Good jobs numbers last month couldn’t keep stocks aloft on Friday. Mr. Market is still trying to figure out how much damage that gnarly little germ will do to the economy.
As equities swoon, money gushes into bonds. Safe stuff. For example, a boring bond ETF like XBB has gained about 6% this year while stocks have plopped. Bond prices rise when trouble comes to town. And as prices go up, yields go down. The debt market is also repricing risk, now signalling now a recession looms. When that happens corporate profits fall, equities reflect it and people shelter inside bonds – no matter what they pay.
So this is a unique time. Central banks cutting. Primes, mortgages and savings rates on the decline. Government debt – considered to be a “risk-free” asset – in big demand and yielding next to nothing. The return on the benchmark Government of Canada bond, for example – at just eight-tenths of one per cent two days ago – has collapsed to six-tenths. In fact the same bond that paid 1.7% at Christmas is now at 0.66% – a drop of more than 60%. In ten weeks. Stunning.
Down she goes! Canada bonds lose 1% in weeks.
Investors are pushing yields towards zero as US Treasuries hit a new record low. The rush into bonds is now at historic levels. People can’t get enough – you know, like toilet paper.
This weird behaviour is likely to last for a while longer, and I hope it underscores the wise (but oft-maligned) advice on this pathetic blog to always have a strong fixed-income component in your portfolio. Government bonds. Corporates. Provincial debt. Together with a little cash this should be about 25% of a balanced account. Nobody owns bonds anymore to collect interest. They’re there as a shock absorber in normal times, and for growth when everyone loses their mind (that would be now).
So, what next?
Lower rates, that’s what. The Bank of Canada ain’t finished, even after that blockbuster half-point raspberry on Wednesday. The next cut looks like it will take place in April, with another one or two after that. Yup, a drop of .75% from now. Yuge. And American rates – already lower than ours – are headed for the big goose egg.
This means if you’ve been shopping for a GIC, lock in now – even though that’s no long-term way to fund your retirement. As for mortgages, variables are hot since loan costs drift lower with the central bank and prime rates. With 2020 destined to deliver two to four more declines, this looks like a no-brainer choice. These days VRMs are in the 2.2% range and five-year fixed mortgages are 2.4%. Both are headed south. So if you’re getting pre-approved make sure you have a commitment to pass through any declines prior to the closing date.
Earlier we speculated what this might do to the residential real estate market, especially in Toronto, Ottawa, Montreal and (to a lesser extent) Vancouver. More buying power unleased. A lower stress test hurdle. Unfettered hormones, just in time for rutting season – and when listings have been scant. It’s a recipe for bubble prices, multiple bids, blind auctions, happy realtors and billions more in new mortgage debt. Sadly, it will push home ownership further away for many.
But we also need to understand stock markets do not fall nor bond prices spike in isolation nor without consequence. Canada’s run into big headwinds lately. The crashing price of oil. The FN protests and damaging rail blockades. The pipelines bottleneck. Political polarization. The clash between climate change and the energy sector, resulting in a flight of capital. Now the virus.
Yeah, home loans are cheap. Historically so. Going to get cheaper, too. But recessions bring job losses, and this may be a poor time to choke down a bulging wad of debt.
Maybe you should wait. There are better opportunities, less risk. Like selling bumwad and baby wipes from your van. Seriously.
143 comments ↓
FIRST!
It’s certainly been an exciting day!
More good news!
In the 25 – 54 yo cohort, Canada has a higher labour force participation rate, 83%, than the US at 81%. This despite a lower US unemployment figure.
https://data.oecd.org/emp/employment-rate-by-age-group.htm#indicator-chart
Plus, 30,000 Canadian jobs came out of the random number generator last month.
https://www.ctvnews.ca/business/canadian-economy-added-30-300-jobs-in-february-1.4841466
cut away! …like straight out of a Silver lining playbook! Mortgage is up for renewal in November :)
“Like selling bumwad and baby wipes from your van. Seriously.”
————————-
Add gel hand sanitizer. Locally our big pharmacies are out. OK then. Carry on.
In Toronto, the FOMO crowd is unleashed:
http://www.chpc.biz/toronto-housing.html
In Vancouver, buyers are piddling up a rope.
http://www.chpc.biz/vancouver-housing.html
TOR has 1.0 x more Listings than VAN
TOR has 3.4 x more Sales than VAN
Inventory Sold Each Month: TOR = 82% VAN = 23%
Months of Inventory: TOR = 1.2 VAN = 4.3
VAN SFD is valued 29% higher than a TOR SFD
10 year inflation rate of SFDs VAN: 79% TOR: 108%
VAN T-House is valued 7% higher than a TOR T-House
VAN Condo is valued 2% higher than a TOR Condo
Annual Precipitation VAN:TOR = 2:1
I want a mortgage of 2.5 percent locked in for 10 years.
Anyone want to take my money?
The Orange bank currently has a 2.79 ready for a 10 year lock in…. but let’s continue to wait.
What does it mean when the yield on Real Return Bonds – Long-Term goes negative?
https://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/
Yes, it is exactly like toilet paper. Same value, less utility.
And is not investors, but central banks who buy it.
The only value a bond has is due to the fact that it will yield less tomorrow.
Picture this: yield on 5 years bonds is 0.65 % yearly with official inflation 2.4 %, unofficial of necessities 8 % + .
Bhahahahahahahahahhahahahahaha idiot,
Cheers,
I believe the bank of Canada will cut a quarter in April. However if oil goes under 40 dollars and stays under in April. I wouldn’t be surprised to see another half cut.
@#163 Sail Away
“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
++++
Hmmm.
Perhaps Canada should be renamed Cannibalda to placate the outraged pet lovers?
In 2019 the Fed moved in to rescue the repo market (short term institutional lending) to prevent any rise in interest rates. i.e. The primary lenders began to ask: Where’s the floor on these securities (e.g. U.S. Treasuries) in the event of a major default?
Zero yield and possibly negative rates coming to North America.
Question: How do commercial/national banks survive this through the “long” term?
Answer: Many won’t.
Has the BIS (Basel) decided they no longer need the middle? Is this (in part) why debt (now at critical saturation levels globally) was promoted as a key to sound economics for almost 50 years? Is this why the CB’s aren’t overly concerned about the massive expansion of their balance sheets?
P.S. As noted on this blog. Count on a capital gains tax applicable to “ALL” home sales more sooner than later…
@sail away
Funny thing how many miniature power plants are currently being built around balkons. I guess eu is giving grants so every one is jumping on cheap loan plus green grant band wagon and building dams and blocking rivers for something small as 5kva.
it’s @$&+#? nuts over there, it seems like everyone with property near streams and rivers is blocking them and building miniature hydro plants.
Balkonization of canada is on going maybe accelerating if people dont start thinking, sooner the better…
Interesting read on miniature hydro projects it’s impact, I may have posted this or similar links before. But you probably know all this already…
https://e360.yale.edu/features/a-balkan-dam-boom-imperils-europes-wildest-rivers
Addendum to green power
Good news for verwolfs, vukodlaks and drackulas bats, romania recently passed some low about sensless cutting one of the oldest rain forest for making pallets to be burned in eu coal power plants as renewable fuel.
Anyone else not buying this everything great on the housing front story from realtors?
What happens to those empty Airbnbs when people want to avoid BC and ON like the plague once the COVID-19 cases start to explode?
