Spanked

stockings

What’s coming next? Always a big question begging answers when we hit the end of a year. Especially this one. The Trump year.

Luckily I spotted my colleague and ace portfolio manager Ryan in the men’s room. ‘Yo,’ I said, festively, ‘wassup, dude?’

“Well,” he said, unzipping, “this Trump surge has made the markets become overbought and complacent.”

Really? I asked, bending over to polish my Luccheses.

“Yes, with RSI near 70, 74% of stocks in SPX above their 50-day moving averages, and the VIX at 11, all this signals an overbought and exhausted market. Previous readings at these levels have resulted in a small 3-5% pullback over the next month. So we should see a shallow correction starting in January.”

A quick rinse, and he was gone. Porsche keys jingling in his suit pant pocket. I decided to check my new tat, then went off to Google RSI. Of course, this is why it’s cool to have suspender-snapping smart guys around who have more letters after their names than actually in them. How can you not like someone who’s aroused by a chart?

Seriously, Ryan’s right. Since the night of the US election, the S&P 500 has added about 5%, and the Dow’s been propelled to within spitting distance of the historic 20,000 mark. Bond prices have crumbled, bond yields spiked, the US dollar strengthened and consumer confidence soared. It’s all, well, overdone. Especially since equities were expensive even before they were Trumped.

Valuations are stiff – with the price/earnings ratio of the market at about twenty times – but not nosebleed. And as companies make more money in a less-taxed, lightly-regulated America to come, that P/E market should hold firm. We’re figuring this thing has another year, 18 months or even two years to run before a more substantial correction rolls along (think 10-15%). Conclusion – a ‘small pullback’ after the holidays would probably be a good thing for those people who have cash. And courage. And sexy, shapely charts.

THE SUCKER HOUSE

Dozens of people this week rushed to post links on this pathetic blog to a news story detailing how a house in the GTA hinterland sold for $400,000 above asking. It was taken as evidence the market is red hot with no change in sight, even as the economy slips into the dumpster again.

The story, as told, was gripping. “A Vaughan home that sold for $400,000 over the asking price this week drew so many viewers that people lost their shoes at the open houses,” the Toronto Star gushed. “It’s not unusual for homes to sell for tens, sometimes hundreds of thousands of dollars over the listed price in the frenzied Toronto area real estate market. Despite its dated condition, the estate sale property, which sold on Monday for $1.1 million, attracted about 800 visitors over the course of three open houses — and 50 offers ahead of the designated offer presentation time.”

Wow. Eight hundred people tromping through open houses, shoeless, drooling and house lusty. Fifty bully offers. A selling price 57% more than the vendors even wanted! How can this not be a sign from God?

sucker-house

Well, truth be told, houses in that condition (lousy) in an area like that (high demand) at a time when mortgages are where they’re at (record low) fetch about $1 million. The decision by Royal LePage agent Steven Atsaves was deliberate – to list the home  $300,000 below market value (at $699,900) and hope a stampede ensued, followed by a bidding war. That’s just what happened, because Steve knows human nature. He understands people can be easily trapped in a situation in which emotion and competition make them act in ways never intended. “I knew the influx of people coming was going to be insane,” he said. So Stevo may just be the ideal realtor!

The result was as expected. Cars and footwear everywhere. Conversations with prospective buyers limited to two minutes. Deplorables crushing each other in the narrow hallway between tired bedrooms. But it worked.

In the end the sellers, who didn’t lift a finger to prepare for the sale, leaving it all to their agent’s manipulative, morally-questionable, bait-&-switch, ethically-challenged, brilliant marketing plan, scored a sale price of $1.1 million.

We’re doomed.

May your Christmas be merrier for knowing you’re not the nimrod who bought this house. Unless you are.

131 comments ↓

#1 ronh on 12.23.16 at 5:57 pm

The ultimate greater fool contest has been won.
Merry Christmas

#2 Tulip Bulb Mania on 12.23.16 at 6:03 pm

What a bunch of losers who bought this ugly house in Vaughn of all areas, at the peak of the biggest real estate bubble in Canadian history. 2017 is going to make a lot of people hurt. 2017 will be the year the Canadian real estate bubble implodes. Trust me, I see the future and it ain’t pretty for those holding real estate.

#3 An Insider on 12.23.16 at 6:08 pm

Mortgage money is drying up, underwriting becoming much more stringent – just wait until you try to renew your mortgage and HELOC in the new year in the GTA – it’s gonna be fun, watching the panic, while we got you over the barrel. 2017 will be very painful for the highly leveraged.

#4 Sam Hughes on 12.23.16 at 6:08 pm

Merry Christmas to all my fellow fools!

#5 Mike on 12.23.16 at 6:08 pm

Its getting boring – but Canadian real estate will go up and up. People are rich in Canada with high incomes. Even Calgary/Edmonton SFH haven’t budged much even though economy is in dark there. Yes, really….

#6 When Will They Raise Rates? on 12.23.16 at 6:09 pm

“Yes, with RSI near 70, 74% of stocks in SPX above their 50-day moving averages, and the VIX at 11, all this signals an overbought and exhausted market. Previous readings at these levels have resulted in a small 3-5% pullback over the next month. So we should see a shallow correction starting in January.”

Agreed, and there is another factor, not apparent in the charts, that supports the prediction of a January correction; Word on the street is that the lack of selling seen thus far leading into the new year may be attributable to investors being advised to wait until January to crystallize their gains, in order to take advantage of anticipated 2017 Trump tax cuts. If their gains are realized in 2017, then ostensibly, lower tax rates will be applicable when they file in 2018.

Combine that with what Ryan points out, and the correction could be steeper than 3% – 5%.

#7 Context on 12.23.16 at 6:26 pm

Do not feel bad if you missed a good Real Estate buy as here is my condo for the month. It is empty with two bedrooms and the pictures look great, taxes are a mere $247.67 per year, and there is a sign up called Shield Protective Services. A small shopping plaza across the road and the bus stop is on the corner. This can be all yours for just $69,000 and the inside with all the pictures really are nice with updates. The address is at 4625 Jane Street just in case you might be interested.

#8 For those about to flop... on 12.23.16 at 6:27 pm

I would have asked InfLewenza…

Is that a Trump surge in your pocket or are you just happy to see me…

M42BC

#9 Mandria on 12.23.16 at 6:28 pm

Have a great Christmas Garth. Thank you for what you do. Thank you for being a voice of reason when the pressure to buy is nearly unbearable.

#10 Figmund Sreud on 12.23.16 at 6:33 pm

What’s coming next?
_________________________

Well, … let’s do some business press reading.

Bloomberg:

McConnell, Warning of ‘Dangerous’ Debt, Wants Tax Cut Offsets
https://www.bloomberg.com/politics/articles/2016-12-12/mcconnell-warning-of-dangerous-debt-wants-tax-cut-offsets

Wall Steet Journal:

Trump’s Infrastructure Mistake
http://www.wsj.com/articles/trumps-infrastructure-mistake-1482099189?tesla=y

Bloomberg again:

Wall Street’s 2017 Forecasts Are Doomed If Trump Doesn’t Follow Through On Campaign Promises
https://www.bloomberg.com/news/articles/2016-12-16/wall-street-s-2017-forecasts-are-doomed-if-trump-doesn-t-follow-through-on-campaign-promises

And so, … yes, stocks may just – most likely, actually – rise even higher. Quoting banksters from above link:

Deutsche Bank: “If a repatriation holiday is introduced at a ~5 percent rate, as opposed to the generally proposed 5-14 percent rates, 10 percent even by Trump, then we think ~$500 billion will be repatriated in 2017. These funds will go to a combination of dividends, buybacks, onshore debt reduction, Mergers and Acquisitions and capex…”

JPMorgan Chase and Co.: “Cash repatriation alone could boost shareholder payouts by ~$350 billion … we estimate that buybacks from repatriation alone could add ~$1.30 to S and P 500 earnings per share, assuming that 60 percent of potential payouts come in the form of buybacks.”…

JPMorgan Chase and Co.: “We estimate that Trump’s corporate tax plan, which incorporates a 15 percent statutory federal tax rate, would add roughly $15 to S and P 500 earnings.”

… rejoice!

F.S. – Comox, BC.

#11 conan on 12.23.16 at 6:33 pm

I got my TTI chart working now. That’s a Trump Twitter Index for those that like newly invented terms.

I think we will soon see a correlation between TTI activity and major sell offs.

So banking on TTI and sorcery to beat the indexes in the coming year.

