All ears

Last week we talked about Marianne the Car Princess. The 50-something owner of two dealerships had panicked after her $2 million portfolio had lost 2% in the October Scare. Ignore the noise, I told her. She couldn’t. And in going to cash she turned a paper loss of $40,000 into a real one. Bad move. It’s why emotions are almost always the enemy of investors.

So the US stock market fell about 6% in October. Last week it gained 5%. It was the best five-day stretch since December of 2011. That win has extended into this week. And a whole lot has changed since we were carving turkeys in Canada. Listen up.

First came word US interest rate increases may soon peter out. Fed boss Jay Powell said the ‘neutral’ point – where the cost of money neither encourages nor discourages economic activity – was close at hand. That was a big change from weeks earlier when he signalled five or more additional hikes were on the table.

So stocks roared ahead. Bond yields fell. One big negative – that central banks would kill the romping US economy – had just faded away.

Next up, the Trump-Xi thing, which happened Saturday night. The US and Chinese leaders met after the useless G-20 meeting and came to an agreement. It puts that trade war between the two biggest economies on the planet behind us. At least for a few months – but probably for long after. The Chinese media is calling Trump “the statesman of the century,” if you can believe it. And said he: “It is my great honour to be working with President Xi.” Kissy. Kissy.

Here’s why the deal is yuge:

No more trade sanctions, sniping, insults or bullying for the next 90 days. That means the US keeps its tariff level at 10%, instead of raising it to 25% as threatened and another $200 billion in Chinese imports are not affected. China agrees to immediately start ramping up imports of US energy, agricultural and manufactured goods to shrink the trade imbalance. The two nations will try to forge a truce on the transfer of technology, plus work together on cyper-espionage and non-tariff barriers. Xi says he will spank North Korea a little, and make Fentanyl a controlled substance so it’s a crime to export it into the States.

There’s more, but the main thing is that talking has replaced tweeting. Trump now has the ability to look like a successful world leader instead of an outlier. The trade war rhetoric has been scaled back and the path opened for a wide-ranging agreement between the two behemoths. This is a big deal. So another negative fades.

But there’s more.

After hitting the skids last month, the price of Canadian oil screamed higher on Monday – up about 50%. What was selling for about $13 a barrel mid-November was commanding almost $33 just hours ago. Up as well rocketed the shares of pummelled producers like CNRL, Cenovus and Crescent Point.

The breakout came after Rachel Notley, the capitalist dipper premier of Alberta, announced that province would cap oil production beginning in January. Since we can’t seem to build pipelines anymore, a massive oversupply of oil was swamping warehouses and depressing prices.

So, let’s recap. Interest rates may soon crest. The trade war threatening to eat the global economy may be over. Alberta is saved. Now if Britain can find its way out of the Brexit muddle, Europe may also survive.

Meanwhile US growth is robust. Unemployment is at a 50-year low. Corporate profits have been boffo. We signed the USMCA thing and renamed it CUSMA. Stock markets have plumped nicely since Hallowe’en. Adele still isn’t touring. And we’re into the third year of the American presidential cycle – when, historically, markets do best. Nice.

Now we’re into December. Traditionally markets rise 70% of the time in the twelfth month. This year there are more than the normal reasons (like tax-loss selling) to expect gains. If rates top, trade calms and expansion continues, 2019 could be a winner. You can be absolutely sure Trump wants to go into 2020 on a wave of growth and glory.

Therefore, here’s the deal. Next time we have a 10% correction, don’t come here all pissy to moan, grovel, grouse or gloat. Man up. Sell nothing. Ignore the noise. Be confident. Always remember when things feel bad, you alone have the ability to make them worse. So, don’t.

About the picture

Leslie writes: “Long time reader, but recent dog owner. This is Jarvis, a mixed German Shepherd, Labrador and who knows what else, obtained from the Toronto Humane Society in May. I wanted a ‘proper’ dog, not a cat impersonator, and with his big ears, I fell for Jarvis at the first introduction. He is a bit of a chewer, but loves playing ball and is as docile as they come, loving cuddles at any time. A definite therapy dog for the insane world we’re currently in.”

122 comments ↓

#1 kumar on 12.03.18 at 4:00 pm

Kumar is 1st.
It is good to rent. Rent and save your money.

#2 Frank The Tank on 12.03.18 at 4:01 pm

Wait, were you just complimenting Donald Trump, Garth?! Now I am most certainly bullish!

#3 Bluetheimpala on 12.03.18 at 4:08 pm

Oh Garth, corp debt is getting pooched which will drag it all down. You and I both know this event will be tagged as a ‘once in a lifetime, never saw it coming’ crisis. Where was all this bad debt hiding? Hmmm…we’ll never know…for another year or so, just ask the Carillion auditors or the boys at the LPs (lol…APH…) and Junior minors fleecing investors. All this bad debt has been repackaged and resold with leverage now being used to buy products that are inherently built on leverage. Until someone explains to me how corporate junk and near-junk aren’t bringing down this current house of cards in the next 6-12 months then I’m happy sleeping with my cash under my mattress. Tick tock.

#4 Fortunate one on 12.03.18 at 4:12 pm

Garth, agreat read as always and thank you for the market update in a way I can actually understand.Kudos to Leslie for adopting from a local pet shelter. Lucky Leslie and lucky Jarvis.

#5 Fortunate one on 12.03.18 at 4:15 pm

I thought I had by thanking Garth and Leslie.

#6 Kelly on 12.03.18 at 4:17 pm

Life ahead is full of sweet dreams.
Market will surge.
Interest rates will stall.
Real estate will again start to move.
Trump will be recognized as the world leader he is.

2019 will be a very good year.
Hopefully, our Federal leadership will be sorted out in the Fall so Canada can move forward.

#7 NoOneOfConsequence on 12.03.18 at 4:25 pm

It must have taken a lot of effort not to write I TOLD YOU SO…AGAIN! In caps all over the page!

I have read so many times in your blogs over the years that all the doom and gloom shouldn’t be taken to heart. Stay diversified…stay real man. ;)

By the way – I am particularly enjoying the new addition to the blog about the dogs at the end. Please keep it up!

#8 Fortunate one on 12.03.18 at 4:26 pm

Personally I do not understand how someone who is in business and owns two car dealerships panics when her investments drop 2%. Every year we have a correction of at least 10%. Perhaps the market is not for her but then where else would you stash $2 million?

#9 reynolds531 on 12.03.18 at 4:33 pm

Rubbing it in twice, I’m not sure you’re getting Marianne back as a client.

#10 dakkie on 12.03.18 at 4:37 pm

Systemic risk is on the horizon! In the last 5 days, the world just experienced a massive intervention to get ahead of a significant slowdown.

http://www.investmentwatchblog.com/systemic-risk-is-on-the-horizon-in-the-last-5-days-the-world-just-experienced-a-massive-intervention-to-get-ahead-of-a-significant-slowdown/

#11 Lee on 12.03.18 at 4:40 pm

Doesn’t what is happening in Alberta mean that companies that move gas and oil are great buys – like say CNR or TRP or Enbridge ? Anyone? Why are the latter two depressed? Anyone?

#12 Hal Leslie on 12.03.18 at 4:41 pm

And the Yield Curve? Apparently it inverted today..

#13 Douglas Bennett on 12.03.18 at 4:46 pm

Interesting data on Sales to listing ratios and average prices in 12 Ontario communities where the average price is under $500K.

https://www.baytoday.ca/local-news/north-bay-real-estate-market-enjoying-strong-rebound-1140942?utm_source=Email&utm_medium=Email&utm_campaign=Email

Just got my latest MPAC assessment. As of the beginning of 2016, my house is apparently worth $464K (16 rooms and separate garage on 1.1 acres with pond, just south of North Bay). The catch is they just announced they’re building the new casino about 2km up the road. Not sure how that will affect prices, but I’d prefer not to find out.

#14 jimbo on 12.03.18 at 4:49 pm

Beautiful dog Leslie…..looks like Jarvis could handle a few treats….

