In the fog of macroeconomics, people live their lives and try to make good daily decisions. So while the inverted yield curve and Modern Monetary Theory are interesting, what your mom wants is w-a-y more relevant.
Bob knows. Here’s his real-life question, after which we’ll get esoteric.
I’m in a situation where my mother and failure-to-launch sister want to move in with me. My wife and I absolutely want to help them because we’re super close and don’t have a lot of family left. We have a great relationship with them so that isn’t a concern. My house has enough space but would need about 60k in renos to make it work, sort of. To be honest, we’ve never been thrilled about the house, even though we’ve lived in it for 10 years.
I’m wondering if that 60k would be better used against a new house. Ours is a great starter house and would sell quickly due to the shortage of listings in this price range in London. As is, it would likely sell for 360k – newly renovated homes on my street are fetching 435. Houses that would better suit our future living arrangement would be around 600-700k.
Our financials are pretty solid thanks to you. 35 years old, no kids; 60k on the mortgage, total carrying cost is about 1300/m (including utilities). No other debt. 250k across registered accounts in a 60/40 investment split using ETFs when possible. Gross income between the two of us is 180k. Mom and sis would chip in to cover bills, but it would not be much, maybe 1000/m between them (do they need to pay rent or can this be gifted? What does the CRA think?)
Is this a crazy idea? I know we can easily cover the bills, even with a temporary job loss, but I feel like I’d be buying at the top of the market, and in my opinion, higher priced homes will have more distance to fall. The increased carrying costs would slow down my ability to invest, but the extra cash from mom and sis helps balance that out a bit. It really boils down to: spend 60k and have everyone a little uncomfortable, or slave away paying off a newly borrowed 300k but slightly enjoy the house more than the old one.
On the flip side of things, selling and rebuying would allow me to unlock my current home equity and take advantage of low rates – a 130k downpayment on a 650k home would avoid CMHC fees and allow me to lock in 5 years at 3%, leaving 150k from the sale of the house to invest. I’d really appreciate any advice you have, be it financial or mental!
This is simple. Sell and move.
Why?
First, you can afford to upgrade without gutting your investment portfolio, since you have $300k in equity to deploy from the existing house. Second, mortgage rates are ridiculously low, and trending lower. That will help goose the market value of your house and make a mortgage on the new one relatively easy to carry. With some bargaining you should be able to lock in at 2.5% or so – which is barely over the inflation rates. Third, you’re going to get a grand a month to help offset the bigger mortgage (the CRA need not know if mom & sis pay monthly overhead). Fourth, you want this. The family dynamic is with you. But don’t even contemplate adding them to the title – that would change everything. And, fifth, London is actually an active and promising market. The average price is cheap by Ontario standards ($335,000), recent sales activity has been brisk and market values have increased by 14% in a year. If mortgage rates were not headed even lower, you might expect this seller’s market to turn. But that’s not the case. And this is where the macroeconomcis come in…
Given the inevitability of an economic downturn at some point, the weird US president and the global debt bubble. Central banks are about to get busy. Germany’s getting a stimulus plan. China is cutting corporate lending rates. The Fed is expected to cut the cost of money at least twice in the next four months and the bank of Canada will be trimming its key rate by a half point – maybe starting as early (says Scotiabank) as next month.
Says the bank’s chief economist: “Given the evolution of risks, we now think the Bank of Canada should take some insurance and cut rates by 50 basis points by the end of 2020Q1. Were Canada an island, cut off from the rest of the world, such a move would not be necessary. As Governor Poloz has indicated a number of times, he considers the implementation of monetary policy within a risk management framework as have previous Governors. Risks to the Canadian economy are on the rise. Dependent as it is on international trade, Canada cannot be immune to the rising tide of protectionism.”
Fair enough. We get it. If the odds of a recession in the next year or so are one-in-five, central banks will work to mitigate things by chopping the cost of money. But there are risks – one of them being higher house prices in London, ON (and everywhere else), at least for a while.
“There are clear indications that the housing market is strengthening on the back of falling mortgage rates and strong population, employment and wage growth. Rate cuts would put upward pressure on home prices in some markets and encourage households to borrow. With household indebtedness already high, and with the Governor having spoken at length about the risks associated with high household debt, rate cuts could increase financial stability risks.”
Hmm. This warning comes just days after the news a bank in Denmark is lending mortgage money at 0% or less. Plus $15 trillion in government bonds around the world have negative yields. Central banks are now looking at a downturn without much ammo in their chambers. Don’t be surprised if we hit all-time lows in the next year, with GICs and home loans both well below inflation.
Will this bring 2016-type FOMO back to the real estate market?
Nah, unlikely. We still have the stress test, and it continues to sit north of 5%. Meanwhile, if the economy does take a dive, so will corporate profits, job creation and wages. Already household debt is ridiculous and house prices in major centers remain inflated. That’s why markets like London may actually outperform – where (unlike Toronto) starter houses are actually starter houses. Not hovels.
Given what’s coming, borrow lightly.
85 comments ↓
The stress test me thinks will be Kaput after October if we vote with our heads and not our posteriors. If she goes get ready for craziness to start all over again.
OTTAWA — Chinese officials accused Foreign Affairs Minister Chrystia Freeland of “meddling” in China’s internal affairs Sunday after her weekend statement condemning violence in Hong Kong in the wake of escalating tensions between pro-democracy protesters and police.
Here we go again…….
Ford government cuts will blow $2-billion hole in municipal budgets, Moody’s warns
As well as considering tax hikes, the Moody’s report recommends municipalities find “administrative efficiencies,” and look into cutting some non-essential services. It also expects municipalities to rely on their reserve funds to help weather the coming financial storm…Toronto’s reserve funds are especially weak — second lowest of the 10 Ontario municipalities that Moody’s tracks. Only Waterloo’s are lower.
