Game changers

Derek Holt’s a smart egg. We used to hang out together doing interviews when he was a budding econo rockstar at RBC, with strong views on real estate.

In those days I ran and owned a TV production company from a studio I’d built on Bay Street in the financial canyons of Toronto. The business model was simple: produce network-quality shows with original content, buy blocks of time from Global, CTV and specialty channels, then resell some of that time to advertisers. For a few years, it was a dream gig. An investment show. A real estate program. One for rebellious sk8r kids. And my fav, a dog show. Twenty employees – reporters, editors, writers, sales guys – and good profits. Then online killed television. So I went online. Went on tour. Started a wealth management company. Bought a general store. Then a bank. And came here.

Well, back to Holt. Now he’s famous. Vice-president, head of Capital Markets Economics and chief visionary dude for Scotiabank. His voice has emerged as one of the most reasonable and believable – not shilling for his bank. No Pollyannaish musings designed to pimp mortgages and car loans.  Just a realistic appraisal of the world, backed up with copious dollops of thinking and research.

Friday morning he dropped an 8,000-word epistle on the nation. Every person borrowing their butt off to buy real estate inflated by cheap mortgages, a belief that Covid has changed the world forever or pure FOMO, should read it. But they never will. So here are the highlights. Then the reasons why.

His conclusions;

  • Central bankers were fibbing when they said no rate hikes until at least 2023.
  • The Bank of Canada will be the first major bank to jack the cost of money and taper back on its bond-buying program.
  • Interest rates will start rising, officially, in the second half of 2022. The initial jump will take place by October.
  • The US will see inflation return and full employment restored by the end of next year.
  • Bond yields will swell. Mortgage rates will, too.
  • The economy is far stronger than most people realize. Growth in Canada will be well over 5% this year. That’s huge. (And a reason to expect an election in June.)
  • The vaccines, and Biden, will change everything.

Holt points out that over 9 billion vax doses will be turned out this year, enough to jab 5.8 billion people, or close to 75% of the world. Herd immunity (seventy per cent) for the globe could happen by the end of the year. Total game-changer.

But hasn’t Canada botched the dosing? Nope, says Holt:

The narrative that is heard in some quarters that vaccine roll-out has been a failure is patently false. Vaccines arrived on the order of at least 6–12 months ahead of common assumptions up to just before positive trial announcements began to roll in during November. Current roll-out plans point toward full inoculation of the Canadian population over 2021H2. Expectations have shifted as the bar got raised and that’s understandable given the exigency of the challenges at hand, but progress is meaningfully more impressive than some of the opportunistic coverage suggests. In fact, as vaccine delivery recovers from temporary delays, Canada is in the sweetest spot of all with relatively fewer cases per capita and much higher coverage through production orders while the US has higher cases but is also above average in terms of securing vaccine contracts.

Also adding to the bullishness is a heap of pent-up demand, not only in Canada and the States, but everywhere. Covid cash was showered on Canadians. WFH has reduced costs and improved cash flow for millions. The US savings rate has doubled and household debt payments fallen. “A powerful economic force,” says Holt.

And then there’s Biden. The Dems. The big government spending spigot turned on full. An estimated $2.4 trillion in stimulus money is about to wash over the American economy, just as the vaccinations ramp up and the slimy little pathogen is offed. “That amounts to 11–13% of present nominal US GDP,” says the economist, ”with much of that occurring this year while blowing away prior episodes of fiscal stimulus.”

Given all this, CBs are not going to keep spending gazillions buying up bonds to suppress yields. That QE (quantitative easing) activity will taper away and the price of bonds will fall as those yields increase. Five-year fixed rate mortgage costs will increase. Says loans broker/blogger Rob McLister: “Five-year forward rates are now over one percentage point above 5-year bond yields. That’s the biggest gap since May 2017, and confirmation that rates are likely headed higher, so thinks the market. All that is to say, while this may not be the last hurrah for 5-year fixed rates, there are fewer and fewer hurrahs left.”

So, concludes Derek the Seer:

The BoC may well end up hiking ahead of the Fed again in this cycle. Canada’s COVID-19 cases have been vastly lower than in the US, it is much more hedged through vaccine commitments than the US and expected to catch up on administered doses, and both fiscal and monetary stimulus responded more aggressively in Canada than the US with an earlier forecast closure of spare capacity. Canada should also benefit vicariously from US fiscal stimulus.

