D-day

Yes, I know rates just went up, the White House is escalating the momma of all trade wars and Trump is drowning those decadent Europeans in a spray of testo, but let’s also remember it’s July. Chill. Live the moment. And remember what this blog is really about.

“After many years of following your greater fool blog, which of course subtly disguises itself as a financial management site,” says Jeff, “I thought maybe you should do an annual  D-day event – a day to remember our best friends, which is what this blog is all about after all  :)

“How about once a year you do a D-day post and only allow posts about our best friends.  Links to videos and picture allowed maybe even embedded.  That would be sweet.”

It would. I’m good with that. A dog day. We could use one.

So, over to you, the steerage section, blog macroeconomists, house-humpers, perplexed moisters, closet bank readers, cynics, stock cowboys, moldy basement dwellers, wild-eyed BC Dippers, Trumpaholics, renegade realtors and deplorables. Let’s celebrate what binds us. Canines. The universal symbol of goodness and loyalty in a world gone mad with division and hate.

So, yes Jeff, you can post a reason why your pooch is the best, plus a link to some cute thing (s)he’s up to. Everyone else, too.

Here’s my contribution. Bandit holding court in the lobby of the King Edward Hotel in DT Toronto. On his way to the lounge for brandy & a Montecristo, he paused for this selfie.

Now, about those rates. A quarter-point increase ain’t much, but every time the central bank raises (this is #4) it make a lie of what you’ve been told so often on this pathetic blog by others – that rates cannot increase. Of course they can. They are. They will again.

Still low by every historic measure, the cost of money has lots of room to increase. The Plozzer and his minions laid out the reasons succinctly in Wednesday’s statement. (a) The global economy is growing again, bigly. Well over 3% this year. (b) The US is hot, so there are more rate hikes coming there, and a stronger American dollar. We must keep up. (c) Oil is gaining ground. (d) Our dollar is weak and needs propping. (e) The maple economy is strong enough to withstand higher interest costs. (f) Rate increases are a good thing because they’re dampening household spending and stabilizing real estate. (g) Our exports are strong thanks to the global and US economies. (h) Business investment is robust and corporations are making a pile. (i) Inflation will be 2.5% which is near the top of the central bank’s permitted range.

So, up she goes. And there’s more to come. “Governing Council expects that higher interest rates will be warranted to keep inflation near target and will continue to take a gradual approach, guided by incoming data.”

So what about the trade wars? The Dow gave up 200 points Wednesday after the White House said another $200 billion in anti-Chinese tariffs could be around the corner. Meanwhile that 25% tax on Canadian-made vehicles is still very much on the minds of investors and economists. Apparently Donald Trump thinks the US economy is so strong, robust and invincible that America can withstand the lost jobs and pissed-off allies that a trade war inevitably brings.

Maybe it can. But people have long memories. Exporting pain never ends well.

As for Canada, our central banks are shrugging this off. Commenting on the war, and the effect of the recent steel and aluminum tariffs as well as the T2 government’s response, here’s the word: “Although there will be difficult adjustments for some industries and their workers, the effect of these measures on Canadian growth and inflation is expected to be modest.”

In other words, the guys in charge see no disaster. No recession. No reason to panic, move into your mom’s basement, buy gold coins or hoard Cottonelle. It’s all good. Except if you have a LOC or a VRM. Then, life might become a bitch. So why not share it with a furry one?

137 comments ↓

#1 rental property math on 07.11.18 at 5:06 pm

#113 Newcomer on 07.11.18 at 12:47 pm
If you are looking for a place to rent, read:

#63 rental property math on 07.10.18 at 10:08 pm

This is the type of landlord you want to avoid. The best thing is to find a place managed by a property management company, but if that is not available, look for a person with just one property for rent, so they are not over-extended. Find out what their finances are like. Ask about their employment, their family and their retirement/career plans. You don’t have to be rude. Just ask things like, “So how did you end up having a house for rent?” “Do you own a lot of properties?” “What do you do for a living?” “Have you always lived here?” and so on. You are looking for someone with income and wealth that makes it easy for them to carry the property as a long term (ten years+) investment. If you get the sense that they might be struggling or unhappy, or they are secretive, or snobbish, or just generally greedy or petty people, walk away. I’ve lived in rentals in major cities all over the world. I’ve never had my rent raised unreasonably, never waited too long for maintenance and never had the landlord terminate the lease. There are good landlords out there, but there are also people like Math. Choose carefully.
———————————————

1) If you asked me those questions years ago when I was a newbie and had only 20% equity in my properties making money hand over fist in appreciation I would have said I’m going to keep my properties forever!!!

2) If you asked me these questions today I would think you are too nosy and have an agenda. This is a definite red flag that you would be a high maintenance tenant. Hard pass.

3) Anyone’s answers can change on a whim. Like a job loss, a few mortgage rate hikes, kid moves back in town and needs a place to stay. Getting burned by bad tenant(s). B-20.

Now that I have small loan to value ratios I have to decide whether I want to be a provider to people who may kick the crap out of my properties… Or get myself into a 70/30 (since my time horizon is long) portfolio and not have to listen to another deadbeat SOB story.

Do you think I am the only one who runs through these scenarios? I’m a young guy. Old guys would punt their properties even quicker than me. Landlords didn’t get into the biz to make friends. Why does everybody wake up in the morning? To make money.

#2 Ionel on 07.11.18 at 5:06 pm

I like how the CAD gained ground, then lost it in a couple of hours today. Like there wasn’t even a rate hike.

#3 Steve on 07.11.18 at 5:06 pm

You can’t predict the level of the disaster if trump puts a tariff on cars. Lots of jobs would be affected, the guys at the plants, the store and restaurant the plant people use, the tax dollars not going to government.
Pain like that would impact Canada – USA trade for at least two generations.

#4 BlogDog123 on 07.11.18 at 5:11 pm

Never been a dog guy. Maybe if I grew up with them in the house, I’d love ’em.

Usually it’s the inconsiderate dog owners who infuriate me: Endless barking from who-knows-where, dog crap left in the parks, off leash sniffing when I don’t want to be sniffed…

#5 Foreign Money on 07.11.18 at 5:13 pm

BC Gov: “there’s no foreign money, we swear, trust us guys, look at this [bogus] report”.

Meanwhile:
https://www.cbc.ca/news/canada/british-columbia/bc-real-estate-murder-1.4741135

#6 Howard on 07.11.18 at 5:20 pm

I read an interesting theory today.

The theory goes that the shift to increasing rates will set off a new FOMO phase in housing. Once people realize that this isn’t a blip and that rates will continue their upward trajectory, they pile into housing to take advantage of mortgages that are still relatively cheap. Fear of missing out on low rates. This will, of course, propel housing higher for several more years.

Thoughts on whether this could realistically occur?

#7 HT on 07.11.18 at 5:22 pm

Nice lookin bitch!

#8 the ryguy on 07.11.18 at 5:30 pm

https://imgur.com/RKdaHOz

I had to put this little meatball down last week..broke my heart, enjoy your pooches, they really are a gift.

#9 oncebittwiceshy on 07.11.18 at 5:31 pm

Shawn Allen: *”The most obvious answer would seem to be they don’t expect rates to rise.”*

<<<<<<<<<<

Actually Shawn, the institutional investor is telling you the exact opposite. Pension plans and Insurance companies need the guaranteed returns of longer term bonds, but they can't afford the capital losses on the much longer terms that they would prefer.

You were correct regarding the capital losses on long term bonds in a rate rising environment so you can imagine the impact of a rate increase on a 20 – 30 yr. bond.

The 10 year bond provides the security of income flow with less capital depreciation than their preferred 20 – 30 yr bonds

The 10 yr. bond yield is low because all of the institutional investors are gobbling them up.

The amateur housing prognosticators are seeing the low yield as guaranteed lower rates in the future. The institutional investors know that rates are only going one way and they are trying to protect their clients.

#10 MF on 07.11.18 at 5:33 pm

#2 Ionel on 07.11.18 at 5:06 pm

That’s a good thing. We want the CAD to stay stable and not rise too high (yet) so the BoC will raise many more times again.

Rates are still way too low.

MF

#11 Cause and Effect on 07.11.18 at 5:40 pm

If Trump follows thru on the trade wars, expect the opposite of what the last 30 years of free flow goods brought.
In particular, as related to this blog, expect higher interest rates, higher costs of goods, higher unemployment, lower house prices and less foreign funny money in our domestic system.

#12 Penny Henny on 07.11.18 at 5:41 pm

Hey No Name.
I guess you’ll be busy Sunday afternoon.
Go Hrvatska.

#13 TheDood on 07.11.18 at 5:44 pm

#6 Howard on 07.11.18 at 5:20 pm

I read an interesting theory today.

The theory goes that the shift to increasing rates will set off a new FOMO phase in housing. Once people realize that this isn’t a blip and that rates will continue their upward trajectory, they pile into housing to take advantage of mortgages that are still relatively cheap…..

______________________

I hope to god that people aren’t that stupid, but then again, this is Canada.

#14 Realty Bites on 07.11.18 at 5:47 pm

#6
I read an interesting theory today.

The theory goes that the shift to increasing rates will set off a new FOMO phase in housing. Once people realize that this isn’t a blip and that rates will continue their upward trajectory, they pile into housing to take advantage of mortgages that are still relatively cheap. Fear of missing out on low rates. This will, of course, propel housing higher for several more years.

Thoughts on whether this could realistically occur?

Unlikely. The banks are only going to loan to who can afford to pay the higher rates. As rates go higher, less and less people will be qualified to jump into the market. There may be a few, as rates first start going up (i.e. now) that can still afford to jump in. But, at best, this will lead to a short term dead cat bounce in RE prices. It will be followed by a strong downward trend, as rates continue to rise. And rise they will, if Trump stays on course.

#15 Sebee on 07.11.18 at 5:50 pm

#4 BlogDog123

With you 100%. I’m quite tired of the “leash rules don’t apply to my special doggie” attitudes around the city.

I know I wouldn’t pick up the dog poo, hence I don’t own a dog.

#16 Pumpkin on 07.11.18 at 5:50 pm

I’m asking advice for my parents. They are typical boomers in their mid 60s who retired a few years ago with very little savings and poor money management skills. Their saving grace is that they did have a paid off house, which they sold pretty close to the peak of the market and have netted a sizable amount of cash. They were planning to downsize to a condo in Toronto and use the difference + small amount of pension to fund their retirement.

