2018 sucked. Well, not for me because I sold a general store and bought a bank, had another year with Bandit (he’s 13 now) and spent more time by the sea (with my squeeze). But like most people my portfolio lost some air.
That’s okay. This isn’t my first rodeo so I know dips happen. They’re temporary, not permanent. Doing nothing is always the best strategy. There are times to feel good about investments and times to ignore them. Fretting is pointless, if you have a properly weighted account. Things will work out.
Having said all of that, 2019 poses an interesting dichotomy.
The good news is obvious. More people are working now in Canada and the US (especially) than in decades. The economy is growing, yet inflation’s tepid. Corporate profits have been outstanding, which is why companies have been hiring. Housing has corrected but not crashed. No big wars going on to threaten the world. Adele still isn’t touring. And after almost a decade of recovering from the credit crisis, the world is growing again. The time to worry, seriously, was 2009. Not 2019.
But there’s also bad news. In one word, it’s Trump.
The American president has become the biggest destabilizing force on the planet. Hard to believe one guy could do that, but he did. After helping push markets to historic highs with his corporate tax cuts, deregulation, pro-business, inflationary, expansionist, protectionist, America-first agenda, he’s now single-handedly torn them down. Trump has turned the US government into a one-man band. As the shutdown currently shows, when he doesn’t get his way (like funding a silly wall), he’s willing to throw 400,000 people out of work. Being a billionaire must shield you from knowing what that means over Christmas.
Trump fired his secretary of state, Rex Tillerson, because that pillar of the corporate world disagreed with him. Now he says in a tweet the former Exxon CEO is ‘dumb as a rock’. He fired his attorney-general, Jeff Sessions, because he disagreed with him by taking an ethical stand. He fired his White House chief of staff, General Kelly, because he disagreed with him. He fired his secretary of defence, General Mattis (technically he retired), because he disagreed with him over Syria and working with America’s allies. Trump has insulted Britain, France and China. He has cozied to dictators in North Korea, Turkey and Russia. He forgave MBS for slaughtering a US journalist. And he has started a global trade war.
In short, the US president has taken over the legal, military and diplomatic affairs of the strongest nation on earth, installing lackeys to follow his orders. With each of those moves, investors, markets, American allies and most reasonable people have become alarmed. This is a pattern of destructive, quixotic behaviour that goes beyond being an iconoclastic populist. This is emperor stuff. It’s scary.
Now the worst may be to come. Trump’s considering taking over monetary policy. The implications are epic.
Since the Fed raised interest rates for the 10th time last week, the president has been seething. Despite the fact he appointed Jerome Powell to be the Fed boss less than two years ago, Trump is reportedly talking to aides about dumping him. Never before has a president done this. The result would be a grand mess. Such a move would destabilize markets by scuttling investors’ confidence in an independent, non-political central bank setting policy that guides the global system. A Fed chairman has always been above the fray, beyond partisanship and focused on the long-term, multi-decade health of the economy. Not the next election.
Will Trump be the first American leader to attempt such a thing? Myopically, he thinks the Fed hikes have caused stocks to plop, and changing monetary policy will make it all better. But the move would be seismic, destined to breed turmoil and lead to a constitutional crisis as the House and Senate refuse to ratify it.
Let’s hope this doesn’t happen. Higher rates and vigilant central banks are needed to deflate asset bubbles, remove the stimulus that has made houses unaffordable and pave the way for sustainable growth. That’s why the Fed, like the Bank of Canada, has always been independent from politics. But in Trumpworld, everything becomes an extension of him.
Next year brings a divided Congress to the US and more conflict. That’s certain. Mueller could emerge with evidence of personal crimes and misdemeanors. The Dems could start an impeachment process. And the president, true to his nature, will fight in a compelling way that divides the country further. There is no good outcome to this, whether he punts the Fed boss or not. Just talking about such a thing is shocking enough.
As the second year of his presidency ends, however, one thing is clear and, for markets, ultimately reassuring. He’s now toast.
166 comments ↓
B.S. Garth…Trump is the greatest president in the history of the U.S….you are just a typical cynical, blah Canadian
How Bad Will It Get for the Stock Market? ?
As the second year of his presidency ends, however, one thing is clear and, for markets, ultimately reassuring. He’s now toast.
No arguments from me but after Dubya’s re-election in 2004 and Trumps’ victory in 2016, anything in USA politics can happen.
In short, democracy always has been a myth.
Raw power drunkenly advances. Glad to see we never change, as people. T-rump’ s bosses must be exceeding pleased.
Now to things which matter – keeping your eye on the almighty daller . I’ve been accumulating converable (mainly) debentures for the upcoming TFSA .
While Boomers have been investing in convertable dentures (puttable only on your nightstand).
Totally sobar.
We need interest rates to ve raised. Wish they would’ve been doing it years ago. Always afraid how it will tip the scales of those who.are in over their heads. Now we have an epidemic of heloc amd pricey housing clients. House snobs. Will the Canadian election change any of this? We need conservative gov’t back in.
#100 Shawn Allen on 12.23.18 at 1:58 pm
You lack basic economic fundamentals given your claim that you are a CFA.
To consume/eat something you must produce it first or produce the equivalent value in merchandise/services/goods.
Living on credit and buying stuff you did not earn is artificially boosting demand, pulling up demand from the future but that is due to getting loans from somebody else without providing your part of the trade – i.e services, goods. At some point you would have to deliver on it.
Support for aggregate demand is good within certain limits.
Look at stuff that matters like balance of trade, foreign investments, Net national product, not an artificial GDP.
The bad side of an excessively consumption based economy is that it incentives miss-allocations of capital and investments (which are driven by risk, profit and rate of return) and drives the economy to non-competitive state until it eventually crashes (as it appears out of nowhere).
I challenge you to go to a grocery store, to a hardware store or to a general retailer store and check what part of the merchandise/goods is made in Canada. Then go to LCBO and check how much of the alcohol is produced in Canada. Then ask yourself what do we provide in return for that.
What we do pretty much is shifting stuff around including houses, while actually producing very little.
We incentivize financialization as a society by removing the risk, beefing up profits for the players there and we will get as a result excessive financialization.
No society gets rich by shifting paper around.
“Never before has a president done this.”
Andrew Jackson actually went further: https://en.wikipedia.org/wiki/Bank_War
Trump has portraits of two presidents in the office. One is George Washington. Guess who the other one is? :)
There was no Fed then. – Garth
I have a bet that Trump gets re-elected in 2020. Similar to the tories here, the democrats simply don’t have a candidate that has the persona to get elected. From a white angle lens, if you look at history’s recent world leaders…Putin, Berlusconi, Macron, Trudeau, etc….Trump fits in there like a perfect piece of the puzzle.
BTW, the bet is a friendly dinner at Barberians steak house
“This is emperor stuff. It’s scary.”–GT
Oh Garth, why are you always so negative? Or do you just need a better proof-reader?
Of course, that should read, “This is emperor stuff. It’s wonderful!”
You’re welcome.
B.S. Garth…Trump is the greatest president in the history of the U.S….you are just a typical cynical, blah Canadian
OMG, please crawl back under the bridge and roll another joint amigo!
Garth, my understanding is that Mattis resigned.
But that the General’s scathing ‘reasons-why-good-bye’ letter has prompted Herr Gropenfuhrer to hasten the timing of departure.
Merry Christmas to all and to all, a good-nite ..!!
The emperor will not disappear quickly like Nixon did in a helicopter on the White House lawn. He won’t be making peace signs with a phony grin on his face. No, it will be something quite different.
Dear Garth,
I am very grateful for your advise, but on politics I respectful disagree. I love president Trump and my prayers are with him. The true evil leaders right now are the three Ms (May, Macaroni & Merkel). They are the enemy of my home country, which has been humiliated and bullied by the EU. I can’t even begin to imagine how depressing the world would have been if Hillary won.
Merry Christmas to all !!!
“That’s okay. This isn’t my first rodeo so I know dips happen. They’re temporary, not permanent. Doing nothing is always the best strategy. There are times to feel good about investments and times to ignore them. Fretting is pointless, if you have a properly weighted account. Things will work out.”
—
LIfe is temporary too – so go out and have some fun… and max out your credit card.
Merry X-mas and happy housing crash everyone (hey, what happened to him?)
2019-20 will separate the boys from men (sorry PC police!)
TCC
Trump supporters at this point seem to be blind to the validity of almost any criticism. I would make this point to the Trump supporters. In my decades of reading about business, and listening to business analysis, commentary and critique, there is a principle of business and investing that can be regarded as a core economic value.
Businesses, industries and investment capital make a universal statement – they crave, require, demand and appreciate certainty and stability. Governments that provide stable, consistent economic, fiscal and industrial policy attract capital, economic activity and jobs. Trump is sending a very clear message to capital investment – stay away. You cannot count on me or my administration for five minutes – we can and will change our minds. We will not only not back down from a fight, we will go out and pick one.
With a couple of years to go, it seems doubtful that he would be re elected. But a week is a long time in politics, and an eternity in the Trump administration.
“As the second year of his presidency ends, however, one thing is clear and, for markets, ultimately reassuring. He’s now toast.”
=====================================
Not a chance. 6 more years of President Trump.
Prosperity for CNN and MSNBC will continue…
Businesses, industries and investment capital make a universal statement – they crave, require, demand and appreciate certainty and stability. Governments that provide stable, consistent economic, fiscal and industrial policy attract capital, economic activity and jobs. Trump is sending a very clear message to capital investment – stay away.
