Losing it

Yesterday we called out, humiliated and publicly flogged savers. After all, what are they thinkin’? Rates of return on savings accounts, less inflation, are roughly zero. And going lower. Plus, outside of a TFSA or RRSP, that piteous little spec of interest is fully taxable. So unless you already have all the money you’re likely to need in the future (which is almost nobody) then saving in a HISA or a GIC is suicidal.

Having said that, (a) more than half all TFSA money is in brain-dead savings vehicles, and (b) savings rates are circling the drain, and (c) the number of savers is falling fast. The legion of borrowers, on the other hands, is overwhelming. Conclusion: it’s a losing battle.

Yikes. Look at this:

As you know, the world ‘s now sinking into a vat of negative returns on bonds and everything they influence. As bond prices rocket higher, yields plunge lower. Savers are being brutalized. Investors with balanced portfolios have reaped the rewards. A bond ETF I referenced here the other day has shot ahead 12% in a year, outpacing even equities. Those blog geniuses who dissed bonds for the last few months, telling you to dump them, are now crunching crow.

Veteran Bay Streeter Ed Pennock had a few interesting words on this today:

Almost a third of the tradeable bonds bear negative rates. Think of the Bull market that hasn’t quit. Buying bonds has been a great strategy. A 60/40% asset allocation has captured much of that upside. The 10 Year Treasury is at a 1.59% yield. The 30 year is at 2.04% yield. It had hit a record low of 1.91%. Some forecast the 10 year falling to 1.25%. And for example, the Triple C junk bonds Trade “8” percentage points above the double B’s. Clearly, there’s a flight to quality everywhere. That translates into US asset purchases by everyone out there.

Wailings from the steerage section show most people still misunderstand bonds. They think you buy them to collect interest. How cute. For the foreseeable future, there’s no income to pocket. But bonds are assets just like equities, with prices that constantly fluctuate. When money flows into bonds (as a safe haven) the price rises. As the price goes up, the yields they pay go down. Existing bonds get more valuable as the current interest rate environment declines and new bonds are issued at lower yields.

This has reached an extreme – with bond prices so high yields have fallen to 0% or less on trillions worth of government debt. Investors are just happy to have no risk, instead of chasing returns.

Low yields kill savers. But falling yields reward bond holders. And unlike men, bonds mature. So if you hold a bond long enough, you always get your money back.

The real impact of low rates, then, is to discourage saving and encourage turning into a debt piggie. The latest numbers sure underscore that. In BC, land of real estate delusion and a negative savings rate, bankruptcies are up 11% and borrowing is out of control. People are using houses, “for all intents and purposes like an ATM machine,” says a credit counselling agency. “The reality is … they’re spending more than what’s coming in month by month until they near the limits of their credit lines and now they find themselves in the position of not being able to meet the minimum payment required on the credit line and having exhausted the limit itself.”

And here comes a new Ipsos survey to tell us how pooched your neighbours are. More and more people are borrowing against their houses to fund stuff they should buy with cash – like a vacation. “It seems there was a time not so long ago when paying off the mortgage was an important financial goal for households,” says an insolvency trustee. “But today the house is an ATM and the cash withdrawn is being used to pay other bills or to fuel household spending.”

By the way, consumer bankruptcies are not just a BC problem. In Ontario they’re up 13%. HELOC use has exploded, mostly because the cost is relatively cheap (in the 4% range) and it’s so damn easy to borrow a bundle. Bankers will quickly give you about two-thirds of the value of your home equity, then let you make interest-only payments. That’s exactly what one-in-four people do. The actual loan is never repaid. Over 40% of HELOCers don’t even make regular payments.

So, let’s summarize. Savers are being brutalized. The savings rate is at an historic low. Household debt’s hit an historic high. Borrowing continues. And plunging bond yields will make it even easier to be in hock.

How does this end?

A recession is inevitable, but not imminent. Maybe 18 months away. You will find out then. Be ready, be liquid.

116 comments ↓

#1 Stan Brooks on 08.21.19 at 5:06 pm

Veggies up 19 % on yearly basis but ‘inflation’ or whatever bull manure ‘statistics’ they sell as such is stable: 2 %.
Not 1.9 or 2.1 but exactly 2 %.

https://ca.finance.yahoo.com/news/newsalert-consumer-price-index-july-123349203.html

And these people have the faces to sell such lies. And who really believes it?

#2 Yuus bin Haad on 08.21.19 at 5:07 pm

TFSAs are for gambling

#3 Marco on 08.21.19 at 5:11 pm

What is percentage of internal debt re GDP? Anyone?

#4 Brian Ripley on 08.21.19 at 5:12 pm

Borrowing continues. And plunging bond yields will make it even easier to be in hock. Garth

It could be that debt revulsion is setting in according to my Household Debt chart which shows the momentum of debt acquisition is flattening out at the peak since 2017 when real estate prices peaked in the hot markets:
http://www.chpc.biz/household-debt.html

On the same chart is the plot for Net Trade and it has been negative 10 out of the last 11 quarterly prints. (nationally, we bought more than we sold)

Balance sheet repair may be on the minds of the FOMO crowd.

#5 Marco on 08.21.19 at 5:14 pm

Ne pa utilise votre maison come un quiche automatique

#6 HoweStreet.com on 08.21.19 at 5:17 pm

Ross Kay on HoweStreet.com Radio:
Canadian Real Estate Price Continue to Fall.
5 in 7 First Time Buyer Get Help from Mom and Dad.

https://www.howestreet.com/2019/08/20/canadian-real-estate-price-continue-to-fall/

#7 Drew on 08.21.19 at 5:18 pm

I’ve heard some friends at work who spend money, but have no savings give the reasoning as, ‘ I want to have experiences, not material things.’
Unfortunately, they are going to experience some really bad things in the future, like bankruptcy and government housing waiting lists.

#8 Linda on 08.21.19 at 5:19 pm

I noticed that the peak savings on the graph corresponded in a large part to periods of high interest rates. Given the very low interest paid on cash today one can see why folks are not bothering to save. That having been said, I have to believe that people will eventually stop buying stuff because they will already have ‘everything’ & the latest edition at that.

I am presuming a recession may well nuke the debt piggies. Roast pork everywhere. Is ‘be ready, be liquid’ a prediction that high quality assets may be on sale in the near future? Or is this simply basic emergency prep?

#9 TRUMP2020 on 08.21.19 at 5:21 pm

Investors with balanced portfolios have reaped the rewards……

Until the markets plunge – Then you’d be wishing you were sitting on a pile of cash to take advantage of the asset sales.

Why would markets plunge? – Garth

#10 Justin on 08.21.19 at 5:26 pm

Hey Garth,

In these uncertain times, should I still be topping up my (balanced) investments ?

Uncertain about what? Stay invested. – Garth

#11 Camille on 08.21.19 at 5:35 pm

Had a look back at previous post, recession was 9-12 months away I think. But likely not this quarter or next, then few quarters to know, so who knows maybe 18 months. I have prepared as Ryan generally outlined in that previous post. Always interesting and informative. You can’t predict the future. But you know stocks don’t always go down in a recession.

#12 Brett in Calgary on 08.21.19 at 5:35 pm

Yes, exactly. Humans are exquisitely tuned to capitalize on incentives. Raise the interest rate and watch the savings rate come back… lower it and watch the debt snuffling.
========================
#8 Linda on 08.21.19 at 5:19 pm
I noticed that the peak savings on the graph corresponded in a large part to periods of high interest rates.