I know Garth would say that they should rent and invest in a portfolio of diversified ETFs, but like I said they have poor money management skills and are not about to change their ways at their age. For any larger amount of money, they are really only able to tolerate cash equivalents (high interest savings accounts or GICs). They are pretty healthy and hopefully have decades ahead of them, so all cash is just plain dumb in an inflationary environment. Given their significant personal limitations, it makes sense for them to buy a condo and they might be willing to tolerate a small amount of risk/volatility on their small amount of leftover cash.

My question is: should they buy now or should they wait a year or two from now? They are willing to wait and a place to stay for the short/medium term (ie. 1-2 years). Interest rates or stress tests won’t affect their financing at all since they are buying with all cash. However, if the market goes up significantly or if inflation skyrockets, they could be in trouble.

#17 gfd on 07.11.18 at 5:53 pm

Ontario clensing in makings

https://www.theglobeandmail.com/canada/article-entire-ontario-hydro-one-board-to-resign-ceo-to-step-down/

#18 Tony on 07.11.18 at 5:54 pm

Re: #6 Howard on 07.11.18 at 5:20 pm

Very few are willing to work a second or third job to meet the B20 rules and save for a down payment. If a worldwide trade war erupts interest rates will go a lot higher at least in the next year or so. Given that long term Canadian housing will be one of the worse possible investment choices I don’t see anyone rushing to beat any interest rate increases. Most economists expect the housing market in America to bottom out around 2030 to 2034.

#19 Penny Henny on 07.11.18 at 5:55 pm

Mark is STILL WRONG.
And the only one doing the tap dancing is him.
Mark you should change your name to ‘Scroll by Mark’.
#129 The Real Mark on 07.11.18 at 4:00 pm
“25 year Difference = $ 18,817.84 or an Average of $ 752.71/year – how much more will be paid with a 25 bp increase.”

You’re still missing the point. If a banker lends $500k, and rates go up 25bp, the banker earns an extra $1250/year on $500k lent.

Not sure why there’s so much tap-dancing around the obvious here,

#20 TS on 07.11.18 at 5:58 pm

Re #5 – Foreign Money

I thought the geniuses studying the impacts of laundered money from abroad said there was only $100 million invested in GVR bricks?? Yet one guy took $113 million and plopped it into Van real estate for his whole family. Oh wait, they are all permanent residents so it doesn’t count right?

#21 Penny Henny on 07.11.18 at 6:03 pm

If ‘The Real Mark’ was a dog (which he might be) he would be a ‘Know it all Retriever’ mixed with a Shitzhu.
Or more commonly known as a ‘Knows shit retriever’.
( My apologies to all Retrievers reading this).

#22 mitzerboyakaQueencity kid on 07.11.18 at 6:03 pm

https://i.imgur.com/UFHJbzj.jpg

my namesake

#23 Barb on 07.11.18 at 6:08 pm

Beautiful Bandit!

#24 Reximus on 07.11.18 at 6:13 pm

#8 the ryguy on 07.11.18 at 5:30 pm

very sorry for your loss of your little buddy

#25 Leo Kolivakis on 07.11.18 at 6:23 pm

The only D-day we should all worry about is when the next global deflationary crisis strikes, sending Canadian unemployment soaring and house prices to the aboss:

http://pensionpulse.blogspot.com/2018/07/bank-of-canada-preparing-for-next-crisis.html

The Bank of Canada is just following the Fed, raising rates so it can lower them when the next crisis strikes.

#26 The Real Mark on 07.11.18 at 6:29 pm

Actually Shawn, the institutional investor is telling you the exact opposite. Pension plans and Insurance companies need the guaranteed returns of longer term bonds, but they can’t afford the capital losses on the much longer terms that they would prefer.

Really? The difference between the 10-year bonds and the over 10 year bonds, GoC CAD$, is literally 5bp today (https://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/). Such a small spread between 10-year and longer-term debt is basically unprecedented.

Sure smells like the opposite of what you claim, that the institutions are gobbling up long term debt. Believing that Canada is in for a future of basically minimal CPI growth as the consumer debt bubble unwinds and the CAD$ appreciates in response to Canada’s overly-robust export capacity.

Anyways, the curve probably will flatten even more. How long Poloz can keep the charade of believing that the Canadian economy is doing well up is anybody’s guess.

#27 Smartalox on 07.11.18 at 6:31 pm

@Howard #6:

B20 put the pinch on any new demand for residential real estate (to live in, or for speculation). That’s only going to get worse as rising rates raise the thresholds required to qualify.

But the real threat of rising rates is that people who already own residential properties, and who are highly leveraged (multi-mortgages, Debt-fatted HELOCS, or mortgages granted under false pretences) will be pushed into the red, with greater proportions of their payments going to interest costs, instead of paying the principal debt and building equity in their investments.

Then, to add insult to injury, B20 will resurface when current owners go to refinance their mortgages, and debtors will have to either come up with balloon payments to reduce the outstanding amount of the loanoraccept an even higher rate to account for increased risk, or face the B20 stress test at a different lender.

A lucky few might negotiate higher wages, but of course, that’s inflationary, so raise will rise further still.

The majority will be looking at falling property values (already happening due to sales down 40+%) due to decreased demand, and negative equity.

Still, for people who live in the homes they’ve mortgaged, maybe they’ll find a way to hold on.

For prospective buyers though, it’s a LOT cheaper in the long run to buy a cheap house at high rates, than an expensive one at very low rates. Especially when one factors in:
– Interest cost is a function of the balance owing. Paying 50% less for the same house, even if rates are 50% higher? If you do the math, your jaw will hit the floor.
– lower home prices mean less money diverted from other investments (a lower opportunity cost)
– lower housing costs also equate to lower property taxes, though politicians will ensure that tax rates get raised as property values fall. Got to keep the coffers full!

#28 ALFRED E. NEUMAN on 07.11.18 at 6:35 pm

#8 the ryguy on 07.11.18 at 5:30 pm
https://imgur.com/RKdaHOz

I had to put this little meatball down last week..broke my heart, enjoy your pooches, they really are a gift.
_________________________________________

Indeed .. the toughest thing to have to do .. but trust us to do the right thing at the right time .. and stay forever in our hearts. My sincerest condolences.

#29 dosouth on 07.11.18 at 6:38 pm

#4 BlogDog123 on 07.11.18 at 5:11 pm….

Never been a dog guy. Maybe if I grew up with them in the house, I’d love ’em.

Usually it’s the inconsiderate dog owners who infuriate me: Endless barking from who-knows-where, dog crap left in the parks, off leash sniffing when I don’t want to be sniffed…
—————————————————————

First off maybe you should change your name to BlogCat or Blog Hamster if dogs aren’t your thing. Second you are missing the whole point….enjoy the day and what makes this world and country and day special…being part of it. Just sayin’..

#30 Pete on 07.11.18 at 6:38 pm

Howard #6

With that type of logic its No wonder most realtors failed high school.

#31 Briana on 07.11.18 at 6:45 pm

Isn’t Ford going to scrap the foreign buyer’s tax and remove the rent control in Ontario? And remove land transfer tax? What impact will those factors have on the Ontario housing market?

#32 tccontrarian on 07.11.18 at 6:45 pm

“In other words, the guys in charge see no disaster.”

That’s precisely why I AM worried! Has everyone forgotten Ben’s infamous, “the Subrime situation is contained” (paraphrasing). At appears so! A reminder that the ‘guys in charge’ aren’t there to protect you and me (Main Street), is just around the corner.

“No recession. No reason to panic, move into your mom’s basement, buy gold coins …”

Funny you say this today Garth, as I was actually ADDING to my gold/silver holdings.
—-
“It’s all good.”

Until it isn’t.
Time to ready for the ‘ugliness’ is when things are perceived as ‘good’ (by the majority).
When everyone ‘knows’ things ain’t good, it will be too late.
******************************************

Since I’m a cat owner (or rather, the cat ‘owns’ me), is there going to be a C- Day as well?

TCC

#33 Bob on 07.11.18 at 6:46 pm

A dog day? Excellent idea…

…just got an 8 week old German Shepherd puppy…he is already whipping me into shape. Every boy should have his own dog, it just took me almost 56 years…

#34 Reximus on 07.11.18 at 6:50 pm

oh no! now I’m gonna have to bill my client an extra 12mins a month to make increase this up

#35 Allan on 07.11.18 at 6:55 pm

Haha, no biggy is an understatement. Just had a conversation with a family friend. He manufactures curtain walls and aluminum panels. Basically, uses tons of steel, aluminum and silicon for his production. Poor guy says he will be lucky if he can break even. The cost of silicon went up 7% as of las April. Today he received a notice that it will be going up by another 9% to 15% starting April 1st. The cost of steel and aluminum increased around 25‰. He has contracts from last year. Those are for 3 major condo projects in Toronto.

#36 waiting on the westcoast on 07.11.18 at 6:59 pm

MF – we may want the CDN$ to rise but I don’t think it will unless oil goes through the roof. Poor policies, more repressive tax, and trade risks are going to keep us flat i.e even potentially down.

#37 waiting on the westcoast on 07.11.18 at 7:02 pm

My first dog was a German Shepard named Tonka. I was one year old. I had German Shepards all through my youth and eventually setup a kennel with my sister as kids.

Lots of find memories exploring our neighborhoods as a kids with the security is knowing no one would mess with us… ;-)

#38 Kelly Tammerin on 07.11.18 at 7:05 pm

Inflation at 2.5% is ridiculous. It is much higher than that. Tell me hoe inflation can be 2.5% when everything from gas, electricity, property taxes, housing, transportation, rent, utilities, insurance, food, clothing, medical, dental care etc. are going up at least 2 to3 times the so called stated inflation rate.

It is not true. Inflation us much higher than 2.5%.

#39 Bob Dog on 07.11.18 at 7:14 pm

Dirty Money or Dirty Government?

https://www.macleans.ca/opinion/dirty-money-is-destroying-vancouvers-civic-fabric-and-causing-lasting-damage/

Canadians need to learn who the real terrorists are.

#40 Chimingin on 07.11.18 at 7:16 pm

#8 – I’m sorry for your loss, ryguy–it is heartbreaking to say goodbye. Kipling’s poem “The Power of the Dog” sums it up well.

