Move over

We knew the cost of money would be going up. We even knew why. But, what comes next?

So here’s the key para from the Bank of Canad: “Governing Council agrees that the policy interest rate will need to rise to a neutral stance to achieve the inflation target. In determining the appropriate pace of rate increases, Governing Council will continue to take into account how the economy is adjusting to higher interest rates, given the elevated level of household debt. In addition, we will pay close attention to global trade policy developments and their implications for the inflation outlook.”

Now you have it. The official release/explanation’s concluding words are crystal. Rates, The Ploz says, “will need to rise” beyond the current bump higher. How much? Up to “a neutral stance to achieve the inflation target.”

The ‘neutral stance’ we already know from past bank pronouncements is between 2.5% and 3.5%, depending on where inflation sits. The current bank rate is 1.75%. So figure it out.

And how fast?  That depends on, “how the economy is adjusting to higher interest rates, given the elevated level of household debt,” plus the Trump trade wars. In case there was any doubt, Ploz added this during the media scrum: ” “The reality is the economy is running at its capacity and it is no longer needing stimulus, and so it’s our job to prevent the thing from overheating.”

So there it is. (a) Yes, rates will pop further. (b) Expect as many as five more increases. (c) They’ll likely dribble out over the next year. This is new and valuable info.  It was shared with you for a reason. Shortly thereafter, all the banks raised their primes. And the Toronto stock market shed 2.5%. Weed stocks smoked.

Why did the central bank do this when real estate is weaker, family debt historic and surveys show up to half of people say they can’t pay any more?

Simple. It’s not the Bank of Canada’s job to be a bleeding heart, softy, enabling bunch of empathetic pandering pushovers. That’s what the NDP’s for. These guys, in contrast, are mandated with keeping a growth-oriented, low-inflation, competitive economy alive. If people bought too much expensive real estate with oodles of leverage, tough. That’s their problem. The bankers only care if it impacts the wider economy. What they’re focused on now is a healthy US economy, the new trade deal, business investment and (they hope) income growth.

In short, by late Spring the bank prime (today 3.95%) will be about 4.5% and the mortgage stress test over 6%. Obviously if you can’t hack that and have a variable-rate mortgage, lock it up. If you have a LOC or home equity loan, chances are it’s variable and interest charges just increased again. Suddenly it no longer makes sense to keep funds in a HISA paying 2% when the line’s costing 4.5%. So, pay it down.

Also be careful about leverage. Last year smart investors scored with a fat spread between the cost of a HELOC (about 3.5%) and a double-digit return on financial portfolios. This year rates are rising and equity markets entrenching. Yes, you’ve held on to the 20% gains made in the last two years, but 2018 is going sideways. So time to review even tax-deductible debt, if higher rates are starting to pinch your finances. And, yeah, more to come.

Now, against this reality – the normalization of money in both Canada and the US – let’s beam up to Planet Re/Max. As we enter this magical world, you’ll note the ivory gates inscribed with the hallowed words, “It’s always a good time to buy.”

The company’s a media whore, but a good one. Publicists churn out releases every two or three months, usually under the guise of a ‘market report.’ Unlike credible surveys and studies written by reasonable people, these have no statistical summary, no methodology, no sample size and zero evidence to back the claims made.

Got another one this week. “Luxury condo market soars, while single-detached luxury home sales fall short,” was the headline. The release was, as usual, rewritten as news and published by mainstream media. For example, these were the headlines in the Financial Post: “Luxury home sales drop 35% in Toronto and Vancouver, but millennials fuel rise in high-end condo sales. With foreign buyers taxes slowing the luxury home market, lower-end luxury condo sales are up as millennials use inheritances and baby boomers downsize.”

Do not believe it for a moment.

Yes, as reported here, detached home sales have plopped 30% or more in major markets. Prices are unsustainable now that rates are rising. Sales fall first, prices second. But the condo market’s not immune. There is no mass moister rush to buy.

More fake news: “We’re also seeing an emerging trend of Millennials entering the lower end of the luxury condo market, as they tap into their inheritance to invest in this popular property segment,” says Re/Max. Enough kids snapping up $2 million condos to merit a news release? Nope. Not happening. Consider this statement: “In Victoria, condos in the $1-2 million range experienced a 19 per cent increase year-over-year and condos in the $2-3 million range experienced a 67 per cent increase year-over-year.” 67%? Wow. Sounds huge. But the actual number of buyers of $2+ million condos in that city turns out to be 5, up from 3 last year. And there’s nothing to indicate if they were young, old or just crazy.

The point? Anyone 30 or younger has no idea what a rising rate environment can do.  They deserve help. Re/Max knows better. It deserves a big wedgie.

192 comments ↓

#1 Penny Henny on 10.24.18 at 5:05 pm

Wow, what a day!
Poloz raises rates .25% and markets around the world drop right off. S&p down over 3%, Nasdaq down 4.4%.
WOW.
And you say he is going to raise 3 more time next year.
YIKES!

#2 Penny Henny on 10.24.18 at 5:11 pm

Hey Brdwy Skytrn,
seems like you might have gotten back in too early.

#3 The Real Mark on 10.24.18 at 5:15 pm

So Poloz is basically basing his “rate hike” narrative on fake news. Meanwhile the stock market is puking. Deflation is set to deepen as energy prices fall. And college grads across the nation are still wondering where all these mythical jobs that supposedly exist are to be had.

Meanwhile business is afraid, due to the past decade of minimal returns on investment, and the real threat of higher interest rates, to invest significantly into productivity enhancement. At least if labour shortages were meaningful with rising wages, we’d have seen vigorous demand for productivity enhancing machinery and processes. Yet the job boards for engineers in areas like advanced manufacturing, IT/computers, and related fields etc., are practically dead.

This won’t end well. Gold actually held up pretty well today. The higher Poloz forces rates against the natural forces of the economy, the lower he’ll be forced to lower them in the future. And for what, because he’s too deluded to see beyond the fake news? Maybe Trump is onto something, that central bankers need to be held politically accountable if they misbehave or just are outright incompetent. The inflation target is 2%, Poloz has severely missed it as inflation has run the past decade at 1.46%. And now we have deflationary numbers in the latest CPI, a trend almost certain to accelerate as tariff wars and the global capacity glut in many key sectors picks up steam.

Keep your seatbelts fastened, this could get quite ugly before the BoC finally relents and acknowledges the actual state of the economy and the deflationary tsunami that is on the verge of crashing a’shore. From sources both internal (RE) , and external.

Pack it in. You lost. – Garth

#4 Steven Rowlandson on 10.24.18 at 5:20 pm

The only help that will do any good is a 95%+ discount on price or a 600%+ rise in minimum wage. Otherwise there can be no resolution to the problem. I am thinking the price discount on RE is the more realistic option.

#5 Catalyst on 10.24.18 at 5:20 pm

Good summary of the days news.

Didnt one of your porche driving oracles say the tax may get an end of year bump after USMCA was agreed? Is that still the call?

It is. – Garth

#6 Smartalox on 10.24.18 at 5:21 pm

In determining the appropriate pace of rate increases, Governing Council will continue to take into account how the economy is adjusting to higher interest rates, given the elevated level of household debt.

Translation: we’ll keep raising interest rates until housing crashes. Then, when it does, we’ll back off for a few months, and let those who’ve been waiting to buy lock in at lower rates AND lower prices.

Those that hold mortgages on over-priced homes, and who won’t sell at a loss, will then enjoy the experience of watching their new neighbours pay thousands less per month for a similar home, in a similar neighbourhood, while enjoying a far superior lifestyle.

#7 BG on 10.24.18 at 5:23 pm

Is there even an asset class that is not going down these days?
It’s like everything is red.

#8 Graeme on 10.24.18 at 5:24 pm

If you are convinced that there are going to be more hikes, get out of the stock market …NOW.

Any more of this and Jerome Powell is going to drops rates, and maybe as an emergency measure just before mid terms.

This is a political move to oust Trump, in part. Much as I don’t like the clown there is no reason to raise now. None. Inflation is well contained by govt. metrics.

#9 dan on 10.24.18 at 5:25 pm

@The Real Mark ,

Christ man, Stop wiht the long winded BS. Give it up. Either you are a realtor shiilling or you ability to read markets is a complete joke. What are you averaging for returns 1-2%

#10 arfmoocat on 10.24.18 at 5:26 pm

Love seeing the pot stocks crash and all the moisters blaming it on the BoC.

They’re not even old enough to know what normal interest rates are. lol

#11 Ron H on 10.24.18 at 5:26 pm

“The real danger comes from encouraging or inadvertently tolerating rising inflation and its close cousin of extreme speculation and risk taking, in effect standing by while bubbles and excesses threaten financial markets. Ironically, the “easy money,” striving for a “little inflation” as a means of forestalling deflation, could, in the end, be what brings it about.”

What’s Wrong With the 2 Percent Inflation Target

– Paul Volcker

https://www.bloomberg.com/opinion/articles/2018-10-24/what-s-wrong-with-the-2-percent-inflation-target

#12 MF on 10.24.18 at 5:26 pm

I thought the stock market (both the American’s and ours) had factored in higher rates already?

All our portfolios are hurting. Real estate is down. Is there anywhere to hide?

MF

#13 Capt. Serious on 10.24.18 at 5:27 pm

re: The Real Mark

Face it dude, you can’t fight the Fed.

#14 Darts on 10.24.18 at 5:30 pm

Trump says the FED and its rate rises are the biggest threat to the US economy.

The FED says they plan to keep on raising.

For the masses that believe Trump. His attempts to create a fall guy are actually going to hurt the markets further.

The Real Mark’s statement above proves this.

#15 crossbordershopper on 10.24.18 at 5:32 pm

i guess an almost zero growth 2020 is in the cards already, there just lighting up their ducks.
2019 will be a slowdown , the market is already pricing in higher rates and slower growth with no fiscal stimulus(taxes). in 2019.
so. Canada is really pooched, with carbon tax in the west is done, i mean like forget about it , crescent point will be at less than $2 a share next year, and all the rest of the western oil patch.
the wealth that Trudeau has destroyed is 50 to 100 billion in western canada with the market cap of all these oil and gas companies stock totally crashing.
what a complete idiot. like how hard is it to build a pipeline, a few natives and a few moose need to get out of the way, Trump wouldnt have a problem.
all this for the immigrants and the weed peedlers, what an idiot this guy is, taxes will rise believe it or not to 55% marginally in most provinces as deficits as far as the eye can see will be the norm.
i have no idea why anyone would want to invest in Canada, the stock market in canada is junk, have you seen these material stocks,i sold hudbay earlier in the year at $12, its like $5 bucks. OMG get out Canada

#16 Ummmmm on 10.24.18 at 5:40 pm

Look up how Trudeau Senior sold our BOC independence to the rich and powerful private interests…this will answer a lot of Central Banks questions…

Neil MacDonald of CBC had a 3 part series on this mafia cabal!

#17 Bk on 10.24.18 at 5:41 pm

Let’s talk about the stock market. How bad is this going to get? How many years till we see new highs???? There goes my down payment for when house prices drop.

US markets have been hovering around record highs all year. We didn’t hear from you then. Wuss. – Garth

#18 Capt. Serious on 10.24.18 at 5:41 pm

It’s a good time to remind ourselves:
1. You can only achieve high returns by taking risk. Risk and return are related. You cannot achieve high investment returns with low risk investments. The surest sign of fraud is the promise of high returns with no risk.
2. It is the duty of equity investors to bear the gyrations of the market with equanimity.
3. You have an expected rate of return given the asset classes you invest in. That return is not guaranteed (or it would not be risky), and you may achieve more or less than the expected return over a given time period.
4. Have a plan, stick to it.

#19 Penny Henny on 10.24.18 at 5:52 pm

Balanced and diversified down 3% for the year after today’s close :(
I’m thirsty for a beer :)

#20 Tim P on 10.24.18 at 5:56 pm

“Simple. It’s not the Bank of Canada’s job to be a bleeding heart, softy, enabling bunch of empathetic pandering pushovers. That’s what the NDP’s for. These guys, in contrast, are mandated with keeping a growth-oriented, low-inflation, competitive economy alive. If people bought too much expensive real estate with oodles of leverage, tough. That’s their problem. The bankers only care if it impacts the wider economy. What they’re focused on now is a healthy US economy, the new trade deal, business investment and (they hope) income growth.”

In the not to distant past ‘saving’ was one segment of the path to achieve financial security. Savers have been punished for far to long, glad to see interest rates go up. Hopefully, a few financial literacy lessons will be learnt by those who were financially ignorant.

#21 Rentin on 10.24.18 at 5:56 pm

I am eagerly awaiting the times where money is expensive. Things become cheap.

For everyone who gorged themselves on cheap debt, let them choke. It will speed up the process.

#22 BlogDog123 on 10.24.18 at 5:56 pm

Husband/Wife team of realtors came to my door with a terrible flyer (front of it with an airplane, no idea how it relates to home sales: shows they are bad marketers). I wonder if they realize they are destroying their chances of being a selling agent with such a bad marketing pitch. I feel tempted to write them an email to say if they can’t even create a decent leaflet to drum up new clients they should reconsider their career choice before they bankrupt themselves…

#23 dakkie on 10.24.18 at 5:57 pm

6 Charts: Data Suggest “We Have Seen the Peak in Housing Activity for the Cycle”

http://www.investmentwatchblog.com/6-charts-data-suggest-we-have-seen-the-peak-in-housing-activity-for-the-cycle/

#24 Zen on 10.24.18 at 6:01 pm

BG
Is there even an asset class that is not going down these days?
It’s like everything is red.
——————————————–
Yes there is. The brainless no risk GIC. TSE down 8.02% YTD. You would’ve earned just under 2% if you bought GIC 1 year ago. You can renew for another year – over 2.5% today. And GIC rate is going up. The ‘brainless’ may be a winner again this year.

Equity losses are deductible and GIC interest is fully taxable. Not as simple as it sounds. Anyway, stick with the plan. Corrections are a healthy part of life. – Garth

#25 Shawn on 10.24.18 at 6:06 pm

The TSX closed at the same level it was at 10 years ago. Emerging markets and international equities closed at levels they were at 12 years ago. Bonds are also in free fall. No one wins here.

