On Thursday he did it again. Trump tweeted that the Fed needs to cut interest rates (a week after the last cut) because the US dollar’s too high. It’s clear the American president won’t give it up until the central bank capitulates. So the race to the bottom continues.
If you were thinking about retiring and living off low-risk stuff like GICs, think again. Take a look at the latest chart for 5-year Government of Canada bond yields. It’s a ski hill.
More rate cuts in the States will throw gas on the economy, send stocks to further record highs and drop the US dollar. That will paper over the China trade war and pave the way to a 2020 re-election romp (he hopes). The Fed is expected to trim the cost of money again on September 18th. The market’s pricing in one or more chops after that by the end of the year. All-in, US rates will be a full 1% lower by the time of the general election.
So, what’s it mean for us?
When the US dollar falls, ours rises. We should be back to 76 cents soon. Some forecasters see eighty by Christmas. Mortgage rates have yet to bottom. It’s interesting that five-year variable-rate mortgages now cost more (at around 2.8%) than those with rates fixed for the term (2.6%), suggesting Mr.Market figures the Bank of Canada will have to follow the Fed at some point – perhaps early 2020. If this happens, the economy has stalled out.
Will we get negative interest rates with mortgages at 0% or the bank paying you to borrow?
Not a chance.
Meanwhile equity investors decided the big sell-off Monday was overdone and have been gobbling up stuff that went on sale. While a recession of some kind is in the cards in the next year or two, successful companies won’t stop making money. Trump will not stop being Trump. And it’s in the mutual interest of both Washington and Beijing to find common ground on trade rules. So while volatility is likely to shot higher, those who come here to tell you markets will lose half their value are just making it up.
Stay invested.
By the way, remember that when markets gyrate your portfolio asset weightings may well drift off target. Don’t rebalance too often (things change fast) but when you do, get it right. Do the opposite of what your pants tell you – harvest the winners and buy the losers to restore the plan. For example, unloading prefs now because of the rate decline is silly. You may realize an unnecessary capital loss while giving up a fat (and tax efficient) dividend stream. Expecting all assets in a diversified portfolio to increase at the same time is illogical. When central banks cut, preferreds suffer and bonds plump. When bankers hike, the opposite. Also recall this little rule: buy high. Sell low. Oh, wait a minute…
If events of the last few days tell us anything – from panic selling on Monday to panic buying Wednesday – it’s to ignore the short-term and focus on your own life goals. Buying a house. Financing kids. Surviving retirement. Making moves – buying, selling, freaking out – in a swirl of news is a really bad idea. You haven’t a clue what the next Trump tweet will say, or how the hardasses in China will respond. Next week is a fog, utterly unclear. Ten years from now – when you need the dough – is actually more predictable. You don’t worry what your house is worth until you come to sell it. Same with the investment portfolio. Set it. Forget it. Tune it up once or twice a year. Ignore this crap.
And speaking of crap, here’s CMHC.
This week the federal agency mandated with Screwing up the Housing Market and Fomenting Inter-generational Warfare was responsible for this media story:
A growing cohort of rich, aging baby boomers will contribute to even tighter housing supply for younger generations in Toronto over the next decade, according to a new report. Seniors have traditionally downsized or switched to rentals and retirement homes, which has freed up supply for younger homeowners. Rising employment and income among older generations along with growing social-support services has turned that trend on its head, the Canada Mortgage & Housing Corp. said in a report Thursday.
“Rising home-ownership rate among seniors may continue, which will translate into less supply being freed up for younger generations,” the country’s housing agency said. A quarter of homes in Toronto were owned by seniors age 65 and over in 2016, up 4.5 percentage points from 2006, the CMHC said. The share of townhouses owned by seniors reached 17 per cent from 12 per cent over the same period.
So, wrinklies make up 16% of the region’s population but own 25% of the houses? The shock here is that the proportion’s not higher. After all, the older people get the more they earn and accumulate. Net worth is the highest among people in retirement. Duh. Meanwhile the run-up in real estate over the past decade obviously favoured those who already owned – which at that point were Boomers in their 50s. And this is a surprise? An injustice?
Anyway, in this case the past does not dictate the future.
Boomers may be house-rich, but the evidence is overwhelming they’re also asset-poor – thin in assets that can become an income stream. Seven in ten lack corporate pensions, and millions are just discovering it’s impossible to live on the government CPP/OAS pogey.
The real estate reset is still coming. Patience.
118 comments ↓
Great post. You mean buy low sell high don’t you?
What an unpatriotic idea. – Garth
« Buy high, sell low » now that’s counter intuitive!
“Also recall this little rule: buy high. Sell low.”
This rule belongs in the same category as the following:
1. When your friend jumps off a cliff, you should too
2. Believe everything people say
3. Trust politicians
4. Eat up, I’m a mushroom expert
5. Go for it- it looks worse than it is
Heading out for dinner last night, I saw an older woman (maybe mid 50’s) in a newly-built condo development, scrounging for returnable bottles in the restaurant’s garbage bin.
Someone home-rich, but asset poor, perhaps?
Just wanted to reassure Millennial Be-For-Realist that his fave Boomer is A-OK.
I have only posted once per day lately and I know that it isnt my usual 14 per day postings.
Been busy enjoying the micro breweries, beaches and boating on the sunny East Coast.
I’m beginning to forget what day it is…a taste of a well deserved early retirement….
Alas…. something Millennial Be-For-Realist will probably never experience.
Oh well. Such is the unfairness of life.
New Zealand dropped the bank rate 50 points last night; India 25. It’s a wild crazy race to the bottom. Odds say US down 100 by January, 2020.
Canada will follow shortly.
Negative interest bonds growing in their negativity and proliferation.
Rumor in Australia is that they are toying with a ban on cash.
I assume so they can suck dry your savings at a faster rate than simple “bank charges”.
I am sure ALL Central Banks are watching the others. Canada will not be any different.
Watch out.
RE reset…..
WHEN?
I’m thinking CHIP reverse mortgages is a solid business to be in (and about as ethical as payday loans) given how many boomers are house rich and income poor.
For those who like to blame the Boomers for all the woes in the world, news articles like the one quoted in today’s blog are further ‘evidence’ that younger generations are being screwed by those old farts. Add in the apparent lack of Boomer retirement (either they really like to work or they can’t afford to retire; either way they are preventing younger generations from moving up) & to add the icing to generational resentment, are now old enough to collect CPP/OAS plus require more health related services. Dentists must be making out like bandits what with all the tooth grinding envy taking place these days…..
