The disconnect

Market odds are 80% that US rates will rise again next month. And 60% for yet another hike before Christmas. On Wednesday American 10-year Treasuries (government bonds) hit that 3% yield, while Government of Canada 5-year bonds (the ones that dictate mortgage rates) also surged higher.

Hmm. This came amid news Trump is ready to raise a proposed tariff on Chinese imports from 10% to (gulp) 25%, and at the same time is trying to officially shut down the Russia/Mueller probe. Big political battle there. Oh, and the world’s most profitable company is shooting for $1 trillion in market capitalization. No outfit in history has done that.

Did I mention the latest employment stats? No? Well, the ADP number in the States just blew past estimates. The next piece of news is Friday morning when Washington unveils unemployment numbers. They’re expected to be awesome.

Last Friday we heard the American economy is growing at 4.2%. Yuge. This week came the Canadian stats – the best in years. Year/year it was 2.6% and half a per cent in May alone (that’s a 6% annualized number). Inflation in Canada is now 2.5% which means almost everyone with a GIC is losing money.

So, in conclusion: we’ve moved from a low-rate, low-inflation, low-yield, low-profit, kinda-deflationary, turtleneck, Obama world into Trump Times. Crimson ties, orange hair, rednecks, big boasts, décolletage, jingoism, high-growth, fat profits, job-rich, expansionary excess. The GDP, cost of living & borrowing, employment and wealth gap are all swelling.

But, but… there’s a disconnect. It’s housing. Everywhere, almost.

While money is sucked into surging equity markets and rising bond yields, it’s flowing out of real property.

In the States home-buying intentions have dropped the most in two years. Existing home sales have slowed dramatically in 2018 and new home transactions along with them. Despite the fact millions more people are working than a few years ago, mortgage rates have risen a helluva lot faster than incomes, while house prices have jumped. Housing demand dropped 9.6% in June.

Sound familiar?

This is exactly the situation that’s felled detached house values in Vancouver and Toronto. But it doesn’t stop there. A combination of tougher borrowing standards and real estate prices that bear little relation to what people can actually afford has led to a global property thumping. In the UK (and especially London) values are a fifth to a third lower over the last few years – partly because of the uncertainties of Brexit (Britain’s version of Trump protectionism), according to Bloomberg.

Sales and prices are falling Australia’s major markets, where people have been even more delusional than in Canada, as regulators there (like here) finally freaked out over lax lending standards and elephantine household debt. Likewise, transactions in New York City have faded 17% and inventory risen more than 11% as prices are trimmed. In Beijing also, officials have moved to curtail borrowing and buying, pushing sales to a record low. In Toronto, the latest realtor stats show detached are down and condos are up after one of the slowest selling seasons in memory.

Why’s this happening at a time when financial assets boom?

Blame human nature. Following the 2008 financial route, stocks looked scary, rates dropped and the world felt dangerous. People nested. They choked down cheap debt, pushed house prices higher, created a bubble then told each other this was normal and real estate would rise forever – buy now or buy never. House lust combined with FOMO was too powerful. Prices roared to a peak. And, yes. There’s always a peak.

Now, on the other side, real estate values and the debt they engendered are a threat, not an opportunity. Buyers are cautious, skeptical. No longer delirious, frenzied. And while the appeal of real estate is eternal, it’s no longer the purpose of being alive. Meanwhile last year a balanced and diversified portfolio delivered more than 10% while real estate lost money.

Moreover, the costs of home ownership are epic – land transfer charges and legal fees to buy, big commission to sell, hefty insurance bills plus property taxes and rising mortgage rates in between. Compare that to the weensy cost of maintaining a financial portfolio. So, if real estate values are not romping higher, this is just really, really, really expensive shelter.

The tide has turned. Big news for those born after 1990. Something else to moan about.

139 comments ↓

#1 Honey Dripper on 08.01.18 at 5:21 pm

In spite of the moaning those mills still think you need to buy a house to get ahead in life. They know nothing about and don’t care about investing. Please write a new book!

#2 Dave on 08.01.18 at 5:28 pm

The disconnect between house pricing and affordability stop making sense many years ago. Yet monumental increases still occurred year over year.
Normal needs to come into play or people will continue to vote anti establishment. Its the only card the average person has when looking to buy a home and seeing $1.8M crack shack.
Perhaps a 50% correction in the most extreme markets needs to happen or else

#3 islander on 08.01.18 at 5:35 pm

“Fed up with traffic, contractors refuse to work in Vancouver”
https://www.theglobeandmail.com/real-estate/vancouver/article-fed-up-with-traffic-contractors-refuse-to-work-in-vancouver/

So enjoy your 3.5 million YVR ‘teardown’ when trades aren’t interested in giving you a helping hand!

“increasingly, homeowners are facing the high cost of renovation and maintenance as tradespeople either opt out of working in the city entirely, or charge extra for having to go there.”

“A big reason for the premium cost of hiring the trades is the city’s traffic, contractors say. Vancouver traffic is so congested, and so time-consuming, it makes working there a losing proposition. Considering that a lot of tradespeople live outside the city, it means the options are fewer.”

Or maybe it’s that wealth effect factor – we gotta bunch of paper millionaires here – let’s make them cough up!

#4 Howard on 08.01.18 at 5:36 pm

#109 Leo Trollstoy on 08.01.18 at 1:34 pm
Looks like a steal in West vancouver

http://dailyhive.com/vancouver/vancouver-west-end-micro-unit-rental-2018

——————————————-

$2100/month rent for an unfurnished 250 sq ft bachelor!!

FFS that’s significantly more expensive than PARIS!

In Paris, small 250sf studios (as they’re called here) are common. But the going rate for a decent FURNISHED unit at 250sf of similar quality to the Vancouver apartment featured above would be the equivalent of around $1400-1500 CAD. And that’s for a fairly central location. For an unfurnished unit or in areas further out or somewhat gritty, you can find one for around $1200 CAD. You can find even cheaper than that though at that point you’d be looking in old, poorly-insulated buildings surrounded by social housing.

So yeah, comparing like-for-like, that Vancouver bachelor unit is a good 30-50% more expensive than equivalent apartments in one of the premier Alpha cities in the world. Ridiculous.

#5 tccontrarian on 08.01.18 at 5:42 pm

“The next piece of news is Friday morning when Washington unveils unemployment numbers. They’re expected to be awesome.” GT
———————————-

And, after a quick surge in stocks that lasts a couple hours, prices will slump and close lower for the day.
This is what happens when bull markets are lose steam and transition into bears.
Let’s see if I’m right!

TCC

#6 Fidelity on 08.01.18 at 5:42 pm

No mer’s . Wow . Take that vanguard

This industry just keeps changing . Love it!

#7 Andrewski on 08.01.18 at 5:43 pm

Interesting new Angus Reid study released today speaks volumes to the attitudes between the haves & the have nots:

http://angusreid.org/poverty-in-canada-part-2/

#8 jess on 08.01.18 at 5:55 pm

hope these medical doctors nurses and el don’t come up here to practice medicine!

“Thursday, July 5, 2018
National Health Care Fraud Takedown Results in Charges Against 601 Individuals Responsible for Over $2 Billion in Fraud Losses
Two South Dakota Prosecutions Part of Largest Health Care Fraud Enforcement Action in Department of Justice History

Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing more than 13 million illegal dosages of opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in the arrests. In addition, HHS announced that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.

Monday, July 16, 2018
Two Additional Southern California Surgeons Indicted in Health Care Kickback Scheme

LOS ANGELES – Two local physicians were indicted by a federal Grand Jury Thursday as part of Operation “Spinal Cap,” which targeted a long-running health care fraud scheme that generated nearly $1 billion in fraudulent claims to the federal government, the state of California, and private insurers. The scheme involved more than $40 million in illegal kickbacks paid to doctors and other medical professionals in exchange for referring thousands of patients who received surgeries and other services at Pacific Hospital.

Jacob Tauber, 66, of Beverly Hills, an orthopedic surgeon, and Serge Obukhoff, 62, of Malibu, a neurosurgeon, were charged for their roles in receiving illegal kickbacks to influence the referral of patients to Pacific Hospital. The indictment also includes honest services fraud and Travel Act charges against both Tauber and Obukhoff.

“These two physicians leveraged vulnerable patients to participate in a fraudulent kickback scheme,” said First Assistant United States Attorney Tracy Wilkison. “Their scheme violated their oaths as physicians as well as the law.”

According to the indictment, Tauber performed non-spinal surgeries and referred patients to other surgeons for procedures at Pacific Hospital of Long Beach. Obukhoff practiced out of various medical clinics in Southern California. Influenced by the promise of kickbacks and bribes, Tauber and Obukhoff caused patients with insurance or other covered claims to receive surgeries and services at Pacific Hospital.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

https://www.justice.gov/usao-sd/pr/national-health-care-fraud-takedown-results-charges-against-601-individuals-responsible

#9 MSM-Free Zone on 08.01.18 at 5:55 pm

“…..So, in conclusion: we’ve moved from a low-rate, low-inflation, low-yield, low-profit, kinda-deflationary, turtleneck, Obama world into Trump Times……”
_____________________________________-_

President Flash Cards? Seriously?

America blew it’s financial brains out after 8 years (2001-2009) of de-regulatory Bush/Republican rule.

It took 8 years of Obama/Democrat rule (2009-2017, ending just over a year ago), for America to recover yugely, witnessing one of the longest stock bull markets in history.

Cadet Bone Spurs has been Commander in Cheese for just over half a term and you give this thin-skinned, illiterate, insecure, serial-lying, draft-dodging, treasonous , twitter-tantrum whack-job credit for a recovered America?

Last time I checked, the common consensus is this unstable, tarriff-happy, aspartame-addicted lunatic is on the verge of spinning America back into a recession.

#10 Ex-Cowtown on 08.01.18 at 5:58 pm

“Trump…is trying to officially shut down the Russia/Mueller probe.” – Garth

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

Um… er…. actually he’s doing no such thing. If Trump wanted to shut it down he could do so with a phone call. They have this thing called the Constitution that gives him the absolute, undisputed right to do so. The Democrats are praying that he does it, but Trump knows that Mueller is full of crap, so he just blusters and yips enough to keep it in the headlines while Mueller hangs himself.

Meanwhile, the judge in the Manafort trial just told Mueller’s henchmen to stop dicking around and quit complaining about what kind of shoes Manafort wears.

Oh, and can I also mention that Mueller is probably not going to put his “Star” witness on the stand against Manafort? Why? Because he’s a proven liar.

And it gets better: Rosenstein absolved Manafort on the same charges 8 years ago. He’ll be called as a witness explaining why eight years ago Manafort was innocent, but now, because of his association with Trump, he’s not. Popcorn Time.

And so the case against Manafort implodes, slowly at first, then all at once. Kind of like GTA and YVR real estate.

Careful Garth, your TDS is showing (Trump Derangement Syndrome).

Actually, he Tweeted it. – Garth

#11 The Boulder on 08.01.18 at 6:00 pm

Global economies are inter conntected, not only by trade, but the news are shared instantly, and so the market sentiments. Good thing is BoC is accelerating rates on a mild pace, giving lot of time to invostors to off load investment properties with minimal loss. Stress test and foreign buyer tax have also shielded from a sudden drop.
Imagine how much the bubble would have inflated in 2017 without these measures.
Recent events debunked the myth that real estate always go up, next is to see how much a slow housing market impacts the overall economy.

#12 FATLADY on 08.01.18 at 6:01 pm

Housing prices in the GTA are on a temporary decline.

They will soo rise and make higher highs than ever before.

Where do you think all those refugees that trump kicks out and Trudeau pampers is gonna live??

#13 Cliff Dunlop on 08.01.18 at 6:03 pm

You know Garth, when you throw around “gains” of 10% or more, you must be including the value the stock appreciated as well. Since this means nothing until you sell that stock and put the cash in your pocket, what is the “real gain” of a balanced portfolio? ie. the money being returned to you in interest, dividends etc. not the share price increase??

Returns are returns. If a portfolio is worth 7% more at the end of a year, it’s a 7% return. – Garth

#14 Dolce Vita on 08.01.18 at 6:17 pm

“The tide has turned.”

Negative RE wealth effect. More saving, less borrowing, less spending. HELOC amounts decrease as RE assets decrease, less spending.

Less borrowing already started:

-BoC Residential Mortgage Credit growth in the past Month, 50% of the past Year number. Growth in the last Quarter, 70% of past Year number.
-BoC Consumer Credit growth about the same.
-Both slowing down as if someone has put the brakes on.

Will lead to less Consumer Spending; however, Canadians saving more and lowering their debt “snorfling” is better for them in the long term.

Better as they will have more cash to invest (the market) and defer/dodge the tax man (RRSP, TFSA), weather storms such as job loss or recessions (and be able to bitch about debt “snorflers” with a relatively clean conscience).

In the short term, not so good for the economy and RE prices.

I like the long term benefits the best.