Have a beer. – Garth

#26 Penny Henny on 10.24.18 at 6:07 pm

I am either getting more accustomed to these market fluctuations or maybe the beer is tasting better today. If last year you would have told me that $70,000 would evaporate out of my account in a matter of weeks I would have replied “but I already sold my house in Etobicoke”

Cest plan pour moi

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

#27 Jimmy on 10.24.18 at 6:07 pm

My RBC Credit Line is at 7.20%.

#28 Penny Henny on 10.24.18 at 6:09 pm

sorry that’s ‘Ca plane pour moi’

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

#29 yvr_lurker on 10.24.18 at 6:14 pm

Stock market looks like it has fallen off a cliff. After about 2 short weeks, the TSX is back down to the level it was in December 2016 (almost 2 years ago). I don’t believe anything that Remax or Lepage has to say as Garth correctly indicates, but nor do I believe anything BS said to “justify” such a precarious drop in the TSX. It seems as though other powerful forces are pulling the strings of this puppet. Am delighted that I took 400K out of the market in July and did the conservative route and took out a HISA with the tangerine people. Otherwise would have been down around 8%. Might jump back in when in a few months when there is more stability.

One thing though is clear; housing prices in YVR are clearly on the decline. There is a long way to go, but people who have saved over the years and not strangled themselves with debt may benefit in the end. If this continues our kids might also have a decent chance to live in…

#30 jerry on 10.24.18 at 6:14 pm

“But in a departure from previous statements, the bank dropped the word “gradual” when describing the pace of future hikes. Financial markets will interpret the omission as a signal that the BoC is leaving the door open for consecutive rate increases, with one possibly happening as early as December”

https://globalnews.ca/news/4590070/bank-of-canada-interest-rate-announcement-2/

#31 KS on 10.24.18 at 6:22 pm

I guess this is why you just put the money in a global diversified portfolio of ETS. Then trust the soup and ignore the market.

Gulp.

Heard a great story on the CBC this morning, featuring a young man with a $50K student loan moaning about affordability of rising interest rates to service his life.
He seemed particularly concerned about his new car payments… *new* car payments. As if there was nothing odd about that.

#32 finally, a bear market on 10.24.18 at 6:24 pm

everyone is heading for the exits on stocks. the collapse is just getting started

#33 NoName on 10.24.18 at 6:24 pm

This country is i deep trouble, raising interest rates are list of our problems. I brought my older one to mto for driving test, some dude, older teen, 18-19 in my estimation on counter beside us filling a form for his driver’s license has tohaas to call his mother to confirm his address number was is 42 or 48.

Oh Canada…

#34 Dolce Vita on 10.24.18 at 6:25 pm

“…bleeding heart, softy, enabling bunch of empathetic pandering pushovers. That’s what the NDP’s for. ”

THAT was hilarious.

Read 19 Comments and I’m still killing myself laughing.

What I liked was how you snuck that in nonchalantly in between some very serious prose about the Road Ahead.

Good one Garth and the advice as well.

In the next 2 Qtrs. we shall see if all these doomsday polls about the state of Cdn. debt are true. In the past, they have not been (e.g., MBNA that Cdns. were <$200 a month away from financial Seppuku, 1 year ago).

So far, it has been more like Cdns. posturing for well known pollsters so their voice of displeasure at further rate increases will be heard.

"The bankers only care if it impacts the wider economy."

SO true.

#35 Howard on 10.24.18 at 6:28 pm

So what’s the story on Tesla?

Did they cook the books or what?

#36 Trumpocalypse2018 on 10.24.18 at 6:32 pm

As I have predicted, America is now beginning an internal civil war. Terrorist attacks on each other.

https://www.cnn.com/politics/live-news/clintons-obama-suspicious-packages/h_fb2dd1269ed568c8b88360dd26975add

Total chaos internal and external to the USA is now fast approaching.

The midterm results in 14 days will start the next major explosions.

This is exactly as bad as it looks.

Times 10.

PREPARE.

#37 Alberta Ed on 10.24.18 at 6:37 pm

You can count on the hotshot business reporters at the CBC to regurgitate Remax’s report, unedited.

#38 Victor V on 10.24.18 at 6:38 pm

Rate hikes to cost Canadian households $2,500 each year — but it isn’t uncharted territory: report

https://business.financialpost.com/news/economy/rate-hikes-to-cost-canadian-households-2500-each-year-but-it-isnt-unchartered-territory-report

#39 NOSTRADAMUS on 10.24.18 at 6:43 pm

ONE MORE TIME ,”CASH IS KING ”
Real estate today, we may not see an immediate crash, but if not, expect a slow, equity bleed out over many years, Japanese style. In many ways , a slow bleed will be worse than a crash, for after a crash , there is often a sharp rebound, and one can once again use leverage to stay in the game. However, in a slow declining equity bleed out, long leverage gets crushed. With interest rates moving north, this is a foregone conclusion . For a lot of people, the best day was yesterday. Once again, back to the heading “Cash is king”, for the fools run after the golden ring. You can trust me as the teller of truth in the land of gypsies, tramps and thieves.

#40 JOJO on 10.24.18 at 6:52 pm

I’d like to mention the bombs sent to politicians this week.

Several months ago many Dems told their acolytes to attack or confront the republican politicians wherever they found them.

The slobbering lunatics took them literally. The restaurant attacks of Republicans, Portland riots, etc went unanswered by the right.

It was inevitable that someone from the right would respond.

(or an agent provacatuer on the left to confuse the situation – we won’t know)

The leaders set off a further wave of violence across the USA and other areas.

I ask that all people from all political stripes stand down.

It is time to calm down
It is time to talk
It is time to reconcile that each person has their right to THEIR OPINION!
I politely ask all to consider that we all are brothers and sisters.

If you are angry seek help from a friend or family member.

If you are in a position of power
STOP PROVOKING PEOPLE!

It time to pause folks…

I took the time to talk to socialist DEMS protestors today to try to understand their point of view.

I didn’t get it – but I listened…
It’s a start

#41 jojo on 10.24.18 at 6:56 pm

As a longtime investor in many asset classes I have lived through 20% interest rates.

I fuly expect to see them again.
Cost push Inflation is real.
YOu heard it clearly on corporate conference calls this week.

Tariffs, resource costs are causing extensive price increases in all manufacturing.

Cost push is what the central banks responded to last time.

We will see another Volcker moment imho

#42 AB Boxster on 10.24.18 at 6:57 pm

It’s should be pretty apparent now that rates are reverting back to historical normals.
However, this is not due to a strong Canadian economy but rather a strong American economy.

While Canada continues to find new ways to tax citizens, has driven all investment away from one of its most valuable exports (energy) and has a housing bubble of huge proportion and can only create mcjobs or government positions, the American economy is humming along creating real job and wage growth and the government is making it easier for business and citizens with tax cuts.

Canada has no choice but to raise rates or risk a 50cent dollar.

What will be interesting to see is how these rate increases will affect the equity markets.

While rising rates may soften house prices there will be some huge casualties along the way in Canada due to our feeding frenzy on high priced OSB.

And while , in normal times, high interest rates may be a sign of a strong economy, i suspect that for Canada this is not the case.

My theoretical basket of Canadian dividend payers is now down 14% YTD. A haircut of 70k on a 500k portfolio.
These stocks will need to rise 16% to return to 500k.
Think the TSx will rise 16% over the remainder of the year?

However, this basket of large dividend payers now has a combined annual dividend of 6.7 %.
Is it time to buy or is it time to wait for further pain. If they were US stocks, maybe good entry point.

But what is there in Canada that would give confidence to buy?

Government debt is out of control.
Housing market is about to implode.
Foreign investment is in a nosedive.
Carbon taxes will make industry look south.
Canadians debt levels are out of control.
Jobs being created are part time.
Wage growth is non existent.
All levels of government think taxes are the solution to all ills.

Earnings?
Has not made much difference so far this year.
Markets are discounting earnings and focusing on the rest of the mess in Canada.

There is more pain to come in Canadian markets.

#43 Rainman on 10.24.18 at 7:04 pm

Pack it in. You lost. – Garth
This is an interesting comment Garth? Seems maybe this is why you continue to write this blog? it’s about winning and losing. Seems everyone is losing right now?? RE, our economy and the market are all intertwined really. My take anyhow.

I just come here for the dogs. – Garth

#44 Tortoise vs Hare on 10.24.18 at 7:07 pm

So after a 600 point drop today are we all still sticking with the idea that rising interest rates will not wipe out much of the 2016/2017 Trump rally that generated double portfolio digit gains?

My balanced portfolio is now officially in negative territory after a roller coaster 2018.

As a renter, I was happy to see the portfolio finally take off after Trump won and after years of seeing 4.9% anemic growth – at a time when real estate was surging ahead in key markets with double digit annual increases.

I felt that the growth post trump validated the balanced portfolio approach to generating true wealth to an extent.

The portfolio growth provided a degree of justification for renting, albeit my portfolio gains did not match any where near those of leveraged owners. But at least the trend was on the up.

Now that the real estate market has cooled, and rates are rising, and my portfolio is no longer increasing in value, I sure hope that the percentage decline in the portfolio matches real estate price drops in my area. And my area saw 40% increases in real estate prices since 2015.

As has been said many times, if it took 13 years of a bull run in places like Vancouver to reach astronomical prices, it will take a very long time to go down – not simply a year, or even two.

Everyone renting on the sideline better get used to renting (including all those cashing out and hoping to get in and buy again after a year). You are looking at having to rent for the next 5-7 years for prices to come back down to the point that you should have bought.

Prices have to revert back to fundamentals or else there was no justification for renting. In the mean time, you will have wasted many many years paying rent instead of a mortgage. For those of you who take the time to develop some detailed spreadsheets on renting vs buying in places like Vancouver over a 10 year period, you will be surprised as to who ends up ahead financially – real estate or portfolios.

#45 Nonplused on 10.24.18 at 7:14 pm

Who on earth would pay $2 million for a condo in Victoria? You can get a farm for that and still have a reasonable commute to work. I could see it if you worked in downtown New York, having a condo within a reasonable commute of your executive corner office might be nice, and then a home in the Hamptons for the weekends, but Victoria? The commute just isn’t that bad.

Besides global warming is going to wash the whole city into the ocean within the next 20 years, or so we are told to believe. I suppose if it’s a high rise condo the condo board could put a marina where the parking lot was. That would be kind of cool, but my guess is it would require a special assessment.

I do love ReMax’s use of statistics. 5/3 is indeed a 67% increase, but it’s about as useful as saying 50% of your shoes are left-handed. It would have been fairer to say that the market for $2 million dollar condos in Victoria is negligible. Why would they even comment on a market that had 5 transactions? There were probably more $2 million dollar yachts moored around the city that changed hands.

Speaking of yachts, are the crazy dippers going to put a wealth tax on those too? An “empty yacht tax”? I mean why not? People can live in those too. My neighbors have a sail boat moored in Victoria that they only visit on the weekends. I don’t think it’s worth no $2 million dollars but someone could certainly live on it. I don’t see why the crazy BC government would stop at houses. Heck, why wouldn’t they put a luxury tax on RV’s while they are at it? I’m sure there are a lot of 1985 Winnebagos parked between Victoria and Kelowna that are empty most of the year. Tax them! People can live in them! And they are a luxury!

While we are at it, why not impose a luxury tax on second vehicles? After all, a large number of people are living in their cars these days. You could solve the so called “housing crises” right there if you opened up the second vehicle market to rental living quarters.

The problem with “luxury taxes” is that pretty much anything that isn’t food, clothing, and basic shelter is a “luxury”. Got a kayak for those weekend paddle trips? Luxury. Big screen TV? Luxury. Pool table and hot tub? Luxury. Harley? Definitely a luxury. Beer and smokes? Luxuries. Hot wife? Luxury. Maybe they’ll tax her too. The new “trophy wife tax”. It is a social injustice that the rich get all the hotties.

Remember folks, this is how socialism works: You buy your kid a bicycle for his/her birthday, but he/she doesn’t get to ride it the neighbor kids do. In fact, your kid doesn’t get to ride a bike until you have bought bikes for all the kids in the neighborhood. And don’t be waiting until last to buy the nicest bike, or your kid will have to swap the nice bike for one of the earlier purchases.

There is a reason “thou shalt not covet” made it into the top 10 commandments. There are actually 630 commandments in the bible, but “thou shalt not covet” made the top 10. Twice. Add “thou shalt not steal” and socialism is prohibited by the bible 3 times in just the top 10 commandments. All 3 Middle-Eastern religions (Christianity, Islam, and Judaism) subscribe to this. Whether you believe in Dog or not, the writers may have been on to something important. Taking what isn’t yours is bad, and even wanting to take it is bad. And no, getting the government to take it for you does not convert it to good, which is why “coveting” gets 2 of the top ten and “stealing” only one. Somehow they figured this out 2700 years ago, but we haven’t.

#46 Bob Dog on 10.24.18 at 7:14 pm

Get your doggie calendars.

http://dailyhive.com/vancouver/vancouver-police-dog-calendar-2019

Seriously, 2 million to live in Victoria? In a concrete box? That city is a human cesspool on an island far from civilization.

Did I mention earthquakes…

#47 crowdedelevatorfartz on 10.24.18 at 7:18 pm

@#19 Penny henny
“Balanced and diversified down 3% for the year after today’s close :(”
++++
The market always craps its pants in Oct.
Relax.
The year isnt over yet….

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

@#35 Howard
“So what’s the story on Tesla?
Did they cook the books or what?
++++++

Nah, just never turned a profit and now Elon’s smokin dope……

Wait for the doo doo to hit the fan with Netflix…..

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

@#37 Alta Ed
“You can count on the hotshot business reporters at the CBC to regurgitate Remax’s report, unedited.’
+++++
Silly me . And I thought Global TV were the Real Estate industry lickspittles….

