Screwed

RYAN  By Guest Blogger Ryan Lewenza

In many of my client discussions I often half joke that the central bankers are screwing retirees. After a pause and awkward laugh I expand on this somewhat crass quip noting that the severity of the financial crisis forced the global central banks to cut interest rates to rock bottom lows to help reflate the economy and avoid the next Great Depression. Well, with every action there is a reaction and, unfortunately, you boomers will have to “take one for the team” through lower bond yields and portfolio returns, just when you need it most. In this week’s post I examine the low interest rate environment and what it means for boomers and portfolio returns.

First some background.

As the financial crisis began to pick up speed with the failure of Bear Stearns, Lehman Brothers et al., and the full scope of the US mortgage crisis came into focus, the central banks did what they always do and responded by lowering interest rates. What was different this time was how coordinated the global central banks were and how drastically they cut rates. As illustrated below, the central banks around the world cut rates to effectively 0% and kept them anchored at this historically low level for years. But, given the depth of the recession and crisis, this was not enough.

Many of the central banks then implemented new “unconventional” monetary policies called Quantitative Easing, which involved the central banks buying up their own government bonds. In total, the global central banks expanded their balance sheets through these asset purchase programs by an incredible US$14 trillion since 2009! So central banks took aggressive action to drive both short and long-term bond yields lower.

How low?

Global Interest Rates at Record Lows

Source: Bloomberg, Turner Investments

In the table below I provide a small sample of key global interest rates, comparing current levels to their long-term averages and June 2007 levels, which marked the peak of the last cycle. For example, in the US the Fed Funds Rate was cut from 5.25% in 2007 to a record low of 0%. With the recent Fed rate hikes the overnight rate is currently at 1.75%, which is still more than 1% below its long-term average.

Looking at longer term yields, US and Canadian government 10-year bond yields currently sit at 2.86% and 2.24%, respectively, well below their long-term average of roughly 4.5%.

To further hit home the point, the Bank of England has recorded interest rates for 300 years and with its benchmark rate at 0.5% currently, rates are at an all-time record low.

Thanks a lot Ben Bernanke, Mark Carney, Stephen Poloz and others!

Key Government Bond Yields and Benchmark Rates

Source: Bloomberg, Turner Investments

Naturally, lower interest rates are going to weigh on portfolio returns, especially those portfolios concentrated in fixed income. Below are the returns on an average conservative mutual fund invested mainly in Canadian fixed income securities. To better isolate the trend in returns I calculated a rolling 3-year return and note how it has been trending lower since 2010, the period when the global central banks cut interest rates to effectively 0%. And this was during a time of generally strong equity returns, so it really hits home the impact of low bond yields.

The key takeaway is, the low rate environment is and will continue to weigh on portfolio returns, especially for those conservative portfolios concentrated in GICs and government bonds.

Conservative Portfolio Returns are Declining

Source: Morningstar, Turner Investments

Ok Captain Obvious, rates are low and therefore I should expect lower portfolio returns from fixed income and conservative portfolios. What should I do then?

The solution is simple but not necessarily easy. You need to continue to hold a decent amount of equities in your portfolio well into your retirement and favour high-quality dividend stocks that pay out steady and growing dividends to help meet your cash flow needs in retirement. This is why we continue to recommend many (not all) of our retirees maintain 60% equity exposure in their portfolios and why we have been adding dividend-paying ETFs to client portfolios.

Now there’s no free lunch, especially when it comes to investing, and with this higher equity exposure for retirees comes higher risk and larger potential drawdowns during those inevitable bear markets. While difficult to stomach during market downturns, we do believe this is the right strategy for retirees over the long-run because the alternative (low returns from fixed income only) is just not going to cut it for most of them, when they need it most.

Ryan Lewenza, CFA,CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

168 comments ↓

#1 crowdedelevatorfartz on 06.09.18 at 3:23 pm

Unfortunately, with these historic low rates, the Fed doesn’t have much wiggle room during the next financial sh!t storm.
Is this (and inflation/ job creation) why they are aggressively raising rates the last few quarters in the US?

#2 FtMacer on 06.09.18 at 3:27 pm

FIRST!

#3 For those about to flop... on 06.09.18 at 3:28 pm

Weekend Rewind

This week in howmuch articles.

They could only manage two articles this week.

I’m blaming the tariffs…

M43BC

These are the Biggest Corporate Giants Over the Last Decade.

https://howmuch.net/articles/top-3-companies-ranked-by-revenue

See Which Schools Have the Highest ROI in Every State

https://howmuch.net/articles/best-value-colleges-by-state

#4 For those about to flop... on 06.09.18 at 3:29 pm

Pink Pollen falling in West Vancouver.

Well,after dreaming of the good old days either they wondered and worked out that their house was over-asking or their realtor finally levelled with them just how dire things are in West Vancouver.

The stats that relate to them are sobering.

Minus 34% y.o.y for the city average price wise.

Minus 72% detached sales wise.

They have taken the axe to the price but by being so stubborn they missed the bulk of the traditional selling season.

They paid a flat 3.00 early 2016 and the assessment despite working its way up still falls well short of ask at 2.71

For the bulk of the city 10-15% less than assessment will get some action on detached ,from what I have seen,so they are still a long way off.

I saw a waterfront house for about half a million less the other day ,so they are in tough and might just end up sitting it out.

Dunno how any of this is going to end ,especially for the class of 2016 ,but good Gord I’m gonna try…

M43BC

450 Gordon Avenue, West Vancouver paid 3.00 February 2016 ass 2.71

Jan 22:$3,588,000
Jun 7: $3,150,000
Change: – 438000.00 -12

https://www.zolo.ca/west-vancouver-real-estate/450-gordon-avenue

https://www.bcassessment.ca/Property/Info/QTAwMDAyOUEyTg==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#5 For those about to flop... on 06.09.18 at 3:30 pm

CONFIRMED PINK SNOW

B.C assessment has finally updated this case and so let’s see what happened.

The details…

4582 Sunland Place, Burnaby

Paid 1.3 March 2016

Sold 1.29 January 2018

And so it is only a light dusting of Pink Snow compared to a lot of my cases ,but most likely these were junior Specuvestors and the experience cost them anywhere in between 80k to 130k depending on opportunities lost.

The bottom of the ladder here is the top in a lot of other places and so it is the big leagues and you can tell some of these people never spent enough time in the minors…

M43BC

Sold on January 11 2018

https://www.bcassessment.ca/Property/Info/QTAwMDAzV0ZFOA==

https://www.zolo.ca/burnaby-real-estate/4582-sunland-place

4582 Sunland Place, Burnaby, BC, V5J 3A4 paid 1.3 March 2016

Asking price history.

2016-10-15 : $1,399,000
2017-01-11 : $1,299,000
2017-02-02 : $1,499,000
2017-05-08 : $1,480,000
2017-06-07 : $1,380,000
2017-11-13 : $1,449,000
2017-11-17 : $1,199,000

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#6 For those about to flop... on 06.09.18 at 3:31 pm

CONFIRMED PINK SNOW

Let’s see what happened to this flip in Richmond.

The details…

9551 Kirkmond Crescent, Richmond

Paid 2.00 August 2016

Sold 2.05 December 2017

You can see even though though the deal was done last December,b.c assessment has just updated it now,too long, too slow for a changing market currently upon us,which is why I will continue to try and show results in real time via realtors and motivated house hunters.

These guys, as I alluded to in my previous post despite doing relatively well at first glance numbers wise,they still took a punt in the pants for anywhere between 60 to a 100k.

I am a nobody, but I am this blogs medium to the truth…

M43BC

Sold on December 30 2017 2.05

9551 Kirkmond Crescent, Richmond paid 2.0 ass2.00 2017

Paid 2m August 2016

Asking 1.99

https://www.zolo.ca/richmond-real-estate/9551-kirkmond-crescent

https://www.bcassessment.ca/Property/Info/QTAwMDA1WFBYUQ==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#7 For those about to flop... on 06.09.18 at 3:33 pm

CONFIRMED PINK SNOW

I’m sure it’s a total coincidence but I can’t help but notice that b.c assessment has only updated the light losses.

It may take longer than it should but eventually the truth will come out.

Anyway,let’s see what happened to these guys.

The details…

653 Lakeshore Drive, Coquitlam

Paid 1.27 April 2016

Sold 1.25 February 2018

Compared to assessment,which comes in at 1.15 ,these guys did pretty good to limit the damage but it wasn’t enough to let them walk away without some wounds.

The loss zone probably lands between 85-125k depending on how hard you want to work the numbers.

The tried to sell it from late 2016 onwards and if you look at the asking history they were never trying to gouge anyone,perhaps some life changing event took place and they just needed to get out.

I have been portrayed on here as a heartless bastard that laughs at other people’s misfortune.

I stay respectful to the homeowners, in most cases referring to them as ” these guys”.

Last time I did a session like this a guy had a go at me and told me to get my own blog.

This is my gift to the owner of this blog and if he no longer wants the information then it will stop.

Don’t waste your time telling me to stop,the information should already be more readily available to the public ,and I would appreciate it if homeowners put neon signs out the front of the properties telling everyone that they are in trouble so we wouldn’t have to continue this charade that everything is fine in this city…

M43BC

Sold for 1.25 on February 26th 2018

These people spent 1.27 April 2016 ass1.15

653 Lakeshore Drive, Coquitlam

2016-11-01 : $1,350,000
2017-06-11 : $1,190,000
2017-08-09 : $1,370,000
2018-02-13 : $1,288,000
2017-02-23 : $1,299,000

https://www.bcassessment.ca/Property/Info/QTAwMDAzWExYQw==

https://www.zolo.ca/coquitlam-real-estate/653-lakeshore-drive

#8 D.D. Corkum on 06.09.18 at 3:44 pm

“Unfortunately, with these historic low rates, the Fed doesn’t have much wiggle room during the next financial [crisis].”

—-

I’ve never quite understood this argument, except maybe as a call for legislative reforms beyond the scope of central bankers. If crisis can hit despite extreme accommodation, then there must be something else very wrong with the system that needs correcting.

#9 JSS on 06.09.18 at 4:12 pm

About ten years ago, when I changed employers, I transferred my DB pension to a direct investing account (LIRA) and purchased a series of dividend growth common stocks, for example: RBC, CN Rail, TD, Scotia, Enbridge, Coca Cola, proctor and gamble, Brookfield asset management, Canadian Utilities, BCE, Fortis, etc. Looking back, I’m very happy with a 100% all-stock portfolio. Every year, each of these companies have increased their dividends, and I can track and trace each dividend increase. Dividend growth has been around 6-7% annually. The beta (volatility) has been acceptable to me. I’m around 15 years from retirement, so I’m dropping each stock. As I get towards retirement, I’ll probably hold maybe two years salary worth of cash, and rest in dividend growth blue chip conservative stocks.
Average total rate of return has been around 9 percent, I think.

#10 Doug in London on 06.09.18 at 4:12 pm

Yes, but in the foreseeable future aren’t interest rates normalising, in other words going up?

#11 crossbordershopper on 06.09.18 at 4:15 pm

there is a free lunch, the government gives all seniors free money, free lunch. oas/gis .
gst cheques, prop tax rebates if your in ontario.
now for the people with nice pensions etc and big portfolios yes your have income and are taxed but hey, you have so you pay.
for the immigrants among us, well most of them simply live a nice comfortable life elsewhere, mexico is great, $1500 month all in and you live well.
why anyone wants to spend more than 6 months in Canada i have no idea. the cheques are on autopilot, i have guys who call in their tax return from mexico. what a scam. free money from Canada and they live the life in Mexico.
and others worry about interest rates are below the long term average. ok. i’ll keep note of that while these people are at the beach. and the old guy in Scarborough is cutting the grass in Canada.

#12 Grateful Boomer on 06.09.18 at 4:26 pm

Doug,
Just to confirm, are you recommending ( many, not all) maintain 60 % equity portion by adding some dividend etfs or consider replacing ( some ,not all) with the low return fixed portion?

#13 crowdedelevatorfartz on 06.09.18 at 4:39 pm

@#7 Floppie

“Last time I did a session like this a guy had a go at me and told me to get my own blog….”
+++++
Don’t fret the wankers Floppie they don’t want to hear the truth.

