Ballistic

This may not end well, Part Deux. Days ago we told you the beavs are borrowing again.  Household debt’s rising even as interest rates snake higher and real estate wobbles. The decline in new mortgage originations is being made up by refis and home equity LOCs. It may be hard to believe on this blog where our grapes are peeled and the divvies keep rolling in, but the masses are pooched. They borrowed bigly, are swamped with monthlies, and would rather swap a new HELOC for a 19% credit card balance.

Remember mortgage broker Rob McLister’s warning? Rates could easily spike, not just swell. Five-year mortgages could be at 5.5% before you know it, with the mortgage stress test at 7.34%, squishing moister dreams of owning anything. If that were to occur, real estate might do a Cat 5 correction, rolling us back to 2010 pricing. (The average Toronto property way back then sold for $427,329, or 44% less than today.)

That warning is based on some simple assumptions: Trump  continues to gas the economy with tax cuts, weaker regs and protectionist walls; the US federal deficit goes wild, taking the bond market with it; unemployment stays at half-century lows and inflation pops because of wage demands. All of which, ahem, is now occurring.

And that brings us to Wednesday afternoon.

The US Fed and its new boss, Jerome Powell, will announce the eighth rate increase in this cycle. What’s also expected is a hawkish tone on what comes next. Markets think there’ll be another increase in December, two more in the first half of 2019 and then… maybe more. A Fed rate of 3% is considered “neutral” – not stimulating or choking the economy, and we’ll be there in a few months. That much is assumed. Listen to some of the voices:

“While the US dollar has been strong throughout the year, it hasn’t translated to weakness in US markets or economic numbers, so we have no doubt that as long as the stock market continues its upward trajectory it is an all clear sign to this Fed,” says Brett Ewing of First Franklin. Meanwhile Scotiabank’s Derek Holt adds: “I suspect that one of the Fed’s goal this week will be to nudge market rate expectations higher. It will seek to do so in a way that doesn’t derail U.S. economic momentum and is consistent with medium-term stability. To that end, several Fed officials have already come out individually to make a stronger analytical case for a more aggressive path of future hikes.”

At this point “aggressive” means a quarter point hike every quarter. That will get us to 3% lickety split – and add about 1% to Canadian mortgage rates. But some think there’s no stopping at that point.

   “Tomorrow they will hike rates again. That won’t be it,” says Bay Street analyst Ed Pennock. “Bilton of JPMAM global Multi Asset Strategy says that next year the FED will push rates past neutral, “ushering in a Period of genuinely tight monetary policy”.  It’s just going to increase the cost of capital. We know how that ends. In line with this, the 10 year Treasury is close to breaking out at 3.106%.  It’s a crowded trade.”

The danger, then, is that Trump loses control of the economy. Or, rather, that it does just as he hopes – getting more wired, extreme and ballistic than Elon Musk. The deficit hits $1 trillion and stays there as tax money ends up in the bottom lines of Apple and Amazon. Wages spike as corps compete for qualified workers (there are already over 6.9 million job openings – more than one for every unemployed person). Inflation soars. Bond yields spike towards 4%. Trade wars turn into trade deals, flooding markets with speculative optimism. The Fed repeatedly taps on the brakes, then jams them hard. And uppa she goes. The McLister scenario arives – in which case you will may not believe what happens to real estate here in maple.

This ain’t that far-fetched. Every element for an American melt-up is in place. Tax cuts. Reg reform. Full employment. Swelling prices. Consumer confidence. Record markets. Runaway profits. And a bully as the world’s most powerful person. The Fed’s job will be to ride herd on a stampede. Two hundred basis points is no fantasy.

Anyway, pay some heed to Jerome on Wednesday.  Then go lock your loans.

131 comments ↓

#1 Doug t on 09.25.18 at 4:54 pm

KABOOM – I said last week that I had the feeling that a proverbial shoe might drop in 2019 – stock up on provisions folks lol

RATM

#2 jess on 09.25.18 at 4:57 pm

https://www.reuters.com/article/us-argentina-economy/argentinas-central-banker-resigns-in-the-midst-of-imf-talks-idUSKCN1M51U2?il=0

government’s ability to pay its foreign debts.

That run on the peso led Argentina to secure a $50 billion credit line from the IMF

========

Ratings agency Moody’s said in a statement that the “corruption scandal is credit negative for Argentine corporations.” It cited “bribery investigations that led to the arrest of senior Argentine business leaders.”
At Least $36 Billion Has Evaporated In Argentina: The Corruption …
https://www.forbes.com/…/at-least-us36-billion-has-evaporated-in-argentina-the-corru…

Aug 30, 2018 – A public-private corruption ring has siphoned out some US$36 billion from the productive economy in Argentina and into the pockets of a few,

#3 dakkie on 09.25.18 at 5:02 pm

Ten Years after the Financial Crisis, Wall Street Bankers Clear the Air

http://www.investmentwatchblog.com/ten-years-after-the-financial-crisis-wall-street-bankers-clear-the-air/

#4 BK on 09.25.18 at 5:04 pm

Garth, I like when you talk like this!

#5 marcus on 09.25.18 at 5:11 pm

Canada is in for a world of hurt as the next cycle forms. Get ready canucks …….. you are going to need lube.

#6 bb on 09.25.18 at 5:18 pm

If a GTA house reach 2010 levels (Inflation adjusted?), I might be able to finally “own” a place.

#7 reynolds531 on 09.25.18 at 5:21 pm

So if someone is locked in for five more years at a very low rate what’s your standard advice for excess cashflow? Invest confidently that markets will be higher? Pay down the loan banking on a higher renewal?

Go buy a pallet of canned goods for our inevitable transformation into the Venezuela of the north?

#8 NoOneOfConsequence on 09.25.18 at 5:36 pm

Everyone commenting on this blog seemed so smart and wise. They gave me all sorts of seemingly good reasons why interest rates could never go up.
Literally hundreds of them!!
The internet has let me down again….
:(

#9 Jungle on 09.25.18 at 5:37 pm

2010 prices are not going to happen- keep dreaming.

How about this? Zolo showing average price is up for condo and detach. 1.4m for detach we’ll see how the month goes..

Few days ago transunion boss said delinquently rate on non mortgage debt is DOWN, he said the opposite if what was expected is happening in the face of
Raising interest rates.

Average mortgage debt in Ontario is only 180k with wage growth at 3%?

Looks like nafta not going well I don’t see poloz being aggressive at all if there is no deal.

A sell off in our bond market possible if he had to cut rates and loonie will falter.

Still enough wealth to keep the re going, 10 million by 2040 don’t bet against it, there will be immagrants EVERYWHERE !!

#10 HELOCerup on 09.25.18 at 5:37 pm

Here’s why this will end badly. Anyone remember BITCOIN?

All those who got massive windfalls last year in bitcoin, took that profit… or the house’s money, and moved it into speculative ALTCOINS… to find the next bitcoin or ether killer and keep making easy money.

To the moon they said!

Buying RE with a HELOC downpayment is no different, including lending your moister kids money, cash you don’t have.

Using unearned windfall gains, from an already hyperinflated asset, to speculate on even more volatile speculative assets… condos, pre-sales, million dollar knock-downs…

When bitcoing fell, the alts fell HARDER.

We all know how this story ends.

#11 Penny Henny on 09.25.18 at 5:38 pm

“Remember mortgage broker Rob McLister’s warning? Rates could easily spike, not just swell. Five-year mortgages could be at 5.5% before you know it, with the mortgage stress test at 7.34%, squishing moister dreams of owning anything. ”

Dude, that guy is in the mortgage selling business.

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

#108 SP on 09.25.18 at 4:27 pm
“I expect Canadian variable mortgage rates to rise by another 0.25% over the near term, but after that, for the reasons outlined above, I think the odds of more hikes decrease significantly. Over the medium and longer terms, while the BoC sounds inclined to continue raising rates if possible, it has repeatedly said that it would do so cautiously. I think a coming U.S. recession will lead to slower growth in Canada that will raise the possibility of rate cuts thereafter. If you can stomach the volatility, there may well be some saving in variable rates yet.”

He is in the business of giving advice, in fact, and his advice has been invariably useful and correct over the course of many years. I have been one beneficiary and know of many others. The difference between him and the omniscient of this blog is that he is truly independent.

He’s still wrong. And, BTW, I don’t sell mortgages. – Garth

#12 George on 09.25.18 at 5:42 pm

Houses in Hamilton are still selling well, some up to $20,000 over list at the lower end of the market – speculation and flipping remain strong. A slight backing off from the rabidly hot market of last year, but otherwise still a really healthy market. I see no evidence of a collapse, or even a melt in this city. Good example – house below sold over-asking price for $455,000 https://www.cbc.ca/news/canada/hamilton/hamilton-450k-house-listing-1.4794427

#13 Suede on 09.25.18 at 5:45 pm

Sounds like it’s time to wheelbarrow more money into the US markets..

#14 Alessio on 09.25.18 at 5:48 pm

Omg Garth I’m scared and excited at the same time! House prices will crash (I’ll get a detached in GTA for cheap) stocks will crash but I’ll be in balanced portfolio so I won’t lose too much money and I can work three jobs since they are plentiful and pay for increase of goods and services. When will all this stuff come to fruition? December? 2025? 2030?

#15 Dave on 09.25.18 at 5:50 pm

I only read this blog to hear about interest rate hike, luv it. Let the housing crash come, cant come soon enough.

#16 henry k on 09.25.18 at 6:01 pm

meanwhile weed stocks going up big time, no crash. Those who bought at the dip are rewarded well

Tilray lost 55% in a day or two. This is Bitcoin/dot-com replayed. Be careful. – Garth

#17 Mike on 09.25.18 at 6:04 pm

Everyone who said home prices wouldn’t drop, interest rates would remain low and the party would continue are the same people who bought BTC at $18,000 or TLRY at $300. They’ll be the same whiners who will demand the government “do something!”.

pathetic…..

#18 Bernie Allmost Madeitoff on 09.25.18 at 6:06 pm

NAFTA DEAL REACHED!!!

TRUDEAU IS HAILED A GENIUS!!

#19 Dolce Vita on 09.25.18 at 6:06 pm

Well that was fire and brimstone.

