Tiffeconomics

“Tearing my hair out here,” says Brenda, who needs to get a life. “Your blog keeps talking about stupid cheap mortgages at 1.5%, but the best my bank (the green one) will give me is 1.81%. So what should I be doing because my loan comes due in a few months? Will I miss this chance?”

Calm down, lady. Get a grip. Go for a walk. Sheesh. Society’s in the middle of a global pandemic with Depression-era job loss and you’re worried about a third of one per cent?  First World problems.

To be clear, here’s the difference between those rates on a $300,000 mortgage with a five-year term and a 25-year amortization: $44 a month, or $1.46 per day. That’s $526 a year. If that makes a consequential impact on your cash, B, you shouldn’t own a house. Period.

Mortgage rates are both cheap and all over the map. The banks still have posted rates of more than 4.5% for five-year loans, but will generally slash that to 2.3% if you can still breathe. Good customers (flatter [email protected] and buy some of her dodgy mutual funds) will get something between 1.8% and two. Sometimes this will dip to the 1.7% range. To do better you’ll have to visit a mortgage broker (slicked-back hair, loud jacket, big rings, Jeep, curvy secretary) but the borrowing may not come with sexy stuff like pre-payment privileges (…but why would you pay it off?).

Some people think rates will never go up. Central banker boss Tiff Macklem has fed that narrative by pledging to keep the cost of money low until Covid is history. He did it again Wednesday. This is not necessarily good news, since low rates = bad economy. Sooner or later bad economy = crappy real estate market.

Said the Tiffer:

The Bank continues to expect this strong reopening phase to be followed by a protracted and uneven recuperation phase, which will be heavily reliant on policy support. The pace of the recovery remains highly dependent on the path of the COVID-19 pandemic and the evolution of social distancing measures required to contain its spread.

So when the economy reopens, a vaccine arrives and normal creeps back, the cost of money will rise. Not a lot and not fast. But when people stress out over a few basis points and obviously are cash-strapped, imagine when happens when mortgages return to 3%, 4% and then 5%. And, yes, it will happen. If it doesn’t you have bigger things to worry about. We will not survive the next downturn if rates are still in the ditch.

The best strategy?

Lock in, of course.

Do not be seduced by the slightly-tastier rate on a term shorter than five years. Eschew variable. Consider a decade-long loan (now as cheap as 2.55%) if you don’t plan on moving for at least five years (the break fee is big).

And what about aggressively paying down a mortgage with a rate that’s less than two per cent? Does it make sense to double up on payments or throw big chunks of cash at the loan every anniversary?

Nope. Probably not. Despite what your debt-hating spouse wants. After all, you’re using precious after-tax cash to pay down a loan with a rate about equal to inflation on an asset that’s hopefully increasing at a pace faster than the annual cost of living. Meanwhile financial portfolios have averaged a 7% return over the last decade and popped more than 15% in 2019. Even in 2020, the year everything screwed up, returns will likely surpass the cost of that home loan. So over five years you’d be better to invest the dough in balanced ETFs, see it grow, then plunk it against the mortgage principal upon renewal. End result – greater net worth. Happy spouse.

Now look closely at what the central bank just said:

  • “The rebound in the United States has been stronger than expected.”
  • “As the economy reopens, the bounce-back in activity in the third quarter looks to be faster than anticipated in July.”
  • “Economic activity has been supported by government programs to replace incomes and subsidize wages. Core funding markets are functioning well, and this has led to a decline in the use of the Bank’s short-term liquidity programs. Monetary policy is working to support household spending and business investment by making borrowing more affordable.”
  • “Household spending rebounded sharply over the summer, with stronger-than-expected goods consumption and housing activity largely reflecting pent-up demand. There has also been a large but uneven rebound in employment.”

Exports are still iffy. Business confidence subdued. Recovery, the bank says, will be “slow and choppy.” But wait. Core inflation is now between 1.3% and 1.9% – and the point of ignition for interest rates is not far off. When will the cost of money start to rise? The bank said Wednesday it “will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved.”

Dunno about you, but it seems to me the trip from 1.9% to 2% is probably not a long one. Maybe it’ll take a year. Or two. Depends on Covid. But pandemics are temporary, and this one’s already past the curve.

Do not assume cheap money will stay forever. Nor that there’s still a downside for rates. Real estate that’s been inflated by monetary policy can be deflated just as fast.  Lock ‘er up. And if you’re losing sleep over a few basis points, you may not survive what’s surely coming. Time to find a greater fool.

144 comments ↓

#1 YouKnowWho on 09.09.20 at 2:05 pm

Appropriate, since TIFF is starting soon!

There is a comedy premiering:
THE MARKET IS AS FIXED AS IT GETS

#2 Captain Uppa on 09.09.20 at 2:32 pm

“Nope. Probably not. Despite what your debt-hating spouse wants.”

————————

Truer words have never been spoken. I really try hard to explain this, Garth.

#3 Montana Bob on 09.09.20 at 2:33 pm

Well, BoC pledged to low interest rate for a long time. There is no doubt. Because, if they increase rate, it will be a disaster for a housing market, which everyone uses it to pig out; government, banks, construction workers, lawyers, agents…
However, don’t forget that Japan was in similar situation, they kept the rates low. Even doing so, real estate experienced more than 15 years of bubble deflating. Japan has different industry, different mentality and different saving rate and spending habits.
Even rates will be low, people here cannot find money to service mortgages. Thus, it will be a slow deflating.
Cheers

#4 Gramps on 09.09.20 at 2:33 pm

“Lock ‘er up”
Lol
Reminds me of a campaign slogan

#5 Doug t on 09.09.20 at 2:35 pm

This winter will be interesting – imagine if you get a regular cold or flu and your mind starts freaking out “ OMG I GOT THE COVID” – people in grocery stores coughing from the cold and the masses rubber necking at them with the evil eye ready to call you out as a CARRIER – 2 lockdown would devastate an economy already in the gutter – plus send many to the loonie bin. I don’t know how we as a society are going get our collective sh*t together and bring some sanity and common sense back to our daily lives – schools are Petri dishes so expect the expected on that front – oh well just gotta watch the crazy train speed along and hope we all don’t lose our minds :)

#6 Ankush on 09.09.20 at 2:41 pm

Garth , I dont know what, but when I use your analogy among friends here in B-Town , they think i have smoked some really good stuff. Their answer to me is : Every flight landing @YYZ from the subcontinent , the traveller want to make their home in Brampton or Mississauga./ With the increased skilled labor processing time , all the engineers who were even working in the USA , want to come and settle down here in GTA. So the question I get asked : Tell me bud how is the price going to go down when demand is going to be there.?Now and looking into their crystal balls , in the next 5 years. I just grabbed my single malt 12 yr scotch and….Exit Stage Left..

Educate me Garth ..how do I respond back.????

#7 ElGatoNerodeYVR on 09.09.20 at 2:47 pm

To be fair sometimes it is not about what you can afford but about “why leave money on the table ” for those rich bankers to blow when you can take a nice daytrip with an overnight to Whitsler for that 500$ /year ,or a new premium phone every years a.s.o . Not like the bank will give us any money back ,ever.

#8 Ankush on 09.09.20 at 2:47 pm

And how does one get away from all of this :

https://forums.redflagdeals.com/hsbc-hsbc-fixed-rates-1-94-2-year-1-76-5-yr-insured-1-86-5-yr-quick-close-cashback-2358928/

#9 TurnerNation on 09.09.20 at 2:56 pm

What’s tacit here, perhaps obiter dictum, is the comparison of size: 1.5% versus 1.81%.
When you were a kid and a sibling got a larger slice of the pie, what ensued? This blog is not mum, more of an agony aunt/uncle.

With friends how humiliating must it be, paying more for your mort-gage. “Oh we just traded up, 2.2m by the ravine for only 1.6%”. How it goes.
I’m relating this to the many Branch Covidans I’ve met. But one tool is theirs, Humiliation. That’s their ruse.
One educated one said to me point blank “Do you want old people to die?” (If I questioned the New System)

See this new system requires a sacrifice from EVERYONE. You might have had to give up your employment/small business, or your smile (wear that Freedom Mask), your freedom of movement (stand 6-6-6- feet apart on your mark, humiliated as errant kids), your freedom of travel; freedom of association. You might have given up some friends or family over their CV goose stepping ways. Perhaps some are up to their eyeballs in new debt. Your children gave up part of their childhood normalcy. In short **nobody** gets a free ride in the New System. You must sacrifice something.
Same old same old, confess your CV thought crimes:
https://en.wikipedia.org/wiki/Struggle_session
“A struggle session was a form of public humiliation and torture that was used by the Chinese Communist Party (CCP) at various times in the Mao era, particularly years immediately before and after the establishment of the People’s Republic of China (PRC) and during the Cultural Revolution. The aim of a struggle session was to shape public opinion and humiliate, persecute, or execute political rivals and those deemed class enemies.[1]”

— By the way scanning the comments on this CTV Utube about Ontario ‘s new dictatorship rules, all are slamming.
https://www.youtube.com/watch?v=3OsFojBw1Ug

#10 Dave on 09.09.20 at 2:59 pm

Short of a nuclear bomb going off….the real estate boards have infinite amount of money to buy the press/newspapers to keep people buying.
Common sense says that Covid should have killed real estate….but no

#11 Overheardyou on 09.09.20 at 3:06 pm

What puzzles me is that there were 10 years of economic growth and the rates were still low, so low that there was barely any room to cut. What if, COVID was the first shock then the subsequent unemployment resulting from COVID/Societal fears becomes the second shock? To which there will be no more bullets to offer (rates won’t rise fast enough). What then?

#12 Cto on 09.09.20 at 3:06 pm

Rates going up! Rates going up!
…Rates going nowhere!….
Not because of inflation…
I have been watching since 2008, clearly there has been inflation, maybe just from the roof we have over our heads….
CPI and CBs all a smoke and mirrors game to keep house prices rising indefinetly. There is no extreem that they will not take.
They will ruin everyone else, just to float housing.
This is their only strategy now in the too big to fail housing economy. So what are they going to do next?
Maybe:
Print a trillion dollars, and then some…(MMF?
Immigrate a million wealthy people?
Creat massive debt jubalee’s?
After all this, since 2008,… what else could one think?

#13 willworkforpickles on 09.09.20 at 3:06 pm

Message for Brenda…try these people for the 1.5 rate you’re after. Don’t know of the mortgage particulars with them…but they are intellimortgage/RateSupermarket and can be reached at 1 866 462 4779.

#14 Jay on 09.09.20 at 3:06 pm

What if you have a 2.9% or so mortgage with 2 years left on the term?. should you blend it with a 2% rate to knock off a few points, locked in for another 5 years, or just wait the 2 years for the opportunity to shop around and get the lowest rate?

#15 Lefty on 09.09.20 at 3:09 pm

Locked in at 2.5% March 12th. I am awesome.

#16 Sunny South on 09.09.20 at 3:09 pm

Afternoon Mr. T.
Breaking with a long held personal policy to delay reading your daily blog until the following morning as it eliminates any desires to share a comment. However, after reviewing Governor Tiff’s comments and your analysis/opinions, I must respectfully express my disagreement with some of your statements.
I agree with the interpretation that rates will remain historically low however I interpret the statement as meaning that way for 2-5 years. My rationale for this time frame is that in order for the economic slack to be absorbed so that the 2 percent inflation target is sustainably achieved will be through continued spending and ongoing debt accumulation. This can only be achieved through a long period of sustained near zero interest rates.
As witnessed over the last 2-3 months, the low rates have pushed housing in most markets to new highs.
This increase in sales and prices is good for the realtors as well as the municipal, provincial and federal governments who all benefit from higher income and real-estate related fees & taxes. IMHO the government will do anything to keep the gravy train going as long as possible in the hope of paying off some of the debt that has been accumulated. But it won’t happen as they will continue to spend money they don’t have.
As for an increase in interest rates, I reference the graph in a recent post detailing BoC rates. As demonstrated, the BoC tried to start raising rates in 2016 and into 2017. They flat lined below 2% because everyone was screaming that it made family debt unmanageable, that it was killing the housing market, and as it was negatively impacting the stock markets here and in the US.
Because of these factors, and short of some unforeseen economic event, I doubt that we will see interest rates above 2% in the next decade or longer.
As for the stock markets, it was also noted that the central bank also retained a pledge to buy government bonds at the current pace and maintain extraordinary monetary policy stimulus throughout what it calls the recuperation phase of the recovery. Translation, “the BoC will continue to spend whatever it takes to maintain the artificially inflated markets for however long is required”.
Guess he missed the announcement that Ontario is suspending any further removal of current restrictions for another month, and that BC is again closing retail establishments. What do you think will happen infection rate-wise when (or should I say “if”) they re-open that border with the US.
I will defer comments and personal opinions regarding the mortgage holiday, the impact on employment by the morphing of the CERB, and source/anticipated time frame of a potential vaccine until another day.
Apologies to you and the other blog dogs for the Rick Mercer style rant.
As for Brenda, when my wife and I sold our first starter home (near ETR tracks – ask Ryan L. – he should know) to buy and build our current residence in 1996, I was able to change from a 10-year term mortgage at 12.75% to a 5-year term at 8%. It was like winning the lottery. So my advice would be to run, not walk, back to the [email protected] to accept the offer as soon as possible.
p.s. hi to Mrs. T. and a hug to Bandit.