#15 Tony on 08.01.18 at 6:17 pm

DELETED

#16 akashic record on 08.01.18 at 6:22 pm

Same as it was yesterday, the day before yesterday and for the rest of the week.

Anyway, here is the joke of the day:

“You spoke to every living secretary of state for your research. What were some of the concerns they raised about the state of the State Department under President Trump?

Many of them have grave concerns, and Colin Powell was incredibly uncensored here, saying the Trump administration has ripped the guts out of American diplomacy.”

The hilarious line wasn’t delivered by a humorless comedian, but by “Ronan Farrow [who] addresses those concerns in his new book War on Peace: The End of Diplomacy and the Decline of American Influence. He worked in the State Department during the Obama era, but is better known for his work in exposing sexual assault allegations against Harvey Weinstein. Those stories won him a Pulitzer Prize, and were among the catalysts for the #MeToo movement.

No, it’s not from a stand-up comedy show, it’s from CBC radio flagship political program, The Current.

#17 Investx on 08.01.18 at 6:24 pm

“Well, the ADP number in the States just blew past estimates.”

Of course they did. Haven’t you heard, everybody has TWO JOBS.

Lol

#18 Tony on 08.01.18 at 6:29 pm

Re: #5 tccontrarian on 08.01.18 at 5:42 pm

When the 10 year treasury yield is pushing 3 percent and the DXY dollar index is pushing the 95 mark the unemployment report always comes out bad not good. I’ll be loading up on gold (physical) on Thursday and maybe utilities hedged to market or TLT.

1) They have to get the 10 year below the 3 percent mark
2) They have to get the DXY dollar indexes below the 95 mark.

Both are achieved by coming out with low job figures or numbers in America this Friday.

#19 MF on 08.01.18 at 6:31 pm

#1 Honey Dripper on 08.01.18 at 5:21 pm

Over the past 10 years, we have seen friends who bought and sold houses make more profit in 6 months than the average portfolio makes in 5 years.

More profit in 6 months than our yearly contract/temp salary could pay 20x times over.

We have seen house prices march to nosebleed levels year/year in far excess than the savings we could ever manage from living frugally and sacrificing.

We have seen acquaintances, family members and friends who work in real estate, insurance or finance make a killing.

The whole time our central banks ignored any concerns and kept their brain dead low rate policy far longer than needed, and then at the 11th hour our provincial governments diddled and made things worse.

Even now whether interest rates will “normalize” is doubtful and looks to be all for show.

We’ve seen Gen X and boomers retire off of the selling of their homes and pat themselves on the back for price increases that were 100% artificial, forced, and required zero skill on their part.

Of course a lot of Millennials don’t know how to invest and still see RE as a money maker. If you want to see why, just look in the mirror.

MF

#20 saskatoon on 08.01.18 at 6:32 pm

you can sugar-coat it all you want, garth…

but the fed would have raised today if the economy was as strong as you say.

Expectations for a rate hike today were 0%. One or two more will occur in 2018. Seven have already taken place. – Garth

#21 Old gringo on 08.01.18 at 6:33 pm

Watching house prices drop in Kanukistan, is like “death by a thousand cuts”, slow but effective!
RIP

#22 Dolce Vita on 08.01.18 at 6:36 pm

#12 FATLADY

Very few of the “asylum” seekers to Canada (kicked out by Trump) are accepted (e.g., only 8% of recent Haitian “asylum” seekers accepted as legitimate, the rest bogus and to be “removed” in Cdn. Gov. parlance).

Probable next group of “asylum” seekers to Canada: Salvadorans. It is expected that 200,000 will not be receiving renewed temporary protected status by Trump (like the Haitians).

Trudeau talks a good “Give me your tired, your poor, Your huddled masses yearning to breathe free…” story.

But his deeds and actions speak louder than his words.

Thus, do not expect “all those refugees that trump kicks out and Trudeau pampers is gonna live??”

Answer: a 92% probability that it will not be Canada.

#23 young & foolish on 08.01.18 at 6:37 pm

” … what is the “real gain” of a balanced portfolio? ie. the money being returned to you in interest, dividends etc. not the share price increase?? ”

This is a good point. You need cash flow, not valuations that can turn down over an Orange tweet. Predictability of income is the reason people have invested in RE over the years. Having said that, I admit that at today’s valuations, getting a solid passive cash flow is a challenge.

That made no sense. People’s houses have no predictability of income. In fact, no income. – Garth

#24 SoggyShorts on 08.01.18 at 6:41 pm

#129 Newcomer on 08.01.18 at 5:24 pm
#114 IHCTD9 on 08.01.18 at 2:56 pm

Newcomer: you should go back and read those posts again.

The concept was pretty simple:
1. Sellers (of anything) charge the most that they can get away with as IHCTD9 said “prices are always as high as possible”
2. the top 10% of RE buyers in TO (including move-up-bank of mom etc) can and are paying 900K+.

Both 1&2 can be true, they don’t contradict each other at all.

#25 Danny on 08.01.18 at 6:45 pm

“Trump is trying to officially shut down the Russia/Mueller probe”

Not surprisingly….as the evidence is mounting that some of his family may be going to jail.
Remember when a mafia family……sees their family members coming close to danger…they strike out quickly and wide range….as mad people out of control.

So too…in America. Trump is running scarred.
If you don’t believe it ….it’s because Trump has a spell on you….you tribal sheep.

And now neighborhood thug Doug Ford….is setting up a Ontario Government radio station…..Doug gives little and then takes away more ……”If your listening ”

Guess setting up a smaller Toronto City Council to be controlled by big developers isn’t enough!

I’ll tune into Garth’s presentations…..at least there are sound facts there to honestly consider. See there are alternatives to a world run by thugs in Queens Park and Washington.

Carry on Garth…..but look out Ford and friends…..they will be trying to contradict you…..especially when the Real Estate Board has a few more lunches with Ford and who knows what lurks in the dark shadows of greed by land value…or as you call it “dirt”.

Actually nothing new the Royalty and Foreign Empires came here for dirt and made the blood flow many moons ago.

#26 -=jwk=- on 08.01.18 at 6:46 pm

If Trump wanted to shut it down he could do so with a phone call. They have this thing called the Constitution that gives him the absolute, undisputed right to do so.

No he can’t. What nut job right wing conspiracy theory site did you read that on? He can fire the AG. That’s his only recourse. Keep firing them until he gets one that will do what he wants. And he has already fired Sally Yates because she didn’t do what he wanted. Ditto Comey at the FBI. But ordering a Justice department investigation shut down? No can do. Not in the constitution. P.S. you should read the Mueller indictments of the Russian hackers. Wow, they tilted the playing field MASSIVELY in favor of Trump. He must know that now, pretty sure Putin would have mentioned it :)

#27 IHCTD9 on 08.01.18 at 6:53 pm

#128 TheDood on 08.01.18 at 4:55 pm

900K at 3.5% is WAY too much for 95% of the population of Canada, which is why I think you’re probably wrong. RE is local, so whatever the locals can afford will determine price.
—————————————————————-

I’d love to be wrong, trust me.

But 900k at 3.5% is a 4500.00 monthly payment.

Is that totally unaffordable for the local GTA dual income white collar professionals?

I think we need 6.0 in the face of severe house lust to start making these Toronto folks think twice.

#28 IM in C on 08.01.18 at 6:59 pm

Listings in Calgary going up, but prices holding steady. Not surprising. The few power of sales, the bank can’t/won’t take a financial hit. People who want to sell can simply hold on, only takes about 10 K a year to properly vacate a house

#29 Long-Time Lurker on 08.01.18 at 7:19 pm

#79 TFS on 08.01.18 at 12:11 am
Hi Garth

What is your view on appointing a Corporate executor in a will?

Our current executor is moving to UK and I don’t think it’s practical for her to continue in the role. We are still young (50 something) but want to deal with this sooner rather than later.

Net worth currently around $5mil so fees not insignificant but should be a lot cleaner appointing a proffesional firm?

>Garth wrote a blog post about this months ago if you care to look. You have the right idea.

#30 akashic record on 08.01.18 at 7:19 pm

#19 -=jwk=-

No he can’t. What nut job right wing conspiracy theory site did you read that on? He can fire the AG. That’s his only recourse. Keep firing them until he gets one that will do what he wants. But ordering a Justice department investigation shut down? No can do. Not in the constitution.

But you can do what AG Loretta Lynch and former President Bill Clinton did at the Phoenix Airport tarmac in the letters and the spirit of the constitution.

President Obama didn’t even need to lift a finger – yet none of the 3 letter agencies, including DOJ managed to put their investigative hands on the allegedly hacked Hillary and DNC servers, the alleged proofs of hacking American election by the Russian.

Now Mueller has to frighten Manafort on completely unrelated charges, hoping that he flips and provides some shred of evidence that this investigation could not find.

Funny that Muller never cared to ask for the hacked servers in his quest to catch the Russian election hacking.

#31 Dolce Vita on 08.01.18 at 7:21 pm

“Actually, he Tweeted it. – Garth” in response to #10 Ex-Cowtown.

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

Honest to God Garth. You were probably a devout National Enquirer reader at some point.

@realDonaldTrump ‏is nothing more than Donald bitching about work and the people that piss him off at work, things about his family, threatening to nuke N. Korea and then kiss and make up with them a month later, etc. This is where Donald believes he is a normal Joe tweeting mostly about work and his take on it – designed to be pure theater (make his base happy, and drives all the Lefty’s nuts).

Worry when you read it in @WhiteHouse.

@POTUS is Donald being more Presidential, posts on his MAGA successes and the odd family post; although, occasionally something from @realDonaldTrump worms its way in there, much to the consternation I would expect of the @POTUS Communications writers that are telling him: No Donald, No…but alas, he is their boss.

Not even the National Enquirer can hold a candle to all the great and juicy BS/gossip he comes up with in @realDonaldTrump, hands down the winner.

Why I follow all 3:

@realDonaldTrump = Entertainment plus reading about what the next Lefty or TDS meltdown will be about.
@POTUS = Self-congratulatory MAGA.
@WhiteHouse = Be very, very worried when their tweets say Trump will definitely rain thunder and brimstone down upon somebody and/or something.

#32 IHCTD9 on 08.01.18 at 7:25 pm

#129 Newcomer on 08.01.18 at 5:24 pm
#114 IHCTD9 on 08.01.18 at 2:56 pm
———–
What you said was, “It boils down to what folks can pay. What can the top 10% of RE buyers scrape (borrow, beg and steal) together to buy a house? That’s your new home price support right there.”

That is miles away from, “If all a seller can get for a potato is $0.01, that then is the highest price possible.”

I’m glad you are back peddling, but I think you have a way to go. In the first instance, you claim that prices are set by people who will always be willing to overextend themselves and suffer hardship to buy the most expensive thing they can. In the second instance, you admit that prices are set by buyers. But you go on to imagine a scenario in which, “[The potato seller] knows the potato market is hot, and that all the potatoes will be gone at the end of the day regardless if you buy one or not.” Did you stop to consider what happens when the market is not hot and there is a big pile of high-prices potatoes left at the end of the day?

A short internship in the potato business would probably teach you a lot about markets.
https://www.potatopro.com/topics/potato-prices
—————-

My spidey sense tells me you’re having a bad day, your panties are in a bunch, and you’re just being argumentative, but; I will take one more shot at it keeping things real basic:

I assert that the market price of pretty much everything is always at the maximum price that the market will bear.

Do you disagree?

Yes, I also assert that the market (buyers) determines the price of pretty much everything.

Do you disagree?

If you disagree with either, please do so plainly with as few words as possible.

These aren’t exactly rogue ideas…

#33 Ex-Cowtown on 08.01.18 at 7:25 pm

Careful Garth, your TDS is showing (Trump Derangement Syndrome).

Actually, he Tweeted it. – Garth
+++++++++++++++++++++++++++++++++

Actually, No he didn’t…… Nowhere in Trump’s Tweet has he said anything that is other than an opinion. He did not say “Today I ordered Sessions to shut Mueller down” or anything remotely close. He has an opinion just like 7.2 billion other people. So what???

But I guess in today’s world, merely having an opinion is a crime. Sad… very sad…

Here’s the Tweet:

Donald J. Trump

Verified account

@realDonaldTrump
10h10 hours ago
More
..This is a terrible situation and Attorney General Jeff Sessions should stop this Rigged Witch Hunt right now, before it continues to stain our country any further. Bob Mueller is totally conflicted, and his 17 Angry Democrats that are doing his dirty work are a disgrace to USA!

When the POTUS says something should happen, it’s more than an opinion. Stop defending the indefensible. Embarrassing toadyism. – Garth

#34 Bonhomme Carnaval on 08.01.18 at 7:26 pm

#12 FATLADY on 08.01.18 at 6:01 pm

Coming to Montreal, QC. Better social programs. Haitians, and Syrians, for example, are fluent in French.

