The impossible

Recall that poll noted here yesterday showing 65% of Canadians are unconcerned about interest rates? They don’t care because they think the cost of money cannot rise. Ever.

And the steerage section agrees. The belief that mortgages at just 1.5% (the lowest in history) will endure seems almost universal. And the arguments are consistent: (a) higher rates are impossible because everybody’s picked in debt, (b) that would trash the economy, (c) the real estate market would crumble and the government won’t allow that, (d) public debt servicing costs would explode (so the government won’t allow it), and (e) higher rates are a Boomer scare tactic and we hate you.

So Wednesday – the final hours of the Trump experiment – is decision day for the Bank of Canada. Some people have speculated lately that because of Covid’s second wave, the lockdowns in Ontario and Quebec and the big job losses last month, that the central bank would cut its key rate a little. But that seems unlikely.

In fact, here’s a new survey of 16 leading Canadian economists by Finder supporting that – 75% say a cut isn’t warranted. That’s because 2021 is the Year of the Vax and as the months roll by more and more folks will be inoculated, allowing the economy to re-open, restoring growth and kindling monetary demand without more stimulus.

But what comes after that?

What about all those people swallowing huge new dollops of debt to buy houses at record-high prices with financing at well below 2%? What happens to them in five years if they have to renew at a higher rate, especially if rate increases mean house values will moderate or even (gasp) decline?

Here’s what the economists predict:

Will rates rise? 87.5% of these economists say, yep.

Source: Finder

So almost 90% believe the next move by the central bank will be up, not down. Two-thirds of them (69%) say the increases will start within the next two years. The rest say they will commence the year after. Thus 100% of them state the cost of money will be greater than today by the time a five-year mortgage term is up for renegotiation.

Why?

Today is not normal. That’s why. These home loans rates are weird. Unsustainable. The rate structure in place is the result of a once-in-a-generation, global pandemic, emergency recession, holy-crap reality that a year ago nobody expected. And now nobody expects it to last.

What comes next? The majority of people, Ottawa says, will be vaxed by September. Lockdowns will be lifted once case numbers start to decline (seems to be happening already in Ontario and across the US). Service industries will open again. Workplaces will resume. WFH will be under pressure. Half of economists say many people will be expected back at their places of employment by this autumn. Another 25% say it will be in the first three months of 2022. But it will happen. Concurrent with this will be more spending, more consumption, commuting, travel, child care costs, GDP growth and price inflation. As the cost of living creeps back to 2%, for example (it was 1% at the end of 2020), you can be sure the bond market will have pushed yields up in advance. And it’s here that fixed-rate mortgage costs are set.

How about Biden?

Big news, with (probably) a big impact. There will soon be a $2 trillion Covid stimulus plan coming out of Washington now that the Dems control the White House and all of Congress. In fact, expect a lot more spending than would have been the case during a second Trump tenure. Plus an accelerated agenda for vaxing the nation – 100 million people in the first hundred days. That will help economic recovery and, yeah, fuel inflation with all that new stimulus.

Now, all this is good. Better than the alternative. Normal is a long ways off, but 2021 will surely be beating a wide path in that direction. The last ten months have been a long, dark, depressing anomaly. They were not harbingers. They will not frame the long-term future.

Even the Bank of Canada’s former boss said it a few days ago: “I think there’s going to be a boomlet when we come out of this crisis, later this year.”

So, in conclusion: houses jumped 17% in value across Canada during the 2020 pandemic because mortgages cost 1.5% and people could borrow more while paying less. So they did. They pigged out. FOMO and YOLO ruled the land.

But the virus will soon fade, taking with it the reasons money was cheap and why you got to stay home for a year. How is this not simple, and obvious?

Lock in. Set up a weekly-pay mortgage. Start saving for renewal day. Oh, and get new tires.

159 comments ↓

#1 Brian Ripley on 01.19.21 at 2:35 pm

My annual chart update of ​​Full Time and Part Time Workers in Canada by Age since 1976 is up:
http://www.chpc.biz/earnings-employment.html#Profile

There are some interesting gender and age changes noted on the chart:

1) The 2000 equities crash propelled older men to take on more part time employment that younger men used to do. I suggest balance sheet repair was a motivator.

2) The 2008 Housing financial assets crash led to the same thing for older women taking over jobs that younger women used to do prior to the crash. Both trends for older men and women continues.

3) In 1990 Time Berners-Lee created the first web server and foundation for the Wold Wide Web and since then younger men, having already increased their share of full time employment since the 1970’s relative to women, continued to take the biggest share of employment.

4) Since 1990 the biggest acceleration in the share of full time employment occurred for older men and women

Our older workers are an important part of our consumption culture and our collective efforts at balance sheet repair.

#2 Brian Ripley on 01.19.21 at 2:35 pm

My annual chart update of ​​Full Time and Part Time Workers in Canada by Age since 1976 is up:
http://www.chpc.biz/earnings-employment.html#Profile

There are some interesting gender and age changes noted on the chart:

1) The 2000 equities crash propelled older men to take on more part time employment that younger men used to do. I suggest balance sheet repair was a motivator.

2) The 2008 Housing financial assets crash led to the same thing for older women taking over jobs that younger women used to do prior to the crash. Both trends for older men and women continues.

3) In 1990 Time Berners-Lee created the first web server and foundation for the Wold Wide Web and since then younger men, having already increased their share of full time employment since the 1970’s relative to women, continued to take the biggest share of employment.

4) Since 1990 the biggest acceleration in the share of full time employment occurred for older men and women

Our older workers are an important part of our consumption culture and our collective efforts at balance sheet repair.

#3 BlogDog123 on 01.19.21 at 2:36 pm

With all this transition in the USA… it’s time for one of Garth’s blog dog surveys. What-say-you GT?

Survey ideas:
1. Whose investments did well Jan-Dec in 2020 (check your statements)?? Did you panic and regret it in March/April?
2. How many folks do you know are financially wiped out by COVID-19? Can they recover quickly?
3. Do you have family hit by COVID-19, how bad was it?

whatever survey you like… to get the pulse of the blog dogs out there..

#4 KS on 01.19.21 at 2:41 pm

New tires?

#5 TurnerNation on 01.19.21 at 2:43 pm

Checkpoints are back in Kanada. Police checkpoints. Could they become militarized too? Why not.
Easter 2020 I personally observed police check points around Liberty Village area in Toronto. A dense area of condos with only two 2 entrances. Perfect little camp. A friend down in another condo forest, Lakeshore/QEW west area had reported the same.

THIS WEEK yet another person tells me the checkpoints are back, again down around the condo kamps Lakeshore/QEW west area. Almost a year later. This is sounding like a permanent thing huh? This is WAR- a globalist take-over.
Which is why Ontariowe last March set its fictional ‘State of Emergency’ into almost 2022. They knew from the get go how long this war is lasting.

We have been occupied from the inside for some time. This week the political Purges even continue. The Party is kicking out elected reps at all levels. Travel was used as an excuse, now a hundred bucks in donations. Anyone who did not go along with the plan (Like the Ontario MP). Could it be clearer? Or is this January purge all a co-incidence?

— As always, the control over our Breeding, Feeding and Travel/Movements is the goal. and it’s moving, fast:

https://www.cnbc.com/2020/06/16/biomilq-raises-3point5-million-from-bill-gates-investment-firm.html
Bill Gates’ climate-change investment firm bets on lab-produced breast milk

https://landreport.com/2021/01/bill-gates-americas-top-farmland-owner/
The co-founder of Microsoft and his wife rank as America’s largest private farmland owners

–Washington State partners with Starbucks for vaccine distribution (forbes.com)

#6 KNOW IT ALL on 01.19.21 at 2:49 pm

NEW WHEELS?

FOR REAL?????

#7 Dogman01 on 01.19.21 at 2:51 pm

Just writing on Garth’s wall again about Covid and Canada.

Canada has spent Billions upon billions for this crisis.

8 Months ago we learned that Old Age homes were the core part of the problem, and now again Old Age homes are the core part of the problem. It appears to me Canada did nothing substantive over the 8 months and used little of the Billions spent to ameliorate this Old Age Home situation.

8 Months ago we learned that ICU bed were the stress point of our medical system , and now again ICU beds are the stress point of our Health Care system. It appears to me Canada did nothing substantive over the 8 months and used little of the Billions spent to ameliorate this ICU situation.

It appears our Allies in the Western World have vaccines and are conducting a vaccine rollout with more efficacy than Canada. Even the USA with their non centralized Health Care system and their legacy of Trump appears to be getting vaccines into bodies much better than Canada. (Elderly Canadians in Arizona or Florida will get the vac before their fellow citizens in their own country…what ‘s up with that?)

Total Lockdown, Billions upon Billions spent and no evidence of Government efficacy in problem areas?

Why do Canadians accept this performance?

#8 Dogman01 on 01.19.21 at 2:53 pm

Canada defined by our willingness to hock the future.
—————————

#37 Brian Ripley on 01.15.21 at 3:44 pm
My updated chart of Canadian Household Debt, GDP, Foreign Direct Investment and Balance of Trade is up with the latest data
http://www.chpc.biz/household-debt.html
Here is the 10 Year Change of Canadian:
Negative Net Trade: UP 476%
Negative FDI: UP 633%
With respect to the NOV 2020 NET TRADE data; in the last 12 years, 83% of the monthly data have been negative.
With respect to Foreign Direct Investment:
The difference between Capital Investment leaving Canada to Capital Investment entering Canada has widened dramatically since 2014 by 29%.
For every dollar coming into Canada
in 2014, $1.14 left
in 2015, $1.33 left
in 2016, $1.27 left
in 2017, $1.36 left
in 2018, $1.47 left
in 2019, $1.43 left (2020 not available yet)

The 20 year widening super trend has been accelerating. The growing capital flight out of Canada is at the expense of labour employment. Cheap capital is in search of cheap productive Labour in an effort to realize a better return on investment from exploiting the price mismatch. Clearly this is working as our deeply negative 12 years of Balance of Trade data suggest; we buy more than we sell, hence we supply net income to entities outside our “borders” financed and subsidized by our own cheap credit and our willingness to hock the future.

—————————————————-
If this was household I would predict, Divorce then Bankruptcy.

Is this not a country gong down the toilet?

I don’t want to bash Canada all the time but we need a wake up call.

#9 Pissy Fortune Teller on 01.19.21 at 2:56 pm

Young man, have some ambition, go (far) East!