#41 NoName on 07.11.18 at 7:16 pm

I have no dog, I am a dog…

#42 Ionel on 07.11.18 at 7:17 pm

#10 MF on 07.11.18 at 5:33 pm

Totally agree.
I was looking at some of the causes of the housing crash in the 90s, and I could see two major issues: rate hikes and a crisis. We have the rate hikes now, and we have Trump causing a crisis… The history repeats itself?

#43 Newcomer on 07.11.18 at 7:17 pm

#1 rental property math on 07.11.18 at 5:06 pm
….
2) If you asked me these questions today I would think you are too nosy and have an agenda. This is a definite red flag that you would be a high maintenance tenant. Hard pass.
——

That’s what I am looking for. I’ve always tried to weed out landlords who aren’t trustworthy and it has always worked. And, sure, people can lie or give unreliable answers, which is why you have to go with your gut, but bad faith is not that hard to spot.

#44 cd on 07.11.18 at 7:26 pm

Garth, you didn’t mentioned what the rates are now… 1.5% which is still low and quite manageable.

#45 Dolce Vita on 07.11.18 at 7:28 pm

Garth.

If the BoC where a person, you’d have just dry humped it with today’s Blog.

Are these the same people that:

a) Raised rates to 21% in the very early 80’s to cream 416’s overheated RE market and then “OH LOOK, EVERYTHING IS PEACHY KEEN” again.

Followed by not even A YEAR LATER: “Oh look, the World is in Recession” and subsequently dropped rates by 11% in that year.

b) 1990: “OH LOOK, EVERYTHING IS PEACHY KEEN” again followed by not even A YEAR LATER:

“Where the hell did that oil price shock come from”, quick raise the anti-inflation rates since somewhere off in the future our web page banner will read:

“We are Canada’s central bank. We work to preserve the value of money by keeping inflation low and stable.”

c) 2006: “OH LOOK, EVERYTHING IS PEACHY KEEN” again.

Followed by “What just happened South of the Border where the banks aren’t lending money to each other Worldwide…oh no, NEAR MONETARY GLOBAL COLLAPSE”.

Followed by not even A YEAR LATER: Quick, drop the rates like a BAD HABIT and PUMP RE AGAIN, BECAUSE, YES WE CAN (ya, we know…we’re making up for the early 80’s, it is now good to PUMP RE AGAIN since nothing else is resuscitating).

Queue 11 years of rate drops and a HISTORICALLY low rate environment.

d) 2018: “OH LOOK, EVERYTHING IS PEACHY KEEN” again.

Followed by not even A YEAR LATER: ????????

– – – – – – – – – – – – – – – – –

Ya, keep dry humping the Bank ’cause:

There clairvoyant and history confirms that.

#46 Piet on 07.11.18 at 7:28 pm

@BlogDog123
“Usually it’s the inconsiderate dog owners who infuriate me: Endless barking from who-knows-where, dog crap left in the parks, off leash sniffing when I don’t want to be sniffed…”

Your comment brings to mind the scene in 101 Dalmations involving a series of people walking their dogs, and the dogs look very much like their respective owners. That scene reflects a deep truth about dog ownership. Have you ever noticed that annoying dogs almost invariably have even more annoying owners? For example, the people who let their dogs bark endlessly are also those inconsiderate turkeys who irritate the whole neighbourhood by neglecting to maintain the appearance of their property. You know the ones–they have derelict cars on the lawn, an industrial storage bin in the driveway, and their children are always making a racket at all hours of the day and night.
As for interest rates, bring on many more rate hikes! If we can get back to rates from a few decades ago it reduces the chances that some of us retired folks will run out of money before they run out of time.

#47 conan on 07.11.18 at 7:33 pm

Croatia 2 England 1

Time to start giving this team some respect.

https://youtu.be/Ld8qGVvf4aI?t=21

#48 renter in Surrey on 07.11.18 at 7:34 pm

no disaster. No recession. No reason to panic…

————————————————————

so there is no reason for RE prices to drop neither

#49 Rental property math on 07.11.18 at 7:48 pm

#43 Newcomer on 07.11.18 at 7:17 pm
#1 rental property math on 07.11.18 at 5:06 pm
….
2) If you asked me these questions today I would think you are too nosy and have an agenda. This is a definite red flag that you would be a high maintenance tenant. Hard pass.
——

That’s what I am looking for. I’ve always tried to weed out landlords who aren’t trustworthy and it has always worked. And, sure, people can lie or give unreliable answers, which is why you have to go with your gut, but bad faith is not that hard to spot.

———————
I hope you’re not looking to rent in Toronto because I hear the vacancy rate is pretty low. It’s not the renters choice to turn down a unit. I had a tenant who was very active within his church, paid his rent late every single month, started working for a gimmicky financial institution that will remain nameless and wanted to discuss my finances.
I think it’s safe to say don’t discuss money, religion or politics with a landlord. Good luck if you are ever looking to rent in Toronto.

#50 SimplyPut7 on 07.11.18 at 7:57 pm

The comment section finally admits they are all crazy cat ladies.

I knew it.

#51 technical analysis? on 07.11.18 at 8:06 pm

“In other words, the guys in charge see no disaster. No recession. No reason to panic, move into your mom’s basement, buy gold coins or hoard Cottonelle.”

no offense, but i wouldn’t be asking the guys in charge .. they’re paid to tell you everything is fine and dandy.

and usually they are wrong.

#52 Ray on 07.11.18 at 8:19 pm

The irony is the people that voted Trump in most likely also use Walmart the most. After Trump starts a trade war with China, and the rest of the world, will they be able to connect the two dots when prices at Walmart start to escalate? Or will they just blame it on the Chinese ?

#53 For those about to flop... on 07.11.18 at 8:20 pm

Pink Lemonade Stand in Vancouver.

By Vancouver Westside standards this house is modest in looks and price point,but these guys still found a way to get into trouble.

Picked up for 2.38 in May 2016,they tried to take bit of profit out the door with them but security has strapped on the rubber glove and sent them to the examination room for a closer look.

When they ask you how many fingers am I holding up,you reply ,hopefully none.

Flipping houses is not these guy’s forte.

They did not make a good fist of it…

M44BC

3656 Blenheim Street, Vancouver paid 2.38 May 2016 ass.2.41

Apr 5:$2,680,000
Jul 10: $2,280,000
Change: – 400000.00 -15%

https://www.zolo.ca/vancouver-real-estate/3656-blenheim-street

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

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

Feel free to make a donation.

Flop For Fox Fund…

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

#54 Felix on 07.11.18 at 8:21 pm

Dogs and their owners are deplorable and dumb, as others have rightly pointed out tonight.

If your IQ is high enough, get a cat. You won’t regret it.

#55 Long-Time Lurker on 07.11.18 at 8:26 pm

#16 Pumpkin on 07.11.18 at 5:50 pm
I’m asking advice for my parents. They are typical boomers in their mid 60s who retired a few years ago with very little savings and poor money management skills. Their saving grace is that they did have a paid off house, which they sold pretty close to the peak of the market and have netted a sizable amount of cash. They were planning to downsize to a condo in Toronto and use the difference + small amount of pension to fund their retirement.

I know Garth would say that they should rent and invest in a portfolio of diversified ETFs, but like I said they have poor money management skills and are not about to change their ways at their age. For any larger amount of money, they are really only able to tolerate cash equivalents (high interest savings accounts or GICs). They are pretty healthy and hopefully have decades ahead of them, so all cash is just plain dumb in an inflationary environment.

Given their significant personal limitations, it makes sense for them to buy a condo and they might be willing to tolerate a small amount of risk/volatility on their small amount of leftover cash.

My question is: should they buy now or should they wait a year or two from now? They are willing to wait and a place to stay for the short/medium term (ie. 1-2 years). Interest rates or stress tests won’t affect their financing at all since they are buying with all cash. However, if the market goes up significantly or if inflation skyrockets, they could be in trouble.

>You could introduce them to Garth.

Let’s say they wait. I say they should wait. Now, what would cause the market to go up significantly? There is already the stress test and rising interest rates to prevent that.

Now, if inflation skyrockets then what happens to interest rates? If the BoC doesn’t jack them up then the value of the loonie is going to plummet. So even if they’re renting they’ll get more from their cash as interest rates rise as long as they didn’t lock it in long (5-10+ years). At the same time, the higher interest rates should cause housing prices to drop because the mortgage is more onerous (conversely your parents are paying cash) and, quite frankly, a lot of people are going to crash and burn.

It wouldn’t hurt to get them a financial advisor that they can trust. You’ve already pointed out their shortcomings.

#56 FOUR FINGERS WATSON on 07.11.18 at 8:30 pm

(a) The global economy is growing again, bigly. Well over 3% this year. (b) The US is hot, so there are more rate hikes coming there, and a stronger American dollar. We must keep up. (c) Oil is gaining ground. (d) Our dollar is weak and needs propping. (e) The maple economy is strong enough to withstand higher interest costs. (f) Rate increases are a good thing because they’re dampening household spending and stabilizing real estate. (g) Our exports are strong thanks to the global and US economies. (h) Business investment is robust and corporations are making a pile. (i) Inflation will be 2.5% which is near the top of the central bank’s permitted range. ————————————————-

…..and the budget will balance itself.

#57 BlogDog123 on 07.11.18 at 8:33 pm

#29, #46- dog comments

There’s been a few gentle dogs in the world I really like, and many bark-a-lots many houses away I never see that I absolutely despise…

about the cat or hamster alternative: caging/breeding an animal for their master’s liking ain’t my thing. Hey, let’s have a pet monkey, caged bird or python… Amuse me, creature, but stay in this big box.

#58 D C on 07.11.18 at 8:37 pm

#8 the ryguy on 07.11.18 at 5:30 pm
https://imgur.com/RKdaHOz
I had to put this little meatball down last week..broke my heart, enjoy your pooches, they really are a gift.

Sincere condolences. I weep for the day I lose my 8yo Golden. Yours was a cutie.
https://imgur.com/a/58uu3vv

#59 Danny on 07.11.18 at 8:37 pm

FYI
3 condos in a building near Bloor Street West and Islington Ave…were on market over 3 months. Some taken off and then back on.
These were recently renovated.

Prices were between $500,000 and $600,000 just over 18 months ago. After renovation…up they went between $675,000 and $850,000.

They did not sell.
Now all 3….. back on the market….not for sale….but for rent.
$2,400 to $2,800….per month.

What do you think….speculators?
Definitely not the refugees that Parrot Ford’s people are falsely accusing for the housing crisis in Ontario.