#17 Captain Uppa on 09.09.20 at 3:22 pm

For some context…

I got a five year fixed with Scotia for 2.49% back in June 2016.

Moral of the story: rates have BEEN low already for some time.

Question: how is that possibly relevant for the future? – Garth

#18 Mattl on 09.09.20 at 3:35 pm

I don’t expect cheap rates to stick around forever, but variables have performed significantly better then fixed rates over the last decade.

That may change, but I am going to ride the variable train until this mortgage is retired. I just don’t see the BOC having the guts to normalize rates, at least not in the next few years. Will to take a chance on higher rates in the future (on a reduced principal) for the reward of a dirt cheap variable rate today.

Variables are now the same cost as fixed. Why would you gamble? For what gain? – Garth

#19 Catalyst on 09.09.20 at 3:42 pm

@#15 – “Locked in at 2.5% March 12th. I am awesome.”

You better not tell anyone that. I was out with some friends yesterday when I told one I had just refi’d at 1.80% he said ‘Wow, you should have went to my guy, I got 1.6%!’

Only in this upside down world do I feel like I lost out when I borrow money from a bank at 1.8% and their dividend gives me 5%

#20 Mattl on 09.09.20 at 3:52 pm

Variables are now the same cost as fixed. Why would you gamble? For what gain? – Garth

—————————————————————–

HSBC is the only bank I can find that has a posted close to where my variable is at. And those HSBC fixed rate mortgages have terms that aren’t as flexible as the variable I’m in – heavy penalties to break / port. You yourself were calling these mortgages predatory. And they are, they know most people won’t read and comprehend the TOS.

So I will take the flexibility of my variable + 30-50bps discount.

#21 The West on 09.09.20 at 3:56 pm

DELETED

#22 UtterlyConfusedCanadian on 09.09.20 at 4:01 pm

Since i-rates are so low, is it time for a leveraged RRSP meltdown strategy? What are your thoughts especially given Mr Socks’ threathening tones around inclusion rates?

You have it backwards. – Garth

#23 CanadianGrizzly on 09.09.20 at 4:04 pm

NYT article: Your Coronavirus Test Is Positive. Maybe It Shouldn’t Be.

https://www.nytimes.com/2020/08/29/health/coronavirus-testing.html

A very balanced look at how medical officials are running the PCR testing and interpreting the test results.

The virus is real and can be lethal to the elderly and those with underlying health issues but the Plandemic and the lock-downs can end today if they ran and interpreted their PCR testing with a 30 cycle threshold.

#24 Mr Canada on 09.09.20 at 4:04 pm

I locked in a year ago for 5 years at 2.8% thinking it was the deal of the century vs my HELO rate of 3.8% and my prior mortgage rates of 7% & 13% from 10-25 years ago…so in the big scheme of things, life is short ……enjoy it !!

#25 Smartalox on 09.09.20 at 4:08 pm

I’m trying to make this play, but I need to show my math. What’s a good source for historical 5yr mortgage rates?

#26 Classical Liberal Millennial on 09.09.20 at 4:11 pm

These going rates are almost half of what our first term was only 8 1/2 years ago (3.29). Even if rates are inevitably to rise, it’s going to take a while for them
to be higher than what they were for our first term. It’s logical to conclude that the majority of the life of our mortgage will be under 3.5%.

#27 it cant happen here! on 09.09.20 at 4:13 pm

If BOC boss is talking about social distancing, it’s just propaganda and has nothing to do with economics.
Speaking of propaganda as economics, see Chrystia- she wolf of the hard left, minister of finance with a resume containing no economics
The problem is the general public does not recognize propaganda.
Did I tell you we are toast?

#28 Dan in Vancouver on 09.09.20 at 4:13 pm

In this debt saturated society we had better hope that there is sufficient job growth to sustain our level of consumption. Any tightening of bank liquidity will impact lending – and obviously interest rates – which leads to the preservation of capital which is deflationary. Downward real estate valuations will follow. Maintaining expectations of any higher standard of living and lifestyle will be determined by capital flow, the debt/bond market, and the price of crude oil. And then add the the potential loss of confidence that the lingering residue of SARS-CoV-2 might bring to the mix. Manage your short-term risk accordingly.

#29 YouKnowWho on 09.09.20 at 4:14 pm

DELETED
Inappropriate content for this site. Take anti-mask arguments elsewhere. – Garth

#30 Howard on 09.09.20 at 4:17 pm

Meanwhile financial portfolios have averaged a 7% return over the last decade

——————————-

Does that mean they’ll average 7% over the next decade?

Did I say that? Try not to be a dick, as daunting as that might be. – Garth

#31 HoweStreet.com on 09.09.20 at 4:33 pm

Ross Kay on HoweStreet.com Radio:
The Truth About Canada’s Mortgage Deferrals.
Questioning Average Price?

https://www.howestreet.com/2020/09/the-truth-about-canadas-mortgage-deferrals-ross-kay/

#32 Stone on 09.09.20 at 4:37 pm

#15 Lefty on 09.09.20 at 3:09 pm
Locked in at 2.5% March 12th. I am awesome.

———

Thanks for feeding my dividends. My ETFs thank you as well.

Grow B&D portfolio. GROW!!! You can do it!

#33 Mossy on 09.09.20 at 4:51 pm

@Ankush. Garth , I dont know what, but when I use your analogy among friends here in B-Town , they think i have smoked some really good stuff. Their answer to me is : Every flight landing @YYZ from the subcontinent , the traveller want to make their home in Brampton or Mississauga./ With the increased skilled labor processing time , all the engineers who were even working in the USA , want to come and settle down here in GTA. So the question I get asked : Tell me bud how is the price going to go down when demand is going to be there.?Now and looking into their crystal balls , in the next 5 years. I just grabbed my single malt 12 yr scotch and….Exit Stage Left.. Educate me Garth ..how do I respond back.????
———————————–
Yes, anyone can come here, but if they can’t find well-paying jobs, then they have to go back. Simple as that.

#34 Stan Brooks on 09.09.20 at 4:53 pm

https://www.aufinancenews.com/2020/05/07/world-is-facing-a-rare-inflationary-depression-says-economic-historian/

It will be much worse with the ‘loonie’ and the geniuses in power here. BTW next year’s deficits could be even higher than this year and remember folks, 15-17 % increase in money supply/M2 results in sub 1 % inflation!

Bhahahahahahhahahahahaha stuuuuuuuuuuuuuuuuuuuuuuuupid.

Cheers,

#35 cramar on 09.09.20 at 4:55 pm

Zoom Towns And The New Housing Market For The 2 Americas

https://www.npr.org/sections/money/2020/09/08/909680016/zoom-towns-and-the-new-housing-market-for-the-2-americas

Not just in Canada, but there are rising RE prices south of the border as well. US house prices are up on average 8% nationally. But like here, there are two trends:

a) Rural areas and suburbs are booming. “Zoom towns” are the hot destinations as remote work becomes the norm.

b) Seems to be a “K”shaped recovery” that represents Americas increasing inequality. The well-off have housing and stock portfolio rising. The bottom part of the K are the unemployed, facing bankruptcy and eviction, and dependant on government help.

Related to a) above, Aspen is up 32% in a year.

Second-home prices soar in Aspen and Martha’s Vineyard as the affluent flee megacities

https://fortune.com/2020/08/09/second-home-prices-soar-in-aspen-and-marthas-vineyard-as-the-affluent-flee-megacities/

#36 Smartalox on 09.09.20 at 4:57 pm

Okay, further to my last comment, I did a little hunting, and ended up here:

https://www.ratehub.ca/5-year-variable-mortgage-rate-history

These are discounted, 5-year variable mortgage rates from April 2006 to today. After painstakingly culling the data from the chart, this is what I determined:

Average rate between Jan 2010 (exit of great recession) to Jan 2020 (pre-pandemic): 2.2%

For 5-year periods between:
– Jan 2010 and Jan 2015: 2.29%
– Jan 2011 to Jan 2016: 2.28%
– Jan 2012 to Jan 2017: 2.24%
– Jan 2013 to Jan 2018: 2.08%
– Jan 2014 to Jan 2019: 2.03%
– Jan 2015 to Jan 2020: 2.10%
Then, over shorter periods:
– Jan 2016 to Jan 2020: 2.15%
– Jan 2017 to Jan 2020: 2.20%
– Jan 2018 to Jan 2020: 2.38%

So, if I’m running the numbers, I see 2.38% as the max, 2.03% as the min, and 2.19% as the average.

CAVEAT: before the recession in 2008, rates were reliably above 4.00 to 4.50%; but if rates track economic output, I fee that there would have to be an economic miracle for rates to get that high again.

And I am NOT one of the ‘rates will stay low forever!’ types.

#37 Brian Ripley on 09.09.20 at 4:59 pm

My 4 “real” interest rate charts are up now with August data.

The Real 10 year chart
http://www.chpc.biz/real-10yr-rate.html
shows a positive print this month which is the third of the last four since May.

Overlaid on the chart is the TSX Energy Index plot which continues its deep downtrend and has been joined by the TSX Real Estate Index. On the other hand the TSX Gold Index continues to signal risk of continued monetary policy as that index tests the 2010-2011 gold peaks.

Gold miners and their exploration departments love the U.S. dollar weakness along with the lows in the energy sector both of which contribute to miner’s positive balance sheets.

Meanwhile as I have noted for months prior to Covid 19, when deflation hits, consumption turns to savings and as the Trading Economics chart shows (on my Real Long Interest Rate Chart), “Household Saving Rate in Canada increased to 28.20 percent in the second quarter of 2020 from 6.10 percent in the first quarter of 2020.”

Savers reduce their consumption in order to repair balance sheets. Canada is a consumption culture and as reported June 20th of this year, only the top 20% of Canadian households have $1,000,000 or more of net worth… the middle 40% have less than $100,000 of net worth and the bottom 40% of households have less than $50,000 of net worth.

http://www.chpc.biz/history-readings/category/net-worth

I expect weak hands to be listing their investment real estate (Airbnb has crashed) sooner than 1Q 2021.

#38 WE on 09.09.20 at 5:02 pm

Oh no!

WE are going under!

https://globalnews.ca/news/7324897/we-charity-close-operations-canada/

Think of the children!

Think of our 6 figure non-profit management salaries and our Trudeau family friendships and our real estate empire!

https://www.youtube.com/watch?v=ITrYv7f_DhU

#39 Polecat on 09.09.20 at 5:03 pm

Looks like WE is crumbling, no gov money to float it I guess.

#40 Ace Goodheart on 09.09.20 at 5:03 pm

RE: #118 Felon Musk on 09.08.20 at 10:07 pm

#93 tccontrarian on 09.08.20 at 8:44 pm
Alex:

Just look at Tesla stock last few days. Only a week ago there were people applying ‘recency bias’ to an extreme level and forecasting higher prices, even though current levels were already obscenely out of touch with reality.