Merry X mas everyone and HNY, I may start posting drunk here over the next couple of weeks as I am still trying to earn my first “delete”.

Smokin man has the delete thing down. I will give that to him.

#12 Self Directed on 12.23.16 at 6:34 pm

3-5% pullback. And what’s if NOTHING HAPPENS other than Trump getting inaugurated Friday Jan 20? No other black swans on Ryan’s radar?

#13 Self Directed on 12.23.16 at 6:45 pm

#5 Mike on 12.23.16 at 6:08 pm

Its getting boring – but Canadian real estate will go up and up. People are rich in Canada with high incomes. Even Calgary/Edmonton SFH haven’t budged much even though economy is in dark there. Yes, really….
——————————————-
Fail. The middle class will need to budget fresh increases in 2017 (grocery, gas, heating, taxes, insurance, transportation) with their already stretched incomes.

Most people with big mortgages and HELOC’s are barely hanging on and living on credit. With rising rates and tougher lending restrictions.. get ready to watch those prices…. budge yes. But down.

#14 Smoking Man on 12.23.16 at 6:50 pm

Deplorables crushing each other in the narrow hallway between tired bedrooms. But it worked.-Garth.
………

Taken a play out of the lefty manual.

I’m Offended!!!!!!!

Deplorable bought that place? not a chance… It was a progressive 100%

Deplorables can think.

Washroom talk. Hallarious…. Well done.

#15 Goldie on 12.23.16 at 6:54 pm

Merry Christmas to all of you. And a ridiculous new year!

#16 Andrew Woburn on 12.23.16 at 7:02 pm

Merry Christmas to you and your Luccheses, Garth. I own a couple of pairs along with some alligator T.O. Stanley’s.

You must get some weird looks in T.O. It’s bad enough in Vancouver and we’re actually in the West (at least the latte sucking part).

“Are you trying to be a cowboy?”, they ask.

“No. I just like really nice boots”.

#17 crowdedelevatorfartz on 12.23.16 at 7:08 pm

Hello? Helllllloooooo?

Are their any hideously indebted nimrods out there that would care to comment?

#18 crowdedelevatorfartz on 12.23.16 at 7:10 pm

Oh, and before I wish you all a Melly Clistmas( I live in Burnaby)

Garth.
WHERE is and WHAT is your new Tat about?
Or do we just have to ask Ryan?

#19 David Prokop on 12.23.16 at 7:22 pm

No mention about the dismal GDP number released today?
Canadian economy is contracting, all we need is housing to crater and we are all DOOMED!!

#20 palfa on 12.23.16 at 7:26 pm

T2 selfie promised to stimulate the economy with deficit spending. In spite of actually breaking this promise by exceeding the “stimulus” by many billions the economy shrunk by 0.3% in October. Just one of many election promises he has broken. This debt will haunt our children for many generations in increased taxes.

His “donations” from Chinese billionaires simply do not pass the smell test.

https://m.facebook.com/story.php?story_fbid=10154134750638339&id=29313088338&refsrc=https%3A%2F%2Fm.facebook.com%2F22Minutes%2Fvideos%2F10154134750638339%2F&_rdr

Instead of doing things to stimulate the economy he is paying off his strongest supporters the public sector employees with a 5% raise that includes a $650 signing bonus!

http://www.torontosun.com/2016/12/19/trudeau-uses-credit-card-again-to-christmas-gift-unions

http://www.macleans.ca/economy/why-the-one-percent-isnt-to-blame-for-income-inequity/

The public has now become the servant to these Public Sector Unions. George Orwell 1984 was absolutely correct.

Unfortunately the millennials cannot see past the selfie pictures to realize that he is destroying their future.

#21 Andrew marx on 12.23.16 at 7:27 pm

Gta will crash 30 percent in 2017.

#22 nonplused on 12.23.16 at 7:28 pm

I’m not sure whether the list price ever really mattered that much for either houses or cars. I think in both markets the price is considered negotiable. The difference would be that only classic cars go for over the reserve at auctions, regular cars always trade down. Houses on the other hand trade more or less at what the neighboring houses sold for no matter the list price.

#23 Gasbag Boomer on 12.23.16 at 7:28 pm

Merry Christmas to you, your wife and Bandit!

#24 Smoking Man on 12.23.16 at 7:32 pm

What’s will all the Xmas shit. It’s still Christmas eve, eve.

No need to jump the gun for mandatory niceties and a delete free day.

It’s Friday night, time to get a buzz going and let’s see where it takes you.

Oh I’m doing something I’ve never done in my life, signing up for a political party.

Oleary stepping into the ring… He can’t do it with out alien assistance.

http://Www.Olearyforcanada.ca

#25 Ace Goodheart on 12.23.16 at 7:35 pm

Your colleague is right, market is slightly over valued. But people have to remember, these are mostly good companies, that have just been over bought. There are always a few duds but most of this stuff is worth owning (just not at these prices). So when it corrects, it is time to snap it up because when markets correct from over bought they always head down into over sold, then you get the exact opposite, ie good companies going for less than they’re worth. That is when you buy in.

The cool thing right now about the stock market is it’s being bought into in a way that hasn’t happened for about eight years. Lots of money is flowing out of bonds and fixed into stocks. So it’s getting quite heady. This works for well run companies with useful products because they can raise equity in this sort of environment.

Remember, when buying stocks, golden rule is you want to own the means of production of the products consumed by the masses. That is what you are looking for. Whomever is selling whatever everyone is buying, you want that company.

Interesting picks right now include electric car battery and electric car makers. This is an area that is going to go a little nuts (already is). Reason being, cars are sold on two things:

1. Power (as much as possible)
2. Fuel economy (no one wants a dog).

So enter the electric car. These things are direct drive, all wheel drive super-cars for economy prices. If you want 1000 horsepower for example, you can spend 1.5 million on a Bugatti Veyron and get a gasoline engine that gets about 1/2 a mile to a gallon……

Or you can buy one of these: http://www.digitaltrends.com/cars/lucid-motors-electric-car-will-have-1000-hp/

Yup, the Lucid Air. You can pre-order one now. The price? $100,000 US ($1.4 million US less than the Bugatti, and with much better fuel economy).

This is no joke. These cars are coming very soon. You can “fill them up” with electricity for the equivalent of about 10 cents a litre. They are zero maintenance (no oil changes, no transmissions, no clutches). And they absolutely blow gasoline motors out of the water in terms of horsepower and torque curve (the curves are flat – 1000 horsepower is available from 1 rpm all the way up to tens of thousands of rmp).

This is what I mean when I say own the means of production of the products consumed by the masses. You have to predict the next cool thing. I am predicting electric vehicles and their associated slave industries (such as battery production). Time will tell if I’m right…..

#26 Scully on 12.23.16 at 7:37 pm

“I decided to check my new tat”
Hmmmm, since you were in the washroom…where exactly and what is your new tat? ;)
Merry Christmas Garth to you, Dorothy, and Bandit. Wishing you all the best for the season.

#27 Scully on 12.23.16 at 7:51 pm

@24 – Smoking Man
Oh I’m doing something I’ve never done in my life, signing up for a political party.

Oleary stepping into the ring… He can’t do it with out alien assistance
—————————————————————

Go for it Smokey! You can be Canada’s Kellyanne Conway…only sexier ;)

#28 Smoking Man on 12.23.16 at 7:55 pm

Wow, this chick who lost her man to cancer last year is dancing up a storm at the pulse night club at Seneca with a new sugger daddy.

Good for her. You got move past shit when it takes you by surprise.. You can’t live your life that way.

Hope when it happens to me, my wife has enough sence to do the same..

On my death bed, I’ll tell her about the 7 million short term rentals I’ve had, every wierd position and all the experiments I did.

You got to do it right, Hoping she claims your body, apportiate funeral, pine box, burn the bastard, no suit, naked in the pine box. Take that you son of a bitch.

Your shtick has to be just right, you got to make her enough on the death bed confession to easaly move along and find some one else and still give you a send off.

#29 Paul on 12.23.16 at 7:55 pm

Didn’t even shovel the driveway!

#30 Ronaldo on 12.23.16 at 8:02 pm

I wasn’t around during the ‘Tulip Mania’ but from what I’ve read, it wasn’t much different. This is nutso.

#31 Smoking Man on 12.23.16 at 8:05 pm

Couple in there 80s dancing up a storm. They still look at each other through 19 year old eyes. Moving like their 19 just a bit slower. Cute.

