The desperate

Nobody actually knows how many families are being driven into the rapacious arms of the sub-primers. But it sounds like lots. And what a price they’re paying.

For example, a report out of Calgary this week cites 6,000 applications being made to a single MIC (mortgage investment corporation), with people desperate to borrow funds at rates ranging from 8.5% to (shudder) 15.5%. This suggests that while traditional lenders (the banks) see their originations shrink dramatically, a torrent of people they reject are ending up taking money from the alt guys at a cost which is crippling. What a cruel price our house lust is extracting.

It’s not just oil-plagued Cowtown, either. The alt guys are everywhere. They abound in Vancouver, and in Toronto this is the fast-growing segment of the lending market.

MICs are private lenders, unregulated by the feds, not subject to the stress test requirements and specialize in funding people the banks are afraid of. The money they hand out typically comes from wealthy individuals willing to accept the risk involved, or individual retail investors who salivate at a higher rate of return and have no clear idea how dodgy this can be. Sadly, most are retired, older and conservative. They would never dream of buying blue-chip, dividend-paying stocks but happily accept interest from residential mortgages, thinking it’s a far safer asset. Wrong choice.

Alt lenders specialize in funding people with lousy credit, between jobs, unable to renew a bank mortgage or who want to buy real estate and can’t pass the stress test. In return for upfront fees (a grand or two) plus an interest rate two to five times higher than at the bank, they get the loan, typically with a short term of a year or two. For these families, MICs can be a godsend. Without the cash, they might lose a home, be unable to consolidate debt or restructure their lives. But the rapid growth of the sub-prime lenders is clear evidence of the financial mess so many people are in.

It’s also testament to B20, the stress test. By reducing the amount of bank credit by about a fifth, this has crushed a lot of people at the lower end of the wealth spectrum, or who wrestle with job loss. Obviously, those numbers are growing, and CMHC is now trying to determine by how much.

A question: should people in financial distress be given mortgages at crazy costs? Would it be better for them to lose their real estate, and escape this incredibly expensive debt? Is it ethical for retired, old people to suck off 8% returns from MICs on funds provided at usurious rates to desperate families? Just asking.

In BC the MIC business hasn’t even been regulated by the province – until this week. But it will take another year to impose even this gossamer level of oversight. Meanwhile the federal government has in recent days thumped the idea that it will be extending the stress test to the alt landing business.

You will recall such a move was suggested a week or two ago. It threw the mortgage industry into a frenzy. A widely-circulated Reuters report said flatly that fed officials were actively considering ensuring all borrowers – from all lenders – could afford to pay 2% more than their contracted rate. That’s bad enough when the mortgage offer is 3.7%. But when it’s 9.5%, this is slaughter.

Anyway, false alarm. Bill Morneau says it ain’t happening, which is more consistent with his recent assertion the T2 government is about to make it easier – not harder – to buy a house. Especially if you’re a needy Millennial. That had led to speculation the stress test would be capped, the home buyer credit goosed and 30-year ams make a triumphant comeback. So all that may still happen, ether in the coming federal budget or the election campaign.

And speaking of the big picture, here’s a warning. Pessimism among business leaders has jumped and optimism slagged, says a new survey. At the end of 2017 almost half of these guys were bullish on the future, but by last month that had plunged to just 26%. Mostly they fret Trump’s nationalism will sideswipe our economy. Hmmm.

The boss worries about the economy. The worker gambles all on a house. One of them is nuts.

153 comments ↓

#1 Rick Fast on 01.30.19 at 4:23 pm

First!!! Kill Bill!

#2 For those about to flop... on 01.30.19 at 4:32 pm

Someone on here might get some joy out of this one…

M44BC

“Price Changes Over the Last 20 Years Prove the Economy is Rigged.
The economy is rigged.

That’s the message behind our recent analysis of price changes over the last 20 years. We looked at everything from mass market consumer items, like TVs, cell phones and apparel, to critical life-altering purchases, like healthcare, college tuition and textbooks. It turns out that the most important things in life keep getting more and more expensive, while the things that don’t really matter keep getting cheaper.

Proper credit for inspiring our visualization belongs to Mark J. Perry at the American Enterprise Institute. His original visualization was so good that we couldn’t resist using the same basic idea for our purposes. The underlying data come from the U.S. Bureau of Labor Statistics, which keeps detailed records of consumer goods as well as average hourly earnings. Of course, these figures take into consideration inflation.

We start by using prices in 1998 as a benchmark, plotting the relative percentage increase or decrease for each category over the last 20 years. The result is a snapshot of the American economy, providing several key insights about both the standard of living for most Americans and the unique challenges companies face to remain relevant.

Let’s start with the things that have become more affordable in the last 20 years, consumer goods. It costs substantially less money to purchase a TV now than it ever has in the past, dropping some 97% since 1998. We see similar eye-popping declines for other mass consumer products like toys, computers and cellphones. It’s worth pointing out that all these things are not just cheaper, but they’re also objectively better. Almost all TVS are now high definition flat screens with Internet connections. Cell phones are like miniature computers in your pocket, and toys are designed for cognitive development. They’re cheaper and a lot better.

There are several items that haven’t really changed that much in terms of price. Apparel, household furnishings and new cars all cost about as much as they did in 1998. Similar to TVs, cell phones and computers, cars have also gotten substantially better with the creation of new technologies. Adaptive cruise control automatically adjusts to the flow of traffic, and lane assist keeps the vehicle where it’s safe. Even backup cameras are relatively new in automotive history, and yet they come standard in most new cars.

And then there are things that have exploded in relative price, especially compared to average hourly earnings. Healthcare is now over 225% more expensive, and getting a higher education is not far behind at 183%. Both categories have more than doubled the growth rate of average hourly earnings, making them less affordable for middle class families. College textbooks alone now run students almost 150% more than they used to.

Why have these prices increased so much, whereas consumer goods have become cheaper and cheaper? It’s debatable to what extent healthcare and educational outcomes have improved over the last 20 years. And there are lots of possible reasons why they cost a lot more than they used to. Government regulations, market conditions, monopolies and professional certifications all play a role. There’s also a strong bias in both fields for reputation and pedigree. Will we ever get to a place where all the technology in the world could replace the judgement of a Harvard-educated doctor? Maybe, but in the meantime, consumers are paying top dollar for the things that determine major life outcomes while demanding lower prices for other products.

28 January 2019

Visualization
https://howmuch.net/articles/price-changes-in-usa-in-past-20-years

#3 Not 1st on 01.30.19 at 4:37 pm

Millennial don’t mind paying more. They vote for it so let the olds soak em.

And trump? Honestly. The other T is the wrecking ball to Canada.

#4 This Is A Fact on 01.30.19 at 4:41 pm

There are many individuals in Toronto with large amounts of cash to invest. These private investors are family oriented, and traditionally had mortgage portfolios. I guess this habit was passed down to other generations because it was normal. Some of them would take out large bank lines assigning the mortgages for collateral to the bank for the net spread on rates. They did indeed take risks out of greed with secondary mortgages, and there were those that would only advance 65% against appraised value with no questions asked. There was one lender that owned a strip club in the core, whereby $1 million was the minimum amount on any mortgage lent.

#5 NotLegalAdvice on 01.30.19 at 4:52 pm

“In return for upfront fees (a grand or two) plus an interest rate two to five times higher than at the bank, they get the loan, typically with a short term of a year or two.” – Garth

Garth, it’s much more than a grand or two. People are being charged 2 – 3 percent! I know a few private lenders taking fees of 3 percent on 200k , cleaning 6 grand per transaction and only offering the loan for 6 months or default payments are required. They bank on the person defaulting to make an extra $2500.

It’s not going to end well for our market.

#6 Guy in Calgary on 01.30.19 at 4:56 pm

Honestly just extend the amortizations. In my opinion, if we are gung hoe with regards to making it easier to finance homes for a certain demographic, this option is the lesser of the evils. 30 year amms and if they start making more money, the applicants can speed up the amm at renewal. This is less punishing then crazy high rates/fees and by keeping the stress test, we know the mortgage is affordable.

#7 PastThePeak on 01.30.19 at 4:57 pm

#147 Godth on 01.30.19 at 1:45 pm
#140 IHCTD9
so a bait and switch with a gotcha twist – nice.
do i believe that humans will be extinct in 2030? it’s possible.
+++++++++++++++++++++++++++++++

Lead the way brother…

#8 Stan Brooks on 01.30.19 at 5:04 pm

TSX rises by 0.14 % while Dow rises by 1.77 %, Europe by 1 %, EM in 1.5-2 % range. TUR up 3.5 % today (I said to watch it)

On a day when gold and oil rallied.

————————————–

Starting to cut corners in health care, what a shame.
But hey, it is ‘free’. T2 has no money for cancer screenings, he has other priorities/housing, purchase of media support for his campaign.

https://ca.yahoo.com/style/women-need-get-mad-new-canadian-breast-cancer-screening-guidelines-experts-181525879.html

——————————————-

Looking for ethics in the subprime lending department. What an oxymoron.

No mention of ethics practices of banks, mortgage insurers, regulators, including BoC.

#9 Shawn Allen on 01.30.19 at 5:12 pm

The All Clear Signal

In other news it appears the Fed chair just gave the all-clear signal. Interest rates to rise little to none for the rest of this year it seems.

Because, the Fed chair seems not to see inflation going above his target 2%.

#10 Kick Their Ass to the Curb on 01.30.19 at 5:13 pm

The sooner the broke and despondents face the music and get a dose of reality – the better. This “make believe” credit advanced at shyster prices will only serve to create markets to crash sooner than later. Great times for pots and pans lawyers, insolvency trustees and moving co’s. Let the good times roll. Thanks to the elected potheads. We are all richer than you think!

#11 yorkville renter on 01.30.19 at 5:19 pm

Pride will be the (financial) end for too many families… high prices + high mortgage rates = financial suicide

#12 The real Kip (Ret) on 01.30.19 at 5:19 pm

“So all that may still happen, ether in the coming federal budget or the election campaign.”

It’ll come in the budget to allow more time for it to affect the economy…just in time for…the election! Yay!

#13 Ronh on 01.30.19 at 5:21 pm

No more rate hikes, Fed folded.

(@PeterSchiff):

“Powell’s finale statement was that the markets wanted clarity on the balance sheet reduction, and that the Fed was now providing it. The truth is that until recently the markets had clarity and did not like what they saw. So it’s not clarity the Fed is providing, but relief! “

#14 Mike on 01.30.19 at 5:23 pm

.
Fed coming to rescue housing market, after Chinese retreat a bit. Told ya, someone will save the Canukistan RE, and home prices here will go up and up on 2+ year basis.

Long story short, those who listened from 2015-till date missed the bus to buy and get 40-50% gains in RE.

#15 Centre-Right? on 01.30.19 at 5:28 pm

@For those about to flop…
#Price Changes Over the Last 20 Years Prove the #Economy is Rigged.
#The economy is rigged.

manufacturing of consumer goods gets outsourced to prison labour and giant factories that treat their workers like slaves, which brings the cost down of bringing it to market. Even with cellphones getting cheaper, 2000$ for a new iPhone is cheaper?

the other side of the argument is healthcare and higher education? 20 years of labor cost increases in these sectors, pesky unions, increase costs in drugs, increase of old people to care for. and don’t get me started on the health care sector.

Rigged? give your head a shake. This is supply and demand. Logistics. Inflation. Reality.

#16 WUL on 01.30.19 at 5:29 pm

And my future Premier Jason Kenney wants to deliver a stern finger wagging to Dr. OSFI and his vitamin B20 quackery:

https://calgaryherald.com/business/real-estate/weak-demand-over-supply-will-drive-down-home-prices-in-2019-creb

#17 jane24 on 01.30.19 at 5:48 pm

This comment is actually for Saturday’s column but I have been traveling till today in Toulouse, a city in Southern France. I got a first hand look at the weekly Yellow Vest riot. On the Monday I went back into Toulouse to see the damage and boy was it damaged. The mob of ordinary middle class folk went for banks, insurance companies, jewellery and high-end goods and retail global brands. They passed over small French independent businesses and cafes.