I agree, but also would point out Trudeau is doing the exact same thing. Particularly bill C-69 & any new project’s need to study “impacts on the intersection of sex and gender with other identify factors.” As it is not defined clearly it will have to be settle in the courts. Which is a outrageously uncertain outcome, resulting from this very poorly written law.
US uncertainty: Trump.
Canada uncertainty: Trudeau.
Europe: Brexit, Italy debts. Merkel’s out. France is burning.
China: Trade war, miracle growth waning.
EM’s: Brazil’s new leadership, Venezeula currency crises, S. Africa seizing private property.
There is not much for stability in the world these days. No wonder the markets fell.
Love or hate the POTUS, how will we look back at his time in the White House?!
… there’s also bad news. In one word, it’s Trump.
_______________________
Well, … I have been a most keen watcher of U.S. elections since the 35th president being elected, in 1961, … and during the 2016 election all I saw was cowardly, irresponsible, morally deprived opportunists – all lined up to contest the presidency, … and Trump knocked them all out with most unprecedented ease! And not because he is any sort of a prerequisite type of a leader, … but because it was so easy!
Anyway, … bad news: … it’s more than just one word!
Still, though, one finds hope the day after the solstice, the darkest time is already past us.
Yuletide. Be merry!
F.S. – Calgary, Alberta.
Russian engineering of Trump presidency is pure genius. Without a single military casualty they have created a situation where the mighty USA is imploding unto itself. Christmas wish- please sir (Trump), resign.
Well, this day’s comment section is sure to be filled with fair and balanced and diversified, eh?
For those who enjoy well laid out opinion with every point cited there is a user at Reddit called poppinKREAM, a Canadian who seems to have an inexhaustible amount of time to research and an uncanny ability to explain the deeper nuances of today’s political climate.
https://www.reddit.com/r/ShitPoppinKreamSays/
Personally I’m hoping to see the P Tape sometime in 2019.
Where can you buy food with gold? – Garth
////////////////
Next door to ‘Howard the jewelry buyer’
Butts is going to block me again. Just for sharing this fact.
https://www.google.com/amp/s/business.financialpost.com/opinion/canada-may-already-be-carbon-neutral-so-why-are-we-keeping-it-a-secret/amp
Canadian trees, water and plants absorb 20 to 30% more co2 than Canadians produce. It’s estimated that the UN should be paying Canada 10 billion a year.
Paris accord china gets a free pass to burn as much carbon as they wish..
The Climate tax is the scam of the century. Amazon has big sale on yellow vests.. See you in Ottawa in Feb mega caravan getting organized in Alberta.
#18 Andrewski on 12.23.18 at 4:09 pm
Love or hate the POTUS, how will we look back at his time in the White House?!
———
Easy. Erase it from the history books. Trump who?
Rub tummy.
Garth is right about Trump.
https://www.youtube.com/watch?v=x9XbNplyDhg
Do not live in denial about what is obvious to us all.
Bah. The POTUS will announce something in a year about what a great trade deal they came to with China. Whether it is good or not, will probably be like the USMCA, but it will get news. Try to make himself look like he is accomplishing alot for re election.
It is like he causes a stir, just to be the guy who was able to solve the problem he created.
Scott Adams has the best explanation for Trump Derangement Syndrome: “One screen, two different movies”.
The other movie to Garth’s anti-Trump rant is that Trump is adaptable and like a hockey coach, he knows when to shuffle lines, change the line-up and trade or bench players who aren’t performing. What some see as “Chaos”, others view as shifting the team around to accommodate changing on-ice conditions.
In a large part, the Democrats have created a lot of this “chaos” as many good and talented players are on the sidelines as they fear for their lives or careers should they don the jersey of Team Trump.
As a matter of note, when did the market sell-off begin? Sometime in late summer. Why? The market was surprised by the hate and vitriole that Democrats unleashed on Justice Kavanagh’s confirmation. The light went on for many investors; if the Democrats carried the house the next two years would be a never-ending seek and destroy mission against Trump. And that would be bad for business, as the real business of the country would languish. So investors picked up their toys and left.
If anybody out there really doubts that the Democrats will do anything substantive other than try to destroy Trump in the next two years, please explain to me what it is. So far all I’ve seen is “hair on fire” stories about how Job One for Democrats is to destroy Trump and if they can’t get to him, they’ll destroy his family.
Hardly investor confidence inspiring behavior by an incoming congress.
And hence the market swoon.
Nope. Mr. Market is not that petty and partisan. That’s your territory. – Garth
Merry Christmas and Happy New Year to you all!
I have a feeling my parents bought me a new Xbox this year. I can’t wait! Another reason to never leave the basement!
Garth. I really appreciate your insight on real estate and becoming a thinking, responsible investor to protect and gain wealth. Your 6 columns a week are always worth the read.
Two areas where we part ways … your disdain for President Trump and your support for implementing a UN run system for controlling the weather world wide … by committee yet.
The impact of Trump’s presidency had yet to be felt. Lots of noise from MSM ahead but that’s it. He’ll be back in 2020 for another 4 years.
Best to leave it there for now.
Controlling Weston? You’ve flipped. – Garth
One way or the other, Trump sure get people’s blood flowing.
You have now a skittish Market obsessed by what COULD go wrong and NOT what has gone wrong. It has given false indicators before. As you said a 15% drop now is not a 50% drop ala year 2007.
People are all happy when their portfolios are going up and when down, lash out at the easy to blame like Trump or Trudeau.
Human Nature at its worst. Greed and Ego make for a Fickle Mistress.
Take your own advice Garth and calm the heck down.
If I were any calmer I’d be prone. But silence is not an option. – Garth
Merry Mammon everyone!
At the risk of repeating what Garth said re….
Trump’s leadership.
Dips happen.
Your love for “elitists” and your hate for Trump is blindsiding you, Garth.
MSM is not real world, it`s not even News , it`s only opinions now.
Trump will be at the Presidency until 2024.
Just respond to the points raised in the post. – Garth
Not so fast.
If everything is so hunky dory, sunshine and lollipops, then why did the IMF sound alarm bells back in October warning of a severe recession (possible depression) by 2020? As far as the unemployment rate goes, I call BS on that and it’s only when you look at the participation rate and the inside data where the story gets even more interesting: GM, Bombardier, GE, and now even the job outlook for General Dynamics in London is looking terribly shaky all of a sudden. I personally know of three guys who got their pink slips just within the last month… Merry Friggen’ Christmas…
Sure Trump isn’t helping matters, but he’s hardly to blame for this mess. The seeds were planted LONG before the orange populist came along. The truth is that we had a good 10yr bull run that was propped up with nothing more than cheap money and easy credit. Remember folks, the *ONLY THING* that kept the entire game going over the past decade was the central banking cartels who kept pulling rabbits and tricks out of their hats. In other words, NOT ONE BLOODY THING HAS BEEN SOLVED. They merely kicked the can down the road. Now that the well is running dry (again), they have no bullets left to stem off the next crisis. Are the chickens finally coming home to roost? Personally, I think Trump should reign in the Fed and call them out on their BS as this entire debacle–going all the way back to the ’08 crisis–was a DIRECT RESULT of their stupid, incompetent, and downright idiotic monetary policies.
My takeaway? I say let the entire house of cards come tumbling down. What we need is a global reset. The ENTIRE PLANET is currently sinking in a quagmire of red ink. A $250 trillion debt bomb that nobody seems to notice. The notion that stocks, housing, investments, bonds, etc, can only keep rising is nothing more than pure and utter fantasy. The reason we’re witnessing all this chaos and upheaval all over the globe is due to income disparity which inevitably always leads to civil unrest. This is exactly what happens when the income gap grows too wide, when too many people are getting left behind and denied a place at the table. Income Disparity. Class Warfare. Civil Unrest. Tribalism. All throughout recorded history, one can plainly see that it has happened in that precise order and there’s escaping the simple rules of arithmetic. You know. 2+2 is always gonna equal 4 no matter how hard you try to twist and manipulate the numbers. What we have now is a society too concerned with money and material things, a nation of sheep that have enveloped themselves in a bubble of denial, ‘cry zones’ and ‘feel goodism’, at any cost. Sure we can ‘afford’ it because we ‘deserve it’, and gosh darn it, even if we have to be indebted slaves for the rest of our lives and mortgage our entire futures, by golly, we’re going to have it–and now.
Look up Godfrey Bloom’s videos on YouTube and tell me he doesn’t speak the truth. We are truly living in a wicked system of things indeed where a certain segment of the population lives like selfish pigs while others can’t even scrounge up enough money to buy a loaf of bread or even a cup of coffee. Speaking of which, enjoy the 4% rise coming to your grocery bill next year. The day of reckoning will come, folks. Good luck when this global game of Monopoly blows up…
Response to Stan Brooks
#6 Stan Brooks on 12.23.18 at 2:55 pm responded to me and I will respond point by point for anyone interested.
#100 Shawn Allen on 12.23.18 at 1:58 pm
“You lack basic economic fundamentals given your claim that you are a CFA.” Response, well my CFA remains valid.
“To consume/eat something you must produce it first or produce the equivalent value in erchandise/services/goods.” Response: Agreed but when we say GDP is mostly driven by consumption we are talking about where the GDP produced goes, most goes to consumption and providing government services, a chunk gets reinvested in long-lived assets and there can be either net exports or net imports.
