Lock ‘er up?

Days ago a blog dog reported being mocked by buddies for considering a ten-year-long mortgage term. The obvious advice here was to get new friends.

But wait. Does this make sense – now that a decade-long term is available for (wait for it)…1.99%?

Hmmm. It merits some serious noodling.

First, history has proven time and again that people who chose variable rates win. The cost of a home loan with a floating rate is generally less than one which is set for three or five years. Plus, over the last couple of decades we’ve had more deflation than inflation as well as economic potholes which have kept central banks hitting their brakes. So borrowers who went with a VRM saved interest costs and actually paid their principals down at a speedier rate.

But that was then. This is 2020. The year of lockdowns, quarantines, free govey money, recession, pandemic, mask fashion, curbsiding, working-in-undies, social distancing, Trump-busting, vax angst, burb lust, Zooming, crashing rents, bug stress and, yes, .99% mortgages. History is bunk, apparently.

In the last few months the big discount for a variable-rate loan relative to one nailed down for a few years has dissipated. So it just made sense to lock in for five years at 1.5%, or whatever ridiculous number your lender was offering. When rates are this low the bulk of every monthly cheque goes straight to paying off principal, so no need to make annual pre-payments or double up. As spelled out here recently, better to take the extra cash and invest it in a diversified portfolio – then pay down the mortgage upon renewal from investment gains. Diversification is good.

Now decade-long terms are crashing, too. That 1.99% rate is being offered by brokers and comes in below Tangerine’s 2.1% rate – an historic low.

The thing to remember about 10-year money is that all loans become open and fully payable after five years because of the Canada Interest Act (this is why we don’t have USA-type 30-year loans). As a result, if you take a decade-long mortgage make sure you don’t move, sell, croak or get divorced in the first 60 months. The mortgage break fee’s a killer. But after the five-year mark, this loan becomes open, so a homeowner can walk by paying a penalty equal to only three months of interest.

Now, what about the rate? A ten-year commitment at 2% costs more every year than a five-year term at 1.5%. Is it worth paying this additional amount for the first sixty months in order to have a 2% mortgage guaranteed for the next five years? In other words, will mortgage rates be materially higher in 2025 than they are now? If you think so, this makes sense. If not, go five.

Well, if you ask this pathetic (but muscular, low-cholesterol) blog for an opinion, there’s no hesitation. There’s but one direction for rates over the coming years. Up. If not there are worse things to worry about – like a complete vaccine failure, deep recession, and years of masked snouts.

But that’s not gonna happen.

Governments around the world have already spent almost $20 trillion on stimulus programs to counter the virus. More is flowing from Ottawa every day. The US is about to approve another almost-$1 trillion package. Central banks continue to snorfle up assets ($4 billion a week for the Bank of Canada). The combo of this fiscal and monetary stimulus – massive amounts of spending and debt – all but guarantees inflation and higher rates will emerge.

Meanwhile a world in lockdown – Toronto, LA, Madrid, Berlin, NYC – is stoking pent-up demand. Once the vax squishes the slimy little pathogen and herd immunity rides to the rescue, expect a torrent of consumer spending. More inflation. More rate pressure.

And look at the savings rate. As detailed here in recent days, government largesse has more than doubled the amount people are hoarding. Cash deposits are $170 billion ahead of normal levels, says CIBC. So much moolah, and nowhere to shop! This will end. More pressure.

Plus the vaccines. Soon there will be millions of doses available as the biggest inoculation in human history rolls out. Vaccine passports/aps will be required for travel, entertainment, shopping and employment. This is an unprecedented time, but also a triumph of science. As the vax flows, the virus will recede and as that occurs, global GDP will expand, pushing commodity prices higher, increasing inflation and augmenting rates.

It is inconceivable a Canadian mortgage will be 1.5% in 2025. You’ll be gonzo lucky to see 3% money. So a loan that runs until 2030 at just 2% could look very tasty. Borrow accordingly.

142 comments ↓

#1 Felix on 12.16.20 at 2:21 pm

Ughh. Just imagine the dogawful germs those two mutts are spreading.

Just in time to lick their low IQ idolatrous human’s face.

#2 Guy in Calgary on 12.16.20 at 2:23 pm

I do not think a 10 year mortgage really ever makes sense.

Why? – Garth

#3 TDOT Karen on 12.16.20 at 2:37 pm

I’m currently on variable 5-yr at 1.9%. About to lock in at 1.87% for a fixed 5 year which gives me peace of mind to know how much principle I’ll be paying down.

#4 Joe Schmoe on 12.16.20 at 2:39 pm

I thought I would keep my waist/hairline from 2010 too…

10 years is long horizon.

#5 Thomas on 12.16.20 at 2:39 pm

Why sign for a 2% 10 year mortgage when you can sign one at 1%@10y in 2021 when the CB interest rate will become negative. Do you really think that Canada is better than EU and UK?

What is backing the canadian dollar? No army, no gold, no GDP increase… The music will stop next year, when foreigners will no longer buy Canadian (astronomical) debt!

#6 Mark on 12.16.20 at 2:40 pm

Yes, show me your PAPERS, sound familiar???

#7 WTF on 12.16.20 at 2:43 pm

Sounds like the Banks are figuring the rates will be low forevah. Or is this just them trying to take market share from each other?

#8 Outrage on 12.16.20 at 2:44 pm

The debt is to high just like Japan. There have been no interest rate hikes there for may years. The new normal,just asset inflation. Houses went up over 12% in Canada in the worst recession. The house will always be your best investment in Canada !

#9 NSNG on 12.16.20 at 2:44 pm

Give people the power to monitor their risk level and the ‘pandemic’ will end much quicker.

FDA Approves At-Home COVID-19 Test That Works for Children Over 2 and Doesn’t Require Prescription

Are you going to bring this to Canada T2 or just stick mystery meat soup in our arms?

#10 Flop... on 12.16.20 at 2:46 pm

These guys reckon the recovery is looking like the Nike Swoosh.

Pretty sure it’s like Adidas for some people.

Three stripes in your underwear…

M46BC

—————————-

“How COVID-19 Has Changed Employment in the U.S. Industry.

The U.S. Congress and the President continue to negotiate the shape and size of another round of economic stimulus. With deaths from COVID-19 approaching 300,000 as some parts of the U.S. reestablish lockdowns, the unemployment numbers are again trending in the wrong direction. But the coronavirus has already brought
massive damage to key industries, as our visualization makes clear.”

*The coronavirus pandemic decimated the leisure and hospitality industry, shedding almost 50% of all jobs in the two months between February and April 2020. The industry has seen a very slow recovery since.

*The mining and logging industry, which includes oil drilling, has seen the second most damage in terms of lost employment, dropping over 10% of all jobs with the historic collapse in oil prices.

*Every industry in our visual has seen a net decrease in employment, however some industries like financial activities and utilities have only been slightly impacted.

*The overall recovery of U.S. employment to pre-pandemic levels appears to be taking a Nike “swoosh” shaped trajectory, foreshadowing a long and slow grind back to pre-pandemic employment.

https://howmuch.net/articles/employment-downsizing-and-recovery-by-industry-2020

#11 Josh in Calgary on 12.16.20 at 3:04 pm

#7 WTF on 12.16.20 at 2:43 pm
Sounds like the Banks are figuring the rates will be low forevah. Or is this just them trying to take market share from each other?
—————-
Banks lend you other peoples money. They don’t really care what the interest rate is they just take a percentage as a middle man. So yes they have to compete with other banks for market share, but they don’t care what the rate is as long as they get a margin on it.

For example if they can get someone to lock in $1 million in a GIC paying 2% then they’re more than happy to lend it out at 3%. When you pay them their 3% interest on the mortgage they give 2% to the GIC holder and keep 1%. The same thing applies when GICs are paying 3% and mortgages are at 4%.

#12 Niagara Region on 12.16.20 at 3:06 pm

Great photo of Pyramus and Thisbe (the Greco-Roman literary antecedent of Romeo and Juliet)

#13 Jimmy Zhao on 12.16.20 at 3:09 pm

Regarding the Vaccine passports/aps, will there be a special Police/Enforcers walking around asking citizens to “Present your Papers” ?

Just your employer. – Garth

#14 Captain Uppa on 12.16.20 at 3:17 pm

“Days ago a blog dog reported being mocked by buddies for considering a ten-year-long mortgage term. The obvious advice here was to get new friends.”

————————————————–

That’s me! I’m that blog dog!!! I’ve made the big time.

Update: friends have been reading up and mocking has been somewhat muted.

Garth, what if the 10-year comes with a portability option?

#15 Ancient Ron on 12.16.20 at 3:17 pm

It it really a story about hedging against the possibility of higher rates. I have had many clients over the years who liked the security of long term rates. These are typically folks who are thinking about their kids tuition when they are still in kindergarten, stay married, and keep their Honda Accord for 10 years.

#16 Dolce Vita on 12.16.20 at 3:24 pm

A lot of money awash thanks to Gov’s Canada.

Rates will probably go up.

But you know Garth, I’m good with all that.

I think Canada is going to come out of this pandemic like economic gangbusters, with renewed optimism, a healthy respect for life and the willingness to seize, taste and make every moment count.