#14 FOUR FINGERS WATSON on 06.09.18 at 4:54 pm

#11 crossbordershopper on 06.09.18 at 4:15 pm
there is a free lunch, the government gives all seniors free money, free lunch. oas/gis .
………………………..

Those are the same seniors that were taxed mercilessly and relentlessly for 45 years or so while politicians gave themselves nice fat gold plated pensions. Those same seniors deserve to get back as much of their own tax money as they can. Hi yo Silver……awaaaay !

#15 FOUR FINGERS WATSON on 06.09.18 at 4:58 pm

In many of my client discussions I often half joke that the central bankers are screwing retirees.
………………………..

It might be half a joke but it is completely true. I’m glad you pointed that out. Savers got screwed and borrowers were rewarded.

#16 Ryan Lewenza on 06.09.18 at 5:12 pm

Doug in London “Yes, but in the foreseeable future aren’t interest rates normalising, in other words going up?”

Yes but it will be gradual and rates are likely to stay lower than normal for a while. There are a number of reasons for this but the main one is with all the debt in the world we just can’t afford significantly higher rates. So bond yields will remain low for a while making it hard to generate enough returns from fixed income alone. – Ryan L

#17 Ryan Lewenza on 06.09.18 at 5:19 pm

Grateful Boomer “Just to confirm, are you recommending ( many, not all) maintain 60 % equity portion by adding some dividend etfs or consider replacing ( some ,not all) with the low return fixed portion?”

The general rule was to lower ones equity exposure in retirement. Many used 100-age to determine equity exposure. So at 65 that would mean having just 35% in equities and 65% in bonds. Problem is bonds will only get you 2-3%. So what I’m saying is throw that general rule out and continue to hold 60% equities in retirement. – Ryan L

#18 Debtslavecreator on 06.09.18 at 5:20 pm

While low rates screw some retirees who want GIVs and savings accounts they have actually screwed the young much more.
The retirees for the most part were very luck to have purchased their real estate, stocks and bonds during a time where real and nominal rates were high and dropping
The massive increases in nominal values as a result of the dropping rates have provided extraordinary wealth for this older generation including most of the boomers
In a cruel twist, Many Gen x and Moisters are being turned into virtual debt slaves by buying these assets at record valuations financed with extreme debt at the lowest nominal and real rates ever. In essence, these young are engaging in reverse wealth transfer thanks to the result of record low rates
Record low rates and resulting record high asset prices have on average screwed the younger Canadians much harder than the boomers and old
What a farce

#19 Newcomer on 06.09.18 at 5:36 pm

Does this mean that the same balance (60/40) is appropriate both for those currently earning a salary that is larger than their intended retirement income and those who are retired and have essentially no income outside of what their portfolio pays? I would have expected a different approach for the two situations because the earning person can take advantage of a downturn while the retired person cannot.

#20 The Real Mark (not the impostor) on 06.09.18 at 5:45 pm

I must first start of by apologizing to Ryan for stealing away some of his thunder especially with such a riveting post.
With that out of the way here is the fantastic news!
As you may remember I was busily working on some new superpowers and I am wonderfully excited to let you all know that I have run some tests and so far I have nothing but positive news to report.
My superpowers involve time travel, super exciting I KNOW!
My master plan is to first travel back to March 2017 and purchase some SFD’s is the GTA (writing with acronyms is sooooo cool). Since 2017 is basically the bottom of the market in terms of price I will be able to pick up houses very inexpensively. I then will travel back in time to 2013 and sell those same homes at the pinnacle of market pricing.
The residual benefits of such a grand master plan is that when I do sell those homes back in 2013 I will then reinvest those monies in a balanced and diversified portfolio and when 2017 rolls around my profits should be somewhere in the range of 262-264%.
There is however 1 slight glitch. I currently have saved $196.20 and from my research a house might sell for in the range of $271-$275 plus closing costs. So this is my fantastic proposal to all you savvy blog dog investors (Ryan and Doug you can invest also).
If one of you would be so kind to lend me $80 today I can then repay you that same $80 in 2013 money.
I will have my Mom draw up all the proper paperwork (she is a legal secretary and a great cook).
Sincerely yours,
The Real Mark

#21 TurnerNation on 06.09.18 at 6:05 pm

Are supposed to still razz the new guys in a quasi welcoming form? Ok…
What with their Vanilla Ice inspired hairstyles?

Hey the 90s called…they want their interest rates back.

Best buying op is in South America. Now, the IMF helpfully bailed and crippled them with debt.
Don’t forget Ontariowe guys! )

#22 jess on 06.09.18 at 6:15 pm

charm lost CEO steppping down

british telecom
BT has an estimated one million small shareholders after becoming one of the first state-owned business to be privatised under Margaret Thatcher’s government.
=====================

BT’s £11 billion pension deficit obligation

In March, BT paid £1.18bn for Champions League football rights, 32% more than the previous deal, to fend off Sky. The rising cost of sports rights has also affected Sky, which on Thursday said a one-off £629m step-up in Premier League rights costs drove a 14% drop in profits at its UK and Ireland operation.
=================================
BT drops PwC following Italian accounts scandal 8 June 2017
BT has replaced its auditor for the first time in 33 years after an accounting scandal at its Italian business cost it £530m.In January, BT admitted its Italian business had overstated profits, leading to a share price slump.
KPMG was called on at the time to investigate what it described as “inappropriate behaviour” by managers.The scandal at BT Italia emerged after a whistleblower informed executives in 2016 of the problems.An subsequent investigation by KPMG found “improper accounting practices and a complex set of improper sales, purchase, factoring and leasing transactions”, which meant profits in the Italian business had been overstated for a number of years.

“The days of rampant [rights cost] inflation I think are behind us,” said Patterson. “
https://www.bbc.com/news/business-38728816
https://www.theguardian.com/business/2017/jul/28/bt-profits-italian-scandal-deutsche-telekom-orange
https://www.channelweb.co.uk/crn-uk/news/3032066/bt-to-cut-global-services-costs-significantly-after-announcing-13-000-layoffs

===================
“The dividend, which was rising 10% a year not so long ago, is set to freeze for the foreseeable future, and next year’s profits look likely to fall again,” he added
https://www.bbc.com/news/business-44006174
https://www.independent.co.uk/topic/BT

#23 Baroque Millenial on 06.09.18 at 6:18 pm

For those about to flop. We salute you!

#24 FOUR FINGERS WATSON on 06.09.18 at 6:19 pm

Yes but it will be gradual and rates are likely to stay lower than normal for a while. There are a number of reasons for this but the main one is with all the debt in the world we just can’t afford significantly higher rates.
……………………..

That is what I have been saying here for the last 5 years. I am glad you were paying attention.

#25 Renter's Revenge! on 06.09.18 at 6:22 pm

People are living longer now. Maybe the rule should be increased to 120 or 130 minus age to determine equity exposure. That’s the problem with general rules. After a while people forget why they were created in the first place, and then times change.

#26 tccontrarian on 06.09.18 at 6:22 pm

“As the financial crisis began to pick up speed with the failure of Bear Stearns, Lehman Brothers et al., and the full scope of the US mortgage crisis came into focus, the central banks did what they always do and responded by lowering interest rates.”
********************************

Naturally, the $64 Trillion question is (yes, with a “T” – you know… inflation!):

As the debt situation is worse now than in 2008-9 (almost globally), with almost unpayable debt loads in some cases, how is the next ‘crisis’ going to unfold and how are Central Banks going to deal with it?

Are you, at any point, considering adding gold to your holdings in anticipation of something…BIG??

Just curious!

TCC

#27 John on 06.09.18 at 6:33 pm

The only issue I can see with the authors advice is in his last paragraph whereby a retiree may not have a ‘long run’ timeline to absorb a large paper drawdown via additional equity exposure.

The other side of the coin here is managing personal expenses downwards in periods of low returns (read low fixed income yields) for those without the ability to take additional risk.

#28 Stoner on 06.09.18 at 6:36 pm

Just watched Trump’s G7 press conference. He did to the G7 what the British Soldier’s did to the White House in 1814.
– Arrived late for a Gender based summit
– Contributed ZERO dollars to the Fund for Girl Education
– Told Canada in particular to remove tariffs on dairy
– What he didn’t say in public but I could read between the lines was stop being this great I will admit everyone into this country for Immigration.
– Made Larry Kudlow eat his world in public about free trade.

Really interested in seeing how Canada and her Prime Minister react. Its like daddy has told sonny that either follow my rules or get out of my house.

My bet is that both this country and the PM will cave in. Hope I am wrong.

#29 georgist on 06.09.18 at 6:39 pm

Amazed to hear how hard it is for the boomers when generational inequality is up:

https://globalnews.ca/news/3854264/boomers-gen-x-millennials-cost-of-living-canada/

#30 Belmont Park on 06.09.18 at 6:40 pm

Bookie has me covered for $100 on #3 to show.

#31 Poor Boomers on 06.09.18 at 6:43 pm

Oh, the poor boomers. So hard done by. Few had portfolios to begin with, and it turns out, they did not need one.

During the the decade long era of ’emergency’ low interest rates, their principal asset, housing, went up 150-300%. That gain far exceeds the spread between conservative returns and historical returns in portfolios. They did not even need to have a portfolio – nothing beats a 150-300% return on housing.

Now all those sideliner renters waiting during that decade certainly got hooped with their average 6% return over that period with their portfolios. That is the real story and it is what should be talked about.

#32 For those about to flop... on 06.09.18 at 6:47 pm

Hey Ryan, I just had some time to complete my list of World Cup pairings.

I gave you France ,so,potentially you can gain some satisfaction out of kicking Australia’s bum for payback of my presence on here every second Saturday.

Here is a list of the 32 football teams playing in the 2018 World Cup starting shortly.

We did it for the Euros a couple of years ago and we had some fun with it ,and you never know what’s gonna happen even if you get a crappy team.

Iceland surprised everyone last tournament.

On game day if your team was playing you were encouraged to post a short Fun-Fact on your country when doing your regular post.

The tournament goes for a month and will be all over everything ,so we might as well have some fun with it.

I pre- filled in some of them based some basic information,maybe some bad information ,and some just for a laugh,don’t get offended ,it’s just another way to connect with people all over the world that visit this beast of a blog.

The prize was supposed to be a years worth of free ice-cream,but we have had a last minute change of sponsor ,and so the grand prize is now a nights accommodation in a bank vault…

M43BC

Group A:

Russia, Garth Turner Host Nation

Uruguay,Waiting on the westcoast,regular visits.

Egypt,Bitcoinaire, seems to love the Gyptocurrency

Saudi Arabia,Shawn Allen,got sand in his ears.

Group B:

Portugal,Ronaldo,our Ronaldo has less of an ego.

Spain,Fake News Again,full of bulls…

Iran ,Washed Up Lawyer,what he did from the Fort Mac fires.

Morocco ,Smartalox,he’s way smarter than me ,so when I read his posts I come up Casablanca

Group C:

France,Ryan Lewenza.InfLewenza will enjoy spit roasting me.

Peru,TurnerNation, don’t have 30 buck beer and burger,so he’ll probably like it.

Denmark,Screwed Canadian Million,should have probably given her Sweden but Denmark will do.

Australia,For those about to flop…,I come to this blog everyday ,so I obviously like getting my ass kicked.

Group D:

Argentina,crossbordershopper, posts can get pretty Messi

Croatia,No Name ,home team,couldn’t give him Ukraine just to see his reaction again.

Iceland, IHCTD9,living in the middle of nowhere.

Nigeria,Smoking Man,dodgy guy on Internet.

Group E:

Brazil,Keith in Rio,home team,last time Portugal this time the real deal.

Switzerland, Doug Rowat,Robax stays pretty neutral.

Costa Rica ,Crowdie, probably should have seen what Mexican food and tight spaces would have conjured up but strong coffee will do.

Serbia,Long Branch Apprentice,probably should be Smoking Man but he got Nigeria so one of his apprentices will suffice.

Group F:

Germany,Common Sense,worked last time.

Mexico,Trumpocalypse,can focus on the wall and the bunker at the same time.

Sweden,Nonplused,puts things together well or frustrating to work out, depends on your like or dislike for IKEA products.

South Korea,Jaguar,they are the cats.

Group G:

Belgium ,Mark,full of chocolate.

England ,Ace Goodheart,sounds English enough.

Tunisia, Leo Trollstoy ,just to bug Mark

Panama,Penny Henny,there is always something in his canal.