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

@#40 JOJO ( or is it jojo?)
“I politely ask all to consider that we all are brothers and sisters.”
+++++

I’d like to buy the world a Coke…. and keep it companyyyyyyyy ( Sing along everyone!)

https://www.youtube.com/watch?v=1VM2eLhvsSM

#48 AB Boxster on 10.24.18 at 7:19 pm

https://www.zerohedge.com/news/2018-10-24/70-sp-500-stocks-are-already-correction

Interesting that over 1/2 of s&p 500 stocks are already 20% off of their highs.
And over 3/4 of them have fallen 10%.

From historic record highs. Sheesh, relax. – Garth

#49 Exports on 10.24.18 at 7:23 pm

, we will pay close attention to global trade policy developments

So lower interest rates!

Lower rate -> Lower CAD -> More exports.

#50 Nonplused on 10.24.18 at 7:24 pm

It strikes me after I already hit “submit” that “thou shalt not commit adultery” is also a prohibition of socialism. I mean, if we are going to share everything, why not our wives and husbands? It might be fun.

Well, it’s simple. Nobody wants to pay for braces, soccer, anything really, for someone else’s kid. The destruction of the family unit, which they must have also observed 2700 years ago, is not good for kids. It’s not real good for the parents either, who now need 2 of everything (houses, cars, TV’s, toothbrushes, everything).

So actually 4 of the top ten commandments ban socialism.

I think I have to change my handle to “Brother Nonplused”. I’d still like to get the adultery thing repealed though. Although I am not sure what good it would do, my wife likely wouldn’t observe “thou shalt not kill”. She doesn’t believe in Dog.

#51 saskatoon on 10.24.18 at 7:29 pm

hmmm…

as SHTF…

will the FED bail out CANADIAN banks…

yet again?

#52 SoggyShorts on 10.24.18 at 7:30 pm

Remember this?

#43 Burlington Shyster on 10.19.18 at 8:11 pm
Everyone notice how there was no mention here of the huge deflationary number that came out today? Bye bye rate hikes


The odds of a hike next week are now 100%. Stick to being a realtor. – Garth

#53 FOUR FINGERS WATSON on 10.24.18 at 7:35 pm

#42 AB Boxster
However, this basket of large dividend payers now has a combined annual dividend of 6.7 %.
Is it time to buy or is it time to wait for further pain. If they were US stocks, maybe good entry point.
………………………………….

I have a similar portfolio of buy and hold forever dividend paying TSX blue chips. I always buy the dips. I am buying more in November. I don’t give a fig about the share price fluctuations, that will ebb and flow over the long term. I always drip the divvy cuz i don’t need the cash. Without checking the portfolio averages about 10-12 % a year and i sleep well at night.

#54 M.Gandhi on 10.24.18 at 7:39 pm

199 Linda on 10.24.18 at 12:59 pm
” Given how you edited my quote, I have doubts that the quotes you attributed to John Kenneth Galbraith were exactly what he said. Certainly when I went searching for the quote none of the JKG quotes i found on poverty matched the words you cited in your reply.”

Let your doubts be allayed Linda! Here is the great Galbraith with his comments on minimum wages. He makes them in a conversation with William Buckley. Still have to find the poor have been defeated quote…

https://www.youtube.com/watch?v=vchsMpuf90g

#55 Nineteen84 on 10.24.18 at 7:40 pm

I see many are complaining today in the blog about their p/f returns and recent market action.
You’re in a Giant Poker game people and if you think that everyone wins, well, you’ve got another thing coming.
Just as in Poker, only a few win; some manage to break-even; but the majority lose. Of course, the losers have to continue believing that eventually they’ll be winners.

The obvious question is: “how to play and be a winner”.

I’m still trying to figure it out…and if I do, I’ll tell the world (not). Actually, even if I do, most won’t believe it anyway! Just like when I suggested that people should sell their house and rent, a couple of years ago. I was the ‘crazy’ one then – but it would appear that I’m slowly becoming a… ‘genious’.
{This blog helped!}

1984

#56 M. Gandhi on 10.24.18 at 7:48 pm

Linda on 10.24.18 at 12:59 pm
” Given how you edited my quote, I have doubts that the quotes you attributed to John Kenneth Galbraith were exactly what he said. Certainly when I went searching for the quote none of the JKG quotes i found on poverty matched the words you cited in your reply.”

Galbraith quote starting at at 6:09 of the Utube video I posted in my last comment:

“Minimum wage has the effect of a trade union, protecting people who are the weakest in their bargaining power, who are the most vulnerable to the system”

#57 J. Canuck on 10.24.18 at 7:59 pm

#45 Nonplused
Somehow they figured this out 2700 years ago, but we haven’t.
****************************
While your people were reading the bible and killing those that disagreed with them, others spent time inventing stuff and making life better. 2700 years ago, pretty much the ONLY thing you could covet was your neighbour’s ass. And we know that’s a bad thing to do.

#58 D C on 10.24.18 at 7:59 pm

crossbordershopper on 10.24.18 at 5:32 pm

like how hard is it to build a pipeline, a few natives and a few moose need to get out of the way, Trump wouldnt have a problem.

I know it’s a old person thing, but sentences start with capitals…

Your attitude/outlook is awful. Someday (I hope soon) people will wake up and it will going to be de rigueur to respect both indigenous people *and* the environment. People thinking like you will be like drunk drivers.

#59 For those about to flop... on 10.24.18 at 8:16 pm

Race to a million.

Gonna go back to my roots of starting this project and do a couple of houses not far from where I live.

These guys are learning on the job that this market is not like the old market.

Already one of the cheapest options on the market,this ugly duckling on a busy route is getting with the program and anything over a million will be a bonus.

They started off at 1.15,then tried 1.12 now 1.09.

So it’s baby steps and small reductions, but it is telling that they don’t think they can get someone to the table and get them up a few grand to their desired number.

Assessment comes in at 1.26

While they dilly-dally, unless the are getting proper updates from their licensed professional they probably don’t know that their token reductions are less than the market is shedding as a whole.

Who you gonna call?

Flopbusters…

M44BC

https://www.zolo.ca/vancouver-real-estate/1948-east-33rd-avenue

#60 Reximus on 10.24.18 at 8:18 pm

Money is still very cheap

#61 Hugh Jassel on 10.24.18 at 8:20 pm

Garth,
Respectfully your enthusiasm in the US economy is misplaced. Not sure why you don’t recognize how levered up the US Gov, Consumers and corporations are on the ZIRP the US has had for 7+ years.
You claim its priced in but its also based on growth assumptions that are simply not going to materialize

The US is a big fat ugly bubble and it’s already popped….the mainstream simply doesn’t understand it yet.

Great blog, read it daily.

#62 Give me RE, or death on 10.24.18 at 8:27 pm

Poloz says. Yeah. Yeah. Carney also said rates would rise. Adnaseum. Methinks this is just more BS.

#63 Leo Trollstoy on 10.24.18 at 8:31 pm

#2 The Real Mark on 10.23.18 at 5:12 pm
Maybe the BoC won’t go for a rate cut, but a rate hike, seriously?? It looks like the financial media has been seriously trolled by Poloz if they actually believe that nonsense.

Does it feel weird to be wrong all the time?

#64 Tony on 10.24.18 at 8:32 pm

Dark clouds on the real estate market. Tear down and rebuild just went up for sale.
https://www.zolo.ca/markham-real-estate/52-wootten-way-north

#65 Wrk.dover on 10.24.18 at 8:35 pm

#214 Ubul on 10.24.18 at 4:00 pm
202 Wrk.dover

Are you using this brand, or something else?
https://shop.latitude51solar.ca/evacuated-tube-solar-collectors-p/tz-58-1800-30r.htm

————————————

Same Chinese product, different player.

Great for pool.

#66 Linda on 10.24.18 at 8:39 pm

#54/56 – M. Gandhi: Thank you for providing the link, I enjoyed watching it. I did note that nowhere in the interview did Mr. Galbraith say ‘the war on the poor has been won’. The trade union/minimum wage comment quote was made, but since that was not the quote I asked proof of it has no relevance, other than in proving that Mr. Galbraith felt that society would be improved by raising the minimum wage.

#67 For those about to flop... on 10.24.18 at 8:42 pm

Pink Pumpkins being carved in Vancouver.

Back in the second half of 2016 I started to notice that the market wasn’t digesting what it had eaten earlier in the year and started following a few houses to see if my intuition that things had hit a hump were correct.

This was one of the houses a few blocks from where I live.

Granted at the time things were pretty nutso, but there was much nicer options available but all along the plan seemed be to just flip it to a developer.

The photo used in the listing is probably three years old,the house has not maintained a was borderline decrepit at the time of sale.

The gables of the house are now totally rotten,the rest is held together by paint,caulk,duct tape and dreams that they get all their money back.

Similar type houses are going for around a million but the assessment is a lofty 1.46.

We’ll see what wins,greed or gravity…

M44BC

765 e 39th Vancouver

April 2016 1.24

Assessment 1.46

https://www.zolo.ca/vancouver-real-estate/765-east-39th-avenue

#68 Where's The Money Greedeau? on 10.24.18 at 8:42 pm

Re: #206 IHCTD9 on 10.24.18 at 2:05 pm
#196 X on 10.24.18 at 12:32 pm
Instead of the carbon tax getting us at the pumps, why doesn’t gov’t mandate auto manufacturers to have to achieve a certain mileage to sell an auto in Canada?
And:
“The carbon tax is not about cleaning up the air, it’s about revenues.”
++++++++++++
I agree, read on about Martin Strong, Canada’s greatest gift to the NWO:
Jesse Ventura Global Warming FRAUD Maurice Strong Carbon Dioxide Tax Cap and Trade System NWO:
https://www.youtube.com/watch?v=tMkqozFqT0g

https://usefulstooges.com/2015/12/22/maurice-strong-and-world-governance/

https://quadrant.org.au/opinion/doomed-planet/2015/12/discovering-maurice-strong/

https://uncensored.co.nz/2010/02/01/the-yellow-brick-road-to-climate-change/

#69 georgist on 10.24.18 at 8:43 pm

FED decides, BoC follow:

https://www.ratespy.com/wp-content/uploads/2017/03/Fed-vs-BOC-overnight-target.png

It’s been that way for a long time.

#70 jojo on 10.24.18 at 8:53 pm

Martin Armstrong points out that it is not interest rate fears

Its the US election and the threat that the DEMS will take the House ot Senate.

The threat to wealthy peoples wealth and investments intheir busiensses would in danger with a DEM victory int he midterms.

Watch the Dow that is International money. The US investment climate is at risk thus big money has taken money off the table.

You sound as looney as he is. – Garth

#71 Damifino on 10.24.18 at 8:54 pm

#58 D C

Your attitude/outlook is awful. Someday (I hope soon) people will wake up and it will going to be de rigueur to respect both indigenous people *and* the environment.
———————————-

I’ll grant you that crossbordershopper’s comments are crude and Trumpish, but there’s a grain of truth within. There’s plenty of First Nations who’d love to get cracking on that pipeline ASAP.

They see (correctly) that it offers great potential for their communities to work at challenging jobs for good wages and help pull them out of poverty while lessening their dependence on spotty handouts from Ottawa.

I trust they can do that while maintaining ‘respect for the environment’. They should get the chance.

Unfortunately, they must confront the same pushback from within their own communities as pipeline builders dealing with American funded eco-warriors.

#72 Deplorable Dude on 10.24.18 at 8:54 pm

#53 Four Fingers Watson….”I have a similar portfolio of buy and hold forever dividend paying TSX blue chips. I don’t give a fig about the share price fluctuations, that will ebb and flow over the long term.”

Ditto….my dividend payouts (i.e. income) are up 6.7% Ytd. 12 of my 15 holdings have increased dividends this years.

#73 God on 10.24.18 at 8:55 pm

#57 J. Canuck on 10.24.18 at 7:59 pm
#45 Nonplused
Somehow they figured this out 2700 years ago, but we haven’t.
****************************
“While your people were reading the bible and killing those that disagreed with them, others spent time inventing stuff and making life better. 2700 years ago, pretty much the ONLY thing you could covet was your neighbour’s ass. And we know that’s a bad thing to do.”

Much confusion has arisen these past 2700 years over my commandment to not covet thy neighbour’s ass. To be clear and to set the record straight, it has a double meaning. You cannot covet your neighour’s donkey (ass) nor your neighbour’s sexy wife’s a$$. Is it clear now mortals?

#74 conan on 10.24.18 at 8:56 pm

Pretty soon it will be time to talk about the USA Mid Terms.

I expect a big Blue wave. Followed by a Democratic President in the White House two years later.

#75 M. Gandhi on 10.24.18 at 9:02 pm

66 Linda on 10.24.18 at 8:39 pm
“#54/56 – M. Gandhi: Thank you for providing the link, I enjoyed watching it. I did note that nowhere in the interview did Mr. Galbraith say ‘the war on the poor has been won’. The trade union/minimum wage comment quote was made, but since that was not the quote I asked proof of it has no relevance, other than in proving that Mr. Galbraith felt that society would be improved by raising the minimum wage.”

You are welcome. I stated in my post that I had not yet found the poor have been defeated quote. I made mention of two Galbraith quotes and have produced one for you and the other will come. You stated you couldn’t find any of my (2) Galbraith quotes. You now have been given one.

#76 ll on 10.24.18 at 9:02 pm

Now that lots of people are having a rope around the neck…interest rates are rising!

The rope is not tight enough to kill them..they can still breath..a little!

#77 re.,#63 Leo Trollstoy on 10.24.18 at 9:07 pm

wrong all the time? you mocking Mark?

how is your call on US equities doing? rough day today, get ’em tomorrow

#78 Ace Goodheart on 10.24.18 at 9:09 pm

It was the best of times, it was the worst of times…..

Nawww, it’s just the best of times.

Time to back up the truck. Equities on fire sale.

I love market corrections. Correct long and deep, please!

#79 Nonplused on 10.24.18 at 9:10 pm

#57 J. Canuck

“My” people never killed anyone, although I note a fair amount of killing is still going on. That was a reprehensible insult. If I knew where you were we would be in a fist fight.