Forward ONE week later and ‘poof’, Tesla is 30% lower!
—————————————————————-

You mean a zombie company like Tesla with no profits was overvalued? Good thing Sail Away was banned or he would have you for supper…

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

They just excluded TESLA from the SP500.

So it is not going to show up as part of your healthy, happy, SP 500 index fund any time soon.

No matter how frothy a speculative company is, or how much bitcoin it costs, you can’t get onto the SP500 unless you actually turn a profit.

And that doesn’t mean by selling bonds to pay your operating expenses and showing a profit, while being cash flow negative.

Your company has to actually make money.

Something Tesla has never, ever done.

In other news, cracks are appearing in the stupid, FOMO over priced ridiculousness that is Toronto detached and semi detached RE.

We have a listing that has now officially sat for one month. Just a hair under two mil for the usual “just recently hit by a Despicable Me Shrink Ray gun – it used to be a lot bigger, HONEST!” Bloor West special, complete with the usual Ikea kitchen, shoe horned in fake granite counter top and recently “owner remodeled” basement.

And it is not selling.

It appears the new “pressure point” for pricing here is 1.8 mil or so. Anything above that, the listing sits.

No matter how frothy the bidding gets, you can’t get more than a little under 1.8 for the standard two + “wow that is a bedroom, I thought it was a walk in hall closet” bedroom, two car parking “you can park two cars back there, if they are both Smart cars” Bloor West 1930s post war working class box house.

So what happened here, in our storied ‘hood, is that mortgages became available for 1.5% as opposed to 2.5%, the stress test reduced by 1%, and our idiot bidders and dreamers just borrowed their way up to another hard price point.

So I guess, if mortgage rates go below 1%, we will get another run up in prices.

Otherwise, sorry fools, you bought at the top of the market.

There is no way the average wage around here is going up by 20% any time soon. Most people are lucky to earn 1% more than they did last year. Many will be earning a lot less.

The magic of compound percentages when applied to large numbers.

Apparently it works the same for virus death figures? Who knew?

#41 Puzni on 09.09.20 at 5:20 pm

Today zero hedge ran an interesting article about inflation as form of austerity. To summarize: 10% cuts by governments would receive insane amount criticism, yet when your purchasing power gets eroded by 10% inflation nobody says anything. Last week Canadian government said perceived inflation on food prices was offset by other goods falling in price like energy costs.
Canadians barely drove during COVID lockdowns, coupled with warm weather and that influenced the inflation numbers. The disconnect between real inflation and stats inflation will always exists.

https://www.ctvnews.ca/canada/no-food-category-is-immune-how-the-pandemic-is-causing-rising-grocery-prices-1.5076282

#42 Ronaldo on 09.09.20 at 5:22 pm

#18 Mattl on 09.09.20 at 3:35 pm
I don’t expect cheap rates to stick around forever, but variables have performed significantly better then fixed rates over the last decade.

That may change, but I am going to ride the variable train until this mortgage is retired. I just don’t see the BOC having the guts to normalize rates, at least not in the next few years. Will to take a chance on higher rates in the future (on a reduced principal) for the reward of a dirt cheap variable rate today.
—————————————————————-
Son recently renewed is prime minus variable mortgage at 2.45 minus 1.20 = 1.25%. He’s been variable going on 13 years. Far cheaper than rent considering he lives in central Alberta where prices have remained flat.

The best advertised VRM is currently 1.53%. Where dd he borrow? – Garth

#43 Ronaldo on 09.09.20 at 5:27 pm

#25 Smartalox

This might help.

https://www.superbrokers.ca/tools/mortgage-rate-history/

#44 YouKnowWho on 09.09.20 at 5:50 pm

I think what this all comes down to is one simple fact: There is no such thing as a free-market.
——————————————————————
#199 Mark the Carney, Carney

At the risk of being repetitive, the free market DOES exist for the participants who have NOT escaped it.

——–

What you describe seems more like some caught a wave they could ride, and most others did not. Or a race to the bottom – that’s certainly free and without any assistance or government interference.

Very philosophical, except there is serious damage when you look back at all those who didn’t catch the wave. Real human cost, in lives. But right now we only count Covid deaths, so who cares about that other count.

You use teachers to highlight your point, and yet they are hardly an example of wealth and prosperity. Sure, they earn a living, but can a Toronto teacher afford an average SFH in Toronto?

What about those GM workers – they had unions – how did that work out? Has the GM worker’s escape of the free market been voluntary? No wonder all this resentment is brewing out there – all these involuntary escapes from the free market.

It is not the same market for both non-escapees and escapees – on that we agree, since there is no doubt about it.

From your comment it seems like whatever Free Market exists is shrinking in number of participants. And again, how can it be free when it is so heavily subsidized by government actions of one sort or another.

What % would you say are seeing anything resembling free market, you know – those who have not escaped it? 50%? 20%? 10%? 1%?

#45 YouKnowWho on 09.09.20 at 5:59 pm

#198 Mark the Carney, Carney on 09.09.20 at 1:24 pm

On the inflation front, central banks target a 2-3% inflation rate. What they really fear is deflation and will do everything possible to stop that. Cue BOJ.

————————

This is exactly what I am pointing at MtC,C.

If you are setting this inflation target, then you are creating an environment where you want prices to keep increasing for the consumer, intentionally through expressed intent and actions to move those prices upward.

It is an agreement that is implied and communicated on behalf of the CB that signals this desired outcome and drives policy and actions toward this intent.

Deflation – by very definition is the reduction of prices.
To have CBs fight it and desire to keep it positive is an action on fixing of prices, and therefore antitrust, illegal and a federal offence.

Convince me that it is otherwise please.

How the heck did I just realize this right now?

#46 Graphics Girl on 09.09.20 at 6:01 pm

I’m 1.78% variable. Will probably lock in when up for renewal in 2 years.

Garth, I have been a fan for decades. However, your forecast on rates consistently miss the mark.

“Rates have only one direction to go”. Not true. Rates can stay sideways for sone time.

#47 ElGatoNerodeYVR on 09.09.20 at 6:02 pm

#28 Dan in Vancouver on 09.09.20 at 4:13 pm
In this debt saturated society we had better hope that there is sufficient job growth to sustain our level of consumption.
================
This is exactly the reason we got here, too much consumption and a blind faith that there will always be a job that pays the same or more.
I was quilty of it as well untill I developed a spending tracking system which resulted in budgeting then consumption then debt elimination.
Experience has taught me that the only acceptable debt is mortgage ,for a low risk tolerance. SWAN

#48 yvr_lurker on 09.09.20 at 6:10 pm

Off topic, but I realized this week that I am not the typical lefty. Have been a bit bullied by some colleagues this week to join in on the one-day scholar strike in support of the BLM movement. However, there is no way I am going to abandon teaching 220 young adults who are super-anxious already about online learning, and where I spent weeks figuring out how to deliver the content and start out well.

I have some mixed feelings about the politics of the BLM, as I have more empathy with social class issues irrespective of ethnicity, gender etc.. In the type of environment where I spent some time as a kid it was “normal” to have a sofa sitting on the lawn in front of your beaten down little house with a rusting washing machine next to it. No resemblance of that notion of “white privelege” for us. Just was super-driven to make a better life. No need for anarchy… just put your head down and work hard….

#49 Manny on 09.09.20 at 6:24 pm

Do you agree with the Data from Dane Eitel:

https://www.eitelinsights.com/marketupdateblog/2020/9/3/in-the-eye-of-the-storm-vancouver-real-estate-detached-homes

#50 Stan Brooks Psychiatrist on 09.09.20 at 6:28 pm

#34 Stan Brooks on 09.09.20 at 4:53 pm
https://www.aufinancenews.com/2020/05/07/world-is-facing-a-rare-inflationary-depression-says-economic-historian/

It will be much worse with the ‘loonie’ and the geniuses in power here. BTW next year’s deficits could be even higher than this year and remember folks, 15-17 % increase in money supply/M2 results in sub 1 % inflation!

Bhahahahahahhahahahahaha stuuuuuuuuuuuuuuuuuuuuuuuupid.

Cheers,
—————————————————————-

Sorry folks, Stanley just woke up from his afternoon nap and is back at the keyboard….

#51 Miami Blue on 09.09.20 at 6:29 pm

Hi Garth,
Snowbirds are not flying south this year so they need snow tires. They are selling like crazy. If you need winter tires you better buy them now.

#52 Mark the Carney, Carney on 09.09.20 at 6:36 pm

#45 YouKnowWho on 09.09.20 at 5:59 pm
#198 Mark the Carney, Carney on 09.09.20 at 1:24 pm

On the inflation front, central banks target a 2-3% inflation rate. What they really fear is deflation and will do everything possible to stop that. Cue BOJ.

————————

This is exactly what I am pointing at MtC,C.

If you are setting this inflation target, then you are creating an environment where you want prices to keep increasing for the consumer, intentionally through expressed intent and actions to move those prices upward.

It is an agreement that is implied and communicated on behalf of the CB that signals this desired outcome and drives policy and actions toward this intent.

Deflation – by very definition is the reduction of prices.
To have CBs fight it and desire to keep it positive is an action on fixing of prices, and therefore antitrust, illegal and a federal offence.

Convince me that it is otherwise please.

How the heck did I just realize this right now?
—————————————————————

Do you really think that if the BOC didn’t have the legal right to adjust the rate of interest it would have gotten away with it from day one? Seriously…

Central Banks want mild inflation because it means the economy is expanding. Deflation on the other hand means a contracting economy. It is that simple…

#53 YouKnowWho on 09.09.20 at 6:36 pm

#48 yvr_lurker

Joe Rogan with Bret Weinstein #1494

This episode has SO DAMN MUCH interesting factual info that helps pieces fall into place, I am serious when I tell you – mandatory listening! It’s old now, so you’ll see how all the Covid missteps Bret calls out have materialized in US into reality.

Plus, it comes with a SHOCKING twist ending about mice. Little White Mice. Will make you think about taking medications, Twice! Today’s word boys and girls is: Telomere, and what effect it has on your life, the medications you take that you think are safe. It will put all those drug side-effects disclosures for you in a whole new light.

You, being an educator will find it especially enlightening.

http://podcasts.joerogan.net/podcasts/bret-weinstein-3

#54 MF on 09.09.20 at 6:37 pm

So all these low rates do is help current asset holders.

Got it.

Who cares.

MF

#55 Ponzius Pilatus on 09.09.20 at 6:39 pm

I’m encouraged that new economic policy makers like Tiff and Carney are not just looking at traditional economic indicators, but are also taking enviromental and health issues into account when measuring the overall state of a nations financial “health”.
Traditional GDP calculations have been lacking in giving us the full picture.

#56 Nonplused on 09.09.20 at 6:51 pm

Inflation is going over 2% for the next few years because the central banks have created a new policy of “catching up” for missed inflation. I know, I know, it sounds crazy, but desperate times call for desperate people. Anyway that means a 1.8% interest rates will literally be below the rate of inflation over the next five years. It’s not quite free money but it’s close.

When will things return to normal? By the end of five years? Sooner? Never? Will there be a second wave now that the schools are open? Beats me but the traffic jams are back at the school across the street but the buses are practically empty. The before and after care next door is operating as well but it seems to be at reduced capacity. And those kids do not seem to be social distancing. But I don’t think anyone would rightly assume they would. They’re kids.

Anyway I expect a second wave and second lockdown in early October, to be blamed on Trump of course, but covid will magically go away after Nov. 3, no matter who wins. It will have served its purpose so time to roll out the vaccines if they are even needed. I mean even Pelosi seems to know it is more dangerous to be seen in public without your hair blown out (whatever that means) than without a mask. And here I thought she was wearing a wig this whole time.

#57 Mark the Carney, Carney on 09.09.20 at 6:56 pm

#44 YouKnowWho on 09.09.20 at 5:50 pm

What you describe seems more like some caught a wave they could ride, and most others did not. Or a race to the bottom – that’s certainly free and without any assistance or government interference.

Very philosophical, except there is serious damage when you look back at all those who didn’t catch the wave. Real human cost, in lives. But right now we only count Covid deaths, so who cares about that other count.

You use teachers to highlight your point, and yet they are hardly an example of wealth and prosperity. Sure, they earn a living, but can a Toronto teacher afford an average SFH in Toronto?