#13 crossbordershopper on 08.21.19 at 5:36 pm

i find it strange people get credit so easily, since after pledging my paid off house, they still turned me down, like zero, they werent going to give me a heloc.
income to support the loan is fine, income ok. but poor history of payments and they said no, regardless of the rate, i was willing to pay 5-10%,
so decided to go the other way, no debt no interst, no fee’s, i answer to no one, if i dont have it i dont buy it, im ok without stuff didnt have stuff most of my life.
believe it or not, i didnt try mac and cheese until i was in univesity, ate very little during university and now i eat it with my daughter who loves it.
so, moral of the story, freedom is the key, the only point is to do your own thing and answer to no one or there assessment of your financial stability to repay them based on their historical models.

#14 Smoking Man on 08.21.19 at 5:36 pm

You tell laid off Journalist on Twitter to Learn to code. Twitter will ban you for life.

But it’s great advice. Goldman Sacks about to go on a mega hiring spree. Replacing high flying traders with code Smith’s that can code trading algos.. base pay. 7 figures…

I would do it if I could work remotely. I hate NYC

https://www.zerohedge.com/news/2019-08-21/learn-code-and-goldman-will-hire-you

#15 Ron on 08.21.19 at 5:37 pm

So if you hold a bond long enough, you always get your money back.

—————————-

No. You get par back. If you buy bonds at $120 or $200, you get $100 back when they mature. If the coupon is too low or negative the ‘pull to par’ results in a negative return. That’s why even bonds that have a positive coupon rate can have a negative yield.

#16 Blue Angel on 08.21.19 at 5:39 pm

and for preferred shares, is it time to back up the truck?

#17 greyhound on 08.21.19 at 5:39 pm

“This has reached an extreme – with bond prices so high yields have fallen to 0% or less on trillions worth of government debt.”
————–
It’s worth remembering economist Irving Fisher’s remark that stocks had reached a “permanently high plateau” a few weeks before the 1929 crash.

So many talking heads are now predicting interest rates will be “lower for longer,” i.e. it is bond prices that are now on the “permanently high plateau.” What if they are all channeling Fisher 90 years later?

#18 slam on 08.21.19 at 5:48 pm

Is it time to get ahead of the recession and change balanced portfolio weighting from 60/40 to 50/50 or 40/60 and give up the potential equity returns for the next 18 months?

Timing the market never predictable, but the odds seem to be pretty good on a recession happening soon.

#19 Ray on 08.21.19 at 5:51 pm

The 1980s were the peak savings period in your chart in the 15%-20 % level. This would have been the boomers in their late twenties and early thirties. Like it or not, the boomers do deserve some credit for doing some things right to help themselves out .

#20 And The Impact On Housing Will Be... on 08.21.19 at 5:55 pm

“A recession is inevitable, but not imminent. Maybe 18 months away. You will find out then. Be ready, be liquid.”

And roughly by how much will real estate prices drop in Canada’s main markets in such a recession, according to your latest mood, pardon, insight?

#21 FreeBird on 08.21.19 at 5:57 pm

Somewhat related…if using HELOCs or cashing in savings for a pool and looking at saltwater ones esp for those with allergies or sensitivities to chlorine/chemicals look again. It’s not equivalent to swimming in saline water and isn’t safer (or less.) Salt is used to create put chlorine thru a simple chemical rxn. Better to keep the pool you have, use the neighbour’s/friends or go to the beach. Save your money. So if a doctor says ‘you won’t react to salt’ maybe not but you might go all the other chemicals.

https://www.ecosmarte.com/post/seven-secrets-salt-water-pool-sellers-dont-want-you-to-know

http://www.chlorinegenie.com/salt-water-pools/

#22 JSS on 08.21.19 at 6:06 pm

RBC common shares – 2.9% dividend increase.

rub tummy!

#23 The Wet One on 08.21.19 at 6:14 pm

Ok,

Now that you’ve told us stuff we already know Garth, give up the real goods and tell us how to profit from the coming economic dislocation that’s going to rock our fellow dumb Canucks’ world?

Or do we actually have to pay for that information?

;-)

You pay. The rest get it gratis. – Garth

#24 Dolce Vita on 08.21.19 at 6:24 pm

It’s closer than 18 months Garth.

StatCan is freakishly taking raw data and statistically massaging it in ways that mesmerize even those of us that have taught Stats. Also, they go back and change data and do not bother to tell anyone that they have. They can no longer be trusted to tell the truth. I would not bank on anything they say.

Sometime this year, recession. I was wrong about May but I do not believe so this time. Epic debt. RE in YVR and 416 in a RE price correction that will last at least another 5 years. As you point out today increases in bankruptcy (queue epic debt). China vs. US Trade War. The EU in a growth funk, 1% expectation (doubtful if you look at Brexit, France, Germany and Italy), Japan not doing well either.

Too many headwinds for a trading nation like Canada and one of our major exports, oil, being held hostage by the Left Coast.

That 18 months, that’s the Excited States of America and not us.

A recession is two quarters (or more) of negative growth. Of course it won’t happen in 2019. Next year is also doubtful. – Garth

#25 Basil Fawlty on 08.21.19 at 6:28 pm

“Why would markets plunge? – Garth”

Since they are overvalued, just like real estate and bonds, based on the lowest cost of capital in world history. Corporations are borrowing at these low rates and buying back their own shares. The market fell in 2008, but only came back based on unprecedented low rates and money printing in the trillions.
Who knows how long these bubble markets can be sustained, but soon enough the piper will be paid.

Markets rise when companies make money. They do not go lower just because they went up, but rather when corporate returns tumble. We are nowhere near that point. – Garth

#26 Democracy Is Mob Rule on 08.21.19 at 6:29 pm

https://www.marketwatch.com/story/we-havent-seen-interest-rates-this-low-since-before-hammurabi-so-what-bonds-should-you-buy-2019-07-18

“If a significant fraction of [the world’s bond market] has negative interest rates, that’s pretty unusual,” said Sylla. Even in recent history, he added, such occurrences are rare. In 1940-1941, he said, rates on short-term U.S. bonds went negative as the economy still grappled with the fallout from the Great Depression.

Over the next forty years interest rates rose to a new high level, slaughtering bond investors.

https://www.hoover.org/sites/default/files/14110_-_bordo_-_exiting_from_low_interest_rates_to_normality_-_an_historical_perspective.pdf

This paper examines the Federal Reserve’s recent policy of quantitative easing by looking back at the experience of the 1930s and 1940s when the Fed kept interest rates at levels comparable to today and its balance sheet increased similarly.

Massive deflation after 1930 became expected (Hamilton 1992, Romer and Romer 2013) leading to very low nominal rates and high real rates. Some short-term rates hit the zero lower bound in 1932 (some were even negative Cecchetti 1992).

#27 jess on 08.21.19 at 6:32 pm

By Austin Business Journal & KXAN News
Aug 14, 2019, 1:53pm CDT Updated Aug 15, 2019, 9:20am EDT

The FBI on Aug. 14 raided the offices of World Class Holdings

https://austin.curbed.com/2019/8/14/20806079/austin-fbi-raids-offices-downtown-world-holdings-nate-paul

https://www.bizjournals.com/austin/print-edition/2015/06/12/is-this-guy-for-real-the-tall-but-true-tale-of.html

#28 Jimmy on 08.21.19 at 6:34 pm

Sure wish I had maxed out Chase credit cards.
Incredible news.

#29 Dolce Vita on 08.21.19 at 6:37 pm

“A recession is two quarters (or more) of negative growth. Of course it won’t happen in 2019. Next year is also doubtful. – Garth”

No.

A recession is when the guy next door loses his job. A depression is when you lose your job.

