Stimulus

Okay, the class will come to order. Put down your vapes and pay attention.

Let’s review the difference between fiscal and monetary policy. The F-thing is what governments do. Like when Comrade Premier Horgan in BC decides to levy a special tax on people with two houses, just because they have two houses. That’s fiscal policy. It raises money. It seeks to alter human behaviour. All done in the name of a goal the politicians have. In this case, to punish success and make homeless moisters feel better. All taxes are examples of the big F at work.

Monetary policy’s different as it changes economic conditions. This is where central banks come in. They’re not elected, which is why we trust them (supposedly) to set interest rates and control the amount of money. The job of MP is to keep currencies stable, foster economic stability and prevent things from getting too cold or too hot.

Back in 2008-9, monetary policy dudes were obsessed with preventing a depression. So they slashed interest rates to the bone encouraging the deplorables to borrow, spend, and invest. They did. So now houses cost a million. These days – especially in the States – it’s the opposite problem. Thanks to Trumpenomics, the economy there is ablaze. Big tax cuts, less regulation, tariff walls – it’s all thrown gas on America. So the Fed is using monetary policy to hose it down before it flames out of control, creating big inflation and diluting the dollar.

Friday morning we’ll get some stark evidence. Looks like the jobs numbers will be historic – unseen for a quarter century. And the Fed is gearing up for a long boom. “There’s really no reason to think that this cycle can’t continue for quite some time,’ the central bank boss, Jerome Powell, said this week, “effectively indefinitely.”

Yes, class. More rate hikes lie ahead. Everything you thought you knew about borrowing – that it’s good and gets you stuff you could never otherwise possess – will change. Debt will go from helpful to hurtful, sucking off cash flow to make payments on things suddenly worth less. That’s what monetary policy can do. So if elected politicians don’t make their fiscal policy coordinate with central bankers’ monetary policy, things go badly. Like what’s happening now with YVR real estate – higher taxes and higher rates at the same time. Ouch, man.

Some people in the class may have this question: if rising rates squishes houses, why not stocks, too?

The answer: in America fiscal and monetary policy are aligned when it comes to corporations. Yes, rates are rising which drives up business costs, but the government (Trump) just slashed corporate tax rates by the most in three decades. Since profits determine markets, no crash. Besides, the same hopped-up economy that’s affecting monetary policy is good for business, as consumers spend more, make more and work more.

So here we are. Bond yields are spiking. Highest since 2011. Mortgage rates will soon move in sympathy. The stock market at a record level (despite Thursday’s crunch). There are more empty jobs in the US than there are people qualified to fill them. Unemployment at a 50-year low. The malls, restaurants, factories, highways and car lots are full. By Canadian standards it may be a messed-up, polarized, gun-loving country that elected a clown and got a circus, but the longer he’s in office, the hotter the entire economy becomes. This will make the coming mid-term elections – the first big national referendum on Trump – so fascinating.

And us, class?

The good maple news is a US trade deal. No car bomb. Oil’s moving up. Those are positives. But wages are not. Over the last three years of Lib rule incomes have barely kept up with inflation and are expected to trail it in 2018. Meanwhile you know what house prices have done in three years – thanks to rock-bottom rates. Households are falling behind, now using HELOCs and tapping into TFSAs to stay afloat.

In order to maintain the value of the dollar and deflate property prices, our central bank must ape the Fed – so monetary policy in Canada will line up with that to the south. But we’ve had no offsetting tax cut. In fact high-end beavers hand over 53% of their incomes starting at $200,000, while US top taxes click in at $500,000. Plus our corps pay more and can write off less.

The conclusion: this is what happens when you get M’d while being F’d.

The exam is Monday.

170 comments ↓

#1 renter in Surrey on 10.04.18 at 5:12 pm

while being F’d…

——————————————————————-

I don’t need sex because government F’d me every day

and yet RE in the moist valley is still in stratosphere and there is no sign of relief
it’s defining all logic and common sense

#2 paulo on 10.04.18 at 5:12 pm

So whats the odds of the BOC pulling the trigger on a catch up .50 ? .25 is a done deal next meeting still behind the fed with a wider than normal spread….

#3 jojo on 10.04.18 at 5:22 pm

As I said yesterday in Edmonton long ago our family bought whole blocks of houses from the banks as contractors folded like paper in the wind as T1 brought in the NEP which wiped out Alberta.

It was also coupled with horrible interest rates increases. Most of you probably weren’t even born.

You have no idea the carnage coming. You can sense or read that it will be bad. But until you are living in 15-22% interest rates you cant even comprehend how it affects everything….

We sold all of our property in Canada in teh lest 5 years. We have moved to the States for the better tax system and are renting. Locally here in Florida prices are plummeting.

Teh affordability index is what ou need to understand. As interest rates rise the amount you qualify for goes down.

At 3-4% interest you are here to day.

Comprehend a world of 15-20% interest rates.

That is how far this crash will go….

Its an opinion and its mine. But look to history for a guide of your future.

The irony or horror is its another Trudeau who’d gonna wipe most of Canada out. And in 30 years you yoru kids will vote in another…..

few ever learn

#4 dakkie on 10.04.18 at 5:27 pm

Update on Popping Housing Bubbles in Sydney & Melbourne

http://www.investmentwatchblog.com/update-on-popping-housing-bubbles-in-sydney-melbourne/

#5 palebird on 10.04.18 at 5:33 pm

You got it jojo. I was around when that nastiness happened on the prairies. Unfortunately my dad never saw it coming and got wiped out. Never really recovered. Very sobering times.

#6 yvrguy on 10.04.18 at 5:35 pm

#1 renter in Surrey on 10.04.18 at 5:12 pm
while being F’d…

——————————————————————-

I don’t need sex because government F’d me every day

and yet RE in the moist valley is still in stratosphere and there is no sign of relief
it’s defining all logic and common sense

//////////

gawd. your chicken little act is getting old, like your life depends on owning RE.

the match is lit, but no one’s even poured a drink yet to watch this fire burn.

RE will be THE WORST performing asset class in Canada the next decade, if not two.

be patient, shut the F’d up… and chive on.

#7 Alessio on 10.04.18 at 5:37 pm

What I don’t understand is Garth you say get ready for a long boom yet get ready for debt to rein in. If people stop spending and asset prices fall doesn’t that mean the boom goes bust? You can’t have it both ways.

The US Fed described a long boom there. Read harder? – Garth

#8 Ron on 10.04.18 at 5:38 pm

#3

Where do you see 15-20% rates coming from ?

Wage inflation in a world of automation?

Energy inflation in a world of renewables?

Urban Housing inflation in a world of remote work?

Yield curve is pricing in nil inflation for decades to come.

#9 Adam on 10.04.18 at 5:39 pm

This blog is schizophrenic.

A few posts back it talked about what a ridiculous tax policy the US just rolled into (no surprise, look who spearheaded it). Dollars were flowing to the bottom lines of Amazon’s and Apple’s at the expense of massive government deficits and debt….it was an unusual (but correct) admission, because most of the time this blog likes to slam the comparatively good federal Canadian fiscal policy, simple because taxes are cheaper south of the border (but south of the border policy is beyond dumb…so, what’s the problem again?)

Hard to figure out the ideology of this blog – other than to simply diss federal liberals (for, well, any reason that can be found) and anybody under 40.

No opinion was expressed in this post on the long-term wisdom of corporate tax cuts. The implications were described. You failed the comprehension test. – Garth

#10 TSX in trouble? on 10.04.18 at 5:42 pm

How tied is our main index to the US economy? Are we at least benefiting from Maple stocks or is it all going to be a crap shoot?

Canada’s banks are among the strongest and safest in the world due to global ops. What about the rest of Canada’s index?

#11 marcus on 10.04.18 at 5:50 pm

Friday is expected to show 500,000 jobs. Holy Smokes! That combined with a trade deal, Kavanau getting confirmed, Ginsberg and Sotomayor on the way out (Age for one, type 1 Diabetes for the other) and Trump is well on his way to Making America Great Again. Next step ……. China. this one sadly will get dirty. Dirty in the sense of a shooting war over the West Philippine Sea and it’s Trillions in natural resource wealth. Invest accordingly Canada.

#12 Doug t on 10.04.18 at 5:54 pm

I suck at math

RATM

#13 You know val on 10.04.18 at 5:54 pm

Garthgantuan post one of the best I have read…..BIS RULES. M + m 1 + m 2 money supply money delivery Monday velocity it’s still about the big big … F anyway

#14 mitzerboyakaQueencitykidd on 10.04.18 at 5:55 pm

ahhhh Stormy

i wish
u wish
we all wish stimulus

#15 Dave on 10.04.18 at 5:56 pm

Is Trump telling Saudi to flood the market with oil? Perhaps trying to keep inflation down so bankers increase rates slowly?

#16 The Real Mark on 10.04.18 at 5:57 pm

The losses on US long-term Treasuries are really starting to pile up. We know there is a significant long-term correlation between the US stock market and long-term interest rates. If you plot SPY versus TLT (S&P500 vs long-term US treasury ETFs), it is very apparent that SPY has a lot of ‘catching down’.

“#10 TSX in trouble? on 10.04.18 at 5:42 pm
How tied is our main index to the US economy? “

The sector mix, and balance sheet nature of Canadian companies has historically allowed the TSX to outperform the Dow during periods of rising long-term interest rates. In particular, the resource sector tends to outperform, as inflation rises with rising interest rates, while assets that derive their value from long-term interest rates, such as real estate, tend to go down.

So I’d personally expect the TSX to outperform the US indices relatively speaking here. Could be by quite a considerable margin if the precious metals sector really starts to take off.

Canada’s banks are among the strongest and safest in the world due to global ops. What about the rest of Canada’s index?

Canada’s banks mostly do not take interest rate risk, unlike the US banks (who historically run significant duration gaps in their portfolios). Posters like Shawn Allen constantly lament the lack of 30-year fixed term mortgages in Canada, but their absence actually lends a lot of stability to the Canadian banking system in periods of rising long-term interest rates.

Because the banks are already 40% of the TSX index, underperformance (or market performance) is statistically already baked into the cake for them. But that doesn’t mean that they can’t be along for the ride. Largest gains, IMHO, are likely to be in the most depressed and out of favour sector, the precious metals miners, for which shareholders have not experienced even nominal returns since the 1970s, demonstrating significant inverse correlation to long-term bond prices which bottomed in the 1970s.

#17 renter in Surrey on 10.04.18 at 5:58 pm

RE #6 yvrguy

…like your life depends on owning RE.

———————————————————————

my dignity does

#18 Shawn Allen on 10.04.18 at 5:58 pm

Boomers graduating early 80’s

Alistar McLaughlan at 158 yesterday said:

A boomer born at the tail end of the boom – say 1965 – would have come of age in the miserable job market of the 1980s, sandwiched between the devastating 1981-83 recession and the not-quite-as-devastating-but-much-longer-lasting 1990s recession.

**********************************
Absolutely correct. In my experience, high school graduates of 1977 could walk into a decent job and that was even in Nova Scotia. By 1984 I graduated in engineering in Nova Scotia and probably no more than 20% of the class had jobs prior to graduation (75% would have had jobs prior to graduation in say 1979.)

But most people did what they had to do. Maybe take an MBA. Be willing to move. The early 80’s though were very tough times for most of us later boomers. And the early 90’s ushered in another recession. For 35 years I have constantly heard there will be a shortage of engineers. That has almost never been my experience. Other than Alberta circa 2007, professional engineering jobs (Mechanical, Electrical etc.) have generally been scarce rather than abundant. But each of us needs only just one job and the persistent ones tended to get a job in spite of recession.

I DO think things are tough for new university graduates today. Probably tougher than 1984. But it has very seldom ever been the case since the early 80’s that the there was a shortage of university grads for jobs. Not in my experience since 1984. The closest exception was Alberta 2007 and even then not every university graduate walked into a job.

The hardest working (as long as they have decent personalities) job seekers always come out ahead though.

#19 JSS on 10.04.18 at 6:01 pm

I am a bit concerned with the performance of the Tsx, primarily over the last few years, as the DJIA, s&p500, and Nasdaq have been growing significantly. Most Canadians, rightly or wrongly, are significantly invested in the Tsx.

Any thoughts where the Tsx is headed? Are we always going to be a “value index”?

#20 Guy in Calgary on 10.04.18 at 6:03 pm

Yea then the DOW craters 30% and they slash the rates again because no one in charge wants to be the one responsible for killing the economy.

#21 JSS on 10.04.18 at 6:04 pm

#3 jojo

Interest rates will never head back to 15+% like it did in the 1980s. Not in this lifetime

#22 The Wet One on 10.04.18 at 6:09 pm

Just one thing Garth, only in Ontario is the top rate 53%

In Alberta, it’s 48%. Too high still, but less than 53%. Only Ontarians have that privilege.

See here for actual details on what the actual top tax rates are: https://www.taxtips.ca/marginaltaxrates.htm

Garth’s gotta pull your leg to cause outrage because he’s himself and can’t help it.

Try not to be sucked in too much by his B.S. It’s mostly good info, but he tries to pull a fast one on you now and again here and there.

Move to Alberta too. you can make upto $300K without being in the top tax bracket. It’s almost like being in the States. At least so far as Canadians can manage anyways.

Provinces in which the top fed-prov tax rate exceeds 50% of income: Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, PEI, Quebec. – Garth

#23 Shawn Allen on 10.04.18 at 6:09 pm

Stock market direction?

I await Warren Buffett’s updated advice. But at last check he said stocks (S&P 500) will certainly outperform bonds in the long term. But he also always says that where stocks will go in the next couple of years is not something he or anyone else can predict.

Rule number 1: Always assume Buffett is correct

Rule number 2: You need no other rule.

#24 Smoking Man on 10.04.18 at 6:10 pm

Epic Post Garth
Best one of the year.!!!!!

We are on the door step of panic real estate selling.
Watch it from my back yard deck facing Catalina Island.

#25 The Wet One on 10.04.18 at 6:10 pm

Oh yeah, and Quebequers pay more than even Ontarians.

53.3%

Sheesh.

Why stay where you get fleeced people?

Vote with your feet fercrissakes!

