The irresistible

Will the federal budget blow up HELOCs? What a surprise that would be to three million little debt-snorfling voters.

Big fanfare this week for a new report by a federal agency that frets over people’s finances. Needless to say, they have a lot to worry about. Most of us are basket cases when it comes to money. Almost half couldn’t survive missing just a paycheque or two. Nine in ten haven’t maxed their TFSAs. Family debt tops $2 trillion – bigger than the entire economy. Mortgage loans shot higher last year even though house prices went down. Quelle mess.

Home equity lines of credit have been the hottest banking product of the last decade. No wonder. People have stored most of their net worth in a single asset – their houses. So far we’ve borrowed more than $300 billion against residential real estate, half of it spent on the same properties, to finance renos. This doubling down is insane, of course, when home values have peaked and interest rates are rising. But, there ya go. More for Ottawa to worry about.

The new report confirmed what this blog reported last year – a quarter of all the HELOCers are paying nothing on their loans. Only interest. And most of them are using the lines themselves to get the interest money itself – so the debt keeps expanding until it hits the limit. The feds also found half of Canadians have no clear idea how these lines work or the risks involved.

And, yes, the dangers are real.

HELOCs are demand loans. The bank can call you any day of the week and demand the thing be repaid. If real estate crashes or your financial situation hits the skids, that phone call is not so unlikely. And home lines of credit are almost always variable – so every time the Bank of Canada raises its benchmark rate, your borrowing cost goes up. (There are two more increases expected in 2019.) Lenders can also decrease your line’s limit arbitrarily – which sucks since a third of all borrowers say they often or always use HELOC money to make other debt payments.

So every year more people with houses borrow against them, and the HELOC balloon grows. Currently about $100 billion is not being paid off – at all. Meanwhile the cost of carrying all this debt has increased substantially over the last year, in which the central bank jacked rates three times. Home equity lines have turned into quasi-mortgages, a form of debt which will typically last decades or maybe forever – draining off cash flow and eroding real estate equity.

So why do people do this?

Simple. HELOCs are like me – seductive and irresistible, but dangerous when abused. They’re also cheap – prime plus a half for most borrowers. Banks dole them out like lollipops – up to 65% of the equity in a home can be borrowed. They’re open – no term – and can be borrowed against or paid off at any time without penalty. And if you use the money to invest, the interest may be deducted from taxable income. But, sadly, since three-quarters of folks take the money for renos or debt payments, they entirely miss this benefit. Once again, financial illiteracy on full display. No wonder most people live on the edge. By the way, Ottawa’s survey also revealed those aged 25-34 would seriously struggle if their monthly payment increased by just a hundred bucks.

Bankers have been routinely offering people equity-based lines when they take out mortgages. Yep, debt and more debt. Plus there are financial products increasing the limit on a HELOC as the principal on a mortgage is reduced. So overall indebtedness never really falls – you just swap a fixed-rate, stable borrowing for a demand, variable-rate one. No wonder Bay Street loves this stuff.

Was this report, coming just weeks before the next federal (pre-election) budget, timed to set the stage for changes?

I hear it’s under consideration. The 65% equity-borrowing limit could become 50%, then reduced further in subsequent years. Plus, interest-only payments could be banned, with a requirement for banks to adopt blended payments, as with mortgages. Such changes would be prudent and in the public interest. But they’d obviously shock more than a million people who pay nothing against their loans and steadily increase their level of poochedness.

Your neighbours, in turning their homes into banking machines, have created a $300-billion bomb. Ottawa, for its part, has turned a blind eye. Do you think politicians will now do the right thing?

Me neither.

142 comments ↓

#1 expat on 01.16.19 at 4:18 pm

Its another reason we sold every piece of property not strategic to our plans several years ago when the zombies were lining up to buy at 7 times value.

When these HELOCs start to be called and then collapse people’s finances you can be damned sure it’ll be a lehman moment. IMHO.

What is interesting to me and very hard to find is this.

Who holds the bag when these people fold?

Were HELOC’s collatorialized?
Or do the banks hold the damage.

They start foreclosing, they end with massive housing inventory, they start to hold auctions, ???

Florida beach auctions all over again?

Interesting discussion aorund this.
Who holds the risk?
BANKS?, CMHC, ???

One thing is for sure. If this auction flood happens any property holder will be affected by crashing prices….

So smugness won’t help anyone.

#2 Tater on 01.16.19 at 4:24 pm

If these changes are proposed, I will be calling my MP’s office every day to lobby for them to be put in place.

#3 Brian Ripley on 01.16.19 at 4:26 pm

Once again, financial illiteracy on full display. No wonder most people live on the edge. Garth

I have updated my long term (since 1976) Full Time Part Time Employment charts with the 2018 data http://www.chpc.biz/earnings-employment.html#Profile

Living on the edge requires income and in Canada although there is relatively low unemployment (4%-ish in Vancouver 7%-ish in Calgary)… there are more older women than older men working part time shifts, no doubt to keep household cash flow positive. Older men probably for the same reason, are not willing to give their part time shifts up for younger men.

This might affect family formation going forward.
Indeed according to the Vanier Institute of the Family, the fastest growing household type in the 2016 census was multi-generational households up 38% since 2001

This metric should be updated in the next census.

#4 YYZ_2_YVR on 01.16.19 at 4:26 pm

First

Don’t see the change happening. Why would they? It would only mess up their chance to get re-elected

#5 mike from mtl on 01.16.19 at 4:32 pm

What rates going up? Those ‘retail’ investors correctly knew spread dropping so promptly dumped preferreds. RBC already started lowering, rest will follow.

Mid term yields are not pricing in any substantial increases, here or in the US.

This all can change of course with the newfound flipflop FED we all know.

#6 Alistair McLaughlin on 01.16.19 at 4:33 pm

And most of them are using the lines themselves to get the interest money itself – so the debt keeps expanding until it hits the limit.

I had to read that three times before I got it. So, the old analogy about using your MasterCard to make payments on your Visa no longer applies. The new analogy is using your Visa to make payments on your Visa.

Other than that, Canadians are fine.

#7 kafka on 01.16.19 at 4:36 pm

According to Ross Kay, he believes the majority of HELOC debt was poured into TSFA/RRSP investments. After reading today’s blog, he couldn’t be more off the mark.

#8 Beso on 01.16.19 at 4:37 pm

Well said, seductive and irresistible :-)

#9 Alistair McLaughlin on 01.16.19 at 4:38 pm

I hear it’s under consideration. The 65% equity-borrowing limit could become 50%, then reduced further in subsequent years. Plus, interest-only payments could be banned, with a requirement for banks to adopt blended payments, as with mortgages.

No way that happens until after the election. Justin will not risk the ire of the indebted majority in an election year. In fairness, nobody else would either.

#10 Guy in Calgary on 01.16.19 at 4:51 pm

Don’t worry, if your bank threatens to pull the plug on your HELOC just refinance and get a second mortgage with an alt lender. They’ll keep the party going don’t you worry! Sure it’s expensive, but the granite and hardwood isn’t going to pay for itself!

#11 Alberta Ed on 01.16.19 at 5:00 pm

Probably not, as long as we have a “What Me Worry?” government in Ottawa.

#12 Pelé on 01.16.19 at 5:01 pm

Isn’t the budget suppose to balance itself? I thought that was the case when I tapped 150k on my HELOC.

#13 Jimmy on 01.16.19 at 5:05 pm

Just yesterday BMO called me up asking why I haven’t taken advantage of their exciting preapproved line of credit.
The worse was when every single visit to a BMO teller involved an inquiry and inquisition about my finances and their offerings.

#14 All good in Cabo on 01.16.19 at 5:07 pm

No mention of wall down here. No helocs for us back home. Well balanced with waterfront property overlooking orcas. What could go wrong. Best of British to those that over extended. 50% sfd crash in the making in Van. Said it for years. Simply no economic way. Sun kiss from sunny beaches.

