The CPI

ADVISORY: This is the third in a questionable three-part series on the CPI, or Canada’s Poochedness Index©. It is not advisable for people with medical, debt, spousal or emotional issues to read past this point. Okay, you already went past it. Lasciate ogne speranza, voi ch’intrate. Seriously.

Recently the yield curve inverted. So what? So the bond market is betting the economy will be a lot slower in the future leading to interest rate cuts. Thus, long-term bond yields have fallen. Actually, they’ve plunged. You can make more money with a bank high-interest savings account than buying a 10-year government bond. That’s weird.

When this happens it often means a recession lurks over the horizon. Maybe a year away. Possibly longer. Perhaps not. But a slowdown isn’t unexpected after a decade of recovery since the last financial crisis. Houses, stocks, REITs and many other assets have pranced higher in value. This blog has chronicled that in 3,400 posts, which attracted 610,000 comments.

A recession doesn’t mean everything goes down but it brings negative economic growth, job loss and misery for people who are unprepared. The most pooched are those in debt. Lean times mean many asset values fall but the debt remains constant. Net worth takes a hit and especially with residential real estate – where most people use extreme leverage – the consequences can be painful.

Now, recessions usually happen across economic areas where activity is shared and the next one’s quite likely to touch both Canada and the States. Timing? The months following the 2020 US presidential election are a fair bet. Once reality sinks in.

Here are a few reasons (cobbled from past blogs, Bloomberg, StatsCan, the Fed and fresh data) why the downturn could hit the Land of Moose and Beavers (and Raptors) hard. This is also why de-risking your all-stock portfolio and dumping your rental condos might be good ideas. Oh, and be really nice to your boss.

We’re sitting atop a Himalaya of debt. Canadian households have racked up $2.3 trillion in borrowings, two-thirds of which is for mortgages alone. That’s more money than the value of the entire economy. Compare us to US families who owe $13.3 trillion – but there are ten times more of them. Yes, we’re the most indebted people on the planet, and you can blame residential real estate (and our house lust) for that. When the economy turns, we will therefore be more impacted.

With so much debt on the family balance sheet, debt servicing costs are high and savings are low. We’ve lost the capacity to weather a storm, living paycheque-to-paycheque. When a job goes how can you live on savings when you have none?

These days the savings rate has collapsed to just 1.1% of incomes. That compares with the long-term average of 7% in Canada. And it’s a fraction of the 6.7% savings rate in the US. The gulf between the Canadian and American rates has not been this wide for at least 40 years. In fact, Canada’s savings rate has never been this low for this long. It’s as if we have borrowed against the future to consume today. Which is exactly the case. So what if tomorrow is worse?

Incomes have barely kept pace with anemic inflation, while house prices have roared. Therefore families have borrowed more, and the debt-to-income ratio has climbed off the charts. At 178.5% it has never been higher, and this compares badly to the US, where the ratio is 133%. Meanwhile our economy grew over the last two quarters at 0.3% while the States clocked in at 3%. Our capacity to absorb an economic reversal is, yes, pooched.

The third number to reflect on is the amount of income needed to pay debts. These days it’s 15%, the highest since records have been kept. That’s almost double the American rate of 8%. We also know four in ten Canadians are one missed paycheque away from a personal emergency and half of us have less than $200 in disposable income at the end of each month.

Finally, what money we manage to scrape together, we put in the wrong places. Eighty per cent of TFSAs, for example, are invested in low-yielding GICs and high-interest savings accounts. Meanwhile the asset of choice for the majority of American retirement plans – like the 401k – is equities.

A preponderance of Canadian net worth sits in one asset – residential real estate, which also represents the lion’s share of debt. Despite recent weakness in markets like Vancouver, house prices remain near all-time highs. Most families have almost no diversification or balance in their financial lives, pursuing a one-asset strategy, increasing their risk. A recession bringing fewer jobs, lower incomes and a weaker housing market is an ill wind, indeed.

The good news? It’s not here yet. Don’t wait.

124 comments ↓

#1 NotLegalAdvice on 06.10.19 at 4:57 pm

FIRST!!!!

RAPTORS FIRST WIN GAME 5 TONIGHT!

#2 Cottingham a bargain on 06.10.19 at 5:11 pm

In an environment painted and n the blog post, multi unit triple a and quad plexus, bought at reasonable prices ( think Hamilton) are an absolute layup for setting up your financial future.

Yes , definitely some work renovating, retro fitting and managing but a cash flow machine right from the get go.

#3 Scott Fraser on 06.10.19 at 5:14 pm

Justin Trudeau plans to increase the number of student visas to 1.5 million annually by 2020, and allowing them to buy Canadian properties.

Meanwhile, graduates of several Toronto-area colleges are only finding work for free jobs.

One career services department advisor actually waited to almost the end of the meeting to tell applicants that the work they will be doing is work for free for the college’s clients.

Imagine that the only jobs that your college Career Services department could find for you is work for free.

That made no sense. – Garth

#4 Brett on 06.10.19 at 5:18 pm

If bond yields are in the toilet, what’s the best way to de-risk an equity-heavy portfolio? I have a cheap house in Edmonton and break out when I touch gold. I love the yields on my S&P500 index, but the Europe/Asia one I buy (XEF) to diversify has been flat for years and I’m not convinced that the EU is poised to grow with Brexit looming. Any ideas?

#5 The Wet One on 06.10.19 at 5:19 pm

Fact is, most people don’t have a clue about managing their money.

I don’t know if this was always the case, but it certainly has been ever since I started paying attention.

So it goes.

We’ll muddle through and some of us will eat cat foot.

That’s just life.

#6 Leo Trollstoy on 06.10.19 at 5:20 pm

That made no sense. – Garth

He’s having a stroke

#7 David on 06.10.19 at 5:22 pm

And the mortgage brokers can’t help themselves from complaining about these terrible stress tests. Hey Garth, if government hadn’t acted the way it acted and followed the lead of our brokers, would the risks and situation be better or worse? Exactly.

#8 Dave on 06.10.19 at 5:25 pm

Canadians have been drowning in debt for so long…why care now?

#9 rentals on 06.10.19 at 5:30 pm

rental income. Recession proofed myself 15 yrs ago

:)

#10 Dave on 06.10.19 at 5:33 pm

So economy is slowing down, China is beating us up, USA puts us in place as needed, real estate is slow and most likely a recession is ahead.

Isnt this a recipe for almost an upcoming depression? Next Federal govt – what levers can they pull?

#11 BlogDog123 on 06.10.19 at 5:34 pm

So in 5 years is this a buying opportunity for real estate, as a recession in the next few years pushes some folks to insolvency…

A delayed effect however, as people burn their furniture first before selling the house…

#12 FreeBird on 06.10.19 at 5:37 pm

Lasciate ogni speranza, voi ch’entrate
: abandon all hope, ye who enter

Same as saying buyer beware…and it’s a free blog. Thx to a CFO I met 30+ years ago at an office job who passed on the Keep it simple stupid/KISS lesson. Veering from it always got me in trouble. I’ve passed it on many times. We talked a single friend whose finally retiring to take funds from the sale of the house, company RRSP, savings etc and invest then rent. They found a great condo in Windsor on the water by family to rent. Kids are very secure money wise so they’re good. We’re trying to get them away from the TNLB but they really want someone they can trust and talk to. They have read this blog but it took us pushing. Heads up.

#13 AGuyInVancouver on 06.10.19 at 5:37 pm

Memo to Stephen Harper: “escaping” the 2008 Financial Crisis by inflating house prices wasn’t a good idea after all.

#14 Borden Renter on 06.10.19 at 5:39 pm

Since March I have been taking my profits in equities and have slowly been transferring over to the “safe” stuff in my TFSA, from bond ETF’s to dividend ETF’s, GLD, some consumer staples, and cold hard cash. I still have some exposure, mind you, just reduced from about 70% to 20%.

I’m assuming we’ll see your thoughts on the ideal balance in the coming days?

#15 Caledon dave on 06.10.19 at 6:04 pm

I don’t know how I found your blog Garth, but I am glad I did. You should move back to Caledon….it really is quite nice

#16 Rick Stephens on 06.10.19 at 6:10 pm

Those knocking GIC’s sure wish they had a good amount now when the recession hits. We saved in just 16 years $400,560 in RRSPs, $297,400 in TFSAs, $355,215 in non-registered money. They are all in GIC’s. This is our family of four, mom, dad, 2 adult children married.