Freedom First will never understand this. But it don’t matter. Freedom of thought is the only thing that keeps humans civilized, you try and take that away, you end up with Trump.

Progressives you did it to yourselves..

Dr Deplorable Smoking Man
PhD Herdonomics

#32 AfterTheHouseSold on 12.23.16 at 8:08 pm

#5 Mike
“but Canadian real estate will go up and up.”

Nice try Mike, but no cigar.

#33 Lulu on 12.23.16 at 8:14 pm

If that property is located near the future subway extension, then this price tag may be justify in a few years time, the buyer just pay it forward a few years earlier, on the contrary, if this is far from the line and in the midst of nowhere, then Merry Christmas to the seller.

Next……

Have a safe Merry Christmas and a Prosperous New Year Everyone!!

#34 WaitingOnTheWorldToChange on 12.23.16 at 8:21 pm

BANNED

#35 Ace Goodheart on 12.23.16 at 8:22 pm

RE: #7 Context:

“The address is at 4625 Jane Street just in case you might be interested.”

Sweet pad. And a price that rivals the cool deals available in Dixon City.

This is the future of all condos in Toronto, btw. These buildings all used to be high end. What happened? They got old. Unlike houses, when condos get old, the Crips and the Bloods move in, the prices crash, and the infrastructure crumbles. That is the future of every condominium building.

Kind of makes you want to rush out and buy into that new high rise doesn’t it?

#36 S.Bby on 12.23.16 at 8:26 pm

#18 crowdedelevatorfartz
(I live in Burnaby)

Hey, me too.
Small world…

#37 Kevin Li on 12.23.16 at 8:28 pm

Vaughan sellers messed up and should have found a better Realtor.

This “auction” thing is going on all over and lots of sellers are actually get lower prices than they should

A good Realtor would have told the owners to spend 10k to paint it/glamour it up.

In this economy people don’t have money to spend on changing an ugly kitchen, etc.

Spend 10k, get a better Realtor, and sell for more than 1.3 mill EASY. 1.3+ (if on a premium lot sky is the limit)

You haven’t been heavily into the scene Garth.

And prices in the North GTA are going a lot HIGHER in 2017, a little interest blip here or there means nothing.

And with the WITHERING LOONIE Richmond Hill, Vaughan, Aurora are GOING UP BIG TIME even faster in 2017.

North GTA is safe, pretty, nice shopping and GREEN.

…and CHEAP from in’t perspective, especially with the Loonie falling fast!!

Other areas that can’t attract extremely motivated buyers? Perhaps not so much. Sorry Regina.

(Not a realtor, just a seller/buyer)

#38 Tony on 12.23.16 at 8:28 pm

Re: #13 Self Directed on 12.23.16 at 6:45 pm

With the Canadian dollar set to take out its low of 62 cents some time in the next couple of years the price of almost everything except real estate will go a lot higher.

#39 Smoking Man on 12.23.16 at 8:34 pm

#27 Scully on 12.23.16 at 7:51 pm
@24 – Smoking Man
Oh I’m doing something I’ve never done in my life, signing up for a political party.

Oleary stepping into the ring… He can’t do it with out alien assistance
—————————————————————

Go for it Smokey! You can be Canada’s Kellyanne Conway…only sexier ;)

…..

Don’t know about sexier, got the penthouse suite at Seneca for the last 3 days. The room is bigger than my house. Lots of full length mirrors, I come out of the jacuzzi in my room and I saw myself. Full frontal nudity.

Obviously the water was cold, what happend to my big bicepts, like spegety now, I don’t remember swallowing a giant beach ball, the gut is big and hard I can use it as a drink rest, always the optimistic.

Those grey hairs that I keep shaving off my chest grow faster than the plaque on my few remains teeth.

Only thing sexy left on me is my mind. What you wearing tonight?

Merry Christmas the truth is out there. Finding it not as much fun as looking for it.

#40 Brian on 12.23.16 at 8:36 pm

CAD will drop to 65 cents. Foreign money will pick up more CAD RE as its on sale. Globalization continues to squash the locals. Merry Xmas

#41 Pete on 12.23.16 at 8:54 pm

“Thank you for being a voice of reason when the pressure to buy is nearly unbearable.”
—————————————–
Does anyone actually feel pressured to buy real estate? I guess that those who feel that it is a good idea feel pressure to get into it A.S.A.P. For those like me who know enough to steer clear of RE, I’d assume that one would just shake their head and chuckle when confronted by someone espousing the glory of buying one’s own home and all that home-ownership entails.

#42 NoName on 12.23.16 at 8:56 pm

Interesting read

In a letter to investors this month, Mr. Ackman disclosed that through the end of November, the fund had declined 13.5 percent this year after accounting for fees. (Pershing Square Holdings shouldn’t be confused with Pershing Square L.P., Mr. Ackman’s hedge fund, although the two vehicles have the same investment strategy.)

That’s obviously a big disappointment, considering the Standard & Poor’s 500-stock index was up 7.6 percent over the same period. But that’s not what some big investors were complaining about to me this week.

In the same letter, Mr. Ackman reported that during the nearly four years since it began, Pershing Square Holdings had gained a total of 20.5 percent. That would be considered mediocre at best, considering the S.&P. 500 gained over 67 percent during the same period.

http://www.nytimes.com/2016/12/22/business/hedge-fund-fees-returns.html?emc=edit_dk_20161223&nl=dealbook&nlid=65508833&ref=dealbook&te=1&_r=1

#43 OffshoreObserver on 12.23.16 at 9:08 pm

Merry Xmas, Fools!

Re: Garth’s “180”: The following seems to corroborate that view: http://www.caseyresearch.com/articles/the-trump-years-rebuilding-our-hollowed-out-economy

#44 Silver on 12.23.16 at 9:13 pm

clearing my head for Christmas…

120,000 plus hostages leave rebel Aleppo for government safety…
to join the million+ other free inhabitants of Aleppo…

Syrian democracy rebels whom the west demanded the Syria Government give safe passage from Aleppo to
… brutally execute all their captives before leaving to safety. (100+)
many had their heads cut off. just like they did when they took over Aleppo to anyone who disagreed with them…
don’t you just love moderate democracy in action…

Free |Syrian Army wishes to thank Canadians for their support in creating an Islamic State.

the Syrian government responds…
… by putting Christmas trees up in Aleppo and feeding people with the food…

..that the very fat rebel leaders(look at all their starving bellies) stored and kept from the hungry/starving people in the east Aleppo’s hospitals/warehouses…
… along with their mountains of ammunition and bomb making materials, and of course all the missing medical supplies they didn’t have.

it is kinda funny no members off the fake “white hat” aid group have been found anywhere in aleppo. guess after they cut of the heads of the Syrian soldiers they left…. as well. Zinka Brigade group. they cut off the head of a thirteen year old palisinian kid and took selfies doing it.
we want to give tow missiles and more to this group.

sorry Garth but this had to be said.

you can remove if you wish.

now
…on the trueley big plus side…
Christmas celebrations return to Aleppo for the first time in 5 long bloody years…
and the Real Moderate Muslim’s are front and center in promoting it, and setting everything up for the Christian groups.

Christmas in some form or another has been celebrated for more than a thousand years in Aleppo…
I have waited 5 years to see it return to one of the oldest if not the oldest inhabited city in the world.

Aleppo has been crushed many times and always been a secular city and will be again.
for me the best present every is watching the unity that can be achieved under the worst of times.

Merry Christmas all.

Silver

#45 Terry on 12.23.16 at 9:17 pm

Merry Christmas Garth, Ryan & Doug and all the best for the New Year!

Regards,

Another Deplorable

#46 Smoking Man on 12.23.16 at 9:18 pm

Modified the lyrics to Deplorables. T2. Prime minister butts.
You next on my shit list… Got a JD inspired song for you freeks.
………

Do you hear the people sing?
Singing for all Americans!
It is the music of a nation
That will not be sold again!
When they lie right to your face
and they call you deplorable
We will stand for America
When November Comes!

Will you join in our crusade
And kick the crooks out of DC?
Beyond the crony deals,
Is there any integrity?
Then join in the fight
Make America Great with me!

Do you hear the people sing?
Singing for all Americans!
It is the music of a nation
That will not be sold again!
When they sell out all our jobs
Bribing them from across the sea
We will stand for America
When November Comes!

Will you stand with law enforcement
Who are asked to do too much?
Rebuild our manufacturing
That made our country great?
Make our borders secure and
Build unity in place of hate?