#73 God

Thank you for weighing in on things. Dog is so often silent when we could use his guidance. PS I am a religiously dyslexic, and moderately insane. I believe my dog is Dog, creator of the universe and just laying low and observing things while catching a nap. Christ, of course, was Dog incarnate, but who knows where else he’s shown up over the years.

#80 Bdwy sktn on 10.24.18 at 9:35 pm

31 KS on 10.24.18 at 6:22 pm

Heard a great story on the CBC this morning, featuring a young man with a $50K student loan moaning about affordability of rising interest rates to service his life.
He seemed particularly concerned about his new car payments… *new* car payments. As if there was nothing odd about that.
……… heard that too and thought the same thing.
Even worse was the idiot woman who after losing her job, being broke and living off credit cards and loc yet kept on with the 200$ concert tkts and lunches at top downtown restaurants. It’s a warm feeling to hear her moan about never being able to retire. Perhaps she can wash my boat for cash when she is 70.

…….
And penny – yep. Ouch. Still is only 1/3 the loss of everyone else!
I did have a big chunk of new cash that is yet to be deployed. Thank dog.
Sorry for your 70k hit.
Msft tsla Ford and others beat after close so tomorrow may be green.

So…. dow19k or up from here??????

#81 Smoking Man on 10.24.18 at 9:36 pm

jojo on 10.24.18 at 8:53 pm
Martin Armstrong points out that it is not interest rate fears

Its the US election and the threat that the DEMS will take the House ot Senate.

The threat to wealthy peoples wealth and investments intheir busiensses would in danger with a DEM victory int he midterms.

Watch the Dow that is International money. The US investment climate is at risk thus big money has taken money off the table.

You sound as looney as he is. – Garth
…….
Pounce the market a day before the midde terms. My sorces tell me the the pipe bombs are not operational. Very likely they were sent by democratic operatives to fire up the base before the midterm. Once this becomes public knollage. Yuuge back fire.

Trump will get a super majority in the house and Senate, stock markets too the moon. TSYs will get crushed.

Dr Smoking Man
PhD Herdonomics
Read the herd own the market.

#82 D C on 10.24.18 at 9:40 pm

@Damifino on 10.24.18 at 8:54 pm
There’s plenty of First Nations who’d love to get cracking on that pipeline ASAP.

Yes, it’s a creative idea to give them the say… and the ‘stake’. This issue has also been helpful to teach Canadians that FNs are not a homogeneous group.

Also happen to think we need to think beyond pipelines for a fighting chance at a future.

Mainly didn’t like comment about ‘getting native’s out of the way’.

#83 crowdedelevatorfartz on 10.24.18 at 9:40 pm

@#60 Reximus
“Money is still very cheap”
++++

Ladies and Gentlemen.
True words never spoken.

#84 Where's The Money Greedeau? on 10.24.18 at 9:41 pm

Well well well, what have we got here….
https://www.thewhig.com/news/politics/ottawas-estimate-of-how-much-canadas-carbon-prices-will-cut-emissions-just-dropped-dramatically-because-of-california/wcm/89194892-1726-447f-bce8-547ae5293096
Here’s the kicker!:
“Ontario businesses depended heavily on carbon credits from California to meet the province’s stringent emissions cap. A 2016 report from the province’s auditor general calculated that 80 per cent of the emissions reductions required to meet Ontario’s 2020 target would actually take place outside the province — in Quebec and California. The report raised concerns that “funds may be leaving the Ontario economy for no purpose other than to help the government claim it has met a target.”
Just proof to the pudding that it’s all a sham……

#85 Deplorable Dude on 10.24.18 at 9:41 pm

#74 Conan..”I expect a big Blue wave. Followed by a Democratic President in the White House two years later.”

‘And Clinton has a 98% chance of being President’……

MSN pollsters only have one priority…to influence voting….they massively oversample Dem voters.

All the pollsters I’m watching who correctly called the 2016 election are watching the ongoing mail-in votes for the mid-terms, great indicators of actually voting patterns.

Results so far…it’s more like a ‘Blue Drip’……Dems are in big trouble, they typically mass vote with mail-in votes, and the Republicans vote on the day.

Results across the board are showing bigger # of mail-in registered Republican votes than Dems…..Dems are getting crushed.

I’m seeing predictions for close to 60 Senate seats, and holding the House as well as flipping a few seats.

#86 J. Canuck on 10.24.18 at 9:41 pm

9 Nonplused on 10.24.18 at 9:10 pm

#57 J. Canuck

“My” people never killed anyone, although I note a fair amount of killing is still going on. That was a reprehensible insult. If I knew where you were we would be in a fist fight.
********************
So you wouldn’t kill me, but you would beat me up. Well, I guess that’s an improvement.

#87 For those about to flop... on 10.24.18 at 9:52 pm

Pink Pumpkins being carved in Vancouver.

This condo just took 50k off and is only a borderline pumpkin at this stage, but people are being hungry, hungry hippos for information on attached properties and so I will put this one on the record and see what becomes of it.

Picked up for 976k in June 2017,after starting off at 1.15 in May of this year, two reductions later sees them at 1.06

Assessment only comes in at 948k

Maybe someone else already got all the marbles…

M44BC

1705-1050 Smithe st,Vancouver. Paid 976 June 2017 ass 948k

https://www.zolo.ca/vancouver-real-estate/1050-smithe-street/1705

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

Feel free to make a donation.

Flop For Fox Fund…

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

#88 AACI Homedog on 10.24.18 at 9:54 pm

Stock prices may be down, but dividends keep rolling in. Lots of whining today.

#89 Nonplused on 10.24.18 at 10:03 pm

#86 J. Canuck

Ya well that’s what happens when decorum breaks down and you start leveling intolerable insults.

#90 ANON on 10.24.18 at 10:10 pm

BigD is in da’ house.

.

#91 Damifino on 10.24.18 at 10:12 pm

#82 D C

Mainly didn’t like comment about ‘getting native’s out of the way’.
——————————–

I agree. It was a stupid comment and you were correct to call it out.

#92 Canis on 10.24.18 at 10:18 pm

Is this real estate/finance blog really the place for “false flag” claims like #81?

You must be new here. He’s nuts. We keep him chained behind the garage. – Garth

#93 geomanzer on 10.24.18 at 10:18 pm

Garth

Seems geographical diversification is harder and harder to achieve these days. For example, when US markets fall, Japan falls, emerging markets fall etcetc. How to achieve geographical diversification these days?

#94 Doug in London on 10.24.18 at 10:21 pm

I don’t believe a word of this talk of interest rates going up. Why? Here are some words of wisdom on that subject I’ve seen here on this blog:

Nothing is going to happen to RE in Canada. Its up and up on year by year basis. No Interest rate hike, no B-20 can cause it to soft land let alone hard crash.

Interest rates are going down and once people say they will go up and up, they are wrong for 30 years now and counting. June 5/17

Talking about interest rates, they keep falling as the 5, 10 and 30 year Canada yields are now 0.93%, 1.4%, 2.01%.

If interest rates don’t climb then debt can be easily serviced so no falling prices, and interest rates aren’t going to climb meaningfully anytime soon, simple as that really !

Garth Sir, I apologize and again agree to disagree, but interest rates will not rise in near for seen future, at least next 15 years, for multiple reasons.
A) Govt will not want to be blamed and neither will want to lose on taxes.
B) For past 30 years, interest rates are in declining trajectory.
C) Canada will have a negative interest rate model adopted after next 5 years, and that will be kind of tax the rich.

No interest rate increase in Canada, real estate will continue rising

Do you get it now? Interest rates will never go up.

#95 Jacob Bob Marley on 10.24.18 at 10:23 pm

#25 Shawn on 10.24.18 at 6:06 pm

The TSX closed at the same level it was at 10 years ago. Emerging markets and international equities closed at levels they were at 12 years ago. Bonds are also in free fall. No one wins here.

Have a beer. – Garth”

Garth, he may need something a it stronger. He should go get dreadlock extensions and have a toke, then Every Little Thing Gonna Be Alright…..

#96 crowdedelevatorfartz on 10.24.18 at 10:27 pm

@#61 Hugh Jassel

Yes….yes you are.

#97 Doghouse Dweller on 10.24.18 at 10:35 pm

#79 Nonplused
Great insight !
Well and good, but the Laurentian Elites and their clergy in the province of empty churches and taxes upon taxes, have ordained that it is OK to steal, if you promise to give it back and have a valid excuse like saving the planet . You never have to actually give it back, just a promise will suffice.

So are there any commandments for money changers like Poloz and their newly minted debt slaves ?

#98 akashic record on 10.24.18 at 10:44 pm

Calm down kids.

It’s only money.
No one takes any to the other bank of river.

Ate Wakan Tanka, wey oh welo hey.

https://www.youtube.com/watch?v=m6fdVYgWXc0

#99 Doug in London on 10.24.18 at 11:40 pm

With all this doom and gloom, you should look on the bright side. There are some good bargains out there in stocks and ETFs now. Black Friday came one month early, or Boxing Day came two months early this year. Now the punch line, you don’t have to stand outside a store in the cold before opening time to scoop up those bargains!

#100 Bottoms_Up on 10.25.18 at 12:00 am

Be greedy when others are…

#101 Brother Nonplused on 10.25.18 at 12:07 am

#97 Doghouse Dweller

Well in the top ten there is “thou shalt not bear false witness against thy neighbor” so I guess that could be expanded to include all lying, so the banks are going strait to hell, no doubt about it. Realturds too.

But remember there are about 630 commandments in the bible, not just ten. Usury is not allowed, so any lending of money at interest is pretty much like eating the apple yourself, (you can lend at an interest in the harvests or other profits but not at a fixed %, more of an investment really), deceit is out, and don’t forget Jesus threw the “money changers” out of the temple.

Anyone who works for MasterCard or Visa should wear flame retardant clothing to work.

Anyone who deals in bonds and mortgages should also check their fire insurance policy to see if it covers the here-after.

Biblical lending is about an interest in the profits, not about bankrupting the borrower.

When Jesus said “It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of Dog”, I think he was being pretty clear on what’s going to happen to the bankers when they cash their final check. They have money to burn, but unfortunately they will be right on top of the pile.

You can, in actuality, put a camel through the eye of a needle. But you need a hell of a blender.

#102 Smoking Man on 10.25.18 at 12:20 am

Canis on 10.24.18 at 10:18 pm
Is this real estate/finance blog really the place for “false flag” claims like #81?

You must be new here. He’s nuts. We keep him chained behind the garage. – Garth
…….
WOOF! WOOF! WOOF!

We will see how nuts I am Nov 6… Only reason stocks are tanking right now is the fear of a democratic house.

Not going to happen, this is the buying opportunity of the century….

Long on anything…..except bonds and Toronto Real Estate.

False Flag? I’m giving you the insighting incident that will propel the stock market out of our solar system.

Did you just want me to say. Stock Market will go ballistic because I said so without context. Now that would be nuts.

Welcome to dog land newbie.

#103 k on 10.25.18 at 12:23 am

Re #94 Doug in London Do you live in a cave ? Do you not understand there are credit cycles ? Interest rates are going up. This has nothing to do with the government. The bond market controls this. As undiplomatic as this may sound….you may want to rethink how smart you think you are . Simply said you are an idiot . Hope you feel good about yourself in other ways. Knitting maybe ?

#104 Deplorable Dude on 10.25.18 at 12:32 am

I would also suggest this current sell off is the market betting the Dems will take control of the House/Senate and kill all of Trumps MAGA business initatives.

They are relying on the same biased msn polling that got it so disastrously wrong in 2016.

Expect a huge market rally on the 7th Nov :-)

#105 Gravy Train on 10.25.18 at 12:32 am

#42 AB Boxster on 10.24.18 at 6:57 pm
“[…] While Canada […] can only create mcjobs or government positions[…].” Between Sept. 2017 and Sept. 2018, the increase in private sector jobs was 146,500—most notably in educational services (56,000), transportation and housing (37,500), and construction (33,700)—while the increase in public sector jobs was 78,800. “Compared with September 2017, employment was up 222,000 or 1.2%, entirely the result of gains in full-time work (+224,000).”
https://www150.statcan.gc.ca/n1/daily-quotidien/181005/dq181005a-eng.htm
https://www150.statcan.gc.ca/n1/daily-quotidien/181005/t002a-eng.htm

“And while, in normal times, high interest rates may be a sign of a strong economy, I suspect that for Canada this is not the case.” Canada’s unemployment rate of 5.9% is the lowest it’s been in over 40 years.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1410028703
http://www.stats.gov.nl.ca/statistics/labour/pdf/unemprate.pdf

“My theoretical basket of Canadian dividend payers is now down 14% YTD. A haircut of 70k on a 500k portfolio. These stocks will need to rise 16% to return to 500k. Think the TSx will rise 16% over the remainder of the year?” I have no idea. I don’t think even Buffett knows the direction of markets. So what do you plan to do with your portfolio? Buy, sell or hold? :)

“However, this basket of large dividend payers now has a combined annual dividend of 6.7%. Is it time to buy or is it time to wait for further pain. If they were US stocks, maybe good entry point.” Have you looked at earnings? Oh, sorry—I just remembered—you don’t look at earnings! :)

“But what is there in Canada that would give confidence to buy?[…]” Increased economic activity? :)

“[…] Jobs being created are part time.[…]” Counterfactual.

“Earnings? Has not made much difference so far this year. Markets are discounting earnings and focusing on the rest of the mess in Canada.” Reasoned factual analysis? :)

“There is more pain to come in Canadian markets.” What is there left to say? You just make up your own facts to suit your ideology! Not a sound basis for making investment decisions! :)

#106 Brother Nonplused on 10.25.18 at 12:40 am

Ha! Another brilliant revelation from Dog (I think).

The bible does unfortunately from beginning to end condone slavery, but for citizens it’s limited to 7 years and then you have the “jubilee”. So basically all your debts are paid after jubilee. For citizens only, not so much for conquered people.

Slavery is a great disgrace against the bible and calls the whole work into question. But it gives me an idea…

How is Trump going to deal with the “caravan” and other illegal immigrants? How about 7 years mandatory service in the army with no pay, just rations, and then vola! You are free to go and a citizen. I bet the “caravan” does a 180 right prompt.

