The warning

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.

The prime rate will be 3.95% by Christmas. The benchmark qualifying rate for the mortgage stress test will be 5.84%, and HELOC owners will get a letter telling them the cost of their demand loans will be upping to almost 6%. This isn’t idle conjecture, and here’s why…

The Bank of Canada poodles understand they cannot get too out of step with the US Fed, which is full of snappy pitbulls keen to reverse nine years of accommodative money policy and reign in an economy thumping along on Trumpian testosterone. American rates have increased five times in about a year with two more to come in 2018. Without keeping pace, our dollar is whacked, stoking prices and inflation.

Speaking of rising prices, the poodles said this on Wednesday: “Overall, developments since April further reinforce the governing council’s view that higher interest rates will be warranted to keep inflation near target.” The target is 2%, and we’re already over that – with decent economic growth, the best job creation in years, outtacontrol gas prices and a booming American economy. The enemy of central banks for years was deflation. Now it’s all different.

Then there’s real estate. It’s cooling, of course, with a collapse in new house sales and a serious decrease in transactions in major markets. But what the central bank cares about is persistently high prices (inflationary) and mounting household debt. Because Canadians lost their minds and decided to buy what they couldn’t afford by financing it, high house prices and tighter mortgage regs have failed. Debt ratios are still epic. The only real brake will be the cost of borrowing, So, up she goes.

And how about T2? The dude pulled a Pierre this week and bought a pipeline company. The $4.5 billion earmarked for the Kinder Morgan deal – to be organized by a new Crown corporation full of civil servants with DB pensions – is just a start. The final cost could be two or three times that and you can be sure the CPP Investment Board will be strong-armed into ponying up a pile of cash. Good thing all the moisters today are financially self-sufficient and won’t need pensions.

The pipeline deal is inflationary, of course. Billions will have to be financed, then poured into a construction project creating 15,000 construction jobs and 37,000 direct and indirect jobs per year of operation. That’s all great and good, but it’s the kind of massive activity central bankers focus on. Mega-projects – especially ones sucking on the government teat – have consequences.

So there’s this cocktail of factors the bank is convinced will emerge. Sustained strong US growth, thanks in part to the Trump tax cuts. Higher oil prices as the global economic expansion continues (growth has gone from 0% to about 4%). Improving Canadian exports. The best wages in six years (up 3.6%). Ontario’s march to a $15 minimum wage, jacking the price of retail goods and restaurant meals. BC’s massive increase in real estate-related taxes – soon (maybe) to be repeated by the Dippers in the East. And the creation of 378,000 new full-time jobs in the past 12 months. The bank also says that, despite higher mortgage costs, it expects the residential real estate market to rebound.

Whether all this happens or not as expected is moot. The central bank has stated clearly this week that rates will be higher on the afternoon of July 11th and more will follow.

The main reason, then?

Simple. To stop the borrowing. If it continues, we’re pooched, if a state of poochiness has not already been achieved. The increase in household debt needs to be choked off. And I’m betting it will.

To those who have said the cost of money cannot rise because nobody could afford it, you’re wrong. With the mortgage stress test at close to 6% this year, it’s clear that’s not what the poodles fear most.

Canadians have proven they can’t handle credit when it’s cheap and plentiful. God help us when the same happens to weed.

181 comments ↓

#1 Hamilton buyer on 05.30.18 at 5:54 pm

FIRST!!

Still time for a deal in Hamilton Garth or should we wait?

#2 waiting on the westcoast on 05.30.18 at 5:54 pm

As I said on the last post, we just need to pay everyone 40% more! Sillies! ;-)

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

#3 waiting on the westcoast on 05.30.18 at 6:01 pm

I remember in the US from 2002-07 how Verne Harnish said you had to be an idiot not knowing how to make money in that environment. The next three years showed who bought new cars and holidays with their cheap money versus those that bought assets that made them money.

We are about to experience some similar lessons in Canada…

#4 Camille on 05.30.18 at 6:04 pm

Live like in the past, be poor live poor. Live in this century, borrow to live! What’s the cost?

#5 Willy H on 05.30.18 at 6:12 pm

http://www.cbc.ca/news/business/bank-canada-interest-rate-decision-1.4683620

“No surprise here,” TD senior economist Brian DePratto said in a commentary.

“With the economy set to outperform the bank’s earlier expectations … and signs of life in all sectors bar housing, economic conditions favour another interest rate hike,” he wrote.

___ ___ ___ ___

Looks like the BoC is not going to let an unsettled housing market stop the inevitable march to higher rates in sync with the Fed.

#6 Blackdog on 05.30.18 at 6:12 pm

But weed already is cheap and plentiful. The government is screwing up so-called legalization big time. There will be more criminal acts, laws to enforce, back logged courts and penalties than currently. Ain’t gonna buy that overpriced, low THC, government regulated stuff! FREE the weed. The irony is that all Canadians would be safer and healthier if drinkers substituted cannabis for alcohol. But the pharmaceutical companies, alcohol industry, tobacco industry, police unions, etc don’t want the public to know that.

#7 the ryguy on 05.30.18 at 6:14 pm

Yup..

Just talked to a couple friends who bought a new build at the absolute peak. Got a “great deal” on a 3 year rate..but now they figure they need another 60k for garage, finishes, fencing, landscaping etc etc once they get the keys, suddenly they are realizing how they can absolutely not afford this place. I pointed this out to them over a year ago with a simple spreadsheet, I still remember their response.. “worst case we can flip it”.

That new lexus will sure look great in their driveway though, maybe they can burn all the past due notices to heat the house.

Wonder how many Canadians are in similar boats?

#8 FOUR FINGERS WATSON on 05.30.18 at 6:19 pm

It is not what they SAY, it is what they DO. And despite all the predictions today they did nothing. Expect more of the same. Lower for longer.

#9 Willy H on 05.30.18 at 6:20 pm

The Bank of Canada poodles understand they cannot get too out of step with the US Fed, which is full of snappy pitbulls keen to reverse nine years of accommodative money policy and reign in an economy thumping along on Trumpian testosterone.
__ __ __ __ __

The foundation for America’s current economic growth was largely laid down by the Obama Administration. Trump’s irresponsible corporate tax cuts will take years to trickle down and they will be tempered by chronic deficits and an ever bloating national debt!

#10 FOUR FINGERS WATSON on 05.30.18 at 6:23 pm

Even this guy got it wrong:

#253 Smoking Man on 05.23.18 at 1:42 pm
The perfect storm.

Dippers leading the polls, and poloz will hike the overnight rate next week.

What could go wrong?…have you listed your house?

Better get moving.
…………………
Smokey, yer losing it. Howz things down there at Betty Ford ? Did they find that hole in the fence yet ?

#11 common sense on 05.30.18 at 6:27 pm

Love that 2% inflation target they toss around….more like 5% at least but I guess the FED and CDN gov’t ALWAYS can be trusted with their numbers and methodology in obtaining a number they like not based on any sort of reality for 99% of the population.

What a joke.

#12 Suede on 05.30.18 at 6:30 pm

What’s the good news?

#13 Shawn Allen on 05.30.18 at 6:38 pm

Borrowing Levels Off? or Declines?

The credit cycle is sometimes mentioned. Also the concept of people reducing debt is mentioned.

I wonder…

In past credit cycle contractions post World War II, has the amount of total personal debt in Canada ever decreased? (Maybe when rates soared in the late 70’s though I rather doubt it)

I can see debt as a percent of GDP dropping as interest rates rise.

But given that the economy and wages do grow over time and the population increases is it safe to assume that the total dollars of personal debt will merely slow down or stop growing but will not decrease.?(Every loan paid off will be matched by a new loan to someone else?)

#14 Reality is stark on 05.30.18 at 6:44 pm

Canadians vs. Americans.
I go to the USA frequently.
I am always asked what the difference is between Canucks and Yanks.
I tell them that Yankees understand how wealth is created. Canadians do not. Canadians believe that government creates wealth. More government, more wealth, very simple.
Yankees understand customer service. Canadians couldn’t care less.
Yankees believe in accountability when spending public funds. Our funds end up in general revenues and the public has no idea where the money goes and does not care.
Canadians feel they are better than Americans because everything in our society is free. Canadians don’t like to talk about money because that is mean and most Canadians are financially illiterate anyway. Canadians like to help others but they don’t want to work too hard.
Canadians understand that there are a lot of different genders and all need to be respected. Americans can’t understand why gender issues should be the number one focus of all levels of government.
Canadians love taxes, the more the merrier. Americans feel that taxes ultimately lead to repression and they should be minimized.
Canadians like to shop in America until our dollar goes too low, but they don’t understand why the dollar is low. Americans fully understand why we have a poor currency, we really don’t produce many secondary manufactured goods because our production costs are high.
However the rhetoric is that we are better educated than Americans and that is why we vote NDP.

#15 Hamilton buyer on 05.30.18 at 6:53 pm

Wait and save your money, because past history of homes in Hamilton during times like this have simply collapsed in home prices. Saw a flash presentation of the new pipeline from beginning to end a few days ago. We have been led to believe it simply followed the other pipeline. It does for the most part, but not coming into the Vancouver area at all, as it forks into two different branch lines.

#16 Screwed Canadian Millenial on 05.30.18 at 6:54 pm

Just a reminder that Norway has a state owned oil company and has over $1.2 TRILLION (cad) in its sovereign wealth fund. https://www.nbim.no/

In fact they, made $130 billion in returns just last year alone.

Norway’s sovereign-wealth fund raked in a $131 billion return last year — here’s why
https://www.marketwatch.com/story/norways-sovereign-wealth-fund-rakes-in-131-billion-return-thanks-to-2017-stock-rally-2018-02-27

All this wealth for a nation of only 5 million people. Incredible isn’t it? Turns out you don’t have to be obsessed with senseless population growth and cheap labour slavery to be a rich nation.

Oh, and a nation’s resources belonging to its people, not corporations and foreign conglomerates. What a concept!

I voted NDP today and I hope they win. Bringing back Ontario Hydro into public hands is the way to go. Too bad we can’t get Hwy 407 back for another 80+ years after that Conservative giveaway.

Harris, Harper, Mulroney what a giant flaming pile of disasters.

Here’s a nice flashback for you boomers. I know how easily you like to forget.

Mulroney stacks senate to pass GST
http://www.cbc.ca/player/play/1435062472

Nothing worse than tax and spend Conservatives who give away public assets. Conservatives sell the fridge to pay for the groceries.

Just the truth folks. Just the truth. Is that still allowed?

#17 Dave on 05.30.18 at 6:56 pm

The largest demographic will be the millennials going forward…filled beyond capacity in debt.
This is no accident… debt = control
This debt will off set any future inheritance from mom and dad and thus keep the population inline.
You know whats next right?

#18 TheDood on 05.30.18 at 6:57 pm

#8 FOUR FINGERS WATSON on 05.30.18 at 6:19 pm

It is not what they SAY, it is what they DO. And despite all the predictions today they did nothing. Expect more of the same. Lower for longer.

__________________________________________

Yup, and that leads to $10 a loaf of bread and $300 to fill the car with gas.

Poloz = gutless idiot!

#19 Damifino on 05.30.18 at 6:57 pm

“a state of poochiness…”

Destined to become a classic.

#20 dr talc on 05.30.18 at 6:57 pm

industry driven scam alert:
Ontarians, be glad this order didn’t go to Wynne-

https://www.bloomberg.com/news/articles/2018-05-09/california-votes-to-require-rooftop-solar-power-on-new-homes

#21 Sticker Shock.... on 05.30.18 at 7:00 pm

…that’s what you get when checking out that online
purchase after converting to CAN dollar. Our loony
is too low as it is….rising rates usually help that as well
as encouraging people to actually start SAVING again.

#22 You know val on 05.30.18 at 7:00 pm

Thank god T2 pulled a Pierre and not a Margaret… lol

#23 jess on 05.30.18 at 7:05 pm

” Mega-projects – especially ones sucking on the government teat – have consequences.”

yeah, like these?

Subsidy Tracker Top 100 Parent Companies

(Covers federal, state and local awards combined.)
good jobs first database

The Great American Jobs Scam:
Corporate Tax Dodging and the Myth of Job Creation

https://www.goodjobsfirst.org/GAJS

server farms here’s a few

So intense is the competition, that subsidy offerings frequently exceed any projected wages or taxes. Moreover, these are some of the most profitable growth companies in the country, ones with billions in profits that have no need for the millions that hard-strapped communities are shelling out. For instance:

WASHINGTON. In spring of 2010 a new set of tax incentives cleared the legislature allowing a 15-month sales tax exemption on the purchase and installation of computers and energy for new data centers in 32 rural counties. Other incentives will run until 2018. These incentives apply to Microsoft, Yahoo and Intuit, which who are all building massive centers in Quincy, a town in central Washington. While the centers will add to city revenues, all told, these installations will employ fewer than 200 full-time workers, and require government investment in new water systems.

NEW YORK. In late 2010, Verizon was still negotiating with the state of New York and the Niagara County Industrial Development Agency over the exact wording of its estimated $614 million in tax breaks for a $4.5 billion data center in Somerset. According to The Buffalo News, “Verizon would get $330 million in sales tax savings, $188 million in property tax savings and a $96 million break on its power bills.”