I like that better than your definition.

And on your definition, recall StatCan has that nasty habit of going back a quarter and changing the data (without telling anyone). They’ve done already with GDP, which I posted about here.

Thus, don’t count your eggs until their “re-hatched”.

#30 Sail away on 08.21.19 at 6:44 pm

What’s a cheating garage? And why’s he selling his wife?

#31 Tyberius on 08.21.19 at 6:47 pm

Markets rise when companies make money. They do not go lower just because they went up, but rather when corporate returns tumble. We are nowhere near that point. – Garth

So what ’caused’ the plunge last year?

Also, I’ve heard that ‘overcrowded’ trades are to be avoided (I’m assuming because the underlying assets have been excessively bid-up and hence in over-valued territory).

In my limited (but growing) understanding of investing, I honestly don’t think corporate ‘profitability’ is the sole driver of prices. It’s much more complicated than that.

#32 Democracy Is Mob Rule on 08.21.19 at 6:54 pm

https://www.forbes.com/sites/investor/2019/07/27/the-fed-is-going-to-cut-rates-be-careful-what-you-wish-for/#199ef6b160b2

Declining rates are indicative of economic deterioration.

Historically, the first cut usually leads to the start of a serious bear market. Once they stop cutting rates, it’s the bottom of the bear market when you want to buy.

History shows that when the Fed cuts, stocks decline. When rates stay flat or they hike rates, stocks rise. That is contrary to the fables you hear from many analysts.

Contrary to widely-held belief, I have always said that the price of a stock is not a function of valuation and all that stuff analysts always talk about. If that were relevant, why is the DJIA at one time selling at an expensive P/E (valuation) of 20 and still rising, and another time at a cheap 12 and still plunging?

Prices are much more a function of money flows, which depend on more important factors not always known to the general public. And when all the money is in, there is no more money left to drive stocks higher. That then marks the top.

One of the most valuable economic numbers is the PMI (manufacturing purchasing managers index). The PMIs just released for Chicago and NY State are in contraction territory, below 50. That means “recession.”

The PMI is much more relevant than governmental statistics as they come from companies, not from bureaucrats. Below 50 is serious, but the bulls ignore it.
The PMI (manufacturing) in China for May (reported July 23) dropped back into “contraction” territory, to 49.4.

The PMI from the EU on Wednesday (July 24) showed more weakness, in fact the greatest weakness in seven years.

#33 SunShowers on 08.21.19 at 6:55 pm

Ah, I see the savings rate topped out in the early 80s, which is the last time that real wage growth actually outpaced CPI and inflation by a reasonable amount, and real median hourly earnings kept pace with labor productivity (before the former stayed stagnant for decades and the latter took off like a rocket).

Probably a coincidence.

#34 Midnights on 08.21.19 at 7:13 pm

As Martin Armstrong has said, the U.S. is the only game in town.

#35 Yukon Elvis on 08.21.19 at 7:15 pm

A recession is two quarters (or more) of negative growth. Of course it won’t happen in 2019. Next year is also doubtful. – Garth
………………………………

If we were in a recession they would never tell us and we would never know because we believe their bs numbers and can’t figure out the truth for ourselves.

#36 theoryAndPractice on 08.21.19 at 7:16 pm

…bonds mature. So if you hold a bond long enough, you always get your money back. -GT

What about bond’s currency ie. if it is looses relative value to other currencies at the time of cash out (ie. CAD vs USD) ? Even assuming currency relative value stays the same, what about inflation? Basically, it is then becoming negative too when it is par. So, one should be happy to keep the numbers same, even though buying power diminishes?

#37 Randy on 08.21.19 at 7:20 pm

Will Canadians vote for a 55 cent dollar ?

#38 Kay Jensen on 08.21.19 at 7:23 pm

It will en with more bankruptcies and money coming out of the banks. I already have a game plan to take out money when the tie comes. People have so short memories back in 2008 in the U.S. and around the world. Using your house as an ATM machine to buy more junk and real estate will be a financial disaster.

They will not be using my money to fund cheap mortgages for the losers they want to lend money to.

Royal Bank, BMO, Scotia, TD, CIBC, National Bank can use their own money to lend at cheap or no rates. I have plenty of places in and out of the country that want to pay decent interest on my money.

#39 will on 08.21.19 at 7:29 pm

So my question still is if I hold a negative yield bond it pays less than the coupon? Also, do negative yield bonds normally (maybe always) trade over a hundred dollars?

#40 Mf on 08.21.19 at 7:29 pm

A few months ago, I had to force myself to buy bond ETFs to balance my portfolio. Sure glad I did.

#41 Flop... on 08.21.19 at 7:35 pm

Well I just finished my second new build for the year.

Combined value probably 15-16 million in the new marketplace.

Over 20 million in crazier times.

I am a piss ant and so I didn’t pocket that much.

Flop’s Construction Company unfortunately does not feature on this list.

Swing and a miss…

M45BC

“Charted: The Companies Making the Most Money in 2019

Big companies around the world are reaping the benefits of a strong global economy, with many raking in hundreds of billions of dollars. Every year, Fortune Magazine publishes a ranking of the world’s largest companies by revenue. Our new visualization presents the top 100 companies to make the cut in 2019, including where the companies are located and which industries they represent.

Combined, the world’s top 100 companies generated more than $15 trillion in revenue.

There are 17 countries represented in the top 100 companies.

More than half of the world’s 100 most valuable companies are located in the U.S. (35 companies) or China (23 companies).

The world’s 100 most valuable companies are spread across a variety of industries, with particularly strong representation in energy, motor vehicles, and financial services.

The information for this visualization comes from the Fortune list of Global 500 companies, as ranked by revenue (see the full methodology here). We illustrated the top 100 of these companies in the chart above, with each octagon representing one company. Within each octagon, we included the company’s logo, its revenue, and the country where it is located. The size of each octagon in the visualization is proportional to the company’s revenue, with the larger shapes representing higher revenues. In addition, each company is outlined in a color that represents its industry sector, such as energy, food and retail, and technology.

Top 10 Most Valuable Companies by Revenue

1. Walmart – U.S. – $514 billion
2. Sinopec Group – China – $415 billion
3. Royal Dutch Shell – Netherlands – $397 billion
4. China National Petroleum – China – $393 billion
5. State Grid – China – $387 billion
6. Saudi Aramco – Saudi Arabia – $356 billion
7. BP – Britain – $304 billion
8. Exxon Mobil – U.S. – $290 billion
9. Volkswagen – Germany – $278 billion
10. Toyota Motor – Japan – $273 billion

According to Fortune, overall revenue for the Global 500 grew 9% compared to the year before. Decreases in national corporate taxes have been noted as a reason for higher revenues within U.S. companies, although the federal government is also bringing in less tax revenue as a result of the new tax policy. Earlier this year, analysts also predicted that even though U.S. companies were bringing in higher revenues, they could experience lower profit margins due to increases in cost for labor and raw materials.

In addition, tariffs are having an impact on companies in the U.S. and around the world. Some new international tariffs such as the French digital services tax will not only affect company profits, especially in Silicon Valley, but they will also affect revenue. Furthermore, some economists suggest that Trump’s “America First” policies are discouraging foreign companies from investing in their U.S. operations. Big companies will be keeping a close eye on these policy developments to see how they will affect their bottom lines.”

21 August 2019

Visualization

https://howmuch.net/articles/worlds-largest-companies-by-revenue

#42 Dee Willams on 08.21.19 at 7:40 pm

Mexico is not just a great place to beat the cold in the winter time. I love buying my 7% to 7.3% government bonds over the last few months.