Now Garth is of the opinion that country nationalism and anti-globalisation has peaked but based on what I saw and the folk I talked to, it may just be in a slight resting stage. More the end of the beginning than the beginning of the end.

What are the Yellow Vests angry about? They have finally noticed that globalisation makes the governing elites far richer and them far poorer. Their demands are not deliverable as they want cheaper food and lower housing costs. Democratic countries cannot deliver on this. They actually know this and the fact they are screwed makes them even angrier. There is no resolution on such matters in a global world where jobs go to the cheapest producer.

Will the weekly French Yellow Vest riot in every major city in France run out of steam? Not according to the people I talked too. The anger at globalisation and the governing elites is growing.

#18 isuckless on 01.30.19 at 5:51 pm

Stress test will be eliminated as election promise, not before Liberals are elected.

Usury is a sin, no matter what percentage points someone charges.

We won’t see RE collapse is Canada. Maybe runaway inflation but never RE collapse

#19 You know on 01.30.19 at 6:00 pm

Hi garthgantuan …lol… would it be safe to say that engineering a soft Landing in the housing market is created mainly by suck and blow tactics?

#20 Godth on 01.30.19 at 6:01 pm

“In BC the MIC business hasn’t even been regulated by the province – until this week. But it will take another year to impose even this gossamer level of oversight. Meanwhile the federal government has in recent days thumped the idea that it will be extending the stress test to the alt landing business.”
more bloody government regulations! deregulate everything, government is incompetent, a nuisance, parasites. let the market decide! get rid of the 60% usury rules too. if i want to charge 100% or 1000% what business do they have telling me i can’t? are we not all rugged individualists here? what kind of drivel is this?

#21 Reximus on 01.30.19 at 6:11 pm

I am old enough to remember when 8% mortgages were considered pretty cheap

#22 AGuyInVancouver on 01.30.19 at 6:16 pm

#16 WUL on 01.30.19 at 5:29 pm
And my future Premier Jason Kenney wants to deliver a stern finger wagging to Dr. OSFI and his vitamin B20 quackery:

https://calgaryherald.com/business/real-estate/weak-demand-over-supply-will-drive-down-home-prices-in-2019-creb
_ _ _
LOL, Calgary’s dismal housing market has more to do with Alberta’s reliance on a crappy oil-peddling economy than B20.

#23 For those about to flop... on 01.30.19 at 6:22 pm

Well after meeting my first Grumpy Guts on here today,I will try again.

You guys better watch what you do, or else I’ll go back to doing b-grade real estate reports on here…

M44BC
“How Long It Will Take to Kill the Average Credit Card Debt in Every State.

Lots of people make New Year’s resolutions to get their personal financial situation in order, and paying off credit card debt is usually a high priority. Credit card debt is at a $1 trillion. The combination of high borrowing limits, steep interest rates and late payment fees make it extremely difficult to get under control.

But let’s assume people in every state created a plan to pay 15% of their income toward credit card debt. We compiled research from Creditcards.com to understand how such a strategy would play out in every state across the country.

Our visualization starts with a heat map of average total credit card balances broken down by state. We then applied an average household income figure to see how many months it would take to pay off such a balance with only 15% of one’s total household income. This takes into account the compounding interest rate adding to the remaining balance each month. Of course, our analysis assumes people would stick to the plan and avoid taking on brand new credit card debt throughout the process.

There are several big takeaways. First, there’s a regional trend in overall credit card balances. Dark red states like New York ($8,510), Texas ($9,100) and Alaska ($10,685) carry the biggest balances, but the Upper Midwest looks relatively financially healthy. Wisconsin ($6,737) and Iowa ($6,726) have the lowest averages in the country.

Most Americans would need at least a year to pay off their credit cards, and even longer for states in the South. New Mexico, Louisiana and West Virginia have the longest timelines at 17 months each, and Massachusetts has the shortest at just 9 months. The average across all 50 states is 12.7 months, meaning it would have to be a New Year’s resolution for 2019 and 2020 for lots of people.

And finally, there’s the imperfect relationship between how long it would take to pay off the debt and the total debt load. The states with the highest balances don’t necessarily need the most time. Take Massachusetts as an example, where the average credit card debt stands at $7,994 but would only take 9 months to pay off. Compare it to Iowa at $6,726 and 11 months. That’s because people in Massachusetts make a lot more money than people in Iowa. Things generally cost a lot more in the Northeast too, which makes it harder to achieve financial security too.”

21 January 2019

Visualization

https://howmuch.net/articles/credit-card-debt-burden-in-each-state

#24 marcus on 01.30.19 at 6:29 pm

The Boss is right to worry about the economy. He/she should be worried about food production in the next 20 years or so. Big changes on the way. Grand Solar Minimum started 2 years ago and this winter is really showing nature off! -77˚F Lowest AccuWeather RealFeel Temperature, recorded at Thief River Falls, Minnesota, on Tuesday evening. In a few years (2030) the solar minimum cycle will be at it’s peak. Colder in North America, Europe and China will be the new norm. Other areas will be warmer than normal like Greenland and Australia. Brrrrrrrrr. Go long Food, electricity and natural gas stocks.

#25 n1tro on 01.30.19 at 6:31 pm

#177 Godth on 01.30.19 at 5:47 pm
#156 n1tro
it’s inevitable that we’ll go extinct. it’s extremely probable within two decades. it’s possible within a decade. that last doubling in an exponential function…
https://www.sciencedirect.com/science/article/pii/S187661021830136X
https://truthout.org/articles/release-of-arctic-methane-may-be-apocalyptic-study-warns/
————————-
I’m replying to your post because it didn’t resort to any name calling which is respectable.

I have no doubt the human species will go extinct given our destructive nature and the rate of consumption that we are on. <– see…you are so far left and I'm so far right, we're standing right next to each other!

What I don't see as pointed out by a few others is what difference taxing 36 million people will do in a pool of 7B. Yes, you can argume it is a start and better than nothing but given how inefficient tax money is spent, is this the best/only way?

As for the next decade or 2, I'd put my money on a nuke (possible and probable) wiping us out before the climate kills us. Until either event unfolds, I'm going to keep diversifying the GreaterFool way.

#26 Reximus on 01.30.19 at 6:35 pm

Just a Public Service Notice: If you have a new furry pet and have a forced air furnace, change the filter sooner than they recommend, like every month, and the cheapies are fine. No need for the dumb 25$ hepa non-sense ones

Dont ask how i found out

#27 joe on 01.30.19 at 6:42 pm

“That had led to speculation the stress test would be capped, the home buyer credit goosed and 30-year ams make a triumphant comeback.”

It’s government meddling that has helped to jack house prices to insane levels to start with. The last thing we need is government “goosing”.

#28 davidtg on 01.30.19 at 6:47 pm

Is Bill Morneau one of these wealthy people who invests in MIC? He said that stress test ain’t happenning for MIC but what about if himself owns investment in MIC? If yes, there must be some personal interests for him to say that.

#29 Nothing Surprises on 01.30.19 at 6:56 pm

Is it ethical for retired, old people to suck off 8% returns from MICs on funds provided at usurious rates to desperate families? Just asking – GARTH.
…………………………………………………………………………….

Is it ethical for retired, old people (or anybody for that matter) to pay 19-30% to credit card companies, 19% to Hydro One or Union Gas etc. Usurious rates???
8% seems like small potatoes!!
Just saying.

Then pay your bills on time. – Garth

#30 Reality is stark on 01.30.19 at 6:58 pm

Borrowing to take yourself to the promised land. So many people want to die early.
Who forces you to consume now and pay later?
Don’t let anyone make you live like that.
It takes 10 years to get to know someone well. Don’t let them make you sign something until you are absolutely sure about their mental state and character.
10 years and not one day less!
Delay as long as possible and always guarantee your financial future by working 80 hour weeks.
Guarantee your freedom and to hell with anyone else. The rewards are incredible. All it takes is a little bit of discipline.

#31 Cbo on 01.30.19 at 6:59 pm

Was speaking with a pal on the weekend who is Master Electrician. He explained to me that his peers have mortgage brokers offering them second mortgage “opportunities” at 9% return. This cohort is cash heavy, (side jobs), lending to others who are cash flush and therefore not lendable from the banks perspective. These brokers are facilitating big volumes and creating the market place.
It’s not just a market place for the unlendables. Those with low T4’s (on purpose) and are drowning in dollars shop here for mortgages.

#32 NOSTRADAMUS on 01.30.19 at 7:00 pm

CASTAWAYS !
Imagine, a whole lot of Real Estate speculators along with other indebted lost souls, all marooned castaways on the Island of 2017 assumptions. All unaware that times have changed. No one is responding to their S.O.S.’s in the sand. The traditional lending institutions have sailed on by. I suspect a great number of these lost souls are now praying to Lucifer, as their prayers to a higher entity have gone unanswered. In the land of universal deceit, telling the truth can be a revolutionary act. You can trust me as the teller of truth in the land of gypsies, tramps and thieves.

#33 Points on 01.30.19 at 7:07 pm

#5 NotLegalAdvice – The investor sharks call it points, and when a borrower is on the ropes they want 5 points or a 5% commission fee on closing, plus legal costs for a mortgage.

#34 Out Of Work CEO, Will Travel on 01.30.19 at 7:11 pm

It is ethical for investors to get a high return in the “alt mortgage market”. If we are needing a high horse to mount, por que no “Payday Loans?”. Payday loan shops seem to be on most major intersections in towns and cities in Oh Canada God Save my Indebted Butt….preying on the most unaware citizens without a pot to sh** in. Slay the real weapons of financial mass destruction.

#35 Basil Fawlty on 01.30.19 at 7:17 pm

If we want to discuss whether 8% MIC interest rates are ethical, how can we ignore bank credit card rates of 19%?

If interest at any interest rate is ethical, then one could argue that MIC’s and credit cards are just further out the risk curve.

#36 -=jwk=- on 01.30.19 at 7:19 pm

So basically we should have stuck with VRM…. :(

#37 45north on 01.30.19 at 7:27 pm

For example, a report out of Calgary this week cites 6,000 applications being made to a single MIC (mortgage investment corporation), with people desperate to borrow funds at rates ranging from 8.5% to (shudder) 15.5%.

In BC the MIC business hasn’t even been regulated by the province – until this week. But it will take another year to impose even this gossamer level of oversight. Meanwhile the federal government has in recent days thumped the idea that it will be extending the stress test to the alt landing business.

Anyway, false alarm. Bill Morneau says it ain’t happening, which is more consistent with his recent assertion the T2 government is about to make it easier – not harder – to buy a house.

a picture of the crash is coming into focus. Garth says it’s going to be a slow melt. And I suppose in some way he’s right. National average prices will melt slowly. Some places may even go up. I’m guessing Montreal, Gatineau. Vancouver, Vancouver Island, the lower mainland will be spectacular. I mean a disaster. The crash will be accompanied by politicians making promises. There will be wide spread personal angst. Distress. In short, cacophony – especially in the second meaning: an incongruous or chaotic mixture.

https://www.merriam-webster.com/dictionary/cacophony

#38 BlogDog123 on 01.30.19 at 7:29 pm

A few months ago, I was at a big-6 bank ATM machine waiting for my transaction to complete. I saw an ATM receipt that said:

1) Withdraw $40 – insufficient funds
2) Withdraw $20 – transaction completed

Sad fact that some locals are so short of cash…

#39 WUL on 01.30.19 at 7:35 pm

#22 AGuyInVancouver on 01.30.19 at 6:16 pm
****

You are correct. and it might be worth noting from the article that future Premier Kenney (Premier Pukeworthy) cannot distinguish between OSFI and CMHC on the source of the stress test.