NORTH CAROLINA. In 2007 Google won more than $200 million in state and local subsidies over 30 years for a server farm in the small town of Lenoir. In 2010 Apple got half-price electric power, as well as generous tax breaks, for locating a $1 billion data center in the town of Maiden.

OREGON. In 2010 social networking giant Facebook expanded its planned Prineville data center from 147,000 to over 300,000 square feet. Facebook will be excused from paying up to $2.8 million per year in taxes, as long as Facebook maintains an average staff of 35 or more people at the site during that period.

UTAH. Online auction and shopping website eBay is opening a $300 million data center in the Salt Lake City suburb of West Jordan. Although the center will employ only about 50 people, the state offered tax breaks worth $27.3 million over a 10 year period.

#24 akashic record on 05.30.18 at 7:07 pm

“Canadians have proven they can’t handle credit when it’s cheap and plentiful.”

Tell us who could… Individuals, governments, businesses anywhere in the world?

The whole point of cheap and plentiful credit was to consume it and kick-start the economies that banks crippled… because they can’t not handle that printing money is cheap and plentiful.

On top of that, the same banks were unable to handle responsible lending: I did not hear about any Canadian who put a gun to the head of loan officers to get their loans, mortgages signed.

#25 5Inatrailer on 05.30.18 at 7:10 pm

Does anyone here think that this real essays market will resemble the us circa 2009? Rates may be going up now, but that doesn’t really hit you until a few years from now when you need to renew (I did in feb thanks Garth!)
So to sum, it will be a couple years yet for prices to adjust to the new interest rate environment.

It’s not worth what someone is willing to buy it for.
It’s only worth what someone is willing to lend you credit for.

That’s why 5 of us live in a trailer (gawd help us all)

#26 bdwy sktrn on 05.30.18 at 7:14 pm

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.
————————————-
A typically ill-informed statement from a eco-nut bc’er.

you’d think you’d know better living out here.

alaska tankers do now, and have been transiting the lower part of the straight for a long time.

the large WA refineries they supply are located on the SHORES of the southern straight.
(i am quite certain the ships are not air lifted in from the open pacific.)

cherry piont is reached after crossing the straight after transiting the much longer juan de fuca (just as important for whales etc.) all while loaded to the tits with black crude.

shipments from vancouver basically follow the same ‘inland’ route , simply continuing another 37 or so more miles to vancouver (from cherry point)

80% of the route is already running shitloads of tankers and nobody here has a clue.

typical eco-nuts.

#27 NoOneOfConsequence on 05.30.18 at 7:19 pm

Can we please overhaul democracy now?

A government for the people, by the people, stops working when the people are short sighted idiots.

#28 Conservative Canadian Millenial on 05.30.18 at 7:22 pm

#FORD MORE YEARS BABY!

I hope that Doug Ford will exterminate all social justice theory from our classrooms in elementary school all the way to university and doctorates.

Teacher salaries should be CUT by 50% because they are overpaid social justice warriors. Bring back police carding to end crime in Canada. Deny entry to any arrival who has a criminal record. SAY NO to Kathleen Wynne’s Health Education curriculum because according to distinguished journalist Ezra Levant, the Health Curriculum is masquerading as an instruction manual for those who will harm your child.

VOTE for Doug Ford before 10pm tonight, or on June 07, 2018. ALL SJWs need to be removed from power!

#29 VanMan on 05.30.18 at 7:27 pm

I’ll believe it when I see it…there’s just too many factors in a global economy to say anything is certain.

You can only give so many warnings of what’s to come without it ever actually arriving…the wolf has yet to be seen.

#30 Smoking Man on 05.30.18 at 7:33 pm

It’s going to be another Golden Knight…

#31 Fake News Again on 05.30.18 at 7:37 pm

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! :)

______

Hey Taxpayer Funded Gravy Train…….

I was making fun of the FREAKS on the left that always call (non) left people – FAR (alt) RIGHT.

Thank you for proving to us you worked for the Govt Mr Genius……do you have a pipeline to sell us?

#32 Debtslavecreator on 05.30.18 at 7:43 pm

The kleptocracy running this crooked joint just put in place true newest 20-30B scam with the Kinder surprise
We are well past the point of no return with the massive out of control borrowing
The next 10-15 years are going to resemble a more intense and longer version of 1975-1981
Can you say stagflation
I am really concerned about this massive corruption and looting
The interest charges are going to eventually consume more than 50 cents of each tax dollar by 2030 and at this rate possibly by mid 2020s
We are steadily sliding into a totalitarian state with all wealth eventually confiscated through currency debasement , increases taxes on the resulting imaginary gains and outright theft through use of the “law” to steal
This is a very concerning road we’re on

#33 tccontrarian on 05.30.18 at 7:47 pm

“And how about T2? The dude pulled a Pierre this week and bought a pipeline company.” GT
———————————————————

So easy to spend other people’s money, isn’t it?

Funny that so many voted for poster-boy because he made promises about these pipelines NOT going in (at least I think I heard him say this. I wasn’t really listening to their campaigns – because politicians are known to … fib … here and there.

About interest rates and RE bubble:
If we look at what happened in the US, it wasn’t a huge increase in rates that brought on the credit crisis. A small increase was sufficient in exposing the over-leveraged!
Let’s see where the ‘tipping-point’ is here in Kanada. Perhaps we’re already past it – just may need more time.

“Time is a process, in time” – I remember my Geology professor once saying. So, even if the rates don’t go much higher than where they are currently – all we need is…more TIME!

TCC

#34 Fake News Again on 05.30.18 at 7:53 pm

The new Govt Pipeline….

This subject clearly shows how many people on this blog are from Alberta and the ones whom are in offices in Ontario that “think” they might know a tiny teeny amount about oil and gas. The ones that think it is a “Taxpayer Boondoggle” prove that point.

The Govt collects 5 – 10 BILLION dollars a year in oil and gas royalties.

The pipeline is set to increase tanker traffic in BC from 1 a week to 1 A DAY. Do that math people. This will be a windfall for ALL CANADIANS as the Chinese snort up that oil by the tanker ship full…….

#35 For those about to flop... on 05.30.18 at 7:57 pm

Earth,wind and fire…

M43BC

“Visualizing the Most Expensive Natural Disasters in the Last 40 Years.

Hawaii’s Kilauea volcano is now threatening to destroy more homes, forcing the authorities to order a mandatory evacuation for additional neighborhoods. There’s no telling when the volcano will finally stop, but it has already destroyed 82 structures. That means we will have to wait assess the final cost of damages, but it got us thinking about the most expensive natural disasters in American history.

The National Centers for Environmental Information (NOAA) closely tracks severe weather events and natural disasters across the U.S. The dataset runs from 1980 to April 6, 2018, making it one of the most complete and accurate assessments of natural disasters available today. Researchers used the Consumer Price Index (CPI) to adjust the cost of damages, creating a fair apples-to-apples comparison. We illustrated each disaster on a timeline, where the size of the figure represents its total cost.

Top Ten Most Expensive Natural Disasters since 1980
1. Hurricane Katrina: $163.8B in damages, ended in August 2005

2. Hurricane Harvey: $126.3B in damages, ended in August 2017

3. Hurricane Maria: $90.9B in damages, ended in September 2017

4. Hurricane Sandy: $71.5B in damages, ended in October 2012

5. Hurricane Irma: $50.5B in damages, ended in September 2017

6. Andrew: $48.6B in damages, ended in August 1992

7. U.S. Drought/ Heatwave: $43B in damages, ended in August 1988

8. Midwest Flooding: $36.7B in damages, ended in August 1993

9. Hurricane Ike: $35.4B in damages, ended in September 2008

10. U.S. Drought/ Heatwave: $33B in damages, ended in December 2012

Our timeline illustrates how natural disasters have become increasingly expensive over the last 4 decades. In fact, last year they cost Americans a record $306B. Damages from individual events exceeded $10B prior to 2000, with only one event, Hurricane Andrew, coming close to topping $50B. Since the turn of the century, however, Mother Nature has extracted an increasingly higher price from Americans with Hurricane Katrina topping the list at $163.8B in 2005. But that figure isn’t such an extreme outlier any longer as storms have become increasingly costly.

The upward trend in damage is due entirely to hurricanes, but there’s a deeper story going on. Hurricanes have been hitting the Gulf Coast and Eastern Seaboard of North America for centuries, and yes, you can make an argument that recent storms have been more powerful than normal. But the real problem is that Americans have built so many large cities so close to the water without investing in the necessary infrastructure to protect people from disasters. The South is home to a disproportionate share of the country’s fastest growing cities, and we know natural disasters tend to strike the same place time after time. That’s a recipe for very expensive damages.

You can draw a couple more insights from our visualization too. First off, tornadoes are certainly scary events, but they just don’t cause anywhere near as much destruction and property damage as hurricanes. Second, and perhaps more surprising, droughts/heatwaves make it into the top ten most destructive natural disasters. This is no doubt connected to losses suffered on farms in crops and livestock.

The big takeaway here is that if past is prologue, expect there to be several more $50B+ hurricanes in the years ahead. And will we have to add a figure for volcanoes to our timeline if the situation in Hawaii continues to get worse? The Kilauea volcano still has a long way to go, but the costs are already piling up.

If there are other natural disasters missing, let us know at [email protected] so we can update our article.”

https://howmuch.net/articles/most-expensive-naturals-disasters-in-usa

#36 cecil1 on 05.30.18 at 8:02 pm

If you can’t afford real estate now just wait till the government gets its agenda going for 20 years. See #Immigation2018.

My country was my home, now its a hotel. They think we’re willing to be serfs.

For lots of people, FOMO is becoming just MO.

#37 SimplyPut7 on 05.30.18 at 8:02 pm

The benchmark qualifying rate for the mortgage stress test will be 5.84%, and HELOC owners will get a letter telling them the cost of their demand loans will be upping to almost 6%.

——————–

How would HELOCs go to 6% if rates are 3.95% – 4.49% now?

The norm is for HELOCs to be prime plus 1%-2% now. Prime is on its way to 4%, and the banks are tightening. – Garth

#38 Dave on 05.30.18 at 8:04 pm

Come on Polz that real estate apologist uses every excuse not to raise rates. As for the pipeline, regardless of the environmental issues, buying a dud like KM is one of the stupidest things the Liberals did. KM wanted it this way as they were trying to weasel out of a project that doesn’t make financial sense. Now us taxpayers are on the hook for the construction costs, insurance, liability, lawsuites, etc, the cost will be way above 4.5 billion. Trudeau will be a one term PM–if he lasts that long.

#39 dosouth on 05.30.18 at 8:18 pm

Rates can continue to rise and mortgages and HELOC’s but reality is “you cannot legislate common sense”.

So short of stress tests out of the reach of most, like taxing smoking to reduce use, you’ll be writing about indebtedness ad infinitum….

#40 the ryguy on 05.30.18 at 8:20 pm

#9 Willy H on 05.30.18 at 6:20 pm
—————————————–

The Trump derangement syndrome is real.

Please Willy H, tell me one god damn policy that Obama implemented that helped the American economy?

You either are a mouth breathing fool stuck repeating CNN or simply don’t understand Economics. Hope you don’t do anything important.

#41 Willy H on 05.30.18 at 8:34 pm

#16 Screwed Canadian Millenial on 05.30.18 at 6:54 pm
Just a reminder that Norway has a state owned oil company and has over $1.2 TRILLION (cad) in its sovereign wealth fund. https://www.nbim.no/

In fact they, made $130 billion in returns just last year alone. ….

Nothing worse than tax and spend Conservatives who give away public assets. Conservatives sell the fridge to pay for the groceries.

___ ___ ___ ___

Wonderful post!

The Great Canadian Giveaway has been going on for most of my adult life.

Never thought I would live long enough to witness Alberta begging for a reboot of the National Energy Project.

What few Canadian corporate success stories we have tend to wither away or they are sold off a bargain basement prices (our steel industry!) to foreigners.

We sell our resources on the cheap and avoid value-add at all costs.

The state of Pennsylvania has stricter foreign ownership regulations than Canada!

I guess that’s why you can’t put together a quality Canadian stock portfolio.

#42 Willy H on 05.30.18 at 8:41 pm

#14 Reality is stark on 05.30.18 at 6:44 pm
Canadians vs. Americans.
__ __ __

Your post is so 1985.

Truth be told, we have much more in common with our American cousins than we would like to admit.

America is changing and it demographics and political ideology is moving to the centre as generation GOP dies off.

Even the sacred unchallenged myth that America is a “melting pot” and Canada a “muti-kulti paradise” is pure bunk.

The immigrant experience, for the most part, is virtually identical in both countries.

#43 The Real Mark (not the imposter) on 05.30.18 at 8:43 pm

TransMountain is not that big of a pipeline compared to others that have been built in Western Canada over the past decade or two. No big amounts of inflation were unleashed with any such incidents of construction.

There’s no reason to believe that civil servants will be ‘running’ TransMountain or the expansion. Most likely just existing staff of the existing Kinder Morgan Canadian subsidiary will continue working for the same company, minus the affiliation with the US Kinder Morgan corporation.

The Canadian economy clearly is slowing considerably, with housing investment falling. The debt bubble has popped, which will keep any inflationary pressures constrained. Big surprise is likely to be the Bank of Canada not raising much, if at all. Trade wars between China and the USA promise to unleash even more cheap Chinese goods onto Canada, hence, driving deflationary pressures further.