Having all your money in your house with high debt levels is a trap Canadians did not figure out. Cheap money does not exist because they paid 2 to 3 times what their properties are really worth. They prepaid the interest in advance and they have no idea they paid really 6% to 9% rates in reality.

They got tricked with lower of interest rates to not save and look at you guys now, Canada.

#17 At least on 06.10.19 at 6:13 pm

I can still buy a real pint of draught out here on the left coast for a cool $4.00 CDN. Along with Turdeau’s legal pot that will keep us going out here. Not all is lost … yet.

#18 Yukon Elvis on 06.10.19 at 6:14 pm

A recession bringing fewer jobs, lower incomes and a weaker housing market is an ill wind, indeed.
…………………..

They would not tell us if there was a recessionary ill wind. They would lie about it and tell us that the ill wind is just one guy farting in the elevator. Like the 2% inflation numbers.

#19 Damifino on 06.10.19 at 6:20 pm

Trudeau is now grasping at straws. (Sorry, couldn’t resist)

#20 Scott Fraser on 06.10.19 at 6:24 pm

That made no sense. – Garth

Does anything that Carbon Tax Man do make any sense?

Garth, your grandchildren will be working for free in Toronto. The economy is unevenly distributed towards the Wynne Liberals and her cronies, while the rest of us have to settle for crumbs.

I’m voting for Rob Ford as PM of Canada. He will do a way better job than Trudeau.

#21 Debtslavecreator on 06.10.19 at 6:26 pm

Our current economic and financial situation is a PERFECT setup for a devastating era of hard left governments coming our way between 2023-2033
Could not have been a better setup

#22 MF on 06.10.19 at 6:38 pm

#13 AGuyInVancouver on 06.10.19 at 5:37 pm

Yes it was. Kept us afloat when the entire world was on the brink of disaster.

The error was keeping rates too low for too long, which was (and is) stupid policy implemented by the Bank of Canada.

Harper was great.

MF

#23 Strawman on 06.10.19 at 6:52 pm

Yikes!… how can you lose Andy!

https://twitter.com/Canadabuster/status/1138083509048881152/video/1

#24 Steven Rowlandson on 06.10.19 at 7:01 pm

Canadians will get their reality check especially when it comes to real estate. They won’t like it either.
As I said before there is no income support for the real estate market… Those who do the work are blamed for inflation and generally don’t get much in the way of raises if they get any at all and minimum wage seems to be the iron ceiling for wages for a long time and the hours tend to be variable. Can you say no six figure income? I thought you could. Incomes are 50 to 60 years out of date relative to home prices. So how are you going to get workers who make 4 to 25 thousand dollars a year buy or rent a place to live? There are 2 ways. No how and no way and that is why Canadian real estate is going to crash and burn with massive losses. Too many people were priced out of Canada.. Smooth move boys and girls. The insurance industry better protect themselves because desparate real estate investors cum home owners will be having house warming parties and the fire departments will be invited to put out some rather strange and unexpected fires. In truth property owners will be trying to profit via fire insurance pay outs. A last desparate move to be sure but given the sense of entitlement some people have to tax free profits no matter the cost I think such tactics are unavoidable. There are hard lessons to be learned in the near future.

#25 Reximus on 06.10.19 at 7:03 pm

a lot of inheritance coming in Canada…like a trillion some say

#26 oh bouy on 06.10.19 at 7:03 pm

#20 Scott Fraser on 06.10.19 at 6:24 pm
That made no sense. – Garth

I’m voting for Rob Ford as PM of Canada. He will do a way better job than Trudeau.
________________________

lol, rob ford our posthumous minister of Canada.

#27 AK on 06.10.19 at 7:04 pm

China up to their typical tricks. Amazing how many guests on BNN continue to defend them.

Vietnam says that China is mislabeling products as Vietnamese to avoid U.S. tariffs

#28 AK on 06.10.19 at 7:07 pm

For some reason the link didn’t work in my previous post.

https://www.usatoday.com/story/news/world/2019/06/10/vietnam-alleges-china-faking-made-vietnam-skirt-us-tariffs/1408023001/

#29 Flop... on 06.10.19 at 7:09 pm

I thank RBC yesterday for making The Canadian Open a better event and they turn around and expect me to blow more smoke up their backside…

M44BC

“Mapping Out Each Country’s Largest Public Company.

Recent IPOs filed by Silicon Valley firms like Uber, Lyft, and Beyond Meat have garnered significant media attention in recent weeks. While the American news cycle has covered a lot about these newcomers to the stock exchange, they are only a small snapshot of the global network of public companies. Our newest visualization maps out the largest public company in each country, based on the most recent data from the Forbes Global 2000 list.

In the full Forbes list of the World’s Largest Public Companies, 9 of the top 10 companies are located in either the U.S. or China.

Overall, banks, tech, automobiles, telecommunications, and energy are the industries with the largest public companies around the world.
According to Forbes, the Global 2000 have more than $40 trillion in annual revenue and more than $186 trillion in global assets.

The Forbes Global 2000 list draws upon data from FactSet Research systems, Bloomberg, and company financial statements to analyze the sales, profits, assets and market value of public companies around the world. These four factors are combined to calculate a composite score, which Forbes uses to rank the value of public companies. Our visualization above highlights the largest public company in each country by showing the company logo on the country. The darker shades of blue also indicate the public companies with the highest profits. Below, we have divided the visualization into regions and also highlighted the market value of each country’s largest public company. All monetary values are expressed in U.S. dollars. Here’s a closer look at how the biggest public companies vary by region.

Top 3 Countries’ Largest Public Companies by Market Value in the Americas

1. U.S. – JPMorgan Chase ($368.5 billion market value)
2. Canada – Royal Bank of Canada ($114.9 billion market value)
3. Brazil – Petrobras ($91.2 billion market value)

Among all countries in the world, the U.S. has the largest public company by market value Overall, the largest public companies in North American countries have higher profits and market values than the largest public companies in the Caribbean or South America.

Top 3 Countries’ Largest Public Companies by Market Value in Europe

1. Switzerland – Nestle ($281.3 billion market value)
2. The Netherlands – Shell ($264.9 billion market value)
3. Belgium – Anheuser-Busch InBev ($175.7 billion market value)

The largest public companies in Western Europe have higher profits and market values than the largest public companies in Eastern Europe. Notably, the National Bank of Greece, which is the smallest of the large public companies in Europe, has negative profits.

Top 3 Countries’ Largest Public Companies by Market Value in Asia

1. China – ICBC – ($305.1 billion market value)
2. Hong Kong – China Mobile ($197.6 market value)
3. Japan – Toyota Motor ($176.6 market value)

The most profitable and highest value Asian public companies are located in northeast Asia. The majority of the largest public companies in Asia are in the banking industry, but oil & gas and telecommunications also have a significant presence. Since only public companies are included on the Forbes list, the world’s most profitable company (Saudi Arabia’s state-owned oil company Aramco) is not shown on this visualization.

Top 3 Countries’ Largest Public Companies by Market Value in Africa and Australia

1. Australia – Commonwealth Bank ($92.8 billion market value)
2. South Africa – Standard Bank Group ($22.9 billion market value)
3. Kenya – Safaricom ($11 billion market value)

Africa has very few public companies on the Global 2000. The largest public companies in Africa and Asia also have profits under $10 billion.

Although most of the companies on the Forbes Global 2000 have been established for many years, there are constant newcomers filing IPOs and bursting onto the international stage. For example, in 2018 alone, 190 companies in the U.S. went public. How do you think these new IPOs will change the world’s largest public companies in the future?”

https://howmuch.net/articles/the-worlds-largest-public-companies-by-country-2019

#30 Dolce Vita on 06.10.19 at 7:19 pm

Oh Garth, something more cheery.

Ditch Virgil. Find Beatrice in Canto XXX.

