Turkeys

On October 6, 2008, stock markets gave up more than 5% of their value. In just two days the losses totaled almost 10% as equities (the Dow, the S&P and the Nasdaq) dropped to the lowest point in five years.

The next day Stephen Harper, prime minister, said this: “I think there are probably some great buying opportunities emerging in the stock market as a consequence of all this panic.”

 At the time he was running in a federal election, which he won. But Harper was savaged in the media for his advice to buy. History shows that was mid-point in a bear market which bottomed five months later. At its depth, 54% was erased in that two-year period. But then over the next decade, it gained 75%. An ETF based on the S&P gained 160%. Someone buying shares of RBC in the winter of ’09 had tripled their money by the autumn of ’18.

Harper was right. Duh. It was pure logic. When markets go risk-off, with everyone hitting the SELL button, it’s time to get out the chequebook. But for that you need courage, confidence. Most lack it.

Since hitting historic highs in September, stocks are off almost 20%. No 2008 at this point. But Christmas Eve turned into a rout immediately after another Trump tweet trashing the central bank. Losses amounted to almost 3% and the day ended in a swirl of White House-induced angst. Hour-by-hour, a political crisis is developing. Markets worry about a president who deliberately shut the government, dismissed the defence secretary, rashly pulled out of Syria, shocked allies, may punt the Fed boss and could face indictments or an impeachment attempt in 2019. It’s a mess. An unfolding one. Markets hate uncertainty. Sell, sell.

On Christmas Day Trump tried to walk back some of this. “I have great confidence in our companies,” he said. “We have companies, the greatest in the world, and they’re doing really well. They have record kinds of numbers. So I think it’s a tremendous opportunity to buy.”

History will prove him right, as it did our guy. But Trump himself isn’t an observer. He’s the spark. By attacking the Fed he’s weakened it. If the central bank relents and halts rate increases (or even cuts) it’ll be seen as a lackey institution, bowing to political pressure. If it keeps on its avowed path, the president keeps attacking. Lose, lose. So the very institution that can best deal with a financial crisis has been made part of it. Such is the peril of a one-man government.

What next?

I have no answer. Nor does anyone else. The most powerful person in the world is utterly unpredictable. Against every shred of advice, he might take a run at Jay Powell, forcing the Fed boss to give up his chairman’s seat. Bonds would explode higher and stocks plop lower. Traders would have no idea where monetary policy was headed and take few chances. It could end quickly if the Fed’s No. 2 guy moves up. It could get worse if a political crisis ensues. Months of chaos could unfold as Trump tries to manipulate markets – the symbols of his MAGA renaissance.

Or, he could apologize, back off, express confidence in the Fed and pledge to work with the newly-elected Congress in the best interests of Main Street.

Guess which it will be?

Right. Me, too.

The best course of action is to ignore your investment accounts until the daffodils are nicely out. Certainly do not sell into a storm. If you have cash to invest, this is a cool time to do so. Those who have balanced and diversified portfolios can take solace in the fact that while stocks have lost 20%, they certainly have not.

And remember history. Harper was right. So is Trump. Nuts, but right.

Now go and turkey.

132 comments ↓

#1 Felix on 12.25.18 at 2:49 pm

Both pics are disgusting.

An impulsive, moronic dog infecting his owners with innumerable mouth and butt toxins, ensuring Christmas will be ruined and they’ll all be hospitalized by the New Year.

Then a pic with the creepy Harper. Notice how that clever kitten is clearly appalled by and resisting him, soon to be tossed away once the camera is gone. Just like he treated Garth.

Yuck.

#2 Coopoiler on 12.25.18 at 2:56 pm

Can someone explain the terms (risk on) (risk off). I do not understand these terms!

#3 Danforth on 12.25.18 at 3:02 pm

Hi Garth,

Do you see any sectors or geographies being stronger candidates for the recovery?

tx!

#4 Al on 12.25.18 at 3:03 pm

Love the harper picture. That’s gold Jerry, gold! I’ll try to scrape up some pesos to invest..is it time to back it up?

#5 Greg on 12.25.18 at 3:15 pm

Great read with a coffee and Baileys in foggy southern Alberta. Best of the season Garth. Off to turkey and relatives complaining about the market.

#6 oh boy... on 12.25.18 at 3:32 pm

bad advice as usual.

simple enough to know when a market has bottomed and turned around. why subject yourself to losses and stress.

this market is nowhere near bottoming.

Nobody can pick a top or bottom. Even you, anonymous online stock genius. – Garth

#7 NoName on 12.25.18 at 3:36 pm

Not that I am boasting yesterday was my day do put 1st half of cash to work, second half in next year. Honestly I would love to se another few 2-2.5 pullbacks before i deploy rest. But it doesn’t matter i am not in a rush.

I wonder does at this point deplorable furious/fearful leader thinks of deplorables pension plans. Probably doesn’t even know that they exist…

#FeelingLikeGenioos

#8 Shawn Allen on 12.25.18 at 3:40 pm

And Warren Buffett chimed in just 10 days after Harper with a Wall street Editorial under the headline “Buy America. I am.”

https://www.nytimes.com/2008/10/17/opinion/17buffett.html

He later clarified that while the editorial was his, he did not write the headline. His article described what he was doing. He did not explicitly suggest others buy but that was the logical conclusion. Especially if one followed my rule number 1: “Always assume Buffett is correct”.

Buffett too was criticized. Dianne Francis in particular said a few months later that he was too early. And I don’t think she ever apologised for her mistake.

#9 Moses71 on 12.25.18 at 3:40 pm

Thanks for posting today Garth!!
Love your diehard spirit! You’re a real one!

#10 Rargary on 12.25.18 at 3:42 pm

Nuts but right is right Garth. Merry Christmas gobble gobble… my sister said she would check if you posted today… couldn’t believe it. Lol. To all of us diehards who look to see if we can read your pathetic blog on such a day.

#11 Gunnevera on 12.25.18 at 3:44 pm

Worst Christmas Eve in US Stock Market history. Nikkei was down 1000 pts on Christmas Day.

Margin calls, record leverage, herd behaviour, money printing, 1929 all over again. As long as the Greater Fool Theory exists there will be more suckers and panic buyers/sellers for each following bubble.

People have been behaving very overconfident of late and full of themselves, a reset is needed and long overdue….

#12 Shawn Allen on 12.25.18 at 3:44 pm

And let the market be your servant, not your master.

Those who sell now are letting the market be their master.

Seeing equity portfolios decline is no fun. But no one is forced to sell at today’s prices. Waiting it out will work over time on average.

#13 Shawn Allen on 12.25.18 at 3:49 pm

Paper gains and paper losses?

When stocks or real estate rose many claimed “You have not made any money until you sell”.

I don’t particularly agree with that.

But I am willing to reconsider since it presumably applies on the way down too.

“You have not lost any money until you sell”?

Surely there is some truth to the claim both on the way up and on the way down. It’s not 100% true in either direction of course but can give some comfort I think.

#14 Howard on 12.25.18 at 3:54 pm

Black swan event for the Sydney condo market?

An entire building consisting of 400 apartments evacuated on Christmas Eve after the building shifted and residents heard loud cracking noises. The displacement was to such an extent that doors to some units couldn’t be opened and had to be knocked down by rescuers.

Did I mention this is a brand new building? Good luck to speculators there trying to flip their condos. Merry Christmas :)

http://www.abc.net.au/article/10667636

Sydney Opal Tower at ‘no risk’ of collapse, but many residents still unable to return home.

#15 Sask to AB on 12.25.18 at 4:02 pm

Merry Christmas to you and your family Garth!
Thank you for always trying to enlighten us.
We really appreciate it.

#16 Howard on 12.25.18 at 4:03 pm

#1 Felix on 12.25.18 at 2:49 pm
Both pics are disgusting.

An impulsive, moronic dog infecting his owners with innumerable mouth and butt toxins, ensuring Christmas will be ruined and they’ll all be hospitalized by the New Year.

Then a pic with the creepy Harper. Notice how that clever kitten is clearly appalled by and resisting him, soon to be tossed away once the camera is gone. Just like he treated Garth.

Yuck.

—————————————————

The Harpers are well known to be cat fanciers you ignoramous. Quite unlike the Trudeaus who never had pets.

#17 Shawn on 12.25.18 at 4:04 pm

The trade war & Trump is a smoke screen. Yes he’s making the problem worse but it all comes down to the FED.

They erred and need to walk it back or do an emergency cut. The market can’t handle QT + rate hikes. If the FED does nothing deleveraging will continue.

My downside target is S&P500 2100.

#18 NoName on 12.25.18 at 4:15 pm

@Howard

That’s bad. San Francisco’s millennium tower is leaning more and more every year. Since completion in 2009 problems is ongoing and it seems to be accelerated lately. What’s funny is that building cost case 350mill and proposed plan to stabilize a 60 story building is 500. All that California AI used to track and advertise, you would think by now they could find solution for problem 10x over. But I guess facebuks and giggles have their own priorities…

https://www.businessinsider.com/san-francisco-sinking-millennium-tower-concerning-window-crack-2018-9?utm_source=copy-link&utm_medium=referral&utm_content=topbar&utm_term=mobile

#19 Oh ... that pic on 12.25.18 at 4:18 pm

reminds me of a story I heard at a 50th wedding anniversary. The fellow telling the story told of his dog returning home on Christmas day with a fully cooked turkey. He lived in a semi rural local in Idaho. I guess somebody went without their vittles that day.