#15 Raver on 01.16.19 at 5:09 pm

CBC: Author of secret internal report says $1B laundered through casinos — 10 times official estimates: https://www.cbc.ca/news/canada/british-columbia/b-c-casinos-money-laundering-foi-report-1.4972063

#16 Mattl on 01.16.19 at 5:17 pm

I’m not in any way a Trudeau fan but I think he actually gets this issue. At least he talks like he understands the risk that household debt poses to the overall economy. I wouldn’t be surprised to see them regulate HELOC’s more closely and tighten up lending rules. It would kill consumer spending in Canada – already in bad shape – but we may as well take our pill now.

#17 YES SIR!!!!!!!!! on 01.16.19 at 5:19 pm

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-rbc-cuts-5-year-fixed-mortgage-rate-other-banks-expected-to-follow/

other big boys to follow.

#18 SimplyPut7 on 01.16.19 at 5:22 pm

I hear it’s under consideration. The 65% equity-borrowing limit could become 50%, then reduced further in subsequent years. Plus, interest-only payments could be banned, with a requirement for banks to adopt blended payments, as with mortgages. Such changes would be prudent and in the public interest.

——————-

They would only make that change if they find out that most of the speculative homes being built in Canada were bought by local and domestic investors hoping to put the investment property on the HELOC if they could not flip the property for the price they needed to breakeven. They must have started that risk analysis to see how bad the property speculation is in Canada. Right?

#19 David Prokop on 01.16.19 at 5:23 pm

I have been approved for HELOC but I never drew any money. Am I included in this $300B ?

No. – Garth

#20 Catalyst on 01.16.19 at 5:27 pm

Businesses get to borrow against their assets interest only, and they can even write it off. Why should people be mandated to pay down principle?

#21 Guy in Calgary on 01.16.19 at 5:28 pm

#13 Jimmy on 01.16.19 at 5:05 pm
The worse was when every single visit to a BMO teller involved an inquiry and inquisition about my finances and their offerings.
—————————————————————

People still use bank tellers?

#22 AGuyInVancouver on 01.16.19 at 5:33 pm

I can’t count how many commercials I see and hear weekly for Alpine Credits and Capital Direct pitching home equity loans. When will people realize they don’t really “need” a new kitchen?

My only concern is this will just push more people to shadow lenders. Why doesn’t/can’t the government regulate those?

#23 Gulf Breeze on 01.16.19 at 5:38 pm

I recently sold my house and am moving into a townhouse and banking the difference. My house was paid off and I have plenty of money in the bank but I see major storm clouds ahead.

What will really bum me out is if I lose my money in a banking crisis after going to all of this trouble. I am hedged in gold miners…but still…my parents never had these whacky problems to deal with.

It may have been more difficult in some ways but today everything is complicated and weird and I crave simplicity. I feel I am getting too old to play financial defense…am constantly anxious.

#24 JSS on 01.16.19 at 5:45 pm

Had a line of credit with RBC. At the time, I lost my job a month prior. RBC called my wife and I, in order to update the Know Your Client (KYC) database. The banker asked me if I still worked at company ABC. As naive and dumb as I was, I said “I lost my job last month.” The banker said “I’m sorry to hear this.” She got up from her chair, went out the door. I thought she was going to grab the KYC documents from the printer. Instead, the banker showed up with another person, the branch manager. The branch manager said to us “Sorry, but we’re going to have to close your credit line”. Was lucky that we didn’t use any of it. So no harm, but we wanted to use it as a back up in case we run out of money while looking for another job. I asked the banker “what would happen if we owed money?” Banker said “then you would owe us the outstanding balance within 30 days”.

For RBC, it was a KYC moment.
For me, it was a K-Y moment. It really hurt. And I wasn’t ready for this.

#25 Shawn Allen on 01.16.19 at 5:46 pm

So people ARE required to make at least interest payments on HELOCs. At least in form, if not in substance? (Not in substance because they borrow the payment from the HELOC?)

Or shall we stay with this greaterfool claim from June 7, 2017 and repeated often? And where I was repeatedly beat upon for saying it twern’t so.

“A quarter make interest-only payments and, as mentioned, 40% don’t make any until they hit the credit limit.”

So, is it 25% on interest only or that plus another 40% making no payments? So only 35% making steady payments on principal? And many of those sporadically re-borrowing the principal.

But yes, either way the main point stands, a ton of people are basically abusing HELOCs and making little to no progress on repayment.

#26 Dazed and CONfused on 01.16.19 at 5:46 pm

Historically, federal politicians have always done exactly what the Canadian Bankers Association have lobbied them to do, regardless of the detriment to the average financially illiterate Canadian.

Kind of like the Canadian Dental Association lobbying for regulatory approval to ‘whiten’ your teeth with icing sugar.

#27 PeterfromCalgary on 01.16.19 at 5:47 pm

I used a HELOC to repair my house quickly after the floods and promptly paid it back once I got my insurance money. This source of funds helped my family recover fast from this set back.

Just because some Canadians are not responsible with credit does not mean Ottawa should regulate HELOCs and reduce the options of responsible borrowers. Irresponsible people will always find new ways to mess up their finances.

You can’t regulate away stupidity!

#28 Not 1st on 01.16.19 at 5:51 pm

RBC drops the 5 yr. Are you sure you are reading the market correctly?

This was forecast here a few weeks ago. Try to keep up. – Garth

#29 Renter's Revenge! on 01.16.19 at 5:53 pm

#105 Smoking Man on 01.16.19 at 3:07 pm
Renter’s Revenge! on 01.16.19 at 10:50 am
#75 Smoking Man on 01.16.19 at 9:15 am
Peek Civilization before the Freeks took over.

https://youtu.be/OAkVDCqVY6w

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

That ad makes me nostalgic for a time when it was ok to be a man.
…..

It’s still ok. You just bigger balls and thick skin.

From back in the day

” Sticks and stones will break my bones but names will never hurt me “

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

My favorite comment on YouTube on the new Gillette ad so far:

“My wife’s boyfriend loves Gillette!”

#30 Bob Dog on 01.16.19 at 5:58 pm

It almost seems like the government is working in collusion with its chartered banks to enslave the people of Canada. The average family is now required to give 80% of their income to a government chartered bank just to put a roof over their heads and form a family. If 80% of the work you do is for the benefit of someone else, that’s considered slavery. If slavery is implemented on a national scale affecting millions of people, thats terrorism.

Therefore the government of Canada along with its charted banks is an enormous domestic terrorist organization.

Looking forward to the guillotines myself.

#31 Dan on 01.16.19 at 6:14 pm

FYI: I don’t think HELOC are demand loans in the US.

#32 Bill Grable on 01.16.19 at 6:15 pm

Two words on today’s meaty post – PAY ATTENTION.

#33 Daniel Bouchard on 01.16.19 at 6:21 pm

Certainly not on an election year!

#34 unbalanced on 01.16.19 at 6:22 pm

Just heard Jack Bogle Vanguard just died

#35 PeterfromCalgary on 01.16.19 at 6:23 pm

Today the world lost a great man who made the world richer with his innovations and ideas.

“By word and example, Bogle proselytized on behalf of patient, long-term investing in a diversified group of well-run companies. He focused his advocacy on index funds, those that buy and hold the broadest mixes of stocks. ”

https://www.bloomberg.com/news/articles/2019-01-16/john-bogle-vanguard-founder-who-advocated-low-fees-dies-at-89

#36 Smartalox on 01.16.19 at 6:33 pm

So when is the budget to be announced? The end of February? Look for Real Estate listings to surge in March and April!

June and July for those that are going to miss the boat.

#37 Oakville Sucks on 01.16.19 at 6:37 pm

coincidentally I heard today of a couple in their late 60 who are moving into their children’s basement after selling their house here in Oakville. They sold their house to pay off their debts after years of using their home as their ATM. Their heloc was maxed out! They were living beyond their means for a long time. they are broke and looking for a job….