$4.5B is just a mere rounding error in government debt. Harper added $270B+ of it in his decade as PM, including a ~$20B deficit in his last year in office. Which his cronies continue, even to this day, to lie about. Not even to mention the extra debt that was added to the CMHC through guarantees of subprime mortgages which will increasingly start to be called upon as the housing market continues its downwards acceleration.

The US Fed is irrelevant (although they will continue to raise). Canadian monetary policy is determined by monetary and economic conditions in Canada (thank God!), and the Bank of Canada has no obligation to follow the Fed. There would be no point for the BoC to drive the yield curve into the sort of inversion a 3.95% Prime rate implies, especially with inflation only minimally existent and decelerating.

#44 PGer on 05.30.18 at 8:44 pm

While I agree Poloz is a poodle, I think Carolyn Wilkins is more of a Cocker Spaniel. It’s in the eyes.

#45 Pulp Faction on 05.30.18 at 9:11 pm

Here’s a tip from your techdog blogdog.
Huawei is going to pave the street with Samsung, and compete with Apple, possibly coming out the winner.
I’ve been switched over for awhile now.

#46 DON on 05.30.18 at 9:20 pm

#29 VanMan on 05.30.18 at 7:27 pm
I’ll believe it when I see it…there’s just too many factors in a global economy to say anything is certain.

You can only give so many warnings of what’s to come without it ever actually arriving…the wolf has yet to be seen.
*****************

Just because YOU can’t see it coming doesn’t mean it’s not around the corner. Famous last words ‘I didn’t see it coming’.

Look at the data, the bank of Canada went all happy path and isn’t exactly the oracle as they are blinded by group think.

#47 waiting on the westcoast on 05.30.18 at 9:24 pm

#43 The Real Mark (not the imposter) on 05.30.18 at 8:43 pm says… “The US Fed is irrelevant (although they will continue to raise). Canadian monetary policy is determined by monetary and economic conditions in Canada (thank God!), and the Bank of Canada has no obligation to follow the Fed. There would be no point for the BoC to drive the yield curve into the sort of inversion a 3.95% Prime rate implies, especially with inflation only minimally existent and decelerating.”

Mark – this is almost as funny as your 2013 thesis..

If Canada tries to be an island and manage its own currency without consideration of global trade, the currency will devalue, creating significant inflation.

#48 AfterTheHouseSold on 05.30.18 at 9:27 pm

#20 #22 Adrian (yesterday)
“XCB? XSB? where do those come in from your previous advice.
“Global and Canadian sovereign bonds 11(%) IGOV”
“Corporate and high yield bonds 9(%) HYG”

Look closer at Garth’s advice. The key word is ‘AND’ as in ‘along with, together with, as well as’. That is four ETF’s not two that you provided.

The Global AND Canadian bond would total 11%
The Corporate AND high yield would total 9%

Garth generously provided two ‘examples’ of the four, a Canadian bond and a Corporate bond. There was no “cherry picking”.

#49 A Yank in BC on 05.30.18 at 9:30 pm

#30 Fake News Again on 05.30.18 at 7:53 pm

“Do that math people. This will be a windfall for ALL CANADIANS as the Chinese snort up that oil by the tanker ship full…….”

Don’t be so sure about that. Could be a huge boondoggle instead. This well-researched article from last March might change your overly-optimistic outlook.

https://www.nationalobserver.com/2018/03/07/opinion/fatal-flaw-albertas-oil-expansion

#50 DON on 05.30.18 at 9:38 pm

#32 Debtslavecreator on 05.30.18 at 7:43 pm
The kleptocracy running this crooked joint just put in place true newest 20-30B scam with the Kinder surprise
We are well past the point of no return with the massive out of control borrowing
The next 10-15 years are going to resemble a more intense and longer version of 1975-1981
Can you say stagflation
I am really concerned about this massive corruption and looting
The interest charges are going to eventually consume more than 50 cents of each tax dollar by 2030 and at this rate possibly by mid 2020s
We are steadily sliding into a totalitarian state with all wealth eventually confiscated through currency debasement , increases taxes on the resulting imaginary gains and outright theft through use of the “law” to steal
This is a very concerning road we’re on
.#33 tccontrarian on 05.30.18 at 7:47 pm
“And how about T2? The dude pulled a Pierre this week and bought a pipeline company.” GT
———————————————————

So easy to spend other people’s money, isn’t it?

Funny that so many voted for poster-boy because he made promises about these pipelines NOT going in (at least I think I heard him say this. I wasn’t really listening to their campaigns – because politicians are known to … fib … here and there.

About interest rates and RE bubble:
If we look at what happened in the US, it wasn’t a huge increase in rates that brought on the credit crisis. A small increase was sufficient in exposing the over-leveraged!
Let’s see where the ‘tipping-point’ is here in Kanada. Perhaps we’re already past it – just may need more time.

“Time is a process, in time” – I remember my Geology professor once saying. So, even if the rates don’t go much higher than where they are currently – all we need is…more TIME!

TCC
***************

Nicely put boys.

Look around you ‘people’ the signs are there. The straw that broke the camels back.

Newspapers have been slowly socializing the inevitable with the masses in the last couple of months. Last year this time the after party was still rolling on. Not so much anymore.

And when buying a house do young people realize that debt is for decades and in between life happens? And it can be a bitch at times.

Like the ryguy’s friends stated, “worst case we can flip it”. That was their worst case scenarios in a perfect sellers market. Not so much now. Life is longer than a couple of years. But you don’t know what you don’t know. Great way to plan for a 25-35 year mortgage.

FFS! Teach your kids.

#51 NoName on 05.30.18 at 9:45 pm

Buys pipeline, and makes anti-pipeline protesters to pay for it with their carbon taxes.

well played !!!

#52 Love Guru's Dad on 05.30.18 at 9:47 pm

#26 bdwy sktrn on 05.30.18 at 7:14 pm
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.
————————————-
80% of the route is already running shitloads of tankers and nobody here has a clue.

typical eco-nuts.
—————————————
I think you just answered why we are concerned in BC. You described the amount of traffic as shit loads. Can you tell us at what point does the traffic congestion in these straits hit critical mass, and drive the disaster probability curve to the point where it becomes inevitable?

#53 DON on 05.30.18 at 9:49 pm

#38 Dave on 05.30.18 at 8:04 pm
Come on Polz that real estate apologist uses every excuse not to raise rates. As for the pipeline, regardless of the environmental issues, buying a dud like KM is one of the stupidest things the Liberals did. KM wanted it this way as they were trying to weasel out of a project that doesn’t make financial sense. Now us taxpayers are on the hook for the construction costs, insurance, liability, lawsuites, etc, the cost will be way above 4.5 billion. Trudeau will be a one term PM–if he lasts that long.
************

Exactly a company that had no mentionable Asian clients. China is pivoting to Iran, Russia etc for oil and gas. Kinder Morgan chose to pay off debt in the last couple of years instead of saving for the pipeline. They create this scenario so they could bow out and blame a Province.

So now we have a government that will make it work, not a business but a government without the no how.

So in the end the pipeline was saved by taxpayers. If this is so lucrative why didn’t Kinder Morgan proceed. Oh that’s right…it was only profitable but in 2010-12 when the plan was hatched. But things changed…changed.

So Trudeau’s socialist corporate welfare government is making US…US pay for this venture. Where’s the business case, contracts etc?

#54 DON on 05.30.18 at 9:59 pm

#52 Love Guru’s Dad on 05.30.18 at 9:47 pm
#26 bdwy sktrn on 05.30.18 at 7:14 pm
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.
————————————-
80% of the route is already running shitloads of tankers and nobody here has a clue.

typical eco-nuts.
—————————————
I think you just answered why we are concerned in BC. You described the amount of traffic as shit loads. Can you tell us at what point does the traffic congestion in these straits hit critical mass, and drive the disaster probability curve to the point where it becomes inevitable?

***************

I hope you don’t expect a logical answer from bdwy sktrn, reads some of his house prices will never fall posts from the past.

#55 conan on 05.30.18 at 10:02 pm

Just my opinion, but the Libs bought that pipe line to guarantee completion. It is a lot harder now, for well moneyed American oil interests, to legally interfere with “tide water.”

There are 15 billion reasons why this project will make dollars, and pension companies will be all over it.

#56 MF on 05.30.18 at 10:03 pm

I am having a hard time admitting it but I kind of support the Liberals in this pipeline thing.

(Eugh that hurt)

Anyways, in the end, this thing just needs to be built already. The benefits will outweigh the cost (it has to).

MF

#57 Duke on 05.30.18 at 10:05 pm

#16 Screwed Canadian Millenial on 05.30.18 at 6:54 pm

Well said.

#58 BCWally on 05.30.18 at 10:05 pm

I took a look at those HELOC loans which I seem to be alone in believing this will be the trigger quite possibly a debt crisis in the country.
I used this online calculator for 100K with a draw of 10 years and interest rates jumping from 3 to 6%, with a total time period of 15 years.
The article I read stated there is a draw period of time, typically 10 – 15 years in which only interest payments are due. At the end of this period principal and interest payments must be paid monthly.
According to the stats I have read 4 out of 10 people are not even making interest payments during this draw period increasing the principal amount.
So I was wondering, are there statistics on say the average amount of time left on the draw periods of all those loans? That information would be golden for all kinds of reasons.

#59 The Secret Code on 05.30.18 at 10:24 pm

I thought the odds are for a 2nd rate hike in December, not October.

#60 small steps on 05.30.18 at 10:26 pm

“The dude pulled a Pierre this week and bought a pipeline company. The $4.5 billion earmarked for the Kinder Morgan deal – to be organized by a new Crown corporation full of civil servants with DB pensions – is just a start.”
How is this legal for politicians to do?!??

#61 Investx on 05.30.18 at 10:39 pm

Which rates are going up twice this year?

Canada? US?

Please specify.

#62 Deplorable Dude on 05.30.18 at 10:47 pm

We’ve reached the ‘boiled bunny moment’ with our wholly unqualified Foriegn Minister Chrystia Freeland over NAFTA ‘negotiations’…

Think she’s having a meltdown…Canada has ZERO leverage….

….what is she going to do….?

https://theconservativetreehouse.com/2018/05/30/nafta-watch-canada-vows-to-retaliate-if-they-lose-access-to-loophole-permitting-tariff-free-trade-with-foreign-countries/

#63 KM Is Laughing on 05.30.18 at 10:50 pm

T2 is a clown surrounded with handlers who have no clue about politics or the business world. KM could see the writing on the wall, and that T2 became an obvious mark to exploit. KM pushed the right buttons for a positive outcome, and reeled in their fish. It was all a trap to get out of a bad deal with no ending. Now the taxpayers are holding the bag thanks to this Liberal Government.

#64 Myra Andrews on 05.30.18 at 10:51 pm

Greater Vancouver Stats from realtor Paul Boenisch

May 29 New 286 Sold 113 TI:11964
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

#65 NoName on 05.30.18 at 10:54 pm

#56 MF on 05.30.18 at 10:03 pm
I am having a hard time admitting it but I kind of support the Liberals in this pipeline thing.

(Eugh that hurt)

Anyways, in the end, this thing just needs to be built already. The benefits will outweigh the cost (it has to).

MF

here is a problem or not.

Old pipeline 4.5B
New pipeline not built yet cost built 8B if thing go ok

#66 CalgaryCarGuy on 05.30.18 at 11:03 pm

It kind of amazes and surprises me how quick and easy people in this country are to gang upon Alberta. If there is one province in this country that has proven itself to have a long memory and hold a grudge it is Alberta. NEP anyone?…. Wise up, shut up, take your transfer payment allowance and go to your room.

#67 AlbertaGuy in AB on 05.30.18 at 11:09 pm

Re KM: 4.5B is the cost to purchase existing infrastructure plus costs of permits and design required for PH2 twining.

Add 4B+ to construct PH2

Add ongoing operating and maintenance costs for PH1 + PH2

10B easy before crowncorp can unload

Re WEED: I bought my growlight at costco this winter and will be setting up in home operation for my 4 plants when legal. For arthritis relief only of course…

#68 The warning on 05.30.18 at 11:17 pm

The warning.
Wow, that photo is so scary.

#69 Terrie Rolph on 05.30.18 at 11:19 pm

Screwed Canadian Millenial…
Like. ;)

#70 waiting on the westcoast on 05.30.18 at 11:27 pm

#52 Love Guru’s Dad says “I think you just answered why we are concerned in BC. You described the amount of traffic as shit loads. Can you tell us at what point does the traffic congestion in these straits hit critical mass, and drive the disaster probability curve to the point where it becomes inevitable?”

Hmm… I don’t know the probabilities but let’s say it’s 1 in a million. Now it’s 7 in a million. Sure that’s 7x but still an infintismal risk difference.

But hey, maybe you buy 10 lottery tickets because you now have 10x chance to win…

#71 Greg on 05.30.18 at 11:49 pm

Overheard in a downtown calgary pipeline company elevator today. 2 moister women/girls lamenting how it doesn’t matter if they pay $715k or 721k or $725k for their duplex (semi in Ontario-speak) in Bridgeland, because it will sell for “at least double” when they “go to sell it” at some unnamed future date.