#20 baloney Sandwitch on 12.25.18 at 4:27 pm

When you put a bad man in the oval office is it any surprise you get bad government?

#21 Samuel on 12.25.18 at 4:28 pm

If he does shake up the Fed, I agree markets will respond negatively at first. But then once traders realize that easy money is back at a time of record profits and stocks 20% plus off, they will pour back into the market. An overheating economy, and thus inflation will stoke the stock market even more, potentially giving us that blow off top that the market is yet to make. The very thing this Fed is trying to avoid. Interesting times.

#22 Dolce Vita on 12.25.18 at 4:30 pm

“So is Trump. Nuts, but right.”

SO true.

Today’s Blog, a return to the Unsinkable Garth with a good measure of history.

I read Trump’s Tweets daily and you pretty much have to, to get a sense of the guy. From what I can tell, he draws the line at damaging the economy with things he says or does.

He’ll back down and your quote from him today is a sign that he will. After all he’s a business guy that likes to trash talk every now and then. But stupid he is not.

I know you’ll think I’m crazy for saying this but when his tenure as President is done, whenever that is, people are going to miss him. I guarantee it. One thing about The Donald, NEVER A DULL MOMENT.

Whomever succeeds him is going to seem absolutely comatose (prone). People will first marvel at the silence and then, in typical human fashion, grow suspicious as to why the Presidency has gotten SO QUIET.

He’ll come around before the Daffodils…Galanthus instead.

#23 Shawn on 12.25.18 at 4:42 pm

Have your guys look at the monthly RSI for the S&P500.

It’s currently declining at a faster rate than 2008.

#24 oh boy... on 12.25.18 at 4:43 pm

Nobody can pick a top or bottom. Even you, anonymous online stock genius. – Garth
__________________________________

oh please. anyone studying market behaviour for a few years can do it. it’s not rocket science.

#25 TurnerNation on 12.25.18 at 5:00 pm

The Christmas story of importance, which must be re-told.
WW1 – in the trenches. At Christmastime the soldiers called their own truce. Lands were spanned.
Allies and Germans alike got together, shared food, music and stories. How civilizations get built. Why would they kill each other these young lads at the prime of their life? Who told them to and why,

Well our elites put a stop to that. WW2 and each conflict thereafter utilized increasingly more remote WMD. Don’t shoot till you see the whites of their eyes was replaced by an unblinking monitor.

But our our elites’ real coup was their war against us. Propaganda. In WW2 they made sure we knew how ‘bad’ the other guys were.

Even in Gulf War 1, as Wikipedia now notes, the little girl rolled out before US Congress, with tales of the enemy and hospital incubaters was a PR firm’s fabrication.
Ditto nowadays with hollywood grade footage of orange jump suits on a beach (remember that?) or a child lying also on a beach – which spawned forced displacement/migration at once on two continents at once, by some chance it did.

So if anyone believes these Governmental Actors seen on TV…look behind the scenes at who is pulling these stunts. The wicker man is the orange man. The movie posters is orange. https://en.wikipedia.org/wiki/The_Wicker_Man

#26 Patient Buyer on 12.25.18 at 5:02 pm

Oh boy… So you think you’re smarter than Garth AND Warren Buffett? https://www.cnbc.com/2018/05/08/warren-buffett-says-he-never-tries-to-time-stocks-i-never-have-an-opinion-about-the-market.html

#27 JSS on 12.25.18 at 5:05 pm

Is the TSX always on sale?

#28 mitzerboyakaQueencitykidd on 12.25.18 at 5:06 pm

must be Santa
he likes to party too.

https://youtu.be/a8qE6WQmNus

#29 Leo Trollstoy on 12.25.18 at 5:20 pm

USD/CAD = 1.4067

Merry Xmas!

#30 Shawn Allen on 12.25.18 at 5:25 pm

Buy low?

Doing some buying this week does not necessarily mean going all in at once.

Warren Buffett made major investments during the fall of 2008. But he always kept some cash in reserve.

#31 Shawn Allen on 12.25.18 at 5:29 pm

How important is today’s market price for a stock or the S&P 500.

It’s fair that we measure our portfolios mostly based on today’s market value.

But that does not need to be the ONLY measure. $100k in a stock or index earning say $5k annually (20 P/E) and paying a dividend out of that of 3k (3% yield) might fall to $50k just on a rumor or whatever. But if it is still earning $5k and paying $3k and that is expected to continue and grow then do those facts also matter at least a bit?

#32 Smoking Man on 12.25.18 at 5:40 pm

DELETED

#33 Shawn Allen on 12.25.18 at 5:41 pm

The meaning of a market price on a stock or index?

Picture the supply and demand curve lines for a stock or index.

The stock may have many thousands of owners and a far far larger number of potential new owners.

Each day the market price is set by the the intersection of the highest price a few new buyers (out of millions of potential new owners) are willing to pay with the lowest price a tiny percentage of the thousands of current owners is willing to accept.

The fact that over 99% of the existing owners chose not to sell at the market price and some would not sell unless the price was far higher does not affect today’s market price. (But the curve has an impact on future market prices).

The fact that probably millions of investors would not bother buying even at far lower prices has no immediate impact on the market price.

The point is that the market price is set by a small percentage of traders on a given day but is deemed all important.

What are the implications of all the others who choose not to sell or not to buy at that price?

Is the ability to hold and not sell worth something?
Consider too, that the option to hold usually comes with the ability to collect dividends for the indefinite future, potentially even never selling.

I imagine there are academic papers on such topics.

#34 akashic record on 12.25.18 at 5:48 pm

the very institution that can best deal with a financial crisis has been made part of it.

The political independence of The Fed sounds great in theory, but what are the facts?

The “institution that can best deal with financial crisis” could not prevent the 2008 financial crisis, the chairman and the board that was supposedly politically independent at a time, could not even see it coming.

We seem to remember that low interest rates were the result of the 2008 crisis – actually, “the institution”, lowered interest rate to 1% in 2004!, causing the melt down, that required political, government intervention to fix.

More about it here:
“In 2009 Robert Reich wrote that “Greenspan’s worst move was to contribute to the giant housing bubble and the worst worldwide crash since the Great Depression. In 2004 he lowered interest rates to 1%, enabling banks to borrow money for free, adjusted for inflation. Naturally, the banks wanted to borrow as much as they possibly could, then lend it out, earning nice profits. The situation screamed for government oversight of lending institutions, lest the banks lend to unfit borrowers. He refused, trusting the market to weed out bad credit risks. It did not.”

In congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation. The New York Times wrote, “a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending…Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken”.

Moral and fact of the story:

1) “the very institution” that is said to be “the best deal with a financial crisis” has made so far the biggest crises, that also spread way beyond it’s mandate, the US economy

2) The government (politicians) had to step in, overriding the independence to save the day

3) In reality, various players in the financial industry have very different views about the “policies”. Among those The Fed is one, mind you empowered by extraordinary powers by law. But law can make The Fed only an “institution”, it can not make or guarantee that The Fed is the best that can deal with a financial crisis.

#35 Vancouverless on 12.25.18 at 5:48 pm

Merry Christmas Garth!

Thanks for all the sage advice and dealing with the turds in the comments section.

#36 BobC on 12.25.18 at 5:49 pm

I’m wondering who you blamed in 2008. I think it’s official, you suffer from tds.

You are free to address the points raised in the post. – Garth

#37 yvr_lurker on 12.25.18 at 5:52 pm

Don’t think we are anywhere near the bottom now. Big difference between then and now is that Trump, the wild man, is at the helm. Who know what he will do; the more cornered he gets the more impulsive he will be. Has there been a time in recent memory where such a plunge in the market occurs at a time when the economy is generally rather robust both here and abroad? Market seems like a large over-reaction to relatively minor events; I am going to wait a bit before taking the plunge until I see some stability. It’s not like we are going to jump back in the TSX from 13,700 to 16,500 in the same short period 80 day period that it has collapsed this far.

#38 The ghost of Jack Diamond on 12.25.18 at 6:04 pm

Canada’s worst enemy is not Trump, it’s been Trudeau, he’s a country killer. Shift your focus away from the Trump hating media and towards the damage that Trudeau is doing and you’ll quickly see that Trudeau is being used by Globalists to ‘resist’ Trump. Its the Globalists that have the most to lose, their 100% taxation plan and a future of low wages is being undermined by Trump, they are fighting vigorously against being toppled. Trump is our savior, the Globalists, the enemy of mankind, Trudeau is just toilet paper. Trump must win, no matter how dishonest and disingenuous the media is, and how dishonest ‘the resistance’ is, what a lie climate change is. We either win or we become slaves within a generation where confiscation and serfdom are the outcome of this war. Dude, I have a choice, I can delete my life her and plunk my ass down on powder sand, but you might end up penniless and beholden to the ghouls of the world, the Trudeau’s, Butts and Soros. Is that what you want, catfood and misery?