At the end of 2016, this financial accounting of Canadians, all ages:

Total Assets…..$12.028 Trillion
Total Debt……….$1.755 Trillion
————————————-
Net Worth……..$10.273 Trillion

Selected numbers from Assets ($ MM):

Private pension assets………………………………….3,515,237
Employer-sponsored Registered Pension Plans…2,317,796
Principal residence……………………………………….4,334,947
Other real estate………………………………………….1,202,268
Vehicles…………………………………………………………297,955

…and from Debt ($ MM):

Mortgages…………………………………………………..1,416,565
Mortgage on principal residence……………………..1,116,819
Mortgage on other real estate……………………………299,746
Line of credit…………………………………………………..142,194
Vehicle loans…………………………………………………….96,980

Yup, mortgages more than double plus other types of debt on the rise, RE prices going down = reason to worry.

Still, there is still a lot of “fat” in the system before Canadians cease to exist as an economic entity.

Agreed, Household Debt affects Consumer Spending which can crush Consumer Spending and Mr. Market.

#31 mixed messages on 06.10.19 at 7:32 pm

Media says doom one day and rainbows the next

https://www.vancourier.com/real-estate/real-estate-market-primed-for-a-comeback-metro-vancouver-brokerage-1.23850952

The media says no such thing. Dexter Realty does. No moral hazard there, right? – Garth

#32 marcus on 06.10.19 at 7:34 pm

“Hey Canada ……. how is that Globalism working out for you? Heh Heh Heh” – President Trump

#33 Dolce Vita on 06.10.19 at 7:46 pm

The problem as I see it for Canadians, in the here and now, is cash flow.

Most of their net wealth is in pensions and of course homes. Why HELOCs so popular and Reverse Mortgages growing. Add to that historically low savings rates.

It’s hard to say one way or the other if a Black Swan Event brings our economic house down sooner or later. I still think we are in a mild recession.

StatCan reports GDP using Seasonal Adjusting.

If other reports such as the Labour Force Survey or Retail Trade Sales are any indication (i.e., vs. the actual, raw or Unadjusted numbers) with great certainty I can say this:

GDP is understated.

Maybe that is a good thing after all? We’ll find out soon enough, in a couple of months I think.

————————————–

Italian Resident Tip:

Low 30’s here in NE Italia. Looking for Margarita* ingredients online. Mercifully, Google Italia Search took me straight to this on Amazon.it (clearly, they appreciate the emergency):

Jose Cuervo Especial Silver – 70 cl
€11,70

Cointreau Triple Sec 0,70 lt.
€13,99

…and for a Cuba Libra:

Pampero Rum Blanco 700 ml
€8,29
——————–
Total = €33,98 (Amazon Prime, free delivery right to my doorstep).

WHAT a country!

E-A-T
Y-O-U-R
H-E-A-R-T-S
O-U-T
Canada.

*Lime. Pick from trees at your relatives.

#34 Gregor Samsa on 06.10.19 at 7:47 pm

It’s not just personal debt, our governments are debt junkies too. Trudeau blew it by spending at recession levels before a recession on things like abortions in Africa. Every province (except perhaps Quebec) is running a deficit. Even municipal governments, such as Calgary, are pooched.

It seems like rate cuts are back on the table, except Canada has nowhere to go this time, as they barely raised them. So let me be the first to suggest that negative rates are going to be coming to Canada.

#35 meslippery on 06.10.19 at 7:48 pm

We’ll muddle through and some of us will eat cat foot.
#5 The Wet One
—–
You say that but cat food is in many cases way more cash than canned people food.

#36 Josh Hillsdale on 06.10.19 at 7:51 pm

I paid 2% inflation in 2018. I will tell you how. Even as my property taxes are up $200, 7.2%, water bill is up $125, 8.2%, car, home, auto insurance up $275, 7.8%, food bill up $175, 3.9%, car gasoline bill up $127, 6.4%, heating bill up $67, 3.75%, electricity bill up $56, 7.45%.

All these things I had to buy and use but I spent $7,200 less in year 2018 compared to 2017 by not eating out as much,not buying my lunch, not buying my coffee and not buying expensive gadgets, stuff, clothes I did not need. I drove less too because of coming carbon taxes.

They can only fleece you stuff you have to get but use less of it and they will lose more from each individual Canadian.

#37 Dolce Vita on 06.10.19 at 7:57 pm

#32 marcus

Working out just fine thanks.

Read my “in search of Margarita & Cuba Libre ingredients” in Italia Comment above.

Paid for with my Canadian credit card that gives me a 1% discount on the total purchase price.

Not a Globalist here either, but at times, it does have its perks.

#38 Linda on 06.10.19 at 7:59 pm

A good analysis of the current state of indebtedness here. The prudent will take action – pay down debt, set aside funds for emergencies, sell off non-performing assets if they own any & if they have a mortgage possibly selling to get rid of same. Those who prepare will likely sail through any downturn while the unprepared are going under. Some would call it luck. I call it being smart enough to take shelter before the storm.

#39 Felix on 06.10.19 at 8:26 pm

Actually Mr Turner, CPI refers to Cat Primacy Index.

For example, today’s photo would rate a 150 on the CPI.

Which is to say that one cat would have have more than 150% of the IQ of all three creatures in that photo combined.

#40 Dolce Vita on 06.10.19 at 8:41 pm

#38 Linda

True.

But when I read how prudent action is being accomplished from Commenter’s such as #36 Josh Hillsdale, you have to get a shiver down your spine.

He described manifest a drop in Consumer Spending. That’s 60% of the Cdn. economy.

If #36 Josh Hillsdale is representative of what the average Canadian is experiencing and how they are coping, then we are indeed in trouble. Those price increases would wound most household budgets – and he makes no mention of debt payments.

You may well be correct about the coming storm.

This is not the Canada I left for Italia in early 2015 before PM Nutter was elected.

No, it’s not. Sigh.

#41 Ken M. on 06.10.19 at 8:46 pm

#36 Josh Hillsdale on 06.10.19 at 7:51 pm

All these things I had to buy and use but I spent $7,200 less in year 2018 compared to 2017 by not eating out as much,not buying my lunch, not buying my coffee and not buying expensive gadgets, stuff, clothes I did not need. I drove less too because of coming carbon taxes.
—————–
pick bottles too?

#42 not 1st on 06.10.19 at 8:50 pm

People don’t want to hear about all that economic mumbo jumbo. Besides people care mostly about plastic straws and abortion. Having a PM who can formulate a sentence is way down the list of must haves.

#43 akashic record on 06.10.19 at 8:51 pm

#32 marcus on 06.10.19 at 7:34 pm

“Hey Canada ……. how is that Globalism working out for you? Heh Heh Heh” – President Trump

None of the issues covered in the Canada’s Poochedness Index© are related in any shape and form to globalism.

In fact, they exist, due to the improper execution of globalism and related sub-isms.

#44 not 1st on 06.10.19 at 8:57 pm

Why on earth would anyone invest in govt debt? The govt doesn’t make any money. They have to devalue currency or raise taxes to pay you your measly safe yield so you get screwed in the end anyway. If nobody bought their debt then maybe they wouldn’t spend like drunken sailors.

#45 IHCTD9 on 06.10.19 at 8:58 pm

#36 Josh Hillsdale on 06.10.19 at 7:51 pm
I paid 2% inflation in 2018. I will tell you how. Even as my property taxes are up $200, 7.2%, water bill is up $125, 8.2%, car, home, auto insurance up $275, 7.8%, food bill up $175, 3.9%, car gasoline bill up $127, 6.4%, heating bill up $67, 3.75%, electricity bill up $56, 7.45%.

All these things I had to buy and use but I spent $7,200 less in year 2018 compared to 2017 by not eating out as much,not buying my lunch, not buying my coffee and not buying expensive gadgets, stuff, clothes I did not need. I drove less too because of coming carbon taxes.

They can only fleece you stuff you have to get but use less of it and they will lose more from each individual Canadian
————————

ie. a push back, oppa laffer curve style. That’s the point of the arrow, consumer spending. I do this kind of stuff all the time. I’m redoing my own roof, the total cost will be only a little more than just the taxes would be on hiring it out.

Thanks to Trudeau, I already pay almost zero income taxes, my thanks is to carve even more out of consumption taxes. Energy taxes will also meet the IHCTD9 cleaver in the future.

Eventually our leadership will see where the line is when revenue stays the same, or even drops after multiple rounds of tax increases.

#46 Joseph R. on 06.10.19 at 9:04 pm

#32 marcus on 06.10.19 at 7:34 pm
“Hey Canada ……. how is that Globalism working out for you? Heh Heh Heh” – President Trump

————————————————————-

Pretty good. You should ask American farmers how are tariffs working out for them.