Grab life by the collar, give it a good shake and say I will not squander you, I will savour you to my last breath.

THAT’S a good thing and something I want to see. Yes, indeed I do.

#17 C V on 12.16.20 at 3:28 pm

Or they will just keep printing and rates will be the same in 5 years

#18 Ustabe on 12.16.20 at 3:29 pm

#2 Guy in Calgary on 12.16.20 at 2:23 pm

I do not think a 10 year mortgage really ever makes sense.

Why? – Garth

Back in the day Harper’s government decided allowing 40 year (I think) amortizations would be a good idea.

My brother and I were, at the time, building a small/medium property management company. Cash flow was good by this time so we approached our lender (on the advice of our long term accountant) and punched out all our mortgages as far as they would allow. I seem to recall 30 years…don’t @ me, it was a long time ago.

Immediately our “must pay” to the lender was drastically cut, vastly improving the already positive cash flow. We parked that in short term money market funds.

Each mortgage was converted to one year, fixed terms. As they came up for renewal we pulled that cash flow money and applied it to the principle. Recall this was when real interest rates were applicable.

Rinse and repeat a few times and like magic 7 mortgages (commercial ones at that) became 5, then 3 then vanished. You think being mortgage free on your home is great, try it on a stable of rental properties across Calgary.

When we saw the strategy starting to work (its like a toddler going down a grassy hill at the park…tentative and slow at the start but soon enough both confidence and gravity have taken over and the hurtling towards the bottom commences) that is when I knew I would end up quite comfortable in my retirement.

And I did, am, whatever. So…ya, long amortizations have their place provided you put in the effort to make them work for you, not the lender. Not many will do that. Takes a bit of discipline, something rugged, fiscally conservative men and woman have in spades, right?

Bonus Round: as the years went on we came to find out this strategy is what is at the core of Manulife’s ManuOne program, Investors apparently offers a variant and it is all based on an Australian Credit Union model. Funny, take a methodology offered by a CU to its members, monetize the heck out of it despite its simplicity, force the consumer to buy other of your product before it can be implemented and they are good guys?

#19 willworkforpickles on 12.16.20 at 3:34 pm

Unemployment is rising and will remain at these astronomical levels indefinitely. Fools believe that since interest rates decreased as they did in the last 11 years they will continue on that course. They endlessly fail to grasp one particular detail in that unemployment was at its lowest in decades and production spurred on via endless debt creation kept the artificial economy built on debt afloat all those years. All the while enabling them to say “its different this time” (re:RE) and soley as a result of this debt creation that created this twisted reality.
Now they say its not different this time meaning things will carry on as they have to infinity.

It will be different this time as in it won’t be anything like it was in the last 11 years.

Mad Mad runaway money printing with chronic high unemployment long term…low production…rising prices…rampant inflation…devaluing assets…stagflation.

Yes it will be different this time as the fallout of 2020/21 extremes unfold.

Here’s the catch…legions of smiley face green teeth realtor opinions notwithstanding.
The evil demon of stagflation past got exorcised via a massive increase in interest rates…a jump of about 10%.
Can you pay 1.5% today then renew at 11.5% in 5 years after your home equity has devalued more than 50%.
Yes…It will be different this time…that’s no joke.

#20 WUL on 12.16.20 at 3:37 pm

Dawgs,

A lesson in my life over the last few days. Read your mortgage before signing it. I was going to re-finance to save some moolah and that required my making an early payout of my current mortgage.

Can’t. Clause in mortgage contract says early payout only available on a sale to an arm’s length purchaser or my death. The latter is my heirs’ issue.

I did not read it before putting my John Hancock on it.

After all, fine print is for lawyers.

Where the hell would I find a capable one?

Best wishes all,

WUL

#21 Joseph R. on 12.16.20 at 3:44 pm

NSNG on 12.16.20 at 2:44 pm
Give people the power to monitor their risk level and the ‘pandemic’ will end much quicker.

—————————————————–

That’s what the world has been doing since last March. How’s that working out?

#22 Doug t on 12.16.20 at 4:12 pm

If not there are worse things to worry about –

That’s my worry right there – I don’t believe this country will be able to recover – not unless housing just magically keeps going HIGHER AND HIGHER forever – because we don’t have much else

#23 Tim from Midland on 12.16.20 at 4:19 pm

Garth – just went through the same analysis on 10 year terms. I fully agree with you. One point you should make is that if you go with Tangerine, and rates go up (which is the likely scenario), the break fee will only be 3 months interest @2.1% during the first five years too, which is nothing….as long as the comparison rate to calculate IRD is greater than 2.1%.

#24 Rob on 12.16.20 at 4:27 pm

Correct me if I’m wrong…..but if interest rates go up by the time you want to pay off a closed mortgage then interest rate differential penalty doesn’t apply, and the penalty becomes 3 months interest. No?

#25 Bartman on 12.16.20 at 4:28 pm

Hey Josh at #11. They loan digitally (cyber money that doesn’t really exist. At least 32 to 1 on every deposit. 32 X 1.5%.

For what it’s worth,
They own it all now. It does not make a bit of difference to the bankers. If rates go down – mortgage debt increases due to the rise in the price of the house. The bankers hold the mortgage whether its 5% at 500,000 or 2.5 % at 1,000,000 its all the same to them. They are the landlords now. LOCK in for 10 years comrades. They will be raising the rent soon (and the price of Vodka).

#26 Camille on 12.16.20 at 4:34 pm

The other day Garth wrote “The spectre of inflation…” and today the Financial Times writes “Spectre of higher inflation threatens historic bond rally”.
You definitely merit praise for that.

#27 Faron on 12.16.20 at 4:42 pm

#148 George S on 12.16.20 at 1:35 pm

#135 Gravy Train said:

I love the anti-renewable people’s stance: golly, if it doesn’t replace everything that emits CO2 right away, we best not try it. No sir. It’s almost like Suncor engineers climbed into your cranium and futzed around with the wiring of your brains…

Gravy train is pointing out that anyone (with credit or lumps of cash), especially those in southern Alta and Sask or BC can plunk down a solar array and net a decent return on investment. I have an uncle who doesn’t give a rat’s arse about CO2, but happily installs solar on all his properties because he likes the ka-ching. But, yeah, just stick your head in the sand a little longer. Actually, could you do that in Bangladesh? Thanks.

Fun fact: wind blows at night sometimes (although atm boundary layer tends to reduce wind speeds in some conditions)

Fun fact: when it’s cloudy, it’s also very often windy.

Fun fact: no one with any sense is talking about grid scale lithium ion storage.

#28 Pandemic my ass on 12.16.20 at 4:51 pm

DELETED

#29 Cruella de Vil on 12.16.20 at 4:53 pm

Toronto’s top doctor urges people to call out friends, family who plan to break COVID-19 holiday rules | CTV News – CTV News Toronto
___________________________________

You know who you are… The hypocrites on this blog!

The ones having little Johnny fly home for a week at XMas… Or maybe it’s big Sara coming home from university over the break. You know… The same ones calling other people out for similar behaviour or maybe not wearing a mask!

Dog knows there are a lot of you on this blog!

#30 Ustabe on 12.16.20 at 4:59 pm

Everybody talking about rate. The lenders do not care about rates. They are profitable when rates are high, they are profitable when rates are low.

They make their money off of terms and conditions. That is where you should be looking. Being all fussed about rates is diverting you from the steak to the sizzle.

In a rising rate environment a longer amortization is only of benefit to you.

Bonus Round: it is far easier for you or your broker to play with mortgage terms and conditions if you are dealing with a credit union or something like Alberta Treasury Branch.

#31 Adrian on 12.16.20 at 4:59 pm

You’re a smart guy and you know your stuff Garth, but I can’t see interest rates materially rising for a generation — maybe longer. Couple reasons: Anytime the economy gets a sniffle the medicine is a rate cut; And Trump did a good job removing the pretense that the Fed isn’t a political beast. Large deficits mean intense government pressure to keep rates low.

If rates do not rise over time CBs have fewer tools left to deal with downturns. Of course rates will increase. The certainty is 100%. – Garth

#32 Canadarm 2 on 12.16.20 at 5:05 pm

So, how much per year could a $170 Billion dollar B&D portfolio throw off?? Ah, if only! lol

#33 WTF on 12.16.20 at 5:14 pm

#11 Josh

Ahhh of course. Thanks for the explanation, make perfect sense. Cheers

#34 Steve French on 12.16.20 at 5:26 pm

OK blog dogs…

name this author…

Steve.

“I’m into my first salt pack, discreetly slipped into my beer. “Ahhhh”I spark up a smoke to compliment this rush. I take a Marlboro down fifty percent on my first drag.

Just as I reach over to ash it, two slightly wet and cool balls of softness push against my shoulder blades. My utopia is interrupted with salt-induced terror, is this a zombie lesbian grandmother with facial varicose veins set to explode, or maybe a huge fat gay man looking for a Vegas squeeze and a story for back home?

I turn, and to my delight, a gorgeous brunette with fake eyelashes, dripping mascara, specks of glitter on perfect cheekbones. She has the biggest blue eyes I’ve ever seen on a human. She’s two fisting a couple beers and is struggling to put a sentence together.

“Hi handsome, do you all happen to have an extra cigarette.”