High risk necessities high returns. – Garth

#43 Democracy Is Mob Rule on 08.21.19 at 7:41 pm

A bond ETF I referenced here the other day has shot ahead 12% in a year, outpacing even equities. Those blog geniuses who dissed bonds for the last few months, telling you to dump them, are now crunching crow.

Existing bonds get more valuable as the current interest rate environment declines and new bonds are issued at lower yields.

This has reached an extreme – with bond prices so high yields have fallen to 0% or less on trillions worth of government debt.
_____________________________________________

That sounds like “buy high, sell higher”. It worked for Vancouver real estate for many years. Eventually the party must end.

Bonds will only provide good returns in the future if interest rates go negative in Canada and the US. Right now bond prices are at historical highs.

Bonds are as over-priced as Vancouver real estate. Sure, they might have a few more months before the peak, but why risk it?

Risk what? I told readers eight years ago to maintain a bond weighting. Where were you? – Garth

#44 short horses on 08.21.19 at 7:45 pm

Cheating garage? Wife sale?

All like must her go.

#45 MineEngMike on 08.21.19 at 7:45 pm

Are you referring to a global recession or specifically Canada?

Without a US recession there will be no global downturn, and that has yet to become clear. – Garth

#46 Long-Time Lurker on 08.21.19 at 7:49 pm

#97 Justin S on 08.21.19 at 7:37 am
Great post today Garth!

I’m a high income earning millennial with a correspondingly high cash burn rate (especially with a wife who likes to shop and a new kid!)

As such, at the end of the day, I have limited funds to ‘save’. I’ve been choosing to sock money away in my RRSP, as I like the immediate tax savings. I’m getting back $.50 of every $1 I contribute to my RRSP.

Should I reconsider, and take a look at the TFSA plan? I have no work pension, and expect my retirement to be funded mostly by RRSP and my Toronto properties (current FMV $2.5 million, to be mortgage free well before retirement).

Input from anyone is much appreciated!

>Double up. Garth wrote several posts about this if you look back.

#89 Smoking Man on 08.21.19 at 1:42 am

Out for a smoke a homeless dude digging through my garbage, as shit load of them out here. I watch him light up one of my disgarded cigarettes.

I offer up an unsmoked one. We start talking. The bastard was hero in Afganistan, was in a car crash’ lost his job’ hes just trying to make enough to get back to Nebraska where his daughter says she has a room for him….

>Next time ask him for his unit, service record, and commanding officers. He probably would have kept his Purple Heart Medal and SpecOps coin.

#47 Eve Dery on 08.21.19 at 7:53 pm

Mexico is high risk but Greece in the Eurozone paying 2.5% or 2.9% on its bonds are not high risk or Italy paying 1.5% to 2.5% with all their high debt is not high risk. Your a real joker man. Germany is done too pretty soon and they will have to go back using the mark. The European Union is going to break up and the Euro will be killed. Wait and see the European socialism experiment is done within 2 to 3 years at the most.

#48 Scott Bisseton on 08.21.19 at 8:06 pm

Drew, you are making too much sense and that is why these experience zombies will soon find out what a real rush is. The European Central Bank, European Union and the whole European bureaucracy is to blame for this lower interest rates, negative interest rates madness. These people are sick socialists that deserve to all go bankrupt and revert back to their own countries and live with their own currency. It is a sham that will not end well.

#49 Spectacle on 08.21.19 at 8:14 pm

” So, let’s summarize. Savers are being brutalized. The savings rate is at an historic low. Household debt’s hit an historic high. Borrowing continues. And plunging bond yields will make it even easier to be in hock.”
Garth Turner 2019

————–
One. Reason there will be plenty of blog responders tonight is the simple meme responses.

If you want to buy, do so. For the rest, a significant measured portfolio plan is in order.

The future months are so critical to make your children wealthy , and not bankrupt your portfolio.

Plan and invest wisely my friends.

#50 Mark on 08.21.19 at 8:20 pm

If your bonds are bought for stability and not income for your portfolio a GIC can do same thing only not as liquid and money tied up for a year.
There is zero chance of loading money, that’s not case with corps or bond fund.

Refer to recent post on why that is a flawed choice. – Garth

#51 Mark on 08.21.19 at 8:21 pm

Should read losing money not loading money of course.

#52 Doug Petes on 08.21.19 at 8:23 pm

Take all your money out of the bank now before they take it all away.

#53 Bytor the Snow Dog on 08.21.19 at 8:27 pm

#30 Sail away on 08.21.19 at 6:44 pm sez:
“What’s a cheating garage? And why’s he selling his wife?”
—————————————–
A cheating garage is when too many “cars” get parked. And just like cars, wives are a depreciating asset.

#54 conan on 08.21.19 at 8:30 pm

Markets at some point will wake up to the fact that Trump was the wrong guy at the wrong time. No way he wins reelection. Biden has a 12 point lead. The American farmer finally realizing that Trump reamed them bigly..

I think we are going to get a 20 percent correction. I am recommending more liquid than normal.

Listen to your gut.
Mine says October, just because.

#55 TURNER INVESTMENTS BUYS GREENLAND! on 08.21.19 at 8:45 pm

Flip that baby QUICK, Garth!

(there’s an idiot in the White House who will double your money – just tweet him!)

#56 PastThePeak on 08.21.19 at 8:51 pm

Jeez Garth, if I wrote something like that I would have been branded a “doomer”…

It is hard to see how a Canadian recession doesn’t wreak a lot of havoc though, with debt levels so high. A douse of unemployment for those maxed out on debt will lead to some downstream carnage.

#57 DON on 08.21.19 at 8:51 pm

#29 Dolce Vita on 08.21.19 at 6:37 pm

“A recession is two quarters (or more) of negative growth. Of course it won’t happen in 2019. Next year is also doubtful. – Garth”

No.

A recession is when the guy next door loses his job. A depression is when you lose your job.

I like that better than your definition.

And on your definition, recall StatCan has that nasty habit of going back a quarter and changing the data (without telling anyone). They’ve done already with GDP, which I posted about here.

Thus, don’t count your eggs until their “re-hatched”.
*****************

I guess we will have to keep an eye on the PMIs and Mr. and Ms. consumer. According to Trump, “Consumers are rich”.

Thanks for the piece of the puzzle on the unannounced amendments from stats can.

#58 NoName on 08.21.19 at 8:53 pm

#53 conan on 08.21.19 at 8:30 pm

Just a friendly reminder about pols and opinions, luckily for me.i was never wrong yet. ;-)

https://youtu.be/G87UXIH8Lzo

#59 Nonplused on 08.21.19 at 8:55 pm

As I explained in detail on Ryan’s post on the weekend, interest rates cannot go below zero in the equation (1+i+r)^n where I is the risk free rate, r is the risk adjustment, and n is the number of periods. However r can go negative when comparing one asset with another.

The main reason people are borrowing so much is that automation, outsourcing, and immigration (non ethnic based, all sources) have made labour abundant enough that the going wage has been driven way down compared to the cost of living. Minimum wage laws won’t help because they just drive up automation and outsourcing off shore. In a 100% globalized economy there is no reason a person working in Ontario should make more than a person working in China. So if you want to make the big bucks these days you have to be willing to ride the bus to fFort Mac but even those jobs are oversubscribed these days.

Are our lifestyle expectations too high? Ya, that’s part of the problem too. Between my children and I we have a $400 a month cell phone habit and cable, internet, what have you plus everyone gets a new computer ever 5 years. These were things my parents didn’t have to pay for. Plus Netflix, braces, 55 inch tv’s, big as RV’s, all of it. When I was a kid a 24 foot trailer was a big deal. Now it means you are poor.