Waterloo expects $300M loss in 2020
Craig Dyer, Region of Waterloo commissioner of corporate services and chief financial officer, said he and his staff will be meeting with the city’s finance committee in August to determine how they’ll cope with the coming provincial cuts.
“Overall, we estimate the aggregate changes will exceed [a] $300 million loss in municipal funding in 2020 and $2 billion over the next 10 years,” the report states.
“In our view, municipalities will need to address these shortfalls through a combination of administrative efficiencies, raising taxes, cutting some nonessential services and drawing on reserves,” it continues….
Mike Smee · CBC News · Posted: Jun 27, 2019 4:00 AM ET | Last Updated: June 27
Hi all!
I hate seeing these forecasts of higher prices and lower interest rates… we want to buy a house in the short term and it is physically hurtful to think we will need to shell half a million dollars for a roof. Any tips on coming to terms with this fact?
This commentary provides an updated comparison of Ontario government revenue, spending, deficit and net debt with that of other provinces based on Statistics Canada’s Government Finance Statistics.[5]
Ontario’s Financial Accountability Office (FAO) provides the Legislative Assembly of Ontario with independent analysis on the state of the Province’s finances and trends in the provincial economy, and on bills and other proposals to support the Assembly’s performance of its constitutional responsibility.
Key Points
In 2017, the Ontario provincial government received $10,415 in total revenue per person[1], the lowest in the country.
Despite the lowest total revenue per person, Ontario’s per capita tax revenue is above the average of other provinces, owing to a strong economic base.[2]
However, offsetting Ontario’s relatively high tax revenues are lower revenues from other sources. Compared to other provinces, Ontario generates a relatively modest level of resource revenues and receives a relatively low amount of transfers from the federal government.
Ontario’s low per capita revenue is matched by similarly low government spending relative to other provinces. In 2017, Ontario spent $9,829 per person on programs, also the lowest among provinces.
Ontario’s per capita program spending is more than $2,000 below the rest of Canada average, a gap that has widened since 2011.
In particular, Ontario spends $3,903 per person on health care, the lowest in Canada and $487 per person lower than the rest of Canada average.
https://www.fao-on.org/en/Blog/Publications/inter-prov-comparisons-feb-2019
Ontario’s net operating deficit was $3.8 billion in 2017[3], down from a deficit of $5.3 billion in 2016. On a per capita basis, Ontario’s deficit was $271 per person in 2017, below the average of other provinces.
However, Ontario program spending is projected to jump by nearly 5 per cent in 2018 while overall revenues are expected to decline.[4] As a result, Ontario’s deficit is expected to more than triple to $868 per person in 2018, based on the FAO’s projections.
Despite a relatively low per capita deficit in 2017, Ontario had the second highest debt load per person in Canada, behind only Newfoundland and Labrador. Going forward, larger deficits would further deteriorate Ontario’s fiscal position relative to other provinces.
The Ontario government has announced its intention to balance the budget while committing to not raise taxes. Given that Ontario’s per capita program spending is already the lowest in Canada, opportunities to restrain or reduce spending further may be limited.
Lower rates a coming.
As bigriders no no says “ uppa uppa UPPA “ she goes for real estate ….. and that everywhere , the GTA included .
Higher real estate costs and more household debt are intense negatives for our country. Stop humping it. – Garth
+/- 3σ you are always spot on Garth.
This time though, that other 0.3% in play.
Selling makes no sense.
1. If he sells he has a net of $170K left over to invest NOT $300K ($360K sell price – $60K existing mortgage – $130K down payment on new home he wants). Ignores selling costs which will further whittle down that $170K left to invest.
2. Existing $60K mortgage equiv. to $290/mo payment. New home mortgage on $600K home = $2,200/mo payment, 3%, 25 yr. Difference = $1,910/mo. Subtract Mother + Sister cash flow of $1,000/mo = SHORTFALL of $910/mo.
3. Macro: trading nation Canada seeing most of G7 polishing portholes on a sinking ship, save the US. Cheap mortgage rates. Volatile World and local economy, positive 10 year business cycle nearing its end?
SUMMARY:
Stay put. HELOC or whatever the $60K renovation, paid off in 5 years with Mother + Sister money. Equity gain = $75K (homes in his area renovated worth $435K, his worth $360K). $260K investment portfolio untouched. Volatile economic environment.
OR
Sell then buy $600K home. Mortgage increases from $60K to $465K ($130K downpayment). Payments increase from $290 to $2,200/mo less $1,000/mo from Mother and Sister, increased costs = $910/mo. Investment portfolio increases from $260K + $170K (less selling costs). Volatile economic environment.
Basically, he is hoping in extra $170K, less selling costs. of addtional ETF etc. investments will cover -$10,920 of added yearly costs. Maybe. Maybe not.
Increased debt, increased net monthly payments all that in a volatile local and World economy. Stay put. Renovate if necessary.
Surely an Italian dude would know life is not a balance sheet. In any case if he shovels the existing equity into a new place and takes a $300k mortgage, payments are only $1,300, minus $1,000 from mom. Investments stay intact. Mother loves him. All good. – Garth
Last post summary, did not coalesce to something simple:
If he sells, he is gambling that $170K less selling costs invested will cover about $11,000 per year in additional costs. He’ll need an ROI of about 6.5%, minimum, to BREAK EVEN.
Contrast that to stay put, renovation paid off in 5 years, gain $75K in home equity and continue saving as before with existing investments untouched.