I like your -44% better (by when?) than my -50% by end of 1st Qtr. 2019…there is a je ne sais quoi cachet to your precision.

If RE asset values decrease on average by that much, so will new HELOC amounts restricting cheap credit. Down goes Consumer Spending, 65% of GDP.

Trump not afraid of enacting punishing tariffs (e.g., PRC).

If auto tariffs come to pass a rapid recession will result from fear based thinking followed by large ON auto sector jobs losses probably spread out over 2019. That will devastate ON RE to numbers worse than your -44% by the end of next year.

Interest rate hikes for certain since inflation will increase either as a result of your boom time examples or higher prices due to a falling dollar. Either way, consumer debt servicing will increase substantially.

So very bad for all of us.

#20 The Wet One on 09.25.18 at 6:09 pm

So what you’re saying is, if you can survive your mortgage payments going up 25%, and you have no intention of selling your abode anytime soon and you didn’t pay an exhorbitant price for your home (i.e. you didn’t buy in Toronto or Vancouver and a couple of other places, but not in most of the rest of Canada), you’ll probably be ok and not take too much of a hit in this scary situation.

Do I have that right?

Because I can pay 25% more in mortgage costs (though I’d rather not), I don’t plan on selling unless I’m in a casket (in which case I no longer care), and uh, I’m pretty sure I haven’t overpaid exorbitantly for my new home. It’s not an inexpensive house to be sure, but for its segment of the market (brand new upscale luxury duplex), it’s not hugely overpriced and in a very good location.

So I should be, reasonably OK right?

If not.

Sh*t.

It’s too late now.

I’ll lump it and muddle through.

But given that oil prices are on their way up, and that if the U.S. economy goes into high gear, oil prices will likely stay up until things go into the crapper worldwide, and that will buoy the economy where I live (and the NDP will be booted from office next year, yeah I live in Alberta, so we’ll get the juice from a UCP government), I’m pretty sure that this looks more good than bad in my situation.

Lousy things could happen (anything’s possible after all, right?), but I’m feeling pretty comfortable with my situation all things considered.

Of course, that’s what the captain of the Titanic probably thought too.

Eh. I’ll roll the dice and take my chances.

Let the good times roll!

#21 Jungle on 09.25.18 at 6:11 pm

Even in the face of stress test making all new mortgage debt qualify 2% higher, Gta re didn’t even budge ..

Bears realize this: Gta is now global mega city, there are more buyers with money them you and I.

Heck I can’t even afford the average detach @1.4m (zolo) and I’m IN the market..but someone else can!

500+ detach sales mom??

Average Income is no longer the fumdamental metric supporting re here. That’s not needed enough wealth to keep demand going.

#22 Bobs ur uncle on 09.25.18 at 6:19 pm

As a renter on the sidelines, I would like to believe all your provided numbers but reality on the ground in small ski-town BC is that house prices are firm on reduced supply and I can still get 3.39 fixed 5-year from my local CU – among others.

If NAFTA deal goes ahead, I see some variation of your scenario playing out. But if Trump puts tariffs on autos, interest rates in Canada stay low for even longer, and homeowners (those still with jobs) can continue to tread water.

#23 Linda on 09.25.18 at 6:21 pm

The Donald has at a minimum 2 more years in office. So the scenario as laid out by Garth is more than plausible. On the plus side, if housing does indeed crash it may become affordable. On the negative side, the very people who have been demanding lower prices won’t qualify for a mortgage because rates will have swollen. In the interim, those who are indebted will see a swelling of their deficit. As for the USA, how long can it sustain annual trillion dollar deficits before the music stops?

A well known science fiction author postulated a period called ‘The Crazy Years’. I think we are living in them now.

#24 Torontorocks on 09.25.18 at 6:22 pm

Meanwhile back at the ranch, Trudeau continues to stare wide eyed at his audience and slowly realizing he never had a hope in hell to run a country. These are negative interactions we should all learn from, you spoiled sanctimonious man child

#25 KPMG Employee on 09.25.18 at 6:22 pm

https://www.cbc.ca/news/canada/toronto/doug-ford-ontario-line-by-line-audit-1.4837471

Premier Doug Ford should also abolish OW and ODSP and save $9 billion a year. Welfare shouldn’t be a career my friends. The best social assistance is a JOB.

#26 45north on 09.25.18 at 6:22 pm

Remember mortgage broker Rob McLister’s warning? Rates could easily spike, not just swell. Five-year mortgages could be at 5.5% before you know it, with the mortgage stress test at 7.34%, squishing moister dreams of owning anything. If that were to occur, real estate might do a Cat 5 correction, rolling us back to 2010 pricing. (The average Toronto property way back then sold for $427,329, or 44% less than today.)

Rob McLister: “Given that, and the fact that there’s a 95% correlation between U.S. and Canadian 5-year bond yields, there is at least a chance that Canada’s 5-year yield could exceed 4% for the first time in over a decade. That could result in:
* discounted 5-year fixed rates near 5.50%, a whopping two points higher than today
* the stress-test rate near an unthinkable 7.34%.”

Garth: A 2% jump in mortgages is something few people have contemplated or prepared for. Not only would it make renewing a home loan a painful experience and seriously cut into family cash flow, but housing in general could go catatonic.

I said my test is Mortimer Avenue in Toronto. As long as there are buyers ready to bid $1 million for half a double, then real estate may be down, but it’s not crashing. It sounds like we’re on the beach as the tsunami is coming in.

#27 oncebittwiceshy on 09.25.18 at 6:26 pm

Jungle: “Few days ago transunion boss said delinquently rate on non mortgage debt is DOWN, he said the opposite if what was expected is happening in the face of
Raising interest rates.”
<<<<<<<<<<<<<<<

Ahh, my friend, you need to get out of the jungle and take a look at what's really happening.

http://www.macleans.ca/opinion/why-a-low-delinquency-rate-isnt-the-good-news-real-estate-story-you-think/

"Indeed, the delinquency rate on mortgages in the U.S. reached its lowest level in decades in 2005, precisely when the U.S. housing bubble was at its frothiest and money was easy to borrow."

Jungle: "Average mortgage debt in Ontario is only 180k with wage growth at 3%?"

http://www.rbc.com/economics/economic-reports/pdf/other-reports/householddebt_apr2018.pdf

Conclusion
The fact that Albertans—along with British Columbians and Ontarians—carry the heaviest debt loads on a per household basis in Canada inherently makes them more sensitive to interest rate increases. Their debt-service bills will get bigger, and possibly sooner than elsewhere in the country, when interest rates rise. It’s bound to cause many households to spend more cautiously on other goods and services. That could potentially restrain economic growth more in Alberta—and in BC and Ontario—than in other provinces.
How much more? That’s hard to say because the net economic impact of higher rates will also reflect the benefits received by saverhouseholds on the asset side of the balance sheet.

http://www.cbc.ca/news/business/interest-rates-helocs-canada-debt-1.4192847

"There are about three million active HELOCs across Canada, with an average balance of about $70,000, the Financial Consumer Agency of Canada warned last month."

#28 KLNR on 09.25.18 at 6:31 pm

@#15 Dave on 09.25.18 at 5:50 pm
I only read this blog to hear about interest rate hike, luv it. Let the housing crash come, cant come soon enough.
___________________________________

18yrs and counting eh.
Maybe it really will crash this year.
Maybe not.

#29 Penny Henny on 09.25.18 at 6:36 pm

‘Listen, Garth’: How to break up with your pot dealer when cannabis becomes legal in Canada

https://nationalpost.com/cannabis/how-to-break-up-with-your-pot-dealer

#30 Timmy on 09.25.18 at 6:45 pm

So are you liquidating your real estate?

#31 Dolce Vita on 09.25.18 at 6:54 pm

#20 The Wet One

Oil prices may increase but AB hamstrung on ever more discounted crude prices:

Western Canada Select (WCS) heavy blend crude for October delivery in Hardisty, Alberta, settled at $42.00 a barrel below the WTI benchmark (72.28 USD/bbl.).

Widest level on record.

Higher production compared with the second quarter has swelled volumes in storage and put pressure on prices, while tight pipeline space and insufficient rail capacity have pushed the differential even wider.

https://ca.reuters.com/article/businessNews/idCAKCN1M42KC-OCABS

#32 Brian Ripley on 09.25.18 at 7:05 pm

Household debt’s rising even as interest rates snake higher and real estate wobbles. The decline in new mortgage originations is being made up by refis and home equity LOCs … Garth

And as the over leveraged switch to balance sheet repair, consumption will continue to drop as it has been since the 2017 peak in real estate prices.

To demonstrate I mashed up long term credit charts and a chart on consumption with notations on the trend turns to do with inflation and deflation as related to consumption:

http://www.chpc.biz/history-readings/credit-purge

Canadian consumers were goosed with the beginning of NIRP and ZIRP in the 2009 pit of gloom which in consumption terms burnt out over 5 years and then the short and final surge into the 2017 real estate peak.

Now the goose is cooked and the leftovers are chilling in the fridge.

#33 Catalyst on 09.25.18 at 7:06 pm

Irresponsibly bullish presentation of current state.

1. The global economy will not stand sheepishly by as America Alone policies are pursued to the detriment of everyone else.

2. A roaring stock market DOES NOT equal a roaring economy. Wages continue to be stagnant as costs including the defunding of Obamacare continue to skyrocket. Nearly half the US population on food stamps = record high economy. I think our measure of success needs evaluation.

3. A leash will soon be installed on this runaway republican trifecta. Guys like Bernie Sanders are right with the ‘Stop Bezos’ bill that government coffers shouldn’t be subsidizing corporate profits.

#34 MF on 09.25.18 at 7:19 pm

#6 bb on 09.25.18 at 5:18 pm
If a GTA house reach 2010 levels (Inflation adjusted?), I might be able to finally “own” a place.

-Nope. You won’t. You, like me, will have to get to the back of the line since tons of people are already waiting to jump in.

Anyways, the “correction” already occurred last year when house prices in the GTA went from 1.3 million to 1.2 million.

Did you buy? Of course not. None of us did, and you won’t during the next “correction” either since everything will still be too expensive for you.

It’s because of the GTA’s population size, the unstoppable trend towards urbanization, the booming economy, and culture of acceptance that there will not be a big correction here.

