The mess

If you ever wonder why bother with a balanced portfolio, Tuesday was a good study. Italy kinda blew up (it does that occasionally) raising fears the Eurozone is pooched, which tanked stocks, roiled the currency markets and ensured a new election there just three months after the last one. The result may not be pretty.

So if you were a stock-only investor, especially with heavy US exposure, you lost about 2% of your dough. But if you also had a fixed-income component, including a variety of bonds ETFs, then things weren’t so bad. For example, corporate bonds popped higher (an ETF like XCB tracks those), as did short-term government debt (tracked by funds like XSB).

Why? Because when investors go risk-off, they dump equities and look for safe places to scuttle off to. Bonds do the job, so demand pushed debt prices higher and tanked bond yields (they move in opposite directions). Yields actually plopped everywhere, which threw into question some Fed interest rate hikes impacting the US dollar, which helped tank stuff priced in greenbacks, like oil and gold.

As for Canada? While the Dow was shedding 400 points, Bay Street was off just a quarter of that (in point terms), thanks in party to the fact we now own a pipeline, whether we want it or not. That jolted the energy sector, and helped make up for the fact we’re about to be screwed-over nicely on NAFTA by the Trumpster. (T2 issued a dire warning about many lost jobs late in the day.)

As for keeping your money safe in the bank, did you hear about BMO and CIBC’s spelling-challenged offspring, Simplii? Seems hackers made off with the personal data of tens of thousands of customers, which they intend on publishing unless a bribe is paid. Seriously. It sounds like a bad episode of a TV cop show – but it’s real. The stock of both banks didn’t like that much, down the better part of 2% on the session.

The last 24 hours have demonstrated what a weird world we have created. Now Trump says he’s going to meet with Mr. Bad Haircut in Singapore. The NDP is in danger of eating Ontario. May threatens to be the worst rutting season month in memory for Canadian real estate. Air conditioners in Toronto are croaking with summer is a month away, while Newfies shovel and the eastern seaboard is swamped. Roseanne was cancelled. And Alberta seems poised to invade BC, now that it’s won the backing of the federal Libs and a pipeline will be rammed through to the sea.

Yes, companies are making fat profits these days, equity markets are close to record highs and the global economy is expanding the most since the credit crisis. But the world has turned more volatile as protectionism (Trump), populism (Brexit), nationalism (alt right) and tribalism (now Italy) swing politics and whack economies. Little Canada is being caught in the swirl, which is one reason Ottawa took the dramatic and dangerous action of buying a pipeline company with $4.5 billion in publicly-backed money with the creation of a new crown corporation. Trade or die, baby. You can’t build an economy by selling each other condos.

Probable consequences include more equity market volatility, stronger bond prices and central banks backing off for a while. But the global macroeconomics look positive, so this is likely all noise. In sell-offs it’s usually the brave people out Hoovering bargains in the aftermath who do well. Retail investors who bail with the first glimpse of blood normally regret it. And the calm, disciplined people with balanced, globally-diversified portfolios snooze right through chaos. Remember that during the worst three years of our financial lives (2008-10) investors with a balanced 60/40 portfolio ended up making a positive 5% per year (on average), while all-stock investors suffered a 55% market decline and needed seven years to recover.

Italy could well turn into Greece and this could be 2001 all over again. Trump could just abrogate the trade deal with Canada and impose his 25% auto tariff, shutting down a lot of southern Ontario. Two-thirds of the Canadian economy could come to be indirectly controlled by big-spending/big-taxing Dippers who then cause a lot of 1%ers to take their money (and jobs) and split. Canada could descend into an internecine spat between the feds and the provs, with nothing getting built. All of these are reasonable threats. You can cower and embrace [email protected] with her lovely brain-dead, no-grow, high-tax GICs, or invest for the world in which we live.

Easy choice.

167 comments ↓

#1 Stan Brooks on 05.29.18 at 5:12 pm

Italy’s government debt is 131 % of GDP.

https://tradingeconomics.com/italy/government-debt-to-gdp

Italy’s private debt is 172 % of GDP

https://tradingeconomics.com/italy/private-debt-to-gdp

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

Canada’s government debt, including crown corporations and provincial debt is 90 % of gdp

https://tradingeconomics.com/canada/government-debt-to-gdp

Canada private debt is 267 % of GDP.
https://tradingeconomics.com/canada/private-debt-to-gdp

And we are just doing fine while Italy is doomed?

I don’t think so.

#2 joeph on 05.29.18 at 5:16 pm

So stock market down……..and inflation going up ,
so easy answer , buy a biggest house ever and take the mortgage with still low rates and you saved for inflation…
and governments loans will be deflated buy inflation….
easy….

#3 The Condo Economy on 05.29.18 at 5:21 pm

“You can’t build an economy by selling each other condos.”

Heh, that’s an awesome quote! Pure Garth. Love it.
Also, because it’s true.

#4 Private Debt on 05.29.18 at 5:25 pm

#1 Stan Brooks

My guess is that Canada’s private debt is shouldered by Canada’s much larger private wealth, compared to Italy.

#5 Pete on 05.29.18 at 5:25 pm

Is this as dire as you make it sound?

#6 Wrk.dover on 05.29.18 at 5:25 pm

Grand Master Garth on NS CBC supper hour news just now, explaining his bank.

Handsome well spoken fellow.

#7 Game Over on 05.29.18 at 5:26 pm

Just another day in bizarro world. The problem now is we are in this weird world of stagnant volatility because the world is in some kind of holding pattern. Sure, the economy is growing but there are no decisive events to the move the show along. Waiting on NAFTA, waiting on the EURO mess, waiting on interest rates, waiting on a pipeline, waiting on North Korea, etc., etc. The sooner we can reach outcomes, good or bad, the quicker we can move along. Just make a decision!

#8 joblo on 05.29.18 at 5:26 pm

Get your underwriting departments staffed Beh Street
New IPO on the horizon:
Sunny Ways Pipeline

#9 Andrewski on 05.29.18 at 5:30 pm

Easy choice for those who choose to look at life with eyes wide open & stay the course.

#10 conan on 05.29.18 at 5:32 pm

It sounds like a bad episode of a TV cop show – but it’s real. The stock of both banks didn’t like that much, down the better part of 2% on the session. – Garth

The internet is cool, and everything, but client information systems, of a financial nature need to be physically separated from the web. That means a human element making sure that happens.

Back office costs money, and cheap financial services, come with a very steep price if they get hacked.

I take it this why you bought your bank/bunker? A separate facility for critical client data?

#11 Terrie Rolph on 05.29.18 at 5:35 pm

And round, and round we go.
https://thetyee.ca/Views/2005/09/19/TerasenSale/

#12 Stan Brooks on 05.29.18 at 5:40 pm

#4 Private Debt on 05.29.18 at 5:25 pm
#1 Stan Brooks

My guess is that Canada’s private debt is shouldered by Canada’s much larger private wealth, compared to Italy.

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

Bad guess. but hey, keep trying.

Italy’s private wealth:

https://www.theguardian.com/business/economics-blog/2012/nov/27/private-wealth-discrepancy-heart-europe

Consider Italy, which has the highest ratio of private wealth to public debt of any G7 country, and is 30% to 40% higher than in Germany

You are confusing temporary asset valuations based on over-leverage of giant debt with wealth.
Is a person with 1.5 mil mortgage and 300 k equity in the house based on current house values wealthy?

Soon you will find out the truth.

Wealth through credit is not possible.

#13 espressobob on 05.29.18 at 5:42 pm

Buy low and rebalance high, never gets old globally speaking. Got it.

On another note it seems each of us Ontarians owe 22.7k based on provincial debt. Think that’s right?

That amount seems to become less relevant, dependent upon bourbon consumption. Burp.

#14 The Forecaster on 05.29.18 at 5:45 pm

Within 19 months the Canadian housing prices will be down another 30% nationally as a best case scenario.

Worst case by 2019: the greatest job loss since the great depression, which will lead to contagion in consumption and intensify home price values to drop 70-80% nationally.

#15 Reality is stark on 05.29.18 at 5:46 pm

They all love Sweden.
We need the NDP to create Canaswedenstan.
What is it really like for the young in Sweden?
Try getting a job. You need an education to become a cleaning lady or to work as a gas station attendant. Those jobs often take 6 months to land.
They are more tolerant people than Canadians but that gap is closing rapidly. It got them a rape epidemic.
Who got blamed, the rapists? No!
The young Swedish men (who generally are big and strong and now pretty tough as they adapt to North American sports expectations) are singled out for not policing the culprits on the side the old fashioned way.
These young men don’t feel like going to jail so they don’t intervene and just accept the criticism.
This is the kind of inanity that socialism creates.
Where do young Swedes want to go? America.
Watch some YouTube videos and get some perspective on what opportunity means to real people.
Canadians aspire to be Swedes because everything is rosy and free until reality sets in.
It is also not unkind to have decent expectations of people to perform and abide by our societal laws.

#16 The Technical Analyst, CSTA, CPD on 05.29.18 at 5:55 pm

Having a balanced, globally-diversified portfolio. Couldn’t agree more. Just watch out for ETFs and index funds, the liquidity is only so high and downside risks are greater than an active fund. That extra .3% in MER might just save you 5%.

Go Canada. Go O&G pipeline! There are a lot worse infrastructure projects Canada could have spent tax payer money on, a “toll pipeline” that is a necessity for growth is a good one.

Those wanting in on the action, see ticker: ZEO

#17 CHERRY BLOSSOM on 05.29.18 at 6:00 pm

I guess they have to cut the interest rate on the credit cards. Until the credit gobblers have just exhausted themselves.

Pipeine Plolitics: EPIC HISTORICAL BLUNDER: Goodbye Trudeau and Idiot Morneau

#18 The Technical Analyst, CSTA, CPD on 05.29.18 at 6:14 pm

Very happy and proud of our Canadian Government on purchasing the TransMountain Pipeline and balancing economy and environment as well as trying to please the majority of Canadians and grow our economy.

Canada is a rich natural resource Country, we owe it not only to ourselves but the world to deliver these products to market to make it better for all.

Well done Canada. We have a brighter future.

#19 Shawn on 05.29.18 at 6:14 pm

US small caps (IJR) were actually up today. How’s that for risk off?

#20 Adrian on 05.29.18 at 6:15 pm

XCB? XSB? where do those come in from your previous advice. the best matches for ETFs i could find based on your previous balanced portfolio advice are below. It feels like you are cherry picking the one bond ETFs that didn’t tank today, because ALL of my bond ETFs tanked today!

Asset Type Percent ETF
cash 2 N/A
Global and Canadian sovereign bonds 11 IGOV
Provinicial Bonds 3 ZPS
Corporate & high yield bonds 9 HYG
preferreds 15 HPR
Canadian equity and dividend 16 ZCN
REITs 5 XRE
US large cap equity 13 VV
US mid cap equity 3 XMH
international equity 17 XAW
emerging markets 6 XEC

#21 MF on 05.29.18 at 6:18 pm

#1 Stan Brooks on 05.29.18 at 5:12 pm

“And we are just doing fine while Italy is doomed?

I don’t think so.”

-I wouldn’t be so smug. The Eurozone will collapse at some point. Could be ten years, could be 50 -but its coming.

The effects will be felt worldwide of course, but they will be most acute in countries like Italy.

It won’t be debt levels, or GDP, but instead demographics and social upheaval that bring down the Eurozone.

I could be wrong but its not looking good. Not good at all.

BTW, I work with a few Italians from Italy who made Canada home. They all say the same thing: the corruption back home is off the charts.

MF

#22 Adrian on 05.29.18 at 6:22 pm

OK, garth I found your old post on it. you said:
Here’s the current thinking on balanced portfolio weightings, by the way: Cash, 2% (in a high-yield account). Global and Canadian sovereign bonds, 11%. Provincial bonds, 3%, Corporate and high-yield bonds, 9%. The preferreds (rate reset) clock in at 15%.

On the growth side, Canadian equity and dividend, 16%, real estate investment trusts, 5%, US large cap equity, 13%, US mid-cap, 3%, international 17% and emerging markets 6%. In recent months it made sense to take a little off the table in the US (obviously), while adding some to Canada (undervalued) and international (global growth is outstripping that of North America).

Which one of those percentages is XCB and which one of them is XSB???

#23 Samuel on 05.29.18 at 6:30 pm

WAIT, WHAT?! ROSANNE WAS CANCELLED?!

#24 Honey Dripper on 05.29.18 at 6:30 pm

Canada is the only oil rich sovereign nation on the planet without a state owned oil company.
We sold Petro-Canada and gave up our Canadian control.

Now, we own a pipeline and it’s cool. Let’s pair that with SU or CNQ and go full monty back to the future. Let’s reap the rewards of our own resources like the other oil rich countries do.

#25 Victor V on 05.29.18 at 6:33 pm

[BREAKING] The Maclean’s-Pollara Ontario election poll: The NDP lead keeps growing

https://www.macleans.ca/politics/the-macleans-pollara-ontario-election-poll-the-ndp-lead-keeps-growing/

A new online poll shows the NDP’s lead continuing to grow at the expense of both the Liberals and, increasingly, of the Progressive Conservatives.