Then these two proceeded to alternately (and bizarrely) say “guaranteed” — “guaranteed” — “guaranteed” to each other until the elevator landed.

Of course I didn’t say a word for fear of being hauled into HR for assault.

#72 Canada=Poor cousin of U.S on 05.30.18 at 11:52 pm

There reason for housing bubble is simple. There aren’t many great opportunities to make money in Canada
(yeah accept it). Especially for the average Joe. Canada is NOT U.S. So most average Joe’s thought increasing housing prices will be the way to riches and they can snap a house and retire wealthy. Hence the bubble was formed.

#73 Rexx Rock on 05.30.18 at 11:54 pm

Not going to happen.Interest rates will not rise because the amount of debt.This fairy tale or foolish charde of raising rates is so comical that its been almost 10 years.Any way it still a long process of zirp that Canada will endure like Japan.Its means saving is a waste of time and invest and speculate in all assets.It would be great if interest rates would normalize but I think we went to far down the rabbit hole.Poloz the clown has no credibilty.

#74 The Real Mark (not the imposter) on 05.30.18 at 11:55 pm

Anyone else watching the crash of CAD$ GoC bond yields?

https://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Sounds like the “interest rates rates are going to rise” hype is coming to an end. Quite a change, even in the past week or two.

Heaven forbid, the lower rates may even filter down to top-quality residential RE borrowers. Not that such will revive the housing market.

#75 Nonplused on 05.31.18 at 12:00 am

“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.”
– Milton Friedman

There is no way this pipeline gets built now that the feds own it. Why not? Votes. The pipeline isn’t going to be any less contentious now that the feds own it. In fact, it might be worse as the lefties in BC view it as Ottawa ramming a pipeline down their throats. So Turdeau will cave. As soon as the government economists redo the calculations and spreadsheets they get from Kinder Morgan and include environmental, social, and gender equity cost in the calculation it will magically become “uneconomic”.

The real reason to buy the pipeline from Kinder Morgan is to compensate them for the money they’ve already spent and relieve them of an impaired asset. Otherwise there would have been a lawsuit and Turdeau likely would have lost. So now the lawsuit is gone and so is any real need to proceed with the project.

Even if this wasn’t anything more than a political stunt and Turdeau really does want to proceed with the project, we now face years of delays as all the consultations and gender studies and environmental impacts are repeated adnaseum. It just won’t ever be built. If construction ever starts there will be so many protests the Canadian Army would have to be present for every mile of pipe laid. It’s just an impossible project at this point. Kinder Morgan had to be bought out. The project can now be killed.

The good news is with the government now in charge of the old pipeline, it shouldn’t be too long before that isn’t working either and Vancouver goes “carbon neutral”. Have you seen how they look after the roads?

The economic blowback of this fiasco is potentially going to be huge. Who in their right mind would consider a major project in Canada at this point? Even Canadian companies won’t. It’s going to be a very long term disaster and almost impossible to recover from. Even if we re-elect Stephen Harper it’ll be 10 years before anyone would invest in Canada again. This is a disaster.

And then there is the carbon taxes, which make an already uncompetitive environment fraught with political risks even more uncompetitive. Trump doesn’t have to worry about his 25% tariff on Canadian built cars, those factories were all going to shut down anyway because they can’t afford to run the welders anymore.

The absolute stupidity of these policies is breathtaking. Place a carbon tax on Canadian manufacturers (and the public), use the carbon tax money to build a pipeline to China, and let them build and fuel replacement factories with our oil. It’s stunning in it’s stupidity.

The most stupid argument of all come of course from who other than grandma Nutely, in that “Carbon taxes give us a social license to produce oil.” From whom? The Chinese? The Americans? We don’t need a “social licence” we need a market with willing buyers, that is all. If you are looking for a “social license” from me I’ll gladly give you one without having to pay carbon taxes. If you want a social license from BC just turn off the original Trans Mountain for a few weeks. (PS Turdeau’s purchase also also makes this negotiation tactic impossible. He’s more devious than I gave him credit for.)

All in all, if the mellenials think they are screwed now, wait 10 years. We’ll all be screwed at that point. Get US green card now if you can and consider moving. Canada is heading towards a long , slow, grinding economic disaster the likes of which we never imagined. The hostile political and tax regime in Canada is going to mean no capital investment, and without capital investment modern economies whither and die.

Stephen Harper (sorry to say Garth) is going to be remembered as the last great Canadian PM, and people will refer to his time in office as “the good old days”. Turdeau is going to be revealed as the clown that he is. He’s actually done a pretty good job of it already. But these things take time. Turdeau will probably win one more term in office before things get really bad.

And this is all going to happen even without a housing crash. That’ll probably happen at some point too, but it’ll just be used as a distraction from all these other very real problems.

#76 JSS on 05.31.18 at 12:01 am

Rub tummy

Both BMO and National Bank increase dividend.

#77 Leo Trollstoy on 05.31.18 at 12:03 am

Gartho is right

chris is wrong

#78 Ex Pat Canuck on 05.31.18 at 12:22 am

“God help us when the same happens to weed.”

Because?

What’s got you scared about weed being legalized? When cigarettes and alcohol were legalized did you go around writing “God help us when beers and smokes are legal”? Or did you not want government regulation and taxation on those two unhealthy drugs? Please enlighten if you would.

#79 Ian on 05.31.18 at 12:58 am

I’m sorry, strong US growth?

Q1 GDP is now at 2.2% and they are beyond lucky it didn’t hit the 1.9 figures.

Multiple rate rises coming? Ya no, Powell will help the inept Trumpy.

The Fed cannot kick this can down the road any further. There are no more bullets, the Fed Funds is low, this is done.

Long end of Canada yield already inverting, this game is over.

#80 taxpayer on 05.31.18 at 1:04 am

#34 Those tankers filling up in Burnaby aren’t going to China. They aren’t big enough to even make it pay, operational cost wise. Tankers to China need to be Gateway pipeline sized….250,000dwt or bigger. Sock Boy shut that thought down, remember?

Tankers from Burnaby are max 120,000dwt (750,000bbl average) & designed for shallow harbour, short to medium haul. They are similar to the ones shipping from Venezuela to Texas refineries & can fit the Panama Canal.

So, where is the oil going? California or Texas, take your pick.

When Rach threatens to shut the oil flow to Burnaby, that means the oil is shut to Cherry Point Washington State, too. Washington State does not have a US sourced oil pipeline into it. KM’s line does that. Cherry point supplies Vancouver Airport most of it’s jet fuel. Vancouver is a step off to Asian airports. Mr Sock Puppet, despite his hate on for Alberta & it’s oil industry doesn’t need a phone call from Trump when oil is shut from Alberta to the Seattle area.

KM expansion is still on, just might be a slightly different time table for Mr SP. But, Mr Kenny, when he takes over from Rach, will hold Justy to the original time table. I’m voting to make sure it happens, ’cause I’ve got pension needs to finance & pipelines are a big part of that program.

#81 Fortune500 on 05.31.18 at 1:10 am

They will try to have their cake and eat it too. Yes rates will rise, but at such a snails pace, it won’t make much of a difference over the next decade.

#82 The Real Mark (not the imposter) on 05.31.18 at 1:21 am

“The article I read stated there is a draw period of time, typically 10 – 15 years in which only interest payments are due. At the end of this period principal and interest payments must be paid monthly.”

Your article appears to be US-centric, and not particularly applicable in the Canadian context. However, HELOCs, like all other forms of debt, must eventually be resolved. Lenders who become nervous about the value of HELOCs may not move particularly fast to require their amortization, but the interest rate applicable to HELOCs generally can be changed entirely at the discretion of the lender.

So two scenarios arise:

1) The lender itself gets nervous about property values or overall borrower LTV in a given area, and decides that they need to be paid more to compensate for such risk. HELOC rates go up. We’ve already seen this to a small degree as “Prime” itself is now set at a greater spread against the BoC policy target rate, and banks have further increased spreads on actual HELOC products (ie: “Prime” HELOCs are increasingly unavailable). This is due to the fact that Canadian RE peaked in 2013 and lenders have become increasingly nervous about extending credit.

2) The lender itself runs into distress (due to the macroeconomic environment), or the shareholders simply decide that they want to invest their money elsewhere, perhaps into another bubble du jour and need to raise liquidity from any and all sources possible. HELOCs, of course, are an easy and convenient target. Up those HELOC rates go, with the borrowers scrambling either to repay or refinance them.

The extreme amount of adjustable rate debt outstanding in the Canadian economy is why deflation is highly probable compared to inflation. All that the lenders need to do, if they detect that there is inflation, is tighten the credit. And voila, demand evaporates. Very highly supportive of the CAD$, BTW.

#83 So glad I sold on 05.31.18 at 1:27 am

Have a cousin who bought a townhouse closing end of June. Paid asking, which was 10 percent over assessment. Her dad told her she’d just have to pay it because prices are up. They’re paying two thousand renting a 2 bedroom in Richmond, so will probably be paying double that with ownership of the townhouse. Maintenance fees are $366 plus property tax, never mind special assessments as the new purchase is 44 years old.
They have 2 young children and 2 cars. I would be sick if it was me. Better to invest that difference than pay so much to live in something where you are essentially renting from the bank.

Happy to be investing, living in a new purpose built rental for over two years and they haven’t increased the rent. They like good tenants.

#84 So glad I sold on 05.31.18 at 2:00 am

My bother re-iterated your comments Regarding people using their banks, etc. as an atm machine. He met with his investment advisor recently who told him a significant number of his clients (doctors, lawyers and other professionals) who own more than one property, are totally maxed out on helocs, credit cards, etc. and that any increase in interest rates will absolutely crush them. Like you said, it’s the other locals and not offshore that are fueling the insanity.

helots, credit cards

#85 Doug from Victoria on 05.31.18 at 2:01 am

I’m amazed how many people still think this pipeline will carry crude oil and that the risks in the future are similar to those of the past.

#86 jim on 05.31.18 at 2:21 am

#42

“America is changing and it demographics and political ideology is moving to the centre as generation GOP dies off.”

So you say. Go find the articles and surveys showing that the next generation (Z) is the most conservative in history. They are already mocking safe spaces and the rest of the left wing shibboleths.

“The immigrant experience, for the most part, is virtually identical in both countries.”

That statement is so vague that I can’t even figure out what it means.

The USA doesn’t have single payer health care, but Canada does. Hence the ‘immigrant experience’ cannot be ‘virtually the same’, since health is an over-riding concern for a lot of people.

#87 Dolce Vita on 05.31.18 at 2:32 am

“The bank also says that, despite higher mortgage costs, it expects the residential real estate market to rebound.”

Pretty tongue in cheek by the BoC.

With no specific time frame given…yes, RE will rebound.

The question is WHEN?

We have just started to see the effects of B20, a voracious CRA crackdown on undeclared RE speculation capital gains/unpaid taxes, CMHC beginning to crackdown on uninsurable liar loans (e.g., $100 MM’s at Laurentian Bank), tax grabs on RE wealth by ON/BC provincially and by their cities, foreign laundered money crackdowns, etc.

As rates increase, credit will tighten resulting in fewer buyers, let alone because of B20. BoC sees inflation coming and that is it’s prime directive to keep stable (i.e., raise rates to lower borrowing that is fueling higher prices locally or from imports because of a low dollar).

The HELOC tap is about to dry out with higher carrying rates, and undoubtedly as RE prices correct or crash, Banks will demand some payments be made on delinquent HELOC accounts – like a credit card, they want you to hold on to it so they can continue to make money off of you…thus, a coming crackdown is to be expected.

The era of FREE money has come to an END.

Time to pay the piper.

Far too many will not be able to, especially the amateur RE investors hanging on by the thinnest of financial margins and hoping to tough out a declining RE price storm that will last years…they will not be able to do so if history repeats, and it does as usual.

Correction to crash in RE prices by 4th Qtr 2018.

Definitely if Trump pulls the plug on NAFTA.

#88 NEVER GIVE UP on 05.31.18 at 3:51 am

Top o the mornin to all ya wannabe Irishmen!

I just got an email from Ireland today. It said congratulations you are now an Irish Citizen!

I’ve never been there but my Grandmother was born in Belfast so I qualified, I applied and a year later I got this email!

We are really thinking long and hard about moving to the middle or southern Europe. I can go anywhere in the EU now and The Lower Mainland seems like a paradise lost more so every day the correction does not happen.

My kids should not be thinking that they have to go into debt all their lives to own a home and start a family.

It looks like small business retail is getting shut out of Vancouver forever.
Prices for leases and taxes are so high that the last gas station in Downtown Vancouver is slated for demolition to build condos. Meanwhile single family home zoning seems as protected as ever for the privileged few.

These governments only pay lip service to housing. They don’t do what is needed to provide SUPPLY.

Their developer friends have them all in their pockets.

In Canada we have the best 3 levels of governments that money can buy!

#89 Ogopogo on 05.31.18 at 4:27 am

I love mocking all the Pollyanna commenters who barked angrily or scoffingly that rates would never go up. We all know who they are. I’ve been mocking long-time blog resident “TurnerNation” for a couple of years now for insisting rates would never go up south of the border, etc. I suspect most of these financial doofuses are up to the wazoo in debt.

Here’s hoping rates will skyrocket sooner than later.