For the price of a 1 bedroom condo in T.O., you can grab a 4 bedroom cottage in ‘ Le ‘ West Island (Pointe-Claire, Kirkland or Beaconsfield).

Toronto and Vancouver have lots to offer, both wonderful cities in my book. However, they’re not the center of the universe. Oh, and, not everybody wants to move there…

#35 The Real Mark on 08.01.18 at 7:31 pm

“Is that totally unaffordable for the local GTA dual income white collar professionals?”

This isn’t the group that I’d expect to be pushed over the edge. Its the “landlord families” who have bought the 20-30 units heavily on credit. Its the Millennials with the $60k-$80k incomes that cleaned out their folks’ retirement savings for a downpayment that are vulnerable. Its the elderly who have been HELOC’ing or reverse mortgaging their property to cover their lifestyle that are highly vulnerable.

Personally I don’t see the continued stagnation and falling of Canadian RE prices to be a widespread problem of foreclosure. I do, however, see its as massive problem of lost opportunity. Those dual income professionals may very well find themselves making that payment for the next decade or two, accumulating little to no equity in the process, while their counterparts absolutely clean up in what will probably eventually turn into some sort of bubble in another asset class. So while they can’t point to a personal loss, they will have enormous costs in terms of lost opportunity.

#36 The Real Mark on 08.01.18 at 7:35 pm

“#3 islander on 08.01.18 at 5:35 pm
“Fed up with traffic, contractors refuse to work in Vancouver””

Sounds like fake news. But considering how much that particular newspaper has been pumping RE over the years, it doesn’t exactly surprise me. A lot of Canadian news media has basically lost complete credibility when it comes to covering RE as the RE sell side is basically one of the only major advertisers left.

#28 IM in C on 08.01.18 at 6:59 pm
Listings in Calgary going up, but prices holding steady.

While the industry obviously wants to foment that perception, its not too hard to find pricing beneath the 2011 peak.

#37 prairie person on 08.01.18 at 7:36 pm

Garth, things are crazy here in Manitoba, at least in the lake side town where I currently am staying. This has always been an area of small houses suitable for fishermen, farmers, laborers, summer cottagers from the lower middle class. This time when I turned up there were new houses, lots of them, and they are big. Houses like t he area has not seen in the past. I asked and the reply was city folk moving out to the country when they retire. Maybe. I will have to check. However, these are not the same people with the same kind of money as in the past. Price seems to be no object.

What town? – Garth

#38 BooBooBear on 08.01.18 at 7:46 pm

While wandering around my neighbourhood of Fairview (btwn Oak & Cambie) in Vanc. over the past wknd I counted eight (8!) open houses over a 12 block radius. I remember a couple of years ago walking past open houses it would be a beehive of activity, couples coming and going, no street parking etc.

This year….*crickets*….just sad looking realtors standing alone on front porches. I was kind of surprised at just HOW quiet it was. Walked the same route home a couple of hours later, and still, no action whatsoever. Pretty grim considering it was a warm, sunny Sat afternoon.

#39 FATLADY on 08.01.18 at 7:52 pm

#22 Dolce Vita

You been to the GTA lately.

They’ve been piling in for decades.

The next big wave of them is coming.

Windsor, Ontario’s 2nd language is Arabic.

https://www.google.ca/amp/s/windsorstar.com/news/local-news/census-shows-arabic-second-biggest-language-in-windsor-area/amp

#40 baloney Sandwitch on 08.01.18 at 7:58 pm

Just for fun reently I did some back of the envelope calculations – if my parents had invested the money they spent on me for college (1977 – 82) and put it McDonald stock – it would be worth 5 million (with dividend reinvested) and giving off a dividend $50 K per year stream in perpetuity. Instead they helped put me through pharmacy school and got only attitude and perhaps some intangible rewards. God bless their souls.

#41 Stan Brooks on 08.01.18 at 8:07 pm

#12 FATLADY on 08.01.18 at 6:01 pm
Housing prices in the GTA are on a temporary decline.

They will soo rise and make higher highs than ever before.

Where do you think all those refugees that trump kicks out and Trudeau pampers is gonna live?

Let me guess, they will live in $ 2 million corn-flake shacks or $ 1 million glass shoe boxes?

That was hilarious.

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

#27 IHCTD9

Smart people will not come to GTA,
These already here will move out once they realize their kids have no future/and jobs here.

Where? Out. Europe, US.
Rural Canada is not much better due to lack of jobs.

When there are no sufficiently paying jobs that allow you to sustain yourself it is not much different in the big cities.

How much is needed for a family of 4 to live in GTA?
In my mind at least 160 k gross. Next year it will be 175 k , then 190 k. (don’t forget these steep tax brackets…) You will try to cut on spending, eat crap but wages will not increase with inflation.
Zero chance for that.

======

#24 SoggyShorts on 08.01.18 at 6:41 pm
#129 Newcomer on 08.01.18 at 5:24 pm
#114 IHCTD9 on 08.01.18 at 2:56 pm

Newcomer: you should go back and read those posts again.

The concept was pretty simple:
1. Sellers (of anything) charge the most that they can get away with as IHCTD9 said “prices are always as high as possible”
2. the top 10% of RE buyers in TO (including move-up-bank of mom etc) can and are paying 900K+.

Both 1&2 can be true, they don’t contradict each other at all.

And who will buy the remaining 90 %?

Let’s wait until inflation forces baby boomers into selling their precious houses as they won’t be able to support themselves financially.

And the newcomers stop coming due to idiotic cost of living. This is not Norway or Germany. Period. This is Canada.

So IMHO we are facing a 30 years + decline in nominal prices of RE in GTA and Vancouver accompanied by significant inflation and de-facto economic depression.
We are not Japan who suffered horrendous decline of their real estate (since 1989 actually, 30 years and counting….) but they were huge net exporters at times with no economic barriers and tariffs and had no public debt in the beginning ….

We are absolutely facing a wall and keep accelerating.
It will be a monumental, spectacular crash that will destroy life of generations.

Why do you think capital is flowing out of Canada at accelerating speed? What will attract it here, Poloz’s 1.25 % with real inflation 8-10 % and ever increasing barriers and taxes for the Businesses?

If this is combined with another liberal term this place will literally disintegrate at rather fast pace/collapse. Otherwise there is a chance of implosion (around 5 % but still a chance… and as this sheeple is dumb there is still some hope for a controlled (in the elite’s delirious minds) decline…)

#42 -=jwk=- on 08.01.18 at 8:25 pm

@#30Now Mueller has to frighten Manafort on completely unrelated charges, hoping that he flips and provides some shred of evidence that this investigation could not find.

Funny that Muller never cared to ask for the hacked servers in his quest to catch the Russian election hacking.

OMG. Really? You can’t read 29 pages of text that lays out all the info they have on the Russian hacks? They have overwhelming, irrefutable evidence. It’s insane how much they have. how detailed the accusations are. Dates. Times. Tools used. Finances. Paths taken. Everything. All there….

I mean it’s one thing to us Alternative Facts to fill a vaccum when there is nothing else available but the Indictments are public. You don’t have to theorize about what Mueller is doing. You can just read it. It’s right here:

https://www.justice.gov/file/1080281/download

#43 the Jaguar on 08.01.18 at 8:30 pm

” Crimson ties, orange hair, rednecks, big boasts, décolletage, jingoism, high-growth, fat profits, job-rich, expansionary excess. The GDP, cost of living & borrowing, employment and wealth gap are all swelling.”

Mama Mia. It’s the return of the 1980’s. And we know that didn’t end well.
Interesting times. In an upward real estate trajectory everyone looks like a genius. Reading the tea leaves on the way down is another matter. It’s amazing how many out there still spinning around around the room doing twirls when the music has actually stopped. But as an infamous weasel once said, ‘The bigger the lie, the more people will believe it’. Ride that magic carpet.

#44 Drill Baby Drill on 08.01.18 at 8:36 pm

Sunshine & Lolypops boy today just backtracked on carbon pricing. By election time the carbon tax will be a faint future Liberal wish.
Selfie boy needs to get down to dealing in a very serious way (ie: on his hands and knees) with the orange ogre down south or Canada will be put to it’s knees. Between auto/steel/aluminum/ lumber and high interest rates Canada has never been under greater economic threat.

#45 crowdedelevatorfartz on 08.01.18 at 8:46 pm

@#41 Stan Brooks
“if this is combined with another liberal term this place will literally disintegrate at rather fast pace/collapse. Otherwise there is a chance of implosion (around 5 % but still a chance… and as this sheeple is dumb there is still some hope for a controlled (in the elite’s delirious minds) decline…)”
+++++
While I’ll be amazed if “Selfie” is re elected with a majority in 2019…… I do agree this will not end well.

Too many people in debt ( Boomers, Millenials, etc).
Interest rates due to start climbing regardless of who is in power.
Bankruptcies, panic sales, ….what we will see this Summer/Fall/Winter is going to be fugly and if like Japan…..painfully prolonged.

#46 Ex-Cowtown on 08.01.18 at 8:48 pm

When the POTUS says something should happen, it’s more than an opinion. Stop defending the indefensible. Embarrassing toadyism. – Garth

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

No, it isn’t. As POTUS he has to order someone to do something. Anything else is just an opinion and bluster.

I stand by my comment Garth. Trump did not order anyone to do anything. Reading anything else into his comment is pure mind reading, which is a classic tell of Cognitive Dissonance.

Sometimes a cigar is just a cigar. And a POTUS is just a POTUS, no matter how many people’s heads explode.

#47 Kelowna Now on 08.01.18 at 8:48 pm

The work by that weasel of a mayor is finally starting to show its true colors. Right in the back pockets of developers now pissing off boomers and pricing out young people.

1 million dollars for every condo is the target.

“BCGEU members are finding it increasingly difficult to afford life in Kelowna — even with secure employment and regular negotiated wage increases,” union president Stephanie Smith wrote in a letter to city hall.

“With a 0.2 per cent rental vacancy rate in Kelowna, working people are struggling to find long-term rental housing for their families, leading many to move farther away from their work and others to leave the province altogether,” Smith writes. “B.C. is losing productive and experienced workers.”

Mission Group, the Kelowna-based developer behind the Brooklyn project, has said buyers of the 178 suites in the tower will be able to rent their suites out on a short-term basis, through online services such as Airbnb.

“The City of Kelowna should reconsider approving this development proposal and bring in stricter regulation of short-term rentals to benefit working and middle-class families, instead of real estate speculators who currently reap the rewards of rising land values,” Smith writes.

It’s unusual for the BCGEU to weigh in on a specific Kelowna development project. Smith’s letter was one of a handful of critical pieces of correspondence on the Brooklyn received by the city in advance of Tuesday night’s public hearing at which the fate of the project was to be determined by council.

This is worse than Moonbeam Vision Vancouver.

#48 bubu on 08.01.18 at 8:49 pm

#28 IM in C on 08.01.18 at 6:59 pm
Listings in Calgary going up, but prices holding steady. Not surprising. The few power of sales, the bank can’t/won’t take a financial hit. People who want to sell can simply hold on, only takes about 10 K a year to properly vacate a house…

They will have to hold the properties for the next 10 years… ups… you don’t know math and how to calculate the impact of the inflation… same nominal price in 10 years is worth? ….. I know a lot of realtors advising their clients to hold… nobody tells them the math….

#49 FATLADY on 08.01.18 at 8:49 pm

#41 STAN Brooks

Thats right buddy. Refugees have a culture of community and sharing, something that selfish Canadians with closed minds lack like yourself.

They’ll get together as a family of 12 and all get part-time jobs and buy the corn flake house and the glass shoe house and rent out the basements to suckers in your family to pay the mortgage.

#50 dirtydebtor on 08.01.18 at 8:54 pm

I’m with ya Garth right up until the “1990” comment. What are you getting at?

#51 Hi I am running for Kelowna Mayor this Fall on 08.01.18 at 9:05 pm

I am going to offer developers huge deals for bringing in offshore money.

Elect me and your house will be worth 1 million dollars. Even if you live in a tent trailer. 1 million. Guaranteed.

I am going to pretend we have a tech community here with rising wages as the reason your home hits 1 million dollars. 17 dollar per hour tech workers can easily afford it, duh.

I will make sure the BC unions keep squeaking something about affordability for working class. Whatever. Velvet seats on my G4 Jet with my developer buddies.

And if some smart sucker like Horgan figures out what we are up to I am going to come out of my cave and vigorously fight all policy like the spec tax. I have a secret plan around that anyways.

You will never hear me complain about the growing homelessness problem that we will be eliminating – wink.

I will work in the shadows, just like the shadow banking system as all my developer friends get very rich.

By the time the local masses figure it out and realize what a Vancouver like cesspool mess the area has turned into. I will announce my decision not to run again, making out like bandit in the night.

