heartaches away
We’re part of the fire that is burning
And from the ashes we can build another day

But I’m frightened for your children
That the life that we are living is in vain
And the sunshine we’ve been waiting for
Will turn to rain

When the final line is over and
It’s certain that the curtain’s gonna fall
I can hide inside your sweet sweet love
For ever more

#68 young & foolish on 09.30.16 at 10:32 pm

“I work with a couple of Zerohedge/Armstrong fans and they’ve been miserable and afraid for years while the rest of the crew bought houses, invested, and kept the faith. Guess who is better off and happier? The Zerohedge gang are good guys but they look at the world the way they think it should be instead of accepting how it is and working within that reality.”

Exactly … the “system” is just that, a system (and it can be, and is, regularly stretched and manipulated). But we are all in the system, and if it collapses, your friends will go down with the rest of us.

#69 Electric Nikola on 09.30.16 at 10:34 pm

#48 Smoking Man on 09.30.16 at 8:50 pm

The waytrises in sort skirts, so polite here at stir. They see me in my reserved booth, they bring a pino gresio without me asking. they know the drill, I give em a ten for a six dollar drink and say we’re good.

They bring the change knowing I don’t want it… I wave it off.

That’s respect.

Jimmy boy still spewing the verbal garbage………

#70 Smoking Man on 09.30.16 at 10:39 pm

Too my Jewish palls. Stop sucking up to Nutandyahoos.

I know it’s not cool for the overall narrative for the tribe. Palestinians are not Isis.. Give them some dignity.. Your a beautyfull creative culture. But don’t let the Masters putting loot in there back pockets rule your minds.

Nictonites are watching.

#71 Nero on 09.30.16 at 10:39 pm

For those who need a smile…
http://imgur.com/gallery/2VVxO
Happy Friday everyone!

Pass me my fiddle…

#72 MB on 09.30.16 at 10:46 pm

breath is bated. A hook gets baited

#73 Self Directed on 09.30.16 at 10:47 pm

#24 LH on 09.30.16 at 7:32 pm

I need advice

Where to put January’s bonus?
More US stocks?
Or buy a bigger house and garden for wifey and the 4 kids?

Long term we all know the stocks will do better,
but the kids are growing fast and won’t be around forever.

Or just rent?
———————————
Tough call, especially with 4 kids. Some are in school I guess, so you don’t want to be moving around a lot. Rent will do that to you.

One Option: Stay invested. Sell your current house and rent.

You would then have some balance – Some invested, some in cash. And renting is risk free. You would be poised to take advantage of either scenario:

1) RE Crash: Take your cash and buy a house at a discount, under asking, and load up on subjects.

2) Market Crash: Continue to rent and invest the house proceeds. While everyone else has equity tied up in a house, you will have a low entry point in the markets… sit back and make money.

About kids and renting – they don’t know the difference. It’s a parental urge to ‘nest’. As long as you can rent something decent, and stay in the same neighbourhood, they will be happy.

#74 not 1st on 09.30.16 at 10:53 pm

“…Eurozone problems, largely contained..”

A direct quote from Mr Turner circa 2012

You pull four words out of a post from four years ago and it’s supposed to mean something? — Garth

#75 Arfmooocat on 09.30.16 at 10:55 pm

#53 Smoking Man

We succeeded because of real estate, we bought like our parents bought and the stuff went ballistic after we bought. No other reason.

#76 Smoking Man on 09.30.16 at 10:58 pm

DELETED

#77 Love My Kia on 09.30.16 at 11:57 pm

What happened to the ban on verbal garbage Garth?

Its front and centre here tonight.

#78 Tony on 10.01.16 at 12:10 am

Most of the American banks have negative book values as dubious accounting states otherwise. In reality most American banks are worthless due to bad loans and bad mortgages.

#79 Robert on 10.01.16 at 12:17 am

Once the money starts getting to a reasonable size, should I start diversifying my cap exposure in, say, the US market?

For example, I plan to maintain about a 20% exposure to the US market. Currently, it all tracks the S&P 500. As my money grows, should I consider moving some of this 20% (on the order of 4-5%?) into etf’s that track US small/medium cap companies?

#80 Tim on 10.01.16 at 12:21 am

If you have fears adding to your portfolio but know you need too, just use cash covered puts.