#26 Oakville Sucks on 10.04.18 at 6:12 pm

So Trump has been amazing for America!

Only CBC retards can spin this as a negative together with CNN….FAKE NEWS!!!!!

#27 reynolds531 on 10.04.18 at 6:14 pm

Over the past 25 years many talking heads on CNBC have said a lot of things.

“Computers will increase our productivity to the point there will be no more recessions”

“Economic growth solve global warming”

Yes it could be a long boom. Or a short one. Your plan shouldn’t change because of some dudes comments.

#28 BobC on 10.04.18 at 6:20 pm

Notice what has been happening as Trump reverses the democrats policies, executive orders, regulations and even laws?
Employment goes up. Poverty goes down, the stock market sets records which benefits everybody’s IRA’s, 401K’s and pension plans. Wages start going up and bonuses are handed out.
Factories come back, people stuck on means tested welfare programs drop in numbers like food stamps for example.
More pride, self esteem and happiness has to follow.
Just look at the cities and states still in control of democrats. San Francisco, LA, Baltimore, St Louis and Chicago are a few examples.
Forget about hating his personality or the size of his hands. The proof is in. If you still want to be controlled by the left you have to be downright stupid. Tax receipts are at record highs even with the tax cuts. We have a spending and needless war problem.
If Trump fixes our healthcare and not only eliminates the deficit and at freezes the debt in the next 6 years he really will be the best president in the last 60 years.
If you guys don’t learn from our mistakes and get rid of T2 I still say you will be begging for a Trump type PM.

#29 ANON on 10.04.18 at 6:26 pm

Since profits determine markets, no crash.

*raises hand*
But supposing that it’s promises of more which determine profits, which determine markets, then do we get the famous shark-fin chart?

#30 BC to separate on 10.04.18 at 6:42 pm

You are quick to reprimand Horgan for standing up for his people who are all homeless. Let’s take a moment to praise Horgan and remember the day that we were freed of the Liberal rule.

Okay, so, you do not pose any solution to homes in West Vancouver still costing 3 million dollars after a 25% crash in price.

So, this is where I come in. The spec tax will help keep those people in AB in their own backyard and greedy Vancouverites who need 30+homes that have been leveraged on the last one that they picked up – that is now dropping in value. We know you make lots of money in AB (unlike Vancouver) and living where you work is almost inhabitable. We get it. But the spec tax will only go so far, so we need to go further. We need to build a wall and make Alberta pay for it. Start charging a fee just to enter BC at point of entry. For everyone. Don’t have a BC card, you can go play somewhere else or pay up to enter. We have all of the clean water and air (unless you live in the central and southern interior of BC), and it is about time we start charging for it. We also have LNG, and big oil sees us as more lucrative. You can come do business here, but we are going to charge you nicely for it.

All of this money will be used to build shelter for BC people. Which is basically the whole province who either are homeless or on the verge of becoming homeless. Everyone is behind on their bills here.

Lastly, only one property per local person. That is it. And we need mass public auctions for local rental corporations acquire the auctioning off the illicit houses being seized.

And all of this needs to be made public.

#31 common sense on 10.04.18 at 6:55 pm

So Government debt levels mean nothing, the US will not slow down with rates rising, everyone in the USA that wants a job will have one and the Canadian housing market is pooched.

Time will tell as it always does…

#32 Willy H on 10.04.18 at 6:56 pm

“… but the longer he’s (Trumpster) in office, the hotter the entire economy becomes.”
__ __ __ __

We need to be careful crediting the Big Orange with the current state of the American economy. This current growth spurt was overdue after Americans were sucker-punched by the World Financial Crisis of 2008. The Obama administration laid down the groundwork for this current economic boom. It almost took a decade to turn things around. The Trump administration is further stimulating and already stimulated economy. Not good economic policy for the mid-term.

#33 arfmoocat on 10.04.18 at 6:59 pm

#3 jojo

I remember those days vividly. I walked away from my first purchase. It was a $64K condo in Edmonton that the seller had dropped the price from $74K we first agreed on.

I was young and stupid and just got married the 1st time. My mortgage came up for renewal at 19% and I couldn’t afford it.

Went and saw a lawyer and told him my situation and he opened up the draw of his desk, pulled out a piece of paper already printed and said your not the first one, follow this.

It said close the drapes and lock the doors, don’t answer the phone or answer the door. You have 6 months before the bank forecloses on you.

The condo bottomed out at $24k

#34 Stormy Daniels on 10.04.18 at 6:59 pm

I do appreciate the free publicity today Garth, obviously a nice diplomatic olive branch from you.

However, make sure when you reach out there’s also a check for $130,000 in your hand.

The Lunenburg Enquirer is texting me again, wants to know everything about you, me and Bandit in the park that day…….perhaps I will ring them up.

e-transfers are fine, no bitcoin please.

Clock is ticking…………..

#35 Burnaby Boy on 10.04.18 at 7:00 pm

You say oil is going up in price which it is but I am hearing that Canadian oil is sold below Brent or WTC. Is there a Canadian oil index for us lay people to follow?

It’s called WCS – Western Canadian Select. – Garth

#36 Bob Dog on 10.04.18 at 7:03 pm

I can’t even read this nonsense anymore.

“Like when Comrade Premier Horgan in BC decides to levy a special tax on people with two houses, just because they have two houses.”

“Oil’s moving up. Those are positives. But wages are not. Over the last three years of Lib rule incomes have barely kept up with inflation and are expected to trail it in 2018.”

Talk about contradicting yourself. If wages kept up with the massive inflation our worthless POS government has inflicted on the young, there would be no need to punish the “Successful”. Everyone would be on an even playing field. Unfortunately, the roll of the corrupt puppet regime in Ottawa is to provide ample cheap labor for corporations and debt slaves for banks. How else do you explain an immigration policy from 1958 that makes absolutely no sense in 2018.

If the tools running this ridiculous excuse for a country want to implement a mass immigration policy, they may want to think of building some faking houses.

There is no ‘mass’ immigration. As for incomes, when measured against the published CPI rate we get a ‘real wage.’ It is expected to be negative this year. – Garth

#37 Trojan House on 10.04.18 at 7:05 pm

“There’s really no reason to think that this cycle can’t continue for quite some time…” Hmmm, I wonder where we heard this before. Oh yeah:

“The Federal Reserve is not currently forecasting a recession.” Ben Bernanke, January 2008.

No offense Garth, but I don’t believe any of them, not because they are liars but because there is no way in H E double hockey sticks anyone can predict the future. If the Dems get a hold of Congress and the Senate, all bets are off.

#38 Stone on 10.04.18 at 7:06 pm

Yes, class. More rate hikes lie ahead. Everything you thought you knew about borrowing – that it’s good and gets you stuff you could never otherwise possess – will change. Debt will go from helpful to hurtful, sucking off cash flow to make payments on things suddenly worth less.

———

Debt: Spending money you don’t have on things you don’t need to impress people you don’t like or even know.

Need I say more?

#39 FOUR FINGERS WATSON on 10.04.18 at 7:09 pm

I will bet a bag of mice that the Canadian 5 year fixed mortgage rate never reaches the historical norm of 7ish % again. Historical norms would crush economies all over the world.

Only those economies where people have borrowed moronically. – Garth

#40 The Don and Horgan - for the people on 10.04.18 at 7:10 pm

CNN is really bad fake news and potentially hypnotizing to the masses. 21st century hell bent propaganda. Everyone else being shut down. And I think it works on the older people, because since the election the older folks have been watching CNN a minimum 8-10 hours per day and their political views are becoming very distorted and radical, like good little puppets.

It is so brainwashing that the folks now think that they are US citizens who will be voting in the next US election. I have tried to tell them that they are Canadian, but they don’t trust me anymore due to a side comment and my skepticism of CNN’s lopsided reporting.

I am pretty sure that this type of reporting speeds up Alzheimer’s.

#41 Nonplused on 10.04.18 at 7:11 pm

I’ll be grabbing a bag of popcorn to watch the midterms for sure. But before that circus we have the Kavanaugh vote this weekend. Wee!

I expect Kavanaugh will be confirmed by a narrow vote and the streets will erupt with topless protesters in pink hats the next day. If they aren’t already going on outside the senate on the day of the vote.

Anyway, be careful out there boys. We live in a world now where uncorroborated accusations of drunken party groping from 36 years ago when you were 17 can ruin you. “Innocent until proven guilty” has been replaced with “guilty upon accusation”. This brings us right back into the days before the Magna Carta, where the king could imprison or indeed execute anyone he wanted to without proof of a crime being committed. Only now it’s the media who does it, not in the name of justice but that of ratings. Anyway, it’s probably not a good idea to join a fraternity or go to any parties where women are present. It’s a CLM (career limiting move).

Strange, the sexual revolution has gone full circle. Now women are liberated and men are running the other direction, putting everybody right back where they started, refusing to have sex until married.

It’s a shame in this case that there was no testimony to support the single witness. None of the people she cited as being at the party would collaborate her story. So it’s either a big cover up or a case of mistaken identity. (I believe she was assaulted, but given that she can’t remember any of the details I’m not sure she got “by who” correct either. In any case we’ll probably never know.) Somebody is breaking commandment 8 (Thou shalt not bear false witness).

In law it is well established that you don’t have a case unless you have 2 witnesses or collaborating evidence. This is one of the great advancements in our civilization. Shame it seems to be gone. It reminds me of the Rolling Stone article that got an entire frat shut down, many young men expelled and their careers thus ruined, and then it turned out to be a complete fabrication on the part of one woman. Sold a lot of magazines though.

So my advice to young men in this modern era: Be on your best behavior and avoid women you do not know. Merely asking a girl on a date can be an “unwanted sexual advance” now and get you fired, so don’t do it. You are better off single. Besides, single guys are better able to afford motorcycles.

Milo Yiannopoulos is another great example of “trial by media”. The man is certainly controversial, he says some outstanding things, but he is a self professed roman catholic of Jewish background homosexual married to a black man. He also happens to be a conservative politically so he is a bigot according to the media. It’s proof positive that people make up their minds without the slightest influence by the facts. If no facts are available to support their preconceived assumptions, they simply make them up. You and I do it too so be careful out there. Probably most of what you think you know just simply isn’t so.

There are a few social developments that separated us from the barbarians, all of which are now under threat.

Limits on government (like the Magna Carta).
Rule of law, not rule of men or people.
Right to a trial by your peers.
Evidence based testimony.
Property rights (including intellectual).
Democracy.
Scientific inquiry and the scientific method.
Free speech (but not to include unsubstantiated liable or slander).
Freedom of assembly (but not to include rioting).
No taxation without representation.

This list is not complete but it mostly explains modern society. Unfortunately every single one of these advancements is under threat by political, religious, and media entities.

Hey and if you are a “Religious Socialist” (Christian, Jewish, even Muslim), realize that socialism is illegal under divine law. Refer specifically to commandments 9 & 10, 10 in particular. (Thou shalt not covet.)

https://www.dummies.com/religion/christianity/catholicism/catholicism-and-the-ten-commandments/

No I am not a Catholic. But I don’t discount them either.

#42 AGuyInVancouver on 10.04.18 at 7:13 pm

#3 jojo on 10.04.18 at 5:22 pm
As I said yesterday in Edmonton long ago our family bought whole blocks of houses from the banks as contractors folded like paper in the wind as T1 brought in the NEP which wiped out Alberta.

It was also coupled with horrible interest rates increases. Most of you probably weren’t even born.

You have no idea the carnage coming. You can sense or read that it will be bad. But until you are living in 15-22% interest rates you cant even comprehend how it affects everything….

We sold all of our property in Canada in teh lest 5 years. We have moved to the States for the better tax system and are renting. Locally here in Florida prices are plummeting…
_ _ _
One can only have pit for those Canadians who view Florida as some sort of promised land. The tackiest place on Earth. Where wrinklies (and hopes) go to die.

#43 Shawn Allen on 10.04.18 at 7:19 pm

Mark being Mark said:

Posters like Shawn Allen constantly lament the lack of 30-year fixed term mortgages in Canada, but their absence actually lends a lot of stability to the Canadian banking system in periods of rising long-term interest rates.

****************************
Agreed 30 year mortgages kept on the books of Canadian banks would be highly unstable. Not feasible. But I always say that it can only happen if the 30 year fixed mortgages are securitised and sold to investors.

When U.S. banks became unstable the problem was solved without getting rid of 30 year fixed rate (and yet open for prepayment) mortgages.

When I ask exactly what is the barrier to 30 year fixed mortgages in Canada, Mark who must not know the answer (or wrongly cites the bank act) responds that they are not a good idea. Not my question.

Mark, please, take that Dale Carnegie course and meantime, set a rule in each response you will first offer a compliment or agree with something before going onto whatever your criticism or correction is. Try it. It might change your life. Seriously.

#44 espressobob on 10.04.18 at 7:20 pm

So the moral of this lesson is to maintain a globally diversified and balanced portfolio. No?

That has proven to be a sweetheart for some time.

Market timing not required.

#45 Millmech on 10.04.18 at 7:22 pm

JSS
Just like they said they would never go down below 2%

#46 MF on 10.04.18 at 7:28 pm

#27 BobC on 10.04.18 at 6:20 pm

Who would have thought that massive fiscal stimulus would result in a booming economy?

We’ve seen this movie before. The relaxation of regulations, the reduced taxes by the Republicans all result in fantastic booms. Eventually the cycle ends and we have to pay the piper. That’s just the nature of the business cycle, and we cannot change it no matter how much we try.

Trump’s first fault was the omnibus bill. His second mistake was the reduction in taxes. That deficit is a ticking time bomb, and a lot of his supporters (me included), thought he would reign in spending to compensate for the reduction in taxes…. but he didn’t.

Just like I said to some American pounding his chest on here a few days ago: it’s very easy to be arrogant and boastful looking down from the top of the business cycle but it won’t last forever.

MF

#47 Art Vandelay on 10.04.18 at 7:33 pm

I’m going on week 7 now and still haven’t sold my Guelph condo. I snoozed on the decision but haven’t lost…yet

I know some wrinkly out there with deep pockets has their name on it. Lets goooo

#48 SoggyShorts on 10.04.18 at 7:36 pm

#28 BobC on 10.04.18 at 6:20 pm

If Trump fixes our healthcare and not only eliminates the deficit and at freezes the debt in the next 6 years he really will be the best president in the last 60 years.