#52 45north on 08.01.18 at 9:10 pm

Danny: And now Doug Ford is setting up a smaller Toronto City Council to be controlled by big developers

Toronto council votes to call for referendum on provincial bill to slash number of councillors

https://nationalpost.com/news/toronto/toronto-council-votes-to-oppose-ontario-bill-to-cut-number-of-councillors?video_autoplay=true

47 councillors seems awfully large. Each councillor gets his own office and staff. Costs add up.

the province has complete authority here. There is no basis for legal challenge.

The biggest challenge to Toronto is declining property values. As Garth points out 12% of households nationally owe more than 350% of their income. In Toronto it’s more. He says they have pickled themselves in debt. I believe that the decline in property values will be more severe than anything we have ever seen. Governments really cannot do anything about it. I mean the households signed the papers, they made the deal. Garth gave the example of a couple who bought a contract to purchase a house in Barrie for $650,000 but it’s now worth only $550,000. What’s the government going to do? It can encourage families to stay together and build a sense of worth but just when we need a sense of spiritual values we’re going to find we don’t have them. I don’t see how 47 municipal councillors are going to serve the problem any better than 25.

Next big problem is condos. The CBC documentary “The Condo Game” shows yuge problems with Toronto condos. I’m concerned that they’re not a good investment. I was raised in North York. The housing stock of the last century was solid. It has served well. 47 municipal councillors are not going to serve the problem any better than 25.

Infrastructure is a whole series of problems. One problem is the need to demolish the Gardiner Expressway or rebuild it and another is the need to extend the subway system. Again 47 councillors are not going to serve the problems any better than 25.

The charge that Toronto City Council will be controlled by developers is specious. I believe that municipal councillor is a very demanding and unrewarding job. The people that do it need to be supported by their community associations who in turn need dedicated people. Pay is zero. In the absence of community support, the job of municipal council is very lonely. If a developer wants to host a get-together, it’s hard to fault a councillor for showing up.

I live in Ottawa. For the last 40 years I have served on the community association where I live.

#53 Another Deckchair on 08.01.18 at 9:26 pm

#7 Andrewski sent a link to a survey which contains the following quip:

“A similar number (65%) say wealthy people are wealthy because they had more advantages in life, rather than because they worked harder than other people”

Lets see – more advantages – hmmm –

– like above average intelligence, inquisitive, and a sunny outlook on life, so they believe that they will be successful (and, thus are?)

#54 re., Ex-Cowtown on 08.01.18 at 9:32 pm

Careful Garth, your TDS is showing (Trump Derangement Syndrome).
……

ironically, your HUTAS is showing…(Head Up Trumps Ass Syndrome)

too funny

#55 akashic record on 08.01.18 at 9:55 pm

#42 -=jwk=-

OMG. Really? You can’t read 29 pages of text that lays out all the info they have on the Russian hacks?

What has Manafort to do with any of those alleged hackers, who Muller will never be able to bring to court to prove it?

Political virtue signalling and desperate effort to find some tie the Russians to Trump by extortion.

http://www.cbc.ca/news/world/mueller-manafort-trump-trial-witnesses-list-1.4767250

“The prospect of Manafort being found guilty on all charges could mean he spends the rest of his life in prison. That fact could compel someone previously or currently close to the president who knows of any illegal activity to come clean or act as a co-operating witness if they have information relevant to Mueller’s Russia probe.

“Everything about a criminal prosecution is meant to frighten guilty parties into co-operating with the federal government,” former federal prosecutor Alex Little said. “That’s not a bad thing. It’s the way our system works.”

Where is Muller’s investigation to Russian ties of the Clintons, Clinton Foundation, Clinton server, DNC servers, how and why did Iram Awan get immunity?

“OMG.”

#56 Deplorable Dude on 08.01.18 at 10:00 pm

#16 Akashik record…“You spoke to every living secretary of state for your research. What were some of the concerns they raised about the state of the State Department under President Trump?

—————-

Remind me again which of those former SoS met with the leader of North Korea…..secured the release of hostages, arranged for return of the remains of US soldiers, and a path to denuclearization…?

#57 Aleksander Klugman on 08.01.18 at 10:16 pm

#10 Ex-Cowtown
Actually, he tweeted it. – Garth

To Jeff Sessions who recused himself from Russia investigation and can NOT end this investigation – Fact
Come on Garth, don’t you have anything good to say about Trump?

He tweeted it to his zillion zombie followers. You guys are funny. – Garth

#58 young & foolish on 08.01.18 at 10:25 pm

“This is a good point. You need cash flow, not valuations that can turn down over an Orange tweet. Predictability of income is the reason people have invested in RE over the years. Having said that, I admit that at today’s valuations, getting a solid passive cash flow is a challenge.

That made no sense. People’s houses have no predictability of income. In fact, no income. – Garth”

Investment RE?

#59 FATLADY on 08.01.18 at 10:29 pm

DELETED

#60 Headhunter on 08.01.18 at 10:30 pm

#39 FATLADY on 08.01.18 at 7:52 pm
#22 Dolce Vita

Windsor, Ontario’s 2nd language is Arabic.

_________
you sound surprised but who is going to work in all the automotive high tech automation engineering design roles both in Windsor and Michigan? Border town lots of nexus cards.

Why do you think as a community they are so successful there? I just told ya where do I send my invoice?

#61 TRUMP on 08.01.18 at 10:42 pm

#58 young & foolish

GARTH….Good Point. Let the sheep run with the flock. The majority can never be saved!!! It explains the gap between the rich and the whatevers.

“This is a good point. You need cash flow, not valuations that can turn down over an Orange tweet. Predictability of income is the reason people have invested in RE over the years. Having said that, I admit that at today’s valuations, getting a solid passive cash flow is a challenge.

That made no sense. People’s houses have no predictability of income. In fact, no income. – Garth”

#62 akashic record on 08.01.18 at 10:47 pm

#56 Deplorable Dude on 08.01.18 at 10:00 pm

#16 Akashik record…“You spoke to every living secretary of state for your research. What were some of the concerns they raised about the state of the State Department under President Trump?

—————-

Remind me again which of those former SoS met with the leader of North Korea…..secured the release of hostages, arranged for return of the remains of US soldiers, and a path to denuclearization…?

I don’t know.. Who? Hillary Clinton?
Wait, no… she didn’t do that. Madam Secretary destroyed Libya, which resulted in restoring slavery, tragically under the first black, Nobel Prize laureate US president. Generating flood of refugees ever since. Continuing the great Colin Powell tradition of American diplomacy, united and executed across party lines.
As the world is running out of dictators, back to the Russians, because American diplomacy really needs one all the time.

#63 Chico on 08.01.18 at 10:54 pm

#36 The Real Mark on 08.01.18 at 7:35 pm

“#3 islander on 08.01.18 at 5:35 pm
“Fed up with traffic, contractors refuse to work in Vancouver””

Sounds like fake news.

———————————————————-

Where do you live in the Lower Mainland to make such an informed decision about the state of traffic there?

#64 Oft deleted much maligned stock.picker on 08.01.18 at 11:23 pm

Mexico grabs Canada’s oil share as Trump end runs Trudeau’s anti Trump Gambit with Obama, Merkel and Soros…..basically….the global Marxist schematic is being tipped. US will pour billions into Mexico energy creating millions of jobs…..in return for securing the southern Mex border. Trudeau- it’s have Canada going the opposite direction , holding fast to the schedule that Obama has set out for his return to the stage in October. Massive tour set for Obama to tour for Dems….in the hopes of defeating Trump….top Dems scheduled to visit Canada and get all that socialist synchronicity of Trump Hate…….which the Liberals think will rally Canadians under the globalist defeat Trump …Obama Resist campaign in the run up to 2019. Meanwhile Canada will be in recession by then with Trudeau spending more tens if billions on the Obamas campaign.

Yes…..they think you’re that stupid. It’s time to grow up and recognize the growing hate of what Liberals are doing to Canada on behalf of someone else. If anyone is “unCanaduan it’s those who won’t stand up for thier country.

https://oilprice.com/Energy/Energy-General/Mexicos-Next-President-Will-Pour-Billions-Into-Oil.html

#65 Shawn Allen on 08.01.18 at 11:49 pm

Unrealized Capital Gains are Gains Nonetheless/

Returns are returns. If a portfolio is worth 7% more at the end of a year, it’s a 7% return. – Garth

**********************************
Absolutely true!. Well, unless someone decides that having that be false better makes their point. I mean why should math ever get in the way of one’s argument anyhow? That would be old school.

#66 ANON on 08.01.18 at 11:58 pm

Big tremors in da market. Git yo popping corn!

#67 Triplenet on 08.01.18 at 11:58 pm

Newcomer
IHCTD9
If you two are arguing the definition of market value, you’re both incorrect.

#68 FATLADY on 08.02.18 at 12:02 am

#34 Bonhomme Carnaval

Garth deleted my last post to you (#59)

I should have been a little nicer.

Quebec would be more than delighted to take on an influx of as many people from around the world that choose to move there.

Garth (like Trudeau) is planning to build complexes within very close proximity of their own family’s homes. That way all the refugees & immigrants get to stay and play within close proximity of the politicians’ residence.

How nice of our politicians – Canada is the greatest.

#69 Linda on 08.02.18 at 12:03 am

More moaning? Heaven help us. I guess a plus side to getting older is that any increase in moaning/complaints will be offset by the hearing loss:)

#70 Ace Goodheart on 08.02.18 at 12:09 am

As usual what is happening is the wealthy folks are takin the money putting the cost on the middle class while the poor do their usual and party like the world is going to end tomorrow.

Really, if you wanna have some fun in North America you wanna be rich. If you can’t do that, next best thing is be poor. Same hedonistic party life and devil may care value system. Only difference is you’re doin’ it on silk sheets at the Taj Mahal or you’re finding a place in the basement of the rooming/ party house.

What you don’t want to be is middle class.

Spend your life working for the “greater good”, pay more tax than the rich or the Poor, get no benefits from all the tax you pay (all the money goes to the rich through corporate welfare and to the poor through the social justice systems), and never achieve true happiness.

Middle class sucks folks. It is horrible.

Why people are like “I’ll pay down my 900,000 mortgage and retire in 30 years, and that keeps me going (while I live with a person i hate and secretly get off to the internet while lying about how attractive I think she is) and full time work, church on Sundays and a beer on the weekend, will make it all ok”, is beyond me.

A person ends up with no free will at all. Wee Willy Winkle.

But getting back to housing. House prices are delayed currency devaluation.

When you get 4% inflation, what is really happening is your money is worth less. That is all. It’s not a good thing. The house isn’t really worth more.

The bag of potatoes from the USA that used to be 2.99 and is now 5.79 isn’t actually worth more.

Your money is worth less.

Reason: runaway government debt. The USA has to enact trade tariffs. They are drowning in debt. They have to recapitalize their government. So they tax imports. Imports have no input taxes. They are produced elsewhere. Other governments benefit from their production. Payroll taxes, corporate taxes, all paid somewhere else. Dumped on the US market through places like Wal-Mart, they benefit only those who sell them (ie the Walton family).

When governments recapitalize themselves everything gets more expensive.

The government went into debt to get elected so really all that is happening is the electorate is paying the piper.

And everyone’s money is worth less.

House prices react to this by rising.

They have to. It’s a fight between interest rates and inflation and let me tell you inflation always wins.

This is why the old Codger down the street will tell you that he bought his house in High Park for $35,000.00 back in 1964 and he sold it for 1.79 million last week.

Inflation trashes currency not fixed assets.

#71 Jorge on 08.02.18 at 12:32 am

Sorry, but the West Island in Montreal is subject to heavy foreign buying (more than 20% according to a local realtor) and has been crazy over the past 15 months. If a house lists on Monday, it’s most likely sold by Wednesday if it’s renovated and in decent condition.

The prices? $600k min for an older semi-renovated 4-bedroom cottage. Doesn’t sound that bad? This is Wuebec with Quebec salaries and Quebec taxes. Prices are a lot more for something newer or with more spacious bedrooms, and don’t forget that in the West Island, you’re as far from downtown as in Richmond Hill from Toronto.

Maybe a cooling down or crash is coming, but right now there is more FOMO than ever.

#72 Karma on 08.02.18 at 12:51 am

#97 Stan Brooks on 08.01.18 at 9:28 am
“I am perfectly aware what the GDP growth was measuring. Did you read the article and stats Canada ‘data’? It measured increases in retail sales due to increased prices, i.e. inflation and increased construction activities due to ever increasing debt.

That 1.7 % increase in retails sales on monthly bases is pretty alarming, we all know that cost of living increases at 8 % + annually, not with the official CPI of 2 %, agree?

So real inflation 8 %, reported inflation 2 %, 6 % growth my misreporting inflation, without actual goods consumption changing.

If inflation hits 15 % you would be announcing 15 % increase in GDP, that is the pathetic part?

I call that ignorance.”