Are these people really going to keep all of these speculative homes in Canada hoping prices will keep going up? Or will they leave us like Warren Buffett did on the Saguenay LNG project to not end up being bagholders in the Canadian housing market.
https://www.cbc.ca/news/canada/montreal/saguenay-lng-project-1.5486517
Government bonds. Corporates. Provincial debt.
—
If that’s safety I think you are better off getting a big shack and sewing gold into the walls.
I have zero faith in our govt. especially the one we have right now.
Silly comment. Canadian governments will never default. – Garth
Canadas job report was a bust again. Most jobs created in Quebec, hardly any in the ROC. That would square with the amount of dollars and attention Trudeau gives to a single region. Hardly anything to be proud of. But that would be too much work for the MSM to unravel.
So, in other words, the peanut gallery was right – rates never going up. The FED basically confirmed all is not well after all by slashing this early. Demand is so high because memories of 08-09 and yields could go negative just like EU.
Time to cashout and just buya da house.
A warning about home made gel sanitizer. Because lack of one item is now a run on others. Carry on.
https://www.google.ca/amp/s/www.cnet.com/google-amp/news/why-you-shouldnt-make-your-own-hand-sanitizer/
It may be a risky move to take on a mortgage now. But at the same time real estate is projected to be one of the better performing asset classes in Canada this year thanks policy maker’s addiction for perpetual growth. So maybe buying a home now is exactly the right time to protect yourself against inflationary pressures while locking in a low mortgage rate for the next 5 years. :)
Speaking of shelter, I see Toronto is getting $147 million for 514 new affordable apartments, roughly $300,000 per unit. How does this make sense? Talk about a money losing proposition. Charge $1000 rent per month with a 25 year payback not including expenses. Let me guess the reasoning. Could it be Toronto is the economic engine of Canada argument?
Anyone have those Squirrel and Rat recipes handy? Dust them off.
Ps I bought the close. G/L all
Budget rumours from Chateau Bill.
– 75% CG inclusion rate
– full taxable CG on 2nd homes
– GST on non new home sales
That ought to put a damper in the RE mania.
I like this post because I own some XBB.
@#163 Sail Away
“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
___________________
I remember that story and the way it was presented made me feel an initial twinge of outrage and then I remembered that pigs taste pretty good.
I think the fact that it was adopted from a place where a lot of people, including myself, find our “forever” pets made it a bit repugnant to many. Had it come from a livestock auction, nobody would have cared.
I have so thoroughly anthropomorphized my dog that I think I might actually starve before eating her.
I suspect you are patiently awaiting the inevitable BarkingmadDog comment on this
Renter’s Revenge! According to Investopedia, TIPS are negative because the stated interest rate is net of inflation.
Bond world is dire. Corporates face potential default and losses, govm’ts face low rates. Long duration federal debt is only debt to very effectively offset stock losses. But back in November rates were rising.
To remodel portfolio, I would hold long treasuries and short corporates. 50/50 portfolio. 4% yield dividends and interest. -2.5% off year highs.
But what is yet to come?
Sure my GIC yields are about to go into the toilet, but I have that hedged with a couple of real estate investments. When they cut gic rates, they cut mortgages too and real estate values rise. Currently getting about the same in my GIC as I am paying on investment properties mortgages–and writing that interest off against my income! Rent is covering the entirety of my expenses, and demand for both rentals and real estate will go up with the rate cuts thereby increasing this investment for me.
Different ways to get to the finish line–financially stable. Not just a one size fits all stock market ETF investment, blah blah blah like this blog preaches.
Slow and steady wins the race.
Trump and Trudeau have done nothing but tried to sell us a story that the economy is doing great.
Quite the contrary in my opinion. Leading indicators have been screaming recession for over a year and a half. Corona Virus is just the trigger…not the cause!
I see things differently – I suspect the whole RE residential sector may just roll over moribund as we go into this period that is forcing a lot of people to start thinking about a lot of things – including preparedness in general for bad times and situations. Lots are getting hoofed from their jobs already … and as consumer-world goes abysmal … many who want to unload cannot and many who may have wanted to buy cannot.
I also hear rumblings about more and more of those specuvestor landlord types trying to figure out how to unload vis new reporting requirements (tax returns etc).
This is all going to get messy.
A virus is not a germ. Now you know.
30,000 jobs created and 30,000 Canadians created. Isn’t that just break even and the minimal number of jobs needed to keep up with the mass migration industry?
#11 CF re:
“#163 Sail Away
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
++++
Hmmm.
Perhaps Canada should be renamed Cannibalda to placate the outraged pet lovers?”
As per the article, “Canada’s animal cruelty laws are considered the worst in the Western world”. Not exactly something to be proud of as Canadians.
“Moral superiority” is not the issue here, rather lack of compassion and empathy is — something you two are sadly lacking.
That might be why you love each other so much. Two homogeneous peas in a pod, so to speak.
#13 NoName on 03.06.20 at 3:53 pm
——–
Re: power plants
Yes, some can be very environmentally damaging through riparian habitat modification. I understand Norway has many in the fiord landscape that work well on basically solid rock.
@Lambchop #19
“I suspect you are patiently awaiting the inevitable BarkingmadDog comment on this”
Of course, that was the point. Aren’t you a clever little sheep.
I think if we sold Quebec..and let the First Nations have Ontario..or at least charge them with squatting…we can save what’s left of Canada.
#14 SimplyPut7 on 03.06.20 at 3:57 pm
Anyone else not buying this everything great on the housing front story from realtors?
What happens to those empty Airbnbs when people want to avoid BC and ON like the plague once the COVID-19 cases start to explode?
————————————————
Along the same lines, what happens to the Toronto and Vancouver rental markets if the number of foreign students coming to Canada this summer plummets?
#30 Blackdog on 03.06.20 at 4:49 pm
That might be why you love each other so much. Two homogeneous peas in a pod, so to speak.
——————————-
I, for one, will never apologize for having too much love to give.
Cruise Update:
So, as what I thought may unfold..our cruise agent called and said we can cancel the late March cruise …no penalty ..and receive a voucher for another cruise to be used by end of 2021.
I asked is are they cancelling the cruise……or__________??? Re-booking for us will be a bit difficult.
No..they are not cancelling..but I guess they are getting feelers out.
Then they are offering $200 USD on board credits per cabin per day if we do NOT cancel.
Ultimately we intend on going, (aka no fears re the corona virus..I could get it staying home ?!?)and perhaps we will have a lot less guests on board.
Overall..very “sick”..no pun intended ..re the fear porn ” infecting” peoples judgement.
CBC had an interesting article on using water pipes to generate electricity. And there is one in operation in Halifax since 2014. Cost $500,000 and generates $30,000 in energy 17 year payback 40 year life span.
It makes me wonder why the heck we are not doing this in every city in Canada,
. But nooooooo we need to,spend billions on Nuclear.
https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356
Is it just me or does common sense not work any more?
What is bumwad???
I thought I heard a dog barking and whining…….. must have been the wind…..
“Shelter in place”
Doing it at my car, at work, at the Sally Ann, at the Busby center, at the public libraries and at Tim Horton’s. It is affordable and no where else is. Canada does not need to import refugees. It creates its own.
this is fine…
https://betterdwelling.com/canadian-insolvencies-rip-higher-with-ontario-seeing-the-fastest-growth/
“Aren’t you a clever little sheep.”
Not to be accusatory, but I’ll remind our younger readers that the original Lambchop was literally a sock puppet. Irony? Only her hairdresser knows for sure!