Do not settle your life for a house in the suburb, even if it comes with a backyard. Opportunities abound:

https://www.cnbc.com/2021/01/19/foreigners-poured-money-into-china-amid-the-coronavirus-pandemic.html

https://www.cnbc.com/2020/12/26/china-set-to-surpass-us-as-worlds-biggest-economy-by-2028-says-report.html

Look at this young American who is the fastest to become the richest person on earth.
One of the reasons: he has the vision and guts to go East and won the ultimate reward:

https://www.bloomberg.com/news/features/2021-01-13/china-loves-elon-musk-and-tesla-tsla-how-long-will-that-last

https://www.ndtv.com/world-news/elon-musk-is-china-s-favourite-how-long-will-that-last-2352234

Being a cynical and prejudiced keyboard warrior, acquiring skills to spew out nonsense, hatred, and snide comments in the internet forum will not work and do good to your life.

President Xi and China welcome you! Read carefully President Xi’s letter to another successful American, feel the warmth and respect between them, and this is how you will be treated in China:

https://www.bnnbloomberg.ca/xi-asks-starbucks-schultz-for-help-mending-u-s-china-ties-1.1548404

#10 Diamond Dog on 01.19.21 at 2:58 pm

CB’s have kept rates at zero and have been buying mortgage backed securities to keep mortgage loans at unheard of rates to generate a housing boom that inflates the value of real estate, sends money by way of capital gains for sellers and creates a wealth effect (that also boosts markets) built on cheap credit. CB’s did this to paper over disastrous economic numbers from the pandemic.

CB’s can’t do this forever and everyone should know this for a number of reasons but first and foremost, it’s not sustainable. Debt and housing bubbles would become grotesque. Public debt would become unmoored from reality. Once there is an economic recovery of any kind whatsover even if its mild recession, CB’s will end buying mortgage backed securities, rates will slowly creep up, the wealth effect will reverse and this seller’s market is done.

If folks are still variable with their mortgages, they really need to lock in. 10 year terms are looking great even at 2.5%. It’s a no brainer, I would go long if I had the chance and would have done it sooner in a perfect world.

#11 low rates forever on 01.19.21 at 3:04 pm

The problem with your rising interest rate scenario is that should the bond market revolt and sell off, the US Fed will institute yield curve control and keep a cap on rates. There is a point where they will not allow rates to rise. That could be 1.5% on the 10 year. At which point, they will soak up all the bonds for sale with more printed money. The Fed will make sure inflation is higher than any point on the yield curve. Best way to pay off massive debt is to inflate.

So, ya, rates CAN stay low for a long time.

Why would any sentient borrower gamble on such an unlikely and depression-era scenario? – Garth

#12 Faron on 01.19.21 at 3:07 pm

#3 KS on 01.19.21 at 2:41 pm

New tires?

Pretty sure Garth is jokingly referring to some of the least exciting, but essential, human activities out there.

#13 craig fernandes on 01.19.21 at 3:13 pm

https://covid19criticalcare.com/

info for treatment options for COVID while we wait for vaccines to be distributed. Please share – I hope everyone stays safe.

I hope to get back to normal as soon as possible. Too bad my mortgage renewal didn’t land in the middle of this, but it is not so large anymore, so not really a big driver for my family……..

#14 meslippery on 01.19.21 at 3:18 pm

I had a dream last night, away to take control of our own oil in Alberta.
To hell with the USA if they don’t want our oil.
Build a pipe line to the pacific ocean in Canada and sell to the world. You would think someone smarter then I would have thought of that before now.

#15 unbalanced on 01.19.21 at 3:20 pm

New tires? New vehicle prices are going up. So are used ones. Keep the old one and get newer tires. Big savings in the end. A student on frugality.

#16 mattbg on 01.19.21 at 3:24 pm

Good points. Some people need supports, but I really don’t get broad, indiscriminate economic stimulus like what the US is in the middle of doing again.

How can you stimulate an economy that is shut down, and is it even a responsible thing to do while you are telling people to stay home? If people don’t need the money, it’ll just end up inflating the stock market.

I am wondering at this point what happens when the economy does start opening back up. Is it possible that people start gradually pulling out all of this sequestered stimulus from the markets and the economic recovery is accompanied by a market decline?

#17 mel on 01.19.21 at 3:25 pm

get new tires——

everyone will be hitting the road so they will be in short supply

#18 Linda on 01.19.21 at 3:26 pm

While I do believe interest rates will creep up from these historic lows, I also think there is a very good possibility they will stay at relatively low levels for quite some time to come. Could they double? Well, going from 1.5% interest to 3% within the next year or two isn’t at all unlikely.

#19 Tron Light on 01.19.21 at 3:30 pm

So how does interest rates set by the BoC (or Fed) affect the deficit and debt? Do these rates not determine how much interest is paid on the money the government borrows? If yes, would it not mean that the interest paid on all this borrowing would increase? If yes, would it not be in the government’s best interest to keep the rates low to keep payments lower? Unless there is something else that plays into it?

Also, didn’t Congress just pass a trillion dollar covid bill which gave only $600 to the average American? Is this $2 trillion new?

#20 low rates forever on 01.19.21 at 3:56 pm

Why would any sentient borrower gamble on such an unlikely and depression-era scenario? – Garth
________________________________________

because that’s what’s most likely..

the U S of A is flat out broke.

you really think this is a free economy?

you think interest rates float freely??

its not like the Fed hasn’t discussed Yield curve control. Japan has been doing it for years. the FED did it in the 40’s during the war. inflation raged at 19% and Fed Funds stayed at 1/2%

all through the 60’s and 70’s they kept rates below inflation screwing bondholders. and that’s what they will do now.

that’s the whole point of government manipulation. to manipulate. to steal from one sector to give to another.
and that’s why the previous monetary system you despise so much was far better than the current one.

#21 Rasputen on 01.19.21 at 4:02 pm

“These home loans rates are weird. Unsustainable. The rate structure in place is the result of a once-in-a-generation, global pandemic, emergency recession, holy-crap reality that a year ago nobody expected.”

Hmmm…rates have been low for years and years.
Facts matter Mr. Turner

#22 CJohnC on 01.19.21 at 4:04 pm

#6,#7 Dogman01

2 for 2….bang on the money

#23 The Woosh on 01.19.21 at 4:05 pm

Now we’re going to take seriously what economists have to say???? How often do they get it right? That’s right…more often wrong than right. Sleazy snake oil salesmen.

Might as well go see Zelda the fortune teller. She at least provides entertainment. Look deeply into my crystal ball…now pay me $20!

#24 Dolce Vita on 01.19.21 at 4:06 pm

Agree with your projections and logic Garth other than:

timing.

If the numbers are correct from Ottawa then end of Sept., more likely early to mid-October we will see the backside of Covid.

Recall: even if the end of Sept all vax’d + 10 days for the last dose to kick-in and provide immunity.

That does NOT mean that on OCTOBER 10TH Canadians will lock step, march their way back to the office en-masse, ticker tape parade on GO Train, Gardiner Expressway to commemorate the day, etc., begin spending and living pre-pandemic.

It will take months.

Same as other recessions where markets have rebounded, there is a return to GDP and then jobs finally back and latter takes 1 QTR at least.

Early 2022 best guess.

Canada will have just gone thru a once every 100 years pandemic, a return to “normal” will not happen quickly as in a Qtr as most hope.

Human Nature.

A little gun shy after October 10th would be my prognostication.

#25 Sail Away on 01.19.21 at 4:08 pm

You will definitely need new tires for the 6 hour commute from Witless Bay to, you know, your newly re-opened office in the city.

No, Virginia, there is no endless slackoff WFH. Sorry.

#26 CJohnC on 01.19.21 at 4:09 pm

New Tires, LOL, I think Garth refers to needing them for the long commutes back to the office….

#27 Comments! on 01.19.21 at 4:11 pm

It’s pretty easy to say that rates will be “higher” in the future when they’re at zero right now, I mean how bold lol. That doesn’t take a financial genius. Once again a 2 measly percent prime after 10 years of zirp caused a massive market sell off 2 years before the virus and only recovered when the childish whiners were placated with massive and immediate rate cuts and more printed money

So they can go up, but to what…1 percent maybe? Pffft big deal. 5 percent minimum is required to bring some sanity to assets and stock market valuations with no QE but good luck with that. The equity markets have become remorseless welfare recipients for 13 years and counting. Ahhh capitalism! Isn’t it grand?

#28 Billy Buoy on 01.19.21 at 4:21 pm

Yes 2 or 3 years possibly rates SHOULD go up.

Remember eCONomists are the ones running Central Banks right.

And tell me, they haven’t created the mess we are in Covid or no Covid with their expert handling of interest rates, etc?

You can’t fool REAL numbers and once again, DEMOGRAPHICS aka REAL NUMBERS DO NOT LIE.

Economists GUESS. NUMBERS are TRUE FACT.

#29 Faron on 01.19.21 at 4:21 pm

#19 Tron Light on 01.19.21 at 3:30 pm

…Unless there is something else that plays into it?…

The something else is the bond market. CBs do purchase bonds across the yield curve, but they only target control of the overnight rate. I think the so-called “operation twist” in the US was a period of yield curve control that resulted in keeping the long end of the curve from steepening too much. But, for the most part, the central banks pin the overnight rate and let the market determine the rest. Long bonds issued now with a fixed rate will not be affected by changing market rates in terms of what the gov’t pays. This is why Biden is promoting borrowing heavily now, when rates are low, to lock in the low rate for the US gov’t. The effective rate will vary due to the change in the value of the bond, but the coupon is fixed.

Also, didn’t Congress just pass a trillion dollar covid bill which gave only $600 to the average American? Is this $2 trillion new?

The old money was linked into the federal budget. Yes, the 2T is new. It’s likely to be funded at a much lower amount given that a close senate will allow McConnell and friends to filibuster anything they don’t like. They most certainly will.

In reading Obama’s The Promised Land he describes his advisors’ extremely negative reaction to a proposed 1T stimulus bill to recover from the GFC/Great Recession in 2009. That was 12 years ago. Different world today as double digit trillions are spent.

#30 T-Rev on 01.19.21 at 4:22 pm

I grabbed a new pair of whitewalls for the FLSTC. Now I open the garage door and rev it on warm days waiting for spring. You should probably consider opening the comments page to photos under the strict rules that photos must be hyper-masculine, and feature only canines or Harleys.

#31 Dolce Vita on 01.19.21 at 4:26 pm

A Commenter yesterday posted about Norway vax’ng and 27 died right after.

Firstly thanks for that Comment. Made me go search IF that was an isolated case.

Reason:

Fully expect 5% will not get immunity after Pfizer or Moderna but DID NOT EXPECT they would die. They say these people had the ever ubiquitous and obtuse “underlying conditions” – no kidding; otherwise Norwegians have to admit they EUTHANIZED 27 of their elederly.

How prevalent?

Norway
= 27/20,000 doses administered, 0.135%. More than 20 000 doses of the vaccine have been administered over the past few weeks in Norway and around 400 deaths normally occur among care home residents every week.
https://www.bmj.com/content/372/bmj.n149

…yup, there’s more.