#47 joblo on 06.10.19 at 9:12 pm

When can I invest in the
“Paper drink box water bottle” ETF?

Trudeau whatta maroon

#48 Challenge on 06.10.19 at 9:21 pm

DELETED

#49 TRUMP on 06.10.19 at 9:29 pm

When the downturn is upon we will regret my advice…….

Sell your home a buy weed stocks.

Everyone and the mother will want to do nothing but get high when the recession hits.

#50 MaxBerniersShorts on 06.10.19 at 9:41 pm

#31 mixed messages
LOL,I’m surprised they didn’t add “buy now or be priced out forever”!

#51 crowdedelevatorfartz on 06.10.19 at 10:10 pm

A new Vancouver Real Estate blog that the Realtors dont like because they tell the truth…..

http://openhousing.ca/

#52 crowdedelevatorfartz on 06.10.19 at 10:16 pm

@#5 The wet one
“We’ll muddle through and some of us will eat cat foot….”

+++++

And I thought cat FOOD was bad……

#53 dakkie on 06.10.19 at 10:39 pm

The Countries with the Biggest Corporate Debt Pileups. US Fizzles in 24th Place! Canada Shines in 11th Place

https://www.investmentwatchblog.com/the-countries-with-the-biggest-corporate-debt-pileups-us-fizzles-in-24th-place-canada-shines-in-11th-place/

#54 Doug in Londinium on 06.10.19 at 10:40 pm

I’ve given up trying to predict what the economy will do next, but do see good reason for amber alert. In the last 3 years I’ve heard an awful lot about labour shortages and “experts” saying how it will only get worse with an ageing population. The last times I heard of labour shortages was in 1988-89, 1999-2000, and 2006-07. Coincidence? I doubt it, and that’s why YOU would be wise to have a diversified portfolio complete with a fixed income component.

#55 the Jaguar on 06.10.19 at 11:05 pm

We are at the edge of a new frontier, and I don’t mean the one JFK or Captain Kirk dreamed about. This one is more like some kind of grey, bleak wilderness. Think Mad Max. One requires smelling salts to be brought around after looking out over the landscape at the significant number of people so incredibly ‘tapped out’ financially, some still oblivious and with their heads stuck in the trough. Tragedy will ‘out run’ and ‘out wit’ these porkies. If guys like “Steve I” are correct in his assumptions it’s hard to imagine there won’t be an impact on the finances of the great and revered (well maybe not always) institutions of this country. Even the Titanic got whacked by an iceberg on its maiden voyage. The unthinkable becomes possible when revolution happens and a new paradigm arrives. Best to get strapped in securely like Dr. Hannibal Lector.

Funny how in some cities ( Calgary for example) there are suddenly so many buildings going up or in planning stage that will be strictly rental housing stock. Amidst a sea of empty condos. Seems like somebody is counting their chickens in the direction of huge rental demand. One wonders if the collapse of the housing market is behind it or maybe ‘Peak Oil’. Once people actually figure out we are running out of the stuff they may not want to live out in the suburbs where they won’t be able to fill their SUV gas tanks or drive to Costco to load up on Cottonelle. ( I stole that part from Garth). The great contraction will begin sooner than anyone thinks. Time to think strategically, stay lean, increase your flexibility, reduce your footprint, and as always keep your powder dry.
Maybe also do your best to reduce inflammation in the body. You’ll need you health to support you given what’s ahead.

#56 DON on 06.10.19 at 11:06 pm

#20 Scott Fraser on 06.10.19 at 6:24 pm

That made no sense. – Garth

Does anything that Carbon Tax Man do make any sense?

Garth, your grandchildren will be working for free in Toronto. The economy is unevenly distributed towards the Wynne Liberals and her cronies, while the rest of us have to settle for crumbs.

I’m voting for Rob Ford as PM of Canada. He will do a way better job than Trudeau.
********************

A live crash test voter in a Ford factory???

#57 DON on 06.10.19 at 11:13 pm

#38 Linda on 06.10.19 at 7:59 pm

A good analysis of the current state of indebtedness here. The prudent will take action – pay down debt, set aside funds for emergencies, sell off non-performing assets if they own any & if they have a mortgage possibly selling to get rid of same. Those who prepare will likely sail through any downturn while the unprepared are going under. Some would call it luck. I call it being smart enough to take shelter before the storm.
*********************
With our current context in mind, one has gotta wonder how many prudent people exist?

Storms move fast will people see it coming or will recency bias shade that view. Not that anyone can see anything on the horizon, but some small isolated showers.

#58 S.Bby on 06.10.19 at 11:13 pm

#42 not 1st

Best comment of the day !

#59 Phylis on 06.10.19 at 11:17 pm

Using straws saves lipstick. Well known fact.

#60 The Great Gordonski on 06.10.19 at 11:22 pm

#3 Scott

#14 Border

Scott you got it right. Moroneau said as much when he inadvertently told the truth about youth employment prospects a year ago during a ‘Screech Moment’ , much like Climate Barbie did about Liberal lying techniques in the House of Commons in Newfie recently.

According to my memory Moroneau told unemployed grads not to expect to find a job, stay at home and lower thier expectations. Of course now with the election looming and Trudeaus head in
the toilet those unemployed kids have all been morphed into “self employed”… what a joke.

Border, I think you’re going at it backwards. Stock markets often boom during recession. Investors don’t care if you have to prostitue part time or pull a rickshaw for fat American tourists flooding in on the flagging loon.

Wall Street is not Main Street. Everything I see points to a meltup over the next three years minimum. Real estate prices can crash, investors don’t care. The stock market is a forward looking indicator. Today’s concessions are tomorrow’s profits. I strongly suggest you stop listening to media for your investment strategy. Start reading balance sheets instead.

#61 conan on 06.10.19 at 11:28 pm

Vancouver RE is likely to heat up again. Hong Kong just became a mess. Hundreds of thousands of people may sell and move out of Hong Kong. Vancouver is one of the main places that will want to go.

#62 DON on 06.10.19 at 11:38 pm

https://www.scmp.com/news/china/diplomacy/article/3013677/australia-seizes-real-estate-chinese-national-after-joint?fbclid=IwAR0omt4sJUbRxTXNDm62aRjoIUs-HfNGThE8YRZhslQHCw_R7vwxo5sA6ZI

32 year old with lots of money>

“Diplomacy
Australia seizes real estate from Chinese national after joint money-laundering probe

Melbourne properties valued at US$2.93 million were owned by 32-year-old who had been using an assumed name and had moved to the Caribbean
China’s main policing agency had sought Australia’s help in 2016 to identify two people it said had defrauded investors”

#63 Ponzius Pilatus on 06.10.19 at 11:50 pm

#3 Scott Fraser on 06.10.19 at 5:14 pm
Justin Trudeau plans to increase the number of student visas to 1.5 million annually by 2020, and allowing them to buy Canadian properties.

Meanwhile, graduates of several Toronto-area colleges are only finding work for free jobs.

One career services department advisor actually waited to almost the end of the meeting to tell applicants that the work they will be doing is work for free for the college’s clients.

Imagine that the only jobs that your college Career Services department could find for you is work for free.

That made no sense. – Garth
————
Makes lots of sense to me.
My son who is Canadian and has a 94% was barely accepted by UBC.
I get it you don’t have a child working his butt off trying to go to University, competing against foreign students with tons of money.

#64 SNOOP DOG on 06.10.19 at 11:53 pm

Rollin down the street smokin Endo sippin on Gin and juice

with my mind on my money and my money on my mind.

Garth and Snoop ….. the “Dog Pound” brothas

#65 Nonplused on 06.11.19 at 12:01 am

Most societies in the past shunned debt, because all previous experiments with debt led to the destruction of borrower and lender alike.

The problem with debt is the nature of it. For example, let’s take a simple situation where a bank is loaning money to a business. Why loan the business money instead of just purchasing shares? The reason is that loan interest has a priority on the business revenue over share holders. But this means when business turns south the business has less money to survive the storm. But, in the worst case the bank ends up owning the business anyway and the shareholders are wiped out. Therefore leverage is very dangerous, but not for the banks. The worst case for them is they end up owning the assets at a discount paid for by the shareholders.

It is the same thing for a home owner. Should he go into default because his house has declined in value or he loses his job, the bank rarely takes a loss. Instead the bank gets the house and can recover all loses from the homeowner’s equity.