SELL = High risk. Gambling – Break even at best.
STAY PUT = Low risk. Equity gain of $75K.
…and then there is the Macro you explained well Garth = more risk.
“Surely an Italian dude…Mother loves him. All good. – Garth”
And who’s the Mamma’s Boi here, eh Garth?
You old softy you…and me.
He’s gambling on the new investments covering off his new increased costs Garth.
Still, MAMMA e FAMILIA SERVILIS a powerful thing indeed not only to us Italians but apparently to a very distinguished Blogger…
Looks like the decision boils down to this:
https://www.youtube.com/watch?v=UNmT7UswM7E
#1 James on 08.19.19 at 4:08 pm
The stress test me thinks will be Kaput after October if we vote with our heads and not our posteriors. If she goes get ready for craziness to start all over again.
_ _ _
And just how exactly is re-inflating the housing bubble “voting with your head”?
Just exactly how many Hookers jobs was Justin trying to save?
Anyone?
So everyone is happy to be in debt all their lives. You guys are going to get it eventually. Wait until we get high unemployment, even government and socialism will not save you.
Niagara Region July home sales numbers are in.
Listings up.
Sales up.
Prices up.
DOM slightly lower.
https://www.niagararealtor.ca/sites/default/files/Media%20Release%20%20-%20July%202019%20Stats.pdf
We have corporate tax avoidance to thank. Unto which our CRA has no bite and the politicians are sold-out to.
6 Cottingham a bargain on 08.19.19 at 4:52 pm
Lower rates a coming.
As bigriders no no says “ uppa uppa UPPA “ she goes for real estate ….. and that everywhere , the GTA included .
Higher real estate costs and more household debt are intense negatives for our country. Stop humping it. – Garth
——————
You are most likely correct on the negative social effects of higher RE costs.
Lucky for me I have been correct all
along in “ humping it” and will continue to do so…along with bigriders nonno.
So why did Japan’s real estate and other countries in Europe like Spain, Ireland real estate is still in the dumper with such low interest rates? It is over guys.
If a 3% gain per year in a balanced 50% equity, 50% bond, fixed income or 60% bond, fixed income, 40% equity is achievable it will be a miracle over the coming years.
Great advice from Garth here, specific to the situation.
However many will read this as it’s game on for real estate again. Truthfully I can’t see how it’s not going to be unless the quick reversal in rate increases to decreases is quickly reversed again.
What a world. You can have a liquid million dollars but it doesn’t mean anything, to anyone, as 70% of the population is riding the real estate pony to richtown. It’s making me sick. What in the world is going on? What’s next is what’s got me going. $10 million dollar condos and $50 loaves of bread? Fml
I think we are seeing a lot of activity (a lot for summer anyway ) because a good number of buyers sat on the sidelines for the last 18 / 24 months waiting to see if they could save some money on a home, which is smart…it hasn’t quite panned out in a meaningful way so those delayers are deciding waiting any longer isn’t worth it.
the place 3 doors down was a dump that was bought by a renovestor in Feb and the rehab was finished later than ideal…they listed in late July anyway and it was a parade of buyers, which amazed us. They got 250k over ask…in the middle of summer!
But when that pent up demand is met, we’ll know what housing will be like…certainly there isn’t much rushing for the exit from sellers. I really hope the specs don’t come back…
I was just listening to a comment by Rick Rule which aboslutely floored me
For the first time in known history gold’s 0% dividend pays more than 20 Trillion dollars of negative interest rate debt.
I’m telling you one thing.
If you aren’t nervous you should be…
With BOC buying back a billion in bonds last month
Danish negative mortgages
With now 20 trillion dollars of negative bonds (yup it was 15 trillion last month) have been bought by investors that are happy to give say Portugal 10,000 bucks for a 10 year bonds which give them 9,000 bucks.
And that assumed they don;t dcalre bankruptcy or force majeure.
The world is screwed
It just is.
reframing purpose :
The Business Roundtable, a group of chief executive officers of nearly 200 major U.S. corporations, issues a statement with a new definition of the “purpose of a corporation.”
The reimagined idea of a corporation drops the age-old notion that they function first and foremost to serve their shareholders and maximize profits.
Investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals.
The CEOs of nearly 200 companies just said shareholder value is no longer their main objective
ransom:
Twenty-three Texas towns have been struck by a “coordinated” ransomware attack, according to the state’s Department of Information Resources.
According to a weekend update by the department, the attacks started Friday morning and though the locations aren’t named, “The majority of these entities were smaller local governments.”
The attacks come after state and local ransomware attacks in New York, Louisiana, Maryland and Florida resulted in the loss of significant sums.
Texas Governor Greg Abbott
Twenty-three Texas towns have been struck by a “coordinated” ransomware attack, according to the state’s Department of Information Resources.
#4 Jimbo …500k for a roof?
you might check out Venezuela
Buy a duplex or triplex – if and when mom or sis move out or move to the next realm – you can rent out to someone else (professors at the Uni need a place to live too – not just students). If you like the area you can eventually convert it back to a single family and spread out into the extra space, renoed just the way you like it.
We recently had my dad stay with us for 3 months and although we are quite close, everyone was happier having their independent spaces.
Usually there are houses on the market that are illegally converted into duplexes and this would be ideal for your family.
It’s unlikely that family will be able to contribute much & having a possible separate rental is a way to build in some resilience for whatever comes up recession, job loss or lottery win ;-)
What’s the hard cash cost of selling the old and buying the new house?
Getting really tired of this, I am sorry to say but everyone it is over for sure now. Everyone is going to lose and the banks and others with central banks will get bailed out and all the money will be worthless.