AB is mired in hoopededness.

#40 James on 01.30.19 at 7:38 pm

Today is an important day, Bell Let’s Talk Day. It is a reminder that there are those suffering with severe mental illness all around us.

I’d like to reach out to you, “Smoking Man”, and extend an olive branch of concern that you seek some assistance. Your suffering and underlying issues are apparent to all and you deserve some help, quite apart from the criticism you get from people here, including me.

https://letstalk.bell.ca/en/bell-lets-talk-day

Please seek help.

#41 Mattl on 01.30.19 at 7:41 pm

I’ve been posting on here for the last month about declining consumer spending. December was a horror show and consumer spending has been down MOM since the Summer. I’m not sure why it hasn’t hit the news.

I doubt any would consider me a CDN business leader but I’m expecting a tough year for my channel. Consumer spending is going to continue to crater, Canadians are obsessed with real estate and will eat catfood before taking a loss on their house.

I’ve always maintained that any serious RE correction will take out the Canadian economy. Banks will not go under but retailers and service providers are going to get pummeled as consumers clutch their wallets – finally – in order to hang on to their homes.

To all the vulchers that were going to swoop in and profit, just hope your job makes it because pain is coming.

#42 PastThePeak on 01.30.19 at 7:48 pm

#13 Ronh on 01.30.19 at 5:21 pm
No more rate hikes, Fed folded.
+++++++++++++++++++++

“Good Jay – good boy! {scratches ear}” – D.T.

Funny how just over a month ago the Dec dip was being partially blamed on Trump’s attack on the Fed. The market didn’t like this unprecedented political interference.

And now we have the Fed basically start to do exactly like the Trump wanted, and the market is cheering. Expect the QT rate to slow down next.

#43 Mortgagebrokeron on 01.30.19 at 7:51 pm

CMHC charges up to 4% on a mortgage as a premium yet no one blinks eh?

#44 NothingBurger on 01.30.19 at 7:58 pm

The people borrowing from subprime lenders are the flippers and renovators. These people already have a primary home mortgaged at the ultra-cheap rates of 2.4% – 4%.

Of course they don’t qualify for these dirty cheap rates on a flip-home and most flippers don’t care because they only need a 1 year loan to cover the reno and sales times.

Don’t believe this subprime silliness as it’s being delivered because individuals or families who are purchasing a primary dwelling can get the 2.5% – 4% rates.

Common sense will lead you to the same conclusion. If someone doesn’t have the income and down payment combination to qualify for the 2.5 – 4% mortgage from CIBC, how are they going to have the income to cover a 8.5 – 15% mortgage from an alt lender? Alt news. Fake news. Complete nonsense.

These mortgages are not going to primary residences, just secondary homes for flip or rent.

Just remember that “happiness is yelling bingo!”

#45 not 1st on 01.30.19 at 7:58 pm

Humans extinct in 12 yrs? Au contraire there will be 2.5 billion more of us. And then more after that as anti aging tech takes hold.

How would climate change kill us anyway? The world is awash in extra food so people can always get aid from developed countries to eat. The oceans don’t seem to be lapping at my doorstep and I can easily drive around the tornadoes with my F350.

#46 Lost...but not leased on 01.30.19 at 8:03 pm

Re Alt-lenders

Say I have $100 G’s to lend/invest to alt lenders.

QUESTION:
So….what happens to my $100 G’s when SHTF and the suckers who are paying high interest rates on my “loan” default ?

#47 acdel on 01.30.19 at 8:03 pm

Hey, Flop is back, always good to read your perspective on things in this wacky world of ours.

Question to you Garth and all other dogs out there.

Although, I never had a positive feel regarding what they are pushing; what are your thoughts on reverse mortgages? Your current post Garth brought up some memories of what they are trying to sell on there optimistic commercials that we are subjected to each day. Seniors need to know what this is really about, thanks.

#48 Sebee on 01.30.19 at 8:07 pm

Hey Garth,

Re: GM leaving Canada.
Is part of their play here to skirt their pension obligations? Can they?

#49 akashic record on 01.30.19 at 8:09 pm

#40 James

That was nice. Feels better, eh?

#50 Nothing Surprises on 01.30.19 at 8:09 pm

#26
Then pay your bills on time. – Garth

…………………………………………………………………………….

Exactly Garth!! If you purchase using funds that require 8% interest then make your payments on time…….no difference!!
A bargain compared to other lending vehicles.

#51 Ronaldo on 01.30.19 at 8:10 pm

#21 Reximus on 01.30.19 at 6:11 pm
I am old enough to remember when 8% mortgages were considered pretty cheap
—————————————————————–
I’m old enough to remember when interest rates were 6% in the 50s/60s and by the 70’s went to 10 to 12% then by the 80s to 23% and taking over 5 years to return to 14%. The thing is, when rates were 12% a house was still around 3 to 4 times a single income and not 30 times as we have in the lower mainland at 3% interest rates. I remember when people were running to the bank to get a mortgage at 20 to 23% thinking that rates would go even higher. I remember in the fall of 1974 they were saying to not expect to ever see interest rates below 10% ever again. At the time interest rates were 11.75 to 12%. I fully expect to see prices in the lower mainland drop by at least 50% from where they are now in the next few years. I remember a lot more things but no time to list them all. The more things change the more they stay the same.

#52 akashic record on 01.30.19 at 8:13 pm

#45 not 1st on 01.30.19 at 7:58 pm

Humans extinct in 12 yrs? Au contraire there will be 2.5 billion more of us. And then more after that as anti aging tech takes hold.

Only those who should be killed to save mankind from global warming. The necessary collateral damage for the higher purpose.

#53 Starter Marriage on 01.30.19 at 8:14 pm

Take a good hard look at your future – Is your significant other – the one you want to get into a lifetime of debt and grow old together with – or should you just cut and run and re-priorize your life while you still have a chance ?

#54 kaif on 01.30.19 at 8:20 pm

Five hundred families visited a Milton development by Mattamy Homes in two days this month.

Buyer line-ups began forming days before the Saturday openings, and by the end of both days all 180 available lots had been sold out.

The builder says that the fast sale of its Hawthorne South Village Sixteen Mile Creek community shows that the Toronto housing market continues to have strong fundamentals.

#55 Terry on 01.30.19 at 8:23 pm

“A question: should people in financial distress be given mortgages at crazy costs? Would it be better for them to lose their real estate, and escape this incredibly expensive debt? Is it ethical for retired, old people to suck off 8% returns from MICs on funds provided at usurious rates to desperate families? Just asking.”

It’s still a free country Garth. Let-em borrow their brains out and go into debt up to their eyeballs if that’s what they want to do. It’s their decision to make and their consequences they have to live with.

Speaking of things that make you go Hmmm?

“And speaking of the big picture, here’s a warning. Pessimism among business leaders has jumped and optimism slagged, says a new survey. At the end of 2017 almost half of these guys were bullish on the future, but by last month that had plunged to just 26%. Mostly they fret Trump’s nationalism will sideswipe our economy. Hmmm.”

This is also the result of Trumps long term intended goal to get U.S. based companies with operations abroad that export their goods to the U.S. back into the U.S. He wants them to rethink their medium to long term plans about where they are located and has created a huge financially beneficial environment with the recent tax reform agenda for companies to bring the jobs back home. The rust belt states, if you ever travel along there, have literally been hollowed out in town after town and city after city. Trump wants to begin the reversal of that trend that saw many of those jobs disappear over the past 50 years. Ontario is ripe with low lying fruit, (jobs), and as Trump puts it, “The Mother Load” of jobs! Trump’s Nationalism will start sideswiping our economy and in my opinion Ontario will be gutted out between now and the next 20 to 30 years. I do think we are next.

#56 Reality on 01.30.19 at 8:33 pm

@17 jane 24:

These were exactly the deplorable average Joes I wrote about a couple of days ago.

North American average Joes are comfortably numb and dumb, thus going deeper into debt and consumption and taking it up the wazoo with higher taxes and not protesting it…

#57 Nanaimo rocks on 01.30.19 at 8:33 pm

Big night in bc tonite! Go liberals! I have money in Ryan mortgage, 9% every year! How do you beat that? No rebalancing needed

#58 Fish on 01.30.19 at 8:51 pm

Household expenses could rise as city recommends property tax, rate hikes in 2019 budget
Social Sharing

Unclear how city will find $79M in savings still needed to balance $14B budget, councillors say

Lauren Pelley · CBC News · Posted: Jan 28, 2019 6:55 PM ET | Last Updated: January 28

http://www.cbc.ca/news/canada/toronto/household-expenses-could-rise-as-city-recommends-property-tax-rate-hikes-in-2019-budget-1.4996443

#59 Entrepreneur on 01.30.19 at 9:04 pm

Come on bankers, lenders get some more buyers into debt, might as well rope them to hang as their spending power is gone from the economy. But wait, the stupid savers on the side have money and might even start a business. OMG, what a brilliant idea.

As for the climate change, I know it is hard to believe but I didn’t believe it too until about 50 years later, seen the changes.

The question you should ask yourself is “Are we allowing Earth and Sea to prosper and multiply without interfering?” and “Are our animals and sea life growing?” and “What are we doing to support Earth, animals and seal life to their fullest potential?”

Our youth know when in school but when out in this debt world everything is about money/debt to survive.

#60 Peter Schutter on 01.30.19 at 9:08 pm

Have some faith in humanity.
World bank data:
“Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time,”

#61 MF on 01.30.19 at 9:13 pm

#56 Reality on 01.30.19 at 8:33 pm

Almost everything you post is bathed in cynicism, and your comparison is laughable. France is a failed state with no future. Canada is NOT. North America is NOT the EU.

Just Who are these people angry at? The successful elite? What do they want? The Government to subsidize everything for them? That reeks of socialism boyo..the same socialism you claim is so popular in Canada.

MF

#62 Remembrancer on 01.30.19 at 9:15 pm

#55 Terry on 01.30.19 at 8:23 pm
This is also the result of Trumps long term intended goal to get U.S. based companies with operations abroad that export their goods to the U.S. back into the U.S.
————————————————————
US-owned foreign factories is one thing, but the real money is the lost taxes on revenue that has been moved offshore using the ole double irish dutch sandwich and similar menu items – tech sector, I’m looking at you – he’s just very clumsy about it and wanders off topic too much (huge surprise that) to actually have a coherent policy…

#63 Rargary on 01.30.19 at 9:17 pm

I’d guess they are all nuts Garth. Calgary will be on it’s way back up in less years than predicted. But as a Calgarian, for the 1st time, I can relate to east coasters… is that bad?? I just want to retire humbly with an inheritance to leave to my daughters, one is special needs, so they may survive this wicked and treacherous economic Cdn dream. Those permanently disabled don’t stand a chance, so I trust in my eldest to take care of her.

#64 LuckySoB on 01.30.19 at 9:18 pm

So how do you feel about investing in an MIC? Say the MIC only has first positions, and only gives a loan to value of 55%, with a 7% return, it does seem juicy. I can see why people would be inclined to invest this way.

#65 Remembrancer on 01.30.19 at 9:32 pm

#47 acdel on 01.30.19 at 8:03 pm

Question to you Garth and all other dogs out there.

Although, I never had a positive feel regarding what they are pushing; what are your thoughts on reverse mortgages?
—————————————————————
I’ll bite – I’m going with that they are the equivalent of payday loans for retired people…

#66 akashic record on 01.30.19 at 9:34 pm

#60 Peter Schutter

G_d bless technology and productivity increase.
If only people could improve somewhat.