Translation: the future’s coming back. Think twice before you sauté in debt and move to Hick City.

155 comments ↓

#1 Peter McLean on 02.12.21 at 1:58 pm

Ok, that’s all fine a d dandy, but should I sell my GameStop stock, or keep holding? My coworker says it’ll go back up.

#2 Peter McLean on 02.12.21 at 1:59 pm

Ok, that’s all fine and dandy, but should I sell my GameStop stock, or keep holding? My coworker says it’ll go back up.

#3 binky barnes on 02.12.21 at 2:03 pm

That is some good news for the start of a long weekend here in cold Ontario. Enjoy a restful weekend Garth–you deserve it for keeping this blog going all this time.

BB

#4 Dogman01 on 02.12.21 at 2:03 pm

With all the availability of information, what I crave is a trusted aggregator of “quality” information. The MSM has simply lost that trust.
But Garth helps the gap.

Derek the Seer will merit my attention now.
https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.interest-rates.capital-markets–special-reports.us-canada-rates-outlook-2021-22–february-12–2021-.html

#5 truefacts on 02.12.21 at 2:05 pm

“But hasn’t Canada botched the dosing? Nope, says Holt”
____________________________________

Really? We’re ranked 38th in vaxes per 100 people.

https://www.citynews1130.com/2021/02/11/canada-ranking-covid-19-vaccine/

I’d say “botched” is a fair assessment.

#6 truefacts on 02.12.21 at 2:09 pm

…and we had a potential vaccine producer RIGHT HERE in Canada, but Trudeau looked to China instead:

https://calgaryherald.com/opinion/columnists/corbella-covaccine-solution-was-right-here-in-calgary-while-trudeau-looked-to-china

That’s why our vaccine rollout has been abysmal. But yes, things will improve, but not as fast as they could have…

#7 Comments! on 02.12.21 at 2:13 pm

Wow so much sunshine! So rates will rise from zero, how brazen!!! To where exactly and by when cowboy? Full employment when even moron Powell admits that real unemployment may be more like 11% or more and getting worse with most new positions part time and bogus government has positions. Will the Beatles be playing on the Ed Sullivan Show by 2022 as well?

There are much smarter cookies predicting the polar opposite of your old pal Garth. Maybe posting their far bleaker outlook may offer some balance and perspective. I don’t mean to sound confrontational but these are wildly speculative claims by both sides, but some make far more sense. Biden and the vaccine will change everything? The vaccine isn’t even his doing, thank the arrogant orange man. Can Biden change his depends without assistance?

Was good comic relief for me to be honest. But then again, I might have believed “the budget will balance itself”.

#8 JacqueShellacque on 02.12.21 at 2:18 pm

If he’s right…he’ll be the first economist ever to be. Why would stimuls be stopped now when it wasn’t for years after 2008?

#9 Doug t on 02.12.21 at 2:19 pm

How bout that new timmies egg sandwich eh

#10 Howard on 02.12.21 at 2:23 pm

#197 Ustabe on 02.12.21 at 12:56 pm
#195 Howard on 02.12.21 at 12:13 pm

#160 Ustabe on 02.11.21 at 10:31 pm

What are the philosophical differences between a so-called Progressive Conservative and a Liberal? Are there any?

I would imagine you declared Mr. Harper unelectable too. Leftists generally believe any centre-right politician is unelectable.

Howard, I am so very sorry I won’t be able to pass your purity test.

Having worked on two successful provincial campaigns and one successful federal campaign for the former Progressive Conservative Party of Canada I have seen the belly of the beast so to speak.

So to add to my thought that the CPC has transformed itself into an unelectable party I will now add current CPC or conservative adherents alienating those who have both the time and the means to actually do more than bitch about it on an Internet blog.

Good work.

PS: Harper did it to himself. Anyone who can’t or refuses to grasp that is a willful idiot.

———————————————

What was all that about? I asked if there were any philosophical differences between a self-declared Progressive Conservative and a Liberal. I get that there can be individual policy disagreements from time to time. I’m speaking of guiding principles here. Is there any difference between the two? I don’t see any but willing to change my mind on that if you can identify something.

I don’t see the point in having two globalist leftist SJW parties as our dominant two options at the federal level. How would that be good for the country to have two parties that basically agree on everything? Are you that fearful of having leftist ideas challenged?