Germany
= 10/800,000 = 0.00125%. The Paul Ehrlich Institute (PEI) in Germany is also investigating 10 deaths shortly after covid-19 vaccination. “Based on the data that we have, we assume that the patients died of their underlying disease – in a coincidental manner in relation to the vaccination,” said Brigitte Keller-Stanislawski, the department head responsible for the safety of drugs and medical devices.

As of Sunday, the PEI had received 325 suspected cases with 913 side effects, including 51 suspected cases with serious side effects. This corresponds to 0.53 cases per 1000 vaccine doses or 0.08 suspected cases of serious side effects per 1000 vaccine doses.

Israel
= 4/2.7M = 0.00016%. According to the Kan public broadcaster, there have been 4 cases where people in Israel have died shortly after receiving the vaccination, but 3 of the 4 were deemed by the Health Ministry, as well as by both family members and doctors, to have been unrelated to the shots. The fourth case, an 88-year-old man who had serious pre existing health problems, is currently being investigated.
https://www.timesofisrael.com/240-israelis-diagnosed-after-vaccination-underscore-need-for-continued-vigilance/

—————————-

Math wise, Death by VAX Populi hardly registers. Still, it makes a person wonder especially the 31 families, per the above, grieving at the moment at the loss of loved ones.

So Canada, you will be OK. Maybe Canada will have some of these VAX age related deaths as well but so far, they are few and far between.

#32 Billy Buoy on 01.19.21 at 4:29 pm

So Biden running UP debt like no tomorrow is GOOD BUT…

High Personal DEBT is bad?

I take it who controls the digit producing debt machine to benefit the 1% can do whatever the hell they like with no worries as they will be long dead and gone when SHTF. Right? Gotcha.

I wish I could live life with ZERO RESPONSIBILITY.

What’s the alternative? There isn’t any, anymore. The system is totally broken.

#33 Stone on 01.19.21 at 4:31 pm

I do believe rates will be going up. When? Who knows. What’s important is that my B&D portfolio is prepared for it. It has a return of 3.90% YTD. Not bad for the first 12 business days of the year.

#34 zee on 01.19.21 at 4:37 pm

Rates low forever and if they go higher then it will max at 3% on a mortgage, does not scare any one.

Even 3% is not likely because one little thing that would go wrong back to dropping rates!

#35 TurnerNation on 01.19.21 at 4:42 pm

Everything old is new again.

https://en.wikipedia.org/wiki/Cloward%E2%80%93Piven_strategy
..Cloward and Piven “proposed to create a crisis in the current welfare system – by exploiting the gap between welfare law and practice – that would ultimately bring about its collapse and replace it with a system of guaranteed annual income. They hoped to accomplish this end by informing the poor of their rights to welfare assistance, encouraging them to apply for benefits and, in effect, overloading an already overburdened bureaucracy.”[3]

……
It’s been almost a year. Your daily routine is called a “quarantine” by our brutal rulers.
Every system has been turned against you; police bust hockey games; needed surgeries and cancer care is cancelled (your taxes); landlord boards took away all Landlord’s rights; in many areas city facilities you are paying for are closed.
Rights like assembly, outdoor protest, travel, are long gone

Big Tech companies are cranking down on Free Speech per new, global rule.
Small business? Don’t you dare open. UBI is for you.
Still think this is all for Your Health?

https://www.thestar.com/news/gta/2021/01/18/enough-is-enough-toronto-issues-75-weekend-charges-for-lockdown-violations.html

“In all, Toronto Public Health and city bylaw enforcement heard 353 complaints over the weekend, including 165 related to non-essential businesses, “

#36 George on 01.19.21 at 4:43 pm

https://financialpost.com/investing/investing-pro/canadas-balance-sheet-is-deteriorating-and-the-consequences-could-be-significant-for-investors

oh, you mean irresponsible spending may have consequences? who knew!!!!!!???

keep businesses shut down and keep printing. See how this plays out, :)

best wishes Canada

#37 Dolce Vita on 01.19.21 at 4:45 pm

Finally and again here looking for ANYTHING that may affect Canada’s return to generating wealth and give its citizens reason for optimism by Oct 2021.

Brazil Variant

So far the most worrisome to Medical people. Basically, re-infections are possible even if you have had Covid, exhibit antibodies from the Chinese original Covid.

Researchers from Imperial College London estimated that over 70% of Manaus’s inhabitants had already been infected during the first wave. Yet surprisingly, the Covid-19 epidemic has begun to bite again, just when it was thought that natural herd immunity had been achieved.
https://virological.org/t/genomic-characterisation-of-an-emergent-sars-cov-2-lineage-in-manaus-preliminary-findings/586 (Jan. 12).

Make that 75% today per Le Figaro:
ttps://www.lefigaro.fr/sciences/covid-19-le-variant-bresilien-soupconne-dans-la-nouvelle-catastrophe-qui-frappe-la-ville-de-manaus-20210118

——> You vaccinate even those that have had Covid and that is being done, for example, here in Italia and I suspect elsewhere AND looks like HERD IMMUNITY > 75% (was hoping lower so Canada would see Covid’s back side earlier than October…oh well).

Eyes on Israel – Single Dose Protection not as High as Hoped

Not just for Herd Immunity info but large studies. Clalit HMO, Israel’s largest health services organization, compared two groups: 200,000 vaccinated and 200,000 unvaccinated of the same age and health profiles . Until day 12 after inoculation of the first group, there was no difference in infection rates.

On the 13th day, the Israeli newspaper Yedioth Ahronoth writes, something happened: the vaccinated group showed a 33% drop in the number of infected people, compared to the unvaccinated group. In the following days the difference remained, with a range varying between 20 and 40 percent.
https://www.timesofisrael.com/240-israelis-diagnosed-after-vaccination-underscore-need-for-continued-vigilance/

——> Means single dose immunity per Pfizer (Israel using that only) is not 52.4% as they claim: rather, 20-40%, seems 33% the mode number observed.

Why I still think the UK is conducting Guinea Pig trials on its citizens with a time between doses of THREE months.

So careful BC, AB and ON with increased time between doses…not as hoped so far.

————————-

So no worries so far Canada (unless you are the UK – and they call the Americans “Cowboys”, pot calling the tea kettle…).

Mid-October seeing Covid’s backside, return to prosperity game on.

#38 Mortgage man on 01.19.21 at 4:51 pm

I don’t think its worth scaring everyone who is buying a house about their rates renewing higher in 5 years. If that happens, they can always extend their amortizations from 20 years back to 25 years if they can’t afford the monthly payment increase.

#39 Northshore guy on 01.19.21 at 4:53 pm

I almost thought you will name me when I started reading lol..

Again, nobody is dumb enough to believe rates will be zero forever, it is obvious BoC rates will climb but very slowly and will take years to reach prependamic levels.

I understand that mortgage rates are set by bond market and not BoC, but then they go on and keep buying billions in bonds per week to create fake demand and to depress rates in bond market.

Plz explain if BoC is controlling rates both ways, how can we reasonably expect them to go higher quickly?

By the way I am the guy who has been waiting to buy for a decade and never jumped in because I believed rates will normalize. I am running out of patience

#40 kommykim on 01.19.21 at 4:53 pm

RE: #13 meslippery on 01.19.21 at 3:18 pm
I had a dream last night, away to take control of our own oil in Alberta.
To hell with the USA if they don’t want our oil.
Build a pipe line to the pacific ocean in Canada and sell to the world. You would think someone smarter then I would have thought of that before now.

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

What rock have you been under for the last decade?
Or was that a sarcastic post?

#41 The Woosh on 01.19.21 at 5:02 pm

#38 Mortgage man on 01.19.21 at 4:51 pm
I don’t think its worth scaring everyone who is buying a house about their rates renewing higher in 5 years. If that happens, they can always extend their amortizations from 20 years back to 25 years if they can’t afford the monthly payment increase.

——————————————

See…there’s always a solution. Let’s keep up the positive thinking.

#42 Sheet-Metal Worker on 01.19.21 at 5:02 pm

All due respect, seems like ground-hog day from 2 years ago, we all expected rate increases and the exact scenarios Garth lays out for renewals and distressed people re-financing at higher rates never came to fruition. there will be some other black swan to come along and crush rates down again. MMT is in full swing. When will we ever see Fiver for 5% again? Not in my lifetime. Im 31.

#43 The Woosh on 01.19.21 at 5:09 pm

#39 Northshore guy on 01.19.21 at 4:53 pm
I almost thought you will name me when I started reading lol..

Again, nobody is dumb enough to believe rates will be zero forever, it is obvious BoC rates will climb but very slowly and will take years to reach prependamic levels.

I understand that mortgage rates are set by bond market and not BoC, but then they go on and keep buying billions in bonds per week to create fake demand and to depress rates in bond market.

Plz explain if BoC is controlling rates both ways, how can we reasonably expect them to go higher quickly?

By the way I am the guy who has been waiting to buy for a decade and never jumped in because I believed rates will normalize. I am running out of patience

—————————————

This guy is your barometer for when rates will rise. Northshore Guy, let us know immediately when you buy a property. That will be the signal for the Central Bankers to raise rates! Hold off purchasing for another decade and the rest of us will do just fine. Lol

#44 Dave on 01.19.21 at 5:11 pm

Whenever interest rates rise…..no significant increase for over a decade.

Whenever the rates super slowly rise….government will open the immigration flood gates. Rich dudes will be coming over here looking for houses, fancy cars and the best restaurants

#45 Prince Polo on 01.19.21 at 5:19 pm

Garth, you are forever the optimist! I have been waiting for the “inevitable” raising of rates and accompanying gnashing of teeth. Meanwhile, central banks invent increasingly novel ways to keep them suppressed. So why wouldn’t they continue their “innovative” ways until all renters are begrudgingly converted to mortgage holders?

I’d love to see financial prudence be rewarded, but I will believe it when I see it! On the very small off-chance that you could be wrong (GASP), I’ll make hay while the low-interest rate sun shines: margin loan, anyone?

#46 Millennial 1%er on 01.19.21 at 5:24 pm

Reminder to the boomers in this blog that I will forever be jealous of your bbq grilling, beer drinking, snow shovelling, lawn mowing life styles.

#47 neo on 01.19.21 at 5:25 pm

Garth,

What are you suggesting here? Let’s say we go from 1.5% to 2.5 to 3.0%. That is still historically low. The market was already overheated with rates that way even with “stress tests” remember those?

Anyway check out the bidding wars in Clarington of all places. Ya, this won’t end well when it finally does.

https://twitter.com/REWoman/status/1351363944468914190/photo/1

#48 jess on 01.19.21 at 5:41 pm

hey politicians this is not what to as words do matter!
double cross to save your own skin !
After Quitting Trump for a Week, Graham Now Claims Trump Wants Calm and “Orderly Transition”
https://www.motherjones.com/politics/2021/01/all-of-lindsay-grahams-flagrantly-self-serving-flip-flops-on-trump-a-5-act-play/

#49 Rook on 01.19.21 at 5:41 pm

Everybody remember in 2007-2009 when quantitative easing was temporary and the Fed would eventually stop buying government debt? How about when rates going to 1-2% was temporary?