#67 will on 01.30.19 at 9:36 pm

well yeah i get your point, but all MIC’s are not created equal

#68 akashic record on 01.30.19 at 9:51 pm

DELETED

#69 Remembrancer on 01.30.19 at 10:03 pm

#46 Lost…but not leased on 01.30.19 at 8:03 pm

QUESTION:
So….what happens to my $100 G’s when SHTF and the suckers who are paying high interest rates on my “loan” default ?
================================
How did you have the loan terms structured, are you able to enforce those terms in civil court if necessary and where in their debt holders pecking order are you and are you sure of that?

Maybe you get a 100 acre homestead after evicting them or get to liquidate $20000 of abandoned inventory at 10 cents on the dollar or just maybe you’re plain old SOL. Under normal circumstances though, if you have $100G loaned at 8% with solid collateral, you hope they never pay the loan back and keep servicing it forever…

#70 Paul on 01.30.19 at 10:07 pm

#60 Peter Schutter on 01.30.19 at 9:08 pm
Have some faith in humanity.
World bank data:
“Over the last 25 years, more than a billion people have lifted themselves out of extreme poverty, and the global poverty rate is now lower than it has ever been in recorded history. This is one of the greatest human achievements of our time,”
————————————————————————————————
Or our ultimate demise!

#71 Kona on 01.30.19 at 10:07 pm

Twenty-five years ago I worked at one of those financial places that wrote personal loans at 34.95% and second mortgages at 15%. Those second mortgages were nearly always for credit card debt consolidation. And of course, we all know that debt consolidation generally fails.

Five years ago I dipped my toes into the Mortgage Brokerage business only to discover that nothing had changed. People want the money at any costs. Many don’t even ask about fees or interest rate. Just get it. A MIC was my go to place for debt consolidations. Not once did a client balk at the idea of paying lender and broker fees.

And when a MIC said no, there was always the private lender. Lots of scary stories there.

#72 Doug in London on 01.30.19 at 10:10 pm

Alt lenders you say? A sub prime mortgage by any other name is still a sub prime mortgage.

#73 NoName on 01.30.19 at 10:20 pm

Interesting read.

https://mashable.com/article/tesla-ev-cold-weather-polar-vortex/#qwsAI8gUTPOX

#74 mathman on 01.30.19 at 10:22 pm

#44 Nothing Burger

Dead Wrong my friend – what Alt lenders do is protect themselves in other ways – the high rates are a hedge based on the credit risk, they also have covenant and outs to protect themselves. They don’t care so much for traditional TDS, GDS ratios – they look at the quality/liquidity of the collateral and gamble that in a default situation their recovery rates combined with the initial fees and the interest spread over market mortgage rates will cover them. Sub prime borrowers are just like high yield bonds, everything looks great till it doesn’t. A credit event drains the swamp – quickly. The good ones will survive and every other alt lender who jumped in the market for the easy money will disappear – just like the fly by night mortgage co’s in the US in 2007/2008.

Your right about flippers – absolutely they will take on 10% for a year with the confidence they can make significant money on the flip. Big banks won’t touch them and many want to avoid using their personal HELOC’s.

When the smoke clears the tag line will be I had no idea the Jones next store had a million dollar mortgage with that dicey mortgage company – oh gosh the horror.

#75 S carrel on 01.30.19 at 10:31 pm

Garth , in order to go all out and ensure a crash, these loans need to be packaged and securitzed

#76 David Driven on 01.30.19 at 10:46 pm

Wonderful news to see the second mortgage lending business blossom once again. I was investing in the 80’s loaning tranches to borrowers at 15%. This is a business mind you and a shotgun etf like approach is not smart. Lending money is like picking a wife, you have to be selective. Lend smart and it’s a great business opportunity.

Government says new immigrants are spending more on housing. How does this compare to Canadian home buyers? First, Canadians are less able to compete because government is stealing over 50% of income in egregious tax schemes. In Asia taxes are extremely low to zero. That’s how Asians get rich faster and have more children. Canada allows new immigrants a five year tax free holiday, where they pay zero tax in Canada. Working people in Canada can only dream. So it’s simple, the playing field is not level. Government ensures that by allowing imported money into Canada tax free while money earned in Canada pays 70 cents on the dollar.

https://www.bnnbloomberg.ca/new-vancouver-immigrants-are-spending-824-000-more-on-houses-1.1205881

Make it an apples to apples comparison and you can instantly see that tax free is better and amounts to pandering for votes to a ghetto of people who immigrate, get a passport in three years, and then leave who’re the five years is up and claim citizen non resident status for taxation, and a Trudeau Hello allowing untaxed ex residents to vote from foreign countries to retain privelages for family , education and health.

#77 Ronaldo on 01.30.19 at 11:04 pm

This was too good not to share. Enjoy.

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

#78 For those about to flop... on 01.30.19 at 11:11 pm

Recent sale report.

When I last featured these guys maybe a little over a month ago, I said something like, you know the boom is well and truly over when no one is interested in semi-waterfront for 1.3 million.

Well they got it sold and took the loss.

The details…

2493 Panorama Dr,North Vancouver.

Paid 1.47 April 2017

Sold 1.28 January 2019

Originally asking 1.59

Assessment 1.54

I haven’t been over Deep Cove recently but I’m sure at some stage I parked out the front of this place and went for a hike.

Really good location, maybe a bit of a zoo during the summer, but I didn’t think they would lose this much with only a park between them and the water.

These guys blew a 265k size hole in their pocket.

I guess you could call it a Deep Cove…

M44BC

https://www.zolo.ca/north-vancouver-real-estate/2493-panorama-drive

#79 Vampire studies on 01.30.19 at 11:23 pm

46 lost – is this a trick question?

#80 n1tro on 01.30.19 at 11:26 pm

#46 Lost…but not leased on 01.30.19 at 8:03 pm
Re Alt-lenders

Say I have $100 G’s to lend/invest to alt lenders.

QUESTION:
So….what happens to my $100 G’s when SHTF and the suckers who are paying high interest rates on my “loan” default ?
———————
The bank, 1st holder of mortgage forces a sale of the house at current market value. Makes themselves whole again with any losses paid by tax payer funded CMHC. As the 2nd mortgage holder, you get in line with all the other creditors which the deadbeat has to pay. Good luck though as if SHTF, the deadbeat would most likely have declared bankruptcy.

#81 Tom on 01.30.19 at 11:40 pm

A MIC? Is this what my optometrist friend is talking about? He says he has money invested in some BC company that makes mortgage loans and flips too. Doesn’t sound like he can pull his money out on a whim either.
Just wondering.
Thanks

#82 Jean on 01.30.19 at 11:52 pm

These MICs sound risky. You can’t even withdrawal any money without their permission. Read the fine print.

#83 coinnut on 01.30.19 at 11:53 pm

Don’t forget the other bankers, credit unions. I wonder how many house investors are borrowing money from these alternate banks.

https://www.ratespy.com/mortgage-rules-2018-credit-unions-stress-test-01095377

https://www.theglobeandmail.com/real-estate/mortgages-and-rates/credit-unions-an-under-the-radar-cheaper-mortgage-option/article19307516/

https://globalnews.ca/news/3874523/new-mortgage-rules-canada-2018/

#84 Ponzius Pilatus on 01.30.19 at 11:57 pm

Floppy,
Remember the one paragraph rule.
People are busy.
Make your point and move on.

#85 Ponzius Pilatus on 01.31.19 at 12:12 am

#48 Sebee on 01.30.19 at 8:07 pm
Hey Garth,

Re: GM leaving Canada.
Is part of their play here to skirt their pension obligations? Can they?
—————
Buddy,
That’s what corporate well fare is.
Canadians bailed out GM after the 2008/2009 fiasco.
That’s how they pay as back.
Capitalize the profits, Socialive the losses.
That’s how Capitalism works.

#86 Not So New guy on 01.31.19 at 12:45 am

Sadly, most are retired, older and …… greedy

FIFY

#87 Smoking Man on 01.31.19 at 12:50 am

#40 James on 01.30.19 at 7:38 pm
Today is an important day, Bell Let’s Talk Day. It is a reminder that there are those suffering with severe mental illness all around us.

I’d like to reach out to you, “Smoking Man”, and extend an olive branch of concern that you seek some assistance. Your suffering and underlying issues are apparent to all and you deserve some help, quite apart from the criticism you get from people here, including me.

https://letstalk.bell.ca/en/bell-lets-talk-day

Please seek help.
……………………..

Ah, James, that’s so sweet of you to think of me on metal case day.

What part of my disclaimer did you miss?

I’m a confused lier, a required superior characteristic for a good fiction writer.

Smoking Man is an invented character, the steerage section of this truly pathetic blog is where I experiment with different themes. You can’t know the herd unless you poke em a bit.

I have an encyclopedia of amazing writing never published. Will be after I buy the farm, Nothing like being not famous and walking into a rub and tug through the front door. Purely for prostate cancer prevention.

I mean you think you know where I work,
close but no cigar. Few buildings down the road. Clue Bill Gross is my buddy and writing mentor, we go way back.

All those clips on periscope where done cold stone sober. I’m a good actor too

The CRA hotline, come on man how many times did you rat me out. They know me.

You became obsessed with hating and trolling a fictional character, you don’t contribute shit on here other than attacking the great Smoking Man.

In reality I could be a chick with small boobs, and acme who hated the world, who has transformed into the Smoking Man trying discredit and make every straight white man look bad.

You just don’t know for sure.

You had many opportunities to meet me, every time I was in Toronto. But you went full on pussy and never showed.

You go ape shit every day on a fictional character.

I formally give up my spot at the front line for metal cases and yield it to you.

You need help a hell of a lot more than me. I’m just playing here, you’re serious.

Dr. Smoking Man
Ph.D. Herdonomics.

#88 yvr_lurker on 01.31.19 at 1:00 am

Despite what the polls indicated, it looks like the people of Nanaimo chose to stick with the NDP efforts at affordable housing and their focus on curbing corruption and other important issues neglected by the liberals over the past 15 years (and not vote split with Greens). No need to vote in the priviliged heir of the owner of a car dealership who has made their living off of selling overpriced new and used cars to the populace (does anyone remember Van der Zalm??) ,and then throwing in a few crumbs towards charities and local initiatives so as to have a good “public face”. Although Nanaimo’s demographics has become more conservative owing to rich folks cashing out of YVR, it is clear that it is still a place where the average Joe wage earner still has a voice.

#89 Nonplused on 01.31.19 at 1:16 am

It would be my contention that all the borrowing is giving the Canadian economy a false sense of security.

When the last big crash happened in Canada (right around 1982) interest rates were skyrocketing and people couldn’t borrow so the banks started liquidating houses and consumer spending dropped precipitously.

This time around most people have a comfortable amount of equity in their house and cheap HELOCs so when the job went away they just started tapping equity. That can’t last forever.

Another potential mitigating factor this time around is that there are more women in the workforce today as opposed to in 1982, so for many, I’d say most, families a job loss while still dramatic does not mean zero income. But it does mean the economy is performing at a lot less than full capacity.

#90 Where's The Money Greedeau? on 01.31.19 at 1:38 am

Garth says: “The money they hand out typically comes from wealthy individuals willing to accept the risk involved, or individual retail investors who salivate at a higher rate of return and have no clear idea how dodgy this can be.”
++++++++
I say this is the new area where money laundering is happening, that’s why the federalis don’t want to touch it.
It seems our best of the best gov’t s are just a little step behind the criminals ALL the time. Isn’t this strange?
Obviously not to them.
How come when Gordon Campbell was voted into the BC Legislature in 2001 and then the RCMP stated publicly that organized crime had infiltrated the BC Legislature, absolutely nothing was done about it?
Strange indeed, unless you are on the inside.
Maybe some of this will come to light now that the Liberals will be running for the exits before the SHTF since they couldn’t get their insider elected in Nanaimo.