…”The special investigations division of the Belgian tax authorities tracked down 147 wealthy Belgians, who reported they were moving to live in Monaco. However, reality shows they had only registered an address that turned out to be a hotel room or a post-box. The investigations unit considers these HNIWs guilty of domiciliation fraud, and has presented them with a bill totalling €99.6m.
The newspaper revealed three taxpayers who gave the same address, which turned out to be a hotel which rented out rooms at the price of 96,600 euros a year. Another 12 gave the address of an apartment block where a simple room could be had for €3,200 a month – not intended for habitation, only for providing an official address in Monaco.”
28 officers from HMRC searched one residential and one business addresses yesterday in Manchester and Macclesfield, while properties in the Netherlands and Austria were also raided.
Three UK advisers arrested in offshore tax fraud
Newcastle and West Ham raided in mass HMRC tax probe
EU authorities net assets, documents in ‘coordinated action’
UK advisers jailed as part of £2.4m fake F1 film tax scam
Cash, computers, business and personal records were seized
https://www.internationalinvestment.net/news/4003488/wealthy-belgians-pretending-live-monaco-hit-eur100m-tax
My Millionaire metric chart is up
http://www.chpc.biz/millionaire-metric.html
Since the real estate price highs of 2017, gold has been in rally mode and housing prices have been sliding. Those 2 metrics have a “Millionaire” and the SF detached house prices for Vancouver, Calgary and Toronto dropping at nearly the same rate as they did in 2007-08.
Perhaps the reset is on but not yet confirmed by all local Canadian markets (Montreal SFDs set another new high price in July, and in June both Montreal and Ottawa did).
“The Fed is expected to trim the cost of money again on September 18th.”
The Fed is trapped. The EU is in trouble, as is China, et. al. If the Fed bumps rates, it will send foreign markets into a tail spin. Unfortunately, the day of reckoning will come when the Fed won’t have a choice and that will cook nearly every other economy due to stagflation.
As the world reserve currency, any increase in interest rates will destroy other economies. Remember hearing that the Fed and other central banks can “fix” the economy through monetary policy? Ya….they can’t.
Like I have said for awhile with Trump in the White House. Risk on baby….
I’d encourage blog dogs to read Ray Dalio’s recent essay “Paradigm Shifts”. Food for thought.
Geez — maybe my recent conversion to a 2.8% 5 Year Fixed Mortgage is not going to be such a great deal after all !!
I’m no financial expert so I find it hard to make heads or tails of daily events…leave that upto Garth.
Real Estate Reset Still Coming – that I hear loud and clear!!!
98 IHCTD9 on 08.08.19 at 1:59 pm
Yup. Add to that that the US has to fight with one arm behind its back while keeping an eye on “world opinion” that will be against it regardless of what it does. It’s similar to how a small country in the Mid East has to defend itself.
If fully unleashed the US military would lay waste to any foe.
MF
Why should Trump Almighty “give it up”?
Have you ever?
How many boomers are stuck in their houses, unable to cash in and downsize because their sponging kids have nowhere else to go?
Sometimes Garth, I wonder what exactly is the limit to the gibbering insanity that you’ll allow to be posted on your blog.
I’m not going to try to test that limit, but given what I’ve seen over the last year or so of coming here regularly, I do wonder what it is.
Hateful attacks on whomever don’t seem to pass muster, but there’s a lot more to gibbering insanity than that (though that one is fairly prominent this week). I wonder where the lines are.
Any hints?
As for all gyrations in the market, you’re quite right.
Still though, wait for the sh*t to really hit the fan, and buy somewhere at the trough. March or April 2009 was a winning time to buy as I recall.
When Canadian banks are yielding 10%+ on their common shares, that’s a buy signal screaming about as loud as it possibly can.
I probably won’t see that again in my life, but it was a hell of a thing to see in any event.
Let the good times roll!
“Same with the investment portfolio. Set it. Forget it. Tune it up once or twice a year.” – Garth
I rebalance mine once a year, on my son’s birthday. It’s an easy way to remember when to do it (and when not to do it).
debt jubilee?
U.S.-based Chase Bank is forgiving all outstanding debt owed by users of its two Canadian credit cards: the Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa. The bank retired both cards last year and said it’s wiping out cardholders’ debt to complete its exit from the Canadian credit card market.
=====are other provinces watching the new rules in Quebec (what if you carry a larger balance or outside ?)
Quebec’s new rules on minimum credit card payments, which take effect Thursday, will likely be followed closely by other provinces, the head of a consumer advocacy group says.
The new rules require banks to set a minimum payment of at least two per cent of the balance owing starting Aug. 1. It will eventually rise to five per cent.
Why is it happening?
Quebec’s previous government passed the law in 2017. It is intended to counter rising household debt by making people pay off more than just accumulated interest, Tanguay said.
The move is a positive one for consumers, Hannah said.
“We’re carrying an awful lot of debt,” Hannah said. “The average Canadian, excluding their mortgage, is carrying $22,000 worth of credit card debt, lines of credit debt and other loan debt, which is substantially higher than in the past.”
What will these changes mean for your monthly bill?
Imagine you make a $1,000 purchase using a credit card with a 19.9 per cent rate.
If you paid two per cent of the outstanding balance each month and nothing more, it would take you nearly 26 years to pay off that purchase, and you’d have paid an extra $3,001 in interest.
Increasing the minimum payment to three per cent would reduce the time to pay off that purchase to around 11 years and you’d pay just under $1,000 in interest.
At a five per cent monthly payment, your interest charges would drop to $442 and you’d have paid off the purchase in six years.
======
It is likely irresponsible to say that markets can’t be cut in half, 50% because mostly everybody said it would not happen before and 2008 happened and there are still alot of people that ran out of money or are really poor now.
The bottomline is there is too much debt and not lower interest rates and negative interest rates will solve anything. As for GIC’s, if they don’t like them just get rid of them and when retirees, seniors and others have no more money the financial industry can pay for their living expenses, rent, taxes etc. Since you guys don’t want to pay even inflation+1.5% to 2.0% as always was done.
This is not capitalism and a free enterprise system, it is a rigged, socialistic, destructive economy now.
I think real estate and stock markets are going to end up like Japan style crash here in Canada because interest rates are following the same path so your $1,000,000 house will be $400,000 in the next 60 to 80 months. The TSX will probably be 10,000 by that time too.
Rate Cuts Coming To Canada Too, But More Will Be Needed
https://jugglingdynamite.com/2019/08/01/rate-cuts-coming-to-canada-too-but-more-will-be-needed/
IMF Exposes Canada’s Housing Market Slowdown: “Prices Remain Overvalued”
https://www.investmentwatchblog.com/imf-exposes-canadas-housing-market-slowdown-prices-remain-overvalued/
#6 Kelly on 08.08.19 at 4:03 pm
New Zealand dropped the bank rate 50 points last night; India 25. It’s a wild crazy race to the bottom. Odds say US down 100 by January, 2020.