#90 Proof ? on 05.31.18 at 5:12 am

re: TransMountain Pipeline

The Lieberals bought the pipeline for reasons;

1) Without it, they would have not been able to implement the carbon taxes they planned – tax revenue from which is necessary to fund their reckless spending.

2)To curry favour / support from voters – more Canadians wanted the pipeline than didn’t according to recent polls – so play to the crowd.

3) Another opportunity to ‘pad the pockets’ of their Lieberal cronies – from the expenditures to get it built.

4) An attempt to convince foreign investors that “Canada is open for business”.

It will be yet another expensive lesson in the “Sunny Ways” economic educational process.

#91 Oft deleted much maligned stock picker on 05.31.18 at 5:42 am

Poloz does give a Gawd Dam about household debt, he’s only concerned about Trudeaus ability to borrow more and that’s why he’ll ring his hands once more next meeting and leave rates alone. There will be a chicken in every pot until 2019 when Gladys Knight sings Trudeau back into another term. Trudeau has flushed 120 billion down the toilet since he got in and the 12 billion so far for the pipe is just the beginning of the boondoggle. There are natives to hire, ethnic voting blocs to hire….civil servants who adore to the sunshine list…and it’ll all seem like Trudeau was forced into it. That’s just the Feds, the Dippers will be wading in with more billions in spending on social programs and union ties . I figure the Trudeau pipe is worth upwards of a hundred billion in new spending. Poloz will more likely pound the table for more free daycare for all those newly employed union members and freshly bought off greens voting Liberal. Forget raising rates…..Papa Porker just got a brand new bag.

#92 Proof ? on 05.31.18 at 5:51 am

Do Ontatrians realize that a prime reason that their electricity rates are so high is due to oversupply of “green” energy contracted at grossly overpriced rates ?

The Ontario Lieberals, under McGuinty approved the building of over 30 megawatt capacity when every independant (government paid for) study recommended the max need was 15 megawatt.

Gee, I wonder why they did that ?
Could they have been receiving an incentive / kickbacks/ future promises of employment to override the experts ?
Could they have been “rewarding” their cronies and political contributors ?

The fact that the bulk of this “green” generating capacity was contracted to only a few international entities certainly raises questions.
While this has never been investigated, it seems to me that this would form the basis of the right to terminate said agreements.

E- Health ?
ORNG ?
Gas plant cancellations?
OLG casino sale?
etc., etc.

All of these “scandals” enriched private entities at the expense of the taxpayers. All occurred during Lieberal governments.

The NDP are not so well “connected” with the crony schemes. However they will waste just as much money, if not more, in their own way.

Same old, same old – until there is nothing left but debt and few options.

#93 Proof ? on 05.31.18 at 6:04 am

to # 42 Willy H

” The immigrant experience, for the most part, is virtually identical in both countries”

Are you a Canadian or American immigrant?
If so, are you a recent immigrant facing CURRENT immigration policies and societal integration issues ?
Are you intimately knowledgeable about what is involved in relocating to these locales?

If not, how the heck would you know?

#94 Proof ? on 05.31.18 at 6:21 am

The “soft costs” (government fees, taxes, levies, HST, development charges and zoning regulations) now constitute 28 to 40 % of a new home’s costs, so don’t count on housing in Canada to ever become ‘affordable’ again.

The base / hurdle costs are just too high.

When demand wanes, so will supply, thereby insuring that fewer homes are built, leading to reduced supply, which will keep a high bid under residential RE.

It would not surprise me to see very reduced NEW residential building volumes in the next few years as a result.

It is already happening (see GTA new SFH construction down 75 % from previous levels as reported on this blog by Garth himself).

Your (corrupt) government at work.

#95 maxx on 05.31.18 at 6:24 am

#8 FOUR FINGERS WATSON on 05.30.18 at 6:19 pm

“It is not what they SAY, it is what they DO. And despite all the predictions today they did nothing. Expect more of the same. Lower for longer.”

Not a chance. Central banks have tried it all…….and the only thing that will improve economic conditions at this point is restoring value to money through rate hikes, forcing debtor idiots back into savings mode.

Unfortunately, banks now have legions of fools by the short and curlies, marching to work every day for little reason other than to pay off excessively high mortgages, LOCs, car loans and credit card balances. Ready, willing and able to be milked dry, with many paying interest loads that would otherwise easily fill up RSPs, TFSAs and unregistered savings pots annually.

The BOC may ratchet up carefully, but money will most definitely cost more.

Those who saved and didn’t get sucked into buying overpriced re, aka 3-D colouring books for adults (“honey, what about granite and a pop of colour with those cushions”), are incredibly fortunate.

#96 Wrk.dover on 05.31.18 at 6:46 am

20 dr talc on 05.30.18 at 6:57 pm
industry driven scam alert:
Ontarians, be glad this order didn’t go to Wynne-

https://www.bloomberg.com/news/articles/2018-05-09/california-votes-to-require-rooftop-solar-power-on-new-homes

———————————————-

Less than a decade to pay for it’s self, where the sun shines.

#97 MF on 05.31.18 at 6:58 am

#88 NEVER GIVE UP on 05.31.18 at 3:51 am

I love these comments.

Please go. Don’t let the door hit you on the way out.

There’s people working their butt off to immigrate here.

See you when you come running back during the next “euro crisis”, or if the Eurozone outright collapses (which is coming. We don’t know when but coming it is).

and Lol @ complaining about the Canadian government and then saying you want to move to Europe in the same post. Enjoy the biggest most pathetic bureaucracy on the planet.

MF

#98 MF on 05.31.18 at 7:02 am

#42 Willy H on 05.30.18 at 8:41 pm

Lol not even 1985. 1955.

The Democrats in the US are even more left leaning their our Liberals. Probably closer to NDP.

The US is moving very left wing as well. They have their own debt issues like every other western country. I’m a Trump supporter and I think the tax cuts were stupid.

MF

#99 Conn Smythe on 05.31.18 at 7:24 am

#72 Canada=Poor cousin of U.S

Your moniker is truly funny. Guess 63% of Americans (that would be 204 million citizens…)who can’t afford a $1000 emergency hospital visit or $500 emergency car repair didn’t get the memo of how well off they are compared to Canadians. Have your driven through the Appalachians or parts of the southern US and seen the poverty? Have you ever seen something comparable in Canada??

https://www.prnewswire.com/news-releases/63-of-americans-cant-afford-500-car-repair-or-1000-emergency-room-visit-300200097.html

https://theperiphery.areavoices.com/2017/01/29/an-appalachian-woman-tells-all-poverty-and-drug-abuse-in-west-virginia/

#100 maxx on 05.31.18 at 7:46 am

#14 Reality is stark on 05.30.18 at 6:44 pm

Agree 100%.

Stuff you often hear in the US:

“May I refill your coffee?”
“Would you like more water?”
“What can I do to fix this?”
“Sorry about the leak from the other unit – we’ll upgrade you to a two bedroom, refund 25% of your full payment and here are a couple of free tickets to a museum.”
“It’s on the house.”
“Yes, it’s negotiable.”
And enough hellos with a smile to make you feel that you truly are on vacation. The loony can go to whatever depths it likes, holiday spending in the US is still just about the best value anywhere.

And Canadian smugness merits an involuntary guffaw through the sinuses.

#101 jess on 05.31.18 at 7:51 am

a first
Cybercrime detectives seized the bitcoin from Grant West, 26, who was sentenced to 10 years and 8 months in prison Friday for attacking some 100 companies worldwide, largely using ‘phishing’ email scams to obtain the financial data.

Officers also recovered a memory card containing approximately 78 million individual usernames and passwords.

https://www.bloomberg.com/news/articles/2018-05-25/london-police-seize-bitcoin-worth-667-000-from-hacker?srnd=cryptocurriences

==========
rate rises
https://www.bloomberg.com/news/articles/2018-05-30/china-s-shifting-capital-flows-pose-risk-for-emerging-markets

#102 Nonno Nicola on 05.31.18 at 8:00 am

#164 Dolce Vita

“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.”

All fine and dandy but you need consumption in a society to make the wheels turn. It is the classic spending paradox… I have been to the The Italian Film Festival for the past 5 years in Toronto and it is disturbing to see that a major theme in the movies is that of the economic malaise in Italy. The one I have seen so far this year is entitled:

‘Non e’ Un Paese Per Giovani’ – No Country for Youth. People save out of fear, lack of good jobs, low wages, high youth unemployment (the theme of the movie above)and high taxation.

#103 Ezzy on 05.31.18 at 8:00 am

@ #42 Willy H

Hahahahaha Good God man (I’m assuming your gender/sex but could be wrong), what Great Canadian Publication did you pull that from? I deal with Americans in the following states almost every day; Ohio, New Jersey, Texas, California, Washington, Illinois. I promise you generation-GOP, as you put it, is not dying off. While we share cultural aspects, Americans and Canadians are not as similar as you present, and the immigrant experience is actually different in a number of ways. Chief among which is I never hear any of my American colleagues refer to their ethnic/cultural background before saying “I’m American”, regardless of how recently they or their families immigrated to America.

#104 Tater on 05.31.18 at 8:00 am

#74 The Real Mark (not the imposter) on 05.30.18 at 11:55 pm
Anyone else watching the crash of CAD$ GoC bond yields?

https://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Sounds like the “interest rates rates are going to rise” hype is coming to an end. Quite a change, even in the past week or two.

Heaven forbid, the lower rates may even filter down to top-quality residential RE borrowers. Not that such will revive the housing market.
—————————————————————-
5Y yield bottomed out at .48 or so in Feb of 2016. It’s now 2.13 or so after touching 2.34 just a couple of days ago. So, no, the narrative isn’t changing. And neither is the direction of rates.

#105 the Jaguar on 05.31.18 at 8:01 am

@ #80 Taxpayer: “So, where is the oil going? California or Texas, take your pick.”

My guess is Texas, so they can use it to help refine all that “too light” and “too flamable” oil that comes from the frac-ing process.

#106 crowdedelevatorfartz on 05.31.18 at 8:12 am

@#16 SCM & #28 CCM

Could we put you two in an elevator with truncheons to “work things out”? Last one standing wins.

#107 Conn Smythe on 05.31.18 at 8:19 am

IHCTD9

Sounds like you are becoming very self sufficient. You know you might be able to create a commune for blog dogs who want to escape the high cost of living in the big cities. Maybe even invite captain Garth to give a guest lecture…

#108 crowdedelevatorfartz on 05.31.18 at 8:25 am

@#43 The real Mark
“There’s no reason to believe that civil servants will be ‘running’ TransMountain or the expansion. Most likely just existing staff of the existing Kinder Morgan Canadian subsidiary will continue working for the same company, minus the affiliation with the US Kinder Morgan corporation.”
+++++
Bwahahahaha
Thanks for the laugh.
If the coast guard/ navy ship building industry’s are any indication with the govt “running” things in the background ….God help us all.
Over budget, behind schedule, costing billions…..
Layer upon layer of unnecessary govt/ private sector beurocracy feeding off each other to justify their existance.
Garth is right. Kinder Morgan is laughing all the way to the bank.
The Canadian govt will spend at least double if not triple to get that pipeline built years behind schedule.
And built by who? We already have a dramatic shortgage of trades in this country…. and I’m sure allowing thousands more “temporary” foreign workers into the country will make Trudeau even more popular at the polls.
They should have enforced the Law and arrested all the protesters in the beginning.
Now?
We’ll be $10-15 billion deeper in debt with the same protesters at the gates.
Lunacy

#109 crowdedelevatorfartz on 05.31.18 at 8:28 am

@#88 Never Give Up
“We are really thinking long and hard about moving to the middle or southern Europe. I can go anywhere in the EU now and The Lower Mainland seems like a paradise lost more so every day the correction does not happen.”
+++++
Soooo….you’re giving up?

#110 TurnerNation on 05.31.18 at 8:34 am

PC trouble trying again….

I viewed this comments section through an intersectional gender-based lens (as is the trend these days) and damn some of you are hard on the eyes. Shape up! :)

Investors Business daily last week reported that the S&P 500 index would be Down (Red) for the year if not for technology companies. Take that W Buffet.

#111 Conn Smythe on 05.31.18 at 8:56 am

#110 crowdedelevatorfartz on 05.31.18 at 8:28 am

@#88 Never Give Up
“We are really thinking long and hard about moving to the middle or southern Europe. I can go anywhere in the EU now and The Lower Mainland seems like a paradise lost more so every day the correction does not happen.”
+++++
Soooo….you’re giving up?

Very witty!

#112 Ian on 05.31.18 at 9:08 am

So excited for the blog dog meeting at Devon tonight I can hardly contain myself!

#113 dharma bum on 05.31.18 at 9:16 am

#16 Screwed Canadian Millenial

Just the truth folks. Just the truth. Is that still allowed?
——————————————————————–

“The truth is not always beautiful, nor beautiful words the truth.”

― Lao Tzu, Tao Te Ching

SCM is right about all of this. I am a boomer, and lived through all of it. Can’t argue about the fact that former PC politicians were slime ball criminals and charlatans.

Things are going to change. However, only time will tell if it’s going to be for the better or not. Be careful what you wish for.

#114 Alberta Ed on 05.31.18 at 9:19 am

Thankfully, Mr. Dressup still has his magical powers of sunshine and fairy dust to ensure that all will be well.