————–

#35 Blacksheep on 12.16.20 at 5:28 pm

Josh # 11,

“Banks lend you other peoples money”
———————————————
Banks actually create the new ‘deposit’ out fresh air (expanding the money supply) based solely on the banks charter and the mortgagors signature. This is an old topic thats been beat to death by myself and Shaun of the Banks, but it is something worth understanding and dovetails somewhat with MMT thinking….Money is just paper, (plastic?) it’s the sovereign in controls ability to tax and also delegate whom creates it, that gives it value.

http://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

Quote direct from front page of BoE 2014 PDF

“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.”

#36 TurnerNation on 12.16.20 at 5:33 pm

I know this weblog debunked that “plan” which was to see every increasing lockdowns into 2021.
But Toronto and Quebec are talking about or doing just that.

I’d heard that the highway system in Toronto was set up to corral us if needed. I’d posted some maps of the few key pinch points circles, including the otherwise impassable ravine into Pickering. Cannot find that post .

#37 Jake on 12.16.20 at 5:44 pm

#6 Mark on 12.16.20 at 2:40 pm
Yes, show me your PAPERS, sound familiar???

For anyone worried about their freedom or lack thereof following this crises, just know that no one is invisible to Big Brother. For instance, if you have a computer and surf or use a cell phone you’re being watched. Don’t fret, just get the jab and let’s all move on from this.

#38 TurnerNation on 12.16.20 at 6:11 pm

Re. travel rights they told us this a few days ago. Why.
Could they be any clearer? Predictive? Papers please.
This is for our Heath!
Read between the lines

From Toronto Star paper

https://outline.com/B8WGPH

On Friday, the head of Ontario’s largest hospital network, Dr. Kevin Smith of UHN, tweeted that health-care workers are struggling and it is time to lock down a swath “from Oshawa to Niagara, north to Barrie and west to London.”

The data shows what percentage of people over age 15 were “out and about” — ventured 500 metres or more beyond their home postal codes — during a given segment of the week.

“We’re going to need to have a comprehensive approach to supporting these communities if we are to actually control the pandemic,” Brown said. “It requires attention to these longstanding structural factors.”

#39 hingadin on 12.16.20 at 6:16 pm

#33 Steve French on 12.16.20 at 5:26 pm
OK blog dogs…

name this author…

Steve.

***********

“I’m into my first salt pack, discreetly slipped into my beer. “Ahhhh”I spark up a smoke to compliment this rush. I take a Marlboro down fifty percent on my first drag.

Just as I reach over to ash it, two slightly wet and cool balls of softness push against my shoulder blades. My utopia is interrupted with salt-induced terror, is this a zombie lesbian grandmother with facial varicose veins set to explode, or maybe a huge fat gay man looking for a Vegas squeeze and a story for back home?

I turn, and to my delight, a gorgeous brunette with fake eyelashes, dripping mascara, specks of glitter on perfect cheekbones. She has the biggest blue eyes I’ve ever seen on a human. She’s two fisting a couple beers and is struggling to put a sentence together.

“Hi handsome, do you all happen to have an extra cigarette.”

********

Faron.

#40 baloney Sandwitch on 12.16.20 at 6:20 pm

I get what you are saying. Logically I should remortgage my house (fully paid for) and put the money into dividend paying stocks. VDY – Vanguard Canadian High Dividend Yield Index ETF) is yielding 4.2%. So not only is the interest deductible but the dividend income stream is tax advantaged. I doubt my wife is going to go for it and almost sure to veto. Women are emotional animals. They like the warm glow of security better than the excitement of financial engineering.

No such suggestion was made. – Garth

#41 WDL on 12.16.20 at 6:21 pm

“Vaccine passports/aps will be required for travel, entertainment, shopping and employment.”…..I guess I will never be allowed to travel, go out for entertainment, shop, but I’d like to see my employer try and fire me over not getting the vaccine! By the way, did you see this? I am not signing up to be anyone’s laboratory test rat! https://www.foxnews.com/health/alaska-health-care-worker-suffers-adverse-reaction-after-covid-19-vaccine?fbclid=IwAR0x_Tny5iQ_8pz6zr31cf_VG5rZQEKMo24RRg0xAht67DTqiy6D__ICg-M

Employers will not shoulder the liability of allowing non-immunized employees into the workplace. How is that not obvious? – Garth

#42 meslippery on 12.16.20 at 6:22 pm

Get a 10 year with the ability to port if you move, I had one.

#43 Brian Ripley on 12.16.20 at 6:23 pm

“Fun Facts” with #27 Faron on 12.16.20 at 4:42 pm

I added 2 youtube videos to my recent post “PEAK OIL SAYS BP”
http://www.chpc.biz/history-readings/peak-oil-says-bp

1) …of the Aptera, an electric/ solar vehicle that requires no charging for most daily use.

2) …of QuantumScape (Volkswagen-backed) that is building an electric car battery that it says charges to 80% in 15 minutes. Tesla and Toyota are also working on building solid-state batteries.

AND The International Energy Agency November 2020 Fuel Report projects that “Renewables are set to lead the global electricity sector.”

IEA Report Snippet:

“Cost reductions and sustained policy support are expected to drive strong renewables growth beyond 2022. Despite the challenges emerging from the Covid crisis, the fundamentals of renewable energy expansion have not changed. Solar PV and onshore wind are already the cheapest ways of adding new electricity-generating plants in most countries today. In countries where good resources and cheap financing are available, wind and solar PV plants will challenge existing fossil fuel plants. Solar projects now offer some of the lowest-cost electricity in history. Overall, renewables are set to account for 95% of the net increase in global power capacity through 2025.”

#44 Bill zufelt on 12.16.20 at 6:25 pm

Canada isn’t the only one running up debt remember–it is a global thing.Interest rates are low and have been low in countries like Japan for decades.Could we see higher rates in 2025?Maybe ,but why not take the lower rates now?If rates are higher in 5 years so will your pay check likely be higher.

Getting five years of protection for half a percentage point looks like the insurance bargain of a lifetime. – Garth

#45 Nonplused on 12.16.20 at 6:38 pm

Not that the Trump administration was particularly frugal, but I don’t think the Biden administration will attempt to stop the spending anytime soon either. Neither will Trudeau, not that Canada has much impact on rates. One would think that eventually that has to lead to rising rates but recent history would question that thinking.

But regardless, at 1.99% for a ten year one has to wonder how much downside there is. Can it go to 1% for a ten year? I suppose anything is possible but at some point the whole interest charge is just the bank’s margin, so that assumes they are borrowing at essentially zero. On the other hand the banks offering 10 years at such a low rate indicates they don’t see interest rates going much higher anytime soon, so maybe the variable is fine. It seems to me folks can’t lose either way.

Time to consult the magic eight-ball again.

#46 Bill zufelt on 12.16.20 at 6:42 pm

#43

If you do the math it works out to more than half a point—the next 5 years is costing 12.5% or 2.5% per annum that is a 67% increase in your mortgage payment the first 5 years of 1.5% and with todays massive mortgages that is not insignificant.Each to their own but I’ll take the 1.5% and wager my wages will counter any increase(they may go no where)in rates

Math is hard, isn’t it? – Garth

#47 Vexatious Vicky on 12.16.20 at 7:08 pm

DELETED

#48 alfredo on 12.16.20 at 7:08 pm

DELETED

#49 Bill zufelt on 12.16.20 at 7:11 pm

#45

You’re right it is hard for some but banks have it all figured out.Take the !.5% (bird in the hand) and worry about what will be will be in 5 years.2% sounds good though you’re right but upon doing the math it ain’t nothing special or any kind of insurance imo.

#50 Nonplused on 12.16.20 at 7:13 pm

#16 Dolce Vita on 12.16.20 at 3:24 pm

“I think Canada is going to come out of this pandemic like economic gangbusters, with renewed optimism, a healthy respect for life and the willingness to seize, taste and make every moment count.”

Just the carbon tax alone will ensure that the only sector of the Canadian economy that is going to boom is government, and maybe the fake green sector. This is a major tax increase and it is regressive because it impacts low income people the most as they spend a higher portion of their incomes on food and energy. But everyone will have less disposable income. Except the rich of course because they just bake their tax burden into the prices they charge.

The way things are now I pay more in carbon taxes than I do for the natural gas portion of my heating bill. This is set to go up. The proponents of the carbon tax say this will encourage me to alter my behavior. How? I already have modern standards insulation. I put in a new furnace that is so efficient it pees water into the floor drain when it is running. I have one of those fancy-dancy thermostats that turns the heat down at night. (And shows the 7 day weather forecast. Not sure why it needs to do that but hey.) I don’t have an air-conditioner and rely on the open window method. My lights are almost all LED at this point, even the Christmas light. The only place I drive anymore is Costco and the liquor store so it would be environmentally better and more cost effective not to buy a new electric car with all that lithium and new steel. And the motorcycles didn’t use much gas in the first place. The biggest of them, the 1300, gets 50 mpg (highway). The 250 over 80.

The carbon tax is just a tax grab. It would have been just as effective to raise the HST.