As for gold, silver etc. most of those buying them use 3 times leverage, borrowed money at high finance rates, 7%, 8% per year and all these companies charge 1% to 1.5% annual storage fees and who knows if you will see in the vault in years to come.
Real estate will not be sustainable because most people will use their houses as ATM machines and keep borrowing money to pay property taxes, hydro, utilities, credit card bills etc. etc.
Stock markets will earn much lower returns inflation+2% a year unless you gamble by trading and lose your shirt on taxes, fees.
#2 Yukon Elvis on 08.19.19 at 4:18 pm
OTTAWA — Chinese officials accused Foreign Affairs Minister Chrystia Freeland of “meddling” in China’s internal affairs Sunday after her weekend statement condemning violence in Hong Kong in the wake of escalating tensions between pro-democracy protesters and police.
Here we go again…….
—————————————–
What the hell is wrong with our foreign affairs? So far, Canada’s sanctimonious preaching has ticked off a laundry list of previous friendly trading partners. Add to this the detention of Meng and the SNC/genocide missteps.
Canada is quickly establishing a reputation as a smug little holier-than-thou jerknation.
I am hearing that the Bank of Canada is more willing to see a 25% drop in the Canadian dollar than cut rates at all or much less. So it looks like the 55 cents Canadian dollar to U.S. dollar is going to become a reality. We are all going down economically.
As I mentioned last week; batten down the hatches dawgs; this time it is different!
#1 James on 08.19.19 at 4:08 pm
The stress test me thinks will be Kaput after October if we vote with our heads and not our posteriors. If she goes get ready for craziness to start all over again.
****************
I gotta ask…did you read the blog post before commenting? House prices are already unaffordable for average folks (most are priced out already).
So how much more craziness can house prices explode to?
Especially in a global environment in dire straights. Looks like a world wide recession is on its way.
Especially when Trump lies and says he ‘thinks’ (that’s the disclaimer) that the US economy is doing “tremendously well” at this point. What about 6 months to a year from now?
Germany’s Merkel is concerned.
Have you ever lived through a recession with job losses. Not the same environment as the last 10 years.
A while back, it was mentioned that Turner Investments was tilting their bond holdings towards short term duration due to likelihood of rising rates. Is it time to revisit that plan and tilt slightly towards long term duration if the world will be cutting in the near future?
Why do you think I have all those fancy portfolio managers hanging around? – Garth
Garth…
No comments with my morning coffee…did Mrs. Turner take the site down. Paying China to do so under Bandit’s name?
Bank of Canada bought back bonds? Not really
#19 expat on 08.19.19 at 6:12 pm
I was just listening to a comment by Rick Rule which aboslutely floored me
For the first time in known history gold’s 0% dividend pays more than 20 Trillion dollars of negative interest rate debt.
I’m telling you one thing.
If you aren’t nervous you should be…
With BOC buying back a billion in bonds last month
Danish negative mortgages
******************************
The point on Gold and negatives yields is indeed scary.
But I believe I looked into this so called Bank of Canada bond buy last month and posted links and as I recall they were buying on behalf of the government. The bonds were not going onto the bank of Canada balance sheet ala quantitative easing. Instead they were indeed being bought back by the government (using the Bank of Canada to do the actual purchase). The bonds were then retired. That is the government was paying off debt as it had extra cash. It was liquidity management. That is my understanding and I posted links last month. Not scary.
#4 Jimbo on 08.19.19 at 4:27 pm
Hi all!
I hate seeing these forecasts of higher prices and lower interest rates… we want to buy a house in the short term and it is physically hurtful to think we will need to shell half a million dollars for a roof. Any tips on coming to terms with this fact?
****************
Could you wait another year to buy a house? Want is one thing, but do you need to?
Bob would be crazy to let
Either his mom or especially his sister
Move in with him. They will both stop paying immediately, mom will try one run the place like she did when Bob was young, and sis will be taught personal responsibility isn’t a necessary thing. Bob, save your life and do not take roommates you can’t fire without ruining Christmas. Also if Bob is married he should count on $60,000 in legal fees and a loss of half the equity in the house because no household can survive two women who thing they are the boss and this whole proposal makes Bob look like a namma’s boy, which women hate for good reason. Once you get married you can only take advice or instruction from one woman and it ain’t mom or sis.
Given the enormous debt many Canadians are carrying, lower interest rates may just save a few patooties. ” Step right up folks, get yer red hot consolidation loans here”!
Wish I had more faith in the ability of those who might benefit seizing the opportunity.
This fall is shaping up to be a perfect storm what with the unrest in Hong Kong, Kashmir, trade pissing matches, and Brexit. We might all feel like Captain Ahab in Moby Dick, lashed to a giant whale on a joy ride of revenge. Some will have it coming. That segues nicely into the fall Federal election and Chrystia Freeland’s habit of beaking off about the political and family affairs of other nations. MYOB Chrystia. We have quite enough to focus on here at home.
Why is the Spirit Dog lying on a painter’s drop cloth in the Instagram photo? Or is that some kind of sail cloth? He naps a great deal, but who doesn’t on a summer day given the opportunity.
@#11 Joblo
“Just exactly how many Hookers jobs was Justin trying to save?
Anyone?”
++++++++++++++++++
Despite the obvious hilarity we could have by reversing your Nom de plume…..
I digress.
What….in “H” “E” Doublehockeysticks …..are you babbling about?
Interesting article on interest rates.