**************************************
Hahahahahahahahahahahahahhahahhah
Fixing healthcare (for I guess zero dollars?) while pulling 1 TRILLION out of his butt per year? Seriously?

With no new taxes, and no reduction in spending where the hell do you think Trump will come up with a trillion dollars per year He was great at cheating taxes in the 90s, but I don’t think that scales well.

#49 WelcometoSlurrey on 10.04.18 at 7:39 pm

Rates are going up, but does anyone expect them to be north of 6% ? Everyone still wants a house, those that have a house want more house.

People see their house go up in value and realize the only way they can realize the gains is by 1. cashing out 2. borrowing against the equity to invest.

They are borrowing the equity and buying more house ( or toys) . Im assuming very few are using the equity and diversifying.

The market is fizzling slowly. Like turtle slow, not like US crash. So those lower mainlanders that have been following this blog since its inception, sucks to be you when it comes to housing. You could have bought 2011, 2012,2013,2014, you will never see those prices again.

Take comfort that those that have seen their equity rise are not cashing out. They are either buying more toys or buying more house which is now falling in value.

#50 Roger Fedherre on 10.04.18 at 7:41 pm

5 year reverse mortgage rates are already near 7% these days. They will likely be 8% by next year. They got desperate people by their neck.

This is why I never liked the idea of having all or most of my money in a primary real estate or residence. Investments that are at least 2 to 3 times the value of a primary house is a much better long term strategy.

My investments bring in thousands a month instead of a money pit of house like the movie with Tom hanks.

#51 For those about to flop... on 10.04.18 at 7:42 pm

Pink Pumpkins being carved in Burnaby.

Here’s another case I have been following that captures the condo rollback in certain parts.

Picked up for 512k earlier this year,they relisted at a price where they weren’t going to make any money after expenses in June.

Maybe yet another one where life took a turn for the worse,who knows?

Anyway, the new ask is 499k and now they could take a decent hit percentage wise.

The market is taking one step forward,two steps back regarding transparency, so I’ll just keep my rogue Pink Project going because I answer to no one.

Thanks for all the GAP Code support…

M44BC

Now asking 499k

1805 4505 Hazel Street, Burnaby paid 512 February 2018 ass 475k

Jun 14:$563,000
Aug 5: $539,000
Change: – 24000.00 -4%

https://www.zolo.ca/burnaby-real-estate/4505-hazel-street/1805

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

#52 MF on 10.04.18 at 7:42 pm

#36 Bob Dog on 10.04.18 at 7:03 pm

Oh look another person blaming immigrants who cannot even vote for Government policy.

If not for immigrants, who would buy your product, or use the service you offer? A bunch of old baby boomers? No.

I know at the business I work for a lot of our clients are immigrants and we profit.

Also, from what I see, the immigrants I know work harder and are more hungrier for success than the native population.

MF

#53 TurnerNation on 10.04.18 at 7:52 pm

Sell sell the Left is set to make us poorer. They hate wealth…except in their own hands.
(You know what would happen if someone gave me free food and housing? I’d get free food and housing. No motivation on my part. Gimmie)

https://www.cp24.com/keesmaat-proposes-rent-to-own-program-financed-by-levy-on-luxury-properties-1.4120961

“Keesmaat said that she would pay for the administration of the program with a 0.4 per cent property tax levy on homes with assessed values of $4 million or more.

According to the Keesmaat campaign, the tax would bring in an estimated $80 million annually.”

#54 The Real Mark on 10.04.18 at 7:59 pm

“#43 Shawn Allen on 10.04.18 at 7:19 pm “

So lets flip our little side-debate around, when interest rates are high, do you think that the Canadian banks will successfully lobby the GoC to make the requisite legislative changes to enable viable 30-year term mortgages?

I think so. And Canadian banks, being Canadian banks, will herd their sheep…err..customers into them. Maybe when rates are 10%, under the guise of “protecting” them from rates of 12%. Or something like that.

Canadian banks are historically such great investments because they’re just so darn efficient and effective at converting the assets of their customers (whether borrowers or lenders) to that of their shareholders. Best to be an owner, not a customer!

#55 For those about to flop... on 10.04.18 at 8:08 pm

Russell Brand unfortunately did not make it to the list of most valuable Brands…

M44BC

“Visualized: The World’s Most Valuable Retail Brands 2018

Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

The top 50 most valuable retail brands doing things better than everyone else are realizing substantial business value according to a new report from Brand Finance. Our latest map explores the geography of these globally dominant brands according to their overall strength ratings and monetary value.

Our data come from the Brand Finance Retail 50, a ranking from the world’s leading brand strategy and valuation consulting company. Brand Finance deploys two key metrics that we adapted into our visualization. The color of each circle corresponds to their brand rating, very similar to a credit rating, where AAA is exceptionally strong. The size of the circle represents the combined monetary value of the company’s retail brands. We also included the countries where these brands originate, letting you quickly and easily see which companies and countries dominate the retail world.

Top 10 Most Valuable Retail Brands
1. Amazon: $151B

2. Walmart: $61B

3. Alibaba: $55B

4. Home Depot: $34B

5. IKEA: $24B

6. CVS Health: $21B

7. JD.com: $20B

8. Walgreens: $16B

9. Lowe’s: $14B

10. Target: $14B

How can we put a figure on a brand’s monetary value? Brand Finance judges the value of a brand by looking at “the efficacy of a brand’s performance on intangible measures, relative to its competitors.” For example, suppliers might be willing to make unique agreements with Amazon just to be sold on the platform, which adds value to Amazon at the expense of its competitors. Brand Finance also measures the hard value a brand adds to a company, taking into account marketing investments, stakeholder equity and business performance. The combination of these elements creates customer loyalty even if competitors offer the same products at a cheaper price.

Earlier this year we partnered with Brand Finance to create a map showing the most valuable brands by country. Amazon remains at the top of our list as easily the most valuable retail brand in the world, adding an astonishing $151B to the company. That’s roughly 2.5 times more than second place Walmart, worth “only” $61B. Keep in mind that Walmart generates significantly more revenue than Amazon ($485B vs. $178B in 2017). And Walmart’s brand value is only slightly ahead of third place Alibaba, a company that many analysts believe still has tons of room to grow. Our conclusion is that ecommerce companies are only just beginning to dominate the retail sector.

Our map also demonstrates how top-heavy the most retail brands are from a geographical perspective. The US dominates the world with 26 out of the 50 companies on our map with a combined value of $410B, followed by Germany (6), the UK and France (4 each). Exactly 0 companies made the list from South America, Africa and the Middle East, and only 3 from China and 2 from Japan. The West is clearly still in control of the retail landscape.

It is also interesting to explore the relationship between a brand’s overall value and its strength compared to competitors. The two are not the same. 7-Eleven has the strongest brand compared to other gas station/convenience stores at AAA, whereas its value is only $8B. Lots of brands are technically worth more but they aren’t so different from competitors. For example, there are 5 companies with the AAA- rating, including both Lowes ($14B) and Home Depot ($34B).

Regardless of the exact value, all these companies have spent decades building up brand name recognition. One only has to look at companies like Equifax to see how quickly that equity can slip away.”

https://howmuch.net/articles/the-worlds-most-valuable-retail-brands-2018

#56 Democracy Is Mob Rule on 10.04.18 at 8:14 pm

#40 The Don and Horgan – for the people on 10.04.18 at 7:10 pm
CNN is really bad fake news and potentially hypnotizing to the masses. 21st century hell bent propaganda.
________________________________________________

Fake news isn’t a new thing. Propaganda just has a new name.

#57 Democracy Is Mob Rule on 10.04.18 at 8:23 pm

#41 Nonplused on 10.04.18 at 7:11 pm
Anyway, be careful out there boys. We live in a world now where uncorroborated accusations of drunken party groping from 36 years ago when you were 17 can ruin you. “Innocent until proven guilty” has been replaced with “guilty upon accusation”.
So my advice to young men in this modern era: Be on your best behavior and avoid women you do not know. Merely asking a girl on a date can be an “unwanted sexual advance” now and get you fired, so don’t do it. You are better off single.
______________________________________________

Rather than avoiding women they don’t know, young men today should avoid ALL women. It’s less risky. I’m glad I’m not young.

#58 Smelly on 10.04.18 at 8:26 pm

Things are looking awesome, so rates will go up, at a much faster pace they say next year. Well, most people are screwed, they just don’t realize it yet. I’m happy as hell renting, glad I sold just before the peak in 2016. I can already buy back at a small discount.

I personally think this whole thing has the potential to go off the rails as mortgage defaults soar in 2020. We might even see a small banking crisis as banks go under.

#59 FOUR FINGERS WATSON on 10.04.18 at 8:28 pm

#39 FOUR FINGERS WATSON on 10.04.18 at 7:09 pm
I will bet a bag of mice that the Canadian 5 year fixed mortgage rate never reaches the historical norm of 7ish % again. Historical norms would crush economies all over the world.

Only those economies where people have borrowed moronically. – Garth
…………………………..

You are quite right about those who have borrowed moronically. I know a number of 30 somethings in Kelowna who have maxed out their lifestyles at 2.5% mortgage rates. And there are many more like that across the country. It would be unimaginable if they had to renew at 7ish %. And I don’t see any wage inflation down the road that would compensate for such a big increase in mortgage rates. And it would be hard to imagine our governments paying double or triple what they pay now on government debt. I think that historical norms for interest rates are just that. Historical. And not to be seen again.

#60 saskatoon on 10.04.18 at 8:29 pm

post-1974 bank of canada is a moral abomination.

#61 Gravy Train on 10.04.18 at 8:38 pm

[…] By Canadian standards [the US] may be a messed-up, polarized, gun-loving country that elected a clown and got a circus[…]. – Garth

#23 Smoking Man on 10.04.18 at 6:10 pm
“Epic post, Garth. Best one of the year!” Do you now agree with Garth that Trump’s a clown? At long last you’ve seen the light! :)

#62 John Kenneth Galbraith on 10.04.18 at 8:39 pm

168 John Kenneth Galbraith on 10.04.18 at 5:09 pm
#161 Alistair

“No wonder guys like you favour the guaranteed annual income.”

My quote that the poor have been defeated was an actual quote of the real John Kenneth Galbraith. He called mimimum wage the poor person’s union. Your buddy Ford has no problems supporting ultra rich farmers and their managed supply system while not giving the poor a higher minimum wage. Hypocrisy of the highest order.

#63 John Kenneth Galbraith on 10.04.18 at 8:40 pm

#169 John Kenneth Galbraith on 10.04.18 at 5:16 pm
#158 Alistair

“He lays waste to the idea that all boomers had it easy. Only the early ones did. A boomer born at the tail end of the boom – say 1965 – would have come of age in the miserable job market of the 1980s, sandwiched between the devastating 1981-83 recession and the not-quite-as-devastating-but-much-longer-lasting 1990s recession.”

The tail end of the baby boom would be me. Born in 1965 I bought my first home in 1990 in the year I was married and our combined income was 1/3 of our purchase price. Paid it off by the time I was 29. In the GTA, on the subway line. Today it is a rental and worth 1.2 million. How many 25 year olds could buy it today?

#64 the Jaguar on 10.04.18 at 8:41 pm

#30 BC to Separate.

Wow. Like Wow. I can’t thank you enough for your post.
A perfect illustration of what Albertans have been up against for years with this kind of attitude.
Talk about biting the hand that feeds you.
The undercurrent of boiling resentment is quite revealing.

#65 Fish on 10.04.18 at 8:59 pm

Conformation, yes!!!!!!! big TIME ouch!
But time My friends,
All in good time

#66 Hal's Ghost on 10.04.18 at 9:06 pm

why is it that when the Leafs win 1 game, they immediately get pre-awarded the Stanley cup by crazy MSM journos. Is this some kind of conspiracy to keep the season ticket holders hooked or what(has worked for around 50 years so far)

#67 akashic record on 10.04.18 at 9:08 pm

How about C?

Canada Revenue Agency ruling.

Like the decision that interest on financing people’s personal future, making themselves more employable is not tax-deductible “investment”.

What could be the rational behind this ruling that by-passes both fiscal and monetary policy?

#68 Yuus bin Haad on 10.04.18 at 9:20 pm

If Trump is a clown, I guess we have Dumbo.

#69 reynolds531 on 10.04.18 at 9:27 pm

#30 thank you comrade. Hope you can attend the how to energy industry conference in Venezuela next week.

#70 Shawn Allen on 10.04.18 at 9:35 pm

Mark being Mark…

Mark, you are right that being a share owner in a bank is a better idea than being a bank customer. But bank customers also get what they want from banks. Banks are VITAL to every Canadian as a customer. Just try living without a bank account. It can’t be done. But I certainly like the idea of being a bank owner as well as a customer.

Now, try to slow down your impulse to argue and lecture long enough to remember that in the U.S. the 30 year mortgages are fixed at the option of the borrower. If rates fall, the borrower can refinance down to a lower rate upon payment of a small fee. U.S. mortgage borrowers are not locked in if rates fall. Borrowers are fixed in at their own option if rates rise.

This is why these U.S. style mortgages have to be securitised. The bank can’t take that lop sided interest rate risk. But fixed income investors can.

An investor who gets his 10% investment paid off early is disappointed but still quite solvent.

As you well know, a bank cannot afford to fund a 30 year fixed mortgage with floating rate deposits. That’s unstable as you said. So they securitise these to investors.

The question is why can’t we do it in Canada? What are the legal barriers? If existing banks can’t or won’t offer such a product that borrowers would want then they are open to new financial technology firms that just might do it. What are the legal barriers to securitisation to do this?

Frankly, why in a so called free country can’t U.S. banks be allowed to come into Canada and offer these mortgages? They can’t even come in and directly offer true America mutual funds for goodness sakes. The whole Canadian financial industry is protected by enormous non-tariff barriers. They better hope Trump does not turn his sights on that.

#71 Stephen Fowler on 10.04.18 at 9:37 pm

Thank you Garth. Every night you provide sound, intelligent insight. Canadians who take the time to digest and understand what you have written are, well, literally richer for it.