Group H:

Poland ,Dorothy Turner,thought I read somewhere on the blog about connection,could be wrong.

Colombia,Stan Brooks…on some good drugs.

Senegal,MF,could probably afford his dream house there.

Japan,LP,don’t bash me Linda, but they have lots of um… er…..older folk.

Good luck to everyone,Flop.

#33 NoName on 06.09.18 at 6:59 pm

this chart will be interesting to watch
https://fred.stlouisfed.org/series/BOPGSTB

#34 Ace Goodheart on 06.09.18 at 6:59 pm

Looks however like govt bond yields have started their slow and relentless creep upwards. Could it be populism and the instability that it brings?

Whatever the cause It’s a good time to buy govt bonds.

#35 MF on 06.09.18 at 7:08 pm

A couple things:

1) the ZIRP policy screwed the young and the old. The young have to purchase assets at nosebleed artificially inflated prices. Equities have been plumped by QE.

2) We all know that rates cannot rise “too much”. When central bankers talk about rising rates the whole world knows it’s just talk, since they screwed themselves with their own policy and are now in a pickle.

MF

#36 young & foolish on 06.09.18 at 7:33 pm

Obviously, the Turner Investment team believes equities will continue to offer reliable returns (of course there will be occasional set-backs, but on the whole, we are still expecting 7% average ?????)

#37 Stoner on 06.09.18 at 7:36 pm

G7 and Russia
I don’t think Trump asking for Russia to be included in G7 is a random message. I think its a very clear signal to Canada that if you are going to host all these countries to threaten US as a neighbour, we will bring Russia in and the whole business of Arctic Sovereignty will raise its head in your backyard as well.

#38 Tony on 06.09.18 at 7:36 pm

Re: #20 The Real Mark (not the impostor) on 06.09.18 at 5:45 pm

Focus on the future and look for bank bail-ins to become commonplace.

#39 mike from mtl on 06.09.18 at 8:04 pm

#34 Ace Goodheart on 06.09.18 at 6:59 pm

Whatever the cause It’s a good time to buy govt bonds.
////////////////////////////////////////////////////////////////////

Yep, it’s been the same story the last few decades, the FED plays catch-up raising rates into a run-up. Which is followed by a massive crash and back down. It’s never different this time.

Always too little too late.

#40 crowdedelevatorfartz on 06.09.18 at 8:33 pm

@#32 Floppie
“On game day if your team was playing you were encouraged to post a short Fun-Fact on your country when doing your regular post.”
++++
Your wish is my command.
I think I’ll pre-empt the rest of the World Cup Pool and toss in some fascinating Costa Rican trivia
Spanish is the linga of the country.
For example:
When in Costa Rica instead of saying,
“This elevator smells like farts!”
You would say,
“Este ascensor huele a pedos!”

#41 Trumpocalypse2018 on 06.09.18 at 8:45 pm

Trump’s walkout on the G7 is truly the beginning of the end, in so many ways.

PREPARE

#42 young & foolish on 06.09.18 at 8:45 pm

So, another 3-4 years away from another credit crisis ????

#43 Our Negotiators on 06.09.18 at 8:58 pm

I guess they never saw it coming, as look at the latest update from the beast. I knew a year ago that the beast wanted to destroy NAFTA for bilateral agreements. In fact, months ago contacted the Union Head covering the auto workers to tip him off. Our negotiators don’t have the experience or intelligence to make a cup of coffee. NAFTA is an umbrella of safety with several components, but once its gone down goes Canada.

#44 crowdedelevatorfartz on 06.09.18 at 9:01 pm

@#37 Stoner
“and the whole business of Arctic Sovereignty….”
+++++
The US has never recognized Canada’s claim of Arctic sovereignty a la the North West Passage

https://www.google.ca/url?url=https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi%3Farticle%3D2865%26context%3Dfacpubs&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwj67ffP8sfbAhWxGjQIHRcFB3kQFgg0MAY&usg=AOvVaw36CWID87JSgvl7_fNrOr0p

#45 FOUR FINGERS WATSON on 06.09.18 at 9:02 pm

Trump seemed particularly angered by Trudeau’s apparent two-faced comments, tweeting:

“PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around’ Very dishonest & weak. Our Tariffs are in response to his of 270 per cent on dairy!” Trump posted in another tweet.
“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” Trump wrote on Twitter.
………………………

Well done Justine.

#46 conan on 06.09.18 at 9:08 pm

#41 Trumpocalypse2018 on 06.09.18 at 8:45 pm

Trump is crazy and he just telegraphed that message to the rest of the G 7 and anyone watching on TV etc.

There is going to be no NAFTA deal, and a trade war like something out of a bad Star Wars trilogy.

My take is that we are going to see a very active G 6 until the November mid terms. They will support each other, take the hit, and hope and pray that November 2018 is bad for the Donald. That will set into play impeachment proceedings by the Dems.

Joe Biden will run for President, and kick butt.

#47 Mexico on 06.09.18 at 9:30 pm

The election might as well be over, as another beast will be President. AMLO will cause more trouble than a hurricane. USA is in for a big surprise because they have been planning unlike Canada. ALMO cannot be trusted by anyone, because he is no sissy boy.

#48 Linda on 06.09.18 at 9:40 pm

I wonder if anyone who has been vilifying Boomers as ‘the root of all their evils’ will be appeased by the thought that the Boomers are going to suffer financially after all? Nah. Too likely to be overlooked & everyone will say that all the Boomers they know are rich & have had too many breaks as it is.

#49 Sydneysider on 06.09.18 at 9:47 pm

“central banks around the world cut rates to effectively 0%”

That did not happen in Australia.

https://tradingeconomics.com/australia/interest-rate

#50 Joseph R. on 06.09.18 at 9:47 pm

#45 FOUR FINGERS WATSON on 06.09.18 at 9:02 pm
Trump seemed particularly angered by Trudeau’s apparent two-faced comments, tweeting:

“PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, ‘US Tariffs were kind of insulting’ and he ‘will not be pushed around’ Very dishonest & weak. Our Tariffs are in response to his of 270 per cent on dairy!” Trump posted in another tweet.
“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” Trump wrote on Twitter.
………………………

Well done Justine.

————————————————

How is PM Trudeau is responsible for words said by an irrational man (Trump) ?

You believe Trudeau to be that powerful?

#51 Ace Goodheart on 06.09.18 at 9:51 pm

Re #45: Trump is right about the Dairy board. But try to find a person in Canada, other than a dairy farmer, who actually wants the Dairy board to exist. You Won’t find anyone.

Get rid of the Dairy board. We are tired of paying $15.00 for crappy Canadian cheddar and grossly inflated prices for any foreign cheese.

The dairy board sucks. Please get rid of it.

Farmers go with it. – Garth

#52 NoName on 06.09.18 at 9:51 pm

interesting video about today’s teenager. min 15 72% of teens want to start their own business.

https://www.youtube.com/watch?v=N5PmuHXBxR0

(an hour long)

#53 FOUR FINGERS WATSON on 06.09.18 at 9:54 pm

#46 Conan
Joe Biden will run for President, and kick butt.
…………………..

Mushrooms or acid ?

#54 Stoner on 06.09.18 at 9:55 pm

#44 crowded
Thanks for the link. I knew it’s disputed but for argument sake what happens if Putin pulls a Crimea type stunt in the Arctic now at Trumps behest. Do you think Nato without US would come to help Canada? Trump could twiddle his thumbs and say sorry guys, you have been exploiting us in trade for so long, so if you really want us to do anything about this, then just shut up and dance.

#55 KLNR on 06.09.18 at 10:08 pm

@#45 FOUR FINGERS WATSON on 06.09.18 at 9:02 pm

Well done Justine.

_____________________

Why do you refer to justin as justine all the time?

#56 Ryan Lewenza on 06.09.18 at 10:09 pm

John “The only issue I can see with the authors advice is in his last paragraph whereby a retiree may not have a ‘long run’ timeline to absorb a large paper drawdown via additional equity exposure.”

Fair point, but the average bear market last 11 months and we always recommend having some cash so if the portfolio is structured correctly they should be able to get through the bear market with minimal impact. – Ryan L

#57 Stoner on 06.09.18 at 10:12 pm

One thing that the western world needs to remember is, there is no appeasing this guy. His need for ego gratification will force him to to push the next set of buttons if they give in.
I think by the time this guy is done, the world is going to a very different place and I don’t mean it in a good way.

#58 conan on 06.09.18 at 10:18 pm

#53 FOUR FINGERS WATSON on 06.09.18 at 9:54 pm

Neither, think green.

Who do you think will run for the Dems in 2020?

#59 Fake News Again on 06.09.18 at 10:19 pm

it’s going to be like winning the lottery for those in their late 50s now whom are cash rich. Once the bond market collapses they will be able to watch re-runs of Die Hard and spew the late Alan Rickman:

“Soon we will be sitting on a beach…..earning 20%”

#60 Arctic on 06.09.18 at 10:21 pm

While T2 has been in parades and taking vacations the Russians have established several military bases in the Arctic. The newest one is called Trefoil, and is quite the establishment getting ready for war.

#61 Seen it All for 60+ Years on 06.09.18 at 10:28 pm

What’s with all the Boomer hatred on this website? Health care, CPP, OAS were “in” in the early 60’s when the voting age was 21. I think I was 12 at the time. We dealt with 75% Cap Gain rates, double digit interest rates & climbing housing prices, whilst wages (I’m a professional) were bottom of the barrel. RRSP’s were “a new idea” consisting of GIC or bank interest only & pretty limited contributions. My first “job” at the low earnings end was at $1.25 a hour. A $1.65 at Uni to make ends meet at the all night A&W.

Want to buy a house sans CMHC…25% down or go pound sand. No semi monthly pmts, 5% down, 40 year amortizations. I made $1200 a month with a BSc, 2 years out of grduating & held a $50,000 mortgage on a 25 year old house in Saskatoon. Women certainly didn’t make the same with equal credentials, ask my ex about that. We didn’t buy new cars, take vacations or buy anything outside of our “means” at the time. Not all Boomers were dope smoking hippies. Most of the ones I grew up with never made it past high school. They’re probably retired auto mechs or the last plumber you had in to fix something. They know more about life than you’ll ever learn.

At least one didn’t need a PhD to run a tire machine or pump gas or change the oil. My new wife worked at a grocery store, when you actually had to count change & some machine didn’t do it for you. I think she made $1.75 to do that, while today it’s $15 an hour & you don’t even have to think or do math in your head.

Hell, I ran a hotel business for a while & I didn’t need an MBA to do it. On top of my other job at the time. My investment acumen is better than most mils today….I learned from the school of hard knocks. Credit a few recessions & stock market crashes & some simple investment rules for that.

I defy the rules on “balanced” portfolios. Sorry, Garth. My “income portion” is currently 1%, “balanced” with blue chip, dividend paying stocks, which pay me close on 6.5% yields, on average. A $65K annual salary, in only 25 years from almost zero, too (I had a bad couple of years & lived in Vanc at the time). Start with your damned bank if you don’t know where to start & you have some time on your hands. The Market crashes on these babies, just buy more of ’em at cheaper prices! I doubled my net in 18 months the last time doing so & on margin to boot.

Quit smoking, drinking & learn the Income Tax Act inside & out. I even worked at a brokerage house for a few years during one recession to pay the bills, completely outside my U-experience & working history, as there was no work in my particular field. Folks were idiots about money then, as they are today. Just as house horny as well & bitchin’ about it just as much.

If you’re whining about how Boomers had it all handed to them on a silver platter, you’ve got too much time on your hands & you’re not focused on fixing your own problems. You waste your time posting about it here, when you should be doing your homework, instead.

Peace brothers. (two finger salute)

#62 Soviet Capitalist on 06.09.18 at 10:28 pm

Here is a solution for current societal problems -> https://www.youtube.com/watch?v=N_zOkljLqS4

#63 NoName on 06.09.18 at 10:36 pm

One more thing for boomers to worry, older news article, but iam sure its not getting any better…

https://globalnews.ca/news/3802497/canada-sti-rates-seniors/

#64 FOUR FINGERS WATSON on 06.09.18 at 10:45 pm

#55 KLNR on 06.09.18 at 10:08 pm
@#45 FOUR FINGERS WATSON on 06.09.18 at 9:02 pm

Well done Justine.