#15 CJohnC on 12.03.18 at 4:52 pm

Trade deal should be called mucas. At least it is pronounceable.

#16 SmarterSquirrel on 12.03.18 at 4:54 pm

Garth,

I’d argue that next time there is a 10% correction, people should see what’s on sale. If they are in ETFs, is there an ETF that has fallen too much based on the assets held within it? If they hold stocks, has a stock fallen to a low and attractive valuation? A 10% correction can be a good opportunity to buy more of an asset that you believe still has its fundamentals intact.

Of course there are numerous factors to look at to see if the fundamentals of a stock are intact (https://smartersquirrel.com/invest/dividend%20investing%20lesson%20with%20brookfield%20infrastructure%20partners), and reading the book “The Intelligent Investor” is a great way to make sure you’re aware of many of them, but if the fundamentals are still strong, why not buy on down days instead of lamenting?

If you’re not planning to cash out of your portfolio until you retire many years from now, you should actually be thankful for sell offs so you can invest at even lower valuations for the same asset. Odd that you never hear anyone moan and complain when Black Friday/Cyber Monday sales happen, so why be upset when stocks and ETFs go on sale? It’s just a chance to buy what you wanted to buy at a better price.

#17 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 12.03.18 at 4:54 pm

All of this while the GTA continues to circle the drain. Even the local police are totally frustrated with idiot residents there full of the Toronturd attitude.

“Effective immediately, York Regional Police will name all of the drivers charged with impaired-related criminal driving offences, to further make impaired driving socially unacceptable and so that members of our community can assist with notifying police if these offenders choose to drive while under suspension. Innocent lives are put at risk every day by this irresponsible and criminal behaviour. We are not giving up.”

“These latest arrests add to the more than 1,400 charges for impaired-related driving offences laid in the region so far this year.”

https://toronto.citynews.ca/2018/12/03/york-police-impaired-driving/

HOLY CRAP! What on earth is going on in the GTA? A total wasteland of self-absorbed narcissistic losers who think they are special and can drive around drunk whenever and kill whoever.

This is a city and a whole region that will be going through a complete social and economic crash.

Sadly, totally deserved.

This is merely one symptom of the rot in the GTA.

Only idiots would ‘invest’ in real estate there now.

#18 smartalox on 12.03.18 at 4:55 pm

I heard that Trump got Xi to agree to declare Fentanyl and other synthetic opiod pre-cursor chemicals to be ‘controlled substances’ in China, making it a crime to export them without a license.

That may be the straw that breaks the back of the Vancouver real estate markets!

Can’t wait to see those REBGV numbers for November!

#19 Paully on 12.03.18 at 4:55 pm

If Alberta oil is just so gosh-darn-cheap, why isn’t there more of a push to simply refine, sell and use it here in Canada, rather than fighting to build more export pipelines? It would seem to me that cheap Canadian oil, refined and used here would help our competitive situation in many other areas. Why doesn’t this happen?

#20 CEW9 on 12.03.18 at 4:57 pm

Alberta is saved.

It will sure help, but a short term to medium term solution at best. We need access to tidewater. Full stop.

In the meantime, we’ll take it. No thanks to T2.

#21 TRUMP on 12.03.18 at 5:00 pm

OWNING STOCKS = Entrepreneurship

How do you make money in business?
You sell a product or service for more than you paid for it.

How do you make money in the markets?
You buy when the share price is low and sell when it’s high.

GETTING RICH = Selling something for more than you paid for it.

NOW GO GET RICH YOU FOOLS!!!!!

#22 The Fat Lady on 12.03.18 at 5:13 pm

If the AMERICAN people followed the status quo and elected the same career politicians who did nothing but run circles in governemnt we would never see the changes were seeing today.

The world would continue to take advantage of the greatest nation on earth. When America prospers – the world prospers.

HAIL THE ALMIGHTY TRUMP!!!!

Don’t get so excited. He just toned down a trade war that he started. – Garth

#23 Shawn Allen on 12.03.18 at 5:24 pm

Albertistan?

Cenovus CEO pathetically said, please Mom, tell the other guys to stop producing so much oil. Mother Notley complied and ordered some trains too.

Too bad though about refiners and any entrepreneurs that were working to get the cheap oil out by private means to make a buck.

It’s rather sad really but will do some good in the short term. Short term gain for long term pain maybe.

In any case, Notley’s chances of re-election may have just gone up a lot.

#24 BlorgDorg on 12.03.18 at 5:27 pm

Sure glad I bought a pile of ETFs in Canadian oil last week when Garth shared Ryan’s analysis.

Thanks, Ryan! Thanks, Garth! Thanks, Rachel Notley!

Best part is, I did it on my smartphone from a small-town German Bierhaus. Prost!

#25 crossbordershopper on 12.03.18 at 5:33 pm

you can buy a car dealership for 3 x ebitd any day of the week, she can easily get 30% down , 70% so for 2 million canadian she can earn . net net after tax is like 1 million a year, canadian with interst and taxes. so she can make 50% return why bother for a few in Canada.
lots good dealerships for sale in the usa. she obviously knows the business and can make real money.
just a suggestion.

#26 Bezengy on 12.03.18 at 5:39 pm

Alberta is saved? Did Notley change her mind and call Trump to see if they need a 51st?

#27 common sense on 12.03.18 at 5:46 pm

#3 Bluetheimpala

Tick tock indeed….starting to get a bit louder don’t you think?

The world’s economies are doing so well, the FED has to reduce the amount of interest hikes planned or stop them altogether after a few, fully telegraphed tiny hikes. Oh yes, that’s a sign of health.

Just a coincidence that both China and the USA accomplished nothing in the trade dispute other than a 90 day delay just in time for everyone to have a chance at a nice Christmas rally and gloss over the slowing growth numbers coming out of China.

Car makers now offering HUGE amounts of subprime loans in the USA for people with laughable low credit scores as long as they can fog a mirror.

Funny how today, the Dow got almost to 26000, just under the number Donald wants it to be BUT couldn’t push over with ALL THE GOOD NEWS from the G-20.

Billions of dollars wasted by companies to juice shares and enrich execs compensation with little to show for it and the cracks are starting to show at companies such as GE.

Poloz likely sleepless in Ottawa knowing whats coming down the pike in the near future.

Stick a knife in it. The party is over.

#28 Sitting on the toilet thinking on 12.03.18 at 5:46 pm

If everything is so maga and equities to the moon why did the u.s 2s 5s in invert today and Canada’s 2s 5s are pubic hair away from inverting. Also if everything is so honkey dorey why wouldn’t higher interest rates be warranted. This doesn’t pass the smell test.

#29 mogulrider on 12.03.18 at 5:47 pm

If I recall this women made money…..
Saying she lost 40K is a shoulda, coulda, woulda, moment
It is all about customer tolerance.

I bought some near the bottom. I also sold a little into this rally.

This trading range this year has chewed people up as could be expected after 2 years of screaming profit…

Being 100% in after 10 years of triple profits is just stupid.

If someone is uncomfortable then adjust..

I’ll say one thing. This smells liek a dead cat bounce..

But who knows

It’s all gambling anyway

Staying for 10% – 20% after 300% profit is just plain foolish imho

Lock in profits is why you invest.

One doesn’t invest to keep financial advisors happy.

BTW – corporate managers just announced they have never seen consumers stop buying overnight like they have in the last month…

I know one thing – I took profits and lowered risk.

Oh and the intra day smash down says something.

Looks to me like big money selling into strength..

Time will tell.

#30 Mr White on 12.03.18 at 5:49 pm

I rent after taking a nice profit selling first in Edmonton then in Calgary. I invested my dough in a nice balanced portfolio. When the market dropped in October I bought in. About triple what I do every month. I’m up nicely on those extra investments.

Heed Warren Buffet, never bet against America. Never sell.

#31 mogulrider on 12.03.18 at 5:54 pm

Alot of people are talking about the never-ending stock market profits like people who bought spec houses 2 years ago…

no where to go but up they say

Just saying

One thing is for sure this bull market has been awesome.