“Living on credit and buying stuff you did not earn is artificially boosting demand, pulling up demand from the future but that is due to getting loans from somebody else without providing your part of the trade – i.e services, goods. At some point you would have to deliver on it.” Response: True what one person buys on credit was effectively paid for today by someone else who could have consumed it today. Anyone borrowing to consume to today must pay that back later. In the net everything produced on earth today was fully paid for today by someone because it is not possible for the earth as a whole to borrow from the future.
“Support for aggregate demand is good within certain limits.”
“Look at stuff that matters like balance of trade, foreign investments, Net national product, not an artificial GDP.” Response – artificial GDP? no response is merited.
“The bad side of an excessively consumption based economy is that it incentives miss-allocations of capital and investments (which are driven by risk, profit and rate of return) and drives the economy to non-competitive state until it eventually crashes (as it appears out of nowhere).” Response: Figures show that fully 23% of Canada’s GDP is reinvested for future while consumption of people plus government is 78% with 1% coming from a trade deficit. Why do you think more than 23% should be reinvested?
“I challenge you to go to a grocery store, to a hardware store or to a general retailer store and check what part of the merchandise/goods is made in Canada. Then go to LCBO and check how much of the alcohol is produced in Canada. Then ask yourself what do we provide in return for that.” Response, yes the fact is that Canada does import more than it exports. The trade deficit however is 1% of GDP. Not huge. Exports are about 31% of the size of GDP and imports about 1% higher. I have the facts. You have opinions.
“What we do pretty much is shifting stuff around including houses, while actually producing very little.” Response: Speak for yourself, that is completely false as the value of final goods produced in Canada (GDP) was $2.18 trillion in 2017. Again, I have facts. Google “Understanding the Canadian Economy” if you are interested in actual facts.
“We incentivize financialization as a society by removing the risk, beefing up profits for the players there and we will get as a result excessive financialization.”
“No society gets rich by shifting paper around.”
Response in closing: You’re welcome.
Garth on Trump
Excellent summary. Vert scary. I pray this is the beginning of the end for him.
WHEN I SHOW UP….
TRUMP WILL LOOK LIKE THE HERO OF THE WESTERN WORLD.
THE BLACK SWAN
As Canadian’s we are too obsessed with American politics.
Rather, be obsessed by their GDP since ours mirrors and follows theirs as we are dependant on America for our economic well being.
So far US GDP up, ours is up. US Job Creation is near unprecedented as is ours. US Inflation low as is ours. US unemployment at near historic lows as is ours.
These are economic fundamentals in REAL TIME and not the Make Believe Market worries as of late.
US RE has peaked and is going down, so is RE in Canada.
The only difference is that US RE no longer represents a big chunk of their economy as it does in Canada. Nor are American’s indebted to the gills as are Canadians with RE underwriting 70% or so of that debt.
That is the CDN. STORM CLOUD to worry and obsesses about (The Wealth Effect) and not Trump and his machinations.
Trump’s a nutter to be sure but look at the economic numbers being posted out of the US in real time…therein lies the truth.
OK Garth I’ll take the bait………Trump will rock the house again in 2020! Americans love him and our family loves him! He is a very transparent man and we have been to one of his political support rallies in Florida and he packs the place with even more standing in line outside who have to be turned away because the arena is full. Joe Biden will most likely win the Democratic leadership race ………. which will turn out to be a huge fail again for the Democrats in 2020. Also, the border wall “Go-Fund-Me” site has already raised 16 Million dollars in 6 days to help with funding to build the much needed southern border wall. The world is just going to have to adjust to Mr. Trump. He is the Commander-In-Chief and he’s going to be around for 6 more years.
https://www.gofundme.com/TheTrumpWall?fbclid=IwAR3ppFQ3yMpjivwgnWmBn7Ur7bP2Bv77FYP5JhD6eCsOdTN-TNyutS1l5bk
There was no Fed then. – Garth (re Andrew Jackson)
Actually there was a central bank then, the second iteration whereas this is the third private central bank of the US currently.
https://www.businessinsider.com/sorry-andrew-jackson-probably-never-said-that-den-of-theives-quote-2010-1
regardless, trump has a long standing legacy he sits atop of.
Trump, the Quintessential American
https://www.truthdig.com/articles/trump-the-quintessential-american/
Early prediction for 2019 word of the year, Trump inspired ” chaos”
I came across this ad on zolo – 6bed SFH in Surrey built in 2012 for $499,000
https://www.zolo.ca/surrey-real-estate/5857-131a-street
It’s happening, correction is on it’s way!!!
Then read details – The price is for half share in the property only.
Damn…
PS. who buys half of a house?
Trump’s leadership is dangerous. A leader who creates so much division in his country and throughout the world brings more unsettling times. He has too much power and his tweeting causes knee jerking. Not an ethical way to run a country and influence the world
To: #30 Dolce Vita
-If I were any calmer I’d be prone. But silence is not an option. – Garth
THAT was good and original but I like the mainstream euphemisms of: Silence is Golden and Failure is not an Option better.
Garth, the economic fundamentals are strong as you say and I agree. Have faith in that.
The Market is being self-absorbed right now and correcting for past gains based on emotion alone.
Look at the Dot.com bubble that was based on emotion (and not the real economic fundamentals of those companies) and mid to late 80’s “corrections” that no one paid attention to including eventually the Market itself (a decade of butt hurt over the early 80’s near crash).
Right now you have a Market that is betting on a COIN FLIP what will happen with rising interest rates.
50% they are correct, 50% they are wrong. We shall see soon enough.
Ultimately the American Consumer will decide and NOT the Market. So far, the American Consumer seems pretty happy I’d say.
Now the worst may be to come. Trump’s considering taking over monetary policy. The implications are epic.
—————————————————————-
The truth is directly ahead.
Everyone, try not to be distracted by Christmas. You need to be planning seriously for global chaos that may be merely days away. Or less.
PREPARE
Stopped reading when you went off on Trump, reciting fake news talking points.
You seriously need to stop watching CNN. It’s embarrassing.
Thank You Garth for your blog and the perspective it gives. It is easy to get caught up in the global issues one cannot control, and simultaneously ignore the gifts presented literally in the present. The most emotionally painful movie I ever watched was one that did not get a lot of press. It was called “A Simple Plan”. It tore me apart because of how a good “simple plan” was slowly disintegrating. This is how I sometimes feel watching US politics at work. The best wishes to you and yours, Merry Christmas.
Just respond to the points raised in the post. – Garth
………..
In a nutshell? Trump is rejecting Globalism and re-engineering the US Economy from being Wall St based to Main St based.
“His Silly Wall”
Tell that to the families of American Citizens murdered by Illegal aliens…e.g. Kathryn Steinle.
Google ‘Rape Trees’…..used to be just a Mexico phenomenon, but now appearing in the Southern US States. Pretty sure a wall would stop that.
Just a microcosm of the pains of an open border. Child sex trafficing, tens of thousands of illegals crossing every year, tens of thousand of illegals in US Prisons, thousand of serious crimes commited by illegals. And of course…..just about 100% of crack and weed entering US comes across that border.
What happens at our Southern Border is nothing compared to what the US has to deal with on it’s southern border.
Do you leave your front door open at night Garth?
Re: #5 Rargary on 12.23.18 at 2:54 pm
America needs to keep on raising interest rates until everything crashes. Bernanke inflicted untold damage on the U.S. economy which spread to the entire world with his zero interest rate policy. Now the entire European banking system is ready to implode all thanks to good old Ben. America should have learned from Iceland not from Japan.
Re: #8 JM on 12.23.18 at 2:58 pm
Trudeau got elected because they let stupid people vote. Obviously the entire voting system needs to be revamped in Canada.
About Rate Reset Pref Shares
#98 mark on 12.23.18 at 1:30 pm complains:
I don’t know why you don’t admit, including garth about how crappy preferred shares are, and quit recommending them, they have LOST money since there inception(ZPR).
Investing in dividends is a illusion as broad market etf are much better and get same or better returns with some growth over time, you know this $hit ryan!?
There are many studies on this including Larry Swedroe saying the same thing about dividend investing.
**********************************
It’s a fair comment that the original rate reset shares issued around 4% turned out to be a bad investment.
They were not a substitute for equity dividend investment which were considered riskier but yes, always expected to beat rate resets in the end.
Rate resets were a fixed income alternative to bonds when bond interest was very low and an alternative to regular perpetual preferred shares. Interest rates were expected to rise crushing the market value of perpetual preferred and longer bonds. Rate resets would have turned out pretty good if in fact interest rates had risen starting around 2013 / 2014 when rate resets became popular.
But interest rates fell a lot and the market decided that about 4% was a floor yield and so resets paying 4% or $1.00 that would reset at 3% of $25 (due to lower rates) had to fall in value to about $18.75 to provide the 4% yield. The fall in interest rates surprised the market.
Anyhow, the fact that a 4% rate reset pref that would reset to pay 3% due to lower rates turned out crappy says almost nothing about today’s situation where you can buy a high quality rate reset pref in the market yielding close to 6%. It’s a whole different situation. Look at the current yield. And look at what the yield on today’s discounted price will be when they reset. You need to forecast the Canada five year on the reset date. Most expect that to rise. To be safe use today’s low rate. Or even assume a drop. Decide if you could live with that yield. Consider the possibility of capital gain (seems more likely) or capital loss (always possible). And if you are truly buying for yield you don’t need to ever sell and trigger a capital loss.
Eschewing these now, would be like avoiding buying stocks in March 2009 because their 10 year returns were terrible at that time.