#11 FriedEggs on 02.12.21 at 2:34 pm

‘Because in some bizarro universe, the $30 trillion in fiscal and monetary stimulus injected in the past years is somehow not enough, in her first virtual meeting – alongside Fed chair Jerome Powell – with G7 finance ministers, Janet Yellen “stressed the importance of providing further fiscal support to promote a robust and lasting recovery” which means that “the time to go big is now” and that the “G7 should be focused on what more we can do to provide support at this time” according to a statement from the Treasury.’ -TD

#12 I am not a cat on 02.12.21 at 2:39 pm

Happy dog!!!

BBC News – Lulu the dog inherits $5m from deceased US owner
https://www.bbc.co.uk/news/world-us-canada-56045881

#13 Rainman on 02.12.21 at 2:40 pm

I think Covid has showed how cool some of the “Hick cities” are. Small towns have community and are far less stressful. I don’t see the growth in them stopping? Just saying…

#14 Wise and Ancient Ron on 02.12.21 at 2:44 pm

100% agree with Mr Holt, thanks for sharing his thoughts GT.

Hard to believe that old folks such as myself will be inoculated only 16 months after the nasty little bug arrived on our shores. Vax shipments start to ramp up big time next week.

#15 Prince Polo on 02.12.21 at 2:45 pm

May I sauté in margin debt (injecting growth hormone into a 60/40)?

#16 Where's My Money Going Greedeau? on 02.12.21 at 2:46 pm

More evidence that buying in a condo tower will cost you mega dollars and is a money loser in the long run, irrespective of the upcoming insurance wallop:
https://theworldnews.net/ca-news/strata-revises-minutes-that-detailed-window-failures-at-vancouver-s-shangri-la-tower
How is this not a type of fraud on behalf of the strata involved in omitting a major repair that estimated costs for repair are more than $65MM? There is going to be a landslide of these types of costs for owners of high rise condos.
Just like the false claims of roofing materials longevity (with no recourse for customers unless class actions), a lot of windows that are “guaranteed” for 20-40 years is laughable. I know I was in that industry for 30 years, before leaving 15 years ago.
Good luck getting 10 years out of them, especially if they are south facing. And from my experience, good luck finding that company to sue because everyone in the industry knows commercial glass companies change hands or go out of business every couple years or so, usually right after mega-jobs like this one.
I worked for one owner, who had contracts with major, well known developers in BC, who changed his company’s names many times, just when the SHTF.
Some CONstruction industry and major, very well-known developers in BC were really dirty when I worked in it, leaky condos to the now the upcoming window replacement fiasco (even in residential windows). The owners, rubbing their hands with glee, just love these cost plus jobs.There were also good developers who do good work, but few.
The tales I could tell……
Stay away from these wealth traps!!!! Stay far away!!!!

#17 Beetman on 02.12.21 at 2:55 pm

I don’t want to be a “Downer Debbie” but there is 4 things I don’t trust and not necessarily in order. Bankers, lawyers, politicians, and experts.

#18 AM in MN on 02.12.21 at 2:57 pm

It all rests on the continued confidence in the fiat currency system. No one ever expects confidence tobe lost until it’s too late.

To me the numbers just don’t add up. The bill for bailing everyone out needs to be paid with printed money. There is no tax base large enough to go after, but residential real estate will be the big target.

If at some point the world sees that the money printing (CB bond buying) can’t and won’t stop, yields could move significantly higher, needing more money printing to pay the interest. Is this really not possible?

Two big factors also at play. Population getting older, needing more taxpayer support for healthcare and nursing homes, and much higher energy prices as the green policies kick in yet consumption stays high.

Higher energy prices act like a tax hike because they ripple through the entire economy, especially food prices.

We’ll see who ends up being right, but if interest rates get away from CB ability to keep them low, Bitcoin goes through the roof!

#19 mike from mtl on 02.12.21 at 2:59 pm

For sure the demand is there, big open question is when governments both here and abroad will get their boot off our necks? Canada seems to be closing the barn door and the US is already aware the horse is gone. Somehow I am not at all convinced it will be this year let alone 2H2022.

If.. it comes to be that the BoC ups .25 soon, T2 and the free stuff party would have a very attentive audience on any campaign promise to bailout the over indebted.

#20 Blair on 02.12.21 at 3:02 pm

I don’t understand what 2021H2 means.

Second half of the year. Second banker code. – Garth

#21 Sail Away on 02.12.21 at 3:03 pm

#10 I am not a cat on 02.12.21 at 2:39 pm

Happy dog!!!