From 2019…..yet still very relevant
Anti-pipeline funds flow from unexpected sources
https://www.princegeorgecitizen.com/news/local-news/anti-pipeline-funds-flow-from-unexpected-sources-1.23660942
QUOTE:
During the recent reconsideration of the marine impacts from the Trans Mountain pipeline expansion, the National Energy Board (NEB) revealed that it doled out $5 million to interveners to help them participate in the hearings.
Fifty-one First Nations and Mtis groups received funding. Most of them got $80,000 each.
QUOTE:
During the recent reconsideration of the marine impacts from the Trans Mountain pipeline expansion, the National Energy Board (NEB) revealed that it doled out $5 million to interveners to help them participate in the hearings.
Fifty-one First Nations and Mtis groups received funding. Most of them got $80,000 each.
Given the complexity of the formal NEB hearing process, it’s not unreasonable for government to provide funding to First Nations that may be directly affected by a pipeline. Some of the First Nations that received funding support the pipeline expansion.
But well-funded environmental organizations also received tax dollars to participate in the hearings. Some of these groups have also received substantial funding from large U.S. philanthropic groups as part of the campaign against the Alberta oilsands.
Stand.earth, Georgia Strait Alliance, Living Oceans Society and Raincoast Conservation Foundation each received $80,000 from the NEB to participate in the recent reconsideration hearings, according to the NEB.
The B.C. Green Party’s Andrew Weaver and Adam Olsen also received $12,000 each to participate as interveners.
QUOTE:
As researcher Vivian Krause has detailed over the years, environmental groups in Canada have received millions from U.S. philanthropic groups like the Rockefeller Brothers Fund, Gordon and Betty Moore Foundation and Tides Foundation.
A good deal of that funding was part of the Tar Sands campaign launched in 2008. According to Krause, of $40 million doled out to environmental groups by the Tides Foundation and Tides Canada since 2009, $25 million was for anti-pipeline activities.
The Tar Sands campaign’s stated aim was to limit the growth of Alberta’s oilsands by halting pipeline and refinery projects, and raising the cost of oilsands production to make it uneconomic.
The campaign failed to halt the expansion of the oilsands, which has roughly doubled in production capacity since the campaign was launched, although it can claim some success in delaying pipeline projects.
Etc. Etc.
==============
Useful idiots, Dupes and Suckers…
@SA re: ” I, for one, will never apologize for having too much love to give.”
That will definitely never be an issue for you, so not to worry.
#36 Lost…but not leased on 03.06.20 at 5:05 pm
Re: Cruise Update
—————————
Hey, if worse comes to worst, making it to 85 is a pretty good run.
Party’s over, hookers are dead and the blow is gone, time for the long hard sobering up.
#37 Power plants on 03.06.20 at 5:09 pm
====================
Came across article re “wind power” and those wind farms with HUGE windmill generators..
Apparently , the blades are made of NON Recyclable materials like fibreglas.
They have a limited life span….and are creating problems for local dump sites via sheer volume.
We enter into the oligarch economy…whereby they parasite off gov’t large$$e aka major tax benefits etc. for poorly researched/motherhood issue/politicized projects of dubious value.
If we purge ourselves from reliable energy sources..and rely on “renewable” such as wind and solar…they have geoengineering as a means to further manipulate us.
Quick question. If the bottom of the market plop can’t be timed, would you advise moving cash into stock in increments over the next few months, or not bother yet and wait a few months and then start buying at cheaper prices?
Re#39 “I thought I heard a dog barking and whining…….. must have been the wind…..”
From your cheeks? Or maybe SA’s sails? If the former, I hope you waited to get off the elevator this time.
The debt market was having serious liquidity problems before the viral outbreak.
Won’t be long before the virus cramps debt payments from both corps and individuals.
Mr. Market knows this – banks and insurance companies are tanking already.
#15 not 1st on 03.06.20 at 4:02 pm
Government bonds. Corporates. Provincial debt.
—
If that’s safety I think you are better off getting a big shack and sewing gold into the walls.
I have zero faith in our govt. especially the one we have right now.
—
Silly comment. Canadian governments will never default. – Garth
————-
No Governments won’t likely default in Canada – not when they can inflate debts away.
A ‘default’ becomes ‘news’ and gets attention, even from the deplorables.
Inflation (even when unusually high), on the other hand, is sold (and perceived by the public) as ‘normal’ and unavoidable (like gravity). They may not like it that everything is going up in price faster than their wages, but they won’t revolt against the system.
I believe something similar happened in the 1970’s.
Re: Apocalypse preparation
Squirrel hunting and turkey hunting are fairly similar. Both animals have sharp eyesight and can pick up the slightest movement, but they don’t smell well, so scent and wind direction is not a concern.
They both sleep during the night, becoming active after the sun rises.
Oak (white, preferably, but red is ok), beech, walnut or other nut tree stands during fall are ideal. It’s best to get there before light wearing full camouflage and hunker down in a natural depression at the base of a tree. Turkeys will often be roosting in the trees, while squirrels will travel from some distance.
With turkeys, it’s one and done. But with squirrels, the best technique is to pick them off one at a time while remaining in the same place and not moving (it takes 20 minutes or so of silence after shots for squirrel activity to resume), then go to gather the harvest at the end.
Both are delicious. Squirrels on the bbq or slow cooked into stew, and turkey roasted as usual. If you send your kids to elementary school with leftover squirrel for lunch, make sure to cook without nuts, because the other nuts will go nuts.
FYI anyone that’s interested, (something I didn’t know)
some ZINC might help, Paper in link near the end @15:19
pulmonologist & critical care specialist Roger Seheult, MD
Coronavirus Epidemic Update 32: Important Data from South Korea, Can Zinc Help Prevent COVID-19? MedCram March 6 20min
https://www.youtube.com/watch?v=Eeh054-Hx1U&t=925s
Bought a whole bunch of energy stocks today, including Vermillion Energy (VET). They announced a 50% cut to their dividend – now around 10% instead of 20%!! Sure beats the 2% GIC. Plus, over the next 1-2 years, there’s a good chance for significant capital appreciation (my guess is >50%). Regardless, I get paid to wait…
There are others too many to mention here, in a similar 5-10% dividend range. Any hint of inflation creeping in and oil will rebound to $50-60 in no time – and the producers will follow.
One of the best times to be an investor in energy!
Canada: Real-Estate Firms Violate Anti-Money Laundering Rules
Published: Friday, 06 March 2020 18:25
Written by Sandrine Gagné-Acoulon
…”Canada’s financial watchdog found that many real-estate companies are violating money laundering rules as they are neither checking the identities of their clients, nor are they reporting large cash deals to the government.
The OCCRP obtained the 2017-2018 assessment of the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) that was just handed to the Finance Minister Bill Morneau.
https://www.occrp.org/en/daily/11760-canada-real-estate-firms-violate-anti-money-laundering-rules
FinTRAC audited 500 companies but “due to sector-wide vulnerabilities to money laundering,” 172 of them were real-estate developers, brokers and sales representatives.
#11 crowdedelevatorfartz on 03.06.20 at 3:35 pm
@#163 Sail Away
“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
=========
Isn’t the SPCA where you pick up most of your dates???
Lost…but not leased
Ultimately we intend on going….
**********************************
Wow, my hat is off. I am a big fan of cruising myself, but right now for a week in a confined place with 2500-4000 people? To get 200 bucks a day per cabin for the high risk of being stuck several miles away from the shore in a quarantine. In worst case if to get sick I would rather have it at home
XBB great….
Why not XLB?