MF

#35 akashic record on 09.25.18 at 7:20 pm

Trump continues to gas the economy with tax cuts

How about tax cut in Canada? Works great for the US.

#36 Fish on 09.25.18 at 7:25 pm

Ford urged to sell Crown corporations like LCBO

Report says government businesses could be ‘monetized’ to bring in cash
Mike Crawley · CBC News · Posted: Sep 25, 2018 10:55 AM ET | Last Updated: 4 hours ago

https://www.cbc.ca/news/canada/toronto/doug-ford-ontario-line-by-line-audit-1.4837471

#37 Muttley O'Toole on 09.25.18 at 7:27 pm

Today’s doggie pic looks to be a short haired border collie – the most intelligent dog and extremely athletic.
Sadly ours will be put down today; his back legs are gone.
It is a beautiful day here, 23 degrees and the sun is shining brightly but I have difficulty in seeing the keyboard.

#38 crowdedelevatorfartz on 09.25.18 at 7:36 pm

@#18 Bernie
“NAFTA DEAL REACHED!!!
TRUDEAU IS HAILED A GENIUS!!”
+++++

Can we call you “Shirley”?
Because surely you jest.

#39 pay your taxes on 09.25.18 at 7:45 pm

Someone’s been drinking the mushroom tea. Real estate at 2010 prices? Are they that bad in Cowtown yet? Speaking of which, what happened to the “Cowtown Death Watch”?

I remember my first visit to Cowtown back when the Glen Clark show was playing in B.C.. The economy was bad here in Vancouver but Alberta appeared to be doing very well with help wanted signs in store windows. Crossing the Rockies felt like throwing off the yoke of communism and visiting the U.S.. I wish the people in Alberta all the best. If anyone can pick themselves up and carry on it’s them. They could certainly use some better political leadership. That Alison Redford was so corrupt she could make a South American dictator blush. And that Nutley character looks like she’s bucking for an oil company job: not what I’d expect from an NDP rep.

#40 Joe on 09.25.18 at 8:00 pm

If you can’t beat them, why not play a little in the mud? I’m your usual alpha male that makes poor decisions about everything in life according to this blog. Bought a house when everyone said it was too expensive about 5 years ago(sitting on bigly tax free capital gains but I live in it so it really isn’t an investment). Mortgage coming up shortly likely with a rate that isn’t that far off of my original term conditions (3.5% for 5 year fixed). Decently employed with large multinational. Some savings(which have grown significantly recently) and what started out as a small investment in weed stocks, now oversized so I’ve been moving money out as each of my holdings pop. If there such a thing as “smarter” speculation? For example, my latest interest is a company called Cannvas Medtech (MTEC on CSE). Yes, penny stock. Yes, risky. AND yes I can afford to lose my investment if it came down to it. At the same time, I’ve been in and out of 8 other similar companies (meaning the bubble sectors – weed and crypto previously) and have no problem pulling money out when it moves, and every single one so far has done it in time, that the odd thing about these bubbles – all boats rise with the tide). At no point do I borrow to invest in these companies so I don’t see myself as being all that risky or lucky for that matter. I just accept that there are elements of risk in any sector you invest in, and I’m willing to pull the plug when enough is enough. Housing….interest rates….individual stocks….whatever, I think it can be done profitably and without emotion.

Brag much? – Garth

#41 crowdedelevatorfartz on 09.25.18 at 8:04 pm

Hmmmm
A harbinger of things to come in Nov 2019?
Trudeau take note.
Another day another minority govt succumbs to populist voters outrage.
Only this time its socially responsible Sweden.
Sweden’s Prime Minister is O….U….T…..

But Canadians are much better than that you say?
Doug Ford says otherwise.

#42 Gustav on 09.25.18 at 8:10 pm

Will someone get this Jungle real estate troll outta. here.

Garth, on another note, if interest rates spike, how do we prepare our portfolio? wont that have downward pressure on the stock market and fixed income?

Higher rates come from a gassed-up economy, which is good for stocks. As for FI, hold rate-reset prefs. – Garth

#43 Doug t on 09.25.18 at 8:11 pm

#37 – feel for you

#44 millmech on 09.25.18 at 8:17 pm

#31
A smart railway owner would weld all the crude cars together in a pipe like form and transport oil to the coast through that line. Technically it would be a rail line(still on rails) and they could transport a very much larger volume to the coast through the rail line.

#45 oncebittwiceshy on 09.25.18 at 8:18 pm

MF: “Nope. You won’t. You, like me, will have to get to the back of the line since tons of people are already waiting to jump in.”

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

Well, at least you are partially correct. Neither you nor him or a hell of a lot of other people will buy.

When the market turns nobody is interested in buying a house that will be cheaper next week, then next month, then next year.

That is actually why they call it a "crash".

Hang on, weren't you the same guy that said that in 1990?

http://www.torontocondobubble.com/2013/02/toronto-housing-bubble-in-1980s.html

"Between 1985 and 1989 the average price of a house in the GTA increased by 113% in real terms or by $240,992 in today's dollars. Low unemployment of the late 1980s and large inflow of immigrants to the area helped to inflate the bubble. Some critics pointed to the fact that in the early 80s many women were still just entering the workforce and thus doubled the income of households by the mid 80s which further fueled the bubble.

However, one could argue that bubbled was fueled mostly by massive speculative investment. In late 80s everyone thought that the housing prices are going to rise indefinitely and that turned real estate into a compelling investment for everyday Joe. More people jumped into the market hoping to make a fortune causing an artificial increase in demand. Suddenly housing became scarce, which further increased the price. Developers decided to profit on this illusive scarcity by building condos left and right – many of them in downtown Toronto."

#46 Reality is stark on 09.25.18 at 8:25 pm

Do not use the Hamilton market as a real estate gauge. It virtually did not increase in value from 1996 to 2005. Most other locals grew by 50-80%.
As Hamilton downtown revitalizes the market has some downside protection.
It is just a market playing catch up.

#47 DD on 09.25.18 at 8:31 pm

The combination of US tax cuts and a spike in rates will be very detrimental to Canada’s economy, being over reliant on real estate and shepherded by a groper with a high tax, high deficit, low growth strategy. Throw in Trump tariff risk, and our economy is very susceptible to a recession.

#48 oncebittwiceshy on 09.25.18 at 8:31 pm

Pay your Taxes: “Someone’s been drinking the mushroom tea. Real estate at 2010 prices? Are they that bad in Cowtown yet?”

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

Uhm….yes, they are, as a matter of fact. Stay away from that tea, buds.

http://www.jimsparrow.com/files/39/CREB%20September%202010%20Housing%20Stats.pdf

The average price of a single family home in the city
of Calgary in September 2010 was $460,278, showing
a 3 per cent increase from August 2010, when the
average price was $445,617, and no significant
change from September 2009, when the average price
was $459,085.

http://www.jimsparrow.com/files/165/Calgary_Housing_Stats_August_2018.pdf

"Detached benchmark prices totaled $497,000 in August. This is a 0.74 per cent decline over last month and 2.6 per cent below the previous year.

#49 BS on 09.25.18 at 8:38 pm

If that were to occur, real estate might do a Cat 5 correction, rolling us back to 2010 pricing. (The average Toronto property way back then sold for $427,329, or 44% less than today.)

That is just the first leg down. After rates peak we get a recession. Credit contracts and we take the next leg down to 2003 prices.

#50 Sebee on 09.25.18 at 8:38 pm

A cat? A baby? A funny restaurant sign? A sassy moose?

Or is this an all Dog radio station?

#51 Smith on 09.25.18 at 8:46 pm

Sorry to spoil it for those who live out side of the golden horseshoe or southwestern BC but the rest of Canada is not in a housing bubble. Canada is in a debt bubble, but not a housing bubble. Alberta has no housing bubble. The prairies are not in a housing bubble. The maritimes and Quebec are not in a housing bubble.

So the housing crash is most likely to be localized in two regions. Anyone who follows betterdwelling.com or the Bank of Canada knows that the risk is concentrated in the golden horseshoe and southwestern BC. 8% of households have 20% of the total 2.1 triilion debt in Canada. So the crash , if it’s coming, will be a convergence of defaults/ distress on these 8% of households and the speculative crash in the pre-sale markets. It’s possible that contagion from these two factors will result in the long awaited housing crash. Anyone who bought several pre sales to flip in the last year in Vancouver must be crapping their pants right now. The banks won’t give them a loan. How will they close?

I could easily see a scenario where speculators are forced to dump their primary residence after defaulting on pre-sales.

It’s going to be a wild ride. Forced selling is the only way to precipitate a housing market crash. That implies foreclosures and bankruptcies. Is it coming? Hard to say. But panic is usually induced by forced sales. It’s similar to the stock market where margin calls can precipitate a larger crash.

Oh, and if you believe low delinquencies are a sign of economic strength, think again. Delinquencies lower dramatically when house prices rise because the owner taps their equity to avoid missed payments. Or they can just sell. That only works in a rising price environment.

https://www.macleans.ca/opinion/why-a-low-delinquency-rate-isnt-the-good-news-real-estate-story-you-think/

https://betterdwelling.com/mortgage-delinquencies-are-flatlining-in-toronto-and-vancouver-shows-cmhc-data/

#52 Tony on 09.25.18 at 8:47 pm

Will the 10 year treasury yield stay above the 3 percent threshold after the midterms November 6th? NO… Every last piece of data must be fabricated in America. That was then this is now will be the motto after the midterms.

#53 renter in Surrey on 09.25.18 at 8:57 pm

RE: #28 KLNR
18yrs and counting eh.
Maybe it really will crash this year.
Maybe not.

————————————————————-

Give it another 18 years…

#54 Spectacle on 09.25.18 at 9:01 pm

#8 NoOneOfConsequence on 09.25.18 at 5:36 pm
Everyone commenting on this blog seemed so smart and wise. They gave me all sorts of seemingly good reasons why interest rates could never go up.
Literally hundreds of them!!
The internet has let me down again….
:(
—————–::————::———–::——
Um, Exactly What blog were you reading?

You might have missed the one yesterday, and going back 8 years! The ones that describe rate hikes, the reason for them, and the misery Canadians will live as a result of ignoring ” Every blog posting” by Sir Turner.