#50 westcdn on 01.19.21 at 5:51 pm

What is the fundamental difference between MMT (modern monetary theory) and QE (quantitative easing)? The treatment of interest rates in my mind. QE is Keynesian thinking where the creation of money begets inflation and is managed through interest rates.

But what if Central Banks have destroyed price discovery and suspended the business cycle with their actions. Under MMT, the creation of money is managed through taxation. Inflation can occur but debt does not matter.

My best guess under MMT (as we seem to be headed), interest rates will remain low and there will be temporary surges of inflation. Putting aside assets, I think the 1st consumption surge will be with food prices.

As for the taxation of homes, I think the capital gain on a principal residence should be calculated on the value of the land only and exclude “improvements”. What a person wants to put on his piece of dirt is his decision and is paid by after tax money. Real estate agents chant “location, location, location” for a reason.

Oddly, if only land is taxable then condo PR owners would pay little if any capital gains.

#51 Travelbug on 01.19.21 at 6:00 pm

What on earth is YOLO?

You only live once, babe. – Garth

#52 Sail Away on 01.19.21 at 6:04 pm

We have a brief moment in time here where money can be borrowed almost for free… and discretionary consumer items have not yet increased accordingly.

This does not apply to houses.

So… now is a fine time to pick up that new item you’ve wanted if it’s within budget since terms will only get less favourable in the future. Opportunism, you know. Go get that new car. Let your husband/wife know you have my blessing.

#53 Brm2000 on 01.19.21 at 6:12 pm

“Get new tires!”

#54 Nonplused on 01.19.21 at 6:16 pm

#11 Faron on 01.19.21 at 3:07 pm
#3 KS on 01.19.21 at 2:41 pm

New tires?

Pretty sure Garth is jokingly referring to some of the least exciting, but essential, human activities out there.

——————————-

I took it to mean the WFH crowd is going to be commuting again, and the ones that bought in the ‘burbs a long way, so you’d better make sure your car is in good order.

But not in Calgary. The vacancy rate downtown is about 30% and that is not WFH related, as those people still have desks downtown.

#55 Sail Away on 01.19.21 at 6:22 pm

#46 Millennial 1%er on 01.19.21 at 5:24 pm

Reminder to the boomers in this blog that I will forever be jealous of your bbq grilling, beer drinking, snow shovelling, lawn mowing life styles.

———–

Then you might also be jealous of our business-owning, non timeclock punching, free traveling, 3 month vacationing, money spending, sportscar driving style as well…

…because it is staff like you, my friend, and your compatriots, who enable us to live this life of luxurious leisure. Nose to the grindstone now.

Thanks!

#56 cuke and tomato picker on 01.19.21 at 6:24 pm

Beautiful sunny day on south Vancouver Island today and tomorrow the IRELATHIEVES leave the White House.

#57 Nonplused on 01.19.21 at 6:29 pm

#46 Millennial 1%er on 01.19.21 at 5:24 pm

“Reminder to the boomers in this blog that I will forever be jealous of your bbq grilling, beer drinking, snow shovelling, lawn mowing life styles.”

Why?

And anyway, slowly but surely they are all selling out and moving into senior condos. You know, the ones with a swimming pool, underground parking, pool tables in the lobby and no kids or pets allowed. That was the retirement plan, after all. Cash in the house.

#58 Slim on 01.19.21 at 6:30 pm

Well, looks like Albertans are going to be about 1.5 billion dollars poorer. After tomorrow Kenney’s pipeline to nowhere will become history. Most everyone paying attention had seen this coming.

#59 S.Bby on 01.19.21 at 6:35 pm

The obvious issue that when rates start to rise it causes an economic pullback (recession) and a panic at the CB and then they lower rates again. They have painted themselves into a corner with low rates and there is no way out.

#60 S.Bby on 01.19.21 at 6:41 pm

Some problems with vaccines are becoming evident:
Allergic reactions are becoming more evident.
Distribution problems.
People delaying too long (or completely missing) their second dose.

#61 Northshore guy on 01.19.21 at 6:50 pm

#43 The Woosh on 01.19.21 at 5:09 pm
#39 Northshore guy on 01.19.21 at 4:53 pm
I almost thought you will name me when I started reading lol..

Again, nobody is dumb enough to believe rates will be zero forever, it is obvious BoC rates will climb but very slowly and will take years to reach prependamic levels.

I understand that mortgage rates are set by bond market and not BoC, but then they go on and keep buying billions in bonds per week to create fake demand and to depress rates in bond market.

Plz explain if BoC is controlling rates both ways, how can we reasonably expect them to go higher quickly?

By the way I am the guy who has been waiting to buy for a decade and never jumped in because I believed rates will normalize. I am running out of patience

—————————————

This guy is your barometer for when rates will rise. Northshore Guy, let us know immediately when you buy a property. That will be the signal for the Central Bankers to raise rates! Hold off purchasing for another decade and the rest of us will do just fine. Lol

—————————–

You sound like a smug Canadian home owner. I am sure you have made serious money buying/selling homes, congratulations! you had the guts to do what a sane person would never do (in Vancouver market, elsewhere housing is still affordable/cheap in comparison)

Sometimes i think if home ownership makes people jerks like this guy, I am happy with modest gains in my balanced portfolio.

#62 Bloff Witzer You're in the sitatation cloakroom on 01.19.21 at 7:01 pm

100 million doses in 100 days, yet the CBC spent a half hour the other day on the topic of Pfizer has a plant in Michigan making the vaccine and health Canada has approved it so we can just get it from there. Of course they didn’t mention that Moderna is making it in the states also because there is no interruption in their shipments. The U.S.A. is not letting one vial out of the country while they are still so ravaged by this disease. That is why we have been getting Pfizer/BionTech from Brussels and Moderna from Switzerland. Does anyone think that it was because that was the best logistical choice?

#63 crowdedelevatorfartz on 01.19.21 at 7:09 pm

@#8 Pee-Leaves Reader
“President Xi and China welcome you! Read carefully President Xi’s letter to another successful American, feel the warmth and respect between them, and this is how you will be treated in China:”

++++++++

Until the successful American investor in China is asked to comment by American media on another human rights violation on the beloved “Motherland that takes no criticisms with Chinese characteristics”

https://www.wsj.com/articles/one-year-after-china-banned-the-nba-basketball-returns-to-chinese-tv-11602260786

Aiii Yaaa!
Chairman for Life Xi is not impressed.

Far be it for me to suggest that China wants our technology…..and not much else.

#64 Genbizx on 01.19.21 at 7:10 pm

Just some thoughts…I have all my vaccinations as do all in my family. But I have reservations about this one. Question 1: will the vaccine help me not contract covid19? Question 2: will I still be contagious if I get it? These are key questions in my mind. If the answers are yes to Q1 and no to Q2 then even though this is an experimental drug I can see a massive benefit. But it appears that it may be no to Q1 and yes to Q2. Time will tell. Certainly most doctors agree that anyone under 20 need not be vaccinated. (Antibody dependent enhancement is a risk so why chance it?) Current stats indicate that 99.997% in this group are able to ward off covid with little effect. In the 20-49 age group it’s 99.98% which doesn’t seem to warrant the risk. 50-69 sees a drop to 99.5% survival rate with minimal issues. In the 69 and over we see a drop to about 95% survival rate. In this group that 5% risk is significant and vaccine seems to be a good option but again personal choice. Please don’t label me or anything cause that’s not the point. Just wondering

Strangely enough, it’s not about just you. Vaccinations bring herd immunity which helps vanish the virus and stops defeating the health care system. It’s a societal problem requiring a societal response. Your moral and ethical duty is to take the shot. It doesn’t mean you won’t contract the virus, but it will lesson symptoms and keep your precious snowflake butt out of hospital so someone else can be assisted. – Garth

#65 the Jaguar on 01.19.21 at 7:24 pm

On December 10th the number of active cases in Calgary was 6349, following week 6114, then 5627,4436,4028,3870, today reporting 3458. If it’s a race to the bottom, I’m “all in” as they say.

Alberta. 4.371 million peeps, with the youngest population in the country. The best Chief Medical Officer of Health. She’s grace under pressure without the theatrics of some. Not everyone has that quality. I wouldn’t want to be anywhere else in this country. I feel so giddy I might even give Jason Kenney a hug. I think he needs it.

This past year has tested people in ways they never imagined. Financially, emotionally, and in that ‘inner strength’ kind of way. I’m grateful to be so free of any hardship, in excellent health, and to have so many choices in front of me when we are all finally cut loose again. Despite all the current calamity and hand wringing, it seems like a great time to be alive.
Amen.

#66 Ustabe on 01.19.21 at 7:32 pm

Strangely enough, it’s not about just you. Vaccinations bring herd immunity which helps vanish the virus and stops defeating the health care system. It’s a societal problem requiring a societal response. Your moral and ethical duty is to take the shot. It doesn’t mean you won’t contract the virus, but it will lesson symptoms and keep your precious snowflake butt out of hospital so someone else can be assisted. – Garth

Garth, its been just about a year now…it takes less time to toilet train a toddler. They haven’t figured out the mask thing, how would you expect them to figure out a concept like herd immunity?

#67 earthboundmisfit on 01.19.21 at 7:37 pm

“What comes next?” you ask. Rhetorical question, right? A whole lotta hurt for a whole lotta people.

#68 Rakesh Ravi on 01.19.21 at 7:38 pm

Janet Yellen says republicans will not put the most stimulus that democrats want to help bolster US economy.

I have a real stimulus plan for you Janet Yellen, the Federal Reserve, central banks in Canada, EU, UK, Australia, Japan, all other central banks worldwide etc. give everyone 10 million dollars today. Let’s see how your MMT and other stimuseless works.

What is this $2,000 or $3,000 a person, UBI, welfare, CERB peanuts guaranteed annual income $1,400 a month, $2,000 a month etc. Come on pump it up. Really pump it up big time. Devaluation days brought to you by your governments, UN, world bank, IMF etc. etc. is here to help you.

#69 Drill Baby Drill on 01.19.21 at 7:40 pm

People who do not know how the credit market works are convinced that rates will not go up. Wow Barnum and Bailey were sure right.

#70 Bonobo on 01.19.21 at 7:43 pm

Ha…good one Garth!

“Plus an accelerated agenda for vaxing the nation – 100 million people in the first hundred days.”

As much as it is needed it is unlikely to happen. By tomorrow nothing will have changed on the ground in terms of delivery. My bet is that Biden will have a hard time delivering 50 million doses. Of course they will spin it by blaming Trump for the failure. So predictable.