Retail sales were down 1.0% in April, making the May/April increase of 2.0% not very “alarming”. Furthermore, Year-on-year growth in retail sales was only 1.9%, which isn’t very impressive at all.

https://www150.statcan.gc.ca/n1/daily-quotidien/180731/t001a-eng.htm

I disagree with the idea that inflation for Canada as a whole is 8% (y/y) in May 2018. That’s silly. Lots of prices are stagnant that hold the overall inflation rate down.

In Metro Van, where I live, the inflation rate is much higher than the overall for Canada.

Not sure if this works, but it should be Canada and Metro Van for June 2017 to June 2018:
https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1810000401

Canada y/y: 2.45%
Van y/y: 2.98%

Like, even a quick sniff test on your “8%” is easily debunked. Nearly 2 years ago, I bought a Mazda 3 for $25,100 after taxes. I just went on the website and built the same car (2018 model though), and it was $24,998. If we applied a standard 8% growth rate for two years, the same car would be $29,277. Now apply that process to all sorts of things you buy. The reality is inflation isn’t nearly as crazy as you think it is.

At 8% growth, prices for everything would double every 9 years. That’s clearly not been the case, particularly in technology goods (which is a huge sector). My phone bill alone hasn’t changed in like 10 years, despite getting more data for the same price, so technically that’s deflation because I’m getting more for less.

#73 Newcomer on 08.02.18 at 1:11 am

#32 IHCTD9 on 08.01.18 at 7:25 pm

I assert that the market price of pretty much everything is always at the maximum price that the market will bear.

That may be what you are asserting now but it is not what you said earlier. You are pretending that you said something sensible (the price is what the market will bear) but you did not say that. You said something much harder to defend, to wit, “It boils down to what folks can pay. What can the top 10% of RE buyers scrape (borrow, beg and steal) together to buy a house? That’s your new home price support right there.”

You must understand that there is a difference between what people can pay and what they will pay. For example, I imagine that most people on this blog CAN pay $500 for dinner tomorrow night but am equally sure that few if any of us WILL pay that much. You argued that prices are set by “what can the top 10% of RE buyers scrape (borrow, beg and steal) together.” I disagree.

If you are now changing your position to, “prices are set by what the market will bear,” we are in agreement.

#74 Ace Goodheart on 08.02.18 at 1:17 am

Fordsie cancels “basic income”.

Sanity returns to Ontario.

Recipients are afraid they’ll lose their housing and not be able to afford to live.

Yeah, so was I. That is why I ran businesses, worked 7 days per week, worked so hard my brain hurt, so that I could build a business empire that would keep me out of poverty and comfortably well off.

I did not work that hard to pay for other people’s “basic income”.

These people can f$ck o$$.

Go steal some one else’s hard earned money.

#75 The Real Mark on 08.02.18 at 1:27 am

I’m here doing all of you a public service providing expert insight into everything that matters. Why doesn’t anyone seem to appreciate it? Does anyone even read my posts?

#76 NoName on 08.02.18 at 1:29 am

Recently, two days ago book 12 rules for life by Jordan Peterson, was delivered, so i started reading it today. Very interesting, cant wait how much of serotonin will reminder of the book will robe me.

Just small note if you are in fowl mood, dont read it!

#77 fishman on 08.02.18 at 1:35 am

Reacting to CNN’s Jim Acosta’s tweeted footage of being jeered by Trump supporters; Politico’s Marc Caputa mocked the Trumpsterites, “if you put all their mouths together you’d get a full set of teeth.”
Quite true. Nothing tells your class like the state of your teeth. My depression poor parents had all their teeth pulled by 50. I’ve spent 2 grand in the last month. Looks like 30 grand for implants or go cheap with falsies at 10. Or save my money & buy the blender,tablespoon & porridge bowl.
Like to have my own teeth when I check out Walmart on the way to Seattle.. Wouldn’t want to be lumped in with those smelly hillbillies with no teeth.

#78 cultural elitist on 08.02.18 at 1:36 am

Sorry about this Garth, but weak logic gives me a rash …

@#30 – akashic record
Tu Quoque fallacy (look it up). Changing the subject to Hillary does not make anyone’s argument against Trump less valid.

You might as well tell your husband, “Yes, I cheated on you with your best friend, but don’t you remember how you treated the bridesmaids at our wedding?” Both are bad, but one thing does not excuse the other.

@#31 – Dolce Vita
… pure theater (make his base happy, and drives all the Lefty’s nuts)

If your best answer to divisive comments coming from the president is to laugh when others get angry, then you are not part of the solution. He has a serious responsibility beyond the cheap gratification of the minority of citizens who get a kick out of seeing their political opponents suffer.

How can you build a unified country on this basis? Healthy and robust public debate consists in more than trolling the opposition. To heal divisions, stop dividing. We can disagree without dehumanizing.

@#33 / #46 – Ex-cowtown
As POTUS he has to order someone to do something. Anything else is just an opinion and bluster.

See above. Saying something is doing something, especially if you’re the POTUS. In this case, he is undermining public confidence in the investigators. If you agree with that strategy, then ok fine, you’re entitled to your opinion. But try to be honest about it so we’re clear where you stand.

If you actually believe that words have no meaning until there is an action, try telling your wife “Maybe I’ll call a lawyer to draw up divorce papers”, but don’t do anything about it. Then tell me how that doesn’t undermine her commitment to your marriage :-)

——-

Full disclosure: In general I’m not a believer in the impartiality of intelligence agencies (weapons of mass destruction anyone?), or the strategies of over-aggressive prosecutors angling for a conviction. Also, I think Trump is an odious human being. But I try not to let that interfere with my assessment of his actions as president.

But we are mere onlookers to this drama. There is a lot we don’t know. And if we’re being honest, then we should avoid specious forms of argumentation, n’est-ce pas?

Please take these comments in the respectful spirit in which they are intended.

… and now, back to our regular financial blog programming …

#79 Stan Smith on 08.02.18 at 2:24 am

Well if people hold on to their property hoping for prices to receover while interest rates are going up…are they in for a surprise. Boomers have been around long enough to remember 1980-1985…mortgage rates were double digit and house prices catered everywhere. “Historically interest rates move in 20 year cycles.” James Grant, Grant’s Interest Rate Observer.

#80 jane24 on 08.02.18 at 3:12 am

Real London RE is finally correcting Garth but it has nothing to do with Brexit. The surge to stupid levels was Chinese and Russian money. Global people hiding money. In the last 12 months the UK govt has cracked down on grey money from anywhere, China has cracked down on their money flows out and Russians can no longer get visas due to the Salisbury poisonings by the Russian state. Mega rich Russian football team owners can no longer get visas to visit their mega London digs and the govt is finally interested in where they got their money from and why they don’t pay taxes.

The homes going down in value are the multi-million mansions, regular homes prices are steady. Such are stats. I know that normal homes are holding their value as my daughter’s best friend has been looking for a two bed flat in SE London for a year now. Just decided that the Brexit RE bust doesn’t exist and is getting more serious in her search.

Finally in my fantasy I can buy the medieval manor of my dreams with the Russians and Chinese shut out!!

#81 Dolce Vita on 08.02.18 at 4:18 am

#39 FATLADY

Same 416 rhetoric from the 80’s. YVR worried about the “Asian Invasion” back then as well (yes, that was in the headlines back then).

As they say “Same dung, different pile”.

Live a few more decades and get back to me; although, I ought to have met my maker by then if the Life Insurance Actuaries are correct, on average.

Also, you will find that the average wage of immigrants is low when compared to the average Canadian family. The average, if my CRA or StatCan memory serves me correct, is $55K after 5 years of living in Canada (vs. $70K).

Not exactly a well healed crowd that is going to turn around any RE market in strict $ and cents.

#82 Dolce Vita on 08.02.18 at 4:25 am

#60 Headhunter

Do check the average income of immigrants in their 1st 5 years of living in Canada vs. the average Cdn. family income (hint: about 20% less).

Hired because of their lower wage rate expectations vs. the already lower white collar Cdn. salary when compared to their US counterparts.

Then again, if you were indeed a headhunter, you would know that.

#83 Dolce Vita on 08.02.18 at 4:34 am

“He tweeted it to his zillion zombie followers. You guys are funny. – Garth”

That was good.

Speechless when I read Donald’s Devotees retweeting his every word as if dispatches from Heaven, Gospel truth & Moses descending from Mount Sinai.

I love it.

Just as entertaining as reading the Lefty Meltdowns that follow.

You have to love Twit-ter.

Free entertainment.

#84 Oft deleted much maligned stock.picker on 08.02.18 at 4:50 am

DELETED

#85 Mike in Toronto on 08.02.18 at 6:06 am

#9 MSM-Free Zone

Yeah, I don’t get it. “Conservative” fiscal responsibility is a myth.

#86 dharma bum on 08.02.18 at 7:56 am

#70 Ace Goodheart

Why people are like “I’ll pay down my 900,000 mortgage and retire in 30 years, and that keeps me going (while I live with a person i hate and secretly get off to the internet while lying about how attractive I think she is) and full time work, church on Sundays and a beer on the weekend, will make it all ok”, is beyond me.
——————————————————————-

Yah. It’s beyond me too.
I can’t figure it out, so I stopped trying to.

Just became a free wheeling bum. Happy go lucky.

There is no prize to be had by being in the rat race.

Consumerism creates a mass of population that slowly loses its skills. Creativity and talents go unused and start to fade, rust or never develop at all. We slowly become less and less able to do even the most simple things in life to take care of ourselves or maintain our existences. Psychologically we’re starting to all be driven by the same desires which are simply implanted in us by the big machine. We’re told what to like, what to do, how to be, what to desire, how to spend our free time between gathering-money-time to get more things.

http://grego.ca/consumerism.htm

#87 Pepito on 08.02.18 at 8:00 am

#65 Shawn Allen on 08.01.18 at 11:49 pm
Unrealized Capital Gains are Gains Nonetheless/

Returns are returns. If a portfolio is worth 7% more at the end of a year, it’s a 7% return. – Garth

**********************************
Absolutely true!. Well, unless someone decides that having that be false better makes their point. I mean why should math ever get in the way of one’s argument anyhow? That would be old school.
_______________________________

Talking out of the both sides of your mouths gentlemen. Unrealized capital gains are no more returns than the appreciation of an UNSOLD house. In both cases, these are merely paper gains which have no material value and may disappear tomorrow. The original comment pointing this out is absolutely correct.

Learn the difference between yield and return. – Garth

#88 Felix on 08.02.18 at 8:11 am

That picture today is alarming.

Put more cat-friendly stuff on here, we deserve it.

#89 crowdedelevatorfartz on 08.02.18 at 8:14 am

@#69 Linda
“More moaning? Heaven help us. I guess a plus side to getting older is that any increase in moaning/complaints will be offset by the hearing loss…”

++++

Thats why us old moaners learned to type.
Hearing loss isnt an issue anymore.
We can moan all day long on your beloved internet…….. :)-

#90 crowdedelevatorfartz on 08.02.18 at 8:17 am

@#74 The Real REAL mark
” Does anyone even read my posts?”
++++
I stopped reading them in 2013….when the market peaked…..

#91 crowdedelevatorfartz on 08.02.18 at 8:20 am

@#76 NoName

“Very interesting, cant wait how much of serotonin will reminder of the book will robe me.

Just small note if you are in fowl mood, dont read it!”
++++

I’m in a foul mood trying to decide how an illiterate who can barely write……can read……

#92 TurnerNation on 08.02.18 at 8:29 am

Guns or butter? In Kanada we love monopolies. World class! From stockwatch.com:

Globe says Saputo sees dairy monopoly raise prices 4.1%
The Globe and Mail reports in its Thursday edition that Canada’s food-service industry is facing tough choices after the Canadian Dairy Commission announced it is raising the price of butter fat and raw milk by 4.1 per cent. The Globe’s Amy O’Kruk writes that the hike, which goes into effect on Sept. 1, is the first in two years and caught dairy processors and food producers off guard. While price increases usually happen in February, the CDC, a Crown corporation that co-ordinates milk production, said it raised prices because of higher interest rates and higher prices for fuel and feed, which increased dairy farmers’ costs by 5.1 per cent. The Dairy Farmers of Canada asked for a price review. The CDC’s last price adjustment to butter and raw milk was in 2016, when it raised dairy prices twice over all by close to 5 per cent. For many businesses reliant on dairy ingredients and products, the 4-per-cent increase is an unexpected headache

#93 crowdedelevatorfartz on 08.02.18 at 8:33 am

@#80 Jane 24
” I know that normal homes are holding their value as my daughter’s best friend has been looking for a two bed flat in SE London for a year now. Just decided that the Brexit RE bust doesn’t exist and is getting more serious in her search.”

+++++
“your daughters best friend…..”

Well thank the heavens we have that gold plated economic standard to fall back on.
Brexit aint over by a long shot and if The recent “surprise” resignations in Ms May’s govt are any indication…… You aint seen nuthin yet.
Brexit was described by one British spokesperson thus.
“Send that screaming, defecating, vomiting baby back to its parents…the electorate”

Do I see another referen-dumb in the next 10 months befor “B-day” in March of 2019 ?
Or will the hardcore Brexiteers get their wish and pull out of the EU full stop?
I cant wait to see the financial, taxation, border chaos ramifications of that “insignificant” event.