Canada will follow shortly.
Negative interest bonds growing in their negativity and proliferation.
+++++++++++++++++++++++++++++++++
Yep. ECB is expected to cut further (more negative) in September + potentially other easing (QE like) measures, trying to stimulate the EU corpse. There are over $15B in bonds yielding negative rates globally.
Canada is not an island. There is no way (NO WAY) that BoC stands pat while the Fed and other nations are cutting further, with us as a trading nation and an economy that is middling.
Will the Canadian consumer see negative rates or 0% mortgages – not likely. Will many central banks be at 0 or negative over the next couple of years, with QE flying around printing money – most likely.
Trump wants to devalue the dollar. Draghi (and soon Lagarde) want to devalue the Euro. China wants to devalue the Yuan, and Japan of course doesn’t want the Yen to rise. It is becoming a full on currency war, race to the bottom. The Plozzer isn’t going to sit that one out.
I fully agree that a balanced portfolio is the right strategy, but If I won $100K in the lottery right now, I sure wouldn’t be putting much into equity markets at the moment.
So central banks will have nothing in the toolkit to fight the next recession. Brilliant.
As I recall, everything was fine until the “Oracle of the Hood” Ryan suggested it’s time to start taking shelter on Saturday. Maybe he can share his predictions for the Leafs this year.
…. A growing cohort of rich, aging baby boomers will contribute to even tighter housing supply for younger generations in Toronto over the next decade, according to a new report.
_____________________________________________
Dopey Trudeau will interpret this a perfect opportunity to bring forth an rich senior extermination program.
Butts forgot to edit the comment and policy papers and goofy will take it upon himself to think independantly…
Expect the Polka dotted suits from the senior eradication team to show up soon..
SARC!
Just another thinly veiled attack on people who saved all their lives and invested wisely…..
HuffPost says, global recession is already here.
https://www.huffingtonpost.ca/entry/global-recession_ca_5d4c2a4be4b0066eb70dd835
Thanks for nothing, Paleo Boomers. Yet again.
Do not expect any sympathy from us when are in charge of everything and you are trying to live off your inflated house assets.
Basic civility, yes.
But Boomer Privilege will be toast.
New Zealand and Australia are full of socialism idiots that are even worse than Canadians when it comes to debt and real estate. Just like their gun policy move lately.
#27 PastThePeak on 08.08.19 at 6:00 pm
Trump wants to devalue the dollar. Draghi (and soon Lagarde) want to devalue the Euro. China wants to devalue the Yuan, and Japan of course doesn’t want the Yen to rise. It is becoming a full on currency war, race to the bottom.
————————————————-
Exactly. And in a macro environment in which every single central bank is trying to outdo all the others in trashing its own currency, which asset class is likely to do well in such a situation?
I sold the last of my protfolio today and took profits that I didn’t last week on this relief rally and gap fill…
WAYYY!! to much volatility.
Too many unknowns.
For CB’s to rip 50 basis point interest rate drops. There is no clearer picture for me needed.
I suspect big money sold today as well.
Its about tolerance. We have a monster run.
The market needs to reset short term in my opinion.
I have not sold my bond etfs though.
As a side note teh BOC bought another 500 million in bonds this week.
This goes on top of the 500 million they did 3 weeks.
That is a billion in liquidity for something in a month?
These are liquidity events.
I have feeling someone is illiquid.
Time will tell.
Thus as trader I back out…
Long term investors don’t care
I do
#14 Howard on 08.08.19 at 4:47 pm
——————
Thanks for the info Howard, while searching for it , I come across also this one as well, it is pretty good :
‘How the economic machine works’
https://youtu.be/PHe0bXAIuk0
It’s becoming more and more absurd that The Fed is getting paid to issue money, beyond the printing cost.
I too thought the article on the wrinklies staying in their houses was overly optimistic. Who knows, but it appears to me that many boomers heading into retirement have more debt, less savings, less/no pension and are less frugal than the generation before them. Not to mention MANY still have a mortgage!! Because of this, they will have to downsize in larger numbers than the generation before them.
Something has to give. Either the bond market is completely right, in which case rates are going lower and we’re heading into a recession, or the equity market is right and bonds will get crushed in the coming years as CBs try to catch up to inflation. What a fun thought, inflation crushing equity returns whilst fix income gets crushed. Well, at least the latter would restore starting yields going forward.
It’s just so weird the Fed is cutting when employment is high (Fed mandate checkmark) and inflation is low (Fed mandate checkmark). Not normal.
#12 Mike on 08.08.19 at 4:45 pm
Agreed.
I’m no conspiracy theoriest. I don’t believe central bankers are intending to cause harm. I do believe, however, that they have made tons of mistakes and are basically incompetent.
Most recent examples: rates being left way too low for too long. Everyone and their brother knew interest rates needed to rise to deflate some asset bubbles that had developed but no..rates were left at zero for way longer than necessary.
To rub it in, we were told that the economy was “recovering” for years while rates didn’t move. Hilarious.
Second is related to the first. But since rates stayed too low for too long. The required increase was stopped prematurely, with rates still too low. Now these idiots want to reduce interest rates again. Yeah….smart move champ.
More stimulus. Just want me need /sarcasm
MF
#38 LS in Arbutus on 08.08.19 at 6:44 pm
RE: seniors retiring in debt.
Basically the marker of a failed individual, to be frank.
I bet they enjoyed some great swinging parties, awesome new toys, and fabulous vacations though eh crowdedelevatorfartz???????
Anyways, I have spoken to a few of these broke boomers. They are usually in debt because some idiot real estate agent son/daughter manipulated them into putting all their savings into some rental property.
Try it. When a boomer tells you he is broke. Dig a little deeper and you will usually hear of rental income properties, or investment condos hoping to pay off in the future.
It’s always the same story: “my son/daughter (insert name here) is a real estate agent and he/she told me my investment property will help me retire later on. I just have to wait.”
No sympathy. But who can blame these people? Our stupid central bankers are encouraging this behaviour with their failed policy.
MF
from the wsj :
Inflated Bond Ratings Helped Spur the Financial Crisis.
ARE Credit-grading firms are giving out increasingly optimistic appraisals as they fight for market share in booming debt-securities markets?
http://housingbubble.blog/
While Trump definitely has his faults. I pondered about the alternatives. I’m more scared of the alternatives really.