#115 TurnerNation on 05.31.18 at 9:28 am

Kiss inheritance goodbye.

https://reversemortgagedaily.com/2018/05/29/reverse-mortgage-debt-in-canada-keeps-climbing-as-demand-soars/

#116 Wrk.dover on 05.31.18 at 9:32 am

108 Conn Smythe on 05.31.18 at 8:19 am
IHCTD9

Sounds like you are becoming very self sufficient.

———————————

Surely you jest.

That man stated here yesterday that his yearly energy bill is $13,000.

He is not an Island of self sufficiency!

#117 Daniel Bouchard on 05.31.18 at 9:34 am

“And how about T2? The dude pulled a Pierre this week” Pulled a Pierre?!! Love it! Absolutely love it! Literary stroke of genius there!

#118 PastThePeak on 05.31.18 at 9:40 am

#89 Ogopogo on 05.31.18 at 4:27 am
I love mocking all the Pollyanna commenters who barked angrily or scoffingly that rates would never go up. We all know who they are. I’ve been mocking long-time blog resident “TurnerNation” for a couple of years now for insisting rates would never go up south of the border, etc. I suspect most of these financial doofuses are up to the wazoo in debt.

Here’s hoping rates will skyrocket sooner than later.
+++++++++++++++++++++++++++++++++++

BoC rates are going higher, with the reasons Garth wrote about today. Poloz is the biggest dove BoC governor in my lifetime, but even he cannot delay forever. Even the government manipulated CPI (which is cryptic but seems based on Canadians not having jobs, being able to comparison shop all day, to figure out how to substitute to a lowest cost alternatives in every category).

Now, I don’t see any “skyrocketing rates” on the horizon at all. I think the BoC rate will remain what those of us older than 35 consider “very low”. I doubt it will get much above 2% this cycle (which means 3-4 more 25 basis point increases). Even that though is likely to cook many Canadian geese…

#119 Wrk.dover on 05.31.18 at 9:41 am

When comparing how much better off the lower 90% of Americans are than the lower 90% of Canuks, keep in mind how many of them live in mobile homes sitting on stacked cinder blocks. Not much of that here. Lots there though.

Their grass is always greener more of the year than ours, but the standard of housing there is not all to be envied.

Then again, they don’t have to tie up a whole lifetime of earnings to get a residence…or do they with the lower minimum wages that they can’t prosper on?

#120 Victor V on 05.31.18 at 9:50 am

BREAKING: U.S. slaps tariffs on Canadian steel and aluminum imports

https://www.bnnbloomberg.ca/u-s-slaps-tariffs-on-canadian-steel-and-aluminum-imports-1.1085700

The Trump Administration said Thursday it is imposing tariffs on steel and aluminum imports from Canada, the European Union, and Mexico.

The decision came hours before temporary exemptions are scheduled to expire.

U.S. President Trump imposed 25 per cent duties on imported steel, and 10 per cent tariffs on aluminum in March. But he quickly exempted Canada, Mexico and Europe until June 1 in order to allow time for talks to take place.

The decision comes as NAFTA renegotiations continue.

#121 Davis on 05.31.18 at 9:58 am

DELETED

#122 Renter's Revenge! on 05.31.18 at 10:03 am

#107 crowdedelevatorfartz on 05.31.18 at 8:12 am
@#16 SCM & #28 CCM

Could we put you two in an elevator with truncheons to “work things out”? Last one standing wins.

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

Don’t forget to include CLM. He could psychoanalyze the fight and provide commentary.

#123 TurnerNation on 05.31.18 at 10:07 am

Actor Kim Kardashian meeting with TV actor Trump at white house. How will our actor/drama teacher T2 respond?

All the world’s a stage. Stay tuned.
SPOILER alert, we will be robbed by the elites.

#124 Conn Smythe on 05.31.18 at 10:33 am

#119 Wrk.dover on 05.31.18 at 9:32 am

“Surely you jest. That man stated here yesterday that his yearly energy bill is $13,000. He is not an Island of self sufficiency!”

That did strike me as strange. Perhaps he added a zero by accident. Hey IHCTD9 please clarify! Was your energy bill $13000 or $1300?

#125 Freeland on 05.31.18 at 10:36 am

This woman came out of nowhere to join T2’s travelling circus. She has an ideology that is bent and twisted with a personal vendetta. She talks the good talk with spins to impress us all, but at midnight will be tested. Trump will be bringing on the bogus tariffs upon Canada in the name of National Security. Let the show begin, as T2 will be crying a river of tears.

#126 Duke on 05.31.18 at 10:40 am

#42 Willy H on 05.30.18 at 8:41 pm
#14 Reality is stark on 05.30.18 at 6:44 pm
Canadians vs. Americans.
__ __ __

The immigrant experience, for the most part, is virtually identical in both countries.

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

Not so much. The immigrant experiences in these two countries are completely different. Canada seems promoting multi-cultural society, but they don’t want immigrants to move up the wealth ladder. They want immigrants to be stuck in their own communities. On the flip side in US, immigrants get more freedom and have more chances to get wealthy. Which country is easier to get a permanent residency or citizenship? That is the answer.

#127 Shawn Allen on 05.31.18 at 10:47 am

Are Home Equity Lines of Credit Being Paid Down?

#58 BCWally on 05.30.18 at 10:05 pm said about HELOCs:

The article I read stated there is a draw period of time, typically 10 – 15 years in which only interest payments are due. At the end of this period principal and interest payments must be paid monthly.

According to the stats I have read 4 out of 10 people are not even making interest payments during this draw period increasing the principal amount.

************************************
Well, sort of. Most HELOCS require principle and interest payments and I am pretty sure that basically ALL require monthly interest payments.

But it is easy to make the payments while continuously drawing out more money so that the balance never declines. Technically, the payments have been made. In substance, arguably not. (That’s what the four in ten allegedly not paying interest referred to)

Individuals should be expected to pay off their HELOCS by the time they die or sell the hose but not necessarily before that.

Collectively, HELOC balances in Canada are likely to rise basically forever. For every dollar paid down, someone else will likely be drawing out at least a dollar.

We may get a brief period where the balances do decline collectively. But don’t count on it. If interest rates rise we will see the balance as a percent of GDP (Which in nominal dollars is going up at 3 to 5% annually) go down. But don’t hold your breath for the total HELOC balances in Canada to decline, ever. The trend is upwards as the economy grows.

Will there be a credit crisis? Don’t count on it.

#128 IHCTD9 on 05.31.18 at 10:51 am

#159 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.
_______

Electricity – 1800.00
Gasoline – 9100.00
Heating fuel – 1700.00
Misc heat/fuel/other – 500.00

You can see transportation fuel is front and center. It is possible that I can knock 6000.00 off that number alone. It will be a while yet as I buy equipment for the effort as the deals come, and repair same as I find time. Over 3 thousand worth of my gasoline bill is pure taxation. It’s the first in line when I have everything I need in house to extract myself from the pump.

Three down, and two to go.

#129 Smoking Man on 05.31.18 at 10:57 am

Whoa!! steal and aluminum terifs. Nafta is a gonner.
Dippers in the lead..
USDCAD Just watch and cry…

#130 Asds on 05.31.18 at 11:05 am

It’s a sad day when the NDP is more fiscally conservative than the PC party… If you are voting PC you can stop pretending you care about the debt and admit to yourself you just hate anyone who has less than you.

#131 IHCTD9 on 05.31.18 at 11:19 am

#108 Conn Smythe on 05.31.18 at 8:19 am
IHCTD9

Sounds like you are becoming very self sufficient. You know you might be able to create a commune for blog dogs who want to escape the high cost of living in the big cities. Maybe even invite captain Garth to give a guest lecture…

______

I’m not after self sufficiency, I’m trying to find options to being taxed to death, have found several, and am working towards them.

Self sufficiency is what it’s going to effectively be in the end though. It’s just not going to be a lifestyle for me – it’s more like having a shed full ammunition.

IMHO – the costs of living in Ontario have really jumped – and we only have more to look forward to. Even the cake eaters will get bent over. No one will be able to plead ignorance.

#132 conan on 05.31.18 at 11:26 am

“Stephen Harper (sorry to say Garth) is going to be remembered as the last great Canadian PM, and people will refer to his time in office as “the good old days”.

– Nonplused on 05.31.18 at 12:00 am

LOL @ that comment. If Harper had won the last election our number one industry would be purge camps. Filled with 1000 ‘s of people charged with bogus crimes. Their crimes? Not Harper enough.

You want to live in a country where the government can use the RCMP to charge someone with 50 criminal offenses, and not one of them sticks?

Here are the keys to my time machine, you know where you want to go.

#133 Stones on 05.31.18 at 11:33 am

I called it almost 6 months ago when I talked about Boy wonder visiting US that NAFTA is SHAFTA. Trump is like one of those kids who likes to make worms wiggle by poking them with a stick and boy what a worm this country has become through sustained dependence on house flipping, resources and finance. If you can’t create value, be ready to be decimated. US is just the beginning, just wait for China to overtake US and then the real fun begins.

#134 Shawn on 05.31.18 at 11:36 am

$CAD will end the year near 70 cents. It doesn’t matter what the BOC says or does…

#135 april on 05.31.18 at 11:36 am

#122 – I’d live in a mobile home in a minute but unless you own the land it’s on the pad rentals are up near 1.000 dollars a month and the insurance is, I think, near 700 upwards per yr. I’m referring to the LM BC.

#136 IHCTD9 on 05.31.18 at 11:43 am

#114 Be Realistic on 05.31.18 at 9:03 am

I would state the opposite of fortunate. Though that’s not to say that home ownership is the only path to success, it certainly is the tried and true one for the average person.

It boggles my mind that after years and years of this crash talk, the doomers watch prices go up and instead of realizing their mistake, just get louder.

We’ll see if you feel the same way years from now; I highly doubt you will.
__________

I bought a house 17 years ago. If I sold it tomorrow, I might make 1% after “being realistic” about the costs imbedded in the buying, maintenance, and ownership of a SFD.

I’d say a guy is just plain lucky to have made money on any SFD that was owned, lived in, and mortgaged over 25 years. I’d say that for any house, anywhere, any market, and at any time.

Am I a doomer?

#137 april on 05.31.18 at 11:46 am

#122 – I’d live in a mobile in a minute but the pad rentals here in the LM – Coquitlam, just outside Vancouver, over 900 a month and insurance is I believe about 70 a month,so the only advantage to that type of housing is one is not sharing walls with neighbours.

#138 IHCTD9 on 05.31.18 at 11:49 am

Turns out you don’t have to be obsessed with senseless population growth and cheap labour slavery to be a rich nation.
———–

No you don’t.

You just need to control government size and spending, and while you’re doing that – you pump oil and build pipelines and tankers like it’s going out of style. Then you get the money and invest it instead of blowing it all on goofy feel good SJW crap.

I’m all for it – when do we start?

#139 G7 on 05.31.18 at 11:49 am

This becomes an important meeting with friendly countries that usually have mutual interests for discussion. T2 needs to man up, and grow a pair by showing some leadership. He needs to inform the American Embassy in Ottawa that Trump is no longer invited, and to forward the message to the WH. His appearance will not be in the interest of those attending.

#140 Gravy Train on 05.31.18 at 11:56 am

#134 IHCTD9 on 05.31.18 at 11:19 am
“Even the cake eaters will get bent over. No one will be able to plead ignorance.”

I don’t/can’t eat cake anymore; otherwise, my triglycerides, LDL cholesterol, and fasting blood glucose shoot through the roof! I do make an exception at birthdays, though; don’t tell my doctor. He’ll put me on drugs—and not the good kind! :)

#141 IHCTD9 on 05.31.18 at 12:00 pm

20 dr talc on 05.30.18 at 6:57 pm

industry driven scam alert:
Ontarians, be glad this order didn’t go to Wynne-

https://www.bloomberg.com/news/articles/2018-05-09/california-votes-to-require-rooftop-solar-power-on-new-homes
______

Never happen here. Californians buy electricity from privately owned companies.

Here in Ontario – we buy our electricity from our government at one of the highest rates in the world.

Of course, if the Libs get in again, we may well end up with a privately owned monopoly supplying us our electricity.

(See activities taking place at IHCTD9 Headquarters for what I think is coming down the pipe).

#142 IHCTD9 on 05.31.18 at 12:31 pm

#133 Asds on 05.31.18 at 11:05 am
It’s a sad day when the NDP is more fiscally conservative than the PC party… If you are voting PC you can stop pretending you care about the debt and admit to yourself you just hate anyone who has less than you.
_______________________________________

The truth is, no Ontario politician can talk about balanced budgets or making a payment against debt. Voters would have him/her unemployed right then and there.

The time is now, where those with eyes to see and ears to hear understand that old school politics is dead. The reason is the voting public has killed it off in favour of a “what’s in it for me right now?” attitude.

WHO CARES what old school perceptions attribute to 2018 politics. Today, we can expect only the standard to which voters insist.

In Ontario, that would be free stuff for me right now, send the bill to my kids later. All parties, Cons included.