BBC News – Lulu the dog inherits $5m from deceased US owner

https://www.bbc.co.uk/news/world-us-canada-56045881

—————-

In my experience, dogs are absolute disasters with personal finance. Beware the scammer carrying bacon!

#22 TurnerNation on 02.12.21 at 3:04 pm

GNDP.TO surging today did Blog Dogs light it up.

What’s really going on. At this point, all our leaders are on board. (Those which were not, ~2 dozen of them, got purged in January – holiday travel we were told). For what, for whom?
Our Leaders *are not* working for us .
Economic hitjob:

“U.K. Economy Suffers Biggest Slump in 300 Years Amid Covid-19 Lockdowns(wsj.com)”

This economic shutdown and “CV laws” have one goal: further the globalists and bankers goals – in this WW3 where we are the enemy. So dangerous is your fellow man that you must wear shields and ‘distance’ yourself. (The telescreens told us this not common sense).
Who is the main target of all this? Not us aging folks but the Children. Hence the extreme focus on abnormal schooling. Prison-like conditions. Why? So that they will #stayhome and sit in front of a laptop. I’ll get to more on this…

-UC Berkeley enforcing COVID lockdowns with officers monitoring dorms, outdoor exercise ban(nypost.com)
-CDC considering classifying schools into color-coded zones for reopening(cbsnews.com)
-Universities’ Insane COVID Rules Train Next Generation To Embrace Totalitarianism (thefederalist.com)
-California Parents Despair over Mental-Health Toll of School Closures: ‘It’s Criminal’ (nationalreview.com)


—– Ok now we follow the MONEY on all of this, to the vulture capitalists and bankers. Remember: Blockchain is likely a cell-block chain. For us. Hence the focus on swabbing and testing. Into the DNA bank we go, our data is worth $$.
This current WW3 is for our MINDS, children’s first:

https://wrenchinthegears.com/2021/01/30/open-letter-to-dr-miguel-cardona-on-the-future-of-public-education-and-indigenous-resurgence/

Eric Schmidt says data is the new oil. The elite intend to frack the world’s children for it.

The United Way has partnered with the Federal Reserve on plans to reengineer the nation’s workforce. I expect their ALICE (Asset Limited Income Constrained Employed) program for the working poor will interface with data-sharing agreements they established between schools and community partners across the country in the years before lockdowns catalyzed mass economic dispossession.

Starting in utero, through pre-k, career-aligned pathways, and perpetual re-skilling, children will be triaged for a dystopian future. Ever more sophisticated technologies will identify mindset, grit, and resilience. Labelled gammas, deltas or epsilons, a majority of low-income toddlers will be placed into feedback loops with prescribed digital therapeutics optimizing them to their station in life. Within this established caste system, they will say they are engineering “equity.” Wages, debt, social welfare, and transactions in “smart” environments will be managed through digital wallets, “permanent records” against which a person’s relative worth as a human capital investment can be evaluated in real time.

https://wrenchinthegears.com/2020/09/22/blockchain-education-a-ticket-to-digital-serfdom/
Devices, especially virtual and augmented reality, are being used to predict, track, and shape behaviors. In fact, measurable behavior change has been identified as a global human capital impact market. As a result, blockchain, Internet of Things sensors, xAPI technology linked to Learning Record Stores, and skills badging, will be used to monitor behavior change in students over time (see JCA Solutions slide share above). This aggregated data will underpin emerging futures markets in digital educational programming / behavioral brainwashing.

Use of Virtual Reality headsets to generate “measurable behavior change,” which will be tied to human capital bond markets. More here: https://www.nist.gov/ctl/pscr/variable-labs

#23 Catalyst on 02.12.21 at 3:06 pm

Sounds like he’s angling for a position in the Liberal party with commentary like that. Yellen was just begging other CB’s to turn up the music to 11.

I guess in the mean time, the music is still blaring in small caps for a while longer. Party on! Stay Safe.

#24 Captain Uppa on 02.12.21 at 3:09 pm

DELETED

#25 Chris Dunn on 02.12.21 at 3:10 pm

“The narrative that is heard in some quarters that vaccine roll-out has been a failure is patently false.”