#81 No Mercy on 10.01.16 at 12:22 am

SM … I like your posts but with the new rules in play, time to say good night. Remember your 7PM rule.

RE: electric universe

Interestingly, my genius, old, science-oriented brother has been blabbing about something similar.

Hmmm…

Good night SM.

#82 No Mercy on 10.01.16 at 12:37 am

I have a question.

If the CAD went down against the USD by 30 cents. Are all those Canadian asset owners roughly 30% under campared to USD? That’s what I see in terms of investments as the CAD went down…

I was having a talk with 2 home owners today at work. Both boomers and pulled the “you are paying your landlord’s mortgage” BS …

Man … these 2 boomers worried of a re-org got my 2-cents.

They couldn’t counter back Rent vs. Buy.

#83 Steve French on 10.01.16 at 12:58 am

Smoking Man said “Dudest don’t do yoga…..”

——-

Smokey Dude, are you kidding me?

http://thescript.thetake.com/wp-content/uploads/2015/08/The-Big-Lebowski-rug-1024×769.jpg

http://dudespaper.com/what-is-that-yoga.html/

Even The Dude his self would advise to go easy on the White Russians once in a while.

Not to mention Smokey, D’ya have to use so many cuss words?

#84 Steve French on 10.01.16 at 1:01 am

Smoking Man said “Dudest don’t do yoga…..”

——-

Smokey Dude, are you kidding me?

http://www.dailymail.co.uk/news/article-2695997/The-Dude-abides-Meet-founder-Dudeism-laidback-religion-based-The-Big-Lebowski-250-000-followers.html

http://dudespaper.com/what-is-that-yoga.html/

Even The Dude his self would advise to go easy on the White Russians once in a while.

Not to mention Smokey, D’ya have to use so many cuss words?

#85 Steve French on 10.01.16 at 1:16 am

Garth-dude, Smoking Man:

I’ve got $140 K sitting in cash. No debt. What should I do with it? There’s only so many White Russians one dude can drink.

Sincerely,

– The Dudely Renter

#86 test-alex on 10.01.16 at 2:29 pm

this is a test

Technical issues have temporarily disabled comments. We’re working on it. Sorry! — Garth

#87 PR on 10.01.16 at 2:48 pm

The Government of British Columbia hoped to calm its property market boosted with the imposition of a 15% tax to foreign buyers.

It was served.

Data published this week -That must be analyzed with some prudence- show a decline of 97% in this market segment since the imposition of the special charge on August 2!

In the metropolitan market of Vancouver 1974 transactions totaling $ 2.3 billion were recorded during the period from June 10 to August 1, just before the tax.

Between 2 and 31 August? Barely 60 sales, totaling 46.7 million, show the data of the Ministry of Finance of British Columbia.

In Richmond, a wealthy suburb of Vancouver popular Chinese buyers, the number of transactions has melted from 310 to 10, and their value of 335 to 6.4 million.

Throughout the Vancouver market, the proportion of international buyers rose from 13.2% before tax to 0.9% in August.

#88 Doug on 10.01.16 at 2:49 pm

September 2016 Greater Vancouver Housing Stats

http://www.yattermatters.com/2016/10/vancouver-home-buyers-mexican-stand-off/

#89 steerage steward on 10.02.16 at 1:02 am

No offense to you Garth, but a lot of people don’t get it.

Have directed 20/30 YOs to this site and they draw a blank. How about having a standing page, no more then three paragraphs? These kids need help.

#90 Shawn on 10.02.16 at 8:29 am

http://bloombergtv.ca/2016-09-30/news/industries/finance/hsbc-forecasts-bank-of-canada-rate-cut-this-year/

Now this would be something…

#91 Weekly Linkfest #6 - Financial Uproar on 10.02.16 at 2:26 pm

[…] Garth Turner points out the Deutsche Bank fiasco probably isn’t as bad as the folks at Zerohedge make it out to be. Speaking of whackos who […]

#92 Risk is Everywhere on 10.03.16 at 6:26 am

Who’s been peddling avoid real estate for a decade and a half, yikes, nothing to see here folks, keep investing, time is on your side? D-bank fails, it will create a global crisis, all assets currently overvalued. Pair your risk.

I see from your email addy that you’re a realtor. — Garth