Wiped

So, here’s the good news.

The prime rate at the Big Banks just eroded nicely, down a half point to 3.45%. That means consumer and car loans cost less. The rate on your line of credit just dropped. Ditto for the HELOC. Five-year mortgages are moving close to 2.5%. One lender now has a 1.99% three-year offering. And variable-rate mortgages are a bargain – likely to move lower.

The mortgage stress test – diddled by Ottawa just weeks ago to make it less gutsy – is on its way to just 4.5% (given current bond yields). That’s almost a full point lower than a couple of months ago.

There’s bad news, too. Are you sitting?

Savers are being crushed. High-interest account will pay less than inflation. A 5-year GIC at the Big Blue Bank is yielding 2%. Yeah, also under inflation and you have to pay tax yearly on money you don’t get. Sucks.

When it comes to real estate, the plunging cost of home loans and the defanged stress test will unleash a lot of new buying power. Given the shortage of listings in most places, this translates into price pressure. We’ve already seen that in the last month. Big jumps in the GTA (17%) and Montreal (13%). The rash action by the Bank of Canada this week will only serve to make housing less affordable and undo three years of government efforts to get the hormones back into the gland. Unless, of course, the virus keeps all the buyers at home washing their hands and guarding their hoards of toilet paper.

Also bad news (maybe)?

Mr. Market has no idea how to price things at the moment. Stocks soared Monday, tanked Tuesday, exploded Wednesday and died Thursday. Thousand-point sessions used to be stunningly rare events. No more. Meanwhile bond yields have been driven towards zero and bond prices set on fire. Investors with balanced portfolios have seen equity holdings flip wildly while their fixed-income stuff appreciates. Now everybody should understand why you always hold bonds. Even ones that pay you nothing.

Does this portend crappy days ahead? And, if so, wouldn’t this be a really bad time to buy a house in Toronto and swallow a million in mortgage debt?

Ah, that’s the question.

Well, Canada’s in some trouble. Oil prices have fallen 30% and $45-a-barrel crude (world price) is a disaster. Especially in a country when we can’t even get a pipeline built. Meanwhile the FN goofs caused serious economic damage by squatting on rail lines, and the feds seem incapable of decisively dealing with the radicals. Warren Buffett just pulled out. There’s a huge federal deficit now and no path to getting rid of it. Government spending will have to jump if the economy stutters, just when reduced economic activity means lower revenues. And now, the virus.

The central bank move this week – cutting rates by a half point (more to come) – was about as clear a signal as you can get that the economy is sliding. Resource-rich Canada was hobbled by the climate change agenda of Ottawa, aboriginal demands and commodity weakness even before Covid-19 whacked demand by shutting down China, kicking the airlines and plunging crude.

This week I spoke with an experienced, talented resource engineer who for the first time in his life can’t find work in Saskatchewan. Meanwhile his condo in Saskatoon has lost a third of its value. “Trapped,” he said. “What am I supposed to do now?”

So low rates might look sexy amid a forest of condo towers in urban 416. Maybe more kids renting condos will be able to buy the same units, and go from being miserable loser-tenants to happy owners with giant debts. But make no mistake. Overall, this is not good.

What to do?

If you have a balanced, diversified, liquid and global portfolio, ignore the noise. It’s going to last a while. The virus will be here all Spring, into summer, maybe longer. Nobody knows. But it will end. Growth will continue. Pent-up demand will shove values higher, fast. Don’t try to time it, since you can’t. Missing the good days of recovery is a bigger hit than waiting through the bad ones.

Real estate? Nothing’s changed. If you need a house, and can afford one, buy. If you can carry a big mortgage without a job, go ahead. Jump in. But don’t buy into a weakening economy just because mortgages got a half-point cheaper. Don’t wade into debt because you’re pregnant, are suffering from FOMO or your mom’s beating on you. There are a number of negatives swirling these days which should keep reasonable people from wanting any more debt – no matter how cheap it comes.

And if you’re a saver?

Sorry. You’re pooched. You might as well spend it. But not on a cruise.

165 comments ↓

#1 Party on Garth on 03.05.20 at 3:07 pm

The following numbers are from the Bank for International Settlements (BIS) as of the end of the 3rd quarter, 2019:

Total credit to the non-financial sector (core debt), % of GDP

Greece – 294.1
Canada – 303.2

https://stats.bis.org/statx/srs/table/f1.1

The following BIS chart shows Canada’s total credit to its non-financial sector (core debt), as a percentage of its GDP from 1990 to the end of the 3rd quarter of 2019:

(In 2006 it was 213)

https://stats.bis.org/statx/srs/tseries/CRE/Q.CA.C.A.M.770.A?t=f1.1&c=&p=20193&i=6.10

#2 cog-diss on 03.05.20 at 3:17 pm

“the greatest shortcoming of the human race is our inability to understand the exponential function”
Exponential Growth Arithmetic, Population and Energy, Dr. Albert A. Bartlett
https://www.youtube.com/watch?v=kZA9Hnp3aV4

Anyone Who Believes Exponential Growth Can Go On Forever in a Finite World Is Either a Madman or an Economist

#3 cog-diss on 03.05.20 at 3:20 pm

personally, i’ve bet everything that the central banks and donald trump will come up with the cure for reality.

#4 COVFEFE-19 on 03.05.20 at 3:22 pm

“Savers are being crushed.”

Not the one who occasionally posts here bragging that his(?) entire portfolio is in 30 year strips. Probably up about 60% in the last year…

#5 Savers Pooched on 03.05.20 at 3:29 pm

Amanda Lang and BNN tool the words from my mouth.

Not verbatim but more or less accurate.

There are scores of stock market investors who have their money in a place where they and their money don’t belong. Many of these people are the ones who panic. They are savers and should have safer options but have been screwed for almost 12 years and counting now. This because interest rates should have been pushed up to 4-5% or higher after the recovery regardless of how that would have hampered the markets.

We’d have far more realistic valuations, a true economic recovery and housing markets that made a semblance of sense.

Central Banks effed up and they know it.

#6 Catchit on 03.05.20 at 3:30 pm

Here’s some things from CorV files that will effect your life….

Dog gets CorV virus from owner…….

https://news.google.com/articles/CAIiEL_gxdfPRfa23WBIjmrlcc4qGAgEKg8IACoHCAowjtSUCjC30XQwzqe5AQ?hl=en-CA&gl=CA&ceid=CA%3Aen

Starbucks suspense use of personal cups…….

https://news.google.com/articles/CAIiELueqqe1exMaZb_vDCscO0YqGQgEKhAIACoHCAow6f-ICzDjj4gDMJTFnwY?hl=en-CA&gl=CA&ceid=CA%3Aen

Globalization unable to supply essentials………

https://www.theglobeandmail.com/business/commentary/article-coronavirus-is-circling-the-planet-and-exposing-the-risks-of-the/

#7 Carlyle on 03.05.20 at 3:35 pm

Garth I sell cruises for a living. You are not helping my employment situation AT ALL

=*(

For the record business is dead. We’ve basically written off this year’s season (we specialize in Alaska). Numbers are waaaaaay off. Cancellations rolling in for those cruises booked and no calls coming in to book new cruises. Never ever seen it this bad although the old timers tell me 9/11 was worse.

So I moved all my retirement funds from 100% equity to Canadian bonds in my RRSP and my TFSA to a high interest savings account — did this just before the market crashed.

Planning on getting back in but I’m not sure when — feel the market will drop further.

When I eventually do buy back in should I still be going 100% equities? I have a 25 – 30 year investment timeline. Debating about maybe doing 60% equities 40% bonds or maybe 80/20. This crash scared me how lucky I was to switch out just in time. I might not get lucky like this next time ….

#8 technical analysis on 03.05.20 at 3:43 pm

without savings, there is a serious problem. you’ll find out soon enough.

#9 Sail away on 03.05.20 at 3:48 pm

Yes, uncle Warren did indeed pull his $4B support from the Quebec Saguenay LNG project. He still holds a stake in Suncor, and his good friend Bill Gates is still the biggest shareholder of CN Rail.

All we hear are investor dollars fleeing Maple; Saguenay is just the most recent, although arguably one of the most telling. If the world’s best investor can’t make a go of it here…. who can?

So… no good news in Canada. If someone really had no choice but to invest here, CNR and SU would probably be decent bets, but during a landslide, everything drops.

#10 Sail away on 03.05.20 at 3:51 pm

More Buffett: Berkshire did increase their share in Delta Airlines after it dropped 20%.

It’s still going down on Corona fears. Here’s a chance to get in lower than Buffett did- rarely a move that fails.

#11 CanadianGrizzly on 03.05.20 at 3:58 pm

“The ends justify the means.” This phrase is used when the end result justifies whatever action was used to get there. (from Google search)

The Globalist’s “means” is COVID-19

The Globalist’s “ends” is inscribed on the Georgia Guildstones.

“Inscriptions:
A message consisting of a set of ten guidelines or principles is engraved on the Georgia Guidestones[8] in eight different languages, one language on each face of the four large upright stones. Moving clockwise around the structure from due north, these languages are: English, Spanish, Swahili, Hindi, Hebrew, Arabic, Traditional Chinese, and Russian.

Maintain humanity under 500,000,000 in perpetual balance with nature.

Guide reproduction wisely — improving fitness and diversity.

Unite humanity with a living new language.

Rule passion — faith — tradition — and all things with tempered reason.

Protect people and nations with fair laws and just courts.

Let all nations rule internally resolving external disputes in a world court.

Avoid petty laws and useless officials.

Balance personal rights with social duties.

Prize truth — beauty — love — seeking harmony with the infinite.

Be not a cancer on the earth — Leave room for nature — Leave room for nature.”

(quote from Wikipedia) https://en.wikipedia.org/wiki/Georgia_Guidestones

#12 Dissymmetry on 03.05.20 at 4:02 pm

Hey Garth,
Are there any assets you would recommend buying to diversify and hedge against the possibility of inflation going wild? Land? Metals? Art? Livestock? Just wondering…

#13 just snootin' on 03.05.20 at 4:04 pm

Kudos to soft spoken virus warrior Dr. Bonnie Henry, BC’s top doc, who has used isolation and rapid testing to crush any virus spread in BC—without panic.
When word gets out BC is truly a 21 Century juridiction with the best healthcare in the world…
Combine that with lots of manufacturing start ups, tourism, agri, r&d, services, tech, geography, culture, transport, gas that will go thru… I see a diverse and balanced economy poised to preserve and expand on the harmonious outlook of residents. I am calling BC a “buy”. Dirt in BC is as good as gold.

Saving… 2% interest is still cheaper than paid security for the pile. I have to start a new bank acct every couple years to stay under the insurable amount. I did start a tfsa on Sir Garth’s advice and am learning how it works—for fun.