#72 mike from mtl on 10.04.18 at 9:44 pm

#25 The Wet One on 10.04.18 at 6:10 pm
Oh yeah, and Quebequers pay more than even Ontarians.

53.3%

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

No argument there, but honestly there’s a tiny percentage idiots who meet (and pay) this income bracket here, only stupid Dentists and IT middle mangers work ‘by the book’. All the really successful folks here I know don’t on paper ‘live’ here.

Much more efficient to declare “residence” condo located in Calgary and pay divs through corp.

#73 Gary on 10.04.18 at 9:50 pm

#42 AGuyInVancouver

“One can only have pit for those Canadians who view Florida as some sort of promised land. The tackiest place on Earth. Where wrinklies (and hopes) go to die.”

Now,now, Florida has great trailer parks, Walmarts, every available gun you could desire sold at the local gun shop and the opportunity to be charged with a felony for almost anything. Forgot the wonderful jungle humidity in the summer…

#74 Tim on 10.04.18 at 9:53 pm

Happy Thanksgiving Garth! Hope you have a good weekend.

Thanks again for the lesson on what the difference is between fiscal and monetary policy. I think confusing the two are much more common than I know and I will need to be clear when visiting the in-laws this weekend.

At least the turkey and pie will be good.

#75 WUL on 10.04.18 at 10:04 pm

#28 BobC on 10.04.18 at 6:20 pm

“Wages start going up ….”

workingmanworkingmanworkingman….

Real wages have gone down following Tump’s tax cuts. I’m not your librarian. Look it up.

#76 akashic record on 10.04.18 at 10:04 pm

#52 MF on 10.04.18 at 7:42 pm

#36 Bob Dog on 10.04.18 at 7:03 pm

Oh look another person blaming immigrants who cannot even vote for Government policy.

If not for immigrants, who would buy your product, or use the service you offer? A bunch of old baby boomers? No.

I know at the business I work for a lot of our clients are immigrants and we profit.

Also, from what I see, the immigrants I know work harder and are more hungrier for success than the native population.

MF

—–

What’s the excuse for being lazy, unmotivated dummy, that needs to rely on steady flow of immigrants to bail you out and keep the economy going? How come you can’t even reproduce on your own at a rate to maintain the population?

#77 WUL on 10.04.18 at 10:13 pm

#35 Burnaby Boy on 10.04.18 at 7:00 pm

You say oil is going up in price which it is but I am hearing that Canadian oil is sold below Brent or WTC. Is there a Canadian oil index for us lay people to follow?

Garth:

“It’s called WCS – Western Canadian Select. – Garth”

WTIWTIWTI….

Here you go:

PSAC daily market stats:

https://www.psac.ca/business/gmpfirstenergy/

I look at it every morning. My net worth is hinged on it. Bookmark it. Doug and Ryan have.

WUL – an oily Albertan

M62AB

#78 georgist on 10.04.18 at 10:16 pm

> Oh yeah, and Quebequers pay more than even Ontarians.

> 53.3%

> Sheesh.

> Why stay where you get fleeced people?

> Vote with your feet fercrissakes!

Think of rent / land costs as a tax. In Montreal we pay very little compared to other large Canadian cities for the right to exist. Now think again whether the total tax rate is highest in Quebec.

#79 For those about to flop... on 10.04.18 at 10:23 pm

Pink Pumpkins being carved in West Vancouver.

After looking at the cheaper side of things let’s switch back over to this heavy hitter and see how they are fairing.

Nope,still buggered.

Picked up for 4.7 in July 2016 with an assessment of 4.68 after just pulling out the weed whacker and give it the big chop,the ask is now 4.48.

Down 1.4m from original ask or 25%

Pretty sure I’ve got another case in the same street, so maybe the can see who’s got the biggest Pink Pumpkin.

Nothing like a bit of friendly competition.

Knock,knock.

Who’s there?

Your pissed off neighbour…

M44BC

1080 Eyremount Drive, West Vancouver

Apr 12:$5,888,000
Oct 4: $4,489,000

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

Feel free to make a donation.

Flop For Fox Fund…

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

#80 Shawn Allen on 10.04.18 at 10:28 pm

There is no “we”

BC to Separate provocatively at 30 said:

You can come do business here, but we are going to charge you nicely for it.

************************************
Nice try, but there is no “we”. You will learn that economically you are on your own. Even BC is not a socialist place yet. (And if it gets there everyone will share equally in not much at all)

You will sink or swim on your own economically eventually.

If you are not winning economically, Albertans are not the problem. Guess who is?

#81 Smoking Man on 10.04.18 at 10:35 pm

61 Gravy Train on 10.04.18 at 8:38 pm
[…] By Canadian standards [the US] may be a messed-up, polarized, gun-loving country that elected a clown and got a circus[…]. – Garth

#23 Smoking Man on 10.04.18 at 6:10 pm
“Epic post, Garth. Best one of the year!” Do you now agree with Garth that Trump’s a clown? At long last you’ve seen the light! :)
……

I wrote a book a while ago, published it before the election.
With out giving away the ending.

Smokey said to Issac, the Rouge council men from Nictonite.
I’m helping Trump get elected. Damn Shlong Zumanga Then Isaac replies you can’t beat the machine Smokey.

There you have it. The machine, all those tech billionaires who pretend to hate Trump. MSM, giving airtime to lunatic lefties. All visable to normals and regular voters.

I’m not sure you will get your head around this. But get ready

Massive Red wave at the mid terms. The machine always wins.
Everything you see and hear is not random. It’s planned and executed with precistion by very smart men.

They have just slayed communism for the next 100 years.
Let me know if you want a free copy of my book.

I don’t think you will make it past the first page.

#82 crowdedelevatorfartz on 10.04.18 at 10:45 pm

@#61 Harold Ballard’s ghost of Christmas Past
“why is it that when the Leafs win 1 game, they immediately get pre-awarded the Stanley cup by crazy MSM journos. Is this some kind of conspiracy to keep the season ticket holders hooked or what(has worked for around 50 years so far)”

+++++

Yes.

#83 Moses71 on 10.04.18 at 10:54 pm

#57–Demolition..
Hey, anyone who says they wouldn’t want to be young is lying.
Second-young men should avoid women? Who should they seek, Unisex Unicorns?
Pft
Quiet with the drivel, eh? lol

#84 AB on 10.04.18 at 10:54 pm

#30 BC to Separate
Typical self important Alinsky malcontent. What a load of angry nonsense. Thankfully most people in BC and Canada are decent, level headed folks who have not swallowed this poison. Ridiculous rabble rouser rubbish.

#85 Blackdog on 10.04.18 at 11:02 pm

Re: #41 Nunplussed: “So my advice to young men in this modern era: Be on your best behavior and avoid women you do not know. Merely asking a girl on a date can be an “unwanted sexual advance” now and get you fired, so don’t do it.”

So my advice to young women is, don’t get raped. Avoid sexy clothes, parties…and MEN. And if you do get sexually assaulted, make sure you head on down to the cop shop and get a vaginal swab right away. Otherwise it didn’t happen. Come on girls…chop…chop. The vast majority of sexual assault goes unreported and unpunished. That’s on you! Men don’t need to change. Women need more evidence!

#86 Deporable worst seller list on 10.04.18 at 11:05 pm

#81 Smoking Man on 10.04.18 at 10:35 pm

61 Gravy Train on 10.04.18 at 8:38 pm
[…] By Canadian standards [the US] may be a messed-up, polarized, gun-loving country that elected a clown and got a circus[…]. – Garth

#23 Smoking Man on 10.04.18 at 6:10 pm
“Epic post, Garth. Best one of the year!” Do you now agree with Garth that Trump’s a clown? At long last you’ve seen the light! :)
……

I wrote a book a while ago, published it before the election.
With out giving away the ending.

Smokey said to Issac, the Rouge council men from Nictonite.
I’m helping Trump get elected. Damn Shlong Zumanga Then Isaac replies you can’t beat the machine Smokey.

There you have it. The machine, all those tech billionaires who pretend to hate Trump. MSM, giving airtime to lunatic lefties. All visable to normals and regular voters.

I’m not sure you will get your head around this. But get ready

Massive Red wave at the mid terms. The machine always wins.
Everything you see and hear is not random. It’s planned and executed with precistion by very smart men.

They have just slayed communism for the next 100 years.
Let me know if you want a free copy of my book.

I don’t think you will make it past the first page.
…..

Wow …..what a stunning best seller ya got there… LMAO.. ya cracked the top 400k!

Amazon Bestsellers Rank: #391,323 Paid in Kindle Store

Free won’t cut it… maybe start paying yer suckers with booze or some stormy time

#87 MF on 10.04.18 at 11:06 pm

#76 akashic record on 10.04.18 at 10:04 pm

“What’s the excuse for being lazy, unmotivated dummy, that needs to rely on steady flow of immigrants to bail you out and keep the economy going? How come you can’t even reproduce on your own at a rate to maintain the population?”

Read this:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4255510/

“Developed countries tend to have a lower fertility rate due to lifestyle choices associated with economic affluence where mortality rates are low, birth control is easily accessible and children often can become an economic drain caused by housing, education cost and other cost involved in bringing up children. Higher education and professional careers often mean that women have children late in life. This can result in a demographic economic paradox”

…and now tell me where lazy, unmotivated, or dummy shows up in that answer. Try to form a proper sentence so we can understand for once please.

MF

#88 J. Canuck on 10.04.18 at 11:14 pm

We sold all of our property in Canada in teh lest 5 years. We have moved to the States for the better tax system and are renting. Locally here in Florida prices are plummeting.
******************************
Things are better than Canada? I’m curious if you still come back to Canuckistan to take advantage of our second-rate, but almost free health care.

#89 J. Canuck on 10.04.18 at 11:26 pm

#18 Shawn Allen

Absolutely correct. In my experience, high school graduates of 1977 could walk into a decent job and that was even in Nova Scotia. By 1984 I graduated in engineering in Nova Scotia and probably no more than 20% of the class had jobs prior to graduation (75% would have had jobs prior to graduation in say 1979.)

But most people did what they had to do. Maybe take an MBA. Be willing to move. The early 80’s though were very tough times for most of us later boomers. And the early 90’s ushered in another recession. For 35 years I have constantly heard there will be a shortage of engineers. That has almost never been my experience. Other than Alberta circa 2007, professional engineering jobs (Mechanical, Electrical etc.) have generally been scarce rather than abundant. *********************************
I’m an EE and grad’d in 1978. Had to travel to Calgary to get a job. People kept telling me that I should buy a house because “money will never be this cheap again”. I didn’t and the RE market went through floor in 1982 or so. Followed in Calgary, by yet another iteration of the bust/boom cycle.

And I started a seemingly never-ending round of getting a job, being laid off, etc. Times were so tough at one point that I was considering selling an organ or maybe two.

Like you, I never understood how there could simultaneously be a shortage of engineers to fill jobs and no actual jobs for them to fill. Since then, I’ve never believed anything I’ve heard from the MSM about Economics.

#90 Viorelli on 10.04.18 at 11:36 pm

The current population of youngsters are a joke here in the BPOE, except some of course, but many are in a la la land glued to their smartphones and organic chia seed cappuchinos. Back here on planet Earth I was interviewing several people last week for one of my full time positions, some immigrants, some locals, some young, some older. “We open here at 7 am, will you be able to get up at 5 am in order to make it here from Port Moody with traffic and breakfast? I asked one college grad. OHHHHHH, Ummmm, I am not so good in the mornings, Yahhhhhhhh!???” WTF? Why are you even here for an interview when you cannot get up at 5 am? Stupid losers, I am in my sixties and still get up every morning to beat the local traffic. When I was a helicopter medic saving wounded Russians in Afghanistan nobody gave you choices, cold shower in the morning and off you go to carry the daily survivors from mujahedeen bullets over to Uzbekistan where the nearest large surgical centre was, sometimes they would try to hit the medic helicopters too, but I guess I got lucky. One must have some toughness and discipline in life to succeed, be it in business or investment, if you cannot get up at 5 am you are doomed to failure off the start. I hired a 62 year old immigrant from Belgrade, Serbia, so so English, but gets up early and knows his job.

#91 Overheardyou on 10.04.18 at 11:46 pm

#30 BC to separate on 10.04.18 at 6:42 pm

———————-

Separate if you can, or you can head to NK. I’m sure you’d love it there

#92 BS on 10.04.18 at 11:50 pm

Thanks to Trumpenomics, the economy there is ablaze. Big tax cuts, less regulation, tariff walls – it’s all thrown gas on America.

Yup, in less than 2 years Trump has corrected much of the mismanagement of the past. Imagine where we will be in 6 years once he is done.

A recap on how we got here.

Official Movie Trump at War:

https://www.youtube.com/watch?v=TODyyR5GRqw&bpctr=1538712896

#93 DON on 10.04.18 at 11:52 pm

#17 renter in Surrey on 10.04.18 at 5:58 pm

RE #6 yvrguy

…like your life depends on owning RE.

———————————————————————

my dignity does
@@@@@@@@@@@@@@@@@@@@@

House/dignity…that’s realtor speak.

Besides…the previews are just ending and the main attraction is about to begin – get your popcorn. Life is a lot longer than a decade and so is a mortgage ask the people who bought last year. Momentum is on the downside. Australia is raising it rates as its housing prices decline over the last year – no bottom is sight – lots of hope though.

#94 IHCTD9 on 10.04.18 at 11:52 pm

#41 Nonplused on 10.04.18 at 7:11 pm

Strange, the sexual revolution has gone full circle. Now women are liberated and men are running the other direction, putting everybody right back where they started, refusing to have sex until married.

———

I have noticed this too, but I see it more as Men returning to their natural state of existence.

If you read some literature say from at least 150 years ago, all the way back as far as written history goes, it is clearly evident that marriage was an institution brought to bear by Women. Yes, Women essentially HAD to get married for many reasons back then, but more to the point, Men have always had to be coerced into it in some way.

History is rife with various forms of direct and indirect “bachelor taxes”, government incentives, Religious, and institutional coercion, de-facto forced and arranged marriages and more – all in the name of getting Men to commit to a Woman and to reproduce.