It’s nice to see a US prez actually withdrawing troops from the Middle East. And it’s been… almost two years, and still no new wars, which is also pretty good for a US prez, especially considering the alternative choice and her hawkish stances on those issues.
But Oh! Russians bought some Facebook ads in support of Trump so he needs to be impeached and DEMOCRACY ITSELF IS NOW IN DANGER!
Garth, I respect your economic objections to Trump. It’s a valid concern, unlike most of the, frankly childish, common attacks on the man.
Regarding Comment #1 Trump Rules
There is a slim chance you are being sarcastic. A weak attempt I may add. The man is mentally ill . He can’t string two sensical sentences together in a row. He has the vocabulary and understanding of a failing fifth grade student . That you look up to such a blowhard buffoon is very telling of your character and moral compass .
I doubt Trump makes it to 2020. Maybe he will bankrupt the debts to China via a Trumponium diplomatic disaster move.
It’s in the air, he is going to do something stupid.
He’s now toast.
—————————————————————
Correct.
But the problem is that he has the power to weaponize, and nuclearize, the toaster.
PREPARE.
a sermon for the darkest days.
America: The Farewell Tour – Chris Hedges at The Unitarian Church of All Souls
https://www.youtube.com/watch?v=-PXoDSpF2N0&t=3s
i sent my “seed faith offering” to my local con man, ahem pastor, at my church. jesus is going to make me rich in 2019. when you have an investment adviser named jesus on your side what could go wrong? praise the lord!
There was no Fed then. – Garth
—–
And there shouldn’t be one now. its the most dangerous unchecked organization on the planet. Mafia has nothing on those cats. It has caused more grief and destruction on the planet that all wars combined. Funny how Trump tries to execute some oversight, the world goes crazy.
Trump is trying to save the world. I know that’s lost on a lot of people but it will become more evident. Maybe we were too early for him but if he gets ousted then Soros socialism is a lock.
Watched Fahrenheit 11/9. What do you all think about it?
Meanwhile, Twinkletoes and Seymour are out testing a new campaign slogan for 2019: “If you don’t agree with us, you don’t belong here.” Personally, I don’t think it’s very catchy.
I hope you are right Garth. American’s usually do the right thing after having exhausted every other possibility.
I keep hearing that the dems don’t have a candidate with the persona to get elected.
Usually from people who had no idea who Barak Obama was prior to July 2008 and thus thought the same thing at the time.
Nancy Pelosi and Hillary Clinton are not the only members of the Democratic Party even if the currently get most of the press.
#6 Stan Brooks on 12.23.18 at 2:55 pm
#100 Shawn Allen on 12.23.18 at 1:58 pm
I challenge you to go to a grocery store, to a hardware store or to a general retailer store and check what part of the merchandise/goods is made in Canada. Then go to LCBO and check how much of the alcohol is produced in Canada. Then ask yourself what do we provide in return for that.
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Good example, if the merchandise/goods and alcohol are from outside this otherwise closed system you describe with no value then how are they being paid for in a form accepted by those outside this system?
Interesting link about carbon absorption SM.
The hate for Trump comes down to one single thing. He has kicked a lot of people off the trough and they get mad.
Wall street making $ off American suffering and overseas slavery.
MSM getting a free unchallenged pass like they are angels without an agenda.
Countries that want to act all tough and high and mighty but cant protect themselves in a fight.
Virtue signalling fools like our own PM
Military industrial complex who have US in perpetual wars.
list goes on…
Garth, I enjoy your weekly call etc usually agree with you, however the markets have to correct.
Trump= 18000 Dow when elected, inflated by tax breaks
share buybacks, so we could see a 19000 Dow.
I have been stopped out of 75% of my portfolio mostly dividend payers, which I will buy back starting at a 21000 Dow, I love blood in the streets.
#23 Smoking Man
I have been saying that for years now. Even included many links in the past on this blog regarding what you just posted. As mentioned 2019 will be the breaking point in AB/SASK.
————————————————-
Anyways. I can understand why Trump is doing what he is doing but there a part of him that is just irrational and naive. I still place my bets that he will win again but taking on the Fed is a dangerous tactic, 2019 will be interesting.
“3 times in our lives Berkshire Hathaway’s stock has declined by 50% and we never sold a single share. In fact we bought more of our same holdings at a deep discount”
“If you can’t stomach a 50% decline in your stock portfolio then you shouldn’t be invested in the marktes, nor should you deserve the riches that Warren and I have”
FOR THE LOVE OF GOD!
Please cut my dear friend Donald a little bit of slack. It’s Christmas man.
As to your constant refrain, stay the course, there is nothing to fear, the stock markets always come back. Question? Do we all collectively stick to Garth’s programed G.P.S. and never deviate? If I go out to my car for example and there is a huge rain storm washing out bridges, power lines, etc. Do I just follow Garth’s G.P.S. into the flooded waters or do I adjust my plans? It’s really not that complicated until theoretical academics start trying to play God, no one can ordain how the markets will behave- and then think to just act according to the plan- every stock trader who tried that tends to lose his pants sooner or later when he gets it a bit wrong, responding to markets, not trying to dictate how they will behave. In the land of universal deceit, telling the truth can be a revolutionary act. You can trust me as the teller of truth in the land of gypsies, tramps and thieves.
I wish everyone would chill out re Trump.
It is what it is & remember it takes two to tango; and past events throughout history have shown that you cannot make changes ( good or bad) without being a stand-out from the crowd.
Anyway, my question is regarding the Fed: I understand it is the only privately owned Federal Reserve in the world, the others are all government owned & controlled.
Therefore who gets the profits ( and they do make profits, big profits!)?
If we could follow the money I’ll bet that would be the source of all our woes.
US Treasury. – Garth
cant wait to deploy more funds on january 2nd into tsfa and resp. wont tell what investment is yet until i deploy capital. i want to buy cheaply so i want no fanfare in it to keep prices down. already own massive amounts. it haa gone up too mich in the last week. please go down more!!
What is normal for the spider….
……is chaos for the fly.
My investments are up for the year. If you can’t beat them join them.
Nope. Mr. Market is not that petty and partisan. That’s your territory. – Garth
++++++++++++++++++++++++++++++++++
Tsk, tsk Garth, no need to personally insult me.
Mr. Market did notice that Trump was elected though and went on a tear. I did see Obama trying to jump on that bandwagon and claim credit for the Trump Melt-Up. Don’t see Obama taking credit for the Correction though. Weird…..
I did notice that you didn’t answer what exactly the Democrats big plans are for the new Congress, other than pitch forks and bonfires for Trump and his family.
Don’t feel bad if you can’t answer what constructive things the Democrats want to do. Their TDS has made them blind, tone deaf and dumb-struck. Again, bad signal to investors, and the Mr. Market saw that and reacted.
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@#45 Trumpocalypse2018 – 2019
“Everyone, try not to be distracted by Christmas. You need to be planning seriously for global chaos that may be merely days away. Or less.
PREPARE”
*****
Must be awesome Christmas conversation at the dinner table
Christmas Tinner in the bunker?
https://www.youtube.com/watch?v=QUs0pmbv6G8
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The Bank of Canada better re-think about catching up with the U.S. with even higher interest rates here very shortly or we will be having our own currency crisis. If that happens watch how fast interest rates here in Canada can spike! Our dollar was 78 cents to the U.S. dollar on October 1st. of this year. It’s now almost touching 72 cents. That’s a 6 cent drop in just 3 months or a 2 cent per month drop.
Trump’s Wall
So Trump wants to build a wall to keep out some bad people who might bring drugs and some might be murderers and rapists.
Well, I suppose he has a point there. After all, America has by far more native-born murderers than any advanced nations. (Look at gun deaths). And more native-born jail inmates than probably any advanced nation. People figure they don’t need and more bad people since they have so very many of their own already!
Of course a certain percentage of illegal immigrants would be bad people. But as a percentage of the population the bad people might not be any higher than the native-born Americans. Most people fleeing poverty are not bad people.
Honestly though, I would give Trump the money for the Wall. $5 billion is not a lot and he was elected to do it. Let him get on with building it at least until he gets out of office. How is it possible he failed to get the Wall money with two years of controlling both houses? Major fail there.
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Modernity has failed us.
Love it if we made it…
M44BC
https://m.youtube.com/watch?v=1Wl1B7DPegc
Garth I agree completely. Very scary stuff, but with an end that is surely to come soon. Once the market figures that out, up we go.
The American president has become the biggest destabilizing force on the planet.
________________________________
Sure. Just a thought: … Game theory, a practical application of:
The game theory is applicable best when talking about international trade – Trump’s predominant point.
Trade is a rules-based arrangement and if destabilzed will, for certain, rearrange the fairness (or unfairness) of the said arrangement. Trump continues to claim that international trade harms the US.
Now, I don’t believe that this is simply Trump’s sport, … but all those who pull his strings, … since they openly endorse the idea that current trade arrangements are inherently tilted against the US. Think about it, … China, Germany, EU, et al, commodity, energy, security, food security, …
Best,
F.S. – Calgary, Alberta.
Came to this country 29 years ago.
Considering what it has become, I couldn’t regret it more.
Actually, it’s not even a country anymore.
How sad.
America America, if I was only younger.
Lucky Yanks. :(
#62 Remembrancer on 12.23.18 at 6:50 pm
Good example, if the merchandise/goods and alcohol are from outside this otherwise closed system you describe with no value then how are they being paid for in a form accepted by those outside this system?
