Reality. Check.

This week stocks laid an egg. The pros weren’t much surprised.

We were overcooked, after all, with investors getting ahead of themselves and pushing valuations – especially for inflated tech companies and sexy corps like Tesla – into the stratosphere. Mobs of moist little day-traders clicking on their Robin Hood apps didn’t help much. Lately speculation has been everywhere. Equity markets hit record highs earlier  this week, and the S&P 500 had gained 60% since March. Sixty per cent. That’s about nine years of normal growth. Stunning.

So markets are taking a reality check.

Do we still have a global pandemic? Check.

Almost 190,000 Americans have died of Covid, right? Check.

There are some 30 million unemployed Americans on the dole? Check.

The federal deficit in Ottawa is 12 times bigger than expected? Check.

Washington is spending $3.3 trillion more than it’s collecting this year? Check.

These are numbers the world has never seen before, is that correct? You bet, check.

The jobless rate in Canada tops 10% even after the latest gains? Check.

This is the worst recession since at least World War Two? Check.

The US is trying to pick between a burned-out 77-year-old career politician and a quixotic, race-baiting misogynist billionaire reality TV real estate guy? Who’s 74? Uh-huh. Check.

So, stock markets are reassessing their froth. Good thing. A correction of 10% or so would be understandable. Even welcome. The world is still brimming with uncertainties. A second virus wave could come. The American election could degenerate into chaos. The online stocks are smelling a lot like the dot-coms did twenty years ago, more flash than cash flow. After riding an incredible tsunami since the virus first hit, professional fund managers are happy to hit the sell button, take risk off the table and wait for the economy to catch up.

Average investors can try the same, but it’s probably not a great idea. Let the Robin Hood kids get whipsawed around by Mr. Market. For most people with an eye on retirement, for example, the best strategy is to set up a B&D portfolio, tweak it every year or six months, and forget it the rest of the time. A bunch of gains since March could be reversed, but they will be restored over time. And you have absolutely no idea on what day big advances or declines will take place. So stop trying to time it.

Now what differentiates putting money into a financial portfolio from investing in a house comes down to one word. Debt. Or leverage. People buy ETFs with money they have. They grab houses with wealth they don’t have. Using 10x or 20x leverage is common. When the real estate you bought with leverage rises in value, you win. If you paid too much in a frenzy and the value falls, you’re pooched.

So if stock investors were overly ambitious and are now being spanked, why can’t that happen with real property? After all the same conditions exist – pandemic, recession, big unemployment, political instability and debt. How much danger is there that this housing market could correct, far faster and sooner than many expect?

Hmmm. Beats me. But look at this:

In Toronto in August prices hit an all-time record high. That was the second record in two months. Sales were up 40%, the average selling price gained 20% year/year and a ho-hum detached gained 19%, to $1.2 million. Toronto, by the way, has an unemployment rate of 13%. Fewer people went on vacation in August this year because of the pandemic and job loss, says the real estate board, so they stayed in the city and bought houses. Sure, makes sense. Toilet paper, Zoom downloads, houses. Whatever.

In Vancouver sales were 20 times higher than the 10-year average. The benchmark price topped $1.04 million. Both detached and attached houses saw sales more than double from the same month a year ago. Prices were up 5%. The realtors said, “Low interest rates and limited overall supply of homes for sale are creating competition in today’s housing market.”

In Victoria there were 48% more sales in August, while listings fell and prices gained over 5%. To its credit, the local board has been realistic, suggesting this stuff will not last: “This is not a trend, but our market at this moment in time during a unique situation. It is a challenging time to define what is happening in the market given so many factors that don’t exist in a normal year. We have been surprised by the pace of the summer market and are grappling with the evolving socio-economic effects of the pandemic and how these underlying factors will influence our fall real estate market.”

In Ottawa there were 17% more sales last month amid the biggest surge in listings in five years. House prices shot ahead 22% and the values of condos swelled 24%. Multiple offers abound and the realtors are calling it “a perfect storm.” Adds real estate board boss Deb Burgoyne: “This is an extremely challenging market for many, especially those on the buying side. Many are experiencing what we call ‘buyer burnout’, having placed many offers without success.”

Other cities – Halifax, Montreal, Winnipeg – have yet to report, but the story’s expected to be the same. The disconnect between what people perceive and what exists is huge. It’s unprecedented that in a recession, amid job and employer carnage and in the grip of a public health crisis, battling a virus with no cure, that FOMO would foment.

Some people have come here to slough off warnings about a real estate bubble, saying if it exists, stocks must be there, too.

Maybe so. But one is far more lethal.

147 comments ↓

#1 Overheardyou on 09.04.20 at 2:05 pm

Are you allowed to sell the stock of a company in bankruptcy court (US company) if it’s still traded on the major exchanges?

#2 Colin on 09.04.20 at 2:07 pm

Garth, the jobs numbers changes just released are imo extremely weak and worrying.

https://www.ctvnews.ca/business/unemployment-dips-as-246-000-jobs-added-in-august-statcan-1.5092292

Big trouble ahead for the Canadian consumer and real estate economy with any kind of second wave. Things are just not stable and the jobs that have been recovered are actually quite precarious. Hospitality work for example may collapse almost totally by the late fall. How an people keep pushing up house prices then?

#3 Dolce Vita on 09.04.20 at 2:09 pm

“But one is far more lethal.”

True.

Perusing your “Check” list, insanity best describes Cdn. RE FOMO.

The rarified air of the suburbs has not deterred COVID-19 as many reports coming out now of barbecue parties, suburban Church services, etc. resulting in outbreaks.

And, Back to School…all in your comfy womfy suburbs. 1,000’s of little Typhoid Mary’s ready to do the bidding of Mother Nature, spread her latest creation.

Outbreaks soon enough with Rt values in ALL Provinces above 1, save Manitoba:

https://twitter.com/imgrund/status/1301877150585425921/photo/1

The air is not more rarified in the suburbs, imagine that?

#4 DON on 09.04.20 at 2:10 pm

Reading comprehension will be tested again today on this blog.

Recency bias and lack of experience combine to diverge perception from reality as long as ‘everyone’ is doing it.

Job losses are now in the international media. Not so much in the local media.

The normal summer reprieve is over…now it’s back to reality.

#5 KNOW IT ALL on 09.04.20 at 2:16 pm

The investment landscape is undergoing extreme “DISTORTION”.

Nothing makes sense anymore.

The only for sure bet you can make is that one-day the market will crash – trees don’t grow to the sky.

And on the topic of real estate – So you mean to tell me there are (lenders) knowingly giving money to property buyers who are purchasing RE that is overpriced???

Well shame on them!! They all deserve what’s coming next.

#6 looking up on 09.04.20 at 2:23 pm

Too many people are buying things they don’t need with money they haven’t earned yet to impress people they don’t like.

Highly appropriate right now.

#7 crowdedelevatorfartz on 09.04.20 at 2:26 pm

One employee at the company is listing his Strata this week.

Another ( the same age) is seriously contemplating financing a Lincoln Navigator for his wife because “she drives a lot of kids to school”…….

While, admittedly, both are not rocket scientists…..

One guess as to which one is more prepared for retirement.

#8 Dolce Vita on 09.04.20 at 2:28 pm

Whilst on the subject of VIRUS PORN, step aside French infected nude sunbathers here come the Deutschers & step aside Amsterdam (who knew?)…

120 “workers” and 60 Support Staff lose their jobs, sad.

———————-

1st up, rock, solid, reputable Deutsche Welle:

“Germany’s ‘Pascha’ brothel goes bust amid coronavirus crisis”

2nd, for some “local flavor” (Pasche is in Köln) & in their own words (nice night shot of the establishment) – blaming COVID-19 of course:

„Wir sind am Ende“ Europas größter Sex-Club: Kölner Pascha stirbt den Corona-Tod

[like the French, not beneath Germans to do a bit of marketing as well “Europe’s largest sex club”]

3rd up is the cheeky, verbose and rather familiar with the premises English:

“Unhappy ending: Cologne’s ten-storey Pascha brothel – one of the biggest in the world – shuts down after Covid restrictions stopped it from operating for months”

4th up the visceral Americans:

“Swanky German brothel files for bankruptcy amid prostitution ban in COVID-19 era”

[visceral because on Google Search the same article title reads: “Ladies of the plight: Hookers lose jobs due to COVID-19”]

5th is Reuters and if you wanted to know prices and other expenses, this is the article to read:

“Sex workers stranded in Germany as coronavirus shuts brothels”

[somebody at Reuters maybe just a bit too familiar with the establishment]

6th Canada:

Hear no evil, speak no evil, see…

———————-

Links:

https://www.dw.com/en/germany-pascha-brothel/a-54801694
https://www.express.de/koeln/-wir-sind-am-ende–europas-groesster-sex-club–koelner-pascha-stirbt-den-corona-tod-37282372
https://www.dailymail.co.uk/news/article-8694001/One-worlds-biggest-brothels-files-bankruptcy-Covid-19-restrictions-prostitution.html
https://www.nydailynews.com/news/world/ny-german-brothel-broke-20200903-43zepwztmfbg5o7g5gc4twfbmy-story.html

Again, for pricing details, if it ever opens up again:

https://www.reuters.com/article/us-health-coronavirus-germany-brothels/sex-workers-stranded-in-germany-as-coronavirus-shuts-brothels-idUSKBN21L0ZY

———————-

Ja! Deutschland.

#9 Tarot Card on 09.04.20 at 2:30 pm

Happy Friday
Thanks for the blog Garth

Today I would like to post a story
Please be aware it contains graphic material, well for 8 million of you the rest it’s a good feeling story. and just maybe there’s a dog, but you’ll have to,wait.

It begins a young girl of 13 going to high school, mom I want a new pair of jeans, the kind that has those fashionable rips. Mom says sorry dear I cannot afford them. Mothers then goes out on some errands.

Smart kid goes online, uh oh you say not good, more to come,
She phones this lady from google, the lady says how old are you? The girl replies 13, is your mother home, sorry she’s out right now, please have your mother call me.

Mother comes home, little girl mommy mommy I have a job a the ladies waiting for your call. Mom is worried and asks the question did you submit a resume? Little girl what’s a resume?
So the mother calls, hello says the lady. Mother whose this!
Sorry I did not answer with my professional Business.
This is a dog grooming business and I am the owner.

Mother says my daughter called yes says the business women…. your daughter shows lots of initiative!!!

Warning graphic content coming……
I have five employees and they are all collecting CERB and don’t want to work!
So the discussion continues and the little girl gets a job walking dogs.
A few weeks later the little girl gets her first pay check.
She is very excited should I stretch this story and says she wants to invest with Garth? Hmmm okay that’s a bit of a stretch.