Uhhhhmmmm, if we want to talk facts, Canada is hardly on the chart in terms of per capita vaccinations.
https://ourworldindata.org/covid-vaccinations

#26 Faron on 02.12.21 at 3:11 pm

Here’s the link to Derek’s 8000-worder. Correct me if I’m wrong, Garth.

https://www.scotiabank.com/content/dam/scotiabank/sub-brands/scotiabank-economics/english/documents/capital-markets-special/cmsr210212.pdf

Interesting note about the vaccine, its roll out and Canada’s position going into becoming vaxxed. I had been unimpressed, more so last night after talking with my sister in the US and finding out that half of my immediate siblings and some family friends are all dosed and boosted.

Good news it’s coming and all the more reason for keep the borders locked hard until then.

#27 Calgary Rip Off on 02.12.21 at 3:13 pm

Hi Garth.

Thanks for your blog. Im not so sure about anything anymore. More and more it seems Covid 19 is not a hoax. That being said, it seems quite unlike any typical virus. Small, and inward manifestations of disease, not outward. Several physicians have spoken about this at bitchute.com Additionally, many patients spoken about last year at Mass General Grand rounds(Harvard) have definite effects. Why is not addressed. Physicians more recently have complained that the CDC and other labs have not explicitly examined covid 19, yet amino acid sequences for variances has been shown. Odd. Much of Covid 19 seems cloaked in mystery, much like HIV. Is it true that Fauci was aware of research assigned to Wuhan to generate a more virulent coronavirus when he said in 2017 “A surprise is coming?” Not clear. And the founder of PCR test is not accurate in detecting covid 19? Additionally, is the spike protein as a potentiator against covid 19 for the immune system no more than an exposer to the proteins, not like a traditional vaccine? And if so, is https://www.globalresearch.ca/could-spike-protein-moderna-pfizer-vaccines-cause-blood-clots-brain-inflammation-heart-attacks/5737069 applicable? It seems that some persons are dropping dead after getting the vaccine. Why? A coworker, his Dad got the vaccine, 2 days later got Covid 19, then died. Why?

Also https://www.globalresearch.ca/clinical-lab-scientist-covid-19-fake-wake-up-america/5737013
Why would a scientist list his name and publish such an article?

I work with two people who have had Covid 19. Horrible body aches and fatigue. Both are alive, with no residual symptoms. Scientists still have not identified why exactly some seemingly well patients survive quite well, while other patients that are elderly with comorbidities are asymptomatic. And perhaps this is why lockdowns continue to occur.

I don’t the answers to any of this. I do find it curious when physicians talk about dangers: https://www.bitchute.com/video/7aq9x2S5c2Q3/
(Dr. Sherri Tenpenny talks about vaccine efficacy)

Unfortunately due to the reality that it seems that this Covid 19, whatever it really is, isn’t able to be managed consistently the world wont be going back to normal. Hopefully I am incorrect about what I have read and that vaccines are effective at improving immunity. https://www.openvaers.com/covid-data

#28 BlogDog123 on 02.12.21 at 3:21 pm

In those wonderful months where the sun shines more hours per day, May, June… What’s a poor restaurant owner to do today?

Not everyone is vaxxed, still mask guidelines, business is slow,

it’s that “grey period of time” of 3rd, 4th waves where folks think they don’t need a mask, another super-spreading event here or there, politicians temporarily closing health clubs and restaurants again…

Bills to pay, over a year of dismal income, debts, debts…

Should a restaurant owner simply wind down the business, hibernate and then snap up cheap bankrupt / liquidated restaurant equipment and restart in 2022 ??

#29 Big tuna on 02.12.21 at 3:25 pm

Second half of 2022 is like in a million years in this non-sense we see since Covid. We’ve been expecting rate to increase for more than 10 years and it’s still going down.
So much can happen, low rates are going nowhere.

Of course they will rise as growth and inflation rekindle. It’s a no-brainer. – Garth

#30 Dolce Vita on 02.12.21 at 3:28 pm

First, I like you last sentence. Could not agree MORE.

Second, have a care with the Herd Immunity numbers. NOBODY knows what that number is since NO ONE has achieved it yet.

The closest I have been able to find is Manaus, BR where 76% of 2.4M people infected and still cases on the rise. So it’s at least that. Israel is just easing its strict lockdown so we shall soon see if their 41.6% 1 dose, 26.5% 2 doses vax’d population to date does the trick (highest level of vaxing on Planet Earth so far).

On the rest a rosy take.

I agree Canada will emerge like gangbusters and we will have inflation. But we already have it, it’s right under noses:

1. RE.
2. The Markets.

That is where the CB money is flowing to ultimately. Restrict that either by higher rates and/or lower cash there will be a pause until the economy actually starts to generate wealth in goods and services not just speculation as it is now.