#39 David Paquette on 12.25.18 at 6:10 pm

It is interesting to me that Warren Buffet bought Alberta’s electrical transmission lines and holds railroad power. It looks to me he believes in Alberta’s future. Anyway, onto climate change that is meat to this cat. I loved her – I still see her. She was hunter and liked to tease dogs.

I don’t know the answer but I am growing vegetables, walking, eating less meat and sorting my garbage. As a boomer, I resent doing more – bring back the burning barrel. How much more the authorities want from me when I see their hypocrisy? I am responsible and go “f” them when they want more of my hind.

#40 My Pathetic Take on 12.25.18 at 6:19 pm

#30 Jack Diamond’s Ghost – To be frank about it all, I cannot tell the difference of who is a Nationalist or a Globalist anymore. Its become a circus of changing hats depending which way the wind is blowing.

#41 KLNR on 12.25.18 at 6:20 pm

@#30 The ghost of Jack Diamond on 12.25.18 at 6:04 pm
Canada’s worst enemy is not Trump, it’s been Trudeau, he’s a country killer. Shift your focus away from the Trump hating media and towards the damage that Trudeau is doing and you’ll quickly see that Trudeau is being used by Globalists to ‘resist’ Trump. Its the Globalists that have the most to lose, their 100% taxation plan and a future of low wages is being undermined by Trump, they are fighting vigorously against being toppled. Trump is our savior, the Globalists, the enemy of mankind, Trudeau is just toilet paper. Trump must win, no matter how dishonest and disingenuous the media is, and how dishonest ‘the resistance’ is, what a lie climate change is. We either win or we become slaves within a generation where confiscation and serfdom are the outcome of this war. Dude, I have a choice, I can delete my life her and plunk my ass down on powder sand, but you might end up penniless and beholden to the ghouls of the world, the Trudeau’s, Butts and Soros. Is that what you want, catfood and misery?
________________

LOL

#42 Old gringo on 12.25.18 at 6:24 pm

Merry Xmas to all and hopefully, a super prosperous New Year to all.
Just as a side note, these huge losses are only losses if you bought at the top!
If you bought in 3-5 years ago….. you’re in a winning position still.
So measure up not down and sleep better!
Cheers

#43 akashic record on 12.25.18 at 6:46 pm

The former Fed chairman, Greenspan’s had quite an ego.

Industry, media and the political elite were kissing his ring in unison, making “the maestro” out of the “institution”, the holy emperor of finance.

Arguably, the collective religious bowing at his feet contributed to the financial crisis in 2008.

Interestingly enough, not a even a drop of Trump was required for the disaster.

#44 Smoking Man on 12.25.18 at 6:58 pm

#32 Smoking Man on 12.25.18 at 5:40 pm
DELETED?

Was clean on topic for a change? Pointing out the market tanked because the dems took the house. Just watch what happens to the markets if they try and impeach trump.

#45 Oakville Sucks on 12.25.18 at 7:00 pm

JFK talked about the Fed. His most famous speech abou the Fed came 5 days before his assassination.

Just listen to it…its on YouTube. You be the judge.

#46 Yuus bin Haad on 12.25.18 at 7:02 pm

Back in 2000, it was that damn Mike Harris!

#47 Oakville Sucks on 12.25.18 at 7:09 pm

2019 is going to be bad…the begginning of a serious recession…

I WISH I AM WRONG!

#48 Stan Brooks on 12.25.18 at 7:23 pm

#14 Howard on 12.25.18 at 3:54 pm
Black swan event for the Sydney condo market?

An entire building consisting of 400 apartments evacuated on Christmas Eve after the building shifted and residents heard loud cracking noises. The displacement was to such an extent that doors to some units couldn’t be opened and had to be knocked down by rescuers.

Did I mention this is a brand new building? Good luck to speculators there trying to flip their condos. Merry Christmas :)

http://www.abc.net.au/article/10667636

Sydney Opal Tower at ‘no risk’ of collapse, but many residents still unable to return home.

Note the prices, at 160 millions for 400 condos that is 400 k per condo which is chump change compared to Toronto prices in downtown… from 10 years ago.
And we thought Australia had a housing bubble…

Our bubble is the biggest ever in history and specially in GTA/Southern Ontario/Hamilton and everywhere in BC is of gargantuan, unimaginable proportions.

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

Addressing the points of the post:

1. There are always some good buying opportunities in any market.

2. Mr Harper’s track record is very poor, all he and the lil Jim were able to come up with to address the bubble in real estate in Canada (yes, in 2009 when prices corrected by 20-25 % in mere months) was the idea to blow the bubble even larger, by engineering and implementing extremely irresponsible ‘mortgage insurance’ policies which drove the housing market further up to 2013-2014 extreme valuations until the absolutely ridiculous blow of the top in 2016 and 2017 in the condo markets.

Note that this has nothing to do with free markets.
If markets were free and banks were not covered by removing the risk for their loans houses would have been 400-450 k for SFH in Toronto, maybe 500 k in Vancouver, condos in 200-250 k range.

Also note that we did in fact have a form of QE for all that time with these guarantees and securiziation of CHMC loans (in international currencies…) and now BoC is preparing to fix it by some more QE in the form of government bonds and MBS purchases…

which clearly shows that the Canadian Business and financial leadership is incompetent, clueless and outright dangerous in it’s actions.

Generations will be unable to survive the high cost of living in the big cities, have no kids (due to the mortgage) or never be able to retire while the economy lays in ruins.

It is part Mr. Harper’s legacy as well.

3. The actions on the stock market in US is related to withdrawal of liquidity by the Fed and due to quantitative tightening, and is not due to political uncertainty.

I never liked Mr Trump (he deserves that title at least as Mr Harper) but he did quite a lot to beef up that market.

I think with this momentum going down 40 % -45 % from the top is not impossible and average buying when it hits 30 % down seem not a bad idea in long run.

Dividend paying, diversified portfolio will be down 20-25 % which is fine, emerging markets and gold will present good buying opportunity pretty soon.

I reiterate my warnings about the TSX, except the mining sector. Insignificant exchange not interesting to investors in a place with diving currency, loonie politicians and hollow economy where the populations is overly indebted and has nothing to invest; the sheer size of the debt will consume most of the discretionary spending.

Also warnings on tax and policy uncertainties, specially around registered plans. Just imagine what could come to the French villa guy’s mind 4-5 years down the road when T2 gets reelected (with this sheeple’s IQ and the bought with tax money media), I would not leave a single penny withing the reach of this individual.

#49 not 1st on 12.25.18 at 7:33 pm

God I miss Harper. Imagine Canada votes out a sane, calm economist and votes in the disaster we have now. Trump has nothing on the chaos our current govt has sown in 3 short yrs. US is a much more stable and powerful democracy than we can ever have here even with Trump in charge.

#50 John in Mtl on 12.25.18 at 7:38 pm

Si Garth, Madame Dorothy, Bandit and all You Blog Dogs (ok, Felix, cats too!)

Merry Christmas ! Hope you had a nice day all.

#51 AK on 12.25.18 at 7:39 pm

“The best course of action is to ignore your investment accounts until the daffodils are nicely out.”
====================================
It’s like shooting fish in a barrel. So many stocks and ETF’s that are yielding over 7%.

A divided government works better, based on history. President Trump will also hit the campaign trail soon, which will provide great entertainment over the next 2 years.

#52 AK on 12.25.18 at 7:41 pm

#3 Danforth on 12.25.18 at 3:02 pm
“Hi Garth,
Do you see any sectors or geographies being stronger candidates for the recovery?
tx!”
====================================

Financials, Energy and Technology…

#53 AK on 12.25.18 at 7:47 pm

#47 Oakville Sucks on 12.25.18 at 7:09 pm
“2019 is going to be bad…the begginning of a serious recession…
I WISH I AM WRONG!”

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

How the heck does a recession start with a 3.4% GDP, an unemployment rate of 3.7% and a federal election in 22 months. ??

#54 Fish on 12.25.18 at 7:49 pm

MP confident Trans-Canada Highway will finally be twinned west of Kenora, Ont.

Two-lane roadway site of many crashes, closures over the years

Ian Froese · CBC News · Posted: Dec 24, 2018 1:42 PM CT | Last Updated: December 24

https://www.cbc.ca/news/canada/manitoba/trans-canada-highway-twinning-kenora-manitoba-ontario-border-1.4958461

#55 Stan Brooks on 12.25.18 at 7:51 pm

#43 akashic record on 12.25.18 at 6:46 pm

Yep, and their debt situation in 2007 was probably much better than ours a the moment, our housing bubble is much bigger and we never deleveraged. And our ‘loonie’ is not the world reserve currency.

It bugs me big time how people underestimate the outcome from all this: the huge inflation.

Look at the Mexican peso and they have comparable trade with US as we do. But much better weather.

People of fixed income, retirees, young generations totally doomed.

Big exodus from Canadian big cities coming, with all the impact on services, crime, quality of life.