And long story short the girls starting high school next week and the business women loves her so much she can work any hours she wants during school, a valued employee she says.

So bottom line we have a bunch of 18 to 25 years olds who are a lost lazy generation thankfully the 13 years olds have grasp of initiative and they will change the world!

Have a great weekend!
Woof!

#10 Dolce Vita on 09.04.20 at 2:43 pm

OMG, you ran my:

Ja! Deutschland virus porn Comment.

BRB, my heart be [is] still, phoning:

112
118

in Italia.

Nice. It would seem NOT ALL OF CANADA:

Hear no evil. See no evil. Speak no evil.

—————–

Good to know Garth and thank you.

#11 Brian Ripley on 09.04.20 at 2:44 pm

My Vancouver vs Toronto housing chart with August data is up: http://www.chpc.biz/compare-toronto–vancouver.html

HIGHER PRICES
40% more for a SFD in VAN
26% more for a Town House in VAN
10% more for a Condo in VAN

1.3 more Listings in TOR than VAN
3.5 x more Sales in TOR than VAN
Monthly Absorption Rate TOR:VAN = 2.7

Ratio of SFD to Strata
1 VAN SFD = 1.8 VAN Town Houses
1 TOR SFD = 1.6 TOR Town Houses
1 VAN SFD = 2.4 VAN Condos
1 TOR SFD = 1.9 TOR Condos

10 Year SFD Inflation Rate:
​VAN = 106% and TOR = 131%

​​Annual Precipitation VAN:TOR = 2:1

#12 Ace Goodheart on 09.04.20 at 2:44 pm

RE: “This is an extremely challenging market for many, especially those on the buying side. Many are experiencing what we call ‘buyer burnout’, having placed many offers without success.”

The ridiculousness continues here in Toronto.

We have had two recent sales in the old ‘hood that defy both logic and common sense.

Both were sales of semis. Not nice houses. Tight, cramped. One had a finished basement (but it looks like someone’s teenager did it), the other, well they painted everything white. The walls, the concrete floor. The roof beams, the underside of the upstairs hardwood plank flooring, the “X” support joists between the beams. The exposed wiring. The duct work. All white. This, apparently, is how you finish a basement now. With a large can of paint (preferably white paint).

Neither house had parking. That is right, if you move there, you cannot bring a car with you. There is a long wait list for a street parking permit (usually you put yourself in line and then follow the obituaries – when someone dies, you can lobby for their spot).

One had a backyard you could throw a baseball in (as long as you can throw really, really straight), the other did not.

One appears to have an Ikea kitchen. The other, perhaps they actually hired someone in.

One goes for a little over 1.4 million, the other, a little under (1.38 I believe).

This time last year you would have been lucky to get a mil for either of them. 1.4 got you a detached with a laneway garage, two parking spots and three large bedrooms.

Just two months ago, 1.5 got you a large detached with a garage and a driveway.

There is no sense to this anymore. These houses are garbage. I don’t know if people are even looking at them anymore.

There is no way, anywhere, on this earth, I mean, not even if the house was located directly next to Buckingham Palace and Bruce Wayne lived next door and let you use his Batmobile on Sundays, not if the world’s best dim sum outlet was across the street and had a special “skip the line” option for neighbouring houses. Not even if Gordon Ramsay just opened a restaurant two doors down and the house came with free dinners for a year, not even then, would these places be worth 1.4 million dollars.

There is just no way.

These houses are junk. The only person who is getting a good deal here is the seller. They are making out like a bandit. This is highway robbery.

The buyers are getting chewed, screwed and tattooed.

#13 Millennial 1%er on 09.04.20 at 2:45 pm

>20% ottawa increase year over year

must remain calm. must resist FOMO. must make good financial decisions & stick to plan

#14 Tom on 09.04.20 at 2:47 pm

Would VGRO or VBAL constitute a B&D portfolio?

#15 Stunned Observer on 09.04.20 at 2:57 pm

>race-baiting

How, with specific, proven, documented examples and quotes, did you arrive at this conclusion?

Because as I scan the US media, it seems the DNC is the side inciting the flames or race, class and gender warfare.

This is a shocking thing to claim when EVERYONE acknowledges the Democrats are the party of identity (i.e. race) politics.

How could you say such a dishonest thing?

You Trump guys are also amusing. Thanks for dropping by. – Garth

#16 The real Kip (Ret) on 09.04.20 at 3:00 pm

Looks like markets are rolling green on the day. I’d say Munchkin made the call so as not to ruin anyone’s weekend.

#17 Pete from St. Cesaire on 09.04.20 at 3:08 pm

A question for you Garth (or anyone else who may have the answer). I’ve been unable to find out whether or not life insurance companies are paying out claims for people who are listed as having died from Covid. I wonder if the insurance companies have some small-print in their policies classifying Covid as an act of God or perhaps, since there has been much talk of Covid being a bio-weapon, classifying it as an act of war. Most policies won’t cover death due to acts of war/terrorism and likely won’t cover pandemics either. Has anyone had any experience with making a claim for life insurance vis-a-vis Covid?

#18 Al on 09.04.20 at 3:08 pm

I hope you handle the numbers regarding your clients’ accounts better than you do statistics. There is no ‘check’ beside ‘192,000 Americans have died of Covid’. The CDC itself came out last week and admitted that less than 10,000 have died of it.

Covid stats are from John Hopkins, the most credible source available. – Garth

#19 Ponzius Pilatus on 09.04.20 at 3:10 pm

#8
in modern Germany, the oldest profession has always been treated like a business. The workers are taxed, get benefits like health insurance and EI, like regular workers
They get tested regularly, and are entitled to a safe and clean working environment..
As for surviving: they are called the oldest profession for a reason.

#20 Andrewski on 09.04.20 at 3:12 pm

I spoke with a man the other day while our dogs were at the dog park and he lowered his voice to tell me that the guy he knows who sells Lotto tickets told him about a stock I should buy, Tesla, Lol. I suggested he not take the plunge, especially since he told me he’s an investment neophyte. Yikes.

#21 Dolce Vita on 09.04.20 at 3:15 pm

About safety in the suburbs and Back to School.

The one thing that amazes me is that the Cdn MSM all worried about Junior getting sick as are videos of frantic parents worried about Junior going back school.

OTHER WAY AROUND people.

5-14 yrs old COVID-19 mortality rate is, Dr. Deborah Birx (other studies corroborate this as well):

< 0.1% [of course, that's 0.1% too many if you were to ask me]

Europe and other country studies show that the VIRAL LOAD of CHILDREN just as potent as that of ADULTS:

https://www.ecdc.europa.eu/en/covid-19/latest-evidence/transmission

Who should be worried at schools? The adults that work there.

Who should be worried in the Suburbs? FOMO adults with school age kids or childless FOMO adults that attend their barbecues or in home parties.

———————–

Ford, Kenney on Back to School: damn the torpedoes.

Pres. of Madrid, about Back to School, the short of it:

They're going to get infected, nothing you can do about it.

Chilling but honest unlike HAVE IT ALL BACKWARDS Canada.

———————–

Give it a couple of months Garth, and they'll all be moving back to their lovely concrete, glass, steel rooted in asphalt, concrete bunkers, stacked like sardines in the sky.

#22 ElGatoNerodeYVR on 09.04.20 at 3:15 pm

Markets can be irrational for longer then you can stay solvent is well known.
When it comes to RE in theory a well balanced market will increase prices by roughly the inflation rate for less desirable properties(say condos) and slightly more for more desirable ones.
What we have seen in the past decade or so is a skewing of the balance due to various factors ( Air BnB, holding properties, investment properties, immigration, laundering …) which all compounded to higher demand then supply so the natural order of things got disturbed.
Historical reality is that RE always performed well as protection znd diversification againt inflation and for North America due to poor financial education as then only way for people to actually save money (forced savings ). Most people I’ve worked with or know really close would blow any disposable savings and would never consider investing them.
I am not condoning it ,just trying to make sense of it. Short of a massive campaign to reeducate people in investing or a national forced savings plan (Australian superannuation model, the 5K at birth , CPP on steroids…) I don’t see the RE market becoming rational over the long term.
We will see a short term correction surely ,as to when and how long for and more importantly how much that is debatable.
After all a 50% correction ( which I don’t believe will see in our lifetimes short of a war)wil not make a 2 mil home affordable . The hospitality and service workers are really not in the market of buying houses ,they are competing for rentals with those seniors who haven’t saved zilch.
I think it is more likely to see a downward correction in the 20% range short lived ( 2 to 3 years) then back to normal.
You read it here first :-)

#23 JonBoy on 09.04.20 at 3:22 pm

Dolce Vita

#3 Outbreaks soon enough with Rt values in ALL Provinces above 1, save Manitoba:

https://twitter.com/imgrund/status/1301877150585425921/photo/1

The air is not more rarified in the suburbs, imagine that?

—-

Newfoundland has ONE case of COVID-19 (returning traveler from Asia) and ZERO cases of community spread for months. I don’t know how you translate that into an Rt of greater than one in any upcoming situation.

COVID essentially doesn’t exist in NL or the other three maritime provinces and they are still requiring 14 day quarantines for anyone coming into the province (7 days for returning workers that have a negative COVID test after 5 days).

In other words, your Twitter friend is missing some critical information that is readily available. That makes me distrust any projection(s) he makes….

#24 JacqueShellacque on 09.04.20 at 3:22 pm

Unfortunately not true, Garth. Sequence matters:

“For most people with an eye on retirement, for example, the best strategy is to set up a B&D portfolio, tweak it every year or six months, and forget it the rest of the time. A bunch of gains since March could be reversed, but they will be restored over time”

When you refer to gains, are you referring to amounts or CAGR? A 10, 20, or even 30% plop in the next few months could in theory be ‘reversed’ with %age gains later so that the average is 7 or 8%, but the gain would be on the smaller post-plop amount, not the pre-plop amount. Over time this would represent a significant loss compared to projections using a standard 7 or 8% calculation. What this means is no one should be in this market unhedged.

In the real world normal people should stay invested. You, on the other hand, can interpret sheep entrails. – Garth

#25 Post on 09.04.20 at 3:26 pm

This article (from today) is about the “greater fool theory”.

“The greater fool theory is used to describe bubbly markets in which investors buy assets regardless of the underlying fundamentals, confident they can sell them on later at a higher price to an even greater fool.”