With only nine days until the June 7 election, the poll by Pollara Strategic Insights gives Andrea Horwath’s NDP 43 per cent of the decided vote, up five points from the last such poll published here six days ago. Doug Ford’s Progressive Conservatives are at 32 per cent, down five points. Kathleen Wynne’s Liberals are at 17 per cent, down a point to a level that would represent a historic low in the Ontario party’s history.

The poll was conducted Sunday and Monday, beginning shortly before Sunday’s televised debate of provincial party leaders. Most respondents completed their surveys after the debate was over. “Momentum has continued to swing the NDP way post-debate, at the expense of the PCs and the Liberals,” Pollara Chief Strategist Don Guy said of his results. “About a quarter of the remaining undecideds have also moved, with the NDP doing well thanks to positive impressions of Andrea Horwath.”

#26 Alberta Ed on 05.29.18 at 6:34 pm

Let us all pray that the federal bureaucrats responsible for the Phoenix fiasco are not transferred to the pipeline portfolio.

#27 Shawn on 05.29.18 at 6:36 pm

I think the S&P500 goes to 3750 over the next 18 months

#28 Lee on 05.29.18 at 6:45 pm

Wynne is starting to look pretty good isn’t she?

#29 Smartalox on 05.29.18 at 6:48 pm

Didn’t the original Trans-Canada pipeline (built in the 1950’s) require some leve of Federal (Liberal) government finagling in order to get all the affected provinces onside?

Didn’t the Ontario government take a huge equity stake in Sun or (or was it Syncrude?) in the 80s, to keep the oil sands afloat when the price of oil dropped?

Didn’t the Feds and the Ontario government bail out GM after the great financial crash?

I fail to see how this plan to buy the Keystone pipeline is radically different. it seems to me a thing like a pipeline is exactly the kind of income asset that pension plans love to invest in. Didn’t the CPPIB just post a surplus?

#30 Sultan of Sudbury on 05.29.18 at 6:50 pm

Just don’t invest in Canada because we couldn’t organize a street fight if our lives depended on it.

#31 crossbordershopper on 05.29.18 at 6:53 pm

or you could just hide your money in the caymans or offshore like 1/2 of all immigrants coming to canada currently. and collect your welfare cheque from the socialist government and travel back to your old country anytime, to live well for six months of the year, in your homes, business and friends and money over there.
simple. done everyday.

#32 Joe Schmoe on 05.29.18 at 6:55 pm

I like the pipeline move.

Infrastructure just ain’t airports and overpasses.

NDP in AB has been moderately irrelevant. Notley realized social posturing makes for difficult governance.

JT’s Liberal party must have realized the same.

#33 PGer on 05.29.18 at 7:01 pm

I sold all of my bond ETFs a month ago, after watching them continuously decline for a couple years with no end in sight. A small pop because of a little volatility isn’t worth it IMHO, while interest rates are generally rising.

I bought some brain-dead 1 year GICs for our RRSPs, which at least gives me 2.1% – better than nothing for short-term cash. Most of the rest is dividend stocks and ETFs (and covered call etfs). I will buy back into bonds when I figure the tightening cycle has ended.

#34 TurnerNation on 05.29.18 at 7:04 pm

Amazing. This weblog and most everyone I know spends lots of time on ACTORS. Yes, the front people to pacify us – while the elites rob us blind behind the scenes.

(Psst anyone want to buy a pipeline for pennies on the dollar soon? Contact T2.)

All actors and teachers/presenters:

PM T2 – Actor/drama teacher/presenter
Premier Wynn(e) – teacher/presenter

Rosanne Barr: Actor
Donald Trump – actor/TV personality

Elon Musk: Actor: “He is an actor and producer, known for…”
https://www.imdb.com/name/nm1907769/?ref_=nv_sr_1

Jeff Bezos: Actor: “He is an actor, known for”
https://www.imdb.com/name/nm1757263/?ref_=nv_sr_1

There was actor Ronald Raygun and Arnold S. in Cali.

A good and plausible Youtube video: “North Korea is a giant movie set.” No wonder Actor former player Dennis Rodman had a role here. You are being entertained.
Don’t mind the man behind the curtain.

Pass the flouride, stat, I can’t take it any longer.

#35 Lorne on 05.29.18 at 7:04 pm

#18 The Technical Analyst,
Very happy and proud of our Canadian Government on purchasing the TransMountain Pipeline and balancing economy and environment as well as trying to please the majority of Canadians and grow our economy.

Canada is a rich natural resource Country, we owe it not only to ourselves but the world to deliver these products to market to make it better for all.

Well done Canada. We have a brighter future.
………
How does owning a pipeline fit into “balancing the economy with the environment”? And how does “delivering these products to make make it better for all”? Nice statements that makes no sense!

#36 Lorne on 05.29.18 at 7:08 pm

#18 The Technical Analyst, CSTA, CPD on 05.29.18 at 6:14 pm
Very happy and proud of our Canadian Government on purchasing the TransMountain Pipeline and balancing economy and environment as well as trying to please the majority of Canadians and grow our economy.

Canada is a rich natural resource Country, we owe it not only to ourselves but the world to deliver these products to market to make it better for all.

Well done Canada. We have a brighter future.
……….
How does owning a pipeline balance “the economy and the environment”? And how does delivering these products to market “make it better for all”? Nice statements that make no sense at all!

#37 Scott Danson on 05.29.18 at 7:10 pm

What about those interest rates? I thought they were supposed to rise.

Every time it seems that long term Canada bonds reached 2.5%, 2.51% they drop.

Yes, 2, 5, 10, 20 years have gone up in recent months but are still much lower than even 4 or 5 years ago. Even 10 years ago rates were at 75% to 90% higher, 4%+ GIC rates and bond rates.

Italy, Eurozone, Portugal, Spain, Greece, U.S. Debt Ceiling, BREXIT, Trump etc. etc. all excuses to keep rates down!!!!!!!!!

#38 Nonplused on 05.29.18 at 7:12 pm

Well, I suppose with a Turdeau in office we should have expected a national energy program of some sort. What’s next? Buy Trans Canada so energy east can go ahead? May as well buy Enbridge and Pembina then and own it all.

My guess is that the Trans Mountain expansion never gets built. This purchase is more Ottawa compensating Kinder Morgan for the actions of their bratty little kid BC, same as how if your kid broke the neighbor’s window because he thought playing baseball in the backyard was a good idea you’d have to buy the neighbor a new one. This purchase if anything makes it all the more probable in my opinion the pipeline doesn’t get built. It would cost too many Liberal votes in BC. Turdeau can’t have that.

And all over pipelines. Social media really is a powerful mass influence, it can now no longer be doubted. There are 100’s of thousands of miles of energy pipes running every which way in North America and indeed the entire developed world and we’ve co-existed with them for 100 years. More so than that, they have been integral to our way of life. It’s hard to see how we would heat our homes, fuel our cars, and power industry without them. But now suddenly they are evil.

It’s a bit of irony that the protesters in Vancouver are filling up their Kias with gas that came to them via the existing Trans Mountain pipeline. But now that the government owns it, they really could shut it down without having to compensate Kinder Morgan. That would be sweet. We could then all see once and for all how a “carbon neutral” modern city would function.

(Remember, the greater Vancouver area gets the lion’s share of it’s gasoline, diesel, and jet fuel via the Trans Mountain pipeline, the remainder coming from the US via truck, barge and possibly train. The capacity isn’t there in the short to medium term to replace Trans Mountain. The grocery stores would be bare in 3 days, just like in a hurricane. I think it is something that must eventually happen just so these protesters and good ol’ Montreal can experience first hand what they are actually asking for.)

Also on the subject making the news this week Trans Mountain was briefly shut down due to a spill:

https://globalnews.ca/news/4235287/trans-mountain-spill-darfield/

Note how the amount was reported as 100 liters and not as “less than a barrel”. 100 sounds more dramatic than less than 1. The timing couldn’t have been better, so I wonder if it was staged. They should have reported it as “100,000 ml” for better effect.

#39 Shawn Allen on 05.29.18 at 7:14 pm

Debt and wealth

#4 Private Debt on 05.29.18 at 5:25 pm responded:
#1 Stan Brooks

My guess is that Canada’s private debt is shouldered by Canada’s much larger private wealth, compared to Italy.

****************************************
Speaking of debt and wealth…One man’s debt is another man’s wealth.

Even when deposits are created out of thin air as when a customer is given a matching loan (debt) and deposit, the deposit is not owned by the bank. It is initially owned by the customer taking out the loan. As soon as the created deposit is spent to access the loan, someone else owns the deposit.

Of course if the debt is not repaid there is a problem. That’s why we don’t loan money to our brother-in-law and smart people would never touch peer-to-peer lending. Instead, the bank stands between the person owing the loan and the current owner of the created deposit (and that owner changes constantly as what we call spending money, consists usually of transferring our deposit to a vendor who then owns that much of our former deposit).

If a loan is not repaid the bank writes it off as a bad loan. All banks expense an estimate for such write-offs each quarter and they always cumulatively have more expensed than has been cumulatively actually written off. The excess is called a reserve for bad loans.

If the reserve ever proves too small (see America 2008) then, Houston we have a problem…

#40 The real Kip on 05.29.18 at 7:20 pm

Ok, so, what’s the bad news?

#41 aa5 on 05.29.18 at 7:22 pm

Now it is Italy’s turn to start the radical reforms and austerity as Greece, Spain, Portugal & Ireland before it.

The Germans also don’t tolerate corruption so that will have to come to an end. Of course all the millions of people connected in with the Italian state are screaming, as they start to be dealt with.

#42 tccontrarian on 05.29.18 at 7:26 pm

#27 Shawn on 05.29.18 at 6:36 pm

I think the S&P500 goes to 3750 over the next 18 months
——————————————-

Dude, wayyy more likely SP500 @ (3,750 x 0.5) = 1,875 in 18 months.
From current levels (2,670), that’d be only a 30% drop.

Ultimately, I expect more than 50% drop, but whether it takes 18 months or 28, I’m not sure.

But I like what you’re smoking!

TCC

#43 Tad Bielski on 05.29.18 at 7:29 pm

please advise

#44 WUL on 05.29.18 at 7:29 pm

To commence an upswing in the fortunes of the Ontario PC party, the roster of failed leaders should look like this the next time around:

Hudak, Brown, Ford and Brian Burke.

In the spring of 2015 I failed to mind my own business as an Albertan prior to the selection of a leader by the party and commented here that the party should go with Christine Elliott. The advice was rejected.

#45 espressobob on 05.29.18 at 7:34 pm

Global index by market capitalization investors take the guesswork out of the equation.

Many think they can time an index, commodity, or sector play. This involves a large amount of coin at risk and is usually on the wrong side of the bet, most of the time. And the opportunity cost?

Market timing is the real threat. BURP.

#46 Ex-Cowtown on 05.29.18 at 7:38 pm

#3 The Condo Economy on 05.29.18 at 5:21 pm
“You can’t build an economy by selling each other condos.”

Heh, that’s an awesome quote! Pure Garth. Love it.
Also, because it’s true.

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

Someone, somewhere must wrest something of value from the ground to support everyone else. Movies, condos, Facebook, GTA and the Lower Mainland all exist because someone else does a dirty job that they feel is beneath them.

Doesn’t matter if it’s oil and gas, forestry, mining (rare earths for cellphones, Teslas or PV panels, all same same) or agriculture.

Somebody needs to get their hands dirty so hundreds of people can keep their hands clean.

#47 georgist on 05.29.18 at 7:40 pm

Italy have elected someone who is going to reduce the ability of the US banks to skim off surplus value from labour.

The day Canada does this, just like Greece before them, they will hit a bond “crisis”.

To encourage les autres.

#48 SoggyShorts on 05.29.18 at 7:47 pm

#15 Reality is stark on 05.29.18 at 5:46 pm

Check your facts. There is no “rape epidemic” in Sweden.
They massively broadened their definitions of sexual assault, so things like telling a dirty joke to 5 co-workers could be reported as 5 individual sexual assaults.

https://www.snopes.com/fact-check/crime-sweden-rape-capital-europe/

https://europeum.blogactiv.eu/2017/03/01/debunking-the-right-wing-myths-about-sweden/

#49 Headhunter on 05.29.18 at 7:48 pm

#25 Victor V on 05.29.18 at 6:33 pm
[BREAKING] The Maclean’s-Pollara Ontario election poll: The NDP lead keeps growing

FAKE NEWS!!!
dude step away from the edge and please no sharp objects…802 not a province make Nefarious union $$$ at work

Pollara conducted a 10-minute online survey of 802 Ontarians who self-identified as eligible to vote in the Ontario Elections on May 27 and 28, 2018

#50 All Equity vs. Balanced Portfolio on 05.29.18 at 7:52 pm

This is comparing apples to oranges:

“Remember that during the worst three years of our financial lives (2008-10) investors with a balanced 60/40 portfolio ended up making a positive 5% per year (on average), while all-stock investors suffered a 55% market decline and needed seven years to recover.”