Look at Canada, so high and mighty, shouting down Trump in his effort to deal with the virus. Sockboy is a monumental failure – Just ask Sophie if you don’t believe me…

#71 Apocalypse NOW on 01.19.21 at 7:48 pm

Do not waste time. What will unfold starting tomorrow will be epic and horrific.

Fuel up your vehicle tonight and stock it with at least three weeks of foodstuffs.

Charge all devices now. Load up on medications and first aid supplies.

Set your alarm for 3:30 AM eastern time. Check the news. Not just US. Proud Boys was founded by a Canadian, and the insurrectionists have many connections here. Much of what happens starting tomorrow may have Canadian connections. Wake up no later than 5:30 AM.

There’s a 98% chance of disaster erupting tomorrow. It’s just a matter of what times and where.

PREPARE

#72 Surreal on 01.19.21 at 7:48 pm

Everything continues to get more surreal.

So now we have 25,000 national guards descending on Washington for an inauguration nobody is expected to attend, and everyone has been told not to. And the Biden camp has supposedly been rumored to asked for them to be unarmed incase there is a MAGA terrorist in the national guard. What is this world coming to???

So we had virtually no police presence for the “Stop The Steal” rally where hundreds of thousands of people attended, but for the inauguration where practically nobody is expected to attend we have 25,000 unarmed national guards? WTF. Is it a fake crowd for TV?

Trump spent most of today pardoning people but that is typical of an outgoing president. Obama pardoned more people than Trump has. So it isn’t really news. Assange didn’t make the list though. Neither did Snowden. I think the hope for humanity rested in pardons for those two.

So Trump will board Airforce 1 for the last time tomorrow at 8 am headed for Mar-a-Lago, with little to no fanfare. At noon Biden will be inaugurated with little to no fanfare but an absolutely huge police presence compared to the expected size of the crowd. Does all this not seem weird?

We live in very interesting times. I expect them to get more interesting, not less.

And of course, other than cancelling Keystone, one of Biden’s “day 1” objectives is to give the 11 million illegal immigrants (can we call them “immigrants” if they entered illegally? Shouldn’t it be “illegal residents”???) legal status. This is a brilliant play because if it includes voting rights then the democrats will have all three branches of government for a generation. It will be a one party system.

#73 crowdedelevatorfartz on 01.19.21 at 7:59 pm

@#71 Apocalypse Now , Never, whenever
“There’s a 98% chance of disaster erupting tomorrow. It’s just a matter of what times and where.”

++++

Poxy poxy poxy.
I noticed you ditched the “yearly” moniker.
2018, 2019, 2020…..kinda confirmed year after year…..you were wrong.

Probably a good idea if you want the Trump survivalists to latch on to your “message” now that Trump has been neutered……they’re looking for a new messiah.

#74 YVR 60% Crash on 01.19.21 at 8:03 pm

@#8 Pee-Leaves Reader
“President Xi and China welcome you! Read carefully President Xi’s letter to another successful American, feel the warmth and respect between them, and this is how you will be treated in China:”

————————————-
Change your login name again 50 Cent Army?
I don’t think Secretary Pompeo would agreed with you.
“The CCP is the central threat of our time. CCP authoritarianism isn’t the future the free world wants … but it’s the future we’ll have if we let our guard down again. ”

https://twitter.com/SecPompeo/status/1350933416758317056

#75 S.Bby on 01.19.21 at 8:06 pm

I recently bought new tires for my car from Costco. Michelins and I got an $80 rebate; it was a good deal.

#76 Old Man Too on 01.19.21 at 8:09 pm

Why you can’t get your vaccine:
https://edmontonjournal.com/opinion/tasha-kheiriddin-the-liberals-went-hostile-against-big-pharma-now-were-facing-vaccine-shortages/wcm/c082a6de-8132-46de-b4f5-e231fad82ad5
Blame Trudeau and the Dippers

#77 S.Bby on 01.19.21 at 8:18 pm

According to BC Premier Horgan you can all just stay away please …

https://www.citynews1130.com/2021/01/19/bc-travel-stop-health-expert/

#78 Nonplused on 01.19.21 at 8:19 pm

Because of the media bans, I don’t know how many people will see this:

https://www.youtube.com/watch?v=6h5_d3DUdR4

It’s mostly a bunch of bragging but it seems clear he is leaving peacefully.

#79 crowdedelevatorfartz on 01.19.21 at 8:42 pm

DELETED. Turn off the hate. – Garth

#80 crowdedelevatorfartz on 01.19.21 at 8:54 pm

Wow.
An article from the New York Times is “hate”?

No, yours. – Garth

#81 Ustabe on 01.19.21 at 9:26 pm

Nattering nabobs of negativity.

Hard to tune them out these days.

#82 Reddy on 01.19.21 at 9:35 pm

I haven’t written or lurked here in a while. But I’m back…

Trying to buy another house… It’s impossible. Houses in my area sell in days. The fomo is unbelievable. I guess I caught it too… No bids yet for me, just interest, and chats with Realtors trying to get a read on the market. Basically the read is: in my area which has never seen bids over ask is now expecting all bids to be over ask. Looked at two places recently and both had ten offers and some on two days . I’m looking in Quebec…

#83 Don Guillermo on 01.19.21 at 9:45 pm

#78 S.Bby on 01.19.21 at 8:18 pm
According to BC Premier Horgan you can all just stay away please …

https://www.citynews1130.com/2021/01/19/bc-travel-stop-health-expert/
******************************************
Been practicing that for a few years. Works fine for me.

#84 DON on 01.19.21 at 9:52 pm

I take it the term consequences is suddenly no longer applicable. ‘The government will never….’

raise short term interest rates because Jack and Jill went up the debt moutain and cannot afford it. Then that means they will never raise taxes either?

Gov debt is our debt, but your debt is yours alone. If your spending decisions are not prudent than no one is coming to the rescue except mommy and daddy. The gov assumes that you can cover your bets. They will make a move that benefits Canada as a whole and not Jack and Jill who over spent. They assume you are adults and so does the bank.

Rising rates usually mean the economy is getting stronger. Running from the eventual hang over for those who spent outside their means will be tiring and bring on compounding stress.

Every action has an equal and opposite reaction.

But if all it takes is positive thinking…I’m looking for a free lunch.

#85 willworkforpickles on 01.19.21 at 9:53 pm

The most indebted nation on earth and of all time will be upended for its posturing as the richest nation on earth…for its unpayable debt…for its intention of going deeper in debt unrestrained with no intention of paying back.
It…(the US) and all other western nations having done the same and doing the same…(UK, Canada, etc) along with it.
The day of debt reckoning is coming upon the Western World.
This debt creation is unequivocally a house of cards.
No house of cards…a house of cards created by debt can stand indefinitely.
The rest of the non-western world – ready for revolution and change ultimately winding up as they will looking like nothing we in the west are accustomed to *** will grind us into the vortex with them.

#86 glenn wood on 01.19.21 at 9:54 pm

CONSIDER THIS SCENERIO: Justin has your back covered. He will save you with a kick the can down the road strategy. He will help you roll your mortgage over to super low variable rates which will force the banks to stop extending credit to even people with good credit ratings. Real estate prices will gradually fall over time as the zombie mortgage boat anchor puts a major drag on the economy. CMHCwill become insolvent requiring a government bail out of eye-watering proportions. The bond vigilantes will crucify Canada and interest rates rise relentlessly. In 5 years Justin will be voted out and the conservatives will be left to do the dirty work and clean up the mess. Oh and the Canadian dollars will be worth 60 Us cents.

#87 Dr V (not DV thank dog) on 01.19.21 at 9:54 pm

51 westcdn

Found this under Christmas tree

https://stephaniekelton.com/book/

The book that is, not the author.

Not finished reading it yet, but find much of interest,
and do not disagree with some of the mechanics of how certain things work. In disagreement with some of the
proposed solutions.

#88 Tyberius on 01.19.21 at 10:22 pm

Rates?

Going down before they go up. I’ve suggested to a friend who’s considering taking a penalty to lock in lower (would be saving about $7,000 over the 5 years, even after paying a hefty $12k penalty), to wait a couple more months.
After that it’s likely to go up for the next 30 years (not in a straight line, naturally).

All this according to my made-in-China (assembled in Mexico) crystal ball.

#89 GRG on 01.19.21 at 10:26 pm

JGB 10 yr yields have been sub-2% since 1998 and hovering around zero since 2016. Central Bank financial repression can keep markets irrational a lot longer than most of us can stay solvent.

No reason not to believe the much smaller Maple Market for bonds can’t be “managed” equally skillfully.

As for a boomlet later this year…what will be left to buy by then? You give me $381 Billion and I’ll show you a good time too. Tonight.

#90 Moses71 on 01.19.21 at 10:39 pm

#9 Piss & Vinegar
Touching I’m sure for Americans
What about Canadians? Just ask the 2 Michaels

#91 Two-thirds on 01.19.21 at 10:53 pm

Yes, rates could double in a year or two from now, from 1.7% to 3.4%!!!!

3 . 4 . percent .

How numerically-consequential is this?

Going from historically low to almost historically low, but still way below the long-term 5-6% level in Canada’s history.

So yes, today’s message is true, but on a monthly basis impact… minor sting.

Plus, the impact will not be felt until 2025-2026, when 2020-2021 borrowers renew.

So, prepare. Yes. Panic? Nope. No need to. 3.4% is nothing to be afraid of!

#92 SOMETHINGS UP! on 01.19.21 at 11:08 pm

DELETED

#93 IceMan on 01.19.21 at 11:16 pm

So what is the advise for someone with 600K $ in cash and wants to buy a house in GTA. Shall I wait or just buy somewhere in the eastern city for 800K with the remaining 200K to be paid within 5 years (possible for me at my current savings rate).

#94 Bill on 01.19.21 at 11:41 pm

In Dec the wife got a flat on our errand runner, a 2017 Nissan Leaf.
A GREAT car but realized those tires are DONE on the rear.
What the hell!?…A new set was 850 bucks! Me being cheap and all thought I’m not paying that. So I just bought a 2019 Leaf SL Plus the other day. 10Km on it but out of the USA of course….even after exchange and importing it was $12-$13k cheaper than in Canada. My 2017 I had for 2 years and will sell it for more than I paid for it…Yes it is a US car as well.
We get screwed in this country on sooooooo many levels.
If you can:
#1 Never buy new….let someone else take the hit.
#2 always run it in your company if justifiable.
# 3 Buy only vehicle’s, if you can in mint shape from warmer winter areas. ie Cali, Oregon, WA state…Salt and cold winters suck for autos.