What about those GM workers – they had unions – how did that work out? Has the GM worker’s escape of the free market been voluntary? No wonder all this resentment is brewing out there – all these involuntary escapes from the free market.

It is not the same market for both non-escapees and escapees – on that we agree, since there is no doubt about it.

From your comment it seems like whatever Free Market exists is shrinking in number of participants. And again, how can it be free when it is so heavily subsidized by government actions of one sort or another.

What % would you say are seeing anything resembling free market, you know – those who have not escaped it? 50%? 20%? 10%? 1%?
—————————————————————–

I like a dialogue with someone who listens to what the other says and makes good comments as you have done. To0 many idealogues out there that refuse to even look at a different opinion. The big idea Galbraith had throughout his career was that “the market” in the classical sense, participants competing with each other, is something most individuals and companies would like to escape. What contractor wouldn’t like to get a job without having to compete with others on price? What company wouldn’t want to set the price for its products without having to compete with others? Take a look at milk farmers in Canada. They have a quota system and set their prices. Does it get any better than that? You control the supply and the price! Paradise! US milk farmers meanwhile are going broke because they have to accept the market price for their milk and can’t control the supply…

As Galbraith said, classical economics exists only for those individuals and companies who have not escaped the market. What percentage is this? I don’t know but as you correctly point out, those who are subject to the market, especially in the lower ranks of society, have a very rough existence.

We have been living in a Keynesian world for the past 80 years. This is not changing. The free market is still there and governments will continue to be part of the market. Government workers in Canada for instance, provide aggregate demand for products. That’s a big part of the Keynesian system we have.

The classical market model of the uncle Miltie Friedmans of the world exists only in textbooks and for those participants who have not escaped the market.

#58 Debtslavecreator on 09.09.20 at 6:57 pm

Tiff, Stiff’em, will very likely be proven spectacularly wrong.
Barring a miracle credit risk premiums will trend upward and at some point, likely 2023 onward, inflation risk will trend higher at the same time

The biggest short term risk remains a shock sale of treasuries by China and a debt cancellation by Trump

They are telegraphing their intentions via the Global Times

Biden and family are major investors in China

If China sells USTs and Trump cancels their debt assets look out

We easily have 4-5% 5 year mortgages by late Q1 and stocks at 2007 levels

This entire system is a hot mess and in the process of collapsing

It ought to be an incredible 5 months ahead

Let’s get price discovery bank mr Macklem

Time to end the central bank fraud

#59 crowdedelevatorfartz on 09.09.20 at 7:03 pm

@#38 WE
https://globalnews.ca/news/7324897/we-charity-close-operations-canada/

+++++

Im sure the “rock star” brothers will rebrand under another name…Perhaps you should start a charity called OUI and let then buy it from you for $1 million

#60 Uncle Al Sinclair on 09.09.20 at 7:04 pm

#40 Ace Goodheart on 09.09.20 at 5:03 pm

I know the Bloor West area you describe well. Crappy old homes that need to be gutted. Your comments on Tesla are also spot on. We need to get together for a beer with some other blog dogs when this pandemic ends.

#61 Oliver the Loan Arranger on 09.09.20 at 7:12 pm

The best advertised VRM is currently 1.53%. Where dd he borrow? – Garth
——————————————————————
Oliver the Loan Arranger?

https://www.youtube.com/watch?v=PWi6W-ZNQc8

#62 crowdedelevatorfartz on 09.09.20 at 7:13 pm

@#197 CalgaryCarGuy
“I run seven game cameras 24/7 here and have captured great pictures and videos of all kinds of Alberta foothills wildlife.”
++++

The only “wild Life” I saw in Bragg Creek in 1980 while camping was a helicopter that landed at our campsite at 7am.
Seems our campfire was still smouldering and the fire warden called it in.
We were in a clearing down by the creek and had a permit for a small fire.
Helicopter came in , woke everyone up, We all came out to see what the commotion was about…. Then teh real show started.
Seems one of the helicopter firefighters was a prisoner working his last 8 months off for forestry.
His WIFE was camping with one of my friends….
None of us had any idea she was married.

Busted by hubby at 7am on a saturday, in the wilderness…… oops.

Needless to say it took several other prisoners to get him back on the chopper.

#63 Nottawa Housing Bust on 09.09.20 at 7:18 pm

How about Tiffs remarks regarding bond buying. How on earth is 5 billion a week to be maintained, and how does this lead to a healthy market. The “Taper Tantrum” that will result from this will be unreal.

And furthermore, if things are so healthy why buy bonds at all. Something is off. Banks are only profitable due to lower T1 LLp. What of there is a default wave on horizon.

Still do not fully believe things are ” getting better”

#64 Two-thirds on 09.09.20 at 7:26 pm

Good points, but Tiff is also quietly polling Canadians to inquire whether BOC should continue using inflation as its target, as opposed to other less-conventional alternatives.

As reported here last week by a keen-eyed blog-dog, the bank is signalling a willingness to depart from its historical 2% inflation target, and seeking public support for the alternatives, to wit:

https://letstalkinflation.ca.engagementhq.com/lets-talk-inflation-survey/survey_tools/take-the-survey-today1

So let us not assume the rules will stay the same because they are likely going to change, to provide cover for broke governments, broke individuals and oceans of red ink that now cover our country.

Buy yes, locking in now, probably not a bad idea. Expecting rates to go back up in a hurry once we reach 2% inflation: not a guarantee.

#65 SoggyShorts on 09.09.20 at 7:28 pm

#5 Doug t on 09.09.20 at 2:35 pm

This winter will be interesting – imagine if you get a regular cold or flu and your mind starts freaking out “ OMG I GOT THE COVID” – people in grocery stores coughing from the cold and the masses rubber necking at them with the evil eye ready to call you out

*************************
How is that different from any other year?
Cough or sneeze in a public place like a grocery store should get you the evil eye.
I don’t care if it’s “just the regular flu” keep that to yourself ffs.

#66 Nonplused on 09.09.20 at 7:29 pm

What contractor wouldn’t like to get a job without having to compete with others on price? What company wouldn’t want to set the price for its products without having to compete with others? Take a look at milk farmers in Canada. They have a quota system and set their prices. Does it get any better than that? You control the supply and the price! Paradise! US milk farmers meanwhile are going broke because they have to accept the market price for their milk and can’t control the supply…

The classical market model of the uncle Miltie Friedmans of the world exists only in textbooks and for those participants who have not escaped the market.

——————————–

I am not sure what you are advocating, or what “escaped the market” means. Are you in favor of monopolies, oligopolies, and quota systems?

And how do teachers fit in? They make what, $84,000 a year or so (after 10 years, they start out much lower), which is not bad but it isn’t like engineering or lawyering. I think if anybody has complaints about teachers it is usually the amount of time they get off, and the pension. But I am not sure the salary is a problem considering they have to have a degree, so 4 years in university at their own dime before they can start.

It is also a bit of a myth to say that they have escaped the market. I’ve coached your kids before and I can assure you there is no way I would do that full time. It takes a level of patience that I can muster for 1-1/2 hours twice a week but there is no way I could survive that all day. Also the “invisible hand” gets in there anyway. If they pay teachers too much then they end up with a bunch of people going to school who cannot secure a job after. To little and nobody goes to school for education.

Teaching is a nice secure job with lots of time off. But if you want one of those Moomba wakeboard boats in your future that ain’t the way to do it. And you have to deal with other people’s kids, and worse, their parents.

#67 Clint Eastwood of Toronto on 09.09.20 at 7:34 pm

If the economy is so bad, then why are house prices in Toronto skyrocketing like mad? Back in my day a house was worth 3 times your salary.

#68 Nonplused on 09.09.20 at 7:40 pm

#62 crowdedelevatorfartz on 09.09.20 at 7:13 pm

That is a great story, but I find it hard to believe unless it was a training exercise. They have fire trucks in Bragg Creek and would not land a helicopter on a campfire, risking sending embers everywhere. Anyway if the dude was mad his wife was camping with a male friend, I suppose her retort would be “well, why are you in jail? You could have been here instead.” I think when you go to jail you should pretty much expect that the marriage is over even if the paperwork isn’t done yet.

#69 Mark the Carney, Carney on 09.09.20 at 7:51 pm

#66 Nonplused on 09.09.20 at 7:29 pm

I am not sure what you are advocating, or what “escaped the market” means. Are you in favor of monopolies, oligopolies, and quota systems?
—————————————————————-

I am not advocating anything mon ami. I am merely stating how our economy functions. Escaping the market means very simply that you set your prices and wages and do not rely on the market of competition/supply and demand to make that determination. Large oligopolies set their prices and another interesting fact overlooked by classical economic buffs is that oligopolies act just like a monopoly in their price setting. Classical economics teaches that there is a difference between oligopolies and monopolies when in reality there is not. They both set their prices.

As much as classical economists talk about the wonderful market, in reality, businesses and individuals, given the chance would rather not let the market determine their wage of product price.

Canadian dairy and egg farmers have escaped the market. They set their price and control the supply and consequently do very, very well financially. I have a buddy in Ontario that is a dairy farmer and is worth north of $10 million and he did that by escaping the market of competition. Many of his US counterparts are going broke because they are subject to market competiton and don’t control their price and supply.

Public school teachers in Ontario make $100k at the high end of the grid, principals make $130k. Their pensions are golden. They have escaped the market. Sure other professionals make more but many make less and further, do they have the golden pension? I know a lawyer who left his practice to teach high school. My lawyer doesn’t make $100k (he is a good friend and has confided what he makes in an average year) and has no golden pension to retire on.

Am I clear now?

#70 YouKnowWho on 09.09.20 at 7:52 pm

#52 Mark the Carney, Carney on 09.09.20 at 6:36 pm

—————————————————————

Do you really think that if the BOC didn’t have the legal right to adjust the rate of interest it would have gotten away with it from day one? Seriously…

Central Banks want mild inflation because it means the economy is expanding. Deflation on the other hand means a contracting economy. It is that simple…

—————————————————————

MtC,C

That’s my exact point. This manipulation of interest rates, results in price fixing on a market wide scale.

I understand your point about legality because it is the government, but by the same token why was the government awarding $1B to WE not legal? Governments are not above the rule of law.

It is one thing to have the legal right to set interest rates, it is another when you identify that you specifically want to create inflation – or increase in prices. And then do it too!

Also, if we hold corporations to a standard where they are not able to imply or express desire to increase prices in a coordinated effort, why is that same behaviour acceptable from one level higher?

Finally, if inflation is artificially gained, then the growth is artificial. What is the point except to defraud the consumer of purchasing power?

Set targets for inflation and actions to achieve it look illegal to me in terms of anti-trust laws the highest courts hold other legal entities to.

#71 Dolce Vita on 09.09.20 at 7:57 pm

Spice things up here a bit with some more VIRUS PORN [update].

Well, apparently the loss of Pasche in Köln (the former largest Brothel in Europe) did not go unnoticed in the rest of Deutschland.

I would have expected der Spiegel or racy Express.de to continue the Pasche saga up BUT OH NO, rock solid, reliable Deutsche Welle picks the story up instead (like saying the Toronto Sun ran the original story on the Sunshine Girl page and The Globe & Mail continues it):

“Sex workers return to work in northern Germany as coronavirus restrictions ease”

They (North Rhine-Westphalia, Hamburg, Bremen and Schleswig-Holstein) relaxed lockdown laws to save the workers and industry.

..a happy ending after all.

It must really contribute a lot to German GDP for them to make that “special” accomodation AND/OR Germans are VERY pro-labour.

Who said the Deutschers were dull, dutiful and boring…oh ya, that was me. I take it ALL back.

Ja! Deutschland.

—————————-

https://www.dw.com/en/sex-workers-return-to-work-in-northern-germany-as-coronavirus-restrictions-ease/a-54857916

#72 TurnerNation on 09.09.20 at 8:26 pm

No fun allowed in the New System comrade. Remember the most valuable land in the country sits below those downtown bars and nightclubs in Toronto, Vancouver. Why BC just ordered them closed. Condos and 2nd wave of bankruptcies coming.