Or will that “nothing event” trigger you having to dig out your passport to visit the Italian villa you regale us with stories of?
P.S.
Dont forget to get medical insurance after “Brexit” because you wont belong to the EU and cant go to an Italian hospital without paying lots of money.
Ciao!

#94 Ace Goodheart on 08.02.18 at 8:43 am

This is going to be interesting:

https://www.thestar.com/news/canada/2018/08/01/ottawa-looks-to-soften-carbon-tax-impact-as-battle-with-ontario-looms.html

It’s not the constitutional battle that will matter. Likely Ottawa would win that.

The problem Ottawa has, is Ontario has just voted against carbon taxation, giving a hard right conservative leader a landslide majority government, and T2 needs to win an election next year (Monday October 21st, 2019).

It is widely accepted as a fact that T2 cannot get re-elected without winning Ontario (while it is numerically possible, it is incredibly unlikely). If he loses support here, he will lose his office as well.

So T2 has an interesting choice: Give up trying to force carbon taxation down Ontario’s reluctant throat (and lose the next election), or water down carbon taxation and upset his base (and lose the next election).

Our Prime Minister looks to be heading towards “lame duck” status. We shall see how this plays out……

#95 NoName on 08.02.18 at 8:59 am

#91 crowdedelevatorfartz on 08.02.18 at 8:20 am

@#76 NoName

“Very interesting, cant wait how much of serotonin will reminder of the book will robe me.

Just small note if you are in fowl mood, dont read it!”
++++

I’m in a foul mood trying to decide how an illiterate who can barely write……can read……

You see farts you got that illiterate thing wrong, in your eyes i am just some overconfident fat #[email protected]&# who didnt’t learn or don’t accept his place in the society, but in my mind, and real word I am doing beat to my abilities to educate my self to better my family with limited resources and time that i have.
If my pay is dependant on proper grammar and correct spelling i can assure i would do it correctly.

Have a wonderful day you judgemental peace of $#!7.

#96 IHCTD9 on 08.02.18 at 9:05 am

#73 Newcomer on 08.02.18 at 1:11 am
#32 IHCTD9 on 08.01.18 at 7:25 pm

I assert that the market price of pretty much everything is always at the maximum price that the market will bear.

That may be what you are asserting now but it is not what you said earlier. You are pretending that you said something sensible (the price is what the market will bear) but you did not say that. You said something much harder to defend, to wit, “It boils down to what folks can pay. What can the top 10% of RE buyers scrape (borrow, beg and steal) together to buy a house? That’s your new home price support right there.”

You must understand that there is a difference between what people can pay and what they will pay. For example, I imagine that most people on this blog CAN pay $500 for dinner tomorrow night but am equally sure that few if any of us WILL pay that much. You argued that prices are set by “what can the top 10% of RE buyers scrape (borrow, beg and steal) together.” I disagree.

If you are now changing your position to, “prices are set by what the market will bear,” we are in agreement.
________

Original post:

“To me it is simple. Prices will always be as high as possible”

Word for word.

If you want to pretend the statement “the highest price possible” is something totally different than “charging what the market will bear” I guess I’m arguing with one who simply just loves to argue no matter how stupid the assertions have to be.

#97 Another Deckchair on 08.02.18 at 9:13 am

Hey Ace and Dharma;

Both interesting posts, and I hope people do get it, but I doubt many will.

I think the youngsters who are into “FIRE” and live well within their means get it, so long as they enjoy every day, and are not focusing 100% on “the future”.

See you – keep posting, please!

#98 Ex-Cowtown on 08.02.18 at 9:17 am

Re: Build that Wall

Guess who just built a real wall around her $10 million Hollywood mansion?

Yep. Kathy Griffin. Another Hollywood quasi-celeb who ends up doing the exact thing that she calls out Trump for. Next thing you know she’ll have armed bodyguards… oh wait… she already does? Nevermind.

Another classic case of TDS and Cognitive Dissonance.

#99 IHCTD9 on 08.02.18 at 9:24 am

You must understand that there is a difference between what people can pay and what they will pay. For example, I imagine that most people on this blog CAN pay $500 for dinner tomorrow night but am equally sure that few if any of us WILL pay that much.
__________________________________________

Obviously.

You argued that prices are set by “what can the top 10% of RE buyers scrape (borrow, beg and steal) together.” I disagree.
_______________________________________

I said prices are as high as possible at all times.

I said the top end of the RE market (buyers) set the prices.

If you disagree, please do so plainly and with as few words as possible.

I think you are trying too hard to disagree.

#100 KLNR on 08.02.18 at 9:56 am

@#79 Stan Smith on 08.02.18 at 2:24 am
Well if people hold on to their property hoping for prices to receover while interest rates are going up…are they in for a surprise. Boomers have been around long enough to remember 1980-1985…mortgage rates were double digit and house prices catered everywhere. “Historically interest rates move in 20 year cycles.” James Grant, Grant’s Interest Rate Observer.
______________________________________

friend bought in Toronto at peak in 89.
Literally took 20yrs to get back to the 800k he paid.
Now, another decade later it’s worth triple that.
Guy never worried about the market. Buy what you can afford and enjoy your life – it’s a short ride.

#101 Steven Rowlandson on 08.02.18 at 9:57 am

It might appear that the tide has turned but it has not bottomed out yet when it comes to real estate. Home prices are still a barrier to behavioural and social normalcy except for the rich.

#102 Pepito on 08.02.18 at 10:01 am

#87 Pepito on 08.02.18 at 8:00 am
#65 Shawn Allen on 08.01.18 at 11:49 pm
Unrealized Capital Gains are Gains Nonetheless/

Returns are returns. If a portfolio is worth 7% more at the end of a year, it’s a 7% return. – Garth

**********************************
Absolutely true!. Well, unless someone decides that having that be false better makes their point. I mean why should math ever get in the way of one’s argument anyhow? That would be old school.
_______________________________

Talking out of the both sides of your mouths gentlemen. Unrealized capital gains are no more returns than the appreciation of an UNSOLD house. In both cases, these are merely paper gains which have no material value and may disappear tomorrow. The original comment pointing this out is absolutely correct.

Learn the difference between yield and return. – Garth
______________________________

If unrealized capital gains are considered a “return”, logically so must unrealized appreciation of a realestate investment – something you have consistently denied. What’s the difference? Both have to be sold to realize the profit, and both continue to be subject to the whims of the market until such a time as these gains are realized. The original comment comparing unrealized capital gains in financial assets to the appreciation in the value of realestate holdings is valid. Both are unrealized.

#103 IHCTD9 on 08.02.18 at 10:04 am

#81 Dolce Vita on 08.02.18 at 4:18 am

Also, you will find that the average wage of immigrants is low when compared to the average Canadian family. The average, if my CRA or StatCan memory serves me correct, is $55K after 5 years of living in Canada (vs. $70K).

Not exactly a well healed crowd that is going to turn around any RE market in strict $ and cents.
______

Yep, this is pretty well documented. You see all kinds of indicators like the median household income for Toronto dropping to par, and even below that of smaller cities out in the boonies, and new “economic households” (ie. multi family/multi income dwellings) developing in certain areas of the GTA.

Then there are reports of up to 40% of immigrants bailing right back out of Canada within 10 years of arriving.

None of this says they’re loaded and doing great.

#104 young & foolish on 08.02.18 at 10:06 am

“Your money is worth less.” — Goodheart

Exactly true. It has been argued that property can serve as a hedge against inflation. Keep in mind that when the easy money stops flowing it’s not only property that will be “deflating” … so will the half of corporate America.

Most people need yield, not high valuations. In that respect, a solid portfolio of rentals serves the same purpose as a basket of dividend yielding equities.

For those invested in both, you would know one is not all that far ahead of the other.

Rental income is 100% taxed. Dividend income is tax-advantaged. Rentals have substantial ongoing costs. Financial assets virtually none. Both provide inflation protection, but financial assets have been historically superior. You are wrong on many counts. – Garth

#105 crowdedelevatorfartz on 08.02.18 at 10:07 am

@#95 NoName

No I don’t think you’re “overconfident” and after that raving diatribe….you’re quite the opposite.
As to your physical (fat) attributes? How would I know that? Or care.
As for your “pay being dependant on your abilities”.
Again, I really don’t care.
However. if you hope to further yourself in this world of corporate, politically correct, BS bafflegab…. You have to be able to write correctly, spell correctly and form coherent sentences when dealing with your employees, coworkers or customers.
OR your employees, coworkers and customers will, (incorrectly?) think you are uneducated and thus stupid.

I have many friends who while, extremely intelligent, cant write a single sentence without spelling or grammatical errors.
They come across as idiotic if they are responding or issuing an email. They cant understand why they don’t get promoted when their written responses are the quality of a 13 year old.

The fact that you are reading is a positive step. Keep reading. Eventually it will help your written prose.

I barely graduated High school. Hated school.
But I read. A lot. It helps.
No need to thank me for the free advice.

#106 TurnerNation on 08.02.18 at 10:09 am

What is it with Kanada and monopolies? ?
The elites shove it in our face naming it Hydro ONE
Stockwatch:

FP says Hydro One buying Peterborough utility for $105M
2018-08-02 09:09 ET – In the News
The Financial Post reports in its Thursday, Aug. 2, edition that as it tries to move past politics and get back to business as usual, Hydro One announced Wednesday that it has finally secured a long sought-after deal to buy a Central Ontario utility. The Post’s Geoff Zochodne writes that under the terms of the transaction, Hydro One said its wholly owned subsidiary

#107 IHCTD9 on 08.02.18 at 10:13 am

#95 NoName on 08.02.18 at 8:59 am
#91 crowdedelevatorfartz on 08.02.18 at 8:20 am

@#76 NoName

“Very interesting, cant wait how much of serotonin will reminder of the book will robe me.

Just small note if you are in fowl mood, dont read it!”
++++

I’m in a foul mood trying to decide how an illiterate who can barely write……can read……

You see farts you got that illiterate thing wrong, in your eyes i am just some overconfident fat #[email protected]&# who didnt’t learn or don’t accept his place in the society, but in my mind, and real word I am doing beat to my abilities to educate my self to better my family with limited resources and time that i have.
If my pay is dependant on proper grammar and correct spelling i can assure i would do it correctly.

Have a wonderful day you judgemental peace of $#!7.
______

Hey NoName – I like your posts and your links!

I like Fartz too – but I think he’s having a rough start today , he’s tearing everyone a new one on here this morning!

Hey Fartz – long weekend coming up, one more day!

#108 Shawn Allen on 08.02.18 at 10:16 am

Unrealized Gains are not real? Use emotion, not fact?

Pepito at 87 responded:

“Talking out of the both sides of your mouths gentlemen. Unrealized capital gains are no more returns than the appreciation of an UNSOLD house. In both cases, these are merely paper gains which have no material value and may disappear tomorrow.”

*****************************
Indeed, Pepito, I mean why should actual market values matter at all or the rules of accounting when they don’t support your argument?

With the internet, everyone is entitled not only to their own opinion but apparently to their own facts (for example Stan Brooks 8% inflation) and their own rules of math.

Emotion and volume rule these days. The use of facts and math and logic is obsolete. Popular opinion cannot be swayed except by emotion and volume. This explains the rise in nationalism and racism. Hopefully, the pendulum will swing.

Are unrealized gains real? That apparently now depends ENTIRELY on whether you would like them to be real. Facts and math play no part, apparently.

#109 IHCTD9 on 08.02.18 at 10:25 am

#77 fishman on 08.02.18 at 1:35 am
Reacting to CNN’s Jim Acosta’s tweeted footage of being jeered by Trump supporters; Politico’s Marc Caputa mocked the Trumpsterites, “if you put all their mouths together you’d get a full set of teeth.”
Quite true. Nothing tells your class like the state of your teeth. My depression poor parents had all their teeth pulled by 50. I’ve spent 2 grand in the last month. Looks like 30 grand for implants or go cheap with falsies at 10. Or save my money & buy the blender,tablespoon & porridge bowl.
_______

I knew of a couple old guys who ate meat potatoes and veggies with no teeth. The gums must toughen up after a while, or maybe it’s technique?

10 grand for false teeth – serious?

#110 Shawn Allen on 08.02.18 at 10:33 am

Who Got Lucky?

It may have been blind luck, but it would be hard to argue that that the Mother-in-laws of the nation have been champion financial advisors for about the past two decades (at least).

Their advice seemed crazy. Leverage to the hilt and buy a house at all costs. Crazy! Irresponsible! But as it turned out, brilliant!

But have they overplayed their hand by continuing this advice too long? ONLY time will tell.