It seem in the last 15 years we were living on fumes from the credit supper bubble just to pretend that we are a G7 nation.

#56 Alex in YVR on 12.25.18 at 8:11 pm

Hey blog dogs – any advice for those who do *not* have diversified portfolios? I came to Canada 2 years ago and faced with the situation in Vancouver I had lived minimally and invested all earnings into a tech-heavy portfolio (mostly QQQ/XLK/SKYY but some individual stocks as well; around 100K at this point; down 10K if I were to sell).

I’m not panicking and will not sell but have basically stopped investing at this point. Should I eschew tech completely now and invest in something else (what?) or should I buy the dip, tech included? I feel all of these companies have real value in them and will come back eventually.

#57 Fish on 12.25.18 at 8:22 pm

Space tech that feeds high-end diners in Toronto could help Canada’s North
Lush, leafy greens could be locally grown with innovative vertical farming system

James Dunne · CBC News · Posted: Dec 25, 2018 4:00 AM ET | Last Updated: December 25

https://www.cbc.ca/news/business/space-food-technology-led-1.4945788

#58 Nonplused on 12.25.18 at 8:39 pm

“Hour-by-hour, a political crisis is developing. Markets worry about a president who deliberately shut the government, dismissed the defense secretary, rashly pulled out of Syria, shocked allies, may punt the Fed boss and could face indictments or an impeachment attempt in 2019”

So point by point.

Trump did not shut the government the Democrats did. All he was asking for was $5 billion to put up some fencing along the boarder. Compare that to what they are spending trying to get the F-35’s to fly or their new aircraft carrier to actually launch planes and it seems pretty modest. And it was a campaign promise and he got elected with that campaign promise so he has no other choice from a democratic point of view to at least build something. It is the Democrats who are ignoring the will of the people by not letting Trump have something on the boarder he can say is a wall. He campaigned on it and he won on it. It is the will of the people.

He did not dismiss his defense secretary, Mattis retired because he disagreed with Trump’s decision to pull out of Syria. Well, the rest of us are wondering why the US was in Syria in the first place. All the 2-3000 troops that are there now are is “human shields”. Russia, Turkey, or Syria could take them all out in a day. They are serving no purpose. Back them up 100 miles back into Iraq and the “pull out” is accomplished but they are still fairly nearby if needed. The Syria invasion remains one of the most inexplicable actions of our young century. It is right to pull those troops back to Iraq.

It is not even entirely clear that Trump can “punt” the Fed boss. It would be unprecedented. He can nominate, sure, but “punt”? Not sure. The Federal Reserve is not a government agency despite the name and the Federal Government actually has little jurisdiction. The “Federal Reserve” is owned by the member banks. The “Federal Reserve” is about as much of a “Federal” agency as “Federal Express”.

Impeachment has been under way since 2016 and so far they have come up with no crime. Maybe some tax shenanigans but it is not the IRS who is after him. He wasn’t the one spying on his campaign. He may have “colluded” with the Russians but collusion is not a crime, and so far there has been no evidence provided. You collude every time you make a deal with someone. It’s a very sketchy concept. When you throw a surprise birthday party you collude. So it comes down to intent. And what about what the DNC did to Bernie Sanders? That was obviously collusion but it is not illegal.

Anyway, if they do get him on some sort of actual crime they can impeach him on, they better make sure they have a crime. If they move to impeach with no proven crime all hell is going to break lose and that will be the Democrats fault, not Trump’s. You can’t just overturn an election because you don’t like the results.

They could try and get him on article 25, incompetence or incapacity, but there are a whole lot of old senators that will have to go for mental evaluations before they can vote if they want to go that way. We can’t have senile crazy people voting on who is senile and crazy and who is not.

Trump, folks, is what you get when leadership no longer responds to the will of the people. The problem isn’t Trump, he wouldn’t have to be there if leadership was responsive. He is a symptom, not the cause. Just ask the “yellow vests” in France. Macron is done, but Trump isn’t.

Pssst. You have Kool-Aid on your chin. – Garth

#59 ShawnG in TO on 12.25.18 at 8:40 pm

Merry Chrismas Garth and family
and blog dogs
and a few cats

#60 Nonplused on 12.25.18 at 8:55 pm

PS I forgot to mention that the US pull out from Syria was followed a day later by an announcement that Turkey was going to buy US Patriots rather than S-400’s from Russia.

A lot goes on behind the scenes that doesn’t make the MSM.

Turkey wants the US out of Syria. Why I am not sure. But they want them out and have been quite clear about it.

My post said markets are worried about these Trump actions. They are. Your trying to ‘educate’ people as to why the US president is infallibile is irrelevant. But entertaining. – Garth

#61 KLNR on 12.25.18 at 8:59 pm

@#53 AK on 12.25.18 at 7:47 pm
#47 Oakville Sucks on 12.25.18 at 7:09 pm
“2019 is going to be bad…the begginning of a serious recession…
I WISH I AM WRONG!”

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

How the heck does a recession start with a 3.4% GDP, an unemployment rate of 3.7% and a federal election in 22 months. ??
____________________________________

just wishful thinking on the part of miserable doomers like Oakville Sucks and stan brooks.

#62 KLNR on 12.25.18 at 9:04 pm

@#49 not 1st on 12.25.18 at 7:33 pm
God I miss Harper. Imagine Canada votes out a sane, calm economist and votes in the disaster we have now. Trump has nothing on the chaos our current govt has sown in 3 short yrs. US is a much more stable and powerful democracy than we can ever have here even with Trump in charge.
_______________________________
Bwahahahaha. oh man, tell me this is satire.

#63 Marty on 12.25.18 at 9:20 pm

The Fed is helpful at inflating housing and stock bubbles. The bubble is now deflating after only a small change in interests rates.

The trade war, loss of political confidence and government deadlock are also to blame. – Garth

#64 Dave on 12.25.18 at 9:24 pm

If I had to guess…I would say the S&P 500 will bottom at around 1800 in May 2019

#65 Nonplused on 12.25.18 at 9:36 pm

“Pssst. You have Kool-Aid on your chin. – Garth”

Thanks for that. About what part? The relationship between the Federal Government and the Federal Reserve is the hardest to understand, but let me identify that I don’t necessarily think it’s a bad thing if the Federal Reserve is independent, at least to some degree, of the government. A government in control of the central bank might most probably be a bad thing.

“My post said markets are worried about these Trump actions. They are. Your trying to ‘educate’ people as to why the US president is infallible is irrelevant. But entertaining. – Garth”

I am not saying in anyway that Trump is infallible. He may be the most fallible president ever. He is probably way in over his head. What I am trying to say is that he is a consequence of the times, and he probably did little on his own to generate the crisis other than comment on it. Any other man or woman in that position would be having a hard go of it. I’m trying to say that trying to impeach him or not give him a little money to fulfill a campaign promise which is what the Democrats are doing is a lot more of a threat than laying down some barb wire on the boarder.

The populous can vote again in 2020. Until then just let him build some structures on the border which has already been approved by the voters and be done with the bashing.

They say that when the student is ready the teacher will arrive. They never said it would be a good teacher. Trump is, more than anything else, a yellow vest protest. The elites need to figure this out before it goes all revolution.

It might be worth mentioning Trump lost the popular vote, so be careful with that ‘approved by the voters’ meme. – Garth

#66 TurnerNation on 12.25.18 at 9:51 pm

Time to stuff the TFSA!
Have a sobar look at it.

Longbranch imortalized:

Wild Turkey Longbranch
http://www.lcbo.com/lcbo/product/wild-turkey-longbranch/575001#.XCLr_vlKi00

#67 crowdedelevatorfartz on 12.25.18 at 9:59 pm

Wow!
A Christmas Day post?

Merry Christmas Garth, Dorothy, Bandit and all you blogdogs out there….
Dont eat, drink or smoke too much……..

#68 crowdedelevatorfartz on 12.25.18 at 10:09 pm

@#16 Howard
“Quite unlike the Trudeaus who never had pets….”
******

He doesnt need pets to love. He has a mirror.

#69 Kaganovich on 12.25.18 at 10:31 pm

Asset classes of all sorts will carry on deflating if the central banks continue to rein in liquidity. Mind you, who knows what the algo bots are programmed to do after Trump sends out a wild couple tweets lol. Regardless, central banks bought us quite a bit of time since the GFC and we didn’t do a whole lot with it other than attempt to maintain business as usual. If the central bank put is gone, then so are the valuations it fuelled. Maybe we will witness a 40% or 50% dump in RE and stocks in the context of central banks out of ammo. That’s a scenario that isn’t too farfetched.

#70 Ponzius Pilatus on 12.25.18 at 10:46 pm

#2 Coopoiler on 12.25.18 at 2:56 pm
Can someone explain the terms (risk on) (risk off). I do not understand these terms!
————
Watch the Karate Kid.
“Wax on, Wax off”
Get it?

#71 Nonplused on 12.25.18 at 10:54 pm

“It might be worth mentioning Trump lost the popular vote, so be careful with that ‘approved by the voters’ meme. – Garth”

The US electoral system is what it is and it was devised exactly to prevent the popular vote from over-riding state authority. It is what it is. Is it the best conceivable system? Probably not, but it is what it is and it is the way it is.