Evidently lots of Men, if left to their own devices; stay single. I’d even go so far as to say that the more intellectual or artsy the Man, the less interest in Marriage they have. Note the near complete lack of married classical philosophers, and the endless collection of Womanizing, philandering, Artists, Scientists, Writers and composers carousing their way through the pages of history.

As the sexual revolution of the 60’s dawned in America, the expectation of marriage had already grown into a impenetrable cultural expectation. Kids resulting from marriages provided labour for the farm, security in old age, and frankly, it was the only way Western society allowed a Man to have a sex life.

IMHO, this pre SR era will go down in history as the time when Women were the most powerful they would ever be. The value of your typical Woman back then was outstanding, and the gains from getting married were huge, and every guy out there knew it. Women were shiny new Corvette ZR1’s sitting on the lot, but you had to walk in and sign before you could drive one home. Men wanted Marriage for a barge load of reasons back then, not the least of which was he was getting a top quality life partner in exchange for his heart, desire, work, loyalty, and commitment. Women were at the pinnacle of desireability, and it appears that this was the only period in written history where Men were falling over themselves to get hitched.

Today, the Government, Society at large, the Church, and Women themselves are no longer bringing marriage to the doorstep of Men. Women are financially independent, and immigration is always there to deal with the lack of offspring. Women have thrown away their trump card, and are giving sex away for free. Men today do not put Women on such a lofty pedestal as their Grandfathers once did. A single Man has none of the stigmas today that he used to have. There is a lot of fun to be had out there for a single.

IMHO, Men are no longer being pushed into marriage, so they’re reverting back to “normal”.

#95 Vision on 10.05.18 at 12:00 am

akashic record on 10.04.18 at 10:04 pm
What’s the excuse for being lazy, unmotivated dummy, that needs to rely on steady flow of immigrants to bail you out and keep the economy going? How come you can’t even reproduce on your own at a rate to maintain the population?
—————
You must be a man.
Is your measure of worth how many babies your wife can deliver? Think of all the baby bonuses you can get!
What else can you do? Major f’d, i would say.
( Garth, you invented a new abbreviation. I like it!)

#96 BobC on 10.05.18 at 12:02 am

#75 WUL

Not looking for a fight but the more you hate the dumber you look.

https://www.cnbc.com/2018/09/12/median-household-income-climbs-to-new-high-of-61372.html

#97 DON on 10.05.18 at 12:09 am

#46 MF on 10.04.18 at 7:28 pm

Just like I said to some American pounding his chest on here a few days ago: it’s very easy to be arrogant and boastful looking down from the top of the business cycle but it won’t last forever.

##########

The same can be said about housing in Canada and the economies of GTA – GVR – Greater Victoria etc. Then again Canada is facing major headwinds where as the US already went through their crisis, but Canada hasn’t.

Back in the Financial crisis massive stimulus created a commodity buying spree that benefited Australia and Canada who avoided a sustained downturn in a sea of despair. Nope we didn’t see the writing on the wall or pay attention to the lessons learned elsewhere. And here we are today with daily, weekly warning about being over leveraged. This all happened before when the boomers were your age. History repeats, except this time the debt party is unhinged.

Roller coaster seems to be at the top slowly inching downward until momentum takes hold.

Visiting Victoria were you? Cheers

#98 WUL on 10.05.18 at 12:24 am

Turner,

If I may.

FLOP, welcome back.

I wish Boom (WI Retiree Boomer) was still with us. A moderate, common sense and gentle dude. He and our International Harvester wrangler were/are the steady voices here.

He ditched the Milwaukee Brewers as his fave ball team and switched allegiances to the Cubs if memory serves.

Lo and behold the Brewers are back. Their recent playoff record:

2011
NL Championship Series
St. Louis Cardinals
Lost, 4-2

NL Division Series
Arizona Diamondbacks
Won, 3-2

2008
NL Division Series
Philadelphia Phillies
Lost, 1-4

1982
World Series
St. Louis Cardinals
Lost, 3-4

AL Championship Series
California Angels
Won, 3-2

1981
AL Eastern Division Series
New York Yankees
Lost, 2-3

M62AB

#99 fishman on 10.05.18 at 12:27 am

I don’t know about F’d oe M’d, but if you want to get lucky & aren’t nursing a bad habit or two that could turn into a problem come on out to B.C. Tons of money hitting the street. This LNG thingy is just an appetizer. We got the water & the yanks don’t. All the rich from around the Pacific Basin are gonna keep coming to put their kids in school & hide from the kidnappers. The oil under the Hecate Straights will make the Haida’s richer than Saudi Princes.
Look upon these commies in now as a chance to dig down & save. Go up to the camps, save your money,get the skinny from the locals. Make your move on a spot. If you picked right you’ll ride the next boom.

#100 Grandma Moses on 10.05.18 at 12:31 am

It’s not a stock market, that’s how losers get felched, it’s a market of stocks. Pick the right ones and get rich, pick the wrong ones you lose. For example, TRI sold 55% of the news biz to Black Rock and ended up with billions to disperse to shareholders. This was broadcast to the investment community a year ago. We all pigged out. In reality you only need one of these once a year to get rich and stay rich. Do your homework. I bought at $38 when the deal was announced , collected a nice dividend since, and today the stock is worth $60. Forget about who your PM is groping and pay attention to your wallet. There are plenty of these deals floating around. I cap my reading at 10 hrs a day. A younger guy could easily work harder and make more.

#101 Stan Brooks on 10.05.18 at 1:00 am


#49 WelcometoSlurrey on 10.04.18 at 7:39 pm
Rates are going up, but does anyone expect them to be north of 6% ? Everyone still wants a house, those that have a house want more house.

People see their house go up in value and realize the only way they can realize the gains is by 1. cashing out 2. borrowing against the equity to invest.

They are borrowing the equity and buying more house ( or toys) . Im assuming very few are using the equity and diversifying.

The market is fizzling slowly. Like turtle slow, not like US crash. So those lower mainlanders that have been following this blog since its inception, sucks to be you when it comes to housing. You could have bought 2011, 2012,2013,2014, you will never see those prices again.

Take comfort that those that have seen their equity rise are not cashing out. They are either buying more toys or buying more house which is now falling in value.

Who cares what people want?

They have no money, just debt acquired in ordered to purchase houses they could not afford in first place.
Now they have to pay for it.

The bill is coming due and it seems it will be nasty, with rates going up much higher and much faster than anyone expected.

What matters is the US market:
– wage growth
– inflation
– bond yields up

Some behinds will be whipped.
Both Fd and Md at the same time at the peak of the biggest ever credit bubble in housing with stagnant wages (thanks to huge influx of TFW and outsourcing), roaring inflation and ever increasing taxes.

Fun. As I said, load on lubricant companies and learn to bend.

#102 Ian on 10.05.18 at 1:07 am

It won’t be long until all this ‘US economy is cooking’ nonsense comes to a close too. There are PLENTY of problems beneath the pretty unemployment headlines.

They have enormous twin fiscal and trade deficits. Sure the tax cuts were great, but where were the spending cuts? The swamp is larger than ever. Auto and student loans are off the hook out of control, because the savings rate is rock bottom. Housing inventory is at its highest level since 2008. The homebuilding stocks are getting murdered. Auto stocks are getting murdered. Where is all that manufacturing that was supposed to come back to the rust belt?

Then, the markets will realise there is no QE4 because the Fed has very few bullets to use to reduce rates. Inflation will continue skyrocketing because of all the cheap money supply over the past ten years. Then the Fed is completely and utterly trapped.

Now you have bond yields soaring because the market is finally waking up to the US fiscal situation, coupled with the Fed releasing $50b of treasury dog poo per month into the market from its balance sheet. That’s a LOT of supply that no one wants.

If stocks and bonds keep selling like today, it’s game over Irene. I’m expecting a VERY interesting October.

#103 Newguy on 10.05.18 at 1:14 am

I disagree with calling it the envy tax.

It is more like ‘you squandered the next two generation’s wealth and left them with the bill’ tax

As those generations become politically stronger they will continue to make an effort to take it back

#104 Ian on 10.05.18 at 1:20 am

‘Three reasons yields are soaring’ article:

https://on.mktw.net/2P8G9gy

Read the section ‘Fading Pension Funds’ section VERY closely.

I maintain the 30 year yield is not rising due to ‘economic growth’ exactly as this section suggests. Something else is happening. I believe it’s the awakening to the cataclysmic US debt levels, and a play on the coming devaluation of the USD.

If you believe the ‘economic growth’ theory, then you sell the 5 year, not the 30.

The bond market has known since December of 2016 we are on a rate raising path. The suggestion that now all of a sudden it needs to price in further rises is nonsense.

#105 Ian on 10.05.18 at 1:32 am

Great graph on stock subsectors ranked by interest rate sensitivity:

https://on.mktw.net/2yarie0

Guess which sector responds worst to higher yields?

Don’t tell Al Sinclair!

#106 TRT on 10.05.18 at 1:33 am

Smoking man: move on man. I come back here after a few years and you spewing the same nonsense like you know it all. Move on

#107 FOUR FINGERS WATSON on 10.05.18 at 1:34 am

Bank of Canada Gov. Stephen Poloz including “home prices” on his list of risk factors that “keep me up at night”, which he shared with an audience of economists at the prestigious Canadian Club earlier this year. But Poloz’s words of caution have not stopped housing costs for Canadians from climbing to precarious new highs. Signs of this stress are already apparent – for example, in Vancouver, where a chasm between bids and asks has caused the local housing market to grind to a halt.
The latest warning about an impending implosion in the Canadian housing bubble comes courtesy of a quarterly RBC report, which found that the aggregate costs of homeownership in Canada, a category that includes mortgage fees, interest, property taxes and utilities and other miscellaneous costs, have reached their highest levels since 1990.
The most alarming aspect of this trend, according to the bank, is that rising mortgage costs.
Rising mortgage rates have, of course, been spurred by the BoC’s rate hikes. Today, the average Canadian would need to spent roughly 54% of their income to buy a home. That’s up sharply from 43.2% three years ago.
But in Canada’s most unaffordable housing markets, these figures are considerably higher.
“From overheating to correction to the onset of recovery, we’ve seen pretty much everything in the past three years in Canada’s housing market,” economists at the Toronto-based bank said in the report. “Yet an eye-watering loss of affordability has been a constant.”
In Vancouver, Toronto and even Victoria, RBC’s index of home prices relative to average income has reached 88%, 76% and 65%, respectively. The bank’s data includes costs for condos and detached single-family homes.And with the BoC widely expected to continue raising interest rates…”We expect the Bank of Canada to proceed with further rate hikes that will raise its overnight rate from 1.50 percent currently to 2.25 percent in the first half of 2019,” the report said. “This will keep mortgage rates under upward pressure and boost ownership costs even more across Canada in the period ahead.”…….its analysts have warned that a momentous housing implosion looks increasingly likely. Adding a dash of irony to this scenario, the BoC has expressed caution about the housing bubble and cited raising interest rates as a necessary measure to combat it.

#108 SoggyShorts on 10.05.18 at 2:46 am

#76 akashic record on 10.04.18 at 10:04 pm
#52 MF on 10.04.18 at 7:42 pm

#36 Bob Dog on 10.04.18 at 7:03 pm

What’s the excuse for being lazy, unmotivated dummy, that needs to rely on steady flow of immigrants to bail you out and keep the economy going? How come you can’t even reproduce on your own at a rate to maintain the population?

*********************************
It isn’t a matter of “can’t”. Not everyone wants kids. The ROI is pretty terrible. Actually, it’s probably the worst investment you can make other than a bad marriage.
How many people retire before 65 with 4 kids?

Aside from the negative financial implications, the restrictions on time and travel are enormous. Not to mention the 9 months of pregnancy and then childbirth (those look like great fun)

Objectively someone who allows others(immigrants or not) to take on the burden of raising children in order to keep population levels stable is the smart one.

#109 Ustabe on 10.05.18 at 2:47 am

Hey, guys!

If I was walking past you and you saw I had a couple of squares of toilet paper stuck to my shoe at least one of you would let me know, right?

Cause I’m just thinking that if I walked past say 15 or 20 of you blog dogs and not a one told me of my potentially embarrassing situation…well that sure says a lot about how you relate to me now doesn’t it?

#110 abracadaver on 10.05.18 at 3:09 am

“There is no ‘mass’ immigration”

The majority of people in the city being immigrants and the houses being a million bucks because of the number of people in the city is what the ‘mass’ refers to.

#111 Smoking Man on 10.05.18 at 3:12 am

Just saying

https://youtu.be/QJWn61jNfsE

#112 Where's The Money Greedo? on 10.05.18 at 3:39 am

Re: #30 BC to separate on 10.04.18 at 6:42 pm

You said “We need to build a wall and make Alberta pay for it. Start charging a fee just to enter BC at point of entry. For everyone. Don’t have a BC card, you can go play somewhere else or pay up to enter. We have all of the clean water and air (unless you live in the central and southern interior of BC), and it is about time we start charging for it. We also have LNG, and big oil sees us as more lucrative. You can come do business here, but we are going to charge you nicely for it.”
+++++++++++
I think you should be looking long ball on this one.
Do you know how bad fracking is?
Do you know where the fluoride in the water originally came from?
http://www.fluoridation.com/exner.htm
https://www.nytimes.com/2015/05/05/science/earth/fracking-chemicals-detected-in-pennsylvania-drinking-water.html
https://www.vanityfair.com/news/2010/06/fracking-in-pennsylvania-201006

You have to read about Wiebo Ludwig and what sour gas wells did to his family, most dying of cancer.
https://en.wikipedia.org/wiki/Wiebo_Ludwig

To me, he is a hero for fighting against sour gas wells, violence aside; he believed that the O+G sour gas sector was poisoning his family, mostly true, imo, and was fighting until his death. Much respect. A true gladiator.