Racists…….come in different shapes and sizes!

Hey….the election is over…you won…now Ford Family and Friends…..you have to substantiate your finger pointing.
Show us your proof.

Slogans should not be necessary any more…..you have 4 years to show that you really are for the little guy?
Should I hold my breath Garth?

#60 The Real Mark on 07.11.18 at 8:40 pm

” So even if they’re renting they’ll get more from their cash as interest rates rise as long as they didn’t lock it in long (5-10+ years).”

Careful. To an investor, what really matters is the real after-tax return. And in a higher interest rate environment, such is often less than it is in a lower rate, lower inflation environment.

For example, let’s compare 2 scenarios, and see why lower interest rates help savers more than higher rates:

Scenario A: 2% inflation, 4% interest, 30% taxes.

The real after-tax rate of return is 4% (1 – 30%) – 2% = +0.8%/annum

Scenario B: 4% inflation, 6% interest, 30% taxes.

Return = 6% (1-30%) – 4% = +0.2%/annum

And so on and so forth. So the higher rates have actually damaged the saver. The low inflation, low rate environment, which also keeps taxes lower (due to lower government debt finance costs — something I didn’t even cover in my above calculations) is far better for your typical saver than the scenario of higher interest rates.

Additionally, as you point out, if investing is done in a rising rate environment, there will be no opportunity to pick up extra return by extending portfolio duration. At least until the long-term rate cycle reverses. So in such a scenario, there will be no reason to take additional duration risk. Absolutely deadly to fixed income investors.

Currently the CAD$ bond market is showing no signs of rising long-term interest rates, but at some point, probably after the coming deflation runs its course (see Leo K’s comments earlier!), the cycle will solidly reverse and it will be a world of hurt for fixed income investors.

I know it seems absurd, especially today, but an allocation, to the precious metals complex is one of the only known long-term hedges to both significant deflation, as well as the melting down of the long-term bond market. Both of which are inevitable at some point as monetary instability rears its ugly head.

#61 Re..ryguy on 07.11.18 at 8:44 pm

Really sorry to hear about your loss.
Your friend will wait for you on the other side.

#62 NoName on 07.11.18 at 8:55 pm

@47 conan on 07.11.18 at 7:33 pm
Croatia 2 England 1

Today Brexit got hole new meaning.

#63 Guided by Dogs ...Life is simple on 07.11.18 at 9:05 pm

Bandit looks very pleased with life …I take a few moments of relaxation to read this blog every day (first attracted by the dog pics- there must be something worthwhile here) …smile to myself when there is a lag in new comments … Bandit must be getting his evening walk! All is well with the world!

Wanted just 2 things when “grew up” – dog and a piano. (As Garth says – focus on what is important to you) A Dog needs a safe home ( which is why I respectfully disagree with Garth’s basic premise of renting) ….bought nice/modest home in W Van 30 yrs ago for $425,000…now worth over 3M …adopted a long series of “reject/loser” dogs – puppymill survivors …gives me perverse pleasure to contemplate that these dogs (forgotten by almost all) must think they have gone to heaven! While the blog dogs do their calculations, gnash their teeth and spin their wheels.

Now have a few empty condos…in perfect setting for dog walking when I get old! Use the freezers now for raw dog food.
Yes – the Dippers are irritating (like fleas)- but they can be exterminated – just takes time . The dogs like the climate here so we will stay and enjoy our walks.

And yes we have a balanced portfolio to pay for dog food, toys and vet bills.
Not meaning to brag in the least …just illustrating how keeping a dog happy is perfect for guiding your life.
So many beautiful dogs to get to know …so little time.

I am not the best with computers …so if got the links wrong …you may enjoy googling to listen to the songs.

https://www.youtube.com/watch?v=BqV9NZSG1a4
(Tom T Hall – “old dogs and children and watermelon wine”)

https://youtu.be/RjyWqEfKapQ
(Stephen Foster :Old Dog Tray)

#64 oncebittwiceshy on 07.11.18 at 9:29 pm

The Real Mark: “Really? The difference between the 10-year bonds and the over 10 year bonds, GoC CAD$, is literally 5bp today (https://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/). Such a small spread between 10-year and longer-term debt is basically unprecedented.

Sure smells like the opposite of what you claim, that the institutions are gobbling up long term debt.

<<<<<<<<<<<<<<<<<<<<<<<<

You're overlooking the duration risk, Mark. The difference between a 10 yr. duration bond and a 30 yr. duration bond in a rising interest rate market can be devastating.

The institutional investor would love the longer bonds for duration matching but it's not all about the yield. They have to protect their capital investment.

#65 Ronaldo on 07.11.18 at 9:35 pm

#1 Rental Property Math

Why does everybody wake up in the morning? To make money.
——————————————————————–Everybody??? I don’t think so. For old geezers like myself, am happy as a pig in manure just to wake up and have another day to enjoy my retirement freedom. Going on 18 years now. Can’t imagine doing some of the stuff I did to make money. Gives me nightmares thinking about it.

#66 For those about to flop... on 07.11.18 at 9:39 pm

Recent sale report/Realtor assistance needed.

Well I featured these guys recently in my Eastside/Westside post as I was a liveable detached on the Westside for only 1.5m with an assessment of 2.06

I showed pictures of someone living there in reasonable conditions.

It sold 23 days ago and hopefully I will get some assistance to set what the floor is for a detached on the Westside in the new world that folks over that way are slowly waking up to.

This house is not much to look at from the outside and could have an argument with a bulldozer soon that it is likely to lose ,but the gap seems to be closing slowly back up in certain parts as people are holding out for 1.5 for properties like that on the Eastside.

I know some people want a family of 3 or 4 to move back into these places with a kid or two as some of the Westside is a bit of a ghost town ,but at that price or slightly above there is still plenty of meat on the bone for a developer to build big and bold.

I’ll make a prediction on the result of this match.

Bulldozers 1- Poor innocent house 0…

M44BC

836 w 66th ave,Vancouver.

Sold on June 19th,2018

https://www.zolo.ca/vancouver-real-estate/836-w-66th-avenue

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

Feel free to make a donation.

Flop For Fox Fund…

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

#67 Ronaldo on 07.11.18 at 9:41 pm

#6 Howard on 07.11.18 at 5:20 pm

I read an interesting theory today.

The theory goes that the shift to increasing rates will set off a new FOMO phase in housing. Once people realize that this isn’t a blip and that rates will continue their upward trajectory, they pile into housing to take advantage of mortgages that are still relatively cheap. Fear of missing out on low rates. This will, of course, propel housing higher for several more years.

Thoughts on whether this could realistically occur?
—————————————————————
The new stress tests will determine whether people will get a mortgage or not. The banksters will be the ones to decide this.

#68 M.J. LeBlanc on 07.11.18 at 9:47 pm

Bandit in the lobby of the King Edward in DT Toronto is classic hutzpah! Your an epic character GT. LOL
Our 12 year old Nugget is the ultimate gentle sable German Shepherd and he and Bandit would be immediate friends! No doubt we’ve both been blessed to have them in our families.
Cheers to you both,,,,, Nuggets buddy.

#69 Oft deleted much maligned stock picker on 07.11.18 at 10:36 pm

Poloz has raised rates as part of a coordinated PR campaign to sell Groper Trudeau as strong and effective…note the coincidence of rate increase and shirtless jogging with our troops in peaceful Latvia. After 6 months of losing 80,000 a month we get a bump of 30,000 and that’s ballyhooed by the CBC as real strength in our leadership? Nonsense. You’d have to be a moron not to put this Humpty Dumpry picture together.

Groper T is losing on every front….so is Trudeaus ‘Vaganada’…..hundreds of billions have fled the country after a raft of assimine business hating laws passed in the Groper T cabinet mass of maroons.

The short covering was fierce….but piled right back on double because it just showed that Poloz has nowhere to go now. He’s burned all the fuel on a last desperate gambitvto support the enormous lie that the economy of Canada is “OK”.

But…..while everyone who owes got screwed I made out like a bandit with a huge position on QSR that will open 1500 Tim Hortons in China over ten years. That’s ten years of positive PR and accretive earnings announcements. The stock doubled when the Middle East expansion was announced and that was only for 150 new stores. Will QSR double double again? No one knows….but I can’t lose either way…..I bought Tims at $14 and got my QSR stock free in the merger…..oh yeah.

But this Groper thing….really bad for Canada’s international image….he makes no one confident that Canada is a good place to be. Here in Asia we are a laughing stock….money laundering and perverts… that’s the story…..pathetic.

#70 acdel on 07.11.18 at 10:36 pm

I figure that bionic dog of yours needs a haircut in these hot summer days, amongst others! :)

#71 Lost...but not leased on 07.11.18 at 10:48 pm

Bandit is tired of doing his humanoids work…(time to sh*t or cut bait.)

Look for a new blog site…starting with hydrant futures and birth control pills for cats.

#72 the Jaguar on 07.11.18 at 10:49 pm

He, (Bandit) enjoys the feel of cool tile floors beneath him in the hot summer climate of the GTA. His regal pose is framed by the beautiful architecture of the ‘grand old gal’ hotel. ‘Dignity’ emanates from them simultaneously.
Some obtain their reverence and status the old fashioned way. They ‘earn’ it. Seems to be self evident in this photo.
I suspect the Spirit dog rarely barks.
The Jaguar might be rewarded with the companionship of an animal one day. Dogs and cats are both appreciated. A few more night flight missions to fly before that is possible.

#73 Former head of B.C.’s illegal gambling enforcement team blames RCMP, B.C. Liberals for inaction against money laundering on 07.11.18 at 10:54 pm

Public inquiry coming. Stay tuned folks.

https://globalnews.ca/news/4317081/bc-illegal-gambling-enforcement-team-blames-rcmp-liberals-money-laundering/

#74 Leo Trollstoy on 07.11.18 at 10:56 pm

crissy gettin schoold again

US economy hot!

Canadian economy strong!

deflation ded!

US$ ALL DAY ERY DAY!

#75 Daveyboy on 07.11.18 at 11:12 pm

Mark. When does the Canadian dollar hit 1.32 USD?