#55 Pete on 09.25.18 at 9:03 pm

NAFTA will succeed. Unlike the cut and run fake Conservatives aka the conservative party of Canada , the liberals at least have the balls to do hard bargaining. If it was up to the fake conservatives of Canada they would be giving away Canada for pennies on the dollar. Btw the real conservative party for the people is the peoples party of Canada. Next year we will kick the phony corporate conservatives butts out.

#56 LP on 09.25.18 at 9:09 pm

Spotted on a sign this morning while out and about:

To get out of debt…act your wage.

#57 For those about to flop... on 09.25.18 at 9:11 pm

Pink Pumpkins being carved in North Vancouver.

This is one of them ones where I just look at and wonder what they hoping to get out of it besides a heap off stress.

If this was a 2016 purchase then fair enough, but Spring 2017 the amber lights were flashing for most and even the ones with deep pockets started to notice that their arms were suddenly shorter.

Even at 2.59 it wasn’t worth doing so they were getting fed some a-grade bull from someone.

Who could that be?

Wouldn’t be the least surprised if some of these guys are counting the same person that got them into this mess to get them out of it unharmed.

No commissions will be waived.

The road to hell is paved with good commissions…

M44BC

1900 Mackay ave,Vancouver paid 2.38 March 2017 ass 2.53

Jun 25:$2,599,000
Sep 5: $2,410,000
Change: – 189000.00 -7%

https://www.zolo.ca/north-vancouver-real-estate/1900-mackay-avenue

#58 Burlington Shyster on 09.25.18 at 9:11 pm

UBS forecasts that the Fed will skip the December hike “in response to weaker-than-expected data”

Tomorrow they raise, but They’ll be dropping rates after that, and starting a helicopter money. It’s coming, bank on it

You wish. – Garth

#59 Smoking Man on 09.25.18 at 9:24 pm

#34 MF on 09.25.18 at 7:19 pm

#6 bb on 09.25.18 at 5:18 pm
If a GTA house reach 2010 levels (Inflation adjusted?), I might be able to finally “own” a place.

-Nope. You won’t. You, like me, will have to get to the back of the line since tons of people are already waiting to jump in.

Anyways, the “correction” already occurred last year when house prices in the GTA went from 1.3 million to 1.2 million.

Did you buy? Of course not. None of us did, and you won’t during the next “correction” either since everything will still be too expensive for you.

It’s because of the GTA’s population size, the unstoppable trend towards urbanization, the booming economy, and culture of acceptance that there will not be a big correction here.

MF
……..

Don’t kid you’re self.

Wages will not go up in Toronto. TFW
Microsoft coming here to take advantage of that
Nafta will die.
Rates will rise a lot.
Jobs will be lost
Millennials will move to small towns or out of prov
Boomers selling property in mass to fund retirement
Toronto goes Chicago boom boom.
Auto sector and all the jobs that go with it gone.

You can thank George Soros and T2.

Patients kido. Why are you still in Toronto?

#60 LP on 09.25.18 at 9:26 pm

Oh Muttley, I’m so very sorry. I’ve been where you are right now and it hurts like hell.

My grand-dog, Deacon, was euthanized last Friday evening and our whole extended family is still reeling; I expect we will be for quite a while. Deacon was a tri-colour Scotch collie – not beautiful in any way because he steadfastly refused to be brushed by anyone. But he was a dignified old soul…gentle, quiet and affectionate. I was his favourite grandma, a distinction I loved and fostered with extra pats and secret treats. We were co-conspirators in the treats department.

#61 georgist on 09.25.18 at 9:30 pm

Another ingredient in the mix: capital flight from the UK, which is going insane.

#62 georgist on 09.25.18 at 9:33 pm

> Quebec is not in a bubble

I wouldn’t call it a bubble, but debt is at a peak:

https://www.desjardins.com/ressources/pdf/pv170828e.pdf

Only going one way, like rates.

#63 For those about to flop... on 09.25.18 at 9:40 pm

The only thing I can think of that can make this thread better is some Flopper magic…

M44BC

How Much You Must Earn to Afford a House in the 50 Largest U.S. Cities

“Buying a home used to be part of the American dream. It lets you build equity over the years, gives you a significant financial asset, and provides a pride of ownership or investment in the surrounding community. The problem is that in some cities, workers must earn hundreds of thousands of dollars to afford an average-sized home.

We found the numbers behind our latest map from HSH.com, one of the largest publishers of consumer and mortgage information in the country. HSH focused on the 50 most populous metro areas in the country, and figured out the price of the median home for sale. They then calculated monthly principal, interest, property tax and insurance payments buyers have to pay for a 30-year fixed rate mortgage. To keep things simple, they determined what salary would be needed to afford each home using the 28 percent “front-end” debt ratio, meaning the total housing payment could not make up more than 28% of gross income. They also assumed a 20% down payment. We mapped the resulting needed annual salary as a spike on a geographic outline for the metro area.

Top 10 Cities Where You Need to Earn the Most to Afford a Median-priced House

1. San Jose, CA: $274,623

2. San Francisco, CA: $213,727

3. San Diego, CA: $130,986

4. Los Angeles, CA: $114,908

5. Boston, MA: $109,411

6. Seattle, WA: $109,275

7. New York City, NY: $103,235

8. Washington, DC: $96,144

9. Denver, CO: $93,263

10. Portland, OR: $85,369

Our map reveals three tiers in annual income workers need to earn to afford a median home. First, the West Coast stands out as by far the most expensive market in the country, with 4 out of the top 4 markets in California alone. San Jose, CA is easily the most expensive; workers need to make well over a quarter million dollars to afford a median-priced home. San Francisco is not far behind at $213,727, followed by Sa Diego much further down at $130,986. These numbers indicate the extent to which Silicon Valley has created a massive increase in property values.

The second tier of expensive locales is along the East Coast, led by the familiar hotspots of unaffordable housing like Boston, MA ($109,411), New York City, NY ($103,235) and Washington, DC ($96,144). But there are also other expensive metro areas located along the Atlantic Coast as well, such as Miami, FL ($78,337) and Providence, RI ($75,808). It’s clearly expensive to live somewhere close to an ocean.

The third and final tier of cities where workers don’t need to earn 6-figure salaries stretches across the country’s midsection. Ranging from Minneapolis, MN ($63,962) down to New Orleans, LA ($49,249), there are several metro areas with plenty of relatively cheap housing. A couple of old Rust Belt cities round out the bottom of the list in Cleveland, OH ($39,730) and Pittsburgh, PA ($38,253).

There is one more interesting and overarching trend\ worth noting on our map. Median household income across the US recently reached a record high of $61,400, which is great news for workers. The bad news is that isn’t enough to afford a typical house in 25 out of the 50 cities on our map. Granted, workers in metro areas tend to make more than their rural counterparts, but there is no doubt a real concern about affordable housing in certain urban areas.”

Visualization

https://howmuch.net/articles/buy-home-50-largest-metro-areas

#64 Smith on 09.25.18 at 9:42 pm

RE: #28 KLNR
18yrs and counting eh.
Maybe it really will crash this year.
Maybe not.

————————————————————-

Give it another 18 years…

We haven’t had these kind of conditions in the last 18 years. Actually we are just above 5000 year old lows in interest rates. This is a global phenomenon of bubble cities. It’s not a Canadian phenomenon. Many countries with cosmopolitan cities have similar bubbles.

For those that believe it’s a supply and demand / immigration problem, do the math on an $800k condo or a $1.5 million. Does the average household, or immigrant, for that matter, have a 20% downpayment. Do they have the after tax income to support a mortgage between $600k and $1.1 million. Probably not under the current conditions. People who just qualified at 2.5 % will be locked out at a stress tested 5.5%.

Supply of housing is always subordinate to supply of credit.

#65 akashic record on 09.25.18 at 9:52 pm

Journalist’s confession and mea culpa for falling for Bill Browder’s Magnitsky story, without due diligence.

Will any of the lawmakers wake up some day, too?

http://theduran.com/the-magnitsky-affair-the-confession-of-a-hustled-hack/

#66 Milkman on 09.25.18 at 9:54 pm

I always thought it was “lickity”.

And they said this blog was useless!

#67 Adineko on 09.25.18 at 10:00 pm

If I’m holding a small $25 000 couch potato portfolio of 3 ETFs, is it worth liquidating it all and going with a better diversified one(recommended here numerous times)? Or should I hold out until my portfolio is larger?

#68 Shawn on 09.25.18 at 10:05 pm

It’s the late 1940s all over again.

Nasdaq to 11643

#69 drama mode? on 09.25.18 at 10:05 pm

If that were to occur, real estate might do a Cat 5 correction, rolling us back to 2010 pricing. (The average Toronto property way back then sold for $427,329, or 44% less than today.)

………..

no cat 5. Ship sailed, sorry all

#70 Shawn on 09.25.18 at 10:14 pm

https://www.huffingtonpost.ca/2018/09/22/tech-boom-toronto-real-estate_a_23538014/

Will GTA prices keep going in the same direction as the Nasdaq?

#71 WE'RE RUNNING OUT OF IDIOTS on 09.25.18 at 10:18 pm

Markets depend on new first time buyers to enter the market. As rates rise, financing becomes harder to get on houses at inflated prices, so they fall accordingly and….. they will keep falling for years. We have been to this movie before.

#72 A Yank in BC on 09.25.18 at 11:50 pm

#67 Adineko on 09.25.18 at 10:00 pm

Be calm. Without question, your 25k portfolio is very well served by the low-cost simplicity of a 3-ETF Couch Potato. Arguably, the very same would be true if it were 250k.

#73 Nick B on 09.26.18 at 12:01 am

You can’t have it both ways. Higher interest rates will reduced corporate profitability along with potentially higher wages. Also, higher yields will likely attract capital away from equities. I don’t foresee a melt up in the US. But for now I won’t fight the trend but usually rate hike cycles in the US end when something breaks. With all the leverage out there I don’t expect it to take too many more hikes. Well see.

#74 Smoking Man on 09.26.18 at 12:03 am

Great writers.

They don’t live in safe spaces. They get drunk, they seek truth, damn the consequences. All other writers seek loot.

I have loot. Don’t need to suck up.

True writer here.

Love me or hate me. I give no shit.