Also, his vaccine dose estimate for the year overestimates (9.2B doses) since those are contracts and a large chuck of that is NOT in production yet (e.g., Novavax 1.364B contract doses production to start this Summer?). Bloomberg comes in at 9.04B contracts for the year and reckons it will take 5.4 years to vax Planet Earth, 2 doses, at 75%.

All World Contracts
https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/contracts-purchasing-agreements.html

How Long Vax Earth’s Home Sapiens, 2 dose, 75%
https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/contracts-purchasing-agreements.html

Which after reading his “US-Canada Rates Outlook 2021–22: So Long Emergency, Hello Inflation?” is what he is saying in as many words, though far too many of them (but to be expected for his job).

I AGREE WITH HIM overall, just not on his VAX and Herd Immunity GLEE CLUB admonitions.

————————

The only thing that will throw our knickers in a twist, his, yours Garth and mine, is a variant which eludes the vaccines. That has started already in the UK, hope they contain it and it is shrouded in mystery so far in the MSM – I expected* this, so as not to scare the bejesus out of mankind:

E484K

the 2nd UK variant, this one’s home town is Bristol, UK. The one everyone talks about as the “UK variant” or N501Y is an amateur effort by comparison.

“Covid-19: The E484K mutation and the risks it poses”
-British Medical Journal

Why it scares me and per bmj above:

“E484K is called an escape mutation because it helps the virus slip past the body’s immune defences.”
https://www.bmj.com/content/372/bmj.n359

————

*expected it since 108M infected to date, S. L. Pathogen and its children make a 100K copies at least in each infectee: thus, variants were to be expected and they are gaining voracity as of late.

#31 jal on 02.12.21 at 3:30 pm

Did you read the following?
Every little bit helps.

https://c19ivermectin.com/

Database of all ivermectin COVID-19 studies. 58 studies, 22 peer reviewed, 38 with results comparing treatment and control groups.

——
https://c19study.com/

Database of all HCQ COVID-19 studies. 247 studies, 177 peer reviewed, 203 comparing treatment and control groups.

#32 Winterpeg on 02.12.21 at 3:31 pm

Can you clarify for my own education (and maybe
others)

The Government of Canada borrows money from where? The BOC? or other institutions?
So if the rates go up, so does our governments debt increases?

That’s the first in my list of “There are no stupid questions”

The government issues bonds and other debt instruments in long and short durations which are purchased by individuals, institutions, pension funds, other central banks and (during periods of QE) our own CB. Yes, when rates rise the cost of servicing our debt – now $1 trillion – also rises. It will happen. – Garth

#33 cramar on 02.12.21 at 3:37 pm

And most importantly, there is again a FIRST DOG (and second) in the White House again! (Unless, of course you count 45 as a first dog.) That means sanity has returned. Pres. Biden has to have two to make up for the dearth of the last four years.

Isn’t it incredible? Major goes from a rescue shelter to First Dog in the White House! Wow! Talk about the ultimate rags-to-riches American Dream! Brings a tears to your eyes, and a lump in your throat!

“If you want a friend in Washington, get a dog.”
– Harry S. Truman

#34 Leftover on 02.12.21 at 3:40 pm

My tennis buddy, a successful realtor (not the breathless kind unless chasing a backhand), reports that things are not all they’re cracked up to be in the real estate market, especially for higher-priced houses.

It seems the banks, while advertising ultra-low mortgages, are skeptical of valuations and are demanding significantly more equity as the spring unfolds. The point being they know higher rates are coming and are hedging in response.

So, tighter credit and higher interest rates in 2021. Who knew?

#35 Friend of the Mayor on 02.12.21 at 3:42 pm

Good looking dog.

But he still appears to be worth more than 9 Million

#36 Drill Baby Drill on 02.12.21 at 3:45 pm

Sorry i do not have any faith in our Fed government to role out the vaccines in a timely and efficient way. They are beyond inept.

#37 First time poster on 02.12.21 at 3:48 pm

Garth – for sure rates will go up but imagine how much more debt people will take on until that happens late 2022!! See link https://mobile.twitter.com/francesdonald/status/1359870661175504900

A woman by the name of Frances posted a funny or disturbing tweet based on how you look at it! She called a landscaping to get a quote for some work at her house. The company got back to her with a quote of 100K by saying I know it’s not what you asked for but rates are so low and everyone is re-mortgaging their house. I didn’t realize a landscaping company also provided financial advice!!! And I bet that quote for 100k is 70% profit….it’s all good!