#60 Post 291 on 08.21.19 at 8:56 pm

The Smoker was never in the military or has given service to his country. The largest American Legion in USA is located there. They have funds for situations like this, and you never gave this a thought.

#61 DON on 08.21.19 at 9:01 pm

#33 SunShowers on 08.21.19 at 6:55 pm

Ah, I see the savings rate topped out in the early 80s, which is the last time that real wage growth actually outpaced CPI and inflation by a reasonable amount, and real median hourly earnings kept pace with labor productivity (before the former stayed stagnant for decades and the latter took off like a rocket).

Probably a coincidence.
*****************
Another factor. The parents of the boomers were savers having lived through the great depression and wars. They also got better interest on savings accounts. They didn’t purchase everything on credit, most saved then bought.

#62 DON on 08.21.19 at 9:10 pm

#53 conan on 08.21.19 at 8:30 pm

Markets at some point will wake up to the fact that Trump was the wrong guy at the wrong time. No way he wins reelection. Biden has a 12 point lead. The American farmer finally realizing that Trump reamed them bigly..

I think we are going to get a 20 percent correction. I am recommending more liquid than normal.

Listen to your gut.
Mine says October, just because.
********************
I’ve been watching China. Are they feeling strong enough to keep challenging the US and waiting Trump out. Do they need to rush or does Trump? I think China can wait Trump out. If China feels the pain most likely there will be no protests in the streets, being a party dictatorship and all…but Americans can protest at election time.

Trump needs another distraction.

#63 Blog Bunny on 08.21.19 at 9:16 pm

Garth,

You will probably enjoy this video about Toronto’s condos published on August 8th 2019:

– TOWERS OF TROUBLE by CBC docs

https://www.youtube.com/watch?v=QIWimSN_cGk&t=1486s

#64 Flop... on 08.21.19 at 9:18 pm

Hey NoName, I finally got around to checking out your new photos.

Looking good Ol’ boy.

Don’t remember the facial hair a couple of years back.

Did Garth inspire you to grow a beard or has the cost of razors seen to that.

Actually looking more like Eric Cantona every time I see you.

Definitely press play…

M45BC

https://m.youtube.com/watch?v=Ij0FrhyWWW8

#65 Ronaldo on 08.21.19 at 9:26 pm

#60 Don

Another factor. The parents of the boomers were savers having lived through the great depression and wars. They also got better interest on savings accounts. They didn’t purchase everything on credit, most saved then bought.
——————————————————————
Exactly Don. I’m the oldest of the boomers and can verify that. My mother had a revolving account with Eatons and she would buy things using the “layaway plan”. I recall the day when she said, “I finally made the last payment on my Eatons account”. She was about 46 at the time. She never charged anything after that. Saved and paid cash. There was not the inflation back in her days and up until the early 60’s when inflation started to set in. Much different times.

#66 joblo on 08.21.19 at 9:37 pm

DELETED

#67 joblo on 08.21.19 at 9:42 pm

DELETED

#68 Jon on 08.21.19 at 10:11 pm

“A recession is inevitable, but not imminent. Maybe 18 months away. You will find out then. Be ready, be liquid”

When you say be liquid do you mean carry a slightly higher cash position than normal while maintaining a 60:40 portfolio? If so, what do you see as an appropriate cash/ cash equivalent position?

If this includes moving to larger cap, blue chip, dived paying equities do you have some examples of appropriate ETFs?

#69 ShawnG in TO on 08.21.19 at 10:19 pm

> #42 Dee Willams on 08.21.19 at 7:40 pm
> [snip]

if you like Mexico’s 7-7.3%, you must really love Argentina’s 60% interest rate.

—-

> #39 will on 08.21.19 at 7:29 pm
> […]negative yield bond it pays less than the coupon?

no, you will still get your coupon payments exactly as stated in the bond t&c. but buying a negative yield now means you are paying much higher than $100 for the bond, so at maturity, even after all the coupons and $100 face value of the bond you are still not getting all your money back.

—-

hey Garth,
your readers are pretty smart. they know that the market has all that emotions build in on top of business fundamentals. in Fat Tony’s famous words: markets and the economy are not the same ting

#70 Grunt on 08.21.19 at 10:48 pm

Wall Street coders? Algorithms? Better be Putin (cyber) proof.

#71 Billy on 08.21.19 at 10:54 pm

Rates will continue dropping to stave off a downturn as long as possible, which encourages ever more borrowing (and less saving). Bonds should continue to perform well in that environment until a bottom is reached where rate reductions lose effectiveness. After that, central banks will presumably look towards alternate monetary strategy with an aim towards deleveraging. How well they can coordinate that will impact in many ways. https://www.project-syndicate.org/commentary/mmt-debt-crises-by-robert-dugger-1-2019-05

#72 Shawn Allen on 08.21.19 at 11:12 pm

Trump insults NATO allies and threatens to stop defending them.

So, NATO allies should be thinking of upgrading their own military, perhaps getting Nukes too.

Any country would be a fool to give up Nukes with five more years of Trump looming.

Trump knows how to win an election. Get people excited about perceived enemies (immigrants, Democrats, other countries, third world labour). Then position himself as being on the side of the masses and against these enemies.

I guess Trudeau does it too, with climate change and non-progressives as the enemy. But a lot of the masses are not buying these (especially the latter) as enemies.

Conservatives might want to take a look at the Trump play book and play a little harder. Trudeau is a viable (supposed) enemy of the people in Alberta but not so much in Ontario and Quebec or B.C.. What other enemies can they come up with?

In the internet age, most people seem angry about something. They vote against the opposition more so than for their guy?

#73 Sail Away on 08.21.19 at 11:35 pm

#46 Long-Time Lurker on 08.21.19 at 7:49 pm

#89 Smoking Man on 08.21.19 at 1:42 am

I offer up an unsmoked one. We start talking. The bastard was hero in Afganistan, was in a car crash’ lost his job’ hes just trying to make enough to get back to Nebraska where his daughter says she has a room for him….

——————————————–

>Next time ask him for his unit, service record, and commanding officers. He probably would have kept his Purple Heart Medal and SpecOps coin.

———————————————

Smokey said nothing about the guy claiming to be wounded or part of spec ops, and honestly, the spec ops coins are just a silly tradition by some units, not all. And what good would the CO question do? You have no idea if they’re telling the truth.

Best idea for someone who hasn’t been in the military is to not try to expose a self-proclaimed vet as a fraud.

#74 Mousy on 08.21.19 at 11:40 pm

Re: #13 Mac and Cheese
It’s orange and comes with powder, so yes, it’s weird. Very unnatural, but strangely tasty.

#75 SoggyShorts on 08.22.19 at 12:44 am

#1 Stan Brooks on 08.21.19 at 5:06 pm
Veggies up 19 % on yearly basis but ‘inflation’ or whatever bull manure ‘statistics’ they sell as such is stable: 2 %.
Not 1.9 or 2.1 but exactly 2 %.
********************
Dude, how much of your spending is on veggies?
Even if they went up 100% it wouldn’t put a dent in most peoples spending and therefore barely moves the needle in a weighted inflation statistic.

For myself, not living frugally(at all) I’m spending
33% on rent&utilities, which has zero inflation in Alberta and
33% on vacations which haven’t noticeably changed.

So right there it’s gonna take a huge jump in everything else to make up for 2/3 spending at zero inflation.

BTW gas is still under a buck here.