Sure, the decline of an all equity portfolio was much larger than for a portfolio containing bonds. Yet, the 2009 rebound for equities was also much sharper. As a result, all equity investors also got positive average returns during the same period:

-> Investors holding all their wealth in S&P500 ETF would get on average yearly return of 1.5% (prior to ETF fees) during the 2008-2010 holding period and thus would not have lost any money either.

->For a 65 equity/35 bond portfolio, the average 2008-2010 return was 3.7% (prior to ETF fees).

These returns are for a USD denominated investor without any adjustments accounting for CAD/USD FX movements.

Source: https://www.blackrock.com/investing/literature/investor-education/asset-class-returns-one-pager-va-us.pdf

With all due respect, for a truly long-term investor, I see little value in holding any bonds. Sure, advisors can always sell the emotional benefits of bonds, I get that. But in the long run, with today’s interest and inflation rates, it is a wealth destroying proposition. For doubters, check out these asset class returns occurring during bond’s bull market:

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

#51 the Jaguar on 05.29.18 at 7:53 pm

“And Alberta seems poised to invade BC, now that it’s won the backing of the federal Libs and a pipeline will be rammed through to the sea.”

We invaded a long time ago, which explains a lot of the resentment, though at the root of some of it is just plain envy. Hard living next door to people with intelligence, strong work ethic, and good looks. Maybe look at todays announcement about the pipeline “expansion” as a way of the kid making up for the sins of his father, i.e. the NEP debacle of the early 80’s. Besides..the Feds can’t just sit back and let the BC gov flip them the bird while tanker after tanker from Alaska floats their way through the coast of BC. Dios mio, the Americans must be laughing their asses off at the nonsense. Once the bulldozer engines get turned on again the mob will turn its attention to more urgent matters of the day in the lower mainland. Like the whoopee cushion sound of air being let out of their housing market. We all know what that sounds like and on close examination it might just be the real mcCoy.

#52 Brian Ripley on 05.29.18 at 7:54 pm

The mess

I updated my Federal Direct Investment plot
http://www.chpc.biz/household-debt.html

The record wide “negative” FDI capital balance is now 3 years old. Canadian capital would rather flee than fight. Perhaps the Government purchase of Kinder Morgan will stimulate some of that capital to flow back into Canada.

I also mashed up another chart to include import prices:
http://www.chpc.biz/history-readings/debt-vs-employment
and the plot is getting worse and today’s FX worries will presumably translate into a continuation of trend of higher prices on imports against record household debt levels and a recent downturn in employment levels.

#53 ANON on 05.29.18 at 8:03 pm

invest for the world in which we live.

Go Long Oil! Umm … never mind, that popped. Go long commodities, like food? Long Pork! Wait… that sounded really weird… Tuna cans and popcorn? Anti-zombie training? Zombie training?

#54 Stacy on 05.29.18 at 8:04 pm

As a teacher and a feminist, driving my Aston Martin into the staff parking lot today, I saw a lot of Conservative signs and I could only think “Will Doug Ford keep my salary high like the Liberals so I can finally get a summer home in the Hamptons?”

I’m worried his cuts will affect teachers like me. If he decides to cut money for individuals schools, how will we have our Caviar and Champagne staff meetings? Or our monthly Wagu Beef BBQ Staff parties? It’s going to be hard to find the time with larger class sizes to our take our yachts out around the harbour in the spring if I have too many exams to mark and I have to sign in on Snapchat to discuss personal affairs with some of my students.

It’s already a struggle, my Berkin bag was taken from my office because we have a busted lock in our 85 year old building with no air conditioning. It makes my skin so sticky, that’s why I have to wear no underwear and dress in revealing tops to remove sweat.

After a fight last week, some hoodlum stepped on my Louboutins, and I thought about quitting but how would ever find a career as high paying and fulfilling as education.

All of us cosmopolitan and well-dressed teachers are worried about Ford’s possible reduction in our lifestyles. For now, we vacation on private islands near Bora Bora but one day we might just have to settle for a 6 star hotels in Dubai with the rest of you peasants.

#55 John on 05.29.18 at 8:12 pm

100% equity vs 60/40 balanced really depends on investment time horizon. Long term avg returns are 10.2% vs 8.7% respectively (1926-2016 US). This difference can be huge over the course of an investment lifetime. As example at a contribution rate of $5k/yr for 35 yrs the difference in portfolio value is almost $500k. (~$1.6 vs ~$1.1 mil). However one must expect and endure the associated volatility and be disciplined thru it knowing equity markets eventually recover but if you don’t have time on your side to wait for said recovery then balanced is the way to go.

#56 Tony on 05.29.18 at 8:15 pm

Bonds are supposed to sell off when the U.S. dollar is rising. Of course with the June rate hike in America they have to push rates down to mitigate all the damage of the June rate hike. Everything is just a repeat of what happened every time they raised rates in America. Everything is like just when you think you’ve seen everything they throw more at you. The fall in U.S. stocks was just month end profit taking and nothing else. They just dream up news to fit all the situations. The best way to day trade sometimes is don’t read any news just look at the chart levels.

#57 Tony on 05.29.18 at 8:22 pm

Re: #14 The Forecaster on 05.29.18 at 5:45 pm

There really has to be another place to put money in order for the Canadian real estate market to crash. Presently there isn’t many places to put money as most of the trades were crowded or overcrowded trades. Until an alternate place for money pops up real estate won’t likely implode.

#58 For those about to flop... on 05.29.18 at 8:28 pm

#46 Ex-Cowtown on 05.29.18 at 7:38 pm

#3 The Condo Economy on 05.29.18 at 5:21 pm
“You can’t build an economy by selling each other condos.”

Heh, that’s an awesome quote! Pure Garth. Love it.
Also, because it’s true.

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

Someone, somewhere must wrest something of value from the ground to support everyone else. Movies, condos, Facebook, GTA and the Lower Mainland all exist because someone else does a dirty job that they feel is beneath them.

Doesn’t matter if it’s oil and gas, forestry, mining (rare earths for cellphones, Teslas or PV panels, all same same) or agriculture.

Somebody needs to get their hands dirty so hundreds of people can keep their hands clean.

/////////////////

I’m one of the dirtiest guys in Vancouver.

I feel no shame…

M43BC

#59 John of Grant on 05.29.18 at 8:32 pm

#24 Honey Dripper …..Canada is the only oil rich sovereign nation on the planet without a state owned oil company.
We sold Petro-Canada and gave up our Canadian control.
———————————-

Canada ranks 7th in production, U.S. is third. U.S. has no national oil company.

#60 Bonds on 05.29.18 at 8:52 pm

Don’t beat inflation . One would be a fool to put money into them in this environment.

You are decreasing returns . Period

It ain’t hard

Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth

#61 AlbertaGuy in AB on 05.29.18 at 8:58 pm

Garths BMO story…Here it is at 18:50 into the program

http://www.cbc.ca/news/canada/nova-scotia/cbc-nova-scotia-news-may-29-2018-1.4683208

#62 OttawaMike on 05.29.18 at 9:01 pm

Meanwhile in Ottawa we erected a $200k eel statue today.
So there’s that.

https://twitter.com/MidCenturyMike/status/1001550303194476545?s=09

#63 Nope on 05.29.18 at 9:03 pm

We are in a rising interest rate environment .

This isn’t 2008

. A globally diversified portfolio hasn’t made 1% ytd and if equites don’t turn around ? It will be in the red by year end

Bonds will NOT ‘save your butt ‘

Until they do. – Garth

#64 What can I say about that? on 05.29.18 at 9:05 pm

#14 The Forecaster on 05.29.18 at 5:45 pm

Within 19 months the Canadian housing prices will be down another 30% nationally as a best case scenario.

Worst case by 2019: the greatest job loss since the great depression, which will lead to contagion in consumption and intensify home price values to drop 70-80% nationally.

—————————————————–

My son is currently searching for a SFD house in North York. He’s looking within a radius of 10 KM, or so, of Keele and Wilson. Well, it is proving to be very difficult. Everything is selling within days and at much higher than posted prices. I think that, despite the often repeated predictions of doom, TO RE will never go down. As long as a planefull of new Canadians lands at Pearson every 10 minutes and rates stay low (likely for economic reasons such as today) TO RE will remain at elevated price levels.

#65 Long-Time Lurker on 05.29.18 at 9:24 pm

#6 Wrk.dover on 05.29.18 at 5:25 pm
Grand Master Garth on NS CBC supper hour news just now, explaining his bank.

Handsome well spoken fellow.

>It’s the beard, I tell you. Ryan and Doug are you reading this?

#66 Doug t on 05.29.18 at 9:28 pm

Hell meet hand basket

RATM

#67 Mark Baum on 05.29.18 at 9:40 pm

The last Ontario NDP victory was into a large house price correction/recession. Looks like 2018 is the new 1990

#68 Smoking Man on 05.29.18 at 10:02 pm

Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth.
……

If the dippers get… Seriously, Ontario Provies.
Hope Ryan and Doug know how to short, if not. I’ll show them…

I’m sure they do…..I’ll be making an appearance at the duke of Devon Thursday 5pm. On the patio. In my vegas knights cap. 500 to 1 on my bet.. Can’t find the damb ticket. I’ll be drinking.

I know JohnneyBoy will show up on his harley with his bitch on the back seat wanting to plant one on my face. he’s a man. . James and Gravy Train.. I’m thinking. In the shadows with the telescopic camera with the 1 800 number to CRA on speed dial..

Life is an adventure. Never fear it… It doesn’t last long..

Will doug or Ryan or Garth show up…

Not a chance…they fear compitition..

#69 Happy Housing Crash Everyone! on 05.29.18 at 10:05 pm

64 What can I say about that?

I can say it is fake news. Nothing is selling and the for sale signs are proof. The sales numbers are proof. Another fictional realtor story. Time for a new job.

#70 Lily on 05.29.18 at 10:09 pm

Actually my 8 stock portfolio was up 1% today! Nice.

#71 dumpster fire on 05.29.18 at 10:18 pm

#57 Tony on 05.29.18 at 8:22 pm

There really has to be another place to put money in order for the Canadian real estate market to crash. Presently there isn’t many places to put money as most of the trades were crowded or overcrowded trades. Until an alternate place for money pops up real estate won’t likely implode.

===

This is something I’ve been musing about. Say the credit cycle were to finally turn and we enter bond bear market territory with heart-attack inducing rates (yea, a daydream – I know).

Would the highly liquid dogs with fat stacks of cash jump into depreciating housing or would the juicy yields be more tempting? Would home owners pull out whatever equity is left to invest in that kind of environment? Hmn.

~ breathe deep

#72 Capt. Serious on 05.29.18 at 10:25 pm

Everyone who is so sure of all equity ought to look at this:

https://www.crestmontresearch.com/docs/Stock-Rolling-Components.pdf
(Yes this is just the S&P500. Take it or leave it.)

Very few people have the calm necessary to endure a decade that results in 0 return, and that can and does happen with equities. If you do possess such calm, good for you, but if you haven’t lived through such a decade you really do not know how you’ll react. If you abandon your strategy at the critical point it will sink any perceived advantage.

There is a whole secondary discussion we could have about the efficient frontier and whether taking an all equity portfolio makes any sense. You could be opening yourself up to a wide range of outcomes, when a narrower range of outcomes would ensure you meet your savings goals. You don’t always need to swing for the fence if all you need are steady doubles to get to your goal. People overlook this terribly.

#73 For those about to flop... on 05.29.18 at 10:36 pm

I do not do news interviews like Thor Turner, but in the interests of restoring old stuff I am currently restoring these benches in pictures 4 and 5 ,supposedly constructed in 1910 and returning them to their former glory.

I just hope they don’t try to pay me through the Phoenix pay system…

M43BC

http://wikimapia.org/5400/Pacific-Central-Station

#74 The Real on 05.29.18 at 10:37 pm

As per WC, the best argument against democracy is a five-minute conversation with the average voter.

#75 PastThePeak on 05.29.18 at 10:59 pm

#38 Nonplused on 05.29.18 at 7:12 pm

My guess is that the Trans Mountain expansion never gets built. This purchase is more Ottawa compensating Kinder Morgan for the actions of their bratty little kid BC, same as how if your kid broke the neighbor’s window because he thought playing baseball in the backyard was a good idea you’d have to buy the neighbor a new one. This purchase if anything makes it all the more probable in my opinion the pipeline doesn’t get built. It would cost too many Liberal votes in BC. Turdeau can’t have that.

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

Completely agree. TMP expansion will NOT get built. This is a payout disguised as a purchase to forestall a lawsuit under NAFTA that KM could have easily launched.

What does the Canadian federal government owning the pipeline change about its prospects of being built? KM wanted to build it, but it became clear to them the BC gov’t and (more significantly) the protesters, natives, and municipalities, were going to put roadblock upon roadblock up to delay it for years.