#38 Yellow Vest on 01.16.19 at 6:40 pm

“The Real Estate Bomb will balance itself”

#39 Reality is stark on 01.16.19 at 6:43 pm

Like I always say, “Money isn’t everything, it’s the only thing”.
Now that the party is over and you can’t borrow against your house any more you have to take away the punch bowl. They won’t like it and they will leave.
That is the reality of North America.
The golden rule: He who has the gold makes the rules.
If you had learned to say “No”, you’d be on a beach somewhere like me. I hear it’s going to be a touch cold this weekend in the GTA. Colder if you got kicked out of your house and have to live in your car.
The police aren’t interested in your side of the story.

#40 AK on 01.16.19 at 6:44 pm

“Nine in ten haven’t maxed their TFSAs.”
==================================

Is this Fake News ?

#41 As predicted on 01.16.19 at 6:47 pm

#52 Smoking Man on 01.16.19 at 12:04 am

Gillette is finished as a brand. Wrong ad agency.
Who is next?

——————————

They have snowflakes like you talking – the ad works.

#42 the ryguy - In cabo on 01.16.19 at 7:01 pm

#14 All good in Cabo on 01.16.19 at 5:07 pm
—————————————————

What are the odds…2 of garths blog dogs both commenting from Cabo?

I too leave the terrible winters of Canada behind, for a nice place in Pedregal..can usually only stay in the pool until 4 though, then it gets shaded and…blah who needs that?

Heloc’s are seductive and irresistible
—————————–

100% this. I have many friends in their 30’s that have real jobs and still can’t go golfing until “next friday”. Yet they have way too much house with a lexus and a truck in the driveway.

Ironically this could be the one good thing JT could do for Canadians. If he pulled the trigger I might even think he has a spine.

#43 SimplyPut7 on 01.16.19 at 7:05 pm

Why is everyone excited RBC dropped their 5-year fixed from 3.89% to 3.74%. If you were expecting rates to still be 2% like they were 2 years ago when you bought the investment property for 500k, and now not only do you not have enough room on your HELOC to transfer the property, you also do not have the number of speculators in the market to buy your investment property now that CRA is cracking down on speculators and FOMO is almost completely gone.

How is 15 bps going to save you, when you still have to go to the MIC and pay 10%-12% for a second mortgage to take ownership of the property?

#44 Greg on 01.16.19 at 7:08 pm

I loved my HELOC. Got a mortgage in the form of a HELOC in 2010 and paid it off in exactly 8 years. Had every pay cheque go directly into the account and had every penny in the HELOC. Paid expenses on cresit csrd and paid off the credit card with the HELOC. Also locked in various portions at different terms with good rates and used the 15% prepayment option to open fixed portions and relock in at lower rates. Traditional mortgages are for suckers.

#45 will on 01.16.19 at 7:11 pm

love the pic. love the dog.

Garth, as you know John Bogle has died. Can you write something about him tomorrow…

#46 will on 01.16.19 at 7:12 pm

i want that dog.

#47 islander on 01.16.19 at 7:15 pm

#24 JSS…”I asked the banker “what would happen if we owed money?” Banker said “then you would owe us the outstanding balance within 30 days”.

Let’s remember, bankers exist to sell product. Bankers are not your ‘friends’. Also the ‘friendly’ (virtual or not) agent who sells you products (HELOCs etc), will not be the one pulling the plug when you lose your job.
For us dawgs, think ‘happy golden retriever’ vs ‘unhappy pitbull’.
Of course the issue for many, especially in YVR, is that you can borrow a million, buy a house/condo and still find yourself living in a dump!

What to do, what to do?? The moment some people have enough equity in their homes, they immediately apply for a HELOC, renovate and tell themselves they are making a good investment. Of course, it’s all just great – until it isn’t.

#48 BC_Doc on 01.16.19 at 7:16 pm

There’s the saying, “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”

Canadian banks have a big problem.

#49 TurnerNation on 01.16.19 at 7:16 pm

Frankly, and in spite of T1’s musings, all that T2 & Co. care and rank is my skin pigment from birth and my bedroom preferences. Based upon this I may or may not get a special status.

Halp I’m being robbed! I will lose 10% of my after tax income this year.
– 3-5% extra in payroll taxes
– My rent is rising 3%
– I anticipate 5-10% hikes in everything else: Telecom and insurance bills, bank fees, Dollarama.

Add +~5% from a Balanced Port and I’m working for the weekends :-(

UN Communism, gotta love it. Women cannot afford childcare, we’ve been waiting 15 years for a TO downtown relief subway line. But the press conferences with the UN Bluehat/caps in evidence shovel it down our gloats.

I knew it – when they said it’s for Middle Class (un)Fairness.

#50 TurnerNation on 01.16.19 at 7:20 pm

^Add mandated global CarbUN Taxes to that theft.

#51 IHCTD9 on 01.16.19 at 7:20 pm

I know Garth doesn’t like a big pile in an emergency fund, but as a heretic on this front – I have always loved having it on hand for whatever curve balls life throws our way. Yeah, we could invest it and make a few bucks, take out a loan instead, be ahead of the game a bit. I just get a warm fuzzy feeling of security in my belly knowing I can just pay cash and move on, no HELOC required.

Looking at these numbers today though, I can’t see how it could have been life’s curve balls running up that kind of debt. More like blowing it on a fake baller lifestyle. It’s a sad day when the government ends up having to control peoples spending.

#52 BC_Doc on 01.16.19 at 7:23 pm

Just saw the posts regarding Jack Bogle’s passing.

Jack was a fine, fine man. He was a friend and advocate for the small retail investor. Rest in peace Jack!

#53 Ken M. on 01.16.19 at 7:26 pm

https://www.cnbc.com/2018/12/14/jack-bogle-founder-of-vanguard-group-and-creator-of-the-index-fund-dies-at-age-89.html

#54 Nothing Surprises on 01.16.19 at 7:27 pm

Garth refers to $300 Billion and $2 Trillion! Have you any idea what these figures represent?
Read On.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The next time you hear a politician use the word ‘billion’ in a casual manner, think about whether you want the ‘politicians’ spending YOUR tax money.
A billion is a difficult number to comprehend, but one advertising agency put that figure into some perspective in one of its releases.

1. A billion seconds ago, it was 1959.
2. A billion minutes ago, Jesus was alive.
3. A billion hours ago, our ancestors were living in the Stone Age.
4. A billion days ago, no-one walked on the earth on two feet.
5. A billion Dollars ago was only 13 hours and 12 minutes, at the rate our present government is spending it (USA).

#55 ronh on 01.16.19 at 7:38 pm

Why worry? Our economy is debt based, its growing as it should.

#56 Idiot GOAT on 01.16.19 at 7:40 pm

Bigger is better. In terms of the HELOC, the bigger it is the more rich you are.

Your house is the new credit card and your credit limit can be up to 600k in many cases. Debt is king and what do you have to lose when you never had anything to begin with?

Spend it #boomerlife

#57 Rub tummy dividend guy on 01.16.19 at 7:44 pm

#22 a guy in Vancouver

Alpine credits is regulated. Invest in their mic and get a nice 9% on average

#58 NoName on 01.16.19 at 7:45 pm

Yesterday “cousin” of mine pointed out that some of the food i mention is not as authentic as it shooed be, so i apologize for misleading you.

But one thing he got wrong was a spelling of “čevapi”, he used wrong letter. Letter he used was found in my last name, what a coincidence… Proper letter for word is “ć”.

Not they i am ranting about fake food, here is older interesting video about fake food made buy el geezers tv. Definitely something to watch. Probably why i pay 3-4x more for garlic and produce in general in Canada that we put in our food.

https://www.youtube.com/watch?v=5oQbCOz9nlU

#59 islander on 01.16.19 at 7:55 pm

A $4,201,988.00 House/Single Family with 4 bedrooms in MacKenzie Heights, Vancouver West

No need to renovate – just tear down, rebuild and enjoy the view!
Maybe one day you’ll have enough equity to apply for a HELOC.

https://www.40listings.com/REBGV/R2332928/4407-puget-drive-vancouver-west-mackenzie-heights-v6l2v7

#60 MF on 01.16.19 at 7:55 pm

#39 Reality is stark on 01.16

“That is the reality of North America.
The golden rule: He who has the gold makes the rules.”