#76 GoldnSilver on 08.22.19 at 12:46 am

#45 MineEngMike on 08.21.19 at 7:45 pm

“Are you referring to a global recession or specifically Canada?

Without a US recession there will be no global downturn, and that has yet to become clear. – Garth”

It appears that it may become real clear quite soon. Looks to me that the USA is already in the early stages of a recession. Real statistics tell the story, not the BS the politicians and the BS media feed on a regular basis.

https://moneymaven.io/mishtalk/economics/bls-revises-payrolls-501-000-lower-through-march-RG2I7b3Si0KNrivanxNuiQ/

#77 Far away and hsppy on 08.22.19 at 1:14 am

Do bonds went up ? Even a stopped clock is right twice a day. The important stuff is being glossed over. The Liberal leaning business news doesn’t want you to think about the hundreds of billions of foreign direct investnent that Justin has run out of town at the point of his broomstick.

http://www.bnnbloomberg.ca/the-30-billion-exodus-foreign-oil-firms-are-bailing-on-canada-1.1304966

For every body won on a bond your taxes have gone up five to maintain the artificial status quo for unions and Quebec. Wait a little longer under that fairy dust shower of pretty hair and wierd sox and you will be paying 100% income tax and be stealing carrots from the community garden.

#78 Smoking Man on 08.22.19 at 1:19 am

Not feeling the love . Zero insults from mama boy James.

Did I red pill the bugger..

It was good entertainment for the dogs.

Bottom line. I dont know I’m shit faced at this moment in time and regret giving the homeless vet 500 bucks to make it home.

That was ten minutes of fun on a slot machine. The bastered is in my garbage every day.. did not see him tonight. He left his purple gloves on my drive way.. hope he makes it to his daughters room.

Life ain’t fair. In real life away from the campus not everyone gets trophy…

Best they can hope for is good freind.

Dr Smoking Man
PhD Herdonomics

#79 crowdedelevatorfartz on 08.22.19 at 1:22 am

@#54 Turner Investments buys Greenland!

Good one.
I was thinking the Danish PM missed an opportunity to call Trumps bluff.

Greenland.
Population 55,000.
Offer to sell for 55,000,000,000,000.00 (trillion).
All native Greenlanders get 10,000,000.00 US and all Danes get dual US citizenship.

OR

The real reason Trump boycotted Denmark?
Apparently Obama is visiting at the same time and Trump was worried his crowds would be smaller than Barack’s……
Unless the diaper wearing Trump Blimp actually scared him off….

#80 Smoking Man on 08.22.19 at 1:34 am

Been researching on Bing and Yahoo. Google sucks all propaganda..

Every mass killer had a mother that hated them..
You want to find the next mass shooter.

Profile the mother…..

Dr Smoking Man
Figuring out shit while hammered out of my mind.

#81 Smoking Man on 08.22.19 at 1:44 am

Trump 2020

https://www.zerohedge.com/news/2019-08-21/learn-code-and-goldman-will-hire-you

He gets it……

#82 Smoking Man on 08.22.19 at 1:46 am

DELETED

#83 Smoking Man on 08.22.19 at 1:52 am

DELETED

#84 BK on 08.22.19 at 7:30 am

What of the decision between short (e.g. VSB) and long bond ETFs (e.g. ZAG)? The most recent consensus seemed to be go sort in preparation for rate hikes. The Couch Potato has been saying stay long “cause you never know rate direction”, and he has been right for six years and counting at this point…

#85 Kerry Thomas on 08.22.19 at 7:49 am

European Union will break up and the Euro will be destroyed. Why buy European bonds with that whole continent being a economic basket case from France to Italy to Spain and Germany is in real trouble too. Socialist Europe is a goner in the next 18 months to 24 months.

#86 expat on 08.22.19 at 8:08 am

There is a reason Trump wants to buy Greenland.
It’s because there is one hell of a lot of green under that now exposed rock.

The slobbering lefties see takeover, Trump sees trillions of wealth in minerals for the USA.

The difference between Trump and politicians is that Trump is savvy.
The average politician is dumb brick out for for personal greed, power, and that beautiful retirement cheque after 9 years.

Oh how I wish we had a trump in Canada instead of that Hufflepuff we have.

Oh well, life is great in Florida.
I feel for Canadians stuck there.
Just saying….

A leader who wants to ‘buy’ another country is beyond moronic. This is but one step up from seizing it militarily. – Garth

#87 expat on 08.22.19 at 8:14 am

Regarding bonds.

They were a great trade the last 6 months.
I sold mine yesterday ahead of the fomc meeting.
Far too many fish in one side of the boat imho.

I have a feeling, and it’s only a feeling, that a surprise awaits those who stay too long on one side of the ship.

Only my steerage section opinion.

Never exit an asset class. Amateur move. – Garth

#88 dharma bum on 08.22.19 at 8:40 am

Avoid the trap of short term thinking.
What’s the fuss about?
Do what you do and ignore the noise.
Recession? So what.
They’re always followed by booms.
So let’s focus on the next inevitable boom.
Keep saving (investing) for that rainy day.

#89 crowdedelevatorfartz on 08.22.19 at 8:42 am

Annnd as Brexit draws near the Conservative Party of Britain realizes what a huge,self destructive, mistake they have made in appointing Boris(Buffoon) Johnson as PM.

Could a snap British election before Nov 1st be in the cards?
Will EU demands to Britain become so harsh Boris snaps?
Will Limeyland crash out of the EU with no border guards to the north or south?
Will thousands of British expats in the EU be stranded without passports?( only rich, bragging palazzo owners need apply)
Will the traffic jams at the borders reach gridlock?
Will British PM Johnson yell at his girlfriend in front of #10 Downing?

Stay tuned.
Brexit fallout should be more interesting than Trump “double dipping” french fries in a communal ketchup bowl at a Barritz G-7 conference…..

#90 Tony on 08.22.19 at 9:40 am

Re: #9 TRUMP2020 on 08.21.19 at 5:21 pm

The way I see it they’ll be an initial crash of 50 to 60 percent in one day tripping all the circuit breakers closing all the major exchanges for 2 weeks to a month. The buyers of the initial crash will also be wiped out upon reopen of the markets in due time.

Did your mother drop you? – Garth

#91 GoldnSilver on 08.22.19 at 9:48 am

https://www.cnbc.com/2019/08/22/recession-may-already-be-here-long-time-market-bear-david-tice-warns.html

Somebody else who has no idea what they’re talking about. Pump that gold! – Garth

#92 James on 08.22.19 at 10:04 am

#77 Smoking Man on 08.22.19 at 1:19 am
Not feeling the love . Zero insults from mama boy James.
Did I red pill the bugger..
It was good entertainment for the dogs.
Bottom line. I dont know I’m shit faced at this moment in time and regret giving the homeless vet 500 bucks to make it home.
That was ten minutes of fun on a slot machine. The bastered is in my garbage every day.. did not see him tonight. He left his purple gloves on my drive way.. hope he makes it to his daughters room.
Life ain’t fair. In real life away from the campus not everyone gets trophy…
Best they can hope for is good freind.

Dr Smoking Man
PhD Herdonomics
________________________________________

#118 James on 08.21.19 at 12:07 pm
#109 Sail Away on 08.21.19 at 10:25 am
#89 Smoking Man on 08.21.19 at 1:42 am

Out for a smoke a homeless dude digging through my garbage, as shit load of them out here. I watch him light up one of my disgarded cigarettes.
I offer up an unsmoked one. We start talking. The bastard was hero in Afganistan, was in a car crash’ lost his job’ hes just trying to make enough to get back to Nebraska where his daughter says she has a room for him.
I’m a sucker , I beilive him. I gave him 500 bucks. That smelly hug was the best hug I’ve ever had..