#91 Damifino on 01.31.19 at 1:58 am

#51 Ronaldo

I remember in the fall of 1974 they were saying to not expect to ever see interest rates below 10% ever again.
—————————————————-

Me too. That’s what my Dad said around then. But we easily passed back through 10% on the way to nearly zero. Now I’m thinking Dad was almost correct. His prediction was simply off by 40 years, and viewed from the wrong direction.

#92 Where's The Money Greedeau? on 01.31.19 at 2:04 am

Re: Climate Change
I’ve said it before and I’ll say it again. carbon taxes are a scam perpetrated since the 70s:
Maurice Strong, Climate Crook
https://quadrant.org.au/opinion/doomed-planet/2015/12/discovering-maurice-strong/

Jesse Ventura Global Warming FRAUD Maurice Strong Carbon Dioxide Tax Cap and Trade System NWO:
https://www.youtube.com/watch?v=tMkqozFqT0g

“The consummate sleazebag, thief and all-round corruptocrat who launched and shaped the UN effort to rid the world of CO2 has died, appropriately enough as his heirs gather in Paris to rob the world blind. Good riddance”

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

The Yellow Brick Road to Climate Change
https://uncensored.co.nz/2010/02/01/the-yellow-brick-road-to-climate-change/

#93 Spaccone on 01.31.19 at 3:05 am

#38 Blogdog123 That reminds many years ago, a couple of guys in a sweet convertible Beemer with the top down had just pulled away from the RBC ATM (King & Bay) as I approached it and had left the receipt behind. They looked like professional or well-off bros just enjoying a summer drive. I don’t remember the balance or withdrawal amount anymore but it was shocking, I’m pretty sure on the order of a $100-$200 balance.

#94 JM on 01.31.19 at 3:52 am

Of all the lenders on CP24, Oren is better.

#95 crossbordershopper on 01.31.19 at 5:19 am

i borrowed money at a mortgage at 10% , i paid it off in the year, and i owned the house. The banks are terrible, they have no interest in dealing with any self employeed, they dont care about anything, equity in the home, so i declare low income for tax purposes, like millions of others.
canadian banks are so conservative, and regulated, so much easier in the us.
many many millions of canadians are using high rate credit cards, pay day loan operations, second tier mortgage people. there is a huge non bank segment out there.
these banks posted rates etc are not being used by millions of canadians.
i cant wait when i go for a morgage at bank of nova scotia with 80% down payment and they turn me down becasue I owe CRA few grand or my income is too low or something. sure i will pay 8% no problem. Canada is a joke, no risk capital, no understanding of cash flow by bankers, etc.

#96 expat on 01.31.19 at 6:14 am

The FED Yesterday,

Contrary to what all the pundits say that the FED Capitulated to the stock market and didn’t raise rates…

I will say this….

Look at the charts of 10 leading world markets. Most are clearly showing recession. Many are in CRASH mode.

The US is sliding into recession.
I live here. You can see it clear as day…

The Fed lowers rates in recessions or crises. It’s not raising because the economy is slowing.

It’s slowing fast too.

You may be in recession but the US is not. Nowhere close. – Garth

#97 I’m stupid on 01.31.19 at 6:27 am

#93 Spaccone

Your story proves nothing. My bank account never has more than 20k in it, living expenses for 2 months. Why would anyone keep a big balance in a checking or savings account?

I’m not saying that the 2 bros with the beemer weren’t broke, chances are they were. I’m just saying you just never know.

I remember the first year I made 100k. I was 23 and felt invincible, I purchased an expensive car. I had no money, just a great income and being 23 and growing up poor I wanted to flaunt it like a fool. That was 2003, then of course 2008-2009 happened and my income from my business dried up. I had zero saved, spent it all on memories and junk.

At 30 all I had was 10k but learnt a big life lesson, nothing beats liquid wealth. Income isn’t reliable, recession, job loss, injury, disease etc can quickly reduce your income. While the money you accumulated is yours, sure it can be reduced (25% during gfc for a balanced portfolio) but for the most part it’s there if you need it.

Now I’m 39 with a net worth of nearly 2 million, all liquid. I had a good run business wise, but more importantly I held on to the money I made. No more high priced cars or expensive watches or luxury brand clothing. I realize that those things didn’t increase my happiness, they only serve as status symbols to make you feel like your superior to others.

I’m much happier now than I ever was. I think I’ve found the right balance for me in life.

Find your balance, find your happiness!

#98 Tater on 01.31.19 at 7:56 am

#31 Cbo on 01.30.19 at 6:59 pm
Was speaking with a pal on the weekend who is Master Electrician. He explained to me that his peers have mortgage brokers offering them second mortgage “opportunities” at 9% return. This cohort is cash heavy, (side jobs), lending to others who are cash flush and therefore not lendable from the banks perspective. These brokers are facilitating big volumes and creating the market place.
It’s not just a market place for the unlendables. Those with low T4’s (on purpose) and are drowning in dollars shop here for mortgages.

—————————————————————
Oh boo hoo. Poor tax evaders can’t get a mortgage! I’m quite happy if they have to pay 9%+

#99 David Driven on 01.31.19 at 8:10 am

https://www.cnbc.com/2019/01/31/world-gold-council-central-banks-buy-most-gold-since-1967-.html

Got gold? The smart money is way ahead of you. Of course the God of Idiots aka PM Trudeau has cleaned out all remaining gold assets out of Canada and left us with a baseless currency only floating on fumes of an energy industry he’s trying to kill? Will POT become attractive to foreign buyers of currency? Likely the Loon is headed for sub 50 cents.

Of course not, as much as you bullion-lickers would love to be bailed out. – Garth

#100 jess on 01.31.19 at 8:16 am

short termism

“There’s a difference between weather and climate
Weather is what happens today. Climate is what happens over the long run.
Here’s how NASA explains it: Weather is the condition in the atmosphere are over a short period of time. Climate is how the atmosphere behaves over relatively long periods of time.”

=======
Switzerland tax evasion amnesty brings in $44.5bn (28 Jan 2019)
“Switzerland is the only country that declined an invitation from the German police to sift through the leaked Panama Papers that detail the activities of global banks and financial intermediaries on behalf of wealthy clients”
=========
tax leakage
https://nowthisnews.com/videos/politics/billionaires-called-out-for-tax-evasion-by-historian-rutger-bregman?utm_content=Billionaires+Called+Out+for+Tax+Evasion+by+Historian+Rutger+Bregman&utm_source=twitter&utm_medium=social-media

ken goldman speaks against taxes
job quality/guantity
wearing diapers to eliminate bathroom breaks is efficient
===========

Bloomberg News indicating that the Federal Reserve “is examining how Deutsche Bank AG handled billions of dollars in suspicious transactions from Denmark’s leading lender [Danske Bank], according to people familiar with the matter, further intensifying what could be one of the biggest money-laundering scandals ever.”

– criminal money laundering is the job of the Justice Department which can impose criminal charges while the Fed can only impose fines.
==========================
“The Fed’s New York regional bank, which plays an outsized role in the Federal Reserve system
the Fed funneled $16.1 trillion of almost zero interest loans to the global banks from 2007 through the middle of 2010 and then fought in court for years to try to keep these loans a secret from the American people.(background – wall street on parade)

#101 crowdedelevatorfartz on 01.31.19 at 8:21 am

@#134 Flop
Re; Burnaby sale
‘Absolute carnage.
Definitely the worst one I recall in Burnaby.
Close to 30% hit after expenses or roughly 850k”

++++

Wow!
I dont think we’ve seen anything yet. I commute home through Burnaby and I’ve seen the same brand new 4Plex “For Sale” for months…. The Realtor sign has changed but it aint movin…….
The guys building houses on spec must be crapping their pants.
Not a lot of fires yet though…..

#102 not 1st on 01.31.19 at 8:22 am

Never in a million yrs would I take any sort of long term financing at 8+%. That is a trip to bankruptcy.

On the other hand, never would I trust my money to create an investment in a potentially high default business. Why would you do that when you can buy REITs yielding in the same range. Its messy foreclosing on people. You could get stuck big time in the mess of defaults and court proceedings.

Only two types of investments, ones I can control and ones I can exit with the click of a mouse. Looks like boomers are just as reckless as millennials.

#103 Remembrancer on 01.31.19 at 8:31 am

#78 For those about to flop… on 01.30.19 at 11:11 pm

Thanks for the laugh last night Flop. A semi-water front? Is that really a thing out there?

So, a $1.3M winterized cottage on a 33′ lot with a parking pad across the road from a popular public park that’s on the water with a grove of serious looking trees in said park completely blocking the view – its hard to tell the elevation, is that a gently sloping walk to the water from the park or a rappel? Oh, did it come with the beer taps?

#104 Godth on 01.31.19 at 8:42 am

#61 MF
The Chunky Mark Tory Magic Money Tree – Get Shut Down
https://www.youtube.com/watch?v=nHHDWmXUCck&t=2s
We Have to Choose Between Billionaires or Democracy
https://www.youtube.com/watch?v=tSwmSe_PWjY
Professor Mark Blyth on Bernie & Scandinavian Welfare
https://www.youtube.com/watch?v=Vnr7GN5T_tg

#105 crowdedelevatorfartz on 01.31.19 at 8:44 am

@#146 IHCTD9
“The idea that we’re all toast just like that ignores our individual and collective abilities.
Sound reasonable?”
++++

Scientists theorise that during the last major global climate catastrophe the entire world population may have dwindled to as low as 3000 to 8000 people mostly clustered in central Africa where the ice and cold hadn’t taken hold.
And they were “hunter gatherers”.
Our western “civilization” would starve if the electric can opener fails…….
I cant imagine people without gas, electricity, food, clean water, heat, A/C, texting( the horror)…… for a week, a month, a year?
People get real nasty, real fast when they havent eaten in 3 days.
I talked to an Iraqi Yasidi refugee yesterday. Isis hunted them down because they weren’t Muslim.
Killed the men and boys, took the women.
He escaped with less than 1 hour ahead of the carnage with his family.
Now?
Driving a delivery truck. He’s very glad to be here. He didnt care about how expensive things are.
He didnt care about his low paying job.
Just… happy… to… be… here.
His kids are in school, his English is excellent, his wife is reading and writing English, he’s working….
“I’m a Canadian 1st!”
“When you come from a place with no rules and people do what ever they want to survive……. I like a place with rules.”

#106 Steven Rowlandson on 01.31.19 at 8:44 am

Making it easier to contract gigantic unpayable debts is not the answer. Extreme discounting the purchase price is. Real estate is a place to live it should never
be an investment.

#107 waiting on the westcoast on 01.31.19 at 8:49 am

44 NothingBurger on 01.30.19 at 7:58 pm says… “Common sense will lead you to the same conclusion. If someone doesn’t have the income and down payment combination to qualify for the 2.5 – 4% mortgage from CIBC, how are they going to have the income to cover a 8.5 – 15% mortgage from an alt lender? Alt news. Fake news. Complete nonsense.*

I have a friend who is a mortgage broker and secures private deals as well. Most of the deals he does are for people who have inflated amounts for down payments (so lowers equity risk) but cannot qualify under the rules for remaining mortgage due to B20, back cautiousness, etc. Many of these are issues at renewal or due to not being able to close and will lose deposit. I agree that a number would be speculators but I also think many investors would not take on these risks and either look to other markets where more potential exists or only do a deal if lower financing costs could be secured.

#108 crowdedelevatorfartz on 01.31.19 at 8:49 am

@#84 Ponzie Pilot
“Remember the one paragraph rule.”

++++
The one paragraph rule?
Who made you the grammar nazi?

I’m curious , do your lips get tired when you read?