Possibly Canada should look a little further a-field then just south of the border??
https://business.financialpost.com/news/economy/the-bank-of-canada-has-a-dilemma-instead-of-looking-to-the-fed-maybe-it-should-look-to-norway
Nothing to worry about, Toronto is only ranked #12 in most expensive housing markets globally – way behind the usual suspects: Hong Kong, Beijing, London, New York etc.
https://www.cbreresidential.com/uk/sites/uk-residential/files/property-info/FINAL%20REPORT.pdf
#33 Nonplused, Right On, Exactly!
To #32 DON
What would i gain by waiting a year?… Lower rates and higher prices?…
Higher House Prices! Lower rates. Coming soon! I really feel sorry for people that didn’t buy years ago. They were told that GTA house prices were too high and going to correct. Just the opposite happened. By a factor of 3. Too bad.
@30 Don on 08.19.19 at 8:24 pm
This may be related to your comment but due to Garth’s recent “blog snafu” I noticed that this blog’s latest blog entry RRS feeds were no longer getting picked up by my Feedly website aggregator. The solution: I deleted Garth’s blog url address from Feedly and then re-added it back in again. All’s good now and I can now see his dog pic blog entries again plus related peanut gallery comments.
“Don’t be surprised if we hit all-time lows in the next year, with GICs and home loans both well below inflation.” – Garth
————————————————-
I’m not surprised at all. Rates will absolutely crash in the coming years. Anybody that predicted that higher rates would come is a fool. Rates can never normalize. Not until we have a depression and a reset.
No depression in this lifetime, and rates cannot remain at these levels indefinitely. – Garth
Hey everyone!
Sorry for the long absence. Lots to catch up on in here.
PS I’m running for the PPC in Don Valley West!
Follow me on DELETED
Nice try. – Garth
Tried for a $4 million profit… ended up with a $850,000 loss (+ expenses)
1448 CHARTWELL DR, West Vancouver
Bought 2015 $8,000,000
Just sold for $7,150,000… was asking as high as $11,980,000
2018 Assessed: $8,415,000
2017 Assessed: $8,509,000
“We’re going Japanese, oh yes we’re going Japanese, I really think so!”
House prices won’t go up from here regardless. Maybe a wee bump, but the forces of deflation will overwhelm the forces of inflation in most sectors. Give it a decade or more and things might improve.
Baby boomers are going to start to die en masse in about 20 years. That’s a lot of empty homes!
Bob, I just don’t see how this is going to work, living under the same roof as your mother, sister and especially your wife.
Overdebtnes and overweight almost a same probem…
How you know that you have a problem, when you lose 20lbs and noone notice…
Ok where I was going with this. Some time ago I got me one of those smart devices to help me shed some fat, and combination of that and not eating bread it’s seems to be working, slow but its working.
So over the time I noticed that my heart rate and probably blood pressure drops significantly (15-20%) on a random days for months could not figure it out why.
Than other night discovery by accident, I noticed that my heart rate is in sleep range while I was a wide awake. Then I am thinking what’s up with that, than I realized I had two shoots of makers mark.
I was so excited with discovery that I “volunteered” as a subject and commited my time and limited resources to scientific experiment, so hopefully peoplekind can reap some benefit, bourbon 1st, blends and single malts 2nd, than brandy’s and cogniacks 3rd.
Blue pill came out from similar study with savire side effects, makes you go blind, Ian thinking ocasional 2 shoots definitely won’t make you go blind.
Hey loony docktor am I on to something here?
@#25 Sail away on 08.19.19 at 7:22 pm
#2 Yukon Elvis on 08.19.19 at 4:18 pm
OTTAWA — Chinese officials accused Foreign Affairs Minister Chrystia Freeland of “meddling” in China’s internal affairs Sunday after her weekend statement condemning violence in Hong Kong in the wake of escalating tensions between pro-democracy protesters and police.
Here we go again…….
—————————————–
What the hell is wrong with our foreign affairs? So far, Canada’s sanctimonious preaching has ticked off a laundry list of previous friendly trading partners. Add to this the detention of Meng and the SNC/genocide missteps.
Canada is quickly establishing a reputation as a smug little holier-than-thou jerknation.
_____________________________
lol you two are hilarious.
I never would’ve thought you capable of such naivete Garth, as to (a) take at face value the downmarket relatives’ promises to pay what is a token amount relative to the investment and call it cash flow, and (b) completely glide over the L&T Board trouble this couple could be in if the arrangement ever goes sour and they want the relatives gone. No good deed goes unpunished. A good buddy of mine lives in an $800,000 pile in Burlington but only in 60% of it – out of the goodness of his heart he let m-in-l move in when she was between relationships and jobs. 4 years and much marital damage later, she still resides there, never having paid for anything or even helped take care of the kids. Exercising your legal rights (eviction) in this situation essentially becomes a nuclear option that could take out other in-law relationships or even the marriage as well. Freeloaders have a way of imposing themselves beyond what is initially foreseen. Mother Shellacque took in Sister Shellacque (in her 40s!) and her daughter a few years ago as well. My own daughter, little Miss Shellacque, went there for a visit last month and reported that Mother Shellacque slept on the couch, in the house she’s spent 40 years helping pay for because she’d given away the other bedrooms. One could argue that taking in someone doesn’t preclude setting appropriate boundaries, but really no one wins in these situations – the owners at best may get a little peace of mind having ‘helped’ someone in need but in the long run reduce the quality of life they may have worked hard for, while the recipient never learns to be resourceful and responsible. You’ve whiffed on this one, Garth.
Garth, you keep saying rates can’t stay this low for a long time but you are more wrong every year. Just tell the truth that you don’t know what you are talking about.
It has been 40 years interest rates keep dropping and why would they go back up to even 20 year highs, 5% to 6% on savings, GIC’s, 7% to 8% on mortgages. Even the 5% mortgage rates you predicted over the next few months to years did not even come close.