#14 cog-diss on 03.05.20 at 4:06 pm

#6 Catchit
there are so many uncertainties surrounding covid 19 it’s way too early to say that it’s jumped the species barrier to dogs from a mouth/nose swab. if they did a mouth/nose swab on my dog on any given day he’d likely have numerous diseases he’s not infected with.

#15 Sail away on 03.05.20 at 4:09 pm

#11 CanadianGrizzly on 03.05.20 at 3:58 pm

———————–

Interesting trivia: the bar screen used for gravel / aggregate sorting in rock operations is known as a grizzly.

The reason is that these were originally manufactured in Canada and were informally referred to by the nickname ‘Grizzly Bars’.

That was, obviously, in the days before all Canadian production came to a halt. Maybe in future, total failure to move forward will be called a “Canadian”, as in:

‘I’m stuck in traffic, total Canadian: won’t be moving for hours’

‘I’ve been Canadian’ed for weeks and nothing helps- Metamucil, prune juice… nothing’

‘Well, whatever happens- don’t Canadian the toilet when it finally lets go’

#16 Bob in Hamilton on 03.05.20 at 4:10 pm

Not trying to sound like a Cassandra here but…

….wither Canada?

#17 just snootin' on 03.05.20 at 4:11 pm

#2 cog-diss on 03.05.20 at 3:17 pm
“the greatest shortcoming of the human race is our inability to understand the exponential function”
Exponential Growth Arithmetic, Population and Energy, Dr. Albert A. Bartlett
https://www.youtube.com/watch?v=kZA9Hnp3aV4

Anyone Who Believes Exponential Growth Can Go On Forever in a Finite World Is Either a Madman or an Economist

Of course, exponential growth is a fallacy. I see it more like waves in a bathtub…which end are you in?

#18 Orange Man...Orange on 03.05.20 at 4:15 pm

So now you have the stars of two of your favorite movies running for office:

Bernie Sanders starring in “Weekend at Bernies” in which he plays Bernie, of course.

And Joe Biden starring in “Night of the Walking Dead” in which he plays Zombie #14, because the other 13 zombies were cut by the Director.

Crazy Bernie or Frail Joe. It’s a wheelchair race to the finish.

#19 Lost...but not leased on 03.05.20 at 4:18 pm

#7 Carlyle on 03.05.20 at 3:35 pm
Garth I sell cruises for a living. You are not helping my employment situation AT ALL

=*(

For the record business is dead. We’ve basically written off this year’s season (we specialize in Alaska).

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

Hi Carlyle:

We have a Caribbean cruise booked with Princess lines for end of March.

We are taking my 85 year old Mother -In- Law..likely her last trip out of Canada.

What’s your view of what will happen….will they cancel ??? ……..or will we simply be on a cruise with a potentially low passenger count?

Thanks

#20 JSS on 03.05.20 at 4:20 pm

i want to buy shares of Suncor @ $31/share.
At $31/share, this will provide a 6% dividend.

Today, Suncor shares were at $34 something. we’re getting close

#21 The Wet One on 03.05.20 at 4:22 pm

Meh.

It’s just another day on that tiny blue ball in the sky (not our sky but other skies).

Let the good times roll.

By the way Garth, you forgot the possibility of war between Russia and Turkey (though that does seem to be tamping down) and anti Muslim pogroms in India.

But y’know, whatevs. You can’t have all the bad news in one post. People might get depressed or something.

LOLOLOLOLOLOOL!!!!

:-)

#22 paddy on 03.05.20 at 4:23 pm

#7 Carlyle on 03.05.20 at 3:35 pm:

I don’t think he got the memo Garth….

#23 cog-diss on 03.05.20 at 4:23 pm

#17 just snootin’
i think you just cured basic maths. donald trump needs your wisdom.

#24 Re-Cowtown on 03.05.20 at 4:23 pm

Hey Garth,
Are there any assets you would recommend buying to diversify and hedge against the possibility of inflation going wild? Land? Metals? Art? Livestock? Just wondering…

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

Canned peaches and TP.

#25 neo on 03.05.20 at 4:28 pm

Soooooo… Does Buffet still have that large stake in that subprime lender in Canada that almost went bankrupt?

Home Capital was it….

#26 TRUMP2020 on 03.05.20 at 4:30 pm

BUT WHAT IF IT DOESN’T??

#27 Carlyle on 03.05.20 at 4:40 pm

So most of the cruise lines cancelled Aisan and Italian itineraries.

For clients booked in March or April there is a chance everything will be cancelled and refunded IF there is a breakout in North America similar to Italy and South Korea.

In Wuhan the virus went from a few infected (city locked down January 27th) to insane numbers by the end of February. I’m thinking in the West we are like early January on that timeline ….

Who knows though, I mean it’s here. The problem is that no politician in the west is going to be able to enact the kinds of crazy lockdown measures they did in China which means the virus will likely spread quickly (IMHO) and exponentially.

So who knows where we will be by the end of March — I’m thinking the situation will be going downhill quickly. But perhaps not quickly enough for cruise itineraries out of North America to be cancelled.

Don’t know if you heard but the Grand Princess is quarantined right now too — https://www.kron4.com/health/coronavirus/grand-princess-cruise-cancels-call-to-mexico-will-return-to-san-francisco-after-cdc-says-it-is-investigating-small-cluster-of-coronavirus-cases-linked-to-ship/

So yeah things aren’t looking too good right now for the cruise industry. You are so close to sailing so way past being able to cancel and get money back. Insurance won’t cover it either unless you have Cancel for Any Reason policy. Even regular Trip Cancellation will unlikely cover it — that usually only covers if you get sick (non Coronavirus), lose your job, family member dies etc …

Sorry wish I had better news for you.

On the bright side it doesn’t look like too many infections in the Caribbean — but I’d be more worried about fellow passengers on board.

#28 Deplorable Dude on 03.05.20 at 4:40 pm

Cruises…..a good chance to catch something nasty, with the remote chance of drowning….

Never saw the attraction myself.

Wonder how long before this starts affecting our local economy in Victoria…..big cruise ship destination. Will the City Council dare ban ships from docking at some point?

#29 Ponzius Pilatus on 03.05.20 at 4:44 pm

Just filled another 90 days prescription for my blood pressure medicine.
Still had 60, but followed the advice from my doctor to get more because of looming shortage.
Sure enough, the pharmacy had to make a few calls before they could fill the whole prescription.
Not afraid of running out of toilet paper.
But my blood pressure needs to be controlled, especially when I read the comment section.

#30 Howard on 03.05.20 at 4:44 pm

British airline Flybe just went bust today. Passenger traffic down 50% in the past few weeks. Was already struggling, corona finished it off.

#31 COVFEFE-19 on 03.05.20 at 4:45 pm

“They are savers and should have safer options but have been screwed for almost 12 years and counting now. “

Plenty of safe options out there — none of my companies have announced dividend cuts. Several have recently announced increases.

But I have to ask:
1) Why do ‘savers’ feel entitled to a positive return on cash after inflation and tax? It wasn’t written on a tablet at Mt. Sinai. Maybe it made sense in a gold standard world, I dunno. Richard Nixon ended the last vestiges of that long before I started investing. Some people sound like Shylock from the Merchant of Venice. Pound of Flesh! I am entitled to my entitlements!
2) If you think central banks have the backs of indebted governments, companies, and people, all at the expense of people who save, then why the heck aren’t YOU levered up with property and a big fat mortgage? Because that’s how this thing works. No government and no central bank wants a repeat of 2008, and they are going to print money to make sure. Why do you want to be long money in such an environment? You want to be short! Hie thee to a mortgage broker!

#32 Ace on 03.05.20 at 4:51 pm

If you’re a saver… Join the debt party and when the debt runs out, cut them a deal to only pay back 5% of what you owe. Have fun, you’re welcome.

#33 baloney Sandwitch on 03.05.20 at 4:54 pm

OK, I was caught with my pants down. Had about over a million in margin when the virus struck. Hanging on. Looks like the Recession is here.

#34 SimplyPut7 on 03.05.20 at 5:03 pm

While markets are slightly down and real estate is doing well, I don’t sense the FOMO of 2016 in the GTA housing market.

Maybe it’s because I know too many landlords and speculators who don’t know what they want to do with their condos: do they keep renting it and barely breakeven? Do they sell and face the CRA?

I think summer will give us a better sense of what impact COVID-19, lower oil prices and the rates cuts will have on our very weak economy.

In the meantime, I’m going to top up my supplies. You never know when someone at work will cause the whole office to be quarantined for 14 days.

#35 Caledondave on 03.05.20 at 5:06 pm

DELETED

#36 Camille on 03.05.20 at 5:06 pm

Sober, humble post if I may say so. Thank you.
I wonder will gvm’t try to fill gap in lng. And then I think will gvm’t crowd out everything including home ownership?
And I’m forced to rethink my bond allocation. What good will high priced bonds, paying me back my money do?
And Garth says you don’t hold bonds for interest. Ok, so rates need to make their way up again. I seem to need a leap of faith for that.

#37 Bigriders Nonno on 03.05.20 at 5:06 pm

DELETED

#38 not 1st on 03.05.20 at 5:18 pm

Garth should have renamed the post to wiped out as in all Canadas wealth courtesy of Trudeau.

7 train derailments in less than a month, one yesterday, one today.

That rail system has been carrying Canadian exports and finished goods around this country for more than 100 yrs and I can never remember that many derailments in such a short period. Is anyone in the RCMP still awake? I mean you get a $500 ticket for looking at your phone while parked at a light but people can derail trains with impunity?

We are so lost. Thanks Toronto.

#39 COVFEFE-19 on 03.05.20 at 5:23 pm

“if they did a mouth/nose swab on my dog on any given day he’d likely have numerous diseases he’s not infected with.”

What, he’s just holding them for a friend?

#40 Cto on 03.05.20 at 5:25 pm

#5 saves pooches
Amanda Lang,
She summed it up perfectly.
Some time ago interest rates should have been raised probably in 2014 but the FED dropped the ball big time.!
They should have raised and allowed a recession as it is a normal part of the process. dumbasses!!!

#41 Cto on 03.05.20 at 5:26 pm

I think central Bankers need to go to boot camp and grow some balls!

#42 Get Out on 03.05.20 at 5:28 pm

“If you have a balanced, diversified, liquid and global portfolio, ignore the noise. It’s going to last a while. The virus will be here all Spring, into summer, maybe longer. Nobody knows. But it will end.”

With all due respect, there is another strategy: get out now, get into cash and money market funds, and get back in when volatility gets more normal.