#109 IHCTD9 on 01.31.19 at 8:58 am

#97 I’m stupid on 01.31.19 at 6:27 am

Now I’m 39 with a net worth of nearly 2 million, all liquid. I had a good run business wise, but more importantly I held on to the money I made. No more high priced cars or expensive watches or luxury brand clothing. I realize that those things didn’t increase my happiness, they only serve as status symbols to make you feel like your superior to others.

I’m much happier now than I ever was. I think I’ve found the right balance for me in life.
____

Excellent, and I’m not just talking about the 2 mil.

It’s just like every stoic philosopher who ever lived eventually concluded. Things and money don’t make happiness. That comes from elsewhere. You are lucky to have learned this so young.

Best plan is to achieve both!

#110 James on 01.31.19 at 8:59 am

Trying to help an Old Man here who thinks denial is a strategy is hard and not likely to succeed, but we should never give up when it comes to family in trouble.

https://letstalk.bell.ca/en/

#111 down and out on 01.31.19 at 8:59 am

Wondering how much of the MIC business is driven by people who can,t met their mortgage renewal requirements.

#112 Remembrancer on 01.31.19 at 9:06 am

#97 I’m stupid on 01.31.19 at 6:27 am
#93 Spaccone

Your story proves nothing. My bank account never has more than 20k in it, living expenses for 2 months. Why would anyone keep a big balance in a checking or savings account?
————————————————————–
Back in the early days of eBay one of the items you could buy was ATM receipts with high balances on them – they were sold to guys using them to write their phone #s on the back to impress girls at clubs. These days there’s actual print services doing the same thing as “novelties” on line. Not sure which is sadder, intentionally buying something like that or falling for it as the guy peeled away in his mom’s Dodge Colt… Like, so where is the Chase Manhattan branch in North Bay anyway?

#113 Stan Brooks on 01.31.19 at 9:25 am

#97 I’m stupid on 01.31.19 at 6:27 am

Exactly. The freedom to take 1 month, 6 months, 1 year, 3 years off without having to work in the rat race…. Priceless.

Changes the perspective as well.

But you are missing on that adrenaline rush that 1 million dollar mortgage/with no savings brings to your life.

#114 PastThePeak on 01.31.19 at 9:47 am

You may be in recession but the US is not. Nowhere close. – Garth
++++++++++++++++++++++++++++++++++

The US is not close to a recession – but I am not as confident about Canada.

https://business.financialpost.com/news/economy/energy-slump-drives-canadas-second-gdp-decline-in-three-months

An optimistic forecast of 1.7% growth can easily turn negative. That last forecast was before the China Q4 meltdown, Canada – China rift.

#115 IHCTD9 on 01.31.19 at 9:47 am

#105 crowdedelevatorfartz on 01.31.19 at 8:44 am
@#146 IHCTD9
“The idea that we’re all toast just like that ignores our individual and collective abilities.
Sound reasonable?”
++++

Scientists theorise that during the last major global climate catastrophe the entire world population may have dwindled to as low as 3000 to 8000 people mostly clustered in central Africa where the ice and cold hadn’t taken hold.
And they were “hunter gatherers”.
Our western “civilization” would starve if the electric can opener fails…….
I cant imagine people without gas, electricity, food, clean water, heat, A/C, texting( the horror)…… for a week, a month, a year?
People get real nasty, real fast when they havent eaten in 3 days.
___

Yep. In a major and sudden SHTF crisis the large urban areas would quickly starve to death. It would be a horror show which would include mass murder, cannibalism, and suicide the world over – but not for everyone.

Many folks out there make a hobby of “prepping”. Where this once was preparing due to a real fear of economic collapse, it has now evolved into a common sense approach to preparing for disasters of various types. Reading through this material – you find out some folks already have many of the skills, knowledge, and equipment required to survive a long time just because of their lifestyle, while others are the type you mentioned who would starve to death trying to figure out how to operate a manual can opener.

In the context of climate change which we can observe happening, and moves slow – we would probably adapt through technology to the changing conditions as it happens.

IMHO, the modern human is untested. For me it’s the same as saying “never bet against uncle Sam” when it comes to the Human ability to solve problems and innovate.

#116 Ian on 01.31.19 at 9:48 am

Good post! But this is where I disagree with the wise Garth Turner. (Disclaimer, not an economist with a shred of the knowledge and experience the blogger has!)

I think your prediction that it will be a housing correction and not a “crash” is reasonable, but I think it’s going to be more drastic than that. I will tell you why I predict this future.

– It’s SO damn high, any fall is going to gain momentum. Looking at all the graphs, housing prices go up and down like a roller coaster. Seems like the higher it climbed, the harder it came down. NEVER seen a climb like this in history. Hard to imagine a slow descent in this bizarre scenario

– Financially, the citizens of this great country have made some brutal decisions and continue to spend like drunken sailors. How many are a whisker away from insolvency? How many are using HELOCs to keep up with the Jones? (Who are also deeply in debt.) Now we have these sub-prime lenders who are going to help people REALLY dig themselves into a ditch. How does that end? With a LOT of bankruptcies and disaster.

– When (not if) these people who have spent themselves into oblivion have that moment of clarity (Shopaholics and alcoholics!) they will stop spending. How does THAT effect the economy? Ripple effect like no other.

So for me, not an educated economist, looking at history and reading the points made by my betters (like Mr. Turner) I see a housing fall, financial disaster for individuals, a tough recession, and a much quicker descent when the roller coaster crests the first rise.

If you were to bet on me, or Mr. Turner … I’d bet on him. He has forgotten more than I know about such matters. But these are the reasons I think it’s going to be much harsher than expected. Time will tell.

Keep writing Garth… it is the highlight of my day!

#117 IHCTD9 on 01.31.19 at 10:10 am

#112 Remembrancer on 01.31.19 at 9:06 am
#97 I’m stupid on 01.31.19 at 6:27 am
#93 Spaccone

Your story proves nothing. My bank account never has more than 20k in it, living expenses for 2 months. Why would anyone keep a big balance in a checking or savings account?
————————————————————–
Back in the early days of eBay one of the items you could buy was ATM receipts with high balances on them – they were sold to guys using them to write their phone #s on the back to impress girls at clubs. These days there’s actual print services doing the same thing as “novelties” on line. Not sure which is sadder, intentionally buying something like that or falling for it as the guy peeled away in his mom’s Dodge Colt… Like, so where is the Chase Manhattan branch in North Bay anyway?
_____

So much BS in life would disappear overnight if we all had our liquid net worths beamed directly onto our foreheads by the bank for all to see. Bright red, updated every minute. The music would stop immediately.

All those leased BMW’s and Benz’s would go straight back to the dealership the next day.

#118 Godth on 01.31.19 at 10:12 am

#105 crowdedelevatorfartz
“Today’s rate of change in atmospheric CO₂ is unprecedented in climate archives. It outpaces the carbon release during the most extreme abrupt warming events in the past 66 million years by at least an order of magnitude.

We are therefore unable to rely upon past records to predict if and how our ecosystems will be able to adapt. We know, however, that mass extinctions have occurred in the past and that these extinctions, at least in the case of the PETM, were triggered by much smaller rates of change.”
https://www.iflscience.com/environment/mass-extinctions-and-climate-change-why-speed-rising-greenhouse-gases-matters/

“The academic literature, popular press and blog sites have all traced out the history of the 2°C limit. Its origin stems not from the climate science community, but from a Yale economist, William Nordhaus.”
http://theconversation.com/why-is-climate-changes-2-degrees-celsius-of-warming-limit-so-important-82058
if we use the original 1750 baseline we’re already over 1.5 C. if we shut down all fossil fuel burning the all the particulates it creates would fall back to earth in weeks and we’d lose the aerosol masking effect, aka global dimming, and the temp. would be over 2 C above baseline.
we’re on a bullet train speeding over the edge of a flat earth.

#119 dharma bum on 01.31.19 at 10:16 am

The monumental debt incurred by so many is largely self imposed.
Unfettered desire, greed, jealousy, FOMO, craving, and obsessive attachment to material goods has led the weak minded masses down this primrose path.
Once they realize it’s a trap, it’s usually too late.
Then the finger pointing starts.
Don’t blame the lenders.
It’s always the borrowers’ fault.

If you can’t pay, don’t buy.
Resist the urge to borrow.
Live within your means.
Rid yourself of desires.
End your suffering.
Be free from debt.

#120 not 1st on 01.31.19 at 10:23 am

There is no way modern urban humans could solve problems in a crisis. The evidence of upheaval in modern countries points to anarchy. Look at Venezuela. Do you see a lot of innovation in the face of disaster?

What would happen is the deeply dependent which is 90% of the population would first line up at the govt offices and start protesting. That would go on for a few weeks or months until someone realizes no help is coming from them. Then they will simply turn on the city loot steal murder and destruction ensues.

#121 unbalanced on 01.31.19 at 10:40 am

# 99-I’m Stupid. Dont break your arm by patting your back so hard! Well done

#122 IHCTD9 on 01.31.19 at 11:12 am

#120 not 1st on 01.31.19 at 10:23 am

There is no way modern urban humans could solve problems in a crisis.
___

There may be a few Urbanites who could – but these folks are few. Only those that have been around long enough to have seen Mom and Dad doing practical things like hunting, fishing, cleaning products of same, cooking and preserving. Most of these types do not live in the concrete jungle.

Those worldly types born into the internet age will have it the worst in the event of a sudden overnight shock to the system. No pertinent knowledge, skills, or equipment means they’ll be fighting for survival – and then losing the fight.

I used to think these Prepper folks were freaks (and some were). But now, I see the common sense value in learning a few new skills, and maintaining my old ones.

I plan on getting my PAL and a small game/bird permit and start learning a bit about hunting. I’ll also likely get a 12 gauge, a very good .22, and a .308 of some kind. I may even try some amateur trapping on my own property. I also want to try ice fishing. All this would be fun, and provide a basic knowledge on how to feed myself and family outside of a supermarket.

All the things I am doing to cut my reliance on conventional energy to avoid abusive levels of taxation would also be very handy if trouble comes, allowing me the option of generating electricity and allowing transportation even if the grid and gas stations shut down.

The more I think about this preparedness stuff, the more I feel I should possess at least the basics for knowledge, skills and equipment to help endure through a “who-knows-what” scenario. Even more so because it’s fun doing it.

#123 For those about to flop... on 01.31.19 at 11:13 am

Recent sale report.

The owners of this property bought it a few years ago and demolished the structure and then built at least two structures back in place.

To my knowledge they decided to build a duplex and then squeeze in this detached structure,which at the time with a robust marketplace probably seemed like it was a real money spinner.

I never focused on this one to see if they were gonna make enough money to make it worth their while,instead offering up as a solution as a somewhat afford option, instead of commuting out to the Fraser Valley for someone who wanted turnkey housing on a budget.

Most people know but for those that don’t an Infill house is detached structure on a block of land with sometimes irregular boundaries but you own the land although it is not always the fairly standard rectangular shape.

I offered up the best example I had seen of this in my neighborhood, where a developer bought a heritage house and moved the whole house over to the side of a corner lot and then proceeded to build two more brand new structures.

At first it looked weird,but as time passed and other new houses were built nearby, a few years later you would never know what went on if you moved into the street.

Enough of that b-grade explanation and let’s get back to this affordable option that just sold.

The details…

4650 Baldwin st,Vancouver.

Just sold for 857k

Originally asking 1.59

So I featured these guys in a Race to a million post, maybe even Race to 900k just to point out to young families that these options should be explored before committing to buying a place out in Surrey.

Compromises would have been made on this one but someone bought a one year old detached property in East Vancouver for 857k

It also will have a less vigorous maintaince schedule than a beater and less yard work because you most likely won’t have much of one.

Ever heard of taking the kids to the park?