Do you hear the people sing?
Angry for all Americans!
It is the music of a nation
That will not be sold again!
When they divide us by our race
So they can make us fear ourselves
We will stand for America
When November Comes!

Will you salvage failing schools
So that communities can heal?
and restore the broken cities
That have lost vitality
so mothers with children
Build lives without poverty?

Do you hear the people sing?
Joyous for all Americans!
It is the music of a nation
That will not be sold again!
The shining city on the hill
Will again be our destiny
We will stand with Donald Trump
When November Comes!

#47 acdel on 12.23.16 at 9:25 pm

Gen X rocks; those who do not get it; too bad!

Ha, Merry Christmas Gen-Exers! Life is good!

#48 Capt. Serious on 12.23.16 at 9:25 pm

I have a feeling the Trump presidency is going to present quite a few nice buying opportunities. Tweet this one week, tweet that the next week. It’ll be fun.

#49 Ret on 12.23.16 at 9:26 pm

#3 “… while we got you over the barrel.”

You will pay the renewal rate that the bank demands or you will lose your house and be humiliated in front of all your friends, family and colleagues.

Pay the piper or we trash your credit rating. You won’t like public housing and will be lucky if you can drive a clapped out ten year old Kia down to the food bank.

Those bankers have no heart.

#50 Smoking Man on 12.23.16 at 9:28 pm

To all the people that think they are journalist at the Toronto Star.. Zombies as I call em. A teachers success story…

I dedicated this tune to your mental disorder.

https://youtu.be/6Ejga4kJUts

#51 SWL1976 on 12.23.16 at 9:34 pm

Thanks for another informative and entertaining year of writing Garth. Haven’t missed a blog post, but rarely seem to find the time to comment these days. Doug and Ryan are a welcome addition with the Saturday post.

I recently pulled some money out of the markets and decided to invest in family and set us up with a nice little pizza shop. We are now the proud owners of an independent pizza shop here in a small town on the west coast.

Merry Christmas to all the blog dogs out there, and all the best in 2017. It’s looking to be anything but boring. Perhaps I’ll find some more time to join in on the conversation.

Cheers!!!

#52 Smoking Man on 12.23.16 at 9:40 pm

In my eyes this loser was right up there with Nictonite Tesla.

https://youtu.be/SmVAWKfJ4Go

#53 espressobob on 12.23.16 at 9:46 pm

Taking profit is the whole point of investing. Why would anyone do otherwise, unless their trying to prove Something?

Actually it’s called rebalancing.

If it was as easy as some proclaim including professional fund managers what did the rest of us Miss?

#54 BS on 12.23.16 at 9:54 pm

Yes, with RSI near 70, 74% of stocks in SPX above their 50-day moving averages, and the VIX at 11, all this signals an overbought and exhausted market.

History shows a stock market pull back about inauguration day to continue for several months after. I bet we see a 10% plus correction that lasts 6 months or so. Then a multi year bull market you will not want to miss. Bonds are the buy right now. For stocks wait till summer.

#55 Maj on 12.23.16 at 10:05 pm

#24 Smoking Man on 12.23.16 at 7:32 pm
“Oleary stepping into the ring…”

So, you like turkey for PM?…
http://www.nationalobserver.com/2016/01/26/news/real-and-shocking-story-kevin-olearys-business-career

#56 Context on 12.23.16 at 10:15 pm

#25 Ace Goodheart:- Your car story reminds me going to Georgetown as this poor greenhouse farmer had a financial statement that sucked and needed a mortgage on his mother’s house. He grew roses and plants for the florists trade in Toronto. I saw this cool car parked and inquired who it belonged to and the young farmer said its mine – a brand new Bricklin!

#57 Bottoms_Up on 12.23.16 at 10:16 pm

#20 palfa on 12.23.16 at 7:26 pm
——————————–
Too bad the reporting is so bad, cause the real news is way more interesting.

That 5% ain’t no raise. It is an increase in salary so that wages do not fall behind inflation.

Looking at CPI numbers, it is clear inflation is running at 1.5-2% per year since 2014.

As the unions negotiate a 4-year deal, at the bottom rate (1.5% per year), a 5% wage raise in a 1.5%/yr inflationary environment leads to wages actually falling behind inflation over 4 years.

#58 Arnold Ziffle on 12.23.16 at 10:18 pm

Trump moving residence to Nuclear Silo near Fort Knox..all Fort Knox Gold will become radioactive after Putin lays nuclear egg…..Putin(Gold Finger) is mad at Trump…he wants Fort Knox Gold…Hillbilly…want to get in Silo they are mad….because Trump locked the door…only him and his cabinet are safe inside….rest of the peeps cluding hillbilly…outside in nuclear fallout…have radiation sickness now…..but no more pimples on Bills face

#59 Ace Goodheart on 12.23.16 at 10:38 pm

RE: #45 Smoking Man:

“Do you hear the people sing?
Singing for all Americans!”

Yup with “the Donald” who has apparently decided he wants to re-start the cold war. So we all get to learn about nuclear winters and fall out shelters and mutual annihilation again, just like children in the 1960s and 1970s. I am fortunate enough to have survived this era in history and I still remember being terrified of nuclear war. We lived with the fear every day of our lives.

Honestly I am completely tired of politicians. If they are really going to put my kids through another cold war and another life long fear of death through nuclear destruction, we need a new system. Ours is not working. The whole government by the children of the wealthy, through rigged elections is just finished. We need to clear this mess out. I am not going to watch as my kids have their lives ruined by another nuclear arms race. This is going to stop. Now.

#60 DM on 12.23.16 at 10:41 pm

#5 Mike – Even Calgary/Edmonton SFH haven’t budged much even though economy is in dark there. Yes, really….

The darkness in Alberta has just started Mike. There are two massive construction projects that are keeping Alberta just above the waterline. The Northwest Upgrader and Suncor’s Fort Hills Project each employs thousands of construction workers and most of them will be laid off by June. The Great Alberta Garage Sale will commence in January 2018.

#61 CONFUCIUS on 12.23.16 at 10:49 pm

DELETED

#62 Smoking Man on 12.23.16 at 11:07 pm

https://youtu.be/ohOtDA3dTAA

To drunk to type

https://youtu.be/ohOtDA3dTAA

#63 Smoking Man on 12.23.16 at 11:13 pm

The wife, with all her falts. Love her

#64 greyhound on 12.23.16 at 11:17 pm

“We’re figuring this thing has another year, 18 months or even two years to run before a more substantial correction rolls along…”

Systemic vulnerabilities have been rising for 8 years now. If US rates go to 4%, that’s 1.2 trillion in US gov. debt service. Every year. Everyone needs to consider that bonds, stocks and real estate can all go down together at the same time, just as they have in the past. And a reversion to the mean (or past it) might come sooner than another year, 18 months; stuff could get serious. Lightening up market exposure a tad isn’t the worst idea.

#65 acdel on 12.23.16 at 11:59 pm

#60 Smoking Man

Gen X rocks; only us get it for our time; Merry Christmas!

#66 Something has to give... on 12.24.16 at 12:15 am

First, thanks for what you do Garth et. al.

Second, agree with Ryan. Same conclusion a few weeks ago that I posted. Trump market euphoria with no substance. A repeat of the Tech Bubble Bust of the early 2000s.

Third, sputtering economy continues (Oct. – 0.3% GDP). Everyone talks %’s which is utter BS.

I look at dollars, which you can spend and invest unlike %’s. Here is our GDP last few years in US $ billions:

2012 = $1824.3
2013 = $1837.4
2014 = $1783.8
2015 = $1550.5
2016 = $1239.6 (to the end of October, annualized)

Since and versus 2014, US $0.78 trillion has disappeared from GDP.

That, is a lot of cash out of the economy. Probably why borrowing levels are so high [to maintain lifestyle] and asset bubble investing has gone haywire [a quick way to make up for the lost cash].

Something has to give with that much money out of the system.

When and what will happen, who knows…but it will happen and it will not pretty.

bsant

#67 acdel on 12.24.16 at 12:16 am

Joyeux Noël from a red neck in Alberta.

https://www.youtube.com/embed/GBaHPND2QJg

#68 When Will They Raise Rates? on 12.24.16 at 12:31 am

#57 Ace Goodheart on 12.23.16 at 10:38 pm

RE: #45 Smoking Man:

“Do you hear the people sing?
Singing for all Americans!”