#76 LP on 07.11.18 at 11:12 pm

Here she is…the most beautiful exemplar of a noble breed. Her name is Robyn. I had to give her up late last fall and miss her still.

https://www.dropbox.com/s/r6kvm1rva055oze/Robyn%20left.JPG?dl=0

#77 Marcus on 07.11.18 at 11:15 pm

Canada had better fast track their defense spending. A storm is coming. scuttlebutt in the American Navy and certain research facilities warns of a serious confrontation with China. Canada and Europe are being given a warning to get their ass in gear. Time is short. “The Phantom” has kicked on the after burners.

#78 Rargary on 07.11.18 at 11:31 pm

No doveish… dogs are cutesie but bills need to get paid… millenials and all other delusionals… get used to the increases… theyre not done… your fun money is already spoken for. If your elders havent told you.. get out your calculators

#79 NEVER GIVE UP on 07.11.18 at 11:33 pm

#20 TS on 07.11.18 at 5:58 pm
Re #5 – Foreign Money

I thought the geniuses studying the impacts of laundered money from abroad said there was only $100 million invested in GVR bricks?? Yet one guy took $113 million and plopped it into Van real estate for his whole family. Oh wait, they are all permanent residents so it doesn’t count right?
===================================
Any Foreign national or local person can open a Canadian Corp and use a proxy owner. All the real ownership paperwork is stuffed in a safety deposit box somewhere and and the proxy owner collects a fee for keeping quiet. They usually do the Corporate renewals every year for about $1k a year.

No one knows how many foreign nationals own property here and the last government (BC Liberals) didn’t even want to know because they are in on the bubble.

If you want money to arrive in Canada it is very easy to get it here. Use Money Changers like EVERFOREX, who take Canadian dollars that want to be in another country to pay for goods or Alimony or family support.

A person in that country wants money in Canada but their government wants to restrict them.

Solution. The person in the foreign land trying to get money out simply gives the money direct to the person in the foreign land in local currency and picks up Canadian dollars in Canada after Everforex confirms their client has been paid. By the way no laws in Canada are broken here.

So in summation there are no controls on money over borders. It is easier now than smuggling diamonds in the old days.

There is only one way to control unwanted foreign investment and that is to tax the profits away.

The only problem with that is you want good foreign investment that builds good housing for locals to rent. You want innovative builders financed by foreigners to buildout neighborhoods, make a healthy profit but in the same instance be a competitor to another builder and keep prices of homes low by competition.

Trouble is, we have so many Nimby restrictions on building now that anyone who builds can get top price because the taps are almost turned off to new develop-able land. Competition has been eliminated by our own selfish restrictions on building.

How can you low tax builders who are good for the industry and high tax the assignment flippers.

I think the best way is to have a graduated tax based on the number of years holding the property.

Flip in year one and pay 50% of the difference in price from purchase to sale. year 2-45%, year 3-40% and no tax after 7 years of holding a property.

Something like that will kill the leeches that are flipping our properties like concert ticket scalpers.

This is what I hate the most. Our complete acquiescence of responsibility to the wild west of Cronyism profit taking.

#80 D day on 07.11.18 at 11:42 pm

Dog day afternoon more like.
Dogs are for home owners not renters you hipocrite.

#81 Puzni on 07.12.18 at 12:12 am

DELETED

#82 Newcomer on 07.12.18 at 12:26 am

#49 Rental property math on 07.11.18 at 7:48 pm

I hope you’re not looking to rent in Toronto because I hear the vacancy rate is pretty low.
——–

I’ve rented in Toronto, and Vancouver, and New York, and Paris, and Rome, and Tokyo, and a few places in the countryside. It has never taken me long to find a place. When you encounter the right landlord, they are happy to see that the tenant is doing their due diligence. It’s probably a question of finding a good fit, which is what you want when you sign a five-figure contract. Thankfully, I’m not looking to move at the moment. It is a lot of work.

#83 Fortune500 on 07.12.18 at 12:27 am

I keep hearing a lot of people (realtors especially) saying, ‘interest rates are still low by historical standards’ as a way to downplay this But if you are Gen Y, or younger, your time horizon is much shorter than your Baby Boomer parents (or great grandparents).

The fact is, interest rates haven’t been this high in 9 Years! And they are continuing to go up. And we haven’t held this much personal debt ever … By Historical Standards.

So, context … it’s important people.

#84 Spectacle on 07.12.18 at 12:31 am

#53 for those about to flop
M44BC

3656 Blenheim Street, Vancouver paid 2.38 May 2016 ass.2.41

Apr 5:$2,680,000
Jul 10: $2,280,000
Change: – 400000.00 -15%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Flop,
You are Bang right on the numbers.
I am a little too close for comfort to the YVR real estate construction business.

We just had a talk on single Family site today, this Blenheim example, and even West Van , they ALL (sorry to yell) just took a major 20% plus shearing! And this is reasonably seasoned, professional builder/owners.

Final discussion point by one succesful younger builder was, ” I’m getting outta this biz, but what am I going to do”.

#85 Jeff on 07.12.18 at 12:44 am

Short video of my current buddy gassed out but he couldn’t be happier. He wakes up every morning and never stops wagging his tail, 30 years of having dogs as part of the family this guy takes the cake for just being so darn happy all the time. It rubs off on you.

Bandit looks pretty content, doesn’t he. :)

https://www.youtube.com/watch?v=jpjGs44V1Bc&feature=youtu.be

#86 Blackdog on 07.12.18 at 12:50 am

Since this is a financial blog for dog lovers, I have two words to share: “pet insurance”. If you don’t have thousands to spend on fido (or felix) in case of an unexpected accident or illness, you may want to consider it. After having recently acquired a ‘rescue’ puppy who is a hazard to his own health, I decided pet insurance would be a good idea. It costs $45 per month for $15,000 annual coverage at 90% reimbursement with $300 annual deductible. Of course premiums vary depending on the age of the dog, and how much coverage you want. Something to think about.

#87 Smoking Man on 07.12.18 at 1:01 am

What a great day.

The UN agenda of the demasculation of young boys is over in Ontario. Sex Ed axed.

The entire board of Hydro mass quits. Garvey train over. Behaviour modelling of liberal lunatic control is over.

The USDCAD is not only holding its oun but its set for a huge spike. Should have lost a cent or two. This has never happened before after a rate spike.

The #Walkaway movement has so much momentum right now. In the near future we will be able to speak our minds without fear of getting fired on linked in. My old freinds may even like one of my posts there.

It’s a realy Bad day for people with mental disorders.

Dr Smoking Man
Phd Herdonomics.

#88 Dolce Vita on 07.12.18 at 2:12 am

#56 FOUR FINGERS WATSON

…..and the budget will balance itself.

– – – – – – – – – – – – – – – – – – – – –

THAT, was too FUNNY.

Short and too the point, unlike my writing style.

Let me illustrate how I imagine Garth’s reaction to your conclusion will appear (hope the Comments accept Unicode):

¯\_(ツ)_/¯

#89 Midnights on 07.12.18 at 2:28 am

Canada’s Housing Market- Ready to implode!
https://www.zerohedge.com/news/2018-07-11/canadas-housing-market-ready-implode

#90 Howard on 07.12.18 at 3:17 am

#13 TheDood on 07.11.18 at 5:44 pm
#6 Howard on 07.11.18 at 5:20 pm

I hope to god that people aren’t that stupid, but then again, this is Canada.

————————————————-

Back in 2008 during the financial crisis, when foreclusures in the US soared and the housing industry was exposed to be a den or criminality and carelessness, I was dismissive of Americans for being apparently too stupid to understand the difference between principle and interest. It could never happen in Canada, I told myself; we’re too fiscally conservative, never would we reach personal debt levels even a fraction of that in the US.

Well here we are 10 years later and I need to issue a mea culpa. Yes, people really are that stupid in Canada.

#91 Jay Currie on 07.12.18 at 4:34 am

Interest rates up?

Don’t care…My owners rent.

https://photos.app.goo.gl/9vRUEviftRC8swSv6

#92 Howard on 07.12.18 at 6:00 am

#27 Smartalox on 07.11.18 at 6:31 pm

@Howard #6:

B20 put the pinch on any new demand for residential real estate (to live in, or for speculation). That’s only going to get worse as rising rates raise the thresholds required to qualify.

But the real threat of rising rates is that people who already own residential properties, and who are highly leveraged (multi-mortgages, Debt-fatted HELOCS, or mortgages granted under false pretences) will be pushed into the red, with greater proportions of their payments going to interest costs, instead of paying the principal debt and building equity in their investments.

Then, to add insult to injury, B20 will resurface when current owners go to refinance their mortgages, and debtors will have to either come up with balloon payments to reduce the outstanding amount of the loanoraccept an even higher rate to account for increased risk, or face the B20 stress test at a different lender.

A lucky few might negotiate higher wages, but of course, that’s inflationary, so raise will rise further still.

The majority will be looking at falling property values (already happening due to sales down 40+%) due to decreased demand, and negative equity.

Still, for people who live in the homes they’ve mortgaged, maybe they’ll find a way to hold on.

For prospective buyers though, it’s a LOT cheaper in the long run to buy a cheap house at high rates, than an expensive one at very low rates. Especially when one factors in:
– Interest cost is a function of the balance owing. Paying 50% less for the same house, even if rates are 50% higher? If you do the math, your jaw will hit the floor.
– lower home prices mean less money diverted from other investments (a lower opportunity cost)
– lower housing costs also equate to lower property taxes, though politicians will ensure that tax rates get raised as property values fall. Got to keep the coffers full!

———————————————-

Re: your points about prospective buyers.

You say that as if more than a tiny fraction of Canadians are financially literate enough to do that kind of analysis. They aren’t.

I can very easily imagine a new FOMO phase as the mindless masses rush to get in before rates go any higher. Yes B20 will restrict them somewhat, but there’s been no effect on prices so far aside from York Region.

#93 theoryAndPractice on 07.12.18 at 6:23 am

It looks like Bandit captured the Knight and celebrating.

#94 Westcdn on 07.12.18 at 6:58 am

In my young formative years, I was in a logging camp near Savary Island on the mainland. I went out one day and saw a young Dalmatian who had been abandoned. He was vicious, probably eating feral cats which were numerous (like the mice) and was emaciated. I would plant open fish cans near where I saw him and replenished them. It took weeks sneaking canned fish out of the “homestead” to feed him before I could pet him. We bonded as he got to trust me but he never liked anybody else. I called him Rex and he started to follow my orders, particularly about not attacking neighbours. My father thought Rex to be a hazard and would not let him in eyesight. Rex listened to me and protected me against all comers. I remember being lost in the woods and asking Rex to lead me out which he did – go home Rex, go home. I never told my parents they would have restricted my freedoms. It was one of my many lessons about limitations and hubris. Rex was a one person dog.