#95 willworkforpickles on 01.20.21 at 12:05 am

The talk on this blog has been endless as always coming from the deep thinkers regarding interest rates and debt in that there are just no worries with either going forward.
They want to remind you constantly since there has been no substantial rate increase in over ten years, its not going to happen now because of the debt and which is their other point of non concern.
Unrestrained rising government debt unlike the last 10 years should be their main concern now if the interest rate question means anything at all to them.
The debt we are realizing now has grown into a monster and becoming viscous and more so with each passing year. Not the cuddly pup it once was anymore and therein lies the difference now where the level of runaway debt creation will soon be affecting interest rates…and this baby’s got teeth…big sharp teeth and is unfed and hungry and slowly going mad.
(i would never do that to my own dog…not ever)

When debt to GDP ratios exceed 77% the real problems begin and already have long ago.
The US debt to GDP ratio was 107% in the 4th qtr. of 2019.
When Trump took over in 2017 the national debt was a hair under $20 trillion dollars US.
With Biden taking over now the debt will be just a hair under $30 trillion US. …by the end of 2021 it will likely be approaching $33 trillion…and on and on.
So what is the debt to GDP ratio now. Significantly larger and growing out of control than the then astronomical calculations at the end of 2019.

This debt being much greater than the entire country’s now declining production rates is and would deeply concern any lender (holder of national debt) as to weather they can be repaid. Nations buying and holding US debt are already backing away from further government debt purchases and even scaling back holdings with future intent to upend the US primary reserve currency status.
Worried lenders always want and demand higher interest rates under increased risk which is now snowballing.
Before the US would ever default on its debt, it will raise interest rates and drastically…with a subsequent recession/depression notwithstanding.
What’s more, reduced demand for US based treasuries can and will further increase interest rates and slow economic growth.
This lowering demand for US treasuries is and will continue to lower the dollar’s value as pissed off foreign holders of US debt see their holdings erode.
Then in itself, rising interest on the debt will become an even greater calamitous predicament in the unsolvable US debt crises to come…and sooner than many believe.

And so…as the US goes, Canada follows…(non identical bond structure notwithstanding)

I have lost count as to how many times and in so many ways i have gone over this subject here over the past year … how many different ways can you expound on the same message and put it a different way each time meaning the exact same thing every time.

Endlessly so I guess.

#96 mark on 01.20.21 at 12:20 am

Its the biden bubble, market ready to POP. Prepare.

#97 Russ on 01.20.21 at 12:34 am

crowdedelevatorfartz on 01.19.21 at 7:59 pm

@#71 Apocalypse Now , Never, whenever
“There’s a 98% chance of disaster erupting tomorrow. It’s just a matter of what times and where.”

++++

Poxy poxy poxy.
I noticed you ditched the “yearly” moniker.
2018, 2019, 2020…..kinda confirmed year after year…..you were wrong.
=====================================================

Hey Mr. Crow Dedelevy F,

This is old school. What’s old is new Now.

We had a comrade ApoxyNow in the comments way back in March 2009.

Good consistent performance from this lad. He meets expectations… unless your expectation is for ‘im to be correct, of course.

Cheers, R

#98 BillyBob on 01.20.21 at 4:45 am

#12 Faron on 01.19.21 at 3:07 pm
#3 KS on 01.19.21 at 2:41 pm

New tires?

Pretty sure Garth is jokingly referring to some of the least exciting, but essential, human activities out there.

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

Well, I dunno about exciting or even essential. But I do know that some of the most enjoyable times of my life have been spent on top of two wheels.

Many memorable trips, one coast to coast and back in 6 weeks, over 23,000km. Solo trip – seems not many people could afford that much time off. Kept the oil clean, the only mechanical issue the entire time was a broken speedo cable. Bavarian Motor Works R1200R. Harleys are cool, but if you want reliable go Deutsche…what a magical summer that was.

On the other hand, sitting behind a laptop in a cafe in James Bay and scrolling Insta pics is easier and has a smaller carbon footprint, amirite?

#99 MF on 01.20.21 at 6:51 am

6 willworkforpickles on 01.20.21 at 12

Just because you have said something multiple times doesn’t make it true.

-Every other country on earth buys USD to devalue their own currency and stay competitive
-There is no viable alternative reserve currency. People do not trust other countries as much as the US.
-The US debt is high, but compared to overall assets (geography, population, military, etc.) it is still managable and better than anyone else’s situation.

There are other reasons but this is the short of it.

The USD isn’t going anywhere, regardless of what some think/hope.

MF

#100 NoName on 01.20.21 at 7:35 am

#99 BillyBob on 01.20.21 at 4:45 am

now that you mention motorcycles and carbon foot print…

https://www.autoblog.com/2021/01/19/austria-alps-motorcycle-museum-fire/

More than 230 vintage motorcycles and at least a dozen classic cars and vans were destroyed when the Top Mountain Crosspoint Museum located in the Austrian Alps caught fire on January 18. Opened in 2016, the museum housed an impressive and diverse selection of rare, offbeat, and historically significant two-wheelers.

#101 willworkforpickles on 01.20.21 at 7:45 am

Biden’s commitment at the start going forward to healing the deep divisions within America is about on par with Trump’s plan to make America great again (MAGA) 4 years ago.
Consider the Biden commitment failed from the get go and you’ll be less disappointed.

#102 Regjeg on 01.20.21 at 8:15 am

Inflation rates in Canada have been remarkably stable and below 3% since 1992.

https://www.statista.com/statistics/271247/inflation-rate-in-canada/

#103 Apocalypse NOW on 01.20.21 at 8:18 am

TRUMP HAS BOARDED MARINE ONE!

HE HAS ALL THE NUCLEAR CODES!

HUG YOUR CHILDREN.

PREPARE

#104 Steven Rowlandson on 01.20.21 at 8:19 am

Debt contracting is how the official currency gets created.
Think about it. If debt gets created and then paid off there really isn’t inflation but if you have chronic debt build up you have inflation and sometimes a lot of it.

#105 Wrk.dover on 01.20.21 at 8:30 am

#47 Millennial 1%er on 01.19.21 at 5:24 pm
Reminder to the boomers in this blog that I will forever be jealous of your bbq grilling, beer drinking, snow shovelling, lawn mowing life styles.

—————————————–

How about dealing with the beaver that has flooded part of my back 40, does that make you jealous too? You should see the stumps it wants me to be impaled on.

#106 Sail Away on 01.20.21 at 8:35 am

#99 BillyBob on 01.20.21 at 4:45 am

Many memorable trips, one coast to coast and back in 6 weeks, over 23,000km. Solo trip – seems not many people could afford that much time off. Kept the oil clean, the only mechanical issue the entire time was a broken speedo cable. Bavarian Motor Works R1200R. Harleys are cool, but if you want reliable go Deutsche…what a magical summer that was.

—————

Phaedrus? Have you returned?

#107 IHCTD9 on 01.20.21 at 8:48 am

“Lock in. Set up a weekly-pay mortgage. Start saving for renewal day. Oh, and get new tires.”
_____

Well the mortgage is kaput, and I actually got new tires last year for the truck. Michelin Defender LTX M/S 265/75/16 E rated. These are great tires by the way, a bit expensive, but good tires are worth it. I don’t think there is a better tire you can put on a “non-working” 3/4 ton.

So then, I hope to keep knocking the cost of living/taxability down where I can instead. I’ve been playing with the rocket stove heater I built during Christmas break for 2 weeks now, and have decided it needs a few mods. It kicks out a ton of heat, but it will find a way to go out if not attended to every 10-15 minutes. I am going to convert it to a “batch-box” style, and add air directly to the combustion chamber, and a choke/damper arrangement. If I can get this thing to run unattended for 2 hours minimum, it’ll stay. I have years worth of scrap wood out back, it would be sweet to heat the house with it rather than just pile it all up some winter and throw a match to it.

#108 David Hawke on 01.20.21 at 8:50 am

Hey TurnerNation, it’s started the EU has approved bugs as a food source.

https://www.theguardian.com/environment/2021/jan/13/yellow-mealworm-safe-for-humans-to-eat-says-eu-food-safety-agency

#109 Apocalypse NOW on 01.20.21 at 9:04 am

BHC06 917 XLV 0

Spread the code. Your life may depend on it.

PREPARE

#110 BillyBob on 01.20.21 at 9:15 am

#107 Sail Away on 01.20.21 at 8:35 am
#99 BillyBob on 01.20.21 at 4:45 am

Many memorable trips, one coast to coast and back in 6 weeks, over 23,000km. Solo trip – seems not many people could afford that much time off. Kept the oil clean, the only mechanical issue the entire time was a broken speedo cable. Bavarian Motor Works R1200R. Harleys are cool, but if you want reliable go Deutsche…what a magical summer that was.

—————

Phaedrus? Have you returned?

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

Ha! I’d be happy to have half of Pirsig’s intellect. The jury’s still out on the mental illness side of things.

“It is a puzzling thing. The truth knocks on the door and you say, “Go away, I’m looking for the truth,” and so it goes away. Puzzling.”

#111 KLNR on 01.20.21 at 9:18 am

@#82 Ustabe on 01.19.21 at 9:26 pm
Nattering nabobs of negativity.

Hard to tune them out these days.

I for one am grateful for this comments section.
Whenever I’m feeling a little to positive about life, I come here to read for a bit :)

#112 willworkforpickles on 01.20.21 at 9:20 am

#100 MF
“The USD isn’t going anywhere, regardless of what some think/hope.”
……………………………………………………………………………………………………….

Only down and out eventually.

#113 KLNR on 01.20.21 at 9:24 am

@#94 IceMan on 01.19.21 at 11:16 pm
So what is the advise for someone with 600K $ in cash and wants to buy a house in GTA. Shall I wait or just buy somewhere in the eastern city for 800K with the remaining 200K to be paid within 5 years (possible for me at my current savings rate).

folks have been screaming crash for 20+ years now.
Probably a lot of regret for ‘some’ of those who are still waiting for one. Buy what you can afford.

#114 Cheese on 01.20.21 at 9:24 am

#108 add a pellet hopper and an cheap Arduino screw feeder :D did you add mass along the exhaust for thermal battery?

#115 Sail Away on 01.20.21 at 9:30 am

Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450

And… with a new vehicle, you get the 3 best years with full coverage warranty and you know how the vehicle’s been treated.

Also, there are often great promos for new vehicles. If 0 or 0.5 APR is offered, the new deal gets even better.

#116 Sara on 01.20.21 at 9:42 am

#80 crowdedelevatorfartz on 01.19.21 at 8:42 pm
DELETED. Turn off the hate. – Garth

#81 crowdedelevatorfartz on 01.19.21 at 8:54 pm
Wow.
An article from the New York Times is “hate”?

No, yours. – Garth

#82 Ustabe on 01.19.21 at 9:26 pm
Nattering nabobs of negativity.

Hard to tune them out these days

#112 KLNR on 01.20.21 at 9:18 am
@#82 Ustabe on 01.19.21 at 9:26 pm

I for one am grateful for this comments section.
Whenever I’m feeling a little to positive about life, I come here to read for a bit :)

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

I feel for Garth. He has to read all the DELETED comments.