SEPTEMBER IS HARVEST SEASON, as predicted the Crown Bankers are using the Crown Virus to take back Crown lands:

https://www.blogto.com/eat_drink/2020/09/doug-ford-supports-shutdown-bars-toronto/

Ontario Premier Doug Ford says he’ll support Toronto’s move to shut down the city’s bars if Mayor John Tory decides to do so.

#73 Sunnyways on 09.09.20 at 8:28 pm

It’s a lot of fun to pontificate about interest rates and the economy in the future and this and that. There really is no point in doing that right now though because our dear leader is currently in the process of remaking us (his words).
Canadians and Canada in general are flawed. He knows this and he knows exactly how to reform us into Canadians 2.0. He will force us to be the best Canadians we can be. And this will be the best Canada can be. Probably best to wait and see what he is going to make us all into befor we speculate too much about the future.

#74 Dolce Vita on 09.09.20 at 8:30 pm

Well, we’re starting to see some of the “plan” to bring back the Canadian economy.

This story has been causing quite the Twitter storm to say the least (NO COMMENT), Twitter post by:

Justin Trudeau @JustinTrudeau · 4h

“Black business owners and entrepreneurs face unique challenges accessing the financial tools and mentorship they need to succeed – and we’re taking action to change that. Today at @HXOUSE, we’re launching Canada’s first-ever Black Entrepreneurship Program.”

Justin Trudeau @JustinTrudeau · 4h

“We’ll also work with Black-led community and business organizations to create the Black Entrepreneurship Knowledge Hub, which will help identify barriers to success and opportunities for growth. For more information on what we announced today, click here:

https://pm.gc.ca/en/news/news-releases/2020/09/09/prime-minister-announces-support-black-entrepreneurs-and-business

—————————

And 1 hour before with the $$$ tag:

Navdeep Bains @NavdeepSBains · 5h

“Today, we announced investments of up to $221M in partnership with Canadian financial institutions – including up to nearly $93 million from the Government of Canada over the next four years – to launch Canada’s first-ever Black Entrepreneurship Program.”

…and the systemic barrier, I suppose the “why?”:

Navdeep Bains @NavdeepSBains · 5h

“The success of Black business owners and entrepreneurs is essential to Canada’s economic recovery and future prosperity. COVID-19 has highlighted and exacerbated existing systemic barriers faced by Black entrepreneurs and small and medium-sized business owners in Canada.”

—————————

And yup, they’re headed for the “new economy” with Green investments:

Navdeep Bains @NavdeepSBains · 5h

“A key component of our economic recovery is supporting clean technology across Canada. As the world moves towards more sustainable options, investing in these key sectors will keep us globally competitive, and help us achieve our climate change goals.”

[image of a Toyota Fuel Cell]

—————————

And of course, to get rid of that NASTY WE

#75 Bill on 09.09.20 at 8:34 pm

They have attempted to raise int rates repeatedly since crunch #1… last decade. Same result, the economy tanks. The debt is massive and growing and the gov a central banks have trapped themselves.. Only way out of debt is growth and I highly doubt that its possible…..Both consumer debt and gov debt is off the chart. Good bloody luck paying it off
I see deflation due to this current ugly situation. Maybe we go Japanesea…highly likely.

#76 Dolce Vita on 09.09.20 at 8:35 pm

…last post cont’d:

NASTY WE controversy.

They’re pulling out of Canada taking jobs with them, nice. Craig and Marc Kielburger, will also transition from the organisation (they do not say how and where to).

“We Charity to exit Canada amid Trudeau scandal probe”

Better take on it by BBC than Global.

https://www.bbc.com/news/world-us-canada-54096059

Crazy times Garth.

#77 Ponzius Pilatus on 09.09.20 at 8:35 pm

#68 Nonplused on 09.09.20 at 7:40 pm
#62 crowdedelevatorfartz on 09.09.20 at 7:13 pm

That is a great story, but I find it hard to believe unless it was a training exercise. They have fire trucks in Bragg Creek and would not land a helicopter on a campfire, risking sending embers everywhere. Anyway if the dude was mad his wife was camping with a male friend, I suppose her retort would be “well, why are you in jail? You could have been here instead.” I think when you go to jail you should pretty much expect that the marriage is over even if the paperwork isn’t done yet.
—————-
CEW outrageous anecdotes remind me of the stories I read as a child in Austria.
About Baron Munchhausen, who told fantastic stories about his travels.
Munchhausen syndrome is named after him.

#78 Bill on 09.09.20 at 8:48 pm

Ok so we sure as hell dont need covid money but our stupid dictator has no idea what hes doing sooooo wife gets free money she dosent need..The gov attacked me 2 years ago on being bit late on a small tax bill my that my accountant missed (T5 got forgotten.) They charged me an extra 5k on my 10k bill. The CRA guy waz an ass to say the least.
Im getting it back now…or she is. Revenge is sweet.
The…systems has so many bandades to plug the holes its now just a bandade.
Good luk to us all the next decades going to be a dinger…

#79 One of the joys of retirement ... on 09.09.20 at 8:50 pm

#51 Miami Blue on 09.09.20 at 6:29 pm
Snowbirds are not flying south this year so they need snow tires. They are selling like crazy. If you need winter tires you better buy them now.
—————————————————–
ain’t buying any … don’t need em’.

#80 Tyberius on 09.09.20 at 8:53 pm

Vancouver Freedom Rally 2020 on September 13th

Vancouver Art Gallery: 12- 5 pm
March 1 pm
Speeches 2:30 pm

Be there!

Mandatory masks, right? – Garth

#81 Captain Uppa on 09.09.20 at 8:59 pm

#17 Captain Uppa on 09.09.20 at 3:22 pm
For some context…

I got a five year fixed with Scotia for 2.49% back in June 2016.

Moral of the story: rates have BEEN low already for some time.

Question: how is that possibly relevant for the future? – Garth

——————————————————-

I said nothing of the future. I was simply showing that rates haven’t really dropped off a cliff since 2016.

In Jan/Feb I will be renewing and I will look at 5 or 10 year fixed.

#82 ABK on 09.09.20 at 9:01 pm

Wait until September 23 and the Liberal throne speech. I suspect it might truly change all the rules (not sure if for the better?) and may actually result in things truly being”different this time”.

#83 crowdedelevatorfartz on 09.09.20 at 9:40 pm

@#77 Ponzie Pilot
“CEW outrageous anecdotes remind me of the stories I read as a child in Austria….”
++++

I dont believe you were ever a child.
Hatched in a clone factory at the age of 70…..grumplestiltskin……

I was expecting MF to slag my 100% true anecdote….apparently you led a more boring life then him.

#84 crowdedelevatorfartz on 09.09.20 at 9:51 pm

@#78 Bill $$$$$
“Ok so we sure as hell dont need covid money but our stupid dictator has no idea what hes doing…”

++++

Well.
The rumours for the Sept. 23 Toilet Speech is.

A higher tax bracket for the Uber rich ( They will move)

Higher Taxes for share dividends.( Middle Class kicked again).
Taxes taxes taxes….so that Canada can single handedly feel good about …… saving the Global Warming World…..

The result?
Businesses will shut down or leave.
The buck will tank.
Unemployment will soar.
People with money will sit and wait for the idots in charge to get booted by the unemployed voting mob………

Buy a farm and grow your own food…before the lineups at the Food bank get really long…….

#85 Stan Brooks on 09.09.20 at 9:52 pm

#67 Clint Eastwood of Toronto on 09.09.20 at 7:34 pm
If the economy is so bad, then why are house prices in Toronto skyrocketing like mad? Back in my day a house was worth 3 times your salary.

Destruction of currency?

The Chapwood index, measuring increase of cost of living:

https://chapwoodindex.com/

It is probably north of 12-15 % for GTA/Vancouver.

Stealing 10 % from the value of your pension (if lucky to be inflation ‘adjusted’) and savings. Year after year.

For a decade. Then for another one.

I am sure ‘they’ have the right to do it.
Increase in house prices and assets in the greatest economic contraction for a year the world has ever seen.. Sure. Yes folks, it is all ‘green organic growth’.

Cheers,

#86 Ace Goodheart on 09.09.20 at 9:57 pm

RE: 60 Uncle Al Sinclair on 09.09.20 at 7:04 pm

#40 Ace Goodheart on 09.09.20 at 5:03 pm

I know the Bloor West area you describe well. Crappy old homes that need to be gutted. Your comments on Tesla are also spot on. We need to get together for a beer with some other blog dogs when this pandemic ends.

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

We certainly do.

I still remember when Garth used to have dog fest up at the ranch (before he sold the place and moved out East).

Smoking Man used to show up in his old pick up with the cracked wind screen.

The staff were quick, helpful and “fetching” (country girls).

He used to string a big Canadian flag on the side wall. They drew water from a little river that ran behind the place.

Those were the days………..

Most certainly have to get the dogs back together for another watering fest, once this darn virus is over and the bars open back up.

#87 TurnerNation on 09.09.20 at 10:08 pm

#74 Dolce Vita I know three small business owners, one I frequent, who happen to be ‘black’. A small
bar-club, and a barber shop, and formerly one of the top event promoters . All were SHUT down earlier this year, thrown onto Cerb-Ceba; the bar-club will get SHUT down again, if the globalist leaders have their way this fall.
Event guy is done for good. Decades long career, bust

Which systemic barriers again?????
A fourth such fellow I know is a realtor. I guess he can still sell. See I only hang or get to know the successful people. Their skin pigmentation matters not to me.
This is all a big joke they are playing on us, a distraction as they wind Kanada down.

#88 crossbordershopper on 09.09.20 at 10:17 pm

rates wont rise they will continue to drift lower to close to zero, thats right close to zero and you will be getting 5 yr variable at below 1. if rates were to rise to somewhat normal say 4 to 5%, what do you think canada’s new debt plus the provincial level , trillions of dollars paying 5% what do you think that would do to pensions and health care, the most indebted are the governements and since they are the ones that print the money they will make it as cheap as possible for as long as possible to keep it at japan levels efectively forever, maybe even sub zero if thinks go off the rails.
who would honestly price a 5 year canadian bond at 40 bp with trillions in debt and structural deficits and bonds just got downgraded. easy if your the one printing the money and setting the interest rates, qe4, qe 200 its all the same, pay you back with diluted paper, as long as you keep going to work everyday.

#89 TurnerNation on 09.09.20 at 10:25 pm

“It doesn’t make any sense”. It does when you consider their small businesses are sitting on LAND with high value. Get off the land/War are fought over land. This is WW3. Portland Oregon.

—->In Toronto, Vancouver pay attention to the land under the closed bars, nightclubs and sports stadiums. Keep your eye on the ball – the planetary one.
This is really simply guys once you know their goal.

https://www.kgw.com/article/money/business/portland-business-owners-call-on-city-leaders-to-stop-violence/283-432b8005-5fb4-4916-8fba-717f8c71e6f0

“There is frustration among business owners struggling to survive after shutting down due to the coronavirus pandemic, and then reopening to chaos.
“It doesn’t make any sense,” said Jen Causey as she stood inside her empty coffee shop with wood covering her windows.
“I was patient at first and I understood why the destruction was happening. But it’s still happening and it’s hurting us so bad,” she said.”

——–

Learn from history it is repeating. I guess WW2 was the test for WW3.

https://en.wikipedia.org/wiki/Kristallnacht
“Kristallnacht (German pronunciation: [kʁɪsˈtalnaχt] or the Night of Broken Glass, also called the November Pogrom(s),[1][2] was a pogrom against Jews carried out by SA paramilitary forces and civilians throughout Nazi Germany on 9–10 November 1938. The German authorities looked on without intervening.[3] The name Kristallnacht (“Crystal Night”) comes from the shards of broken glass that littered the streets…”

#90 it cant happen here! on 09.09.20 at 10:26 pm

#72 TurnerNation on 09.09.20 at 8:26 pm

Ontario Premier Doug Ford says he’ll support Toronto’s move to shut down the city’s bars if Mayor John Tory decides to do so.