Think the market would improve if a Democrat was the prez?
Remember Greenspan…he lit the fuse.
If coach had put me in we woulda made State. No doubt. No doubt in my mind.
Those currency forecasts are wrong. $CAD is going into the 60s next year.
One needs to know their market history.
“That will paper over the China trade war and pave the way to a 2020 re-election romp (he hopes). ”
—————————————————————–
Trump 2020 Landslide victory. That’s an easy call, especially after watching the 26 Democrat clowns beating each other up on the CNN debates.
The Canadian economy is weaker than the analysts believe. Why do you think the entire Canadian yield curve is below the BOC overnight rate? What is this saying re future growth prospects?
#32 Millennial Realist on 08.08.19 at 6:14 pm
Thanks for nothing, Paleo Boomers. Yet again.
Do not expect any sympathy from us when [we] are in charge of everything and you are trying to live off your inflated house assets.
Basic civility, yes.
But Boomer Privilege will be toast.
——————————————-
Mill, you’ve posted a few times in this vein whereby the millennials somehow become the overlords to the quivering boomers who toe the line in terror.
Honestly, it sounds like the hero fantasies that kids have, but I’m wondering what is the procedure you see playing out here? Are you thinking a revolution is nigh?
You must have some understanding that boomers are gen-x’ers are millennials are people right? All groups merge together.
And all millennials are not in what I assume is your poor (or at least very angsty) economic situation- many are doing fantastically well. These are the ones who will actually become the overlords. You probably won’t like their rules either.
Young and angry often leads to old and angry. Try happiness.
The Canadian (XEG) and US (XLE) energy sector are pricing in much lower oil prices in the future.
Garthy, can you clarify your RE reset? You’ve mentioned many times RE values will not go reset in key areas closer to or in main cities. Where will the reset be then? Milton? And what does reset mean?
“The real estate reset is still coming. Patience.”
The real estate reset has arrived. In Edmonton!
And if the public sector in Edmonton goes through massive provincial layoffs, then another reset is probably in the cards. Maybe end of this year or early next year. Look out below !
I am a gen X I see people around me as well heading into their last 20 years of work (health permitting) with no savings and no pension. Some won’t even get full CPP. I am extremely concerned about a few of my friends. At least with the older boomers and the silent generation, typically had a half-decent pension and minimal debt, the younger boomers and gen x really don’t have this… it’s truly scary. As we know, health can and will get in the way for many. There is no guarantee you can work until 65 even. Hell there’s a poor guy who must be 75+ as a cashier at my local safeway. I asked my mom, you think he just wants to get out of the house? She said, “No way.”
@#48 AK on 08.08.19 at 7:40 pm
“That will paper over the China trade war and pave the way to a 2020 re-election romp (he hopes). ”
—————————————————————–
Trump 2020 Landslide victory. That’s an easy call, especially after watching the 26 Democrat clowns beating each other up on the CNN debates.
___________________________
I remember when everyone was calling trump a clown – no chance that clown wins. easy victory for hillary etc etc. Low and behold lol.
my uneducated guess is that it will be a lot closer than some would like to believe.
#55 oh bouy on 08.08.19 at 8:19 pm
“I remember when everyone was calling trump a clown – no chance that clown wins. easy victory for hillary etc etc. Low and behold lol.
my uneducated guess is that it will be a lot closer than some would like to believe.”
————————————————————-
Stock up on the popcorn. It’s going to be very entertaining.
#86 Flop… on 08.08.19 at 11:14 am
Looks to be headed for a seven figure loss in West Vancouver
1080 Eyremount Drive, West Vancouver
Bought 2016 $4,708,000
Now asking $3,998,800
2018 Assessed: $3,877,000
2017 Assessed: $4,681,000
/////////////////
Impersonation alert.
I guess you’re the same person pretending to be Boom…
M45BC
#54 LS in Arbutus on 08.08.19 at 8:11 pm
Expect Shawn Allen to jump in and to state that there is no inflation, apparently everyone around him is well, so what is the problem? CPI should be sufficient to enjoy life in a very advanced society (according to his delusional mind).
#6 Kelly on 08.08.19 at 4:03 pm
Negative interest bonds growing in their negativity and proliferation.
Rumor in Australia is that they are toying with a ban on cash.
I assume so they can suck dry your savings at a faster rate than simple “bank charges”.
I am sure ALL Central Banks are watching the others. Canada will not be any different.
Watch out.
There can not be negative interest rate on money loans.
It is mathematically impossible, impossible by the very definition of ‘money’.
Loaning you have a risk that justifies a premium.
Try getting insurance where the insurance company pays you premium, not the other way around.
Or ask at a grocery store to pay you for picking products there instead you paying.
Banning of cash and negative rates on savings are a form of suppression on already suppressed assets – through obvious inflation. It is basically a theft as it is based on non market conditions – manipulation of central banks to a degree where currencies become something different from money.
Bitcoin and gold rise is indicative that something is very, very fishy.
Should we expect confiscation of cash assets through some new/accelerated form of wealth tax that would drive people into bonds where the loss would be smaller?
Imagine being caught on fixed income with some savings while rates decline and go negative, as inflation roars, both due to excessive lending.
Tax on deposits includes deposits created through lending from money that never existed before as well as money from sale of assets or labour, totally different animals, apples and oranges.
Like a counterfeiter arguing there is too much money out there (and trying to tax the non-fake bills). Good luck, central bankers. (not sure where that central comes from, implying some government affiliation?)
#7 TRUMP on 08.08.19 at 4:11 pm
RE reset…..
WHEN?
*******************
US 2009 (Spain/Ireland)
Now if you can’t sense something coming, you just might be senseless. Your handle doesn’t help your cause.
#50 Sail away on 08.08.19 at 7:45 pm
#32 Millennial Realist on 08.08.19 at 6:14 pm
I too would like to know what cataclysmic event will push boomers out of power while Millenials become dictatorial overlords (and Gen-x is simply forgotten as always, I assume?)
https://www.msn.com/en-ca/news/canada/we-are-helpless-calgary-woman-loses-life-savings-in-failed-real-estate-deal/ar-AAFwszv
A good example of a shady realtor and a loss on a rent to own. Realtor declares bankruptcy so can’t pay down payment back etc. Worth a case study.
#2 David McDonald on 08.08.19 at 3:54 pm
“« Buy high, sell low » now that’s counter intuitive!”
– Just make up the difference on volume.
—————
Meanwhile while nobody was looking the price of gold in Canadian dollars just made an all time high at $1987/CAD. Most of that was exchange of course the last time gold got to the $1900’s the Canadian dollar was closer to par. What strange times we live in. Also, time to re-balance back to that 5-10% range.