You see, that is the environmentalist tactic these days. Drag out the process to make the economics untenable. They know the federal / provincial gov’ts have no interest in pushing hard for it.

It is a smart move politically for T2 though. The hot issue is taken off the front burner, and the project can trundle along until after the next federal election. Maybe in 2020 the feds announce that, despite their best intention, they just couldn’t get “social license” on the expansion and that will die. They will sell the existing pipeline at a bit of a loss. Perhaps a few billion cost to the feds overall, but the political job was done.

#76 jane24 on 05.29.18 at 11:00 pm

I have been warning you lot about the Italian situation for several months now. I live there part-time and in the poor South too. The Italians are furious about both the EU and the euro and have discovered that by voting for populists both the Germans, who they owe big, and the EU bureaucrats suffer. They love this.

Next election after the summer will be much more of the same. The League will take the north and Five Star will take the south and then they will put the boot into both the euro and the EU. Italians love cutting off their nose to spite their face. I have an Italian husband and kids that demonstrate this daily. On the pus side taking out the Italian establishment will mean cutting corruption at least for a while.

#77 FOUR FINGERS WATSON on 05.29.18 at 11:01 pm

Buy dividend paying blue chips like the Big Six or the pipelines etc. Never sell them, drip the 4-6% divvies for a few decades and you will do well. And he TSX will give you 4-6% along the way too. Buy the dips. Time IN the market is the most important factor in investing. No need to pay me 1%. You are welcome.

#78 All Equity vs. Balanced Portfolio on 05.29.18 at 11:30 pm

#72 Capt. Serious

Good point. Investing is very behavioural. The worst thing an investor can do is to try to predict how a market will behave in the short to mid terms and if it does not work out be upset over it.

One thing though that makes sense for all equity portfolios (or for the equity portion of a balanced portfolio) is to diversify across equity classes instead of just picking an S&P index fund.

Especially small caps have historically generated larger returns as the market does not always price these securities efficiently.

For Canadian investors, two small cap Mawer funds Maw107 and Maw150 have both generated incredible double digit returns over long holding periods (disclaimer: I do not currently hold them).

They also seem not to be overly correlated with the market which can increase an all equity portfolio’s diversification. They will for sure have long periods of flat returns, they will for sure tank heavily in market crashes, but over a long holding period, 13%+ p.a. returns after fees look good to me.

For a young investor with decades to invest, these could be great choices as complementary holdings to core ETFs holding global blue chips contained in S&P500, Russell 1000 Growth/Value etc.

#79 Ian on 05.29.18 at 11:36 pm

I still do not see what strategy you have for when stocks AND bonds sell off. There isn’t one. That has worked the last few sessions. But prior to that there were multiple sessions where both sold. The warning is there. Stocks are in record overvaluation, and someone explain why the US 10 year note is at 2.77% yield when it should be at 8.77%. No one has an answer.

The answer is the only risk off asset: gold. Silver is good too.

Bonds are NOT a risk off asset. The US is a fiscal trainwreck. Of historical proportions.

#80 Ian on 05.29.18 at 11:39 pm

#64 what can I say

Tell him to rent. You know, so he avoids the further 40% decline that is coming.

#81 Ian on 05.29.18 at 11:44 pm

Ontario NDP: 90-95

Ontario real estate bear: 89-96

Thanks everyone

Please vote Ontario PC before I really do have to make the decision to leave?

Please.

#82 Karma on 05.30.18 at 12:13 am

The reason bond yields are falling….

https://www.wsj.com/articles/anti-europe-partys-fortunes-rise-in-italys-political-turmoil-1527632259

#83 Ace Goodheart on 05.30.18 at 12:17 am

Doug Ford will win the Ontario election. Not because he deserves to. Not because he has a platform (he doesn’t). But because of people’s guts.

Dougie is a rich kid, born and bred, who runs a company that makes money.

The NDP leader is a career politician who buys expensive suits and bills it to her party (who are funded by the taxpayers).

The Liberal Leader adjusted the education curriculum to teach little boys that they might actually be little girls, and vice versa.

This election will be ruled by gut feelings. Dougie has won. Smoking man has already called it (and he successfully called Trump). I second. Dougie is the clear winner here.

Ontario always swings right when it gets too socialist. There is a groundswell of people who just do not like the whole “tax and spend, blame everyone else for your problems, take no responsibility for your own life” liberal socialist idealism. The Ontario Libs have swayed dangerously into radical left wing territory and it is going to cost them dearly. They may not even get a seat on June 7th. There will be blood on the floor when this is done.

I predict a Conservative landslide.

Let’s see if I’m right………

#84 not so liquid in calgary on 05.30.18 at 12:25 am

@ Honey Dripper on 05.29.18 at 6:30 pm

——————————————————————————

no thanks… we’ve done pretty well, so far, without TROC

#85 Ace Goodheart on 05.30.18 at 12:29 am

Also, with regard to the upcoming Ontario election, here is some food for thought (or for ruminating on the can while sipping a fifth of Jack over ice):

Who votes in Ontario elections?

Usually we get around a 40% turnout, often less.

Who are these people?

Well, they are senior citizens, predominately. Millennials, as a group, while wildley socially active and super connected to the “Face Book” and the “My Space” and the like, do not, on the whole, attend at and vote at elections.

These morons (oops, sorry, bad word) for the most part abstain from voting, for various Starbucks fueled reasons, including that they are not understood, that they cannot find a candidate that they identify with, and that they do not feel that the choices are fair.

They also work late, have “hook up” appointments with “friends with benefits” and simply cannot be bothered.

Your grandparents are going to vote in the next government. Who do you think they will vote for?

The person who tried to convince their grand kids that they should change their gender in elementary school?

The flashy, paid for super dresser femme fatale who promises to increase Ontario’s debt to fund her socialist agenda?

Or the honest, good at his word, career business man and family man, who pledges to cut the fat and prosper an Ontario based on hard work and family values?

This is easy folks. Predictable, and easy.

The only question I have, is why in the world did the Libs, who could have won this, run a candidate that everyone so obviously hates?

#86 Dolce Vita: What's Up w/Italia - My Take on 05.30.18 at 12:30 am

Firstly, Germany can take 6 months to form a coalition government but Italy since March 4 is not allowed.

Secondly, the so called crisis is that President Mattarella (a figure head) refused to accept the M5S-Lega coalition candidate for PM (Giuseppe Conte who in turn wants Paolo Savona, a controversial Euro-skeptic professor, as minister of the economy).

Mattarella also rejected alternative names provided by the coalition and went to appoint his own EU favorable caretaker PM, Carlo Cottarelli, a former International Monetary Fund official. There will be a confidence vote in Parliament and in all likelihood Cottarelli will be defeated by the M5S-Lega coalition.

More than likely there will be elections in the fall.

Thirdly, that’s what this whole overblown affair is about and ya, some Italian bond holders from abroad are trying to dump Italian bonds and no one is buying unless “The Price is Right”. Imagine that, risk in bonds…too bad, too sad I say.

Fourthly, there is no corruption in this affair as I read in statistically insignificant polling of “friends” posted in the Comments above.

The M5S-Lega coalition do not want to take Italy out of the EU or get rid of the Euro – just read de Maio’s (leader M5S) and Salvini’s (leader Lega) Twitter feeds and you will get it – learn to use Google Chrome Translate. Yes, they are populists that want to reform Italy for the better.

And, among other things, the M5S-Lega coalition to fix Italian banking problems once and for all, which they cannot do because of EU financial rules.
_______________________________

Finally, President Mattarella’s actions are seen as the “old guard wealthy” and EU apparatchiks (the “German Cage” as one Italian economist put it) imposing their will on a democratically elected Government coalition in Italy (M5S won big in Southern Italy and Lega won big in Northern Italy – a very good national coalition if you ask me).
_______________________________

Meanwhile, our food is excellent as usual (no GMO, Roundup, Steroid Juice Pig, Antibiotic stunned meat and veggies here as you have in N. America) and of course, our cuisine’s not bad either. All think it is our cuisine, true, and forget that the half of it is our produce which has such great taste (e.g., no highly reflective wax coated apples, tomatoes, etc. at our grocery stores).

Our culture is as thick as ever and most want a taste of it (recall a millennia of Rome, the Venetian Republic and of course those damn Eat, Pray, Love Tuscan’s that gave us the Renaissance…oh ya, and Shakespeare with a play that popularized a small terrazzo in downtown old Verona).

They (GAP attired half nude flip flop wearing clattering luggage dragging SPF 500 sun tan lotion smelling tourists) are still plying our millennia old streets by the droves and choking Rome, Venice, Florence and Verona with their presence…as usual.

We are used to them and do not care. We have been around for a long time (Rome celebrated its 2500th anniversary last year) and we have horse races (Il Palio) that are older than N. America.

We will survive this, as usual.

Thus, relax Nervous N. American investing Nellie’s.

#87 Ex-Cowtown on 05.30.18 at 12:53 am

Someone, somewhere must wrest something of value from the ground to support everyone else. Movies, condos, Facebook, GTA and the Lower Mainland all exist because someone else does a dirty job that they feel is beneath them.

Doesn’t matter if it’s oil and gas, forestry, mining (rare earths for cellphones, Teslas or PV panels, all same same) or agriculture.

Somebody needs to get their hands dirty so hundreds of people can keep their hands clean.

/////////////////

I’m one of the dirtiest guys in Vancouver.

I feel no shame…

M43BC

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

Me either. I’m just glad to pump oil from the ground so that Suzuki, May, Horgan and Weaver can use it to jet around the planet telling everyone how deplorable I am.

MAGA! Make Alberta Great Again!

#88 Shawn on 05.30.18 at 12:55 am

I think we see Nasdaq 10000 by 2020…

#89 Shawn on 05.30.18 at 1:04 am

I would say at best Europe (VGK) and emerging markets (VWO) are back at their Jan 2018 highs by 2020.

#90 Dolce Vita - Thks Stan Brooks on 05.30.18 at 1:15 am

Stan Brooks

On my behalf, thank you for posting some Italian truths to N. American Nervous investing Nellie’s.

Taxes are onerous in Italy (the lowest income bracket is at an MTR of 23% [about 27% w/other local taxes piled on vs. 15% in Canada], and with fewer deductions as in Canada…also, add to that a National Sales Tax, IVA, that is 22% [lower or 0% for essentials such as foodstuffs, etc.]…near double HST, GST and PST combinations.

So, it has become an Italian national obsession to avoid taxes at any cost…Italian taxation rates such as the above would result in a coup d’état in Canada (if the RE windfall $5 MM plus BC homeowner tax revolt is any indication or Garth’s favorite & frequent “anti-tax the rich or SMB Owner” homilies).

Some post here as if Italy is threadbare and will go the way of Greece.

Italy has the 4th largest economy in the EU (3rd w/Brexit).

The Economist in the 90s, did a study on Italy and concluded that at least 20% of Italian GDP goes unreported (“sotto tavola”, under the table)…to avoid onerous taxes.

If so, and The Economist in general is believable, in the 90s Italian GDP was 2nd only to almighty Deutschland [everyone’s EU darling], comfortably ahead of France and Brexit UK.

From what I have seen living here, 20% is conservative, and probably why the The Economist happily used that number…thus the corruption.

…and high risk bonds when there is political instability.

#91 Myra Andrews on 05.30.18 at 2:05 am

May 28 New 303 Sold 158 TI: 11882
May 27 no post from Paul

May 24 New 231 Sold 128 TI: 11,676
May 23 New 328 Sold 144 TI: 11,613
May 22 New 477 Sold 143 TI: 11,496

May 18 New 226 Sold 119 TI 11,208
May 17 New 191 Sold 110 TI 11,161
May 16 New 235 Sold 147 TI 11,133
May 15 New 315 Sold 178 TI 11,127
May 14 New 302 Sold 124 TI 11,052

May 11 New 183 Sold 132 TI 10,935
May 10 New 229 Sold 126 TI 10,957
May 9 New 309 Sold 172 TI 10,914
May 8 New 318 Sold 117 TI 10,835
May 7 New 389 Sold 131 TI 10,697

May 4 New 191 Sold 110 TI 10,540
May 3 New 213 Sold 103 TI 10,503
May 2 New 268 Sold 146 TI 10,481
May 1 New 363 Sold 134 TI 10,420
Apr 30 New 375 Sold 163 TI 10,459

April 16-27 New 2453 Sold 1224 TI 10,347
April 3-13 New 2111 Sold 916 TI 9,727

Mar 19-29 New 1834 Sold 1072 TI 9,032
Mar 5-16 New 2248 Sold 1224 TI 8,743

The inventory at the end of February was 8,211

#92 Tony on 05.30.18 at 2:18 am

Re: #72 Capt. Serious on 05.29.18 at 10:25 pm

The problem is if the bankers own everything because no one makes any money ever virtually for eternity. Case in point the Bank of Japan. No one will buy from them and when or if they own everything everyone has the insider information so all they can do is trade shares back and forth with each other but since everyone is in on it and knows what will happen no one makes anything. That’s the catch 22.