NW Alberta-NE BC is, if not already, a toxic slough.
Adding more of those chemicals to their water table is going to up the cancer rate exponentially, in cahoots with the sour gas.
I worked up in Dawson Creek in the 80’s and I lament for the people who are/will be poisoned. At that time it seemed unspoiled.
Please look at all the info, both pro and con. The jobs are wonderful, $40 bn in activity for workers for 50-ish years, in Kitimat, so many jobs. But what is the take-home of Shell-et-al?
What about the clean-up. Just have a look at the orphan wells the Alberta gov’t (taxpayers) have to pay for remediation, increasing at an astonishing rate; https://www.cbc.ca/news/business/redwater-aer-atb-supreme-court-1.4528996
Just look at what happened with the Expo lands in Vancouver that were sold for pennies (by Gordon Campbell Socreds) and then the taxpayers had to pay for the clean-up.
I still don’t yet see 35 year old promised social housing being built in that area.
https://vancouversun.com/news/local-news/this-week-in-history-1988-the-socreds-sell-the-expo-lands

I need to see provable info on how fracking ISN’T a death sentence for those people in NW AB + NE BC.
So far I haven’t. Anyone please show me proof to appease my worries.
Is that Site C water for people who find their groundwater poisoned
or is it for the frackers? How much of that water will be poisoned to frack? Just what got the USMCA deal signed? Like I said, we’re a material colony of the US. Have a look where this dam is situated.
https://www.google.ca/maps/place/Site+C+dam,+Peace+River+E,+BC/@56.092294,-120.5040842,9.5z/data=!4m5!3m4!1s0x5392374e8793b5c5:0x8006f794d89554c4!8m2!3d56.195!4d-120.914167

Guess where some of the cheapest land to buy fairly habitable in NE BC/NW AB……
As a cancer survivor who messed with these chemicals in a related industry, I implore Canadians to review the info and hope for our progeny to not end up this way.
Cancer is mostly a losing hand and it shit-kicks you in the face when detected.
Will NE BC + NW AB be a forbidden land in 20-30 years due to the “swamp”, or is it already from sour gas and we’re not apprised of the inevitable catastrophe.
Just look at the O+G/Mining past behavior;
http://www.trailtimes.ca/news/time-change-for-second-acid-spill-in-trail/
https://globalnews.ca/news/4434427/icbc-reports-high-volume-of-claims-after-acid-spills-on-b-c-highway/

Have BC’ers been compensated for the Imperial Metals in BC?

https://www.vice.com/en_ca/article/59k38q/still-no-charges-for-the-company-behind-canadas-largest-mining-spill
Since this article, a couple engineers are getting spanked, but sweet FA else.
These guys are destroying our land!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

#113 Uncle Al Sinclair on 10.05.18 at 6:15 am

#101 Stan Brooks

“Both Fd and Md at the same time at the peak of the biggest ever credit bubble in housing with stagnant wages (thanks to huge influx of TFW and outsourcing), roaring inflation and ever increasing taxes.”

You are dead wrong Stan! Prices on real estate only go up and if you don’t buy now you will be stuck in your basement or drug infested rental forever! Catch me on CP24 during my Hot Property section and you will see the truth about real estate.

http://alsinclair.com/our-cp24-hot-property-show/

#114 Gravy Train on 10.05.18 at 6:48 am

#90 Viorelli on 10.04.18 at 11:36 pm
“[…] One must have some toughness and discipline in life to succeed, be it in business or investment; if you cannot get up at 5 am you are doomed to failure off the start[…].” My money works for me 24/7, allowing me to do whatever I like, and sleep for as long as I like. Retirement is underrated. :)

#115 dharma bum on 10.05.18 at 7:59 am

#30 BC to Separate

Start charging a fee just to enter BC at point of entry. For everyone.
——————————————————————–

Nahhhhh….we’ll just annex you.

But wait until the toxic smoke from the endless forest fires clears.

Sheesh.

What a marooooooon!

https://www.youtube.com/watch?v=hxGgnI6kCrs

#116 M. Towne on 10.05.18 at 8:02 am

Garth,

I’ve been relying on your blog for financial advice for several years and it looks like I’m actually getting better advice from you, for free, than from the various people who get paid to do this. So, first, thank you for what you do. Secondly, I have a question that I have been unable to get straight answers from ANYONE on, including people I’ve specifically hired to tell me what’s what. Help me Obi-Wan; you’re my only hope.

I hold in my TFSA, among other securities, a plain vanilla Standard & Poor 500 index ETF. There’s nothing special or unusual about my situation i.e. I live in Canada full-time, I don’t have extensive interests over the border beyond these ETF’s.

My question relates to withholding taxes and what I need to do to minimize them. I have asked this question in three different venues and received three different answers:

1) The Internet tells me I need to file a W-8BEN form, otherwise I will be charged 30% US withholding taxes on dividends. By filing the form, I can take advantage of the treaty that reduces my withholding taxes to 15%.

2) The financial “advisor” at BMO tells me I don’t need to file the W-8BEN, and that I am already getting the 15% withholding tax rate because I opened my TFSA prior to a certain date.

3) The fee-only financial advisor I have hired to look at my investments has told me that as a Canadian resident I don’t qualify for the 15% rate, filing the W-8BEN will do nothing for me, and I’m stuck with the 30% withholding tax rate whatever I do.

So I have received three completely different answers. Must file the form; don’t need to file the form; don’t bother filing the form, it won’t make a difference. Can you please tell us which is correct?

Also, how can I find out whether I am being charged 15% or 30% by the US Government on dividends.

Thanks Garth. I know you get a lot of people asking for free advice, but seriously, I’ve actually ponied up $800 for a one-time fee-only advisor to answer my questions and she’s really only muddied the waters.

Are you a dualie? If not, the form is not required. In any case a small without tax on miniscule dividends associated with one ETF is not worth fussing over. If you are a dual, then you should not have a TFSA. The IRS is vicious these days. – Garth

#117 Chico on 10.05.18 at 8:06 am

#26 Oakville Sucks on 10.04.18 at 6:12 pm

So Trump has been amazing for America!

Only CBC retards can spin this as a negative together with CNN….FAKE NEWS!!!!!

————————————————————-

Here’s an interesting fact. Some folks at Harvard did a study that concluded that over 90% of all news stories in the states about Trump were negative. They included FOX in the mix. If one takes out the positive Trump coverage from FOX, that means around 98-99% of the news articles/stories about him are negative.

When it comes to Trump coverage in the MSM, it’s largely left wing propaganda.

One more tidbit…a region/county in Texas with a 70% Hispanic population voted in a Republican a couple weeks ago after being run by the Democrats for 131 years solid!

Not a peep from the left wing MSM.

#118 dharma bum on 10.05.18 at 8:09 am

#41 Nonplused

Anyway, be careful out there boys. We live in a world now where uncorroborated accusations of drunken party groping from 36 years ago when you were 17 can ruin you.
——————————————————————-

Ahhhhhh…just like the good old days of witch hunts!

https://www.motherjones.com/media/2017/10/a-brief-history-of-witch-hunts-real-and-imagined/

Actually, the whole situation is akin to McCarthyism.

https://www.youtube.com/watch?v=N35IugBYH04

#119 Tater on 10.05.18 at 8:15 am

#41 Nonplused on 10.04.18 at 7:11 pm

So my advice to young men in this modern era: Be on your best behavior and avoid women you do not know. Merely asking a girl on a date can be an “unwanted sexual advance” now and get you fired, so don’t do it. You are better off single. Besides, single guys are better able to afford motorcycles.
—————————————————————
This is nonsense. No one has been fired for asking a co-worker on a date once.

#120 dharma bum on 10.05.18 at 8:19 am

#71 Stephen Fowler

Thank you Garth. Every night you provide sound, intelligent insight. Canadians who take the time to digest and understand what you have written are, well, literally richer for it.
——————————————————————–

So, does this guy get the “Mandatory Suck Up” winner prize, or what?

Take notes. I’m watching you. – Garth

#121 James on 10.05.18 at 8:23 am

Celebrate today World Teachers’ Day!

When you consider the prevalence of conspiracy-idiot, anti-vaxxer morons like emasculated smoking turd bashing educators while promoting populism and fascism, it gives a new appreciation for the valuable work of so many good teachers around the world.

Thanks to you all!

(see Google for more)

https://en.wikipedia.org/wiki/World_Teachers%27_Day

#122 crowdedelevatorfartz on 10.05.18 at 8:26 am

@#89 J Canuck
a seemingly never-ending round of getting a job, being laid off, etc. ………

Like you, I never understood how there could simultaneously be a shortage of engineers to fill jobs and no actual jobs for them to fill. Since then, I’ve never believed anything I’ve heard from the MSM about Economics.

+++++
Similar experience. Grad 79, Moved to Calgary in 80.
The meltdown was underway. Job after job for crappy wages. Then the early ’80s interest rates slammed the door on everything. Was ugly for 5-8 years.
I’m thinking we may be heading down the same fiscal road if housing melts big time in Canuckdia.

#123 crowdedelevatorfartz on 10.05.18 at 8:44 am

@#90 Viorelli
“We open here at 7 am, will you be able to get up at 5 am in order to make it here from Port Moody with traffic and breakfast? I asked one college grad. OHHHHHH, Ummmm, I am not so good in the mornings, ”
++++
Yep.
I hired a local manchild (29 yrs old)about a year ago.
He showed up to work on time maybe 5 days out of the 45 i had him at work.
I’m not talking 5 minutes late.
Usually 15-30 minutes late. Day in and day out.
He had zero incentive.
Had to be told what to do and where to do it every few hours.
The epic was 2 hours late with, “I slept in…” and a shrug as if its perfectly acceptable to sleep in.
So I laid him off. ( firing is a legal/ logistical nightmare).
4 WEEKS later his DAD phoned me up to find out when we were going to hire him back again………
“When you make sure he will stop playing video games til 3 am and kick his ass out at 5am to get to work on time?”
Silence then, “Yeah, he does stay up all night with those stupid games. I kinda thought he was fired.”

“Well if his priority is “gaming all night and not work….he’s gonna be your problem for a long long time.”

Kids and their parents today need a crushing, brutal recession to kick them right in the fiscal gonads and wake them up.
But hey!
Pot is legal in less than two weeks!
Just what we need in Lotusland to make all our worries go away……..

I cant wait to see the pushback with US customs.

Thousands of Canadians banned for life …..for admitting to smoking pot.

#124 Andrewt on 10.05.18 at 9:16 am

This just in:
https://www.cbc.ca/news/business/treb-mongohouse-house-prices-listing-lawsuit-1.4851733

#125 Figus Makum on 10.05.18 at 9:50 am

#92 BS
Official Movie Trump at War:
https://www.youtube.com/watch?v=TODyyR5GRqw&bpctr=1538712896

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

Watched this movie by Steve Bannon.
Have been observing, sometimes with amusement, the political spectacle below the 49th parallel.

Almost a century ago, the American journalist/political satirist, H.L.Menchen, predicted this very situation when he wrote: “As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be occupied by a downright fool and narcissistic moron.”
One has only to go to one of president Trump’s rallies.
His supporters go there to be “entertained”, not to listen to his political wisdom. They come to hear him denigrate those that do not share his values, policies or ideals. During the Roman empire, the emperors placated the mob with “bread and circuses”. Trump, the reality star, has mastered the art of providing the “circuses” part.

#126 Smoking Man on 10.05.18 at 9:58 am

Boom. Trumps latest tweet puts Soros on notice.
The Storm is coming. #MEGA.
#WWG1WGA

The very rude elevator screamers are paid professionals only looking to make Senators look bad. Don’t fall for it! Also, look at all of the professionally made identical signs. Paid for by Soros and others. These are not signs made in the basement from love! #Troublemakers

#127 crowdedelevatorfartz on 10.05.18 at 10:04 am

@#112 Where’s the Money Greedo
“Just look at what happened with the Expo lands in Vancouver that were sold for pennies (by Gordon Campbell Socreds) and then the taxpayers had to pay for the clean-up.”
++++

As much as I detested Gordon Campbell ( and Christy Clark, and Bill Van Der Zalm, etc)
I believe Gordo was still in university in the mid 80’s.

You’ll have to blame Bill Bennett for the Expo86 land sale fiasco .
Remember Bill’s famous line ” Only bad British Columbians don’t want this Expo!” And on opening day a lady was turfed from the Expo site because she wore a T-shirt that said…” I’m a bad British Columbian.”
After Expo?
Then we had the sale of the Expo lands to Li Ki Shing of Hong Kong.
A deal so bad , local wags dubbed it the “worst prime real estate give away in North America since the Indians traded Manhattan for glass beads”.
The deal? ALL the water front land in downtown Vancouver around False Creek ( aprox 100 acres) for $300 million…..The catch? The $300 million came from the BC Taxpayers as an INTEREST FREE LOAN to Li Ki Shing…. to be paid back over 30 years.
The result ?
Li Ki Shing immediately sold about a third of the land to Asian interests. reaping a cool $200 million in the process that he invested elsewhere. He took his good old time paying off that interest free loan …. as any smart business man would.
Then we discovered how polluted the land was and the BC taxpayers were stuck with a $100 million dollar clean up bill.
As an aside.
The Expo deal seemed to open the flood gates for deals with the uber rich from asia and an endless procession of BC Premiers a la Bill Vander Zalm and the brown bag of cash delivered to him by Fay Leung for the sale of his Fantasy Garden failed theme park to a Hong Kong billionaire. ( She later unsuccessfully attempted to sue Premier Vander Zalm for her commission but the damage was done. He was toast in the next election)
Several failed Socred ( rebranded as Liberals) leaders later we had Gordo and Christy…….
And the rest is history.
Gordo walks away after the 2010 Winter Olympics with his head held high (as his polling numbers reached historical lows) and he avoided testiifying in the looming BC Rail trial in the 11th hour as the Provincial govt broke its own rules and paid $6 million in legal fees for two of its own ministerial assistants charged with trading inside info on the sale of BC Rail.

Case dismissed, gag order. No one involved may ever speak of this again. ( I played golf with a Crown prosecutor directly involved with the deal a few years later who commented …..people should be in jail for that deal)

In moved Christy Clark as Premier as Gordo fled to London as the Canadian High Commissioner( thank Harper for that appointment).

The very same Christy who’s brother and ex husband were instrumental in brokering the sale of BC Rail.

Nothing to see, move along.