Nope. History says you are wrong. Stop being emotional. – Garth

#43 Dave on 03.05.20 at 5:33 pm

If we are headed for a recession…not just us but other countries….Hence the CB collaboration.

World slow down…why would you buy real estate?

Aren’t the banks clamping down on how much they are lending or has that changed? Are the banks opening up the cash vaults?

#44 Jay on 03.05.20 at 5:37 pm

Government spending will have to be reduced eventually wont It ? How can we run deficits forever? Meanwhile in Alberta the highest paid teachers, doctors and nurses in the country are getting ready to protest and demand more raises, maintain unsustainable amounts of public sector spending and want to just keep raising taxes on everyone but them to pay for it all.

#45 JSK on 03.05.20 at 5:38 pm

#13 just snootin’

BC has a large homeless population. Wait times in ER are 2-4 hours even with no pandemic going on. Real estate eats up all disposable income. Large proportion of old residents susceptible to disease. It’s a travel hub. Lots of international students. I’m still waiting for universities to start shutting down. Some friends already report spring vacations being extended by schools to deal with the situation, which forces parents to make arrangements. And if schools get closed due to virus concerns, do you really want to be hiring a babysitter and have a stranger visit the house on regular basis? That would defeat the purpose of isolation. Plus you just blew your savings building a tin can castle.

BC is a sell. There is nothing special about this place. As corrupt and unprepared as any other jurisdiction. Just wait till downtown homeless start coughing up blood over feces and needles that already litter the streets.

Best looking horse at a glue factory.

#46 Sail away on 03.05.20 at 5:38 pm

#25 neo on 03.05.20 at 4:28 pm

Soooooo… Does Buffet still have that large stake in that subprime lender in Canada that almost went bankrupt?
Home Capital was it….

—————————–

No. He doubled his money, gave back the company’s respectability, and was voted out by investors when better rates were available elsewhere.

#47 crowdedelevatorfartz on 03.05.20 at 5:40 pm

@#29 Ponzie Pilot
“But my blood pressure needs to be controlled, especially when I read the comment section.”
++++
Damn!
It’s getting harder and harder to poke the bear….

#48 cog-diss on 03.05.20 at 5:44 pm

#30 COVFEFE-19

he’s not a house dog. on our daily off leash walks on the beach or in the forest he’s prone to sniff, roll in and often eats horse, rabbit, deer, bear, beaver, otter, and other dog poop (thankfully he gave up the latter at 9 months old). we also feed him a raw diet, never had commercial food in his life and i know how to use google scholar much to our vets. chagrin. at a minimum he’s exposed to giardia, leptospirosis, E. coli and salmonella daily. healthy as can be but he only gets to lick our ears (not a big licker anyway) – i know where that mouth has been.

#49 MF on 03.05.20 at 5:48 pm

#5 Savers Pooched on 03.05.20 at 3:29 pm

She’s correct, and I think pretty much everyone else agrees as well.

At this point, the game is about trying to predict how bad the central banks will screw up policy so you can profit off of it.

Interest rates are the obvious example.

The correct, smart thing to do would have been to raise rates to 4-5% and normize the world economy after the GFC. However, many people wisely predicted the incompetence and myopic thinking would continue for a long time and made a profit. Rates were kept too low for too long, of course. Human nature is consistent, so people who overextended (everyone in real estate) will be ultimately crushed during the next crisis like the generation before them. But for now they think they are geniuses.

Or how about Powell, who, during the previous rate cut, relented to the demands of an elected official (Trump)? What a way to appear partisan, and easily manipulated. To work for the 1%. What a way to lend credence to all the nut case conspiracy theorists and anarchists out there, and erode your own credibility in the process.

Real smart move Jerome.

Garth’s last few paragraphs are crucial to anyone smart enough to listen. This is not the time to be tempted to go into massive debt. The worldwide crisis just got moved a lot closer.

MF

#50 Nonplused on 03.05.20 at 5:48 pm

I don’t understand why everyone suddenly got so woke to pipelines. Don’t they know the land is literally covered with them? Well, they are buried, so out of site out of mind, but they are everywhere. Even in pristine BC. They run from northern BC to Vancouver, from Alberta to Vancouver, from there across the straight to Victoria, from Alberta through BC and on to California, they are everywhere. Nobody seemed to mind before. These are all gas pipelines mind you, so far as I know Trans Mountain is the only one carrying liquid products. And it’s been there since the 50’s.

And I don’t understand Ontario. Of course they have lots of gas pipelines out there too, but why they want to keep buying their oil from the Saudi head choppers is beyond me. That’s a lot of money that could be staying in Canada and a lot of oil floating up the St. Lawrence that doesn’t need to. And they are buying that oil at world prices, not the deep discount available in Alberta. It makes no sense once you know a little bit about how things work.

I think there are more people who understand the energy in Alberta than in say BC or Ontario, and this is why so many conspiracy theorist in Alberta sense a coordinated effort to intentionally harm the Albertan economy. If such a conspiracy exists, it is probably American in nature because they are making lots of money off the low Alberta oil and gas prices. It doesn’t do them any good to see Canadian exports that don’t head south.

And the will approve Keystone XL when they are good and ready for it but right now they have too much shale oil. They already approved and built the sections that help move the shale oil. So they are saying that the principle is that bitumen is dirty, but bitumen doesn’t flow in a pipe (it’s too thick), what goes in the pipe is dilbit or syncrude which is not much different than any other oil and they import lots of it already.

#51 I figure ... on 03.05.20 at 5:49 pm

the next gas price hike in the LM will somehow be linked with Covid19. They’ve used up everything else now many times over …

#52 Lost...but not leased on 03.05.20 at 5:55 pm

#28 Deplorable Dude on 03.05.20 at 4:40 pm
Cruises…..a good chance to catch something nasty, with the remote chance of drowning….

Never saw the attraction myself.

Wonder how long before this starts affecting our local economy in Victoria…..big cruise ship destination. Will the City Council dare ban ships from docking at some point?

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

We were in Victoria on weekend.
At night. …..main hotels looked DEAD…few lights on

The V2V ferry apparently has gone bankrupt…

#53 joblo on 03.05.20 at 5:57 pm

Peter Zeihan’s Dis United Nations
” The world we know is collapsing”
I know, I know, he is trying to sell a book.
Notwithstanding, security from USA is being reduced.
Who wins, who loses?
In a geopolitical context?

#54 Lost...but not leased on 03.05.20 at 6:04 pm

#27 Carlyle on 03.05.20 at 4:40 pm

====

Thanks for info..

My own view is the coronavirus in an overhyped psy-opp nothing – burger.

Too many variables…it appears the main issue is whether ports will allow ships to dock.

My own guess is our cruise will be cancelled…

#55 Rico on 03.05.20 at 6:16 pm

Not trying to time the market. If I have $1M in cash today should I:
1. buy a diversified global mix of ETFs an any drop day
2. buy $250K of same now, again in a week, again in another week…
3. but $250K of same now, again in a month, again in another month…
4. Wait awhile. Buy once the S&P reaches -19% from the peak

Sure sounds like timing to me. – Garth

#56 Tony on 03.05.20 at 6:23 pm

Re: #7 Carlyle on 03.05.20 at 3:35 pm

I’m betting my own money Trump won’t allow a bear market in an election year.

#57 not 1st on 03.05.20 at 6:25 pm

Peter Zeihan, geopolitical strategist on Canada;

https://us11.campaign-archive.com/?u=de2bc41f8324e6955ef65e0c9&id=9e03e3be59

“There is no modern Canada without Albertan and Saskatchewan financial strength, and there is no Albertan and Saskatchewan financial strength without the two provinces’ energy sectors.

The Canadian system is splitting along provincial, economic, demographic and ideological lines, and there is no one in the Trump administration who likes Justin Trudeau personally, ideologically or politically. Add in a now-unrestrained America, an America who sees Canada as a competitor, an America who sees the Canadian government as a mix of annoying and ungrateful and self-righteous, and a complete role-reversal is fully in play. Unless the Canadians can get their shit together, it will be eeeeeeasy for Washington to start cutting deals with individual Canadian provinces to hammer preexisting wedges ever-deeper into the Canadian system.

Alberta has the means and motive to destroy Canada. Washington has the means and motive to destroy Canada. And the likely format of the new Trudeau government is providing the opportunity.”

#58 Sold Out on 03.05.20 at 6:26 pm

#38 not 1st on 03.05.20 at 5:18 pm
Garth should have renamed the post to wiped out as in all Canadas wealth courtesy of Trudeau.

7 train derailments in less than a month, one yesterday, one today.

That rail system has been carrying Canadian exports and finished goods around this country for more than 100 yrs and I can never remember that many derailments in such a short period. Is anyone in the RCMP still awake? I mean you get a $500 ticket for looking at your phone while parked at a light but people can derail trains with impunity?

We are so lost. Thanks Toronto.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Funny, a quick Google search of Canadian train derailments reflects that the only criminal charges pressed were against rail company employees.

#59 Saver here... on 03.05.20 at 6:30 pm

I’m trying to understand how pooched I should feel with six figures, mostly liquid. I get the erosion of buying power, but for the near term who cares?

I’ll happily pay a premium for short term security.

My stash is insured, liquid, tax sheltered, and can be moved into any equity with a few mouse clicks. I’m earning maybe 2.5% on average (HISA and some GICs in RRSP+TFSA) but I pay zero fees, and when the markets tank I make out like a relative bandit.

Plus, I have the security of being liquid. For the next 3-6 months, until I decide if I’ll jump in at near bottom, I don’t understand how this makes me pooched, exactly.

Unless I’m supposed to judge myself by the relative measure of the greed of others?

These days I’ll take return of capital over return on capital.

#60 bdwy sktrn on 03.05.20 at 6:33 pm

#7 Carlyle on 03.05.20 at 3:35 pm
Garth I sell cruises for a living. You are not helping my employment situation AT ALL

=*(

For the record business is dead. We’ve basically written off this year’s season (we specialize in Alaska). Numbers are waaaaaay off. Cancellations rolling in for those cruises booked and no calls coming in to book new cruises. Never ever seen it this bad although the old timers tell me 9/11 was worse.

So I moved all my retirement funds from 100% equity to Canadian bonds in my RRSP and my TFSA to a high interest savings account — did this just before the market crashed.

Planning on getting back in but I’m not sure when — feel the market will drop further.

When I eventually do buy back in should I still be going 100% equities?
————————–
yes. do it. 100% eq if fine when the market is in the tank (now). half vfv half qqq. period. DO NOT buy ANY maple.
the crashes always recover.
grow a set , u can do it.

no one stopping you from going 60/40 after the next good stock run.

i’m out too. killed it on a 2x down etf. sold it today. bet the farm. woot.

i will go 100% long/strong at a re-test of 2850 unless the world looks to be ending, then ill wait a bit more. 2700 would be a gift.

buffett says it’s fine to go here, though.