But don’t blind yourselves to risk. The next downturn is coming, when who knows….

But one thing is true through all of it.

It is never profit until you take it

Do not invest in a stock-only portfolio. – Garth

#32 mogulrider on 12.03.18 at 6:00 pm

I’d also like to bring up something that should concern all citizens

Stascan’s direct attempt to spy on us. This was without any doubt a direct threat to us as citizens.

Government is tracking transactions for tax hunts, psychological profiling, many other nefarious intents and to build a portfolio on us…

As an IT security guy for 25 years I never thought a government agent would so brazenly attempt to take away our privacy.

Yes government spies on us, but this event tells us clearly that government is not our friend and is becoming our enemy.

This dangerous, dangerous precedent needs to fought by all Canadians. It is a direct threat to our freedoms. Don’t take this lightly.

I sent emails to all my elected officials in outrage.

We see you!

https://www.theglobeandmail.com/politics/article-statscan-suspends-credit-searches-delays-plan-to-obtain-banking/

#33 acdel on 12.03.18 at 6:01 pm

Another awesome dog pic; oh, poor Felix, i do feel for for you, hopefully one day you will wise up! :)

Not a big fan of Notley, but she is an Albertan, fell into the trap of National Politics (lesson learned “I hope” for her dealing with T2) and his lies. What a screwed up country; we have it all to be the most powerful but yet elect the one’s who just do not get it. Perhaps what is happening in France is a precursor as what is to come.

All the Hillary and Gore fans (yes you Garth) read this. Not so bad!

https://www.dailymail.co.uk/news/article-6455183/Secret-service-agents-tell-milk-cookie-raids-George-H-W-Bush.html#comments

#34 mogulrider on 12.03.18 at 6:03 pm

“”Do not invest in a stock-only portfolio. – Garth””

exactly

#35 Jarvis on 12.03.18 at 6:04 pm

Jarvis is one beautiful looking dog. Just look at the tight coat of hair, the intelligence vested in the eyes, and the modest stance for his master. Unlike the purse mutts that are owned by the Smoking Man which sleep day and night ignoring him completely, because he is a drunk.

#36 Basil Fawlty on 12.03.18 at 6:28 pm

Given that Eastern Canada is importing crude oil, would it be practical to build a refinery in Alberta and then build a pipeline for finished product, to the east? A spill of finished product ie. gasoline would evaporate and not cause near the pollution. Canadians would likely approve such a pipeline.

#37 AGuyInVancouver on 12.03.18 at 6:29 pm

From Ryan’s post Saturday:
#78 Remembrancer on 12.02.18 at 3:28 pm
#42 AGuyInVancouver on 12.01.18 at 7:58 pm
#60 Doug Rowat on 12.02.18 at 7:28 am

Cliche but has to be said, the best way to become a aviation millionaire is to start off as an aviation billionaire…

Seriously, if you are investing in individual companies like this you need to do the homework and watch fundamentals like a hawk – as for Doug’s analyst comments I’d add you want to understand who has a position and do they have the industry / regional chops to be a call you trust…
_ _ _
In my defense, Chorus has a contract with Air Canada through 2025, pretty much a solid license to make money in the world of aviation. AC bears the risk, Chorus pays a nice dividend. As mentioned the stock was a “recommend” from several analysts and a way to secure a reliable dividend and not pay bank stock prices.

#38 You know on 12.03.18 at 6:30 pm

Read the story Read the Remarks…..here is the answer. .Everyone tries but “You Can’t Suck And Blow At The Same Time. New spin new day same suckers slurping it up.

#39 Ace Goodheart on 12.03.18 at 6:33 pm

Trump turned out to be human after all.

Who knew?

#40 Unhinged Trader on 12.03.18 at 6:47 pm

> Xi says he will spank North Korea a little, and make Fentanyl a controlled substance so it’s a crime to export it into the States.

B-but, what will happen to the poor industrial-scale drug dealers who reside in B.C. and who have very expensive property taxes? Why have these people been singled out for economic assassination?

Vancouver’s wealthiest home owners and their servile realtors will be hit hard. Expect a tremor in the market values of homes.

#41 Barb on 12.03.18 at 6:54 pm

#6 Kelly: “Hopefully, our Federal leadership will be sorted out in the Fall so Canada can move forward.”
—————————————————
I simply cannot describe Canada’s government as “leadership”.

Jordan Peterson’s 2 min video explains it succinctly.
https://youtu.be/GiAF1_osKB8

#42 Victor on 12.03.18 at 7:01 pm

Hopefully Powell and Trump just agreed to lighten the statement about future increases, but will still gradually raise 4 or more times. Everybody knew higher rates may affect stocks, but somehow not much happened until Powell said there would be many more next year. Now stocks are ok and rare increases with not clear future plans will not do much damage.

#43 Dave on 12.03.18 at 7:01 pm

Isn’t it funny how the oil companies constantly whine about government intervention and meddling. When they lay people off, it’s because of “market forces” but when they are in a tough spot due to their poorly planned strategies they go with a tail between their legs and beg the government to intervene with production cuts

#44 Dave on 12.03.18 at 7:03 pm

Like many things on this blog, you oversimplify Trump’s meeting on trade. There is no specifics arising out of that meeting and they were thin on the details, so we can look for more uncertainty and volatility in the stock market.

#45 Steven Rowlandson on 12.03.18 at 7:05 pm

Any idea how much WCS has to be for Canadian oil companies to do equal to or better than break even?
If it is higher than market prices Canada and its oil companies have a problem.

#46 acdel on 12.03.18 at 7:06 pm

#36 Basil Fawlty

With all due respect; we do have refineries that export.
Do we need more, you bet, but it will take an investment from all Canadians to do so. There is only 4.5 million persons in this province and we welcome all Canadians but it is about time all of you that keep saying that we need to build more refineries to put your money where your mouth is.

It takes billions upon billions to build one, and yes, pipelines to ship it. We are maxed out due to past and current incompetent governments, provincial and federal that squandered it away and had “NO” vision.

To move to a cleaner so called green energy; it will take billions if not trillions to do so; where is the money going to come from? I do not see any greenies setting up there own enterprises, the one’s that do, good for them but they are usually bankrupt withing a short period of time.

It takes money to move forward, we have an abundance of resources; we could use that money to create the greatest country on earth but the general populace are a bunch of loudmouths and whiners that are the biggest hypocrites.

We have politicians that only say what it is to say to get re-elected for there next term. The sad part is that we all know this. No difference in the business, environmental, special interest groups. It is all a sham.

We need to attract leaders with a long term vision and the populace to agree with it, will it be easy, hell no, but the way it is going will be our downfall. Man, I just depressed myself, good-night dogs!

#47 not so liquid in calgary on 12.03.18 at 7:16 pm

@ Paully on 12.03.18 at 4:55 pm

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

Glad you asked! Start by asking PM Trudeau why Energy East failed (he moved the goal posts so often; and, finally they had to take into account the Co2 caused by the end user). Northern Gateway, again ask the PM, was shelved when Trudeau banned oil tanker traffic off BC’s northern coast. And now Trans Mountain. “We” bought it (probably overpaid by a billion), and there it sits, not one shovel in the ground since.

There you have it, three examples with one thing/person in common.

As for refineries, they cost in the billions to build, and then we start hearing the NIMBYism.

#48 Pepito on 12.03.18 at 7:19 pm

So, 4 more hikes in 2019 was supposed to be good because it reflected a bigly improving economy. And, now, a few weeks later, no more hikes is good too because it will prevent the bigly improving economy from crashing?

Sure sounds like the economy wasn’t bigly improving after all.

If the rate hikes have done the job, how is that a negative? – Garth

#49 Dolce Vita on 12.03.18 at 7:19 pm

Skeptical on the success of AB production cuts.

Russia and Saudi Arabia tried production cuts this year and the price went up, then they both started pumping more in Sept./Oct. and down came the oil price. The same will happen in AB as prices recover, companies will produce more and down will come the price.

https://www.macrotrends.net/1369/crude-oil-price-history-chart

I hope the production cuts continue to raise prices and that AB gets more money for its oil in the long term, wishful thinking in light of the above but hope does spring eternal (my home Province).