Nope, Garth didn’t write it.

https://www.marketwatch.com/story/the-only-path-to-a-sharply-higher-stock-market-is-a-bubble-like-the-late-1920s-and-1990s-says-analyst-who-called-rally-off-march-lows-11599240793?mod=home-page

#26 SoggyShorts on 09.04.20 at 3:29 pm

#14 Tom on 09.04.20 at 2:47 pm
Would VGRO or VBAL constitute a B&D portfolio?

***********************
Those are really good until you hit around 100K invested.
At that point splitting it up and reducing your Canadian exposure (VBAL/GRO are overweight) as well as adding some USD becomes a good idea.
Also, those all-in-ones aren’t perfect for tax purposes so splitting up your PF a little bit between RRSP/TFSA and non-reg for tax reasons becomes worth it around the 6-figure mark.
Oh and Garth’s PF includes preferred shares and REITs which aren’t really represented in those V-funds.

#27 I believe anyone in a lab coat on 09.04.20 at 3:37 pm

All those vids of Ausie cops arresting people for facebook comments and no masks etc are staged. The guy in Minden, On. shot for no mask , guy in PQ in Tim Hortons wrestled for no mask- all fake or staged.

#28 A J on 09.04.20 at 3:45 pm

The best thing you can possibly do in life for your mental wellbeing, and for your finances, is to resist FOMO and ‘keeping up with the Joneses’. As soon as emotions come into play, you’ll make mistakes. Whatever everyone else is doing, I’m doing the opposite. I’m fine waiting on the sidelines until everyone else is pooched. Patience is key.

#29 A J on 09.04.20 at 3:46 pm

#18 Al

Stop getting your medical stats and info from Facebook memes.

#30 A J on 09.04.20 at 3:50 pm

#6 looking up

Perfect way to put it.

I have a friend who put his pontoon boat up for sale on Kijiji. He got inundated with offers for it. Someone offering double what it’s worth because boats have been so hard to come by this summer. People are out buying houses, boats, cottages, and RVs in the middle of the worst financial situation of our lifetimes. It’s absolutely insane and mind boggling.

#31 Eco Capitalist on 09.04.20 at 4:02 pm

@ #9 Tarot Card

But did she buy the jeans?

#32 Lisa Campbelford on 09.04.20 at 4:06 pm

Houses are more expensive. So are stocks. And food. And gold too! And even crypto. So maybe the thing is that the money(any currency actually) value is down? We were declaring/printing it lately, so it’s buying power went down. I call this global inflation.

#33 Stoph on 09.04.20 at 4:06 pm

#158 Shirl Clarts on 09.04.20 at 1:22 pm
#141 Stoph on 09.04.20 at 10:43 am

BTW: a $560k mortgage amortized over 15 years at 3.5% is $4k/month – doable for a professional couple.

^^^^^^^^^^^^^^^^^^^^^^^

Hey Sugarcoat,
Sure, but 5 year fixed rates in 2005 were 5.99%, so maybe they got around 5%.

And they make 160K in 2020. They were probably only making half that in 2005.
And you didn’t consider taxes, insurance, maintenance, utilities.

They had help, in a big way… somehow.

Source: https://www150.statcan.gc.ca/n1/pub/11-210-x/2010000/t098-eng.htm

—————————————————————–

Well I am a glass half full kind of guy, so I’ll take the sugarcoat comment as a complement.

You make fair points about the interest rate being higher in 2005 than it is now and additional costs of home ownership besides the mortgage. Your assumption that they only made a combined $80k a year, or $20/hr each is low.

My point that it’s possible for two professionals to pay off a $560k mortgage over the past 15 years still stands. Maybe they got some kind of windfall, maybe they didn’t.

Most likely they would have increased their payments as their salaries increased, so they would have been paying less than the $4600/month needed to pay it off in 15 years at 5% to start with, and more than the $3730/month that’s needed at 2.5% (available five years ago) towards the end of their mortgage. The $4k/month at 3.5% was a ballpark average.

Despite the impression people may have gotten from Garth’s witty writing, this couple obviously has done well for themselves financially and made fiscally prudent decisions. I bet Garth regularly gets new clients like this.

#34 AM in MN on 09.04.20 at 4:10 pm

There is no unemployment for anyone who wants to work.
There is a big shortage of workers for just about any business trying to hire, especially in construction.

When JR quits handing out free money, people will go back to work, especially if they need to pay their rent or get evicted.

#35 Leftover on 09.04.20 at 4:19 pm

So, how is real estate going to unfold?

First, the truly awful deferred mortgages were securitized and sold to the BoC (you and me), clearing the way for OSFI to declare that non-performing mortgages would once again have to be deducted from banks’ tier-1 capital. That kept credit flowing this summer and guess where it went? No prize if you guessed real estate.

One hopes that the new mortgages issued against rapidly increasing house prices at least had additional equity backing them up. They would have had to pass the stress test in any event.

That leaves 500,000 deferred mortgages worth about $130 billion on the banks’ balance sheets, or roughly 15% of their total mortgage book. 500,000 deadbeats? Maybe. That’s the $130 billion question.

The worst of the worst are now owned by the BoC, so it’s likely that the rest of these folks are unsteady but not hopeless. If the market stays hot then many of them will sell into it and get on with their lives, it depends how many actually take this option. If it’s a stampede, then prices drop. A trickle, then probably not much change.

It’s not until at least 2021, well past the US election cycle, that bond markets will act on comparative differences between sovereign currencies (they’re all printing presses at the moment). If CAD is a laggard then we get inflation, higher interest rates, and a very shaky housing market.

#36 David McDonald on 09.04.20 at 4:25 pm

#13 Millennial 1%er on 09.04.20 at 2:45 pm
>20% ottawa increase year over year

must remain calm. must resist FOMO. must make good financial decisions & stick to plan

How clever, you made me laugh and I feel your pain. Nothing makes sense anymore.

#37 Paddy on 09.04.20 at 4:26 pm

“Other cities – Halifax, Montreal, Winnipeg – have yet to report, but the story’s expected to be the same”…..I will go ahead and confirm that RE in the Halifax area is certified nucking futs(I’m sure you checkout Viewpoint Garth)…our house sold in 2 days(not bragging)in a not so desirable area….buyer burnout is definitely happening.

#38 Post on 09.04.20 at 4:31 pm

Hmm…

Censored again. This blog is beginning to resemble Fox News.

Nothing was removed. – Garth

#39 Billy Buoy on 09.04.20 at 4:33 pm

Far more lethal and the question is….

Can the powers that be do anything to stop the pop?

World of hurt time coming in 3…2….1…

#40 Linda on 09.04.20 at 4:34 pm

Today’s pup picture is not the most flattering angle:) The USA election: hope that Biden will win over Trump, because if either of the two top contenders croaks during their term in office – a not unrealistic scenario considering their current ages – Ms. Harris is a much more appealing POTUS replacement than Mr. Pence. Plus I’m not sure America will be able to take a second term of ‘the Donald’. At the rate things are going, civil unrest may well morph into civil (race) war, except there will be nothing ‘civil’ about it. There wasn’t the first time round either, so would be good to avoid a remake.

#41 Felix on 09.04.20 at 4:36 pm

Anyone who thinks the dogawful canine in today’s photo is somehow ‘cute’ has already exceeded his Labour Day weekend alcohol quota.
_____________

PS: Morbid obesity is as dogawfully rampant in canines as in humans, and a threat to health and the planetary environment.

Cats have much more self control. Mutts are like FOMO buyers in this real estate craze, unable to resist any scraps.

#42 Alberta Ed on 09.04.20 at 4:41 pm

Winter is coming.

#43 Ponzius Pilatus on 09.04.20 at 4:42 pm

#20 Andrewski on 09.04.20 at 3:12 pm
I spoke with a man the other day while our dogs were at the dog park and he lowered his voice to tell me that the guy he knows who sells Lotto tickets told him about a stock I should buy, Tesla, Lol. I suggested he not take the plunge, especially since he told me he’s an investment neophyte. Yikes.
—————
That guy was probably Sailo.
Rumors have it that since his suspension, he’s hanging
out at dog parks, hustling his Tesla shares.
Be careful, he’s not who he seems to be.

#44 Guelph Guru on 09.04.20 at 4:45 pm

In Guelph, on the surface it’s business as usual. Houses are routinely selling over asking in a matter of days. But, I am sensing an undercurrent. It’s like the building is still standing, but the central column that holds it together is gone. And people for the first time have started noticing. Had been to our only mall in the city and under all the masks I could sense “fear”. I’ve never had this feeling in the last 10 years. Something fundamental has shifted underneath. I’ve learnt over years to pay attention to the subconscious and it’s telling me something is not right. We will soon know if it’s just a feeling.

#45 Nobody on 09.04.20 at 4:46 pm

misogynist you said? Untrue
Check out women for Trump…
Blacks for Trump…
Latinos for Trump…

#46 ImGonnaBeSick on 09.04.20 at 4:47 pm

#14 Tom on 09.04.20 at 2:47 pm
Would VGRO or VBAL constitute a B&D portfolio?

—-

They’re pretty good, but you’ll need to flesh them out with some REITs and Preferreds.. you could try VEQT or XEQT for your equity and then buy the correct ratios of ZAG, CPD, XRE?

#47 vanreal on 09.04.20 at 4:49 pm

Hey Stoph #32

I have to agree with the doubters on this one. Let’s say their mortgage was 500,000 15 years ago. They would have been making less money say 100,000 a year. They would have had some kids then because their kids are now teenagers plus they put away 300,000 in savings. I’m allowing for growth of their portfolio over the 15 years to 400,000. that means they had to find 800,000 over the last 15 years to pay off mortgage and build savings. And now that their mortgage is paid off they can’t find any money for savings??? Something is not right. Teenagers aren’t that much more expensive than younger kids. Their story smells!

#48 FreeBird on 09.04.20 at 4:52 pm

Whatever happened to buying a house with 3x (4 max) household income? That’s what we did and then didn’t max out prequalified mortgage amount to leave a buffer. I guess that’s now seen as crazy?

PS one of my favorite dog pics so far for blog (excl Bandit). Only a face a fur mom could love.

#49 crowdedelevatorfartz on 09.04.20 at 4:53 pm

@#40 Linda
“Today’s pup picture is not the most flattering angle”
++++

I’m sure the dog is ok with it’s “Rubinesque” physique …. all good.

#50 the Jaguar on 09.04.20 at 4:54 pm

Garth: I am your humble student.