-Yeah and place on earth is that not the rule?

And what’s with these people (usually expats) constantly mentioning winter? The sun comes up and it goes down. The weather gets cold and then it gets warm. It’s not a surprise to anyone nor an insult.

Give this poster a medal of achievement for being a beach.

MF

#61 Dolce Vita on 01.16.19 at 8:12 pm

A demand loan with no amortization period or principal repayment?

What a Country!

#62 WUL on 01.16.19 at 8:19 pm

#54 Nothing Surprises on 01.16.19 at 7:27 pm
Garth refers to $300 Billion and $2 Trillion! Have you any idea what these figures represent?

yup..yup..yup

Speaking of moolah, billions and seconds:

“Further putting things in perspective, the U.S. national debt has been growing by more than $5 billion per day since late 2017, adding almost $2 trillion in just a single year.”

The US national debt is growing by more than ~ $50K per second.

That’ll work.

My calculations are probably suspect. I’m happy to be corrected by a math whiz here.

#63 yorkville renter on 01.16.19 at 8:19 pm

How come this reg comes from the Feds and not OSFI?

#64 Bill on 01.16.19 at 8:37 pm

“But, sadly, since three-quarters of folks take the money for renos or debt payments, they entirely miss this benefit.” – Just wondering if there are any verified stats on this or just assumptions? Maybe us sneaky canucks have that 300 B$ invested in juicy dividend paying diversified ETF portfolios !!

Data comes from FCAC. – Garth

#65 genbizx on 01.16.19 at 8:40 pm

Royal bank lowers rates….I guess we need more people in debt not less. I suppose if we’re all in debt the banks, central bank, government, will all ensure things don’t implode to the point that profits suffer. Even if it’s for long term health and stability. What a racket. Talk about moral hazard. The rules have changed. Prudent financial behaviour isn’t rewarded. Quarterly profit is all that counts now. If we took $150,000 off the average single dwelling we’d be somewhere that makes sense but I guess greed will prevail now.

#66 KLNR on 01.16.19 at 8:50 pm

@#60 MF on 01.16.19 at 7:55 pm
#39 Reality is stark on 01.16

“That is the reality of North America.
The golden rule: He who has the gold makes the rules.”

-Yeah and place on earth is that not the rule?

And what’s with these people (usually expats) constantly mentioning winter? The sun comes up and it goes down. The weather gets cold and then it gets warm. It’s not a surprise to anyone nor an insult.

Give this poster a medal of achievement for being a beach.

MF
________________________

The gloating by some on here is hilarious.
Its almost like they’re trying to convince themselves how great they are.

#67 akashic record on 01.16.19 at 8:50 pm

#44 Greg on 01.16.19 at 7:08 pm

I loved my HELOC. Got a mortgage in the form of a HELOC in 2010 and paid it off in exactly 8 years. Had every pay cheque go directly into the account and had every penny in the HELOC. Paid expenses on cresit csrd and paid off the credit card with the HELOC. Also locked in various portions at different terms with good rates and used the 15% prepayment option to open fixed portions and relock in at lower rates. Traditional mortgages are for suckers.

===

I like the way you think.

#68 Joe Schalk on 01.16.19 at 8:57 pm

Suspicious cash in BC casinos between 2010-2017

“The numbers exceeded 1 billion dollars for sure in suspicious transactions”

Enough of P.German corruption coming to light.

Time for a public inquiry.

#69 Remembrancer on 01.16.19 at 8:59 pm

#41 As predicted on 01.16.19 at 6:47 pm
#52 Smoking Man on 01.16.19 at 12:04 am

Gillette is finished as a brand. Wrong ad agency.
Who is next?

——————————

They have snowflakes like you talking – the ad works.
————————————————————-
Talking about how their feelings were hurt? The real problem with Gillette is $4 disposable blades…

#70 yvr_lurker on 01.16.19 at 9:00 pm

Yes, HELOCS are potentially a disaster, and I loathe it when BMO has either phoned me directly (when I am at work) or else sent a spam letter asking indicating that they have offered to increase the credit limit or else wondering why I haven’t used it yet and what could they do to improve their service. I have told them in a super-polite way to go *&*^&* themselves and not send me unsolicited shit either by phone or the mail. Generally I hate banks, and this is why we doubled up on mortgage payments to be debt free and to have little to do with them.
I have a 50K credit limit on it, and 10 years ago used 20K from it for a renovation, and paid it off in 1 year. Haven’t touched it since, and will not going forward (bar some emergency when it is my last resort).

#71 Still in Cowtown on 01.16.19 at 9:16 pm

Looking south of the border, setting aside the politics driving the news stories, ponder the unpaid federal employees who are now becoming substitute teachers, applying at Walmart/Target, selling their cars etc… No trouble finding people who couldn’t make do without one paycheque… either their HELOCs are maxed or were all yanked… and Canadians are apparently worse off.

One good reason to have an unused HELOC registered by the bank against your mortgage free house? Tougher for someone else to commit title and mortgage fraud.

#72 Ray on 01.16.19 at 9:18 pm

23 Gulf Breeze on 01.16.19 at 5:38 pm
I recently sold my house and am moving into a townhouse and banking the difference. My house was paid off and I have plenty of money in the bank but I see major storm clouds ahead.

What will really bum me out is if I lose my money in a banking crisis after going to all of this trouble. I am hedged in gold miners…but still…my parents never had these whacky problems to deal with.

It may have been more difficult in some ways but today everything is complicated and weird and I crave simplicity. I feel I am getting too old to play financial defense…am constantly anxious.
—————
You may be in danger of doing permanent financial harm to yourself. Talk to a financial adviser. e-mail or talk to Garth. Get some help! Let him do your worrying for you

#73 GolfFoxtrot on 01.16.19 at 9:34 pm

Technically a HELOC devalues by the inflation rate when not paying any principal. You can consider interest only payments as a 2.5% paydown rate.

#74 DON on 01.16.19 at 9:35 pm

“Bankers have been routinely offering people equity-based lines when they take out mortgages. Yep, debt and more debt.”

*************
Explains how so many people are looking the partand spending when they first get a mortgage. Ouch!

$100 – can be eaten up on gas increases if oil rallies significantly. The cost of groceries is already climbing. Bank fees should be climbing soon to replace losses in the new mortgage business. This while our economy is running on all cylinders. Not much room for anything remotely negative.

#75 akashic record on 01.16.19 at 10:10 pm

# Gillette P&G

Funny reader comment of the day from an other blog.

“Sent today in the mail, along with a bunch of unused blades and my once-trusty Gillette Mach 3 razor:

Dear Geniuses of the Gillette Company,

As a 30-year customer, I am returning all unused Gillette products to your care and will not be purchasing them in the future.

Your entire marketing department and brand management team should be keelhauled for your recent online advertising campaign. It’s frankly the most breathtakingly unforced exercise in self-immolation I’ve ever witnessed, and I’ve been in marketing for a lot of years.

It’s painfully clear that you do not wish to have my custom any longer, and I can only assume you are only interested in serving your female customers – that is, if you erudite New Englanders still dabble in such paleolithic ideas as “men” and “women” as binary terms.

It’s equally clear that not a single member of your marketing decision tree has ever exerted enough masculinity to change a goddamned tire, let alone earned the chops to tell American men how badly we should feel about our gender.

Indeed, the last man to come out of Boston who was worth a damn was John motherfucking Adams.

Therefore, I am sending these unnecessary symbols of patriarchic oppression for your safekeeping in your vast underground vault of political correctness, since I would not want to contaminate my local landfill with any residual toxic masculinity that remains on these relics of a once-relevant brand.

Good luck in your ongoing efforts to denigrate, insult and otherwise impugn the very genetic composition of your primary customer.

Idiots.

Sincerely,

Signed with my real name and address, so they can waste extra money trying to buy me back with freebies – which I will immediate throw away or donate to a shelter.”