When my father was fired and we were shipped out, no one wanted Rex and my father could not see him living in a city. He arranged to have him be shot but the guy butchered the job and Rex ran to me with a mortal wound as we were boarding the float plane. My father grabbed a rifle and finished Rex on the spot. It was the first trauma of many that I would face. Yet I knew my father did the right thing and I never held it against him. Other things I did but those are other stories.

So why I reminiscing about one traumatic point in my life – Trump and the US Fed. To me, positive relationships are meant to be grown and be solid – people I can expose my soul for healing.

This Playby interview tells me lots about Trump
https://www.playboy.com/read/playboy-interview-donald-trump-1990 So what Trump is doing today is no surprise. How to deal with Trump is a problem. The only thing he seems to respect is power and money hence my fondness for nuclear. Trudeau would be wise to treat Trump like nitroglycerin.

As for the Fed, I think they will push interest rates too far. They want to stay in front of the wage cost push inflation of the 80’s but where is it? I say look at the elites in the top 10% of our current societies. The inflation today is caused by government spending more than they tax. The elites are the one taking the economic gains and building “wealth” in assets. What society will look after “normalization” looks awful for the 90% unless you are happy being a debt slave. Life is more than gaming a societal system for your benefit. I see a lot of fat butts. I have no answer and I respect religions for trying. My motto is “try to leave the world a better place than you found it” – mileage will vary by person.

#95 Howard on 07.12.18 at 7:07 am

#82 Newcomer on 07.12.18 at 12:26 am

I’ve rented in Toronto, and Vancouver, and New York, and Paris, and Rome, and Tokyo, and a few places in the countryside. It has never taken me long to find a place.

—————————————

Were you on the run? All good choices though; Tokyo, that must be intense. I think I’d feel very overwhelmed living in a city of 25 million people.

I don’t know when you lived in Paris but finding an apartment here these days (I live in the 17th arrondissement), while not quite to the level of a nightmare, is stressful to say the least. Obviously if you’re wealthy it’s easy, just as everything is easy when you’re wealthy. If you get an email alert for a desirable unit at a halfway decent rent (relative to the market), chances are it’ll be gone within 48 hours. If you happen to have work meetings and can’t drop everything in the middle of the day to go see the place right that minute, you’re out of luck. Multiply that dozens of times over. Draining to say the least. Despite the extreme urgent nature of apartment-hunting in Paris, I wouldn’t say the rents are extremely high. You can find a nice place in one of the outer arrondissements for the equivalent of around $1800 CAD per month. Not cheap but not outrageously expensive; it IS Paris after all.

#96 Victor V on 07.12.18 at 7:17 am

Canada’s big banks raise prime rate to 3.7% after Bank of Canada hike

https://www.bnnbloomberg.ca/canada-s-big-banks-raise-prime-rate-to-3-7-after-bank-of-canada-hike-1.1106411

TORONTO — Canadian banks say they will raise their prime lending rate after the Bank of Canada increased its overnight lending rate to financial institutions.

Royal Bank (RY.TO), TD Canada Trust (TD.TO), BMO (BMO.TO), CIBC (CM.TO), National Bank (NA.TO), and Scotiabank (BNS.TO) all say they will increase their prime rate by a quarter of a percentage point to 3.70 per cent, effective Thursday.

The rates had previously been set at 3.45 per cent.

The increase will raise the cost of borrowing for customers with loans linked to the prime rate such as variable rate mortgages and lines of credit.

The Bank of Canada raised its target for the overnight rate a quarter-point to 1.5 per cent Wednesday.

It was the central bank’s fourth rate increase in the last 12 months.

#97 Tater on 07.12.18 at 7:39 am

1 rental property math on 07.11.18 at 5:06 pm
#113 Newcomer on 07.11.18 at 12:47 pm
If you are looking for a place to rent, read:

#63 rental property math on 07.10.18 at 10:08 pm

This is the type of landlord you want to avoid. The best thing is to find a place managed by a property management company, but if that is not available, look for a person with just one property for rent, so they are not over-extended. Find out what their finances are like. Ask about their employment, their family and their retirement/career plans. You don’t have to be rude. Just ask things like, “So how did you end up having a house for rent?” “Do you own a lot of properties?” “What do you do for a living?” “Have you always lived here?” and so on. You are looking for someone with income and wealth that makes it easy for them to carry the property as a long term (ten years+) investment. If you get the sense that they might be struggling or unhappy, or they are secretive, or snobbish, or just generally greedy or petty people, walk away. I’ve lived in rentals in major cities all over the world. I’ve never had my rent raised unreasonably, never waited too long for maintenance and never had the landlord terminate the lease. There are good landlords out there, but there are also people like Math. Choose carefully.
———————————————

1) If you asked me those questions years ago when I was a newbie and had only 20% equity in my properties making money hand over fist in appreciation I would have said I’m going to keep my properties forever!!!

2) If you asked me these questions today I would think you are too nosy and have an agenda. This is a definite red flag that you would be a high maintenance tenant. Hard pass.

3) Anyone’s answers can change on a whim. Like a job loss, a few mortgage rate hikes, kid moves back in town and needs a place to stay. Getting burned by bad tenant(s). B-20.

Now that I have small loan to value ratios I have to decide whether I want to be a provider to people who may kick the crap out of my properties… Or get myself into a 70/30 (since my time horizon is long) portfolio and not have to listen to another deadbeat SOB story.

Do you think I am the only one who runs through these scenarios? I’m a young guy. Old guys would punt their properties even quicker than me. Landlords didn’t get into the biz to make friends. Why does everybody wake up in the morning? To make money.
—————————————————————–
No reason to even ask your landlord these questions. If you want to get a sense of their financial position, just pull a title and get the mortgage details. Costs less than $100 and can do it online. Simple and lets you avoid landlords who are overlevered.

#98 Wrk.dover on 07.12.18 at 8:09 am

One miserable night after winter had set in while I was still living in the Golden Horseshoe I drove past a god awful house on a corner lot in a god awful town and saw a circle of bare ground with a shallow trench/track around the perimeter, right at the front corner of the lot with an emaciated German Shepherd chained to a stake with a ramshackle dog house on the edge, and lots and lots of frozen turds rolled around in heaps by the chain. The dog had no fur and raw skin in a 4″ band in the collar zone and on closer examination red weeping scabs on the edges of the ears just like most of the neck had.

I drove around the block, pulled alongside and before you could blink I had liberated the dog into my warm car with karma. We stopped at a convenience store for food, and I took her to the industrial park unit I rented and lived in under the radar. I hosed her down with warm water and brushed out gobs and gobs of dirty hair, then named her Dolly.

The skin healed and the fur grew back in a couple of months. That dog was always shy and hid behind me, unless she smelled trouble, then Wow! Fierce! She didn’t get more then ten feet from me in non leash situations.

I was a young buck at the time, and she accompanied me on all of my adventures, when I was not at a job.

Now a days, I fly on vacations far too often to own a dog, to be left behind.

But I do ‘get’ dogs. Most dogs existences are just waiting for someone to come home all day long, so they can pee.

#99 Tater on 07.12.18 at 8:29 am

Just dropped the dog off this morning to have a vet re-check after TPLO surgery. He’s almost 10, but still full of life.

#100 NoName on 07.12.18 at 8:42 am

Latest product list of new 10% tariff.

https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf

#101 rental property math on 07.12.18 at 8:50 am

#97 Tater on 07.12.18 at 7:39 am
—————————————————————–
No reason to even ask your landlord these questions. If you want to get a sense of their financial position, just pull a title and get the mortgage details. Costs less than $100 and can do it online. Simple and lets you avoid landlords who are overlevered.

——————–

You guys are still missing the point. It’s the under leveraged landlords you have to worry about.

Lets say my property could sell for 530K and I only owe 80K on it. My net rental income after paying property tax, mortgage interest, insurance and maintenance will come out to less than what a balanced fund would yield with 400K invested. The value of the property must go up at a minimum of 5% each year in order for me to want to deal with the stupidity that comes with many tenants.

If the government wants to implement rules like B-20 that will flatten the market then why would I volunteer to still participate?
Unless the tenant is a retired former home owner boomer who takes great care of the property forget about it.
There are too many shitty tenants these days. I’ve seen tenants ruin a whole floor after two years. Drywall is no big deal but flooring is expensive. When you have these damages now you’ll most likely want to rent the place out for 10-20 years to justify those hefty reno costs in the end.

The boomer tenant is safe. I will take the gamble in the housing market with them. They are only sticking around for another 3 years though. There is no question that I will sell that new construction home I rented to them when they leave and not roll the dice on some loser tenants.

But for the ones that messed up the place… My mortgage is locked in at 2.84%. Renewed in December. I’ll see what the market looks like next spring, and if it’s not looking good then I will hand them an N-12. They will be in for a big shock of current market rent while I live there for a minimum of 1 year and fix the place up on my own. Sell. Invest in a balanced portfolio.
I’m not even concerned about the market to be honest as I’ve invested in entry level homes. Most my purchase prices were 350K.

#102 rental property math on 07.12.18 at 9:00 am

#82 Newcomer on 07.12.18 at 12:26 am
#49 Rental property math on 07.11.18 at 7:48 pm

I hope you’re not looking to rent in Toronto because I hear the vacancy rate is pretty low.
——–

I’ve rented in Toronto, and Vancouver, and New York, and Paris, and Rome, and Tokyo, and a few places in the countryside. It has never taken me long to find a place. When you encounter the right landlord, they are happy to see that the tenant is doing their due diligence. It’s probably a question of finding a good fit, which is what you want when you sign a five-figure contract. Thankfully, I’m not looking to move at the moment. It is a lot of work.

——————
I’m glad your landlord isn’t selling at the moment and you’re not looking to move. Listen to Howard. If you want to rent in Toronto have your blank cheque book ready. While you are poking and prodding with your questions about the landlord’s bank account someone else is already offering over asking and the place is no longer available.

#103 LP on 07.12.18 at 9:08 am

#98 Wrk.dover on 07.12.18 at 8:09 am

The Almighty surely smiled on you that day and probably is still giving you lots of mulligans. Bless you!

#104 ALFRED E. NEUMAN on 07.12.18 at 9:32 am

The Power of the Dog

Rudyard Kipling, 1865 – 1936

There is sorrow enough in the natural way
From men and women to fill our day;
And when we are certain of sorrow in store,
Why do we always arrange for more?