It’s all about the buzz…

Dr Smoking Man
PhD Herdonomics

#75 Smoking Man on 09.26.18 at 12:40 am

Truth from an empty bottle of no agenda.

It’s a lonely place. Heaven for me..

Apologise for being me. Not.

#76 Smith on 09.26.18 at 12:48 am

https://www.huffingtonpost.ca/2018/09/22/tech-boom-toronto-real-estate_a_23538014/

Will GTA prices keep going in the same direction as the Nasdaq

————————

@Shawn

The “expert”in the article has a vested interest in booming real estate
http://www.luxuryhomesinbc.com/the-engel-volkers-leadership/

Even tech workers need down payments and mortgages. They also aren’t earning silicon valley wages. That’s one of the catalysts for the tech boom in the GTA. Lower wages.

According to statscan there are 106000 units under construction in Ontario as of Q2. They are completing almost 20000 a quarter. I dont think there are 20000 tech jobs a quarter being created. And that assumes that they all have a downpayment / mortgage qualifications.

#77 Stan Brooks on 09.26.18 at 12:49 am

#59 Smoking Man on 09.25.18 at 9:24 pm

Spot on.

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

Microsoft is simply moving some of their office staff from Mississauga to Toronto.
They plan to hire 500 people in the next 4 years. And that is a news?

Amazon is still trying to fill in GTA and Vancouver openings. No luck as Seattle and SF are far more affordable for high tech staff.

A note to ignorants who think that Canada has the same taxes as US:

1. Calculate income taxes on upper middle class – high techs earn in 250 k + USD range in California, 150 k + USD in Texas, around 80 k CAD in Toronto

Keep in mind taxes include social security which is much better than our CPP in terms of benefits

2. Add sales taxes. – much higher in Canada

3. Health care premium for high tech workers in US are paid by their companies.

Cost of living in GTA and Vancouver is prohibitive for any QUALITY high tech hiring bellow salary of 250 – 300 k CAD + which is never gonna happen.

Current economic conditions justify house prices in GTA and Vancouver that are 25-30 % from current valuations.

I bet on 70 % + decline.

Immigrants coming to Toronto have no money. Most are actually going in debt just to settle here due to cost of living.

GTA is doomed.

#78 Grumpy Cat on 09.26.18 at 1:08 am

Good!

#79 Deplorable Dude on 09.26.18 at 1:25 am

#55 Pete….”the liberals at least have the balls to do hard bargaining.”

They aren’t bargaining at all, everything is for show, for the Canadian domestic audience. Unfortunately we have zero leverage, Trump has ALL the leverage.

Won’t drop dairy tariffs, or close the NAFTA loophole that allows undeclared Chinese steel in Canadian made cars?
..Fine we’ll slap a 25% tariff on your auto imports…

We have zero leverage, T2 is playing the waiting game, hoping Trump loses in the mid-terms….

He won’t lose according to the few accurate pollsters I follow who correctly called the 2016 election.

So all I can say is I hope all those auto workers know how to milk cows.

#80 Piet on 09.26.18 at 3:54 am

We’re currently hanging out in Penang, Malaysia, enjoying some of the tastiest food in the world. The culinary delight was interrupted somewhat a couple of days ago when a large chunk broke off a previously filled molar while eating some crunchy ground nuts. This led to my first experience with dental tourism. On the recommendation of some of our local friends I ended up in a modern, well-equipped dental clinic. The dentist took a look and gave me two options. Either get a new crown installed for CAD$234, or have the tooth drilled out followed by installation of a pin and then reconstruction of the tooth with composite material for CAD$90. I opted for the reconstruction because it could be done immediately without a need for a follow up visit. The dentist is a true craftsman, creating a nice new shiny tooth from scratch in about an hour. Based on prior experience, I’m quite sure sure that my dentist in Canada would have said that a crown is the only option, and it probably would have cost somewhere between one and two grand. The dentist here in Malaysia explained to me that most local people can’t afford crowns, so this requires dentists to become skilled in devising affordable reconstruction techniques. I am very much impressed with this dentist’s level of skill. I told him that I would be back for checkups every time cravings for delicious food bring me back to this special part of the world.

#81 Oft deleted much maligned stock.picker on 09.26.18 at 3:56 am

Let’s get one thing straight…..Trump is not a bully….he’s a focused American president….the most focused in decades…..he’s a man of the people….the American people…..we should be so lucky. Meanwhile our little simpleton spoke to an empty room he’d hoped would platform another anti Trump tirade….no one showed up to listen. Trudeau-Butts have pissed away Canada’s political capital and no one is left to listen to Truds squeky message about pronouns and fashionable skirt legths…..he’s baked…..the Obama resistance has resulted in little more than make up tips from Michelle . Trudeau was relying on a blue wave to resurrect globalism….and a NAFTA defeat over Trump…..look what Trump is doing to China

https://www.cnbc.com/2018/09/24/trumps-trade-war-threatens-chinese-economy-china-already-has-cracks.html

Does a whiny snit at the UN kids conference give Trudeau the shot at Trump he’s been hoping for? Not likely. Trudeau needs Canadians to spend the next 12 month baking in the pot store to fall for his brand of crap again. He’ll need to lower the voting age and pot buyers ages to 14 and disallow anyone over 30 into the voting booth ….either that or enjoy the coming recession folks….the cupboards bare and foreign investment has dried up.

Back of the nspkin looks like pot numbers are a pyramid scheme…..to generate the billion a month the CBC is printing as the numbers for pot profits….it means every man, woman, child and the family goat will have to get down 24/7 on the bong. They talk of sober seniors now starting to blast off…..all of them. Otherwise Trudeau somehow doubles the population every six months. Like a pyramid scheme there isn’t enough people on the planet to make the CBCs numbers to play out.Not unless they think every Canadian will spend 3.2 million a year on pot products. Maybe dogs will have bigger litters and they’ll get stoned too……but like the NDP…..on someone else’s money.

Trudeau is a massive joke….his policies are an incredible fraud…..he’s as delusional as Maduro, Amin, Xie, Soros and Obama. Some of us don’t want socialism, globalism or getting stoned….humans don’t work that way. Trump is bringing order to chaos….that is the nature of the universe…ask the Chinese. Trudeau won’t win….Canadians will lose….

#82 Crazyfox on 09.26.18 at 5:28 am

https://www.thebalance.com/fed-funds-rate-history-highs-lows-3306135

History does repeat itself.

We’ve had 10 years of rates between 0 and 2% and now North Americans will find out if we can handle more. The Fed rate exiting 2018 @ 2.5% is a given. Historically, the Fed has not raised a quarterly more than .25% or a quarter point since 94′ but we would be foolish to think that will not change.

We are in the Trump era now, watching a U.S. presidency and congress become more and more suspicioned with electoral fraud with each passing day as 2016 election interference by Russia and within U.S. borders becomes more reported, and by the very treasonous actions of this Whitehouse within foreign policy.

To add to confusion, we are witnessing the Republican controlled Whitehouse, congress and Senate be slaves to the will of the Koch brothers who fund over 40% of Republican elections throughout the U.S. in return for tax cuts to the top .1% earners, deregulation of the oil and gas industry and environmental regulations giving the Koch brothers easily more than 10x return on their investments.

We are witnessing rollbacks in car and truck MPG standards and emissions for the benefit of a handful of Americans only to witness green tech take a back seat to accelerated climate change as Trump’s trade war with China tacks on double digit costs in Solar and Wind. Rollbacks on banking regulations are making it easy for banks to lend to anyone with a pulse once again, setting the system up for mass defaults. Those cheering deregulation today are either paid Sycophants, greeders who want short term profit gain regardless of long term loss pain, or have no sense of economics and the world is full of the latter, only too willing to cheer on that which they don’t understand.

If these government changes continue in foreign and domestic policy there will be a reckoning. Damage has already been done, yet to pay it forward. This world is no longer as safe a place as it was with Trump in power. U.S. power has diminished as the U.S. continues to isolate itself from its allies and flatter and aid kleptocracies around the world for Trump’s own fresh kleptocracy open for business. Just today, as Trump addresses the UN with Narcissistic grandiose and self flattery on display for the world to see, it strikes home that we are not living in normal times.

https://en.wikipedia.org/wiki/Kleptocracy

How can it end well with an illegitimate flagrant narcissist controlling the largest economy in the world, beholden to the world’s most successful kleptocrat (Putin) and the Republican’s by far largest political donor the world has ever seen in the Koch brothers who by action, demonstrate a greater love for money propped by pride, regardless of cost to anyone or anything else that at the very least I’ve ever seen in the political arena… ?

The quick answer is it won’t end well. The Trump era has ushered in broken past agreements and sanctions placed back on Iran to push the price of oil higher, destabilizing peace in the region for future years, perhaps decades to come. Decades of influence by the state department in the areas of humanitarian causes as well as UN initiatives making this world a better, safer place, have ended as the U.S. continues its withdraw from the world order it once controlled. Trade wars have erupted with U.S. and its allies in North America, Europe and now China. $265 billion dollars worth of Chinese imports now face a 10% import tax just in time for Christmas and its expected to double soon effecting all Chinese imports, some $550 billion or so.

NAFTA will not happen with Canada that I can see as long as Trump is in power. The president controls all trade negotiations regardless of who controls the houses. 2016 campaign promises of a 25% tax on oil imports can still be reality with Trump as a Koch brothers puppet, Putin puppet and puppet to his own greed pushing oil ever higher, friendships with kleptocracies like his own and as us sober ones watch on, how can this end well? The quick answer is, it can’t. Even with Trump by the end of next year, karma will still demand atonement.

Look for the Fed rates to rise a quarter point into the second quarter of 2019 but its either the second or third quarter of 2019 that drills home the true impacts of Trump’s trade wars on inflation. Couple this with higher wages at home and the continued revelation of political instability in the WH and you have an ugly cauldron of double, double, toil and trouble. Don’t be surprised by .5% back to back Fed rate hikes in the latter half of 2019 if not sooner.

My mind hasn’t changed, for what its worth. My best guess is that Canada slips into recession in Q4 of 2019, one that will last through 2021. The U.S. hits the skids in Q1 of 2020. This cookie is already baked, the damage is already done. Even if the Dems take Congress AND the Senate and Trump is gone by Q3 of next year, this will still happen, I fear.