At the end of next year AB will still have the same problem of 190,000 bbl/day of excess crude and bitumen production than can be shipped by rail and pipeline. Adding 120,000 bbl/day of tank car capacity by the end of next year will help but shipping oil by rail is about 3-5x more expensive than by pipeline.

The solution is to export to countries other than the US to get higher prices. But that will need a pipeline to the West or East Coast.

And that does not look like it will happen for years to come. For that, we can thank Trudeau and his Liberals (same guy that wants to ban oil tankers from Northern BC but quite happily welcomes them to La Belle Province & the Atlantic Coast).

And thanks to Trudeau we now own a pipeline, only the old one so far – and funny how Kinder Morgan used that money to build a new pipeline in Texas.

Nice, Canadian taxpayers fund a new Texas pipeline…well, at least TRUDEAU GOT A PIPELINE BUILT, wrong country.

#50 Steven Rowlandson on 12.03.18 at 7:20 pm

I think Basil is onto something. We should process our crude oil and use it to supply the nation before considering other options in respect to energy.
Transportation infrastructure between Manitoba and southern Ontario could use some work so that we don’t need to cross international borders for any reason.
The quick and easy way through the USA is not the best way as we want to think of ourselves as Canadians instead of being tempted to think of our selves as Americans. Otherwise this country is just a series of business deals that went south and there is no real nation that people can believe in. Having borders is essential to having nations otherwise you have nothing.

#51 Murphy on 12.03.18 at 7:25 pm

The trade war with China has been settled the same way that North Korea has disarmed it’s nuclear arsenal – it hasn’t! it’s been delayed, not resolved. There are no firm and concrete commitments on either side at this point….this is hype, an obvious attempt by Trump to calm the markets. China is not giving in, but they are certainly happy to delay Trump’s realization of this (and the consequences) as long as possible; preferably well into 2019, and as strategically close to the presidential elections in 2020 as possible. The Chinese know how to influence US elections too.

#52 Henry Stapleton on 12.03.18 at 7:28 pm

Sorry to say to all the doomsayers but The Dow Jones will be 28,000 by 2nd to 3rd Quarter 2019 as well as 3,300 S&P 500, Nasdaq 8,300, TSX 16,500.

Watch and see guys!

#53 Ronaldo on 12.03.18 at 7:37 pm

Best explanation of why Bitcoin is close to becoming worthless that I have read.

https://www.marketwatch.com/story/bitcoin-is-close-to-becoming-worthless-2018-12-03

#54 Rexx Rock on 12.03.18 at 7:38 pm

What about the 22 trilion dollar debt?Is it gone or forgotten?I can’t believe this debt will come without some very serious conquences.

#55 For those about to flop... on 12.03.18 at 7:41 pm

Have a stickybeak at this…

M44BC

“Visualizing the Aftermath of the Real Estate Bubble (2007-17)

The economy is at full employment, the stock market is doing fine, and memories of the Great Recession are finally starting to fade.

Unfortunately, not everyone is feeling the love of a growing economy, and nowhere is that more apparent than in the housing market. As it turns out, according to the U.S. Census Bureau’s American Community Survey for both 2007 and 2017, lots of states have barely recovered from the housing crash. In fact, the housing market is still below its 2007 figures in several locations around the country.

Our visualization provides a useful way to quickly see a snapshot of the housing market before-and-after the Great Recession. The first image from 2007 shows median home values in a heat map. The second image displays prices as of 2017, plus the percentage change in value from 10 years prior. Housing prices declined almost everywhere across the country in 2008 and 2009. Our GIF therefore highlights the places that have seen prices surge in recent years as well as the states that are still recovering from the crash.

Before the housing bubble burst, the most affordable housing market was sandwiched in the middle of the country between the expensive West and East Coasts. Stretching from North Dakota ($106,800) down to Texas ($120,900), housing prices were relatively cheap. California was the most expensive state on the mainland where the typical house cost an eye-popping $532,300. Another cluster of pricey states can be found in the Northeast around New York. The Upper Midwest around the Great Lakes region was somewhere between these two extremes.

In total, median house prices are now higher in 41 states plus Washington, DC than they were in 2007. But a closer look at the map reveals how underwhelming housing prices are. 22 states have seen values climb by 20% or less over the course of 10 years. Granted, prices have not only recovered but surged to double-digit increases in a few locations. North Dakota (+82.3%), Colorado (+49.2%) and Texas (+42.4%) have posted massive gains. The boom in domesticshale fracking largely explains the growth in North Dakota. The same can be said about Colorado and Texas, plus the fact that lots of young people are moving to cities like Denver and Austin.

But the housing market doesn’t look so positive everywhere, especially in those states that have yet to recover. Nevada is a case in point, where median home values are still 17.1% lower than their pre-recession levels. Las Vegas clearly doesn’t hold the same appeal for millennials starting their careers or baby boomer relocating for retirement. Other states like Rhode Island (-12.0%), Connecticut (-11.7%) and New Jersey (-10.0%) similarly remain below their pre-Recession levels.

The Great Recession revealed that housing prices don’t always go up year after year. With theFed raising interest rates and growth starting to slow around the world, what will this same map show in 2027? There’s no telling what the market will look like after a housingcorrection, much less years into the future.”

3 December 2018

Visualization

https://howmuch.net/articles/median-house-value

P.S Ronnie,I got your message,I was trying to tell everyone it was the house next door…7777

#56 Dan on 12.03.18 at 7:47 pm

You used the same wording as the Post today, “swamped warehouses.”

When you picture oil storage, do you actually see stacks of barrels in a building? Just curious, because it seems everyone (even folks I respect like you) has a fantasy view of the business. Further proof the industry here could have done a better job educating the public before the unwashed protesters drew up their loosely factual protest signs.

I worked in a refinery, actually. – Garth

#57 Pepito on 12.03.18 at 8:23 pm

Sure sounds like the economy wasn’t bigly improving after all.

If the rate hikes have done the job, how is that a negative? – Garth
———————-
Interesting. What job have the interest rate hikes done? Was it slowing down the runaway production and capacity expansion of businesses that used the tax break for buybacks or was it perhaps the galloping invisible wage growth? Was there bigly inflation?

#58 renter in Surrey on 12.03.18 at 8:26 pm

RE: #40 Unhinged Trader

> Xi says he will spank North Korea a little, and make Fentanyl a controlled substance so it’s a crime to export it into the States.

B-but, what will happen to the poor industrial-scale drug dealers who reside in B.C. and who have very expensive property taxes? Why have these people been singled out for economic assassination?

—————————————————————————————-

Nothing will happen to the poor drug dealers in BC.
Xi will make importing fentanyl to US crime, not to Canada.
So Canada will have to import US portion as well.
Lower Mainland is cartels land.

#59 For those about to flop... on 12.03.18 at 8:26 pm

Pink Pumpkins being carved in Vancouver.

This long term case seems to be grinding it out.

As in grinding their teeth and putting their realtor through the grinder.

So many reductions since starting off at 2.79 to cover their buy price of 2.6.

They just took another 100k off as that’s the only discount sticker they had at the dollar store that day apparently.

They have got themselves a good realtor,look after that realtor.

Cherish that realtor.

They’re not making them anymore…

M44BC

Originally asking 2.79

Then 2.69

Then 2.59

Expired and relisted.