Seems like all the big set it and forget it portfolio guys in the USA use TLT as their bonds. Ray Dalio, David Swensen et al.
TLT is up 22% YTD
A far better shock absorber.
The only US treasury ETF I can find is HTB – 7-10 yr – and it’s up 13%
Blog dogs… what am I missing? Please enlighten me.
You have to be nuts to buy a condo in Toronto in 2020! The value proposition is just not there anymore!
Buying to live in one is a huge mistake, same if you are Canadian and looking to be an “investor”. If you are laundering cash form overseas, keep it up, still worth it!
Found this on HouseSigma:
Unit 804 – 508 Wellington St W, just sold for 600,000$.
What you get: 1B, 653sqf and your bedroom has sliding doors and no window! You get a small living room window overlooking another wall!
What you owe:
Lets say 10% down: 60,000$
Land transfer taxes: 17,000$
What is your strategy?
1. If it’s pricing appreciation, good luck. You already paid the max!
2. Renting? Sure, hope you find someone willing to pay 3,400$ per month. (maint @ 587$, proptax @208$, mortgage @2500$)
Condo market is heading south!
#24 Lambchop on 03.06.20 at 4:24 pm
I have so thoroughly anthropomorphized my dog that I think I might actually starve before eating her.
———————–
Doubt it. When actual survival is on the line, civilized sensibilities vanish amazingly fast.
Wall Street’s Pros Fess Up: ‘We Don’t Know What’s Going On
https://www.bloomberg.com/news/articles/2020-03-05/wall-street-stock-pros-fess-up-we-don-t-know-what-s-going-on
“…Gains on Monday turned to losses Tuesday turned to gains Wednesday turned to losses Thursday. In nine trading sessions, three have seen the S&P 500 close up or down 4%, and four others brought 3% dives. An eight-day average of the S&P’s daily high-low range is the widest since 2011, according to Bloomberg data.
Buy the dip? “This time, it’s a little harder to say whether that’s the right thing to do,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “Until you have better clarity on whether or not it could cause a recession or a dramatic slowdown, the likes of which the bond market is indicating, it may be a little premature.”
Cantor Fitzgerald says use any rally based on central bank actions to sell equities. JPMorgan Chase & Co. says the responses will succeed: time to wade in. Bloomberg Intelligence’s Gina Martin Adams points to a spike in high-yield spreads — bad for shares. Deutsche Bank Securities Inc. sees the sell-off continuing….”
Still wondering what happened to “it’s an election year” and don’t bet again the markets.
Well I am betting against the markets. Even risking a 15% loss this year going to cash. And soon that cash will be put to work.
Vancouver condo prices have turned positive. Kelowna prices up year-over-year and let’s face it, you can’t live in a stock when it goes down like you can a house if you can afford to keep it!
Gold, obviously.
And let’s talk about the biggest risk. Those boomers who have stayed to heavy in equities are crapping their pants, which means the bottom could fall out of this. Not many talking about this. You watch.
When Jamie Dimon has acute aortic dissection you know something is up in the markets and not in a good way. He knows more than us.
So, you watch. We are getting close to a decent entry into financial markets not seen since the last financial crisis.
Yes, we will all lose our jobs. Yes, house price defaults will spike in Canada and yes life will go on with gold performing well and equities bouncing back to where people are saying I should have bought, yada, yada. I can make you rich Garth.
Being a saver means being punished.
Yes, rates are coming down. Savers have forever been removed since 2009.
Should have kept the house. Should have loaded up on ETS…shoulda, didn’t,dam.
Broke and can’t afford rent.
Looking forward to job loss.
29 Bob Dog on 03.06.20 at 4:46 pm
A virus is not a germ. Now you know.
30,000 jobs created and 30,000 Canadians created. Isn’t that just break even and the minimal number of jobs needed to keep up with the mass migration industry?
*******************************************
20,000 of those jobs were in Quebec where they have control of their immigration.
#CIB – Canada is broken!
37 Power plants on 03.06.20 at 5:09 pm
CBC had an interesting article on using water pipes to generate electricity. And there is one in operation in Halifax since 2014. Cost $500,000 and generates $30,000 in energy 17 year payback 40 year life span.
It makes me wonder why the heck we are not doing this in every city in Canada,
. But nooooooo we need to,spend billions on Nuclear.
https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356
Is it just me or does common sense not work any more
*******************************************
CBC … equals stop reading further.
Wall Street’s Pros Fess Up: ‘We Don’t Know What’s Going On
The big boys are playing. We saw it the first week with those multi thousand plus sell off days, then again on the day the Fed rate was reduced by a half point and the market still went down. That is institutional selling, they were selling into a market where they knew that there would be buyers.
We saw this in 2008. Makes me think there is some tightly held information about this virus that is not out yet.
This is getting ridiculous. – Garth
Sadly, it will push home ownership further away for many.
————————
I was thinking about how you told me that I should not be happy about the immense gains my home is making.
For those who really want to own a home (and why the hell would they want to, according to Garth), is it their right to be able to afford Toronto? I doubt you would agree with that.
Canada is a huge chunk of land, perhaps people should be looking elsewhere other than Toronto and some others.
Owning a home in Toronto is not a right. Renting at “affordable” prices is not a right. And if Toronto wants to be so expensive and lose a big chunk of service workers and middle class, well then let Toronto find out the hard way.
#53 G on 03.06.20 at 6:04 pm
FYI anyone that’s interested, (something I didn’t know)
some ZINC might help, Paper in link near the end @15:19
pulmonologist & critical care specialist Roger Seheult, MD
————————-
We had a macabre joke on the farm that we were at risk of heavy metal poisoning because most of our meat had died of lead poisoning.
#57 Gil on 03.06.20 at 6:15 pm
Lost…but not leased
Ultimately we intend on going….
==============================
I erred…its $200 USD credit for entire trip.(Big F’n Deal). They are not offering refunds..simply credits for future cruises.
Regardless, I live in a Lower Mainland city with a high % of Asians(over 50%)
IMHO I have a much higher probability of catching this ” alleged killer disease ” staying here at home than mingling with people on cruise ship.
@ 56 Lost but not leased re:
#11 crowdedelevatorfartz
“Isn’t the SPCA where you pick up most of your dates???”
Nahh….they smell him coming from miles away.
Re: Coronavirus
Under the oft quoted comment on a large % of the population is one paycheque way from bankruptcy…the SHTF will soon manifest itself.
This is getting ridiculous. – Garth
The good news is the same people are going to bring the market back up again. I do not know when.
There it is again…… a barking dog that degenerates into a pitiful keening wail……
Perhaps it’s wishing I would play fetch with it…..alas, flea infested cur dont deserve the ofaculatory experiences I have to offer…..
See I saw something like this coming and posted it here.
I know how our elite rulers work. It’s not about money – they have more money than God – no it’s about control.
They’ve made us the enemy. Workplaces have now no hugging, no assembly, no travel edicts.
It’s always about constraining our freedoms. Stay locked up in your home-prison citizen. Fear the other.
And pay taxes upon taxes on air (HST + Carbon tax).
Never ever forget they hate our freedoms. Those predators.
It’s all about trusting the tele-screen’s output. Not thinking just reacting. Good worker bees in the Hive Mind:
>>>>>>>>>>>>>>>>>>
The stampede — Greater Fool – Authored by Garth Turner …
Dec 30, 2019 – #9 TurnerNation on 12.30.19 at 4:56 pm … Maybe the WHO declares global pandemic, maybe the correct Carbon Permit was not obtained.