Liberals would be frightened of him.
Me a risk taker… I hope it works out for him…

———————————————
I’ll bet you $500 you’ll see him again- broke again but for a very good reason that he’ll tell you all about.
_____________________________________

Old Man I used to gas up at a Mobil Mart on San Joaguin Hills Rd & San Miguel and every day the same guy was there routing through garbage and asking for handouts. They live over by Big Canyon Reservoir and they all have their own little territories in which they ask for cash. $500 bucks will buy him a lot of booze and crack. This guy will probably blow through it in two days. He will be back

^^^^^^^^^
Jesus Old Man you have to catch up with the reading. Above is yesterday’s post. Alas I really did not slight you when it comes to purported homeless military people it could be true. I merely informed you of the likelihood of his return. When I resided in your region years ago the homeless were rampant. California in particular has an enormous homeless population and it is a sad sign of the times. The truth is that most of these people have mental illness, drug addictions, war related PTSD and or are just down on their luck after losing their job and home. These people live on as an organized secret society in little territorial groups. They are however living on the fringe of society and literately any one of us could easily be in their place. What I have done in the past is bought them a Mobil Mart egg & bacon sandwich, coffee and a two quart bottle of water some mornings. Feeding them straight cash may be helping them get home or like I said before may end up helping them to procure enough crack to overdose and die as some of these people have severe addictions.

BTW. You take the blue pill—the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill—you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember: all I’m offering is the truth.

My mother passed away when I was two, so sorry to disappoint you! I do have a very loving step-mother does she count?

#93 Leave Smoking Man Alone on 08.22.19 at 10:11 am

All you nay-sayers ought to leave Smoking Man alone in the instance of his kindness to the homeless man. We’re not called upon to judge another’s need, merely to recognize it and alleviate it if we can. SM did both and should be commended for his non-judgmental generosity.

The Good Book says: “I was hungry, and you fed me. I was cold, and you dressed me.” We can add, “I was broke, and you gave me money.” The book also says, “Inasmuch as you did it for the least of these, you did it for me.”

Personally, I keep an envelope in the dashboard of my car that I replenish every month. Those people at intersections who appear to need help get $5 whenever I can safely stop the car. Don’t tell me that is their job, that they are on contract, that they drive caddies and live in mansions. I don’t care about that! I am happy knowing that I might be doing God’s work.

#94 mike from mtl on 08.22.19 at 10:16 am

#83 BK on 08.22.19 at 7:30 am

What of the decision between short (e.g. VSB) and long bond ETFs (e.g. ZAG)?
///////////////////////////////////////////////////////////////////

Because for a time it finally seemed and was rates were going up. At first the ‘market ignored the FED, only by end of last year it then took them seriously. Well after almost a decade of the flip-flop FED then it truly felt different. VSB indeed was best to counter VAB. Now the flip-flop FED is back!

But as we now are, rates cannot go up – everyone knows this. I’d be very surprised if the 10yr (Can or US) reaches 3-range in the next decade.

#95 Russ on 08.22.19 at 11:19 am

#79 Smoking Guy

Hey Smokie,

Why not use search engine DuckDuckGo?

You get Bing, Yahoo AND privacy!

Cheers, Russ

#96 expat on 08.22.19 at 11:34 am

Never exit an asset class. Amateur move. – Garth

Sorry Garth 12% return in 4 months is a sell not a hold in my world
I sold the fomc news
It is hardly amateur.
My stops got hit. Nothing more

Amateur is holding in algo driven market.
I’m a trader not an investor there are a huge difference between them.

I never sell exact tops and I never buy exact bottoms.

Don’t have to

So one has to assess their own style
Buy and hold is dead IMHO

Peace

#97 Basil Fawlty on 08.22.19 at 11:36 am

“Somebody else who has no idea what they’re talking about. Pump that gold! – Garth”

Diversification reduces risk!

#98 TorontoBull on 08.22.19 at 11:43 am

“Without a US recession there will be no global downturn, and that has yet to become clear. – Garth”
1. inverted yield curve
2. contracting manufacturing PMI.
both VERY clear leading indicators that a marked slowdown and quite possibly recession is coming. Officially, maybe Q2 2020

Maybe you should revisit the post I wrote about extreme thinking. Stay invested. Enjoy life. – Garth

#99 n1tro on 08.22.19 at 11:48 am

#92 Leave Smoking Man Alone on 08.22.19 at 10:11 am

Personally, I keep an envelope in the dashboard of my car that I replenish every month. Those people at intersections who appear to need help get $5 whenever I can safely stop the car. Don’t tell me that is their job, that they are on contract, that they drive caddies and live in mansions. I don’t care about that! I am happy knowing that I might be doing God’s work.
———————-
What you are doing isn’t God’s work. God doesn’t say to give money to random people who are too lazy to work or got themselves into the situation they are in. But go ahead and keep giving yourself that false sense of virtue while doing nothing to solve the problem. Try this experiment out. Instead of giving $5, give them your business card and offer them an hour of your time to train them in something useful to help them get out of their situation. Let the rest of us know what the results are.

#100 Sail away on 08.22.19 at 12:05 pm

#92 Leave Smoking Man Alone on 08.22.19 at 10:11 am

All you nay-sayers ought to leave Smoking Man alone in the instance of his kindness to the homeless man.

The Good Book says: “I was hungry, and you fed me. I was cold, and you dressed me.” We can add, “I was broke, and you gave me money.” The book also says, “Inasmuch as you did it for the least of these, you did it for me.”

I am happy knowing that I might be doing God’s work.

————————————————-

You might or might not be doing the work of god. It’s tough to say. Gods are fickle creatures.

As long as we can supplement scripture, though, why not also add, “I was sober and you helped me get high again”.

This is fun. Let’s make some more commandments while we’re at it.

#101 mark on 08.22.19 at 12:55 pm

Smokey is on a roll tonight!!!

#102 IHCTD9 on 08.22.19 at 12:59 pm

#92 Leave Smoking Man Alone on 08.22.19 at 10:11 am
All you nay-sayers ought to leave Smoking Man alone in the instance of his kindness to the homeless man. We’re not called upon to judge another’s need, merely to recognize it and alleviate it if we can. SM did both and should be commended for his non-judgmental generosity.

The Good Book says: “I was hungry, and you fed me. I was cold, and you dressed me.” We can add, “I was broke, and you gave me money.” The book also says, “Inasmuch as you did it for the least of these, you did it for me.”

Personally, I keep an envelope in the dashboard of my car that I replenish every month. Those people at intersections who appear to need help get $5 whenever I can safely stop the car. Don’t tell me that is their job, that they are on contract, that they drive caddies and live in mansions. I don’t care about that! I am happy knowing that I might be doing God’s work.
____

Excellent post. You’ve obviously spent some time thinking about this. I just had this discussion with a few folks. We are called to do this, but sometimes we get the feeling the help we give will not be used as we hoped it would be. There are indeed those who exploit and take advantage. We are also called to be stewardly and to be good managers of the resources we are given.

Where to draw the line separating helping vs. throwing money away? It is not our place to be the Judge. The resources we possess, were themselves also a gift given to us. You may well have been blessed financially explicitly for giving (a cheerful giver).

The consensus was to “help” even those who are likely taking advantage, but that the help would not be a standing offer, and the expectations would be that they are working to become independent. Progress would mean additional help. Those who have a real need would receive ongoing support.