We don’t yet know if the mid terms will be fair elections. Even if they are and Dems take control of both houses the Senate needs a 2/3rd’s vote to impeach Trump, not a given in with a Koch brother controlled Republican Senate with at least with 48 or 49 Republican seats. Then, there is the question of how Americans will react on both sides with Trump impeached or not impeached and the S___ show continues. 2019 is rife with political instability no matter how one slices it. It has the juice to roil markets, destabilize currencies and raise the ugly Spectre of war as Trump continues to decentralize NATO and isolate the world’s still greatest economic power abroad.

You tell me….

How can the U.S. Fed not respond to all that? How can this end well?

#83 Oft deleted much maligned stock.picker on 09.26.18 at 6:17 am

JP Morgan forecasts the failure of NAFTA and a massive dump in the Canadian dollar…..this is the smart money talking folks….so you better listen. These people have no axe to grind….JP Morgan has more dollars in transit on any given day than Canadas GDP…..they don’t need to make idoe threats towards a pimple on America’s butt. They predict Poloz will have to lower the rate by .50 basis points immediately on the announcement to prevent a total collapse of the currency…….Turkey, Argentina…Canada…..inflation wiping out business and grocery stores shuttered after weeks of 1000% inflation. This is the insanity that Trudeau has wrought……what his plan is…no one knows. Is he the most incompetent leader in the history of Canada or the first dictator. JP Morgan says it doesn’t look good for Canada regardless. And we will remain an inconsequential pimple on America’s butt…..even after bail ins fail and confiscation begins. Get liquid in an American bank account if you can….otherwise prepare to lose everything.

https://www.forexlive.com/news/!/jpmorgan-on-how-fall-the-canadian-dollar-could-fall-on-nafta-implosion-20180925

JP Morgan also says no deal would result in a drop of “almost 10%” for the dollar, while obtaining a deal would push it up to 80 cents US, for an 11% gain. You are the most negative person on this blog, the most virulently partisan, the most disrespectful and the most deleted. Keep it up and you will also be history. – Garth

#84 KLNR on 09.26.18 at 6:41 am

Folks who can’t afford a house in Toronto are now jacking up prices in small town Ontario. good grief.

That trend peaked in 2017. – Garth

#85 Karl on 09.26.18 at 7:14 am

Go East rich man.

Luxury RE sales booming again in Toronto. Pooched in Vancouver. Sales of homes 1M+ in Toronto climbing 19% YOY.

Don’t shoot the messenger.

Link: https://www.bnnbloomberg.ca/luxury-home-sales-are-booming-in-toronto-tumbling-in-vancouver-1.1143068

Do you believe every realtor media release you read? Sad. – Garth

#86 Gravy Train on 09.26.18 at 8:15 am

And a bully as the world’s most powerful person. – Garth

#81 Oft deleted much maligned stock.picker on 09.26.18 at 3:56 am
“Let’s get one thing straight…..Trump is not a bully….”

Are you trying to get Garth to change his opinion? Why do you read his blog? Do you just like to aggravate yourself?

Oh—BTW, did you catch Trump’s speech at the U.N. yesterday? The gathered assembly all laughed at him (he seemed to forget that he wasn’t at a Trump rally). He later claimed to be in on the joke (he hates to be laughed at). Such a clown! I just hope he doesn’t seek retribution.

#87 TurnerNation on 09.26.18 at 8:21 am

Yes King Ford’s job is one of stripping assets away from Ontariowe and in to the hands of elites. Blog dogs noted all the pot companies getting top brass (former police chiefs and so on) into plum positions.

Wynn (like the casino family) already sold off Hydro One.
Ford is to sell the Toronto Transit, sell public lands to casinos , and then the LCBO.

Stand in line at the LCBO after a days work paying .45 cents of every dollar in taxes, then pick up a product taxes at 80%…and the clerk ask: $5 donation to the way that’s United charity -or something?

How stupid do they take Kanadians. Look around your city. It’s run with drug dealers and violently ill homeless people – free to commit crimes and impinge upon your freedoms. What charity could change this.
Charities exist as slush funds for admin and managers. I defy anyone to show me someone helped by them. All 10,000 charities soaking up tax deductions.

#88 Karl on 09.26.18 at 8:22 am

#85 Karl on 09.26.18 at 7:14 am
Go East rich man.

Luxury RE sales booming again in Toronto. Pooched in Vancouver. Sales of homes 1M+ in Toronto climbing 19% YOY.

Don’t shoot the messenger.

Link: https://www.bnnbloomberg.ca/luxury-home-sales-are-booming-in-toronto-tumbling-in-vancouver-1.1143068

Do you believe every realtor media release you read? Sad. – Garth
—————————————————-

Did I not explicitly say “DO NOT SHOOT THE MESSENGER.

So you are claiming “fake news”?

More like a fake reader. – Garth

#89 russell on 09.26.18 at 8:24 am

Employment numbers are fake in the US. Global debt, Central banks are the ones holding up the stock and bond markets, the unwind will create liquidity problems and the markets will fold. This is not an if but when story that is not going to end well for anybody anywhere. The conclusion to this is of course war.

Markets will not fold. Another silly, emotional comment. – Garth

#90 wow on 09.26.18 at 8:28 am

Garth you becoming a bear? :)…..yikes. I did say about a month ago that the globally diversified portfolio wont beat inflation for 2018……need a Santa Claus rally or I win

The best defense against the unknown – proven over decades of booms and busts – is a balanced & diversified portfolio. I’m stocking with it. – Garth

#91 crowdedelevatorfartz on 09.26.18 at 8:41 am

@#81 & 83 Oft Deleted

Your vitriol seems to increase during a Full Moon….
Time to visit your doctor to increase the prescription.

#92 Gravy Train on 09.26.18 at 8:42 am

#79 Deplorable Dude on 09.26.18 at 1:25 am
“..Fine we’ll slap a 25% tariff on your auto imports…” I take it you’re an American—because, if you’re a Canadian, you’re just an asshole. Whose side are you on, anyway? Trump’s? You jackass! You’re just like Smokey! A traitor!

#93 Evangeline on 09.26.18 at 8:52 am

In honor of great dog lives well lived.

(If I picked up the link here on GF, I apologize, but it’s worth watching more than once.)

https://www.youtube.com/watch?time_continue=36&v=y07at1bU89Q

#94 Leo Trollstoy on 09.26.18 at 9:15 am

Toronto Tech Boom!

Jobs galore!

Earlier this month, Microsoft Canada announced it is relocating its headquarters to downtown Toronto. Soon after, computer chip giant Intel said it would be opening a graphic-chip engineering lab here. Then Uber revealed plans to build a $200 million software-engineering lab in the city and to expand a research centre for self-driving cars that it opened last year.
https://www.thestar.com/business/technology/2018/09/25/as-silicon-valley-eyes-toronto-some-worry-tech-boom-could-hurt-canada.html

#95 Bytor the Snow Dog on 09.26.18 at 9:21 am

#63 For those about to flop… on 09.25.18 at 9:40 pm sez:

“The only thing I can think of that can make this thread better is some Flopper magic…”

—————————————————–

Geez aren’t you a little full of yourself. The only “magic” you could do that would be of any significance is if you could snap your fingers and make your posts disappear…

#96 JB on 09.26.18 at 9:35 am

#59 Smoking Man on 09.25.18 at 9:24 pm
#34 MF on 09.25.18 at 7:19 pm
#6 bb on 09.25.18 at 5:18 pm
If a GTA house reach 2010 levels (Inflation adjusted?), I might be able to finally “own” a place.

-Nope. You won’t. You, like me, will have to get to the back of the line since tons of people are already waiting to jump in.
Anyways, the “correction” already occurred last year when house prices in the GTA went from 1.3 million to 1.2 million.
Did you buy? Of course not. None of us did, and you won’t during the next “correction” either since everything will still be too expensive for you.
It’s because of the GTA’s population size, the unstoppable trend towards urbanization, the booming economy, and culture of acceptance that there will not be a big correction here.
MF
……..
Don’t kid you’re self.
Wages will not go up in Toronto. TFW
Microsoft coming here to take advantage of that
Nafta will die.
Rates will rise a lot.
Jobs will be lost
Millennials will move to small towns or out of prov
Boomers selling property in mass to fund retirement
Toronto goes Chicago boom boom.
Auto sector and all the jobs that go with it gone.
You can thank George Soros and T2.

Patients kido. Why are you still in Toronto?
__________________________________________
Because you are not here! :)
Clean air, nice people and not stepping in any of your bull$hit on the street. I understand what you’re saying, but if I agreed with you, then we’d both be wrong.

#97 Smoking Man on 09.26.18 at 9:36 am

DELETED

#98 dharma bum on 09.26.18 at 9:40 am

#30 Timmy

So are you liquidating your real estate?
——————————————————————–

Funny you should mention it.

So, I finally sold my old ma’s house!

Got out by the skin of my arse.

One Showing. One lapsed offer. Then crickets.

Buyers eventually came back with an acceptable offer.

Grabbed it.

The higher end market at the moment is kind of stagnant.
A lot of hesitation on buyers’ parts, with a real fear of impending mortgage rate increases and significant price drops materializing in the coming months.

Houses for sale on either side of this one have been sitting unsold for almost a year.

So glad I’m out.

#99 Penny Henny on 09.26.18 at 9:47 am

#84 KLNR on 09.26.18 at 6:41 am
Folks who can’t afford a house in Toronto are now jacking up prices in small town Ontario. good grief.

That trend peaked in 2017. – Garth

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

Prices still trending up in the Niagara region

https://www.niagararealtor.ca/sites/default/files/August%202018%20Stats%20Press%20Release.pdf

Not exactly. Sales are flat and the average price is lower than it was four months ago. Listings are up, as is the DOM. Try not to be so manipulated. – Garth

#100 For those about to flop... on 09.26.18 at 10:00 am

at 9:21 am
#63 For those about to flop… on 09.25.18 at 9:40 pm sez:

“The only thing I can think of that can make this thread better is some Flopper magic…”

—————————————————–

Geez aren’t you a little full of yourself. The only “magic” you could do that would be of any significance is if you could snap your fingers and make your posts disappear…

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

I’ve actually been mocking myself since I came back on the blog because there is so much hate on here.