#38 Dolce Vita on 02.12.21 at 4:02 pm

PS, link typo about Bloomberg Vax Earth estimate (“The Path to Immunity Around the World” section):

https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/

————————

Stock Manipulation Hoodie Update (I posted cannabis was 1 of their targets a week or so ago*, took them long enough to get it together):

Classic Pump and Dump.

-they went after Cannabis stocks a couple of days ago – look up stock charts on your own:

Aurora Cannabis Inc, NYSE: ACB – select 1 month to see the effect best.
Tilray Inc, NASDAQ: TLRY – ibid.
Sundial Growers Inc, NASDAQ: SNDL – ibid.

Hedge funds getting smarter about the Hoodies, bailing before their wrath can be felt monetarily:

Aurora
https://i.imgur.com/ASpuOhM.png

Tilray
https://i.imgur.com/mHTQrRP.png

Sundial – no hedge fund activity.

So, there are no noble causes here by this hoodie crowd (“stick it to the man”, revenge of the 99%), just a “greed is good” FIFO pump & dump…simple as that.

—————–

*most of the pump and dump target agglomeration happens on Twitter daily, hourly. Follow it and you will see what I mean. Also, they self congratulate afterwards on Twitter as well.

#39 Guelph Guru on 02.12.21 at 4:03 pm

We have recently borrowed 390B as a nation. Rising interest rates will now demand a more portion of the tax revenue. Meaning less funds for Canada.
Anyone knows when the 390B loan comes up for renewal? Is it 5 or 10yrs? Does anyone know?

#40 Ace on 02.12.21 at 4:10 pm

Shhhhh…. saying the words “rates” and “rise” in the same sentence is a big no no around here.

#41 Penny Henny on 02.12.21 at 4:11 pm

#167 Sail Away on 02.11.21 at 11:07 pm

You think I’m incoherent? Should’ve heard your mother last night.

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

Hey weren’t you the one whining way back when to leave family out of it?

#42 Warren-the-lagging_indicator on 02.12.21 at 4:15 pm

SAGE released today that up to 40% of Covid transmissions are nosocomial meaning you are catching Covid in the hospital. Over 36000 of the 90000 infected in South Korean hospitals between Feb and July 2020 got infected in the hospital. This also suggests it is not airborne and masks are futile. Wash your hands and get your vitamins D3, Zinc, C etc.

#43 Drinking on 02.12.21 at 4:21 pm

#25 Calgary Rip Off

I have been jabbed for the major illnesses from the past, no issues with that. But I am concerned on how quickly this is being phased out to the general public and how little is being said about all the adverse effects from the jab. For me, as long I can stay healthy I will wait as long as possible until we know more about the safety of the jab.

————————————————-

There is so much debt out there I agree with very small increase in interest rates but it will not be like on what we experienced in the past. When Danes offer 20 yr mortgages at 0 %, link was posted in a previous post of mine, I just cannot see drastic increases in rates. Wait and see I guess..

An increase does not need to be ‘drastic’ to be a game-changer. – Garth

#44 Faron on 02.12.21 at 4:27 pm

#172 Stoph on 02.12.21 at 1:21 am

#135 Nonplused on 02.11.21 at 8:25 pm
#67 Faron on 02.11.21 at 5:24 pm
#54 Stoph on 02.11.21 at 4:39 pm

#36 Bill on 02.11.21 at 3:41 pm

This is for Nonplused who mentioned that O+G are the “cheapest” source of energy. Aside from gov’t subsidies which are huge you have externalities. You may wish to brush up on them. From the market ear, for example:

…more than 8 million people died in 2018 from fossil fuel pollution, significantly higher than previous research suggested, according to new research from Harvard University, in collaboration with the University of Birmingham, the University of Leicester and University College London. Researchers estimated that exposure to particulate matter from fossil fuel emissions accounted for 18 % of total global deaths in 2018 — a little less than 1 out of 5.

The Market Ear is fairly agnostic on all things as one needs to be to comment on markets, so this isn’t agenda driven messaging.

Speculative: makes one wonder what COVID x O+G particlates does? It would be interesting to correlate PM2.5 with COVID incidence and death. Might be pretty damning, but that’s an untested hypothesis on my part.