_____________________

Why do you refer to justin as justine all the time?
…………………..

First time i have called him Justine. I used to call him Turdo but Garth threatened to ban me for being disrespectful, hence Justine.

#65 FOUR FINGERS WATSON on 06.09.18 at 10:47 pm

#50 Joseph R
How is PM Trudeau is responsible for words said by an irrational man (Trump) ?

You believe Trudeau to be that powerful?
……………

Nope. Just really stupid.

#66 Fake News Again on 06.09.18 at 10:53 pm

Ace Goodheart on 06.09.18 at 9:51 pm
Re #45: Trump is right about the Dairy board. But try to find a person in Canada, other than a dairy farmer, who actually wants the Dairy board to exist. You Won’t find anyone.

Get rid of the Dairy board. We are tired of paying $15.00 for crappy Canadian cheddar and grossly inflated prices for any foreign cheese.

The dairy board sucks. Please get rid of it.

Farmers go with it. – Garth

______

Correct…and in Canada……ALL FARMERS are rich. They all have a mercedes in the garage. KILL the Dairy Board….Trump is correct again.

#67 Doghouse Dweller on 06.09.18 at 10:56 pm

#56 Ryan Lewenza
the average bear market last 11 months.
———————————————–
After a decade long global $12 trillion dollar money printing frenzy , the lowest rates in 5,000 years, the everything bubble and looming trade wars. Do you really believe the next bear market will be near average when everything else extreme ?

#68 crowdedelevatorfartz on 06.09.18 at 11:11 pm

@#54 Stoner

I also wonder about Trumps tweet slagging a leader of a NATO ally and his next door neighbor as he’s jetting towards his historic summit with North Korean Nuclear loon Kim Jong Un.

Perhaps setting the stage for a smiley, handshaking photo op with one of the most ruthless dictators of the 21st century ………..with a follow up tweet from Air Force One slagging The Nuclear Hermit as Trump heads home.

The unpredictable US Prez is becoming…… predictable….?

#69 EP on 06.09.18 at 11:30 pm

Hi Ryan, with a 3.8% unemployment in US which looks like a bottom, does that mean we’ve seen the top of SP500 at this point – if you were to just randomly search for unemployment vs. SP500 charts, there seems to be a strong negative correlation, with one occurring a few months apart of the other e.g. http://chartsetcetera.blogspot.com/2013/11/unemployment-rate-vs-s-500.html

#70 EP on 06.09.18 at 11:36 pm

Another example of the Unemployment rate vs. S&P 500 charts, more current, including current valuations – looks like we hit the bottom of one and the top of the other – post US mid-terms might be the breaking point?

https://www.crystalbull.com/stock-market-timing/Unemployment-chart/

#71 crowdedelevatorfartz on 06.09.18 at 11:51 pm

@#51 Ace
“The dairy board sucks. Please get rid of it.”
++++++

While I agree that we “cheeseheads” in BC (as our Washington State neighbors have dubbed Canadians) who shop “across the line” buying up cheap milk and cheese….. deserve a break.
What’s the solution?
The heavily regulated Dairy “marketing” Board regulates milk production here in canada.
We literally have dairy farmers pouring thousands of gallons of milk down the drain becaue…they arent allowed to sell it.

https://www.google.ca/url?url=https://www.theglobeandmail.com/report-on-business/milk-surplus-forcing-canadas-dairy-industry-to-dump-supply/article25030753/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwi-uf_clMjbAhVmGzQIHdiVBuYQFggUMAA&usg=AOvVaw1U-S8IdrMEZBugivbx20p2

Dairy Farmers agreed to strict regulation ( Supply Management)of their industry decades ago because they tired of the “feast or famine” stye of wild price fluctuation in their industry…..similar to what is happening in the US today.

https://www.google.ca/url?url=https://en.wikipedia.org/wiki/Supply_management_(Canada)&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjq8tXilcjbAhVIHDQIHcKuBacQFggUMAA&usg=AOvVaw1Bep3WNZHXbKeqLihxlcPa

Possibly why the US govt buys and stores dried milk, cheese, etc. by the billions of dollars per year….a roundabout way to “supply manage?

https://www.google.ca/url?url=https://www.smithsonianmag.com/smart-news/us-has-massive-cheese-surplus-180958985/&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiR_eq-lsjbAhWeHzQIHbEnCL8QFggdMAI&usg=AOvVaw1Qv8G8CQW1qu9M3xw6wxLZ

My cousin is a dairy farmer.
Yes he’s wealthy but he inheirted the farm from his father and he NEVER has a day off…..farming isnt a job. Its a way of life. None of his kids are interested in farming. They hate it. Up before dawn, finish after dark.

He simply cannot compete with larger US operations if the borders open up to US dairy farmers.
He would sell, and he wouldnt be the only one…..

1st its Dairy, then poultry, meat, grain, whatever…..

How much of our country will remain “ours” when we dont control our own food?
China is buying up huge tracts of African land to grow food for their country….not quite “self sustaining” when….during a war…you have to ship food from one country back to yours through potential hostile waters…like the South China Sea…….

But thats another discussion

#72 ANON on 06.09.18 at 11:51 pm

Now there’s no free lunch

Sorry, but there is indeed. There’s free lunch for everyone! But not for long… sniff… EROI is dropping off a cliff.

#73 millmech on 06.10.18 at 12:10 am

#31
Bitcoin, Pot Stocks, Apple etc they all beat housing returns.

#74 Ponzius Pilatus on 06.10.18 at 12:24 am

Ryan,
Why do you bother?

#75 Spectacle on 06.10.18 at 1:07 am

#55 KLNR on 06.09.18 at 10:08 pm
@#45 FOUR FINGERS WATSON on 06.09.18 at 9:02 pm

Well done Justine.

_____________________

Why do you refer to justin as justine all the time?

************ I’ll Get This One ******************
Have you seen the socks she (Justine the man child) wears?
Because sHe’s Weak, and openly destroying Canada and the financial well being of hard working Canadians. Implying sHe doesn’t care at all about Canadian wellbeing.

Justines sociopathic pattern of claims about creating a better world for women, native affairs, Canada, then physically assaulting a Female member of the government on camera in the House. Ditching every aspect safeguarding native or environmental reality….

Weak, hair obsessed, childish posing, stuttering childlike utterances about Envronment…Native affairs…..never mind. It could be just her spectacular Socks

#76 Smoking Man on 06.10.18 at 1:35 am

@Stoner.

Trump is not a globalist teet sucker. T2 is.

Screw globalism. Just look at Sweden if you are confused.

#77 Oft deleted much maligned stock picker on 06.10.18 at 2:29 am

The culprit who invented QE and emergency rates was in fact Alan Greenspan….the rest who followed were just opportunists who saw easy money a fantastic way for governments to lavish themselves with boondoggle borrowing. And gorge like pigs in the trough they did. For the first time in 300 years of economic science our advisors saw gluttony and greed as the panacea rather than rational sense and funding vehicle for every imagined global “problem”. Of course rampant greed and rot was an the heart of every new cause. New charities sprung up and civil service unions were lavished with perks and raises. Of course they screwed the saver generation….these greedy pigs always attack the weak.

#78 Oft deleted much maligned stock picker on 06.10.18 at 2:43 am

#45 Watson…the signature gigantic outcome of Trumps exit tweet from the G7 was his statement that Trudeau is a two faced liar. The truth about Trudeau is no longer hidden behind manufactured nicities and blatant PR. Trudeau is a disaster for Canada. His handlers have painted him as the anti Trump torch bearer and he’s fooling no one that he’s not working for Canada.. only politicizing every move like a puppet on a string. He’s on the wrong stage and Teump is no tap dancer. Calling the PM of any country a liar to his face is huge news but CBCis trying to play it down.

Only a few days since Trudeaus sex assault on a young journalist in Creston BC. Nothing on the CBC about when he’ll step down. He fragged so many other careers with his zero tolerance speech. When will Yeudeau finally step down. Not even Martin or Goodale could want this outcome for Canada. Time for a palace coup for the good of the country.

#79 majik on 06.10.18 at 3:44 am

T2 is pooched. He is increasingly perceived as being a bit of a douche, especially abroad. Trump just ate him for breakfast. Expect big US interference in our general election next year especially if the Trumpster is on the ropes after the mid-terms. Always laugh at naviety of Canadians, always thinking that US only interferes in elections in far off distant lands. Why do you think electoral reform here always gets roadblocked? The last thing the US wants on its border is a prosperous first world nation with an accountable government elected via proprotional representation .

#80 Nonplused on 06.10.18 at 3:45 am

Ryan, how can we think anything works when the “risk free” rate of return is zero, or less than zero after inflation and tax? The only way this can work in my mind is that the economy is shrinking, no matter what the fudged up government numbers say. The pie is getting smaller. There is no return on capital anymore. Whatever you put into new equipment and capital will not be returned. Buy farms and gold. Something is really wrong that after 10 years of interest rates being below inflation but still taxed and we don’t have a booming economy.

And what is wrong? Playing with interest rates only affects the value of money, it doesn’t actually affect the economy. It makes it cost $100 to fill up your car rather than $50. But it changes nothing besides prices. We are eating our seed.

And don’t get me going on the CO2 thing. Sure, that may be a problem, but not nearly so much as that we are killing all the bees with chemicals. And other things we are doing. We simply cannot live without the bees, and it isn’t CO2 that’s doing them in.

You talk often about how with rates so low you need growth stocks. Sure, but to get you to where when the planet dies? And it won’t be CO2 that does it. And it’s only about 15 years off.

Watch the bees. We won’t live much longer than they do.

And those of you who are thinking about having kids, don’t. They are going to starve.

#81 Balmuto on 06.10.18 at 4:30 am

@#57 Stoner on 06.09.18 at 10:12 pm
One thing that the western world needs to remember is, there is no appeasing this guy. His need for ego gratification will force him to to push the next set of buttons if they give in.
I think by the time this guy is done, the world is going to a very different place and I don’t mean it in a good way.”

I’ve had that exact feeling ever since he got elected.

#82 David McDonald on 06.10.18 at 5:50 am

Thanks for your insight. As a retiree on a DB plan I do hope inflation and hence interest rates stay low for longer as you predict. Unfortunately we have Mr. Irresponsible in the White House and everything he does points to more inflation. Even though the US economy is humming now from the overstimulation of the tax cuts I am more cautious with equities.

#83 Technical analysis? on 06.10.18 at 8:10 am

hate to break the news to to Ryan, but these low rates are going to result in the same as previous low rate disasters. namely, the 1998/9 nasdaq bubble and the 2002-5 housing bubble. you can take the logic even further back to the late 1960’s and 1970’s when the US was borrowing massively for the war and social programs, and the FED kept rates far below inflation. end result was the massive spike in inflation and near 20% interest rates.

what happens in the next few years is yet to be seen. but interest rates below inflation … for as long as they have been this last decade, will result in another disaster soon enough.

#84 maxx on 06.10.18 at 8:18 am

#45 FOUR FINGERS WATSON on 06.09.18 at 9:02 pm

“Trump seemed particularly angered by Trudeau’s apparent two-faced comments, tweeting:”…………

………..”Well done Justine.”

Textbook for how not to run a G7 meeting. Smiles, toothy grins and social justice lectures simply don’t cut it.

There absolutely will be repercussions from T2’s “closing remarks”, which are all the more memorable because they have the home advantage of being the “last word”.

Only with Twitter, the last word no longer exists.

Peoplekind can always stamp his little designer socks post fallout.

#85 TRUMP on 06.10.18 at 8:19 am

TRUDEAU IS “dishonest and weak”

https://www.cnn.com/2018/06/09/politics/trump-justin-trudeau-g7-communique/index.html

Haha!!!!!

#86 Gravy Train on 06.10.18 at 8:20 am

#80 Nonplused on 06.10.18 at 3:45 am
“Playing with interest rates only affects the value of money; it doesn’t actually affect the economy.”

Really? Influencing interest rates (by expanding or contracting the monetary base) is the conventional instrument of monetary policy in macroeconomics.