#93 Stan Brooks on 05.30.18 at 4:43 am

#71 dumpster fire on 05.29.18 at 10:18 pm
#57 Tony on 05.29.18 at 8:22 pm

There really has to be another place to put money in order for the Canadian real estate market to crash. Presently there isn’t many places to put money as most of the trades were crowded or overcrowded trades. Until an alternate place for money pops up real estate won’t likely implode.

===

This is something I’ve been musing about. Say the credit cycle were to finally turn and we enter bond bear market territory with heart-attack inducing rates (yea, a daydream – I know).

Would the highly liquid dogs with fat stacks of cash jump into depreciating housing or would the juicy yields be more tempting? Would home owners pull out whatever equity is left to invest in that kind of environment? Hmn.

~ breathe deep

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

1. no one has any ‘fat stacks of cash’.
Every sane person was fully invested in the last decade.

2. bonds are for suckers, with rising rates their price
declines.

3. stock markets are not overvalued compared to inflation and potential top end-cycle rates.
US, Europe, large emerging markets are a good bet.
Learn to sit tight on your stocks and for your own sake, do not sell a diversified stock portfolio.

4. some cash if you have any in stable currencies – USD, the Euro (ignore what you hear in the ‘news’, the Euro is here to stay). Loonie under BoC wise leadership will tank big time.
There are already indications that the rates for the end of this cycle for CAD won’t go above 2-2.5 %.
This is not mortgage interest rates, they will follow 10 years US treasuries, these are variable rates mortgages and (surprise, surprise sucker savers) deposit rates.
Banks will make it like bandits on huge spread while taking no risk.

Retirees (CPI will measure sub 2 % of course), and savers will be hurt deep, maybe is good to buy lubricant companies.

5. The dreaded gold and some oil at the end of the cycle are worth considering.
Stay away from Canadian companies as potential investors there are very very limited.

6. Only a truly insane person would consider 4-5 times overvalued housing market as a viable option at this point, considering overvaluation and rising property taxes. We know that Canadian like to push boundaries in idiocy investing but even for that there are some boundaries.

#94 Honey Dripper on 05.30.18 at 6:03 am

#84 ot so liquid in Calgary

I think we’d be a lot better off controlling our own oil than leaving it up to the Yanks. Why can’t Canadians enjoy the riches our natural resources bring in?

Stop being brainwashed by the Cons, this has never worked for all of Canada. Joe who?

#95 Honey Dripper on 05.30.18 at 6:09 am

#59 John Grant

The US has the SOR which they can flood the market with to ease the pain at the pump. What has Canada got?

So, yes they control the price, the resource and the global oil price is priced in US dollars. Canada has what?
What benefits does our oil bring to Canadians? Just whiny comments about high prices all the f’n time!

#96 SimplyPut7 on 05.30.18 at 6:48 am

#69 Happy Housing Crash Everyone! on 05.29.18 at 10:05 pm

Some people can’t help themselves even when all the signs of a slowdown are around them.

I have 2 empty homes behind my house: one has no furniture or curtains and timer lights that come on in the middle of the night, one has blinds but the lights never go on even in winter. If I walk outside I have 2 more within a 1-minute walk from my home, one was bought at the peak in 2017 and became a short-term Airbnb like rental for a while, but I guess they were caught by CRA and stopped that nonsense, one was bought in 2016 and no one ever moved in there.

There are some areas of the city that are doing well, mainly in the downtown core of Toronto, but that hot market where dumb money was chasing dumber money is gone. Prices in my area are down to mid-2016 levels, some areas of the GTA have prices dropping to 2015 levels. Even the condos are starting to slow down and listings for all type of homes are almost as high as last year’s peak just before the market began to fall.

The listing count doesn’t include all of the sellers waiting on the sideline hoping for prices to go up because they bought a new home and need their current home to sell at 2017 prices to get an affordable mortgage and it doesn’t include the empty homes across the GTA, such as the 4 surrounding me.

If the NDP gets into power in Ontario, the speculation tax will probably increase to 20% to match the BC NDP, and who knows what other taxes they will put on homes to cover the costs of the additional programs they want taxpayers in Ontario to pay for.

The Ontario real estate market will go into a freefall because no one wants to admit the increase in housing prices were caused by local speculators, banks, private lenders, realtors and the media – not foreign buyers.

Any NDP policies that hurt business, hurt homeowners. People will stop shopping at retail businesses, spending money on entertainment and restaurants in order to make sure their basic needs are covered first. And this is before they introduce the $15 minimum wage which has increased the number of self-checkouts at stores, fast-food restaurants and movie theatres across the province as well as prices for products and services in Ontario.

The only positive note about the NPD party is I haven’t heard anyone from the NDP blame foreign buyers for the housing mess, so maybe they won’t introduce too many harsh measures aimed at foreigners that end up hurting people living and paying taxes in Ontario. I also haven’t heard them say how they would fix housing either.

Nine days and counting…

#97 Tater on 05.30.18 at 7:54 am

Remember that during the worst three years of our financial lives (2008-10) investors with a balanced 60/40 portfolio ended up making a positive 5% per year (on average), while all-stock investors suffered a 55% market decline and needed seven years to recover.
—————————————————————–

It’s not fair to compare the CAGR of one portfolio with the max drawdown on another. An investor who held just SPY from 08 to 10 would have had a -2.5% CAGR over that time period. That’s not great, but hardly a nightmare.

#98 Tater on 05.30.18 at 7:59 am

#93 Stan Brooks on 05.30.18 at 4:43 am

4. some cash if you have any in stable currencies – USD, the Euro (ignore what you hear in the ‘news’, the Euro is here to stay). Loonie under BoC wise leadership will tank big time.

—————————————————————-
The EUR is doomed. The economies that underlie the currency are too disparate for one monetary policy to be ideal for all of them. With the restrictions on member countries’ fiscal policies, imbalances build, and so do tensions between the countries. Eventually, the wheels will fall off.

#99 dharma bum on 05.30.18 at 8:18 am

#83 Ace Goodheart

I predict a Conservative landslide.

Let’s see if I’m right………
——————————————————————–

Please please please please please be right!

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

#100 Tater on 05.30.18 at 8:20 am

#79 Ian on 05.29.18 at 11:36 pm
I still do not see what strategy you have for when stocks AND bonds sell off. There isn’t one. That has worked the last few sessions. But prior to that there were multiple sessions where both sold. The warning is there. Stocks are in record overvaluation, and someone explain why the US 10 year note is at 2.77% yield when it should be at 8.77%. No one has an answer.

The answer is the only risk off asset: gold. Silver is good too.

Bonds are NOT a risk off asset. The US is a fiscal trainwreck. Of historical proportions.
—————————————————————-

Volatility is the asset you want to be long.

#101 BMO project on 05.30.18 at 8:46 am

Nice interview Garth. I hope all goes well with the project.

http://www.cbc.ca/news/canada/nova-scotia/cbc-nova-scotia-news-may-29-2018-1.4683208

#102 Ian on 05.30.18 at 8:50 am

US Q1 GDP revised down to 2.2% growth:

https://www.marketwatch.com/story/us-economy-grew-slightly-slower-22-in-first-quarter-revised-gdp-figures-show-2018-05-30?mod=bnbh

#103 JohnnyBoy on 05.30.18 at 8:59 am

#68 Smoking Man on 05.29.18 at 10:02 pm
Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth.
……
If the dippers get… Seriously, Ontario Provies.
Hope Ryan and Doug know how to short, if not. I’ll show them…
I’m sure they do…..I’ll be making an appearance at the duke of Devon Thursday 5pm. On the patio. In my vegas knights cap. 500 to 1 on my bet.. Can’t find the damb ticket. I’ll be drinking.
I know JohnneyBoy will show up on his harley with his bitch on the back seat wanting to plant one on my face. he’s a man. . James and Gravy Train.. I’m thinking. In the shadows with the telescopic camera with the 1 800 number to CRA on speed dial..
Life is an adventure. Never fear it… It doesn’t last long..
Will doug or Ryan or Garth show up…
Not a chance…they fear compitition..
…………………………………………………………………..
OK Smoking Man did you just call my wife a bitch?
She is 5’7″ tall with I might add she has met all of the Katas with a Yondan belt. I dare you to call her a bitch to her face old man. BTW she doesn’t care about making you look like an old man fool in front of anyone. Bring your nads!

#104 Ian on 05.30.18 at 9:07 am

#60 Bonds on 05.29.18 at 8:52 pm
Don’t beat inflation . One would be a fool to put money into them in this environment.

You are decreasing returns . Period

It ain’t hard

Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth
————————————————
They certainly did, because the Fed Funds rate was cut from 5.25% to zero.

What happens now when the Fed Funds Rate is only 1.75%? That strategy of bonds helping out bad equity results will not work this time.

Bonds as a safety valve at this juncture would be the absolute dumbest decision anyone could make.

A rash and incorrect statement. – Garth

#105 Danforth on 05.30.18 at 9:11 am

So if you were a stock-only investor, especially with heavy US exposure, you lost about 2% of your dough. But if you also had a fixed-income component, including a variety of bonds ETFs, then things weren’t so bad.

I’m down 1.06% between yesterday and today. (But still up 1.31% on the month).

#106 Classical Liberal Millennial on 05.30.18 at 9:12 am

The NDP are going to win. Ontario voters are obtuse, shortsighted morons. The Liberals swung to the left of the Dippers in 2014 and won. Now that the Socialist Swine are offering up even more free swag, the idiots in this god forsaken place will vote them in.

#107 Stan Brooks on 05.30.18 at 9:18 am

#86 Dolce Vita: What’s Up w/Italia – My Take on 05.30.18 at 12:30 am

Excellent post.

But keep in mind you most likely are dealing with brainwashed which is worse than plain stupid as it has sufficient ‘intelligence’ to pretend he/she can engage in intelligent conversation with ‘independent’ (read in the newspaper) opinion.

One of the strategies to keep the sheeple calm and obedient is to give it false sense of superiority by spreading misinformation about other places to show it ‘how good life here is’.

Same for the pretended ‘wealth by credit’ travesty.

The level of private indebtedness is the ultimate indicator for the intelligence of the consumers and there Italians win big time.

#108 Stan Brooks on 05.30.18 at 9:36 am

#99 Tater on 05.30.18 at 7:59 am
#93 Stan Brooks on 05.30.18 at 4:43 am

4. some cash if you have any in stable currencies – USD, the Euro (ignore what you hear in the ‘news’, the Euro is here to stay). Loonie under BoC wise leadership will tank big time.

—————————————————————-
The EUR is doomed. The economies that underlie the currency are too disparate for one monetary policy to be ideal for all of them. With the restrictions on member countries’ fiscal policies, imbalances build, and so do tensions between the countries. Eventually, the wheels will fall off.

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

It (the Euro) is up against the CAD significantly,

I trust EU short to mid term much more than Poloz/BoC, who said that by raising rates he is causing (not fighting) inflation (and non of the obedient brainwashed sheeple objected).

#109 Stan Brooks on 05.30.18 at 9:46 am


#105 Ian on 05.30.18 at 9:07 am

Bonds as a safety valve at this juncture would be the absolute dumbest decision anyone could make.

It seems that is Bill Gross and Jeff Gundlach opinion as well.

Also read this:

https://econompicdata.blogspot.com/2017/02/the-return-free-risk-of-bonds.html

YOU CAN’T EAT NOMINAL RETURNS

#110 Oft deleted much maligned stock picker on 05.30.18 at 9:58 am

In Thailand the retail investment industry is in its infancy…the hurdles to join are high….and minimums expensive….so condos , like in most Asian nations are like the piggy bank, for appreciation and income in a world without government pensions. Lots of people still pile up gold bars under grandmas bed…. but a funny nuance is “investing” in very expensive cars…..

However, how does this compare with the 9.1%of US homeowners currently underwater? Who’s got it better….a bunch of small rental condos or one big house you’ll never pay off between our massive soul sucking recessions. BTW…. my stock portfolio does go up and down but still pays the same dividend yield….which is paid from profits not married to the stock price. Over the same seven years I made a lot more than 5% avg…..a lot more. The fear about losing money short term is misplaced unless you’re ninety and live solely off savings. The most important element to building a portfolio is time ….the next is alternative cash flow. If you can work or consult and avoid looking at your statements then the day to day tragedies play in an empty theater.

#111 Shawn on 05.30.18 at 9:59 am

Small caps (IWM) new all time highs. Not a downtrend folks.

#112 Shawn on 05.30.18 at 10:01 am

USD strength and emerging market weakness continues. This is the real story – not Europe.