——————————
Notice the media hated Ford during his campaign. When he goes perma lockdown, they love him, because media want a never ending lockdown. Ford has really gone ‘next level’ jackass

#91 Bill on 09.09.20 at 10:38 pm

Garth
There is some sort of sanity to your dog blog….at least you are pointing in the righ direction and thats bloody rare today.
I did what you recommend years ago but went bigger…Its worked out and now i can pull my horns in being comfortable and concervative.

You should have rode out the gov shit show for the never ending large pension.
Im ok i think.
$250k ok at 2.5% increase on rents plus property appreciation in a high demamd location…thats all i can ask for..
Cheers

#92 The Woosh on 09.09.20 at 11:06 pm

#61 Oliver the Koan Arranger
The best advertised VRM is currently 1.53%. Where dd he borrow? – Garth
——————————————————————
Oliver the Loan Arranger?

——————————————————————

Thanks!! :) That was a good laugh. I’m still laughing.

#93 Upenuff on 09.09.20 at 11:07 pm

Did I say that? Try not to be a dick, as daunting as that might be. – Garth

____________________________________________
that is so beautiful to read and say out loud, during a time of Covid crisis; for that you cant help but smile and love the Greaterfool…….

#94 Ronaldo on 09.09.20 at 11:11 pm

#42 Ronaldo on 09.09.20 at 5:22 pm
#18 Mattl on 09.09.20 at 3:35 pm
I don’t expect cheap rates to stick around forever, but variables have performed significantly better then fixed rates over the last decade.

That may change, but I am going to ride the variable train until this mortgage is retired. I just don’t see the BOC having the guts to normalize rates, at least not in the next few years. Will to take a chance on higher rates in the future (on a reduced principal) for the reward of a dirt cheap variable rate today.
—————————————————————-
Son recently renewed is prime minus variable mortgage at 2.45 minus 1.20 = 1.25%. He’s been variable going on 13 years. Far cheaper than rent considering he lives in central Alberta where prices have remained flat.

The best advertised VRM is currently 1.53%. Where dd he borrow? – Garth
—————————————————————-
Actually his new rate is 1.20%. I sent you an email so you can see for yourself. Hard to believe right?

#95 Ace Goodheart on 09.09.20 at 11:15 pm

RE: #46 Graphics Girl on 09.09.20 at 6:01 pm

I’m 1.78% variable. Will probably lock in when up for renewal in 2 years.

Garth, I have been a fan for decades. However, your forecast on rates consistently miss the mark.

“Rates have only one direction to go”. Not true. Rates can stay sideways for sone time.

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

The trick with interest rates and house prices, is they move opposite to each other.

Rates go up, house prices go down. Rates go down, house prices go up. They are inverse to each other. Kind of like bond prices and interest rates. Rates go down, bond prices go up. Rates go up, bond prices go down.

The problem is, you have two driving factors that set the price of a house (well, actually three).

1. The amount of money people can earn, per year, in the area where the house is located. This is a biggie. The hard ceiling for the price of a house is the average wage, combined with driving factor #2, which is……..

2. How much can you borrow? In any scenario, where you have more than one person who wants to purchase a house, and average wages are around equal for the area, how much you can borrow, determines how high the price will go. Again, you get a hard price ceiling. You can’t go beyond a certain price, because people can’t borrow any more than a certain amount, and the wages for the area are all roughly the same…..which leads to…….my favorite……..how I made more than 1/2 of my money…….

3. Gentrification: occasionally, for reasons no one other than artists understands, a crappy, smelly, drug and crime infested area, that no one wants to live in, and that you could not pay someone to walk through at night, suddenly becomes somewhere that upper middle class people want to raise families.

No one knows why (if we did, we would all be rich, because we could just buy houses in crappy, drug and crime infested areas, and then wait until they gentrify).

Sometimes, you get lucky. Sometimes, your understanding of how transit politics work, developed by years working as a civil servant in a maintenance position (where you learn all the dirt, without getting dirty – well, except with real dirt, which doesn’t count), enables you to call a big one, and get it right.

The reward is millions of dollars of free money, earned for doing nothing. Just by being able to predict accurately a gentrification event.

But the houses that people are bidding over in Toronto, are located in areas that are ALREADY GENTRIFIED. So these people are idiots. A gentrified area can’t ever get beyond the two limiting factors in house prices, those being average wages, and low interest rates.

We are at the lowest possible rate. The Bank of Canada overnight rate is 0.25%. Mortgages can be had at 1.5%

Unless the Bank of Canada starts paying banks to take loans from it, rates cannot go any lower.

So these people who are buying houses in gentrified neighbourhoods, are betting on wages going higher. By about 20%. In the middle of a pandemic, leading into what looks like a nasty recession.

It just ain’t going to happen. This is not hard stuff. This is an easy one to call.

We are at a high price ceiling, which cannot be breached, without a substantial increase to the earning capacity of the upper middle class, currently occupying the gentrified areas.

If you bought a house in a gentrified area, over this summer, you bought at the absolute top of the market.

#96 not 1st on 09.09.20 at 11:18 pm

Interest rates will be negative within 2 yrs. I wouldnt lock anything in until

Nope. – Garth

#97 YouKnowWho on 09.09.20 at 11:22 pm

Garth covered it, the weight of real estate trading to the Canadian GDP.

So, how much of a contribution to the GDP will this quarter Canadian real estate nuttiness contribute?

And if Canadian real estate dropped 20-30% in value, how much would that hit GDP – perhaps 2 quarters from now?

#98 Nonplused on 09.09.20 at 11:28 pm

#69 Mark the Carney, Carney on 09.09.20 at 7:51 pm

“Am I clear now?”

Well, clearer, but I am not sure I agree with the usage of the term “escaped the market”. Sure, the quota system in Canada does give Canadian dairy farmers pricing power, but the system has run amok in other ways. The quota itself is now worth more than the farm, and corporate farms are slowly buying it all up, so the family dairy farm is disappearing. Monopolies like the local power company tend to be regulated. Oligopolies get busted up when they are discovered (at least sometimes). Private sector unions have limits to what they can do before they ruin their employer (GM, for example). So I don’t know that anyone completely escapes the market, although where they can they will certainly run a hussle. Even the dreaded dairy farmers can only raise prices so high before people start drinking more orange juice.

#99 Tyler Durden on 09.10.20 at 12:24 am

what about paying down your mortgage so that you can turn around and borrow off the heloc to invest? That would lower cost of borrowing by making it tax deductible, no?

#100 Saul Rubicon on 09.10.20 at 12:38 am

Watching this clown show from abraod I ask myself how Canadians can be so pathetic – or maybe I should say apathetic? Hoping the cowboys get on their horses soon so when I return I’m not surrounded only by bawling sheeps and little fraidy cats who’ve watched too much TV news

#101 willworkforpickles on 09.10.20 at 12:42 am

#75 Bill
Internal forces are not at play insomuch as international pressures that can bear cause for an interest rate increase even within a year.
China has plans to reduce its U.S. debt holdings by 20%, from $1 trillion to $800 billion. (likely)
They could even sell all of their US bonds in an extreme case like a military conflict. (not as likely)
China reducing American debt will put pressure on U.S. interest rates.
It’s the wanton run-away amassing of debt by the US in disregard of its devaluing effect, and show of contempt and disrespect to nations who hold US debt.
The patience of those forced to play by US dollar hegemony or suffer severe economic limitations is ending.
The very crux that’s allowed the US to keep the world under its thumb with dollar dominance won’t last as China and the rest of the world gradually sell off US securities.
Willing as they are to suffer the economic pain to gradually dethrone the US dollar of its reserve status is better done in times of economic tumult than in times we’ve seen.
Nations holding US debt are not too thrilled seeing the value of their US holdings devalued as a result of a reckless system having no regard to creating massive new amounts of debt whenever they please bringing the value of their US holdings down in doing so.
This will all take years to come about where a new international reserve currency will eventually replace the old, but the steadfast movement toward replacing the worlds dominant reserve currency has gotten underway and will gradually pick up steam.
There is no chance to reverse this course.
Interest rates Stateside (and Canada) will begin to rise with it.
Greater fools overpaying for RE purchases and locking in at sub 2% rates are in for a shocking and terrible surprise in a few years.
The Fed and BoC are as arrogant as ever ignoring international rumblings at play. But they like most in NA do not see the big picture or want to either.

#102 slick on 09.10.20 at 12:47 am

Not to turn this into a pi$$in contest, but 3 of my kids bought houses in august. first 2 are first time buyers. bought private, posted on facebook, rural properties. both are locked in 5 years at 2.09%. one from RBC, one from First National, (with a mortgage broker).
The last one bought a second house, left 1st house as a rental, for some reason bought the CMHC insurance, and is in at 1.91%. that one never asked for parental advice, and never got it.

#103 willworkforpickles on 09.10.20 at 1:01 am

In addition to my previous post…China and the rest of the world will slowly sell off US securities into gradual obscurity and worthlessness.

#104 Drunken Stupor on 09.10.20 at 1:03 am

Hey dogs. Anyone knows lawyer Rocco Galati that is suing our government and others for Covid mismanagement?

#105 Crazyfox on 09.10.20 at 2:07 am

Off topic, but this is not normal. Scroll down to “GOES-17 SATELLITE VIEW OF RECORD U.S. FIRES” in the link below and freeze it within the first second of the 14 second clip to see the extent of fires burning off the west coast for the scale of it from Satellite view. Unfortunately, its a prelude to what follows.

https://www.theweathernetwork.com/ca/news/article/raging-wildfires-destroy-washington-town-roar-through-california-oregon

#106 under the radar on 09.10.20 at 5:40 am

Plan B – 416
Some of my clients who bought before they sold are now scrambling, especially the ones who bought a SFH and thought their condo sale was in the bag.

Not so fast, market has taken a pause and those condo’s are sitting longer while buyers sift through more inventory and drive harder bargains ,meanwhile their closing dates are here.

#107 Dharma Bum on 09.10.20 at 7:02 am

#30 Howard

Does that mean they’ll average 7% over the next decade?

Did I say that? Try not to be a dick, as daunting as that might be. – Garth
——————————————————————-

Heh-heh-heh-heh….he said dick…heh-heh-heh-heh-heh.

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

#108 Joe on 09.10.20 at 7:14 am

Target inflation is 2%? Inflation is already in double digits. What he meant is that CPI should be 2%, but that target can later be moved to 3%, then 4% and so on… until the pitchforks show up in the streets. JT is the new Chavez :(

#109 crowdedelevatorfartz on 09.10.20 at 8:17 am

@#103 willworkforpickles
“China and the rest of the world will slowly sell off US securities into gradual obscurity and worthlessness.”

++++
And then the world will flock to that bastion of objective Law Courts, open accounting principles and all around democracy….China and buy the Renminbi as the currency of the world?

https://www.investopedia.com/articles/forex/061115/yuan-vs-rmb-understanding-difference.asp

Not for a long long time.
Or they win the next world war……

#110 Do we have all the facts on 09.10.20 at 8:20 am

I find it curious how our governments and mainstream media are expressing concern over the number of citizens testing positive for the Covid 19 virus. Since June 18, 2020 over 3,400,000 Canadians have been tested for the Covid 19 virus and a grand total of 33,000 citizens, or less than 1.0%, tested positive for the Covid 19 virus.

Medical examinations have determined that the Covid 19 virus may have contributed to the death of 730 of the 33,000 Canadians who tested positive for the virus over the past 12 weeks. This represents a mortality rate of 4.65 deaths per 1000 people tested.

What the media is neglecting to mention is that over 96% of all deaths attributed to the Covid 19 virus involved individuals 65 years of age or older. The average annual mortality rate for this sector of the Canadian population is 34 deaths/1000 people.

Expressed another way over 50,000 Canadian citizens 65 years of age or older have died during the past 12 weeks. It was determined that the Covid 19 virus may have contributed to 730 of the total deaths. I use the term ‘contributed to’ since over 90% of the 9,153 deaths attributed to the Covid 19 virus since February 2020 involved individuals with two or more pre-existing health issues that compromised their immune systems.

If there was a vaccine available that claimed to protect 99% of the population from infection it would be front page news. Instead we are living in fear of a virus that has infected less than 1.0% of those tested and poses virtually no risk of death to healthy individuals under the age of 65.