In terms of what the carbon tax will do to Canadian competitiveness, I have a story from years ago about tax avoidance. I once flew on a private jet (Nice! I wouldn’t mind flying so much if that is how it worked.) from Calgary to San Francisco. We left Calgary flying on fumes and landed in Montana for fuel. It made that much of a difference even before carbon taxes. Of course they fueled up again before we headed home. Whenever possible these private planes leave the US filled to the brim and they don’t refuel in Canada unless they have to. This has been going on for decades now. It will only get worse.

I wouldn’t be surprised if the major carriers do the same thing, taking on as much fuel as they can in the US even though a “full” plane takes an efficiency hit. There’s your reduction of carbon footprint for you. They are burning more carbon to avoid carbon taxes.

And of course drivers do the same thing. Nobody leaves the US without a full tank. Even people going from Alberta to BC top up just before the boarder, including BC residence who are returning. It just makes sense to pay less tax where you can.

#51 Tron Light on 12.16.20 at 7:14 pm

Employers will not shoulder the liability of allowing non-immunized employees into the workplace. How is that not obvious? – Garth

An employer cannot force you take a vaccine if it wasn’t part of the original employment.

Dream on. – Garth

#52 Russ on 12.16.20 at 7:14 pm

hingadin on 12.16.20 at 6:16 pm
#33 Steve French on 12.16.20 at 5:26 pm
OK blog dogs…

name this author…

Steve.

***********

“I’m into my first salt pack, discreetly slipped into my beer. “Ahhhh”I spark up a smoke to compliment this rush. I take a Marlboro down fifty percent on my first drag.

“Hi handsome, do you all happen to have an extra cigarette.”

********

Faron.

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

Ah yes, the Dislexyc Smokin’ Man, in his persona as a Nicroette Itte (from the planet Nicole, etc.) or something like that. :)

Cheers, Russ

sic is intentional, in his honour

#53 Bezengy on 12.16.20 at 7:16 pm

Speaking of debt, I see Ford gave municipalities 695 million today. In other news Toronto got another 531 million today too. Gotta keep that economic engine humming I guess.

#54 Garth's Son Drake on 12.16.20 at 7:17 pm

All good points. I am agree with nailing the 10-year at present.

The US Fed thinks inflation will catch in 2023. If so, you know what that means.

Until then, is the stress test still needed? Time to get rid of it or rename it to the home inflationary control tax – because that is what it is. Rates have only gone down, not up.

Now, Garth, did you see BTC blow through 21KUSD today. Man, what a trade to become rich.

#55 Faron on 12.16.20 at 7:24 pm

#42 Brian Ripley on 12.16.20 at 6:23 pm

“Fun Facts” with #27 Faron on 12.16.20 at 4:42 pm

Thanks Brian.

It’s possible to get to net zero by 2050, but it will take concerted effort. And there are known unknowns that include some of the issues that are pointed out here — flight, concrete, carbon capture and storage, social resistance. The report was sponsored by two oil companies (who recognize the existential threat they face):

https://environmenthalfcentury.princeton.edu/sites/g/files/toruqf331/files/2020-12/Princeton_NZA_Interim_Report_15_Dec_2020_FINAL.pdf

Here’s a summary in the NYT from yesterday:

https://www.nytimes.com/2020/12/15/climate/america-next-decade-climate.html?smtyp=cur&smid=tw-nytclimate

A different look:

https://www.unsdsn.org/Zero-Carbon-Action-Plan

#56 fishman on 12.16.20 at 7:26 pm

#38 Hingadin: Sometimes reading this comment section is like watching Jeopardy with my mother. Hate it when I always get beaten to the right answer.

#57 Stone on 12.16.20 at 7:33 pm

#24 Rob on 12.16.20 at 4:27 pm
Correct me if I’m wrong…..but if interest rates go up by the time you want to pay off a closed mortgage then interest rate differential penalty doesn’t apply, and the penalty becomes 3 months interest. No?

———

You are correct. Even before the first 5 years are up if rates rise in that time.

#58 Nonplused on 12.16.20 at 7:38 pm

#42 Brian Ripley on 12.16.20 at 6:23 pm

The problem with these IEA reports and others is that they consider the cost of “replaceable” (they are not “renewable”, they don’t last forever and the windmill blades go to the landfill 20 years later) after subsidies and “go first” rules. The also do not consider that the electric utility has to keep a fossil fuel plant on stand by (ancillary services) to balance the load and jump in when it gets cloudy, which is expensive and burns natural gas for no good reason other than keeping the turbine spinning at grid frequency until needed.

As for the super-duper batteries, well, nuclear fusion will arrive first I think. Then the whole problem will go away and all these solar panels and windmills will head to the dump where they belong.

#59 "NUTS!" on 12.16.20 at 7:39 pm

I’m curious, wonder if all those folks not willing to take the vaccine are willing to sign away their rights to medical treatment if they contract Covid? I doubt it. So, they don’t believe the science, but they’ll run into the hospital getting help from the medical professionals if they contract Covid. The same medical professionals who will use science to save their lives.

Yup, all makes perfect sense

#60 Flop... on 12.16.20 at 7:40 pm

You guys in Ontario must have noticed how Doug Ford looks ruefully when someone opens up a fridge door to show him where the vaccine is going to be stored and it is empty.

The guy gets traumatized.

Never show Doug Ford an empty refrigerator…

M46BC

#61 truefacts on 12.16.20 at 7:42 pm

@ #51 Tron Light…

An employer cannot force you take a vaccine if it wasn’t part of the original employment.

Dream on. – Garth
________________________________________

Are you sure about that? That doesn’t seem to be the legal precedent when the nurses refused to be forced to either get the flu vaccine or wear a mask – and that was in hospitals! What would differentiate the legalities for the Covid vax? Anyone?

https://www.canadianlawyermag.com/practice-areas/adr/nurses-win-dispute-over-vaccinate-or-mask-policy/269926

#62 I am cancelling you on 12.16.20 at 7:50 pm

DELETED

#63 When Will They Raise Rates? on 12.16.20 at 8:01 pm

The combo of this fiscal and monetary stimulus – massive amounts of spending and debt – all but guarantees inflation and higher rates will emerge.

Au contraire, it all but guarantees that rates can never rise.

#64 Scott Reider on 12.16.20 at 8:15 pm

Garth, i don’t think it really matters anymore where interest rates are. We will not have a Canadian dollar in by 2025.

All the money people invested, saved will be worthless, Garth. I know will not respond but that is okay.

#65 mark on 12.16.20 at 8:17 pm

#51 Tron Light on 12.16.20 at 7:14 pm
Employers will not shoulder the liability of allowing non-immunized employees into the workplace. How is that not obvious? – Garth

An employer cannot force you take a vaccine if it wasn’t part of the original employment.

Dream on. – Garth

********************************************

I think someone has bumped their head…………..

#66 Will on 12.16.20 at 8:35 pm

Garth or guests,
Does the Canada Interest Act rule regarding open mortgages after 5 years apply to commercial mortgages as well? I’m guessing it is only residential, but just wondering.

#67 Faron on 12.16.20 at 8:38 pm

#50 Nonplused on 12.16.20 at 7:13 pm

The carbon tax is just a tax grab. It would have been just as effective to raise the HST.

It’s revenue neutral. So, not a very good tax grab…But, I wouldn’t put it past the govvy to grab those funds in the future.

#58 Nonplused on 12.16.20 at 7:38 pm

The also do not consider that the electric utility has to keep a fossil fuel plant on stand by (ancillary services) to balance the load and jump in when it gets cloudy, which is expensive and burns natural gas for no good reason other than keeping the turbine spinning at grid frequency until needed.

Yes, they do consider these and a myriad of other factors that will make this a very challenging transition. See the reports I posted in #55. Do you really think you have thought of things that professionals in the energy planning industry have not? Which struggle-bus Calgary oil company do you work for anyway?

#68 Ponzius Pilatus on 12.16.20 at 8:39 pm

#9 NSNG on 12.16.20 at 2:44 pm
Give people the power to monitor their risk level and the ‘pandemic’ will end much quicker.

FDA Approves At-Home COVID-19 Test That Works for Children Over 2 and Doesn’t Require Prescription

Are you going to bring this to Canada T2 or just stick mystery meat soup in our arms?
———————
Hold the horses!
You didn’t read the whole story.
You gotta sent it in to a lab.
By the time it comes back, you could be dead already.

#69 Faron on 12.16.20 at 8:39 pm

#65 mark on 12.16.20 at 8:17 pm

#51 Tron Light on 12.16.20 at 7:14 pm

I think someone has bumped their head…………..

Yeah, that Tron light always cuts out when you need it leaving one vulnerable to tripping and head bonking..

#70 belly rubs on 12.16.20 at 8:40 pm

“Vaccine passports/aps will be required for travel, entertainment, shopping and employment.”

Will we still be able to donate blood if we have been vaccinated? Maybe I should ask my doctor… when I ask her if the vaccine is right for me. It’s fun to speculate, though. Imagine… what a snitchfest that’ll be. I could make a killing bootlegging toothpaste.

#71 Linda on 12.16.20 at 8:44 pm

Anti-vaxxers are Darwin Awards in action. Only problem I’ve got with them is that they clutter up the hospital halls to the detriment of the rest of us. Because you just KNOW they’ll be demanding instant help/service should they get ill with a virus they refused to be vaccinated for.