2.38

Now asking 2.28

4855 Collingwood Street, Vancouver paid 2.6 April 2017

Sep 25:$2,798,000
Feb 9: $2,698,000
Change: – 100000.00 -4%

https://www.zolo.ca/vancouver-real-estate/4855-collingwood-street

https://www.bcassessment.ca/Property/Info/QTAwMDAwMEc4TQ==

#60 Sam the Sham on 12.03.18 at 8:29 pm

Well it looks like silly little Justin is at it again. On the spur of the moment he tweeted out to Trevor Noah at a celebration for Nelson Mandela in South Africa that he was pledging $50 million dollars to a local charity. Now don’t worry, this isn’t money from his personal trust fund, this is tax payers money. All right you could say it’s only $50 million, but you know $50 million here and $50 million there and pretty soon you’re talking real money! You wonder how far that $50 million would go to helping our seniors or veterans. Our little Justin sees himself as a celebrity on the world stage prancing around at international forums and conventions. He sees no reason why he can’t use tax payers money to burnish his image

#61 Brian Ripley on 12.03.18 at 8:43 pm

“Alberta is saved” Garth

Maybe…but the November real estate data is out and I have my chart study updated:
http://www.chpc.biz/calgary-housing.html

Calgary SF Detached Price
Down 8.3% from MAY 2017 peak
Up 22% in last 10 years

Calgary Town-House Price
Down 16.3% from FEB 2014 peak
T-Houses are priced at 68% of SFDs
or 1 SFD = 1.5 Townhouses

Calgary Condo Price
Down 21.8% from JUL 2016 peak
Condos are priced at 52% of SFDs
or 1 SFD = 1.9 Condos

Single Family Detached house prices are facing a retest of support, while strata prices continue dropping.

#62 Doug t on 12.03.18 at 8:56 pm

YES we are all gonna be rich – CANADA is saved

RATM

#63 Not So New guy on 12.03.18 at 8:56 pm

On trade deals and tariff spats, I think Shakespeare said it best 400 years ago:

Life’s but a walking shadow, a poor player,
That struts and frets his hour upon the stage,
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

#64 DON on 12.03.18 at 9:03 pm

#19 Paully on 12.03.18 at 4:55 pm
If Alberta oil is just so gosh-darn-cheap, why isn’t there more of a push to simply refine, sell and use it here in Canada, rather than fighting to build more export pipelines? It would seem to me that cheap Canadian oil, refined and used here would help our competitive situation in many other areas. Why doesn’t this happen?

**************
Lack of diversity, balance, vision and leadership.

#65 Drill Baby Drill on 12.03.18 at 9:09 pm

Don’t get so excited. He just toned down a trade war that he started. – Garth

Actually the Chinese started it 15 yrs or more ago with help from some US conglomerates and the Chinese up until today were winning it. But you are right we need the stability or we are all hooped. Perhaps Selfie Boy could tweet us a cool 50 mil.

#66 Lead Paint on 12.03.18 at 9:42 pm

#41 Barb on 12.03.18 at 6:54 pm
Thanks for sharing, yes JP nailed it on T2. Hopefully Scheer is taking points from him.

#67 mike from mtl on 12.03.18 at 10:02 pm

#65 Drill Baby Drill on 12.03.18 at 9:09 pm

Actually the Chinese started it 15 yrs or more ago with help from some US conglomerates and the Chinese up until today were winning it.
/////////////////////////////////////////////////////////////

Pulezzze, the Americans, us Canadians by extension, ‘voted’ with our wallets and the corps were all too eager to agree. Cheap Chinese crap due to their superficial laws, wild west standards and ultra cheap abundant labour started this trend decades ago.

The CPC was all too happy to oblige.

Walmart used to proudly proclaim “made in America” sometime in the 90s. That all changed due to – you the people!

China as the CPC as personnage is no innocent that is for sure, but “joe” public had a large say.

#68 Raging Ranter on 12.03.18 at 10:08 pm

@#19 Paully, oil refining is an extremely low margin activity, with extremely high start up costs. A more capital intensive, low margin activity than gasoline refining is hard to find. Tha’s why there is little enthusiasm for building more refineries in Canada, or anywhere else. Believe it or not, the most profitable part of the oil industry continuum is pulling it out of the ground and upgrading it just enough so that it is exportable. When we can’t get that product to market, we suffer. Remember, the oil industry exists to make money, not to put cheaper gas in your tank.

#69 CalgaryCarGuy on 12.03.18 at 10:15 pm

Alberta is not ‘saved’…not even close. Canada and Alberta needs pipelines…plural..and we need them asap to even come close to being saved. We are in a deep hole and, as every true Albertan knows, we WILL climb out of it somehow. But a even a little bit of help would be nice. We’re not getting that now.

#70 Smoking Man on 12.03.18 at 10:15 pm

Last year when Macron defeated la pen. I was very suprised. She was crushing it at the polls. Yet lost in a land slide.

Something fishy happend. I’m usually right.

With cops removing there helmets, the ambalance drivers protest and the fire fighters turning their back on him. The hundreds of thousands of protesters in the street.

That election was fixed 100%. Globalists are going to lose France very fast.

This is turning point people. Good guys are going to win.

T2 is next to go down. Demonizing construction workers a big mistake.

#71 Boxing Match on 12.03.18 at 10:22 pm

#67 mike from mtl – Did you see the big fight the other night? Now if you were watching did you observe something wrong with it all? It reminded me of the Ali and Chuvalo fight. George and I had dinner one night and disclosed to me things about who wins.

#72 JohnnyAB on 12.03.18 at 10:36 pm

So what do the fellow readers of this blog think about the RE prices if the rates won’t go up anymore? Should we expect rising prices again? It’s a little disappointing seeing lots of people who believed the “houses always go up, and if they go down it will be a small decrease” and who bought in 2016, being right…

#73 Smoking Man on 12.03.18 at 10:36 pm

Make families great again. Risit the new world order. Love your dog. The UN hates em.

#74 VicPaul on 12.03.18 at 10:38 pm

#11 Lee on 12.03.18 at 4:40 pm
Doesn’t what is happening in Alberta mean that companies that move gas and oil are great buys – like say CNR or TRP or Enbridge ? Anyone? Why are the latter two depressed? Anyone?

Both took on enormous debt to buy big takeover targets (Columbia/Spectra). Both are paying down debt/off-loading non-core assets, both pay a tasty quarterly divvie and, in my nobody’s estimation, both are a good long-term buy….hey, he said anybody.

#75 CEW9 on 12.03.18 at 10:57 pm

#36 Basil Fawlty on 12.03.18 at 6:28 pm

Given that Eastern Canada is importing crude oil, would it be practical to build a refinery in Alberta and then build a pipeline for finished product, to the east? A spill of finished product ie. gasoline would evaporate and not cause near the pollution. Canadians would likely approve such a pipeline.

A big problem with transporting gasoline its that its so darn volatile. Yes, it evaporates when it spills, but it also explodes. Much more dangerous over long distances.

The Sturgeon Refinery is the only new refinery built in Canada in the last 34 years. It is much needed, but is definitely not enough. As abdel stated, we need more.

The Energy East project was supposed to help, shipping Canadian Oil from AB to NB refineries, but was put down by the Trudeau Government, even though it uses an existing pipeline for 70% of the way. They were just going to reverse the direction the stuff flowed, and change over from NatGas to DilBit. But, no. That was a bad, bad decision, for both Eastern and Western Canada. Now they get their oil from the Kingdom of Saudi Arabia (who has kings anymore, anyways? Like, real a honest to goodness dictator of a king? I thought that went out of style around Cromweel’s time).

All of Canada is suffering as a result of this. We will continue to suffer. Shrinking equalization payouts. Shrinking federal and provincial tax income. Exploding deficits. A big sign to the world investment community saying they are not welcome. This will echo in Canada for decades, maybe a whole lifetime. Things may change a bit if the Lib’s get voted out and we have a rational govt take their place, but the threat of a return to T2’s ‘sunny ways’ will hang over the investment status of the nation for years and years to come.

Anyways, that’s my 2 cents. But we round to the nearest nickel now, so its worth less.

#76 fishman on 12.03.18 at 11:35 pm

Boxing Match: The Ali Chuvalo fight in the Gardens. Murray Pezim promoted that fight , at least promised Ali’s people the money. It lost a lot of money & Ali’s people took Pezim to the old Vancouver Court House.
We got wind that Pezim was in court & just like the old lady’s around the guillotine we went downtown to see the legend in action. I remember him leaning back in his chair like he owned the room. Well, to us he was magnificent. I heard he had to sell an Hawaiian Island to pay for that failed enterprise.
Maybe thats why I like Trump. He reminds me so much of Pezim. Its exciting, theres always something happening, or going to happen completely new & unscripted around these guys. Like venturing close to a pack of alpha wolves. Lots of fresh meat, but pay attention.