Yup with “the Donald” who has apparently decided he wants to re-start the cold war. So we all get to learn about nuclear winters and fall out shelters and mutual annihilation again, just like children in the 1960s and 1970s. I am fortunate enough to have survived this era in history and I still remember being terrified of nuclear war. We lived with the fear every day of our lives.

Honestly I am completely tired of politicians. If they are really going to put my kids through another cold war and another life long fear of death through nuclear destruction, we need a new system. Ours is not working. The whole government by the children of the wealthy, through rigged elections is just finished. We need to clear this mess out. I am not going to watch as my kids have their lives ruined by another nuclear arms race. This is going to stop. Now.
———————–

You have it backwards. It’s the likes of Bush, Obama, Hillary and their globalist/neocon/deep-state handlers that are intent on starting war with Russia. Turn off the TeeVee and lay off the propaganda for a while (CBC, Global, WaPo, NY Times, CNN, ABC, NBC, FOX, MSNBC, etc..)

Yes, I’m aware of the tweet you just based your entire argument on. You fail.

#69 Pete on 12.24.16 at 12:45 am

Ace Goodheart “we need a new system. Ours is not working. The whole government by the children of the wealthy, through rigged elections is just finished. We need to clear this mess out. I am not going to watch as my kids have their lives ruined by another nuclear arms race. This is going to stop. Now.
———————————————
I agree. Now, what are the people willing to do about the system? The International Tribunal into the Crimes of Church and State has already disestablished the authority of the Canadian political system, the genocidal churches, and the House of Windsor but the people have failed to grasp the significance and have continued to carry on as if nothing has changed. You can see how powerful peoples allegiances are to those who claim a legitimacy to their rule over others.

#70 When Will They Raise Rates? on 12.24.16 at 12:47 am

#61 greyhound on 12.23.16 at 11:17 pm

“We’re figuring this thing has another year, 18 months or even two years to run before a more substantial correction rolls along…”

Systemic vulnerabilities have been rising for 8 years now. If US rates go to 4%, that’s 1.2 trillion in US gov. debt service. Every year. Everyone needs to consider that bonds, stocks and real estate can all go down together at the same time, just as they have in the past. And a reversion to the mean (or past it) might come sooner than another year, 18 months; stuff could get serious. Lightening up market exposure a tad isn’t the worst idea.
————————

Before they let that happen (assuming they don’t want the system to collapse in order to blame it on Trump), they will simply step in and do massive QE, followed by helicopter money if necessary.

If they let the US 10 year get to 4%, its a controlled demolition.

#71 jane24 on 12.24.16 at 2:18 am

Well the horrible freezing wind off Russia has been replaced by a warm wind from Spain here in the South of England. Scotland getting spanked by the storm you had a few days ago. Bookies are not taking bets on a white Christmas, more often a white Easter on this crazy weather island, but on whether or not Christmas Day will beat the plus 14 degree record set in the 1920’s. Have £5 on this one but £20 on Marine le Pen winning France in the Spring. Adds interest to life. Oh the daffodils are up in the garden. Well enough of that.

2017 will be a very very interesting year as us deplorables reclaim more countries from that global elite. Even the BBC which is left wing, now refers to the ‘global elite’ totally missing the point that it includes them. Be ready for the totally unexpected happening. Bet against everything that has worked for the last 20 years and you will do fine. I agree with Garth that interest rates will go up a lot faster than they went down, so get long term on everything and pay off as much as you can. There will be a tipping point where safe interest is more attractive than risky stocks and the markets will go down. They are indeed ahead of themselves right now. It is a fast changing world but maybe not a happier one. There sadly will be terror everywhere but we will go on.

Merry Christmas fellow dogs. Woof. God bless.

#72 stage1dave on 12.24.16 at 2:22 am

I’m in Banff tonite (actually for the last week) working my ass off, and it certainly isn’t the best place to be pondering Canada’s RE insanity…even the prices in nearby Canmore give a person pause.

I do get the impression that a lot of residents in this area haven’t had to worry about money for quite some time, and most of the sidewalk traffic is tourists taking pics of very well-fed Magpies (who no longer have any fear of human beings, btw) and/or of their just-purchased ice cream cones…really, I’m not making this up. I’m also going to assume these peeps are not worried about money (or housing back home) either; knowing what the hotel rates are at up here.

However, I was down in Calgary on wed and ran into several tradesmen (all homeowners) who were filling me in on the deteriorating work situation, and all agreed that the housing prices are proving fairly sticky so far regardless. I got the impression they’re waiting for the next shoe to drop…while hoping the work situation picks up.

Not too much price movement in Edmonton either, tho the rental rates are sure comin’ down! Lots of “incentives” too…what’s next, “smokers welcome?”

Traffic seemed to be the one constant…no matter how bad the economy gets, the traffic is always a bitch…

#73 Stock Picker on 12.24.16 at 2:31 am

A 3 to 5 % correction wouldn’t last five minutes. This Trump Juggernaut has years to run. One word about relaxing the repatriation of offshore profits will burn like rocket fuel. There’s trillions of dollars in line to be repatriated. With Trumps tax cuts and relaxed regulations the PEs we see today will easily triple before any sign of a flame out. We see RSI go way past 70 plenty of times….it’s an indicator…one of many…not a law….especially when contributing factors are as brazen as we see…..don’t bet against a major macro trend friends. Don’t think about the Obama economy….that’s all behind us….change your thinking right now or get left in the dust. I have six giant picks for 17…but in deference to Garth and his balance. I will hold my tongue.

#74 westcdn on 12.24.16 at 4:20 am

Smoking Man – why do I like you? Keep posting.

#75 DoomandGloomer on 12.24.16 at 8:24 am

Vaughan, “The City Above Toronto”, as it had been marketed in the past, is actually a clone of what the real Toronto used to be 50 years ago:

White-Jewish-Italian.

It is made up of ex-Torontonians of primarily italian and Jewish heritage (who originally built Toronto), and their offspring (2nd generation), who bought their first homes in Vaughan back in the good old eighties (for around $80,000 – $100,000).

It’s one of the better suburbs in the GTA. Close proximity to the city, and with a new subway line that will have stops right in it. It will be the only Toronto suburb directly linked to the subway system. Real estate values along the Yonge St. corridor, Bathurst St., Centre St., and Hwy. 7 will continue to soar.

$1.1 million for this typical Vaughan house will seem like a bargain in 10 years.

#76 maxx on 12.24.16 at 8:43 am

A very Merry Christmas Garth and dawgs!
Best wishes for a wonderful New Year, filled with happiness, health, optimism and opportunity.

…….whilst keeping your eyes open and your powder dry.

#77 crowdedelevatorfartz on 12.24.16 at 8:55 am

@#64 acdel
“Joyeux Noël from a red neck in Alberta. ”
********************************************

True Alberta Blue rednecks wouldnt know how to spell “Joyeus Noel”. Or admit to eating quiche.

Admit it ,you’re a Quebec spy sent to infiltrate the barren wasteland of Ft mac
If they question your slight accent.
Tell people your from Mexico.
Feliz Navidad

#78 crowdedelevatorfartz on 12.24.16 at 9:02 am

@#69 Stage one Dave

When I lived in Cowtown in 1980 and we drive out to canmore on the weekends to camp/hike/party up in the Spray Lakes it was a truck stop and small train station on the side of the Highway.
Population 25 hardy souls……….

The winter olympics ruined it.
A snobby chi chi place with faux log cabin construction , coffee shops, and trendy shops.
Vancouverite, latte sipping, Robson St Starbucks snobs with their yappy little lapdogs would be right at home there.
What a shame.

#79 traderJim on 12.24.16 at 9:03 am

#57 Ace

As someone else mentioned, you seem confused.

The lefty media narrative is that Russia rigged the election in FAVOUR of Trump, not against him.

It was Hillary and her war mongering pals who wanted to confront Russia in Syria, starting by creating a no-fly zone that would have meant American planes shooting down Russian planes…also known as war.

And that war was to be fought by America on the side of ISIS…and people say Trump is the crazy one?

My only fear about Trump is that he will go against his better judgement and be convinced by the massive defense industry lobby to keep meddling in the middle east.

Trump may be the only hope to get America the hell out of there and let the Sunnis and Shiites continue to slaughter each other for another 5,000 years and leave us out of it.

#80 maxx on 12.24.16 at 9:04 am

“#30 Smoking Man on 12.23.16 at 8:05 pm

Couple in there 80s dancing up a storm. They still look at each other through 19 year old eyes. Moving like their 19 just a bit slower. Cute.”