#111 Dissident on 08.02.18 at 10:41 am

A good friend of mine who recently had her first child still lives in a 400 sq ft condo at Yonge/Sheppard, with her baby daddy, and when asked about her plans for it, and moving to a larger space for her burgeoning family, she said, “Oh we’re not selling it, I want to keep it for Victor (her kiddo), and rent it out”. And I’m like, “What’d you buy it for?” “$150K. If we sold it, we could get $350K” I said, “That’s 200K profit, give or take…did you know that if you invested 200K for 22 years at a modest 8% interest rate, with nothing added or taken away, you’d be at around $1 million dollars. Add about 10K to that each year and you could reach about $2 million dollars…aren’t compounded interest calculators fun?” She blinked; it was as if a light bulb went off. “Yeah, that’s pretty good”. (At least that’s what I got from the online compounded interest calculator).

I don’t think most of the population even realizes that there are other ways to make money, that don’t involve being a landlord or holding real estate forever. Real estate can be a part of that ‘path’ (if you are lucky and entered the market at the right time), but it’s not the *only* path, and you have to ‘engineer’ your own situation based on your own circumstances, market conditions, your existing profit margins…etc. That’s where it gets interesting.

In any case, I hope I opened her eyes to other options, aside from holding down what is one and could later be two mortgages on some mediocre Toronto condo units. I really hope she sells it. They do need the money, living like paupers as it is. But then again, that’s all she’s ever known.

#112 IHCTD9 on 08.02.18 at 10:44 am

#76 NoName on 08.02.18 at 1:29 am
Recently, two days ago book 12 rules for life by Jordan Peterson, was delivered, so i started reading it today. Very interesting, cant wait how much of serotonin will reminder of the book will robe me.

Just small note if you are in fowl mood, dont read it!
_______

That book is just rocking on Amazon, Peterson must be a multi-millionaire by now – at least I hope he is.

His book is the first ever I will not buy due to not wanting to hear the truth. I already know the gist of it, but he’s going to serve it to me “raw and wriggling”.

He’s one guy who really has things figured out, and it’s just too hard to hear it un-cooked.

Like I said, I’m not blind as to what’s going on – but I’m going to stick with making others pay for it all instead of me, and keeping my household out of the whirlwind.

#113 soost on 08.02.18 at 10:44 am

Anecdotally I’m seeing an increase in demand and slight upward pressure on prices in Toronto. Is this a genuine recovery or a blip?

#114 Jas on 08.02.18 at 11:31 am

#104 young & foolish.
I agree with you.
And one thing that Garth did not mention is the leverage you get in RE. You can certainly do the same in stock market with margin account but you run the risk of getting wiped out overnight. This is not the case with RE. This factor should also be considered in favour of RE.

Real estate debt often equals 95% of the holding – a 20-to-1 ratio. Nobody does that with financial assets. Debt = risk. This does not make real estate more attractive, save to the naive. – Garth

#115 IHCTD9 on 08.02.18 at 11:53 am

#70 Ace Goodheart on 08.02.18 at 12:09 am

What you don’t want to be is middle class.

Spend your life working for the “greater good”, pay more tax than the rich or the Poor, get no benefits from all the tax you pay (all the money goes to the rich through corporate welfare and to the poor through the social justice systems), and never achieve true happiness.

Middle class sucks folks. It is horrible.
_______

IMHO, it’s high time the middle class gets their ass in gear and does something about their miserable condition. Yes we’ve obliterated the OLP and have DF at the reigns now, but reasonable, logical thought experiments tell me our debt ain’t going down much if any.

We’re too far gone, and the remedy is way too hard to swallow for the voting public. Any real attempt by any politician to fix the spending will be met directly by a front-kick out the door the very next election.

Voting is good, but forcing our leadership into an obviously untenable position is the only way the public can even begin to start accepting a new reality.

That untenable position required is being severely limited in ability to borrow, and severely limited remittances for incoming revenue with no prognosis for reliably increasing it.

I’ve already started work…

#116 Guy in Calgary on 08.02.18 at 12:06 pm

1 Honey Dripper on 08.01.18 at 5:21 pm
In spite of the moaning those mills still think you need to buy a house to get ahead in life. They know nothing about and don’t care about investing. Please write a new book!
—————————————————————-

Yea it’s the Mills! Not the boomers looking to offload their homes as their ticket to retirement and you know… the ones responsible for educating their kids on basic financial management.

Those stupid mills can’t do anything right!

#117 IHCTD9 on 08.02.18 at 12:58 pm

#111 Dissident on 08.02.18 at 10:41 am

In any case, I hope I opened her eyes to other options, aside from holding down what is one and could later be two mortgages on some mediocre Toronto condo units. I really hope she sells it. They do need the money, living like paupers as it is. But then again, that’s all she’s ever known.
_____

If they’re not making the big bucks in the GTA and instead struggling, it’s a no brainer to liquidate, invest, and move.

Tell her to move to a smaller town and her and the BD can get whatever jobs at 14.00+ hr min wage. That’s 58 grand per year gross or about 4125.00/month net between them.

They can buy an actual house – not a mansion – but needs a little work for 150K, that’s a 750.00/month payment at 3.5%. Cheaper than rent – even local rent.
BD can learn to do renovations, roofing, windows, decks, etc, whatever is needed.

They can add 500.00 per month to the 200K nest egg and end up with 823K after 22 years at an easy 5.0% – they’ll almost certainly do better.

They can live, invest, and own a home and still have at least a grand left over every month. Increases in interest rates could be handled, daycare could be covered (it’s not 2K per month out here). They’d probably have near a million at retirement. They’d be set. Sounds like her current lifestyle is worse than the above by a long shot.

Kudos for making her aware of investing the money, I also believe many are just not aware of the potential, or even the option.

If she is less than 35 years old, she has the potential to equal our personal efforts thanks to that 200K (with BD’s future input also) – and we have been at it for 20 years working decent jobs. The younger she can put that 200K to work, the better off she’ll be. Life changing potential here.

Think about how long it would take for her to get that 200K together any other way – probably impossible, and definitely too late to make it pay.

#118 Johnny on 08.02.18 at 1:18 pm

#52 45north on 08.01.18 at 9:10 pm
Danny: And now Doug Ford is setting up a smaller Toronto City Council to be controlled by big developers
Toronto council votes to call for referendum on provincial bill to slash number of councillors
https://nationalpost.com/news/toronto/toronto-council-votes-to-oppose-ontario-bill-to-cut-number-of-councillors?video_autoplay=true
47 councillors seems awfully large. Each councillor gets his own office and staff. Costs add up.
the province has complete authority here. There is no basis for legal challenge.
The biggest challenge to Toronto is declining property values. As Garth points out 12% of households nationally owe more than 350% of their income. In Toronto it’s more. He says they have pickled themselves in debt. I believe that the decline in property values will be more severe than anything we have ever seen. Governments really cannot do anything about it. I mean the households signed the papers, they made the deal. Garth gave the example of a couple who bought a contract to purchase a house in Barrie for $650,000 but it’s now worth only $550,000. What’s the government going to do? It can encourage families to stay together and build a sense of worth but just when we need a sense of spiritual values we’re going to find we don’t have them. I don’t see how 47 municipal councillors are going to serve the problem any better than 25.
Next big problem is condos. The CBC documentary “The Condo Game” shows yuge problems with Toronto condos. I’m concerned that they’re not a good investment. I was raised in North York. The housing stock of the last century was solid. It has served well. 47 municipal councillors are not going to serve the problem any better than 25.
Infrastructure is a whole series of problems. One problem is the need to demolish the Gardiner Expressway or rebuild it and another is the need to extend the subway system. Again 47 councillors are not going to serve the problems any better than 25.
The charge that Toronto City Council will be controlled by developers is specious. I believe that municipal councillor is a very demanding and unrewarding job. The people that do it need to be supported by their community associations who in turn need dedicated people. Pay is zero. In the absence of community support, the job of municipal council is very lonely. If a developer wants to host a get-together, it’s hard to fault a councillor for showing up.
I live in Ottawa. For the last 40 years I have served on the community association where I live.
…………………………………………………………………….

Honestly who the hell wants to essentially own “really rent” a space in concrete. You actually only own the right to occupy the space concrete walls. The condo paperwork is criminal and they (the boards and developers) always win. Lately it has been a piss away for investors who are being suckered into “The Lifestyle”. I have had two relatives that have bought in and then unloaded these money pits at a loss. A lot of the problems as well are the investment condos where your neighbour is a renter that quite frankly don’t give a hoot and really drive down the resale values.
https://watch.cbc.ca/media/doc-zone/season-8/the-condo-game/38e815a-0094a90dc64

#119 jess on 08.02.18 at 1:36 pm

fake invoices ? where are prosecutors going ?

========

Between June 2013 and January 2014, a Chicago-based money broker secretly working as a Homeland Security informant arranged for the Sinaloa cartel to make nearly 20 transactions with Golden Opportunities, according to an indictment.

The indictment refers to “Refinery A” in Florida as the gold buyer, which several sources familiar with the case said is a reference to Golden Opportunities.

Cartel members based in Chicago collected shopping bags and suitcases of drug cash from associates in the Midwest and South. They used the money to sweep up gold from pawnshops and jewelers. Then, they shipped the goods to Golden Opportunities, which in turn sold the gold to big refineries.

To cover up the dirty deals, Jed Ladin created fake invoices to make it appear that the company was buying gold from a Mexican jewelry store, De Mexico British Metal. Federal agents said the store was owned by a Sinaloa cartel member, Carlos Parra-Pedroza, who inexplicably went by the nickname “Walt Disney.” He was described as a ringleader in the Chicago money-laundering case.

At Parra-Pedroza’s direction, Golden Opportunities wired millions of dollars to the store and to other members of the cartel in Mexico, court records show. In return, Ladin received packages from Parra-Pedroza’s store in Mexico — but they weren’t filled with gold.

Read more here: https://www.miamiherald.com/news/local/article194188089.html#storylink=cpy

…” case shows how international organized-crime groups manipulate America’s hush-hush gold industry to launder money and keep their businesses running. Even minor industry players can wind up playing supporting roles in vast criminal operations. While the couple was never charged in the Chicago case, Golden Opportunities shut down after the Ladins pleaded guilty in 2014 in a separate money-laundering prosecution involving gold.

The Chicago coke-to-gold scheme was based on a tried-and-true criminal playbook: During the late 1980s, in a case dubbed “Operation Polar Cap,” federal investigators discovered Colombia’s Medellín cartel had funneled $1 billion in dirty money through jewelry stores in New York, Los Angeles, Houston and Miami.

Read more here: https://www.miamiherald.com/news/local/article194188089.html#storylink=cpy

#120 Newcomer on 08.02.18 at 1:38 pm

#96 IHCTD9 on 08.02.18 at 9:05 am

You said two things, one of which was reasonable (prices are set by what the market will bear) and the other of which was unreasonable (people will pay the absolute maximum that they can for Toronto housing). I’m only disagreeing with the unreasonable statement. If you want to pretend that you didn’t say it or that it is somehow equivalent to the reasonable statement, that’s fine. Another option would be for you to say, “Oh, yeah. I guess I went too far when I said, “What can the top 10% of RE buyers scrape (borrow, beg and steal) together to buy a house? That’s your new home price support right there.”

And yes, I am only arguing for fun. Is there another reason to argue in the comments section of a blog?

#121 Ted on 08.02.18 at 1:59 pm

Question re GDP growth that I can’t seem to find online explained with any clarity. Garth cited Canada’s Year-over-year as 2.6%, with .5% in May alone. The US number of 4.1% for Q2 – that’s annualized year-over-year also, I assume? Ie not 4.1% in a 3 month period??

Yes, annualized. – Garth

#122 Pineal Tone on 08.02.18 at 2:06 pm

I suspect the cycle has just turned. The housing cycle will rise in the future (it is starting to come down now) and the stock market will underperform.

Might be actually be a good time to monitor the housing market and buy what one can afford since housing asset will become more affordable going forward while that balance ETF might underperformed.

There is no discernible correlation between Canadian housing and equity markets. – Garth

#123 thebarold on 08.02.18 at 2:33 pm

http://www.visualcapitalist.com/most-valuable-companies-all-time/

Dutch East India Trading Co was worth the equivalent of $7.9T in modern dollars.

#124 James on 08.02.18 at 2:56 pm

#112 IHCTD9 on 08.02.18 at 10:44 am

#76 NoName on 08.02.18 at 1:29 am
Recently, two days ago book 12 rules for life by Jordan Peterson, was delivered, so i started reading it today. Very interesting, cant wait how much of serotonin will reminder of the book will robe me.

Just small note if you are in fowl mood, dont read it!
_______
That book is just rocking on Amazon, Peterson must be a multi-millionaire by now – at least I hope he is.
His book is the first ever I will not buy due to not wanting to hear the truth. I already know the gist of it, but he’s going to serve it to me “raw and wriggling”.
He’s one guy who really has things figured out, and it’s just too hard to hear it un-cooked.
Like I said, I’m not blind as to what’s going on – but I’m going to stick with making others pay for it all instead of me, and keeping my household out of the whirlwind.
_________________________________________
Should we send a copy to Donald J Trump?
Here is an excerpt from his book.