Mortgage rates these days seem to be playing limbo. How low can they go? Has there ever been a negative mortgage rate anywhere in the world that anyone knows of?

As for #29 ‘Cruella’, I have to say I think she makes a valid point. I strongly suspect a lot of folks are planning to meet up with family/friends for Christmas regardless of the public health orders in place. While I’m delighted a viable vaccine has arrived, the problem with having one is that folks may feel its safe to stop doing all the public health measures because hey, there’s a vaccine. False sense of security may see one big spike in infections come January 2021.

#72 cramar on 12.16.20 at 8:56 pm

FED Chair J. Powell said today that he ain’t raising rates until 2023.

Just saying.

Irrelevant to Canadian mortgages. – Garth

#73 Ponzius Pilatus on 12.16.20 at 9:04 pm

Just saw the news:
About 100,000 inactive oil wells, many of them orphaned, in Alberta.
They are becoming a huge environmental problem.
The industry has not allocated enough funds for clean-up, so the public purse has to come to the rescue.
Again, income is capitalized and costs are socialized.

#74 Ponzius Pilatus on 12.16.20 at 9:10 pm

Just love Chris Cuomo on CNN.
Gotta watch him.

#75 Keen Reader on 12.16.20 at 9:27 pm

DELETED

#76 truefacts on 12.16.20 at 9:31 pm

#59 “Nuts”

“…wonder if all those folks not willing to take the vaccine are willing to sign away their rights to medical treatment if they contract Covid? I doubt it. So, they don’t believe the science, but they’ll run into the hospital getting help from the medical professionals if they contract Covid.”
_________________________________

I wonder if people who eat greasy burgers and fries are willing to sign away their rights to medical care if it gives them a heart attack? Science proves this type of diet CAN lead to heart attacks, but people reject the science and still eat it…

I’m not pro or anti-vax, but your example does not link up logically. Let’s say you are younger and looked at the stats and realize the chance of Covid being serious is quite small if you don’t have underlying health issues – but the effects of the vaccine are still unknown as they have little data. A risk/benefit analysis might lead you to conclude you want to postpone or avoid the new vaccine. Is that unreasonable?

I think older vulnerable people (esp. long-term care residents) will get vaccinated (first in line as they should be). Once that happens, Covid will become a nothingburger in the grand scheme of things as the data shows the VAST majority of Covid deaths have been the elderly (esp. those with comorditities).

If you were not full of crap, hospitalizations across Canada would not have surged with Covid patients. But you are. We do not vaccinate only to prevent death. – Garth

#77 Keen Reader on 12.16.20 at 9:32 pm

DELETED

#78 steve on 12.16.20 at 9:36 pm

hint for those who use the term windmills.

you sound dumb.

(you likely are dumb)

windmills mill grains.

windmills do not generate power.

using the term windmills is like using the term sheeple. Your opinion immediately gets dismissed by anyone with a working brain.

#79 Discombobulation on 12.16.20 at 9:51 pm

#59 “NUTS!” on 12.16.20 at 7:39 pm

I’m curious, wonder if all those folks not willing to take the vaccine are willing to sign away their rights to medical treatment if they contract Covid? I doubt it. So, they don’t believe the science, but they’ll run into the hospital getting help from the medical professionals if they contract Covid. The same medical professionals who will use science to save their lives.

Yup, all makes perfect sense
_____________________________________________

Brilliant point. As a taxpayer, I completely agree with you.

AND this means if you didn’t get your pneumonia shot, don’t come in when you get pneumonia. Did you get your shingles vax? Don’t want to see you. You smoke but you’ve got stage IV. Back of the line for you? Who knew smoking could kill you? Need a new liver because you melted yours with alcoholic dependence? Don’t claim you weren’t warned. That goes for you, Eddie Van Halen…. no, wait… that was a guitar pick that caused caused your demise… not years of cigarette, alcohol and other abuse. Ditto for your hip.

From small brains come small ideas!

#80 Funny Bee on 12.16.20 at 10:05 pm

The BOC Trudeau ATM Alliance is still puking out debt and killing jobs at the same time. A Miracle.

http://www.bnnbloomberg.ca/fed-to-maintain-bond-buys-until-substantial-economy-gains-seen-1.1537486

#81 Doug in London on 12.16.20 at 10:07 pm

Higher interest rates going forward? That’s quite likely, keep in mind these unbelievably low rates are just as much an anomaly as the high rates in the fall months of 1981. Here comes the pesky time tunnel again. Say, has anyone heard that new tune The Stroke by Billy Squire? How about I Will Follow by that new Irish band U2, or Bette Davis Eyes by Kim Carnes? I heard them on my way to see that new movie Time Bandits.

#82 Reynolds 531 on 12.16.20 at 10:23 pm

I agree wholeheartedly but you’re not asking the other side of the question.

If all this is true, wouldn’t that BD portfolio want to trade all medium and long term bonds for resets and money market instruments?

#83 Stan Brooks on 12.16.20 at 10:24 pm

As David Rosenberg said and I agree with him:

The low rates are pretty much locked in for a very long time/forever. The boss of BoC confirmed that it is their policy to fix debt with more cheap debt. They start the fire and then pretend to distinguish it with more fire.

Pretended ‘savings’ are printed new money while everyone is deeply in debt.

The problem is when inflation shows up and the whole thing falls apart.

So they will lie about inflation with any means possible.
Pretend that it does not exist.
Invent new statistical methodology and massage data.
Ignore historical methodologies that would show that inflation is north of 8-10 % /would be, if based on old statistical methodologies from the time of Paul Volcker were used.

Retirees, savers, the whole economy will be destroyed as a result as we continue to boost housing which is the end game in the currency devaluation process.

This is not Japan. They had the production base and positive trade/surplus at times when the world did not have competitive devaluation. Their housing shrunk in half in nominal terms, in same places more in 3 decades, while our keeps increasing.

You need no hyperinflation to destroy a currency and and economy, 8-10 times prices increases of houses in a decade or two will do and we are on our way to achieve it.

The lies about inflation, linking it with the consumers’ spending habits (and the consumer is broke) will do considering the stupidity and gullibility of the sheeple.

Dharma had and excellent post on the topic yesterday. Ignorance, stupidity, brainwashing and small dick superiority complex.

They also keep lying about debt.

So what comes will be epic and there would be nothing then would be able to do about it. The rates are locked in and not going up.

Cheers,

#84 Canuck on 12.16.20 at 10:37 pm

DELETED

#85 truefacts on 12.16.20 at 10:42 pm

“If you were not full of crap, hospitalizations across Canada would not have surged with Covid patients.”

– Garth

_______________________________________

The stats indicate the older the Covid patient, the more likely they are hospitalized.

For example, an 85-yr-old is 85 times more likely to be hospitalized with Covid than a teen. Or put another way, if 100,000 of both 85+ people and teens get Covid, you would end up with 865 older people in hospital, and only around 10 teens. (Adjust for underlying health issues, and the numbers for teens would drop more).

https://www.statista.com/statistics/1122354/covid-19-us-hospital-rate-by-age/

#86 Linda on 12.16.20 at 10:42 pm

#76 ‘True’ – past time to do face facts. A lot of posts focus on the death rate, correctly citing that the majority of Covid deaths are mainly seniors or those with underlying health conditions. All too many then state, incorrectly, that Covid isn’t really a concern for anyone who doesn’t fall into said categories.

This ignores the fact that if a hospital bed is being occupied by someone battling Covid, health resources may not be available to aid those whose health concerns are not Covid related. There are only so many health resources available.

Second, there have already been some disturbing results from early studies of post Covid patients. It seems that Covid likes to leave a little memento of its visit behind, in the form of damaged organs. Heart damage in particular. An early study of some 900+ post Covid patients found that approximately 25% – twenty five percent – had suffered heart damage, regardless of whether they only experienced a ‘mild’ case of Covid.

Bottom line is, a lot of previously healthy individuals are going to receive an unpleasant surprise. Now think a moment about how much that is going to add to the cost of & demand for health related services going forward. You can bet governments are doing just that.

#87 Sheesh on 12.16.20 at 10:43 pm

#78 steve on 12.16.20 at 9:36 pm
hint for those who use the term windmills.
you sound dumb.
(you likely are dumb)
windmills mill grains.
windmills do not generate power.
….
Semantics, buddy.

#88 Russ on 12.16.20 at 10:58 pm

Linda on 12.16.20 at 8:44 pm

Anti-vaxxers are Darwin Awards in action.

Only problem I’ve got with them is that they clutter up the hospital halls to the detriment of the rest of us.
Because you just KNOW they’ll be demanding instant help/service should they get ill with a virus they refused to be vaccinated for.

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

You nailed this one Linda!

I can back you up without facts or links that less than 1% of patients currently plugging up hospital halls have not taken the vaccine!!

*insert facetious eye-roll*

Whatta maroon.

Cheers, R

#89 hingadin on 12.16.20 at 11:20 pm

#78 steve on 12.16.20 at 9:36 pm

hint for those who use the term windmills.

you sound dumb.

(you likely are dumb)

windmills mill grains.

windmills do not generate power.

using the term windmills is like using the term sheeple. Your opinion immediately gets dismissed by anyone with a working brain.