‘Interesting, but not the reason O’Toole won. Of the four candidates, three were socons, and O’Toole consolidated those votes. Do not mistake this as being representative of mainstream small-c conservative thought. The path to electoral victory does not lean to the right in Canada. You shall see. MacKay had a far better chance of winning government. Politics is mathematics. – Garth

If this is the electoral system for the conservatives to choose a leader, and the party is filled with ‘socon’ votes, then how will a centrist candidate ever rise to the top? The grass roots votes out west will back the right wing candidates repeatedly, won’t they? What will it take? ( other than you running, smile…)

#51 Toronto on 09.04.20 at 4:59 pm

$950,000 for a detached home in Rogue Hill.

#52 FreeBird on 09.04.20 at 5:00 pm

#6 looking up on 09.04.20 at 2:23 pm
Too many people are buying things they don’t need with money they haven’t earned yet to impress people they don’t like.

Highly appropriate right now.
————————-

Agreed. Can prob simplify: too many buying things they don’t need with credit. Your last line very true.

#53 David Portnoy on 09.04.20 at 5:01 pm

#29 A J on 09.04.20 at 3:50 pm
#30 AM in MN on 09.04.20 at 4:10 pm

Stimulus (CERB, mortgage deferrals etc.) -> sense of wellbeing++ esp. among WFHers -> consumer spending -> RE boom in the boonies -> house builds -> construction

We’ll find out soon if the bridge was built long and sturdy enough for all sectors to be restored v-like.

VIX down, 3 advancers for every four decliners on the NYSE today. Worse on the TSX with fewer on the upside. Market plop probably about done but likely some ringing of the ears in coming trading days. No surprise given the positive beats in US employment and wages today. There was a hidden headline in there about the Russian vaccine showing safety and promise as well. The drop shaved some fat off of tech and shifted overbought signals to neutral. Lets see what happens as the Robinhood crowd licks their wounds over the long weekend. As Garth points out here, the economic fundamentals are still bad and there will be turmoil surrounding the election but there will be an element of market FOMO as no one wants to be out of the market when the convincing headline on a vaccine lands. Be ready to sell the news on that as the vaccine won’t immediately solve all (or most) of the problems in the economy right now (or then, whenever then is). We are still a long way from normal.

#54 Dr. Oz on 09.04.20 at 5:04 pm

“But one is far more lethal”

I’m not an English major, but as far as I know, something can’t be more lethal. It’s kind of like being pregnant – you know, on or off.

Maybe what you meant to say is that one would lead to a very quick end and one will be a slow bleed until you’re finished?

You have something against zombies? – Garth

#55 Tarot card on 09.04.20 at 5:08 pm

To 31 eco capitalist
Thank you for commenting
Sounds like someone found my story had a cliff hanger ending, thank you!

since you asked and you did not believe the part about calling Turner Investments, the story
Continues…..
She whispered in her mother’s ear,
All my friends have one, can I skip the jeans and buy a cell phone.
I guess she made allot of money.

I cheer her on, lots of time in life to think about saving.
And if some of you agree that 13 year olds are winning,
Here’s another quick story,

I met a 13 year old and I asked what are you doing
He replied I am designing a business card,
Really? I cannot imagine a 13 year old self employed!

Turns out he will work painting, cutting grass any general labour jobs. Turns out he was working 20 to 20 hours a week all summer!
and he has a you tube channel.
Amazing!

And I met another 13 year old who had his own lawn maintenance business he whispered …..and I have an employee I pay him $1.00 he does not do much but I like him as a friend, then he proceeds to tell me he donates 10 percent of his earning to charity.

I think theres still hope for humanity.
Cheers
Everyone have a fantastic weekend.

#56 Post on 09.04.20 at 5:09 pm

“Nothing was removed. – Garth”

My apologies Garth. I didn’t mean your writing was anything resembling Fox News. But the comments in this section… sheesh!

#57 Ronaldo on 09.04.20 at 5:11 pm

#33 Stoph

You make fair points about the interest rate being higher in 2005 than it is now and additional costs of home ownership besides the mortgage. Your assumption that they only made a combined $80k a year, or $20/hr each is low.
————————————————————–
Those 5.99% rates were posted rates and few people paid that. Banks were handing out prime minus mortgages back then. Prime minus 1 to 2 percent in some cases. My own son purchased at that time in Alberta and got a variable prime minus 1.20 and just recently remortgaged and now paying 1.25%. The money saved over those years has been huge. What he pays in interest on his mortgage even with the taxes etc. is still far less than he would pay to rent the same home on large lot and detached double garage. Many families in Alberta were making $160m plus back then.

#58 FreeBird on 09.04.20 at 5:11 pm

#40 Linda on 09.04.20 at 4:34 pm
At the rate things are going, civil unrest may well morph into civil (race) war, except there will be nothing ‘civil’ about it.
———————
Seems like most here agree. I also agree with the belief the risk is high no matter who wins. I’m not a political expert but looks like either way things will get worse (for a while) before better. Food bank line ups are reportedly already pretty long. Hungry, un/der employed plus possibly homeless isn’t a good combination for too long.

#59 crowdedelevatorfartz on 09.04.20 at 5:16 pm

@#56 Post
“But the comments in this section… sheesh!”

+++

Sooooo I can assume a dinner invitation isn’t forth coming any time soon?

#60 The Woosh on 09.04.20 at 5:22 pm

#44 Guelph Guru on 09.04.20 at 4:45 pm
In Guelph, on the surface it’s business as usual. Houses are routinely selling over asking in a matter of days. But, I am sensing an undercurrent. It’s like the building is still standing, but the central column that holds it together is gone. And people for the first time have started noticing. Had been to our only mall in the city and under all the masks I could sense “fear”. I’ve never had this feeling in the last 10 years. Something fundamental has shifted underneath. I’ve learnt over years to pay attention to the subconscious and it’s telling me something is not right. We will soon know if it’s just a feeling.

—————————————

Nah…that’s not fear for the housing markets. Cinnabuns must have been out of cinnamon sticks. I’d be fearful too if that happened!!!

You sound like the guy at the dog park pumping Tesla stock.

#61 Asterix1 on 09.04.20 at 5:22 pm

The 20% raise in average prices in GTA is a joke, means nothing and is dangerous as it distorts the real carnage on the ground.

Dig into the numbers and reality is very different. Less condos sold, more expensive home sold, first time buyers diminished. Sales mix has changed!

Prices are falling across the board, not going up. Average price is a meaningless stat as the sales mix change produces unreliable stats.

RE and MSM love it. Makes for great headlines. Get the sheeps to go all FOMO and call their agent.

Go to HouseSigma, find those homes that sold back in 2017 and then again in the past months. Lots of lost money!

#62 baloney Sandwitch on 09.04.20 at 5:24 pm

Real whip-lash action in the market today. Looks like the froth is coming off the tech stocks. Value stocks are doing quite well and seemed to bouncing back.

#63 Ronaldo on 09.04.20 at 5:27 pm

#47 vanreal on 09.04.20 at 4:49 pm
Hey Stoph #32

I have to agree with the doubters on this one. Let’s say their mortgage was 500,000 15 years ago. They would have been making less money say 100,000 a year. They would have had some kids then because their kids are now teenagers plus they put away 300,000 in savings. I’m allowing for growth of their portfolio over the 15 years to 400,000. that means they had to find 800,000 over the last 15 years to pay off mortgage and build savings. And now that their mortgage is paid off they can’t find any money for savings??? Something is not right. Teenagers aren’t that much more expensive than younger kids. Their story smells!
————————————————————–
Chartered bank primes in 2005 were 4.25 to 5.00. Banks offered prime minus mortgages so they could have been paying 2.75 to 3.5%. The average price of a house in Toronto then was 360,000. Figure it out.

#64 Uncle Al Sinclair on 09.04.20 at 5:34 pm

#12 Ace Goodheart on 09.04.20 at 2:44 pm

The buyers are getting chewed, screwed and tattooed.
—————————————————————–

Look up caveat emptor and you will see the photos of the buyers of these two recent sales Ace…

#65 Flop... on 09.04.20 at 5:36 pm

It has been 4 years tomorrow since Roy Stacey passed.

Garth stated in his tribute post that Boom wrote 285 posts on here.

Felt like more to me…….but I hung on every word.

Not too sure how many posts I started with “Hey Boom” , just trying to draw him into the conversation of the day, if I had to guess, I would say somewhere between 50/60.

The April 20/21 2016 thread was most likely an anomaly as he posted 7 comments on that thread, while sociable , he wasn’t really one to waffle as he tried to make them all count.

Must have been having extra trouble with the patio door instillation that day, with a few cocktails on the side.

Amongst all the financial information, I actually missed the paragraph about the health scares, which we found out posthumously, via his obituary, like all of his writings on here to be true and sincere.

Garth, thanks for the archives, and your continued efforts to inform and entertain.

Here is one of his posts from that session after I told him I looked up to him…

M46BC
M64WI

//////////////////////////////////////////////
#130 BOOM! on 04.21.16 at 12:32 pm
#92 Flopper…

Me, as a role model? I’m flattered, but Flopper… aim HIGHER. I probably match more as a guy in a criminal line-up, than any role model.

As we say here when we lose control driving down an icy winter road, “here hold my beer, and watch this shit”…

Yes, married now for almost 42 years to same Miss Wonderful. We only once managed to hit 100K combined income. When we started saving / investing with a purpose & direction it was 1987. That year, our combined income maybe was $25-26 Grand? Not a thriller number!
It went up from there, not too fast either. It was my 2nd to the last year of work that we hit that magic number.

What we got was tight on spending for dumb consumer stuff. Shopped HARD for things like insurances, dropped whole life, for 20 year term policies that cost less than half as much but provide 10 times the coverage, figuring by the end of 20 years we could pay for burying each other, just by saving & investing the difference. Worked out that way, too.

Instead of buying a new car every 2-3 years, went with used cars kept the same length, or more. (I drove 50,000 miles+ a year back then). Killed off car payments a LONG time ago!

Best of all, we started putting away 10, then 12, then 15% of our gross earnings in our employers 401-K plans (your RRSP ideas). Took the tax deduction. When we had a ROTH (your TFSA) we tried to put after-tax money in there. We didn’t do as well the first few years, kid, bills, life gets in the way…you know how that goes.., but soon we were able to put $5,000 or 6,500 after age 50 max here into the tax free stuff, as well as do the 401-K.

No, it wasn’t perfect, we made errors, we didn’t get everything “perfect” who does?

I had a couple of health scares, coming within croaking off twice once at 44 and once at 58. Wife had a bout with cancer. We took a look and said: what are we doing?

Then I decided to retire at 60, she at 62. No debts by then, and $550k in investments. Use mostly Garth’s balanced approach, but I do use some individual dividend stocks -minority portion!!