It would be “socialism” most fine only you have to do the work first before getting the benefits.

I wouldn’t apply the concept of a “jubilee” to mortgages, after all you have your house, but we are enslaving our students for life right now. All student debt should be forgiven after 7 years. That will put a different factor in the risk models and drastically reduce the amount of unnecessary lending. No, it will not cause students to want to borrow less, indeed they will want to borrow more. Instead what it will do is cause lenders to be much more careful where they put their money. Which we need a whole lot more of anyway. It’s time to stop protecting lenders and make them do their own due diligence. Nobody should be able to get a student loan to study “gender trans-intersectionality”. They ain’t going to pay off the loan, so the loan should not be made.

#107 prairie person on 10.25.18 at 12:45 am

“We haven’t thought that selling would be this steep. This sell-off makes us think the market may be set for capitulation,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. –from The Guardian
I haven’t heard the word capitulation in a long, long time. China has started supporting their market.

#108 eternalpessimist on 10.25.18 at 1:04 am

Nothing ever changes really, the stock market will be fine obviously because all the rich have their money there. If the rich lose their money what are they? Us, but with no coping mechanisms and no skills.

The stockmarket sells us our own death and people can’t wait to buy buy buy.

#109 TheDood on 10.25.18 at 1:13 am

58 D C on 10.24.18 at 7:59 pm
crossbordershopper on 10.24.18 at 5:32 pm

like how hard is it to build a pipeline, a few natives and a few moose need to get out of the way, Trump wouldnt have a problem.

I know it’s a old person thing, but sentences start with capitals…

Your attitude/outlook is awful. Someday (I hope soon) people will wake up and it will going to be de rigueur to respect both indigenous people *and* the environment. People thinking like you will be like drunk drivers.
_——————-

Actually, he’s not wrong. You are.
I mean, how hard is it (really) to build a pipeline? Roll in the tanks and build it. Simple. Except we don’t have that kind of leadership here in Canada. We have weak kneed wimps for leaders. While we sit and study, and discuss, and consult, our energy resources sit and collect dust, and our country’s energy industry dies and outside investment into our crappy economy goes elsewhere. Good strategy!

#110 Mrs Hubris on 10.25.18 at 1:16 am

Planet/ReMax, Mars

Where there’s a will there’s an inheritance but you need a body first. Most boomer parents are still alive, you schmucks. Bwahaaah…. aahaaa….haaaah – millenials buying 1-2 million dollar luxury condos. Time you came back to earth.

#111 Newguy on 10.25.18 at 1:18 am

Why is crude at $20 per barrel?

We are losing 100 million per day on our oil

https://www.zerohedge.com/news/2018-10-24/why-canadian-crude-selling-20

#112 MaxBerniersShorts on 10.25.18 at 1:24 am

#84 Smoking Man
Thanks for living down to your reputation as a right wing loon who will fall for ridiculous conspiracy theories.

#113 yorkville renter on 10.25.18 at 1:58 am

#15but it would appear that I’m slowly becoming a… ‘genious’.

That’s comedy gold.

#114 NoName on 10.25.18 at 2:07 am

Interesting read

https://www.bloomberg.com/view/articles/2018-10-18/elizabeth-warren-dna-response-shows-failure-of-liberalism

#115 Steve French on 10.25.18 at 3:23 am

more fake news from Liberals, eh Smoking Man?

Steve-O

—–

https://www.splcenter.org/hatewatch/2018/09/12/study-shows-two-thirds-us-terrorism-tied-right-wing-extremists?fbclid=IwAR1TfL4KOp7ZcKE24-uB6mQkgUfHLcnc_pSj-Q3ywslk0NRvfMXPZclrok8

A new terrorism database analysis shows almost two-thirds of the terror attacks in the United States last year were carried out by right-wing extremists.

Researchers and journalists for the news site Quartz said they used data compiled by the Global Terrorism Database that has tabulated terrorist events around the world since 1970. The database is supported by the National Consortium for the Study of Terrorism and Responses to Terrorism (START), affiliated with the University of Maryland.

“A Quartz analysis of the database shows that almost two-thirds of terror attacks in the (United States) last year were tied to racist, anti-Muslim, homophobic, anti-Semitic, fascist, anti-government, or xenophobic motivations,” its posting says.

#116 Canis on 10.25.18 at 3:25 am

Is this real estate/finance blog really the place for “false flag” claims like #81?

You must be new here. He’s nuts. We keep him chained behind the garage. – Garth

I’m not new. I just don’t think it’s so harmless today. I doubt I’m alone.

#117 Brian1 on 10.25.18 at 3:58 am

JoJo; Why the rush to judgement? How do you know it was a Republican nut. The Democrats have been desperate for a long time. The mainstream media have taken their opportunity to unfairly pounce on Trump. The Republican early turnout on voting has been high. The bomb threat was very organised. Smoking Man was right that the bombs were ineffective. All possibly designed to be investigated well after the midterms, this event gives a convenient lift to the Democrats.

#118 Howard on 10.25.18 at 4:06 am

#47 crowdedelevatorfartz on 10.24.18 at 7:18 pm

@#35 Howard
“So what’s the story on Tesla?
Did they cook the books or what?
++++++

Nah, just never turned a profit and now Elon’s smokin dope……

Wait for the doo doo to hit the fan with Netflix….

———————————————-

I’m referring to TSLA’s blowout earnings report yesterday evening. Go look at its share price after hours. It is apparently now profitable.

I’m skeptical. This is a stock to avoid as a long or a short. Too unpredictable.

#119 Linda on 10.25.18 at 5:23 am

M. Ghandi: you refer to your paraphrase of what JKG said regarding minimum wage having the effect of a trade union in your earlier post. Fair enough, although I am not sure whether his actual quote would be considered the same as the words you used. It will be interesting to learn what JKG may have actually said regarding ‘the war on the poor’. When I watched the Firing Line interview I was struck by how JKG & his debating host used language. Both sought to get the opposite party to state a definitive point; both used language in a way that implied a stance more than committed to a stance. I got the impression that the party that did commit would have been deemed to have lost the debate. I’d say it ended in a draw.

#120 NoName on 10.25.18 at 5:47 am

Soon after i finished reading an article, link below, how is pc hurting liberals, my mind started to wonder, to esl classes that I took years ago, and one of my jobs interview.

esl
During a some of those classes teache told us to make a few sentence about something that we have on our person. Mostly boring sentences, i have keys, i have wallet, i have umbrella, this guy is moron – dude besides me describing me…
Boring sentances, until guy few tables over decided to add an adjective to his sentance, and he sad, i have small pencil, on what teacher replayed, thats nice dear, i would really like to see how small your pancil is. That’s what she said.

job
I am very nervous, svetting bullits, so interviever said, don’t worry noone here is trying to trick you and make you fail. I am only one with scrudriver in this this room, and of course my mouth whent before my brain clicked in, and i sad, i wouldn’t be so sure about that, i have screwdriver to. By the time sentance was done brain clicked in, i looked around to reaction of “panel” and from acros a room i could see lady from hr lifting her head that was burrid in papervork, and giving me candind smile. Every so often when hr lady would give me same candid smile. That was easy.

Now read this
https://www.bloomberg.com/view/articles/2018-10-18/elizabeth-warren-dna-response-shows-failure-of-liberalism

#121 NoName on 10.25.18 at 6:18 am

#118 Howard on 10.25.18 at 4:06 am

Dude, tesla sheres went from high 300, down to 250, any eps at this level will good. Remember em making fun of short sellers six months ago, if you don’t i do. It was funny how short sellers are up 500m since em mak them.

https://www.marketwatch.com/story/tesla-short-sellers-are-up-500-million-after-elon-musks-tweets-attacking-them-2018-10-05

#122 BillyBob on 10.25.18 at 6:20 am

#46 Bob Dog on 10.24.18 at 7:14 pm
Get your doggie calendars.

http://dailyhive.com/vancouver/vancouver-police-dog-calendar-2019

Seriously, 2 million to live in Victoria? In a concrete box? That city is a human cesspool on an island far from civilization.

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

2 mil for a place in Victoria = absurd. Agreed. It’s an economy seemingly based on useless civil servants and street kids with dogs wearing bandanas.

But if you think VICTORIA is a “cesspool”, I’m eager to hear what you think of…um…pretty much every other city in Canada.

LOL

#123 Wrk.dover on 10.25.18 at 6:25 am

So, yesterday I triumphantly boast of saving a hundred a month on hot water, then Penny Henny points out that hot water costs $5.00 a month in Alberta with gas.

What a country!

Big oil found gas off the shore of NS, brought it ashore, and piped it to Boston, while Halifax heats with Venezuelan oil. The oil also is burned to makes 17 cent / kw hr electricity!

Now that mould free weed is available to all, how about a national energy policy next?

#124 BillyBob on 10.25.18 at 6:31 am

#151 Stan Brooks on 10.24.18 at 7:46 am
#143 BillyBob on 10.24.18 at 4:09 am

Of course you are joking.

London is expensive as it is one of the 2 major world financial hubs with New York being the other.

You can buy a nice house in Leicester for 300 k. Manchester is working class city, much cheaper than Toronto. United tickets are 1/3 of leafs/raptors tickets.

There are at least 20 world other class cities before Toronto and Vancouver in the list.

Besides it/London has excellent public transport. Of course you are joking about driving in London as well, it is a compact city and driving is frankly not recommended.

UK is 60 millions on 2% of Canada’s territory.

People in UK have actually pensions, the pension system is very different, much better than CPP and very close to defined benefit pensions plan.

If you believe that Toronto or Vancouver can or will compare with London in the next 100 years, you are insane.

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

Uh…not sure what you’re on about there Stanley. My only point was that Canadians or Americans moaning about gasoline prices have no idea what high prices are.

And thanks for attempting to Stansplain it to me, but FWIW, I LIVE in London, I don’t just read about it on Wikipedia. If I thought Toronto of Vancouver could remotely compare in opportunity I guess I’d probably live there instead of here? You’re quite the champ, arguing with the few who agree with you lol! But there’s a reason housing in places like Derby is cheap, just like it’s cheaper to buy in Weyburn than Victoria. What was your point again?

I do note you conveniently gloss over the fact that London’s banking sector is under heavy pressure due to Brexit with many firms considering, or actually pulling out and relocating to Frankfurt, etc. Might be interesting to see where it ranks as “The City” after next March, hmm?

But, still enjoy your dilettante rants.

#125 Ace Goodheart on 10.25.18 at 7:04 am

RE: #108 eternalpessimist on 10.25.18 at 1:04 am

“The stockmarket sells us our own death and people can’t wait to buy buy buy.”

The stock market is an odd bird. It doesn’t behave like people think it will.

When you get a monetary stimulus period following a recession, the stock market almost always bloats up, because people are buying stocks to “get rich” and they are borrowing to do it. They do this because they are bored, underemployed, they are feeling financially underwhelmed, and they have dreams of big payouts in their eyes. This situation is perpetuated by markets seeming to go up and up, which of course they will, if everyone is buying stocks.

End the stimulus, have the economy ramp up, start back with inflation, full employment, busy people making money where they work, and you usually get a pull back in equities. This of course is weird and makes no sense. The companies involved are doing well, earnings are high, everyone is buying again, and these companies should be going up in value, not down.

But people are selling their stocks. Why? Because they are making money again. They want consumer goods, they want to pay down debt, they want to own their stuff. And they are feeling interest rate pressure. They sell stock to pay down mortgages and lines of credit.

On the other side of things, capital costs more, so companies which are doing very well, end up with higher interest rate costs and they have to pay higher dividends, particularly on their preferred shares.

So when the economy is booming, stocks usually go down in price. They stay down until the next recession, then they start going up again.

When you get a prolonged market down turn, that is when you buy stocks. As many as you can. You don’t worry about losing money (because you will, in the short term, it is impossible to time a market). You find solid, well run companies that are incorrectly valued, and you back up the truck. I often lose 100K or more during my boom time buying sprees, purchasing companies whose values are going down, despite being at full tilt, selling everything they can make, and being very profitable.

I just keep buying until the prices start going up again, then I stop.

Equities are a weird bird that way. They don’t make sense unless you really think about them.

But the advice for buying them is always, do not buy when they are rising in value, only buy when they are on a prolonged downturn.

#126 Victor V on 10.25.18 at 7:32 am

Expert advice on how to stop ‘using our houses like ATM machines’

https://www.cbc.ca/radio/thecurrent/the-current-for-october-24-2018-1.4875872/expert-advice-on-how-to-stop-using-our-houses-like-atm-machines-1.4875874

The latest rate hike is bound to affect Canadians with mortgages, car payments and other debt. By the end of last year, Canadian households owed just over $2 trillion, with mortgages accounting for almost three-quarters of this debt.

For Helen Van Dongen of Mississauga, Ont., not knowing if she could make her next mortgage payment became too daunting. After losing a corporate job five years ago, she had to resort to emptying out her RRSPs and maxing out credit cards to pay her bills.

After many sleepless nights, the event planner decided this spring to dig herself out of her crippling $140,000 debt by selling her condo.

“I have a small cushion — only $25,000 — that remained after I had paid everything off, and my RSPs are gone,” she told The Current’s guest host David Common.

#127 akashic record on 10.25.18 at 7:55 am

#106 Brother Nonplused on 10.25.18 at 12:40 am

I wouldn’t apply the concept of a “jubilee” to mortgages, after all you have your house, but we are enslaving our students for life right now. All student debt should be forgiven after 7 years. That will put a different factor in the risk models and drastically reduce the amount of unnecessary lending. No, it will not cause students to want to borrow less, indeed they will want to borrow more. Instead what it will do is cause lenders to be much more careful where they put their money. Which we need a whole lot more of anyway. It’s time to stop protecting lenders and make them do their own due diligence. Nobody should be able to get a student loan to study “gender trans-intersectionality”. They ain’t going to pay off the loan, so the loan should not be made.

You obviously have no idea how many jobs have been created to research/invent, teach and enforce in all segments of society all the social engineering methods, including your example, which are designed to control and orchestrate votes on election days. Protecting lenders? They are part of the chief-designers.