#113 Musty Basement Dweller on 05.30.18 at 10:10 am

Mr Dressup should stick to picking colorful socks instead of investment decisions. Check out some of the facts in this article. :
Finance Minister Bill Morneau has proposed sacrificing Canadian taxpayers to bail out an uneconomic U.S. pipeline owned by former Enron executives. And the bill for taxpayers won’t be $4.5 billion as …

http://flip.it/CqRVFb

#114 jess on 05.30.18 at 10:10 am

The Foreign Agents Registration Act (FARA) is a United States law passed in 1938 requiring that agents representing the interests of foreign powers in a “political or quasi-political capacity” disclose their relationship with the foreign government and information about related activities and finances.

work arounds shell companies

US Lobbying Firm Launders Azerbaijan’s Reputation — And Gets “Laundromat” Cash

FARA “Image building or public relations services in the United States, which are non-commercial political activities aimed at influencing the US public … does trigger FARA,” says Josh Rosenstein, a lawyer at Sandler Reiff who specializes in FARA. “FARA’s applicability is much more broad than just traditional lobbying. It specifically includes, as listed in the statute, public relations and communications work.”
When OCCRP reporters called Suleymanov’s office, his secretary told them that they could not speak to him directly as he does not speak English. His profile on the Council of Europe website, however, lists English as his working language. Neither Suleymanov nor his office responded to questions about Renaissance.

“If the NGO, that is itself controlled by the government, is actually controlling, giving direction or funding to this opaque company [Renaissance], then it would seem that FARA would likely be required,” says Rosenstein, the Sandler Reiff lawyer. “This middle-man is essentially a shell being used to either intentionally avoid FARA registration, or otherwise to pass the funds through to the US actor.”

“I think you’ve got several issues here that at the very least raise the real specter of FARA requirements which are not being followed,” says Rosenstein.
https://www.occrp.org/en/azerbaijanilaundromat/us-lobbying-firm-launders-azerbaijans-reputation

#115 Musty Basement Dweller on 05.30.18 at 10:11 am

Finance Minister Bill Morneau has proposed sacrificing Canadian taxpayers to bail out an uneconomic U.S. pipeline owned by former Enron executives. And the bill for taxpayers won’t be $4.5 billion as …

http://flip.it/CqRVFb

#116 Tony on 05.30.18 at 10:18 am

Re: #103 Ian on 05.30.18 at 8:50 am

Of course GDP growth is revised downward because they’re raising interest rates this June. The outcome could not be any different. Virtually all the news will push down interest rates before the June hike. It happens every time they raise rates and I mean every time.

#117 Stan Brooks on 05.30.18 at 10:21 am

BoC keeps rates on hold

https://ca.finance.yahoo.com/news/newsalert-bank-canada-holds-key-140143566.html

and the loonie ‘rallied’ on the news/as it seems rate cut was expected?

It is absolutely fabulous to look how the loonie rises when it should fail at time when diversifying away from CAD. Great, absolutely amazing con artists.

#118 Shawn Allen on 05.30.18 at 10:21 am

Actually, there is a risk-free asset and it is certainly not gold

#101 Tater on 05.30.18 at 8:20 am said:

“I still do not see what strategy you have for when stocks AND bonds sell off. There isn’t one.” …

“The answer is the only risk off asset: gold. Silver is good too.

Bonds are NOT a risk off asset.”

**************************************
Cash and its equivalents (Treasury bonds) short-term GICs are the one and only risk-free asset. Over short periods of time such as a year or two or three, inflation is not a big risk for Canada.

Stocks, long-term bonds or riskier corporate bonds and also gold and silver can all easily fall 20% in a year. For stocks a 50% crash is never really out of the question.

I am not advocating a high level of cash. But if one truly feared/expected a sell-off in both stocks and bonds, then cash is the obvious choice for the short term to weather the expected storm. Traditionally, I believe cash was a component of a balanced portfolio despite that it erodes in value after inflation. It was part of the balanced portfolio precisely because it is the only risk-free asset.

When measured in nominal dollars cash is truly risk free (setting aside theft or default of the bank).

When measured in real dollars, cash is still almost risk free in the shorter term given the level of inflation in Canada.

#119 Stan Brooks on 05.30.18 at 10:28 am

Arrogant (while spending your tax money on failed projects), and very confused individual.

https://ca.news.yahoo.com/morneau-takes-dig-scheer-business-211400354.html

#120 Tony on 05.30.18 at 10:36 am

More jawboning question is will the Bank of Canada ever raise rates again?

https://www.marketwatch.com/story/canadas-dollar-rallies-against-buck-after-boc-policy-update-2018-05-30

#121 Nonno Nicola on 05.30.18 at 10:36 am

All this commentary on Italy/Italians. Credit is far tighter for consumers in Italy than Canada. Rural Italians often have four generations living in an ancestral home. Different culture than the leave home at 18 that many Canadians espouse. In rural areas most live thie whole lives and die in the ancestral home.

#122 People watching people on 05.30.18 at 10:38 am

Saw a curious this this morning on my way in to work on the TTC. The entire interior of the train car I was in was adorned end to end with an ad from a pawn broker (operating since 1860). I guess someone smells the fear in the air.

#123 KLNR on 05.30.18 at 10:40 am

@#85 Ace Goodheart on 05.30.18 at 12:29 am

I think you and your fellow dinosaurs are in for a surprise lol

#124 Tony on 05.30.18 at 10:41 am

Globe and Mail today: Bank of Canada clears way for July rate hike, warns of need to act to temper inflation

Canada’s central bank has cleared the way for a July interest rate hike, warning that it will need to act soon to keep inflation from pushing past its 2-per-cent target.

The Bank of Canada kept its key interest rate unchanged at 1.25 per cent on Wednesday, citing the impact of trade uncertainty, a slowdown in housing activity and mounting “stress” in emerging markets.

Most telling, however, is what Governor Stephen Poloz and the members of the bank’s governing council didn’t say. The statement accompanying the rate decision dropped two key phrases that have been a staple of the bank’s recent communication. Gone is the reference to being “cautious” about future policy changes. Also absent is the qualifier that higher rates will be needed “over time.”

In their place is a new more assertive language about where rates are headed now that the economy is running near full capacity.

“Overall, developments since April further reinforce the governing council’s view that higher interest rates will be warranted to keep inflation near target,” the statement said. “Governing council will take a gradual approach to policy adjustments, guided by incoming data.”

The Canadian dollar jumped in the wake of the announcement, rising about 1 per cent to trade at 77.57 US cents just before 10:30 a.m. (ET).

The bank identified several signs of emerging economic strength, including stronger than expected U.S. growth, higher oil prices, more “robust” exports and “solid” labour income growth. The bank also predicted that housing activity will recover and that consumption will boost growth through the rest of the year.

The bank’s next rate decision is on July 11, when it also releases its next quarterly economic forecast, the Monetary Policy Report. Many economists expect the bank to raise its key rate to 1.50 per cent on that date, with at least one more hike before the end of the year.

The Bank of Canada has raised its overnight rate three times since last June, each time by a quarter percentage-point. It has been on hold since January, in large part because of the uncertainty swirling around the future of the North American Free Trade Agreement with the U.S. and Mexico.

The threat that the President Donald Trump might pull the U.S. out of NAFTA has receded. But so too has the chance of a near-term agreement as the three countries remain far apart on several key issues, including North American content rules for autos and the dispute settlement regime.

The Canadian economy has been growing steadily in recent months and inflation is now at or above 2 per cent, based on the various price benchmarks the central bank tracks. Under its mandate, the central bank uses interest rates as a tool to keep inflation near 2 per cent, pushing rates higher when prices exceed that threshold.

“Inflation in Canada has been close to the 2 per cent target and will likely be a bit higher in the near term than forecast in April, largely because of recent increases in gasoline prices,” according to the statement. “Core measures of inflation remain near 2 per cent, consistent with an economy operating close to potential.”

The bank’s April forecast had called for inflation to be running at a 2.1 per cent annual pace in the first quarter, along with economic growth of 1.3 per cent. Both forecasts now appear a touch low.​

#125 Conn Smythe on 05.30.18 at 10:41 am

#54 Stacey

You had me howling over your post. Very witty!

#126 saskatoon on 05.30.18 at 10:52 am

garth,

you got the recency: stocks and bonds are no longer inversely correlated.

#127 Al on 05.30.18 at 11:20 am

Italy could be the next Greece, and Ontario could become Venezuella with the NDP at the helm.

#128 fancy_pants on 05.30.18 at 11:24 am

What is ironic is the hand that feeds so many may look like the hand of the gov’t but indirectly it is from those who are being tapped the hardest. Socialism will keep tapping the remaining wallets until there are none left to tap. Yet votes continue to choose to bite the hand that ultimately feed them. This country is staring down the barrel of some hard consequences. Most are just to myopic to see what they are ordering.

#129 In Garth We Trust on 05.30.18 at 11:25 am

“Doug and I are resigned to the fact that we cannot match Garth in his wit, biting prose and chiseled abs.”

Duh!! There is a reason why the mystic bearded financial oracle, denouncer of inept politicians, Harley riding bada$$, articulate and Churchillian in his retorts, financial tea leaf reading prognosticator, blog dog hero, champion of canine causes, best selling author, financial prophet in the Canadian wasteland of debt and bloated real estate values and all round jolly good fellow, gets double your comments.

#130 jess on 05.30.18 at 11:37 am

weirdness

Russia, Ukraine blame each other for journalist killing
CNN · 3 hours ago
Day After His Reported Death, Russian Journalist, Kremlin Critic Babchenko Alive
RadioFreeEurope/RadioLiberty · 20 mins ago
Arkady Babchenko: Ukraine blames Russia for journalist murder
BBC News · 52 mins ago

why fake death
Splainer: SBU/ Babchenko say RU services recruited a Ukrainian citizen to hire a contract killer. He hired a military veteran for 30k. The vet informed Ukraine’s secret service & collaborated to fool “broker” that murder went thru. This permitted SIGNIT to track source of order.

in his own words…anyone speak ukranian?
https://twitter.com/ianbateson/status/1001840116661411840/video/1

#131 IHCTD9 on 05.30.18 at 11:40 am

#177 Wrk.dover on 05.29.18 at 12:43 pm

…The by product of the mill/toy meets all my heating needs. House kept between 75 and 80 F.

You just can’t beat the economy of store bought power, if you use it parsimoniously.

By Garth’s definition, I live on air. No problem!
_____

Yes – hydro is cheap in Ontario right now too – thanks to Wynne’s “make the children pay” debt for discount arrangement. I will be producing zero electricity myself if the costs stay where they are, just not worth the trouble. AH is promising another 30% cut on top.

I do not expect this arrangement to last. If this kind of stuff keeps up, I expect the hydro debt accumulation will top 20 Billion by the time someone does something about it. Frankly, the most likely scenario is folding Hydro One and starting over (again).

My plan is not to save a pile on electricity, rather to avoid a pile of costs/taxes right across to board in every conceivable way.

The game at IHCTD9 Head Office is played the same way our government plays their hand. A little here, a little there, a little more every year, a new one every now and then. If I wanted to eliminate or severely reduce just ONE expense, it just doesn’t pay. I’m covering a broad spectrum, not only in reducing my cost of living, but also reducing taxes paid to fund dumb ideas. I’ve hardly got going and I’m saving thousands every year since 2016. That’s the low hanging fruit of course, – but it’s not chump change.

For example: thanks to our efforts on the RRSP front and claiming everything and everything we could at tax time, we ended up with a near 15K tax return. I bought a 3000.00 hunk of equipment that was severely worn/damaged for 50.00 (scrap metal price) and repaired it to like new for 2-300.00 (This machine is part of the “plan”). I had an appraisal done on a vehicle for 50.00 that saved 650.00 in taxes (vehicle is part of the “plan”). I rebuilt another well used pc of equipment to like new for 800.00 that would have cost 3K to buy new (this pc is also part of the plan). THOUSANDS saved all over the place before I’ve avoided a single KWH or drop of gasoline.

BTW, I’d love a (swing blade) mill, but that stuff is best for guys who have real acreages with mature stands of good wood. If I had that, a mill would already be out back. I’ve seen cut and dried slab wood from saw logs here in Ontario sell for 150.00-200.00/ bush cord for firewood too. I really wish I somehow would have ended up with 50-100 acres of mature forest – but it was not to be. I’m sure as hell very well equipped for moving/lifting heavy stuff like logs – maybe some day…

FWIW, my total conventional + non conventional energy bill last year was over $13,000.00. If all goes as planned – I’ll cut that cost right in half even while still buying from the grid.

#132 PastThePeak on 05.30.18 at 11:48 am

Finally, a reporter that is looking beyond the fed spin.

http://business.financialpost.com/opinion/kevin-libin-trans-mountain-remains-a-paralyzed-pipeline-regardless-of-liberal-illusions

#133 Another Deckchair on 05.30.18 at 11:52 am

@61 AlbertaGuy in AB

Appreciate the link, but:

1) Had to find a computer that would play the content;

2) Lost the enthusiasm on the second commercial, so closed it. Not worth the hassle.

How come we support the CBC with our tax dollars, but we need to watch a bunch of adverts, AND find an antique computer to play them on??

Oh well, I’m certain that Garth Turner on CBC TV caused many of our fairer half to swoon! ;-)

#134 LivinLarge on 05.30.18 at 11:55 am

So is this your warm and fuzzy post leading up to Thursday’s Armageddon is nye post?????