External debt:
https://www.indexmundi.com/g/g.aspx?c=ca&v=94
It went from 0 to 1.6 trillions from 2004 to 2018.
It has to be repaid back and is in international currencies.
——————————–
#35 Shawn Allen on 12.23.18 at 5:20 pm
Your responses are quite amusing.
These are the facts, yours are interpretations.
People tell you that on GDP of 2 trillion the NNP is 1.6 trillion, out of that over 1.1 trillion is semi-tangible or non tangible ‘services’, 400 billions (20 %) is debt, – external and internal and you are are saying: so what?
The structure of GDP is what matters, disproportional/over exposure to construction, financial sector and dependent services, all of them credit and debt driven.
Put that CFA brain to work and you will find out that 50-70 % of our GDP is fake and if we have to pay back the debt, run surplus, not deficit and shrink those sectors to normal levels we would have to live within 40 % of our current ‘standard’ that is constantly deteriorating anyway.
BIS is constantly warning Canada about debt levels and we keep saying: our financial system is strong, our banks are the most prudent but keep transferring the risk to the taxpayers. This is what Hank Paulson was saying just before the big financial crisis in US in 2007.
and this is what he was saying in 2013
The 2008 financial crisis was a 100-year storm, and no one involved in it had ever seen anything like it, former Treasury Secretary Hank Paulson told CNBC on Friday—nearly five years since the bankruptcy of Lehman Brothers.
“This was a massive credit bubble that burst and I just think this was a major dislocation,” he said in a “Squawk Box” interview. “We’re fortunate to be where we are right now.”
What if I tell you that our credit bubble is at least twice that of the US at their peak?
If you believe that this can go on for much longer and that the deficit does not matter, your are delusional.
Deleveraging does not matter?
Hold on for the ride, boy.
Correction on GDp sentence
Above I said “Speak for yourself, that is completely false as the value of final goods produced in Canada (GDP) was $2.18 trillion in 2017.”
That should read final goods and services, not just final goods.
And yes most of Canada’s GDP is services as opposed to goods. Well, it seems we are good at producing services and services are highly valued and include health services, education, police and much more.
Both services and goods are highly important. Generally goods are easier to export but Canada exports a lot of financials services as well. Most exports are goods as opposed to services. A country that needs imports must export something in return. Canada does so and has close to balanced trade with the rest of the world.
Trade is tilted against the U.S.
…sure and my trade with the local grocery store is tilted against me! They buy nothing from me! Unfair!
Geeze you would think China was force feeding goods into the U.S. when in fact consumers willingly buy those goods.
91 Stan Brooks on 12.23.18 at 11:42 am
#76 Stan Brooks is a Kook on 12.23.18 at 8:30 am
“Your extensive Business travel must have been outside of Europe, South Asia, Japan, South Korea, California, hell even OAE, Turkey. One wonders what a real estate professional would do in such places. You are so transparent in your pumping, calling a large farmer operation (over 20 million in net worth) a humble farmer? And what exactly was automated there that is not done elsewhere in modern farming”
A sign of your demented state of mind is that you assume everyone who doesn’t buy your deranged view of the world is a real estate pumper. Of the places you mentioned I have been to Europe many times, Japan, Turkey and lived in California for 4 years….
That you are a boomer who is griping about the state of affairs in Canada is proof that you have lived a wasted life. I will grant anyone starting out now in Canada has it harder than the boomers did but to repeat what I said in my earlier post, so do folks all over this little blue dot in every country. You conveniently ignored the report that voted Canada the 2nd best country in the world to live in after Switzerland in 2018. That is because you want to adhere to your deranged view of the world.
The automated set up I mentioned was a dairy farmer. My cousin is a dairy farmer in Europe and in a G8 country and was totally blown away by the level of automation that my buddy’s operation had. He couldn’t get over the amount of land he owns and cultivates, 1500 acres. Totally mind blowing stuff for someone coming from a G8 European country. I told him he should check out farms in Western Canada if he thought 1500 acres was a lot…
This country has made mega millionaires out of immigrants who came here with a suitcase in tow and little else. I know more than one centimillionaire who came here with a suitcase, built up a business and are fabulously wealthy today. You on the other hand have lived your life in this great country and have nothing to show for it but pathetic bleating about how rotten it is. The only thing rotten is your mind Stanley. You are a loser who couldn’t accumulate any wealth in a country that has been voted the best in the world numerous times.
Trump is a financial second chance. I sold all stocks a year ago and waited for the inevitable. Just need to call the bottle. Probably another month.
Another anti Trump rant?
Same old silliness on CNN and MSNBC and CBC etc, etc.
24 hours a day.
7 days a week.
Trump would be wrong to fire Powell, but faith in the fed or he BOC is very misplaced.
Their policies over 10 years have doused the market and housing bubble and to try and unwind it all in2
Treasury secretary startles Wall Street with unusual pre-Christmas calls to top bank CEOs:
https://tinyurl.com/yddeknsz
Now whatever could the motive for this be? Rest assured, a healthy dose of stupidity was assuredly involved.
Unwind it in 2 years is too fast.
Raising rates so fast does not give borrowers or the markets time to adjust.
Rates must rise but why so quickly.
Inflation is now under control so what is the great rush to get back to neutral. Stock and housing markets rise over time.
If stock and housing markets fall due to rapidly rising rates then perhaps the fed is to blame.
They are sure to blame for causing the problem in the first place.
Reasoning from one camp sounds pretty right to me regarding Powell’s actions. He states that Powell needs to continue raising because the last ten years of ultra low interest rates have brought US pension funds to the point of insolvency. The bankruptcy of these behemoths as the boomers are just getting ready to latch on to them for sustenance is putting Powell between a rock and a hard place
If Sir Charles Darwin could be here to experience the Trump phenomena, he would be disappointed that his theory takes so long to play out.
There once was a time that Canadian Progressives would applaud a US President who actually ended a war and brought the troops home (“Syria”). But under the heading that nothing, absolutely nothing, achieved by Trump is viewed positively, the neocons on both sides of the boarder are beside themselves that Trump forced his Defense Secretary to resign, who wanted to maintain troops in yet another foreign nation indefinitely. Sounds as if Trump should be nominated for a Noble Peace Prize, not vilified by the Left.
And Putin gets Syria. – Garth
Leaders suppose to ” lead “. Trump’s style might not be ordinary but he acts as a leader not a follower. Often leaders see what no one else sees. We’ll see what happens in 2020.
On the contrary our ” leader ” blamed Trump for immigration crisis growing in Canada. Someone wanna tell me he didn’t have foresight to see that when Trump got elected ?
I’m thinking a cost reduction solution might win out to get a wall built along the Mexican boarder. Why not just dig a four foot deep trench the entire distance along the boarder. Then insert scrapped cars that have been previously flattened length wise on end. Backfill with cement, your done. No need for new construction materials covered with tariffs that become pricey. Just use the thousands of existing recyclable junk heeps littering the U.S and ….. your good to go! Bit of barb wire on top…no problem.
We the people…
https://www.gofundme.com/TheTrumpWall
What a sad misappropriation of money. – Garth
#Trump2020Landslide
David Collum
Good read….
https://www.zerohedge.com/news/2018-12-22/david-collums-2018-year-review-year-everything-changed
“Despite the fact he appointed Jerome Powell to be the Fed boss less than two years ago, Trump is reportedly talking to aides about dumping him.”
=====================================
The President does not have authority to fire the Fed.
Probably fake news, started by CNN.
Tell him. He believes it. – Garth
Whew, “The Emperor”.
I thought you were going to show us a picture of Trump with no clothes on !
What better investment is there than the integrity of your nations sovereignty. It has a million fold return.
As far as Syria goes, let Putin have it. Russia will be limping home broke in a few yrs while Trump puts the wasted capital to use back in the homeland. Time people fight their own battles on their own dime and if they cant, then get to the negotiating table. Why should I care about Kurdish independence.
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#7 Joe. You are exactly correct. It was Andrew Jackson who on his deathbed answered the question as to what he was proud of doing. He said “I killed the Bank.” Meaning the attempts to create a Federal Reserve Bank in the USA. Eventually They did get it done and the IRS as well. It is a control mechanism and it is NOT for the benefit of the citizens of any country. It is for the benefit of the few.
End central banking and see what happens. You’ll soon be trading rocks. – Garth
#35 Stan Allen
If you look at GDP it includes consumer spending as well as government spending. It is not all manufacturing and export driven. If you are to fully understand an economy you simply can’t look at statistics without understanding what is happening to produce them. In Canada’s case Stephen Harper in his quest to be re-elected juiced the rap estate market by instructing CMHA to create 600 billion dollars of mortgages out of thin air to anybody with a pulse. This was his method of creating QE Canadian version. This is the root of the housing bubble. Harper went to the general population and shovelled basically counterfeit money at them and told them to go out and out bid each other. Now it has inflated the value of our houses and we can now go out and make all those consumer purchases in our GDP figures. Also the government gets more revenue from real estate taxes so their GDP expenditures are raised. All of this so called wealth created by not producing a single thing. Please educate yourself and think at a deeper level of all the dynamics at play. In the US just before the collapse GDP was incredible but just like ours it was counterfeit. Even Japan just before they collapsed GDP was fabulous. GDP figures are almost irrelevant because they primarily reflect spending and not real production of physical goods or commodities.
Trump must be missing a chromosome.