Did Notley win the popular vote in Alberta? Not by a long shot. But election rules are what they are. But now that the conservatives and wild rose have figured out that they were only harming their own cause, Notley is going out in the spring in an absolute landslide. It is what it is. By popular vote she would never have been elected in the first place. The NDP might not get a single seat, including Notley’s. You read that here first.

Presidents in the US are not elected by popular vote any more so than Prime Ministers are in Canada. In the US they win states, because states in the US are still afforded some autonomy. (I know this because I did some business in NJ and found out that NJ did not adhere to NAFTA even though it was supposedly a treaty.)

Anyway even in Canada as you know all representatives are elected locally and then the representatives appoint the Prime Minister popular vote be damned, even though most times they coincide. Popular vote is not the way it works in either country.

It is the people who say that Trump did not win the popular vote who are denying that he won in a land-slide according to the rules. The rules never allowed for “popular vote”. Should that be changed? I don’t know but I think not. The US system was explicitly set up to prevent mob rule over dissenting states. Maybe they can change it if they want but I think the dissenting states will have something to say about it.

Trump stole the election fair and square. Hillary was an unlikable candidate that ran a horrible campaign. All Trump wants is a few billion for a wall, or fence or whatever it’s going to be, which he has to get if he is to have any hope in 2020. He said “wall” so many times during the 2016 campaign and since that this is an existential issue for him. He has to build something he can point to and say “Look! Wall!”.

Whatever the so-called “popular vote”, Trump stole that election fair and square. He is the president.

#72 domain on 12.25.18 at 11:02 pm

The Fed blows bubbles then it pricks them. The churn makes other rich while it shakes the careless and amateur hands free of their capital.

I man-ed and went shopping for stocks in October. I loaded up on the ones nobody wants, primarily gold miners. While they are exceptional destroyers of capital, there is almost no other industry as volatile as they are, and that can reward like nearly nothing else. I have bet heavily that I will be richly rewarded by the end of 2Q2019.

Once the love returns to the gold miners, I will rotate out from them into another unloved industry – large cap Canadian Oil.

#73 Ponzius Pilatus on 12.25.18 at 11:26 pm

Stock markets post the biggest drop on Christmas Eve.
Ever.
Still believe in Santa Clause?
But then most blog dogs here have a balanced portfolio as per Sir Garth.
So keep calm and stay balanced.

#74 will on 12.25.18 at 11:54 pm

“Since hitting historic highs in September, stocks are off almost 20%”

yes, if you are talking about the S&P 500. the S&P/TSX is off 15% from peak.

#75 Deplorable Dude on 12.26.18 at 12:06 am

“Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade”…

Quote from Craig Johnson, president of Customer Growth Partners.

As I said the other day…..Trump is re-engineering the US economy from Wall St centric to Main St centric….

Maganomics……Wall St Journal reports…..Shoppers delivered the strongest holiday sales increase for U.S. retailers in six years, according to early data.

Total U.S. retail sales, excluding automobiles, rose 5.1% between Nov. 1 and Dec. 24 from a year earlier, according to Mastercard SpendingPulse.

#76 Not So New guy on 12.26.18 at 12:48 am

I have head Harper likes kittens. Apparently, they make tasty snacks

#77 NEVER GIVE UP on 12.26.18 at 1:06 am

#55 Stan Brooks on 12.25.18 at 7:51 pm

Big exodus from Canadian big cities coming, with all the impact on services, crime, quality of life.

It seem in the last 15 years we were living on fumes from the credit supper bubble just to pretend that we are a G7 nation.
==================================
Moved to Vancouver in 85 from living in Asia, Could have moved anywhere in the world but I chose to settle in Vancouver.
Just goes to show how wrong you can be!
I didn’t see what was coming. This place is a hole. I’m leaving soon.
Just making plans for me and the Fam! Leaving Canada that is!

#78 Lady Jane on 12.26.18 at 3:41 am

When will these Koolaid drinkers wake the hell up? Trump is a Russian asset, plain and simple. He’s taking the country apart brick by brick and destroying any positions they had with their allies and the global community. This ridiculous border wall is just another diversion while he further weakens the country from within. He needs this pathetic, needless border wall win to save face with his mouth breathing base although the majority of the country is against it. I hope the Democrat’s stay strong and then mop the floor with his traitorous ass in January. How anyone can defend this despicable, narcissistic A-hole is beyond me. I guess talking points from FOX news are easier for some to follow than the stark reality that is unfolding. He’s a bloviating windbag, and full on head case. That he has any logical, sane plan for the good of the country is beyond ludicrous.

#79 Crazyfox on 12.26.18 at 7:12 am

http://www.multpl.com/shiller-pe/

Yup. Same old chart, different reason. I like this 10 year inflation adjusted earnings chart for several reasons mainly of which it is more of a reflection of economic confidence/stability than earnings and when you compare, say, fed interest rate charts for example:

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

… we see that there is a direct correlation between higher rates and lower stock valuations! So anyone telling you that higher rates are good for the stock markets has no clue and history spells this out well but we knew this. What people miss however, is that its not always about earnings and valuations, stability matters too. 2 big drivers to the bear market selloff have been? Higher interest rates coupled with growing political instability (we’ll get there).

But I digress. I’m going to try to stay on point today and talk about why Stephen Harper was, for example, wrong to tell Canadians it was a good time to buy into a falling market in 2008 and not just because history said so, but because where he said to do so on the Shiller chart above (as I remember it, he said to do so with P/E’s at 23. If you had money and were looking to get in, 15 was way better. We are at 26, higher and not wise advice to buy into today’s stock market with such high historical P/E multiples with the political instability at present).

Now, I don’t want Garth to get upset with me over a misunderstanding of context so I will clarify. Garth uses a mix of stock and bond investments to hedge against market downfalls. Yields go up and coupon values go down or vice versa, you are covered with bond diversity. Stocks/ETF’s go down, you are covered again because of bond/ETF/equity diversity and that’s all well and good with a 6% growth target and time on your side but that wasn’t what Stephen Harper suggested you do back in 08′ is buy a diversified portfolio of stocks and bonds, no, he said invest in a falling stock market with P/E ratios averaging 23 in the S/P.

Again… look at the Shiller chart. If that number goes back to 23 by mid February, Harper’s advice if acted upon and held onto over 10 years might yield plausible 0% capital gains over 10 years. Stephen Harper advised Canadians to buy into a falling market that was still historically high just before an election where he was telling every Canadian that he was going to balance the 08/09 budget (it was a $52 billion deficit, the largest in Canadian history as I recall). Was he lying? Was Harper as a sitting PM clueless? Or both! Of course it was both, I don’t miss him and I’m glad he’s gone. I only wish he would stay gone.

We have to instead hear stories about Steve Harper wanting to set up online casino’s with Trump’s help and in return reward Canada with favorable NAFTA II negotiations, like that will turn out well for us. One of Trump’s latest wannabe buddies, one can only guess its because they have so much psychologically in common… but I again wander.

Where was I… right. Investing in the stock markets now at these valuations with the news cycles ahead, lets take a look. Rates are going up as mentioned, not good for stock markets as history shows. Earnings, are they good overall? Yes they are! There will be some incumbent hiccups but they are good overall. Earnings are 7 weeks away or more but they are still good for one more quarterly cycle and then all bets are off due to trade war concerns and inflation that follows but these numbers won’t show up until April and lots can happen its a long way off.

So rates have gone up. If the rate hike gives the U.S. dollar a bump, that’s also good, no two ways about it. If the dollar doesn’t rise, that’s bad meaning confidence is leaving the U.S. economy but early indicators are the dollar is strengthening. I don’t have to see it in currency, I see it in commodities, it will make things cheaper for Americans to buy so that’s good. Employment numbers are good, earnings, inflation is tame, where is the drama? Why are markets falling? Is it really just rates? There’s more.

2019 will be the year of U.S. political instability. There are 17 investigations into Trump and the little Trumps now (that we know of) and a few are grounds for impeachment and it is in my best view that the Republican controlled Senate will vote in favor of impeachment with the least serious of them (campaign finance laws) and get rid of Trump because the most serious investigations (Russian collusion, election interference, obstruction of justice, bribes) will kill any chances of Republicans holding onto a majority Senate:

https://en.wikipedia.org/wiki/2020_United_States_Senate_elections

Republicans defend 22 Senate seats while the Dems defend 12 in 2020. The numbers are tilted against the Republicans keeping a Senate majority including the VP tie breaker if needed. Look for Republicans to jump the Trump train before it derails and the greater truth is that train has already left the tracks.