***********

Hi Steve, Wikipedia does not seem to agree with the wisdom you expound. To wit:

“A windmill is a structure that converts wind power into rotational energy by means of vanes called sails or blades, specifically to mill grain (gristmills), but the term is also extended to windpumps, wind turbines and other applications.”

#90 NSNG on 12.16.20 at 11:23 pm

#21 Joseph R. on 12.16.20 at 3:44 pm

NSNG on 12.16.20 at 2:44 pm
Give people the power to monitor their risk level and the ‘pandemic’ will end much quicker.

—————————————————–

That’s what the world has been doing since last March. How’s that working out?

Really?

How many 30 minute home covid tests have you taken?

#91 millmech on 12.16.20 at 11:26 pm

#71 Linda
Not an anti vaxxer, but I guess we should start parroting the phrase “vaccination is freedom”.
I wonder if you think this way about another virus that has killed way more than covid and has no cure.
3.5 million HIV deaths so far since 1980, 940,000 last year alone. If those cases of HIV uptick I suppose we should deny them employment (or be forced to reveal your condition), medical services, education because they are a risk. Maybe just quarantine this group of at risk people because they are a worse risk than covid until a cure is found.
Now that the cat is out of the bag what other diseases are now going to force people into lockdown over.

#92 When Will They Raise Rates? on 12.16.20 at 11:48 pm

#63 When Will They Raise Rates? on 12.16.20 at 8:01 pm

The combo of this fiscal and monetary stimulus – massive amounts of spending and debt – all but guarantees inflation and higher rates will emerge.
————

Au contraire, it all but guarantees that rates can never rise.

————–

^ QE infinity until the Great Reset.

#93 Shake the tree on 12.17.20 at 12:19 am

DELETED

#94 NSNG on 12.17.20 at 12:23 am

Employers will not shoulder the liability of allowing non-immunized employees into the workplace. How is that not obvious? – Garth

So employers are liable for covid employees but drug companies are not liable if their vaccines go awry?

Ironic.

Good thing this isn’t being forced on us.

Also, they have told us that the vaccines don’t eliminate Covid. It only lessens the severity of it.

#68 Ponzius Pilatus on 12.16.20 at 8:39 pm

Hold the horses!
You didn’t read the whole story.
You gotta sent it in to a lab.
By the time it comes back, you could be dead already.

What are you talking about?

According to the story:

Per the release, the over-the-counter Ellume COVID-19 Home Test detects COVID-19 from a nasal swab sample and takes 15 to 20 minutes to provide a result. The Ellume test can be used by anyone over the age of 2.

Unlike other similar products, the Ellume test can also be utilized by individuals with or without symptoms of COVID-19.

https://people.com/health/fda-approves-at-home-covid-19-test-without-a-prescription/

#95 Global on 12.17.20 at 12:24 am

Mortgage: in debt till death. Bankers got it covered

#96 NSNG on 12.17.20 at 12:27 am

One final point:

If the vaccine only lessens the severity then they should have no legal right to block you from the workplace since the severity risk is to the individual and not those around them.

This is where home testing and covid sniffing dogs become the superior solution.

#97 Capt. Serious on 12.17.20 at 12:30 am

10 year makes a lot of sense if you are in that part of life where you have spouse/kids/job/location all settled. If any of those things are in flux, there is a good chance you will be moving at some point. If I was in my 20s, I’d probably just go variable and make sure my mortgage is not so big it could eat me alive.

#98 Stoph on 12.17.20 at 12:45 am

#58 Nonplused on 12.16.20 at 7:38 pm

The also do not consider that the electric utility has to keep a fossil fuel plant on stand by (ancillary services) to balance the load and jump in when it gets cloudy, which is expensive and burns natural gas for no good reason other than keeping the turbine spinning at grid frequency until needed.

—————————————————————–

Good thing Canada has loads of hydro that can be turned on and off relatively quickly, I’d think that the current grid could accommodate some level of wind.

A reasonable case can be made for solar where there’s a significant AC demand as there’s a correlation between hot days requiring AC and sunshine. Plus if the solar is distributed (eg. on people’s roof tops), it would also reduce the load on the transmission and distribution equipment; a win for the utility and the user.

#99 Faltering Towers on 12.17.20 at 1:18 am

DELETED

#100 Diharv on 12.17.20 at 1:23 am

So are proof of vaccination certificates or “passports” being given now? I have not heard or read a thing about this issue. If they aren’t, how will one be able to prove they’ve had it if it’s required for travel?

#101 Hilroy on 12.17.20 at 1:38 am

I bet if anti-vaxxers were told a side-effect is penile growth , there’d be a helluva line up.

#102 Jeff on 12.17.20 at 2:35 am

Thought i share my experience with you. Last Monday I called HSBC to transfer my secured mortgage from another institution, for 0.99% mortgage. It took 2 hours and 35 minutes to get a response. After asking preliminary questions [email protected] assured me that my contact has been sent to a team of mortgage specialists and I should hear back in 2-5 days. Waited whole week without any contact from them. Waited 2 more days this week without any word.
Now I submitted an online booking request, don’t have time in regular business hours for that kind of wait on phone.
May be this rate is not offered to as many people as much it is advertised.

#103 Nonplused on 12.17.20 at 2:42 am

#78 steve on 12.16.20 at 9:36 pm
hint for those who use the term windmills.

you sound dumb.

—————————–

Ok, “wind turbines” then Mr. smarty pants. But they aren’t turbines either. Although they are probably even better at killing birds.

#104 Alex G on 12.17.20 at 2:43 am

#76 truefacts on 12.16.20 at 9:31 pm

“… Let’s say you are younger and looked at the stats and realize the chance of Covid being serious is quite small if you don’t have underlying health issues – but the effects of the vaccine are still unknown as they have little data. A risk/benefit analysis might lead you to conclude you want to postpone or avoid the new vaccine. Is that unreasonable?”
_________________________________

If I eat a few too many burgers, the only person I’m endangering is myself. Haven’t heard of anyone giving somebody else a heart attach because they sat next to someone enjoying a few too many Big Macs at once; not so with COVID. That’s the liability Garth is referring to.

And sure, you could argue that “people at risk should just get vaccinated and you be left alone not to do so if you don’t want to”. Well, yeah, most people will get vaccinated but some that might very much want to get vaccinated won’t be able to because of allergies to the adjuvant contained in the vaccine or other medical conditions or drug/drug interactions with the vaccine.

So while Nuts’ example may not have been perfect, your analogy with the burgers doesn’t quite work. Speaking of nuts… think of the “no peanuts in schools” rule. I love peanuts but something that might have no negative impact on me, can cost someone else their life. And yes, I know this isn’t a perfect example either since for the peanuts you can always enjoy your nuts in the privacy of your own home but once you’re jabbed with the vaccine it’s already done. Who said life is fair? We can’t all get our way with everything. But when one person might be seriously injured by the actions of the other, we tend to side with the victim.

Finally, vaccines do have potential complications and side effects (some I already pointed out above) but in the grand scheme of things, the dangers of not taking it, far outweigh the risks of taking it. I don’t work for Pfizer so I don’t know their specific targeting sequence with this one, but in theory at least (unless someone messed up the target sequence royally – which doesn’t seem to be the case) this mRNA vaccine should be a lot more specific and have significantly fewer side effects than the more “traditional” ones e.g.: the AstraZeneca vaccine that has a substantially lower efficacy but is way cheaper to produce and easier to store/distribute. And no, I’m not talking out of my rear-end here, I’ve worked with mRNA in various form in vitro and in vivo over a decade ago for my grad studies when it was very new tech. Glad to see more and more real-world applications other than early animal models.

#105 Nonplused on 12.17.20 at 2:50 am

#67 Faron on 12.16.20 at 8:38 pm
#50 Nonplused on 12.16.20 at 7:13 pm

The carbon tax is just a tax grab. It would have been just as effective to raise the HST.

It’s revenue neutral. So, not a very good tax grab…But, I wouldn’t put it past the govvy to grab those funds in the future.

#58 Nonplused on 12.16.20 at 7:38 pm

The also do not consider that the electric utility has to keep a fossil fuel plant on stand by (ancillary services) to balance the load and jump in when it gets cloudy, which is expensive and burns natural gas for no good reason other than keeping the turbine spinning at grid frequency until needed.

Yes, they do consider these and a myriad of other factors that will make this a very challenging transition. See the reports I posted in #55. Do you really think you have thought of things that professionals in the energy planning industry have not? Which struggle-bus Calgary oil company do you work for anyway?

———————————-

It’s revenue neutral because they have lots of fake green plans to spend the money on.

And yes I know something about the electric markets I worked 4 years right in the heart of one of the largest US electric companies, doing the analysis. We had a large market share in every US market. They still do.

Stop being so condescending when you don’t know who your are talking to.

#106 Nonplused on 12.17.20 at 3:12 am

So for Faron an Brian here are a few more tales from my time in the US working for an electric company. I probably shouldn’t say all this because a clever Google would absolutely reveal the source.

So this company did try and convert perfectly good coal units into natgas units due to Obama, but that doesn’t increase the efficiency. They also invested heavily in solar and wind hoping to get “offsets”. None of it made money. Then they went into a reflective solar/gas project with Google as a partner and that turned out to be even better at killing birds midflight than wind “turbines”.