#135 russell on 05.30.18 at 11:58 am

By 2021 you will see that the USD will have crushed world currencies as wealth flees the EUR. We are witnessing the unraveling of the monetary system globally. Gold and crypto idiots are living in a fantasy. The situation in Canada with real estate is only a small preview of what is now unfolding and will accelerate into a smash and grab taxation that will deflate the middle class and wealthy alike faster than anyone could have thought. We are heading into the epicenter of the perfect storm on so many fronts that the career politicians that think they have the answers will be running for cover and there will be no place to hide. The average joe consumer has no friggin idea what we are dealing with here until it hits them in the face like hockey puck traveling at warp speed. But hey if you have any equity left in your home might as will HELOC it into a fun package in cuba will it is still available.

#136 Fake News Again on 05.30.18 at 12:20 pm

So if the supposed “alt-right” is nationalist……I guess that makes the Radical Left ANTI-Nationalist? Wooohoooo….lets all raise our hands to ANTI-Nationalism……

#137 Smoking Man on 05.30.18 at 12:23 pm

JohnnyBoy on 05.30.18 at 8:59 am
#68 Smoking Man on 05.29.18 at 10:02 pm
Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth.
……
If the dippers get… Seriously, Ontario Provies.
Hope Ryan and Doug know how to short, if not. I’ll show them…
I’m sure they do…..I’ll be making an appearance at the duke of Devon Thursday 5pm. On the patio. In my vegas knights cap. 500 to 1 on my bet.. Can’t find the damb ticket. I’ll be drinking.
I know JohnneyBoy will show up on his harley with his bitch on the back seat wanting to plant one on my face. he’s a man. . James and Gravy Train.. I’m thinking. In the shadows with the telescopic camera with the 1 800 number to CRA on speed dial..
Life is an adventure. Never fear it… It doesn’t last long..
Will doug or Ryan or Garth show up…
Not a chance…they fear compitition..
…………………………………………………………………..
OK Smoking Man did you just call my wife a bitch?
She is 5’7″ tall with I might add she has met all of the Katas with a Yondan belt. I dare you to call her a bitch to her face old man. BTW she doesn’t care about making you look like an old man fool in front of anyone. Bring your nads!
…..

Ha I thought you were a biker. Bitch is an endearing term for the loved one on the back of a hog. Don’t tell me you traded in the Harley for a yamaha. Now your going all girly on me…

#138 Fake News Again on 05.30.18 at 12:24 pm

Ian on 05.30.18 at 9:07 am
#60 Bonds on 05.29.18 at 8:52 pm
Don’t beat inflation . One would be a fool to put money into them in this environment.

You are decreasing returns . Period

It ain’t hard

Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth
————————————————
They certainly did, because the Fed Funds rate was cut from 5.25% to zero.

What happens now when the Fed Funds Rate is only 1.75%? That strategy of bonds helping out bad equity results will not work this time.

Bonds as a safety valve at this juncture would be the absolute dumbest decision anyone could make.

A rash and incorrect statement. – Garth

_____

I guess we will find out after the bond market collapses.

You won’t live that long. – Garth

#139 IHCTD9 on 05.30.18 at 12:27 pm

#44 WUL on 05.29.18 at 7:29 pm
To commence an upswing in the fortunes of the Ontario PC party, the roster of failed leaders should look like this the next time around:

Hudak, Brown, Ford and Brian Burke.

In the spring of 2015 I failed to mind my own business as an Albertan prior to the selection of a leader by the party and commented here that the party should go with Christine Elliott. The advice was rejected.
_________

Too bad again for the OPC, Elliot would have been a slam dunk, probably a majority.

Oh well, AH is in like Flynn, DF will disappear into the same fog that PB did, and I’ll be hard at work getting a read on what things might look like in 2022 with the Provincial finances.

…and continuing my divorce proceedings (that would be my decades old arranged marriage with the CRA et al).

#140 IHCTD9 on 05.30.18 at 12:41 pm

#114 Musty Basement Dweller on 05.30.18 at 10:10 am
Mr Dressup should stick to picking colorful socks instead of investment decisions. Check out some of the facts in this article. :
Finance Minister Bill Morneau has proposed sacrificing Canadian taxpayers to bail out an uneconomic U.S. pipeline owned by former Enron executives. And the bill for taxpayers won’t be $4.5 billion as …

http://flip.it/CqRVFb
________

I had to stop reading…

Must… maintain… a shred.. of… morale…

#141 Smoking Man Disclosed on 05.30.18 at 12:47 pm

He was the fictional character on X-Files who has hundreds of aliases, but his real name was finally disclosed. I still believe he was a double agent working both sides of the fence.

#142 IHCTD9 on 05.30.18 at 12:52 pm

#138 Smoking Man on 05.30.18 at 12:23 pm

Don’t tell me you traded in the Harley for a yamaha.
________________

Whoa, WHOA – things are starting to get OUTTA CONTROL here!!!!!

Deep down inside, you know that anything YAMAHA manufactures is without equal.

I can not stand idle and watch a Man defile his own conscience.

#143 jess on 05.30.18 at 12:58 pm

the international hacker for hire

Baratov’s role in the charged conspiracy was to hack webmail accounts of individuals of interest to his coconspirator who was working for the FSB and send those accounts’ passwords to Dokuchaev in exchange for money.

Baratov has been detained since his arrest in Canada in March 2017. Baratov waived extradition to the United States and was transferred to the Northern District of California in August 2017. In November 2017, Baratov pleaded guilty to Count One and Counts Forty through Forty-Seven of the Indictment. Count One charged Baratov, Dokuchaev, Sushchin and Belan with conspiring to violate the Computer Fraud and Abuse Act by stealing information from protected computers and causing damage to protected computers. Counts Forty through Forty-Seven charged Baratov and Dokuchaev with aggravated identity theft. As part of his plea agreement, Baratov not only admitted to agreeing and attempting to hack at least 80 webmail accounts on behalf of one of his FSB co-conspirators, but also to hacking more than 11,000 webmail accounts in total from in or around 2010 until his March 2017 arrest by Canadian authorities. In addition to any prison sentence, Baratov agreed to pay restitution to his victims, and to pay a fine up to $2,250,000, at $250,000 per count, with any assets he has remaining after satisfying a restitution award.

Tuesday, May 29, 2018
International Hacker-For-Hire Who Conspired With and Aided Russian FSB Officers Sentenced to 60 Months in Prison
Russian Officers Tasked Prolific Hacker-for-Hire to Target Webmail Accounts

https://www.justice.gov/opa/pr/international-hacker-hire-who-conspired-and-aided-russian-fsb-officers-sentenced-60-months

#144 SimplyPut7 on 05.30.18 at 1:17 pm

Bank of Canada signals it’s on the verge of a rate hike to tame inflation

http://business.financialpost.com/news/economy/bank-of-canada-holds-interest-rate-at-1-25

I guess that’s the excuse we are going to use to raise rates instead of saying the US is doing it so we have to. It has been years since the Bank of Canada cared about raising rates due to higher inflation.

For all of you with investment condos in the GTA under construction, keep hoping rates will go down by the time you have to take ownership of your condo unit you were hoping to flip for a quick buck.

None of the candidates for the provincial election in Ontario can save you from your poor decisions.

#145 Gravy Train on 05.30.18 at 1:20 pm

#137 Fake News Again on 05.30.18 at 12:20 pm
“So if the supposed “alt-right” is nationalist…… I guess that makes the Radical Left ANTI-Nationalist? Wooohoooo…. lets all raise our hands to ANTI-Nationalism……”

Ah, no. The term you’re looking for is internationalist, you genius baby! I’ll even give you the definition of internationalism.

internationalism
noun in·ter·na·tion·al·ism \ ˌin-tər-ˈnash-nə-ˌli-zəm , -ˈna-shə-nə-ˌli-zəm \
1 : international character, principles, interests, or outlook
2 a : a policy of cooperation among nations
b : an attitude or belief favoring such a policy
— internationalist \ˌin-tər-ˈnash-nə-list, -ˈna-shə-nə-list\ noun or adjective

Get it now? No? I give up! :)

#146 jess on 05.30.18 at 1:38 pm

straw buyers …if it could happen south then why not here?

FBI Houston opened its investigation into Ortiz and Santillan in late 2008. That investigation revealed that from 2005 to 2008, the two recruited so-called straw buyers with good credit who allowed their names to be used on loan applications to purchase residential properties in the Houston area. Ortiz promised the buyers that the properties would be renovated and re-sold within a short period of time, and that he and Santillan would take care of any mortgage payments and other fees during that time. “In return for their names,” explained Hawkins, “the buyers would usually receive a one-time payment of around $5,000.”

Then Ortiz and Santillan submitted fraudulent loan applications to a number of lending institutions throughout the United States in the names of their straw buyers asking for up to 100 percent of the sales price of the property. To enhance the amount of money they were asking for on these loan applications, they also submitted incredibly inflated appraisal reports on the homes they wanted to purchase.

“Since the loans were in the names of the buyers, and Ortiz and Santillan had never intended to hold up their end of the bargain to make the mortgage payments, the loans eventually went into default.”
James Hawkins, special agent, FBI Houston

Once the loans were approved, Ortiz and Santillan used bank accounts affiliated with fake businesses they created to receive the dispersed funds at the closing of each sale. The sellers of the properties were paid, and the remaining loan funds—millions of dollars over the lifetime of the scam—eventually found their way into the pockets of Ortiz and Santillan.

https://www.fbi.gov/news/stories/mortgage-fraud-fugitive-receives-additional-prison-time-052918

========
shadow financing
China Energy Misses Payment on Bond, Triggering Cross Default

2018-05-29 — bloomberg.com

#147 No Choice on 05.30.18 at 1:48 pm

Liberals with the blessing of voters created the fiscal mess.
Conservatives do not say how they will fund reductions that will reduce revenue or how they plan to deal with the 340 billion dollar deficit.
NDP wants to do the right thing for marginalized people but because of the fiscal irresponsibility of previous voters and governments will be unable to improve people’s lives by providing – prescription drugs, dental care, eye glasses, affordable day care or a living wage.
The problem isn’t the 1% who earn a salary, or foreign buyers, it is living beyond our means for years and people with billions who amass billions more every year.

#148 jess on 05.30.18 at 2:12 pm

only ten years later and listen to this

multi million dollar mortgage fraud
mar 2011 june 2017 apartment greater didn’t know the truth of apartment complex inflating rent rolls
overstating occupancy appearance
generating more income than they were – magic!
lender liar leases prevent inspectors staging units appear occupied mats and shoes outside turning on radios tv. etc employ others to pretend to be renters
167.5 million dollars 7 properties
mortgages thru fannie and freddie securitized sold to investors …remember 2008 beyond 167m goes further investigation ongoing

https://www.democratandchronicle.com/story/news/2018/05/29/morgan-communities-bob-morgan-kevin-todd-fbi-bank-fraud-court/650509002/
=

BUFFALO, NY (WROC) – Todd Morgan, the son of prominent Rochester developer Bob Morgan, pleaded not guilty to charges of fraud on Thursday.

Todd Morgan appeared in federal court Thursday morning after being charged in a 62-count indictment this week. Prosecutors say Todd and his cousin Kevin Morgan misled financial institutions in order to get bigger loans for seven properties across Western New York.

In court, Todd Morgan was released on a $25,000 bond.

Prosecutors say the pair would take steps, like turning on televisions and radios, to make vacant buildings appear occupied.

Two loan officers, 43-year-old Frank Giacobbe of East Amherst and 34-year-old Patrick Ogiony of Buffalo, were also charged in the case. And Wednesday, U.S. Attorney J.P. Kennedy said the investigation is still underway and more people could face charges in the investigation.

In a statement Wednesday, Bob Morgan said both Todd and Kevin had been suspended without pay. Bob Morgan added, “Morgan Communities continues to cooperate with a federal investigation related to federally backed loans placed to several developers through a specific mortgage broker. We have been and continue to be current on all loan obligations.”

http://www.rochesterfirst.com/news/local-news/todd-morgan-pleads-not-guilty-in-fraud-case/1196682625

#149 wealth on 05.30.18 at 2:15 pm

#12 Stan Brooks

Is a person with 1.5 mil mortgage and 300 k equity in the house based on current house values wealthy

There are plenty of people w a $2M home and a 500K mortgage too.
So it balances out.

#150 NumNum on 05.30.18 at 2:22 pm

Garth, what seems more like to you:
1. Interest rate goes up and the government and the millions of over leveraged citizens get screwed.
2. The government keeps the interest low or destroys the value of money via inflation and both the government and majority of voters make it out just fine at the cost of those who worked hard and saved aggressively.

Imo the answer is obviously 2 since people haven’t been known to vote for anything but their short term interest and that’s all the government cares about.

#151 saskatoon on 05.30.18 at 2:24 pm

#48 SoggyShorts

in sweden:

women have the legal right to insemination.

also, if a child is born out of wedlock…a mother has full custody rights automatically, and can forcibly stop visitation.