#128 BS on 10.05.18 at 10:10 am

#125 Figus Makum on 10.05.18 at 9:50 am

#92 BS
Official Movie Trump at War:
https://www.youtube.com/watch?v=TODyyR5GRqw&bpctr=1538712896

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

Watched this movie by Steve Bannon.
Have been observing, sometimes with amusement, the political spectacle below the 49th parallel.

Almost a century ago, the American journalist/political satirist, H.L.Menchen, predicted this very situation when he wrote: “As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be occupied by a downright fool and narcissistic moron.”
————————————————————-

He was refering to Obama.

#129 SwanPardis on 10.05.18 at 10:17 am

“If you are a dual, then you should not have a TFSA. The IRS is vicious these days.”

This is not correct, in fact. For some years, transborder accountants were of diverging views on the TFSA question for Dual citizens (I’m one too). From my research and recent conversations with a few of them who are top-of -the-line, duals are advised to open a TFSA with no concern. Their convincing argument (shared among a good many reliable sources in the transborder accounting world) is that had TFSAs preceeded the Treaty, they would have been included in the Treaty like RRSPs.

You got bad advice. Your accountant will enjoy collecting a nice fee for IRS compliance. – Garth

#130 Evangeline on 10.05.18 at 10:23 am

#92 BS

When I clicked the link to the movie, Youtube issued a warning that the content was considered offensive, and asked if I still wanted to proceed. I did — and found the “warning” far more offensive than the movie.

Whatever happened to the great generation’s credo: “I don’t agree with a word you say, but I’ll fight to the death to defend your right to say it.”

#131 Alfred Nobel on 10.05.18 at 10:24 am

Even Nobel Laureates have to liquidate possessions to pay for medical expenses states side…

https://www.independent.co.uk/news/science/leon-lederman-death-nobel-prize-sell-physicist-higgs-boson-god-particle-medical-bills-a8569761.html

#132 JB on 10.05.18 at 10:31 am

#86 Deporable worst seller list on 10.04.18 at 11:05 pm

#81 Smoking Man on 10.04.18 at 10:35 pm

61 Gravy Train on 10.04.18 at 8:38 pm
[…] By Canadian standards [the US] may be a messed-up, polarized, gun-loving country that elected a clown and got a circus[…]. – Garth

#23 Smoking Man on 10.04.18 at 6:10 pm
“Epic post, Garth. Best one of the year!” Do you now agree with Garth that Trump’s a clown? At long last you’ve seen the light! :)
……

I wrote a book a while ago, published it before the election.
With out giving away the ending.

Smokey said to Issac, the Rouge council men from Nictonite.
I’m helping Trump get elected. Damn Shlong Zumanga Then Isaac replies you can’t beat the machine Smokey.

There you have it. The machine, all those tech billionaires who pretend to hate Trump. MSM, giving airtime to lunatic lefties. All visable to normals and regular voters.

I’m not sure you will get your head around this. But get ready

Massive Red wave at the mid terms. The machine always wins.
Everything you see and hear is not random. It’s planned and executed with precistion by very smart men.

They have just slayed communism for the next 100 years.
Let me know if you want a free copy of my book.

I don’t think you will make it past the first page.
………………………………………………………………….

Wow …..what a stunning best seller ya got there… LMAO.. ya cracked the top 400k!

Amazon Bestsellers Rank: #391,323 Paid in Kindle Store

Free won’t cut it… maybe start paying yer suckers with booze or some stormy time
…………………………………………………………………….
Ha,ha,ha Smoking man on the best seller list. I only counted three spelling mistakes on his post. Who the hell edited his book?
BTW Smoky I’ll take two copies, one for my bird cage and one for my dog.

#133 IHCTD9 on 10.05.18 at 10:47 am

#108 SoggyShorts on 10.05.18 at 2:46 am

It isn’t a matter of “can’t”. Not everyone wants kids. The ROI is pretty terrible. Actually, it’s probably the worst investment you can make other than a bad marriage.
How many people retire before 65 with 4 kids?

Aside from the negative financial implications, the restrictions on time and travel are enormous. Not to mention the 9 months of pregnancy and then childbirth (those look like great fun)

Objectively someone who allows others(immigrants or not) to take on the burden of raising children in order to keep population levels stable is the smart one.
__________________

Those reasons have always been; so something else has changed since the 70’s to make people pass on reproduction.

IMHO, the culture of family is gone, and passive increases have been eliminated (due to widespread birth control and abortion). Women work outside the home, and consumerism is front and center in modern life.

I think folks want to chase dollars and fun these days (in the West). I think the emergence of the internet and social media has really turbocharged these sentiments as well.

Raising a family is viewed as too much work, too invasive, and too expensive. I’m not going to crap on this sentiment, as family IS expensive and lots of work – but there is obviously a cost to not reproducing.

It’s funny, ancient Rome was the West of its day, they quit having babies too, and they eventually had to enlist conquered Men into their own armies to defend their Empire. This did not work out too well.

Today, we are doing it all over again. Today, we enlist immigrants to work and pay taxes for us to support our GDP and social net. Who knows how this one will turn out?

#134 Capt. Serious on 10.05.18 at 10:51 am

US jobs report was hot fire:
Unemployment rate declines to 3.7% in September; payroll employment increases by 134,000 go.usa.gov/vrK

Full throttle on rate increases.

#135 GIC's on 10.05.18 at 11:02 am

keep raising them!!!!!

whoohooooo

can we see GIC’s out yielding dividend-paying equities?

go Trump go! this guy is fantastically inflationary

#136 Jimers on 10.05.18 at 11:07 am

Stormy and Ford need to do a tag team performance.

#137 AB Boxster on 10.05.18 at 11:25 am

Just for fun, when Moneysense published their list of the top 100 dividend paying stocks in Canada, I decided to track a basket of these stocks, just to see how effective pure dividend investing in Canada is.

So I tracked the following stocks:

CIBC
BMO
Power
Altagas
BCE
Enbridge
InterPipeline
Transalta Renewables
Genworth
Emera

The results have been pretty surprising.

As of Jan 1 2018 the projected dividend of equal investments of each stock, was approximately 5.8%.

So on a 500K portfolio of these dividend payers, the annual return would be about 29K in dividends.

As of October 4, 2018 the total value of the 500K dividend portfolio is $444K.

So the value of this basket of stocks is down $56k.

Now these are not all, according to MoneySense, the top 8 “All-Stars’ in Canada, as in the top 8, four are bank stocks.
However, one of the top 8 “All-Stars” GWO – Great West lifeco, is still down 10% YTD.

So in Canada, where rates have gone up, but nowhere near as much as in the US, had you invested in this basked of divided paying stocks, to date your return would be:

Dividends YTD – $21,750
Growth – ($56,000)

Net – ($34,250) or Negative 6.85%

So dividend payers are down.
Fixed income as Preferred shares are down.
Fixed income as bond funds are down.
Fixed income as high yield are down.
Emerging Markets are down.
Europe is down.
US is up.
REITS are up.

Dividend investing as a core component of a portfolio would be pathetic in Canada so far in 2018, unless you only invested in banks, which certainly does not imply diversification.

The remaining investment classes, unless you are only invested in the US, looks to be pretty pathetic as well.

Kind of reminds me of this:

Q – What is the best way for an investor to obtain 1 million dollars?

A – Invest 2 million.

#138 Stormy is my name! on 10.05.18 at 11:39 am

#126 Smoking Man on 10.05.18 at 9:58 am

Boom. Trumps latest tweet puts Soros on notice.
The Storm is coming. #MEGA.
#WWG1WGA

The very rude elevator screamers are paid professionals only looking to make Senators look bad. Don’t fall for it! Also, look at all of the professionally made identical signs. Paid for by Soros and others. These are not signs made in the basement from love! #Troublemakers
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Ive got news for you, The Storm is coming and my name is Stephanie Gregory Clifford! Your damn right the Storm is coming! But it aint gonna be good for your Dementia ridden Orange guy. Baton Rouge girls rule!

#139 Nineteen84 on 10.05.18 at 11:47 am

And the Fed is gearing up for a long boom. “There’s really no reason to think that this cycle can’t continue for quite some time,’ the central bank boss, Jerome Powell, said this week, “effectively indefinitely.”
—————————————————————-
It’s always calmest just before the storm, Jerome.

What storm? It’s not even cloudy. – Garth

#140 Ace Goodheart on 10.05.18 at 11:48 am

The whole Millennial vs Boomer thing is a bit of a stretch. I know there is a couple out there who took advantage of the Turner Investment program and made it their life work to “fight the revolution” as Mills vs Booms.

The problem with the scenario is what are Boomers? A group of people supposedly born during the economic recovery following the end of the second world war. So you “revolt” against these people, and then continue a never ending “Revolution” that never stops, just because? Sounds like something Fidel Castro would dream up. The never ending revolution.

So in other news, TSLA chair person (soon to be former chair person) the great dreamer himself, roundly snatches defeat from the jaws of victory, “tweeting” against the SEC while a Judge is still considering whether or not to accept the terms of settlement, which include as a provision that he “stop f*ckin$ tweeting so much stuff without letting anyone vet it first”.

The word on the street after his tweet was “was he high when he tweeted this?”. Yeah that is really wonderful for the share price, thank you for that. Now we have to worry about North America’s largest car company by market cap, being run by someone who may or may not make what appear to be not very well thought out decisions, while “high”.

Pass the popcorn, this is getting interesting.

And in the USA, a Supreme Court nomination is held up by the “me too” movement, who despite having a very good candidate for their judicial appointment roadblock, can’t seem to get the date and time correct for a 36 year old allegation against Trumpster’s star candidate. This is like Hercules versus the Hulk. No idea how this one is going to turn out. It may once and for all set some rules in place for “me too” allegations, which appear to be light on evidence and require a person to simply believe the accuser without being allowed to investigate the facts.

What “Me too” has done in my estimation is cull the herd of perhaps slightly shadowy male persons of power, however the cull has resulted in anyone with a conscience, and perhaps a strike or two against them in the distant past, being dropped like a hot stone, while those with massive dark marks against their characters, but with no conscience or values at all, are allowed to continue. It appears to be getting rid of the wrong people.

If you are a dude, in a position of power, and you did something wrong decades ago, you get called out publicly.

If you happen to be a person with a conscience and some sort of value system, you resign.

However, if you do not have that, then you tell the accusers to go eff themselves, and continue on, fighting “me too” as you go.

The result is a group of powerful men who do not have any conscience or value system, being in charge.

It seems to get rid of the moderates and encourages the really bad ones.

Toronto: soon to have a tax on $4,000,000 homes? That is like a lot of house rich old ladies and their 30K per year pensions. Oh well….

#141 IHCTD9 on 10.05.18 at 11:51 am

#136 Jimers on 10.05.18 at 11:07 am

Stormy and Ford need to do a tag team performance.
____

The idea is to sell beers.

#142 Karl on 10.05.18 at 11:53 am

#108 SoggyShorts on 10.05.18 at 2:46 am

It isn’t a matter of “can’t”. Not everyone wants kids. The ROI is pretty terrible. Actually, it’s probably the worst investment you can make other than a bad marriage.
How many people retire before 65 with 4 kids?

Aside from the negative financial implications, the restrictions on time and travel are enormous. Not to mention the 9 months of pregnancy and then childbirth (those look like great fun)

Objectively someone who allows others(immigrants or not) to take on the burden of raising children in order to keep population levels stable is the smart one.

————————————————–

Wow.

Your mom must be so proud. You know, the stupid woman who wasted all of her time not, finances and early retirement to give you life.

#143 Dogman01 on 10.05.18 at 12:12 pm

#11 marcus on 10.04.18 at 5:50 pm

Friday is expected to show 500,000 jobs. Holy Smokes! That combined with a trade deal, Kavanau getting confirmed, Ginsberg and Sotomayor on the way out (Age for one, type 1 Diabetes for the other) and Trump is well on his way to Making America Great Again. Next step ……. China. this one sadly will get dirty. Dirty in the sense of a shooting war over the West Philippine Sea and it’s Trillions in natural resource wealth. Invest accordingly Canada.
——————————————————–

Yes – Trump is an ass-hat. But it is the economy stupid and he has done the major thing he said he would for his base. Get them jobs! (which for the middle American work ethic equals self-esteem, self-worth, sense of purpose, belonging etc.)

Next is China.

For 20 years I have wondered why the West is giving the key to the kingdom to the PRC – a Commie Dictatorship cultural nation-state harboring a deep held grievance against the west and not in any way holding western values.

If you know anything about IT- this is super scary as they make most all system components . https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies?srnd=businessweek-v2

Displaying some wisdom, Trump’s USMCA Free Trade has a provision that any agreement to Free Trade with a non-market economy , i.e. China needs to be approved by all three parties. Makes sense.

China is not our friend.

#144 Phylis on 10.05.18 at 12:18 pm

#86 Deporable worst seller list. How is your book doing in the ranking?

#145 bdwy sktrn on 10.05.18 at 12:29 pm

cnbc….

Stocks fell sharply on Friday after the release of mixed employment data jolted interest rates higher.

The Dow Jones Industrial Average declined 263 points as Intel lagged. The S&P 500 traded 0.8 percent lower as the tech sector underperformed. The Nasdaq Composite pulled back 1.5 percent as Amazon, Apple, Netflix and Alphabet all traded lower.

The U.S. economy added 134,000 in September, well below the expected gain of 185,000. However, the U.S. unemployment rate fell to its lowest level since 1969. Job gains for August also received a sharp upward revision to an addition of 270,000 jobs from 201,000. Wages, meanwhile, grew by 2.8 percent last month on a year-over-year basis to match expectations.

“The labor market is going to keep getting tighter and that will mean higher wages,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “This is going to keep upward pressure on rates and continue to put downward pressure on stocks.”

The 10-year note yield rose to 3.24 percent and hit a fresh 2011 high while the two-year note yield advanced to 2.897 percent.
—–

todays tip/// costco is on sale for the first time in a long time. growth is still rocking, internal password issues should not amount to much. opening in china.
other than a continued general market meltdown , COST is a buy somewhere right around here.