When I was in town I sat within 50 feet of the CEO, on the same floor.

If you haven’t been to the show, don’t think you understand it.

#107 Howard on 12.17.20 at 4:34 am

Here we go. Trudeau “looking over options” on CERB clawbacks. As many of us predicted, people who essentially stole money from taxpayers will be allowed to keep it without penalty.

Here’s what our PM has to say :

Faced with the issue, Prime Minister Justin Trudeau said the government didn’t give aid to vulnerable people to pay the bills through the pandemic “to then claw it back afterwards.”

“We need to have a system that goes after people who are deliberately trying to defraud the system,” he said in an interview with The Canadian Press. “But people who received money that they needed, or made good-faith mistakes about the application, should not worry about it.”

https://www.ctvnews.ca/politics/as-vulnerable-youth-face-cerb-clawbacks-trudeau-says-liberals-looking-over-options-1.5235070

What does “should not worry about it” mean? Will they be allowed to keep the money they were never eligible for? And how does he propose to figure out who deliberately defrauded taxpayers and who made a so-called “good faith” CERB request?

Talented young Canadians MUST leave the country and build lives elsewhere. It’s the only way. I cannot believe what this man and government have done to this country.

#108 Damifino on 12.17.20 at 6:20 am

#101 Howard

I cannot believe what this man and government have done to this country.
——————–

Like father, like son.

#109 doctor who? on 12.17.20 at 6:31 am

WOW. Look at cryptos and metals surge on a collapsing USD. Only a matter of time when the bond market breaks and rates move up

#110 Keen Reader on 12.17.20 at 6:36 am

Great, my first deletes! Probably saved me from getting drawn into debating extreme PoVs, thanks!

Back on topic: very interesting Fed update yesterday WRT deflation concerns and keeping rates low for much longer. Especially noteworthy were Jerome Powell’s comments about CBs prepared to give trillions more in stimulus, plus sky-high P/E ratios not being a concern during low-rate periods. On the flip side, it means that increasing rates should force P/E ratios to decrease, so either companies become much more profitable or equities get a big repricing down. Love optimism for the year ahead, but long-term prospects definitely worry me.

#111 Damifino on 12.17.20 at 6:36 am

#78 steve

using the term windmills is like using the term sheeple. Your opinion immediately gets dismissed by anyone with a working brain.
——————————-

If it pleases your highness, we shall henceforth use the term ‘wind turbines’. As Shakespeare said:

“A rose by any other name would smell as sweet”

As I say:

“An antique technology by any other name remains just as irrelevant.”

#112 Prince Polo on 12.17.20 at 6:51 am

Where can I lock in a margin loan @2% for 10 yr?

#113 MF on 12.17.20 at 7:17 am

01 Howard on 12.17.20 at 4:34

“ Talented young Canadians MUST leave the country and build lives elsewhere. It’s the only way.”

-Yeah no thanks. Life is good. The grass is definitely not greener anywhere else.

MF

#114 mathieu asselin on 12.17.20 at 7:22 am

Speaking of the huge increase of savings…..what will happen when the Pandemic madness finally ends? Life will start again? What will happen when everybody start spending all that money at the same time….to compensates for lost time….massively withdrawing their pesos from the banks to go to restaurants, trips to the Bahamas, crazy nights downtown….?

#115 Wrk.dover on 12.17.20 at 7:31 am

#58 Nonplused on 12.16.20 at 7:38 pm
#42 Brian Ripley on 12.16.20 at 6:23 pm

The problem with these IEA reports and others is that they consider the cost of “replaceable” (they are not “renewable”, they don’t last forever and the windmill blades go to the landfill 20 years later) after subsidies and “go first” rules. The also do not consider that the electric utility has to keep a fossil fuel plant on stand by (ancillary services) to balance the load.

———————————

Or open the floodgate at the local hydro power reservoir.

Negativity clouds your vision.

#116 Wrk.dover on 12.17.20 at 7:42 am

In ’81, I was the envy with an open 25 year mortgage at 11%. My van was 14%, my business place 15% and supplies about the same.

In ’82 income tanked.

’84 on were stellar years, debt free in ’88.

FIRE in’89

M67NS

#117 Steve on 12.17.20 at 8:03 am

DELETED

#118 Prince Polo on 12.17.20 at 8:15 am

#72 cramar on 12.16.20 at 8:56 pm
FED Chair J. Powell said today that he ain’t raising rates until 2023.

Just saying.

Irrelevant to Canadian mortgages. – Garth

==============================
If Canadian mortgage rates don’t stay ~2%, how else are the remaining 30% of households (aka “loser” renters like me) supposed to be enticed into taking on gargantuan mortgages? We are the last resistance!

There is an inverse relationship between rates and prices. You should be cheering the cost of money higher. – Garth

#119 truefacts on 12.17.20 at 8:25 am

@104 Alex G…

You seem knowledgable… I guess the issue I have is why should one person be forced to endure a medical procedure they don’t want – even if it protects others.

An extreme example would be if you have two working kidneys and another person needed a transplant to live – should you be forced to give it up to save their life? You’re not dying in this case…(I know, more extreme, but as an example)…

I guess the issue I have is that vaccines can cause some side-effects (if they never did, there would no need for legal immunity for vaccine producers) – but they do have legal immunity thru the “vaccines courts”. So thier is always a degree of risk…

https://www.hrsa.gov/vaccine-compensation/index.html

I (and my kids) have been vaccinated for many things (dpt,mmr, etc), but for example, we don’t bother with the flu shot – should we be forced to? People instantly shout “anti-vaxxer”, but that is not really an accurate description, is it?

The point I was making with “Nuts” is that he was arguing that if people refuse to be vaccinated, they should sign away thier rights to any medical treatment – to me that is a slippery slope, so I was pointing to a decision many people make (eating burgers/fries) and asking if their medical rights should also be removed. Is that really a logical path for society to go down? Where should the line be drawn if this is your worldview?

Cardiac disease is not infectious. Get the shot. You have a social responsibility to do so, which outweighs your cowardice. – Garth

#120 millmech on 12.17.20 at 8:34 am

https://www.reddit.com/r/PersonalFinanceCanada/comments/kemn8o/globe_mail_many_canadian_employers_say_they_wont/

#121 truefacts on 12.17.20 at 9:25 am

Cardiac disease is not infectious. – Garth
___________________________________

Okay…suppose and AIDS vax is developed with unknown side-effects. Should people be forced to get it?

I’m not homosexual or an intraveneous drug user, so not in a higher-risk group and I’m married. But you never know…things change for people (divorce, death, etc). For the good of “society” – should I be forced to get the AIDs vax in this case?

Is that a better example?

You’ve lost it. – Garth

#122 Tron Light on 12.17.20 at 9:37 am

Cardiac disease is not infectious. Get the shot. You have a social responsibility to do so, which outweighs your cowardice. – Garth

No, it is not infectious but a lot of the times it is preventable by eating healthy, not smoking, etc. Speaking of smoking, we all know it has very adverse side effects, including cancer, yet people still smoke. Should they not receive health care? Alcohol also has severe side effects we all know about, so somebody who drinks and becomes ill, should they not receive health care?

The argument for not receiving health care if you are not vaccinated is discriminating and disgusting.

#123 George S on 12.17.20 at 9:43 am

It seems like there is a lot of debate about whether the conversion to net zero carbon emissions by an arbitrarily set date sometime in the future is going to be possible. Small scale solar arrays are fine and make people money in the long run. But they are puny little things that barely generate enough electricity for a single house. Solar panels last for a long time and are relatively cheap. The rest of the electronics necessary to turn DC into extremely stable sine wave AC, not as much, but you still make money and pay off the system in about 10 years.
The giant problem is when you try and replace a large power plant with an intermittent energy power plant. Say a medium sized 500 MW natural gas power plant. You can’t simply set out 500MW of solar panels and plug it in to the grid. Those panels only produce 3.7 hours (depending on latitude and chronic weather conditions) worth of electricity per day on average for a year. What you really need is 3 GW worth of solar panels and a huge amount of storage and a corresponding number of inverters. Just the steel tubing for the racks and the copper for the wire works out to be a huge pile of stuff.

And yes the wind does occasionally blow at night, but all wind is not the same. Most wind generators only start outputting power at about 20 km/hr wind speed and their rated output is at about 40 to 50 km/hr. If it isn’t super windy out most of those windmills you see turning are just some sort of gigantic lawn ornament or wind chimes, not generating any power at all. That is why you only see them in areas that are basically wind tunnels where nobody wants to live.

Almost all GHG emissions by electricity generation could be eliminated by conversion to nuclear power, just like France did some years ago. Nice medium sized nuclear reactors. If you look at the embodied energy of nuclear power it is about the same as wind and not intermittent at all. With nuclear power all intermittent sources of power are unnecessary.

Besides, electricity generation is not the main source of GHG. Most places, electricity generation produces less than 20% of the area’s GHG emissions.

Big sources of GHG emissions are agriculture and industry. Transportation is a big one. Fossil fuel refining can be big in areas where fossil fuels are processed.

Major solutions are needed for areas of the economy other than electricity generation to even start to consider total conversion to intermittent sources of electricity generation.