#76 You dont own those shares on 01.16.19 at 10:15 pm

Gulf Breeze

I am hedged in gold miners…but still…my parents never had these whacky problems to deal with.

You don’t own those mining shares. Speak to Investor Relations of those companies. Your broker owns those shares. The company has no record of you.

Own those shares in Certificate form outside of the system completely. Then you own them. That is how I hold my hedge stocks.

#77 IHCTD9 on 01.16.19 at 10:17 pm

Ever wonder where in Canada all this debt is concentrated?

1st place goes to Vancouver at a whopping 242 % debt to income ratio

2nd place goes to Toronto at 208%

https://www.blogto.com/city/2018/12/personal-debt-levels-toronto-just-reached-all-time-high/

It’s no wonder (mostly young) Canadians are starting to finally bail out of these expensive cities. The chart shows the vast majority of this debt is mortgage and HELOC driven.

#78 Felix on 01.16.19 at 10:26 pm

Good pic. Two very smart and attractive creatures drawn to each other together.

Oh, and a dog.

#79 Bottoms_Up on 01.16.19 at 10:35 pm

“Your neighbours, in turning their homes into banking machines, have created a $300-billion bomb.”

The government, in allowing 0/40 mortgages, and RRSP down payments, contributed the powder.

#80 Dragonslayer on 01.16.19 at 10:50 pm

So perhaps a Heloc is not the best emergency fund plan if it can be yanked at will by the bank?

#81 The Real Mark on 01.16.19 at 10:51 pm

“#73 GolfFoxtrot on 01.16.19 at 9:34 pm
Technically a HELOC devalues by the inflation rate when not paying any principal. You can consider interest only payments as a 2.5% paydown rate.”

Except inflation has been only 1.5% over the past decade, and trending lower as consumer led deflation sets in.

#82 PastThePeak on 01.16.19 at 11:13 pm

#51 IHCTD9 on 01.16.19 at 7:20 pm
I know Garth doesn’t like a big pile in an emergency fund, but as a heretic on this front – I have always loved having it on hand for whatever curve balls life throws our way. Yeah, we could invest it and make a few bucks, take out a loan instead, be ahead of the game a bit. I just get a warm fuzzy feeling of security in my belly knowing I can just pay cash and move on, no HELOC required.
++++++++++++++++++++++++++++

I am with you. I always keep about a year’s worth of cash that can cover the essential expenses (property taxes, utilities, food, etc), or handle some curve balls.

It also grows a bit more when the market runs really ahead of themselves (2017), which is very useful in times like we just had (I was in the market for equities, especially preferreds, in Nov. and Dec. including grabbing some last minute sale items on Christmas Eve).

#83 PastThePeak on 01.16.19 at 11:23 pm

#69 Remembrancer on 01.16.19 at 8:59 pm
#41 As predicted on 01.16.19 at 6:47 pm
#52 Smoking Man on 01.16.19 at 12:04 am

Gillette is finished as a brand. Wrong ad agency.
Who is next?

——————————

They have snowflakes like you talking – the ad works.
————————————————————-
Talking about how their feelings were hurt? The real problem with Gillette is $4 disposable blades…
+++++++++++++++++++++++++++++++++

Well, traditional thinking would question the approach of showing an ad which insults the majority of your primary market, when you only sell one thing, and the switching cost is as much as taking two steps to the left in the men’s grooming aisle.

But who knows – it is 2019 after all – maybe the insults will work and in some magical backwards way result in higher sales. Myself, I am going with Schick. I bought Gillette for 30 years, but that was just habit.

As for calling someone a snowflake, I am not sure you know what that really means. I don’t know anyone that was running off looking for a safe space or seeing if HR could help. Just some people that thought it was insulting, and will vote with their wallets. All without making much noise. It is kind of a “man thing”…

#84 Nonplused on 01.16.19 at 11:34 pm

I have a HELOC because I don’t have a mortgage and I understand you are at less risk of mortgage fraud if the bank has a lien on the property. The land titles folks don’t check with the homeowner when a fancy lawyer comes in with a land title change, but they will check with the bank to make sure they are ok with it.

So the way the fraud works is find a property with no liens, and then fraudulently transfer the title to an accomplice, who then takes out a big mortgage on the property. They then make no payments and abscond with the money. Foreclosure proceedings follow, and often the original homeowner has no idea what happened until it’s too late. Then everybody is in a pickle, because the bank is owed money on a house they never had an interest in. It’s a mess to resolve. You can get title fraud insurance but it only covers your legal fees. So, since the bank will give you a HELOC for free in the hopes that one day you will use it, go on down to your local branch and set one up. At the very least you will get a notice from your bank that the HELOC has been withdrawn if you become a target for fraud.

When I was young my mother trained me to believe in the good in all people. She was so wrong. There are probably a few people in your life you can trust, but it takes a long time to figure out who they are.

#85 Ponzius Pilatus on 01.16.19 at 11:41 pm

#13 Jimmy on 01.16.19 at 5:05 pm
The worse was when every single visit to a BMO teller involved an inquiry and inquisition about my finances and their offerings.
—————————————————————

People still use bank tellers?
—————
Obviously you gotta crawl out of the basement more often.
Visit the next bank/credit union.
20 minutes line ups.
The new shopping centre in our hood has 3 new bank branches.
People just don’t trust the Internet with their money .

#86 Smoking Man on 01.16.19 at 11:43 pm

Friends are waste time and an obstacle in the quest for truth.

They are a boring distraction that keeps you from your mission.

Broom them get a good bottle and find it.

#87 Toni on 01.17.19 at 12:09 am

25 years ago, in QC, with a business struggling in the midst of the 90s crisis, got a call from my bank, went; the guy behind the desk asked my CC, opened his drawer, pulled out a pair of scissors, cut out in pieces my little plastic surviving tool and gave me 30 days to reimburse the balance. Never ever forgot. Never trusted a banker again; they are not human, they are aliens and not the kindest.

#88 ozy - The Solution on 01.17.19 at 12:11 am

The Solution once we spend it all is to look where the $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ is, and change back to a socialist GOVT to go and confiscate it, NATIONALIZE it per say. Not all at once, just with some increased SALES taxes on all luxury goods, AUDIs and staff! :)

Problem Solved, you can sleep now, Kanata is watching

#89 Ustabe on 01.17.19 at 12:15 am

King Gillette, founder of the Gillette company was a (gasp) socialist. No wonder they have the alt boys in a tizzy.

Switch over to Dollar Shave Club and shut up maybe?
oops, Dollar Shave is owned by Dove…probably coat the blades with estrogen, eh?

Grow a beard. Hope it doesn’t get tangled up with your other beard wearing buddies as you whisper sweet conspiracy theories to one another..

On another matter Google up “rat king”, read up a bit. That is the state modern conservatism finds itself, from the GOP to the Scheer/Bernier/Ford/Kenny mess in Canada. Ostensibly the same thing but killing itself while exhibiting much ugliness.

#90 Fortune500 on 01.17.19 at 12:18 am

#41 if by works, you mean has moved a relatively neutral observer of the SJW/guilt culture insanity to stop using Gillette products, then yes it certainly got us ‘talking’.

#91 DON on 01.17.19 at 12:33 am

#68 Joe Schalk on 01.16.19 at 8:57 pm

Suspicious cash in BC casinos between 2010-2017

“The numbers exceeded 1 billion dollars for sure in suspicious transactions”

Enough of P.German corruption coming to light.

Time for a public inquiry.
*************

Are you the real Joe, who was fired for raising concerns of money laundering occurring in BC Casinos?

If so…Vindication!

Time for an inquiry.

#92 David Driven to Succeed on 01.17.19 at 12:42 am

Banks lower 5 year mortgage rates as Canada officially falls into recession battered by Trudeau economics.

http://news.trust.org/item/20190116130324-fza8m

Think it’s going to be worse than before, I do, and have increased cash position accordingly. Meanwhile , my suffering is intense. The sunshine in Bali is mocking Trudeaus bleak visions of a he’ll bound society begging him for handouts.