Do readers remember the NY Times reports coming out with a story on Trump concerning his self made story of making big on a million dollar loan from his dad and paying it back with interest? Donald Trump was gifted close to $200 million instead, most of which was laundered by Donald and his siblings to avoid an inheritance tax (now being investigated). When the old man kicked, DT took most of the buildings and sold them and took the cash and invested in the Taj Mahal in Atlantic City, remember this? If DT would have done nothing and just held onto his dad’s assets, DT would be a NY titan king today. What did the smartest guy in every room do? The “stable genius” who never has to be briefed or read? The self made loser took huge write downs in an illiquid asset (casino) that he couldn’t unload and went into Chapter 9 bankruptcy:

https://en.wikipedia.org/wiki/Hard_Rock_Hotel_%26_Casino_Atlantic_City

What did he learn from Atlantic City? More money laundering. When Trump’s credit rating was bust and Trump couldn’t get a loan from North American banks (tells you something right there), he got $300 million through Deutsche bank:

https://money.cnn.com/2017/01/31/investing/deutsche-bank-us-fine-russia-money-laundering/index.html

A Putin controlled Alpha bank cosigned for Trump. The connection was money laundering not just with the casino or loan but through real estate. From then on Trump was Russian compromised and groomed for a presidency run and all U.S. foreign policy we’ve seen since reflects just how much control Russia has over Trump’s WH.

This is all mainstream news. No one is going to fix this for Trump, not the Republicans, not FOX news, not the Russians, not $, certainly not Russian trolls here, no, nothing. Trump is dead in the water in 2019 and the markets will have to price it in.

Oh, there could be surprises. A U.S. China trade deal “fixes” everything and global growth is on again etc. but it would be unwise to not price in what happens to Trump and fallout in 2019 no matter what happens.

I have a different distraction now today… fascinating stuff. No one can accurately predict the future?

https://www.youtube.com/watch?v=TRcx-btcle4&t=4673s

#80 Bezengy on 12.26.18 at 7:25 am

Harper was a genius, and I’m buying. btw, Harper had a balanced budget.

#81 meslippery on 12.26.18 at 8:16 am

#71 Nonplused
—–
So the US pays for the wall then invoices Mexico?

#82 Howard on 12.26.18 at 8:59 am

#72 domain on 12.25.18 at 11:02 pm

The Fed blows bubbles then it pricks them. The churn makes other rich while it shakes the careless and amateur hands free of their capital.

I man-ed and went shopping for stocks in October. I loaded up on the ones nobody wants, primarily gold miners. While they are exceptional destroyers of capital, there is almost no other industry as volatile as they are, and that can reward like nearly nothing else. I have bet heavily that I will be richly rewarded by the end of 2Q2019.

Once the love returns to the gold miners, I will rotate out from them into another unloved industry – large cap Canadian Oil.

————————————

Rather than shop for individual gold stocks, which is always a crapshoot, it might be better to buy some gold miner ETFs : HEP.TO, ZJG.TO, and HGU.TO. That’s what I’m doing.

Though if I had to pick a particular gold stock, ELD.TO is very tempting as current valuation.

#83 Godth on 12.26.18 at 9:15 am

The Best of Pastor Jim Bakker
https://www.youtube.com/watch?v=ezENqnD_yGg

#84 crowdedelevatorfartz on 12.26.18 at 9:38 am

@#79 PrattlingFox

Less bloviating more brevity

#85 MF on 12.26.18 at 10:14 am

#77 NEVER GIVE UP on 12.26.18

-Moved to Vancouver in 85, didn’t purchase a house and win the house lottery? Now is complaining on a housing bubble blog the place is a “hole” and “threatening” to leave.

Lol I guess between this poster and Stan you can see who the winners of the housing lotto (and losers) are.

Hilarious.

Worse complaining than a first year uni course full of millennials.

Btw we should punt the idea of dual citizenship (citizens of convenience).

MF

#86 MF on 12.26.18 at 10:20 am

Bezengy on 12.26.18 at 7:25 am

Harper was a great leader. Business oriented. Knew where Canada stood in the world in terms of our allies.

Like all strong leaders he was disliked by the weak among us (who must have voted for handouts from guys like T2)

MF

#87 dharma bum on 12.26.18 at 10:22 am

RE: TODAY’S PHOTO
_________________

That looks like a chicken to me!

https://www.youtube.com/watch?v=hF_-5pZ_kxY

#88 not 1st on 12.26.18 at 10:24 am

Garth, 2/3rd of people voted for somebody other than Trudeau and he runs the country like an tin pot dictator. There are no checks and balances on him. Does whatever he wants, no consultation.

I love the chaos trump sows every day. I love how he trolls the MSM everyday with his dog whistle tweets. I love how he makes weasels in Washington squirm. I love how he rewriting this stupid liberal world order we have been stuck with for 70 odd years. And I love how he triggers SJW like ladyjane into a hate filled frenzy and sends crazyfox into a conspiracy fuelled tirade.

#89 MF on 12.26.18 at 10:24 am

Trump is just deflecting and trying to appeal the primitive portion of his base who are suspicious of the federal reserve because they believe in conspiracy theories, are still upset about the bailout etc.

It is a good buying opportunity.

MF

#90 dharma bum on 12.26.18 at 10:24 am

Stock market bailers are chicken!

https://www.youtube.com/watch?v=oVJA89XBQ_4

#91 Shawn Allen on 12.26.18 at 10:25 am

U.S. Home Prices News Good or Bad

Here is news on U.S. home prices. Like most news it can be interpreted as good or bad. Right now the market seems to view that “all news is bad news” so we can guess which way the head lines will go.

The news:

“The S&P/Case-Shiller 20-city index rose a seasonally adjusted 0.4% in October but in a clear sign of the housing market’s recent struggles the increase in prices over the past 12 months slipped to the lowest level in two years. The year-over-year advance in prices fell to 5% from a revised 5.2%. The Econoday consensus was for a 0.4% monthly increase for the 20-city index and a 5% yearly increase.”

******************************
So, U.S. existing home sale prices are up 5.0% year over year. Pretty solid indeed. And exactly as expected. Good news?

Or oh no, the year over year increase was the lowest in two years. So bad news? Terrible news? Watch for people to read this as home prices are the lowest in two years.

#92 Daughter of Ponzi on 12.26.18 at 10:33 am

Harper was also a stable genius.

#93 Ace Goodheart on 12.26.18 at 10:47 am

“Do you still believe in Santa? Because, at 7, that’s kind of marginal, right?”

The above comment illustrates in pretty clear detail all that is wrong with government today. Run by the children of the wealthy, who have never cared for their own children (T2’s first move as PM was to get his full time babysitter on the payroll), our governments are made up of adult babies, trust fund children who never grew up and who cannot take care of themselves, let alone be mother and father figures for an entire nation.

“The People” have decided that 800,000 Federal workers will continue to not be paid, and of course the wonderful US banking system is now quickly setting up loans and lines of credit for these people, so they can not only work for free, but go into debt while they’re doing it.

What to do?

Well you can’t beat them, but you can join them.

The children of the wealthy do not work. They earn their incomes for the most part from monies which are put in large trusts for their use, by their parents and grandparents. These monies are invested and pay out dividends and capital gains.

For this reason, dividend and capital gain income will always be taxed less than employment income, in any developed country where wealthy kids control government (yes, that’s you Canada and USA).

Have a phone bill? Why are you working to pay it? Purchase the stock of the phone company, and pay the bill using dividends. The money they send you, send back to them. Your phone is free!

You can do the same thing with your mortgage (bank stocks pay dividends, use them to pay the interest on the mortgage loan), your utilities (Hydro one is a public company, despite what Doug Ford thinks), your groceries, basically anything and everything you work to spend money on, is available for free, at a reduced rate of taxation, if you own shares in the company that provides it to you.

How do you think the rich stay rich? They tax themselves less than everyone else, and they own the means of production, for the products they (and everyone else) consumes.

You’ll never beat these people. They are far too powerful, they control government and they have more money than you can ever even imagine.

But you can join them……

#94 Godth on 12.26.18 at 10:58 am

#79 Crazyfox
putin is clearly a genius. $4700 worth of ads to google, $100k troll farm ads on facebook, half of which was spent after the election, and american “democracy” was overturned. it took the us over a decade of colour revolutions and 5 billion dollars to stage a coup in ukraine, the russians are certainly efficient.
putin is responsible for: black lives matter, brexit, yellow jackets in france, the metoo movement, pussy hats marching, and likely this market downturn plus anything else untoward in your world.
when you say “the russians” you may want to get more specific. Cohen—> felix sater—> Semion Mogilevich would be more reasonable.
when trump had his people reach out to the kremlin over the hotel deal putin was very silly, or a genius, not to respond to his manuchurian candidate.
with a gdp nipping at the heels of canada clearly russia is set to take over the world. http://statisticstimes.com/economy/projected-world-gdp-ranking.php

#95 jess on 12.26.18 at 11:22 am

hypocrite /Hippocrat …and the ” hippo” in the ZOO

Mr. Trump wants a wall to limit people crossing the borders …calls them criminals and rapists. Where are President Trumps descriptives regarding executives that knowingly allow bulk cash smuggling, black market peso exchange, transaction structuring, suspicious wire transfers, etc., totaling in the hundreds of millions of dollars over a several years…apparently familarity doesn’t breed contempt.