Gold, like real estate and most other things, generally goes up with inflation. But unfortunately it does not pay dividends and you can’t live in it. But if it is used as a proxy for inflation, inflation in Canada has been a lot higher than reported. My Costco reporting would indicate this is true. Especially items that come from the US like produce have gone up at way more than 2%. It’s interesting how Costco does it when they make a price hike. They make it look like it’s on sale, but really what they’ve done is introduced a higher price and then say it’s on sale for the old price for a limited time. Either way, best to stock up. Your money isn’t making any money in the bank.
Or look at my truck: When I bought it new 5 years ago the MSRP was $70,000. A similarly equipped model is now $90,000. That’s mostly currency too but yikes!
Patience the reset is still coming
Patience gold to $5000
Patience canadian dollar to par
Patience Democrats regain power
Patience canadian dollar to 70 cents
Patience Canada’s next PM will actually have b*lls
Patience gold to $300
Patience Canadians will implode on debt
#32 Millennial Realist on 08.08.19 at 6:14 pm
Thanks for nothing, Paleo Boomers. Yet again.
Do not expect any sympathy from us when are in charge of everything and you are trying to live off your inflated house assets.
Basic civility, yes.
But Boomer Privilege will be toast.
************************
By the time your generation becomes fully in charge of things most boomers will be long gone. And most likely Millennial’s attitude will shift as you get older. The sooner you realize that the sooner you will look for realistic solutions.
The boomers have their own demons to face as does every generation. (not all of course).
Let’s just call each other people ‘in a similar boat’ and stop using boomer, millennial, Gen X tags.
Everything has a reset. Be patient…you have time on your side, and that in itself is valuable.
#5 crowdedelevatorfartz on 08.08.19 at 4:02 pm
Just wanted to reassure Millennial Be-For-Realist that his fave Boomer is A-OK.
I have only posted once per day lately and I know that it isnt my usual 14 per day postings…
********
I’m going after your ‘Crown’ no more slacking of the submit button…game on.
Enjoy the east coast sounds fun, nice to forget what day it is…
This real estate reset will be interesting to see. I’ll get a bag of popcorn and a drink, park my ass in the comfy cozy chair, put my feet up and watch the show. Should be interesting. And yes, if this blog is still around I’ll be entertained by the comments from the steerage section.
Earlier old coworker got hold of me and aksd me can i troubleshoot her kitchen wiring have some odd problem. She’ll get someone tomorrow to fix it, than i remembered this. I did post-it before. funny.
DEFINITELY PRESS PLAY !!!
https://www.youtube.com/watch?v=69yswP-MSvQ
#31 AnonDude on 08.08.19 at 6:14 pm
HuffPost says, global recession is already here.
https://www.huffingtonpost.ca/entry/global-recession_ca_5d4c2a4be4b0066eb70dd835
********************
Can’t be true…governments don’t lie.
How will bank stocks hold up in the event of a recession?
#6 Kelly
How is that Australia ban on cash possible?
Garth, how can such law be even considered in a country like Australia? It seems it’s moving along and being entertained, is it not?
NY Times piece offering one explanation for this week’s market gyration based on the Chinese (one day) currency uncertainty. https://www.nytimes.com/2019/08/08/opinion/trump-china-trade.html
#61 DON on 08.08.19 at 9:29 pm
https://www.msn.com/en-ca/news/canada/we-are-helpless-calgary-woman-loses-life-savings-in-failed-real-estate-deal/ar-AAFwszv
A good example of a shady realtor and a loss on a rent to own. Realtor declares bankruptcy so can’t pay down payment back etc. Worth a case study.
———————————
The unholy trinity of bad financial deals: pay day loans, reverse mortgages and rent-to-own…
#32 Millennial Realist on 08.08.19 at 6:14 pm
Thanks for nothing, Paleo Boomers. Yet again.
Do not expect any sympathy from us when are in charge of everything and you are trying to live off your inflated house assets.
++++++++++++++++++++++++++++++++
Millennials in charge of everything (anything)? I suppose there will be a time, maybe in 30 years or so, after the last of Gen-X head off to retirement, that some Millennials with some work ethic might still be around to fill positions of power. Not likely too many though.
Isn’t this the generation that is staying in Mom & Dad’s basement until early 30s, and then after a few years in the work force their goal is early retirement?
My bet is on Gen-Z taking the reigns…
Boomers may be house-rich, but the evidence is overwhelming they’re also asset-poor – thin in assets that can become an income stream. Seven in ten lack corporate pensions, and millions are just discovering it’s impossible to live on the government CPP/OAS pogey.
——————
That really strikes a chord. I was chatting with some colleagues who deal with municipal property taxes in the GTA last week, who were mirroring this sentiment of how cash-strapped home owners are there.
In Toronto in particular, they said they are being flooded with requests for the annual tax rebate program for seniors, which gives people a few hundred dollars back in most cases per year. To qualify you have to have income below $40-50,000 annually for the whole household, which is usually a couple or one person.
Apparently it is now the norm for households to report barely $20,000 or slightly above in total income and so the local government is starting to wonder if it can still afford this politically motivated rebate program, but they are being flooded with new applicants who basically have OAS and CPP and little else to live on.
And these are from people whose homes have assessed values of about $650,000 on average they tell me, retail price about twice that. The program deadline to apply is in a few weeks and they are expecting record numbers to sign up by then.
So a significant percentage of the population would seem to be quite literally ‘house-poor’.
#103 PastThePeak on 08.08.19 at 2:54 pm
#100 Ponzius Pilatus on 08.08.19 at 2:18 pm
100th!
++++++++++++++++++++++++++++++
About the only factual post you have made…
—————
Your handle says it all.
Keep up, man!
There are millions of ways to make Millions a year. Millennials have zero concept of were to start.
Taught by communist teachers who dont khow shit. Success to them is a big pension and the summer off with pay.
What a horrible existence.
#27 PastThePeak on 08.08.19 at 6:00 pm
#6 Kelly on 08.08.19 at 4:03 pm
New Zealand dropped the bank rate 50 points last night; India 25. It’s a wild crazy race to the bottom. Odds say US down 100 by January, 2020.
Canada will follow shortly.
Negative interest bonds growing in their negativity and proliferation.
+++++++++++++++++++++++++++++++++
Yep. ECB is expected to cut further (more negative) in September + potentially other easing (QE like) measures, trying to stimulate the EU corpse. There are over $15B in bonds yielding negative rates globally.
Canada is not an island. There is no way (NO WAY) that BoC stands pat while the Fed and other nations are cutting further, with us as a trading nation and an economy that is middling.