…
By the dawn’s early light — Greater Fool – Authored by Garth …
Oct 4, 2019 – I’ve said it many time, we will see soon armed government men destroying perfectly good foodstuffs. We’ll be told it;s a WHO directive to keep …
…
Dr Garth — Greater Fool – Authored by Garth Turner – The …
Dec 1, 2019 – I always said a day will come here whereby armed government men destroy foodstuffs or kick people out of perfectly good homes. Maybe they …
#24 Lambchop on 03.06.20 at 4:24 pm
“I have so thoroughly anthropomorphized my dog that I think I might actually starve before eating her”
Poor puppy. Has to make mommy believe he is a human, else he might get eaten.
Squirrel stew sounds delicious but your comment about dogmeat is intriguing.
There was a family in east Vancouver a decade or so ago that was caught bbq’ing a dog in their garage and the neighbors called the cops.
Cops arrive, Fire Dept. , SPCA arrives, ….cant do nothing.
Apparently no one saw the family actually kill the dog before cooking it.
No one could prove the family caused the dog “cruel and unusual suffering” before it’s demise.
Totally legal back yard bbq….. carry on , keep rotating it and smearing it with sauce….. yummy.
In confusing times like this anyone can just open a browser in incognito mode, type youtube.com. All the important things in the world coming up will ground even the most confused mind.
And Canada added 30,300 jobs in February – near a 40 year low…………
The ‘wokesters’ are beginning to wake up. Energy projects being cancelled, people like Warren Buffett pulling the plug, etc. Even the CBC is starting to air stories that detail the enormous costs and consequences of ‘anything but fossil fuels’ mentality.
Link below will be broadcast on the ‘radio’ on Sunday.
Worth a listen with your saturday or sunday morning coffee.
https://www.cbc.ca/radio/thesundayedition/the-social-and-environmental-costs-of-mining-for-green-energy-1.5486686
#59 Asterix1 Toronto condo market will not go south. Go ahead ask around and 3/4ers of people will tell you that the “Stock market is risky!!”. Recent trend only reinforces this in their mind.
Real estate always go upa up. And it has, in Toronto. New build condos are $1100- $1600 per square foot. Primo builds will nose up to $2000.
Millennials KNOW they never will afford a house. Why bother and buy a condo. Parents will gift or loan funds for a condo. Never for an RSP or TFSA (see point #1 above…risky they say)
And you can borrow at close to 2%!!
GTA populating is exploding in part due to government policies (hey we need more bodies to pay that debt interest right…)
Paging Bigarider’s nonna to the blog…or not.
Garth and minions.
BOC dropped by 0.5%
On Commuted DB pensions, I know the commuted sum is related to the pool of money based on an actuarial table it would take to generate that pension.
So anyone have any insight into how much a 0.5% drop may impact a commuted value?
Now the DB pension I am interested only recalculates once a year in January, but since interest rates were low already a 0.5% drop seems a high relative cut. (and likely another 0.25% drop soon)
Any idea if this drop from BOC has a material impact on commuted value? (or have I got this first world problem all wrong)
You are correct. Commuted values rise as rates drop. – Garth
#66 conan on 03.06.20 at 7:17 pm
Wall Street’s Pros Fess Up: ‘We Don’t Know What’s Going On
—–
Probably not what you think. Virus was responsible for a bit of the drop, the rest is probably taking the froth out of the system, shaking out the fearful and then might as well beg for a rate cut and oil cut so the party can restart in a month.
Never let a good crisis go to waste.
Trudeau will be using the virus for cover when the recession hits.
Hi #68 Sail away,
Yes I know lead is very toxic if you eat it or in car exhaust. As are other heavy metals like mercury and other things.
Some were wise enough to stop using lead in Gasoline not that long ago. Because it seemed to damage kids brains. But you probably already know that. But the Romans didn’t know and used lead for water pipes and makeups. And that didn’t work out to well for them in the long run.
Zinc, D3, K2, C, folic acid, multi-vitamin, iodine, to name a few might actually be good for you and your immune system, if you don’t over do it. Plus get enough good sleep and a balanced diet with real fruits and vegetable, to go with a balanced investments.
I get some of my stuff from this Canadian company.
https://naturalfactors.com/
#73 crowdedelevatorfart
“There it is again…… a barking dog that degenerates into a pitiful keening wail……
Perhaps it’s wishing I would play fetch with it…..alas, flea infested cur dont deserve the ofaculatory experiences I have to offer…..”
That’s it. That’s all you have. No witty responses to my insults. Come on…try a little harder…make it hurt a bit.
CBC had an interesting article on using water pipes to generate electricity. And there is one in operation in Halifax since 2014. Cost $500,000 and generates $30,000 in energy 17 year payback 40 year life span.
It makes me wonder why the heck we are not doing this in every city in Canada,
. But nooooooo we need to,spend billions on Nuclear.
https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356
Is it just me or does common sense not work any more?
———————
sure let’s install over 20,000 of these things in Toronto at 500,000 each for a total cost of….10Billion. And then we have to manage and support 20,000 mini powerplants instead of one. ‘common sense’ would be so much easier without that pesky ‘reality/math’ getting in the way….
@CF #76 “Squirrel stew sounds delicious but your [SA’s] comment about dogmeat is intriguing.
There was a family in east Vancouver a decade or so ago that was caught bbq’ing a dog in their garage and the neighbors called the cops.
Cops arrive, Fire Dept. , SPCA arrives, ….cant do nothing.
Apparently no one saw the family actually kill the dog before cooking it.
No one could prove the family caused the dog “cruel and unusual suffering” before it’s demise.
Totally legal back yard bbq….. carry on , keep rotating it and smearing it with sauce….. yummy.”
You are really intrigued with the whole dog meating concept aren’t you stinky? It’s got you hot and bothered otherwise why else keep hammering on about it? Why don’t you ask your buddy SA to hook you up?
DELETED
https://www.businessinsider.com/coronavirus-who-scientists-sent-china-new-covid-19-research-findings-2020-3
Looks like I’m a goner, Adios ;)
Re: #48 DavidW2 on 03.06.20 at 5:47 pm
If Trump won’t allow a bear market in an election year you could lose big after the 2020 election even if Trump wins like April 2021. The same doesn’t hold true for the rest of the world markets they can fall more than 20 percent this year from their highs.
“Silly comment. Canadian governments will never default. – Garth”
That is true, sort of. No entity that has a structural deficit and no path to profitability eventually defaults. They have too, eventually.
The power that governments have is that they can raise taxes. But if that could eliminate the deficit and even pay back existing debt why haven’t they done that already? The answer is that they can’t, we are already at or beyond peak tax. So the borrowing will continue. It is structural and has been for a long time.
So instead they use managed inflation. 2%/year might not mean much but it does mean that all past government debt is slowly becoming irrelevant as the amount owed in constant dollars becomes less valuable in the real world every year. And if the government can borrow below the inflation rate? And then tax whatever it does pay out? Well nothing could be more beautiful.
But unfortunately any inflation rate above zero is a controlled default, especially if borrowing rates are at or below inflation. You aren’t getting your money back in constant dollars. And the longer you leave it in the less you get back. It’s just a drip, but eventually a drip can ruin the ceiling.
Now I understand there is a need to have an inflation rate above zero because deflation is very bad for the lending industry, borrowers and lenders alike, but that is the only reason for it. 2% is a Faustian bargain.