The goals of monetary policy are to increase GDP, lower unemployment, stabilize prices, and maintain predictable exchange rates.
https://en.m.wikipedia.org/wiki/Monetary_policy
https://en.m.wikipedia.org/wiki/Macroeconomics

You might want to take a first-year economics course before spouting off on subjects you know nothing about! :)

#87 Ponzius Pilatus on 06.10.18 at 8:28 am

http://m.spiegel.de/politik/ausland/bild-1212154-1298593.html

Merkel unleashes “furor teutonicus” on Trump.
Time that somebody stands up to the bully.
Trudeau take note

#88 Stoner on 06.10.18 at 8:36 am

@Smoking Man
I do regard you as a smart guy that cares about Canada despite your posts to rile people.
I also understand the risks of unbridled Socialism, Social Justice Posturing and chilling effects on Free Speech, Free thought and advancement of Human experiment.
However, I also believe that there needs to be a positive view point in terms of some level of idealism to any philosophical approach.
Here are a couple of thought questions for you.
Let’s say instead of Roosevelt during World War 2, we had a Trump/Bannon based ideology in the US and the general sentiment was to hate Jews as immigrants. Do you think Einstein would have been admitted to the US?
US has been a beacon of light in terms of ideology and the best minds from the world have wanted to immigrate to the US and advance themselves and the world forward. Do you think that will continue to occur with Trump’s philosophy of zero sum game and every country for itself? Do you think 4 blocks of power ie US, China, Russia and the Rest of the World fighting with each other all the time is better for Humanity?

#89 MF on 06.10.18 at 8:50 am

#77 Oft deleted much maligned stock picker on 06.10.18 at 2:29

The first evidence of QE was used was during the Great Depression. It was more recently brought to life by the Japanese government in the early 2000’s.

Where did you hear Alan Greenspan?

MF

#90 Stoner on 06.10.18 at 8:56 am

crowdedelevatorfartz on 06.09.18 at 11:11 pm
@#54 Stoner

I also wonder about Trumps tweet slagging a leader of a NATO ally and his next door neighbor as he’s jetting towards his historic summit with North Korean Nuclear loon Kim Jong Un.
===========
The way I read it was he basically dared T2 to say no as an individual and as a leader. When T2 stuck to his old position, Trump felt insulted and said ok, step 2 of Automobile sanctions begin.
With Kim Jong, I think he respects him more than Canada. So even a small concession from him will seem like a huge deal for Trump and he will play it up. I think he will be cautiously optimistic after his meeting with Kim Jong as long as it doesn’t go totally bad.

#91 MF on 06.10.18 at 9:06 am

#79 majik

I’m a huge Trump fan and I usually don’t like Trudeau at all but I’m not some blind partisan either.

I was against his tax cuts due to the effect on the US deficit, and I’m against this idiotic trade war with Canada.

The US/Canada relationship is unlike any other on planet earth. To risk it with the bullying and name calling is totally uncalled for and it 100% warranted a response.

Will it amount to anything? No. A new agreement will be made and that will be the end of it. But T2 has actually shown some teeth in this matter. I see him gaining not losing votes due to his actions.

MF

#92 Dissident on 06.10.18 at 9:06 am

#18 Debtslavecreator on 06.09.18 at 5:20 pm
While low rates screw some retirees who want GIVs and savings accounts they have actually screwed the young much more.
Record low rates and resulting record high asset prices have on average screwed the younger Canadians much harder than the boomers and old
What a farce

– – – – – – – – – – – –

Honestly, the only way a millennial can ensure their financial future outside of current debt obligations (i.e. mortgage) and living expenses, without relying on an inheritance, and short of having a juicy six-figure salary, is to contemplate starting a side business that could one day become a primary source of income. This is what it comes down to.

No amount of investing in the volatile stock market or measly tax breaks from the government is going to get millennials where they need to be if their moderate cash flow is going towards the inflation of Toronto price$ or going towards servicing debt.

Be your own tooth fairy. Or be ok with living frugally in old age. Or both. Or, just retire to Europe.

#93 Stoner on 06.10.18 at 9:07 am

@Smoking Man
I read Atlas Shrugged many decades ago when I was a teenager.

#94 MF on 06.10.18 at 9:10 am

#73 millmech on 06.10.18 at 12:10

Housing provided mega leverage that stock picking could only dream of.

The average pot head, anarchist, gangster, tax evader who invested in that crypto/weed stock/other similar garbage didn’t have the same leverage.

MF

#95 Dissident on 06.10.18 at 9:19 am

#61 Seen it All for 60+ Years

Enjoyed this post. Reminds me of my mom and dad, paying off their $60K house (yes, I said $60K house) in the ‘burbs in the 70s in record-time cause they were penny-pinching immigrants (fleeing Eastern-euro Communism). Never took extravagant trips, just went camping or rented a cottage here and there. Never threw out anything (you should see their basement, can you say #hoarders!) Never really dined out – they do that now in their old age. Dad taught himself about taxes and actually does mine, hah! Mom sewed clothes for herself. Dad learned how to fix the car and his motorcycle himself, didn’t trust the mechanics in the shop. (The motorcycle was his one splurge).

Not a lot of people live like this nowadays. They wouldn’t call it living, not with everyone else parading around with their debt-purchased ‘things’. Being an immigrant with just the shirt on your back will do that to you. But that’s how you survive, raise a family, and reach old age with something in the bank.

#96 Meek and Mild on 06.10.18 at 9:36 am

The beast has personified T2 as meek and mild. This is what our pathetic government must do immediately, as today the officials are baffled by the beast. They have sat back thus far waiting for a miracle. Announce the counter tariffs go into effect as at June 11th, 2018.

#97 Stoner on 06.10.18 at 9:36 am

#78
Your type of response is exactly what Trump wants. Instead of rallying around your leader in a moment of crisis, divisiveness is better for him.
Divide and rule always works better for the more powerful than the weaker party. For weaker it is Unity is Strength and Canada is definitely weaker than US in terms most things

#98 Wrk.dover on 06.10.18 at 9:48 am

There was a time when little farms dotted the landscape, scratching out a living in our short season, competing with farmers south of the border working under better circumstances.

Then came the milk marketing board to protect the Dairy producers from that competition.

Then those producers prospered to where it made economic sense to buy one cow of quota for the price of a house near GTA, in the hundreds at a time.

The Royal Bank in Embro, Ontario has the smallest number of depositors in the system, but remains open despite other RBC outlets ten minutes away, because of the clout of the local Dairy farmers. When they were held up in April, the perps even drove a Mercedes.

Saputo has taken advantage of zero interest and stock horny investors to assimilate much and become the biggest Dairy monopoly in the nation.

Mom and pop don’t have Dairy farms anymore, just legacy big deposit gentleman farmers, and Suputo.

Shall we start WWIII on the behalf of Suputo?

Enlist the 90% that can’t afford Dairy for the fight on the ground. That’s how wars are structured.

#99 Camille on 06.10.18 at 10:04 am

Hi Ryan, thank you for an excellent post.
If I had a hammer… i would hammer a nail. The stock centric investment industry has a hammer, and a nail. If drawdowns are of short duration, might as well own stocks. And bonds, take them as preferreds and short duration bonds. In a drawdown, use your bonds (cash) to buy more stocks. Don’t look too far, too wide, very simple, simple to sell, a necessity in the industry. There are alternatives, as some try to hedge some more encompassing possibilities, including President Trump’s or Prime Minuster Trudeau’s actions. I can see clearly now…

#100 crowdedelevatorfartz on 06.10.18 at 10:14 am

Soooo immediately after Trump was elected there were mass resignations in the US State Dept ( embassies, diplomatic corp, etc.) that still, to this day, havent been replaced. A dearth of experienced people to lead the agendas of foreign meetings, smooth over protocol gaffs, apologize for slights….etc.
Now? When Cadet Bonespurs meets with the Leaders of countries, smiles, says all the right things, shakes hands, leaves….. then…. back on Air Force One he starts the slagging tweets.

The Mexican President, The Chancellor of Germany, The British PM, Canada’s PM, essentially everyone but the Russian President for Life.
Does no one see a pattern here?
Trump has done more harm to US foreign policy in 2 years than 100 years of diplomacy combined.
One wonder when no leaders will agree to meet with him?
Or back the US in another military dispute.
China is laughing all the way to its eventual world supremacy.

#101 Ryan Lewenza on 06.10.18 at 10:14 am

Doghouse Dweller “After a decade long global $12 trillion dollar money printing frenzy , the lowest rates in 5,000 years, the everything bubble and looming trade wars. Do you really believe the next bear market will be near average when everything else extreme?”

The average bear market lasts 11 months and sees the S&P 500 and TSX fall 30%. Despite the length of this bull market and amount of stimulus injected into the system I still believe the next bear market will be inline with an “average bear market”. First the last two bear markets saw 50% declines (2000 and 2008) so I think we’re due for a more normal bear market decline. And the central banks will step right back in and support the economy/markets with lower rates and more stimulus. – Ryan L

#102 Ace Goodheart on 06.10.18 at 10:22 am

RE: “Farmers go with it. – Garth” (the dairy board) – no, they don’t.

People are farming all sorts of items in Canada. None of it is supply managed. Local produce and farm goods are shipped to market every morning. I know a number of quite well off potato farmers. Know a couple who farm strawberries, beans and greens on their inherited family land near Port Perry, again, quite well off, employ hundreds of locals all summer to do the harvesting.

Supply management does not work.

Look what is happening in Quebec with their supply managed maple syrup problems, people rioting, burning down maple syrup operations, it’s a nightmare. All because of supply management and quotas.

The mantra is always “get rid of the quotas, and you get rid of the farmers” or “no one can survive the hostilities of an open market”. That sort of talk is communist drivel. I have run a number of businesses and I run two right now. I survive the open market every day.

Load of horse caca, that is what that is. Nothing more.

#103 Ace Goodheart on 06.10.18 at 10:32 am

Re: Supply management of the Dairy industry is necessary arguments: They said the same thing about Ontario’s beer industry. We could only purchase beer in one place, sold by three multinational producers. Opening the market would result in chaos, social disorder, no one could compete, it would be the end of Beer in Ontario.

Well, they opened the market. Guess what? Ontario beer is much better than the international slop we were being force fed. We now have a large amount of small Ontario Breweries, making products far superior to anything the big three multinationals can brew up.

And people are buying from the Ontario producers. They are making a lot of money. The beer is better, the customers are more satisfied, and we have local industry again.

Supply management is just another word for communism. And it doesn’t work. It results in waste, corruption and really crappy products that are force fed on an unwilling, captive population.

Every drive a Lada? Or a Trabant?

Communist, supply managed products are massively expensive, produced in a way that is completely inefficient and non competitive, and they suck royally.

#104 NEVER GIVE UP on 06.10.18 at 10:35 am

#51 Ace Goodheart on 06.09.18 at 9:51 pm
Re #45: Trump is right about the Dairy board. But try to find a person in Canada, other than a dairy farmer, who actually wants the Dairy board to exist. You Won’t find anyone.

Get rid of the Dairy board. We are tired of paying $15.00 for crappy Canadian cheddar and grossly inflated prices for any foreign cheese.

The dairy board sucks. Please get rid of it.

Farmers go with it. – Garth

====================================
Shame on you Garth for defending what is clearly Crony Capitalist Lobby pressure on politicians to keep the status quo.

https://www.macleans.ca/economy/economicanalysis/why-the-dairy-industrys-defence-of-supply-management-is-so-flawed/

Not a defence, but a fact. If you want to give up the security of a national food supply, then end agricultural tariffs. Simple choice. – Garth

#105 Ryan Lewenza on 06.10.18 at 10:51 am

EP “Hi Ryan, with a 3.8% unemployment in US which looks like a bottom, does that mean we’ve seen the top of SP500 at this point – if you were to just randomly search for unemployment vs. SP500 charts, there seems to be a strong negative correlation, with one occurring a few months apart of the other e.g”

Yes there is a strong negative correlation between the S&P 500 and the unemployment rate. This is because as the labour market and economy strengthen the Fed starts to hike rates which ultimately leads to a top in the economy and stock market. So we’re watching that closely but I think we’re still a few years from a top. First the Fed is going to be very slow in hiking which should elongate this cycle. Second we need to see the unemployment rate begin to hook back up and i think that is still another year out at least. I agree that we’re going to have another bear market but I think we’re a few years out from this happening. Until then position for more growth. – Ryan L

#106 akashic records on 06.10.18 at 10:58 am

51 Ace Goodheart on 06.09.18 at 9:51 pm
Re #45: Trump is right about the Dairy board. But try to find a person in Canada, other than a dairy farmer, who actually wants the Dairy board to exist. You Won’t find anyone.