#77 acdel on 12.03.18 at 11:36 pm

#70 Smoking Man

Good observation my friend; I am glad that you noticed and hopefully others did as well. Most of my extended family reside from there so I am very much aware as to what is actually happening in that country. :)

#78 David Driven on 12.03.18 at 11:43 pm

#11 Lee, IMHO , ENB and TRP are screaming buys. Read any analytical report to separate the noise from the fundamentals. TRP doesn’t give a crap about Trudeaus hissy fit, they’re sitting on a 40 billion dollar backlog outside Canada, buy backs, raise dividend, what’s not to like. Ditto ENB , only much larger fundamental story, ground up , bottom down, this stock is on sale big time. Reuters, Market Beat, Zacks, Raymond James, whoever you choose to follow are thumbs up on these two issues. Focus on the future, don’t wait for a dinner bell , a perfect article, and cherry soda before buying these stocks. I’m buying more with dividends every thirty days. Look at the dividend on ENB, 6%++. Yum!!

Plenty of others that are so beaten down by ‘the fear’. One more if I may, although I could list at least a dozen with 50% upside and more, based on fundamentals alone, ECA, don’t take my word for it. Dig into the skyrocketing profit margins since they pulled off a huge reverse takeover. The TSX is a market of stocks, there’ll be no 50% returns on ETFs, but individual stocks are sleeper cells of profit. OK, one more TD Bank, more branches in the US than Canada, huge year ahead, again.

#79 acdel on 12.03.18 at 11:47 pm

Now that I have just recently woken from my nap I have to know from our beloved good irritable cat lover ” FELIX”.

Have you finally coughed up that fur ball and navigated against the dark side (felines, no offense) and joined the Dawg force? Ha, :)?

May the Dog Force be with you……

#80 Fortune500 on 12.04.18 at 12:27 am

#41 Jordan Peterson on point again. Very true.

#81 Big Pat on 12.04.18 at 12:37 am

US Equity may be bouncing back. What about preferred shares ZPR (BMO Laddered Preferred) down 10% from a few months ago. I thought Preferred Shares are relatively safe. no?

#82 Evangeline on 12.04.18 at 1:05 am

#14 Jimbo

I totally agree with with your tactful comment that beautiful Jarvis looks like he could handle more treats. A lot more treats.

#83 Evangeline on 12.04.18 at 1:20 am

#27 common sense on 12.03.18 at 5:46 pm “Just a coincidence that both China and the USA accomplished nothing in the trade dispute other than a 90 day delay just in time for everyone to have a chance at a nice Christmas rally and gloss over the slowing growth numbers coming out of China.”

Xi says that China will not be charging tariffs on US cars going into China any more, which was one of President Trump’s major demands.

Slower growth for China? Wait until the world’s “Marshall Plan” for building up North Korea starts. China is going to garner huge growth from that.

#84 Evangeline on 12.04.18 at 1:44 am

#28 “Also if everything is so honkey dorey why wouldn’t higher interest rates be warranted. This doesn’t pass the smell test.”

Because after a decade of low rates, the economic reshuffling in the USA has happened so fast that it needs time to re-establish itself. Many large new US factories are still under construction and haven’t even started producing yet.

#85 diharv on 12.04.18 at 1:46 am

Trump now has the ability to look like a successful world leader . Um no . He has always had the opportunity to do so but he is absolutely incapable of being statesmanlike . The man has no presidential decorum whatsoever . His “Get me out of here ” remark caught after abandoning the Argentinian president on a stage is just one of his latest improprieties .

#86 You know on 12.04.18 at 3:06 am

how do you know if the rate hikes have done their job if they take months and months to show up in the statistics..Garth?

#87 Stan Brooks on 12.04.18 at 3:12 am

Relax folks,

That light at the end of the tunnels is the coming train.

https://www.bnnbloomberg.ca/real-estate/video/realtor-sees-troubling-downturn-in-toronto-housing-as-sales-drop-44~1144831

https://seekingalpha.com/article/4192197-housing-bubbles-common-think

http://dailyhive.com/toronto/ubs-global-real-estate-bubble-index-2018-toronto

Chinese Media Is Now Warning Canada’s Housing Crash Will Be Worse Than The US

https://www.millennial-revolution.com/rent/canadian-housing-crash-worse-than-the-us/

While the dying cartels try to keep the bonanza going trying to influence people on what kind of news is desired and what is not.

Free press and democracy in action in T2’s Canada.

https://www.movesmartly.com/articles/toronto-real-estate-board-warns-agents-housing-price-crash-unlikely

The gold is all gone, boys and girls. Hangover time.

#88 The Real Mark on 12.04.18 at 4:39 am

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

Another great interview with Ross Kay on Howestreet.com. He discusses the systemic effects of the falling Canadian housing market, and the dramatic shift in the sales mix.

As usual, worth a listen.

Calgary SF Detached Price
Down 8.3% from MAY 2017 peak

Nonsense, Calgary peaked in 2010. Coincident with the peaking in front-end engineering associated with the oilsands projects.

#89 crowdedelevatorfartz on 12.04.18 at 5:25 am

@#60 Sam the Sham
“Well it looks like silly little Justin is at it again. On the spur of the moment he tweeted out to Trevor Noah at a celebration for Nelson Mandela in South Africa that he was pledging $50 million dollars to a local charity.”

+++++

Yesterdays news….but well worth repeating…..

#51 Ottawa Mike 12/02/18

Sadly this Tweet is not from the Beaverton:

Check out @JustinTrudeau’s Tweet: https://twitter.com/JustinTrudeau/status/1069214653169844227?s=09

#90 crowdedelevatorfartz on 12.04.18 at 5:46 am

@#60 Sam The Sham

One wonders if Trudeau will have anything to say about the South African Govt.’s seizing of white owned farms without any compensation.

https://www.dailymail.co.uk/news/article-6294121/In-South-Africa-city-plans-seize-land-test-case.html

While I expected Nelson Mandela’s death to accelerate the corruption, incompetence and looting of the public purse by the countries elected “leaders” .
I had hoped I was wrong and South Africa would be different from all the rest of that continents failed democratic experiments

Apparently South Africas neighbouring country Zimbabwe’s seizure of large farm lands 30 years ago in a “frenzy” of nationalization wasnt enough of a lesson in the abject failure of a populist electoral stunt gone wrong.
Zimbabwe..has gone from a nation that exported food to the rest of Africa to a net importer of food with millions of the population malnourished and a economy absolutely wrecked.

https://www.theglobeandmail.com/news/world/it-was-horrific-how-zimbabwes-upheaval-pushed-this-white-farming-family-toofar/article32104191/

Perhaps if Trudeau is elected leader here for a second term he can send $500 million in food aid to a country that, without large, economical farms providing food, jobs and stability will be scrambling to feed an angry population while its leaders spend their time whiling away in London on shopping sprees for the latest Rolls Royce to stuff in an already full garage.

https://www.irishtimes.com/news/world/africa/long-and-winding-road-of-south-africa-corruption-inquiry-1.3649391

#91 conan on 12.04.18 at 6:06 am

2018 closing out with moderate Democrats and capitalist Dippers grabbing the lime light. T2 will easily win the next Federal election.

#92 Howard on 12.04.18 at 7:03 am

#19 Paully on 12.03.18 at 4:55 pm

If Alberta oil is just so gosh-darn-cheap, why isn’t there more of a push to simply refine, sell and use it here in Canada, rather than fighting to build more export pipelines? It would seem to me that cheap Canadian oil, refined and used here would help our competitive situation in many other areas. Why doesn’t this happen?