Come clean and tell it straight, people and governments with central banks are addicting to screwing the financially prudent, responsible because they can’t have that mindset grow to much.
Interesting article on how negative interest rate bonds can be used to profit, but if the main way is via price/capital appreciation one has to wonder what happens when interest rates eventually stop going down? Not a pretty picture if everyone suddenly wants to unload them all at once…. https://www.bloomberg.com/news/articles/2019-08-15/three-ways-to-profit-from-16-trillion-of-negative-yielding-debt
#39 Jimbo
IF ‘higher prices and low interest rates’ are all you can see in the future then buy now and be happy with your decision. By the way…how long do you plan on having a mortgage for?
“rates cannot remain at these levels indefinitely. – Garth”
Humans cannot live indefinitely either.
Just returned from 2 weeks holiday in Montreal. Although originally a Montrealer from the 1960s, I had not returned for a decade. Was keen to see if Garth’s comments about a booming RE market and economy were true as Montreal has had many false dawns in the last 50 years.
Well Garth is right as I have never seen Montreal so buzzing. Usually it is all empty shops and houses with ‘for sale’ and ‘for rent’ signs on every second one. Now folk are actually buying RE as an investment and it is going up in price. Family who rent apts said that rents were going up fast and vacancy rates are now below 2%. Neighborhoods which were dumps 20 years ago are now very trendy and for the first time in my life shops and restaurants has ‘help wanted’ signs on their front windows. Help wanted everywhere in fact.
Another major change was that as a Montreal Anglophone I felt welcome and all bus drivers, cab drivers, shop assistants spoke to me in English. This would not have been the case in 2000. I fact in the 1970s and 80s I felt menaced in Montreal if I spoke in English. Quebec is finally open for business.
As Garth says if you have a reason to buy a home in Montreal go for it. Prices there have a lot of catching up to do to Toronto. It will indeed be a good investment.
33 Nonplused – I too have to agree with you
36 Dutchy – Poloz has been very slow to raise rates and at this point I’m not sure he wants to give any of it back, so I’ll go no change for now.
Beware of 10 Year Fund Performance Data
10 year data no longer includes a full market cycle and no longer illustrates the full range of what an investor might experience.
https://dumbwealth.com/beware-of-10-year-fund-performance-data/
Don’t remember where this came from. Was it Garth? “Eitel Insignts, is a Van based global leader in applying the principles of technical analytics to residential real estate.” “The results have been uncanny. Wicked accurate”. They see a “tumultuous time still upcoming for sellers”. “30% drop from the peak” ” “… cannibalization of the condo market….” and on and on…….
When average price for a home in the big smoke was 400k and rates went to almost zero. Of course there was a surge in price.
At a million don’t get to excited. Boomers take advantage of this. Unload and buy that hotel in south America. The millenials that hate you. There parents will pay huge price when shit hits the fan..’
“Greenland is for small-timers. Trump should make an offer for an even bigger, richer, more strategic and more passive-aggressive Arctic ally”
From the Washington Post:
“A modest proposal for the Trump administration to buy Canada”
https://nationalpost.com/opinion/a-modest-proposal-for-the-trump-administration-to-buy-canada
A nudge, nudge, wink, wink…know what I mean effort. Who said Lefty’s have no sense of humor? Oh, that was me.
https://www.newsweek.com/landlord-split-apartment-being-john-malkovich-1455003?amp=1&__twitter_impression=true
Best part is bubble wrap on celing, so tenants don’t bump their heads. What can I say, other than dude is genius.
DELETED
And down go bonds says Pimco.
https://www.cnbc.com/2019/08/20/pimco-us-china-trade-breakthrough-could-trigger-a-powerful-snapback-in-yields.html
No where to run.
Garth you better give another spiel about how to use TFSA’s apparently Canadians dont know….
https://www.bnnbloomberg.ca/many-canadians-unsure-how-to-use-tfsas-to-build-wealth-rbc-poll-1.1303724
This guy must be a saint.
If I took my mother and sister into my house, I would become a serial killer.
Not an option.
https://www.youtube.com/watch?v=BFqHyCoypfM
Whenever I’m temped to move up into a newer nicer home, the final thing rolling around in my mind that prevents a trigger pulling is job security.
I don’t know what Bob and wife do for a living, but I work in an industry that keeps getting kicked in the teeth, and Ms. IH works in the public sector where a change in government could cause funding to be cut overnight without warning.
I made it to 39 before my original career job self-nuked. I was forced to change careers, and frankly I don’t expect to make 65 before it self-nukes too. It would be a miracle if I don’t end up kicking pebbles at least one more time before I hang up the gloves.
This is Bob’s #1 reality check IMHO. How solid is the position/company? – and what are the chances of getting another job paying the same or more if the shtf.
#35 crowdedelevatorfartz on 08.19.19 at 8:53 pm
@#11 Joblo
“Just exactly how many Hookers jobs was Justin trying to save?
Anyone?”
++++++++++++++++++
Despite the obvious hilarity we could have by reversing your Nom de plume…..
I digress.
What….in “H” “E” Doublehockeysticks …..are you babbling about?
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Come on Fartsy, you are usually more well read.
SNC Lavalin, Gaddafi’s son, entertainment budget for his time in Canada.
Connect the dots Man!
Hey No Name, your wife is on this blog too!
#47 Vanja Culjak on 08.19.19 at 10:07 pm
Then I am thinking what’s up with that, than I realized I had two shoots of makers mark.
I was so excited with discovery that I “volunteered” as a subject and commited my time and limited resources to scientific experiment, so hopefully peoplekind can reap some benefit, bourbon 1st, blends and single malts 2nd, than brandy’s and cogniacks 3rd.