Get rid of the Dairy board. We are tired of paying $15.00 for crappy Canadian cheddar and grossly inflated prices for any foreign cheese.

The dairy board sucks. Please get rid of it.

Farmers go with it. – Garth

That would apply to any other industry, wouldn’t it? As it did.

How does one pick and chose for selective globalism?
Who picks the winners and losers?

#107 Doug in London on 06.10.18 at 11:02 am

@Ryan Lewenza, post #16:
On that note I’ll keep those stocks and ETFs that pay a generous yield. If interest rates actually do go up higher than anticipated, those rate reset preferred share ETFs are a good hedge against such a thing happening.

#108 Tom Shneider on 06.10.18 at 11:06 am

Our immediate family aggressively maxes out our RRSP’s, TFSA’s, non-registered accounts to help us deal with these low GIC, government bond, strip bond yields.

We reinvest all of our RRSP tax refunds and this also helps us deal with this low rate environment. As long as we keep saving, compounding that money at around 3% to 3.75% rates what we have done on average with rates for the last 7 years, we have have done well.

Also, no having any debt, no mortgage, no credit card debt, no lines of credit, no car loans etc. Our modest house paid off house is all we own and we make sure that our net worth does not have more than 20% to 25% in physical real estate as this keeps in check rising property taxes, utilities, maintenance, repairs, insurance, H.S.T. etc. to only what we should pay to keep a roof over our heads.

In 16 years we have a 100%, free and clear house worth $485,000 and $268,000 in TFSA’s, 4 adult family members, spouses and our adult kids in their late 30’s, all of us have $885,000 in RRSP’s, $535,000 in non-registered investments, $50,000 in short term reserve savings.

As our investments, savings keep building up our ultimate goal is to keep our physical real estate at 15% to 18% maximum of our total net worth at best.

#109 Doug in London on 06.10.18 at 11:19 am

@FOUR FINGERS WATSON, post #45:
And you actually believe any other prime minister could have done any better when dealing with a nutcase like Donald Chump? What Donald Chump calls being meek and mild is what the the other 7 billion people in the world call being polite, tactful, diplomatic, and gentlemanly. Donald Chump doesn’t understand such a highly abstract concept, never did, and never will. If he has such negative words to say about our prime minister, why didn’t he say it when with him at the meeting, rather than when thousands of miles away aboard Air Force One? Such actions are typical of a wimp, a coward, a pansy with no balls whatsoever. No manliness here at all.

#110 AB Boxster on 06.10.18 at 11:28 am

I am becoming less and less convinced in the management of ETF funds.

Over the past few years many of these ETFs (fixed income mainly) have taken some very large hits in terms of total return.
Preferred share ETFs (like CPD down 1.75% and XPF down 1.85%) are down YTD and around 5% over 3 years.
Yet these funds should be doing better in a rising rate environment. (as you Ryan commented recently on BNN)
Why would we believe that they will do better as rates continue to rise, when over the past 2 years the ETF value has gone down and total returns are sad?

Bond ETFs are the same.
Funds like XSB show a 12 month yield of 2.41% but over 12 months the fund value itself is down over 3%.
Other ETFs such as high yield bonds (XHY down 3.3% YTD and almost 5% over 12 months)

I have read some comments that etf fund managers, in order to accommodate fund redemption, will sell the underlying assets, sometimes at a large discount. If this is true, then the underlying assets in the fund are diminished and the value of the fund is impacted for the investor.

So while the equity markets languish, fixed income ETFs are getting clobbered.
Yes, as rates rise, fixed income will be impacted. (with rate resets supposedly the exception)
But it seems that the ETFs are being impacted far more than the underlying assets themselves.

Why does it not make more sense to own the bond itself?
Sure, ETFs are more liquid than a bond, but a quality bond will pay you 2.5% a year for five years, and you get your face value back.
ETFs pay you, but their capital value falls so over 5 years you essentially make nothing. How does that make sense?

I had a bundle of preferred shares that I bought when the bottom dropped out of this market several years ago. They all pay around 5%
While the market value of CPD and XPF has declined over the past 3 years, these individual shares are down far less than the ETF funds.

So not sure how these ETF funds operate in reality versus theory.

Is it better to hold a dividend ETF or perhaps its better to hold a basket of quality dividend paying stocks themselves?
At least one can understand the actual dividend payments and see the capital value of the securities rise or fall.

To own a dividend ETF, where the capital value of the ETF falls, yet the dividend payout percent of the fund stays the same, makes one wonder what is going on.

Starting to think that, once again,as with mutual funds before them, that the ETF fund managers are making all the money, and the investors are getting screwed.

Generally speaking, there are no ETF managers. – Garth

#111 Mike on 06.10.18 at 11:29 am

#82 David McDonald:

Your assumption that one person can control the world economy is grossly mistaken:

1) Europe is tearing itself apart. Between credit default risk of several countries, the cost of health care for “refugees” (aka standing army), brexit, etc it is going to be the death of the EU by 2025, probably by 2020;

2) No one could have prevented the collapse of numerous US banks and the hard recession that followed. While a few saw it coming and made large, the economic power houses got caught off guard;

3) Interest rates were at 5000 year lows. There are records going back to Greek and Roman times that show the rise and fall of interest rates, currencies and empires.

To think that we’re we’re somehow better or immune from the cyclical nature of generations and human nature is laughable. People only see recency and their bias is glaring.

#112 Ace Goodheart on 06.10.18 at 11:29 am

RE: “Not a defence, but a fact. If you want to give up the security of a national food supply, then end agricultural tariffs. Simple choice. – Garth”

The Dairy Board is not a set of agricultural tariffs. It is a supply managed system. There is a big difference. With tariffs, the market is free, but imports have a duty levied on them to “level the playing field” with foreign produced products, so that domestic industry can compete. This is normal and all countries do this.

Supply management is a different animal all together. With supply management, there is no market at all. The product sold is the property of the supply management board, must be sold only to the board, at set prices and in set quantities, and only by those holding a permit or “quota” which allows them to sell to the board.

Supply management is like communism. No free market, all goods are the property of the government and all goods must be sold to the government, who redistribute them to the public.

I am surprised that a self confessed progressive conservative supports supply management.

Your former commander in chief got rid of the supply managed wheat board. The Dairy Board was next…..

And with it, national food security. You rail about housing as a right. Strange you would not worry about the security of what you feed on. Dogmatic blindness. – Garth

#113 crowdedelevatorfartz on 06.10.18 at 11:35 am

@# Ace Goodheart
“I know a number of quite well off potato farmers. Know a couple who farm strawberries, beans and greens on their inherited family land.”
+++++
A bit of a difference between vegetables that can be sold at a road side stand by anyone and highly perishable milk or eggs that need refrigeration, homogenization, etc and a potato farmer that can store his product in a seed barn all winter .
Ruinous price fluctuations were bankrupting small farmers in the 1950’s. Larger farms could supply more and more product to drive small farmers out of the business. The dairy and egg producers were slaves to what ever price the Dairy purchasers offered.
So.
The farmers agreed to quotas to garantee pricing for their product. Not a perfect solution but better than what was happening. Selling milk to a Dairy for a loss.

I’m sure if Italian owned mega dairy conglomerate Saputo was able to grind dairy farmers to sell raw milk for pennies on the gallon they would do it in a heart beat.
And do you think Saputo would pass those savings on to you?
Give me a break.
As garth has said.
If you want to hand over your National food security to a foreign producer( the US farmer)…..go for it.
But dont bitch when there is a crisis and the US refuses to allow its food to leave its country.

#114 Millmech on 06.10.18 at 11:40 am

#94
How is Apple, Google or any of the big banks garbage?
Please enlighten me.

#115 FOUR FINGERS WATSON on 06.10.18 at 11:48 am

#58 conan on 06.09.18 at 10:18 pm
#53 FOUR FINGERS WATSON on 06.09.18 at 9:54 pm

Neither, think green.

Who do you think will run for the Dems in 2020?
……………………

Get a dart board and throw some darts….Or flip some coins…the Dems don’t have a leader or a platform…right now I like Trump’s chances of being re- elected….i don ‘t like Trump but the Dems have NOTHING.

#116 Wrk.dover on 06.10.18 at 11:51 am

The way Lake Ontario drawn drinking water has declined in quality and taste, in my lifetime, I can see why Garth thinks we need milk supply security…that or face death from dehydration for those in the GTA!.

#117 Food Freedom on 06.10.18 at 11:54 am

Mexico will be implementing a new agricultural plan in the near future. They believe that the food security for its citizens is a top priority, and they must grow their own, and not be dependent upon others. In Canada we have farmers markets, and look for homemade cheese products for example. Support these markets and see what they have to offer.

#118 Stoner on 06.10.18 at 12:02 pm

#100 crowdedelevatorfartz on 06.10.18 at 10:14 am
Agreed. I think the way most world leaders are approaching this is that there is crazy dog on the loose. Don’t know whether it will go right or left or pounce on me. Let’s just hope that it doesn’t pounce on me, so I’ll avoid eye contact and wait for it to finish its term.
I think this action of Trump to start a trade war may prove to be a turning point for the other leaders to recognize the kind of menace he is and prepare themselves.
OTOH, I also expect some poodles to go and try to ingratiate themselves to the crazy dog. Let’s see where Canada lands and where does European countries land. Leaders of Philippines, South Korea, Hungary, Italy will all land in the Poodles gang. Hahaha… Maybe Garth already has a picture for this gang

#119 akashic records on 06.10.18 at 12:11 pm

Not a defence, but a fact. If you want to give up the security of a national food supply, then end agricultural tariffs. Simple choice. – Garth

Do we actually have “security of national food supply” when global chemical companies, Monsanto/Bayer/BASF are the primary suppliers of seeds, that need yearly license renewal, like software?

Does Canada have “national supplier” of agricultural equipment?

It looks like the only real part of the “secure national food supply” is the farmland, labour, plus the rhetoric to maintain artificially a higher priced market for the consumers.

#120 AB Boxster on 06.10.18 at 12:13 pm

#112 Ace Goodheart on 06.10.18 at 11:29 am

And with it, national food security. You rail about housing as a right. Strange you would not worry about the security of what you feed on. Dogmatic blindness. – Garth

——————————————————-
You make an interesting point Garth, but the supply managed dairy board is still problematic.

Why can Canada not have more access to our markets,
to allow for some competition, which allows for better innovation and efficiency, lower prices, without risking our security?

T2 makes the case that Canada is not a risk to the US as we have been great friends for the past 50 years, fought wars together, etc, etc.

Well if his point is valid for steel and aluminium then how is it not the same for food.

Canada’s security would be compromised with freer trade of mike, butter and maple syrup?
Good grief.

Is opening up the Canadian market to the Americans really a risk to Canada, or is this a convenient excuse for a badly managed supply based system that benefits a very small group of farmers who have become vastly wealthy because of it?

We seem to be doing ok without supply management for livestock, grains, pulses, fruit and vegetables and pretty much any other commodity we grow and sell.

How is supply management for dairy products any different?

Or, is the fact that most of the industry is in the province of Quebec, central stronghold of Liberal governments, where there is never enough money to be provided through federal transfer payments or charity to liberal friends who own the Bombardiers of the world.

No, it must be because Canada needs a secure supply of milk and cheese.

#121 Our Great Leader on 06.10.18 at 12:19 pm

He refuses to talk, while the insults from USA come non stop attacking him. Now his head negotiator is on live standby to make a speech about the situation. Is T2 in hiding?

#122 Ace Goodheart on 06.10.18 at 12:25 pm

I’ve never said housing is a right. It isn’t
But supply management is unnecessary. Agricultural tariffs work fine.

Supply management always uses the same argument: the producers cannot withstand the free market. It’s the same argument used by Quebec’s maple syrup supply managers. But Ontario produces maple syrup on the free market and our producers are doing fine.

Looking at my favorite blue stilton cheese in the local supermarket…that retails for $25.00 per pound…and I remember once again why I hate the Dairy board….

#123 Stoner on 06.10.18 at 12:27 pm

Ryan, Congratulations on breaching 100 comments barrier.

#124 Gravy Train on 06.10.18 at 12:28 pm

#100 crowdedelevator on 06.10.18 at 10:14 am
“Does no one see a pattern here?”