A vaccine for Covid 19 is not going to resolve the pre-existing health issues that contribute to the deaths of elderly people every year. Improved health care, reduced density accommodation for the elderly, high quality masks and social distancing will reduce the risk of death from viral infections for our most vulnerable citizens.

Time to examine actual risks related to the Covid 19 virus and to focus our remaining resources on improving productivity.

You have posted a variation of this daily. Time to stop. We get it. – Garth

#111 Mark the Carney, Carney on 09.10.20 at 8:26 am

#98 Nonplused on 09.09.20 at 11:28 pm
#69 Mark the Carney, Carney on 09.09.20 at 7:51 pm

“Am I clear now?”

Well, clearer, but I am not sure I agree with the usage of the term “escaped the market”. Sure, the quota system in Canada does give Canadian dairy farmers pricing power, but the system has run amok in other ways. The quota itself is now worth more than the farm, and corporate farms are slowly buying it all up, so the family dairy farm is disappearing. Monopolies like the local power company tend to be regulated. Oligopolies get busted up when they are discovered (at least sometimes). Private sector unions have limits to what they can do before they ruin their employer (GM, for example). So I don’t know that anyone completely escapes the market, although where they can they will certainly run a hussle. Even the dreaded dairy farmers can only raise prices so high before people start drinking more orange juice.
—————————————————————
Good points and a nice civil dialogue. You are correct that milk farmers can’t raise their prices beyond a certain point. They are still making good profits without having to get to that level. Milk farms are being bought up by large corporations for the quotas and pricing protection. You can bet they aren’t doing that States side where the milk farmers are going broke and have no quotas and price protection . Private sector unions have been crushed for decades in the USA and Canada. Hence the lower wages many Americans are facing now that the market establishes their wages. Large corporations still have a great deal of pricing power. If you are a massive MNC with few competitors, why would you compete with your competitors like the local contractors who are a dime a dozen competing for a job? This is the point Galbraith was making when he stated that the principles of classical economics applies to those firms or individuals who have not escaped the market. Don’t you think companies like Nike, Microsoft, Apple have great price control? What about the big pharmaceuticals? They make massive profits and have great price control. I agree there are limits, you can’t price to the stratosphere but the classic market price determination, the classical equilibrium point is not there for them as it is for small business.

#112 crowdedelevatorfartz on 09.10.20 at 8:32 am

Hmmmm.
1st day of school starts in BC and the local media give us this….

https://www.citynews1130.com/2020/09/09/burnaby-teacher-two-day-suspension/

I guess its better than the “grooming” stories that have been in the News of late.

#113 Captain Uppa on 09.10.20 at 9:17 am

I have noticed a slowdown in RE sales on HouseSigma. I check daily (nerd alert!) and it was going fast and furious, but not so much anymore. I suspect the expected slowdown has already begun.

#114 YouKnowWho on 09.10.20 at 9:20 am

#111 Mark the Carney, Carney

MtC,C,

You can’t declare Canadian milk farmers as having escaped the market because they received protectionism from the government. That action is a finger on the scale, obviously.

This milk example is actually a very good one, because it shows the finger on the scale and confirms beyond any doubt that THE MARKET IS AS FIXED AS IT GETS.

There is no such thing as a free market.

Your milk example is but one thing. But let’s deal with those escapees for a moment, shall we?

The people who have “escaped” the market are out there, in a spiral to the bottom, gig economy, part time, multiple jobs, reverse auction to the bottom on services.

This is clearly and issue and helps corporations be profitable. It is wage deflation, which clearly the government is perfectly fine with, because there is no intervention in this case like with the milk dudes.

The NON-ACTION on this point is a form of enablement. Suddenly more and more human beings have no protection, no benefits, no security.

Also, please don’t throw companies like Nike, Apple, Microsoft to prove your point about NOT escaping the market. The more I read what you wrote, the more I feel like your definition of NOT escaping is either a monopoly or market share dominant player. Nike makes she’s for $2 and sells them for $200. Apple sells $1500 cell phones. Microsoft, well, it must be nice of Bill to be so generous. He played cut throat and perhaps has some conscience to clear. I hope he does deliver that Molten Salt Reactors to the world and essentially address our energy problem once and for all.

Please forgive if I myself am a little salty. It is early in the day and I’m still drinking my opening day coffee.

Cheers.

#115 YouKnowWho on 09.10.20 at 9:24 am

TurnerNation,

I keep reading your point about how our freedom to travel is being compromised, messed with.

I think you got it wrong. The situation is much more clear cut. This isn’t a stick situation, it’s a carrot situation.

We want the borders closed. We don’t want to travel. Small minority wants to.

Ask a Cuban what they want – and they will tell you “let me travel to United States!”

Ask a Canadian what the want – and they will tell you “Keep that US border closed, Cuba style!”

#116 VicPaul on 09.10.20 at 9:28 am

YVR Lurker
– I have some mixed feelings about the politics of the BLM, as I have more empathy with social class issues irrespective of ethnicity, gender etc.. In the type of environment where I spent some time as a kid it was “normal” to have a sofa sitting on the lawn in front of your beaten down little house with a rusting washing machine next to it. No resemblance of that notion of “white privelege” for us. Just was super-driven to make a better life. No need for anarchy… just put your head down and work hard….

*********

Good for you…you know, to resist being overtly racist against Whites. This is another assault on one race (most of whom are NOT responsible for past transgressions against others) – but apparently, it’s not racism…why, because Caucasian’s deserve it?

This pernicious, racist transgression is being subsidized by corps. all over through forced attendance/assault of training programs like critical race theory (tantamount to re-education camps where attendees are disrespected/humiliated and told (screamed at) of the depth of their racism)…and this is ok?

No, it not ok. It is time for some push back. The badge of victim-hood is hidden behind while these overtly racist attacks on one group mushroom.

The myriad hypocrisies of this world are disheartening and right now, a disingenuous lefty media is a driving force in this sh*tstorm.

Knowing all this, try to go out today and be a good guy.

M56BC

#117 YouKnowWho on 09.10.20 at 9:30 am

Did you see the Corona Broadcasting Corporation news yesterday about returning to the work place?

NO STAND UP DESKS!

NO STANDING AT SIT DOWN DESK!

NO PERSONAL “FLAIR” IN YOUR CUBICLE!

NO GROUP GATHERINGS!

I gotta tell you, it’s just how you name it. Since we call it “preventative measures” instead of “demoralizing de-humanizing controls” it’s OK.

Branding – it is amazing! What can’t branding do? You don’t like something? Rename it! Rebrand it! NOW IT IS DIFFERENT AND GOOD!

They are communists – BAD!
We are a democracy – GOOD!
Republican/Democrat. –
Libaral/Conservative
Coke/Pepsi
PC/Mac

You see how you believe they are different? When really, they are 99% exactly the same thing.

#118 JB on 09.10.20 at 9:30 am

#109 crowdedelevatorfartz on 09.10.20 at 8:17 am

@#103 willworkforpickles
“China and the rest of the world will slowly sell off US securities into gradual obscurity and worthlessness.”

++++
And then the world will flock to that bastion of objective Law Courts, open accounting principles and all around democracy….China and buy the Renminbi as the currency of the world?

https://www.investopedia.com/articles/forex/061115/yuan-vs-rmb-understanding-difference.asp

Not for a long long time.
Or they win the next world war……
…………………………………………………………..
Never, never, never trust China! I would rather trust the Orange Maniac to the south of us at least we know he lies all the time so at least we can rely on that fact!

#119 willworkforpickles on 09.10.20 at 9:48 am

#109 ce-fartz
China is moving slowly selling off US debt bonds inspiring others to do the same. Too much too soon will only boomerang on China negating the ultimate goal of dethroning the US dollar as the worlds reserve currency with the rest of the world buying those bonds at China’s loss if the move is made with too much selling too soon.
You are right it will take years as i previously stated, but the gradual pace of selling off US debt as is the intent in itself puts upward pressure on rates.
The strategy is to take short-term pain and inflict long term damage but at a gradual pace. (tariff war backlash)
Long story short as the bond market is a much detailed subject, dumping US treasuries even at a gradual pace puts pressure on interest rates which is and was the main point of my previous message/s and how it will sooner rather than later reflect on the RE market here at home.

#120 Do we have all the facts on 09.10.20 at 9:54 am

Only trying to shed a bit of light on the actual risks associated with Covid 19. All we hear about these days is an increase in infections without any context.

No more comments from me on this matter.

#121 YouKnowWho on 09.10.20 at 10:05 am

Inappropriate content for this site. Take anti-mask arguments elsewhere. – Garth

Forgive, I simply found it very interesting that there is a co-ordinated effort, complete with ad copy, print, distribution at street level promoting anti-masking. Someone is covering the cost to do this, and what timing – right at BtS and pre second-wave. I wonder who is behind it really.

I also found the shift of message interesting Garth. Whatever anyone’s stance on masks is, the messaging, science, arguments have been horrendous to date by leaders and especially the scientists – unfortunately. I thought it was worth noting.

When a guy tries to sell you a used VW Diesel, and you challenge the green, safe, low-cost claims with facts of damaging particulates that take 4 years off city dweller’s life on average, pollute air for those who have not made the choice to buy a VW Diesel, and highlight the maintenance cost needs for a VW Diesel to run anywhere near 10x the approved emission levels, suddenly they go silent and have no retort.

This feels quite similar unfortunately, and if this thing is as serious as we’re to believe, we have no time for this type of nonsense. We need to get serious to crush it, or it’s all pointless and only gives more validity to the theories that turn out to not be theories at all in the end. The excuse for this happening cannot be incompetence by the leaders. If I can ask these questions, so should they. And it is on them to come up with real solutions.

Then again, I did highlight a few nuclear bomb “accidents” United States has had. If reading that nuclear accident history of the richest most powerful country on the planet is any indication of how they handle something as serious as nuclear weapons – with duck and cover as they accidentally drop nuclear weapons after nuclear weapon on themselves and Canada as well – then what honest hope is there in this case?

#122 Lost on 09.10.20 at 10:07 am

s://whttpww.theglobeandmail.com/business/article-canadian-banks-return-to-focus-on-cost-controls-resume-paused-job/
Like Garth said before, out of sight out of mind, very easy to let go, nothing personal as there is no real connections forge through Zoom.
Management will fight a lot harder for their team if there is a personal connection and the fellow team members are more loyal when seeing your superior going to bat for you.
The banks can now downsize with impunity as there is no social consequence, you are in your little area far away from corporate not in an office with lots of coworkers.
The media will not care about a couple of WFH employees getting the axe, it will be a constant drip of people being let go every week, better optics that way.

The employment consequences of WFH will not be pretty for many. What a bad choice many young professionals are making. – Garth

#123 YouKnowWho on 09.10.20 at 10:17 am

#110 Do we have all the facts

I’m gonna say it Garth. I read Dwhatf’s stuff, and dug deeper into some of the points to learn. He did share some crushing info about WHO death classification orders/instructions – which are real and I have not seen anywhere else, strangely and disappointingly. Sometimes it seems a bit as if MSM doesn’t want the masses to question anything. I mean, we see it on RE Board, with press releases feed right into the news cycle, why would they act any different in this case? If nothing else, it is though provoking about the info and data we are fed. Even if it’s off-finance/market topic, I appreciate the broader discussion. It’s like a cocktail party where you move from group to group to see what they are talking about. Quite appealing really.

These comments have a tendency to throttle back the fear actually – so a good thing. Also, not same eyes are on this blog all the time to read them.

I do understand your point about stepping away. Too much of a good thing is…well, too much. But appreciate reading them nonetheless.

#124 not 1st on 09.10.20 at 10:19 am

#96 not 1st on 09.09.20 at 11:18 pm
Interest rates will be negative within 2 yrs. I wouldnt lock anything in until

Nope. – Garth
—-

With another expect $100B added to the countrys credit card and none of it going to spark our main industries which could bring us out, I am betting Trudeau sinks us into a deeper hole. One that MMT wont get us out of. That should be evident by the time our ratings get cut to BBB.

#125 Toronto_CA on 09.10.20 at 10:40 am

“1. The amount of money people can earn, per year, in the area where the house is located. This is a biggie. The hard ceiling for the price of a house is the average wage,”

Looks at Vancouver area RE prices…
Looks at Vancouver average wage…

Nope. Guess again.