Thought we can live on my small pension, social security, and earnings from investments. Remember, I handle the investments, too. With good wife’s suggestions she is no idiot. We make joint decisions, no bitching allowed!!

Well, I have now been retired 5 years, wife 2. Investments total $748K currently, and the plan thus far has been OK. No complaints, it still isn’t ‘perfect’ as nothing ever is, but close enough to smile.

Your mileages will vary.”

https://www.greaterfool.ca/2016/04/20/the-price-of-advice/

#66 cramar on 09.04.20 at 5:38 pm

Reality check indeed!

So if there are any parallels between the housing and stock markets, it’s that fear and greed are the principle human emotions. And plenty of really smart investors have said to sell when everyone else is greedy, and buy when everyone else is fearful—or “blood in the streets” as Baron Rothschild said.

Trouble is the cycles in the RE market are far longer than the cycles in the stock market. Now might be a perfect time to sell a house into this insanity. Like the dude yesterday who didn’t know whether he should take $2 mil on this TO digs and run for the hills.

#67 Uncle Al Sinclair on 09.04.20 at 5:39 pm

#63 Ronaldo on 09.04.20 at 5:27 pm
#47 vanreal on 09.04.20 at 4:49 pm
Hey Stoph #32

I have to agree with the doubters on this one. Let’s say their mortgage was 500,000 15 years ago. They would have been making less money say 100,000 a year. They would have had some kids then because their kids are now teenagers plus they put away 300,000 in savings. I’m allowing for growth of their portfolio over the 15 years to 400,000. that means they had to find 800,000 over the last 15 years to pay off mortgage and build savings. And now that their mortgage is paid off they can’t find any money for savings??? Something is not right. Teenagers aren’t that much more expensive than younger kids. Their story smells!
————————————————————–
Chartered bank primes in 2005 were 4.25 to 5.00. Banks offered prime minus mortgages so they could have been paying 2.75 to 3.5%. The average price of a house in Toronto then was 360,000. Figure it out.
—————————————————————

You are spot on with your answer Ronaldo. It is interesting to note that 2005 was the year the GTA Greenbelt, the biggest on the planet (not kidding) at 7500 sq kms was put in place. That essentially stopped supply in its tracks, combined with rock bottom interest rates and heavy demand has made the GTA was it is today.

https://en.wikipedia.org/wiki/Greenbelt_(Golden_Horseshoe)

#68 Jake on 09.04.20 at 5:42 pm

Someone I know just sold their parent’s house after mom and dad went into a nursing home. An old Scarborough bung complete with 1970’s Wayne’s World fake wood wall panelling. List 700k, sold for 1 mil. all thanks to cheapo rates.

Powell says low interest rates could last for years

https://www.cnbc.com/2020/09/04/powell-says-duration-of-low-interest-rates-will-be-measured-in-years.html

#69 Uncle Al Sinclair on 09.04.20 at 5:45 pm

#61 Asterix1 on 09.04.20 at 5:22 pm
The 20% raise in average prices in GTA is a joke, means nothing and is dangerous as it distorts the real carnage on the ground.

Dig into the numbers and reality is very different. Less condos sold, more expensive home sold, first time buyers diminished. Sales mix has changed!

Prices are falling across the board, not going up. Average price is a meaningless stat as the sales mix change produces unreliable stats.

RE and MSM love it. Makes for great headlines. Get the sheeps to go all FOMO and call their agent.

Go to HouseSigma, find those homes that sold back in 2017 and then again in the past months. Lots of lost money!
—————————————————————-
Ace can you believe this post above??? This is absurd. I defy you to show me a SFH sale in the GTA from 2017 that is selling for less today. Patent nonsense. Read Ace Goodheart’s posts and see what is actually happening. I know first hand from a sale in August that blew 2017 out of the water. A home on the same street, that was renovated to the nines in 2017 sold for $250k less than a home this August that had no renovations done in the since it was built 30 years ago.

#70 Uncle Al Sinclair on 09.04.20 at 5:48 pm

#57 Ronaldo on 09.04.20 at 5:11 pm
. Many families in Alberta were making $160m plus back then (2005)
—————————————————————–

$160 m(illion) or $150k?:)

#71 In Garth, Not God We Trust on 09.04.20 at 5:54 pm

#56 Post on 09.04.20 at 5:09 pm
“Nothing was removed. – Garth”

My apologies Garth. I didn’t mean your writing was anything resembling Fox News
——————————————————————

Glad you came to your senses and apologized to the Lunenberg sage, all knowing, all wise oracle from the east, lone voice of reason in the financial wasteland of Canada, financial prognosticator without equal, former Minister of National Revenues, honest and upright politician in a swamp of swindlers, soon to be recipient of the prestigious Order of Canada, NYTimes bestselling author, friend of canines across this great land, devoted and loving husband of 49 years, Harley riding badass and last but not least, all round jolly good fellow.

#72 Thornstein Veblen on 09.04.20 at 5:58 pm

#52 FreeBird on 09.04.20 at 5:00 pm
#6 looking up on 09.04.20 at 2:23 pm
Too many people are buying things they don’t need with money they haven’t earned yet to impress people they don’t like.

Highly appropriate right now.
————————-

Agreed. Can prob simplify: too many buying things they don’t need with credit. Your last line very true.
—————————————————————

Nice to know conspicuous consumption is alive and well in this great land!

“Conspicuous consumption is a term introduced by the Norwegian-American economist and sociologist Thorstein Veblen in his book “The Theory of the Leisure Class” published in 1899. The term refers to consumers who buy expensive items to display wealth and income rather than to cover the real needs of the consumer.”

#73 Uncle Al Sinclair on 09.04.20 at 6:02 pm

#51 Toronto on 09.04.20 at 4:59 pm
$950,000 for a detached home in Rogue Hill.
——————————————————————-

Is this Rogue Hill next to Rouge Hill? You would think a neighbourhood called Rogue Hill would turn buyers off…:)

#74 Ponzius Pilatus on 09.04.20 at 6:02 pm

The kids that where pumping up tech stocks on Robin Hood are going back to school.
Time for the pros to go in and clean up the mess.
Hope the kids are learning a valuable lesson.

#75 Filthy Fred on 09.04.20 at 6:04 pm

DELETED

#76 Contrarians to the Corner on 09.04.20 at 6:04 pm

Sorry, but there will be no mortgage deferral cliff and massive increase in supply in the Fall. Nobody will be listing their house in the Fall and Winter, and Spring 2021 will be exactly like this summer – record prices and sales.

Interest rates are the driver- and they will be low for years now, just like they have been since the first warnings of massive rate increases in rates in 2008. Canadians gorge on debt regardless of the economic conditions because leveraged real estate returns have absolutely far outweighed un-leveraged portfolio returns.

The uneducated, financially illiterate masses that jumped in with low interest rates any time since 2008 have made more money than the highest paid, smartest individual investing the difference between renting and buying into a B&D portfolio.

Those who rented over the same time frame, especially with a family, has been left behind in the hierarchy of net worth.

Putting an extra couple thousand a month into a B&D portfolio has generated peanut returns, and will never ever catch up to the real estate returns on the investments of the over-leveraged. The best means of getting ahead has been real estate. That will not change as the current government had demonstrated a willingness to fund all Canadians during the pandemic so that they do not ‘go without’- and that means homes – so that there will always been a federal backstop.

It has paid immensely well to hav have run with the masses rather than being a contrarian since 2008, with contrarian renters being relegated to the corners of ‘investing.’ That will not change anytime soon.

#77 Uncle Al Sinclair on 09.04.20 at 6:05 pm

#48 FreeBird on 09.04.20 at 4:52 pm
Whatever happened to buying a house with 3x (4 max) household income? That’s what we did and then didn’t max out prequalified mortgage amount to leave a buffer. I guess that’s now seen as crazy?
——————————————————————
That’s so 1970s!!! You are a nobody today if you don’t go for 10-20X household income and leave as a buffer a steady stream of valium…get with the program! Sheesh!!

#78 Uncle Al Sinclair on 09.04.20 at 6:08 pm

#47 vanreal on 09.04.20 at 4:49 pm
Hey Stoph #32

I have to agree with the doubters on this one. Let’s say their mortgage was 500,000 15 years ago
——————————————————————As Ronaldo pointed out, the prices have tripled in many parts of the GTA in the past 15 years. The doubters have this one wrong…

#79 TurnerNation on 09.04.20 at 6:15 pm

44 Guelph Guru that’s a scarily astute observation.
I truly believe they have submitted into fear and the New System.
People whose lives are consuming/consumers and upholding protocols. It’s the new global religion.
They structure their lives – and children’s – around this.
Last night I did my best no overhearing 15 minutes non stop of CV talk. Their greatest fear was of infecting others. See our elites convinced us we all are walking bio weapons. They also know someone who “tested positive” but is totally healthy.
You don’t say…

One single line conquered the world. One line.
It is “you can be sick and have no symptoms”.
Oh cool we used to call that being healthy.
Not in the new slave system. No free ride for anybody. There’s no escaping the submission.
You are no longer allowed to get sick; coversely you have no method of proving your health.
This is total control.

#80 Tony Mattea on 09.04.20 at 6:16 pm

I lost my highest paying full time job 15 years ago and had little savings compared to my $100,000+ income, just a $46,000 RRSP. I took my unemployment lived off that for 8 months or so and found another full time job with a 20% pay cut, roughly $21,000 a year less.

This really shocked me and scared me and since then I changed my ways and saved like crazy and managed to invest it in mostly equity mutual funds, ETF’s 80%, 10% bonds, 10% GIC’s to max out my RRSP’s, TFSA’s, some non-registered too all in all worth $950,000.

I got a laid off notice last week at 57 years old and sold it all last week because I did not want to lose $150,000 or more in gains just in the last 18 or so months. I see another 6% to 12% drop in coming many weeks, probably over the next 6 to 8 weeks and then will jump in again.

If i do not want to jump in the worse that can happen is I make not much interest, return maybe $18,000 to $20,000 a year for a 1 year or 2 years on this money collect my EI over 2020-2021 and live decently as I am totally debt free since 2014 and have modest living expenses.

#81 Looking up on 09.04.20 at 6:27 pm

I always felt a real estate correction would be short lived because of too many people on the sidelines with money waiting to get in.

At this rate of buying there will nobody left with money on the sidelines.

The buyers will run out. Once they do Oh Baby…..