Will the Canadian consumer see negative rates or 0% mortgages – not likely. Will many central banks be at 0 or negative over the next couple of years, with QE flying around printing money – most likely.
Trump wants to devalue the dollar. Draghi (and soon Lagarde) want to devalue the Euro. China wants to devalue the Yuan, and Japan of course doesn’t want the Yen to rise. It is becoming a full on currency war, race to the bottom. The Plozzer isn’t going to sit that one out.
I fully agree that a balanced portfolio is the right strategy, but If I won $100K in the lottery right now, I sure wouldn’t be putting much into equity markets at the moment.
————-
Another armchair financial advisor.
What are your credentials?
#17 MF on 08.08.19 at 4:56 pm
98 IHCTD9 on 08.08.19 at 1:59 pm
Yup. Add to that that the US has to fight with one arm behind its back while keeping an eye on “world opinion” that will be against it regardless of what it does. It’s similar to how a small country in the Mid East has to defend itself.
If fully unleashed the US military would lay waste to any foe.
MF
————
Indeed, the US can’t win a popularity contest unless some group of nutbars half way around the world start bombing their own countrymen into oblivion. THEN everyone craps on the US for not getting over there soon enough.
If the US ever pulled out of Japan, the Middle East, and everywhere else they’ve parked an air base or an aircraft carrier – that would be a good time to start stocking up on freeze dried food and gold. Half the damn planet would be at war the next day.
If it wasn’t for the USA, we would not have near the overpopulation problem that we currently see in certain parts of the world…
Stan misses me
#58 Stan Brooks on 08.08.19 at 8:57 pm
Expect Shawn Allen to jump in and to state that there is no inflation, apparently everyone around him is well, so what is the problem?
***********************
Sorry Stan, I was too busy golfing yet again today. With other youngish retiree friends. Sorry we grabbed the last of the DB pensions. Actually, one of my kids is in a DB pension plan now so we are making this a family tradition.
Some one’s gotta do it;
https://www.zerohedge.com/news/2019-08-07/chart-week-canada-housing-market-slowdown
Uber just lost 5 billion in the last quarter.
Apple, Amazon and Wallmart are in a deadly fight for market share.
Boeing is finished.
My bet is on China.
Learn Mandarin.
Easy to pull stats n data from the net, but truth needs boots on the ground.
Visited Canada last month from so-called Dirty Asia, and boots on the ground in Toronto proper and south down the 401. Walking the streets in the core hoods of these cities I saw nothing but SOLD signs. Even far from the core, toward the burbs, ugly condo bldg, units start at 650 and only 1 left, act now!
Timmie’s, Lawblaw’s, Sbux, Eatin’ Centre, cinemas, cafes, restaurants — nothing but registers ringing off the hook constantly. People spending like no tomorrow, not a care in the world!
Saw no hint of slowdown in consumer spending, no hint of slowdown/melt in Canadian housing. Saw nothing that indicates job insecurity or folks living like miserable wretches.
Garth, your investment advice is spot-on but your take on housing just don’t jibe with reality. How many other cities in Canada are like Toronto and the 401 corridor? Nothing but SOLD. Maybe Canuck real estate really is unique. Maybe it really IS different here? How many people in, say, Vancouver or Toronto sold their pad in a panic only to see it continue to rise in value?
And let’s not forget that much of the planet’s population is crammed into megacity hellholes of varying degrees of liveability. Many people would risk everything to reach Canadian shores.
DELETED
Dominoes lining Up, they liked voted for John Tory the fake conservative but really a Liberals, NDP socialist.
Now they will pay those higher property taxes, water, garbage, other fee increases up 50% total over the last 4 years Tory is in power. Inflation is at 2% or 2.4% yeah right, good luck living by those figures.
When you trade in the cowboy boots for walmart flip flops.
https://youtu.be/Ckom3gf57Yw
To the wife of 40 years.
It wasent easy. But we made it to death’s door together. Love you .
https://youtu.be/CjRas1yOWvo
https://spaceweathergallery.com/indiv_upload.php?upload_id=155374
Oh Garth, I love you
That report from the CMHC is full of holes and almost seems like they’re trying to help the real estate industry by getting the youngsters nervous to get them to buy now.
The report left out the fact that almost no nursing homes have been built in Toronto in the last 10 years, unlike the number of condos being built (perhaps there’s a story there). If there are no spaces in nursing homes, or when the waiting lists can be up to 7 years long for a man who needs a semi-private room, no wonder seniors are staying in their houses longer – they have no choice. In 2006, the Baby Boom cohort which was the population with the largest number of people until the Millenials, was 40 to 60 years old in 2006. Of course in 2016 they would be seniors and hence the incredible increase. Also, when all these seniors die there will probably be a glut on the market and house prices will go down noticeably as long as the younger generation has packed it in for a cheaper and less crowded city like Montreal.
After 2 years of decline, condo pre-sales in the Lower Mainland were up in July.
Probably due to events in HongKong.
You actually believe that? – Garth
IHCTD9 08.08.19 @ 11:05 #85
Read up on folks who work there but were born in the UK or USA. Single hard working Professionals who lose over half of their paycheque to taxes, and then pay 20+% more on sales taxes when they spend what little they have left over. For what? Health care, a crap pension, and EI? You can fill your boots – I’ll pass.
————-
This is different from Canada-how?
#62 nonplussed wrote: Gold, like real estate and most other things, generally goes up with inflation
I need to correct you. Gold doesn’t go up in inflation. It goes up in deflation, declining interest rates and a fear of government.
Gold is rising because there is fear of government. Go compare lowering interest rates and trade wars. The timetable is perfectly aligned with gold’s rise.
There is a direct correlation to these recent events. The Chinese people are buying physical gold by the truckload due to fear of their government policy of fighting the trade war. Thus fear in government.
Chinese folks trust gold. They have trusted for 1000’s if years. As do India folks.
Westerners are buying it due interest rate declines
Compare the interest rate lowering timetable. You will see gold exploded at the same time. Gold used to react to the USD now it reacts to these events.
Add in Trump’s trade war rattling and these two events caused this breakout. There is no inflation.
I’ve held gold and silver for decades. I am NOT a gold bug. My family uses it as another tool to transfer wealth. It is a cultural thing.
It is not an investment IMHO. It is insurance.
Unfortunately people listen to the gold hucksters.
Gold and silver are due for an intermediate decline.
Yes it will rise as this epic battle between China and the US escalates.
But again, don’t be sucked in by hucksters.
It is not for specualtion and should never be more than 5-10% of any asset allocation.