#126 Ronaldo on 09.10.20 at 10:55 am

#92 The Woosh on 09.09.20 at 11:06 pm
#61 Oliver the Koan Arranger
The best advertised VRM is currently 1.53%. Where dd he borrow? – Garth
——————————————————————
Oliver the Loan Arranger?

——————————————————————

Thanks!! :) That was a good laugh. I’m still laughing.
—————————————————————–
That was a good laugh. Actually I made a mistake, his rate is now 1.2 not 1.25 2.45 – 1.25 = 1.2. Guess who is having the last laugh? lol

#127 Ponzius Pilatus on 09.10.20 at 11:04 am

112 crowdedelevatorfartz on 09.10.20 at 8:32 am
Hmmmm.
1st day of school starts in BC and the local media give us this….

https://www.citynews1130.com/2020/09/09/burnaby-teacher-two-day-suspension/

I guess its better than the “grooming” stories that have been in the News of late.
——————-
CEW
You must have some bad experiences in school.
You don‘t like teachers, we get it .
Time to move on.

#128 YouKnowWho on 09.10.20 at 11:09 am

#125 Toronto_CA on 09.10.20 at 10:40 am

Nope. Guess again.

Market manipulation through removal of all risk on banks, thus allowing those with little to no equity to enter the debt prison, while the entire risk of debt is absorbed by CMHC?

Since we make nothing, our GDP is just puffing up house values?

I gotta tell you, it’s worked so far. So who da’fool is a valid question to ask.

Another valid question to ask is, do you feel $6M in Oakville is worth while with 8 months of garbage weather. I mean, that’s 75% of every year. Wouldn’t you rather spend 1/6th of that, go to Europe and live in 15-30 degree climate, with winter a simple drive into the mountains away?

#129 YouKnowWho on 09.10.20 at 11:10 am

66%! HAHAHA. Close to 75% though with the rainy summer days.

#130 TurnerNation on 09.10.20 at 11:33 am

#105 Crazyfox at you recognize it’s not normal.

On the trend of kicking us off the land, a few guys with flamethrowers could herd us well. We will be herded away and the spoils of war, the land will go to whom?
To me it appears what’s going on today is the largest transfer of assets and land since…WW2.
Why did the bloody British Empire (whose face graces our coinage) press into Africa during WW2 , of all places?
https://en.wikipedia.org/wiki/Second_Boer_War

4-letter word, begins with l ends with d: l__d.

#131 TurnerNation on 09.10.20 at 11:34 am

^^ Correcting link, I had two tabs open – no germans down there so why?
https://en.wikipedia.org/wiki/North_African_campaign

The North African campaign of the Second World War took place in North Africa from 10 June 1940 to 13 May 1943. It included campaigns fought in the Libyan and Egyptian deserts (Western Desert Campaign, also known as the Desert War) and in Morocco and Algeria (Operation Torch), as well as Tunisia (Tunisia Campaign).

The campaign was fought between the Allies, many of whom had colonial interests in Africa dating from the late 19th century, and the Axis Powers.[12][13] The Allied war effort was dominated by the British Commonwealth and exiles from German-occupied Europe. The United States officially entered the war in December 1941 and began direct military assistance in North Africa on 11 May 1942. Canada provided a small contingent of 348 officers and enlisted men.[citation needed]

#132 Tyberius on 09.10.20 at 11:37 am

#80 Tyberius on 09.09.20 at 8:53 pm

Vancouver Freedom Rally 2020 on September 13th

Vancouver Art Gallery: 12- 5 pm
March 1 pm
Speeches 2:30 pm

Be there!
————
Mandatory masks, right? – Garth
———————————

Ha! Glad to see you still have a sense of humour Garth!

I’d say that it being an anti-mask, anti-lockdown, etc protest, anyone showing up with a mask will be the odd man out (or woman).

Here’s the latest from other parts of the world:

Anti-mask group sues city of Tulsa, alleges masks cause oxygen deprivation

A Tulsa optometrist and some area business owners have filed a federal lawsuit to challenge the city of Tulsa’s mask mandate.

The group, led by Robert Zoellner and ThriveTime radio show host Clay Clark, named Mayor G.T. Bynum, Tulsa Health Department Executive Director Bruce Dart and the Tulsa City Council as defendants in the 33-page federal filing alleging masks cause oxygen deprivation.

https://tulsaworld.com/news/local/anti-mask-group-sues-city-of-tulsa-alleges-masks-cause-oxygen-deprivation/article_0d4c47d4-dcac-5cf8-b788-b80271a9cfa5.html

#133 Lambchop on 09.10.20 at 11:43 am

#123 YouKnowWho on 09.10.20 at 10:17 am
#110 Do we have all the facts

I’m gonna say it Garth. I read Dwhatf’s stuff, and dug deeper into some of the points to learn. He did share some crushing info about WHO death classification orders/instructions – which are real and I have not seen anywhere else, strangely and disappointingly. Sometimes it seems a bit as if MSM doesn’t want the masses to question anything. I mean, we see it on RE Board, with press releases feed right into the news cycle, why would they act any different in this case? If nothing else, it is though provoking about the info and data we are fed. Even if it’s off-finance/market topic, I appreciate the broader discussion. It’s like a cocktail party where you move from group to group to see what they are talking about. Quite appealing really.

These comments have a tendency to throttle back the fear actually – so a good thing. Also, not same eyes are on this blog all the time to read them.

I do understand your point about stepping away. Too much of a good thing is…well, too much. But appreciate reading them nonetheless.

______________

Second.

I have learned much from this blog, and also been exposed to many different, interesting and educational viewpoints via the comments section.

Deeply appreciate both aspects of your blog.

#134 Don Guillermo on 09.10.20 at 11:59 am

#51 Miami Blue on 09.09.20 at 6:29 pm
Hi Garth,
Snowbirds are not flying south this year so they need snow tires. They are selling like crazy. If you need winter tires you better buy them now
****************************************

My snowbird flight is full

#135 Doug t on 09.10.20 at 12:05 pm

65 soggyshorts

are you Howard Hughes ?

#136 KNOW IT ALL on 09.10.20 at 12:17 pm

OIL is headed for its 2nd grand tumble of the century.

The calculation for Unemployment numbers in the U.S. have been altered for the purpose of deception and the
Claims are still climbing.

What kind of rebound are we referring to here?

Maybe the rebound in overvalued tech stocks which btw are the only companies propping up the general markets ……. until they can’t anymore.

When the punch bowl runs out and the party is over there will be a tremendous HANGOVER awaiting.

#137 YouKnowWho on 09.10.20 at 12:28 pm

Speaking of TIFF…opening today….2 interesting new movies premiering.

The New Corporation: The Unfortunately Necessary Sequel: The sequel to The Corporation exposes how companies are desperately rebranding as socially responsible — and how that threatens democratic freedoms.

76 Days: Raw and intimate, this documentary captures the struggles of patients and frontline medical professionals battling the COVID-19 pandemic in Wuhan.

76 Days is in Mandarin, and directed by Hao Wu, Weixi Chen, Anonymous. I gotta tell you, with the access necessary for this movie to be made, I think we know who Anonymous is, right?

I hope Netflix buys both movies.

#138 Oliver the Loan Arranger on 09.10.20 at 12:46 pm

#126 Ronaldo on 09.10.20 at 10:55 am
#92 The Woosh on 09.09.20 at 11:06 pm
#61 Oliver the Koan Arranger
The best advertised VRM is currently 1.53%. Where dd he borrow? – Garth
——————————————————————
Oliver the Loan Arranger?

——————————————————————

Thanks!! :) That was a good laugh. I’m still laughing.
—————————————————————–
That was a good laugh. Actually I made a mistake, his rate is now 1.2 not 1.25 2.45 – 1.25 = 1.2. Guess who is having the last laugh? lol
————————————————————–

Glad you got a good laugh and kudos to your son getting such a great rate!

#139 Bill on 09.10.20 at 12:54 pm

T2 said “no to helping our vets” while helping out SNC AND others.
Now look at him go. Does he know something we don’t…maybe debt levels dont matter?!
Or its the new green economy getting hammered at us!? Full on scocialism.
Ive never seen a gov run a company effectively so how does he think can completely redesign it into a green and survive the depressional blast?
Enjoy your debt bindge.

#140 Mark the Carney, Carney on 09.10.20 at 12:59 pm

begun.

#114 YouKnowWho on 09.10.20 at 9:20 am
#111 Mark the Carney, Carney

MtC,C,

You can’t declare Canadian milk farmers as having escaped the market because they received protectionism from the government. That action is a finger on the scale, obviously.

This milk example is actually a very good one, because it shows the finger on the scale and confirms beyond any doubt that THE MARKET IS AS FIXED AS IT GETS.

There is no such thing as a free market.

Your milk example is but one thing. But let’s deal with those escapees for a moment, shall we?

The people who have “escaped” the market are out there, in a spiral to the bottom, gig economy, part time, multiple jobs, reverse auction to the bottom on services.

This is clearly and issue and helps corporations be profitable. It is wage deflation, which clearly the government is perfectly fine with, because there is no intervention in this case like with the milk dudes.

The NON-ACTION on this point is a form of enablement. Suddenly more and more human beings have no protection, no benefits, no security.

Also, please don’t throw companies like Nike, Apple, Microsoft to prove your point about NOT escaping the market. The more I read what you wrote, the more I feel like your definition of NOT escaping is either a monopoly or market share dominant player. Nike makes she’s for $2 and sells them for $200. Apple sells $1500 cell phones. Microsoft, well, it must be nice of Bill to be so generous. He played cut throat and perhaps has some conscience to clear. I hope he does deliver that Molten Salt Reactors to the world and essentially address our energy problem once and for all.

Please forgive if I myself am a little salty. It is early in the day and I’m still drinking my opening day coffee.

Cheers.
————————————————————-

You are forgiven for being salty mon ami! You are also forgiven for misquoting me/not understanding my escaping the market(btw this is the term the late great John Kenneth Galbraith used extensively in all his books of which he wrote many). I take it you have the same credentials of the esteemed Mr. Galbraith?:)

I used Nike, Microsoft, Apple, the pharmaceuticals as examples of firms that HAVE escaped the market to a large extent not as you incorrectly quote me as saying NOT escaped.

Escaping the market is what all government workers have done via their collective bargaining/unions. My point with teachers in Ontario is proof. Private sector teachers make 50% less on average because that is what the market will pay them. Public sector teachers have escaped this private sector market. That goes across the board for all government employees.

American milk farmers are subject to the market and are going bankrupt while many Canadian milk farmers are very, very wealthy ( a buddy of mine owns $3 million in quota alone, his land is worth $10 million). Not bad huh?

You are spot on in how Nike makes huge profits and that WAS MY POINT. You seemed to have missed it. Nike has tremendous market control which little Joe Blow business does not. Classical economics teaches that all market participants are subject to the same market principles and it is clear that all market participants are NOT subject to the same market principles.

Am I clear now mon ami?

#141 Sonny on 09.10.20 at 1:47 pm

Bank of Canada head says uneven recovery could hit living standards for all Canadians

https://vancouversun.com/news/economy/bank-of-canada-head-says-uneven-recovery-could-hit-living-standards-for-all-canadians-2/wcm/630495f8-7fe4-4a87-98c0-276f52034a71/?fbclid=IwAR0CRrhtMJqrycFEr74897FL8fYYmOTBGPlvdRBQ3gtfNE9Q6iB7ptYz4tQ

#142 You know val on 09.10.20 at 5:29 pm

Garth why the double standard on social distancing what’s good for the general population but not classrooms?

#143 1255 on 09.10.20 at 5:48 pm

Garth, what are you talking about? Cheap money has been here for 11 years, what’s another 11?

There’s no way rates are going up in the foreseeable future.

#144 jess on 09.10.20 at 5:58 pm

insurance claims lagging indicators

“Combined ratio, a key measure of underwriting profitability, deteriorated to 110.4 per cent from 98.8 per cent a year earlier. A level above 100 per cent indicates an underwriting loss. – Bloomberg/Reuters/PA