Rule 8: Tell the truth.

You may lie to others to get what you want; you may lie to yourself to feel better. But deep down you know it’s inconsistent with your beliefs, and you feel unsettled.
You must develop your personal truth, and then act only in ways that are consistent with your personal truth.
Lies can be about how much you enjoy your job; whether you want to be in a relationship; whether you’re capable of something; that a bad habit isn’t that bad for you; that things will magically work out.
Once you develop your truth, you have a destination to travel toward. This reduces anxiety – having either everything or nothing available are far worse.
Act only in ways that your internal voice does not object to. Like a drop of sewage in a lake of champagne, a lie spoils all the truth it touches.

#125 Interest effect on TSX on 08.02.18 at 3:00 pm

Re:122

I see two opposing effects of these higher interest rates on TSX and RE:

(1) Higher rates give people an incentive to sell off stocks to pay off mortgage.

(2) Higher rates scare off RE investors, causing them to sell off RE, and put the proceeds into TSX.

The first would cause lower stock prices, the second would cause higher stock prices.

So maybe netto, higher interest rates wouldn’t do too much to TSX valuation?

(It most certainly will lower RE prices though.)

#126 James on 08.02.18 at 3:01 pm

Wow a real prognosticator!

https://bigthink.com/paul-ratner/34-years-ago-a-kgb-defector-described-america-today

#127 jess on 08.02.18 at 3:02 pm

26 -=jwk=- on 08.01.18 at 6:46 pm

nutbars – Q anon “we the people” ???

e.g. Man Shuts Down Hoover Dam in Armored Vehicle Demanding Release of Full IG Unredacted Report

What is QAnon? rightwing conspiracy theory

or?

Turd Reich: San Francisco dog owners lay minefield of poo for rightwing rally

‘I just had this image of alt-right people stomping around in the poop,’ says the organizer of an unusual protest ahead of Saturday’s Patriot Prayer rally

=======

Two Canadian women arrested for ‘shoot an Indian day’ social media posts

Posts targeted residents of First Nation communities after a wave of vandalism in Flin Flon
https://www.theguardian.com/world/2018/aug/01/canada-shoot-an-indian-day-facebook-arrested-first-nations-flin-flon

=======
Pecksniffian? “Ontario News Now.”

#128 Stan Brooks on 08.02.18 at 3:23 pm

#108 Shawn Allen on 08.02.18 at 10:16 am
Unrealized Gains are not real? Use emotion, not fact?

With the internet, everyone is entitled not only to their own opinion but apparently to their own facts (for example Stan Brooks 8% inflation) and their own rules of math.

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

Brainwashed to the core. Stupid, arrogant, ignorant.

How much is inflation in housing in the last 2 decades in the big cities in Canada?

10 % +. 6 times increases in Mississauga, Vaughan.

Cost of prepared food from doubled, to increase of 2.5 times in the last 10 years.

Cost of electricity in Ontario doubled in the last 3 years.

So how much do you say is the inflation, boy?

http://www.mining.com/web/the-real-inflation-rate-and-what-to-do-about-it/

Here is some more calculations from other people:

True inflation rate in Canada from 1995 to 2010 is 7 % per year
https://www.youtube.com/watch?v=RP34yHPntxc

Sick and tired of dealing with idiots.

#129 Leo Trollstoy on 08.02.18 at 3:26 pm

#111 Dissident on 08.02.18 at 10:41 am
She blinked; it was as if a light bulb went off.

Did u blink when she pointed out that the kid can’t live in a portfolio and that only a tiny minority of Canadians are able to reap an 8% annual return for any significant length of time?

#130 jess on 08.02.18 at 3:36 pm

July, 2005 helicopter ben:

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though. ”
=============
Oct. 20, 2005

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals

Nov. 15, 2005

“With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly.”

Feb. 15, 2006

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise .”

Oct. 4, 2006

“If current trends continue, the typical U.S. worker will be considerably more productive several decades from now. Thus, one might argue that letting future generations bear the burden of population aging is appropriate, as they will likely be richer than we are even taking that burden into account .”

March 28, 2007

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency .”

Feb. 15, 2007

“Despite the ongoing adjustments in the housing sector, overall economic prospects for households remain good. Household finances appear generally solid, and delinquency rates on most types of consumer loans and residential mortgages remain low .”

May 17, 2007

“All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system . The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.”

Oct. 31, 2007

” It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions .”

Jan. 10, 2008

” The Federal Reserve is not currently forecasting a recession .”

Jan. 18, 2008

(Two months before Fannie Mae and Freddie Mac collapsed and were nationalized) ” They will make it through the storm .”

Jan. 18, 2008

” [The U.S. economy] has a strong labor force, excellent productivity and technology, and a deep and liquid financial market that is in the process of repairing itself .”

June 9, 2008

” The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so. ”

July 20, 2008

” The GSEs are adequately capitalized. They are in no danger of failing. ”

Aug. 2, 2010

” The financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again. “

#131 NoName on 08.02.18 at 3:53 pm

#126 James on 08.02.18 at 3:01 pm
Wow a real prognosticator!

https://bigthink.com/paul-ratner/34-years-ago-a-kgb-defector-described-america-today

if you find that interesting check this out form july 20.
https://www.greaterfool.ca/2018/07/20/the-fly/#comment-604942

#132 Shawn Allen on 08.02.18 at 4:17 pm

More Fake Facts

#123 thebarold on 08.02.18 at 2:33 pm
http://www.visualcapitalist.com/most-valuable-companies-all-time/

Dutch East India Trading Co was worth the equivalent of $7.9T in modern dollars.

************************************
I recently read quite a bit about the VOC. the Dutch East India Company.

The claim of it being worth 8 times what Apple is now worth in comparable dollars is beyond laughably fake. There is no possible way that this is based on the market value of the shares adjusted for inflation. It must be assuming instead a value for the lands it controlled unhinged from the market value of the shares circa 1637.

But the shares of the company, first issued July/August of 1602 are interesting.

The shares used to trade on the basis of so many times the original invested value of the shares.

The Dividend used to be stated not as a percent of market value but as a percent of the original money invested. A 25% dividend per year (which it did give in some years) meant 25% of the IPO value of the shares.

#133 James on 08.02.18 at 4:21 pm

#131 NoName on 08.02.18 at 3:53 pm

#126 James on 08.02.18 at 3:01 pm
Wow a real prognosticator!
https://bigthink.com/paul-ratner/34-years-ago-a-kgb-defector-described-america-today
__________________________
if you find that interesting check this out form july 20.
https://www.greaterfool.ca/2018/07/20/the-fly/#comment-604942
______________________________________
Great minds think alike.

#134 The Real Mark on 08.02.18 at 4:30 pm

“#75 The Real Mark on 08.02.18 at 1:27 am ”

Personation isn’t cool. Knock that off.

#135 The Real Mark on 08.02.18 at 4:33 pm

“So maybe netto, higher interest rates wouldn’t do too much to TSX valuation?”

Higher rates historically have been very positive for the TSX, not only higher short-term rates, but higher long-term rates.

In the 1970s, the TSX solidly outperformed the US stock market.

Unfortunately I don’t have any data on the 1930s, but I suspect the TSX would have also solidly outperformed the US stock market at the time due to its substantial overweighting in the precious metals mining shares.

Many TSX components respond very favorably to the higher inflation that higher interest rates imply from a top-line revenue point of view. Many TSX components have substantial *long-term* debt which depreciates as interest rates rise.

Additionally, higher rates obviously cause a rotation out of Canadian RE and that money has to go somewhere. Eventually into investments like the TSX indices.

#136 jess on 08.02.18 at 4:56 pm

markets
1MDB Lawyer Who Worked With Goldman a Target in Swiss Probe
By Hugo Miller
and Andrea Tan
July 30, 2018, 11:00 PM EDT Updated on July 31, 2018, 6:01 AM EDT

Two accused by Swiss prosecutor of bribery, misconduct in case
Four Petrosaudi, Abu Dhabi executives also under investigation (bloomberg)

A former top executive with the Malaysian investment fund 1MDB and a senior lawyer at the fund who worked with Goldman Sachs Group Inc. are among six people targeted in a Swiss criminal probe into the multibillion-dollar scandal, according to people familiar with the matter.

========

famous last words ?
Najib and Trump golf partners :

At the game’s conclusion, Trump posed for a photo with Najib and the late Malaysian ambassador to the US, Jamaluddin Jarjis, and autographed it. It was inscribed: “To my favorite Prime Minister. Great win!” according to Najib. The Malaysian PM said he keeps the photo on his desk. “I did it before [Trump] became as famous as he is today,” Najib told the Star.
============
Public disgust at allegations of corruption linked to Najib was a major factor in the upset, with the ex-leader, his family and cronies accused of looting state fund 1MDB.
Najib Razak charged over multibillion 1MDB corruption scandal …
https://www.theguardian.com/…/najib-razak-charged-over-multibillion-dollar-1mdb-c…

#137 Pepito on 08.02.18 at 7:00 pm

#108 Shawn Allen on 08.02.18 at 10:16 am
Unrealized Gains are not real? Use emotion, not fact?

Pepito at 87 responded:

“Talking out of the both sides of your mouths gentlemen. Unrealized capital gains are no more returns than the appreciation of an UNSOLD house. In both cases, these are merely paper gains which have no material value and may disappear tomorrow.”

*****************************
Indeed, Pepito, I mean why should actual market values matter at all or the rules of accounting when they don’t support your argument?

With the internet, everyone is entitled not only to their own opinion but apparently to their own facts (for example Stan Brooks 8% inflation) and their own rules of math.

Emotion and volume rule these days. The use of facts and math and logic is obsolete. Popular opinion cannot be swayed except by emotion and volume. This explains the rise in nationalism and racism. Hopefully, the pendulum will swing.

Are unrealized gains real? That apparently now depends ENTIRELY on whether you would like them to be real. Facts and math play no part, apparently.
_____________________________

You’re blabbing a lot of nonsense. Market values do matter but, unless you harvest your gains, those valuations are unrealized paper gains, just like the appreciation of an unsold house. Your argument against this is what, exactly?

#138 Where's The Money Greedo? on 08.02.18 at 11:17 pm

RIP John Carten….
I just found out that John Carten has passed, July 31st.
John Carten was the person behind the waterwarcrimes.com website where he reported on his take of the criminal activity in Canadian gov’t with respect to selling Canada’s water by insiders in gov’t all across Canada and the supposed insiders who, in his words, were killed and had a page in his site devoted to just that called the Graveyard of the Guilty, showing the relationship of former and present Lawyers-judges-politicians-insiders who bit the dust suspiciously and water war crimes.
I have included as many links as I can since his site is now down.
I hope this blog’s readers were privy to the original site. It was a treasure trove of info on the so-called “elite” of Canada and how utterly horrible these people are/were. They ruined his life.

If anyone can help me keep as much info on this for reference before TPTB scratch it from the net let me know.
We have to try to keep all his info on hand to give a retrospective of how horrid the players that be in Canada. And also to keep John’s memory alive of one who stood up for ALL Canadians.
To me, he is a hero, much like Garth.

Here is a youtube piece that gives a quick rundown of waterwarcrimes: https://www.youtube.com/watch?v=HNta99sAhO8&feature=youtu.be

Many links:
https://gangstersout.blogspot.com/2018/07/in-memory-of-john-carten-and-water.html

https://waterwarcrimes.blogspot.com/

https://ascendingstarseed.wordpress.com/2011/12/24/dead-judges-dont-lie-a-graveyard-of-the-guilty-canadas-water-crimes/

http://deadjudges.blogspot.com/

http://bcsecuritiescommissionasham.blogspot.com/2016/06/the-bc-securities-commission-water-war.html

https://www.conspiracy-cafe.com/apps/blog…estruction/show/44318693-prime-minister-pierre-trudeau-the-water-war-crimes

The Law Society of British Columbia has become a criminal organization.
https://lawsocietybc.weebly.com/

http://waterwarcrimeslegal.blogspot.com/

http://chinawatchcanada.blogspot.com/2014/09/paul-desmarais-and-water-war-crimes.html

http://cornwallfreenews.com/2011/01/17/the-wet-job-of-murder-water-politics-special-to-the-cornwall-free-news-by-roy-berger-january-17-2011-cornwall-ontario/

Report about BC Supreme Court Judge John Stansfield:
https://itccs.org/2014/11/08/itccs-breaking-update-november-8-2014/

Let us not forget!

RATM!

#139 Bdwy sktn on 08.03.18 at 9:07 am

10 yr once again can’t summit 3%.
Down age goes again.

………….
On a different note, jess should get some kind of prize for posting hundreds (thousands?) of times yet not a single post on topic.
He seems rather scared of his shsdow.