Low interest rates also distort economic decisions. The shale oil boom is a classic example of that. Very few of these shale oil companies are making any money, but because they can borrow cheap they continue to drill. I suppose there is a national security interest to it for the US at least, as since oil is priced at the margin it might make sense to waste a few hundred billion drilling for shale oil if it lowers the whole oil market price. But it is a poor economic decision and much money will be lost in the near future.

Many people believe that interest rates can no longer rise to historic levels because it would bring about a default crises. I think there is reason to think this is true. 2% is the new 6%. But the low rates also means that poor investment decisions are also the new normal. Money is being directed to poor investment decisions. The end result of that cannot be good.

The fact is rates were left far to low for far to long, and now it will be hard to raise them. Like a person who ignores their weight gain for years, we face a much more prolonged period of correction if we decide to shed the extra weight now than if we had paid better attention in years past before it got out of control.

#66 Old Dog New Tricks on 06.11.19 at 12:07 am

It seems the ol saying “this will not end well” has a greater and greater possibility of happening. The only thing that seems to be certain is that interest rates are gonna stay low for a long long time. If we see 5 percent in the next 10 to 15 I would be surprised.

#67 2 in 5 on 06.11.19 at 12:13 am

Why don’t you simplify your fraction when you talk about Canadians being one paycheck away from pooch’d ness?
4/10? I’m on team 2 in 5

#68 Not So New guy on 06.11.19 at 12:48 am

A recession should hit before the 2020 election because the Fed wants Trump gone

#69 Spaccone on 06.11.19 at 12:49 am

https://www.wsj.com/articles/some-investors-had-hunch-yields-were-about-to-fall-11560072600

Not one out of around 60 economists predicted where the rate would be at in June (you may not be able to see the graph in the link). Truly a fool’s errand, just like oil, not even the major oil-producing nations (or investment banks) can predict oil even though it has a big impact on their budget.

#70 Smoking Man on 06.11.19 at 1:21 am

This Amazoneian Rocks. She’s better than me. I yield the torch of you cant bend what you cant offend.

Go Polly. Love ya.

https://youtu.be/Ub5tKm3KjoM

#71 Howard on 06.11.19 at 4:56 am

I’ve despised this government since day 1 yet in the past 24 hours they have done TWO things that I can only applaud enthusiastically :

1) Ban on single-use plastic (by 2021)
2) Ban on dolphin/whale captivity

For the first time since this government was elected in 2015, I say….thank you.

Stick to stuff like this and ditch the identity politics and you might escape total meltdown in October.

#72 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.11.19 at 7:38 am

Choke. Gasp. Fail. So predictable.

Another revealing moment of the true character of Toronto and all who claim to cheer for it.

What a deplorable performance at the Scotiabank Morgue last night.

Idiots lined up all day in the rain to get into Jurassic Puke, looking just like the delusional real estate bozos lining up at a particleboard townhouse offering in Milton, ready to lose their shirts in the coming real estate meltdown.

And all those despicable Toronturds and GTAholes who were CHEERING and JEERING for Kevin Durant’s injury!?

OMG. What savages. So sad.

They are just like all the Make Believes supporters of MLSE in recent years, cheering in spite of all those years of failure and child abuse at the hands of Gardens staff, no high standards, no moral compass.

And in the racially segregated city that pretends to be diverse, thousands of wealthier white Toronturds kept flipping the channels last night, pretending to ignore the game entirely.

No matter what else happens in this meaningless series, Rapt Whore fans, you have revealed yourselves.

You are very Toronto.

You belong there.

#73 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.11.19 at 7:45 am

Rapt Whore fans cheering at Kevin Durant’s injury?

“Trash. So Trash.”

https://www.youtube.com/watch?v=ExqdQ7kzZh0

True Toronto.

#74 dharma bum on 06.11.19 at 8:02 am

Net worth takes a hit and especially with residential real estate – where most people use extreme leverage – the consequences can be painful. – Garth
——————————————————————–

You have forewarned the people about this for decades – in books and on your blog.

Those that did not heed the warnings failed to do so at their own peril.

Let the chips fall where they may.

You can’t eat granite and stainless steel.

#75 crowdedelevatorfartz on 06.11.19 at 8:17 am

@#71 Howard
“For the first time since this government was elected in 2015…”
*****

My Gawd, It seems like only yesterday I cringed at Trudeau’s breathless, wheezing pontificating as the newly elected PM and his “Because it’s 2016!” smug announcement.

How far we have come.
The multi headed Hydra SNC-Lavalin proves… whats old is new again.
Senior staff resign before scandals explode in their face.
Jody Wilson Raybould is fired for refusing to “play along”.
Trudeau proves even social justice warriors kneel before corporate donations and the God of Profit.
Pipelines still get built no matter how many protest…
Andrew Scheer is still a dreadful choice for leader of the Cons.
Banning plastic straws,plastic forks, plastic knives is a crass knee jerk reaction to steal Green votes in Quebec.
Chinese chopstick manufacturers celebrate.

Election 2019.
So much potential.
Squandered.

#76 crowdedelevatorfartz on 06.11.19 at 8:25 am

@#74 2 in 5
“Why don’t you simplify your fraction when you talk about Canadians being one paycheck away from pooch’d ness?
4/10? I’m on team 2 in 5”

++++++

Fractions….ugh.
I’m a 40% guy myself.

#77 Jack on 06.11.19 at 8:47 am

Inflation is not anemic – it is at record highs. This is why the government increased interest rates last year … It wasn’t to cool the economy, it was to reign in massive inflation caused by cheap money. I don’t know about everyone else on the blog, but i’ve been tracking my spending (upper middle class) in detail for the past 10 years and the inflation rate is close to 7% yoy for things the middle class actually spends money on. Google ‘chapwood index’ for more stats if you don’t believe me. As for house prices – I agree the reason they’re so high is due to low interest rates (and some speculation), BUT their actual value in terms of buying power hasn’t changed. A house today worth 800k was 400k 10 years ago (London, ON). So I just made 400k right? Wrong! That 800k today can only buy what 400k could buy in 2009 in terms of the usual items the middle class spends their money on. So houses are basically a hedge against inflation. And my 2% government raise each year is actually a pay cut of 5%!

#78 milly on 06.11.19 at 9:04 am

Hi Garth,

With the news of a possible housing meltdown and recession, do we keep a larger portion in cash? How do we adequately prepare (either than saving and investing in a balanced portfolio of course)?

5% cash is fine. There’s no apocalypse coming. Wise investors will maintain the same portfolio weightings and just ignore the noise. It will pass. Always does. – Garth

#79 not 1st on 06.11.19 at 9:10 am

I am curious. Cyclical recessions have always been in the cards but a debt fueled one has not been experienced here before. The only comparison would be Japan. If Canadas debt to GDP suddenly jumped up, how would we ever recover from that especially when taxation is already at the max. Wouldn’t it be a stagnation scenario? That’s not really a recovery. More of a permanent zombie state.

#80 Howard on 06.11.19 at 9:11 am

#75 crowdedelevatorfartz on 06.11.19 at 8:17 am

Banning plastic straws,plastic forks, plastic knives is a crass knee jerk reaction to steal Green votes in Quebec.
Chinese chopstick manufacturers celebrate.

—————————————

Disagree. I would have surely preferred a market solution to the plastic problem, but the issue is becoming too massive for governments to ignore. Europe and many US states, Australia too I believe, are phasing out single-use plastic and I’m glad that for once the Trudeau Liberals are doing the right thing. If single-use plastic is not banned at the very least it should be heavily taxed.

#81 RE Investor on 06.11.19 at 9:34 am

Good post. Keep them coming. Warn those over-leveraged negative cash flow investors or FOMO housing families about the impending doom. Maybe they will get out in time. Of course this will mean a drop in RE prices. As with most investing, buying when heaving selling is occurring, usually provides rewards.

#82 crowdedelevatorfartz on 06.11.19 at 9:42 am

@#80 Howard.
” but the issue is becoming too massive for governments to ignore…”
+++++

I agree with your assessment for the banning of single use plastic.
The dead whales washing up in BC seem to be full of plastic bags when necropsies are performed.
My cynical side just questions Trudeau’s timing. 4 months before the election he bans single use plastic….
The Greens are rising in Quebec polls, the Libs need every seat they can get.
I’m sure its a coincidence.
The best thing to get plastic banned…….was the Philippines and Malaysia send our plastic garbage back…..