———————————————-

This piece in the Post explains it. There are valid economic reasons for not refining more of our oil in Canada.

https://nationalpost.com/news/canada/tristin-hopper-why-canada-shouldnt-refine-the-oil-it-exports

#93 Albertastrophe on 12.04.18 at 8:16 am

The recovery in Alberta will be short lived. The disruptive move to electric and hybrid vehicles will cause oil demand to plummet in the next few years.

https://www.cbc.ca/news/business/gm-canada-president-says-electric-vehicles-are-the-future-but-they-won-t-be-made-in-oshawa-1.4931107

Alberta will become like Oshawa, times 10. House values will probably drop by 90% and even the population of the province will probably go down by about a million by 2030 (People are stubborn deniers, so many will hang around in poverty as well, so by 2040 this number could be even higher)

It’s not Rachel’s fault, or even Justin’s or Steven Harper’s. Just a fact of economic life and the market ramping up major changes that will, coincidentally, be much better for our environment and global warming as well.

Painful but necessary. It’s coming. Get out of Alberta real estate while you still can.

#94 Paully on 12.04.18 at 8:24 am

#92 Howard on 12.04.18 at 7:03 am

This piece in the Post explains it. There are valid economic reasons for not refining more of our oil in Canada.

https://nationalpost.com/news/canada/tristin-hopper-why-canada-shouldnt-refine-the-oil-it-exports

————————-

Thanks for the link! It was a worthwhile read!

#95 Howard on 12.04.18 at 8:39 am

#27 common sense on 12.03.18 at 5:46 pm

Poloz likely sleepless in Ottawa knowing whats coming down the pike in the near future.

—————————————–

Oh please. As if Poloz gives a rat’s behind?

What does the man even do all day?

#96 neo on 12.04.18 at 8:44 am

Garth,

So the 10 year bond is 2.97% this morning. After all these rate hikes and pom pom waving about how great the US economy is and corporate profits are the 10 year can’t even go to 3.35% without the bottom falling out of the stock market and retreating back below 3%. There hasn’t been a true recovery, just a papered over one with debt that is beyond the scope of servicing.

Actually the bond retreat is good. The Fed will soon say mission accomplished. It will drive guys like you nuts. Nice to see. – Garth

#97 Crazyfox on 12.04.18 at 9:13 am

I agree with you Garth in that there are positives in the market right now so the next 2 weeks look good. On or after December 19th, don’t be fooled however. A fed rate hike is still highly likely to happen meaning a brief selloff that will follow and a mixed market through Christmas and into next year. Beyond January… way too soon to say 2019 will be a good year.

Firstly, Trump is still Trump. Just because Chinese state controlled media is lauding affection on Trump doesn’t mean Trump acts in the best interest of Americans. Trump is way too greedy, narcissistic, bigoted and Russia compromised to do that and will be a drag on the markets regardless of what media has to say. Trump is a terrible leader, perhaps the worst the U.S. has ever had and they’ve had some stinkers. If people use Trump as a positive for the economy, they’ve been suckered and/or miss the obvious.

Secondly, trade with China is far from fixed. I expect plenty of noise and not much by way of China changing the way they do business.

Thirdly, the yield curve just produced its first inversion beginning with 3 and 5 year bonds:

https://www.bnnbloomberg.ca/the-flattening-yield-curve-just-produced-its-first-inversion-1.1177456

If it happens with the 2 and 10 year rate, that’s more serious meaning recession is certain but this is how it starts. Lots of caution out there right now…

Fourthly, expect another rate hike in 2 weeks! Ok, covered that but expect it! At the very least, don’t surprised. Consider what this will do and what that signals in the short term. Beyond this and into 2019, consider that equities are still historically high priced to earnings adjusted for inflation. Buy low sell high right?

Oh, and can’t not say something about our WCS crude chart. While its good to see prices rebound, this will hurt oil exporters that are forced to shut in production. There will be losers because of Notley’s policy, its not all roses for Canadian oil producers.

A December rate hike is baked in. Nobody will be surprised. The yield curve inversion is meaningless. – Garth

#98 Lee on 12.04.18 at 9:18 am

#74 Vic Paul,

Yes, long-term they look good. Although I am scared that if Trudeau and Notley continue their attacks on the energy sector, not to mention the courts continuing to do so, these stocks could lag for along time. However, they pay 5-6% dividend and they have not failed to increase their dividends for a long time so they look pretty solid as a hold.

For people who love pref etfs like CPD, you may wish to consider a Canadian equity/dividend etf, CDZ. This thing pays a dividend of about 4.3% right now in eligible dividends. I think it is safe to say Canada will average 2-3% per year growth in equities in the next ten years so this thing pays about 7% per annum if the dividends hold up. The US equivalent is SPHD which pays a dividend of about 3.9% (although accounts of this differ) and grows at a rate of 6-7% per year the last five years. These two can make up a solid foundation to one’s growth side of the portfolio.

#99 dharma bum on 12.04.18 at 9:55 am

#60 Sam the Sham

He [Trudeau] sees no reason why he can’t use tax payers money to burnish his image.
——————————————————————–

Trust fund babies have zero concept about the value of money. They’ve never earned a penny.

#100 Howard on 12.04.18 at 9:59 am

#94 Paully on 12.04.18 at 8:24 am

#92 Howard on 12.04.18 at 7:03 am

This piece in the Post explains it. There are valid economic reasons for not refining more of our oil in Canada.

https://nationalpost.com/news/canada/tristin-hopper-why-canada-shouldnt-refine-the-oil-it-exports

————————-

Thanks for the link! It was a worthwhile read!

————————————–

Of course bear in mind that those advocating for more refineries may have their own rebuttals to some of the points raised in that article.

But many people seem to think Alberta is just too “lazy” to build refineries or lacking in vision, etc, when the reality is a lot more complicated.

I’m neither pro- nor anti-refinery, I’m not sufficiently knowledgeable on the issue so I defer to the experts.

#101 PastThePeak on 12.04.18 at 10:23 am

#93 Albertastrophe on 12.04.18 at 8:16 am
The recovery in Alberta will be short lived. The disruptive move to electric and hybrid vehicles will cause oil demand to plummet in the next few years.

https://www.cbc.ca/news/business/gm-canada-president-says-electric-vehicles-are-the-future-but-they-won-t-be-made-in-oshawa-1.4931107

Alberta will become like Oshawa, times 10. House values will probably drop by 90% and even the population of the province will probably go down by about a million by 2030 (People are stubborn deniers, so many will hang around in poverty as well, so by 2040 this number could be even higher)

It’s not Rachel’s fault, or even Justin’s or Steven Harper’s. Just a fact of economic life and the market ramping up major changes that will, coincidentally, be much better for our environment and global warming as well.

Painful but necessary. It’s coming. Get out of Alberta real estate while you still can.
++++++++++++++++++++++++++++++++++

How many (pure, plug-in) electric vehicles do you own? If not, why not? Do you know how many pure EV’s were sold in Canada last year (hint – it was less than 20K)? I don’t believe that number will grow this year after Ontario cancelled the $14,000 per vehicle subsidy they provided (yes – you read that number correctly).

Globally the % of EV’s sold in 2017 was 1.3%, most of which were sold in China.

From less than 20K vehicles sold in Canada, you expect gas/diesel cars to go extinct by 2030?

Sometimes it is a mystery why some people are so completely clueless and delusional…

#102 World Leader on 12.04.18 at 10:33 am

#85 diharv – Oh, but Garth’s statement was more than correct. Trump being a world leader matters not, but the perception of such is all that counts. Trump can indeed appear to be a statesman to others, if he’s perceived that way by changing his brand.

#103 IHCTD9 on 12.04.18 at 10:40 am

#91 conan on 12.04.18 at 6:06 am

2018 closing out with moderate Democrats and capitalist Dippers grabbing the lime light. T2 will easily win the next Federal election.
____

Hopefully with a majority.

The bigger the hole in the hull, the sooner we’re going to have to abandon ship.

#104 Steven Rowlandson on 12.04.18 at 10:40 am

Regarding pipelines, refineries and made in Canada solutions to problems.