You’re one of the few smart ones here in steerage—having eyes to see with, and ears to hear with. :)

#125 Damifino on 06.10.18 at 12:44 pm

Anyone versed in Trump-speak knows he wouldn’t have called our PM weak unless he actually viewed him as strong. For that, my hat goes off to T2. Today, anyway.

#126 conan on 06.10.18 at 12:46 pm

One lesson from WW 2 was to always have a secure food supply. Another lesson, was to share steel production capacity among allies, you never know.

I guess Trump means well, but I don’t think he understands the complexities of what he demands.

#127 Ace Goodheart on 06.10.18 at 12:58 pm

If you want to see what supply management does, have a look at Canada’s domestic cheese industry. There basically isn’t one. Why bother producing cheese people want to buy, when you can just make cheddar, sell it to the board for vastly overpriced amounts, and then we have the choice of either cheddar, or good, foreign produced cheese that actually tastes good, for $25.00 per pound.

Supply management crushes innovation and competition and results in high priced, crappy products.

#128 A special place in hell on 06.10.18 at 1:00 pm

Well that wemt swimmingly well.. way to go dancing fool!

http://www.foxnews.com/politics/2018/06/10/theres-special-place-in-hell-for-trudeau-after-his-g7-stunt-top-wh-trade-adviser-peter-navarro-says.html

#129 maxx on 06.10.18 at 1:07 pm

@ #78

Yet another galactic diplomatic catastrophe wrought by T2.

Remains to be seen what Peter Navarro’s words “a special place in hell” really mean for the citizens of Canada, most of whom don’t have T2’s enormous financial resources, required to avoid this conveyor belt of ineptitude.

That being said, there is probably not enough cash in the world to cover the self-indulgent arrogance that bad mouths a peer not simultaneously in the same space.

Mexico may very well be poised for a big trade win.

#130 Blacksheep on 06.10.18 at 1:31 pm

Ace # 112,

“Supply management is like communism. No free market, all goods are the property of the government and all goods must be sold to the government, who redistribute them to the public.”

“I am surprised that a self confessed progressive conservative supports supply management.”

“Your former commander in chief got rid of the supply managed wheat board. The Dairy Board was next…”

“And with it, national food security. You rail about housing as a right. Strange you would not worry about the security of what you feed on. Dogmatic blindness. – Garth.”
——————————–
Were it not for the US, how long ago would some world power of immense strength, have expropriated our Canadian sovereignty?

We are “free” only do to our geographical proximity to our good friends and protectors, the US of A.

Let’s not kid ourselves for one minute that we could ever, ‘go it alone’ financially or military (forget food). Like it or not, we are in bed with all things American, but think we can play the ‘holier than thou’ card when it suits us.

Look how intertwined our auto sectors are.

Let the US, slam the border closed on those 100,000
canadian jobs and the last thing we will need to worry about is our ‘dairy supply security’

Don’t get me wrong, I’m not a big American advocate, but simply pointing out the time for protection of
our independence from the USA, has long since past.

Trudeau, is really screwing up….

#131 WhyBuyWhenYouCanRentUntil2013? on 06.10.18 at 1:31 pm

“Last time I did a session like this a guy had a go at me and told me to get my own blog.
This is my gift to the owner of this blog and if he no longer wants the information then it will stop.
Don’t waste your time telling me to stop…”

But for the amount of space you take up with your weirdly-crafted posts, why not do it right? Use current purchase/sale price instead of list price/useless out of date sale price from bc assessment office.

I recall you have some interest in a special realtor that must agree to be your friend forever or something to take on this role – evidently that ain’t gonna happen – maybe lower your standards? Right now your posts are scroll-through.

#132 Stoner on 06.10.18 at 1:32 pm

#113, #114

Congratulations Garth! You have the attention of a couple of US paid trolls in your comments section!

#133 Kissinger on 06.10.18 at 1:39 pm

This quote is attributed to him “Who controls the food supply controls the people”. Give this some serious thought.

#134 Stan Brooks on 06.10.18 at 1:40 pm

Ryan, Ryan, Ryan,

The great financial crises arose from over crediting, i.e thanks to the banks. Great depression is normal consequence from that/due to credit contraction.

Of course central banks decided to interfere and suppress cost of money overriding money markets which was never their mandate in first place and is repression and theft in second place.

As I said only the insane can have any trust in the weak currencies like the Poloz’s peso or its derivatives, any soft of bonds which will (guarantee) generate negative return in the next 2 decades.

The game is so clear that it is astonishing that the majority of the populace does not get it.

It is quite amusing to watch the clearly incompetent head of BoC trying to talk down this issue of suppressing rates (again real inflation/cost of living at 8 % +, while BoC rate is at 1.25 % and ‘core inflation’ or whatever fake number they come up with at 2 %), announcing end of risk for housing and all sorts and types of obnoxious idiocy bull crap instead of letting the markets decide th erates itself.

So Yes, Poloz is screwing retirees. Period. Intentionally.

Majority of Canadians will never truly ever ‘retire’ due to his actions.

#135 Mike on 06.10.18 at 1:40 pm

#100 – Crowdedelevatorfartz: Trump has done more harm to US foreign policy in 2 years than 100 years of diplomacy combined.

Actually, what Trump has done is he’s managed to get citizens of other countries to start thinking of their own country, their nationalist pride and patriotism.

By throwing a stick into the spokes of the globalist movement, Trump has people riled up over trade and tweets. Only months ago he was being chastized for calling KJU “Rocketman”. Now he’s brokering peace on the Korean peninsula.

Trump’s a shrewd businessman and running gov’t like a business – no more handouts, no more deals. Take it or leave it.

What a time to be alive!!

#136 Ace Goodheart on 06.10.18 at 1:51 pm

RE: #113 crowdedelevatorfartz on 06.10.18 at 11:35 am

“And do you think Saputo would pass those savings on to you?
Give me a break.
As garth has said.
If you want to hand over your National food security to a foreign producer( the US farmer)…..go for it.”

I’m sorry but this just isn’t true.

A country can control foreign ownership of its production facilities.

It can control what comes in, through tariffs.

It can control the prices of items sold, through sales taxes.

There is just no need for a centralized supply management system.

The Dairy Board exists for the benefit of quota holders, and the millionaires who run it. They’re the folks that pay for all those annoying “does a body good” dancing cow commercials that pop up whenever you go to see a movie.

They are rich, well connected lobbyists who are preserving their wealth. They do nothing for any of us.

When you have middle class families who cannot afford milk and cheese, and your argument is “we need to protect the Dairy farmers and their well to do Dairy Board”, for national security reasons, I am sorry, but I can’t agree with you.

The Dairy Board is not just restricting dairy imports, they are restricting dairy producers in Canada. Domestic industry is being crushed and restricted.

You are an ideologue. Either that, or you can’t afford cheese. Supply management actually works, ensuring secure and ample food is produced by people who have the income to invest in efficient, hygienic, regulated, stable operations that no foreign entity can cut off or impair. You would be handing over control of vital portions of our food supply to US_based multinationals, and shortly thereafter be forced to comply with USDA and FDA regulations. Adios sovereignty, and the family farm. – Garth

#137 conan on 06.10.18 at 2:04 pm

Trump’s a shrewd businessman and running gov’t like a business – no more handouts, no more deals. Take it or leave it. – Mike

Or, his actions will lead to the Blue States separating from the Red States, who then, join Canada, and create the greatest country in the World.

I am reading this now on the higher profile American news sites.

T= disaster
Peter Navarro sounds like an idiot.
Watch T2’s closing G7 statement. There is nothing wrong with it.

#138 crowdedelevatorfartz on 06.10.18 at 2:08 pm

@#124 Gravy T
“having eyes to see with, and ears to hear with….”
+++++
You forgot my most important sense…..smell……

#139 maxx on 06.10.18 at 2:08 pm

@ #106

Consumers.

#140 maxx on 06.10.18 at 2:11 pm

@ #108

Brilliant! Our fiscal philosophy precisely. The more CB’s drop rates, the more we save.

#141 This Was A Surprise on 06.10.18 at 2:14 pm

I found a few links with comments about the speech made by our head negotiator. I will not give out the bad comments made, but here is a sample of the others. She can’t even speak French properly; she must be kidding; she seems nervous; and is this the Cinderella from Canada?

#142 Blacksheep on 06.10.18 at 2:20 pm

Why # 131,

“Right now your posts are scroll-through.”
—————————–
Since I never been in the market for a property priced over $ 1,000,000, as I believe to be the case with a large % of the readership here, I too, scroll right over.

But hey, I’m still a big advocate of free speech, so carry on.

If a tree falls in a forest, it indeed still makes a sound, regardless of whether or not, any one is actually listening…

#143 VicPaul on 06.10.18 at 2:21 pm

#46 Conan
Joe Biden will run for president, and kick butt.

———-
The Republicans (post trump) will be much like the frozen north’s conservatives – they need an intelligent, authentic, principled Human – someone with a spine to not just follow along with the “we are the world” aggrandizers – Merkle/Macron and their ilk. Enough virtual signalling and political correctness – fewer “shaming strategies” employed and a little more honesty.
My guess – Ben Shapiro 2020.

#144 Ace Goodheart on 06.10.18 at 2:23 pm

RE: “You are an ideologue. Either that, or you can’t afford cheese. Supply management actually works, ensuring secure and ample food is produced by people who have the income to invest in efficient, hygienic, regulated, stable operations that no foreign entity can cut off or impair. You would be handing over control of vital portions of our food supply to US_based multinationals, and shortly thereafter be forced to comply with USDA and FDA regulations. Adios sovereignty, and the family farm. – Garth”

Wow. I can’t believe this comes from the pen of a card carrying conservative.

This is simply not true. Supply management has nothing to do with restricting foreign access to our Dairy markets. It has to do with crushing local dairy producers, in favour of quota holding insiders. Creating a market for dairy quotas similar to Toronto’s taxi license market before Uber.

Supply management destroys local industry, creates a small group of large dairy producers, and creates an expensive, inferior quality product that is produced in an atmosphere of communism.

Canada should try out free markets for its Dairy products. You will love it. High quality dairy products, sold on an open market. Way better than the supply managed hell we live in now….

First, I carry no political card (do they still have them?). More importantly, it’s all about access to markets, since the end of supply management would open Canada to be serviced by US producers – unless a tariff wall is built to keep them away. By increasing US production %, all of Canada could be milked and cheesed. No local producers could survive. What a dangerous situation. Another leg of dependency. – Garth

#145 Mike on 06.10.18 at 2:24 pm

#137 – conan: Or, his actions will lead to the Blue States separating from the Red States, who then, join Canada, and create the greatest country in the World.

In 2008-09, a Russian economist hypothesized the separation of the US into 5-6 separate countries. Ten years later, this is now a growing trend. Catalonia wanting to separate from Spain, Brexit and underlying protectionist movements (ie: BC/Kinder Morgan). Social unrest is a global phenomenon, people are growing weary of socialism and the burden it places on their production. Nothing new here.

#146 Ace Goodheart on 06.10.18 at 2:27 pm

Oh, and do you think that the quota holders actually produce Dairy products?

Well, perhaps not. Look into “dairy quota leasing”. Yes, you can lease out your dairy quota.

Who is actually producing these fabled Canadian family farm dairy products, Garth? A bunch of mom and pop farms with the kids all pitching in?

No.

The quotas are all held by a small group of people. And do these people actually produce dairy?

You need to do some research.

There are about 12,000 dairy farms in Canada employing 215,000 workers. I have spent much time with these people. Get out of the dairy aisle of Wal-Mart and you also might learn a few things. – Garth

#147 Stoner on 06.10.18 at 2:34 pm

Sorry, my comment at #132 was for #128 #129.
Something got messed up with the order or numbering of posts.

#148 AGuyInVancouver on 06.10.18 at 2:37 pm

#78 Oft deleted much maligned stock picker on 06.10.18 at 2:43 am
#45 Watson…the signature gigantic outcome of Trumps exit tweet from the G7 was his statement that Trudeau is a two faced liar. The truth about Trudeau is no longer hidden behind manufactured nicities and blatant PR. Trudeau is a disaster for Canada. His handlers have painted him as the anti Trump torch bearer and he’s fooling no one that he’s not working for Canada.. only politicizing every move like a puppet on a string. He’s on the wrong stage and Teump is no tap dancer. Calling the PM of any country a liar to his face is huge news but CBCis trying to play it down.
_ _ _
Lordy, why don’t you and all the unhinged geriatrics with your Contard rants renounce your Canadian citizenship now and move to Alabama? We’d all be better off without your “contributions”.