Banning ubiquitous single use plastic…. lets have a look shall we?

Bags(shopping, zip lock, garbage?), water bottles, straws, cutlery, food containers, packages, shrink wrap, disposable razors, bubble wrap, styrofoam?, on and on and on.
Until the US, China , India, Europe, etc get serious about global pollution ….. Canada’s baby finger poke at the 2000lb plastic grizzly is a well intentioned…. fashion statement.

#83 Tony on 06.11.19 at 10:37 am

Re: #68 Not So New guy on 06.11.19 at 12:48 am

Odds of that are zero, with Trump as president any and all data will be falsified until after the 2020 election is over.

#84 INVESTMENT W on 06.11.19 at 11:16 am

WITH AN ASSET ALLOCATION
5.3% CASH
14.4% BONDS
8.9% PREFERRED
1.1% CONVERTIBLES
34.9 CANADIAN EQUITIES
35.4% FOREIGN EQUITY
DO YOU FEEL WE SHOULD CHANGE OUR ASSET MIX AROUND THE 2020 ELECTION?
OR SHOULD WE JUST WAIT OUT AND HOLD?

Too much maple. Too light FI. What’s the US? – Garth

#85 MF on 06.11.19 at 11:28 am

72 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.11.19 at 7:38 am

I waited or your post. You were silent while the raps beat Milwaukee and won three games in the final.

How pathetic.

This is not a sports blog. Get lost with your fake Toronto comments you worthless Trollolol.

MF

#86 IHCTD9 on 06.11.19 at 11:34 am

I tend to think the kids coming up are going to have to start thinking about their future prospects differently.

The current trend of racking up a 6 figure debt, and 4-6 years on an education that won’t even pay 100K in 75% of Canadian businesses out there is just not worth it. It’s becoming a lottery – and with Trudeau chasing all the investment dollars out of the country, while simultaneously importing 100’s of thousands of degree holding immigrants every year – fewer and fewer will get a winning ticket. Wages will keep eroding too, as more and more folks are chasing fewer (good) jobs.

Keep in mind also – marriage and co-habitation rates are steadily falling – but life in Canada is priced at dual income levels. Most Gen Z’ers will be single. Single living is at its highest levels they have ever been already right now. This development will be a tough problem for the entire economy, and government revenues. This trend will not reverse until prospects for Men improve.

Young Women. It has been well documented that Women are loathe to marry down, and prefer to remain single if a suitable for commitment partner can not be obtained. The problem is, they will still have all kinds of kids with the unsuitable ones in the meantime. Thus single motherhood is expected to become the new normal. Obviously, a single parent raising kids is going to be a tough proposition for most.

Kids, do you want to win? Get a good marketable education or earning equivalent, and find a partner who has done the same. Get married and stay married. Plan together for the long haul. Win big.

#87 LP on 06.11.19 at 11:35 am

#59 Phylis on 06.10.19 at 11:17 pm

**************************************

I’ll stop wanting straws when wait staff is taught not to put their fingers all over and around where I’m expected to put my mouth to drink. Personally, at home I use stainless steel straws which, for cold drinks, are fine but beware using them for something really hot.

#88 AK on 06.11.19 at 11:40 am

#83 Tony on 06.11.19 at 10:37 am

“Odds of that are zero, with Trump as president any and all data will be falsified until after the 2020 election is over.”
====================================

Rates raised 7 times in less than 2 years is false? You are hilarious. LMFAO

#89 LP on 06.11.19 at 11:40 am

#76 crowdedelevatorfartz on 06.11.19 at 8:25 am
***********************************

I’m in for “almost half”.

#90 thebarold on 06.11.19 at 11:41 am

Not that I think that most Canadians are not saving enough but shouldn’t we see a shifting of the savings rate due to demographics? As boomers retire and start spending their savings, I would imagine the savings rate to slip. The newcomers, young immigrants, needed to keep our economy rolling are probably not saving enough though I would imagine some newcomers would have a higher savings rate based on their past experience in other countries.

#91 AK on 06.11.19 at 11:42 am

#68 Not So New guy on 06.11.19 at 12:48 am
“A recession should hit before the 2020 election because the Fed wants Trump gone”
=====================================

Let me guess your source. CNN or MSNBC ??

#92 Howard on 06.11.19 at 11:42 am

#82 crowdedelevatorfartz on 06.11.19 at 9:42 am

Every political party on the planet does things to get votes. Sometimes they coincide with actual good policy. Harper’s doubling the TFSA limit was blatant vote-buying, but it was great policy (undone by the Liberals, as we all know). This plastic ban is clearly aimed at Green supporters, as you state, but it has the side effect of actually being a good initiative and in line with what other developed countries are doing.

I take a dim of view of “the problem is so massive so why bother” arguments. Nobody’s saying this will solve Canada’s plastic problem – much less the world’s! – but it’s a step in the right direction. It might be an issue if the plastics industry employs masses of people, but it doesn’t.

#93 AGuyInVancouver on 06.11.19 at 11:46 am

#22 MF on 06.10.19 at 6:38 pm
#13 AGuyInVancouver on 06.10.19 at 5:37 pm

Yes it was. Kept us afloat when the entire world was on the brink of disaster.
The error was keeping rates too low for too long, which was (and is) stupid policy implemented by the Bank of Canada.
Harper was great.
MF
_ _ _
Nope, as Garth points out Americans took their lumps following 2008. Canadians not so much. Harper just punted it down the road, creating a huge debt bubble.

#94 n1tro on 06.11.19 at 11:48 am

#80 Howard on 06.11.19 at 9:11 am
#75 crowdedelevatorfartz on 06.11.19 at 8:17 am

Banning plastic straws,plastic forks, plastic knives is a crass knee jerk reaction to steal Green votes in Quebec.
Chinese chopstick manufacturers celebrate.

—————————————

Disagree. I would have surely preferred a market solution to the plastic problem, but the issue is becoming too massive for governments to ignore. Europe and many US states, Australia too I believe, are phasing out single-use plastic and I’m glad that for once the Trudeau Liberals are doing the right thing. If single-use plastic is not banned at the very least it should be heavily taxed.
——————————-
Yes, anything you can’t ban, let’s tax the crap out of it for everyone else. There is already a $0.05 tax that is collected on plastic bags at the consumer level. What is being done with that money?? Have you ever drank any kind of liquid using the new paper straws? It’s disgusting.

#95 Jed Clampett on 06.11.19 at 12:17 pm

Seen yesterday at 6 pm at No Frills grocery Renfoth/Rathburn Etobicoke. Two Porsche SUV’s
park and the drivers go in for budget grocery shopping.

#96 Sail away on 06.11.19 at 12:20 pm

Play defense. If the retail investor, corporations and federal government have money problems, the guy with a pile of money is in the driver’s seat.

As always, patience pays and bargain shopping is best.

#97 Investment W on 06.11.19 at 12:21 pm

#84 Too much Maple. Too light FI what is the US? Garth

US equity currently 29.4%
6% other equity
What percentage of CDN Maple sitting currently at 34.9% equity would you change to US equity?
And would you increase other equities?

#98 Sail away on 06.11.19 at 12:34 pm

#95 Jed Clampett on 06.11.19 at 12:17 pm

Seen yesterday at 6 pm at No Frills grocery Renfoth/Rathburn Etobicoke. Two Porsche SUV’s
park and the drivers go in for budget grocery shopping.

———————————-

Hey Jed, those are people like me! Buy Porsche on sale for cash in distress sale and waste no money elsewhere. Budget beans are the same as boutique beans, just way cheaper.

Price is what you pay, value is what you get. Fiscal prudence and parsimony rules the day. Why pay more?

#99 Shopping Groceries on 06.11.19 at 12:43 pm

#95 Jed Clampett – I do my grocery shopping now at Food Basics, and will explain the con. This is the discount store of the major chain. The discount store is large and modern selling the exact same products for much less. I leave there knowing I have ripped them off, and feel good about it with a smile.

#100 Headhunter on 06.11.19 at 12:45 pm

#86 IHCTD9 on 06.11.19 at 11:34 am
I tend to think the kids coming up are going to have to start thinking about their future prospects differently

_________________________________________

Good point and its already in play. Especially young Men.