Getting all sentimental on us Smoke? Suits you!

#81 Deano on 12.24.16 at 9:22 am

The market may correct or it may not, I really don’t listen too hard to the predictors. I’m in it for the duration and I buy equities whenever I have spare cash. It really does work, been doing this since the mid 80’s.

Smoking Man:
I bought and read your book. It was a short and entertaining read. One thing I noticed was that your grammar and spellin’ got worse in the final third of the book. Intentional? Or were you hitting the bottle hard to finish it? Anyway, I commend you on your first book..

#82 A belieber on 12.24.16 at 9:22 am

‘Yo,’ I said, festively, ‘wassup, dude?’

This was just painful, please don’t Garth. If you need to appeal to a younger audience (like under 65) I can help you out with a few articles.

Never been in our men’s room, have you? — Garth

#83 Derek R on 12.24.16 at 10:00 am

Been a little while since I last distributed the GarthFAQ. So here, once again, is a link to help anybody who isn’t sure who [email protected] is, or whether they should worry because their Lucheses don’t shine.

The GarthFAQ

#84 conan on 12.24.16 at 10:02 am

Trump hails new arms race in a nuclear sort of a way.

More of a maintenance security issue. You think old jet fighters are a PITA to deal with………

#85 Capt. Serious on 12.24.16 at 10:28 am

2017 will be a very very interesting year as us deplorables reclaim more countries from that global elite.

Oh, you mean like Trump, who has proceeded to stock his cabinet with business elite? Yes, that will turn out so much better for the average person.

#86 Debtslavecreator on 12.24.16 at 10:45 am

#3- I second everything you said
Mortgage credit is tightening very fast
And so it should – there are too many morons who are on the edge of bankruptcy who just want to keep taking on more and more mortgage /HELOC debt at record low rates with nominal and real house prices at record highs
We need a sharp correction and we will get it
Many people smarter than me expect 5 year fixed mortgage money to cost 4-5% by summer 2018

#87 LP on 12.24.16 at 10:46 am

#77 maxx on 12.24.16 at 9:04 am
“#30 Smoking Man on 12.23.16 at 8:05 pm

Couple in there 80s dancing up a storm. They still look at each other through 19 year old eyes. Moving like their 19 just a bit slower. Cute.”
***********************************
That may be the greatest thing he’s ever written. I found it romantic.

#88 conan on 12.24.16 at 10:46 am

“Trump may be the only hope to get America the hell out of there and let the Sunnis and Shiites continue to slaughter each other for another 5,000 years and leave us out of it.”

When you think about it…..America super sized their Latin American destabilization strategies and used them in Ukraine, Libya, Syria, and Iraq.

One problemo, blow back……lots of it. We screwed around with people who are known to keep grudges for thousands of years.

America has made their bed in the ME and they did it in the most incompetent way imaginable. They have created a “clear and present danger” to themselves and to the rest of the civilized world.

I don’t think Trump can fix this. He could partner up with Putin and say together lets fix this poo, but Putin might have some grudges himself. Ukraine was a bit of a slap in the face, don’t you know.

#89 NoName on 12.24.16 at 11:05 am

Merry Christmas

Asia Monet – Mary, Did You Know?
https://youtu.be/3fLhw9XiQqs

#90 crazed and a little confused on 12.24.16 at 11:18 am

Hi home people
long time reader here., well I missed the housing gravy train. I was outbidded for last 2 years im just looking for a 2 bed place to live not invest. It’s at nose bleed prices in the lower mainland. I think about $430k. Im not talking about down town Vancouver. We are talking new west , burnaby
anyway, I had dinner with friends and they encourage d me to buy because its always a good time to buy real estate. One guy has 2 condos and living with mom. While his brother has 3 condos and living with his girlfriend so 2 guys 5 condos.

im not going to even try to explain stocks snd investment have doubled or tripled in 10 years ; however yes I do agree gold is down 50_ 70%.

Oil is down 30_50 % I let 1 gold stock gold awhile ago eo I kept the gains there and let 3 commodities go as well early.
But still in negative in 1 gold and 2 oil. So I’m definitely not perfect.
my others are doing great I bought time Warner in the 40s and sold at 74 recently waiting for a pull back . But it might not happen because it at 95 now.
I still have time Warner cable which is now charter communication. That is over 3x my original purchase. My manulife has doubled and pzifer over 2x. You notice its mostly in US $$$.
I let some of early investments go and bought CAN etfs anf reits. My etfs are breaking even about 4.38% dividend yield and reits are down 30 % a 5.6% dividend giving me a monthly income. So again im not perfect
I follow the 20, 30 , 50 rule
20 in gic and money market
30 in mutual funds US/CAN
50 in US stocks and CAN Etf/ reits
im 46. Might be single forever given the house lust here

#91 Julie K. on 12.24.16 at 11:24 am

Cash is King.

And Queen!

#92 WUL on 12.24.16 at 11:33 am

That was fun. Worked out on the Cross Trainer Fitness Machine* four times in the last 24 hours. Over doing it at the age of 60 in Cowtown.

* Snow Shovel.

It is coming down here and it is beautiful. What a nice city.

#93 Tim P on 12.24.16 at 11:33 am

Garth, thanks for your daily ‘present’ of wisdom. You are ‘our’ Santa, all year long.
Merry Christmas

#94 jess on 12.24.16 at 11:44 am

“Ellard declared, arguing that the leaker, now a fugitive in Russia, would have received the same protections as other NSA employees, who file some one thousand reports annually to the agency’s hotline. “We have surprising success in resolving the complaints that are brought to us,” Ellard said, adding, “Perhaps it’s the case that we could have shown, we could have explained to Mr. Snowden his misperceptions, his lack of understanding of what we do.”
===============================
what snowden feared was true?

“The official finding that Ellard retaliated against an NSA whistleblower, the credibility of Ellard’s argument that Snowden could have come to him is gravely undermined.”

http://www.pogo.org/blog/2016/12/intelligence-community-landmark.html

Whistle-Blowers Spur Companies to Change Their Ways

Fair Game

By GRETCHEN MORGENSON DEC. 16, 2016
http://www.nytimes.com/2016/12/16/business/whistle-blowers-corporate.html?_r=0

The Justice Department recovered more than $4.7 billion through False Claims Act cases in fiscal year 2016—a sizable increase over last year’s total, and the federal government’s third highest annual fraud recovery ever. pogo

#95 Ace Goodheart on 12.24.16 at 12:09 pm

Re 76 trader Jim:

Why the nukes then? Who does he think he needs to use them against? North Korea could be put in its place with a single strike. Only reason they don’t do that is the body count. Who does Trump want to get into an arms race with? There is only Russia.

#96 Russ on 12.24.16 at 12:32 pm

Feliz Navidad to Alpha dog, Dorothy, Bandit and the rest of his pack.

Tell Pete I haven’t spent much time away from the beach so I still don’t know the gas situation in Mexico.

And to Maxx, it’s too bad you were triggered by me pointing out your mistake and getting your name wrong.
You should have called me “Rus”. Now that would have been witty.

Cheers, R

#97 Context on 12.24.16 at 12:45 pm

#92 Ace Goodheart:- Trump is a wild card and can’t be read and might not have both oars in the water. He made a lot of promises to game the election telling the voters what they wanted to hear. Nothing makes sense about this man and he’s just a blowhard without a direction.

#98 };-) aka Devil's Advocate on 12.24.16 at 12:51 pm

Very strange year behind us and likely more of the same ahead.

Did I mention I am working with a disproportionately large number of buyers with no indication that supply will loosen up any time soon? Supply and demand. Last Spring things took off right out of the gate and I fully expect the same will be the case this Spring as buyers anxiously await the Spring supply which, likely, will not materialize.

No one is selling unless they have to for, if they were to sell, what would they buy?!? Supply and demand.

Crazy as this market is I don’t see any end in sight. Nothing lasts forever but this market is probably going to continue for a lot longer than you and I think it should.

#99 Shawn on 12.24.16 at 1:00 pm

http://www.macleans.ca/economy/economicanalysis/canadas-housing-market-looks-a-lot-like-the-u-s-did-in-2006/

Interesting article with some great charts.

#100 Penny Henny on 12.24.16 at 1:03 pm

Listed for $749,900 and sold for $1,265,000.

http://gtasoldview.com/Form/public/SoldResult.aspx?tfm=1&HouseSoldId=327217627

What is shocking though is last spring this basic bungalow would not have cracked a million.