What a sad misappropriation of money. – Garth
No, sending South America 10 billion dollars to slow down migration is a misappropriation of money. Protecting your borders from 10’s of thousands of illegals every year is not misappropriation of money. Trump supporters realize that it won’t solve the problem completely but it will help a great deal. The gov’t blows billions of year on pork in it’s bills and it’s crickets. Incredible.
There’s a financial writer I follow on Seeking Alpha, Kirk Spano, who very distinctly does not like Trump, and who also calls for Powell to be fired.
The specific article I can’t link to because it’s behind a paywall, but the article (titled “President Trump Should Fire Fed Chairman Powell …”) summary is:
– The Fed Chairman is living in the past and does not recognize the structural difficulties of the economy.
– Demographically driven “Slow Growth Forever” requires that monetary policy remain accommodative relative to the past for decades.
– The neutral interest rate, that which does not harm the economy, is too high for the growth the economy needs to avoid tipping over.
– The Fed is risking stagflation by restricting liquidity while we muddle through decades of aging demographics issues.
– For its part, the government must adopt a long-term sustainable approach to economics in order to give the necessary growth to avoid a stagflationary depression.
Further:
“… Chairman Powell is locked into being bad for the economy and markets. His vision of the world is backwards looking. If he does not reverse course or is not removed, he will cause stagflation in America as former bad Fed Chairman Greenspan alluded to in recent interviews.
It is time to take off the gloves, to stop pussyfooting around, President Trump needs to fire Federal Chairman Powell or the United States and the world will face a stagflationary recession, possibly depression, bond markets will crash and the stock market will head down 50% from its peak.”
again – this guy hates Trump. Point – whether you agree with this or not (and I know you probably don’t, and I don’t think he should be removed either), there are other views supporting Powell’s removal based on economics and not just that Trump is an evil emperor who fires everybody who disagrees with him.
Removing a Fed chair would be historic and dangerous. Period. – Garth
#77 Shawn Allen
Trump’s Wall
The taxpayers of the state of Texas and California spend every month $3.55 Billion or $42.65 Billion a year right now to deal with all aspects of illegal immigration. As far as nasty people, the main gangs are MS-13, 18th Street, sur-13, USBP has stopped 3,844 from entering the US in the past 5 years in the Southwestern Division only.
$5 billion for a wall is coffee money!
What a sad misappropriation of money. – Garth
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How do you feel about the $150B + $2B in Cash Obama sent to Iran?
I respect all your work Garth, and I agree with you on most things outside of Trump. Your disdain for him is clear, but you seem to believe the other side would be doing “good” things. You really think the Clintons would be a better option? There would be a war with Russia and who knows who else.
I couldn’t care less if Putin “gets” Syria, I follow this stuff more than most and to do this day I have no idea why any nation is fighting there.
#94 xaucad on 12.23.18 at 12:24 pm
gold is UP about 5-6% this year in Canadian dollars. saying it is down in usd isn’t being entirely honest and doeant represent what a canadian would see when they use their canafian dollars to buy food. alwaus quote gold in cad unless you save in usd or another currency.
have thpse quotes rates of return been properly converted into canafian dollars? our dollar has gotten weaker. therefore the rates of return may not be so bad when convertrd to cad.
Where can you buy food with gold? – Garth
————
May not happen again.
But in postwar Germany, a gold ring bought you a sack of potatoes.
Kudos to the NDP for preserving land for agriculture in BC.
California is burning
#82 Unhappy on 12.23.18 at 8:28 pm
Came to this country 29 years ago.
Considering what it has become, I couldn’t regret it more.
Actually, it’s not even a country anymore.
How sad.
America America, if I was only younger.
Lucky Yanks. :(
***********************************
This, above all…we don’t force you to stay!
#95 Scrap Heep, Wall….!! on 12.23.18 at 9:19 pm
Congrats, you just gave Mexico the Rio Grande or did you invade Mexico dig that ditch?
#101 not 1st on 12.23.18 at 9:49 pm
What better investment is there than the integrity of your nations sovereignty. It has a million fold return.
As far as Syria goes, let Putin have it.
———————————————————-
Look at a map once and awhile. Its the left flank of the mideast…
Just wandered back from our local Walmart, where they have begun selling Craft Beer.
But it is Sunday.
On Sunday, in Ontario, one can only purchase alcohol, from a location that did not brew it, until 6pm. This is to pay respect to a Christian God that the majority of Ontarians do not believe in.
This Christian God, however, does not need to be respected, if you purchase the craft beer in the location in which it was brewed. In that situation, you can purchase until 11pm on a Sunday, without offending said God (whom most of the residents of this Province don’t believe in).
Sunday is special. Even though it is entirely made up, based on a calendar that doesn’t even accurately count the rotations of the earth in conjunction with the spins around the sun (which is why we need “leap years”, the calendar is so inaccurate that we have to add a day every few years to catch up).
How does one become a God that no one believes in (and thus influence the sale of alcohol (but not cannibis) in a Canadian Province)?
You have to become immortal. Which means you have to be dead.
So the dead Gods society is keeping me from buying booze from my local Walmart on a Sunday evening.
And people wonder why Trump is popular?
Rates have to go up due to the pension crisis.
The Fed balance sheet will explode 10 trillion overnight in teh next recession.
Speaking about the next recession. US Banks CEO’s figuring out liquidity right now. Wait for the news Monday.
Haven’t heard about these types of meetings since just before Lehman failed.
US boomers are a ticking time bomb with their equity holdings that need to be liquidated now. Recession talk popping up on MSM could be a self fulfilling prophecy.
Thanks for printing my previous comment – I agree with you, it would be historic and dangerous to remove a Fed chair.
Hope you don’t mind, but today’s column really got me going. I also want to say this (and another comment immediately following):
Garth, I agree with some of the other commenters today who greatly value your financial advice, but have problems with your view of U.S politics.
You call Trump and “emperor”, i.e implying he’s some sort of tyrant, and I recall you actually calling him a tyrant for his trade policies in a previous column.
I agree that there’s a risk of rising tyranny in the U.S and other countries, but that risk comes primarily from the left. It’s the “left”, through it’s followers and institutions (universities, the media, hollywood, big corporations etc.) that threaten fundamental rights like freedom of speech, democracy, being fired for one’s political views, 2nd amendment rights etc. through ever larger and more oppressive government. Notwithstanding what may be misguided trade policies, Trump’s election was at least a reprieve from what would have been an accelerated erosion of liberty had the Democratic party won.
Further, as you know he’s also reduced taxes and excessive economic regulations – whether you agree with that or not economically, those moves reduce government power and are the opposite of tyrannical behaviour.
Get ready to vulch and snap up great deals for cents on the dollar. So many Canadians have lived far above their means for far too long and are out of cash and out of credit and will soon be out on street minus their homes and vehicles. Lenders and creditors will grab what ever they can while the clock is ticking. Tick Tock.
and lastly …
Regarding: “Trump has … cozied to dictators in North Korea, Turkey and Russia. He forgave MBS for slaughtering a US journalist.”
Trump had a breakthrough with North Korea, unlike his predecessors who always kicked the can down the road. We don’t yet know how it will turn out, but at least now there’s a chance of resolution. If Obama or Hilary had done what he did they would have gotten 10 Nobel Peace Prizes.
Turkey – don’t know what you mean here. I do know that Trump has decimated ISIS, unlike ineffectual Obama. The improvement in the lives of millions of people previously under ISIS rule is incalculable.
Russia – Trump is/was far harder on Russia than the democrats – i.e the bombing in Syria, and providing advanced weapons to Ukraine and Poland, against Russian wishes. Contrast with Obama caught on microphone promising to “be more flexible”, and Hilary agreeing to sell 20% of U.S uranium to Russia while receiving $140 million to her foundation.
I don’t recall Trump “forgiving” Saudi Arabia for the journalist murder; he just didn’t make it an international incident as demanded by the always-hostile media.
Globalism is a weird, new cocktail of totalitarianism.
Capitalist Western democracy (still the best in history) has been systematically diluted since the 1980’s with the following, old toxic additives:
* Fascist totalitarianism: too big to fail corporate monopolies in financial-health-war, etc. industries grew inside politics, governments, like incurable cancer, one has to live with.
* Feudalistic totalitarianism: billionaires with emperor-complex can tax-shelter their money in “charity” foundations to social engineer the world, as societies were created for them as a toy, to play with, bypassing with their money the fundamentals of traditional Western democracy: 1 eligible citizen, 1 vote.
* Communist totalitarianism: social engineering a supposedly better world, with supposedly the best intentions… those who have experienced this script before recognize it from miles. Those who have not, walk into the trap enthusiastically, felling morally superior, over and over again. One can only pray for less body bags than the historical average.
* Techno-surveillance totalitarianism: if you have a mobile phone, if you ever use the Internet you are part of the matrix. If they come to you (and in totalitarianism they always did eventually) there is no chance of hiding, as in romantic Hollywood movies of the past.
* Fascisto-Communist totalitarian control of free speech, control of freedom of expression with laws and techno-survaillance, global propaganda control of the narratives.
* Globalist totalitarian un-elected governing structures with no accountability to citizens to take over decision making, power from communities, electorate, as defined in traditional Western democracy.
In that context Trump is just a symptom, not the cause.
Garth, I know that the stress of the holidays can push people over the edge – as reflected in the nonsensical rantings in the steerage section tonight.
Thank you for all you do. You are the voice of reason in a world that seems to be tossing it out the window. Please ignore the noise and keep educating us. It may feel like an exercise in futility but you are getting through to many. We just don’t comment all the time.