#61 Sail away on 03.05.20 at 6:37 pm

In trying market times like these, I tend to divert myself with exciting plans.

So, a new bird dog pup is joining the team this year- a Kleine Munsterlander pointer. He’ll be a little young for first bird season, so will join us in the field, but will mostly be coming along for fun.

In the meantime, in preparation for training, the pigeon coop is getting repopulated with downtown pigeons live-trapped at my business. They’re very easy to catch with a pre-captured traitor already inside the trap luring them on- then they’ll have eggs and chicks in the coop, and those ones will forever return to the coop.

I like to think we all enjoy the training: the pigeons get an outing to the field, the dogs get to search and point, I get to watch the pure excitement. Then when we get home, the flushed pigeons are waiting on the ledge to get back to the food.

Heck, bird dogs don’t care about markets. Birds, baby, birds!

#62 Get Out on 03.05.20 at 6:39 pm

“Nope. History says you are wrong. Stop being emotional. – Garth”

Historical data is completely irrelevant for forecasting. Prices develop according to stochastics, in essence a lognormal random walk. Just like historical data has no relevance on future performance when playing roulette in a casino. All that matters are probabilities, volatility, and risk-free trend line; none of those have any relation to past performance data.

As opposed to your gut, you mean? – Garth

#63 Don Guillermo on 03.05.20 at 6:41 pm

#38 not 1st on 03.05.20 at 5:18 pm

We are so lost. Thanks Toronto
*********************************************

… and Vancouver Island, LML, Atlantic Canada, Quebec.

#64 Simond on 03.05.20 at 6:46 pm

Meanwhile the FN goofs caused serious economic damage by squatting on rail lines,
————
what about the non-FN people who did the same in support?

#65 Nonplused on 03.05.20 at 6:46 pm

#171 not 1st on 03.05.20 at 1:20 pm

“Most of the posters have no idea whats coming down the pike.

Rumor is Trudeau has agreed to ratify UNDRIP and give the Wetsowetin title to their 22,000 acres. That title is on an equivalent basis to the crown. So another layer of govt is being added to our country. Everything will have to be run past these two groups.”

——————–

If that happens it will open a whole can of worms. There are a lot of people living on the land claimed by the Wet’suwet’en. What will happen to them? Will they have to move? Pay taxes to the band? Be policed by the band? Will the RCMP be told to leave? If I know anything about the people who live in rural BC things will get very messy if anything like that happens.

Second, while the situation is a little different in BC in that much of the land was never ceded by the natives so their claims are stronger than in much of Canada, there isn’t a square inch of Canada that isn’t claimed by one band or another, and often by more than one. How would they sort all that out? And what good does it really do to claim land that has already been settled? It’s probably time to move on and acknowledge the realities of things as they are today. The British crown stole that land fair and square and built a country on it. It is, unfortunately, past tense. We’re not all moving back to Europe or wherever it was our parents came from.

I suppose one solution would be that anyone living on land claimed by a tribe automatically becomes a full voting member of the tribe, but I bet that isn’t what they are thinking.

And what good the land claims actually do I am not quite sure. Technically they don’t even own the reserves, those are all crown land too. That’s why they can’t subdivide and sell it. I am only familiar with a couple of subdivisions on reserves, and those are all leases. The crown retains ownership of the land and the band control, and at the end of the lease the land and any structures on it revert back to the band unless a new lease is written.

This is not a lot different than how the crown handles most crown land. For example the Sunshine ski resort (which is in a national park) just renegotiated (if you can call it that) its lease with the crown. When the lease expires, not only the land but all of the infrastructure (lifts, lodges, everything) reverts back to the crown. At that point the operator can negotiate a new lease but there is nothing preventing the crown from entertaining multiple offers or just having the resort removed. The whole town of Banff and Jasper are built on a similar premise. The crown retains so much power over the town that you can’t even buy a house there unless you can prove a “need to reside” (in other words you work or own a business operating in town). Development is strictly controlled by Parks Canada, which is an extension of the federal government. Many rich people operate small gift shops in town possibly at a loss just to prove the need to reside so they can buy a house there.

So these land claims are all very complicated. It would be much easier to just accept that the British won the war, and there was no rebellion that transferred ownership and authority yet again as occurred in the US. Same as how the French conquered Quebec but the British put a stop to that too.

Authority always goes to those who have the best army. Like it or not, that’s just how things roll. I think it has always been that way. History is one long list of one people conquering another.

#66 Faron on 03.05.20 at 6:51 pm

Re: #42 Get Out

I mentioned before that I managed to sell my equities on the open of the 25th which was the bottom so far. Tracking my old portfolio, I can see that it has regained more than 1/3 of the loss while my new bond-heavy portfolio has gained only a wee bit. The story doesn’t end here, but I’ve already learned that missing out on big days sucks.

#67 S.Bby on 03.05.20 at 7:13 pm

Sunny ways everybody, sunny ways.

#68 leebow on 03.05.20 at 7:22 pm

#62 Get Out

What’s risk-free trend line? Sounds like something I require.

#69 COVFEFE-19 on 03.05.20 at 7:23 pm

“[…] geopolitical strategist […]”

So I’d never heard the term and I’m like “WTF is that even a thing?” so I googled it and sure enough everything on the first page of search results refers to the aforementioned self-promoter. Truly, an onanist outstanding in his field.

#70 cog-diss on 03.05.20 at 7:25 pm

“Nope. History says you are wrong. Stop being emotional. – Garth”

linear history is bunk in exponential time. dottage sneaks up and then hits you all at once, look at joe biden.

#71 Lost...but not leased on 03.05.20 at 7:34 pm

#65 Nonplused on 03.05.20 at 6:46 pm

If that happens it will open a whole can of worms. There are a lot of people living on the land claimed by the Wet’suwet’en. What will happen to them? Will they have to move? Pay taxes to the band? Be policed by the band? Will the RCMP be told to leave? If I know anything about the people who live in rural BC things will get very messy if anything like that happens.
==============

Was on the Ferry to Victoria last weekend…
Looked over at Tsawassen SuperPort..never ever saw the coal pile so low. There is a vivid indication of blockades’ and protests’ impact.

These protests are far too organized to be spontaneous grassroots movements. Duly note the vast majority of Non First Nation protestors are of European descent…so where are the Chinese, East Indians etc…??? (probably laughing at us).

It appears the TIDES foundation is behind these protests (aka effectively wealthy Americans trying to stop competition from Canada. Warren Buffet makes $30 per barrel for oil shipped by train…versus Pipelines can do it for $10 per barrel.)

The First Nations have made there point..enough is enough.Time for Turdeau to lead or get out of the way.

#72 We usta ... on 03.05.20 at 7:37 pm

#61 Sail away on 03.05.20 at 6:37 pm

They’re very easy to catch with a pre-captured traitor already inside the trap luring them on- then they’ll have eggs and chicks in the coop, and those ones will forever return to the coop.
—————————————————————
catch them when they would flock inside an open door of a RR grain car … just pull the door closed. Sold them to either a local gun club or down in Chinatown.
Tethered crows make for a great crowshoot though.

#73 Bdwy on 03.05.20 at 7:39 pm

My gut says the sp500 opens up 20 or 30, gains 10 or 20 more (top alert)then goes red, breaking the up down up down pattern for -50 or so.

Is smokey still around?

#74 Andrew on 03.05.20 at 7:41 pm

Appreciate your change in tone and focusing on the long term financial aspect of this. You were/are dead wrong shaming people for preparing. This is likely going to be a long process. “We’ll never see something like 2008 again” you’ve said many times. Perhaps you’re right, it might be worse! I look forward to longer blog posts when we’re all quarantined inside our homes. Stay clean all!

Scaremongering. For what purpose? – Garth

#75 earthboundmisfit on 03.05.20 at 7:42 pm

#48 cog-diss

Sorry to be a Dickie Downer but if your fuzzbutt has leptospirosis, he is, literally, the walking dead. I’d be sleeping with one eye open.

#76 Drill Baby Drill on 03.05.20 at 7:51 pm

DELETED

#77 Sail away on 03.05.20 at 7:53 pm

#72 We usta … on 03.05.20 at 7:37 pm

Re: Pigeons…

Sold them to either a local gun club or down in Chinatown.

—————————

Huh. I didn’t know the folks in Chinatown even trained bird dogs.

#78 cog-diss on 03.05.20 at 8:08 pm

Scaremongering. For what purpose? – Garth

the scariest thing i’ve read is your analysis of covid 19 two days ago. if this was china you would be in jail for spreading such counter-factual misinformation. please consult an epidemiologist, pathologist and psychiatrist before you ever write about it again. ignorance is fearful, informed and aware not so much. look at how singapore dealt with covid 19 as they’re still the highest standard of transparency and correctly informing their citizens. or we could pray with mike pence in the dark, or heaven fore-fend listen to donald trump and his hunches .

Google tells me a hundred thousand people come to this blog every few days. Here’s betting few catch the bug and none die. But there will be miles of virgin toilet paper. – Garth

#79 Apocalypse2020 on 03.05.20 at 8:09 pm

Take a moment to appreciate the people and good health in your life, everyone. We so seldom live in the moment enough to realize how good we might have it until something comes along to change it all.

#80 Andrew on 03.05.20 at 8:11 pm

To counterbalance the narrative that it’s just another flu. It may one day be just another flu but this iteration and the possible next wave can’t be treated like a seasonal flu if we want to mitigate risk. This is a case where possibly overreacting can only do…good? Except to the bottom line maybe. Ironically overreacting would help that aspect medium term tremendously. Such is the irony of the too cool for school.

I had reasonable comments the past week or so about reasonably being prepared. You took the other side of the coin and brushed it off saying people were panicking and being hysterical. Just because my points are based on a fear of something happening and yours are based on something not happening doesn’t mean you’re not the one being over the top. I found your previous post that I commented on in severely poor taste, as I said it will not age well. People deserve to the hear the reality of possible outcomes and choose to prepare or not prepare as they see fit. Black swans don’t disappear if we close our eyes.

Yes long term it will pass, I agree. Short term people can take simple steps that will have compound benefit if they take them now rather than wait for a worst case. People shouldn’t be ridiculed for that and those in the comments commending you and being clever by half are the ones fearmongering in my eyes. I see the bury your head in sand act as the ones that are hysterical. People who prepare with small steps that if are not needed don’t matter but if are needed pay the dividend.

Probably the same people who scoff are a 2% allocation to gold. Who’s hysterical??