#149 Deplorable Dude on 06.10.18 at 2:38 pm

#71/100 crowdedelevatorfartz

“How much of our country will remain “ours” when we dont control our own food?”

Funny that…when Trump pointed out the same issue with the US having to rely on other countries for a critical military national resource…i.e. Steel/Aluminum…..he was ridiculed….

“Trump has done more harm to US foreign policy in 2 years…”

You misspelt ‘Globalism’…..

#150 Deplorable Dude on 06.10.18 at 2:45 pm

Ohhh.and I would love to be able to buy affordable grass fed butter. But I can’t because pretty much no one makes it in Canada.

And as Trump has pointed out, Canada slaps a 300% tariff on dairy imports which is why a stick of New Zealand grass fed butter in my local supermarket (when they have it in stock), is $15…..insane.

But apparently Tariffs are only illegal when the US does it according to our PM….

#151 Balmuto on 06.10.18 at 2:48 pm

Unbelievable how the Trump-lovers on this board swallowed his blame-Canada routine hook, line and sinker.

What, exactly did Trudeau say that was so offensive? That the national security excuse to levy tariffs on Canada was insulting? First of all it was, and secondly, it’s nothing he hasn’t said before. That Canada won’t be pushed around?

We won’t, not externally nor internally. Trudeau has the support of the overwhelming majority of Canadians on this issue. Also, the rest of the world.

Trumpism is a blight on humanity.

#152 Fake News Again on 06.10.18 at 3:04 pm

Ace Goodheart on 06.10.18 at 1:51 pm
RE: #113 crowdedelevatorfartz on 06.10.18 at 11:35 am

“And do you think Saputo would pass those savings on to you?
Give me a break.
As garth has said.
If you want to hand over your National food security to a foreign producer( the US farmer)…..go for it.”

I’m sorry but this just isn’t true.

A country can control foreign ownership of its production facilities.

It can control what comes in, through tariffs.

It can control the prices of items sold, through sales taxes.

There is just no need for a centralized supply management system.

The Dairy Board exists for the benefit of quota holders, and the millionaires who run it. They’re the folks that pay for all those annoying “does a body good” dancing cow commercials that pop up whenever you go to see a movie.

They are rich, well connected lobbyists who are preserving their wealth. They do nothing for any of us.

When you have middle class families who cannot afford milk and cheese, and your argument is “we need to protect the Dairy farmers and their well to do Dairy Board”, for national security reasons, I am sorry, but I can’t agree with you.

The Dairy Board is not just restricting dairy imports, they are restricting dairy producers in Canada. Domestic industry is being crushed and restricted.

You are an ideologue. Either that, or you can’t afford cheese. Supply management actually works, ensuring secure and ample food is produced by people who have the income to invest in efficient, hygienic, regulated, stable operations that no foreign entity can cut off or impair. You would be handing over control of vital portions of our food supply to US_based multinationals, and shortly thereafter be forced to comply with USDA and FDA regulations. Adios sovereignty, and the family farm. – Garth

______

Have you worked for the Dairy Board Garth? My Mother did…..for ten years.

And you are DEAD WRONG…..it is a monopoly that punishes Canadians and keeps farmers RICH.

#153 For those about to flop... on 06.10.18 at 3:04 pm

#131 WhyBuyWhenYouCanRentUntil2013? on 06.10.18 at 1:31 pm
“Last time I did a session like this a guy had a go at me and told me to get my own blog.
This is my gift to the owner of this blog and if he no longer wants the information then it will stop.
Don’t waste your time telling me to stop…”

But for the amount of space you take up with your weirdly-crafted posts, why not do it right? Use current purchase/sale price instead of list price/useless out of date sale price from bc assessment office.

I recall you have some interest in a special realtor that must agree to be your friend forever or something to take on this role – evidently that ain’t gonna happen – maybe lower your standards? Right now your posts are scroll-through.”

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

Not bad ,not bad.

Couple of things though.

Pink Pollen posts are the latest reductions.

Confirmed Pink Snow posts are the latest confirmed cases and sales made public.

If you are going to claim double time to troll on a Sunday ,the real estate board is gonna want a better effort than that…

M43BC

#154 Farms on 06.10.18 at 3:07 pm

Grass fed butter can be bought throughout parts of Ontario. There are also an array of beef farms with coolers, and butcher facilities. The going price is about $3.50 per pound hanging weight for a 1/4 cow and your looking at 161 lbs. on average. This can be cut up and packaged according to your directions into a variety of cuts all ready for your freezer, and bring cash lol. Why pay $15.00 a lb. for a T-Bone steak?

#155 georgist on 06.10.18 at 3:07 pm

This made me raise an eyebrow:

https://twitter.com/i/status/1005707571859283969

#156 Stan Brooks on 06.10.18 at 3:12 pm

#150 Deplorable Dude on 06.10.18 at 2:45 pm

Food in Canada is bellow sh..ty, but US is even worse, except for the organic food grown in California, you can buy some in Costco or While Foods in Canada.

It is amazing how different european food tastes without the GMO stuff.

In same places you can actually eat meat without antibiotics, growth hormones and produce without pesticides and GMO. Completely different taste that drives away cancer and diabetes/reserved for north americans.

#157 Ace Goodheart on 06.10.18 at 3:32 pm

RE: “the end of supply management would open Canada to be serviced by US producers – unless a tariff wall is built to keep them away.” – Garth

Isn’t that what I said? Get rid of the Dairy Board, and build a tariff wall to keep away foreign producers?

I’m all for protecting our domestic farms. But why crush domestic local producers by restricting sales through supply management?

“There are about 12,000 dairy farms in Canada employing 215,000 workers. I have spent much time with these people. Get out of the dairy aisle of Wal-Mart and you also might learn a few things. – Garth”

And do you think that by getting rid of the Dairy Board, there would be less dairy farms? When you could sell more dairy products? When you could export them? When you didn’t need to lease a quota from someone so you could make cheese or sell milk? Why in the world would anyone think, that restricting supply, would result in more farms and more jobs?

#158 crowdedelevatorfartz on 06.10.18 at 3:42 pm

@#150 Deplorable Dude
“Ohhh.and I would love to be able to buy affordable grass fed butter. But I can’t because pretty much no one makes it in Canada….”
+++++

What in the H E Doublehockeysticks are you babbling about?
Last time I was on my cousins’ dairy farm the cows were out in the front field chewing on……grass.
Yes they are also fed hay, grain, whatever.

(But if you expect to buy “affordable” New Zealand butter shipped in from 10,000 miles away ….good luck with that!)

And I hate to break it to you but all his farm milk is mixed in with all the other farm milk when the tanker shows up daily to collect it.
Then off it goes to the dairy to be sampled, inspected, filtered, pastuerized, chilled, etc etc etc. to ensure a safe product.

But if we REALLY want cheap milk …. we could just buy our “affordable” milk from that bastion of food security …….China

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiE_PaU7cnbAhUJ0YMKHTzRCGwQFggnMAA&url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2F2008_Chinese_milk_scandal&usg=AOvVaw2AyL2fofQ5vj3NEEuc6UlA

#159 Ace Goodheart on 06.10.18 at 3:56 pm

Why are all the interesting cheeses at the local grocer imported (with 300% duty on them)?

Is it because Canadians can’t make cheese?

Or is it because the Canadian cheese industry is supply managed, and people can’t sell the cheese they make?

Would Canada’s local cheese producers (who are limited to selling their cheese illegally through home operated shops) benefit from less restrictions on their businesses? If they could sell in super markets, would this be a bad thing? Would it result in less jobs? More foreign competition?

Why restrict local industry?

#160 AB Boxster on 06.10.18 at 3:58 pm

#144 Ace Goodheart on 06.10.18 at 2:23 pm

By increasing US production %, all of Canada could be milked and cheesed. No local producers could survive. – Garth

———————————————

I don’ get it.
How are BC wines and forest products able to compete with American wines without supply side management?
How is Alberta and Saskatchewan beef and grains able to compete with American and world producers without supply side management.

Surely Canada can manage its dairy markets in a way that allows for actual competition in this industry, and can still provide for security of food supply.

Supply side managment was used in New Zealand for years until it was eliminated.

As the following article says:

“Since moving to a free-market model from subsidies and tariffs, dairy in New Zealand has become the country’s top export earner. Overseas shipments last year, totalling NZ$11.9 billion worth of milk, accounted for about two per cent of world production, according to a report by the Dairy Companies Association of New Zealand.”

https://tvo.org/article/current-affairs/lessons-for-canada-from-new-zealands-dairy-industry

Why can’t Canada’s dairy industry produce successfuly as an export market as does Canada’s beef producers and grain producers?

Because supply side systems do not compel them to innovate, become more efficient, or compete. They just produce to their quota, no more no less, and charge whatever. Hence ridiculously high cost of domestict product, lame selection of product, and being shutout of other trade agreements because we do not force these producers to join the rest of the world.

If other countries and other producers in Canada can compete, why cannot the dairy industry?

#161 conan on 06.10.18 at 4:07 pm

Make America great again is having a bad week. Their leader hurts his country at every turn. What are these guys going to turn into?

https://youtu.be/DeSs-NQpS64?t=40

I nominate this guy for idiot of the year.

https://youtu.be/GViPhQZqy0c?t=84

#162 LivinLarge on 06.10.18 at 4:21 pm

Ryan, it’s 4:20 Sunday afternoon and with this post you now have 162 comments. Do you feel bettet than last week?

#163 Gravy Train on 06.10.18 at 7:37 pm

#143 VicPaul on 06.10.18 at 2:21 pm
“The Republicans (post-Trump) will be much like the frozen north’s conservatives—they need an intelligent, authentic, principled Human—someone with a spine to not just follow along with … Merkle, Macron and their ilk.”

Uh, no. Ninety percent of ‘Republicans’ support Trump (leaving only 10% who are true conservatives). The Republican Party no longer exists. It’s now the Party of Trump.

Oh—and what makes you think Trump will relinquish power? Fifty-two percent of Republicans say that they’d be okay with a postponement of the 2020 election if Trump called for it. Fifty-nine percent of Americans say that Mueller hasn’t uncovered evidence of any crimes—despite five guilty pleas and 17 criminal indictments (so far). :)

#164 B Wilds on 06.10.18 at 10:10 pm

The low-interest rates feed into the idea that the bond market is a bubble about to pop. This matter has been scrutinized many times in recent years and little has really changed except debt has grown much faster than the economy in general.

The so-called experts such as Paul Krugman in the ivory towers of academia in many ways pose one of the greatest threats to our economic stability in that they often fail to see potential second and third order effects of debt monetization. The article below delves into why bonds could be a trap that strips investor of their wealth.

http://brucewilds.blogspot.com/2018/06/bond-market-stability-must-again-be.html

#165 Pete on 06.10.18 at 10:57 pm

Just so you hypocrite CONs can shut up. https://www.cbc.ca/amp/1.876766

Dont forget that was 1.1 billion dollars in 2010. Everything has almost doubled since.

#166 Shawn on 06.11.18 at 7:15 am

IWM:SPY
XLY:SPY
QQQ:SPY

The trend is up.

#167 Steven Rowlandson on 06.11.18 at 3:05 pm

I tend to go by the idea that the lower the interest rate the higher the mount of capital needed to generate a decent after taxes income…. Getting the extra cash is easier said than done.

#168 Manny Santiago on 06.11.18 at 7:30 pm

To Maxx and Tom, I know exactly how you feel and your philosophy.

My wife and I are in our 80’s and have been saving, investing, accumulating assets, investments for almost 60 years now.

When we were first saving interest rates were low, 3% to 4% at most. So i have seen these days again.

This is why we have managed to save and save over these decades and used compound interest to our advantage when GIC’s, Canada savings bonds, provincial, Canada bonds, strips were in the 5% to 18% range. We did see a good 20 years plus in the 8% rate average or so.

This is why we are now worth $10.5 million which includes our house, life insurance, rental properties and non-registered investments, RRSP’s, TFSA’s etc. Debt free for 45 years now!!!!!

We are gladly content with $375,000 a year in income from all sources and even if rates drop in the future we don’t care.