A good start might be to develop an electric tractor for farmers or at least show that it is possible. Some sort of non-fossil fuel way of drying grain. All those trains you see could be converted to electricity but requiring vast networks of electrical lines to power them.

And then once you have Canada emitting net zero GHG and doing away with 4% of the world’s GHG emissions you have the task of convincing the world’s two largest emitters of GHG to reduce their emissions. But keep in mind that since we humans have started emitting GHGs in large enough amounts to have them accumulate in the atmosphere there have been another 7 billion people appear and start living on earth.

So, your little solar system my make you feel good that you are doing your part to reduce emissions but, really, is it doing all that much? I guess depending on your feelings about ‘doing your part’ or social responsibility.

#124 Not Surprised on 12.17.20 at 9:46 am

DELETED

#125 Dharma Bum on 12.17.20 at 9:57 am

I wish I was a moister.

Back in my day, I paid 14% and 12% mortgage rates.

It’s good to be moist.

These are the things we know. We know.

Speaking moistly, of course.

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

#126 Dr V on 12.17.20 at 10:10 am

98 stoph – so you are replacing one renewable (hydro) with another (solar) but have to keep the hydro as backup?

#127 Sara on 12.17.20 at 10:27 am

#121 truefacts on 12.17.20 at 9:25 am
Cardiac disease is not infectious. – Garth
___________________________________

Okay…suppose and AIDS vax is developed with unknown side-effects. Should people be forced to get it?
=================================

Only if you are like my dog and jump on everything in sight.

#128 Prince Polo on 12.17.20 at 10:28 am

#118 Prince Polo on 12.17.20 at 8:15 am
#72 cramar on 12.16.20 at 8:56 pm
FED Chair J. Powell said today that he ain’t raising rates until 2023.

Just saying.

Irrelevant to Canadian mortgages. – Garth

==============================
If Canadian mortgage rates don’t stay ~2%, how else are the remaining 30% of households (aka “loser” renters like me) supposed to be enticed into taking on gargantuan mortgages? We are the last resistance!

There is an inverse relationship between rates and prices. You should be cheering the cost of money higher. – Garth

==================================
I have been cheering for this since 2014. Alas, my resolve is wavering and ‘twill soon be time to move from a land of gargantuan mortgages to a lower-cost jurisdiction. You wouldn’t happen to be hiring any interns for the Lunenberg branch? Let him/her suffer through the slings and arrows of the comments section…

#129 mike from mtl on 12.17.20 at 11:33 am

#125 Dharma Bum on 12.17.20 at 9:57 am
I wish I was a moister.

Back in my day, I paid 14% and 12% mortgage rates.
/////////////////////////////////////////////////////////

And that was a temporary fluke of the 80s and a blip in the 1990 recession. Perfect time to buy, low price and decades of lowering rates. Tried of hearing that old saw.

Of course the purchase price then was 3-4x less than today along with downpayment. It made sense to pay that off quickly then and was ‘easier’ since the dollar amounts are so much less. Last I checked working people’s salaries have not increased 4x since the 90s.

I’d take high rates any day, but that would destroy this RE bubble so never going to happen.

#130 BillyBob on 12.17.20 at 11:39 am

#113 MF on 12.17.20 at 7:17 am
01 Howard on 12.17.20 at 4:34

“ Talented young Canadians MUST leave the country and build lives elsewhere. It’s the only way.”

-Yeah no thanks. Life is good. The grass is definitely not greener anywhere else.

MF

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

I suppose it would seem that way when you’ve never been outside of the GTA.

But he said TALENTED young Canadians. So you can safely ignore his advice.

Bought a house yet?

#131 Phylis on 12.17.20 at 11:48 am

#106 Nonplused on 12.17.20 at 3:12 am Theory and practice comes to mind. Keep exposing the reality.

#132 Neo on 12.17.20 at 11:55 am

If you are asymptomatic. You will continue to be asymptomatic whether you take the vaccine or not. It lessens the symptoms that would require hospitalization of the elderly or high risk who are going to be the first to get vaccinated anyway. For how long? We don’t know. How well? We aren’t sure.

You can’t make something mandatory that doesn’t even eradicate the virus.

As far as interest rates rising. They aren’t rising in any meaningful way. End of story. The entire world is basically Japan at this point. They will never normalize to where the cost of money should be is the point here. It may creep up a 50-100 basis points here and there but will crash back down once the stock market has a fit about it and that has been the case the past 12 years.

#133 Linda on 12.17.20 at 11:58 am

#91 ‘mill’ – your post underscores my point. First, I’d point out that HIV is not an air borne illness; if it had been likely every person on the planet would have it by now. Direct exchange of bodily fluids is required, which usually takes place via sexual contact though there were some infections caused by blood transfusion in the early days.

Second, the annual average cost of HIV treatment was as per 2010 stats $23,000 per year. The annual HIV death rate is at least in part due to the fact that many sufferers do not have the financial ability to purchase the required medications. Estimated lifetime cost for the medications was estimated at over $357,000 as of 2010.

Now think about the possible health related costs of treating patients whose organs were damaged from Covid. Do you begin to see why this might be an issue?

As for being ‘forced into lockdown’, I am no more a fan of it than anyone else. We could rise up, refuse to stay home, fling our masks in the air & ‘just say no’ to any vaccine offered. However, should we then get ill as a result of not taking precautions, we would then have no one to blame but ourselves for our predicament. Take personal responsibility? ‘gasp’ ‘Anything but that!’

#134 majik on 12.17.20 at 12:02 pm

Employers will not shoulder the liability of allowing non-immunized employees into the workplace. How is that not obvious? – Garth

———–

A reasonable statement. But will an employer shoulder the liability if an employee has an adverse reaction to the vaccine that they required the employee to take? Businesses will have zero legal cover here.

It will likely become mandatory for employees who deal with vulnerable populations in healthcare scenarios and government would possibly enact regulations to indemnify employers in these licensed sectors, but everywhere else?

Nobody has to take the vaccine. You’re not forced to be employed, either. – Garth

#135 East Coast Life Style on 12.17.20 at 12:06 pm

How much of the domestic bond market can the Bank
of Canada buy before they reach a point of no return?

That is what is artificially suppressing interest rates is it not? Same as BoJ?

#136 Damifino on 12.17.20 at 12:13 pm

#123 George S

Thanks for taking the time to write something coherent and sensible. It won’t likely garner you many friends here, but at least you’re helping to promote the idea that the laws of thermodynamics are immutable and not subject to political meddling. Precisely what the PM does not comprehend.

#137 Stoph on 12.17.20 at 12:25 pm

#126 Dr V on 12.17.20 at 10:10 am
98 stoph – so you are replacing one renewable (hydro) with another (solar) but have to keep the hydro as backup?

—————————————————————-
I wouldn’t look at it that way. Most hydro dams have way more generating capacity than they can run 24/7 (they’d run out of water if they ran at max output), so by adding wind to the mix you’re saving water in the reservoir that could be used to generate electricity at a later time.

Good point on hydro being renewable as that point is often overlooked.

#138 IHCTD9 on 12.17.20 at 12:31 pm

#107 Howard on 12.17.20 at 4:34 am

Talented young Canadians MUST leave the country and build lives elsewhere. It’s the only way. I cannot believe what this man and government have done to this country.
___

Either that, or land one of those 6 figure unionized govy jobs with a DBP. That way you don’t really need to give a rip about what Ottawa is doing, because you’re not going to lose your job or your pension unless Nuclear War breaks out.

That said, I expect an increase in folks leaving places like the GTA, and Canada as well. Wages will be going sideways (at best) for most, and taxes HAVE to go WAY up. If interest rates ever climb, Canadians will be paying gargantuan taxes and getting SFA for them. It’ll all be going into debt servicing.

#139 Another Deckchair on 12.17.20 at 12:33 pm

Nonplused;

May I respectfully ask that you keep writing?

One article that highlighted that “this isn’t Hollywood anymore” was from a Physics Prof at UCSD; one post that really hit home was his nation-sized battery:

https://dothemath.ucsd.edu/2011/08/nation-sized-battery/

Sure, it’s almost 10 years old, but changes since then are only putting lipstick on a pig.

(I think this topic is relevant, as energy and finances and life are tied at the hip)

#140 calgaryPhantom on 12.17.20 at 12:46 pm

01 Howard on 12.17.20 at 4:34

“ Talented young Canadians MUST leave the country and build lives elsewhere. It’s the only way.”

-Yeah no thanks. Life is good. The grass is definitely not greener anywhere else.

MF

————————————————————————

MF,

You will be surprised. There are a lot of places in this word where you get to keep most of your salary with you, where weather is much more comfortable, where people talk about things other than houses and where people get more chances to excel and get rich.
Canada is great for all the natural beauty and safety it has to offer, but that doesn’t translate to a happy and full filling life.

#141 ronh on 12.17.20 at 1:02 pm

Its here. Mark the calendar.

https://financialpost.com/news/economy/the-great-rethink-cash-is-no-longer-king-and-the-transition-is-going-to-be-a-high-stakes-affair

#142 Tron Light on 12.17.20 at 2:08 pm

Nobody has to take the vaccine. You’re not forced to be employed, either. – Garth

Sounds like what you are advocating for Garth will just open a Pandora’s box full of wrongful dismissal suits.