The market death spiral is nigh – but in the meantime have a corona (with lime) and laugh at the complete and utter stupidity of the human race – if we are “supposedly” the most intelligent life form on this rock then we have truly failed in a massive way to live up to that
#79 the Jaguar on 03.06.20 at 7:50 pm
“The ‘wokesters’ are beginning to wake up. Energy projects being cancelled, people like Warren Buffett pulling the plug, etc. Even the CBC is starting to air stories that detail the enormous costs and consequences of ‘anything but fossil fuels’ mentality.”
———
The problem with the “anything but fossil fuels mentality” is that at this point in time we really don’t have anything else besides horses and buggies. And starvation. And there isn’t enough horses and buggies to go around, although there could very well be enough starvation.
When the woke start turning in their smart phones for recycling (and don’t get an upgrade), turn off the heat and power in their condos, take the stairs, stop buying anything that comes from a store or Amazon including food, and of course walk everywhere they go (but not in manufactured shoes), they are simply a bunch of bloviating windbags who just don’t have any idea how things work but think they can fix the world with a crayon drawing of a flower and a windmill. I’m not saying they are all unintelligent, but they are very very uninformed and uneducated. You can’t be reforming the energy industry if you aren’t an engineer who understands thermodynamics. I am sorry, no you can’t. Your art history classes have not prepared you to think about such things.
Whoops. Edit-Replace(“when”, “until”)-Ok.
DELETED
Saw an interesting, no, frighting, model today. If infection rates continue unabated, and the guy used transmission rates similar to the flu, all of the US will have had the illness by August. Most will recover just fine but the death count will be high, because the death count is always a lagging indicator. People live for a while and spread the disease before they head off to the crematorium. The death count will still be low, around 2%, which put in perspective the death rate with no Covid-19 is still higher that 1% (that would be 1 in 100 people die every year, which is most obviously the case).
This won’t happen of course because it assumes there will be no reaction to slow the spread. There will be and already is.
But anyway a doubling of the death rate of the population is no small matter, even if it only lasts a while.
Oh well. Fun while it lasted. I guess canid gustatorianism is over
:-(
“As per the article, “Canada’s animal cruelty laws are considered the worst in the Western world”. Not exactly something to be proud of as Canadians.
Eh, if your citizens are generally decent, the laws aren’t so important. And if they aren’t, the laws won’t help. I don’t know what a rabid animal rights activist thinks is appropriate… the death penalty?
You can already get five years, or two less a day and a $10,000 fine if you breed or impregnate a whale, dolphin or porpoise. So that covers John McAfee, and that’s good enough for me.
https://laws-lois.justice.gc.ca/eng/acts/c-46/page-92.html
Wall Street Week
If Louis Rukeyser was around today he would say:
“It’s the institutional Patsies who are doing the selling”
So money is flowing out of cheap stocks and into bonds, which have gone up in price. Shouldn’t the opposite be happening now?
#98 COVFEFE-19 on 03.06.20 at 9:39 pm
You can already get five years, or two less a day and a $10,000 fine if you breed or impregnate a whale, dolphin or porpoise.
——————————————-
Exception
(3.1) Subsection (2) does not apply to a person who is conducting scientific research pursuant to a licence …
There’s just always a loophole
@#97 ‘Oh well. Fun while it lasted. I guess canid gustatorianism is over
:-(”
Elaborate please. As in what is fun about joking about eating our friends?
@#98 re: “if your our citizens are generally decent, the laws aren’t so important. And if they aren’t, the laws won’t help. I don’t know what a rabid animal rights activist thinks is appropriate… the death penalty?”
We’re not talking about “rabid animal rights activists” though. People like SA and CEF poke fun at others who care about animal cruelty. Compassion and empathy are a gift and a strength, not a weakness like SA and CEF would like others to believe.
#91 Nonplused on 03.06.20 at 8:46 pm
Correct on peak tax. You can only get that much water from a stone.
But that 2 % inflation was 20 years ago. Note that then the interest rates were 5-6 % and the economy was relatively solid.
Now is 8 % + inflation of necessities and accelerating and the economy is in the dumpster. Flushed down the toilet. Credit driven economy where you loan to the struggling and then beat the crap out of them to pay it back/advertised by Shawn Allen as the engine of progress that drives everything in this place.
The problem is exactly that the economy is built on credit/borrowing and cheap labour and then extraction through taxes, all that billed as ‘social country’ to attract more workers.
This is a 19th century colonial model.
It leads to economy that is not competitive or innovative in the today’s world so the decline occurs naturally, initially slowly, but now accelerating.
What we were left with basically is flipping houses, financial services that are cheapo and do not pay their workers and very cheap labour for US.
All that ‘innovation’ is in the head of the politicians and it is just that: talk.
I am very surprised by how long the upper and middle middle class was able to hang on.
The road ahead is very clear: more of the same (reducing rates, borrowing, flipping houses, deleveraging is not possible in any shape or form or the ‘economy’ will crash) until a point when the currency collapses completely and people riot due to cost of living becoming unbearable (look at Mexico but with worse weather.)
Soon living in the big cities here will be a diagnosis.
Already rents and food prices are subject to runaway inflation north of 8-10 % as of lately. ‘Generous’ pensions in a ‘social country’ that are half of the social security payments in US, indexed annually at 1 %. Attacks on small businesses and middle classed billed as ‘the rich’. It is desperation folks, nothing else left to loot as even future generation are already sold out in debt slavery.
Cheers,
> It’s a recipe for bubble prices, multiple bids, blind auctions, happy realtors and billions more in new mortgage debt. Sadly, it will push home ownership further away for many.
When the virus really starts spreading throughout Canada and as the global spread expands, no one is going to be buying real estate in Toronto. This virus will crush real estate in Canada. No doubt about it.
#87 Sail away on 03.06.20 at 8:21 pm
DELETED
—————–
Finally.
Thanks Garth.
So it starts.
Reports are today that the Balzac Costco (near Cross Iron Mills super mega mall) near Calgary was lined up today on open and sold out of toilet paper in half an hour. A fist fight erupted when one guy took the last 8 packages and there were people behind him in line.
Water and hand sanitizer were also shortly gone.
All of this over one suspected Covid case in Calgary.
Folks! Slap yourselves! You don’t need 8 Costco bags of toilet paper to get through this! Worst case is you use your shower as a bidet. Toilet paper is not survival prepping. It is convenience prepping. I realize it is sometimes hard to tell the difference if you are new at this. But of all the species out there, humans are the only ones that use toilet paper and so far as I know they all shit.
Costco all across the land is introducing SKU limits on certain products. All the ones you don’t need. Buy non-perishable food while you can (but in reasonable amounts). You can’t eat toilet paper but you can get by with a stinky bum and a shower if you have food.
If you want a pro tip, buy a Costco box of bar soap for around $10. Maybe 2. You won’t need 4. Hand sanitizer is nice if you can find it but you don’t need it if you have soap.
Apparently there is also a run on white vinegar. Nope. Get a bottle of bleach and cut it 20:1 with water. Or buy some Comet, it’s really cheap.
Of course my suggestions assume the power and water will still be functioning, but I think they will be. I don’t even think Netflix will go down so if you don’t have a pool table you can always watch Monty Python. The main concern I have seen with the internet seems to be that if everyone starts working from home the internet may experience delays due to congestion, which is perhaps a real concern, so maybe all those DVD’s and board games might be resurrected. Or even books if you still have any or if you are a millennial ever did.