No strata fees to worry about as well.

Once again, someone could of bought this brand new but, they were made to wait and slash in asking price almost in half.

The fastination is in condos, although cooler, not detached at the moment.

Part of the reason this house sat on the market for so long was because no one thought I can buy that and flip it for a profit 12 months later.

This is what a lot of people wanted.

Someone possibly bought this house to live in for a substantial amount of time and maybe even raise a family.

I have witnessed this in the four other countries I have lived in,but had limited exposure to it in Vancouver.

What a concept…

M44BC

https://www.zolo.ca/vancouver-real-estate/4650-baldwin-street

#124 not 1st on 01.31.19 at 11:17 am

#118 Godth on 01.31.19 at 10:12 am
—-

That’s interesting because apparently both Suzuki and DiCaprio’s homes would be wiped out under sea level rise. Hmmm.

The areas of the world at risk of rising oceans (rising at a glacial pace of few mm a yr) are already at risk from mild tsunami which has a much higher likelihood. Hey maybe we should have built there in the first place. Venice didn’t move when it got flooded.

Arctic ice and Antarctic ice is growing these past years and the nasa dude just pointed out the atmosphere is under a solar minimum so all of this is been balanced out again and the catastrophe people are apparently seeing has been extended out 200 yrs well past the age of fossil fuels which will be replaced by fusion inside of 30-50 yrs.

https://news.nationalgeographic.com/2018/02/ross-ice-shelf-bore-antarctica-freezing/

There is nothing to do.

#125 For those about to flop... on 01.31.19 at 11:17 am

Recent sale report.

After doing thousands of posts, a mixture from 300k condos, to 13 million dollar luxury homes, I know what people prefer to see but to me it’s all just news.

Some results seem more exciting to some people, while other couldn’t give a hoot.

Since I have been doing this, the market has evolved and so has what I report on.

People seem to make a mental marker of the big loses while I try to use my limited brain power to try and remember what is the going rate where.

I can tell you that the cheapest knockdown on Vancouver Eastside that I saw last year went for 775k

We are not even at the end of January and I have a new record on the way down.

The details…

2547 Woodland Dr, Vancouver.

Just sold for 750k

Originally asking 1.05

Assessment 1.06

O.k so also I should remind that a perfectly livable house went in this street last year for around 950k opposite a park.

It’s down near Commercial Dr ,so I probably live a ten minute drive away on a good day, but the last time anything was available for around that number in my neighborhood was probably 2011-2012.

For the average person, especially with kids this is a big deal.

Yeah, I know it’s still expensive but just remember this,less than 36 months ago block of land like this could have fetched 1.3-1.4 million,although maybe you could have gotten something slightly bigger than this block.

It is a mammoth collapse at the bottom, but almost no one is aware of it.

The broad message from the professional memo handlers, is that your house might sit on the market for a little bit longer, and you won’t quite get as much as in 2017-2018.

Last year a house on the Westside went for 1.4 as well.

I don’t know how low things are gonna go, I just know that the majority of people aren’t gonna hear about it.

It’s better to be in the know.

For better and for worse…

M44BC

https://www.zolo.ca/vancouver-real-estate/2547-woodland-drive

#126 Renter's Revenge! on 01.31.19 at 11:18 am

Interesting blog post on stock returns:

https://globalinvestmentstrategy.wordpress.com/2019/01/28/baseball-and-stocks-games-of-failure/#more-1543

Reminds me of a conversation I had with Shawn Allen a couple of months ago, speculating why average investor returns lagged the index:

#16 Shawn Allen on 12.01.18 at 4:33 pm
#45 Renter’s Revenge! on 12.01.18 at 8:30 pm
#51 Shawn Allen on 12.01.18 at 11:09 pm
#52 Shawn Allen on 12.01.18 at 11:18 pm

Quotes of interests from the post linked above:

“Five stocks of the almost 26,000 that existed at some point from 1926 to 2016 account for 10% of the wealth equities created relative to t-bills. It took 1092 stocks or just 4.3% to create all the wealth!”

“Active managers may be perennially underperforming because they are under-diversified. Yes, you may win the lottery by investing with a particularly talented (or lucky) manager who holds a 50 stock portfolio, but don’t count on it. A corollary may be that active managers do have the skill to pick stocks that add value, but don’t have enough skill to pick the small set of big winners.”

#127 IHCTD9 on 01.31.19 at 11:31 am

#118 Godth on 01.31.19 at 10:12 am
___

Who gives a rip – we’re all dead in 11 years anyway.

Right?

No need to trouble your mind with the minutiae of Climate Change.

#128 JonBoy on 01.31.19 at 12:31 pm

Is it immoral to balance the risk of issuing high-risk loans by collecting more money up front (higher fees) and requiring higher interest rates? Nope.

Bad decisions beget bad decisions. If people made bad decisions, they need to learn from them. You can’t learn if people keep making your problems go away. Higher interest, higher fees and (ultimately) losing your home, while painful, will teach a lesson: DON’T BUY WHAT YOU CAN’T AFFORD.

Pain is an unfortunate but often necessary form of learning. We’ve forgotten that in society and all people seem to think about is “We have to help everyone!”

Help people by teaching and letting them decide whether or not to implement what they’ve been taught, not by fixing their lives when they ignore sound principles. If people ignore what they’re taught, the consequences are on them. We aren’t here to bolster every bad decision, driven by FOMO, in the country.

I’m sick of the idea that my income should be taxed higher so that we can bail out people (or “support” people) that have newer cars, more vacations, and all the gadgets that I tend to NOT buy in order to remain fiscally responsible.

I’ve found that many of the “needy” or “at risk” or “nearly broke every month” have more than I do, looking from the outside. Problem is, the tide is going out and it’s suddenly apparent who’s been swimming with no bottoms…

Who’s immoral? In my mind, those that make bad decisions and expect others to pay for them or otherwise treat them as if they offer no more risk or chance of default.

#129 JB on 01.31.19 at 12:46 pm

#87 Smoking Man on 01.31.19 at 12:50 am

#40 James on 01.30.19 at 7:38 pm
Today is an important day, Bell Let’s Talk Day. It is a reminder that there are those suffering with severe mental illness all around us.

I’d like to reach out to you, “Smoking Man”, and extend an olive branch of concern that you seek some assistance. Your suffering and underlying issues are apparent to all and you deserve some help, quite apart from the criticism you get from people here, including me.

https://letstalk.bell.ca/en/bell-lets-talk-day

Please seek help.
……………………..

Ah, James, that’s so sweet of you to think of me on metal case day.

What part of my disclaimer did you miss?

I’m a confused lier, a required superior characteristic for a good fiction writer.

Smoking Man is an invented character, the steerage section of this truly pathetic blog is where I experiment with different themes. You can’t know the herd unless you poke em a bit.

I have an encyclopedia of amazing writing never published. Will be after I buy the farm, Nothing like being not famous and walking into a rub and tug through the front door. Purely for prostate cancer prevention.

I mean you think you know where I work,
close but no cigar. Few buildings down the road. Clue Bill Gross is my buddy and writing mentor, we go way back.

All those clips on periscope where done cold stone sober. I’m a good actor too

The CRA hotline, come on man how many times did you rat me out. They know me.

You became obsessed with hating and trolling a fictional character, you don’t contribute shit on here other than attacking the great Smoking Man.

In reality I could be a chick with small boobs, and acme who hated the world, who has transformed into the Smoking Man trying discredit and make every straight white man look bad.

You just don’t know for sure.

You had many opportunities to meet me, every time I was in Toronto. But you went full on pussy and never showed.

You go ape shit every day on a fictional character.

I formally give up my spot at the front line for metal cases and yield it to you.

You need help a hell of a lot more than me. I’m just playing here, you’re serious.

Dr. Smoking Man
Ph.D. Herdonomics.
……………………………………………………………..
Have to disagree with you buddy, Ive seen some of your Periscope videos you are not acting and by no means are you even close to being an actor. You are very amusing though! Keep up the drinking please as Ive bought shares in Brown-Forman Corp. Need to raise the payback with people like you!

#130 Ubul on 01.31.19 at 12:51 pm

#117 IHCTD9 on 01.31.19 at 10:10 am

All those leased BMW’s and Benz’s would go straight back to the dealership the next day.

Most of those are leased for expense against revenue.
Picking the beemer or benz over paying more tax is just the weakness of human nature. Or not. Depends on your philosophy.

#131 jess on 01.31.19 at 12:52 pm

tractor :

“the context of climate change which we can observe happening, and moves slow – we would probably adapt through technology to the changing conditions as it happens. ”
==========
Consider the latest insurance costs /cleanup/future flooding etc
https://www.ncdc.noaa.gov/billions/mapping
=====================
The report, “Counting the Cost: A Year of Climate Breakdown,” looked into events including catastrophic flooding in Kerala, India to devastating wildfires in California, extreme weather events exacerbated by a warming climate. Christian Aid, which works to eradicate global poverty, identifies the top 10 climate-related disasters of 2018 costing more than a billion dollars each. Hurricanes Florence and Michael and the California wildfires in November topped the list, marking yet another expensive year of extreme weather for the United States.

“The year has once again featured extremes of weather made worse by human-induced climate change, with major consequences, costs, and human suffering,” said Dr. Kevin Trenberth, senior scientist at the National Center for Atmospheric Research.

The devastation of 2018 comes on the heels of 2017, which was the costliest year yet in the U.S. with more than $300 billion in damages from climate-related disasters. In 2018, at least a dozen extreme weather events cost at least a billion dollars each, according to the National Oceanic and Atmospheric Administration.

https://www.ncdc.noaa.gov/billions/mapping

#132 Barb on 01.31.19 at 1:02 pm

“My bank account never has more than 20k in it, living expenses for 2 months.”

—————————————————-

Holy Toodles! 10k/mo???

I don’t spend a tenth of that.
We don’t owe a penny on anything.
Ever.
And we eat like royalty.

The only interest we see is in each other.

#133 jess on 01.31.19 at 1:05 pm

make is so! more transparency of those accounts and less shell games….

“We’ve put forward a proposition that where there are frozen assets they should be unfrozen through a proper legal process and reallocated to help the victims of the crime and corruption and instability that the bad guys create,” said Axworthy. “It’s a morality play. The bad guys have to pay to help their victims.”

The World Bank estimates the pool of cash to be worth $10 billion to $20 billion per year, Axworthy said in an interview.xworthy

Use money languishing in frozen accounts of dictators and despots to …
https://nationalpost.com › News › Canada
Nov 10, 2018 – “We’ve put forward a proposition that where there are frozen assets they should … and corruption and instability that the bad guys create,” said Axworthy. “It’s a morality play. The bad guys have to pay to help their victims.” … the host countries that are reeling under this growing refugee and migration crisis.”.

#134 Godth on 01.31.19 at 1:05 pm

#127 IHCTD9
Guy Mcpherson stopped updating his requiem essay in 2006. since then the news has become dramatically worse and he’s revised his prognosis down to just a couple yrs., which is what the UN secretary general said too immediately following the last IPCC report(government interrupted science – particularly the USA and Saudi Arabia).
I don’t have kids or grandkids so i won’t have much explaining to do….i’ve done my thing and made my peace.
so lots of violence and then a profound silence—–forever, from the story telling ape.
the only good thing about the narcissistic man-boy called trump is that he’s ripped the mask off the ugly face.
US coup in Venezuela motivated by oil and corporate interests – Neocon John Bolton spills the beans
https://www.youtube.com/watch?v=O_yHo9efvO8

#135 Deplorable Dude on 01.31.19 at 1:06 pm

#124 Not1st…”and the catastrophe people are apparently seeing has been extended out 200 yrs well past the age of fossil fuels which will be replaced by fusion inside of 30-50 yrs.”