#93 Sean McNamara on 01.17.19 at 1:20 am

Is Vancouver’s Real Estate Market Crashing?
Prices are plummeting, taxes are up and the foreign money has run dry. Are the crazy times finished in the city’s real estate market?

http://vanmag.com/city/is-vancouvers-real-estate-market-crashing/?fbclid=IwAR1KtBXNCKh_aL4zHwo2sxOg7GUWge2U8eSQztmSsJcmE9_iC1twOP9x1lo

#94 Stan Brooks on 01.17.19 at 2:08 am

#59 islander on 01.16.19 at 7:55 pm
A $4,201,988.00 House/Single Family with 4 bedrooms in MacKenzie Heights, Vancouver West

No need to renovate – just tear down, rebuild and enjoy the view!
Maybe one day you’ll have enough equity to apply for a HELOC.

https://www.40listings.com/REBGV/R2332928/4407-puget-drive-vancouver-west-mackenzie-heights-v6l2v7

That is a little bit short of (the definition of) hyperinflation in housing, 10 times price rise in 20 years is quite an inflation.

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

Quite interesting that GT is starting to look the right way at Canadian politicians (aka ‘Ottawa’) – irresponsible incompetents who think that the sheeple will keep taking it for a little while longer.

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

#74 DON on 01.16.19 at 9:35 pm

This while our economy is running on all cylinders. Not much room for anything remotely negative

It is debt driven – the whole economy based on consumption thingy.
Debt has to be repaid.
We keep maxing our credit card, hiding out debt and lying about it, with nobody having any money (explains the HELOC orgy).

The only thing keeping it still whole is the un-measurable and infinite ignorance of the average Joe.

Firing on all cylinders …. And yet interest rates are at 1.75 %, not at 8 %.

Good luck in trying to buy a house/even a condo with these ‘jobs’, even 3 of them.

#95 Stan Brooks on 01.17.19 at 2:27 am

The proponents of ‘all is good’ meme are becoming more and more active as of lately. The very way they communicate the message is actually quite scary and gives an indication that there is no much thinking or plans going forward.

Live for the day, don’t worry, things are OK, etc. are sounding the alarm.

As Nassim Taleb said: we need both immense growth and quite an inflation to get over that debt and unfortunately we have no growth (constantly revised down, 1.7 % with the world growing at 3.5 % while interest rates are very low), so immense inflation it is.

Of course people in charge have seen this from the very beginning, I have to admit that I was naive up to some point that common sense will prevail and the insanity with debt stop but I was wrong. Human stupidity is infinite.

People on fixed income and savers are screwed, pensions will be obliterated along with government provided services. It is inevitable.

A hope that some imaginary gains in depreciating currency on a second rate stock exchange with no foreign capital inflows will smooth out the ride are illusory.

At least we have pot.

#96 David Driven to Succeed on 01.17.19 at 3:40 am

Desperate globalists to huddle at Davis to reinforce the synchronized recession they’ve initiated to battle Trump and attempt to retake control. This is the fight of your life, capitulation means the death of everything you know.

https://www.cnbc.com/2019/01/16/world-leaders-head-to-davos-as-uncertainty-darkens-the-global-outlook.html

The lice infested pols will not beat America, they will not beat the people down, they will not destroy western democracy or allow the head choppers to assert themselves as Obama would have done if Trump hadn’t won.

God bless Donald Trump and all freedom loving people in the western world. Stand against Trudeau and his puppet masters.

#97 under the radar on 01.17.19 at 6:23 am

In 1999 i used a heloc on my home to purchase a commercial building. Between the building mortgage and my home ,100% financed. It was a nail biter for a while. About two years in, i leased the building to a national tenant . That tenant has paid for the building twice. Net rent is six figures and debt free for years.Not all use their heloc’s to buy RV’S or do reno’s they can’t afford.

#98 Stan Brooks on 01.17.19 at 6:53 am

From the time I mentioned Turkey, a few weeks ago, their ETF/TUR is up over 15 %.

Severely under-priced, room to at least double from here.

Of course nobody will buy it, this is why I so enjoy recommending it, especially when nobody is listening.

#99 MF on 01.17.19 at 6:57 am

#83 PastThePeak on 01.16.19 at 11:23 pm

Gonna agree with this one. Saw the Gillette commercial and it’s a tough to watch.

Everything about it screams marketing error.

On the Youtube page, someone left this comment: “Thanks Gillette! My wife’s kid loves this commercial!”

Gillette upvoted it, not knowing that whoever wrote that comment was being sarcastic lol. It’s been taken down.

MF

#100 Dan on 01.17.19 at 8:03 am

>HELOCs are like me – seductive and irresistible, but dangerous when abused

I need some real life example…

#101 crowdedelevatorfartz on 01.17.19 at 8:07 am

@#99 MF
“Gonna agree with this one. Saw the Gillette commercial and it’s a tough to watch.”
++++
No no no.
Once you surrender to the MSM message that all men are misogynistic oafs that need to be either ridiculed or rescued from their own stupidity…..you’ll be fine.
These types of ads have been going on for years.
Boycott the product.

#102 Dominoes Lining Up on 01.17.19 at 8:13 am

#22 AGuyInVancouver

I can’t count how many commercials I see and hear weekly for Alpine Credits and Capital Direct pitching home equity loans.

————————————————

Same here. I listen to AM radio to and from work and it seems all the ads are for similar HELOC companies. Then on the tv at home, they are everywhere as well.

I can’t recall when advertising seemed so dominated by one group of advertisers, maybe the auto industry in the 1970s?

This kind of ad porn is a serious canary in the coal mine, IMHO. As soon things tighten for these firms and they have to turn off the taps it will be a new world for those in debt.

#103 dharma bum on 01.17.19 at 8:28 am

HELOCs are demand loans. The bank can call you any day of the week and demand the thing be repaid. – Garth
——————————————————————–
The bankers are just mobsters in nice offices and suits.

https://www.youtube.com/watch?v=0XDhP4gNzrs

https://www.youtube.com/watch?v=ZC5AJ9uU9hI

#104 crowdedelevatorfartz on 01.17.19 at 8:49 am

@#112 Nancy Viagra
“With over 25 years of watching and working the real estate dream I know that the buyers today will not regret getting into the market now. Just do it.”
+++++

Getting a little desperate for a commish Nancy?
Trying to drum up some biz here? Yeesh.
Sales tanking?
I see some of your listings have been languishing for months…perhaps you should tell your customers to …..lower their price….and then lower it again……
2019. Crickets

#105 KLNR on 01.17.19 at 9:03 am

LOL at all the snowflakes on here upset with Gillette.
What’s with certain segments of society these days?
Always looking for something to be upset about.

#106 JSS on 01.17.19 at 9:33 am

Morning. Can we please have a separate blog topic regarding Gillette shavers and cauliflower. Thank you

#107 Classical Liberal Millennial on 01.17.19 at 10:12 am

We have a $200k mortgage with about 17 years remaining and $35k on a HELOC, which, yes was used mainly for renos. But it allowed us to stay put rather than upsize and increase the mortgage by 100 or more.
Our household income is about $100-110k. No other major debts. Would Garth say this is irresponsible?

If all your net worth is in one asset, dangerous. – Garth

#108 not 1st on 01.17.19 at 10:13 am

Garth is dead wrong about the Canadian economy. It teeters on a pin. Interest rates rising with falling home prices along with extra govt taxation and massive capital flight is a 100% guaranteed recipe for a recession. Thanks to Trudeau.

Recession is always possible, but it will be shallow and short. – Garth

#109 PastThePeak on 01.17.19 at 10:28 am

#105 KLNR on 01.17.19 at 9:03 am
LOL at all the snowflakes on here upset with Gillette.
What’s with certain segments of society these days?
Always looking for something to be upset about.
++++++++++++++++++++++++++++++++

It is something that men find insulting, but that wouldn’t concern you.

#110 IHCTD9 on 01.17.19 at 10:40 am

Gillette had to know that they were risking pissing off all kinds of Men by lecturing on how to “fix them”.