#81 down and out on 03.05.20 at 8:17 pm

I think the markets are bi-polar

#82 Sean on 03.05.20 at 8:22 pm

They are already expecting another rate cut in a couple weeks…

https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

#83 Captain Uppa on 03.05.20 at 8:52 pm

#34 SimplyPut7 on 03.05.20 at 5:03 pm
While markets are slightly down and real estate is doing well, I don’t sense the FOMO of 2016 in the GTA housing market.

——————————

Go and look at sales data on HouseSigma. This is absolutely the return of peak FOMO.

I just finished reviewing some recent sales and my mouth dropped.

I am speechless. It’s complete insanity right now. Oh and I hear conventional 5 year mortgages out there for under 2.5%. Lawd have mercy.

#84 Stan Brooks on 03.05.20 at 8:59 pm

#31 COVFEFE-19 on 03.05.20 at 4:45 pm

Spot on. This is the world today with ‘central banks’ incompetent bureaucrats in charge.

1. Money is not credit. It looks like it but it is not. Credit drives consumption. Money and savings drive investment and innovation.

2. retention of value is a key attribute of money. So we have not money today but coupons with expiration dates that are not even issued by governments despite it’s ‘sovereign’ status.

3. maybe you have not noticed but people are not saving at all but going deeper in debt/ultra-leveraging for quite some time here. It drives prices up for everyone. Your rent/your property taxes/your food/your services/your insurance/your maintenance etc.
We are more indebted than the Greeks at the heights of their credit crisis. And we keep piling on debt in order to solve a debt super-problem. Never deleveraged.

4. Let’s wait and see how the whole credit ponzi scheme plays out but it is already running out of time as basic cost of living become unbearable for everyone except the few very rich.

We are pretty much at the place of eastern Europe during the collapse of communism/it’s economy fake, indebted/it’s markets collapsing. It took them 20-30 years to recover, let’s see how long it will take here.

The only thing holding on the hollow game of cards is the incredible stupidity and willingness of the sheeple to play the game ‘by the rules’ and ‘don’t rock the boat’/the hope dies last attitude. And when it (the hope dies) does die … Watch out.

I am surprised that we held for that long in this cheap labour camp/resource extraction/HMQ bankers owned colony.

Congrats to all retirees for their generous ‘inflation’ adjusted ‘fair’ pension indexations, to all savers for their ever higher banking fees and 0.1 % ‘interest income’ /if lucky on long term contract/ fully taxable while inflation of necessities runs north of 7-8 % to all consumers for their ever-higher food prices (of GMO glucose fructose syrup sweetened piece of crap ‘quality’ food) and to all for the carbon taxes.

https://www.citynews1130.com/2019/06/19/vegetable-prices-may-2019/

A kilo of ‘normal’ (bio) tomatoes at 10-13 bucks, celery at 9 bucks, you can all thank the ‘confident’ and ‘diligent’ central bankers and their idiotic policies for that.

It will become really, really fantastic when high food inflation experience is being combined with soon negative nominal rates (de-facto reality with the high banking fees) and very strong negative real rates) for a veeeeeeeeeeeeeeeery long time to come.

Cheers,

#85 Itchy Fingaz on 03.05.20 at 9:03 pm

Garth,

These buy and hold strategies only work in a bull market. With all volatility more advanced trading strategies are needed. Oil is looking good if Ruskies approve OPEC cuts and certain FX positions like JPY/USD as sheeples flock to safe haven yen, although that ship might have sailed. Timing is everything. Buy and hold is dead.

#86 Quebec Is Great on 03.05.20 at 9:03 pm

I have great respect for you Garth, and everyone else that tunes into this blog. Having said that, signals from the bond market, mass exodus of CEOS and oil tell me that there is a substantial probability of:

near single digit oil and S&P falling to approx. 2K

I’m asuming significant drop in S&P will put many large caps in serious trouble due to substantial corp debt used for share buybacks. If debt downgrade is triggered, then pension funds have to pull out – creating a huge mess and putting pension funds in more peril than they already are.

Yes, might not happen but the probabilities are not insignificant. If crash continues, might be an interesting option to park funds in USD as USD will no doubt strengthen – probably to the point where USD/CAD can reach 1.6 or even 2.0

yes I’m crazy I know, but perhaps it is useful for readers to see worst case scenarios as well as some of the more optimistic ones (ie. just a correction and it will get better from here)

#87 DON on 03.05.20 at 9:04 pm

https://business.financialpost.com/personal-finance/debt/canadian-consumer-debt-nears-2-trillion-as-mortgage-costs-jump

“Canadian consumer debt nears $2 trillion as mortgage costs jump. Mortgage debt rose 5.2 per cent to $1.341 trillion, Equifax says, as non-mortgage debt slowed

Canadian consumer debt closed in on the $2-trillion mark at the end of last year as higher mortgage costs hit home, says credit report company Equifax Canada Inc.

Total consumer debt expanded by 4.4 per cent in the fourth quarter of 2019 from a year earlier to $1.989 trillion as mortgage debt rose 5.2 per cent to $1.341 trillion, Equifax said in its report, released Thursday. Non-mortgage debt, including credit cards, loans and lines of credit, rose a corresponding 2.7 per cent, it said.

Average mortgages surged 7.2 per cent year-over-year during the quarter to $289,000. New mortgages averaged $448,000 in Toronto, an 8.5 per cent jump — the highest on record, Equifax said. In Vancouver, the increase was 7.4 per cent to $455,000, regaining ground it had dropped over the past two years as government initiatives to limit speculation bit into the market.

“Consumers had figured out the mortgage stress test and were back in the housing market,” said Bill Johnston, vice-president of data and analytics at Equifax. “Auto loans and lines moderated with delinquency rates marching higher for much of the year. These trends are likely to continue for much of 2020.”

Lower use of credit lines, which make up 45 per cent of non-mortgage debt, represented the most significant drag on non-mortgage debt growth, falling 2.3 per cent in the fourth quarter compared to a year earlier, Johnston said by phone in Toronto.

Average non-mortgage debt grew at its slowest pace since 2013, up one per cent during the year compared to 2018, Johnston said. However, the non-mortgage debt delinquency rate rose to 1.19 per cent, its highest since 2012.”

#88 Sail Away on 03.05.20 at 9:05 pm

@ Apocalypse2020

Hey Poxy, your hippie niece ‘Roses and Sunshine’ is posting on your account.

#89 cog-diss on 03.05.20 at 9:08 pm

DELETED

#90 Savers Pooched on 03.05.20 at 9:15 pm

#31 COVFEFE-19 on 03.05.20 at 4:45 pm

———————–

Your post is too silly and ill-conceived for me to address. I really wouldn’t know where to start.

#91 MF on 03.05.20 at 9:18 pm

83 Captain Uppa on 03.05.20 at 8:52 pm

It means the end is nearer than it was. Nothing in life is finite. Economies are boom and then bust. To believe otherwise is incredibly naive.

Dig deep and read the posts of the Captain Uppa’s from 2006 in the US. It will sound eerily familiar. Notice when they stop posting around 2008 when it becomes clear they are in trouble.

This time:

No room to drop rates and foolishly “bail out” the economy. You’ll be on your own. Lots of complaints and pleas.

Have fun bud. Look at it like the last rations being consumed before the famine.

MF

#92 Remembrancer on 03.05.20 at 9:28 pm

#10 Sail away on 03.05.20 at 3:51 pm
It’s still going down on Corona fears. Here’s a chance to get in lower than Buffett did- rarely a move that fails.
———————————
The best way still to become an airline millionaire is to start off as an airline billionaire…

#93 ppsez on 03.05.20 at 9:31 pm

Hi Garth,
What is your opinion on re-balancing a portfolio in this time, good or wait?

#94 crowdedelevatorfartz on 03.05.20 at 9:35 pm

@#88 Sail Away

Damn!
People are even beating me to the “Poxy” beat down.

Oh well.

Would the last person to cancel their flight, hotel, Cruise Ship booking please turn out the lights?

#95 Spockspeak on 03.05.20 at 9:43 pm

Once the central bansk run out of ammo, they will have to resort to non-conventional social methods. Some well-intentioned but delusional policy maker will propose a strategic cull of the viral zombies roaming the neighbourhood during a euphemistically named, daily “Happy Hour”, kind of like the movie, the Purge or the Red Hour from the Star Trek episode, Return of the Archons. Home security stocks will soar. Toilet paper will be replaced by bidets or high tech Japanese autowash toilets with user console as people get used to being locked down.
Truth imitates fiction.

#96 tom black on 03.05.20 at 9:54 pm

I diversified my portfolio after taking some losses in the 2007-2008 downturn. I stopped trusting the markets around that time as I could longer understand or judge a company by its merits.

I moved into precious metals and some real estate. There have been many occasions during the last 10 years that I felt regret for my decision. I took some comfort in my strong intuition that the markets were being heavily manipulated as interest rates declined yet stocks rallied.

I want to write a further with my thoughts on the current worldwide political situation, but I will leave that to the so called experts.

Buckle in folks things and prepare for the worst..

good luck

#97 MF on 03.05.20 at 10:00 pm

#84 Stan Brooks on 03.05.20 at 8:59 pm

I…..a….a…agr….agree with y..(gulp)….you (slow swallow).

That was hard.

My take was we were hanging on the edge for the past two years. The new virus highlighted how dangerous the situation is.

The economy looks to not be able to handle a rate level of 2%. That’s pretty worriesome.

Like a treadmill test where the patient cannot handle any fast walking. He’s huffing and puffing, begging to go slower. The central banks set the speed and incline.

The real estate industry is a commercial on the TV in front of the treadmill for fast food. The commercial says being an ugly fat slob is okay.

The rate cuts are the treadmill stopping to give a reprieve to the out of shape patient so he can eat some greasy salty junk food and then rave about his meal.

Sure tastes great and makes him feel fantastic in the moment.. down the road though there will be clogged arteries, high blood pressure, strokes, heart attacks, and so on.

Emotions are easy to predict. This is why our population actually is out of shape and unhealthy. The analogy is perfect. Quick rewards and short term gain are all anyone cares about. Nobody wants to put in the work and get lean. All they want is to taste grease and salt.

It’s over. Like Garth says, pooched. There is no way out now. Won’t matter who bought real estate and when. She’s going down. The central banks have lost control and are in a pickle they can’t get out of. It should be clear to see. Almost everyone is out of shape.

MF

#98 Harry Hedgerz on 03.05.20 at 10:01 pm

#7 Carlyle on 03.05.20 at 3:35 pm

Garth I sell cruises for a living. You are not helping my employment situation AT ALL”

Think out of the box son. You need to continue to sell the cruises, but also sell branded hand gel, hazmat suits, and anti-viral life jackets to customers, to cover the other side of the equation. A bit like how arms dealer Kashoggi used to sell missile systems to one side and missile defense systems to the other during the Iran-Iraq war.