Rabobank to pay $369 million in money-laundering case
By ELLIOT SPAGATFebruary 7, 2018

SAN DIEGO (AP) — Dutch lender Rabobank’s California unit agreed Wednesday to pay $369 million to settle allegations that it lied to regulators investigating allegations of laundering money from Mexican drug sales and organized crime through branches in small towns on the Mexico border.

The subsidiary, Rabobank National Association, said it doesn’t dispute that it accepted at least $369 million in illegal proceeds from drug trafficking and other activity from 2009 to 2012. It pleaded guilty to one count of conspiracy to defraud the United States for participating in a cover-up
when regulators began asking questions in 2013.

https://www.justice.gov/opa/press-release/file/1032096/download
fintegrity.org/rabobank-similar-facts-different-outcome-signal-new-doj-approach/
https://www.americanbanker.com/articles/ex-ceo-whose-bank-hid-drug-cash-is-said-to-avoid-charges

#96 Doug in London on 12.26.18 at 11:27 am

I haven’t been to the shopping mall, not far from where I live yet, but have already taken advantage of some AMAZING Boxing Day sales on my U.S. trading account. That’s odd, I didn’t even think that Americans officially recognise Boxing Day as we Canadians do.

When markets go risk-off, with everyone hitting the SELL button, it’s time to get out the chequebook. But for that you need courage, confidence. Most lack it.
——————————————————-
Really? If anything I’m a wuss, a pansy, a sissy who’s afraid of his own shadow and is thus terrified of buying stocks and ETFs at inflated prices. Only now when such assets are on sale does such a timid person as myself actually find enough nerve to actually buy any.

#97 Doug in London on 12.26.18 at 11:34 am

@Ponzius Pilatus, post #73:
You’re damn right I still believe in Santa Claus! Out of the goodness of his heart, the biggest in all of the world if not in the entire universe, he’s given me some amazing deals in the last few days. Again, thank you Santa Claus!

#98 TurnerNation on 12.26.18 at 11:37 am

#56 Alex in YVR then you missed out. For example the India ETF INDY.US is up 16% in past two month.

Even the 3 Wise Men came bearing a balanced portfolio for their time. Like an RESP for the young lad.

#99 JSS on 12.26.18 at 11:55 am

#93 Ace Goodheart

This comment about dividends and trusts, I personally feel, is so bang on and critical to understand and absorb. The “system” can be used not only by rich families but also middle class families that want to move to an upper-middle class.

#100 jess on 12.26.18 at 11:57 am

Inversion : but if the money is real?

http://nymag.com/intelligencer/2018/12/how-much-of-the-internet-is-fake.html

#101 Harpo on 12.26.18 at 12:11 pm

He was nothing but a blowhard on stage with an agenda. The budget was rigged and never balanced; he was a tyrant of deception; never a genius by definition; and informed his Cabinet Ministers under threat what they must do or they will be destroyed. He wore his mask well, and many were fooled by his lies. The kids being taken to Sunday school was a myth, and when the Pastor was asked about the wife he replied that he has never seen her in his church.

#102 Long-Time Lurker on 12.26.18 at 12:25 pm

CADUSD at 0.7108 cents. A 6 cent drop in 6 months.

#103 Tony on 12.26.18 at 12:40 pm

Harper was actually wrong but he saw the movie The Cincinnati Kid. Making the wrong move at the right time. Dumb luck in the long run is something that fades fast.

#104 Godth on 12.26.18 at 12:44 pm

every time i go down the Trump – Michael Cohen – Felix Sater – Semion Mogilevich rabbit hole, where moscow, london, and new york converge at the highest levels, i always feel so dirty. it’s time to jump in my golden shower, fire up the bugatti, climb aboard the lolita express and meet up with jeffrey epstein, bill clinton and prince andrew so i can leave all my troubles behind. a refreshing holiday.

#105 AK on 12.26.18 at 1:05 pm

#78 Lady Jane on 12.26.18 at 3:41 am
“When will these Koolaid drinkers wake the hell up? Trump is a Russian asset, plain and simple.”
====================================
You are watching too much CNN…

#106 akashic record on 12.26.18 at 1:27 pm

#93 Ace Goodheart

basically anything and everything you work to spend money on, is available for free, at a reduced rate of taxation, if you own shares in the company that provides it to you.

Absolutely, but…

To cover a $50 monthly Rogers bill with 48 cents quarterly dividends, you need to own 313 RCI.A shares @68.32 each, a total of $21.385 initial cash investment.
Income tax on dividend not included, so you need to have even more shares upfront to cover that.

Do the math for everything else that you want to get for “free”.

Now we just need to figure out how to manifest the initial capital.

#107 Leo Trollstoy on 12.26.18 at 1:41 pm

How’s the CADUSD pair doing today?

#108 crowdedelevatorfartz on 12.26.18 at 1:45 pm

@# 77 Never Never NEVER EVER give up

“I didn’t see what was coming. This place is a hole. I’m leaving soon.
Just making plans for me and the Fam! Leaving Canada that is!”

******

Sooooo…..you’re giving up?

#109 Leo Trollstoy on 12.26.18 at 1:47 pm

Lose California and Trump wins the popular vote lol

California is a failed state anyway. Their only claim to fame is revenue, which is more than offset by their massive expenses and liabilities

#110 MF on 12.26.18 at 2:08 pm

08 crowdedelevatorfartz on 12

-Ha. Looks like he gave up a long time ago.

MF

#111 What A Genius on 12.26.18 at 2:13 pm

John the Bear bailed out on Harpo in order to hoop his pension under the old rules and was a smart move. The political genius of Harpo couldn’t even see his fate written on the wall, because in his delusional world of Neverland actually believed he would win again. He rolled the dice instead of resigning, and it cost him almost $2 million in pension money because he fell under the new rules. Its ironic that he wrote these rules passed by his own parliament too.

#112 crossbordershopper on 12.26.18 at 2:21 pm

no one ever talks about protection. ride the wave, go ahead, i want security, buy puts, protect yourself. they will tell you, you dont have to ride out the waves and you will see you will see that protection wasnt necessary, oh ya, i see, blue chip stocks go down 25% and you say to sit back and relax, wait, for what? im down 25%, and you say that i am long term investor, i see, long term, like what 3 years, 5 years 10 years?
you will see that dec 31 numbers the long term is garbage returns for canadian mutual funds, and given the best time where prices in first quarter 09 where the lowest, and we are barely above that.
i buy buy long dated puts no premium to cover my downside, and write weekly options and sell premium.
make great money with no risk.
if you want me to go on a ride, and not get paid, and be happy with like 5% long term return(see the dec 31st numbers). net of fees then go ahead.
if your not going to make real returns dont even play this game, buy a 5 year gic and get same rate without risk or volatility.
if you want to make real money, private market, you dictate the business, pay lot less tax, freedom.
or watch the screen and allow others to dictate your future retirement.

#113 not 1st on 12.26.18 at 2:22 pm

Garth, ask your self honestly, whom does a central bank serve? Why other banks of course.

Lower raises to get everyone in, raise them to increase revenue. Put out some fluff about inflation yadayada, see how much pain the economy can take without a crash, lower them back down again, bounce it around a bit and on and on it goes.

The fed rate should exactly match the quarterly GDP and stay range bound 2-4%.

#114 Shawn Allen on 12.26.18 at 3:03 pm

BADLY NEEDED! – Trusted Experts

Much of the population has lost trust in experts be it in science, how banking works, how the stock market works, politics and much more. News media is derided for being “main stream”. In many quarters the lunatic fringe has far more credibility than the mainstream. Educated “elites” are not trusted.

People say we need more financial education but then much of the population would not trust what was taught.

With so many people not trusting experts and with various crackpots and wackos finding big audiences on line, the population is very vulnerable to ideas that are wrong and down-right dangerous.

What to do?

#115 Crazyfox on 12.26.18 at 3:08 pm

#79 Crazyfox

Ok, I lied. I woke up from a Christmas nap and realized I fibbed. Investing in the TSX @ 11,500 or 12,500 or whatever it was at the time Harper said so, or the U.S. S/P 500 or a broad based ETF at the time would have led to what Garth has said, 160% gain, the number is not unreasonable. Sounds a little high but still probable. Small and mid caps? Lambs for slaughter most likely. Earnings are earnings after all, divvy’s are divy’s and share buybacks would offset some of the dilution and corps that fall from grace etc.

Nevertheless, the TSX cratered to 8500 I think it was later in 08′ and again in March of 09′ with all large caps screaming “buy me!” in loud forte. Gains are gains! It was not wise to tell the nation its a great buying opportunity when a bottom is nowhere in sight regardless of my absolute dislike for Harper. But anyway, I lied. Now I have come clean. Oh, the humility. My reputation… my inconsistencies… if anyone is looking for me, leave me alone as I will be under the front porch licking fresh wounds.