My bet is their research says that Women are doing most of the razor buying these days as far as the shaving stuff goes. That ad would definitely appeal to many Western Women. There is no way G put that ad out there because they want to “fix” anything – other than their bottom line.

Looking at my own household – G would be correct. Our boys are just starting to shave, and it’s Ms. IH that buys the razors and shaving cream along with all the other bathroom stuff.

Also – forces in the West over the last decade or two have combined to create hoards of single mothers as well. Gillette probably understands the implications of this development. I’d bet these hard working single Moms would sympathize strongly with the various victim-hoods displayed repeatedly on that ad.

Hell – I’d even guess new Westerners could take a strong identification to some of the bullying/racial stuff G also carefully included in this ad.

I think G has crafted a story line designed to to tug at the heart strings, and subsequently purse strings – of the more vulnerable segments of Western society via this ad. They hope to gain a following through identity rather than product quality or price. Politicians have already been doing this for years.

It’ll probably work, and if so we’ll get to see more of it. I hope all the real life victims, Women in general, and ideologues out there will be able to see through it, but from the looks of it – it ain’t going to happen.

#111 Steven Rowlandson on 01.17.19 at 10:50 am

” Do you think politicians will now do the right thing?”

Not a chance Garth.

If it were possible they would have acted long ago..
Preserve capital if you can and be ready to vultch if possible.

#112 IHCTD9 on 01.17.19 at 11:02 am

#107 Classical Liberal Millennial on 01.17.19 at 10:12 am
We have a $200k mortgage with about 17 years remaining and $35k on a HELOC, which, yes was used mainly for renos. But it allowed us to stay put rather than upsize and increase the mortgage by 100 or more.
Our household income is about $100-110k. No other major debts. Would Garth say this is irresponsible?

If all your net worth is in one asset, dangerous. – Garth
_____

Two major missing bits of info:

1. How old are you?

2. What is your portfolio worth?

#113 Alistair McLaughlin on 01.17.19 at 11:20 am

@ #97 under the radar, I know this guy who won several hundred thousand in the lottery. So what’s my point? I don’t have one. (And that’s exactly my point.)

#114 Damifino on 01.17.19 at 11:30 am

Standing out on my Vancouver balcony this morning I can detect a pungent odor wafting in from the Federal Burnaby South by-election.

https://nationalpost.com/opinion/john-ivison-a-most-convenient-misstep-for-the-liberals-in-burnaby-south

#115 not 1st on 01.17.19 at 11:37 am

Recession is always possible, but it will be shallow and short. – Garth

—–

Not without a policy change. Those prime rates will be heading right back down. Chance to grab a sub 3% 5yr is coming again.

Nope. – Garth

#116 Godth on 01.17.19 at 11:46 am

training people on debt was a great way to keep wages stagnant while productivity exploded. gotta keep up with the joneses to be respectable in the herd. that these systems are only understood by professionals that need to be afforded doesn’t help but it’s a rich persons world. it’s a rare bird that’s going to put in a wage slave shift, put the kids to bed, then crack some books trying to untangle this mess of complexity to get ahead. then they’d have to try to convince their spouse while fighting off all sorts of social pressure. easier to rock up to the bank and do what you’re told to do so you can brag about your newest purchase (on debt) at yule.

#117 JB on 01.17.19 at 12:17 pm

#86 Smoking Man on 01.16.19 at 11:43 pm

Friends are waste time and an obstacle in the quest for truth.
They are a boring distraction that keeps you from your mission.
Broom them get a good bottle and find it.
…………………………………………………………………
Ha, ha,
Translation for above, I’m a looser, I’m lonely and no one likes me or wants to be with me. My only friend is a bottle of booze. My truth is found in a very hazy drunken stupor.
See Smoking Man I understand your lingo!

Cheer up the clouds will dissipate and everything will become clear.

#118 Fish on 01.17.19 at 1:09 pm

Beefing up CPP will hurt economy longer than disclosed …
– CBC.ca https://www.cbc.ca/news/politics/canada-pension-plan-gdp-morneau-cfib-finance-canada-liberals-1.3822865

27 Oct 2016 … But CBC News has learned the “temporary” drag on employment is projected to last until 2035, according to internal Finance Department CPP improvements start in 2019:

CPP improvements start in 2019: How much more you’ll pay, and … https://www.theglobeandmail.com/investing/personal-
finance/article-cpp-improvements-start-in-2019-how-much-more-youll-pay-and-how-much/

5 Dec 2018 … CPP improvements start in 2019: How much more you’ll pay, and how much more you’ll get. Rob Carrick Personal Finance Columnist

#119 Deplorable Dude on 01.17.19 at 1:10 pm

#90 Fortune 500….”#41 if by works, you mean has moved a relatively neutral observer of the SJW/guilt culture insanity to stop using Gillette products, then yes it certainly got us ‘talking’.”

——

And did you notice the not too subtle racism in that commercial? Note the race of all the ‘bad guys’ vs the race of the ‘good guys’ stopping the ‘bad guys’…..

The SJW diversity #metoo crowd has infested corporate HR depts, and now the PR depts…..

Way to go at labelling pretty much your entire customer base as bad men…..

#120 Ponnaps on 01.17.19 at 1:15 pm

“Nine in ten haven’t maxed their TFSAs” is alarmist and misleading…

If I’m $50 below max, I’m in the 90%

#121 Shawn Allen on 01.17.19 at 1:17 pm

HELOCs Cover Up A Multitude of Sins?

Without access to a HELCO or other credit when a person loses their job they would often soon have trouble paying their mortgage and car loan and credit card and all the other costs. Consumer defaults would occur.

But with HELOCs and easy credit, the banks and creditors often never hear about the job loss. In most cases new employment is eventually obtained. All may be good with this system.

But it renders consumer default rates to have a lot less meaning. It could be hiding a lot of defaults that would have occurred without ready access to credit even for the unemployed.

In a steep recession where the jobs don’t get replaced the lenders could face a ton of defaults.

No one need ever default on a loan payment as long as new money can be borrowed to make the payment on older debt. So, people don’t default.

Will this chicken ever come home to roost?

#122 Shawn Allen on 01.17.19 at 1:23 pm

Question for Dividend Tax credit Lovers (or government bashers)

The dividend tax credit is meant to eliminate double taxation where a Canadian corporation has already paid corporate income tax at around 26% (Federal plus provincial) and to the owner of the shares should not have to pay another 40% or whatever their marginal tax rate is. A secondary reason may be to incent investing in Canadian companies.

Question: Why should those many Canadian companies that earn most of their income and presumably pay most of their tax outside of Canada be able to issue 100% eligible dividends? Does the math work after tax treaties are considered? Are the Canadian governments needlessly losing tax revenue here?

Followup: What about the fact that many (most?) corporations never pay tax at the full statutory rate due to various relatively permanent deferrals and such?

#123 not 1st on 01.17.19 at 1:24 pm

Garth, with respect, you need to know where Canada is heading in the world. We will be falling behind economic stalwarts like Nigeria. Our forecast GDP for the next decade is averaging 1.5%.

https://business.financialpost.com/news/economy/pwcs-brave-report-forecasts-egypt-and-pakistan-will-surpass-canadas-economy-by-2050

#124 Headhunter on 01.17.19 at 1:34 pm

#Gillette

Once again the ‘SILENT MAJORITY’ speaks.. (Ben/Jerrys, Starbucks, Dick Sporting, NFL etc)#getwokegobroke

The biggest thing they misunderstood is the simmering anger among men in the west. Now they have galvanized them. Will be a huge blowback.