#128 jack on 10.25.18 at 7:56 am

they’re raising rates because inflation is out of control … period. Their 2% or so a year inflation rate is complete BS – it’s more like 10% for the average middle class consumer.

#129 crowdedelevatorfartz on 10.25.18 at 8:19 am

@#118 Howard
” It is apparently now profitable.”
++++

Sorry but burning through billions of “other people’s money” doesnt equate to me as profit.

https://www.businessinsider.com/musk-says-tesla-is-very-close-to-achieving-profitability-in-email-2018-9

Elon’s a genius and a very good salesman but like the other Tesla….he may die with only a Nikola to his name…..

#130 Ian on 10.25.18 at 8:22 am

It is game over folks.

The US market gains for the year are now erased based on S&P, and bonds keep selling, especially the 30 year due to the Fed balance sheet unwinding and market realising bond prices should be a lot lower. Anyone in a balanced stock / bond strategy is getting murdered, and it will get MUCH worse.

Let’s review how well the US economy is doing:

1) Unsold new homes yesterday hit their highest level since January of 2009.

2) Homebuilder stocks hit new 52 week lows day after day. The housing crisis is repeating. All the same metrics are there.

3) Auto stocks are making 52 week lows each day too. I’ve been talking about the absurdly high auto debt for months now. It’s all coming apart at the seams folks.

4) Bank after bank is staring to hit the fan. Deutsch Bank hit a multi year low. OZK is down 50% and they do commercial loans.

Biggest bubble in history. It’s all coming home to roost.

Emotional extremism. This is a market correction, not the Apocalypse. The US economy is vibrant with unemployment at a 50-year low, robust corporate earnings and solid indicators of continued strength. Chicken Little statements like this only encourage gullible people to panic and sell at a loss. There is a reason most folks are financial basket cases. Your comment provides an excellent example of it. – Garth

#131 crowdedelevatorfartz on 10.25.18 at 8:26 am

@#94 Doug in London
“No interest rate increase in Canada, real estate will continue rising
Do you get it now? Interest rates will never go up….”
++++

Is The Real Mark schizophrenic ?

#132 Stan Brook's Psychiatrist on 10.25.18 at 8:30 am

#128 jack on 10.25.18 at 7:56 am
“they’re raising rates because inflation is out of control … period. Their 2% or so a year inflation rate is complete BS – it’s more like 10% for the average middle class consumer.”

Great, you got Stanley all excited by bringing up inflation. He just finished his monster burrito and is heading over to the keyboard. Be forewarned!

#133 crowdedelevatorfartz on 10.25.18 at 8:32 am

@#109 The Dood
“and our country’s energy industry dies and outside investment into our crappy economy goes elsewhere….”
++++
No no.
Then we sell our energy industry to foreign owners for 100’s of million$$$ and when the protesters STILL wont go away…we buy it back for Billions…..
Your tax $$$ at work in the Land of Butts and potheads.

#134 Smoking Man on 10.25.18 at 8:32 am

Steve French on 10.25.18 at 3:23 am
more fake news from Liberals, eh Smoking Man?

Steve-O

—–

https://www.splcenter.org/hatewatch/2018/09/12/study-shows-two-thirds-us-terrorism-tied-right-wing-extremists?fbclid=IwAR1TfL4KOp7ZcKE24-uB6mQkgUfHLcnc_pSj-Q3ywslk0NRvfMXPZclrok8

A new terrorism database analysis shows almost two-thirds of the terror attacks in the United States last year were carried out by right-wing extremists.

Researchers and journalists for the news site Quartz said they used data compiled by the Global Terrorism Database that has tabulated terrorist events around the world since 1970. The database is supported by the National Consortium for the Study of Terrorism and Responses to Terrorism (START), affiliated with the University of Maryland.

“A Quartz analysis of the database shows that almost two-thirds of terror attacks in the (United States) last year were tied to racist, anti-Muslim, homophobic, anti-Semitic, fascist, anti-government, or xenophobic motivations,” its posting says.
……

You are so gullible. My therom. Too many years in class steveO.
Still love yah dude, in spite of your intellctual short comings.

#135 crowdedelevatorfartz on 10.25.18 at 8:36 am

@#124 BillyBob
“I do note you conveniently gloss over the fact that London’s banking sector is under heavy pressure due to Brexit with many firms considering, or actually pulling out and relocating to Frankfurt, etc. Might be interesting to see where it ranks as “The City” after next March, hmm?
+++++

Shhhhh. Dont tell jane24.

on a side note.
Is England a better tax haven than the rest of the EU to live?
Seems a commercial pilot could live just about anywhere to reduce the tax burden.

#136 dharma bum on 10.25.18 at 8:58 am

#32 finally, a bear market

everyone is heading for the exits on stocks. the collapse is just getting started
——————————————————————–

Perfect time to start buying in.

Corrections are good. They weed out the riffraff.

Like turning on the lights in a filthy kitchen: watch all the cockroaches scramble for cover!

#137 Thanks on 10.25.18 at 9:05 am

Is this real estate/finance blog really the place for “false flag” claims like #81?

You must be new here. He’s nuts. We keep him chained behind the garage. – Garth

Come on Garth, there has to be some way we can pay you for these priceless nuggets!

#138 Steve French on 10.25.18 at 9:09 am

Alright Smoking Man, let’s see whose the real man here.

You, or me.

The delusional American wannabe Trumpista, versus the classic T1/T2 Canadian Liberal.

Line up the bottles. Casino Niagara. July 2019.

Debating the best books ever written by a drunk. A deep dive into the literature on booze and drinking.

Dostoyesky, Lowry, Hemingway, Orwell, Capote, Hunter, Bukowski, Lebowski.

First one to fall off the chair loses.

Let’s get Garth involved.

https://www.theguardian.com/books/2013/jul/28/what-drives-writers-to-drink-echo-spring-extract

#139 Sean on 10.25.18 at 9:20 am

Garth,

In the past you championed Prefereds as being cheap. They were a great buy, they went up and paid a great div.

Is it at time to move away from those as rates rise?

#140 Leo Trollstoy on 10.25.18 at 9:23 am

You guys shoulda bought US apartment buildings in 2009 like Gartho suggested

#141 Andrewt on 10.25.18 at 9:30 am

To lighten the mood

https://www.cbsnews.com/amp/news/gold-digging-dog-pretends-to-be-a-stray-to-get-hamburgers-from-mcdonalds-owner-says/?__twitter_impression=true

#142 Penny Henny on 10.25.18 at 9:48 am

#123 Wrk.dover on 10.25.18 at 6:25 am
So, yesterday I triumphantly boast of saving a hundred a month on hot water, then Penny Henny points out that hot water costs $5.00 a month in Alberta with gas.
////////////////

I simply mentioned that it wouldn’t work for me in Southern Ontario. I was impressed however with what you were able to do with the excess heat generated.
Just goes to show you, it’s a big country and everybody’s situation is not the same.

#143 In Garth We Trust on 10.25.18 at 9:50 am

“Emotional extremism. This is a market correction, not the Apocalypse. The US economy is vibrant with unemployment at a 50-year low, robust corporate earnings and solid indicators of continued strength. Chicken Little statements like this only encourage gullible people to panic and sell at a loss. There is a reason most folks are financial basket cases. Your comment provides an excellent example of it. – Garth”

Slam dunk retort by the fearless mystic financial oracle that runs this pathetic blog!!

#144 For those about to flop... on 10.25.18 at 9:52 am

Recent sale report.

I featured these guys last week in a Race to 850k post.

I have been talking about no support at the bottom of the market and this sale supports it.

The details…

3290 e Georgia st,Vancouver

Originally asking 948k,then 878k

Just sold for 775k

Assessment 1.26

So I should have featured it in a post called Race to 750k instead.

Nearly 40% below assessed value right at the bottom of the market.

This is the first detached going sub 800k but although things are moving fast it will still likely be years before something truly desirable goes for this number in Vancouver proper.

The tracking continues…

M44BC

https://www.zolo.ca/vancouver-real-estate/3280-east-georgia-street

P.S ,thanks Mike for pointing out that it sold,already was in my removed zolo folder.

I can’t keep up…

#145 Tater on 10.25.18 at 9:57 am

#35 Howard on 10.24.18 at 6:28 pm
So what’s the story on Tesla?

Did they cook the books or what?
——————————————————————-
They charge depreciation on a per unit basis. Sales doubled in the Q, and depreciation was flat. Draw your own conclusions.

#146 Smoking Man on 10.25.18 at 10:08 am

138 Steve French on 10.25.18 at 9:09 am
Alright Smoking Man, let’s see who’s the real man here.

You, or me.

The delusional American wannabe Trumpista, versus the classic T1/T2 Canadian Liberal.

Line up the bottles. Casino Niagara. July 2019.

Debating the best books ever written by a drunk. A deep dive into the literature on booze and drinking.

Dostoyesky, Lowry, Hemingway, Orwell, Capote, Hunter, Bukowski, Lebowski.

First one to fall off the chair loses.

Let’s get Garth involved.

https://www.theguardian.com/books/2013/jul/28/what-drives-writers-to-drink-echo-spring-extract
……
No one creates great art eating carrots.

The only way to get to the truth, shit that resonates with people is to clober your bias and fear with a big gulp of my fav, Jack Danials.

It’s magical. You need to disciplined. My drinking and writing time is between 9 pm and midnight. Takes a lot of willpower to stay in that time slot. Vegas trips, well they don’t count. No one in that town will know you’re drunk.

Speaking of Vegas. It’s Halloween, doesn’t get any better than that.
Flamingo pool, it’s the best.

I’ll post some pics on my twitter this week end.

#147 fancy_pants on 10.25.18 at 10:09 am

#128 jack on 10.25.18 at 7:56 am

yes, expect hyperinflation with all these years of suppression.

So much money has been borrowed into existence. In a debt driven economy, debt can never be paid off so the process of people needing to continually go into debt to increase the money supply has to continue perpetually.

All the money in existence is never enough to cover all debt plus interest. We can’t pay it off as it would collapse the ‘money supply’. This means that bankruptcy or ever inherent inflation are real aspects of our monetary system.

#148 Doug in London on 10.25.18 at 10:30 am

@k, post #103;
It’s obvious you don’t have the basic common sense intelligence that I took for granted when I started kindergarten way, way back in September 1966. I was quoting some of the foolish comments I’ve seen here in the last 3 years about interest rates. Hey, I remember the high interest rates back in 1981 and FULLY UNDERSTAND that interest rates, like many other things, go full circle. You think you’re so smart, you should read the first part of my comment again, if you’re up to that level of reading comprehension which I very much doubt. It’s worth noting I could read and comprehend a comment like the one I posted way, way back in June of 1968 when I finished grade 1. YOU should put the knitting down and sign up for grade 1. Well, what are you waiting for?

#149 millmech on 10.25.18 at 10:37 am

#130 Ian
With home builder and auto stocks hitting 52 week lows why are you not buying them. Is this not how wealth is made, buy low sell high?

#150 fancy_pants on 10.25.18 at 10:40 am

DELETED

#151 AB Boxster on 10.25.18 at 10:44 am

Very good review of the state of the Canadian economy and Canada’s rush to raise rates on what is arguably mediocre global and domestic data.
Does the BOC really have a clue?

https://www.bnnbloomberg.ca/rosenberg-floored-by-boc-s-economic-optimism-1.1157698

#152 M. Gandhi on 10.25.18 at 10:50 am

#119 Linda on 10.25.18 at 5:23 am
“M. Ghandi: you refer to your paraphrase of what JKG said regarding minimum wage having the effect of a trade union in your earlier post. Fair enough, although I am not sure whether his actual quote would be considered the same as the words you used. It will be interesting to learn what JKG may have actually said regarding ‘the war on the poor’. When I watched the Firing Line interview I was struck by how JKG & his debating host used language. Both sought to get the opposite party to state a definitive point; both used language in a way that implied a stance more than committed to a stance. I got the impression that the party that did commit would have been deemed to have lost the debate. I’d say it ended in a draw.”

They were both skilled debaters to be sure. As for JKG, he made it clear in the talk with Buckley that minimum wage protects the weakest in society and that it has the effect of a trade union for them because unless the government provides a minimum wage, they are at the complete mercy of the market which can be ruthless. JKG made an excellent point to Buckley when he pressed him on whether he accepted thefact that organized labour has the right to negotiate wages. Buckley danced around the issue knowing that JKG’s point was that if as a society we accept that organized unions have the right to a collective bargain for their wages, why deny the poorest and most vulnerable in society that right. In Canada think of all the unionized government employees who have collectively bargained their wages and benefits. Why should they be entitled to this and not the poorest in society. This was JKG’s point. The poor have been defeated quote is driving me crazy in not being able to locate it! I may have to email JKG’s son who is a professor of economics and ask for help!

#153 AB Boxster on 10.25.18 at 11:06 am

#105 Gravy Train on 10.25.18 at 12:32 am

Hey Gravy Boy..
You’re still and idiot.
Keep posting though.
We love to read your superior intellect.

#154 BillyBob on 10.25.18 at 11:10 am

#135 crowdedelevatorfartz on 10.25.18 at 8:36 am
@#124 BillyBob
“I do note you conveniently gloss over the fact that London’s banking sector is under heavy pressure due to Brexit with many firms considering, or actually pulling out and relocating to Frankfurt, etc. Might be interesting to see where it ranks as “The City” after next March, hmm?
+++++

Shhhhh. Dont tell jane24.

on a side note.
Is England a better tax haven than the rest of the EU to live?
Seems a commercial pilot could live just about anywhere to reduce the tax burden.

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

Body lives in UK. Income deposited to Spain. Savings live in Switzerland.

Fairly typical setup, all legal.

Brexit IS giving me a headache with professional licensing though. In the process of moving my UK license to Ireland (where my accountant lives). No way I’m losing my EASA license just because the UK wants to have their cake and eat it too.

#155 AB Boxster on 10.25.18 at 11:14 am

Hey Gravy Boy

Have a listen to this guy.
I suspect he’s not as smart a you, but at around 2:50 he has some interesting thoughts on earnings.