#116 Crazed and a little confused on 12.26.18 at 3:22 pm

Well guys,
I sold 3 mutual funds in November and the remaining 7 last week. Just keeping my gains from buying it is the early 2000s. Yes it did go down during 2009 and more than half did give me over 100% return . Of course 1 only earned 60 bucks on one ands a lost of $700 on another. Overall good gains…waiting the correction to stabilize. This is not over .to think down approx a 20% is it after a 10 year bull …premature

#117 Remembrancer on 12.26.18 at 3:50 pm

#70 Ponzius Pilatus on 12.25.18 at 10:46 pm
#2 Coopoiler on 12.25.18 at 2:56 pm
Can someone explain the terms (risk on) (risk off). I do not understand these terms!
————
Watch the Karate Kid.
“Wax on, Wax off”
Get it?
————————————————————
While nothing wrong with Ponzius allusion there is also the added element of a thundering herd piling risk on and then shedding it like a winter coat on your favourite couch all together…

#118 Ace Goodheart on 12.26.18 at 4:10 pm

RE: #106 akashic record on 12.26.18 at 1:27 pm

“To cover a $50 monthly Rogers bill with 48 cents quarterly dividends, you need to own 313 RCI.A shares @68.32 each, a total of $21.385 initial cash investment.
Income tax on dividend not included, so you need to have even more shares upfront to cover that.”

That is correct.

I currently pay my gas bill with $50,000 in Enbridge shares (I have a bit left over for extras).

To live comfortably from dividend income you need about $3,000,000.00 CDN.

This is what separates the rich from the poor.

Comparing the average person’s savings with the amount of money you need to live comfortably without working, is like comparing the average velocity we travel every day in our cars with the speed of light.

But that is what you have to do. You have to get yourself up there, to the multiple million dollar mark, and live off the dividends.

#119 espressobob on 12.26.18 at 4:11 pm

What a bull market for some years. Take profit off the top, load up on safe stuff. Buying on the downside, well that’s harder to do for most. Emotions can get in the way when some loose perspective. Even the bears have to feast once in a while.

Welcome to DIY investing.

#120 NoName on 12.26.18 at 4:20 pm

Accuracy vs precision, ancient dilemma…
I personally prefer high accuracy over high precision, but that just me.

#121 AGuyInVancouver on 12.26.18 at 4:29 pm

38 The ghost of Jack Diamond on 12.25.18 at 6:04 pm
Canada’s worst enemy is not Trump, it’s been Trudeau, he’s a country killer. Shift your focus away from the Trump hating media and towards the damage that Trudeau is doing and you’ll quickly see that Trudeau is being used by Globalists to ‘resist’ Trump. Its the Globalists that have the most to lose, their 100% taxation plan and a future of low wages is being undermined by Trump, they are fighting vigorously against being toppled. Trump is our savior, the Globalists, the enemy of mankind, Trudeau is just toilet paper. Trump must win, no matter how dishonest and disingenuous the media is, and how dishonest ‘the resistance’ is, what a lie climate change is. We either win or we become slaves within a generation where confiscation and serfdom are the outcome of this war. Dude, I have a choice, I can delete my life her and plunk my ass down on powder sand, but you might end up penniless and beholden to the ghouls of the world, the Trudeau’s, Butts and Soros. Is that what you want, catfood and misery?
_ _ _
Oh lordy, we have a Soros basher! At what point does Garth pull the plug on closet anti-semites?

You have to wonder if anyone is tracking the Trump family/shady inner circle’s patterns of stock trading before and after the Orange Bloviator’s tweets. Might be interesting…

#122 Stratovarious on 12.26.18 at 4:35 pm

Since everything (absolutely everything) that is bad with the Stockmarket is caused by Trump, how do we now respond to the fact that on December 26, the markets had a historic rally? Might it be that Trump was neither the cause of the “bear” market (which apparently lasted for one day), or the reason for a historic rally on the day after Christmas. When your analysis begins and ends with “Trump”, you might not be seeing the full picture.

He left the country. – Garth

#123 Ace Goodheart on 12.26.18 at 4:36 pm

RE: #106 akashic record on 12.26.18 at 1:27 pm

Wealthy folk have one cardinal rule, a rule that they never break. This rule goes back thousands of years, it is talked about in the earliest literature. The rogue son or daughter of nobility, who broke this rule, is the fool and the black sheep of any good old English novel. The rule makes up the family name. It is like tradition. Like cooking your food before you eat it. It is at the heart of any culture, the driving engine of any successful family.

What is this rule?

“don’t encroach on capital”.

Four simple words, a world of meaning.

Don’t spend your capital. Don’t break the bank. Don’t mortgage, don’t borrow, don’t dig into the family trust and fritter the money away.

Capital is to be employed for the purpose of earning income, which income is spent by the person who controls the capital, or his or her family.

Capital is never, ever spent by itself.

Ever…..

#124 Tfsa girl on 12.26.18 at 4:56 pm

So Jan 1 is almost here, so what is everyone doing with their 6k when deposited in their tfsa account
Myself 75% going in vgro & the rest into vfv
What do you think of that mr.turner?
Tfsa girl or tgirl

#125 not 1st on 12.26.18 at 5:15 pm

#117 Ace Goodheart on 12.26.18 at 4:10 pm

—–

If all your investments are paying your bills, whats paying for the 8% across the board inflation stalking the country. Bought any groceries lately. Whats paying for your carbon tax which is on like everything.

#126 Mike G on 12.26.18 at 5:17 pm

Don’t think you’re eligible for T2’s media bribe, but nice try with Trump being responsible… you haven’t noticed they’ve been gunning for him for 2 yrs?
The Fed was warned stocks would tank if they didn’t cancel the last Interest increase… they went ahead. Oh, and there are all those docs/crimes T is threatening to expose… and crashing the economy isn’t a bad defence!

#127 Howard on 12.26.18 at 6:10 pm

#121 AGuyInVancouver on 12.26.18 at 4:29 pm

Oh lordy, we have a Soros basher! At what point does Garth pull the plug on closet anti-semites?

You have to wonder if anyone is tracking the Trump family/shady inner circle’s patterns of stock trading before and after the Orange Bloviator’s tweets. Might be interesting…

———————————————————

Criticizing a person who happens to have a Jewish background does not make one anti-Semitic.

It’s that kind of shrill, hysterical reaction that makes people disbelieve and tune out instances of actual bigotry when they occur.

#128 KLNR on 12.26.18 at 6:12 pm

#78 Lady Jane on 12.26.18 at 3:41 am
When will these Koolaid drinkers wake the hell up? Trump is a Russian asset, plain and simple. He’s taking the country apart brick by brick and destroying any positions they had with their allies and the global community. This ridiculous border wall is just another diversion while he further weakens the country from within. He needs this pathetic, needless border wall win to save face with his mouth breathing base although the majority of the country is against it. I hope the Democrat’s stay strong and then mop the floor with his traitorous ass in January. How anyone can defend this despicable, narcissistic A-hole is beyond me. I guess talking points from FOX news are easier for some to follow than the stark reality that is unfolding. He’s a bloviating windbag, and full on head case. That he has any logical, sane plan for the good of the country is beyond ludicrous.

LOL

#129 PeterfromCalgary on 12.26.18 at 6:29 pm

Markets need to get back to investing 101. The value of a stock is determined by things like present value, growth, discount rate and stuff like that.

I don’t know all the methods of valuing stocks. What I do know for sure is no legitimate stock valuing model has anything to do with what President Trump is tweeting, who he is firing or even how he deals with Bashar al-Assad. Once the market players realize that they will start being sane again. “Make the Stock Market Sane Again.”

#130 M on 12.27.18 at 8:47 am

Market going up->good
Market going down -> even better

Gold is good, silver is good, TSLA is good, the Qs are good
DOW is good.
There is no such thing as “bad” investment

My take

PS
Who went long Morgan Stanley shares in 2000 never made it’s money back.
Who changed itsmind and shorted same in 2008 made a fortune.

#131 Remembrancer on 12.27.18 at 10:24 am

#129 PeterfromCalgary on 12.26.18 at 6:29 pm
Markets need to get back to investing 101. The value of a stock is determined by things like present value, growth, discount rate and stuff like that.

I don’t know all the methods of valuing stocks. What I do know for sure is no legitimate stock valuing model has anything to do with what President Trump is tweeting, who he is firing or even how he deals with Bashar al-Assad. Once the market players realize that they will start being sane again. “Make the Stock Market Sane Again.”
———————————————————
Sorry Peter from YYC – that’s not 100% accurate. Sure pricing includes things like current and future earnings as a consideration. If the so-called leader of the free world is broadcasting dumb-ass stuff randomly that creates uncertainty, including uncertainty in regards to expected future earnings with say punitive steel tariffs in place with no exit strategy… Or if Syria reverts and BA is running the whole show as a client of Russia and Iran, harassing Iraq and Israel while Turkey presses the Kurds which creates uncertainty for Mideast oil supplies which drives up prices, bam, more uncertainty… etc etc etc

So ya, that dumpster fire on the Potomac matters to the market even on twitter as part of investing 101…

#132 Ex-Cowtown on 12.27.18 at 3:44 pm

Further proof that Nancy Pelosi and NPC’s (Non Player Characters) in a vast video game controlled by…. who knows???? :) Way too funny!

https://www.americanthinker.com/blog/2018/12/with_identical_tweets_schumer_and_pelosi_reveal_themselves_as_mouthpieces_for_the_same_propaganda_puppet_master.html