#82 NoName on 09.04.20 at 6:28 pm

#63 Ronaldo on 09.04.20 at 5:27 pm
#47 vanreal on 09.04.20 at 4:49 pm
Hey Stoph #32

I have to agree with the doubters on this one. Let’s say their mortgage was 500,000 15 years ago. They would have been making less money say 100,000 a year. They would have had some kids then because their kids are now teenagers plus they put away 300,000 in savings. I’m allowing for growth of their portfolio over the 15 years to 400,000. that means they had to find 800,000 over the last 15 years to pay off mortgage and build savings. And now that their mortgage is paid off they can’t find any money for savings??? Something is not right. Teenagers aren’t that much more expensive than younger kids. Their story smells!
————————————————————–
Chartered bank primes in 2005 were 4.25 to 5.00. Banks offered prime minus mortgages so they could have been paying 2.75 to 3.5%. The average price of a house in Toronto then was 360,000. Figure it out.

5 yrs closed in 2005 was 4 and 1/2 to 4 and 3/4 at big banks tad cheaper with cu-s, in 2006 or 7 rates creep up i remember colleague of mine was complaining that he cant find decent lender below 6%…

#83 CL on 09.04.20 at 6:50 pm

Don’t you see yet? Canadian real estate is truly a disease in this country. There is no other reasonable way to explain it.

The money is coming from somewhere…banks….who operate under moral hazard because of CMHC et al. So, the lending continues. If all of the conditions that you keep listing are present, and they are, but yet the real estate market sets new pricing records at the same time, then there is obviously nothing that will stop it. So, party on.

#84 ImGonnaBeSick on 09.04.20 at 6:51 pm

I always find it embarrassing when people include their house in their networth…

#85 Ponzius Pilatus on 09.04.20 at 6:53 pm

#79 TN
One single line conquered the world. One line.
It is “you can be sick and have no symptoms”.
Oh cool we used to call that being healthy.
Not in the new slave system. No free ride for anybody. There’s no escaping the submission.
————–
My wife felt great, had no symptons.
Then she had routine physical. cancer.
Without the test, she would not be alive today.
Stop making an ass of yourself.

#86 Cottagers STAY THE HELL AWAY! on 09.04.20 at 6:53 pm

We don’t need any germ spreading, inbred southern hillbillies up here this weekend. Besides, it will be cold and rainy. Go to some GTA open houses instead and join the real estate fun there.

Just.

Stay.

Home.

#87 Rob M on 09.04.20 at 7:03 pm

“Almost 192,000 Americans have died of Covid, right? Check.” and #18

Actually, as of 6:28 PM EST, the number of U.S. COVID deaths reported = 187,618

source: https://coronavirus.jhu.edu/map.html

But, as predicted, should easily reach / exceed 200,000 by Nov. 3 (U.S. election day). What a disaster !

#88 Flop... on 09.04.20 at 7:04 pm

#22 ElGatoNerodeYVR on 09.04.20 at 3:15 pm

“I am not condoning it ,just trying to make sense of it. Short of a massive campaign to reeducate people in investing or a national forced savings plan (Australian superannuation model, the 5K at birth , CPP on steroids…) I don’t see the RE market becoming rational over the long term.”

///////////////////////////////

Real Estate is messed up in both countries.

I started paying into my superannuation fund in 1992, just a few years out out high school.

I continue to pay into it today, although never forced, as I left before the rules changed.

To say things have changed a lot the last couple of decades is a vast understatement.

People talk about helicopter parents, we’ve got helicopter governments.

I started investing so early (18) because the messaging coming out from the government of the time was, you better look after yourself because there are no guarantees we will be able to look after you in the future.

How does that square with what’s happening in both countries at the moment?

Money on tap.

First you were allowed to take 10k out of your Super, and then they allowed people to go back for another 10k.

That’s with being fed their version of CERB too.

Where is all this money going?

They want people to raid their retirement funds to prop up the real estate complex.

Municipal and State/Provinces taxes are counting on it.

If it does all come tumbling down they will lecture everyone how they were greedy, maybe after voting themselves a payrise, of course.

I’m not Player 1.

Stuff ‘Em.

I’m not raiding anything but the fridge…

M46BC

#89 Ronaldo on 09.04.20 at 7:07 pm

#70 Uncle Al Sinclair

Abreviations for thousand. In my railway days we used ‘M’.

https://writingexplained.org/english-abbreviations/thousand#:~:text=%E2%80%9CK%E2%80%9D%20is%20a%20more%20casual,was%20the%20symbol%20for%20thousand.

#90 Son of Ayn on 09.04.20 at 7:12 pm

When (if) the tide goes out, we will get to see who is swimming naked.

#91 Canuck on 09.04.20 at 7:14 pm

Almost 190,000 Americans have died of Covid, right? Check.
_______________________________________________

You mean 19O,000 Americans died with COVID, not from it. 10’s of thousands of people dies every year from complications of having the flu. Gov’t don’t even bother counting those numbers every year.I don’t recall you freaking out over that.
John Hopkins or not, America is the only country in the world that records COVID as the cause of death if it was possible, probable or assumed. No other country…
Dr Scott Jensen, a Minnesota Senator among others have confirmed that.

I can’t believe you help spread misinformation like that.

Do not come here to trivialize deaths. Six million infections is a Trump indictment. – Garth

#92 TurnerNation on 09.04.20 at 7:14 pm

On a lighter note I trust only “G-Anon” for my leaks.
Trust the Plan: Bikes, Babes and Balanced Portfolios.
It’s coming.

#93 joe montana on 09.04.20 at 7:26 pm

52% of young adults in the US are living with their parents. That’s the highest share since the Great Depression

https://www.cnn.com/2020/09/04/us/children-living-with-parents-pandemic-pew/index.html

#94 David Portnoy on 09.04.20 at 7:40 pm

#68 Jake on 09.04.20 at 5:42 pm

Mortgage rates may not be this low for as long as you think. The fed/BoC doesn’t directly control the yields that drive mortgage rates unless they begin yield curve control (that seems off the table at the moment). Rates are controlled by where central banks pin the overnight rate and by bond prices/demand. Compare with 2010 when the Fed controlled rate was near zero but the 10 year was ~3.5. 10yr today jumped 10 basis points despite a sizeable drop in the equity indexes. Up almost 20 bp in the past month. Note that long bond prices are quite high and likely to drop as the economy improves thus bringing the yields up. Thus, it’s not out of the question for a hint of rate pressure to play against RE prices among whatever unfolds with the various cliffs in the next six months.

Furthermore, the drop in bond prices ahead might be one reason Garth points people towards preferreds that currently pay a high yield, have room for capital growth relative to their pre-COVID prices, are less risky than junk bonds, and show fairly low volatility.

#95 Canuck on 09.04.20 at 7:40 pm

Do not come here to trivialize deaths. Six million infections is a Trump indictment. – Garth
_____________________________________________

I trivialize nothing. 6 Million infections(less than 2.5% of the population) pales to the 60 million for H1N1. Was everyone who died with H1N1 considered a Swine Flu death? Nope but they sure do with this pandemic. The number used by the media is more political than medical or factual.

I appreciate that COVID19 is more contagious than previous strains and that it speeds up the death of those who are in poor health but how this virus is measured compared to previous pandemics is ridiculous. Further, media now spreads more fear quoting over 400k presumed deaths before the end of the year.

Just watch how fast this drops off the news cycle after November 3rd… or whenever the US election is confirmed.

#96 Nonplused on 09.04.20 at 7:41 pm

#30 A J on 09.04.20 at 3:50 pm
#6 looking up

Perfect way to put it.

I have a friend who put his pontoon boat up for sale on Kijiji. He got inundated with offers for it. Someone offering double what it’s worth because boats have been so hard to come by this summer. People are out buying houses, boats, cottages, and RVs in the middle of the worst financial situation of our lifetimes. It’s absolutely insane and mind boggling.

——————————

That is what people do when inflation is in the air; buy all the things.

I mean look at all the money out there! (Except in Alberta.) CERB, no rent, no mortgage, skyrocketing room on the HELOC, zero down, no interest, 80 months to pay, what’s not to love? Plus look at all the money people are saving on airfare and dining out.

If zero interest rates are meant to stimulate the economy, the BoC is happy to see people buying all the things. The money wouldn’t “stimulate” if it just sat in a savings account. It has to circulate!

I think it was Bernanke who popularized the “paradox of savings” concept. Basically the (flawed) idea that if people save too much it slows economic growth. So get out there and buy something people!

#97 IM in C on 09.04.20 at 7:44 pm

My understanding is that 800,000 Canadian mortgages, presently furloughed and not paying, will have to start paying again in another month. That will tell if the real estate market obeys basic economics, or, if house prices are destined to go up forever

#98 FreeBird on 09.04.20 at 7:45 pm

#77 Uncle Al Sinclair on 09.04.20 at 6:05 pm
#48 FreeBird on 09.04.20 at 4:52 pm
Whatever happened to buying a house with 3x (4 max) household income? That’s what we did and then didn’t max out prequalified mortgage amount to leave a buffer. I guess that’s now seen as crazy?
——————————————————————
That’s so 1970s!!! You are a nobody today if you don’t go for 10-20X household income and leave as a buffer a steady stream of valium…get with the program! Sheesh!!

——————-
Agreed. Funny thing is that was 2011 so we we’re way out of touch.

#99 Nonplused on 09.04.20 at 7:49 pm

#33 Stoph on 09.04.20 at 4:06 pm

“They had help, in a big way… somehow.”

Who cares? It is bad form to be envious of someone’s good fortune. It even made the top ten commandments.

“You shall not covet your neighbor’s house. You shall not covet your neighbor’s wife, or his male or female servant, his ox or donkey, or anything that belongs to your neighbor.”

— Exodus 20:17

#100 Ronaldo on 09.04.20 at 7:50 pm

#95 Canuck

Just watch how fast this drops off the news cycle after November 3rd… or whenever the US election is confirmed.
—————————————————————–
Kinda like ‘Climate Change’ got dropped from the news cycle after the election in 2016. Can’t wait to see what they come up with after November 3rd.

#101 Nonplused on 09.04.20 at 8:00 pm

#40 Linda on 09.04.20 at 4:34 pm

“Ms. Harris is a much more appealing POTUS replacement than Mr. Pence. ”

Well we will have to disagree. Ms. Harris has a terrible track record as a DA in California and has said some truly alarming things over the years, whereas Pence seems squeaky clean. I will agree though this election does seem to be between the 2 VP’s moeso than perhaps any other has been. If so, I say Trump-Pence takes it, Harris didn’t have much support when she was running against Biden for top billing. But we shall see some time in December when the last of the mail in ballots gets counted. Or perhaps in March when the Supreme Court decides who won. Next president of the USA: Nancy Pelosi, if only for a short while.