#117 Sail Away on 01.20.21 at 9:47 am

One of life’s great unfairnesses is that the more resources you have, the more you receive for free. Promotions are given, businesses curry favour, all-expense paid vendor conferences are held in exotic locations, bank fees are waived. It goes on and on.

The guy with leverage steers the ship. The guy living hand to mouth pays through the nose every time.

#118 Tron Light on 01.20.21 at 9:52 am

#116 Sail Away on 01.20.21 at 9:30 am

Except very few people – just a guess here but I would say 98% – do not own the same car for 13 years. My other guess is that most people change cars every 5 to 6 years. I bought a 3 year old used car in 2019 and I will keep it until it turns 10 years old. That’s 7 years of ownership for me while only 3 for the previous owner!

#119 jess on 01.20.21 at 9:55 am

perhaps the bc.premier and quebec premier are correct in their thinking

…”A so-called Covid-19 “superspreader” who traveled around northeastern China has been linked to 102 confirmed infections, according to Chinese officials.
The individual, who worked as a salesman promoting health products to the elderly, had traveled from his home province of Heilongjiang to neighboring Jilin province, bringing the virus with him.
Authorities claim he unknowingly spread the virus among elderly residents for several days before he was tracked down by health officials as a close contact of a confirmed case.

#120 Dharma Bum on 01.20.21 at 9:59 am

#99 Billy Bob

Harleys are cool, but if you want reliable go Deutsche…what a magical summer that was.
——————————————————————–

Nothing beats a cross country motorcycle trip. That’s for sure.

I rode my Harley across the U.S. and back in 2011, with 3 other guys. One of them had a one year old BMW touring bike that made my rickety 2000 Heritage Softail look like a rickety 2000 Heritage Softail.

That Beemer was a slick powerful rocket.

If anyone out there is planning a continental ride on a Harley, make sure it’s at least a decker – a 6 speed Ultra Glide or equivalent. If you’re not into the Harley culture, then get a BMW bike.

It’ll save your ass, literally.

Either way, it’s best to get out there and enjoy yourself.

Old age comes too quickly, and there’s no sense obsessing over interest rates, house prices, bond yields, and stuff like that. You need to play the hand you’re dealt, and make the best of the circumstances that you’re born into and have to live with throughout you’re life.

Don’t delay. Just work hard, make as much money as you can given your abilities (brainpower, strength, education, ambition) and use it as a means to an end (money is not the end in itself). Enjoy your life. Do stuff. Go places. meet people. Eat good food. Stay healthy. Have fun.

Many people have done alright when interest rates were high, when interest rates were low, when house prices were high, when house prices were low, when the markets were soaring, when the markets were tanking.

Just focus on your thing and do your best. Stop blaming circumstances. it’s all on you.

#121 Dr V (not DV) on 01.20.21 at 10:04 am

116 sail – your deprecation of 20 percent in 3 year s is low in my opinion.

I have noted a shortage of good used trucks though which has kept prices high

#122 Soviet Capitalist on 01.20.21 at 10:10 am

Inflation is good?
Garth, how about the purchasing power of my salary?
Is it good that it will go down?

#123 Mattl on 01.20.21 at 10:11 am

Today is not normal. That’s why. These home loans rates are weird. Unsustainable. The rate structure in place is the result of a once-in-a-generation, global pandemic, emergency recession, holy-crap reality that a year ago nobody expected. And now nobody expects it to last.

—————————————————–

Pre pandemic my mortgage was under 2.2%. Today it is at 1.74%. If you are calling for a return to pre pandemic rates, in 3 years, then that move – 50bps up – isn’t going to take anyone out. Sure the pandemic moved rates slightly lower but CB policy for the past decade – in what were extraordinarily good times – was to keep rates ridiculously low.

Safe bet that rates will go up, but will stay incredibly low historically for the foreseeable future. If they couldn’t normalize rates during times of great prosperity, how they going to pull that off post pandemic?

Low rates – maybe not late 2020 low – are here to stay.

#124 Sail Away on 01.20.21 at 10:16 am

#119 Tron Light on 01.20.21 at 9:52 am
#116 Sail Away on 01.20.21 at 9:30 am

Except very few people – just a guess here but I would say 98% – do not own the same car for 13 years. My other guess is that most people change cars every 5 to 6 years. I bought a 3 year old used car in 2019 and I will keep it until it turns 10 years old. That’s 7 years of ownership for me while only 3 for the previous owner!

————-

Then the calculation applies even more so:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 6 years. Cost per year = $9,167
Drive used vehicle 3 years. Cost per year = $15,000

#125 Quintilian on 01.20.21 at 10:18 am

#114 KLNR
“folks have been screaming crash for 20+ years now.
Probably a lot of regret for ‘some’ of those who are still waiting for one.
Buy what you can afford”

The problem is that the market is driven by what people can’t actually afford.

Remember the wolf finally did show up.

#126 Mattl on 01.20.21 at 10:28 am

#116 Sail Away on 01.20.21 at 9:30 am
Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450

And… with a new vehicle, you get the 3 best years with full coverage warranty and you know how the vehicle’s been treated.

Also, there are often great promos for new vehicles. If 0 or 0.5 APR is offered, the new deal gets even better.

—————————————————-

Agreed on new vs newish.

Where it gets interesting with used vehicles is when you go outside of 5 years. We have an 8 year old 550HP sedan that was 85K new that I paid 25K + shipping from Alberta. Due to the pandemic they actually sell for 35K now but that’s beside the point. Our SUV was 45K new, we paid 10K cash.

Not for everyone, I keep up on maintenance and do a lot of Google mechanic work to keep repairs low. And at that age something catastrophic could happen (avoid German twin turbo’s that look cheap at all cost!), but you can drive high end vehicles for the cost of a new Honda Civic.

#127 Sonny on 01.20.21 at 10:33 am

Bank of Canada keeps key interest rate target on hold

https://thinkpol.ca/2021/01/20/bank-of-canada-to-update-economic-outlook-with-first-rate-announcement-of-2021/

OTTAWA — The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent.

The central bank is citing the economic conditions and ongoing uncertainty from the pandemic as reasons for its decision.

It also says that the earlier-than-anticipated arrival of vaccines has reduced economic uncertainty from “extreme levels.”

Still, the bank says today it expects the Canadian economy to contract in the first quarter of 2021.

The bank forecasts real gross domestic product will decline by 2.9 per cent in the first quarter of the year compared to the same period in 2020, before improving thereafter if severe restrictions start easing in February.

The bank is forecasting growth of four per cent this year, then 4.8 per cent next year, and finally 2.5 per cent in 2023.

This report by The Canadian Press was first published Jan. 20, 2021.

The Canadian Press

#128 Ponzius Pilatus on 01.20.21 at 10:39 am

How do you know a tire is good?
Is kicking it enough?
For me it’s like buying a water melon.
That’s why it’s Costco all the way for me.
Don’t buy a car that has an automatic tire pressure gage.
The tires needed are more expensive and are crap.

#129 Regjeg on 01.20.21 at 10:52 am

The debt can will be given a steroid shot and kicked down the road, but Yellen will keep her eye on it.

https://www.reuters.com/article/us-usa-biden-yellen/act-big-now-to-save-economy-worry-about-debt-later-yellen-says-in-treasury-testimony-idUSKBN29O1WX

#130 Sail Away on 01.20.21 at 10:56 am

#122 Dr V (not DV) on 01.20.21 at 10:04 am

116 sail – your deprecation of 20 percent in 3 year s is low in my opinion.

I have noted a shortage of good used trucks though which has kept prices high

————-

My son has been looking and 20% depreciation after 3 years (right when full warranty expires, strangely) seems about average for dependable vehicles that maintain resale value. Some less, of course, but usually for a reason.

#131 Apocalypse NOW on 01.20.21 at 10:57 am

New code takes effect in 6 minutes

BHC06 561 XLV 0

PREPARE

#132 Bill on 01.20.21 at 11:04 am

#104 Apocalypse NOW
—————-
Garth why do you put up with this village idiot?
George is that you?!

And go Canada!
https://financialpost.com/real-estate/mortgages/canadians-piling-on-mortgage-debt-as-hot-housing-market-continues

#133 DON on 01.20.21 at 11:12 am

on the subject of used cars…Mattl’s take is what I have experienced. The 5 yr used is the best value. I found two vehicles that were 5 years old with low kilometers under 70k. Works eben better if you find a fully loaded used vehicle.

Lots of new/used trucks for sale on the sides of the roads.

#134 Apocalypse NOW on 01.20.21 at 11:17 am

Trump still has the codes.

The probability of a nuclear detonation in the next 42 minutes is 93.7%.

PREPARE

#135 Penny Henny on 01.20.21 at 11:18 am

#116 Sail Away on 01.20.21 at 9:30 am
Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450

And… with a new vehicle, you get the 3 best years with full coverage warranty and you know how the vehicle’s been treated.
///////////////////

More accurately.
Buy new car for $50k (lets leave the tax out for now) and three years later trade it in and get $25k.

Buy three year old car for $33k and trade in for $15k.

New = $8,333/yr.
Used = $6,000/yr.

Doesn’t make a solid case for new or used but it is certainly more accurate.

#136 Penny Henny on 01.20.21 at 11:23 am

#116 Sail Away on 01.20.21 at 9:30 am
Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450
///////////////

Are you sure your name is not Dolce cause I’m sensing some funny business with you numbers.
first off $40k + $4k tax= $44k not $45k
Secondly 13 years at $423 =$5499 not $55k
same with 10 years at $450 = $4500 not $45k

#137 WTF on 01.20.21 at 11:30 am

#132 Poxy

Thanks for the laugh!

For the record there is more than 1 football and Biden has one of them already.

Now time to cut The Short Fingered Vulgarian off from his post presidential security briefings, given the fact he cannot be trusted, keep his big mouth shut, or mercifully, has digits long enough to activate the damn thing.

Presumably the indictments from NY will be served in Fla. Guess he should have pardoned his now deposed ex Lawyer Cohen

https://www.newsweek.com/trump-wont-pardon-his-family-because-they-may-testify-against-him-says-ex-lawyer-1555953

#138 Prince Polo on 01.20.21 at 11:41 am

Lady Gaga just sang the US national anthem at Inauguration. Time for some on this blog to stop bashing her and to unite around patriotism!

#139 Sold Out on 01.20.21 at 11:45 am

#137 Penny Henny on 01.20.21 at 11:23 am
#116 Sail Away on 01.20.21 at 9:30 am
Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450
///////////////

Are you sure your name is not Dolce cause I’m sensing some funny business with you numbers.
first off $40k + $4k tax= $44k not $45k
Secondly 13 years at $423 =$5499 not $55k
same with 10 years at $450 = $4500 not $45k

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

Hahahaha! Mr ” if you need math done right, get an engineer”.