#99 Mr Canada on 03.05.20 at 10:32 pm

Panic ? I am 85% equities, 15% cash with 15 core holdings , all US Stocks with only 2 TSX Holdings (because of T2).

With C$ decline of 3.5% – I am still up 1.5% since Dec 31. Two rules: don’t time the market, & own dividend paying stocks so you get paid to wait in times like these…
ps—this too shall pass…

#100 Bruce Allen on 03.05.20 at 10:40 pm

Ha!

Just wait until we go negative… Party on, Garth!

#101 Carlyle on 03.05.20 at 10:43 pm

#60 bdwy sktrn
————————–
yes. do it. 100% eq if fine when the market is in the tank (now). half vfv half qqq. period. DO NOT buy ANY maple.
the crashes always recover.
grow a set , u can do it.

no one stopping you from going 60/40 after the next good stock run.

i’m out too. killed it on a 2x down etf. sold it today. bet the farm. woot.

i will go 100% long/strong at a re-test of 2850 unless the world looks to be ending, then ill wait a bit more. 2700 would be a gift.

buffett says it’s fine to go here, though.

————————

My RRSPs are tied to manulife due to work match … I was invested 100% in https://www.mawer.com/funds/explore-funds/u-s-equity-fund/ offered through manulife. I wanted no Canadian equities, US only.

I moves 100% to Canadian bonds on Tuesday 24th (has ordered it on the weekend but takes a day to fulfill) — was clear to me market was on verge of a crash due to the virus issues.

Debating about jumping back in now, but honestly I think the market will tank lower. If you tracked Covid-19 in China, North America is at the equivalent of mid January. The virus went from zero to 100 in a month.

Looking at Spanish Flu, that virus travelled the world in waves … so just because it appears to be leveling off in China (based on very questionable CPP data), doesn’t mean anything in the West … it’s just starting here.

Will North American governments have the will to quarantine half the population taking CPP style measures that WHO by the way has recommended ? I doubt it.

If the markets in a slump now, I can’t imagine what a Wuhan scenario in say NYC would do …

#102 Doug [email protected] on 03.05.20 at 11:09 pm

I would rather burn my money than spend and give it the greedy thieves. If your a saver, take your money out of Canada. Rio looks this time of year with 6% to 7% bank deposit rates.

#103 Whizzer on 03.05.20 at 11:24 pm

Bonds are nearly at their end of life, how soon before they go negative?

Or, if the rates go back up both bonds and stox sink because it’s more expensive for corps to do business.

That stox bond split will be a double slam, through the canvas of retirement.

It’s called the everything bubble.

Seneca cliff in the future…

#104 Ponzius Pilatus on 03.05.20 at 11:32 pm

#42 Get Out on 03.05.20 at 5:28 pm
“If you have a balanced, diversified, liquid and global portfolio, ignore the noise. It’s going to last a while. The virus will be here all Spring, into summer, maybe longer. Nobody knows. But it will end.”

With all due respect, there is another strategy: get out now, get into cash and money market funds, and get back in when volatility gets more normal.

Nope. History says you are wrong. Stop being emotional. – Garth
—————–
Garth,
With due respect, there are no stats, but surely quite a few investors who bailed and got back at the right time must have done well.
At least my BIL claims he did.

#105 Ponzius Pilatus on 03.05.20 at 11:40 pm

#56 Tony on 03.05.20 at 6:23 pm
Re: #7 Carlyle on 03.05.20 at 3:35 pm

I’m betting my own money Trump won’t allow a bear market in an election year.
————
Plase tell us how he’s going to do that.
Looks like he’s like a deer in the headlight right now with the virus thing.
Pence, to the rescue?
Save your money, you’ve got a better chance in Vegas.
And more fun.

#106 Still worried on 03.05.20 at 11:44 pm

I am still worried.
Here’s why in over 50 years of living I have never seen such stupid panicking. I ask myself why now?

Have we always had our heads in the sand and now we wake up and go oh my gosh!

Here’s what I heard today
Remember the Chinese dude in Winnipeg who stole the virus that they were working on yep in Canada we have germ warfare plants too. Anyway stole it and went to China.
And the guess where the chemical war machine is in China, yep ground zero
Opps

Then my grandfather yeah old story as he was born in 1880, said toilet paper well in my day we used….. newspaper and old sears catalogues. Now we have amazon and who reads newspapers anyway?
no wonder we are in trouble.
No wonder some smart sole invented the bidet I wonder if there’s a shortage of them no that we are out of toilet paper.
Me I will just use my hands

I feel very bad for cruise ships but then again did you know this statistic, there is almost one death every day on a cruise ship somewhere in the world, my last cruise they took three people off and you know why? The majority are over 75 so guess what! They are All prime targets for the flu.

Okay your all hanging on for my last comment and this shocked me. A friend needed a prescription and told they were over a week backlog and now here’s the kicker the majority of drugs comes from China. Now that was news to me. Why we cannot manufacture drugs in Canada give me a break.

Here’s a hot tip wait a few weeks and toilet paper will be on sale as no one will be buying ? guess why ? you’re all so smart paying top dollar this week. Ha ha

Apply the same principal in investing do the opposite of the Heard…..moooooooo

So I leave it to you to use common sense and please stop this madness and relax.

#107 just snootin' on 03.05.20 at 11:46 pm

#45 JSK on 03.05.20 at 5:38 pm

BC is a sell. There is nothing special about this place. As corrupt and unprepared as any other jurisdiction. Just wait till downtown homeless start coughing up blood over feces and needles that already litter the streets.

Best looking horse at a glue factory.

….

I do appreciate contrarian views, but I’ll wear that first place ribbon proudly. Personally, I don’t buy anything less than a hectre for zoning reasons…and my rescue pony.

#108 fishman on 03.05.20 at 11:52 pm

Pigeons to train the dogs? Go under the docks built on the pilings at high tide at nite. You’ll see them flying in around dusk to roost. One guy rowing & holding the flashlite& the other with the net on a long pole. Couple of cardboard boxes with lids. Nothing like warm blood to tune them retrievers before hunting season.

#109 Nonplused on 03.06.20 at 12:34 am

Funny

https://www.youtube.com/watch?v=fdmMWqSf8gI

(safe for work)

#110 Blog Bunny on 03.06.20 at 12:39 am

”Sorry. You’re pooched. You might as well spend it. But not on a cruise.”

LOL, just came back from a 2-week cruise in the Galapagos Islands. No hint of the virus over there. Best money ever spent. Now preparing for 1 month in Italy this fall. That will be a different story.

#111 just snootin' on 03.06.20 at 12:51 am

#27 Carlyle on 03.05.20 at 4:40 pm
So most of the cruise lines cancelled Aisan and Italian itineraries….
…Who knows though, I mean it’s here. The problem is that no politician in the west is going to be able to enact the kinds of crazy lockdown measures they did in China which means the virus will likely spread quickly (IMHO) and exponentially.

….

The West got a fair heads up. Folks have been on a disinfection stampede, behaviour is changing in sectors, along with voluntary isolation and rapid testing… The vector is shattered. Outbreaks, like spot fires, will flare up and be isolated. Businesses and institutions are responding and cleaning. The virus itself is not very hardy, we just have to change behaviour for awhile. We learned a lot in 2 months. We don’t need quarantines and panic just to stop touching our faces. Once the maintenance crews sanitize, I suggest this would be an awesome time to take an Alaskan cruise (maybe skip the buffet.)

#112 Sofija Saska on 03.06.20 at 1:00 am

I am living in Canada for 25 years now and from Lithuania. I have $400,000 in Term deposits, GIC’s, RRSP’s, TFSA’s and a small mortgage $125,000 with Talka Credit Union. Talka Credit union is a Hamilton credit union started by Lithuanians in 1955.

My earned $12,400 in interest on my GIC’s, term deposits, RRSP’s, TFSA’s and paid $4,500 in mortgage interest. I got in 2018 a 12% interest rebate of $1488 on all my interest earned and a 6% interest rebate on all my mortgage interest paid $270.

Credit unions in my experience for years really care about their members and their hard earned money.

#113 NoName on 03.06.20 at 1:09 am

i was never good with math but i wasnt this bad ether…

https://twitter.com/Boomieleaks/status/1235797841018146816

#114 Sharon Goldberg on 03.06.20 at 5:03 am

BANNED

#115 Captain Uppa on 03.06.20 at 7:22 am

#91 MF on 03.05.20 at 9:18 pm
83 Captain Uppa on 03.05.20 at 8:52 pm

It means the end is nearer than it was. Nothing in life is finite. Economies are boom and then bust. To believe otherwise is incredibly naive.

Dig deep and read the posts of the Captain Uppa’s from 2006 in the US. It will sound eerily familiar. Notice when they stop posting around 2008 when it becomes clear they are in trouble.

This time:

No room to drop rates and foolishly “bail out” the economy. You’ll be on your own. Lots of complaints and pleas.

Have fun bud. Look at it like the last rations being consumed before the famine.

MF
—————————————————-

I’m going to frame this.

#116 SoggyShorts on 03.06.20 at 7:43 am

#192 IHCTD9 on 03.05.20 at 4:29 pm
#183 Damifino on 03.05.20 at 2:29 pm
#178 IHCTD9

Yep, I know several Boomers who were in the middle of wrapping up their careers when the GFC hit – Poof!
——————————

I retired in 2007. In the autumn of 2008 came the GFC. Poof! I lost about $200 K in a few months.

I was advised not to sell into a storm and didn’t. A little over a year later all losses had returned. A few years after that… Voilà! I’m up $100 K in spite of drawing retirement funds. These days, still way, way, up even after CV hit town.

From poof to voilà. From voilà to poof. You roll with it.
___

Yep, our Portfolio went Poof also, but we still had jobs and a regular income.

Then my job went Poof too!
*******
Blech. What was your calming influence back then? I’m only down 8% from peak and I have to come here for virtual hand holding.
I’m 1 year from retirement and while I could push it back if I had to since I haven’t burned bridges yet, I’m kinda already half checked out if I’m being honest…

#117 maxx on 03.06.20 at 7:46 am

@ #5

Yup. It’s clear as the morning dew that people need to save, starting as early as possible. It s also clear that the main reason is to mitigate for crushingly stupid government and CB policy. Dumb, dumb, dumb.

I like the idea of saving enough to last a few lifetimes sans interest, mothballing the lot as required and enjoying the income stream of government pensions, tax credits and being ruthless with retail.

Amanda nailed it.