Brothers and Sisters, I bid you beware
Of giving your heart to a dog to tear.

Buy a pup and your money will buy
Love unflinching that cannot lie—
Perfect passion and worship fed
By a kick in the ribs or a pat on the head.

Nevertheless it is hardly fair
To risk your heart for a dog to tear.

When the fourteen years which Nature permits
Are closing in asthma, or tumour, or fits,
And the vet’s unspoken prescription runs
To lethal chambers or loaded guns,

Then you will find—it’s your own affair—
But … you’ve given your heart to a dog to tear.

When the body that lived at your single will,
With its whimper of welcome, is stilled (how still!).
When the spirit that answered your every mood
Is gone—wherever it goes—for good,

You will discover how much you care,
And will give your heart to a dog to tear.

We’ve sorrow enough in the natural way,
When it comes to burying Christian clay.
Our loves are not given, but only lent,
At compound interest of cent per cent.

Though it is not always the case, I believe,
That the longer we’ve kept ’em, the more do we grieve:
For, when debts are payable, right or wrong,
A short-time loan is as bad as a long—

So why in—Heaven (before we are there)
Should we give our hearts to a dog to tear?

#105 IHCTD9 on 07.12.18 at 9:47 am

Never been a dog guy, but we had a couple growing up.

We had a Collie/Sheppard mutt, not fixed, quite aggressive, and had to be tied up most of the time. This was back in the early 80’s.

Most memorable for me was the struggle Dad endured to keep her tied to her dog house. She broke collars, then straightened the formed eye that was screwed into the corner timber of the dog house allowing her to take off with the chain dragging behind her. Once a lag with a welded eye was used, she started pulling the threads right out of the wood. Finally, after Dad installed a threaded forged eye with a big washer and locking nut on the back side, we awoke one morning to see she was gone along with the whole side of her dog house.

She would escape, then go fight with the neighbour’s dog or chase cows. She’d roll in any pile of excrement that happened to be laying around. A couple times she came back pregnant.

Maybe that’s why I’m a Cat guy these days.

#106 For those about to flop... on 07.12.18 at 9:57 am

at 12:31 am
#53 for those about to flop
M44BC

3656 Blenheim Street, Vancouver paid 2.38 May 2016 ass.2.41

Apr 5:$2,680,000
Jul 10: $2,280,000
Change: – 400000.00 -15%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Flop,
You are Bang right on the numbers.
I am a little too close for comfort to the YVR real estate construction business.

We just had a talk on single Family site today, this Blenheim example, and even West Van , they ALL (sorry to yell) just took a major 20% plus shearing! And this is reasonably seasoned, professional builder/owners.

Final discussion point by one succesful younger builder was, ” I’m getting outta this biz, but what am I going to do”.

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

Hey Speckie, it’s funny you wrote me as I was going to reply to a post of yours the other day and got sidetracked in some Pink Snow.

You wrote something about getting a 28% pay rise to keep up with something and it made me smile because I just applied for a job with a 30% pay rise.

People on here accuse me of cheering on a housing crash by doing my reports but as someone who makes a living in construction I don’t understand that thinking.I help out people on here and on my Pink Snow blog and it helps me understand a little bit more of what is going on that you will never read in the paper.

I work on luxury detached primarily and it is definitely cooling and this year was the slowest start I can remember since early 2000’s

You will still see plenty of building for a while as a lot of people are past the point of no return and there is still lots of money to be made on the right project ,just not as stratospheric as before.

The thing is when they are building housing as big and complex as some of the houses on the Westside you only need two houses a year to keep you busy.

Back to my original point,I’m not sure as to what is going to happen and so after talking to a couple of contractors last week I decided to apply for a job working for the city as it might offer me a bit more protection from the coming storm.

This correction seemingly will take years to play out and if certain people get their way it will get white hot again,but even if magically the taps turned off tomorrow it would still take 3/4 years for all the condo projects that be finished.

I could get a 30% pay rise or just stay doing what I am doing,I will keep out of trouble either way but I don’t really want to switch over to condos.

I am also interested in doing security at a former BMO branch in Lunenburg…

M44BC

#107 Trumpocalypse2018 on 07.12.18 at 10:12 am

Catastrophic unravelling of NATO begins, and then there’s the Putin meeting.

None of this will end well. But the unprepared will end quicky.

PREPARE

#108 Howard on 07.12.18 at 10:22 am

#105 IHCTD9 on 07.12.18 at 9:47 am

Never been a dog guy, but we had a couple growing up.

We had a Collie/Sheppard mutt, not fixed, quite aggressive, and had to be tied up most of the time. This was back in the early 80’s.

Most memorable for me was the struggle Dad endured to keep her tied to her dog house. She broke collars, then straightened the formed eye that was screwed into the corner timber of the dog house allowing her to take off with the chain dragging behind her. Once a lag with a welded eye was used, she started pulling the threads right out of the wood. Finally, after Dad installed a threaded forged eye with a big washer and locking nut on the back side, we awoke one morning to see she was gone along with the whole side of her dog house.

She would escape, then go fight with the neighbour’s dog or chase cows. She’d roll in any pile of excrement that happened to be laying around. A couple times she came back pregnant.

Maybe that’s why I’m a Cat guy these days.

—————————————-

I didn’t get the impression that you were old enough to have grown up at a time when nobody knew about spaying and neutering. I certainly hope your cats are fixed. No shortage of homeless kittens.

#109 isuckless on 07.12.18 at 10:30 am

Long time ago, far far away, my first dog was German shepherd named Hilda. Someone poison her and she died on my lap. My last dog was a rescue, 26 years ago. I am too selfish now to have a dog, at least until I retire. Cats are making me company at the moment.
M60ON

#110 IHCTD9 on 07.12.18 at 10:47 am

#87 Smoking Man on 07.12.18 at 1:01 am

The entire board of Hydro mass quits. Garvey train over.
_______________

Same old government run Utility story.

The Manitoba Hydro board couldn’t make a financially sound operational decision to save its life. But, when at long last they finally understand that they’re all going broke – they ask for like 10 consecutive years of 7.9% hydro rate increases. up 7.9% EVERY YEAR!

So the increase gets shot down (duh), and what happens next?

They all quit and point fingers at the Premiere.

Looks like Manitobans will be getting a “debt retirement charge” line item on their bills too…

#111 crowdedelevatorfartz on 07.12.18 at 11:26 am

@#106 Floppie
“You will still see plenty of building for a while as a lot of people are past the point of no return and there is still lots of money to be made on the right project ,just not as stratospheric as before.”
+++++

Yep.
I’ve watched an old house on a double lot in Burnaby get torn down and two new houses replace it.
The builder was taking his time until a month ago.
Now they have been working day and night to finish.
They should be on the market in a few weeks.

Condo towers?
An entirely new gamble of the dice.
I havent noticed if any major condo “projects” have been cancelled before the dirt has moved but I’m sure some of the developers with a 30 – 40 story tower half finished and a year or so from completion…..are crapping their pants right now.

Starting to see construction site fires. Abandoned home fires. Expect more.
The 80’s all over again.
Your jump into municipal worker status is wise. Just dont work too hard and make the rest of them look bad.
Drink the koolaid and become a zombie….its easier.

#112 IHCTD9 on 07.12.18 at 11:28 am

“For every $1 Hydro currently gets from ratepayers, 40 cents goes toward servicing debt, she said. If action isn’t taken, Hydro estimates that will go up to 63 cents by 2024.”

https://www.cbc.ca/news/canada/manitoba/pub-manitoba-hydro-increase-1.4431783

_____

^ Just for the folks who have trouble understanding why letting your government run never ending deficits is a bad idea.

Manitoba Hydro has obviously been run by a herd of nimrods for a long time, and now they’re all having a Price-is-Right freak-out because their do-nothing 6 figure jobs might evapourate with the Utility they slowly poisoned to death.

Half their revenues go to paying off debt? FFS… I could get a troop of baboons in there to run the place and get better results.

What level of cement-head does it take to let something like this happen? This board of dingbat managers couldn’t keep a lemonade stand in the black.

#113 conan on 07.12.18 at 11:31 am

Garth could you do a cat day? It’s for science.

#114 FOUR FINGERS WATSON on 07.12.18 at 11:59 am

#108 Howard
I didn’t get the impression that you were old enough to have grown up at a time when nobody knew about spaying and neutering. I certainly hope your cats are fixed. No shortage of homeless kittens.
…………………….

Jeepers ! What’s with you people ? Who spays and neuters their best friend ?!

#115 IHCTD9 on 07.12.18 at 12:36 pm

#108 Howard on 07.12.18 at 10:22 am

I didn’t get the impression that you were old enough to have grown up at a time when nobody knew about spaying and neutering. I certainly hope your cats are fixed. No shortage of homeless kittens.
________

Yep cat is fixed, but only because it is a Male and they like to mark their territory even if permanently in the house if you don’t take care of “Richard and the twins”.

We sure do have a lot of wild cats here – but everyone likes having them around as they take out a lot of pests like certain birds, mice, moles, voles, rats etc. In fact, I even leave food out there for them when the snow gets really deep and they are having trouble getting something to eat.

In our rural area in the early 80’s, few fixed or kept their dogs inside. Not anywhere near as many folks had a dog back then solely as a house pet, most had a job to do as well – usually hunting/security. I didn’t know a single kid who had a purebred. If a 1000.00 vet bill came up, it “never got paid”. We kept meat rabbits back then, and we had semi-regular problems with packs of loose/wild dogs tearing up the cages and eating them.

Different era – different attitudes.

#116 Steven Rowlandson on 07.12.18 at 12:38 pm

Dogs don’t worry about financial matters. If they are fed, sheltered and petted life for them is good. Probably an approach to life God would recommend for people.

Harry Dent is now calling out the excesses of real estate.

https://www.silverdoctors.com/headlines/world-news/harvard-trained-economist-the-sooner-the-bubble-crashes-the-better/

#117 IHCTD9 on 07.12.18 at 12:38 pm

#113 conan on 07.12.18 at 11:31 am
Garth could you do a cat day? It’s for science.
_________

I’m down for that.

For the sake of equality of course.

#118 Wrk.dover on 07.12.18 at 1:19 pm

103 LP on 07.12.18 at 9:08 am
#98 Wrk.dover on 07.12.18 at 8:09 am

The Almighty surely smiled on you that day and probably is still giving you lots of mulligans. Bless you!