Wishing you and your family the best for the holidays.
Merry Christmas to all.
Objectively speaking, Trump is a terrible human being.
– for years, stiffed contractors
– uses his charity to avoid taxes
– pays off mistresses
– busted for being a racist landlord
– bankrupted many businesses
– would do interviews using fake names to pump himself up in the media
Does America have problems? Yes. Is Trump the guy to fix it? No.
Is some of his media coverage actually meaningless? Absolutely,
but Trump is still, objectively speaking, a terrible human being.
Not smart.
Not sophisticated.
Not well read.
Not a good negotiator.
Thinned Skinned.
Not a Leader.
Swayed by emotion and ego.
Constant lying.
Awful
Marylin Monroe and the two kennedys where taken out because they where about to tell the world about zero point energy and space invaders.
Too bad the tree huggers are to stupid to figure this out. I’m backing trump because I think he’s smart enough to get the truth out.
The reptilians are bad ass. Nictonites are good we have one rouge ass hole. I’m going to have to take him out. Next Book.
Fact. If you are at a crap table and you get a roller that goes one hour without rolling 7s. Person has a gift. You get roller that goes for 3 hours and makes everyone thousands. I going with an alien.
It’s all on camera. Last Saturday in Funner California at Harras, a bald roller sporting a pepper colored gotee rolled for three hours.
P
Free book on Christmas day. Pdf
Aliens Exist.
As per the mighty Google, the Donald is the oldest president elected. Come the 2020 elections he’ll be 74. Will he still be interested in being POTUS by then? Will he still be POTUS by 2020? The position he holds, while powerful, isn’t supposed to be a one man show. Time for Congress to implement some of those checks & balances that are supposed to prevent just that.
Wishing Garth, Dorothy, Bandit and all the blog dogs a very merry Christmas and a bright and shiny 2019.
The Trumpster’s genius is that he bypassed the MSM & Swamp & connected to his base with “tweets”. His crew did the same with the internet. Truth, Lies, who cares. With Bannon & Roger Stone & a little rat f**king from some Leningrad university yahoos it was off to the races.
I don’t follow this blog only because of the economics.I started long ago because the Garth got exiled to Siberia by Uncle Joe. For wanting to run a blog. What the hell was a blog? Must be interesting because my man Cummins was already in the camps having bucked Uncle Joe over the Kelowna accord & two laws for two peoples in one country. I figured Cummins was right on. I guess now there’s a few Albertans figure that too. Too bad Dear Leader overlooked the B.C. Reform wing warning about B.C. not having treaties like the rest of Canada. Too bad about the pipelines now eh!. If I was vindictive I’d say I told you so. But its Christmas, so we won’t grind unemployed Albertans that you were warned. Well maybe a little vindictive. I remember going back to Ottawa & having the Alberta wing laughing at us. Not laughing now ,are you?
Our own Garth was on the on the right track too. Dear Leader smashed him down. Before he got trajectory. Anyways, direct communication with constituents, bypassing the MSM & the Swamp. Can’t have that. History has validated our Fearless Leader’s attempt at democratic populism via direct communication with the body politic. No less a personage than the Trumpster himself adopted the format & here we are.
Garth can go to bed tomorrow nite & dream of Santa, fat Santa a la the golden haired Trumpster with his Bunnies & gold pulled by fake reindeer. Dream content, knowing imitation is the sincerest form of flattery.
re: Syria
> Let Putin have it?
You mean, let elected Syrians run Syria?
A shocking concept.
Much better that it is run by those virtuous wise men of Washington, Riyadh, Ankara, Tel Aviv, Paris, and London.
Not afraid
https://youtu.be/k3_RU30tEIE
OK I can’t let it go, so I am guessing as to why you deleted that post, I didn’t think it was that “abusive, obscene or disrespectful”. Some ideas:
1 – I mocked Justin’s last name. I think that’s allowed he’s a controversial public figure.
2 – I don’t agree that Trump is all bad and certainly not that he’s worse than Justin.
3 – I raised the transfer payment issue.
4 – I raised the separation issue.
5 – I said BC is in big trouble if Alberta separates (and then likely becomes some sort of attachment to the US).
I can’t see what I wrote anymore so maybe I went off the rails but I think not by much.
This is not a platform fo AB secessionists. If you wish to leave Canada, start by leaving here. – Garth
104 Ron – Expenditures are one way to calculate GDP. Shawn does a good job explaining that demand brought forward by debt, resulting in the production of goods and services, is included in the GDP. The figure is not “counterfeit”.
Now of course, demand brought forward will be removed from demand sometime in the future, lowering the GDP by the value of that good or service.
That is the challenge that is faced when deleveraging.
I do understand the concern of having a
disproportional amount of the GDP attributed to the
FIRE sector.
Shawn’s first response to stan’s post was very good, as he explained how a large component of the economy is consumer based (ultimately even larger than measured). I believe it could be argued that large parts of our health services and education are consumption based.
Two parts of the economy which I do not see as consumption-based are military expenditures and emergency services.
So are any of us really arguing about any of this?
#10 Old Gringo #13 Bunny
No offense, but you’re all fools.
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#86 Stan Brooks is a Kook on 12.23.18 at 8:39 pm
This is kind of getting boring, same old tricks by the same old hungry real estate agents. I am hearing there is a directive from the real estate associations to go out there and continue aggressively promoting real estate.
Don’t you guys and gals get it that it is over and you most likely ruined along with the loan sharks and incompetent politicians a beautiful country?
Every time the same scenario:
1. State in an authoritative tone how great this country and the economy is.
2. Show examples of how people got rich here and how they must feel privileged and happy by the very opportunity to be here.
3. Tell them to pay excessive taxes, fees, housing prices and if they refuse call them losers who live in basements and ‘show them the door’.
=============================
Now on your baseless stupidities:
1. Knowing multimillionaires does not make you right. I know personally, closely a billionaire, so what?
2. Having worked with some of the top companies in US and Canada and with some of the smartest people in Business I can afford to skip the political correctness and tell it as it is.
3. I get you on farming, you have seen nothing of it, glorifying a subsidized by your taxes business and pushing that image as normal for the ‘wealthy’ Canadians.
Go to the payday loans area of Jane and Finch in Toronto, where people are different/not that wealthy and tell them that paying 2 k/a month for a crappy apartment + utilities there is fine, that they should be prepared to pay 3 k soon and if they don’t like it, they can leave calling them losers and see what happens to your behind.
All those farms in western Canada can only grow wheat, Russia and Ukraine in Eastern Europe can produce even more wheat and they are not considered G7 or wealthy countries. Do you know how much much acreage their farms have?
As for milk: I will stick to Italian and French milk product, GMO and pesticides free.
I am happy that Europe did not open the markets to Canadian milk, I hope you enjoy drinking it with all that wonderful stuff inside. It is still better than the US milk but I am hearing you are getting that good stuff now as well, so I am very happy for you.
It is safe, remember, you are told that on daily bases.
Natural selection works one way or another after all.
And you can live with the idea that elsewhere including Europe, hey even Switzerland and Germany, Austria farmers milk their cows by hand.
I am surprised you did not mention how happy the cows were in that fully automated and robotized farm,
major miss. It seems they were not free range caws after all, I guess no alpine pastures there but GMO and pesticides, nitrates grown corn as a food? Maybe some starch/glucose fructose leftover from the food industry?
Recession time…
We are .16% from a guaranteed recession.
When the 2 year and 10 year treasury yields invert, we’ve had a recession.
It has also foretold every major stock market calamity for the past 40 years.
The yield curve last inverted in 2007.
2007, the calendar confirms, immediately preceded 2008.
Prior to 2007, the yield curve last inverted in 1998.
Recession was not far off.
Recession is probably not far off now…
Inverted yield curves do not cause recessions. – Garth
Inverted yield curves do not cause recessions. – Garth
The data suggests otherwise.
Recessions happen when economies falter. Look around. – Garth
#109 the ryguy
https://www.washingtonpost.com/politics/2018/12/13/president-trumps-claim-that-democrats-gave-iran-billion/?noredirect=on&utm_term=.2de3310efe25
you may want to pay less attention to what trump repeats and more attention to facts.
#136 Godth on 12.24.18 at 7:05 am
#109 the ryguy
https://www.washingtonpost.com/politics/2018/12/13/president-trumps-claim-that-democrats-gave-iran-billion/?noredirect=on&utm_term=.2de3310efe25
you may want to pay less attention to what trump repeats and more attention to facts.
——————————
“facts”
You do understand that what you just posted is propaganda, right?
Arguing with a brick. – Garth
Arguing with a brick. – Garth
Anything from Washington Post should be immediately dismissed as propaganda, but if you take 1 minute to research the author of the article, you will find:
Glenn Kessler (journalist) Kessler is a member of the Council on Foreign Relations and the author of The Confidante: Condoleezza Rice and the Creation of the Bush Legacy. The book, which revealed new details on the making of Bush administration’s foreign policy, was described as “brilliantly reported” by The New York Times Book Review and generated news articles and reviews in two dozen countries around the world.[3]
Do you really want to have this debate?
Please post your credentials. – Garth
A quote from Maya Angelou’s poem Amazing Peace:
“On this platform of peace, we can create a language
To translate ourselves to ourselves and to each other.”
Happy Christmas and everything good for 2019 to Garth, blog dawgs and your loved ones!
All you trump supporters hoping he wins in 2020, should stop and think what happens in 2024 if he does.