Oh and thanks again to the person who posted this website on here (GTA sold view). It helps with my housing porn addiction.

#101 Bram on 12.24.16 at 1:05 pm

Hey Garth,

Third graph on this page should tell you a lot about the expected changes in interest rates.

http://www.macleans.ca/economy/economicanalysis/75-charts-every-canadian-should-watch-in-2017/

#102 AB Boxster on 12.24.16 at 1:12 pm

Reading through local paper and found the following ad from ReidBuilt homes:

Buy a New Home WITHOUT a Down Payment.

“Saving for a down payment on a home may be the most difficult financial task in your life.
Reidbuilt Homes is here to help , by offering 2 and 2 year lease options.”

So essentially rather than buying a house, ReidBuilt Homes will lease it to you for 2 or 3 years, with the option to purchase after the lease ends. Monthly lease payments include savings that go to towards your down payment. At the end of the lease term you use the saved down payment to purchase the house.

So, I guess if you can’t actually save the down payment for a house by putting a certain amount away each month, a mucho better idea is to lease a house for 2 or 3 years, and they will put it away for you. Wow, what a deal.

Builders in Alberta getting desperate?

#103 jess on 12.24.16 at 1:27 pm

uk- amendment would ensure that the UK’s Overseas Territories introduce public registers of beneficial ownership by 2020
=========

How Deloitte squeezes millions out of Government: City’s most rapacious accountancy firm is banned from Westminster for toxic Brexit memo

By Ruth Sunderland for the Daily Mail

Published: 21:51 GMT, 21 December 2016 | Updated: 21:51 GMT, 21 December 2016

Read more: http://www.thisismoney.co.uk/money/markets/article-4056032/How-Deloitte-squeezes-millions-Government-City-s-rapacious-accountancy-firm-banned-Westminster-toxic-Brexit-memo.html#ixzz4TmSYscqw

and weren’t they the auditors of RBS?
Shredded: Inside RBS, The Bank That Broke Britain
http://www.ianfraser.org/shredded/

#104 Dan on 12.24.16 at 1:29 pm

Oil is going to be 80 bucks, comes spring. Pipelines gonna be build. So economy gonna to recover. What I learnt this year is personally devastating. I was considering myself left all my adult life and then I saw Clintons talibans who claim to be left. And actually they are liberals, that means worse than fascists, because fascists take care of their own and libs take care of themselves individually. So goodbye left wherever you are. Long goodbye on your travel through long dark night…

#105 Tony on 12.24.16 at 1:50 pm

Re: #70 Stock Picker on 12.24.16 at 2:31 am

I have no picks for 2017, anyone with half a brain would wait at least another six months to see how the rig artists on Wall Street perform with the upset victory of Trump (so far most of the old patterns have changed). As mostly a day trader I’m going to sit back and watch for probably about 6 months. I wait for opportunities to come to me not haphazardly chasing something on pure conjecture.

#106 Tony on 12.24.16 at 2:01 pm

Re: #69 stage1dave on 12.24.16 at 2:22 am

Laidley Property management in Edmonton has always welcomed smokers. Their vacancy rate in general presently is around 50 (fifty) percent for anyone that thinks real estate is sticky on the way down in Edmonton, Alberta.

#107 Polls R Phake on 12.24.16 at 2:31 pm

For all you Trump haters out there, we just got back from the US where we are forced to treat our son because the shitty Canadian systems wheels are years to grind and by then its too late.

Guess what? The Americans do not think so nicely of Canadas healthcare system anymore, and are happy they are in the USA and not here. They know it sucks. Merry Christmas.

#108 Polls R Phake on 12.24.16 at 2:35 pm

#82 Capt. Serious on 12.24.16 at 10:28 am
2017 will be a very very interesting year as us deplorables reclaim more countries from that global elite.

Oh, you mean like Trump, who has proceeded to stock his cabinet with business elite? Yes, that will turn out so much better for the average person.

____________________________________________

give your head a shake. Government has no idea what it is doing. Why not give business a go. You know? People that know how to make payroll, read a balance sheet, reduce spending. What a concept.

#109 Polls R Phake on 12.24.16 at 2:38 pm

#75 crowdedelevatorfartz on 12.24.16 at 9:02 am
@#69 Stage one Dave

When I lived in Cowtown in 1980 and we drive out to canmore on the weekends to camp/hike/party up in the Spray Lakes it was a truck stop and small train station on the side of the Highway.
Population 25 hardy souls……….

The winter olympics ruined it.
A snobby chi chi place with faux log cabin construction , coffee shops, and trendy shops.
Vancouverite, latte sipping, Robson St Starbucks snobs with their yappy little lapdogs would be right at home there.
What a shame.
_______________________________________

You sir are 100% correct. We lived in AB growing up and know the area well. All snobs in phake junk buildings now.

#110 Smoking Man on 12.24.16 at 3:25 pm

#78 Deano on 12.24.16 at 9:22 am
The market may correct or it may not, I really don’t listen too hard to the predictors. I’m in it for the duration and I buy equities whenever I have spare cash. It really does work, been doing this since the mid 80’s.

Smoking Man:
I bought and read your book. It was a short and entertaining read. One thing I noticed was that your grammar and spellin’ got worse in the final third of the book. Intentional? Or were you hitting the bottle hard to finish it? Anyway, I commend you on your first book..

…..

Hey thanks for buying it. Yeah lots of errors. Sorry. It’s getting proffecialy edited as we speak.

Once done, doing a paper back version. Revising the ebook.

To you all the blog dogs that bought my book. In Jan send me an email proving you bought it, I’ll ship you a paper back version, free of charge. I’ll sign it to if you like.

Thanks again…..

Merry Christmas everyone..

#111 Context on 12.24.16 at 3:34 pm

I have been a bad boy and need a spanking from P.H. to get me back on track. Merry Christmas P.H. and may all good things come to you in 2017.

#112 InvestorsFriend on 12.24.16 at 3:38 pm

Twisted Figures

#63 Something has to give… on 12.24.16 at 12:15 am said:

I look at dollars, which you can spend and invest unlike %’s. Here is our GDP last few years in US $ billions:

2012 = $1824.3
2013 = $1837.4
2014 = $1783.8
2015 = $1550.5
2016 = $1239.6 (to the end of October, annualized)

******************************
Just goes to show you can always find evidence to support whatever position you have. Doom in this case.

It’s Canadian dollars that are relevant in Canada.

Your figures in U.S. dollars are of no great relevance to most Canadians.

The Canadian economy in REAL terms of activity is limping along. It’s not declining rapidly as your figures suggest.

But, people believe what they choose to and seek confirming evidence accordingly.

#113 Grantmi on 12.24.16 at 3:58 pm

Merry Christmas to all the Blog Dogs…

Garth.. you are a national treasure! Day in… and day out.. since 2008 you’ve been pounding out these posts. Each one different from the last, insightful, brutally honest but also funny.

To you and yours, Garth-O! Happy Holidays!

Peace!

#114 ccc on 12.24.16 at 4:01 pm

“manipulative, morally-questionable, bait-&-switch, ethically-challenged, brilliant marketing plan…”
The above does not apply only to the RE industry. As much as I despise some of the players and the process one has to recognize that agent did the job he was hired to do. Sold the place for a nice chunk of $. BTW, VERY UGLY house for such price tag… the garage welcomes you, neighbors as near as stacked dominoes… hope the front at least faces south for some natural light. This particular one, a history of money divorced from taste.

#115 Euro observer on 12.24.16 at 4:01 pm

Enjoy it.

https://www.youtube.com/watch?v=-GUU7zt2t_g

#116 Mishuko on 12.24.16 at 4:58 pm

Gf in montreal for Christmas so I got fly over to stay the night.

The complimentary service was like beer wine juice coffee tea or water. Ask if they had pop and they like sorry no. Got a beer. Guy across from me got one too. Thank God I would have looked like a drunk.

Guy next to me. Middle aged guy in Calgary coming back to his wife and daughter. Didn’t want to sell his home cause it lost value. Mentions Mississauga and how the prices went from 200k to 700k in several years. I play dumb and sympathize. Nice guy making poor decisions.

Ran to the SAQ to buy some alcohol. Got myself a small Remy Martin since the other stuff ain’t good to drink neat. (Think JW red)…. need to leave for the airport at 510am.

Merry Christmas Garth.

SM, OG blog dogs, newer blog dogs. No love to the tree hugging socialists. I hope you get coal for Christmas.