——————————————-

The sequel to the story is I play the part of the Dolly, and my wife with the DBP plays me. 37 years of mulligan, so far!

Telling my saga this morning has opened up a lot of good memories in my daydreams today. What an era we had being dog and young man together. Before I followed current events…..

#119 problem reaction solution on 07.12.18 at 1:26 pm

TO crime wave looks fake

http://fakeologist.com/blog/2018/07/12/toronto-drill-time/

#120 the ryguy on 07.12.18 at 1:31 pm

Thanks for the kind words blog dogs :)

#121 Shawn Allen on 07.12.18 at 1:46 pm

Where Are the Debt Defaults?

Despite all those who have gorged on debt, mortgage delinquency rates remain very (record lows actually) low. Even credit card delinquency rates are low by historical standards.

Garth has often said, if I recall correctly, that the delinquency rate predicts nothing.

In part, the low delinquency rates are explained by what is a low national unemployment rate.

In part it is also explained by the fact that no one need ever default on a debt as long as lenders are eager to provide new debt to make payments on old debt. And, so far they remain pretty eager.

Many years ago, job loss meant immediate problems paying bills and loans. Now, one can often simply run up a pre-existing a line of credit and the bank may be none the wiser. Or, in desperation, one can run up a big credit card debt. And when faced with default versus high interest debt or even when faced with saying no to the kids’ wants, debt wins.

The next round of real credit tightening (if it occurs) will be unique in that it will be I think the first one that comes after a period of such almost universal access to easy credit. Years ago lenders doled out loans only after a humbling visit to the lender’s office, now so much credit is self serve – like an all-you-can-eat buffet. A period of higher unemployment combined with much tighter credit availability could lead to scary results.

#122 Fish on 07.12.18 at 1:59 pm

I’m a puma and a bird dog sounds about right for me

#123 jess on 07.12.18 at 2:08 pm

79 NEVER GIVE UP on 07.11.18 at 11:33 pm

“Nevis, a solitary volcano in the Caribbean with a population of just 11,000, which has been implicated in some of the most sordid financial scams of modern times, from Britain’s biggest-ever tax fraud to the fleecing of 620,000 vulnerable Americans in a $220m payday loan scam. The story of Nevis reveals the difficulties the world faces in trying to put an end to tax evasion, fraud and kleptocracy….

While Nevis’s rivals have lost business by opening up, Nevis has doubled down on secrecy.

https://www.theguardian.com/news/2018/jul/12/nevis-how-the-worlds-most-secretive-offshore-haven-refuses-to-clean-up?utm_source=esp&utm_medium=Email&utm_campaign=Business+Today&utm_term=280829&subid=280978&CMP=business_today

#124 crowdedelevatorfartz on 07.12.18 at 2:26 pm

@Trumpocalypse

“and then there’s the Putin meeting….”
++++++

Ah yes.
Trump meeting Putin.
Trump probably needs some fresh photographic reminders of who’s “the boss” if the rumours of FSB blackmail photos from Trumps frolicking forays at the Miss Universe contest held in Russia a decade or so ago have any validity……..

It would certainly explain his endless pandering to a dictator and the insulting and snubbing of NATO allies.

#125 jess on 07.12.18 at 2:44 pm

Britain’s biggest-ever tax fraud – for which five men were jailed in November, after attempting to scam the Treasury out of £107m in tax – involved Nevis-registered companies, which were helping to hide the identity of the fraudsters. The family of a former president of Taiwan used a Nevis trust to help to hide its ownership of corruptly acquired US property. Ukraine’s deposed president, Viktor Yanukovych, used Nevis structures to hide his stolen assets, as did corrupt Russian officials who stole $230m from the budget in 2007. (When the accountant Sergei Magnitsky uncovered the scam, they arrested him and left him to die in jail.) British trader Navinder Sarao, who pleaded guilty to fraud for helping cause 2010’s flash crash, diverted some of his profits to a Nevis structure called the NAV Sarao Milking Markets Fund.

========
“cum/ex,” a Latin phrase that means “with/without,”
BOTTOM LINE – German prosecutors are on the verge of indicting people at dozens of banks for deals that used short sales to claim multiple refunds of withholding taxes on dividends.

https://www.bloomberg.com/news/articles/2018-07-10/the-tax-dodge-that-cost-the-german-treasury-billions

#126 Slowly Boiling Frogs on 07.12.18 at 3:08 pm

#100 NoName on 07.12.18 at 8:42 am

Latest product list of new 10% tariff.
————————————————–
Interesting that there’s a few lines of Alaskan Pollock.

#127 The Real Mark on 07.12.18 at 3:26 pm

“#121 Shawn Allen on 07.12.18 at 1:46 pm
Where Are the Debt Defaults?”

I believe also, in addition to your theories (which I mostly agree with) that there is a concerted effort at the lenders to not classify defaults as defaults.

For instance, I’m familiar with one bank in Canada that basically sells off credit card loans that have defaulted to collection agencies at steep discounts, rather than formally recognizing defaults on such. Certainly there are many more instances of jerrymandering of statistics through such business practices that could be identified in the economy. Securitization practices for mortgages may also hide defaults on bank balance sheets as losses in the MBS trusts may not be reportable in the same manner as a default on a directly on-balance-sheet mortgage.

Even the definition of ‘default’ is quite flexible. There was a time when missing a single payment was considered a default. These days, the definition appears to be far more flexible with borrowers able to “skip” a number of payments before any ‘default’ covenants are triggered at the bank’s option. So numbers may not be directly comparable to those of the past.

#128 Lost...but not leased on 07.12.18 at 3:40 pm

#84 Spectacle

I recall the first wave of Hong Kong buyers in the 1980’s and 1990’s….a lot of olde school builders did very well. Post 1997, the market went a bit sideways, and a lot of spec builders were hit hard.

Nowadays, everybody and their dog seems to be out building SFH…not one neighbourhood in Metro Vancouver doesn’t have some(or several) over the top McMansions.

Many of the current builders that are dependent on the status quo will be hit hard…demand will ultimately collapse. Example: In 2000, a house was being constructed next to a relatives home. The framers were a father- and- son team..who were being paid $10/hour.

Like all RE cycles….there will be a purge of builders,…till the “next” cycle. However,this “latest” and somewhat unprecedented cycle may result in a long term dead zone for new RE.

#129 Lost...but not leased on 07.12.18 at 4:00 pm

#111 crowdedelevatorfartz

Re market is getting VERY interesting.
SOLDS signs are getting very rare….even on strata.

I’ve seen those tear one SFH down =build 2, completed…and UNsold for weeks.

In Richmond, one developer sat on a parcel for a few years, has just commenced construction, and has a sign advertising “80% SOLD”.

My guess is they couldn’t sell the remaining 20% after a few years of trying, and either chose or obligated to commence construction. Bottom line is…their profit margin may be wrapped up within the 20% that hasn’t sold.

Hi Rises?
….. my prediction is this class of developer cabal is in meetings wondering WHAT TO DO?…aka is any cabal member about to blink?….given each hi rise has 100+ units…and if say one major player cancels s ay a 40 storey hi rise in downtown Vancouver…that will resonate within Canada and internationally. What’s left of the potential buyer pool are likely fickle greater fool FOMOS etc.

#130 Dave on 07.12.18 at 4:07 pm

My Boy:
https://www.instagram.com/p/Bb-XcOKH_CF/?taken-by=dmcgrathphoto

#131 Chris on 07.12.18 at 4:14 pm

What kind of Dog is Bandit?
such a beautiful dog

Chow. A rescue ten years ago. – Garth

#132 Howard on 07.12.18 at 4:20 pm

#114 FOUR FINGERS WATSON on 07.12.18 at 11:59 am
#108 Howard
I didn’t get the impression that you were old enough to have grown up at a time when nobody knew about spaying and neutering. I certainly hope your cats are fixed. No shortage of homeless kittens.
…………………….

Jeepers ! What’s with you people ? Who spays and neuters their best friend ?!

———————————————

Someone who doesn’t want to see more homeless “best friends” created.

#133 Shawn Allen on 07.12.18 at 4:53 pm

Bandit…

“Chow. A rescue ten years ago. – Garth”

Some of us have been reading this blog and the prior political blog long enough to remember when Bandit first came into possession of Garth.

#134 Tony on 07.12.18 at 5:09 pm

Re: #116 Steven Rowlandson on 07.12.18 at 12:38 pm

Harry was spot on about Germany and their low birth rate.

#135 Fish on 07.12.18 at 5:20 pm

Known fact retriever dog brings the game to you

#136 Newcomer on 07.12.18 at 6:01 pm

#95 Howard on 07.12.18 at 7:07 am

I don’t know when you lived in Paris but finding an apartment here these days (I live in the 17th arrondissement), while not quite to the level of a nightmare, is stressful to say the least.
———–

I was actually in Paris at a super-easy time, ’94 to ’99, when people had recently had a property market spanking. While not rich by any stretch, I was also looking for a bit over average prices, which does indeed make things even easier. Had a nice place in the 9th, not far from the border with the 17th, for not much more than 1K CAD.

#137 Steven Rowlandson on 07.12.18 at 9:50 pm

Tony, Harry is right about more than just Germany. The problem of extreme home prices and low birth rates plagues Europe and north america and it can not be sanitized with BS about free markets and capitalism.
Today a Barrie are real estate agent sent me a message advertising a million dollar lake side property by e mail.
I don’t think my previous critiques of the real estate market is too extreme. If anything I might be too polite and merciful.

“The Fournier Experience
Rich Fournier
Sales Representative
705-305-4206
[email protected]  
Our mailing address is:
152 Bayfield St
Barrie, Ontario 
THIS IS A COURTESY EMAIL TO ANNOUNCE A ONE OF A KIND VACANT LOT ON THE WATERFRONT IN INNISFIL, ON

COMING SOON. 
100 FT OF WATER FRONTAGE
EXCLUSIVE AREA
SANDY BEACH
PRIVATE ROAD
The lot will be aprox priced at $999,999. 

This property has never been offered for sale before. Property has  been owned by one family for 125 years

If you are interested and have the financial capacity to entertain this amazing offering please email me back for an exclusive showing before it hits the market. 
Rich Fournier”

Reply: Are you and your client out of your minds?  Do you think me and other Canadians are made of money or something?