#146 Victor V on 10.05.18 at 12:30 pm

Loonie ‘a flightless bird’ amid looming rate decisions: Rosenberg

https://www.bnnbloomberg.ca/loonie-a-flightless-bird-amid-looming-rate-decisions-rosenberg-1.1148216

Rosenberg said the loonie is most likely to “hang around” the 77-U.S.-cent mark it has maintained this week. However, he said if he had to predict a five-cent move in either direction, a decline is the most likely scenario.

“I would see 72 before 82 [U.S. cents],” he said. “The fat part of [the probability] curve is towards weakness not strength.”

Rosenberg added that September’s jobs data – highlighted by an 80,000 jump in part-time workers, but tempered by sharply slowing wage growth – mean the Bank of Canada has less impetus to be aggressive with interest rates than its U.S. counterpart.

“It’s very clear – when you look at the acceleration in wages in the U.S., where their jobless rates are, both on the surface and beneath the surface – that the Fed has a lot more work to do,” Rosenberg said.

“I don’t see the case for the Bank of Canada. Of course, they’re going to raise rates on Oct. 24. That’s in the cards. I just don’t know how much more they’ll have to do.”

#147 Capt. Serious on 10.05.18 at 1:02 pm

@ #137 AB Boxster on 10.05.18 at 11:25 am

Regarding dividend paying stocks, as the risk free asset (i.e. government bonds) yield rises, all other things being equal, the price of risky assets gets adjusted by the market. Dividend paying stocks are still risky assets (being companies, after all). Thus, a constant payout dividend is not enough in a rising rate environment to stay attractive. Either EPS growth needs to happen, or (supported) dividend payout needs to increase, or both, in order to maintain the risk / reward profile.

#148 yvrguy on 10.05.18 at 1:08 pm

#49 WelcometoSHYSTERVILLE

So those lower mainlanders that have been following this blog since its inception, sucks to be you when it comes to housing. You could have bought 2011, 2012,2013,2014, you will never see those prices again.

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

Sure SHYSTER. Wait one more month:

“We are seeing detached houses on the west side of Vancouver selling back at 2015 prices…”

https://vancitycondoguide.com/vancouver-detached-average-sales-price-in-september/

#149 bdwy sktrn on 10.05.18 at 1:47 pm

What storm? It’s not even cloudy. – Garth
——————–
i feel a breeze…

when you are on boat/island regularly you get a keen nose for incoming weather.
the time to add some extra lines and fenders is before the storm.

get at ‘er.

the herd gets spooked by rising rates , dow still down for 1k more, justified or not. re-enter then.

#150 M. Towne on 10.05.18 at 2:18 pm

Thanks for the answer Garth. You the man!

#151 what? not this again on 10.05.18 at 2:25 pm

Since profits determine markets, no crash.-Garth

clearly, yet another false statement. corporate profits by themselves do not determine stock prices. inflation and interest rates play a role.

stock prices at these levels assume inflation below 2% and fed funds gradually rising to 3% in a year from now (more or less)

1% change in those assumptions, is a drastic blow to stocks. (inflation at 3% and fed funds to 4%). a 2% change in assumptions will be deadly. (watch out at 4% inflation and 5% fed funds)

especially with P/E ratios at historic highs.

Nobody is shocked rates passed 3%. It was baked in long ago. Stocks feed on corporate profits, which are currently outstanding. That will not preclude a correction, which is a healthy, temporary (and overdue) event). – Garth

#152 NoName on 10.05.18 at 2:28 pm

@HTCID9

I look at those nombers yesterday, maybe monthly expenses bit on low side, but that greatly varries from family to family. I can actually see it being that low.

When i was in between jobs 4yrs ago, i managed to trim so much fat that i was able to save almost all unemployment money recieved, it was quite easy, i lots of time to come up with new things that would help with cash flow. Than i runned out of time…

#153 NoName on 10.05.18 at 2:28 pm

Interesting read

https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies?srnd=premium-europe

#154 IHCTD9 on 10.05.18 at 2:36 pm

Something happened. There can be only two reasons why Ford would come forward with these allegations after letting them rot for 3 decades: something she recalls as serious actually happened, or someone paid her a ginormous pile of cash to do this. I’ll give her the benefit of the doubt. She won’t live this down after it’s all said and done no matter what the outcome is. We’ll probably see her exit the USA after the vote is in. It appears she knew all this beforehand.

What happened? We’ll never know. There is nothing of substance to direct a reasonable, intellectually honest, unbiased observer strongly in either direction. That’s the best most logical answer we can arrive at.

Those that vehemently and rigorously support either F or K are some of the dumbest folks in society at large, for they have absolutely nothing whatsoever to stack a strong position on other than he said-she said quicksand. The “believe her” and “we stand with K” crowds are logically stunted, emotionally driven airheads who do immeasurable damage with their angry wing flapping.

In the end, K must be confirmed simply because we just cannot allow a precedent to be set for removal of top rung officials as a result of unverifiable allegations. Once this can is opened, we’ll not ever close it again.

#155 n1tro on 10.05.18 at 2:41 pm

#48 SoggyShorts on 10.04.18 at 7:36 pm
#28 BobC on 10.04.18 at 6:20 pm

If Trump fixes our healthcare and not only eliminates the deficit and at freezes the debt in the next 6 years he really will be the best president in the last 60 years.
**************************************
Hahahahahahahahahahahahahhahahhah
Fixing healthcare (for I guess zero dollars?) while pulling 1 TRILLION out of his butt per year? Seriously?

With no new taxes, and no reduction in spending where the hell do you think Trump will come up with a trillion dollars per year He was great at cheating taxes in the 90s, but I don’t think that scales well.
————————————
Trump can start by denying people who are already sick from being covered on the backs over healthy people.

#156 Evangeline on 10.05.18 at 2:49 pm

Scott Adams, the creator of Dilbert, has an interesting daily periscope where he analyzes all thing political. At the end of today’s show a viewer asked him if he would be watching the SCOTUS vote. He said no he would not be watching the vote because at that time, he would be instead delivering a eulogy for his 18 y-o stepson who has just died from a Phentanol overdose.

I was very sad to hear such a tragic story.

#157 BobC on 10.05.18 at 3:11 pm

#155 N1tro

You guys are something else. We already spend $3.3 trillion a year on healthcare. If we can keep the democrats and RINO’s out it can be fixed. I believe there’s no difference between a corporate group plan and a single payer system like Medicare. Everybody pays a % of all income no matter the source.

https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html

I could add a dozen links showing how the democrats have screwed the system up but why? You haters will just make another juvenile remark an laugh.
We do have a war/spending/debt problem but I think those will addressed sometime in Trumps next 6 years.

Time will tell with Trump and also with the many problems Canada has and a lot of new Canadian ones that will grow.

#158 Guy in Calgary on 10.05.18 at 3:13 pm

#30 BC to separate on 10.04.18 at 6:42 pm
———————————————————-

What makes you think Albertans are the one’s shelling out $3M for a shack in Vancouver? How rich do you think people here are?

Typical BC… literally blame everyone else and never look in the mirror.

#159 Tater on 10.05.18 at 3:13 pm

#155 n1tro on 10.05.18 at 2:41 pm
#48 SoggyShorts on 10.04.18 at 7:36 pm
#28 BobC on 10.04.18 at 6:20 pm

If Trump fixes our healthcare and not only eliminates the deficit and at freezes the debt in the next 6 years he really will be the best president in the last 60 years.
**************************************
Hahahahahahahahahahahahahhahahhah
Fixing healthcare (for I guess zero dollars?) while pulling 1 TRILLION out of his butt per year? Seriously?

With no new taxes, and no reduction in spending where the hell do you think Trump will come up with a trillion dollars per year He was great at cheating taxes in the 90s, but I don’t think that scales well.
————————————
Trump can start by denying people who are already sick from being covered on the backs over healthy people.
————————————————————-

Seems you don’t understand how insurance works. Maybe read up on adverse selection.

#160 millmech on 10.05.18 at 3:18 pm

#148
Soon it will be 2014,2013,2012,2011prices

#161 Frank Vassalos on 10.05.18 at 3:23 pm

My personal prediction on interest rates is once they reach 4% then it is much harder if not impossible for them to go much higher or stay there for long, maybe a few months to at best 1 year which is pushing it.

When I mean 4% interest rates, I am talking about 5 year GIC rates and U.S. treasury bonds, strips and provincial bonds, strips.

The last time we were in the 4% range on all of these was back in 2008. U.S. treasury bonds, strips and provincial bonds, strips did have a brief time back in 2010.

Interest rates are the financial repression that they have their eye on and will not slip. Much higher, attractive interest rates is the great equalizer that if they get too attractive will kill stock markets and corporations, consumers, governments etc.

#162 Stratovarius on 10.05.18 at 3:25 pm

Your muse that things look good because “oil is up” is humorous when you consider that the differential between WTI (Texas Oil) and WCS (Canadian Heavy Oil) is at a record high of over $43USD per barrel. In other words, Canadians sell oil to the US for $43 less than the market price in the US. I am sure that the “clown” in Washington is thankful that the Maple crowd is gleefully supporting US consumption at bargain prices.

#163 n1tro on 10.05.18 at 3:26 pm

#157 Tater on 10.05.18 at 3:13 pm

Seems you don’t understand how insurance works. Maybe read up on adverse selection.
————————————-
Insurance works based on discrimination. Discrimination of variables that cut into the profits of the insurers. Full stop.

This means, insurance companies would like to issue out policies to people with perfect health records and no history of dropping dead for various reasons (ideally).

Worst case scenario, the insurers would like to issue policies to a group of people least likely to use their policies and pay a really smart person to figure out their risk exposure before doing so.

As for “adverse selection”….

“…adverse selection refers to situations in which an insurance company extends insurance coverage to an applicant whose actual risk is substantially higher than the risk known by the insurance company. The insurance company suffers adverse effects by offering coverage at a cost that does not accurately reflect its actual risk exposure.”

https://www.investopedia.com/articles/insurance/082516/examples-adverse-selection-insurance-industry.asp

^^Given the above, how do insurance companies avoid adverse selection? Re-read my first 3 paragraphs.

#164 Remembrancer on 10.05.18 at 3:29 pm

#159 Tater on 10.05.18 at 3:13 pm

Ah adverse selection and its traveling companion moral hazard… Health care in the US will likely never be significantly changed, there’s too deep a for-profit market coupled with the upper-middle class catechism that sick people are sick largely due to some moral failing…

#165 Stan Brooks on 10.05.18 at 3:30 pm

#146 Victor V on 10.05.18 at 12:30 pm
Loonie ‘a flightless bird’ amid looming rate decisions: Rosenberg

——————————-

He indirectly call it/implied it is a turkey.
I call it sitting/diving duck.

The perspective for the Canadian economy:
– no wage pressure, wages actually officially decline if you factor in official inflation. With unofficial inflation much higher, wages actually currently dive, in my estimate by at least 5 % in real terms annually.
– inflation in commodities (but CAD going lower).
– certain dive in consumption sector as prices increase, indebted Canadians pay more to service their debt and have less to spend. With inflation they will spend less on much less products.
– total lack of investment due to idiotic liberal government policies.

A text book stagflation.
Stay away from TSX except some energy/commodity plays as where is no way for it to produce real value in stagflationary/shrinking consumption environment.

Read Buffett on how inflation does not produce real value but destroys value.

In my estimate (excluding commodities) TSX will produce negative real returns of 10-15 % in the next 2-3 years (dividends included).

It beats me who will invest in government bonds at these interest levels and weak currency, except sucker pension funds mandated to do so.

I will consider it at 8-12 % +.

Anyway we will see the deflation of the economy that was artificially inflated in first place.

We overshot on inflating it way beyond capacity primarily in the consumption sector (including housing) due to the biggest ever credit bubble, now we complain about the lack of investments and lagging in productivity and most likely will overshoot in deflating it.

In summary: inflation, misery (real Warren Buffett on the inflation misery index), stagnation, higher taxes, no wage growth.

The worse part being the lack of wage growth, Rosenberg points out to it.

Real reduction in standard of living to 30-50 % of current over-inflated, based on excessive debt standard.

We basically deserve based on productivity 65 % of current standard of living, we lived on 100 % (which is 150 % above what the real state of the economy supports). Now reverting back to the mean we will fall to 30-50 % for maybe a decade.

How? It is simple:
Inflation and no wage growth. Consume 40 % of what you consume today.

#166 Michael (in qc) on 10.05.18 at 3:41 pm

RE: #32 Willy H on 10.04.18 at 6:56 pm

“… but the longer he’s (Trumpster) in office, the hotter the entire economy becomes.”
__ __ __ __

We need to be careful crediting the Big Orange with the current state of the American economy. This current growth spurt was overdue after Americans were sucker-punched by the World Financial Crisis of 2008. The Obama administration laid down the groundwork for this current economic boom. It almost took a decade to turn things around. The Trump administration is further stimulating and already stimulated economy. Not good economic policy for the mid-term.

#################

Manufacturing is not coming back -Obama
The steel industry only needs 10% of the workers it used to – Obama
2% GDP growth is the new normal – Obama
something something magic wand – Obama

Trump will wish he had Obama’s numbers. – Forbes

#167 jess on 10.05.18 at 4:38 pm

https://www.cnn.com/2018/10/05/europe/nobel-peace-prize-intl/index.html

Mukwege, a gynecologist and surgeon, has long worked to treat thousands of women and girls affected by rape and sexual violence in the Democratic Republic of Congo.
Nadia Murad, from ISIS sex slave to global human rights campaiger

Murad is a Yazidi woman from the northern Iraqi town of Sinjar, who was held as a sex slave by ISIS, she told CNN in an interview last year. In 2016, at age 23, she was made a UN goodwill ambassador for the dignity of survivors of human trafficking

#168 Pureyam on 10.05.18 at 5:02 pm

at #94

Men are now behaving as the women they want, and the women are behaving as the men they need.

#169 Gravy Train on 10.05.18 at 5:47 pm

#155 n1tro on 10.05.18 at 2:41 pm
“Trump can start by denying people who are already sick from being covered on the backs o[f] healthy people.” Let’s all hope and pray you never get sick, you doofus! :)

#170 Fish on 10.05.18 at 7:10 pm

BMO Capital Markets Economics: Forecasts

https://economics.bmocapitalmarkets.com/economics/forecast/ca/cdamodel.pdf