This is not an insemination blog. Sadly. – Garth

#152 decade on 05.30.18 at 2:26 pm

#72 Capt. Serious

Is that graph including Dividend payments?

If not, I don’t see what that’s so bad….
It is almost impossible to have a capital loss over 10 yrs.

And on top of that, even if you had no cap gain, you enjoyed dividend payments!!!

It is called: “Getting PAID while you WAIT.”

You should try it, it is awesome.

#153 John of Grant on 05.30.18 at 2:36 pm

#95 Honey Dripper
#59 John Grant

The US has the SOR which they can flood the market with to ease the pain at the pump. What has Canada got?

So, yes they control the price, the resource and the global oil price is priced in US dollars. Canada has what?
What benefits does our oil bring to Canadians? Just whiny comments about high prices all the f’n time!
————————————

SOR is not a national oil company. All it does is smooth out price fluctuations, doesn’t change the overall trend. You are suggesting that a national oil company will ensure low oil prices like in Venezuela or maybe Trinidad. Unfortunately, a big part of the reason gas prices is so high are taxes. Can’t increase the price with taxes and drop it at the same time. If the argument for nationalizing the oil industry is sound, no reason not to nationalize everything.

#154 Mark Baum on 05.30.18 at 2:48 pm

US Housing Bubble Timeline

Mid 2005 – Housing sales volume peaks
Mid 2006 – House prices peak
Early 2007 – House prices decelerate aggressively/go negative
Mid 2007 – Significant subprime problems
Mid 2007 – XLF Peaks (US Financials ETF)
Sept 15 2008 – Lehman Bros Bankruptcy
March 2009 – XLF bottoms (>80% drop from peak)

Do you guys think Canada will follow a similar timeline? Where do you think we are currently? To me it looks like we are in the early-mid 2007 phase when comparing with their bubble.

#155 JohnnyBoy on 05.30.18 at 2:57 pm

#138 Smoking Man on 05.30.18 at 12:23 pm

JohnnyBoy on 05.30.18 at 8:59 am
#68 Smoking Man on 05.29.18 at 10:02 pm
Not why you own them. As I showed during the 2009-10 period, bonds can save your butt. – Garth.
……
If the dippers get… Seriously, Ontario Provies.
Hope Ryan and Doug know how to short, if not. I’ll show them…
I’m sure they do…..I’ll be making an appearance at the duke of Devon Thursday 5pm. On the patio. In my vegas knights cap. 500 to 1 on my bet.. Can’t find the damb ticket. I’ll be drinking.
I know JohnneyBoy will show up on his harley with his bitch on the back seat wanting to plant one on my face. he’s a man. . James and Gravy Train.. I’m thinking. In the shadows with the telescopic camera with the 1 800 number to CRA on speed dial..
Life is an adventure. Never fear it… It doesn’t last long..
Will doug or Ryan or Garth show up…
Not a chance…they fear compitition..
…………………………………………………………………..
OK Smoking Man did you just call my wife a bitch?
She is 5’7″ tall with I might add she has met all of the Katas with a Yondan belt. I dare you to call her a bitch to her face old man. BTW she doesn’t care about making you look like an old man fool in front of anyone. Bring your nads!
…..
Ha I thought you were a biker. Bitch is an endearing term for the loved one on the back of a hog. Don’t tell me you traded in the Harley for a yamaha. Now your going all girly on me…
……………………………………………………….
What is a Yamaha? There are only Harley’s and scooters on the road old man. I drive a Harley. Like I said I dare you to call her bitch. She is not impressed with you old man.

#156 bdwy sktrn on 05.30.18 at 2:58 pm

She is 5’7″ tall with I might add she has met all of the Katas with a Yondan belt.
———————————-
my wife got up to a black belt in taekwondo.
she is about as dangerous and can hit almost as hard as a 11yo boy.
my money is on smokey!

#157 jess on 05.30.18 at 3:08 pm

Goodwill and LLCs?

http://buffalonews.com/2017/10/01/real-estate-mogul/

#158 Wrk.dover on 05.30.18 at 3:08 pm

#132 IHCTD9 on 05.30.18 at 11:40 am

FWIW, my total conventional + non conventional energy bill last year was over $13,000.00. If all goes as planned – I’ll cut that cost right in half even while still buying from the grid.

———————————————

We live on less than double your energy bill, plus the DBP on top, which buys vacations and stuffs the TSFAs.

No swing blade needed, one spruce tree 16″ thick at chest height turns into $100 plus fuel wood in an enjoyable morning with primitive methods. It just can’t be dragged on the ground. It is a very seldom played with hobby for me, excuses like bugs, sun, humidity, wind, cold, snow depth and soft thawing roads (mine), which I will not rut for any reason, keep me away from it most always. I just have an arch on the back of a trailer, winch the log to the pulley, lower it to the edge of the trailer, re hook the cable not through the pulley and winch it aboard. Removal is the opposite process. Your Ontario hardwoods would be much much more lucrative than my local spruce. Ten chubby trees a year would is ample.

Solar electric panels grid connected with Enphase micro inverters, will pay them selves off by spinning the meter backward and then running it forward when with out sunlight. The thing is, not to go over capacity and try to get reimbursed for excess. ( I do know about the sweet heart deal in Ontario, that door is now closed to new entrants) We would have gone with 3.5 kw of panels at ten grand (and still might), but it is questionable how much longer we will live at this location…old age is happening. Hence the mega travel programme. Get er done, while you can.

But the point is, solar electric panels are cost neutral at present rates, with out the big price Ontario pays out in those ten year contracts.

The Evacuated tube solar hot water system has we did put in has a much quicker payoff. Now 1/2 paid for in four years.

This is not a homesteading site it is a financial site, my apologies to others for this sweat equity talk.

Speaking of homesteads though, could the Big Bad Wolf blow Garth’s bank down? Nope!

#159 The Technical Analyst, CSTA, CPD on 05.30.18 at 3:52 pm

#36 Lorne on 05.29.18 at 7:08 pm
How does owning a pipeline balance “the economy and the environment”? And how does delivering these products to market “make it better for all”? Nice statements that make no sense at all!”

Make it better for all: Canada is a resource rich country, bringing our products to the global market = win-win for all Canadians as added revenue will generate growth = jobs = money for more programs for all Canadians.
Economy: The Pipeline will add not only 9,000 jobs but allow Canada to reach more than 1 market for our oil. By the Gov’t owning the pipeline it will continuously generate revenue through usage (toll).
Environment: Thanks to the new Pipeline Canada gets the new Oceans Act. Previously over 157 environmental regulations had to be met for the Pipeline to be built. http://www.dfo-mpo.gc.ca/oceans/conservation/act-loi-eng.html

Hope that helps answer your questions.

#160 WUL on 05.30.18 at 4:10 pm

#147 jess on 05.30.18 at 1:38 pm
straw buyers …if it could happen south then why not here?
****
Hi Jess,

Why not here. Old hat in Alberta starting a long time ago. Countless cases in our courts, civil fraud suits, foreclosure actions and criminal prosecutions.

For example:

https://www.canlii.org/en/ab/abqb/doc/2010/2010abqb602/2010abqb602.html?searchUrlHash=AAAAAQAqbW9ydGdhZ2Ugc3RyYXcgYnV5ZXIgZm9yZWNsb3N1cmUgYXBwcmFpc2FsAAAAAAE&resultIndex=5

R. v. Steinhubl, 2010 ABQB 602 (CanLII)

Sometimes Canucks are ahead of US money making schemes. Ingenuity runs deep in Alberta.

#161 AGuyInVancouver on 05.30.18 at 4:15 pm

#51 the Jaguar on 05.29.18 at 7:53 pm
“And Alberta seems poised to invade BC, now that it’s won the backing of the federal Libs and a pipeline will be rammed through to the sea.”

We invaded a long time ago, which explains a lot of the resentment, though at the root of some of it is just plain envy. Hard living next door to people with intelligence, strong work ethic, and good looks. Maybe look at todays announcement about the pipeline “expansion” as a way of the kid making up for the sins of his father, i.e. the NEP debacle of the early 80’s. Besides..the Feds can’t just sit back and let the BC gov flip them the bird while tanker after tanker from Alaska floats their way through the coast of BC. Dios mio, the Americans must be laughing their asses off at the nonsense. Once the bulldozer engines get turned on again the mob will turn its attention to more urgent matters of the day in the lower mainland. Like the whoopee cushion sound of air being let out of their housing market. We all know what that sounds like and on close examination it might just be the real mcCoy.
_ _ _
A typically ill-informed statement from Alberta. Tanker traffic from Alaska is routed 160 km west of Vancouver Island and Haida G’waii. Transmountain tankers will pass right through Georgia Strait.

If Alberta is such a paradise of hardworking folk, why do so many of you yearn to get out of it with cottages in BC? Glad Horgan will be taxing you on those.

#162 SimplyPut7 on 05.30.18 at 4:35 pm

#155 Mark Baum on 05.30.18 at 2:48 pm

Do you guys think Canada will follow a similar timeline?
No

Where do you think we are currently?
Late 2006: Speculators, flippers, homeowners who bought at the peak, realtors and private subprime lenders – all still believe the market will come back with either a change to the speculation tax or a change in government.

They haven’t comprehend the magnitude of their potential loss if prices and/or sales continue to decrease. Realtors and mortgage brokers can’t sell homes/mortgages to get the commission they need to support their families. Private lenders of speculators/flippers will have to start the process of a court order sale of an investment home that will probably have to be sold at a loss, and sue the borrower for the difference to get the money the lender gave flippers/speculators back.

During the period of 2007-2009 in the US, there was a level of fear and panic that I haven’t seen from any speculators or private lenders in Toronto yet. Speculators in Toronto happily took on a lot of debt they never planned to pay back themselves, instead hoped home prices would increase 10% to 20% a year, while making interest-only payments on the property and then sell their property for a profit without ever having to payoff the entire mortgage. They never looked at the probability of having to make mortgage payments, losing all of their upfront investment money and/or going bankrupt.

#163 Dolce Vita: #108 Stan Brooks on 05.30.18 at 4:47 pm

True about debt aversion for the average Italian.

They will build a home, piece by piece, and only when they have cash on hand rather than go into debt.

Even the younger generation has this anti-debt mentality (well, unemployment is high for them, but still, they save and spend only when they have the money and are frugal in the meantime).

Old style Canada mentality, we used to be a nation of savers. The Italians still are.

I can actually say that I have a statistically significant sample sizes worth of relatives here (30+, X-Mas at one half of the family there were 17 of us, and more filtered in later…the other half, about as large).

My relatives are all debt averse, savers and frugal as need be, like Canada used to be. If you tell any of my relatives that you have a mortgage they will look at you in disbelief.

#164 Dolce Vita: #97 Be Realistic on 05.30.18 at 5:04 pm

What peeves Italians is that of the millions that have gone thru Italy en route to higher paying German and French social systems, there are about 600,000 “Clandestini” as they are called that we do not know where they are, what they are doing etc. (we know there is this number as they have to register at our ports before allowed entry…and then, they disappear into the countryside).

So, imagine Canada:

600,000 illegals plying the countryside and no one knows where the heck they are?

And Canada worries about a handful of Haitians and more recently, a smattering of Nigerians.

Imagine 600,000 of them in the last few years alone.

The problem with Migrants is that the majority of them are economic opportunists and not true refugees, the vast majority…something like 85% last number I saw in Italian MSM articles (and most are young, single males).

Yet, on CBC, Global and CTV, you only see Migrant families…they are a minority and have to be sought out, yet, low and behold, there they are on Cdn. TV.

Laughable Cdn. MSM coverage to the average Italian – of course, they have to maintain their very Lefty narrative which is false.

The other peeve is that they get better treatment (free accomodations, food, cell phones and service) than the average Italian pensioner…and still complain…hard to believe when you look at the countries they are from.

One of the reasons why M5S and Lega did so well in the election, is that they will expel these Migrant free loaders that want to by-pass Italian immigration laws by landing on our shores via human trafficking.

But for Italy, my sense is that it is not a leave the EU issue. It is mostly the financial constraints the EU has put on Italy in trying to fix its financial problems.

The sense I get is that there is little Italian appetite to leave the EU and the Euro.

I could be wrong on that, but that’s my take on the Migrant and leave the EU for the average Italian.

#165 Oh Johnny on 05.30.18 at 5:21 pm

The Smoking Man is too old to take on a biker gal, and would be embarrassed to be beaten up in public. She might make him get on his knees, and have him cry for mercy instead.

#166 waiting on the westcoast on 05.30.18 at 5:39 pm

Hey… We just need to pay everyone 40% more… ;-)

https://globalnews.ca/news/4235966/canadians-consumer-debt-40-more-income/

#167 Give it up - Rates will never rise in Canada under Poloz on 05.30.18 at 9:57 pm

“Interest rates will be rising in six weeks – the fourth increase in about a year. The cost of money will rise again after that, likely on October 24th. Don’t say you weren’t warned in advance.”

HAAAAhahahahahaaaaaaaa.