Folks, prepping is a good idea, but think it through. If it gets to the point you need 8 bags of Costco toilet paper but you forgot to buy 1 bottle of Buckley’s you didn’t think it through. And no, don’t buy a case of Buckley’s, if 1 or 2 bottles don’t get you through you just aren’t going to make it. Per member of the household of course.
Super strange that there hasn’t been a run on bidets. Maybe get one of those if Costco is sold out of toilet paper. Maybe the French got one thing right.
It is amusing to me when people say they’ll buy a stock for its high dividend yield. Aren’t they forgetting that the dividind has no gaurantee of staying that high? In a year vermillion’s board could decide to cut to 0 at which time the share price would have also cratered.
Home in 604 is paid for. 800k with TD waterhouse, TFSA’s maxed. Should I mortgage my house and put the money into bank stocks? Pay 2% to get 4.5%??
#98 COVFEFE-19 on 03.06.20 at 9:39 pm
“As per the article, “Canada’s animal cruelty laws are considered the worst in the Western world”. Not exactly something to be proud of as Canadians.
Eh, if your citizens are generally decent, the laws aren’t so important. And if they aren’t, the laws won’t help. I don’t know what a rabid animal rights activist thinks is appropriate… the death penalty?
—————————————-
The penalties are fine but the problem in Canada is that there are an enormous number of loopholes and exceptions for special interests. Treatment of livestock in factory farms is relatively lawless and centuries behind the regulations in UK, EU, and many US states.
So Jamie Dimon is in the hospital for heart surgery.
Would that be microsurgery?
ZTL is long treasuries in CAD unhedged. It is up 35% yoy so too late to be buying it now. But once things settle down and markets go back up it is your best shock absorber for corrections.
—
Thanks man! This is great. Totally what I’m looking for, and will employ once things swing back the other way.
Cheers!
DELETED
Bumwads & baby wipes? Paper products are scarce in tough times. After the fall of Saigon, Cambodia, & Laos all the gf’s of the GI’s, Contractors etc. escaped to Bangkok. Probably 200,000 +. All presented themselves immaculately groomed with spotlessly cleaned clothes. The competition was stiff. Every girl carried small Kleenex dispensers on her person. It was a form of currency.You went into the Soviet Union looking for those Siberian blondes with toilet paper in the suitcase.. That to was currency. Your Venezuelan cougar friend going home to visit her half sisters. Suitcase jammed 100% with Kotex’s. The kid making big money hauling chip barge’s down the coast to the pulp mill. 10 day round trip: two crews. Orders from the office: Don’t stop. A brother on a refit for the paper mill in New West that makes the speciality paper in doctor’s offices covering gurneys & operating bibs etc. Full on double & triple overtime while the mill’s down. Orders from the brass. Just get her up & running.The Gartho is closer to the nerve than you might imagine with bum wads & baby wipes.
As the economy slows, rates are reduced to encourage business.
Where is the impact of Brexit seen in North America?
David Pylyp
Toronto
Ummmm, just an observation. Garth, I think you’ve banned so many commenters that you’re left with a subset of the same 12 guys who agree with you. Keep it small buddy.
All the the BANNED posters are the same person. And that is you. IP: 184.22.87.7 – Garth
Hey Garth.
You have spoken a few times regarding preferred share ETFs on the blog. Any change in view on holding these investments with the continuing rate drops on the horizon?
A tax-efficient dividend yield of 4.5-5% and capital gains when rates rise again. Sounds okay to me. Not selling mine. – Garth
“People like SA and CEF poke fun at others who care about animal cruelty.”
That’s not what I’ve seen here. Discussion has centred around whether certain species are sacred or whether eating them is OK. I don’t remember anyone encouraging or minimizing cruelty.
*I’ve* said (in doggerel) that animal lovers who “rescue” dogs bred for food or fighting from faraway places are just encouraging the breeding of more. If I “rescue” a Chinese-made television from my local mall because I don’t like the way China makes televisions, China will happily make another TV to take its place. Just so with dogs.
I’ve noticed a barking dog for a few days now….off in the distance, barely audible, unintelligent, banshee keening….
The barking is gone now.
I wonder if its caught in a trap?
Or looking for some friends.
Sad.
Oh well, not important.
Back to my book of recipes,
Unmentionable Cuisine;1001 ways to eat your pet.
@#109 Blue Collar
“Home in 604 is paid for. 800k with TD waterhouse, TFSA’s maxed.”
+++
I assume your not a millennial.
#103 Blackdog on 03.06.20 at 11:31 pm
@#98 re: “if your our citizens are generally decent, the laws aren’t so important. And if they aren’t, the laws won’t help. I don’t know what a rabid animal rights activist thinks is appropriate… the death penalty?”
———————————
We’re not talking about “rabid animal rights activists” though.
———————————
Um… actually he was. That’s why he said ‘rabid animal rights activist’
It’s a clue. When someone says something, it’s often the subject they are talking about.
Interesting. The Fed floated the idea of buying assets last week. Absorb that.
You are investing in something that needs to be prompt up in value by the government.
Translation the asset is not trading on supply and demand.
Houses suddenly dont look like a crazy investment. Being a hard asset not a forward looking trading instrument currently at 17x its “future” earnings. Propped up by the government.
How did that work out for Japan?
Geez,
unlike some of the losers that hung around the blog all night waiting for Crowdie Fartz’s non existent replies……
I went out and ate some MEAT at a restaurant with some friends.
Yes Crowdiefartz has friends unlike the socially inept SPCA nazi’s that congregate here.
Anywho, The restaurant was Brazilian and boy oh boy, do they know how to cook MEAT.
Every defenceless , slaughtered animal you can imagine.
Braised, bbq’ed, smoked and roasted….. yum.
There was the usual boring, beef, chicken, pork, but then they served ostrich, emu, llama, the MEAT just kept coming! I’m pretty sure I ate a bit of everything…cats and dogs included!
VERY Tasty.
The servers bring the MEAT around on long skewers and you just point at the slab you want and they hack it off right in front of you.
Absolutely DEEE- Licious.
Then we went to a bar around the corner and listened to a table next to us bather on about animal “rights” (bwahahahaha ..animals have “rights” …so funny)
Well after a few minutes of that I dropped a real stinker and they left…..we talked about perhaps doing a trip to asia to see what all the “meat market” fuss is all about and try some non traditional meats….(you know what I’m talkin ’bout Willis!) perhaps then we’ll head to Italy where fashion is taking a tongue in cheek jab at Corona19.
https://www.reuters.com/article/us-health-coronavirus-italy/italy-coronavirus-deaths-near-200-after-biggest-daily-jump-idUSKBN20T2ML
Oh well. enough talk about my interesting evening….lets hear what the barking dog did……….. oh right….just drank wine and whined.
Oof, pref shares again. Like a zombie that rises from the grave every five years.
If rates stay low for a year, about a fifth of the rate resets are going to reset really low, for the next five years, just like they did five years ago.
I mean, look at Sun Life series G, trading at $11 to yield 5%. Issued in 2010 at $25 to pay 4.35%, it reset in 2015 to pay 2.25%, and is going to reset again in June at the five year Canada + 1.41%. The dividend went from $0.27 to $0.14, and holders are about to lock in another five years of pain, for a total of fifteen since issue. Same for plenty of other issues of that vintage. CFOs are clicking their heels in glee at these billions of dollars of incredibly cheap capital.
In the same time period, the dividend on the common has gone from .36 to .55, and the price has gone from about $28 to $56.
https://peanuts.fandom.com/wiki/Football_gag
Btw. The dividends on investments. You may want to look at the balance sheets to determine the cash flow needed to pay the yields.