Life is great when you have the security of a paid for house and a good flow of surplus cash. I like to think that most Canadians will figure this out eventually. Paying off a 7 figure mortgage is for actual rich folks, not the typical white collar Canadian.
IMHO, folks should shoot to have all their financial goals off and running/conquered between 40-45 years old. If that seems impossible, you probably could have made some better decisions.
If you can set yourself up in a location where you can do this, you will spend a good chunk of your prime years with cash to burn – even if you make nowhere near what the typical millennial who emails Garth with a question does.
Why would mother and sister need to move in the first place? They have $1,000 between them, and if you want to help them out it would be cost effective by just gifting them $500.00 per month. Furthermore, things might not work out with potential family conflicts while living together.
#52 DON
“IF ‘higher prices and low interest rates’ are all you can see in the future then buy now and be happy with your decision. By the way…how long do you plan on having a mortgage for?”
Why would I be happy with spending 500k for a shitty house? I don’t like to have so much wealth sleeping in house/equity… Opportunity cost is a killer. Even if house prices keep climbing, I won’t get that money until I sell. That is not building wealth, it is storing it in an expensive shelter (not even accounting for maintenance).
Mortgages run typically for 25 years. Why would I plan on paying it early with rates like these? But I do have to pay back the mortgage… that’s a lot of money to pay back.
re #68 IHCTD9 on 08.20.19 at 9:30 am
great post–wise advice.
Interesting read
When you run super lean so quarter looks good…
https://mattstoller.substack.com/p/why-new-york-city-is-on-the-verge
#28 DON on 08.19.19 at 8:22 pm
#1 James on 08.19.19 at 4:08 pm
The stress test me thinks will be Kaput after October if we vote with our heads and not our posteriors. If she goes get ready for craziness to start all over again.
****************
I gotta ask…did you read the blog post before commenting? House prices are already unaffordable for average folks (most are priced out already).
So how much more craziness can house prices explode to?
Especially in a global environment in dire straights. Looks like a world wide recession is on its way.
Especially when Trump lies and says he ‘thinks’ (that’s the disclaimer) that the US economy is doing “tremendously well” at this point. What about 6 months to a year from now?
Germany’s Merkel is concerned.
Have you ever lived through a recession with job losses. Not the same environment as the last 10 years.
_________________________________________
This was humbly my reflection and guesstimate of what will come to pass. Our heads should say eliminate T2, Mr Socks or whatever moniker you wish to attach to Trudeau. He is bad for the country on the whole as are the Liberals. Most people are cynical and feel contented sitting on their posteriors and therefore will stick with the status quo. If that is the case then prepare for four more years of peoplekind.
First the stress test will most likely be wiped out by the Cons if they are elected. Good bad or indifferent this is most likely plausible event to occur. Therefor be ready for craziness to materialize all over again with house horny buyers. As for house prices being already ridicules well, we have no control over the market until the market drops and we still do not control of the market. The market is decided by supply and demand. As for me reading the blog post yes I did, but I do not decide prices and have no control as do you over them. Do you believe that I can affect them if so then I have a new business venture? If you are angry about house prices, Trump lying, the US economy then I suggest you take two Advil and lay down for a nap. I cannot help you. Oh and just for fun yes I have seen a recession a soft one mind you but what’s your point? We are all in the same boat on this little blue planet.
#67 Penny Henny on 08.20.19 at 9:26 am
No its not wife, she is from Filipins, her accent is a much different than than mine, few time she ventured to comment section, and i ended up sleeping on a coutch… Luckily she doesn’t come here often.
Ever since google update chrome some time ago, when auto fill went from bright yellow to light blue i get @#%*^ every so now and then, but it doesnt mater to much at this point, i left to many crums around anyways. Unfortunately in real life i cant run comment section me, but i do come close sometimes.
https://www.instagram.com/vanja_culjak/
Electrician by day, know it all, armchair macro economist by night, weekends and occasionally on holidays.
you can press play while you are watching pictures.
https://www.youtube.com/watch?v=_Gbtm-93oqE
#60 NoName on 08.20.19 at 4:17 am
https://www.newsweek.com/landlord-split-apartment-being-john-malkovich-1455003?amp=1&__twitter_impression=true
Best part is bubble wrap on celing, so tenants don’t bump their heads. What can I say, other than dude is genius.
____
I’ve broken a few building codes in my time, but that guy takes the cake!
#54 jane24 on 08.20.19 at 12:15 am
Just returned from 2 weeks holiday in Montreal. Although originally a Montrealer from the 1960s, I had not returned for a decade. Was keen to see if Garth’s comments about a booming RE market and economy were true as Montreal has had many false dawns in the last 50 years.
Well Garth is right as I have never seen Montreal so buzzing. Usually it is all empty shops and houses with ‘for sale’ and ‘for rent’ signs on every second one. Now folk are actually buying RE as an investment and it is going up in price. Family who rent apts said that rents were going up fast and vacancy rates are now below 2%. Neighborhoods which were dumps 20 years ago are now very trendy and for the first time in my life shops and restaurants has ‘help wanted’ signs on their front windows. Help wanted everywhere in fact.
Another major change was that as a Montreal Anglophone I felt welcome and all bus drivers, cab drivers, shop assistants spoke to me in English. This would not have been the case in 2000. I fact in the 1970s and 80s I felt menaced in Montreal if I spoke in English. Quebec is finally open for business.
As Garth says if you have a reason to buy a home in Montreal go for it. Prices there have a lot of catching up to do to Toronto. It will indeed be a good investment.