If the government acts in the national interest for any reason and tells you or any business to do this or that and you or the business tells the government to go shove its head up its butt and fight for air what do you think the government is likely to do? Assume the pose or put on the steel toed boots and kick your arse off the face of the earth to avenge the insult and disobedience? Sometimes the national interest and common good has to come first before private interests. Markets are not the end all be all and they are not the government or equal to or superior to it.

#105 Pepito on 12.04.18 at 10:51 am

Actually the bond retreat is good. The Fed will soon say mission accomplished. It will drive guys like you nuts. Nice to see. – Garth
__________________________

That”s funny. “Mission accomplished”. Where have we heard that before? A little bond inversion recently….hmm.

#106 IHCTD9 on 12.04.18 at 10:58 am

#90 crowdedelevatorfartz on 12.04.18 at 5:46 am
_____

Over the years, I’ve worked with two (white) SA immigrants. They both had the same thing to say about SA, and most other nations on the continent:

“Build a wall around it and fill it with water”

I’ve completely stopped giving to organizations that work to help in Africa unless they can convince me they have 1st party boots on the ground, and also provide pictures, names, and stories/letters directly from their clientele about the effect the work has had in their area – on at least an annual basis.

Any other way, and I’m probably just helping another Mugabe wannabe pay for his Ferrari.

#107 IHCTD9 on 12.04.18 at 11:13 am

#51 Ottawa Mike 12/02/18

Sadly this Tweet is not from the Beaverton:

Check out @JustinTrudeau’s Tweet: https://twitter.com/JustinTrudeau/status/1069214653169844227?s=09
_____

Exactly why I’ll be voting Trudeau. Our taxes go up, and he sends said taxes to *who knows where*, to help females “get educated”.

Taxes have to go up a lot higher yet before Canadians start rearranging their political priorities.

Harden your resources against extraction by government. It’s not going into anything you will benefit from anyway. Once you are well steeled, let’s all go and vote this guy a majority.

#108 Leadership on 12.04.18 at 11:27 am

#104 Steven Rowlandson – The answer you are searching for is the quality of leadership, and you can become the judge in this matter. Our PM has stated that Canada is now a non-national entity, and under his leadership is leading the way. In other words we are no longer a nation, but have been branded into something else. Is this what the majority of Canadians have voted for?

#109 Alistair McLaughlin on 12.04.18 at 12:14 pm

@ # 104 Steve, regarding pipelines, the oil industry never told the government to shove its head up its butt. In fact, their demands thus far have been almost universally to remove its head from its butt, use its Constitutional authority to declare the pipeline in the national interest, and get the damned thing built in spite of opposition. Something that could have been done with private sector money had they acted prior to Kinder Morgan giving up on the idea. It’s not a lack of industry cooperation holding up pipelines. To say that is ridiculous.

Regarding refineries, a good article was linked by #92 Howard explaining why building more refineries isn’t necessarily the good idea so many think it is.

#110 Ex Pat Canuck on 12.04.18 at 12:26 pm

I agree with you, Sir Garth, but I quibble a little, for you never seem to address the person who is close to retirement and the effect a 10% or more drop in that person’s portfolio will have on their finances in retirement. Hey, a 25 year old damn well better heed your advice, keep your investments pat and don’t change the strategy, full steam ahead. But what about the 64 year old who is looking at a dramatic market correction/bear market in the next 12-24 months, what do you advise them to do? You never address that so far as I recall. Thoughts?

There is no ‘dramatic’ market drop likely. Corrections are temporary, and pass. The only ones who take a hit are the emotional people who sell into a storm. So, like I said, don’t. – Garth

#111 James on 12.04.18 at 12:44 pm

California wildfires just claimed the first of a few companies to go be liquidated, not even a chance for chapter 11.
Merced’s assets are about $23 million, but only has $64 million in outstanding liabilities. This is only for the city of Paradise, Ca.

https://www.mercedpcins.com/

#112 Graeme on 12.04.18 at 12:54 pm

Garth,

Sell into a storm? The markets are over valued presently so selling now would be based on logic and if there’s emotion there, so what? Buy low, sell high. And the markers can fall and then flat line for decades. It’s happened in my life time.

And look at the markets today. The dropindicates a lack of confidence. It’s very shakey indeed. Marianne acted prudently.

#113 Penny Henny on 12.04.18 at 12:54 pm

DELETED

#114 Barb on 12.04.18 at 12:57 pm

#108 Leadership on 12.04.18 at 11:27 am

“…Our PM has stated that Canada is now a non-national entity, and under his leadership is leading the way.”
——————————————

Source? Curious when/where T2 made this statement.
To whom?

I seldom read his diatribe but if so, the comment likely evidences his “world government” views.

Canada on the UN’s Security Council may be his “job hunt?” Gawd help us.

#115 TurnerNation on 12.04.18 at 1:18 pm

Well done dogs last night you called this rout.
TLT.US. gone apesh*t today.

So Gartho worked in a refinery and a brewery if I recall. This man knows liquid assets.

#116 Howard on 12.04.18 at 1:27 pm

#114 Barb on 12.04.18 at 12:57 pm

#108 Leadership on 12.04.18 at 11:27 am

“…Our PM has stated that Canada is now a non-national entity, and under his leadership is leading the way.”
——————————————

Source? Curious when/where T2 made this statement.
To whom?

——————————————

https://torontosun.com/2017/01/06/trudeau-doesnt-appreciate-canadas-greatness/wcm/caf3050e-2d2a-4318-828a-c307bec177d2

In one of his first interviews after becoming prime minister, Justin Trudeau told The New York Times Magazine that Canada is becoming a new kind of country, not defined by our European national origins or history, but by a “pan-cultural heritage.”

“There is no core identity, no mainstream in Canada,” Trudeau said, stating that Canada is becoming “the first post-national state.”

#117 jess on 12.04.18 at 2:14 pm

Republicans Finally Have an Election Fraud Scandal. And None of Them Want to Talk About It.
There’s evidence of fraud to benefit a Republican congressional candidate.
Pema LevyDecember 4, 2018 6:00
unanimously not to certify the results in the Ninth District — where the Republican candidate, Mark Harris, led the Democrat, Dan McCready, by less than half a percentage point — because of absentee ballot irregularities.

https://www.motherjones.com/politics/2018/12/republicans-finally-have-a-voter-fraud-scandal-and-none-of-them-want-to-talk-about-it/

Disputed North Carolina Race May Hinge on a Shadowy Operative
https://www.nytimes.com/2018/12/03/us/politics/north-carolina-election-fraud-.html?module=inline

#118 45north on 12.04.18 at 2:27 pm

Always remember when things feel bad, you alone have the ability to make them worse. So, don’t.

good one

#119 Glengarry Girl on 12.04.18 at 2:43 pm

It does not look like the China US Trade Truce has gained the confidence in the Market that was celebrated yesterday.

https://www.google.com/amp/s/amp.cnn.com/cnn/2018/12/04/investing/stock-market-today-dow-jones/index.html

#120 neo on 12.04.18 at 3:39 pm

By the way, that 2.97% ten year is now 2.92% since my post this morning and the stock market isn’t doing so hot. So there is that.

#121 slick on 12.04.18 at 4:35 pm

ooooooooo today’s market move will cause weeping and gnashing of teeth

#122 Barb on 12.04.18 at 11:09 pm

#116 Howard on 12.04.18 at 1:27 pm
https://torontosun.com/2017/01/06/trudeau-doesnt-appreciate-canadas-greatness/wcm/caf3050e-2d2a-4318-828a-c307bec177d2

In one of his first interviews after becoming prime minister, Justin Trudeau told The New York Times Magazine that Canada is becoming a new kind of country, not defined by our European national origins or history, but by a “pan-cultural heritage.”

“There is no core identity, no mainstream in Canada,” Trudeau said, stating that Canada is becoming “the first post-national state.”

———————————————–

Thank you for providing the source.
I vehemently disagree with T2; however he’s certainly working hard to remove Canadians’ “core identity”.

Heaven help us.