I’ve said here before Men used to be 3 things, Provider, Protector, and worker Bee. Now big mamma gov’t takes care of the 1st 2. So no wife, no kids, live simple. Whats going to happen to society when men stop caring and sacrificing themselves?

More women vote then men. Hence the very generous social programs. Everyone Gets a trophy.

https://www.dailymail.co.uk/news/article-7125343/Majority-American-women-age-18-54-prefer-socialism-living-capitalist-country.html

#101 Damifino on 06.11.19 at 12:51 pm

#86 IHCTD9

Kids, do you want to win? Get a good marketable education or earning equivalent, and find a partner who has done the same. Get married and stay married. Plan together for the long haul. Win big.
—————————–

Pretty close. One more thing. Both partners will have to profoundly understand the concept of give and take in a relationship. Gentlemen, some days it’s not all about you. Ladies, same deal. When grownups marry, it tends to last a long time.

#102 IHCTD9 on 06.11.19 at 12:51 pm

#77 Jack on 06.11.19 at 8:47 am

Inflation is not anemic – it is at record highs.
_____

Consumers have a big margin for reducing their cost of living – especially in this day and age. Cutting costs WRT spending on consumer goods is a piece of cake. Amazon, Kijiji, Ebay, and all kinds of discount retailers are clamouring for your business, and they all sell the same stuff. You can also choose to get your hands dirty and save like a boss.

I mentioned earlier about redoing my roof. My neighbour across the road was quoted 12K to redo his roof. My roof would definitely be more. Materials came in at about 1900.00, and that includes buying a top notch air nailer to make it easier on myself (I was in my early 30’s the last time I did the roof). I still have to buy some end wall flashing, rebuild one cupola, and dispose of the old roofing, but maybe another 250.00 and that’ll be it for hopefully 20+ years.

Now, where Government, Energy, Education, Real Estate, etc… are concerned, it’s a different story…

#103 PastThePeak on 06.11.19 at 12:51 pm

#86 IHCTD9 on 06.11.19 at 11:34 am

Young Women. It has been well documented that Women are loathe to marry down, and prefer to remain single if a suitable for commitment partner can not be obtained. The problem is, they will still have all kinds of kids with the unsuitable ones in the meantime. Thus single motherhood is expected to become the new normal. Obviously, a single parent raising kids is going to be a tough proposition for most.

++++++++++++++++++++++++++++++++++

It is an interesting logical conundrum. There is an every greater push at all levels of government, NGOs, the protestor-class, etc – to increase education and career opportunities for women. In the US at least, something like 60% of all university students are women already (for the math challenged, that means only 40% would be male).

But at the same time, as IHCTD9 notes, all statistics and anecdotal information points to (most) women wanting to marry “equal or better” as it comes to career / education. But if more women have degrees than men…

Not easy to square that circle, but I am sure there will be many looking for a government program to fix it…

#104 PastThePeak on 06.11.19 at 12:58 pm

#93 AGuyInVancouver on 06.11.19 at 11:46 am
#22 MF on 06.10.19 at 6:38 pm
#13 AGuyInVancouver on 06.10.19 at 5:37 pm

Yes it was. Kept us afloat when the entire world was on the brink of disaster.
The error was keeping rates too low for too long, which was (and is) stupid policy implemented by the Bank of Canada.
Harper was great.
MF
_ _ _
Nope, as Garth points out Americans took their lumps following 2008. Canadians not so much. Harper just punted it down the road, creating a huge debt bubble.
+++++++++++++++++++++++++++++++++

The reason for the debt bubble is central bank rates and the impact that this has on people unable to control themselves. The American Fed had lower interest rates than Canada until something like 2016. The US did NOT take their lumps as a result of any good government policy – it is simply that their housing & financial situation was worse than ours, and it blew up.

And – for the record – while the US consumer is less indebted now, the government and non-financial corporate sector debt has ballooned.

Harper’s flirting with 40 year mortgages was a bad policy, but it was also short lived. It had a minor impact in RE in Canada overall, and an even more minor impact on overall Canadian indebtedness.

#105 IHCTD9 on 06.11.19 at 1:01 pm

#93 AGuyInVancouver on 06.11.19 at 11:46 am
#22 MF on 06.10.19 at 6:38 pm
#13 AGuyInVancouver on 06.10.19 at 5:37 pm

Yes it was. Kept us afloat when the entire world was on the brink of disaster.
The error was keeping rates too low for too long, which was (and is) stupid policy implemented by the Bank of Canada.
Harper was great.
MF
_ _ _
Nope, as Garth points out Americans took their lumps following 2008. Canadians not so much. Harper just punted it down the road, creating a huge debt bubble.
___

Correct, Harper knew for sure that Canadians would totally, completely lose their minds (especially the doorknobs in BC) over real estate if he made houses easier to buy, but he did it anyway.

Much better to have a bunch of major banks go belly up and spend almost a trillion bailing them out, and then print money like a paper mill for almost a decade.

#106 That's nothing ... on 06.11.19 at 1:23 pm

#95 Jed Clampett on 06.11.19 at 12:17 pm

Seen yesterday at 6 pm at No Frills grocery Renfoth/Rathburn Etobicoke. Two Porsche SUV’s
park and the drivers go in for budget grocery shopping.

I can’t believe all the ultra high end cars I see at the ‘murican gas pumps filling up with crappy ‘murican gas. Surely they are not designed for that stuff.

#107 Sail away on 06.11.19 at 1:25 pm

#99 Shopping Groceries on 06.11.19 at 12:43 pm

#95 Jed Clampett – I do my grocery shopping now at Food Basics, and will explain the con. This is the discount store of the major chain. The discount store is large and modern selling the exact same products for much less. I leave there knowing I have ripped them off, and feel good about it with a smile.

——————————————–

Shopping- you haven’t ripped anyone off. The big companies make their margin with bulk purchase, so selling 1/2 in the full price store and 1/2 in the discount store is already fully accounted into their finances.

You can definitely feel good about getting a good deal for yourself. There’s really no reason someone else needs to lose for you to win, though. That can be a self-limiting mindset.

#108 Where's The Money Being Paid ToGreedeau, AreYouOnTheTake? on 06.11.19 at 1:47 pm

DELETED

#109 IHCTD9 on 06.11.19 at 1:56 pm

#103 PastThePeak on 06.11.19 at 12:51 pm
___

Heh, let’s add some more ingredients to the soup:

The dating of the future (and maybe present already) will be online. OLD in pretty much every form thus far asks the user to sort preferences in initial potential mates by appearance. It’s the first thing you see, and you approve as a maybe, or discard as no way – based on that pic alone. The availability of choice is massive, with competition coming from the world over. More choice than ever before in human history.

Read about the “Paradox of Choice” to get warmed up for the following points.

It has been demonstrated through a few studies, generally speaking; that most Women only find ~20% of all Males attractive looking.

Now add in the fact that Males are faring worse in the workforce every single year.

Needless to say, the pool of ideal eligible Men is VERY small at this point. Probably only about 10-15% of all males.

NOW – stir in a sprinkling of this fact: It has been demonstrated (in India and China with big Male surpluses) that the sex that is in demand tends to resist commitment. The finest of Indian and Chinese ladies do not want to get married (Why would they rush into it? There might be someone even better just around the corner…). This same trend exists among the top tier of any population for both males and females. They are in no rush to tie-off, and want to enjoy the ride. They can always marry later.

So we have both the best of the best of Men and Women chasing each other, but with no real plans to commit. The best of the rest of Men may not be seen as good enough by the rest of the Women for marriage.

I can keep going on this topic – but I’ll stop before I write a book.

I don’t know what kind of soup all of these ingredients make, but I’m betting it won’t taste good!

#110 Where's The Money Being Paid To Greedeau, AreYouOnTheTake? on 06.11.19 at 2:00 pm

DELETED

#111 Linda on 06.11.19 at 2:03 pm

#40 ‘Dolce’ – I hear you & yes, if everyone takes action as #36 ‘Josh’ did the economic consequences would soon show themselves. But as #57 ‘Don’ points out, the number of prudent seem to be thin on the ground. Kudos to ‘Josh’ for taking action despite the rise in costs we all face.