#125 Godth on 01.17.19 at 1:44 pm

what interests me more, now that the “human resources” of mature economies have been harvested, is how this system saves itself. war with iran? venezuela? war always bolsters the system on every level. it’s obvious the western “interests” would love to get their hands back in the russian cookie jar but that’s getting more difficult daily. after putin dismantled the western imposed oligarchy and set up his own laundering their cash through real estate in london, new york and monaco worked for a while but now the system needs more to sustain itself. bolsanaro in brazil should provide some short term gains as he’s opened it up for “profit”. the arctic is literally unstable as the permafrost melts, and pingos burst forth, while serious storms appear. how much more rainforest does south-east asia have left to plunder? does the market need more palm oil plantations? maybe africa, but the chinese are literally making inroads. same for central asia, while more and more countries dump the dollar for trade. interesting times. eventually it all come a cropper, 100% certain. tempus vitae in an exponential paradigm.
Risking Total Annihilation for the Sake of Profit – with Wilkerson and Jay (3/3)
https://www.youtube.com/watch?v=xlwVNAOIRcQ

#126 Godth on 01.17.19 at 2:15 pm

the “anglo-saxon worldview” aka kurgan culture (ironically) is under serious pressure like never before.
Inside the Integrity Initiative, the UK gov’s information war on the public w/ David Miller (E32)
https://www.youtube.com/watch?v=doip79-pYn0

https://grayzoneproject.com/2019/01/08/new-documents-reveal-a-covert-british-military-intelligence-smear-machine-meddling-in-american-politics/

nothing new, only scale. from 35 mins. to 45 mins. – democracy and peace are quaint ideas.
A Very British Coup episode 3 https://www.youtube.com/watch?v=zhVsUAmBQqo

#127 Leo Trollstoy on 01.17.19 at 3:01 pm

That’s an ugly mutt in that picture

And the dog isn’t so good lookin either

#128 Shawn Allen on 01.17.19 at 3:23 pm

New Rate Reset Bank Preferred pay 5.2%

TD Bank out today with a 5.2% rate reset preferred with a spread of 3.27% above the five year Canada on reset. Bank of Montreal had same last week. These sold out quickly.

This is good news and bad news.

The good news is you can easily grab 5% and more on rate reset preferred shares. That is not bad especially when you consider safe withdrawal rate is supposed to be 4%. Here you can get over 5% cash yield on a very safe investment without touching the principal.

Rate reset preferred shares are probably a good investment today.

The bad news is all those existing rate reset preferred that have below market spreads will not return to $25 or anything close to it when the market spread is 3.3%.

Some of the existing older bank reset preferred shares have reset spreads well under 2%. The yield at issue on some of those was 3.8% or lower.

It’s not horrible that investors who bought those may never see $25 or anything close because they still get to collect the 3.8% or whatever it resets to. If they bought for yield and p[tanned to hold forever, it is not so bad. Except it hurts to look at the loss on the statement.

CPD cannot rise much while the market spread remains 3.3%. But it will likely tighten eventually.

#129 Fish on 01.17.19 at 3:28 pm

Average Canadian house cost $472K in December, down 4.9 … – CBC
https://www.cbc.ca/news/business/crea-housing-prices-canada-real-estate-1.4978545

Sales also slumped to their lowest level since 2012. CBC News · Posted: Jan 15, 2019 9:36 AM ET | Last Updated: January 15. The average price of a Canadian …

#130 Ustabe on 01.17.19 at 3:39 pm

#124 Headhunter on 01.17.19 at 1:34 pm

#Gillette

Once again the ‘SILENT MAJORITY’ speaks.. (Ben/Jerrys, Starbucks, Dick Sporting, NFL etc)#getwokegobroke

The biggest thing they misunderstood is the simmering anger among men in the west. Now they have galvanized them. Will be a huge blowback.

Will this be the same blowback that Nike suffered after the Kapernik commercial?

I’m a man in the west, I live and work and volunteer with other men in the west. I don’t see any simmering anger.

In fact I don’t really see any simmering anger in this oft times cess pool of current alt right thought. Just fear.

Don’t allow a commercial to deflect you from what is really important. Unless you enjoy being manipulated by social media.

As Goebbels said at Nuremberg, and I paraphrase, “its easy to convince the public to go to war, just tell them they are under attack.”

What makes it even easier is when that public is willfully dumb.

#131 jim on 01.17.19 at 3:46 pm

All of this debt and loose lending is going to wreck the family unit in Canada….if it hasn’t already. Not to mention the impact of overpriced housing on emerging family formation going forward. Is the central bank and the banking industry and govt going to take responsibility for that?

#132 Alistair McLaughlin on 01.17.19 at 4:19 pm

Most of you, IHTCD9 excepted, are missing the point of the Gillette ad. The ad is not targeted at men at all. It is targeted at women. Western women shave a lot more square footage a lot more often than your average stubble-or-beard-wearing western man does.

The timing of the ad is also no coincidence, coming out right in the middle of “Januhairy”. That’s not a typo:

https://people.com/style/januhairy-encouraging-women-grow-out-body-hair/

You can imagine how much the scruffy facial hair trend has cost Gillette over the past decade. The last thing they need is a repeat of those losses on the female side.

So the ad can be seen as a clever pre-emptive strike to capture the hearts and minds of SJW females before they join the latest Instagram “empowerment” parade and stop shaving.

#133 Headhunter on 01.17.19 at 5:39 pm

#130 Ustabe on 01.17.19 at 3:39 pm
I’m a man in the west, I live and work and volunteer with other men in the west. I don’t see any simmering anger.

_______

great point men are taught to be tough dont cry hide your feelings.. thats where the net now has made this thing go postal. Sure you dont see it doesnt mean your mates are not feeling it and I totally get it. Men will just disengage.. look at marriage and birth rates

men are on strike

#134 acdel on 01.17.19 at 6:08 pm

#132 Alistair McLaughlin

You get it. Advertising companies have seen right through this, laughing within, and completely using this “Me Too” movement to their advantage.

#135 KLNR on 01.17.19 at 7:00 pm

@#134 acdel on 01.17.19 at 6:08 pm
#132 Alistair McLaughlin

You get it. Advertising companies have seen right through this, laughing within, and completely using this “Me Too” movement to their advantage.
____________________
advertising 101, Know who you’re talking to.

advertisers know women generally do the groceries hence buy the razors. women everywhere talking about how great that spot is. Probably see a big spike in sales for gillette.

#136 KLNR on 01.17.19 at 7:04 pm

@#131 jim on 01.17.19 at 3:46 pm
All of this debt and loose lending is going to wreck the family unit in Canada….if it hasn’t already. Not to mention the impact of overpriced housing on emerging family formation going forward. Is the central bank and the banking industry and govt going to take responsibility for that?
__________________________

Why should the gov take responsibility for an idiots lousy spending habits? better the gov stay out of it and let the cards fall where they may.

#137 KLNR on 01.17.19 at 7:25 pm

@#124 Headhunter on 01.17.19 at 1:34 pm
#Gillette

Once again the ‘SILENT MAJORITY’ speaks.. (Ben/Jerrys, Starbucks, Dick Sporting, NFL etc)#getwokegobroke

The biggest thing they misunderstood is the simmering anger among men in the west. Now they have galvanized them. Will be a huge blowback.
_______________________________

only folks upset are the ‘VOCAL MINORITY’.
they get upset about everything lol

#138 acdel on 01.17.19 at 8:00 pm

#135 KLNR

Yep, you bet!
Clever really! :)

#139 David Driven to Succeed on 01.18.19 at 1:10 am

Recession is already here, being masked with massive spending and false advertising. The media is being paid billions to get Trudeau re elected . A re radionuclides during an election year is almost unheard of but the idiot Liberals have pulled it off.

#140 maxx on 01.18.19 at 7:51 am

@ #16

Who knows?….but no economy in the known universe can “balance itself” when its grass roots are mired in debt.
The cost and value of money needs to rise.

and @ #139

I believe that you’re correct – I’d also add that a massive amount of goods is not selling at the retail level and is flowing to discount outlets or simply being directed to dumpsters.

#141 maxx on 01.18.19 at 8:12 am

@ #37

I can’t think of many things that would suck more than being elderly and without equity – let alone being in debt.

#142 Classical Liberal Millennial on 01.18.19 at 2:23 pm

Two major missing bits of info:

1. How old are you?

2. What is your portfolio worth?

——

Early 30s.

Both of us on defined benefit pensions.