#102 Nonplused on 09.04.20 at 8:11 pm

#45 Nobody on 09.04.20 at 4:46 pm
misogynist you said? Untrue
Check out women for Trump…
Blacks for Trump…
Latinos for Trump…

———————-

Some people vote for the policy not the person. While I think Garth’s description of Trump is a little over the top, the man is a whirl storm of controversy, no doubt about that. But prior to covid Trump’s economy and prison reforms were helping certain groups no matter what they thought about each other personally. His support for the wall, the armed forces, economic growth, jobs, and now most recently law and order are wildly popular with many people even if they have to hold their nose when voting for him. But sometimes it takes an a$$hole to get things done.

#103 Nonplused on 09.04.20 at 8:23 pm

#47 vanreal on 09.04.20 at 4:49 pm
Hey Stoph #32

I have to agree with the doubters on this one. Let’s say their mortgage was 500,000 15 years ago. They would have been making less money say 100,000 a year. They would have had some kids then because their kids are now teenagers plus they put away 300,000 in savings. I’m allowing for growth of their portfolio over the 15 years to 400,000. that means they had to find 800,000 over the last 15 years to pay off mortgage and build savings. And now that their mortgage is paid off they can’t find any money for savings??? Something is not right. Teenagers aren’t that much more expensive than younger kids. Their story smells!

——————————–

Again, who cares? You people realise that if you don’t stop coveting you are going to hell, right?

A lot of people are down on the top ten commandments and indeed many of the other commandments (there are about 100 of them), maybe you don’t believe in Dog, maybe you think they are outdated, maybe you think you have an exception because you are special. But the fact of the matter is they were (all 100 of them) designed to prevent social strife. And there is good reason “thou shalt not covet” made the top ten. That way leads to crime, socialism, poverty and death. And that is just in the here and now.

#104 willworkforpickles on 09.04.20 at 8:24 pm

As many as 3% of all residential mortgages in Canada could wind up being foreclosed on late spring early summer 2021.
The four month guaranteed lifetime deferral for those who qualify for it will mostly be used and gone by Jan. 2021
First time buyers…gone, no more a dominant factor.
Move up buyers…diminished, languishing effect on buying pressure.
Who’s left…a large cohort of buyers who ALWAYS wait to buy with cash for pennies on the dollar.

#105 Nonplused on 09.04.20 at 8:32 pm

#54 Dr. Oz on 09.04.20 at 5:04 pm
“But one is far more lethal”

I’m not an English major, but as far as I know, something can’t be more lethal. It’s kind of like being pregnant – you know, on or off.

———————————–

Fentanyl is more lethal than alcohol. Guns are more lethal than knives. I’m not an English major either but I think Garth’s allusion was to how fast you can be wiped out and whether you can recover from your wounds. If you don’t use margin, the worst a stock market crash can do to your B&D portfolio is set you back 40%. Going underwater on a mortgage can be far worse than that.

#106 J.T.Baptist on 09.04.20 at 8:40 pm

DELETED

#107 Nonplused on 09.04.20 at 8:44 pm

“Six million infections is a Trump indictment. – Garth”

Cheese and crackers, when will this end? When Trump shut down international air travel he was called, what else, a “racist” even by Biden. He’s let Fauci call the shots. And the Federal government can mostly only make recommendations. The way the discourse has gone so vitriol if Trump walked across the river people would say “he can’t swim!”

No vitriol in my statement. This is not the finest hour for the most advanced economy in the world. If Trump stopped being political, mocking Biden for wearing a mask, things might improve. At least that’s what the public health guys say. – Garth

#108 Uncle Al Sinclair on 09.04.20 at 8:45 pm

#89 Ronaldo on 09.04.20 at 7:07 pm
#70 Uncle Al Sinclair

Abreviations for thousand. In my railway days we used ‘M’.
—————————————————————-

Grazias for the clarification senor!

#109 DON on 09.04.20 at 8:46 pm

Average cdnian owes appro 74.5k, up 2.2% from last year.

EQUIFAX September 3.

#110 TurnerNation on 09.04.20 at 8:49 pm

#85 Ponzius Pilatus get back to us when you’re standing in -15c windchill outside a store waiting to buy food in a few months due to ‘distancing’. When you no longer are allowed travel without your new COV-ID pass and DNA swab. Get back to us after your Zoom family Christmas dinner. After a ton more small businesses fold this winter. All because healthy people no longer have the right to assembly.
Because ‘you might be sick without symptoms’.
What’s growning inside of you is a hatred of freedoms. I get it.
My sympathies to the diagnosis. Due to the lockdowns I hear many could not even access that level of care and early testing. Doctors would not see them.

#111 Uncle Al Sinclair on 09.04.20 at 8:51 pm

#84 ImGonnaBeSick on 09.04.20 at 6:51 pm
I always find it embarrassing when people include their house in their networth…
——————————————————————–
Is it embarrassing to you when they sell their principal residence in the GTA for example and pocket $2 million capital gains free?

#112 45north on 09.04.20 at 8:59 pm

The disconnect between what people perceive and what exists is huge. It’s unprecedented that in a recession, amid job and employer carnage and in the grip of a public health crisis, battling a virus with no cure, that FOMO would foment.

Some people have come here to slough off warnings about a real estate bubble, saying if it exists, stocks must be there, too.

Maybe so. But one is far more lethal.

There is a disconnect between what is happening and the economy. People have bid house prices up 20% but there are two sources who say house prices should decline. The first is a Bank of Canada study that says with this level of economic decline, house prices should drop 40% and the second is Evan Siddall, Head of CMHC who said prices could drop 20%.

There’s going to be a sudden and drastic drop such as we have never seen. A drop more sudden and drastic than the drop the US experienced during the Great Financial Crisis. How could it not?

#113 Turner Nation's Psychiatrist on 09.04.20 at 9:01 pm

#85 Ponzius Pilatus on 09.04.20 at 6:53 pm
#79 TN
One single line conquered the world. One line.
It is “you can be sick and have no symptoms”.
Oh cool we used to call that being healthy.
Not in the new slave system. No free ride for anybody. There’s no escaping the submission.
————–
My wife felt great, had no symptons.
Then she had routine physical. cancer.
Without the test, she would not be alive today.
Stop making an ass of yourself.
—————————————————————
Good response and very true. TN is a tinfoil hat nutjob…he needs better meds and less watching of UTube conspiracy whackos…

#114 45north on 09.04.20 at 9:01 pm

You Trump guys are also amusing. Thanks for dropping by. – Garth

guilty as charged

#115 45north on 09.04.20 at 9:02 pm

Guelph Guru

In Guelph, on the surface it’s business as usual. Houses are routinely selling over asking in a matter of days. But, I am sensing an undercurrent. It’s like the building is still standing, but the central column that holds it together is gone. And people for the first time have started noticing. Had been to our only mall in the city and under all the masks I could sense “fear”. I’ve never had this feeling in the last 10 years. Something fundamental has shifted underneath. I’ve learnt over years to pay attention to the subconscious and it’s telling me something is not right. We will soon know if it’s just a feeling.

that got my attention

#116 45north on 09.04.20 at 9:03 pm

Toronto

$950,000 for a detached home in Rogue Hill.

pretty funny

#117 willworkforpickles on 09.04.20 at 9:18 pm

#12 Ace
What if it were a bunkie beside the playboy mansion?

#118 MatterOfFacts on 09.04.20 at 9:22 pm

#69 Uncle Al Sinclair
—————————————————————-
Ace can you believe this post above??? This is absurd. I defy you to show me a SFH sale in the GTA from 2017 that is selling for less today. Patent nonsense. Read Ace Goodheart’s posts and see what is actually happening. I know first hand from a sale in August that blew 2017 out of the water. A home on the same street, that was renovated to the nines in 2017 sold for $250k less than a home this August that had no renovations done in the since it was built 30 years ago.
———————————————————
HouseSigma has a category dedicated to houses that are “sold below bought”. Fair number of properties selling for less than last purchased in 2017. These are the same property so there is no need to compare it to the house down the road. This category includes nice houses in nice neighborhoods. So stop popping the housing viagara, take off the blinders and look at facts. Not everyone wins in real estate even in today’s crazy market.

#119 tccontrarian on 09.04.20 at 9:23 pm

“This week stocks laid an egg. The pros weren’t much surprised.”
– – – – – –

Yes, a ‘golden egg’ if you were piling in the shorts.

The pros were actually ‘telegraphing’ it – as the VIX was putting in higher lows since early August.
Tesla down 20% since Tuesday this week!

We’ll probably get a bit of a bounce next week or two, but come October-December, only cash and short positions are the way to play it – in my opinion of course.

People getting into the RE market now – especially with high leverage, are going to be … pooched in a big way.
Rates are not going lower, and the economy won’t be recovering in a significant way for quite some time. A perfect storm for lower prices. Stagflation comes to mind.
Happy Labouring Day Dawgs!

tcc

#120 zoey on 09.04.20 at 9:28 pm

The truth is on house sigma …the RE market is not what they lead you to believe. RE agents in Canada are a bunch of crooks.

#121 IHCTD9 on 09.04.20 at 9:46 pm

#76 Contrarians to the Corner on 09.04.20 at 6:04 pm.

The uneducated, financially illiterate masses that jumped in with low interest rates any time since 2008 have made more money than the highest paid, smartest individual investing the difference between renting and buying into a B&D portfolio.
—-

In the GTA and GVRD – that’s it. Like on the entire planet. And only if they sold.

The metro boomers and Gen X’ers are the only cohort that likely made any real bank. They were gifted with the entire run on houses since the 350k they paid 20 years ago. It remains to be seen yet how everyone else will do.

I know for me, the portfolio is going to win the long game – absolutely no question about it. My non-gta sfd won’t be keeping up. Frankly, I don’t think the Metro re buyers of 2020 will do any better on a 20-30 year bet, and if they do you’ll probably find a Big Mac costs 30.00…

#122 ImGonnaBeSick on 09.04.20 at 10:03 pm

#111 Uncle Al Sinclair on 09.04.20 at 8:51 pm
#84 ImGonnaBeSick on 09.04.20 at 6:51 pm
I always find it embarrassing when people include their house in their networth…
——————————————————————–
Is it embarrassing to you when they sell their principal residence in the GTA for example and pocket $2 million capital gains free?

—-

Nope. Then it’s not embarrassing. But most people die in their houses… So…

#123 Bonobo on 09.04.20 at 10:11 pm

Not to worry Mr Sockboy has us all covered. We will become the next Venezuela. Free medical and education for all. What’s that? You have to line up for bread and a bag of rice? You’re such a complainer!