#118 cto on 03.06.20 at 7:55 am

In grade 10 1980s economics, i learned that:
“world central banks had the harsh job of injecting corrections and recessions into the economy to stabilize growth and inflation”. The high school teacher said ” it was necessary for them to raise and lower rates as need be, but recessions were always part of the game.”
It is clear that sometime in the last 10-12 years the rules or spine of the CBs have changed.
For the last 10 years their decisions really seem to be coming from their own political masters and the financial elite.
Gees’s…They’re the financial elite! and they have big, highly leveraged investments and real estate too! They personally stand to benefit by dropping rates to 0!
THE GAME IS RIGGED…..

#119 not 1st on 03.06.20 at 7:59 am

Its good for people to see some shortages and Costco stampedes. Good wake up call.

Now imagine if we had blackouts and brownouts and no heat and line ups for gas once in a while. Green utopia here we come.

What a clueless generation we have raised.

#120 crowdedelevatorfartz on 03.06.20 at 8:11 am

@#112 Saska Sofija
“I am living in Canada for 25 years now and from Lithuania. I have $400,000 in Term deposits, GIC’s, RRSP’s, TFSA’s and a small mortgage $125,000 with Talka Credit Union. Talka Credit union is a Hamilton credit union started by Lithuanians in 1955.”
++++

You forgot to include your date of birth, SIN number, phone number and address.

Nigerian royalty have $15,000,000 they need to move pronto…..

#121 crowdedelevatorfartz on 03.06.20 at 8:16 am

@#115 Corporal Down
“Look at it like the last rations being consumed before the famine…”
+++++

Ahhh the plague and then the locusts…… biblical times….

https://asia.nikkei.com/Spotlight/Society/Locust-swarms-form-dark-clouds-over-South-Asia-food-security

#122 maxx on 03.06.20 at 8:30 am

A balanced approach to setting interest rates is like biodiversity: makes room for a greater variety of income streams from every stripe of player.

Mr. Market is like big agro, imho, stripping much vitality out of everything in its path.

One formula for all, eh wot? We are all left chewing like cattle on sick-making substandard fodder.

But I hear that it’s really great for the pharmaceutical industry……………..

#123 Bdwy on 03.06.20 at 8:31 am

Black Friday.

10 yr plunges 9,8,7 overbite. OMG.

Ok maybe the world is ending!

Sp entry target lowered to 2500.

Gold the only winner today.
Bitcoin has gone mia.

Jobs # very good

#124 oh bouy on 03.06.20 at 8:36 am

@#119 not 1st on 03.06.20 at 7:59 am
Its good for people to see some shortages and Costco stampedes. Good wake up call.

Now imagine if we had blackouts and brownouts and no heat and line ups for gas once in a while. Green utopia here we come.

What a clueless generation we have raised.
___________________________________

dude, you’ve lost your marbles.
Must be tough living in a constant state of anxiety and negativity.

#125 Bob Sagat on 03.06.20 at 8:49 am

A little economics 101. If GDP goes up, economists and governments are happy. If the money is spent on funerals, hospitals, masks and toilet paper instead of cruises, flights, and casinos the economy cares not. That’s why natural disasters boost GDP and are good for the economy. Not so good for people, but business overall will do just fine. I am still fully invested.

#126 Gil on 03.06.20 at 9:02 am

#27 COVFEFE-19
Why do ‘savers’ feel entitled to a positive return on cash after inflation and tax? It wasn’t written on a tablet at Mt. Sinai.
*******************************************
I think you are approaching it completely the wrong way. Savers (more like investors in your example) are not entitled to anything but that is not the point.

Monetary policy of central banks artificially (through QE) keeps liquidity high making a price of borrowing low. You are saying: “what’s the problem, who cares about the savers”. Nobody. But the consequence of this policy is completely skewed risk/reward graph which forces liquidity to go into risky assets creating bubble in everything.
Then again, if you play this game, you play by the rules that are set. Until a year ago I was in equities for almost 20 years 100%.

#127 JB on 03.06.20 at 9:16 am

#73 Bdwy on 03.05.20 at 7:39 pm

My gut says the sp500 opens up 20 or 30, gains 10 or 20 more (top alert)then goes red, breaking the up down up down pattern for -50 or so.

Is smokey still around?
……………………………………………………..
He is in a rehab clinic learning the twelve steps to freedom. Its weird with that guy, once in a while he retweets on his twitter but not much in way of a deep conversation. He is keeping his toes in the Canadian political scene though on his twitters. Then again its Smoking guy, he always has something to say about everything.

#128 crazyfox on 03.06.20 at 9:41 am

#121 crowdedelevatorfartz on 03.06.20 at 8:16 am

“Take it, Christian dogsǃ take the palaces, the gardens, the mosques, the abode of our fathers – take plague with them; pestilence is the enemy we fly; if she be your friend, hug her to your bosoms. The curse of Allah is on Stamboul, share ye her fateǃ” – Mary Shelley

Slightly bitter, she was. Not helping? Oh, oh, apologies, as you all were, carry on.

#129 Captain Uppa on 03.06.20 at 9:49 am

I am eagerly awaiting to see all the new Audis and BMWs on the road and laughing at the waste of money they are.

#130 CHERRY BLOSSOM on 03.06.20 at 9:49 am

Somebody should really ask the question, “Why are the trains goes off their rails?? This never used to happen.

#131 not 1st on 03.06.20 at 9:54 am

#124 oh bouy on 03.06.20 at 8:36 am
___________________________________
dude, you’ve lost your marbles.
Must be tough living in a constant state of anxiety and negativity.

—–

Nah bra, I just have a better understanding of the economy and the country than the average Canadian zombie. You will too, just give it time.

#132 Sail Away on 03.06.20 at 9:57 am

Oh my. All red. Another buy.

#133 Steerage on 03.06.20 at 10:00 am

127 JB on 03.06.20 at 9:16 am
#73 Bdwy on 03.05.20 at 7:39 pm

My gut says the sp500 opens up 20 or 30, gains 10 or 20 more (top alert)then goes red, breaking the up down up down pattern for -50 or so.

Is smokey still around?
……………………………………………………..
He is in a rehab clinic learning the twelve steps to freedom. Its weird with that guy, once in a while he retweets on his twitter but not much in way of a deep conversation. He is keeping his toes in the Canadian political scene though on his twitters. Then again its Smoking guy, he always has something to say about everything
…..
Greaterfool had to be removed from his circle of bad habits.

#134 Sold Out on 03.06.20 at 10:04 am

DELETED

#135 Bobby133 on 03.06.20 at 10:05 am

Yes world recession. The loan officer sent me an email from their ceo telling them tough conversations were to had with some customers but give out every loan you can. Any kind of equity laying around get it. Hahah cheers.

#136 Ponzius Pilatus on 03.06.20 at 10:07 am

The Prez’s Germaphobia is well documented.
The spigots are opening.
The wall can wait.

#137 Lambchop on 03.06.20 at 10:18 am

#130 CHERRY BLOSSOM

Somebody should really ask the question, “Why are the trains goes off their rails?? This never used to happen.

————————————

Actually this has always happened, since the invention of rail travel.
The more relevant thing is that rail accidents are increasing while pipeline accidents are decreasing.

https://www.tsb.gc.ca/eng/medias-media/communiques/autres-other/2019/prelim-20190306.html

#138 Bezengy on 03.06.20 at 10:25 am

Completed my income tax this week. This year I sold three properties including a principal residence, and because of this I needed to fill out form t2091. I think I now know why the CRA needs 44000 employees to try to process this stuff.

#139 not 1st on 03.06.20 at 10:25 am

South Korea is reporting corona mortality at 0.6% not 3.4% like the WHO. Seems like once the virus hits a first world health system its less deadly. And more testing is confirming the numbers as well. SARS and MERS had way higher mortality rates.

This is way way overblown. Maybe precaution got the best of China and then MSM here latched onto it.

https://www.scmp.com/week-asia/health-environment/article/3065187/coronavirus-south-koreas-aggressive-testing-gives

#140 Dan in Vancouver on 03.06.20 at 10:27 am

The real party starts when the credit markets freeze.

#141 COVFEFE-19 on 03.06.20 at 10:30 am

“Monetary policy of central banks artificially (through QE) keeps liquidity high making a price of borrowing low. You are saying: “what’s the problem, who cares about the savers”. Nobody. But the consequence of this policy is completely skewed risk/reward graph which forces liquidity to go into risky assets creating bubble in everything.”

But what’s the right (i.e. not ‘artificial’) level of interest rates in a pure fiat world? In the old days, it was a level that kept the central bank’s gold reserves roughly in equilibrium with other countries’, given relative balances of trade and exchange rates.

These days, it seems to be whatever level keeps default rates low.

#142 Ubul on 03.06.20 at 10:39 am

Wiped again. The market this morning. At least some have extra paper supply. Paper money, that is, to buy and hoard the cheap supply.

#143 Dmitry on 03.06.20 at 10:44 am

Here is a modelling study from Australia on global population and GDP impact from the epidemic. I think their CFR estimates might be too aggressive for the milder scenarios so I would expect lower mortality numbers there. Not trying to scare anyone or sound sensationalist so won’t mention their mortality estimates here- you can look them up in the study. In the more severe scenarios they are talking about 8% drop in GDP. Either way it is a trade-off between mortality and GDP and it is not going away just yet.

Pages 19-21 show their model results.

https://cdn.uc.assets.prezly.com/f608a96a-ca11-4a06-99ec-adb478629363/-/inline/no/

Garth, I asked you couple times- how do you see this resolving itself without millions dead and/or big economy hit? Still waiting for some thoughts, at least directionally. There will be many industries decimated unless we get some medical miracle soon. For example movie theaters, airlines, cruise lines, etc. And that is just demand side problems. Supply side problems are already disruptive as well.

#144 Damifino on 03.06.20 at 11:10 am

#116 SoggyShorts

Blech. What was your calming influence back then? I’m only down 8% from peak and I have to come here for virtual hand holding. I’m 1 year from retirement and while I could push it back if I had to since I haven’t burned bridges yet, I’m kinda already half checked out if I’m being honest…
————————————-

I too was half checked out in my final year. As for calming influence, it has to come from faith in Mr Market. A tall order, I know. Actually, it’s more faith in people’s desire to make money. Every sale has a buyer in a push-pull operation with a general upward direction.

Therefore, don’t celebrate the uptrend too much nor despair the down. Be balanced. Be diversified. Have some yield. Don’t panic and above all, don’t crystallize losses because of it.

Around 2002, a financial advisor said to me “I guarantee there will be a few years ahead where your investments do not make money, but you are very likely to average 6% annually over the long term”.