—————–
Can confirm, and this is very recent. When I moved here in 2016, rentals were still cheap and abundant. Today, they are being snapped up as soon as they’re listed.
Abundant tech jobs, huge immigration of educated young people from France, and yes, anti-Anglophone sentiment is practically non-existent. Separatism as a serious idea is dead and unlikely to be resurrected.
#74 NoName on 08.20.19 at 12:23 pm
#67 Penny Henny on 08.20.19 at 9:26 am
https://www.instagram.com/vanja_culjak/
Electrician by day, know it all, armchair macro economist by night, weekends and occasionally on holidays.
////////////////
You don’t look obeace.
#74 NoName on 08.20.19 at 12:23 pm
No its not wife, she is from Filipins
__
You are Croatian right?
It must sound interesting when you two get into an argument :).
#73 James on 08.20.19 at 11:36 am
First the stress test will most likely be wiped out by the Cons if they are elected. Good bad or indifferent this is most likely plausible event to occur.
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Stop right there, you are being pulled over and ticketed for excessive optimism. If nothing else, the last Ontario election should have demonstrated that hoping or thinking or expecting a government to do something after skating in with little or no published platform is foolishness. Hell, most barely do what they say they will on a good day, but this approach of expecting is downright crazy. Regardless of who you back – make them be very public about what they stand for and hold them to it…
#79 Remembrancer on 08.20.19 at 2:49 pm
#73 James on 08.20.19 at 11:36 am
First the stress test will most likely be wiped out by the Cons if they are elected. Good bad or indifferent this is most likely plausible event to occur.
—————————————
Stop right there, you are being pulled over and ticketed for excessive optimism. If nothing else, the last Ontario election should have demonstrated that hoping or thinking or expecting a government to do something after skating in with little or no published platform is foolishness. Hell, most barely do what they say they will on a good day, but this approach of expecting is downright crazy. Regardless of who you back – make them be very public about what they stand for and hold them to it…
_________________________________________
I’m not foolish enough to ever believe what a politician will spew out of their mouths. Again this is my humble opinion. However after listening to Orange madman south of us for years now in his own words “vote for me what do you have to lose”. It’s not always better the devil you know than the devil you don’t but in our case we know this existing devil and his liberal minions. So time to go to plan B! Besides the Budget hasn’t balanced itself as he so eloquently stated. So what do we do call him liar, liar, pants on fire?
sail away rlly? check out this gop senator? or what about those guys they call themselves “the base”
Last year, at the Marble religious compound in northern Stevens County, Shea described a brewing civil war in the United States, telling a crowd: “Liberty must be kept by force.” He later acknowledged writing a manifesto titled “Biblical Basis for War.” And recently, “Bundyville,” a podcast about right-wing extremism in the American West, explored Shea’s connections to the racist Christian Identity movement and dominionism, the idea that Christians have a God-given right to govern.
Already, Shea and some of his closest supporters have made physical preparations for a holy war, one that would help them establish their long-envisioned 51st state, their Redoubt, their Christian homeland. Leaked emails published this week reveal that Shea has had close ties with a group that conducted “patriotic and biblical training on war for young men.”
In addition to running “background checks” on liberal activists and supporting military-style training for boys and young men, Shea has in recent years sought to purchase GPS tracking devices, compiled dossiers on local progressive leaders and kept a blacklist of suspected informants in his network. He also plotted to establish a “provisional government” in the event of a collapse and boasted about his efforts to “turn back the tide” of those who practice Islam in the United States
He keeps a list of who is trusted “one of us”
check out this guy!
In a fall 2017 group chat on the encrypted messaging app Signal, Pounder shared the address and contact information of an activist who had opposed a right-wing occupation of federal land in Nevada in 2014, and who was now pushing legislation to protect wolves in Washington. Bosworth suggested sending the activist the severed tail and testicles of a wolf from North Idaho.
https://www.spokesman.com/stories/2019/aug/18/more-from-the-shea-files-gps-trackers-a-provisiona/
#61 Stan Brooks on 08.20.19 at 5:36 am
DELETED
How can our fearless leader get elected if he keeps getting deleted on public forums?
Re: #62 Shaggin’ Wagon on 08.20.19 at 5:59 am
The real Reason Trump is in China is to make sure there’s no progress or things end up worse on the trade issue. This is all so he can get his half point cut in September. This is the real reason that he’s in China. People listen or read the news I differentiate or decipher the news.
#81 jess on 08.20.19 at 3:52 pm
sail away rlly? check out this gop senator? or what about those guys they call themselves “the base”
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By no means am I saying the US has a better record. But Canada needs to be more careful in international rhetoric because we’re more vulnerable.
Just ask the canola, soybean, pea and meat farmers what happens when China gets peeved.
Or the Philippines what happens when we sell war helicopters but virtuously finger-wag that they are not to be used in war.
Or Saudi Arabia when we criticize their citizens’ personal freedoms.
Or the US when Freeland insults Trump in his own backyard.
Sometimes a touch of discretion is better than oozing virtue.
#83 Tony, Trump has China by the sack and everybody who “deciphers” the news knows it. Trump holds all the cards. 87% of the US economy is consumer spending. Only 13% is exports. China has almost no domestic economy and exports 90%. Trump can ban dollar stores and China is hooped. China has been talking big at Davos etc about being a global citizen and all that crap. Xie has actually lulled the EU into a desperate hope that China will fight Trump into submission. No such chance. Bet on the empire every time. China will collapse under Xie. Decipher that.
https://www.cnbc.com/2019/08/20/kyle-bass-says-us-interest-rates-will-follow-the-rest-of-the-world-to-zero-this-is-insane.html