#124 WUL on 09.04.20 at 10:40 pm

Hi Garth and Kennel Pals,

Can’t resist. Re $1M = $1000.

Didn’t any of you play “Mille Bornes” as a youngster? I did as a child ~ 55 years ago. With COVID lockdown and isolation and angry kids, you might want to try it.

A hall of fame card game. From Wiki:

Mille Bornes (/ˌmɪl ˈbɔːrn/; French for a thousand milestones, referring to the distance markers on many French roads) is a French designer card game. Mille Bornes is listed in the GAMES Magazine Hall of Fame.

Also, from an Interweb dictionary:

“mille euros a thousand euros ⧫ one thousand euros”.

Je suis bilingue. Hence, 1M = 1000. 1MM = 1,000,000.

No biggie really.

Hi FLOP!

M64Ft.Mac

#125 crowdedelevatorfartz on 09.04.20 at 11:04 pm

[email protected]#85 Ponzius Pilatus

While I agreed with you that Cancer is a kick in the teeth.

TN isnt talking about Cancer.
He’s talking about Govt control ….using Covid…. a Flu that ….(in most cases 99%) …..is….just….the….. flu.

But, govts all over the world love the State of Fear that it creates.
You, of all people, should realize, how a govt that takes control of the Media…..controls the message.

#126 the Jaguar on 09.04.20 at 11:20 pm

@#44 Guelph Guru on 09.04.20 at 4:45 pm
‘Something fundamental has shifted underneath. I’ve learnt over years to pay attention to the subconscious and it’s telling me something is not right. ‘ +++

Certain readers of this blog will know this to be akin to a passage in ‘Fate is the Hunter’. Ernest K. Gann.

Not everyone is gifted with higher levels of intuition, but an extremely valuable gift it is, and it can be developed to higher levels. Some have it in spades. It can also be a burden, but one has to overlook that.
Well, enough said.

#127 Leo Trollstoy on 09.04.20 at 11:24 pm

I want to experience the UBI that JT is rolling out

#128 Nonplused on 09.05.20 at 12:01 am

“No vitriol in my statement. This is not the finest hour for the most advanced economy in the world. If Trump stopped being political, mocking Biden for wearing a mask, things might improve. At least that’s what the public health guys say. – Garth”

I was referring to the way folks on both sides of the political spectrum seem to be losing their manners. I mean Trump has his flaws for sure but can we really be sure he had that much effect on covid? Is he a KKK supporting racist? I mean maybe but that isn’t the sort of thing you say to people to their faces. Not if they are bigger than you anyway.

#129 Kevin BC on 09.05.20 at 12:24 am

Garth, it’s time for a proper commenting system. Some of these comments can’t be true, it’s becoming a place to put up misinformation and an old school commenting system like this, where each article gets 200-300 comments, is ripe for abuse. Please for heaven’s sake.

#130 Km on 09.05.20 at 12:26 am

Forget the markets laying a few let’s see the puppies this momma is having.

#131 CalgaryCarGuy on 09.05.20 at 12:28 am

Re #31 by Ecocapitalist
@ #9 Tarot Card

But did she buy the jeans?
—————————————————————–

Jeez I already figured that was two minutes of my life I’ll never get back and you just added to it. But your comment made me laugh and made it all worthwhile.

#132 Fortune500 on 09.05.20 at 12:44 am

The difference between stocks and the housing market in Canada is that real estate only goes up. And is protected at all cost by the government. Let’s face it. Those who are on the sidelines have lost. And the stock market has failed to keep up with Canadian real estate.

#133 The first Joel on 09.05.20 at 12:49 am

Thanks Flop for the in memorial to Boom. I too have missed his posts as well as select others who have simply gone away. You are a kind soul to hold his memory so dear. Best regards Joel

#134 Linda on 09.05.20 at 1:00 am

#101 ‘Non’ – this may be apocryphal, but apparently Mr. Pence was chosen as VP because – ‘he made Trump look good in comparison’. Scary thought, that.

#135 NSNG on 09.05.20 at 2:03 am

It’s not just Alberta. BC voted for many Liberals but that does not matter to them.

Dan Fumano: ‘Numbers don’t lie’: B.C. gets just 0.5 % of federal housing program funds

$7 million for B.C., $1.4 billion for Ontario: Lopsided grants from national housing program have officials here fuming

https://vancouversun.com/news/local-news/dan-fumano-b-c-receives-less-than-one-per-cent-of-federal-housing-funding/wcm/fad61ad6-3229-4c4e-80ca-0dcca5e1420e/

#136 Nonplused on 09.05.20 at 3:05 am

#146 DON on 09.04.20 at 11:21 am
“If you are WFH on a computer. It can track you.”

And that would be different from a WFW computer in what way?

#137 Charlie Cooper on 09.05.20 at 4:39 am

DELETED

#138 Do we have all the facts on 09.05.20 at 7:17 am

Assets that begin depreciating in value from the moment of purchase are not referred to as investments. Assets that have a history of appreciating in value become viewed as investment.

When you purchase an automobile, motor home, boat, appliance, clothing, etc you realize that the intrinsic value of these purchases will depreciate over time. It is possible that the passage of time or rarity of an asset will create a demand that results in an appreciation in value. At that point in time the purchase of an appreciating asset becomes viewed as an investment.

Millions of professionals around the world earn their living by promoting a range of assets as investments by quoting the rate of appreciation over a specific period of time. Since there is a limited amount of investment capital available the assets that offer the best rates of return usually attract investment.

What happened in the case of housing however was a decision by governments and their central banks to stimulate the demand for housing through lower interest rates, mortgage guarantees, longer amortization periods, the purchases of mortgage backed securities, more flexible credit terms, grants for first time home buyers, increasing immigration targets by 35%, etc. etc.

All this stimulation siphoned billions of dollars of capital that could have been invested to expand the Canadian economy into the purchase of housing at vastly inflated prices. This might not have been so alarming if our governments had created incentives to encourage the recipients of billions of dollars of profit to invest in expansion of the Canadian economy. Sadly the only chatter coming out of Ottawa these days is to go after investors that are actually investing in economic growth.

The focus on guarantees for the housing sector must be shifted to guarantees for investment related to growth of the Canadian economy before it is too late. Without economic expansion the whole house of cards including the housing sector will come tumbling down.

Generating hundreds of thousands of dollars of profits for homeowners who decide to move to sunnier climes will not benefit Canada one little bit.

Just saying!!

#139 millmech on 09.05.20 at 8:19 am

#129 Kevin BC
Just take a lot of these articles with a grain of salt, start at the end, find out the author for their perspective and then read the article. Some posters here have great info but you have to separate the wheat from the chaff
As for people posting how renters have lost out are incorrect, since my increase in net worth every year covers 181 months of rent(wow just ran the numbers).
I would buy, if housing drops by 40%, if it doe not I will just keep making bank.
I have no need to impress people by being up to my eyes in debt and letting my employer have me by the balls(financially). It is a great feeling not to beholden to anyone and I can leave my job in a moment and not have to stress about finances anymore, priceless.

#140 Justin S on 09.05.20 at 8:25 am

#84 – why embarrassing? My home cost $611k and is now worth $1.3 million in Leslieville. How is that not part of my net wealth?

It is worth $1.3 million (less commission) if you sell it. Until then the book value is $611,000 (less the mortgage). – Garth

#141 Justin S on 09.05.20 at 8:56 am

Yes – book value $611k. FMV $1.3. Mortgage of $400k. On a statement of net worth though, my net value is $900k ($1.3 FMV less debt of $400 K). What’s embarrassing about that?

#142 Dharma Bum on 09.05.20 at 9:23 am

Prediction:

In 15 years, your B&D portfolio will be worth a lot more than it is today.

In 15 years, your house will cost a lot more than it does today.

Hang in there, young dogs.

Take the long view.

Ignore the blips.

Stay the course.

#143 Dharma Bum on 09.05.20 at 9:31 am

#138 Do We Have All the Facts

Sadly the only chatter coming out of Ottawa these days is to go after investors that are actually investing in economic growth.
——————————————————————–

Sadly, that seems to be the only language that Trudeau the Communist pandering virtue signalling identity politics flouting fancy socks wearing pseudo feminist ex part time drama teaching lying cover up artist unethical incompetent understands.

#144 Rick Zani on 09.05.20 at 11:06 am

This whole talk about UBI, CERB, Guaranteed annual income is about giving peanuts and making it sound like they are giving Canadians the world. It is a really more junk policies from the Trudeau, Freeland Federal Liberals. Tell your useless Liberal, NDP, Green, Labour, democrat part and leaders to really pay you off for your vote. Canadians are getting paid off with peanuts.

You should all get $1 million dollars all in one payment and then you can wipe your bum with it as it will be completely worthless in value. You can’t buy almost anything with it. You can’t hide from reality and math. Maximo Alvarez said it best, communists, socialists all they guarantee is poverty.

#145 Eileen on 09.05.20 at 11:51 am

uh… is it FOMO and froth … OR is is the NASDAQ whale called Softbank, that is doing unscrupulous plays and driving up the stock market, only to unload it’s shares and make a profit?

Softbank’s behavior of buying up OTM calls for billions of dollars, forcing the folks holding these calls to then buy up the shares, further causing the stock prices to go up…. should be looked at closer.

It’s all over the news. Softbank was stoking the stock market rally. The lessons of players such as Softbank doing what they did to cause the volatility in the stock market and rise in stocks should be covered by your blog. Not FOMO and froth.

You should be writing about how markets can be manipulated and how really in all investments, one should take profits when they can… and to rebalance portfolios etc etc.

The real source of market instability was not little investors getting greedy. It was Softbank who bought BILLIONS in stock options to drive up the market itself.

#146 Incredible on 09.05.20 at 3:35 pm

Guelph Guru on 09.04.20 at 4:45 pm
In Guelph, on the surface it’s business as usual. Houses are routinely selling over asking in a matter of days. But, I am sensing an undercurrent. It’s like the building is still standing, but the central column that holds it together is gone. And people for the first time have started noticing. Had been to our only mall in the city and under all the masks I could sense “fear”. I’ve never had this feeling in the last 10 years. Something fundamental has shifted underneath. I’ve learnt over years to pay attention to the subconscious and it’s telling me something is not right. We will soon know if it’s just a feeling.
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It is just a feeling, reading this blog since 2008 and still I am waiting for a real estate crash! :(

#147 Freya Nielsen on 09.05.20 at 6:42 pm

#95 Canuck Couldn’t agree more.