As the US electorate clusters at either end of the spectrum and centrists are made extinct, the result will be massive swings from left to right. Each swing further hollows out the middle, until there are just clusters at either pole with no common ground. A true US vs Them. From there, it’s not a big leap to the side in power calling for the elimination of the side that isn’t on the grounds that they aren’t “true” americans.
Do I think a civil war in the US is truly possible? Not tomorrow, possibly not in my lifetime. But unless they build a center that holds, it’s how this ends up.
and in the spirit of Christmas Eve…
Merry Christmas to all my fellow nutters who read this blog and a happy, prosperous and healthy 2019 to all. May the spirit of Christ guide you and bless you at this Christmas time.
#131 Stan Brooks on 12.24.18 at 3:22 am
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Thanks Captain Garth for keeping the mindless blather of Stanley Brooks to a minimum. Merry Christmas Garth to you and your wife and of course Bandit. Thanks for all the great posts in 2018 and may you have an even better 2019!
#121 yorkville renter on 12.23.18 at 11:59 pm
You left out that he has a crappy tailor too…
#126 Iconoclast on 12.24.18 at 1:17 am
re: Syria
> Let Putin have it?
You mean, let elected Syrians run Syria?
A shocking concept.
Much better that it is run by those virtuous wise men of Washington, Riyadh, Ankara, Tel Aviv, Paris, and London.
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You seem to have left out Moscow and Tehran. And elected Syrians running Syria? That’s funny – unless by Syrians you mean the Assad family compact?
Meanwhile. Mnuchin is on the phone with banks who should be on holidays discussing liquidity. Yeah…should be just fine. Buying opportunity. Ha.
#137 Godth on 12.24.18 at 7:05 am
——————————————-
https://www.washingtonpost.com/news/fact-checker/wp/2018/06/27/foundation-face-off-the-trump-foundation-versus-the-clinton-foundation/?utm_term=.29a3bf395241
Well here is a washington post article stating that the Clinton Foundation is a “move along NOTHING to see here”. Hate to play into the stereotype..but WP is fake news.
Ill acknowledge that maybe Trump isn’t a wonderful guy…MAYBE (I still love him but Im not a blind ideologue) however if the general public and MSM would put other world leaders under the type of scrutiny that President Trump has been under they would be appalled at what they find.
Ho! Ho! Ho!
Merry Christmas Everyone!
Garth has kindly offered me the chance to do a little Santa work here this week, and help with a Naughty or Nice list for the posters here. Since my other gigs have run out early, I grabbed the chance. No pay, but Garth has offered me a free subscription to this blog in exchange for my work, which he says is worth at least $50,000 a year!
Wow! Now THAT shows the Christmas spirit :)
So here we go – first on the Nice List:
(Drum roll please!)
Bandit
Dorothy
Garth
Shawn Allen
WUL
SmarterSquirrel
Brian Ripley
And more to come – remember to behave yourselves ;)
Ho! Ho! Ho!
@ #90 AB Boxster, this has been, by far, the slowest rate hike cycle in Fed history. The pace of hikes has been glacial compared to any prior rate hike cycle. Look it up if you don’t believe me. Yet you think they’re hiking too fast? Maybe it only feels like that because you’re too exposed to interest-sensitive assets like stocks and real estate.
The “Fed put” was a 3 decade aberration – the product of weak-minded central bankers whose egos required them believe they could micro-manage markets and growth. It’s gone. The return to sanity will be slow, painful and costly. There is no shortcut.
@#118 built to spec
“Trump had a breakthrough with North Korea, unlike his predecessors ….
++++
No, Trump legitimized a murderous dictator in the eyes of the subjugated, starving North Korean population. No other President would lower themselves to shake hands with a person with so much blood on them for a “photo op”.
“I do know that Trump has decimated ISIS….”
+++++
Bwahahaha, give your head a shake. Even his most senior advisors recommended President Tweet NOT pull out of Syria at this time ( or did you miss the fact that Mattis resigned…like all the rest of the intelligent, educated staff that have had enough of his bombastic bullshit) ISIS? They will be back, stronger than ever now that the US president has essentially told the world, “When the going gets tough, we cut and run…..”
Cadet Bone Spurs Trump is and was ……in way over his head running the US.
He’s in that job to make money, nothing more.
A vain, posturing, used car salesman with the empathy of a vulture eating its way through the fresh corpses on a battlefield.
His inevitable impeachment cant come soon enough.
Where can you buy food with gold? – Garth
Well, one can do Kitcos conversions exchange.
Or one can take his or her ounces to a bank.
Plus one can take his or her ounces to a gold exchange.
All provide dollars for gold/silver.
Interesting conversation though; for every seller there’s a buyer. So who’s buying all these tons of gold when countries sell like Canada or Britain?
So naive to think Trump’s the problem. He’s only a symptom of all problems eating America and the Western world
I love your column and view points even if I disagree with them. One should always be able to debate both sides of the coin. We, understand your personal point of view(s) of Trump. So, what are his good points looking at the other side of the coin? Also, since you voice much distain for Trump; what’s your viewpoint on Justin Trudeau? Considering he’s running our country into the ground or maybe you feel he’s doing a wonderful job?
Anyway everyone have a Blessed Christmas from my family to yours.:)
reply to #4, TurnerNation on 12.23.18 at 2:51 pm
where can you buy convertable debentures?
No doubt about it Trump has introduced an element of chaos to government policy. Those of the center and the left should be relieved that Trump is neither a Nazi nor does he really have a master plan beyond the few basic ideas he spoke of or tweeted about. For the most part he has been improvising in the presence of extreme opposition who will say and do anything to stop him from making any real changes to their
system.. One thing Trump will be able to say when he is removed from office is that he really wasn’t allowed to rule or govern.
154 SU: TSX
A primer but I don’t follow his picks
https://convertibledebentures.blogspot.com/
GDP and deleverageing
#129 Vampire studies on 12.24.18 at 1:55 am said:
Shawn does a good job explaining that demand brought forward by debt, resulting in the production of goods and services, is included in the GDP. The figure is not “counterfeit”.
Now of course, demand brought forward will be removed from demand sometime in the future, lowering the GDP by the value of that good or service.
That is the challenge that is faced when deleveraging.
***********************************
Thank you Vampire.
The risk that paying down debt will lead to slower growth is interesting. It does seem logical that someone borrowing for say a vacation today must forego some spending at some point in the future.
But for the economy as a whole it looks like a new borrower can take the place of someone paying back their debt. The total personal debt of all Canadians probably rarely if ever decreases in dollars. I am not sure we can even expect it to decrease as a percent of GDP either. But it might if interest rates increase.
I don’t have the data but I have no doubt that personal debt has grown as a percent of GDP for many years. Lower interest rates make it perfectly logical for people to use more debt. The cost of debt goes down, the demand for debt goes up. In addition, I think lending in the economy has grown for other reasons including the far higher participation of women in the paid workforce versus some decades ago.
Some of the reasons for higher debt may not reverse.
It seems likely that we get lower growth as the rate of increase in debt to GDP had to slow. But will debt to GDP actually shrink and if so will it shrink at more than a very slow rate?
Periodic recessions and negative GDP no doubt will happen. But fears of some great deleveraging are probably unfounded.
A litmus test for your own sanity:
The president pulls the United States out of two foreign wars/quagmires. Do you:
a) see the move as a negative, as an example of poor leadership or corruption, and lament the withdrawal of US forces?
or:
b) see the move as a positive, as an example of fulfilling election promises, and celebrate the fact that the U.S. is pulling itself out of foreign conflicts it has no place in?
If you chose A, it’s clear you’re insane: a war monger, an expansionist, and one who is unable to see truth.
If you choose B, have an eggnog. You can still see reality for what it is and the past 20 years of war without end, generated by the military industrial complex, haven’t impeded your ability to see clearly.
The republic is back, the empire game is ended, the constitution lives on. All lovers of liberty and democracy should celebrate.
Bonus points: If you guessed that decisions likes these from the president, made the way they’ve been made, are intentionally designed to encourage the resignation of key neo-liberal appointees, you earn an A+.
If not, back to preschool – you’ve got a long way to go, sunshine ’cause it’s not your pappy’s world no more.
Bitcoin will be here. With its transparent monetary policy.
“Hydrocarbons from forests are so common and widespread in the eastern U.S. that their presence simply overwhelms anything happening with anthropogenic (human) hydrocarbons” NASA, Goddard Space Center
https://visibleearth.nasa.gov/view.php?id=84021
https://earthobservatory.nasa.gov/features/Aerosols
I just made a big yellow ‘V’ for vest in the snow.
“the democrats simply don’t have a candidate that has the persona to get elected”
They might approach General Mattis for that role.
It really is a cult.
Trump can mess with China, Russia, Canada, etc.
The last President who messed with the FED, never made it out of Dallas alive.
If our economic system can’t handle 3% interest rates
then the stock market is a Ponzi, yet Trump just added more Nitro to the fire, re tax cuts, repatriated capital.
Now he is bitching about the Fed, he brought this on the world by himself, with a lot of help from G Sachs, look at their share value right now.
@#158 Biddy
I didnt realize “sanity” was determined by a litmus test.
Perhaps you should try another option since it’s clear that your PH isnt neutral……
#163 Gary on 12.25.18 at 1:25 am
I always heard it was the CIA. But I guess if you believe one BS conspiracy theory you believe them all.
and Lol at picking on Goldman. How’s Morgan Stanley’s stock doing?
MF
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