As i said before earnings are important, but it’s not all about earnings.

But, hey, you focus solely on earnings buddy.

https://www.bnnbloomberg.ca/rosenberg-floored-by-boc-s-economic-optimism-1.1157698

#156 jess on 10.25.18 at 11:17 am

The CumEx Files

How Europe’s taxpayers have been swindled of €55 billion.

https://correctiv.org/en/latest-stories/2018/10/21/cumex-files

The Cooperation
38 reporters, 19 newsrooms, 12 countries. Together, they digged through 180.000 pages of documents. Here, team members share their perspectives on cross-country collaboration. What it means in practice and how they made it happen.

The Story: A group of bankers and lawyers have robbed Europe’s taxpayers of €55 billion. The #CumExFiles is a joint investigation by 19 European media from twelve countries, coordinated by the German non-profit newsroom CORRECTIV.
Read the story
Behind The Scenes
Two reporters pose as billionaires looking for investment opportunities and thereby prove: Europe’s largest tax scam goes on. This is how they prepared for the undercover meeting with an investment banker, brought together journalists from twelve European countries and made an insider talk on camera. Plus: Deep insights into the workings of the cum ex machinery and other perspectives on the cum-ex-complex.

#157 ShawnG in TO on 10.25.18 at 11:21 am

a shoutout to xelan and other RE watchers on twitter

https://twitter.com/xelan_gta/status/1055291654104584197

the dominoes are falling around the edges.
they always start from the edges

#158 Stan Brooks on 10.25.18 at 11:21 am

#124 BillyBob on 10.25.18 at 6:31 am

You stated that Canada is still cheap and it could get more expensive giving as an example UK/London, correct? If I misunderstood, my apologies.

Then I stated that London in particular is expensive and gave the reasons for that. It seems you agree with it as you obviously live there and not moving to cheaper Canada.

Gas price alone is misleading indicator as you compare apples and oranges /places with good and almost no public transportation.

I had no intention of arguing with you, I just stated my view that Canada can not become more expensive as it is already too expensive when compared to income, people here have mostly debt but no money.

Cheers.

#159 Shawn Allen on 10.25.18 at 11:23 am

They’re Richer Than You Thought

New average weekly earnings report out from Statistics Canada this morning:

“Average weekly earnings of non-farm payroll employees were $1,006 in August, up 0.6% from July. Compared with August 2017, earnings rose 2.9%.

Non-farm payroll employees worked an average of 32.8 hours per week in August, unchanged from both the previous month and 12 months earlier.”

So average annual earnings for people on a payroll (excluding farms) are $52,312 (assuming employed all year which some are not).

Average hourly earnings are ($1006/32.8) = $30.70!

A couple with both working all year at average weekly wages total $104,624!

Now this is not really the average for a couple because not all couples have both working all year.

But this is for two people working all year and making the average weekly payroll wage. And consider that the average payroll figure is distorted down by the 32.8 hours per week.

Two people working all year at 40 hours per week and making the average hourly wage make a total of $30.70 times 2 times 40 times 52 = $127,712.

On this basis, they truly are richer than you thought!

And remember, half the people on payroll make more than average and half less than average (yes median but close enough).

#160 Stan Brooks on 10.25.18 at 11:24 am

#151 AB Boxster on 10.25.18 at 10:44 am
Very good review of the state of the Canadian economy and Canada’s rush to raise rates on what is arguably mediocre global and domestic data.
Does the BOC really have a clue?

https://www.bnnbloomberg.ca/rosenberg-floored-by-boc-s-economic-optimism-1.1157698

—————————–

Shhh, here comes David Rosenberg’s Psychiatrist…

#161 jess on 10.25.18 at 11:34 am

And that is why on 7 August 2018, Schröm and Salewski disguised themselves to try to discover the negotiations behind these trades and to understand the psychology of the people who created it. They’ve assumed false identities, helped by one of the trade’s insiders. They have also found a former major player who has decided to talk. For the interview, which is broadcast on Panorama, they had to disguise him as well. He offered to tell the story, exclusively on camera for the first time, of how the traders create their own belief system and build the “devil machines”, as he calls the trades. But only from behind a mask

https://cumex-files.com/en/

#162 Stan Brooks is a Kook on 10.25.18 at 11:42 am

#158 Stan Brooks

“I had no intention of arguing with you, I just stated my view that Canada can not become more expensive as it is already too expensive when compared to income, people here have mostly debt but no money.”

Stanley, Stanley, Stanley…. you cannot extrapolate beyond the confines of the mental ward you live in. You see there is a real world out here and some of us have mucho dineros. Have you ever left your rubber room and traveled to Muskoka for example? I know immigrants who came here in the 50s who are worth a fortune. Not even a high school education back in the old country. Your madness is evident every time you post with your broad sweeping generalities. Now get back to your straight jacket!

#163 JB on 10.25.18 at 11:59 am

#117 Brian1 on 10.25.18 at 3:58 am

JoJo; Why the rush to judgement? How do you know it was a Republican nut. The Democrats have been desperate for a long time. The mainstream media have taken their opportunity to unfairly pounce on Trump. The Republican early turnout on voting has been high. The bomb threat was very organised. Smoking Man was right that the bombs were ineffective. All possibly designed to be investigated well after the midterms, this event gives a convenient lift to the Democrats.
……………………………………………………………
And we know this because your connected to ????
Do you have credible information from the NSA?
The FBI?
The ATF?
The Secret Service?

At this particular instance “we” the average Joe public know only what has been reported from the above list of law enforcement professionals.
So please sit back and STFU, let the professionals gather the evidence and present the results.
Your half cocked half baked Conspiracy theory is not assisting in fostering truthfulness and is about as wacky as our resident wingnut Smoking Man whom obviously is in need of professional help. Perhaps if you two go together there is a group discount!

#164 AGuyInVancouver on 10.25.18 at 12:06 pm

#155 AB Boxster on 10.25.18 at 11:14 am
Hey Gravy Boy

Have a listen to this guy.
I suspect he’s not as smart a you, but at around 2:50 he has some interesting thoughts on earnings.

As i said before earnings are important, but it’s not all about earnings.

But, hey, you focus solely on earnings buddy.

https://www.bnnbloomberg.ca/rosenberg-floored-by-boc-s-economic-optimism-1.1157698
_ _ _
Yawn, you quote one economist, one featured in Post media no less, and expect it to be taken as gospel> How about a poll of economists?
“TORONTO (Reuters) – Canada’s economy will continue to grow faster than its potential over the coming quarters as U.S. fiscal stimulus boosts demand for its exports, setting the stage for more Bank of Canada interest rate hikes, a Reuters poll of economists showed..”
https://ca.reuters.com/article/businessNews/idCAKCN1MR1L0-OCABS

I assume the AB in your name is for Alberta? Maybe in that one-trick pony province things seem gloomy but not the case across Canada.

#165 Leo Trollstoy on 10.25.18 at 12:07 pm

Why is gold trash?

https://www.bloomberg.com/news/articles/2018-10-25/goldcorp-s-miserable-quarter-sends-shares-to-16-year-low

#166 jess on 10.25.18 at 12:09 pm

We’re the smartest! We’re geniuses! And all of you are stupid!

The money machine

According to Frey, an equity trader at a US investment bank came across the trade accidentally. He had bought shares that were delivered four days later. This interval covered the dividend payment day of the company whose shares he had purchased. This profit is taxed in the domicile of the company (say, Germany). German shareholders can ask for this tax to be reimbursed because they have already paid corporation tax.

The trader suddenly realised he had this tax payable in his book without actually owning the shares. The amount was £50 million. It was a very large trade.

The trader wanted to get rid of these funds that were not his. He approached the seller of the shares who had also been reimbursed his tax. The bank’s legal department sought professional tax advice to find out how to return the money to the tax office. The answer came back: “You can keep it.”

There is no law that prohibits a multiple tax payout, they said. And if something is not explicitly prohibited, it is legal, the tax advisors argued. The trader kept the money. And because the tax reimbursement happened automatically, the scheme could be repeated time and again.

All you needed was enough funds to trade the shares for a few days around the dividend payment date. Or you could even just borrow the shares.

“It was as if Fort Knox had been looted, but better. Why? Because the state was the source of the funds, and this source could not run dry. If there is perfect crime, it’s this one,” says Frey.

The scheme yielded annual returns of 60 percent with zero financial risk. Frey insists that it was not the work of a handful of brilliant crooks. He says an entire industry was involved, consisting of hundreds of bankers, investors, tax advisors and lawyers spread out over continents.

Investment bankers and hedge funds would structure the Special Purpose Vehicles (SPVs), and traders would then sell them to investors who put in €100 million on average. Banks provided loans, multiplying the trades’ volume by up to 20 times. They also issued the tax credit documentation that investors could use to have tax paid on dividends reimbursed. Tax lawyers would write legal opinions confirming that everything was legal. All of them make money off the trade.

Frey calls it “organized crime in bankers’ suites”. It’s cross-border and happens only on paper. There are no attaché cases stuffed full of used banknotes to be physically smuggled across borders, or mafia-style meetings in back rooms. Every cog in the machine knows what to do. Pre-paid phone are used to agree to deals. There are no witnesses to the deals and very little paper that could serve as evidence…..

—————….

looping

Why Denmark?

In this trade, it’s a mere risk calculation whether or not to go after Denmark. The country boasts few large listed corporations, meaning that high tax reimbursement claims stand out. It’s also a direct challenge to the state, in particular when investigations are already on the case next door in Germany.

Frey remembers one trader telling him: “Shah will bring all of us to our graves. He’s overdoing it.” All traders knew there were limits, Frey says. But not Shah.

Shah also was more resourceful than others. He not only worked out how to get his hands on the tax revenues of nation states but also how to circumvent the investment banks in the process. Banks finance the cum-ex trade, providing loans, sometimes in the billions. Crucially, they issue the tax credit documents that are used to ‘recover’ the corporation tax. For all of this, they get a share of the spoils. Shah simply bought a small bank in Hamburg.

In the trade, it’s put this way: Shah purchased his own printer. Because that’s all it took to print himself the tax credits. Shah turned the complex cum-ex trade into a closed circle. He could turnover the same shares 20 times. This highly refined cum-ex variant is called “looping”.

https://cumex-files.com/en/

#167 Doghouse Dweller on 10.25.18 at 12:11 pm

#101 Brother Nonplused
Amen Brother, Looks like ZERP and Mario Draghi `s “what ever it takes”
were that failed attempt to put the camel through the eye of the needle.
The French are being advised to prepare for Saint Johns Apocalypse and a fate worse than Greece.

#168 Linda on 10.25.18 at 12:14 pm

#152 M. Ghandi: Given that the source of one quote was an interview/debate, the other quote may be located in the same media. Fortunately JKG was a prominent figure, making it much more likely that any recordings would have been archived instead of being discarded.

#169 Stan Brook's Psychiatrist on 10.25.18 at 12:30 pm

#163 JB

“Your half cocked half baked Conspiracy theory is not assisting in fostering truthfulness and is about as wacky as our resident wingnut Smoking Man whom obviously is in need of professional help. Perhaps if you two go together there is a group discount!”

I am accepting new patients and will give blog dogs a discount….

#170 Mattl on 10.25.18 at 12:38 pm

As predicted the RE crash/correction will be accompanied by high interest rates and a soft or declining equity market. So a home that goes from 1mm to 600K is no more accessible in this environment then that home was at 1MM. Net result is some people will get will get killed, and those on the fringes will stay there. A few super savers with high incomes will qualify, but any RE bargains in premium markets will be scooped up by investors and those with very strong cash positions. So the guy that owns the home my mom rents, and 20 other homes, will come out of this with 30 homes.

Further, there will be no incentive for developers to start up new projects and city revenue from prop tax will dry right up. The rental situation likely gets worse in the net, even if high end homes rent for less.

As Garth has been saying careful what you wish for.

#171 AB Boxster on 10.25.18 at 1:33 pm

#164 AGuyInVancouver on 10.25.18 at 12:06 pm


Yawn, you quote one economist, one featured in Post media no less, and expect it to be taken as gospel

————————–

Gospel?

Nope.
I don’t think anyone has the answer.

Economics is a highly imprecise study.
Did the consensus of economists predict the global financial crisis? They were not even close.

Is a nebulous consensus of economists worth more than 1 well articulated opinion?
It seems you believe so.

Maybe have a look at many opinions and comments.
If they make sense, are well articulated and the arguments are backed up by fact and data and well reasoned argument, then perhaps have a better listen.

You link to an article that quotes:

Economists surveyed Oct 10-17 expect Canada’s economy to grow at an annualized 2.1 percent pace or better in the final two quarters of the year, against forecasts for 2 percent growth in those quarters made in a July poll.

Is that kind of like saying that:
Realtors expect the Canadian housing market to shine in 2019″

Do you believe the above, cuz I can find numerous articles in MSM that support it, unconditionally.

The interview I posted makes some interesting comments regarding a contrary view of The Bank of Canada’s view of the Canadian and world economy.

Feel free to dispute anything he says or comments on.
You could comment of his statistics or perhaps question his motives, or perhaps present a reasoned argument as to why ‘you’ don’t agree with him.

But, seriously, If the best you have is :
‘Economists say things are great” well your argument is pretty lame.

The fat that Gravy boy thinks that ‘only’ earnings are important for equity validations is kind of like saying that only C02 is responsible for climate change.

Open your mind and listen to many opinions.
Present some ideas that don’t mimic what others have to say, or that are quoted in your Finance 101 textbook. You will become far more interesting to listen to.

Even though you may live in Vancouver, it may surprise you that there are a few things that you can learn.

#172 M.Gandhi on 10.25.18 at 1:38 pm

#168 Linda on 10.25.18 at 12:14 pm
“#152 M. Ghandi: Given that the source of one quote was an interview/debate, the other quote may be located in the same media. Fortunately JKG was a prominent figure, making it much more likely that any recordings would have been archived instead of being discarded.”

I emailed his son James and received a reply that he does not feel the quote was his father’s. I will continue to rack my brain over this one as I know I got it somewhere but it may not belong to the esteemed JKG after all! My bad perhaps!