#117 Mark on 12.24.16 at 4:58 pm

Its not so much the high P/E of the US market that scares me (well it does). Its the high correlation of the US economy to long-term interest rates and the financial sector that is of particular concern.

We know that during periods of rising long-term interest rates, the US market underperforms. 1960-1980 proved this, with interest rates going from low to high, and the Dow going nowhere. Canada’s TSE/TSX outperforming.

We also know that during periods of falling long-term interest rates, the US market outperforms. 1980-2015 has proven this. The US markets easily besting the performance of the TSE/TSX which looks awful in comparison.

So the correlation is pretty clear. Falling long-term rates = bad for Canada, good for the US. Rising long-term rates = bad for the US market. Better for Canada.

Since the Dow/S&P500 have P/E ratios dramatically in excess of that seen in Canada, despite a future of higher long-term interest rates, it logically follows that there’s a very serious valuation issue with the US markets relative to the Canadian indices.

The coming years should be very positive for Canada, and even if we see one last gasp of deflation in the US (which we may very well), the next few decades, relatively speaking, belong currently out of favour economies like Canada. Especially in equities, which will benefit not only from earnings growth in a higher rate environment (as opposed to earnings impairment south of the border), but also a rotation away from housing speculation.

On that note, Happy Holidays everyone. May your stockings be stuffed with XIU and VWO ETFs to top up your currently under-allocated balanced portfolios!

#118 Mishuko on 12.24.16 at 4:59 pm

Forgot to mention…. it was 9 am flight.

Lunch had sangria with the squeeze.

She has a sobriety requirement. So now I will be a goof ball and get chirped since I not smiling

#119 Euro observer on 12.24.16 at 5:00 pm

#104 Polls R Phake on 12.24.16 at 2:31 pm
For all you Trump haters out there, we just got back from the US where we are forced to treat our son because the shitty Canadian systems wheels are years to grind and by then its too late.

Guess what? The Americans do not think so nicely of Canadas healthcare system anymore, and are happy they are in the USA and not here. They know it sucks. Merry Christmas.

———————–

That’s right.

1. The health system is not free

– I used to pay 250 a month in addition to company contributions for extended health care that includes dental.

– When on contract/no insurance braces did cost over 6 k and the ‘specialist orthodontist’ ruined my kid’s teeth so they had stains and had to pay another 3 k to partially mitigate that, God/Allah knows ho much I will pay for cosmetics later on.

– decent root canal + crowns i over 2.5 k.

2. The health care system is pretty much useless in case of emergency.

I personally know several people who died of hearth attack/stroke due to inability to procure help around holidays, or long wait times.

I had to wait 7 (seven) months for tonsillectomy of one of my kids.

And I personally spent tens of thousands of US dollars going to the states for surgeries/procedures that are deemed not urgent/not covered by Ontario health system.

For example 8 k USD for laser treatment of vocal cords.

So Ontario/Canada is ‘great’ while healthy and young slave, satisfied with boredom/nothing to do except the malls while filling your stomach with complete crap.

Healthy lifestyle? Health system? What a joke!

#120 Vampire studies GMST 454 on 12.24.16 at 5:01 pm

Merry Christmas Garth and all blog dawgs, and a big shoutout to all in BC

#121 };-) aka Devil's Advocate on 12.24.16 at 5:03 pm

#99 AB Boxster on 12.24.16 at 1:12 pm
Reading through local paper and found the following ad from ReidBuilt homes:

Buy a New Home WITHOUT a Down Payment.

“Saving for a down payment on a home may be the most difficult financial task in your life.
Reidbuilt Homes is here to help , by offering 2 and 2 year lease options.”

So essentially rather than buying a house, ReidBuilt Homes will lease it to you for 2 or 3 years, with the option to purchase after the lease ends. Monthly lease payments include savings that go to towards your down payment. At the end of the lease term you use the saved down payment to purchase the house.

So, I guess if you can’t actually save the down payment for a house by putting a certain amount away each month, a mucho better idea is to lease a house for 2 or 3 years, and they will put it away for you. Wow, what a deal.

Builders in Alberta getting desperate?

The way I read that; the developer must have good faith in the market in two years being better than what it is now.

On the offer itself; without having read the terms and conditions, ingenious with potential for a mutual gain for both buyer and seller.

#122 Context on 12.24.16 at 5:08 pm

#104 Polls R Phake:- Polls what did it cost to treat your son and who paid? The so-called great USA healthcare system is about to change under a Trump administration so we shall see what comes of this all.

#123 Euro observer on 12.24.16 at 5:09 pm

More on the health system:
– insurance of 250 /month + company contributions was not sufficient so I had to pay in addition for almost every procedure in addition including dental.
– single primary care provider system sucks. You are pretty much at the mercy of your physician/family doctor to send your specialist.

If you have a serious condition and your family doctor does not send yo to specialist you either go to U and pay or maybe die.

– I had the chance to discuss the Canadian health care system with a US citizen/married to Canadian wife.
He had in the states insurance that allowed him for small co-pay (5-10 bucks) to seek the services of every health care provider he wants in greater Atlanta Area without the approval of a family doctor.

He was truly amazed how gullible and brainwashed Canadians are of their ‘free’ health care system. He simply said: I love my Canadian wife but she is simply brainwashed.

#124 TurnerNation on 12.24.16 at 5:14 pm

I guess the blog elves Doughie and Elfenza have this day off.

#125 };-) aka Devil's Advocate on 12.24.16 at 5:21 pm

#104 Polls R Phake on 12.24.16 at 2:31 pm
For all you Trump haters out there, we just got back from the US where we are forced to treat our son because the shitty Canadian systems wheels are years to grind and by then its too late.

Guess what? The Americans do not think so nicely of Canadas healthcare system anymore, and are happy they are in the USA and not here. They know it sucks. Merry Christmas.

As do most Socialist programs };-)

#126 Context on 12.24.16 at 5:23 pm

The Milliman Medical Index for 2016 USA shows the family of four medical cost at $25,826 per year of which $4,270 is for prescription drugs. Can you imagine these costs living in a high rise condo in Toronto.

#127 Euro observer on 12.24.16 at 5:28 pm

#122 };-) aka Devil’s Advocate on 12.24.16 at 5:21 pm

As do most Socialist programs };-)
———————–
Nothing to do with socialism. Germany is socialist. France is socialist. They both have excellent health care systems far superior to the canadian and free University education.

The great white brain-frozen north is a slave farm with few oligopolies owners of everything, where election of figure heads gives the impression of democracy.

#128 Freedom First on 12.24.16 at 5:43 pm

#30 Smoking Man

Yes. When I am in my 80’s I will still be dancing up a storm. However, she will be closer to 19 than to 80. That is something you will never understand.

Fan #33

#129 Ace Goodheart on 12.24.16 at 7:15 pm

RE: #94 Context:

That is what I am afraid of. Trump is not entirely sane (or completely insane). He has a very loyal following that does not question anything he does, but the man rules by cryptic tweets for cripes sake.

He wants to stock pile nuclear weapons, which will cost trillions of dollars to do (and he can’t borrow from China anymore, they are selling off their US treasuries), but he is friends with Russia. Putin sends him Christmas cards. Who is he going to war with?

Right now everyone’s either enthralled with him, or laughing at him.

Once he actually takes power, that will all change. Then we have someone who makes no sense at all, doing things for reasons that look like something out of Don Quixote.

I think the only thing controlling him right now is sometimes Melania gets the cell phone out of his hand before he sends out another bizarre message.

#130 I like cookies on 12.25.16 at 12:37 am

Shouldn’t post #80 be removed, per rule #7?

#131 JD on 12.27.16 at 10:32 am

The fact remains that we see sales go through in GTA and GVRD for RE priced well above 1 mil. Stats used to support assessment of our financially stressed position appears to be worth nothing! Buyers still pass the stress test and buy overpriced RE! I am starting to believe that all the facts about landing rate and seriously clipped buying power are not correlated to the new price norms in RE markets. Nothing stops folks to buy, this is really a mystery, that is not yet well explained. My friend listed T/H 25 y/o in Richmond and sold it in 2 weeks for 23000 above asking price being over 750K price range for less than 1500 Sq.ft. I am invested outside the RE market and being kicked by the same friends every time we talk and compare gains/losses in last 8 years. My point is such that even patient people can lose it, what about the ones that are growing up leaving through all this!? Not sure anymore that my course is right!
Dr. Herdonomics, what do you see and suggest?
Cheers