Peace
#32 Millennial Realist
Do not expect any sympathy from us when we are in charge of everything and you are trying to live off your inflated house assets.
——————————————————————–
Hey Dooosh Bagggg,
First of all, you won’t be in charge of squat until every last one of us is gone. So we really don’t care what you do at that point.
Secondly, I didn’t realize you worked for the CMHC!
Now, go to your room.
“While a recession of some kind is in the cards in the next year or two, successful companies won’t stop making money.” – Garth
——————————————————————–
Have you heard the News?
Can’t afford no shoes!
Recession…
Depression…
https://www.youtube.com/watch?v=N4Ax__Q_mHw
Crazy smart guy!
https://www.armstrongeconomics.com/markets-by-sector/stock-indicies/is-buffett-just-wrong/
Careful those bonny seniors won’t get caught up in a UN-mandated program, that they must take in one irregular migrant family each.
What this weblog said…fly below the radar in Kanada. There’s a war on you know.
Did you forget it was International Cat Day in Canada?
Where’s the respect?
https://www.theprogress.com/trending-now/its-international-cat-day/
#90 PA on 08.09.19 at 7:25 am
IHCTD9 08.08.19 @ 11:05 #85
Read up on folks who work there but were born in the UK or USA. Single hard working Professionals who lose over half of their paycheque to taxes, and then pay 20+% more on sales taxes when they spend what little they have left over. For what? Health care, a crap pension, and EI? You can fill your boots – I’ll pass.
————-
This is different from Canada-how?
___
Taxes are way higher in Denmark for the same basic benefits a single dude/ette would get here.
https://www.cnbc.com/2019/08/08/cramer-says-a-set-of-bogus-worries-spooked-investors-out-of-stocks-this-week.html
Jim Cramer, love him, calls stocks. Phenomenal track record. I bought two fisted on his Tuesday call that markets were head faked by Trump Hate media, on the money. Cashed up good boyzzzzzz!!
#105 oh bouy on 08.08.19 at 3:28 pm
Even us urban folk like to spend some time in true nature here an there. Having said that, i’m glad i didn’t purchase that serene algonquin cottage this past spring for that very reason. stick to renting a couple weeks a summer.
____
That was a good move – renting stuff like that is the way to go. I’d love to own one of those too, but it just doesn’t make any bloody sense.
I’ve been up and down Hwy 28 and 62 enough on a Friday aft to know the pressure is building to escape up north a ways also. They did a ton of work to 28 a couple years ago.
It will probably be a half day bumper to bumper slog to get up there on a long weekend too someday soon.
https://ca.finance.yahoo.com/news/canada-lost-24200-jobs-in-july-stat-can-125220916.html
Making up statistics, i.e. lying about stuff.
The truth:
With very low interest rates jobs are disappearing at very large numbers during seasonally strong months; more worrying is the disappearance of full time jobs and the emerging contract gigs that are spun as ‘hourly job growth’ mostly due to minimum wage increases and the no-benefits factor.
BoC will cut, it is a given.
#104 Remembrancer on 08.08.19 at 2:58 pm
#98 IHCTD9 on 08.08.19 at 1:59 pm
Everyone likes to apply different rules to what constitutes a win, but I stick with facts. Waging war is killing and destroying. Whoever inflicts the most of these on their enemy is the winner.
————————–
That’s some real Clausewitz meets Sun Tzu level analysis there – sure your criteria may work for a bar brawl or a video game but smashing the place up from a distance is one thing, holding ground, especially with an unwelcoming population or “winning” and sustaining a peace that is to your benefit is quite another…
_____
Holding ground and sustaining peace are not part of the act of war. When these activities are being undertaken, a surrender has been issued, and the war has already been won.
Getting that surrender involved killing and destroying on a huge scale.
Look at Japan, they were fanatical, considered their Emperor a god, and readily sacrificed themselves to missions they had no chance of winning. They took TWO nukes before they surrendered. Everyone has a limit. It’s just how much horror can be withstood before capitulation. The USA would never have pushed the Japanese to surrender by taking pot shots at their shoreline – those nukes were needed.
Waging conventional warfare against the USA today is certain death, that is why we see so much restraint. The USA could go over to the Middle East, and literally send them all back to living in tents and travelling on Camels in a matter of a couple weeks.
But they don’t – and that’s not called losing a war…
#97 IHCTD9 on 08.09.19 at 9:41 am
Taxes are way higher in Denmark for the same basic benefits a single dude/ette would get here.
That is very far from the truth.
They have better healthcare, much better pension system, free education.
+ you can work everywhere in EU with Denmark education.
No tips at restaurants.
#90 PA on 08.09.19 at 7:25 am
IHCTD9 08.08.19 @ 11:05 #85
Read up on folks who work there but were born in the UK or USA. Single hard working Professionals who lose over half of their paycheque to taxes, and then pay 20+% more on sales taxes when they spend what little they have left over. For what? Health care, a crap pension, and EI? You can fill your boots – I’ll pass.
————-
This is different from Canada-how?
___
Taxes are way higher in Denmark for the same basic benefits a single dude/ette would get here.
—–
Really? 54% income tax (Ontario), 15% HST seems rather the same to me…..
#4 Smartalox on 08.08.19 at 3:59 pm
Heading out for dinner last night, I saw an older woman (maybe mid 50’s) in a newly-built condo development, scrounging for returnable bottles in the restaurant’s garbage bin.
Someone home-rich, but asset poor, perhaps?
……………………………………………………………….
Perhaps her Strata Fees went up just a little bit every year? Cat food is next! Good luck moisters, crazy old man and woman that thought they would downsize, sell the family home and retire without debt, ha all those fees certainly eat up the income quickly. Oh and BTW they won’t ever go down, just uppa. They would have been better off staying put.
I like the ” According to some reports”. I am starting to have even less faith in the Media, than ever, as evidenced by the CMHC commentary. In other parts of the world, the Media are reprimanded for negative comments, against Seniors… or Boomers… Politics of Envy, or Division, seems, to be a Deflection point for our Liberal leaders and Media… Boomers, are just a demographic, and all these comments, further the uncertainty, we face…. Build more homes… Duh!
As simplistic as this seems, if most Central Bankers had any logic, the Academics, from the Developed Countries, would simply reset Interest Rates, to an acceptable level, restoring some Balance, to the Credit Market, and your Debt is my income.. Pension plans, our Modern societal pressures, to account for our future, are being jeopardized, by our own leaders… Government needs a reset… soon… as well.
102 Stan Brooks on 08.09.19 at 10:45 am
-lol this guy^
Posting partially digested brown coloured waste day in and day out. Year after year.