Same goes for the sharebuyback bubble.
The balance sheets of most us companies were designed to work as long as earnings didn’t take a major hit like they are now.
Essentially a one way set up.
@#121 Sail Away
“Um… actually he was. That’s why he said ‘rabid animal rights activist’
It’s a clue. When someone says something, it’s often the subject they are talking about.”
+++
Careful, you’ll be accused of “man-splaining”.
#118 COVFEFE-19 on 03.07.20 at 8:38 am
“People like SA and CEF poke fun at others who care about animal cruelty.”
That’s not what I’ve seen here. Discussion has centred around whether certain species are sacred or whether eating them is OK. I don’t remember anyone encouraging or minimizing cruelty.
*I’ve* said (in doggerel) that animal lovers who “rescue” dogs bred for food or fighting from faraway places are just encouraging the breeding of more. If I “rescue” a Chinese-made television from my local mall because I don’t like the way China makes televisions, China will happily make another TV to take its place. Just so with dogs.
———————————
Never let the truth get in the way of a good story, or in this case: fabricated outrage.
A certain subset will always ‘discover’ offense in the most unlikely of places, then scream harassment or appeal to authority.
Despicable behaviour.
The old 1980s axiom is back. When the US catches a cold Canada gets pneumonia.
The BOC was wrong not to cut more aggressively earlier like the FED and RBA. As a result Canada will likely face a more severe recession while the US and other economies face an economic slowdown.
CBC had an interesting article on using water pipes to generate electricity. And there is one in operation in Halifax since 2014. Cost $500,000 and generates $30,000 in energy 17 year payback 40 year life span.
It makes me wonder why the heck we are not doing this in every city in Canada,
. But nooooooo we need to,spend billions on Nuclear.
https://www.cbc.ca/news/technology/what-on-earth-newsletter-in-pipe-hydro-1.5487356
Is it just me or does common sense not work any more?
———————
sure let’s install over 20,000 of these things in Toronto at 500,000 each for a total cost of….10Billion. And then we have to manage and support 20,000 mini powerplants instead of one. ‘common sense’ would be so much easier without that pesky ‘reality/math’ getting in the way….
You guys all know this only works in very specific circumstances where natural water storage ponds exist uphill from homes, right?
Because everywhere else, including Toronto, requires energy to add pressure to the water system. Every hydro turbine would take that energy out of the system to convert it to electricity at a very significant drop in output. In most cases you would be far better off doing nothing, rather than wasting energy in converting it back and forth.
In principle (and in the few areas where pressure reducers are used due to high elevation reservoirs) this could be a small gain. But if you think you can power your house off the city water lines, your are missing the main point of the article.
#106 Ponzius Pilatus on 03.07.20 at 12:02 am
#87 Sail away on 03.06.20 at 8:21 pm
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Finally.
Thanks Garth.
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Hey, how’s it going, Dobby!?
Tell the truth: you’d be lost without me. Probably doing chores for an ungrateful master.
#129 CEW9 on 03.07.20 at 10:11 am
In principle (and in the few areas where pressure reducers are used due to high elevation reservoirs) this could be a small gain. But if you think you can power your house off the city water lines, your are missing the main point of the article.
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Yes, absolutely correct.
And the need for nuclear power plants, hydro plants, dams, etc., is not a giant government conspiracy.
It’s because people, like, use energy.
#48 DavidW2 on 03.06.20 at 5:47 pm
Quick question. If the bottom of the market plop can’t be timed, would you advise moving cash into stock in increments over the next few months, or not bother yet and wait a few months and then start buying at cheaper prices?
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I would start buying in increments now on down days.
10%-15% at a time. Be prepared to see the market drop farther although nobody knows for sure.
Also be prepared to second guess yourself every time the market drops some more after your entry point. It’s only natural to feel that you made the wrong decision but it is near impossible to pick the exact bottom.
Good Luck
How shabby must your life be that you must recount its mundane events in the comment section of someone else’s blog?
Or better yet, dig up a 2 year old story just so you can trigger a comment from someone else?
To make matters worse, you don’t even seem to have the intelligence to understand why people, not just animal lovers, were so outraged by that story.
It is one thing to choose what you want to eat, bird dogs, pigeons, your parakeet or the snakes & snails that live next to you under your rock that you thoughtfully arranged under a bridge. It is a whole other matter to “shop” for Sunday’s roast at your community animal shelter’s pet adoption drive.
People were incensed by this cretin because he lied about his intentions to the SPCA where he freely acquired the “pet” pig. Animal shelters are supported in part by charity from locals with the expectation that they will take care of animals and endeavor to find them good homes. By misrepresenting his intentions this person stole from all of those people and he was caught when he posted a video to snapchat preparing the meat and bragging about how clever he was.
When I think about my retirement I never really worry about running out of money. I worry what will I do? Will my life be so aimless that I will have to fill the hours posting comments on other’s blogs. It is quite a dubious distinction to be the top commenter on someone else’s blog when your comments are rarely helpful or informative or funny.
Here is a challenge to anyone who comes here to whine about Trudeau. The time is now, join the Conservative Party, pick a candidate for leader and throw them a few bucks. Do something constructive. Or not – don’t really care – I am backing Mackay because I can’t stand to see another SoCon blow an election.
@ 56 Lost but not leased re:
#11 crowdedelevatorfartz
“Isn’t the SPCA where you pick up most of your dates???”
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SPCA has much higher standards.
#116 Judy Jamming on 03.07.20 at 8:07 am Busted. Everything is traceable, even thru vpn’s. People in cars might not be directly identified but every packet has a plate. Just watch the traffic.
Re: IP address
Did anyone else look up #116’s IP?
Bangkok, Thailand
#133 Flail Away on 03.07.20 at 10:37 am
I’m just a soul whose intentions are good
Oh Lord, please don’t let me be misunderstood
every yield curve inversion since 1967 has resulted in a bear market and recession. 8 of 8 times. a 100% record. this one was no different.
If bonds are so good, why are GIC’s so bad? Don’t bonds produce yields well under the rate of inflation?
@111 Not So New Guy
“So Jamie Dimon is in the hospital for heart surgery.
Would that be microsurgery?”
Hidden amongst all the crap and nonsense that the host permits in the Comments section of this blog, occasionally there is a gem. Coffee/nose/keyboard. Thanks .
Hey Garth.
You have spoken a few times regarding preferred share ETFs on the blog. Any change in view on holding these investments with the continuing rate drops on the horizon?
A tax-efficient dividend yield of 4.5-5% and capital gains when rates rise again. Sounds okay to me. Not selling mine. – Garth
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That might work just fine if you are 40….not as great if you are 75! We’ve really been waiting 10 years for rates to rise and get to a decent level again and it has not occurred….which has had the negative effect of goosing the real estate market.
@#133 Flail Away on 03.07.20 at 10:37 am
How shabby must your life be that you must recount its mundane events in the comment section of someone else’s blog?
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do yourself a favour and scroll past.
that guy is this forums uber troll.
RE#51
Inflating the debt away would only work if the new currency printed was not based on debt and was used to retire existing debt and over time the entire debt could be inflated away. The practice of deficit spending would have to stop and the whole process would have to be done over 25 to 50 years to limit inflation to being high without going hyper. The problem is that the government can’t remain stable enough or have the discipline to do it. Therefore people had best take steps to save themselves because government is just playing for time hoping the whole thing will go away due to financial collapse, war, plague or pestilence.