#143 Love Guru's Dad on 05.31.18 at 12:33 pm

#70 waiting on the westcoast on 05.30.18 at 11:27 pm
#52 Love Guru’s Dad says “I think you just answered why we are concerned in BC. You described the amount of traffic as shit loads. Can you tell us at what point does the traffic congestion in these straits hit critical mass, and drive the disaster probability curve to the point where it becomes inevitable?”

Hmm… I don’t know the probabilities but let’s say it’s 1 in a million. Now it’s 7 in a million. Sure that’s 7x but still an infintismal risk difference.

But hey, maybe you buy 10 lottery tickets because you now have 10x chance to win…

—————————
WOTW, can you confirm that in your probability analysis you included going from “shitloads” to “shitloads” + a lot more?

And I surely don’t want to make this just about tanker traffic, or even the pipeline for that matter. If we all cared about all of this nation we wouldn’t be dealing with this specific problem. And we might have a pipeline with more favourable conditions for now and future generations. Who knows? I don’t.

#144 conan on 05.31.18 at 12:43 pm

#142 G7 on 05.31.18 at 11:49 am

Not a bad idea at all. But, lets invite him anyway, we can ghost him, and make jokes about his hair. He can sit at the table while we discuss plans to make his trade power irrelevant.

Some new defense agreements might be a good idea.

#145 Baloney Sanwitch on 05.31.18 at 12:43 pm

You heard first here. Liberals will surprise everyone at the polls and win. Both con’s are crazy on coke and dippers are in bed with the unions.

#146 Wrk.dover on 05.31.18 at 12:49 pm

#131 IHCTD9 on 05.31.18 at 10:51 am

Electricity – 1800.00 A
Gasoline – 9100.00 B
Heating fuel – 1700.00 C
Misc heat/fuel/other – 500.00 D

———————————-

A Turn your lights off when you are asleep
B turn your car of when you get out of it
C shut the door
D turn off the bbq when the meat is cooked

might help….my bills last year were

A 1000
B 1770
C zero
D I fill the bbq tank which I also use for my cutting torch, every ten years, not sure what that portable tank costs to fill $25? $2.50/yr?

I read the meter before I used a dozen welding rods recently, I can’t remember how much, but it was only pennies. I cut as much steel as I can with discs. Oxygen costs waaaay too much. And in Ontario you have the luxury of time of day meters to knock down your power bill further. Bonus! Timer everything.

Also, remember the easiest tax to avoid is the one you don’t pay when you don’t earn money to waste.

Just earn the get by, maintenance, capitol purchasing and the TSFA filler. No more. Garth set the level of contribution on TSFAs right at the necessary level to survive well in advanced geriatric years, if contributed to into your mid seventies. Thanks for that lifeline Garth!

#147 PastThePeak on 05.31.18 at 12:51 pm

#145 IHCTD9 on 05.31.18 at 12:31 pm
#133 Asds on 05.31.18 at 11:05 am
It’s a sad day when the NDP is more fiscally conservative than the PC party… If you are voting PC you can stop pretending you care about the debt and admit to yourself you just hate anyone who has less than you.
_______________________________________

The truth is, no Ontario politician can talk about balanced budgets or making a payment against debt. Voters would have him/her unemployed right then and there.

The time is now, where those with eyes to see and ears to hear understand that old school politics is dead. The reason is the voting public has killed it off in favour of a “what’s in it for me right now?” attitude.

WHO CARES what old school perceptions attribute to 2018 politics. Today, we can expect only the standard to which voters insist.

In Ontario, that would be free stuff for me right now, send the bill to my kids later. All parties, Cons included.
+++++++++++++++++++++++++++++++++++

100% agree. It doesn’t matter who forms the next Ontario gov’t, the fiscal disaster will keep gathering steam.

#148 jess on 05.31.18 at 1:03 pm

#103 Nonno Nicola on 05.31.18 at 8:00 am

the “platforms”

according to the research done by Upwork regarding the freelancing markeplace –are working without a regular job

in the usa 57m freelancers that is 35% of the entire work force with no regular job
among millennial the % of them is 47% just shy of half
the freelance catagory is growing 3x faster than the rest of the workforce …

free private cities
advertizing itself for the wealthy “the gated city” keep all the riff raff out ;) e.g. singapore model i guess dictorship is good???

#149 Fake News Again on 05.31.18 at 1:07 pm

A Yank in BC on 05.30.18 at 9:30 pm
#30 Fake News Again on 05.30.18 at 7:53 pm

“Do that math people. This will be a windfall for ALL CANADIANS as the Chinese snort up that oil by the tanker ship full…….”

Don’t be so sure about that. Could be a huge boondoggle instead. This well-researched article from last March might change your overly-optimistic outlook.

https://www.nationalobserver.com/2018/03/07/opinion/fatal-flaw-albertas-oil-expansion

____

It is impossible for Canadians to not benefit if tanker increases from 1 week and 1 a day. I don’t need some fake statistical research paper to know that.

Just think Man Made GloBULL Warming. In the last 5 weeks so many volcanos have erupted around the world – they equate to all the (carbon) man has made in the last 10 years. Yet people are so “dum” they believe everything these FAKE Govt Funded scientists tell them…..

#150 Deplorable Dude on 05.31.18 at 1:09 pm

#79 Ian ‘I’m sorry, strong US growth?’

4.7%

https://www.frbatlanta.org/cqer/research/gdpnow.aspx

#151 IHCTD9 on 05.31.18 at 1:12 pm

#147 Be Realistic on 05.31.18 at 12:39 pm

I don’t know what you bought and where you bought, but something went horribly wrong.

Personally, I know so many people who have had a completely opposite experience of what you said (myself included).
________

You mean it matters where the house is located? You’d better qualify that in your formal assertions.

Nothing went wrong. I bought in a “normal” market (100% or so appreciation per 10-12 years), and I bought using a mortgage, and have lived in it for 17 years.

Now, if you are talking ONLY about houses:

1.That are located in the TWO markets in Canada that have broken almost all RE bubble records throughout most of the planet.

2. That were bought well before prices bubbled over

3. That were sold right around the peak.

4. That were held for a short while and/or were bought with cash.

Well then I agree – easy money. Outside these markets and conditions I stated – go ahead and post the numbers you think are realistic in assessing the true cost of your house, and I will fact check them for you.

#152 Debbie Downer on 05.31.18 at 1:13 pm

#132 Smoking Man on 05.31.18 at 10:57 am

Whoa!! steal and aluminum terifs. Nafta is a gonner.
Dippers in the lead..
USDCAD Just watch and cry…
______________________________________
It’s spelled tariffs, and I have to ask do you get high over bad news. Your weird.

#153 24 Sussex on 05.31.18 at 1:18 pm

Just read the final report and its in bad shape due to poor limestone originally used, and will cost a fortune to repair before it collapses. This is interesting as the government brought in the country’s top engineer who specializes in historic masonry buildings. His name is Jim Cowie from Halifax, Nova Scotia.

#154 cd on 05.31.18 at 1:21 pm

Garth you made some comments about the ‘poodles’… well just a weird fact, but they are considered one of the smartest breeds of dog.

https://www.cesarsway.com/about-dogs/breeds/10-of-the-smartest-dog-breeds

My reference was not to intelligence.- Garth

#155 jess on 05.31.18 at 1:34 pm

#118 TurnerNation on 05.31.18 at 9:28 am

Kiss inheritance goodbye.

re: reverse mortgages

the templeton offshore types like that one ;^)
and the treasury head in the usa muchkin see one west bank

144 IHCTD9 on 05.31.18 at 12:00 pm

Bitcoin’s energy footprint has more than doubled since Grist first wrote about it six months ago.

It’s expected to double again by the end of the year, according to a new peer-reviewed study out Wednesday. And if that happens, bitcoin would be gobbling up 0.5 percent of the world’s electricity, about as much as the Netherlands.

That’s a troubling trajectory, especially for a world that should be working overtime to root out energy waste and fight climate change. By late next year, bitcoin could be consuming more electricity than all the world’s solar panels currently produce — about 1.8 percent of global electricity, according to a simple extrapolation of the study’s predictions. That would effectively erase decades of progress on renewable energy.

Although the author of the study, Alex de Vries, an economist and data consultant based in the Netherlands, has shared these calculations publicly before, this is the first time that an analysis of bitcoin’s energy appetite has appeared in a peer-reviewed journal….
https://grist.org/article/bitcoins-energy-use-got-studied-and-you-libertarian-nerds-look-even-worse-than-usual/
investigation

#156 Ian on 05.31.18 at 1:43 pm

Canada Q1 GDP came in at a whopping 1.3%.

Does that sound like a rising interest rate environment?

Atlanta Fed Q2 GDP was updated today and sits at 4.7%. That will clearly not stay anywhere near that high, but does show the US might continue raising, although I still think politically Powell will stop soon.

The differential between the two countries is just gaping now. The Plozzer had better hope that my theory about the US stopping raising soon is right! If Canadian rates get dragged upwards by the US, we are well and truly screwed.

At least we have good policy like Venezuela where we nationalise energy!

#157 Proof ? on 05.31.18 at 1:55 pm

David Rosenberg in the National Post has an excellent history lesson (must read) on the NDP’s effect on the Canadian dollar last time they won in Ontario.

Ontario was in much better fiscal health the last time they took the reins in 1990 and they still butchered the credit rating and increased the provincial debt / GDP as well as the total debt by a huge factor.

This time around, they will finish the job if elected.

If you care at all about your future or the future of your children, there is no way you can vote these communists in.

#158 The Real Mark (not the imposter) on 05.31.18 at 2:03 pm

Huge GDP miss. Crashing housing market. Does anyone still believe that the BoC will raise again this year? Its increasingly looking like even raising as high as they’ve raised has proven to be a mistake.

#159 jess on 05.31.18 at 2:05 pm

say what!

“Behave More Sexually:” How Big Pharma Used Strippers, Guns, and Cash to Push Opioids
According to recently unsealed whistleblower lawsuits.

Julia LurieMay. 31, 2018 6:00 AM

…” pharmaceutical sales representative in New Jersey faced a dilemma: She wanted to increase her sales but worried that the opioid painkiller she was selling was addictive and dangerous. The medication was called Subsys, and its key ingredient, fentanyl, is a synthetic opioid 100 times stronger than morphine.

When the rep, who requested to go by her initials, M.S., voiced her concerns to her manager, she was told that Subsys patients were “already addicts and their prospects were therefore essentially rock-bottom,” according to a recently unsealed whistleblower lawsuit that M.S. filed after leaving Insys in 2016. To boost her numbers, the manager allegedly advised M.S. to “behave more sexually toward pain-management physicians, to stroke their hands while literally begging for prescriptions,” and to ask for the prescriptions as a “favor.”

#160 Ian on 05.31.18 at 2:07 pm

#151 Peak

Or the PCs squeak out a majority and try to solve the problem, and everyone gets angry again like in the Harris years.

A structural deficit of 12b is just vicious. I do not envy Vic Fedeli who will be the man to solve it should they win. Everyone under the sun will be giving him the gears.

However, he’s a very capable guy. I have followed his finance critic work for a long time and he is a very hard worker and a smart dude.

#161 Proof ? on 05.31.18 at 2:09 pm

to comment # 133 Asds

You are obviously math challenged – just like the NDP.

I guess you, your kids and your grandchildren will be paying for all of their promises.
What are you going to tell those kids when they ask you why they have no shot at the “good life” that you enjoyed? – that you got all emotional and took the NDP bait ?

The PCs will do less harm at a critical juncture in the province’s economic history.

The NDP will push / drag Ontario (and Canada) over the fiscal cliff.

You will pay and pay and pay and pay, then pay some more for your emotional response to Doug Ford.

Hope you will be happy with your pay cut !

#162 Lee on 05.31.18 at 2:13 pm

Does anybody know what BMOs ZDV has such a high dividend (4.5%)? This looks too juicy. What are real risks here? What am I missing?

#163 Proof ? on 05.31.18 at 2:19 pm

to # 130 Shawn Allan

Stop posting on topics you know nothing about. It is misleading and potentially harmful to others.

HELOCs are demand loans and can be called at any time and for any reason and their capped amount and interest rate are solely at the discretion of the lender.

Currently;

40 % of HELOCs pay NO interest nor payment WHATSOEVER !

An additional 25 % pay interest only.

So, 65 % of outstanding HELOCs pay down NO PRINCIPAL WHATSOEVER.

There is a cap on the total amount of HELOC that a borrower can borrow.
When that cap is reached, the total amount must be switched to an AMORTISING LOAN.

Source: Garth Turner on this very blog (amongst other credible financial sources)

The preconditions for a credit crisis in Canada most certainly do exist.

#164 Dissident on 05.31.18 at 2:33 pm

“state of poochiness”……….*clap clap clap* I think this is a technical term.

#165 Proof ? on 05.31.18 at 2:35 pm

to “Mark”
Serious comment – no joke buddy.

People on this blog, including its’ host have been far too accommodating with respect to your inane, inaccurate and frankly embarrassing posts.

I can only conclude that they can’t bring themselves to tell you that because they are too PC, too kind or simply too wishy-washy to give you a kick in the pants.

So, let me put it this way – you drag down the quality and usefullness of this blog, just as you have on every other blog (2 that I know of) that you have poked your lonely nose into.

Go get some help – you need it.

No one can be as wrong and as out of touch with reality without having serious mental issues. We had a family member that spoke much like you post and they ended up in the morgue by their own hand.