Thanks for the confirmation and have a good day…

M44BC

#101 Jungle on 09.26.18 at 10:02 am

#88 Karl

I don’t think this is fake news. Something is pulling the average price up this month on ZOLO between 1.3-1.4 M

5 and 6 bed homes sales are up 50% and 83% respectfully.

So much for raising interest rates and stress test crashing the market? Not happening. The opposite is.

Bears have to realize you are in competition and auction with people that have more money than you. It appears they’re winning.

Not in Van. The same realtor report indicates a 24% crash in sales. Take it all as marketing. – Garth

#102 Stan Brooks on 09.26.18 at 10:19 am

https://www.forexlive.com/news/!/jpmorgan-on-how-fall-the-canadian-dollar-could-fall-on-nafta-implosion-20180925

My assessment as I said was of 20 % one time inflation, then keeping up with 10 % yearly going forward.

The UK pound dropped 20 % against the Euro between beginning of 2016 and now (Brexit) and only 44 % of their trade is with EU. We have 85 % of our trade linked to US. We are basically the cheap labour camp/a resource colony for US.

Loonie in the low sixties even high fifties is not unthinkable.

Outflow of capital will have massive irreversible impact on the economy.

BoC actions won’t matter.
Retirees and savers will be flushed down the toilet as usual but TSX will take a beating.

#103 Jungle on 09.26.18 at 10:41 am

@#94 Leo

Lots of tech jobs coming.. don’t forget about google labs, they are making literally making a tech neighbrohood where everything is connected.. a real life experiment with streets, condos and development planned and approved on unused waterfront land in downtown TO

I can see RE and condos going san fransisco expensive, there will be huge inequality and social housing issues like they have down there form the tech boom.

#104 Penny Henny on 09.26.18 at 10:43 am

#95 Bytor the Snow Dog on 09.26.18 at 9:21 am
#63 For those about to flop… on 09.25.18 at 9:40 pm sez:

“The only thing I can think of that can make this thread better is some Flopper magic…”

—————————————————–

Geez aren’t you a little full of yourself.

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

+1

#105 Penny Henny on 09.26.18 at 10:45 am

Not exactly. Sales are flat and the average price is lower than it was four months ago. Listings are up, as is the DOM. Try not to be so manipulated. – Garth
//////////////////

You are comparing spring prices to August prices. Nice try.

When prices are lower than they were, they’re lower. Seems reasonable to point this out. Or, you can fall for realtor spin. – Garth

#106 fancy_pants on 09.26.18 at 10:52 am

now we’re talking business. I have been waving the warning flag on inflation for a while. Rates have no where to go but up – unless of course the govt prefers you drown in the escalating cost of living expenses. The party is nearly over, hangovers for those who binged on debt . Hopefully the prudent don’t get taken down in the fallout

#107 SimplyPut7 on 09.26.18 at 11:06 am

If that were to occur, real estate might do a Cat 5 correction, rolling us back to 2010 pricing. (The average Toronto property way back then sold for $427,329, or 44% less than today.)

——————

That sounds about right.

No, that does not mean most families will have to sell, most don’t have to (suck it up and enjoy paying off your million dollar mortgage that you bragged to your friends and coworkers about when you bought your home for over the asking price), but for all the empty houses and condos that were hoping to be flipped to some foreigner with a suitcase full of cash – they are eventually going to have to sell and probably at a loss.

Prices in the GTA do not reflect how easily people with no rainy day fund made of cash from their own savings and not a HELOC that can increase to 7% – 10% (see below), can be taken advantage of and fall from grace.

Examples of HELOCs that increased drastically over a short period of time:
https://www.reddit.com/r/PersonalFinanceCanada/comments/9hl0qq/td_just_arbitrarily_raised_the_plus_part_of_my/

https://pbs.twimg.com/media/DmqN73yVAAEOKGT?format=jpg

Home prices from 2010-2013 do reflect how unstable life can be. They were bought by people hoping to make the home their primary residence and not:

* an ATM hoping to make a quick buck buying poorly built condos or pooling money with family to tear down old house and build McMansions to sell to foreigners

* buying homes for family members who do not have the income to pay the mortgage on the homes they bought and bragging about losing $1,000 a month
https://www.thestar.com/life/homes/2018/09/14/property-investment-is-how-this-mom-is-providing-for-her-kids-future.html

* buy syndicated mortgages promising a return of 10% a year and have no idea where your principal investment went
https://www.cbc.ca/news/canada/toronto/syndicated-mortgage-investors-still-out-tens-of-thousands-say-ontario-s-new-regulations-won-t-help-1.4603945

Let’s see if these investors remember what their banks are like when they are not able to make the minimum payments on the HELOC anymore when rates start to rise again.

#108 Karl on 09.26.18 at 11:17 am

#103 Jungle on 09.26.18 at 10:41 am
@#94 Leo

Lots of tech jobs coming.. don’t forget about google labs, they are making literally making a tech neighbrohood where everything is connected.. a real life experiment with streets, condos and development planned and approved on unused waterfront land in downtown TO

I can see RE and condos going san fransisco expensive, there will be huge inequality and social housing issues like they have down there form the tech boom.

——————————

Totally agree, Jungle. I respectfully don’t think people (Garth included), understand what is happening here beyond the numbers (whether you are pro/con RE). Actual rich people are pushing out people who think they are doing really well.

It’s why everyone on here throws up their hands and yells “bubble” or “over-valued”. They can’t believe that they are getting priced out when they are being told by income average statistics that they are “rich”.

The wealth gap and social housing issues are already blowing up in Toronto.

I ran into a couple from SF on my recent travels who made REALLY good US incomes and had no shot in living in SF. They live an hour away.

#109 Gravy Train on 09.26.18 at 11:25 am

#100 For those about to flop… on 09.26.18 at 10:00 am
“I’ve actually been mocking myself since I came back on the blog because there is so much hate on here.”

Glad to have you back, Floppy. Hope we don’t lose you again!

Just ignore ‘Bytor’; his bark is worse than his ‘byte’! :)

#110 crowdedelevatorfartz on 09.26.18 at 11:26 am

@#95 Bytor the Snow Job

I actually like the Flopsters research and posts.

Your contributions? Not so much.

#111 Guy in Calgary on 09.26.18 at 11:41 am

No improvements in the talks between Trump and Socks with regards to trade then it will be difficult for BOC to increase rates.

#112 IHCTD9 on 09.26.18 at 11:56 am

#103 Jungle on 09.26.18 at 10:41 am
@#94 Leo

Lots of tech jobs coming..
_____

All gone within 20 years due to new AI technologies.

The future for those who still work will be essentially detached from bricks and mortar – thereby allowing workers to live wherever they want while making the same wages.

The tech boom districts in North America will eventually become new Detroit Cities as the online business are run by AI, and innovation is handled by self programming (learning) AI.

#113 T on 09.26.18 at 12:04 pm

#100 For those about to flop… on 09.26.18 at 10:00 am

Welcome back flop!

#114 jess on 09.26.18 at 12:22 pm

A court filing by Julie Swetnick includes claims that she witnessed Kavanaugh and his friend Mark Judge regularly drinking excessively during Washington, DC, house parties in the early 1980s, where the two men engaged in “abusive and physically aggressive behavior towards girls.”

Swetnick also alleges Kavanaugh and Judge would “spike” drinks with drugs and alcohol. “I also witnessed efforts by Mark Judge, Brett Kavanaugh, and others to cause girls to become inebriated and disoriented so that they could then be ‘gang-raped’ in a side room or bedroom by a ‘train’ of numerous boys,” Swetnick said in her sworn statement.

Swetnick is being represented by Michael Avenatti.

#115 Shawn on 09.26.18 at 12:22 pm

The Fed will give dovish guidance today.

#116 Ogopogo on 09.26.18 at 12:23 pm

The fear is palpable in the realtors and crypto-realtors who infest the nether regions of the steerage section. They see the writing on the wall but are too cowardly or caught in a trap of their own making to admit it.

I can’t wait until 2:00 EDT for the live Fed conference. Haven’t felt this excited since… the last interest rate hike. Let ’em spike all the way up!

#117 Ilia Baskin on 09.26.18 at 12:59 pm

I have a condo in downtown Toronto (Waterfront). Is now the time to sell? Can this market go any higher?

What’s interesting is there is a development across the street set to open in 4 years. If we look at the average sale price by square foot, my condo is valued at around 720k. Units in the new building that are the size of mine are going for over a million.

#118 SimplyPut7 on 09.26.18 at 1:02 pm

‘…assuming a 20 per cent down payment with a 3.14 per cent mortgage rate and a 30-year amortization — and compared it to the actual median household income in those regions…’

hahaha!

Enjoy those mortgage rates while you can!

https://www.msn.com/en-ca/money/topstories/richmond-hill-tops-list-of-most-unaffordable-housing-markets-in-ontario/ar-AAAEK8r

#119 Deplorable Dude on 09.26.18 at 1:15 pm

#92 Gravy Train….Whose side are you on, anyway? Trump’s?
———–

Simply pointing out the reality of the situation. Canada has no leverage. T2 only option is to run out the clock, hoping the GOP lose in the mid-terms….they won’t.

#120 Brett in Calgary on 09.26.18 at 1:21 pm

Garth – I am curious – what do you think of ETFs like the divy special featured in the Globe and Mail today?

https://www.fidelity.ca/fidca/en/products/fcrr

Something to it, or just a gimmick?

#121 Smoking Man on 09.26.18 at 1:33 pm

DELETED

#122 IHCTD9 on 09.26.18 at 1:33 pm

#96 JB on 09.26.18 at 9:35 am

Don’t kid you’re self.
Wages will not go up in Toronto. TFW
Microsoft coming here to take advantage of that
Nafta will die.
Rates will rise a lot.
Jobs will be lost
Millennials will move to small towns or out of prov
Boomers selling property in mass to fund retirement
Toronto goes Chicago boom boom.
Auto sector and all the jobs that go with it gone.
You can thank George Soros and T2.

Patients kido. Why are you still in Toronto?
__________________________________________
Because you are not here! :)
Clean air, nice people and not stepping in any of your bull$hit on the street. I understand what you’re saying, but if I agreed with you, then we’d both be wrong.
______

I don’t see a whole lot of BS here JB.