#140 Oakville Rocks! on 01.20.21 at 11:49 am

Trump says he will be back in some form…
I am guessing Lizard.

TurnerNation can likely enlighten us on the theory that world leaders have been replaced by lizard like aliens.

Speaking of which, Sons of Kemet released an amazing album in 2018 My Queen is a Lizard – give it a listen, especially track 3 My Queen is Harriet Tubman. It is sure to lift any winter blues you may have.

#141 Doug t on 01.20.21 at 11:55 am

#139 prince polo

lady gaga …… um rich, self absorbed, woke, and just plain untalented

#142 Sail Away on 01.20.21 at 11:59 am

#137 Penny Henny on 01.20.21 at 11:23 am
#116 Sail Away on 01.20.21 at 9:30 am
Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450

———-

Are you sure your name is not Dolce cause I’m sensing some funny business with you numbers.
first off $40k + $4k tax= $44k not $45k
Secondly 13 years at $423 =$5499 not $55k
same with 10 years at $450 = $4500 not $45k

———–

Haha. Day drinking gets me every time!

…or, taking Dolce’s tack: I’m right! I’m right! I’m right! And if you question me, you’re an illegitimate crescent wrench!

#143 Apocalypse NOW on 01.20.21 at 11:59 am

DUCK AND COVER !!!!!

#144 Sail Away on 01.20.21 at 12:05 pm

#140 Sold Out on 01.20.21 at 11:45 am

Hahahaha! Mr ” if you need math done right, get an engineer”.

———–

Actually, my standard phrase during presentations is:

‘…somebody else run those calcs for me. I’ve never been good with numbers.’

I can say that when someone questions an engineer’s numbers, the immediate response is to doublecheck them rather than insulting the questioner.

#145 Love_The_Cottage on 01.20.21 at 12:07 pm

Went for a walk here in the GTA. Cool but sunny. Biden sworn in. Blue Jays sign Springer AND Brantley. It’s a very good day.
Look for good news, not bad. It will improve and lengthen your life.

#146 IHCTD9 on 01.20.21 at 12:13 pm

#137 Penny Henny on 01.20.21 at 11:23 am
#116 Sail Away on 01.20.21 at 9:30 am
Buying used vehicles can be false economy.

Quick scenario:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $45k

Drive new vehicle 13 years. Cost per year = $423
Drive used vehicle 10 years. Cost per year = $450
///////////////

Are you sure your name is not Dolce cause I’m sensing some funny business with you numbers.
first off $40k + $4k tax= $44k not $45k
Secondly 13 years at $423 =$5499 not $55k
same with 10 years at $450 = $4500 not $45k
______

Let the Math wars begin!

#147 Sail Away on 01.20.21 at 12:21 pm

Corrected numbers:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $44k

Drive new vehicle 13 years. Cost per year = $4231
Drive used vehicle 10 years. Cost per year = $4400

———

The question remains: does it make sense to pay more per year for a secondhand vehicle than a new one?

#148 IHCTD9 on 01.20.21 at 12:27 pm

Got a quote on some garden variety structural steel tubing this morning, 105.00/C#. That’s the record for me, in 26 years of buying the stuff.

Add that to the now infamous $6.00 2×6 pre-cut – and I sense projects of all kinds soon being put into suspended animation…

#149 Sail Away on 01.20.21 at 12:36 pm

#136 Penny Henny on 01.20.21 at 11:18 am

More accurately.
Buy new car for $50k (lets leave the tax out for now) and three years later trade it in and get $25k.

Buy three year old car for $33k and trade in for $15k.

New = $8,333/yr.
Used = $6,000/yr.

Doesn’t make a solid case for new or used but it is certainly more accurate.

———–

Ah. Let’s examine using your scenario:

$50k gets you a new car under warranty. To properly compare with a 3yo used car, you would drive the new car 6 years for an equivalent product at the end.

This yields $5,833/mo for new vs. $6,000/mo for used.

#150 Mehling on 01.20.21 at 12:45 pm

Hi Mattl / Sail Away / Bill – good advice on cars:

Mattl – are you referring to a late model Mercedes S550 / S560? Curious which one you would avoid (below).

Thanks in advance.

“And at that age something catastrophic could happen (avoid German twin turbo’s that look cheap at all cost!), but you can drive high end vehicles for the cost of a new Honda Civic.”

#151 IHCTD9 on 01.20.21 at 12:59 pm

#148 Sail Away on 01.20.21 at 12:21 pm
Corrected numbers:

New vehicle: $50k + $5k tax = $55k
3 yo used: $40k + $4k tax = $44k

Drive new vehicle 13 years. Cost per year = $4231
Drive used vehicle 10 years. Cost per year = $4400

———

The question remains: does it make sense to pay more per year for a secondhand vehicle than a new one?
___

If you add financing for both in, it gets even worse. Used cars probably 4%+, new maybe 0%.

Truth be told though, most used 3-4 years cars I’ve bought had 100K on the clock and cost half of new.

Your numbers right now, would probably be accurate for pick up trucks – hardly worth buying a 1-3 year old one, better deal all in to just buy new.

Fun car story: When I was in College, I bought a 1978 Ford Fairmont Futura right out of the scrap yard for 150.00. They towed the exhausted jalopy right out of there and “certified” it for me haha… I drove it for 2 years, and then junked it for 75.00. Cheapest driving I’ve ever done.

#152 BillyBob on 01.20.21 at 1:03 pm

#121 Dharma Bum on 01.20.21 at 9:59 am
#99 Billy Bob

Harleys are cool, but if you want reliable go Deutsche…what a magical summer that was.
——————————————————————–

Nothing beats a cross country motorcycle trip. That’s for sure.

///…edited for brevity.

Just focus on your thing and do your best. Stop blaming circumstances. it’s all on you.

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

Great post DB. Couldn’t agree more.

I remember stopping for gas at one point near Sturgis. It was a bit surreal, with my kevlar and fullface and Eurobike I felt like an astronaut who’d wandered onto the set of a western.

Walking outside after paying, I hear someone say “HEY, who’s Bimmer is that?!”. I look up and there’s a REAL good ol’ boy…lean old gent with the Willie Nelson braids, denim-clad with leather vest, straddling a Hog straight out of Easy Rider. I mean, it was amazing. Ape-hangers, chopped. A biker straight from central casting.

Considering where I was, I braced a bit inside but outwardly smiled and said hi, yeah, that’s mine. Made a few comments about how cool his bike was, the way bikers do. I confess I did think I might get a couple remarks about my Eurotrash steed, sometimes the urban cowboy Harley guys can get up their own rears a bit.

Nope. Nicest guy ever. Lets out a low whistle, compliments the BMW, says he’s heard of how good they are. Asks me about my trip, where I’ve been, how far I’ve gone. We chat for a good 15 minutes.

Towards the end I laughingly admit my original misgivings, said I thought maybe he’d give me a hard time. He says, “As long as you’ve got two wheels between your legs, don’t matter what it is.” Nods, fires his bike up, and roars off.

I dunno if this sort of thing happens between minivan owners, but I have my doubts.

#153 Prince Polo on 01.20.21 at 1:08 pm

#142 Doug t on 01.20.21 at 11:55 am
#139 prince polo

lady gaga …… um rich, self absorbed, woke, and just plain untalented

=====================
I see you missed the point. Kudos!

#154 Inequity on 01.20.21 at 1:34 pm

Apocalypse – Take your meds

#155 Doug in London on 01.20.21 at 4:06 pm

So you think interest rates can’t go up, ever? I have absolutely NO IDEA what will happen, but what’s happened over the last year is an anomaly, an aberration from the norm. While I doubt we’ll see a return to the all time high rates of 1981, a repeat of 1990 isn’t out of the question. That year, to deal with inflation picking up interest rates went up to snuff it out, and it worked. The early 1990s recession followed. Oh no, here comes the time tunnel again. Say, has anyone heard those new songs Diamond Mine by Blue Rodeo? How about Jamie’s got a gun by Aerosmith, or Blue Sky Mine by Midnight Oil, from Australia?

#156 KLNR on 01.20.21 at 4:14 pm

@#121 Dharma Bum on 01.20.21 at 9:59 am
#99 Billy Bob

Harleys are cool, but if you want reliable go Deutsche…what a magical summer that was.
——————————————————————–

Nothing beats a cross country motorcycle trip. That’s for sure.

I rode my Harley across the U.S. and back in 2011, with 3 other guys. One of them had a one year old BMW touring bike that made my rickety 2000 Heritage Softail look like a rickety 2000 Heritage Softail.

That Beemer was a slick powerful rocket.

If anyone out there is planning a continental ride on a Harley, make sure it’s at least a decker – a 6 speed Ultra Glide or equivalent. If you’re not into the Harley culture, then get a BMW bike.

It’ll save your ass, literally.

Either way, it’s best to get out there and enjoy yourself.

Old age comes too quickly, and there’s no sense obsessing over interest rates, house prices, bond yields, and stuff like that. You need to play the hand you’re dealt, and make the best of the circumstances that you’re born into and have to live with throughout you’re life.

Don’t delay. Just work hard, make as much money as you can given your abilities (brainpower, strength, education, ambition) and use it as a means to an end (money is not the end in itself). Enjoy your life. Do stuff. Go places. meet people. Eat good food. Stay healthy. Have fun.

Many people have done alright when interest rates were high, when interest rates were low, when house prices were high, when house prices were low, when the markets were soaring, when the markets were tanking.

Just focus on your thing and do your best. Stop blaming circumstances. it’s all on you.

toured around NA back in my 20’s, on a DUCATI no less.
Don’t want to be doing that as an old fella.
Nothing like seeing the world from a motorcycle
(no matter the make)

#157 Wilbur on 01.20.21 at 5:57 pm

For those of us that filled out the poll, and watched our portfolios today. Joe Biden and the covid virus did not hurt our portfolio’s, or our values of our homes.
The big question here at home, what comes next?
What happens to our capital gains tax?
Should I cash in a few hundred thousand by the end of January, which is my usual spending for the year, ahead of Trudeau raising the capital gains tax or will I still be penalized on those funds? Over to you Garth or is question for my accountant?

#158 Drinking on 01.21.21 at 1:03 am

87.5 % of economist say that rates will go up; what a fricken joke; maybe, just maybe .25%. Did you not read my post last week where the Danes are offering a 20 yr mortgage @ 0 yes, that is 0 % for 20 yrs! THERE WILL BE NO HUGE RATE INCREASE!

Hey all you irresponsible one’s keep borrowing and have no pension later in life; so predictable!!!

#159 Alex on 01.23.21 at 12:10 pm

#32 Dolce Vita on 01.19.21 at 4:26 pm
Who ever dies within 28 days after being PCR+ gets labeled as covid death. They should have followed the same analogy – whoever dies within 28 days after being vaccinated, gets labeled as a vaccine death and family can seek compensation