In hindsight I can see was absolutely correct. I also learned it was a bad idea to watch my portfolio every day when I was paying someone else to do it. (He also urged me to quit doing my own taxes and hire a pro. Another fantastic bit of advice. I found a great guy who actually loves doing that kind of thing).

I’ve been through three unnerving events in the past two decades. The tech bust in 2000, the GFC in 2008, and some dumb-ass crisis in 2011 I barely understood. They were all accompanied by the klaxon call of doom, and naturally, they all passed.

That’s the comfort I can offer today.

#145 Ouch on 03.06.20 at 11:19 am

WTI down in $41-$42 range, WCS $29. Look out belowwwwww! TSX getting slammed, interest rates heading south and blocked railroads out west.

How in the blue hell is the CAD holding up at $.74.45??? Should be down near $.70 at best with the Euro gaining nearly $.08 on the USD in the past few months with negative interest rates and awful economic data coming from the entire Euro zone. Forex, one of life’s great mysteries.

#146 What about Preferred Shares on 03.06.20 at 11:25 am

Preferred shares have sold off dramatically. CPD is down 8% in the past month. It’s super oversold. Pays a 5.3% dividend. Looks like a good time to add some preferred shares. Am I missing something?

#147 IHCTD9 on 03.06.20 at 11:46 am

#116 SoggyShorts on 03.06.20 at 7:43 am
#192 IHCTD9 on 03.05.20 at 4:29 pm
#183 Damifino on 03.05.20 at 2:29 pm
#178 IHCTD9

Yep, I know several Boomers who were in the middle of wrapping up their careers when the GFC hit – Poof!
——————————

I retired in 2007. In the autumn of 2008 came the GFC. Poof! I lost about $200 K in a few months.

I was advised not to sell into a storm and didn’t. A little over a year later all losses had returned. A few years after that… Voilà! I’m up $100 K in spite of drawing retirement funds. These days, still way, way, up even after CV hit town.

From poof to voilà. From voilà to poof. You roll with it.
___

Yep, our Portfolio went Poof also, but we still had jobs and a regular income.

Then my job went Poof too!

*******

Blech. What was your calming influence back then? I’m only down 8% from peak and I have to come here for virtual hand holding.
I’m 1 year from retirement and while I could push it back if I had to since I haven’t burned bridges yet, I’m kinda already half checked out if I’m being honest…
___

I was not a happy Man back then (2010), but I did not freak out because:

a. Mortgage was just about nuked
b. A decent pile of cash was on hand if needed
c. Wife had decent job
e. No debt
f. I could have worked at Timmies for a while if needed – and we would have been fine.

You’re probably in even better shape now then I was back then. I’d do what Damifino did back in 08, stay in the market – chances are basically 99% that it will recover sharply once the fear subsides.

#148 G on 03.06.20 at 11:53 am

Hi #42 Get Out, re: If you were that good, but you’re not… Don’t panic, it never helps.

You couldn’t guess the top, but somehow you thing you can guess the bottom to get back in, really? You will just miss it and cement the lose.

If your funds are in balanced to start with, it will come back up. But if you jump ship now…

If you could you would have been able to guess the top too, but no one can 100% of the time. Yes some get lucky at guessing, but most can’t. That is why rebalancing regularly helps capture some of the added value when the market is up.

Selling when it’s down only cements the paper lose to a real lose. If you were balance to start will. Best to stop looking at the short term numbers, IMO.

The markets always come back up, always have.
The world is still here despite having been forecast to end through out history many times. It is the same this time, it will get better again sooner than later, not sure exactly when, but it always has. The lights are still on and the water is still running. And the sun came up this morning, and we are still here.

Don’t panic. Go for a walk to get some fresh air. And some sun if you can, free vitamin D.
It seems having a dog kind of forces you to do the walk out side thing daily.
Unfortunately I’m a cat person. Witch might explain a lot? But I am well trained to hand out cat treats on command at certain times of the day.

If you’re in Ontario and Canada things don’t look that bad at all at the moment. And the Public health people are working very hard to keep it that way. As well as others around the world. I heard the Ontario Chief Medical Officer of Health Dr. David Williams new conference through Global News, the last couple days and he seems to be on the ball.

Keep informed and use common sense when ever possible.

You can’t guess the top, you’ll just miss the bottom, so don’t even try. It will come back up sooner that later. Probably will see some more up and down stuff in-between now and then. Don’t panic, it never helps.

#149 Ronaldo on 03.06.20 at 12:13 pm

#130 CHERRY BLOSSOM on 03.06.20 at 9:49 am
Somebody should really ask the question, “Why are the trains goes off their rails?? This never used to happen.
——————————————————————–
Lack of maintenance.

#150 Sold Out on 03.06.20 at 12:23 pm

#134 Sold Out on 03.06.20 at 10:04 am
DELETED

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Yeah, those CBC stories are pretty racy.

Libel. – Garth

#151 miketheengineer on 03.06.20 at 12:27 pm

Garth et al:

I know this isn’t business related….feel free to delete it if you want.

Medical Doctor in China talks about Vitamin C and how it kills the Corona Virus….they are treating people in China and they are SAVING LIVES.

Good luck to all.

https://www.youtube.com/watch?v=6-elCYFhqJs&feature=emb_logo

#152 Sold Out on 03.06.20 at 12:54 pm

On a happier note….

Early stages but promising idea about how to use pipeline water pressure to power in-line micro electricity generators.

https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356

#153 Tony on 03.06.20 at 12:57 pm

Re: #148 G on 03.06.20 at 11:53 am

I’ll bet they never let the DOW finish below the 24,000 mark at the 4:00pm close from now until election day in America.

#154 Sail away on 03.06.20 at 1:09 pm

#92 Remembrancer on 03.05.20 at 9:28 pm
#10 Sail away on 03.05.20 at 3:51 pm

Re: Delta Airlines

It’s still going down on Corona fears. Here’s a chance to get in lower than Buffett did- rarely a move that fails.

————————-

The best way still to become an airline millionaire is to start off as an airline billionaire…

————————-

Funny. Although that was indeed the case for quite awhile.

Let’s examine: CAGR in last 10 years: 12% if we take the Corona drop into account; 15% if we don’t.

Plus 3.6% dividend.

That’s a good investment!

As recognized by Buffett, of course. This 20% (well, 17% now, since it’s been rising) drop for Corona is well worth considering.

#155 jess on 03.06.20 at 1:25 pm

Yes bank is a No bank
https://www.cnn.com/2020/03/06/business/india-yes-bank/index.html

India’s government has been forced to rescue one of the country’s biggest banks “serious deterioration” in its financial position. The central bank said it had to act quickly to restore the confidence of Yes Bank’s customers, who had been withdrawing their deposits.
Shares of Yes Bank, which describes itself as India’s fourth largest private lender, collapsed following the announcement. The company’s stock fell 56%.
=
You could lose a large part of your savings if your bank fails
India is among the countries that offer the lowest protection to depositors in cases of bank failure.
economic times
Last Updated: Oct 09, 2019, 11.36 AM IST

#156 Sail away on 03.06.20 at 1:30 pm

#152 Sold Out on 03.06.20 at 12:54 pm

On a happier note….

Early stages but promising idea about how to use pipeline water pressure to power in-line micro electricity generators.

https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356

—————————

Hate to burst your free energy happy bubble, Sold, but this tech is more expensive than grid power.

Expensive to install, expensive and operationally difficult to maintain, expensive to replace. It is an added cost, not benefit, to any system that could otherwise be powered by the grid.

My firm has designed a number of these. They only make sense in remote areas where electricity is needed but is unavailable or unfeasible, from the grid.

Think 100 mile diet. That doesn’t make sense either. Efficiencies come from economy of scale.

#157 Lambchop on 03.06.20 at 1:48 pm

#152 Sold Out on 03.06.20 at 12:54 pm

Early stages but promising idea about how to use pipeline water pressure to power in-line micro electricity generators.

https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356

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This is one of those things that makes me wish I had invented it, and I can’t believe nobody has thought of this before!
Infrastructure is already in place in every city and town. No fishes will die. The turbines have a 40 year life span…what’s not to love here?
This could greatly reduce our reliance on destructive run-of-river projects, at the very least.
Alas, it’s almost free, so likely never get implemented on a large scale

#158 Lambchop on 03.06.20 at 1:51 pm

Crap. SailAway just burst my little bubble too.

Back to sadness.

#159 SoggyShorts on 03.06.20 at 2:06 pm

#144 Damifino on 03.06.20 at 11:10 am
#116 SoggyShorts

That’s the comfort I can offer today
******
I’ll take it, thank you.

#160 Sail away on 03.06.20 at 2:08 pm

#158 Lambchop on 03.06.20 at 1:51 pm

Crap. SailAway just burst my little bubble too.
Back to sadness.

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Sorry. On a small scale, say a remote cabin with waterfall behind, a little turbine runs the place like a champ.

Many run of river projects, though, are actually environmentally low-impact: Intake at high elevation, pipeline to powerhouse at low elevation, water re-introduction. Lowest impact are steep mountain streams. Several of these small powerhouses around.

#161 Phylis on 03.06.20 at 2:12 pm

#146 What about Preferred Shares on 03.06.20 at 11:25 With the recent interest rate cuts, it is expected that some rate reset securities will reset lower, reducing the future return.

#162 Sold Out on 03.06.20 at 2:17 pm

#156 Sail away on 03.06.20 at 1:30 pm

“Expensive to install, expensive and operationally difficult to maintain, expensive to replace. It is an added cost, not benefit, to any system that could otherwise be powered by the grid.”

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Ah, but when the CO2 contributions of concrete hydroelectric dams are priced in, it may be financially viable in future. Clearly there’s no single solution to replacing high carbon energy sources.

https://en.m.wikipedia.org/wiki/Environmental_impact_of_concrete

#163 Sail away on 03.06.20 at 2:19 pm

Shenzhen, China to ban eating cats and dogs:

https://www.bangkokpost.com/world/1872339/chinese-city-of-shenzhen-to-ban-eating-cats-and-dogs

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At least it’s still allowed in Canada. Moral superiorists, please feel free to weigh in with outrage:

https://www.animaljustice.ca/blog/in-canada-its-legal-to-kill-and-eat-your-pets

#164 crazyfox on 03.06.20 at 3:22 pm

My bad, North American attack rate of .55%.

#165 aa5 on 03.06.20 at 4:57 pm

What the Bank of Canada/Federal government will do is if there is a big downturn in Canada’s economic activity, it will cause deflation. So they will just increase the QE & spend more money into the economy until inflation goes back up to 2%.

The change for Canada would be a falling CDN dollar relative to other currencies. And thus making imported goods more expensive.