At the end of the day, I feel most comfortable with the idea that the honest act of responsible giving (in good faith) itself is what we are called to do. If the receiver squanders said help – that goes on their record. You’ve done your job. We can’t read the minds of others or understand the will of God. The minute we start pretending to know whether someone deserves help or not, we are pretending to know what the plan is for this person.

Your last 3 sentences pretty much sums it up.

#103 Sold Out on 08.22.19 at 1:15 pm

#99 Sail Away

“Let’s make some more commandments while we’re at it.”

1. Thou shalt not exit an asset class entirely
2. Thou shalt not pick individual stocks
3. Thou shalt not go to cash due to irrational fears
4. Thou shalt not covet thy neighbour’s bullion
5. …?

#104 IHCTD9 on 08.22.19 at 1:26 pm

#98 n1tro on 08.22.19 at 11:48 am

Instead of giving $5, give them your business card and offer them an hour of your time to train them in something useful to help them get out of their situation. Let the rest of us know what the results are.
____

One good way to give is with grocery gift cards, at least this way; it pretty much has to go towards food. Timmies cards are great too.

#105 Tom Renni on 08.22.19 at 1:52 pm

Stan Brooks, they have been liars for years about inflation rates. Any rational, reasonable thinking person knows that all the things needed from food to shelter to transportation to taxes are way up more than 2% a year. It is such a joke now that they are laughing in our face.

#106 crowdedelevatorfartz on 08.22.19 at 2:24 pm

@#103 IHCTD9

Yep.
I give out McDonald’s free coffee’s, Tim’s vouchers, etc.

Never cash.

If they trade the vouchers for something else….it’s on them.

#107 Marco on 08.22.19 at 2:41 pm

Been researching on Bing and Yahoo. Google sucks all propaganda..Every mass killer had a mother that hated them..
You want to find the next mass shooter.

Profile the mother…..

Dr Smoking Man
Figuring out shit while hammered out of my mind.

Yeah
How come parents are never responsible for bringing up criminals and killers ?

#108 n1tro on 08.22.19 at 2:49 pm

#102 Sold Out on 08.22.19 at 1:15 pm
#99 Sail Away

“Let’s make some more commandments while we’re at it.”

1. Thou shalt not exit an asset class entirely
2. Thou shalt not pick individual stocks
3. Thou shalt not go to cash due to irrational fears
4. Thou shalt not covet thy neighbour’s bullion
5. …?
——————–
5. Thou shalt not convert cash to BTC
6. Thou shalt not question omnipotent central bankers who are looking out for the good of the masses.
7. …?

#109 n1tro on 08.22.19 at 3:01 pm

#103 IHCTD9 on 08.22.19 at 1:26 pm
#98 n1tro on 08.22.19 at 11:48 am

Instead of giving $5, give them your business card and offer them an hour of your time to train them in something useful to help them get out of their situation. Let the rest of us know what the results are.
____

One good way to give is with grocery gift cards, at least this way; it pretty much has to go towards food. Timmies cards are great too.
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Or just take your “I’m such a good Christian” envelope of cash and sponsor a child in the 3rd world. Money is a long term commitment since it is taken out every month and fairly distributed unlike the original poster giving only to those “who appear to need it”.

People who come from 3rd world countries must get a giggle from the beggars in the 1st world.

Got both arms – check
Got both legs – check
No deformities – check
Doesn’t look like they are malnourished – check
Plenty of organizations available to give a helping hand – check

Paradise.

#110 Jaxville on 08.22.19 at 3:11 pm

I have long understood that falling bond yields makes the previous issued bonds more valuable. How much lower can yields go before there is a general lack in confidence of the central banks and their respective products? I recently read that some corporate debt including some junk bonds are being sold at a negative rate.

Perhaps this makes sense to some but every time I hear their explanations it sounds more like rationalizations than rational discourse.

Thought I would have lightened up substantially on my gold exposure by now. Instead I just want to add to it.

#111 Marco on 08.22.19 at 3:15 pm

European Union will break up and the Euro will be destroyed. Why buy European bonds with that whole continent being a economic basket case from France to Italy to Spain and Germany is in real trouble too. Socialist Europe is a goner in the next 18 months to 24 months.

Well this is a an ignorant comment
Only way Europe would be destroyed is to be bombed by anglo world and then anglos can live from interests on reconstruction loans. It happened in the past and those were the best years for lazy anglos.
Now with brexit over rhetoric will start….

#112 PastThePeak on 08.22.19 at 3:23 pm

#86 expat on 08.22.19 at 8:14 am
Regarding bonds.

They were a great trade the last 6 months.
I sold mine yesterday ahead of the fomc meeting.
Far too many fish in one side of the boat imho.

I have a feeling, and it’s only a feeling, that a surprise awaits those who stay too long on one side of the ship.

Only my steerage section opinion.

Never exit an asset class. Amateur move. – Garth
++++++++++++++++++++++++++++++++++++++++++++

How can one rebalance, in the case where there is no longer saving input, without selling some of the assets which rose significantly in value?

Rebalancing does not meaning cleaning out the attic. Just return to the target weightings, selling the winners and buying the losers. – Garth

#113 jess on 08.22.19 at 3:44 pm

the tyee:

July 2015 – Harper government -“Integrity Regime” to replace the Integrity Framework of 2012.
whether domestic or abroad – bribery, fraud, bid-rigging, tax evasion, insider trading or money laundering. suppliers barred for 10 years with gov.of canada.
Harper’s new rules also created so-called “Administrative Agreements” where the ban could be reduced to just five years if the company co-operated with authorities and took remedial action to mitigate their offences and would allow convicted companies to continue to do business with the Government of Canada in lieu of a suspension.One of the grounds for entering into such an agreement with a convicted company was in the “public interest.”
=========
….”hiring middlemen, funneling bribes through offshore shell companies – that unscrupulous corporations have been using since after the Second World War (after Watergate, the Chairman of Gulf Oil testified before the U.S. Congress that his firm had used the system of funnelling bribes through offshore companies beginning in 1958

https://www.theglobeandmail.com/report-on-business/rob-magazine/dont-be-naive-bribery-is-everywhere/article4204455/

Stories by The Globe this year explored EDC’s support for clients dogged by corruption allegations, human-rights or environmental abuses

https://www.theglobeandmail.com/canada/article-outside-review-clears-edc-personnel-of-cbc-allegations-they-ignored/

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

https://business.financialpost.com/news/fp-street/fines-restitution-and-disgorgment-orders-close-in-on-200-million-in-white-collar-crime-cases-but-collections-are-a-different-story-csa

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volker rule went from 11pages to ~1000

When Lobbyists Literally Write The Bill
5:27
https://www.npr.org/sections/itsallpolitics/2013/11/11/243973620/when-lobbyists-literally-write-the-bill
https://www.vox.com/2014/12/17/7405307/swaps-lobbying
November 11, 20132:03 PM ET
https://www.vox.com/2014/12/17/7405307/swaps-lobbying

#114 Sandra P. Cole on 08.22.19 at 3:44 pm

DELETED

#115 bullwinkle on 08.22.19 at 4:31 pm

#110 Marco,

Kerry Thomas is right.

The timing may be off because the EU government has deep roots. Socialism can fall off a cliff or drag itself on longer than expected. I believe the latter.

Britain is getting out just in time.

#116 Caffeine Junky on 08.23.19 at 12:13 pm

When I first got married T Bills were paying 14%. That was freaking nirvana. I loved that crap. I hardly got out of bed. I bought second mortgages , they paid and paid. Those were the greatest days. Now, people want to buy bonds that pay nothing because it’s less scary than cash. That same year CSBs paid 8 %. Man, that’s just nuts.