——————

We’ll let Starfleet deal with it then….:-)

Bluntly I have no trust in a ‘science’ that is not falsifiable, and has been shown to make up, alter, and flat out delete inconvienient historical data, e.g. the 1940’s heatwave.

The US was just as warm between 1912 and 1944 as it is now. Must have been all those SUV’s back then.

Current measurements and models are useless with fake historical data as a baseline.

Oh and btw the Arctic isn’t melting, according to the Danish Meterological Institute. Decade record winter ice volume, and decade record spring ice volume.

https://realclimatescience.com/2019/01/collapse-of-the-polar-melting-scam

Warming alarmist explanations increasingly bizarre…you’d expect more extreme weather if temp differentials grew between the Poles and lower lattitudes. We’re being told the opposite, that extreme weather as the result of temp differentials reducing…..hmmmmm?

#136 Agreed 100% on 01.31.19 at 1:21 pm

#129 JB – I saw those periscope videos too, and the Smoker was loaded like no tomorrow. Never saw a man so drunk in my life making a fool out of himself.

#137 Boots on the ground in Ptown on 01.31.19 at 1:35 pm

5 not 1st on 01.30.19 at 7:58 pm
Humans extinct in 12 yrs? Au contraire there will be 2.5 billion more of us. And then more after that as anti aging tech takes hold.

How would climate change kill us anyway? The world is awash in extra food so people can always get aid from developed countries to eat. The oceans don’t seem to be lapping at my doorstep and I can easily drive around the tornadoes with my F350.

___________________________________
Unsure whether this is sarcasm on or off but it got the best laugh out of me for the day.

I just have to say I agree about too much food and the sheer amounts of it wasted, regardless of the narrative that we’re led to believe. I imagine you’d enjoy Americas favorite farmer Joel Salatin, of Polyface Farms fame. He’s equal to yourself in defying political correct ness norms and- on a more serious note -highly recommend to read some of his books. Basically if we weren’t all a bunch of lazy arses, farming and food production could be done correctly. For anyone thinking he must just be a deplorable think again. A huge reason for why he does what he does is in respect for the Earth.

#138 Godth on 01.31.19 at 1:43 pm

“Guy Mcpherson stopped updating his requiem essay in 2006.”
i meant to say 2016. https://guymcpherson.com/climate-chaos/climate-change-summary-and-update/
in a world of specialization there aren’t too many looking at the whole picture, as it’s understood. the more that’s learned the worse it is.
maybe i’ll start practicing plowing the canadian shield with a horse, or the high arctic and hope my rock garden doesn’t get swallowed by a pingo crater.
whether it’s 2-5-10-20 yrs. is a blink by any measure.
the die is cast regardless. we did it.
“To ravage, to slaughter, to usurp under false titles, they call empire; and where they make a desert, they call it peace.” Tacitus

#139 not 1st on 01.31.19 at 1:56 pm

#131 jess on 01.31.19 at 12:52 pm
—-

Did it ever occur to you there are more insurance claims and more expensive claims because we have more people on the planet, more people with bigger more expensive homes to insure and more stuff. Look a little deeper.

Again best way to deal with climate change and its costs is halt the population. Sounds like NY is doing that already.

#140 Deplorable Dude on 01.31.19 at 1:58 pm

#131 Jess….”Hurricanes Florence and Michael and the California wildfires in November topped the list, marking yet another expensive year of extreme weather for the United States.”

Nope….just normal weather…..

US Hurricane strikes have dropped 25% in the last 150 years.

https://realclimatescience.com/2018/12/attribution-for-hurricanes/

Also….no violent Tornado’s in the US in 2018…..EXTREME WEATHER!

Forest fires acreage burn down 75% since 1937

https://realclimatescience.com/2016/10/forest-fires-down-75-since-1937/

#141 Godth on 01.31.19 at 2:08 pm

#135 Deplorable Dude
there’s a really big contest between your blogger “tony”, fox news, the koch brothers and exxonmobil.
Exxon Knew about Climate Change almost 40 years ago
A new investigation shows the oil company understood the science before it became a public issue and spent millions to promote misinformation
https://www.scientificamerican.com/article/exxon-knew-about-climate-change-almost-40-years-ago/

you need new talking points because all of yours are thoroughly debunked.

“I have a foreboding of an America in my children’s or grandchildren’s time — when the United States is a service and information economy; when nearly all the manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness…

The dumbing down of American is most evident in the slow decay of substantive content in the enormously influential media, the 30 second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance”

― Carl Sagan, The Demon-Haunted World: Science as a Candle in the Dark

#142 Entrepreneur on 01.31.19 at 2:14 pm

Can only help people for so long then turn a cold shoulder to the over-extended debt lords. That old Winnipeg saying comes to mind “Catch me once…”

And yes most people don’t know how to hunt, fish and grow their own food to survive on, confusion on the way. First comes that need for survival then comes the need to live, close to death feeling, reality.

I wonder how the world/earth would be like without the big-push for automobiles which basically make up communities and cities?

Would our communities be more self-sufficient in that we can live harmoniously with nature (most of us are at the bottom of Maslow pyramid), the soul purpose for surviving. We really don’t need credit cards, money.

And maybe even make products in Canada to use. (I remember in the 60’s and 70’s how we were so proud of the quality of Canadian Made products, even competitiveness.)

#143 Godth on 01.31.19 at 2:40 pm

#139 not 1st
there are 146 of them for you to watch, i think the guy has given up making any more…because it’s pointless (look in mirror).
https://www.youtube.com/channel/UCo-r5Q-5TWB43oLI8eZ6euA/videos
apparently people all over the world built towns and cities in places where the streets become rivers. they farmed land knowing it would scorch in drought, they built greenhouses knowing there would be no spring, directly from winter to summer temps., and their crops would fail.
it’s not like the basic physics haven’t been understood for 200 hundred yrs. and we haven’t had 4 or 5 decades of warnings from scientists.
enjoy driving your f-350 to get a slurpee – vroom, vroom. i only hope you have a cup on those big steel balls hanging off your tailgate.

#144 PastThePeak on 01.31.19 at 3:16 pm

#131 Jess….”Hurricanes Florence and Michael and the California wildfires in November topped the list, marking yet another expensive year of extreme weather for the United States.”
+++++++++++++++++++++++++++++++++++

Just yesterday the alarmists were saying that “cold weather” is just weather – that it in no way invalidates global warming theory. Of course it is cold in winter, blah, blah, blah.

But you, every alarmist and everyone in the media will broadcast to the world that every hot day is example of Climate Change hell on earth & worse to come, and every storm/fire/earthquake is observed proof that we are living with catastrophic climate change right now.

I know you probably do not have the ability for introspection to understand this, but “you can’t have it both ways”…

#145 SimplyPut7 on 01.31.19 at 3:18 pm

A question: should people in financial distress be given mortgages at crazy costs? Would it be better for them to lose their real estate, and escape this incredibly expensive debt? Is it ethical for retired, old people to suck off 8% returns from MICs on funds provided at usurious rates to desperate families? Just asking.

——————-

If the government improved financial literacy around MICs and required real estate brokers, mortgage brokers and syndicated mortgage/private lending industries to become more transparent about the risks and returns in their industries like equity markets and financial advisors are required to do (e.g. easy free searches of stock, mutual funds, ETF returns, data going back that last 10 years; management fee ratios and trading costs/brokerage fees, audited financial statements as well as risk, technical and fundamental ratios etc). Then I would say leave the industries alone and let Darwin’s natural selection take care of the market.

If some retiree really thinks they are winning by getting a return of 8% for giving money to people not even credit card companies would touch, and don’t see how they will eventually be burned for this and lose the invested principal when the sub-prime borrower defaults on the loan. They deserve to lose their retirement fund and sell their house to pay for their losses. And only prudent lenders will be left to survive in the market.

Regulators need to let people be responsible for their own dumb actions by giving them all the information they need to make an informed decision.

For example, private lenders should be forced to verify income with income reported to CRA. If the retirees want to charge ridiculous rates with the full understanding this person will never pay back the principal, no one can complain when the person defaults on the loan.

https://twitter.com/ExtraGuac4Me/status/1090623127355383809

#146 jess on 01.31.19 at 3:21 pm

tony heller

deplorable dude not 1st hum …
normal weather sure is EXPENSIVE ! and that article was from 2016 aka who? (tony heller )is doing the talkin?

His degrees are in electrical engineering and geology. Heller is not a part of any organization, but he sometimes participates in work groups held by Myron Ebell, who leads efforts at the Liberatian think tank Competitive Enterprise Institute to deny the findings of climate scientists. Ebell also led Trump’s transition team at the EPA for a couple of months.”

http://www.seattleweekly.com/news/climate-change-denier-testifies-for-40-minutes-in-washington-senate-environment-committee/
==========

Xi

Xi’s article on building ecological civilization to be published
BEIJING, Jan. 31 (Xinhua) — An article by President Xi Jinping on building an ecological civilization will be carried in the third issue of Qiushi Journal this year, to be published Friday…Xi orders concrete efforts to control pollution, promote green development, contain environmental risks and improve governance on environment issues….He stresses the need to enhance the Party’s leadership to win the battle of pollution prevention and control, and asks governments at all levels to thoroughly carry out the decisions and policies of the CPC Central Committee. ”
=====
payment system INSTEX

Europe launches trade vehicle to bypass US sanctions against Iran and salvage nuclear deal

Washington has warned the EU against trying to sidestep its sanctions on Tehran
Iran praises the move as a promising first step

#147 JB on 01.31.19 at 3:24 pm

#136 Agreed 100% on 01.31.19 at 1:21 pm

#129 JB – I saw those periscope videos too, and the Smoker was loaded like no tomorrow. Never saw a man so drunk in my life making a fool out of himself.
………………………………………………………………..
Which one when he tries to pick up woman or when his wife starts to dump all over him and cry about going home to Canada?

#148 jess on 01.31.19 at 3:25 pm

The UN atomic agency has certified Iran’s compliance with its obligations 13 times and even the head of the CIA said this week that Tehran was abiding by the accord – drawing a furious response from Trump

========

#149 LivinLarge on 01.31.19 at 4:29 pm

“Also….no violent Tornado’s in the US in 2018…..EXTREME WEATHER!

Forest fires acreage burn down 75% since 1937″…really? So, all of those storm chasers on the History Channel or Weather Channel were faking it???

Any chance that any reduction in acreage lost to forrest fires might be do to improved fire fighting capabilities like fire bombing aircraft??

#150 Smartalox on 01.31.19 at 4:42 pm

@Flopper #125:

A quick trip to Google maps shows that property at 2547 Woodland Dr. was in a pretty sorry state in July 2018. Maybe a failed demo/rebuild project, an un-started demo project, or even just an empty lot?

Still, it’ll be interesting to see if there is a dent in the median sale price when the REBGV sales stats get released next week.

Price declines like this, and like some of the others that you’ve posted recently are going to be magnified by the small sales volumes.

Keep up the good work.
“Nolite te bastardes te carborundum”

#151 acdel on 01.31.19 at 6:15 pm

#65 Remembrancer

Thanks, those were my thoughts as well..

#152 Hamsterwheelie on 02.01.19 at 4:36 am

#5 NotLegalAdvice is exactly right – we did this to finance the final construction on a total rebuild because banks wouldn’t touch us.
Upon completion we rolled that loan onto a 2 year mortgage with a B-lender.
Regular banks refused to include the income from the 3 rental units (approx $6000 per mo.) as that was projected income only – if we had ‘regular jobs’ that would also seem like projected income to me LOL.
So now we live in one unit of a fully rebuilt, high efficiency home with new everythings and a mortgage of $260 000 w income of $6000 per mo from happy tenants. Am i doing this house thing right yet?

#153 AftrCommunism on 02.01.19 at 7:23 am

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