Hey Stan, Tell us more about how Italian women are having tons of kids because life is so grand in the EU. Tell us how the CAD should have been at 60 cents US by now.
Tell us more so we can post how reality is the stone cold opposite of everything you write. Day in and day out. Year after year.
MF
?/door
https://www.youtube.com/watch?v=_XgsVdmNPxM
Yep my wife’s full-time, pension job ends at end of the month at which point she’s on to part-time, hourly work… that’s what 3 university degrees will get you. Who needs scientists working on epilepsy anyways! Fortunately we don’t own so no fire sale on our street.
============
#53 JSS on 08.08.19 at 8:02 pm
“The real estate reset is still coming. Patience.”
The real estate reset has arrived. In Edmonton!
And if the public sector in Edmonton goes through massive provincial layoffs, then another reset is probably in the cards. Maybe end of this year or early next year. Look out below !
Algonquin Power & Utilities Corp. looks like a real potential long term winner with a healthy current 4.31% annual dividend. It might see a 5% to 10% pullback when the next market correction comes but at currently $17.10 a share could be $20 in the next 18 months to 2 years.
I think that it is a better buy at $15.75 to $16.00 per share if it ever reaches that point.
#106 MF on 08.09.19 at 11:17 am
Sure.
#16 Dave on 08.08.19 at 4:53 pm
I’m no financial expert so I find it hard to make heads or tails of daily events…leave that upto Garth.
Real Estate Reset Still Coming – that I hear loud and clear!!!
____________________________________
How big of a reset? Garth has pointed out several times that certain property values will not drop 50 percent, 30 percent nor 20 percent (depending on area).
How big of a reset we talking about then? Will the suburbs outside of Toronto (45 minute commute into the city on a train) really feel it?
#103 PA on 08.09.19 at 10:59 am
#90 PA on 08.09.19 at 7:25 am
IHCTD9 08.08.19 @ 11:05 #85
Read up on folks who work there but were born in the UK or USA. Single hard working Professionals who lose over half of their paycheque to taxes, and then pay 20+% more on sales taxes when they spend what little they have left over. For what? Health care, a crap pension, and EI? You can fill your boots – I’ll pass.
————-
This is different from Canada-how?
___
Taxes are way higher in Denmark for the same basic benefits a single dude/ette would get here.
—–
Really? 54% income tax (Ontario), 15% HST seems rather the same to me…..
____
That’s the top marginal rate combined. I agree it sucks, but the trip up to that point makes all the difference.
Dane pay on average 45% total in income tax. In Canada it’s about 32%. Sales tax in Denmark is 25%, here it’s 13% (In Ontario), and even less depending on the province.
We get hammered here in Canada no doubt – but Danes get pounded into the ground with a pile driver. Way worse.
#106 MF on 08.09.19 at 11:17 am
Hey Stan, Tell us more about how Italian women are having tons of kids because life is so grand in the EU. Tell us how the CAD should have been at 60 cents US by now.
Tell us more so we can post how reality is the stone cold opposite of everything you write. Day in and day out. Year after year.
MF
___
Ouch! lol
The U.S. can be nasty for employees
From Stantec’s Q2 conference call yesterday:
“We do not expect severance costs to be material and there are a couple of reasons for this. The primary factor is At-will Employment in the US, where more than half of the affected employees were based.”
*****************************
They were reducing employment in higher level admin. These were likely engineers that had been promoted. High paid people.
So, in the U.S. you can get rid of log-term staff quickly and pay little or no severance.
In many ways that’s fair. In Canada we have almost “property rights” in jobs. This costs Canadian companies more. But it also provides stability. Stability to sign a mortgage. Stability for families. But it can make Canadian companies reluctant to hire.
In Canada a really good job is hard to find but then is easy to keep.
I’m not sure I would want to live in the U.S. system. I suppose though the best people thrive but any employee not keeping up for any reason can be easily cast aside. Not great for society.
There are unintended consequences to the law requiring or not requiring severance.
Uber just lost 5 billion in the last quarter.
Apple, Amazon and Wallmart are in a deadly fight for market share.
Boeing is finished.
My bet is on China.
Learn Mandarin.
————-
Another armchair financial advisor.
What are your credentials?
;)
Well Boomers will be remembered in history as Busters
despite all the cruelty they imposed on other generations.
You will not be able to take those houses under with you.
#82 Ty Currie on 08.09.19 at 12:19 am
Easy to pull stats n data from the net, but truth needs boots on the ground.
Visited Canada last month from so-called Dirty Asia, and boots on the ground in Toronto proper and south down the 401. Walking the streets in the core hoods of these cities I saw nothing but SOLD signs. Even far from the core, toward the burbs, ugly condo bldg, units start at 650 and only 1 left, act now!
Timmie’s, Lawblaw’s, Sbux, Eatin’ Centre, cinemas, cafes, restaurants — nothing but registers ringing off the hook constantly. People spending like no tomorrow, not a care in the world!
Saw no hint of slowdown in consumer spending, no hint of slowdown/melt in Canadian housing. Saw nothing that indicates job insecurity or folks living like miserable wretches.
Garth, your investment advice is spot-on but your take on housing just don’t jibe with reality. How many other cities in Canada are like Toronto and the 401 corridor? Nothing but SOLD. Maybe Canuck real estate really is unique. Maybe it really IS different here? How many people in, say, Vancouver or Toronto sold their pad in a panic only to see it continue to rise in value?
And let’s not forget that much of the planet’s population is crammed into megacity hellholes of varying degrees of liveability. Many people would risk everything to reach Canadian shores.
*******************
Wow!!! made a ton of assumptions based on what you perceived to be happening on your short journey’s.
Of course people are still consuming…that’s the point, they can’t seem to stop until they are out of credit. Real estate does not exist in a vacuum many factors affect it…did you research those as well? You mentioned all you see is sold signs?? In my part of Canada, all I see is new listing and price reduced signs in every neighbourhood.
There is a reason why central banks ore cutting interests rates.
“So while volatility is likely to shot higher, those who come here to tell you markets will lose half their value are just making it up.” GT
*******
I never said ‘half’ their value; I said ‘more than half’ their value (ie. SP500, Dow, Naz … etc).
Now, if (or when) the Markets prove me right, I wonder what the ‘explanation’ will be?
I suppose a B & D portfolio will fare much better – obviously, but if 60% of a portfolio sheds 60%, it won’t be a picnik either.
Anyway, loving the volatility – makes for better opportunities as it induces selling at the wrong times (from emotional investors). I’m Vulcan – I act rationally.
At least I try!
tcc