Sincerely, go get some help.

#166 LuckySoB on 05.31.18 at 2:42 pm

Suppose a young couple is financially free – own their home, no debt and 3 million in the bank, and is able to live in either the US or Canada. Where is the smarter place to live, financially, assuming the quality of life is the same in both countries?

Seems like moving to the US would be a wise decision. It feels like its time to cash out, and run far far away from Canada. Am I missing something?

#167 Leo Trollstoy on 05.31.18 at 2:42 pm

#137 Shawn on 05.31.18 at 11:36 am
$CAD will end the year near 70 cents. It doesn’t matter what the BOC says or does…

Bold

I like it

Inflation healthy!

#168 IHCTD9 on 05.31.18 at 2:43 pm

#150 Wrk.dover on 05.31.18 at 12:49 pm

_____

I can see you’ve got options I don’t. I could live like a hermit and love it – the rest of the household wouldn’t. That’s cool though – I’ve still got options.

I’ll never have a 0.00 heating bill – but it could be peanuts. I’ll never have a 84.00/month hydro bill no matter what I do to conserve – I paid more than that 17 years ago with just the wife and I in the house using like 400 KWH/month. My only viable option is to make some of it myself.

This is Ontario, of my 150.00 (“discounted”) bill, only 70.00 or so is electricity, the rest is fluff that does not necessarily drop in parallel with usage. EG. if I cut my usage in half, my bill should go from 150.00 to 75.00 right? The bill in reality would still be about 110.00-115.00 or so. In fact, my bill would still be around 50.00 if I used ZERO KW’s (minimum billing).

FWIW, my “off-peak” cost per kwh is 6.3 cents. That’s 50% MORE than ALL electricity cost before they stuck that extortion device on my hydro pole. Saving money was never part of the plan. The “on-peak” cost is 13.2 cents – over 300% higher than before. Smart meters are there to cover McGuinty’s FIT and Micro-FIT program that was paying producers over .80 cents per kwh for solar power. That’s all there is to it.

Oxygen and Acetylene has gone bonkers – I have the short bottles and it was over 100.00 to exchange both last time – I get 2-3 years out of them. 15.00 to fill a 20 lb BBQ tank, 6 months till empty.

When the kids are gone and the wife and I downsize – my life will start resembling yours a lot more. I still have this crazy idea of moving North of 7 to 1-200 acres of woods, Building a 1200 sf efficient house, and keeping things easy on the brain until it quits.

#169 NEVER GIVE UP on 05.31.18 at 2:56 pm

#97 MF on 05.31.18 at 6:58 am
#88 NEVER GIVE UP on 05.31.18 at 3:51 am

I love these comments.

Please go. Don’t let the door hit you on the way out.

There’s people working their butt off to immigrate here.

See you when you come running back during the next “euro crisis”, or if the Eurozone outright collapses (which is coming. We don’t know when but coming it is).

and Lol @ complaining about the Canadian government and then saying you want to move to Europe in the same post. Enjoy the biggest most pathetic bureaucracy on the planet.
===================================
Even more people are immigrating to the EU!
Better Public transportation. More cosmopolitan cities. More historically interesting cities by far.

The Europeans don’t manipulate the housing market for votes it seems because you can still buy a home for a reasonable price within a reasonable distance to great cities.

Overall the Quality of life is way superior to what we are living here. People can drive or train to 10 different countries in 4 hours. You can live without a car.

Small business is respected and protected. They do not allow Big box stores to destroy every small business within 10 km. We have allowed this and now anyone who cannot drive is disenfranchised and unable to function with ease.

The food and wine is way better and more accessible. Way more interesting restaurants with great menus and high quality fare.

Vancouver is still a no fun city. You can’t put lipstick on a pig. This is really a provincial retirement community. Quiet, dull, everyone wears spandex. Great for skiing and camping, The view is great, The life for the young people is bleak. Money laundering capital of the world now.

So many are leaving for other provinces. I am just lucky that I have even more options than that.

I have spent about 11 years in Asia if you added up all the years and days. I loved my time there when I was young. Asia is a place for the young, not for retiring. Europe is a better fit for me now. I am still working but the end is coming in about 10 years or so.

It is just another adventure that I may embark on but the deal is not yet done.

I may find myself too tethered here with business so I may have to split the time.

Below are some points of view from others who have lived in Europe.

https://rottenindenmark.wordpress.com/2012/01/18/why-i-will-never-move-back-to-the-united-states/

https://thoughtcatalog.com/hok-leahcim/2014/09/11-people-explain-why-americans-shouldnt-move-to-europe-as-if-we-need-to-be-told/

#170 IHCTD9 on 05.31.18 at 3:11 pm

#127 Conn Smythe on 05.31.18 at 10:33 am
#119 Wrk.dover on 05.31.18 at 9:32 am

“Surely you jest. That man stated here yesterday that his yearly energy bill is $13,000. He is not an Island of self sufficiency!”

That did strike me as strange. Perhaps he added a zero by accident. Hey IHCTD9 please clarify! Was your energy bill $13000 or $1300?
_______

OVER Thirteen Thousand Dollars :).

It’s mostly gasoline as noted in another post. There is a good reason for using so much – which I don’t want to get into. Two years ago total energy Bill was 8500.00 or so.

Full potential of my work could cut it down to under 6000.00 (3900.00 of that being gasoline still).

Call it short term pain for long term gain. I’d have the option to cut everything right down to nothing – but I wouldn’t have the time to work a job if I did – so it’s really a matter of how far do I want to go with it once everything is up and running. The important part is gaining the ability to say NO to costs aimed at you maliciously (ie. on the essentials of modern life).

#171 Leo Trollstoy on 05.31.18 at 3:25 pm

#105 Tater on 05.31.18 at 8:00 am
5Y yield bottomed out at .48 or so in Feb of 2016. It’s now 2.13 or so after touching 2.34 just a couple of days ago. So, no, the narrative isn’t changing. And neither is the direction of rates.

chris wrong again??

say it ain’t so!!

#172 Shawn Allen on 05.31.18 at 3:40 pm

PROOF? YOU WANT PROOF!

#167 Proof ? on 05.31.18 at 2:19 pm shouted at me, ironically without any proof or evidence:

“Currently;

40 % of HELOCs pay NO interest nor payment WHATSOEVER !”

*************************************
That is obviously false and I believe an incorrect interpretation of the the source document as I recall.

I believe it meant that 40% pay the interest and or principal monthly but then re-borrow that so that over a year no net payment is made. But technically, interest was paid monthly.

Surely 40% of HELOCS must be mostly from the big 5 banks. Show me a big 5 HELOC offering that requires no monthly interest payment. Post a link to the source of the 40% don’t pay even interest. Or even show me a HELOC from an obscure lender that requires absolutely no payments for years. Maybe that exists, but there is no possible way it is 40%. Some things are obvious. I think this is one of them.

Give it up. You lose. The common practice of banks is to allow HELOCs to sit without any actual payments being made monthly from a borrower’s bank account into the loan account. The amount of the outstanding debt simply increases until the limit is reached. Then the bank calls and asks for some money. Get a LOC. Try it. – Garth

#173 The Real Mark (not the imposter) on 05.31.18 at 3:46 pm

“Collectively, HELOC balances in Canada are likely to rise basically forever. For every dollar paid down, someone else will likely be drawing out at least a dollar.”

Have to disagree here Shawn. Every asset class goes through cycles. Today HELOCs are popular, “tomorrow” (not literally) they’re deeply out of favour. There are lots of scenarios that could be postulated for *why* such would be the case.

For instance, we’ve had a bit of discussion over the years as to why Canada lacks 30-year term mortgages. They’re basically illegal. Could HELOCs also be rendered illegal or with reduced enforceability at some point in the future? Sure.

USDCAD Just watch and cry…

Its worth pointing out here that USDCAD was a lot weaker (or inversely, CADUSD was a lot stronger) prior to FTA/NAFTA. The most profound period of weakness in the CAD$ came during the NAFTA era.

#174 PastThePeak on 05.31.18 at 3:47 pm

#164 Ian on 05.31.18 at 2:07 pm
#151 Peak

Or the PCs squeak out a majority and try to solve the problem, and everyone gets angry again like in the Harris years.

A structural deficit of 12b is just vicious. I do not envy Vic Fedeli who will be the man to solve it should they win. Everyone under the sun will be giving him the gears.

However, he’s a very capable guy. I have followed his finance critic work for a long time and he is a very hard worker and a smart dude.
++++++++++++++++++++++++++++++++

I am a traditional “small c” (fiscal) conservative, and the fiscal state of this province is of great concern. My family has had a presence at the family farm since the original settlers back in 1840 (I live in ‘burbs now, but plan on moving back). However, I believe I may be the last if the province continues on its track.

The Ford PC’s have not produced any platform that would address this situation. It is cut taxes, fake price cuts with the hydro like Libs, increase services, and somehow the math will all work out.

Now I might hold my nose and vote PC (or not vote at all), as the PC’s would at least not destroy the business environment like NDP. But lets not pretend the PC’s (on current populist path) will do anything to stop the runaway debt train.

#175 The Real Mark (not the imposter) on 05.31.18 at 3:53 pm

“And built by who? We already have a dramatic shortgage of trades in this country…. “

Nonsense. There’s tens of thousands of tradespeople currently laid off in Alberta right now, and potentially another million or two will be coming to market as housing investment collapses. There was no problem constructing various pipelines in the 2000s, I don’t see why there would be any today.

If the TransMountain Expansion has any overruns, they will likely be related to deficiencies in project estimating, or litigation that occurs when all of the men and machinery have been contracted to be in the field. But the route of TransMountain already has a pipeline sitting in it, so there is probably not that great of an element of technical uncertainty. A protracted court battle including the near certainty of the matter ending up at the SCC and testing every facet of the Division of Powers provisions of the constitution, and the concept of “Crown Immunity” is probably the greatest risk.

#176 The T2 Gang Blew It on 05.31.18 at 3:54 pm

Freeland recently announced what tariffs would be imposed against the USA. She must be joking or confused by it all. On the other hand, Mexico targeted wisely, tariffs against the congressional districts fighting to retain themselves in the November elections. This clearly shows our Liberal Party as amateurs, compared to the Mexican statesmanship.

#177 Doug in London on 05.31.18 at 4:13 pm

As much as I love this country and still believe it’s one of the best places in the world to live, I’m disappointed by the dumb things we do. Once upon a time we had a company named Kinder Morgan that offered to build a pipeline in our country at their own expense. Just give us the green light and we’ll do the rest. Of course we dug in our heels to fight it and when Kinder Morgan said forget it we instead decided to build it with taxpayer’s money. Sadly, such a story is typically Canadian.

@Ogopogo:
Yes, I’ve been thinking the same thing. While such fools who are in debt they can barely afford to carry, I’ll park my bottom in the comfy cozy chair, put my feet up, and let my rate reset preferred share ETFs work their magic.

#178 jess on 05.31.18 at 4:30 pm

usa chamber of commerce :

The memo reads…

“On each of these issues, the Chamber has privately and publicly expressed our concerns to the administration and to Congress about the economic damage that an escalating series of back and forth tariffs would have on our own country.”
The memo reads…

“On each of these issues, the Chamber has privately and publicly expressed our concerns to the administration and to Congress about the economic damage that an escalating series of back and forth tariffs would have on our own country.”
Here’s how the possible job losses break down, according to the Chamber:

134,000 from tariffs on imports from China
470,000 from tariffs on steel and aluminum
157,000 from tariffs on autos and auto parts.
1.8 million from a withdrawal from NAFTA.

=======
trumps pardon for the liars and cheats …is this a signal to the loyalists on the russia probe?

#179 VanMan on 05.31.18 at 4:30 pm

http://markets.businessinsider.com/news/stocks/canada-gdp-slows-interest-rate-hike-a-lot-less-of-a-done-deal-2018-5-1026011480

#180 crowdedelevatorfartz on 05.31.18 at 5:07 pm

@#179 Mark ( the unemployed job analyst)
“Nonsense. There’s tens of thousands of tradespeople currently laid off in Alberta right now, and potentially another million or two will be coming to market as housing investment collapses. There was no problem constructing various pipelines in the 2000s.”
+++++
Sooooo
BC is screaming for qualified trades and “thousands” of them are sitting on their ass in Alberta drawing EI?

Where’s that “can do” Albertan spirit?
Or has Rachel Notley sucked the life out of everyone?

#181 maxx on 05.31.18 at 9:23 pm

#114 Be Realistic on 05.31.18 at 9:03 am

“It boggles my mind that after years and years of this crash talk, the doomers watch prices go up and instead of realizing their mistake, just get louder.

We’ll see if you feel the same way years from now; I highly doubt you will.”

You seem to boggle easily. To be sure, there are doomers and then there are those who categorically refuse to get hosed by taking on excess debt. Or debt of any kind. Regardless of what the shills in the FIRE industry bleat incessantly on about.

They’re not frustrated nor resentful – they’re simply money smart and wait patiently to vultch….er….price discover when the opportunity arises.

Just did that and acquired a gem at major value. There is nothing quite like the feeling….except maybe that of saving and getting as far away from debt as possible. Forever.

Sorry to scuttle the diagnosis, but it really is low- hanging fruit.