#112 James on 06.11.19 at 2:07 pm

#70 Smoking Man on 06.11.19 at 1:21 am
This Amazoneian Rocks. She’s better than me. I yield the torch of you cant bend what you cant offend.
Go Polly. Love ya.
https://youtu.be/Ub5tKm3KjoM
_____________________________________________
Still hitting the Juice Old Man.
QAnon is a far-right conspiracy theory detailing a supposed secret plot by an alleged “deep state” against U.S. President Donald Trump and his supporters. She is a right wing nutjob! sed certe sic vos!

#113 Where's The Money Being Paid To Greedeau, AreYouOnTheTake? on 06.11.19 at 2:13 pm

Re: #6 Leo Trollstoy on 06.10.19 at 5:20 pm
That made no sense. – Garth

He’s having a stroke
+++++++++++++++++

What he’s saying is that there are no paying jobs out there.
Just like at the “Ho Frills” grocery store I was in the other day.
There was a kid in there stocking shelves and I asked him what he was being paid since he told me he was a student worker gaining experience. He said nothing; I wondered tolkd him my son got paid when he did his work experience back in the 90s. Right away another NF full timer rushes over to explain to me that this is the way all student hires are, in turn trying to stop me from saying any more, shutting me down.
That’s even better than a TFW, you don’t have to pay them!!!!

#114 tccontrarian on 06.11.19 at 2:18 pm

#101 Damifino on 06.11.19 at 12:51 pm

#86 IHCTD9

Kids, do you want to win? Get a good marketable education or earning equivalent, and find a partner who has done the same. Get married and stay married. Plan together for the long haul. Win big.
—————————–

Pretty close. One more thing. Both partners will have to profoundly understand the concept of give and take in a relationship. Gentlemen, some days it’s not all about you. Ladies, same deal. When grownups marry, it tends to last a long time.
===============

“Give and take” eh?

I ‘give’ her all the money she needs (not ‘wants’), and I ‘take’ out the garbage…

That’s been working for us!

TCC

#115 not 1st on 06.11.19 at 2:26 pm

The elevation of women into higher positions has some serious drawbacks. More likely to be risk adverse therefore more socialist. Once empowered in those positions there are less likely to have kids and be more choosy with a mate. Demographics do matter. More likely to make decisions based on feelings than facts. Less ruthless when it comes to negotiating.

But the most dangerous thing is women are getting all into the industries that will be disrupted by automation while men are gravitating to more areas that cant be disrupted. We could have a generation of unemployable women with no families or life partners.

Generalize much? – Garth

#116 Not So New guy on 06.11.19 at 2:33 pm

#91 AK on 06.11.19 at 11:42 am

#68 Not So New guy on 06.11.19 at 12:48 am
“A recession should hit before the 2020 election because the Fed wants Trump gone”
=====================================

Let me guess your source. CNN or MSNBC ??

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

The Creature from Jekyll Island

#117 What A Deal on 06.11.19 at 2:35 pm

#107 Sail away – this is for all the cauliflower lovers in this room. Large grade #1 can be bought for $1.88, and lets not forget the Gallo extra virgin olive oil 1L size for $4.88, and there’s so much more.

#118 Leo Trollstoy on 06.11.19 at 3:08 pm

#116 Not So New guy on 06.11.19 at 2:33 pm

Let me guess your source. CNN or MSNBC ??

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

The Creature from Jekyll Island

Same credibility lol

#119 tccontrarian on 06.11.19 at 3:20 pm

#78 milly on 06.11.19 at 9:04 am

Hi Garth,

With the news of a possible housing meltdown and recession, do we keep a larger portion in cash? How do we adequately prepare (either than saving and investing in a balanced portfolio of course)?

” 5% cash is fine. There’s no apocalypse coming. Wise investors will maintain the same portfolio weightings and just ignore the noise. It will pass. Always does.” – Garth
///

Sure, no ‘apocalypse’ (what exactly is one – would the GFC count as one?), but a serious bear is on the horizon. Just because it hasn’t reached shore yet, doesn’t mean one should not hunker down, gradually.

October-December 2018 was a ‘warning’ – how many were caught unprepared? Most, I assume.
The next one will catch probably as many (or more, since they won’t be expecting anything ‘so soon’ after the last one), with their pants down again.

My opinion only (but I WAS ready for the last mini-bear; perhaps just lucky! Let’s see if I can get lucky again, and again, and…). And then again, a difference of opinion is what makes a market!

Good Luck – TCC

#120 jess on 06.11.19 at 4:36 pm

blackmail material ?
This is sounding all too familiar

The Black Cube intelligence firm has filed a £15 million ($19 million) lawsuit in the UK against Israeli investigative journalist Ilana Dayan after she broadcast an exposé on some of the alleged workings of the secretive company.

Following the airing of Channel 12’s “Uvda” program on Thursday, in which Dayan claimed that one of Israel’s richest men hired Black Cube in 2014 to dig up dirt on Blue and White party No. 2 Yair Lapid, Dayan revealed fresh allegations on Friday, including an attempt to derail a reform in the communications sector and to discredit a leading Israeli businesswoman.

privatized intelligence
former state agents now private double salary control access to gov. data and not to share with state institutions by controlling the info for leverage…private gets stronger and stronger crossing the lines joseph kabella e.g. politicans etc

https://www.timesofisrael.com/secretive-black-cube-sues-israeli-investigative-journalist-for-19-million/#comments

Israeli Private Intelligence Company Black Cube Out of Control
June 11, 2019

Shir Hever discusses the dangers of privatizing security and intelligence, as a private company called Black Cube that claims to use Israeli Mossad procedures hires out its services to the highest bidder and goes after international as well as Israeli activists, business people, and politicians

https://therealnews.com/stories/israeli-private-intelligence-company-black-cube-out-of-control

https://en.globes.co.il/en/article-ofra-strauss-black-cubes-behavior-is-a-wakeup-call-1001288978

#121 jess on 06.11.19 at 4:43 pm

toronto :

https://citizenlab.ca/

A man posing as a French businessman in an apparent ruse designed to discredit the Citizen Lab internet watchdog group is actually a retired Israeli security official and former local politician, according to a report Monday.

The man, going by the name of Michel Lambert, had met John Scott-Railton, a senior Citizen Lab researcher, at an expensive New York restaurant earlier this month, and tried to get the group to backtrack from its claim that Israeli software was used to track Saudi journalist Jamal Khashoggi before he was killed at the Saudi consulate in Istanbul last year..

The meeting between Almog-Assoulin and Scott-Railton was filmed by the AP, who were invited by Citizen Lab, which had suspected a ruse….

https://www.timesofisrael.com/reports-unmask-israeli-man-filmed-in-bizarre-meeting-with-citizen-lab/

#122 Bloodcross on 06.11.19 at 6:08 pm

So what’s the recommandation on ‘derisking’ a portefolio. Buy bond? Lighten the maple proportion? Go 10% cash? Sacrifice a chicken to the recession gods?

I prefer a goat. – Garth

#123 mixed messages on 06.11.19 at 6:36 pm

Media says doom one day and rainbows the next

https://www.vancourier.com/real-estate/real-estate-market-primed-for-a-comeback-metro-vancouver-brokerage-1.23850952

The media says no such thing. Dexter Realty does. No moral hazard there, right? – Garth

~~~The media chooses the story line. If they didn’t like Dexter Realty’s point of view, they wouldn’t print or air it. Our world is narrated….look at our history books.

You have much to learn about media. – Garth

#124 The Great Gordonski on 06.11.19 at 11:57 pm

#123 , exactly right Garth. Mixed Messages, you are a squeaky wet rube if you think the media is a social benefit organization washed in the blood of honest martyrs, even worse if it becomes so with Trudeaus 600 million dollar bribe.

Here’s how it really works. Say I’m a principal in a large real estate org ( which I have been) , I call my publicist and dictate the talking points I want advertised. The publicist then writes the article and pays to advertise the piece in local newspapers, its printed. There are no disclosure laws in Canada so I get to say anything I want as long as it’s not morally repugnant. If you, the public, swallow it, then I consider it money well spent on a successful campaign.

Outright lies in the media are the norm. I’ll admit to writing cynical destructive lies for an unnamed national leftist political party many years ago. I’ve since disassociated myself with that rabble, they’re too sleazy for even an old promoter like myself. I’d rather bump along the road into hell rather than get sucked straight into the devils arsehole.

Bottom line, don’t believe anything you see, read or hear in 90% of msm.