Wages have sucked in the GTA for at least a decade and a half. Median Toronto household incomes are now basically the same than much smaller cities. The news media is full of stories about PHD’s driving cabs, and we just cranked immigration numbers up. These numbers actually have to go even higher than they are right now – a lot higher, and they will – 100% guaranteed. There is nothing at all that even suggests that wages can improve for the majority – much more so the other way.

NAFTA: I’m not seeing anything good on the horizon here. If I were a betting Man – I’d guess it’s toast.

Interest rates are being forcibly dragged upwards. They’re going up, no question about it. We’re along for the ride unless Poloz wants to pay 12.00 for a cauliflower.

If NAFTA dies, the Republicans keep Congress, and Trump gets another 4 – Jobs will be lost here by the hundreds of thousands come 2024. All of this seems more likely than not right now.

Auto sector could totally disappear in Canada if Tariffs come and stay. No way to make money with a 25% premium going out, and 25% premium for every lb. of steel coming in.

IMHO – decades from now, the GTA is set for an Exodus of their wealth. Once they’ve made their money, they’ll exit for a better lifestyle, move back to their home country, retire and move to the countryside, or expire in the city. Fertility rates will be less than 1, immigration will supply 80% of new Citizens. The GTA will have the youngest population in the country. It will become a low wage, low skill working metropolis of transient short term workers. Automation and AI will do most of the work needed with humans employed on an as needed basis. The entire regional economy will evolve around this. The last generation to sell homes at high levels will also be the last to escape – everyone else will be stuck there unable to generate a windfall on RE – and unable to save much due to low wages and high cost of living. We already see a lot of this getting set up to become reality.

If I’m wrong about this, it’ll be because the immigrants just stop coming. This could possibly be just as likely.

#123 PastThePeak on 09.26.18 at 1:45 pm

#107 SimplyPut7 on 09.26.18 at 11:06 am

Examples of HELOCs that increased drastically over a short period of time:
https://www.reddit.com/r/PersonalFinanceCanada/comments/9hl0qq/td_just_arbitrarily_raised_the_plus_part_of_my/

https://pbs.twimg.com/media/DmqN73yVAAEOKGT?format=jpg

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

Just to nit pick, I don’t think either of those examples is a HELOC, but rather a pure LOC. The amount of variance is much higher than what I have seen for HELOCs.

That being said, I fully agree with your points. There are many that also rely upon pure unsecured LOCs for their purchases, and those examples show the costs have increased “bigly” for some. Their monthly costs could be increasing substantially.

This is what the RE bulls in the steerage section either don’t understand, or choose to ignore. Leverage works both ways – amplifying the up & the down. The general thinking here is that “there is no issue if someone already has purchased a home and there is a downturn, everyone will just ride it out”. Anyone who purchased a few years ago, and then took out a HELOC whenever they had any equity (to buy another property, car, go on vacation, renovate, …) could be in for some challenging times if the market is even flat to slightly down.

How many households in the GTA are just barely scraping by with two good incomes on their $1.2M houses (which maybe they have an $800K mortgage on, as they had increases from an earlier property)? For the years leading up to 2017, they could spend beyond their means by tapping into their HELOC as their property rose by 10% in value, for splurges here and there, but not really paying much if any off. That avenue is closed. Now all it takes is for someone in that household to lose their job or other life event.

Anyone who thinks there is no employment downturn event coming in the next 2-3 years is delusional.

#124 IHCTD9 on 09.26.18 at 2:04 pm

#94 Leo Trollstoy on 09.26.18 at 9:15 am
Toronto Tech Boom!

Jobs galore!

Earlier this month, Microsoft Canada announced it is relocating its headquarters to downtown Toronto. Soon after, computer chip giant Intel said it would be opening a graphic-chip engineering lab here. Then Uber revealed plans to build a $200 million software-engineering lab in the city and to expand a research centre for self-driving cars that it opened last year.
https://www.thestar.com/business/technology/2018/09/25/as-silicon-valley-eyes-toronto-some-worry-tech-boom-could-hurt-canada.html
__________

Several years back, there was a lot of hoopla in the local news regarding a new plant being built in town. Hundreds of Jobs! New prosperity for the area! Many small businesses will benefit! Lots of big smiles and pics of ribbon cutting.

After it was all said and done, it was $12.00/hr and half the workers came from somewhere else.

I’d hold the applause till you know what the plan really is.

(Yes I know you’re just ripping Mark a new one with this post :) )

#125 Bytor the Snow Dog on 09.26.18 at 2:38 pm

#114 jess on 09.26.18 at 12:22 pm sez:

“A court filing by Julie Swetnick includes claims that she witnessed Kavanaugh and his friend Mark Judge regularly drinking excessively during Washington, DC, house parties in the early 1980s, where the two men engaged in “abusive and physically aggressive behavior towards girls.”

Swetnick also alleges Kavanaugh and Judge would “spike” drinks with drugs and alcohol. “I also witnessed efforts by Mark Judge, Brett Kavanaugh, and others to cause girls to become inebriated and disoriented so that they could then be ‘gang-raped’ in a side room or bedroom by a ‘train’ of numerous boys,” Swetnick said in her sworn statement.

Swetnick is being represented by Michael Avenatti.”
————————————————-

Of course they have all kinds of physical evidence not just the 40 year old “recollections” of this woman, right jess?

What’s next these two guys sold women into slavery?

#126 AGuyInVancouver on 09.26.18 at 2:50 pm

#123 PastThePeak
..How many households in the GTA are just barely scraping by with two good incomes on their $1.2M houses (which maybe they have an $800K mortgage on, as they had increases from an earlier property)? For the years leading up to 2017, they could spend beyond their means by tapping into their HELOC as their property rose by 10% in value, for splurges here and there, but not really paying much if any off. That avenue is closed. Now all it takes is for someone in that household to lose their job or other life event..
_ _ _
That really summarizes it all. Housing is vastly overvalued, compared to what its local buyers can afford to pay. How did we get here? Interest rates are only part of the story.

#127 Stan Brooks on 09.26.18 at 3:04 pm

#122 IHCTD9 on 09.26.18 at 1:33 pm

IMHO – decades from now, the GTA is set for an Exodus of their wealth.

Absolutely.

But the time to exit was 2 years ago/at the peak of he economy/housing market.

There is no wealth to be made in GTA any more due to excessive cost of living. To live there will require extra money, to subsidize a useless undertaking (to ‘make it’ there)

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

Watched the FED announcement:

https://youtu.be/ZEfZNWE8laY

Oh, boy, they will keep raising rates until job markets stagnates and that is not going to happen in the next 3-4 years partially due to trade wars/capital coming back to US/booming US companies.

They plan for labour shortages, wage pressure up and in case inflation materializes, they will keep raising.

While we have unemployment up, economy shrinking wage pressure down and much higher inflation.

The tale of the 2 economies, one booming and one stagnating in an inflationary depression coming to a town near you.

US completed the deleverage and recovery, now back to normal while we have not deleveraged yet from the highest ever debt bubble, no we kept living the good life and accumulating more debt; and we will be forced to deleverage at the worse possible time.

We should have taken the pill in 2009, we/the economy is pretty much on a dead bed.

Just watch what is going to happen in the next year or two.

#128 n1tro on 09.26.18 at 3:28 pm

#125 Bytor the Snow Dog on 09.26.18 at 2:38 pm
#114 jess on 09.26.18 at 12:22 pm sez:

“A court filing by Julie Swetnick includes claims that she witnessed Kavanaugh and his friend Mark Judge regularly drinking excessively during Washington, DC, house parties in the early 1980s, where the two men engaged in “abusive and physically aggressive behavior towards girls.”

Swetnick also alleges Kavanaugh and Judge would “spike” drinks with drugs and alcohol. “I also witnessed efforts by Mark Judge, Brett Kavanaugh, and others to cause girls to become inebriated and disoriented so that they could then be ‘gang-raped’ in a side room or bedroom by a ‘train’ of numerous boys,” Swetnick said in her sworn statement.

Swetnick is being represented by Michael Avenatti.”
————————————————-

Of course they have all kinds of physical evidence not just the 40 year old “recollections” of this woman, right jess?

What’s next these two guys sold women into slavery?
———————————————-
No worries. Kavanaugh and Judge can invoke the Trudeau excuse. “I don’t remember a negative interaction..” and “I may have been a little forward at the time…”

Worst case they can use the Clinton denial…”I didn’t have sexual relations with that woman..”

#129 IHCTD9 on 09.26.18 at 4:03 pm

125 Bytor the Snow Dog on 09.26.18 at 2:38 pm

Of course they have all kinds of physical evidence not just the 40 year old “recollections” of this woman, right jess?

What’s next these two guys sold women into slavery?
______

What’s next is reading metoo headlines in the National Enquirer next to colour pics of Jerry Springer getting punched in the face by Geraldo Rivera.

How many consecutive decades old, precisely timed; allegations aimed at political figures are we at now?

The meetoo movement looks to be more about politicians taking down their opposition outside the court of Law than anything else.

Another couple years of this stupidity and no one is going to believe a bloody word of it anymore.

#130 bdwy sktrn on 09.26.18 at 4:20 pm

is this really true….

kavanaugh’s 3rd accuser says that…

as a legal adult, likely in her second year of university, she attended high school parties.

-where she was aware underaged girls were being regularly drugged and raped
– and said nothing and nobody else said a word.
– and returned “over ten times” to these same parties with the same people
– until she got raped.

really?

Inappropriate for this site. Buzz off. – Garth

#131 Oft deleted much maligned stock.picker on 09.26.18 at 11:11 pm

#83……fair comment…..but can you give me one example of a single thing Trudeau has done right and solely for the benefits of Canada and it’s citizens that doesn’t seem that he’s obvious being manipulated by a foreign entiy/s? I relied on the work of researchers like Vivienne Krausse….and straight unbiased observations by journalists writing for major media. When the Times of India berates Trudeau and call him a pervert why am I being chastised and not them? If I was to regurgitate the obviously partisna nonsense of the CBC is that OK? Let’s just talk about the truth like adults and forget about Trudeau’s feelings…..I think Canada needs that right now.