#173 espressobob on 10.25.18 at 1:40 pm

Just finished loading up on equity positions. Keeping some dry powder in case of another leg down.

Yup, the markets are going to hell. Love it. This never gets old for some reason.

#174 Where's The Money Greedeau? on 10.25.18 at 1:43 pm

Trudeau’s carbon plan is so much worse than just a tax

https://business.financialpost.com/opinion/kevin-libin-trudeaus-carbon-plan-is-so-much-worse-than-just-a-tax?utm_source=distroscale

#175 Shawn Allen on 10.25.18 at 1:50 pm

Hyper Inflation Coming? Not Likely

147 fancy_pants on 10.25.18 at 10:09 am said:

yes, expect hyperinflation with all these years of suppression.

So much money has been borrowed into existence. In a debt driven economy, debt can never be paid off so the process of people needing to continually go into debt to increase the money supply has to continue perpetually.

All the money in existence is never enough to cover all debt plus interest. We can’t pay it off as it would collapse the ‘money supply’. This means that bankruptcy or ever inherent inflation are real aspects of our monetary system.

*********************************
It’s true that vast amounts of money have been borrowed into existence. It’s true that the debt in the economy can never be reduced to zero and in fact will grow continuously and rarely decline even moderately and temporarily.

But that does not mean that the vast majority of debt will not be serviced and paid off as scheduled. Simply, new debt is continually taking the place of old debt.

But is that a problem?

Look at Berkshire Hathaway. Its debts are vastly higher now than 50 years ago or even 10 years ago. And its financial strength is almost unequaled. All of its debt is serviced and paid off as scheduled. But as it grows it continues to add more new debt than the old debt being paid off. Not a problem.

People are a bit different in that unlike Berkshire or the U.S. Treasury, they have an expiry date. So the vast majority of individuals need to die with no net debt and they do. Most people die with a positive net worth.

I suspect that debt will continue to increase as the economy grows and with rare episodes of increased bankruptcies it will not be a problem. And we will get through the recession / increased bankruptcy times.

Hyper Inflation is unlikely. It has been forecast daily in the U.S. for probably the last 50 years and certainly since the financial crisis. So far, so good.

Don’t hold your breath waiting for hyper inflation.

The correct premise (money is debt!) does not always lead to a correct conclusion (like we are doomed!).

#176 Shawn Allen on 10.25.18 at 1:57 pm

The poor have been defeated

Maybe Warren Buffett

About the theory of wealth trickling down to the poor he did say:

“The tsunami of wealth didn’t trickle down. It surged upward,” financier Warren Buffett …

#177 Penny Henny on 10.25.18 at 1:57 pm

MF this one’s for you.

https://ritholtz.com/2018/10/bbrg-what-minimum-wage-foes-got-wrong-about-seattle/

#178 Brian1 on 10.25.18 at 2:17 pm

JB; Learn the difference between implying and infering.
STFU.

#179 Where's The Money Greedeau? on 10.25.18 at 2:29 pm

#125 Ace Goodheart on 10.25.18 at 7:04 am
RE: #108 eternalpessimist on 10.25.18 at 1:04 am

But the advice for buying them is always, do not buy when they are rising in value, only buy when they are on a prolonged downturn.
++++++++++++++
How long is your prolonged downturn horizon?

#180 M. Gandhi on 10.25.18 at 2:41 pm

#176 Shawn Allen

#176 Shawn Allen on 10.25.18 at 1:57 pm
The poor have been defeated

Maybe Warren Buffett

“About the theory of wealth trickling down to the poor he did say:“The tsunami of wealth didn’t trickle down. It surged upward,” financier Warren Buffett …”

Appreciate the suggestion Shawn. Galbraith had a great line and this one I can confirm which was the horse and sparrow effect. It is an earlier version of trickle down economics. That is, if you feed the horse enough oats, the resulting dung might have enough oats in it for sparrows to feed from…

#181 jess on 10.25.18 at 2:56 pm

CMHC gave Maple Bank green light shortly before banking watchdog seized bank’s assets

The Canadian Press · Posted: Aug 18, 2016 11:28 AM ET | Last Updated: August 18, 2016
https://www.cbc.ca/news/business/cmhc-maple-bank-watchdog-1.3726282

Aug 18, 2016 – Canada’s national housing agency gave Maple Bank GmbH’s … Bank writes off 25% stake in Maple Bank after Germany shuts operations …
German authorities shut down Canada′s Maple Bank | News | DW …
https://www.dw.com/en/german…shut-down-canadas-maple-bank/a-19032268

Feb 7, 2016 – The Federal Financial Supervisory Authority (BaFin) said Sunday it was shutting down the German arm of Maple Bank, which is part of …

=====================
Suspicion of tax fraud

Shah is being investigated by Danish prosecutors as a prime suspect in a case regarding the Danish Government getting defrauded for 1.65 billion euros (12.7 billion DKK).[1][10][11] The tax fraud happened from 2012 to 2015[12] and is the largest in the history of Denmark.[13] He is also the prime suspect in similar tax fraud cases involving more than 200 million euros and 65,000 euros (580,000 NOK) in Belgium and Norway respectively.[14][15][16][17] An additional 300 million euros in Belgium and 40 million euros (350 million NOK) in Norway were only stopped because of warnings from the Danish authorities.[14][15][16][17]

In addition to these countries, he is being investigated by Germany and the UK via Eurojust, and by the US Treasury Department, as it is supected that some of the money were funneled through US pension funds.[10][16][18] Shah’s London-based hedge fund Solo Capital was closed in 2016 amid the investigation by Danish authorities,[2] while his London home and offices were raided by the British National Crime Agency, and Varengold Bank (co-owned by Shah) was raided by German authorities.[13][19] As of December 2016, about 300 million euros had been seized by the Danish police (in cooperation with foreign police forces).[20] Shah was investigated in regards to the case in 2015,[21] and in 2017 two suspected co-conspirators were also charged by the Danish authorities.[22]

Shah resides in Dubai and extradition of a possible suspect from this emirate would be very difficult.[16][23] Sanjay Shah has denied any wrongdoing.[2]

In September, 2018, a High Court of Justice judge in London entered a $1.3 billion default judgment against Solo Capital and Elysium Global, at the behest of SKAT, Denmark. The United Arab Emirates have frozen, but not confiscated $660 million in assets belonging to Mr. Shah.[24]
Varengold bank is a member of the Entschädigungseinrichtung deutscher Banken (EdB), a private institution legally responsible for guaranteeing the deposits of account holders of German banks.

In 2017 plans for a new branch in Sofia were published.[4]

In 2018 it emerged that Varengold is possibly connected to money laundering activities of its former board member Sanjay Shah[5].

==========================
According to Professor Christoph Spengel, Chair of Business Administration and Taxation at the University of Mannheim and an expert on the practice, traders have targeted new jurisdictions after an initial crackdown in countries like Germany.

“After Germany closed the cum/ex-loophole … in 2012, market participants have exploited new opportunities in other countries such as Denmark. The loopholes in Denmark were of a similar nature as in Germany: the system of withholding tax on dividends produced multiple tax vouchers; it is unbelievable,” he said.

Many of the traders involved are based in London, as are some of the world’s largest banks, who lend shares to the traders to make the trades possible.

https://www.occrp.org/en/goldensands/british-financier-under-investigation-for-tax-fraud-Owned-56-million-in-dubai-properties
========================
Raiding Europe’s Tax Coffers

Sanjay Shah calls himself a philanthropist who wanted to give something back to the world. Now he’s accused of committing one of the biggest tax frauds of all time

“According to the public prosecutor’s office in Hamburg, Mr. Shah allegedly used four companies to falsify records on the distribution of dividends, purportedly received by over 200 pension funds in the U.S. and Malaysia. Records showed that these funds held shares in Danish companies listed in Denmark, and that capital gains tax (27 percent) was deducted from their dividends. Through three other companies he controlled, Mr. Shah allegedly applied for exemption from Danish dividend tax – not merely on a handful of occasions, but hundreds of times.

https://global.handelsblatt.com/finance/raiding-europes-tax-coffers-775667

#182 Stan Brooks on 10.25.18 at 3:08 pm

#169 Stan Brook’s Psychiatrist on 10.25.18 at 12:30 pm
#163 JB

“Your half cocked half baked Conspiracy theory is not assisting in fostering truthfulness and is about as wacky as our resident wingnut Smoking Man whom obviously is in need of professional help. Perhaps if you two go together there is a group discount!”

I am accepting new patients and will give blog dogs a discount….

Of course you are accepting new patients, now that your real estate agent career is over.

Let me guess: major in psychology?

I believe I already told you to become a debt collection agent, plenty of work in the field out there.

Or live with the empty stomach and all that anger.

#183 Bdwy sktn on 10.25.18 at 3:12 pm

Nice bounce. Brass ball award to yesterdays buyers.

Buy COST. Dow 750 green by close

#184 Brian1 on 10.25.18 at 3:18 pm

I regret using STFU. I just sank to a lower level.

This blog has that effect. You are forgiven. – Garth

#185 Shawn Allen on 10.25.18 at 3:23 pm

Some People Must Have Very Low Tax rates:

See this shocking statistic from Statistics Canada today:

Effective tax rates (ETRs) provide a measure of the size of various government tax programs relative to individual incomes. They are calculated by averaging every individual tax filer’s ratio of taxes paid to their total income.

Individual Canadian tax filers spent on average 11.8% of their total income on federal and provincial/territorial income taxes and employee contributions to Employment Insurance (EI) and the Canada Pension Plan/Quebec Pension Plan (CPP/QPP) in 2016. This was down slightly from 11.9% in 2015, largely as a result of changes to federal income tax rules.

Federal income tax was the largest component of the overall ETR, representing 5.3% of tax filers’ total income. Provincial income tax accounted for 3.6%, while the effective payroll tax rate represented 2.8%.

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

So, you may be paying over 40% of your income in income taxes plus CPP and EI. But some people are clearly paying very little to get that average down to 11.8%.

That includes low income people. But I suspect it also includes a lot of high income people who get tax breaks on dividend income and capital gains among other things.

So, overall AVERAGE taxes on income are not high but I think shockingly low. No?

https://www150.statcan.gc.ca/n1/daily-quotidien/181025/dq181025b-eng.htm?CMP=mstatcan

#186 Bluetheimpala on 10.25.18 at 3:58 pm

Every time I come here I’m shocked/dismayed/fascinated with the wide range of commentary. Garth’s block is like Breitbart and WSJ mixed together. Not being able to reply directly to comments adds a schizophrenic vibe, sort of like 4chan\B. Don’t.Change.A.Thing.

#187 jess on 10.25.18 at 4:01 pm

Bloomberg investigation in June that detailed the secret work pollsters conducted for hedge funds during the 2016 EU referendum campaign, when the surprise
UK Regulator to Examine Hedge Funds’ Secret Ties to Pollsters

Brexit vote caused the British pound to post one of the steepest crashes of any major currency in modern history. A handful of hedge funds netted fortunes off the market turmoil, thanks in part to private polls.

=======

Wells Fargo Executives Charged With Fixing Wells Fargo

…”The bank said on Wednesday that it had placed its chief auditor, David Julian, and its chief administrative officer, Hope A. Hardison, on immediate leave and removed them from the company’s operating committee of senior executives.

Ms. Hardison had been one of the executives in charge of a broad effort to clean up the beleaguered bank.
https://www.americanbanker.com/news/the-women-to-watch-2018-no-10-wells-fargos-hope-hardison

Wells Fargo suspended Ms. Hardison and Mr. Julian at the request of regulators at the federal Office of the Comptroller of the Currency, according to a person briefed on the decision but not authorized to discuss it publicly.

https://www.nytimes.com/2018/10/24/business/wells-fargo-suspends-employees-sales.html?rref=collection%2Fsectioncollection%2Fbusiness

#188 Remembrancer on 10.25.18 at 4:29 pm

#185 Shawn Allen on 10.25.18 at 3:23 pm
That includes low income people. But I suspect it also includes a lot of high income people who get tax breaks on dividend income and capital gains among other things.

So, overall AVERAGE taxes on income are not high but I think shockingly low. No?

https://www150.statcan.gc.ca/n1/daily-quotidien/181025/dq181025b-eng.htm?CMP=mstatcan
—————————————————————–

Interesting information, I think high income is addressed under the following section of the stats can link:

“Five percent of the top 1% of filers have effective tax rates above 45.5%”

#189 Shawn Allen on 10.25.18 at 4:56 pm

Crazy Effective Tax rates

Thanks Remembrancer at 188 for prompting me to read more of that effective tax rate report.

How about this juicy stat:

“Among all top 1% of tax filers, 5.0% had ETRs below 6.3% and 5.0% had ETRs above 45.5% in 2016. The gap has been widening for this group.”

So among people in the top 1% of incomes, a chunk of them have effective tax rates under 6.3%? Yeah that seems fair?

There is a lot of gold in that report. A more fair scheme of income tax is needed. Top marginal tax rates on ordinary income could probably be lowered substantially by chopping back the numerous lucrative tax breaks the 1% enjoy on various form of their income.

#190 Midnights on 10.25.18 at 5:16 pm

Martin Armstrong points out that it is not interest rate fears

Its the US election and the threat that the DEMS will take the House ot Senate.

The threat to wealthy peoples wealth and investments intheir busiensses would in danger with a DEM victory int he midterms.

Watch the Dow that is International money. The US investment climate is at risk thus big money has taken money off the table.

You sound as looney as he is. – Garth

Calling Armstrong looney is a bit of stretch. Considering most of his forecast have been right on the money. And he does advice countries and Pension funds. Plus people will pay 2700.00 US a pop to see him at his own one man show thats sold out.

His current ravings prove his utter inconsequence. – Garth

#191 Remembrancer on 10.25.18 at 6:17 pm

#189 Shawn Allen on 10.25.18 at 4:56 pm

That caught my eye as well, obviously the tax system is broken…

#192 IHCTD9 on 10.26.18 at 8:58 am

I just recently got my quarterly statement for our investments to the end of September.

I’m going to stick this one on the fridge and throw the December statement in the trash when it comes without opening it :).