#45 Warren-the-lagging_indicator on 02.12.21 at 4:28 pm

I mixed up United Kingdom which was he region of study :
https://www.dailymail.co.uk/news/article-9254495/Stopping-Covid-spreading-hospitals-substantial-reduction-wave-deaths.html
With South Korea which knew this all already for over a year.

#46 AGuyInVancouver on 02.12.21 at 4:28 pm

Great pic, how can any of the Trump-loving idiots who post on here not see it and admit Biden is a far better human being in very way than Trump? Ask yourself who you would want as your next door neighbour. No contest, Joe wins hands down.

#47 Mutt on 02.12.21 at 4:33 pm

DELETED Anti-vax

#48 paulo on 02.12.21 at 4:35 pm

#26

Hell of a good idea, maybe get out altogether it will be a long time before restaurants recover. 50 years of cultivating eating out habits have been wiped out

#49 Dolce Vita on 02.12.21 at 4:42 pm

On the BMJ article in my Comment #28 and E484K it will just slow humanity down in vaxing is all, though it is the worst so far.

Read this section in the Publication:

“Will vaccines work against these emerging variants?”

Why I am still holding on to my Novavax stock and not reaping the benefits so far (289.76 USD today, bought at 134.01 USD – Human Nature, Pandemic, Humans Fear Death, no brainer investment). Good R&D outfit. They are also developing Intranasal Influenza Vaccine, Ought to be a winner in the future.

Old News Release (why it may be good)

https://ir.novavax.com/news-releases/news-release-details/novavax-initiates-pre-clinical-testing-intranasal-influenza

Just a side tip above for Blog Dogs, NOT a pump and dump effort. My way of saying long run plenty of legs to Novavax aside from their 1.4B dose Covid vax contracts.

AstraZeneca reconfiguring its vax for E484K and the Brazilian variant (latter = the UK original variant N501Y, a version 2 hatched in Brazil and not in Kent, UK).

As I’ve posted before mRNA vax’s like Moderna, Pfizer say 6 weeks to model new variants and a new vax for them afterwards. So help is on the way.

——————–

It’s just going to take a little longer to RETURN TO THE NORMAL, the mundane than humanity is expecting if the variants esp. if E484K take hold globally.

Not clear sailing yet but will be.

-FWIW

#50 Do we have all the facts on 02.12.21 at 4:45 pm

Where does 5.0% growth in 2021 get Canada in the long run. What is the average growth of Canadian GDP over the last 5 years. I get the point about the injection of billions of dollars into the economy in 2020 and part of 2021 but I don’t see an obvious connection to reasonable wage increases and a return to 5.0% unemployment rates.

A return to normal in 2021 seems just a bit optimistic when you consider the shifts in economic direction that occurred in 2020. Retail will never be same nor will the viability of many office buildings. The rapid shift towards electric cars will have an impact on the value of Canadian oil and considering the rate of economic growth within India it seems doubtful that our auto industry will remain competitive as the demand for electric cars begins to increase.

Our two primary sources of export income over the past five years are facing a difficult future and I don’t immediately see where replacement income might come from.

Our economy has become service based and survives on government debt not on increased productivity. Rather that sweeping generalizations I would prefer a detailed examination of the economic sectors that are poised to expand in 2021 and concrete reasons why expansion might occur.

Canada has relied on the liquidation of non renewable resources for far too long and I fear that our balance of trade in 2021 and 2022 will expose this shortcoming.

It is time for Canadians to invest in the stimulation of economic growth before other countries decide our future.

#51 Mutt on 02.12.21 at 4:47 pm

DELETED Anti-vax

#52 Linda on 02.12.21 at 4:54 pm

The thing that is annoying me about further lockdowns is that we seem to be closing the barn door after the horse has been stolen. Late February, further restrictions to international arrivals. Well, if the plan was to prevent variant Covid virus strains from arriving, too late. As per the Canadian Covid tracking we already have both the British & South African variants frisking about, with the majority of confirmed cases in Ontario & Alberta. If we had wanted to be serious about keeping the variants out, we should have had those stronger border restrictions implemented immediately after the presence of the variants was announced. It wasn’t like we hadn’t had ample evidence of how quickly a virus can travel!

I do hope that vaccinations ramp up. Also as per the Canadian Covid tracker, Canada has fully vaccinated about 238,000 Canadians & roughly 1.1 million Canadians have received at least one dose of vaccine. I’m not sure if the ‘fully vaccinated’ number is part of the 1.1 million number but I think it is. If we hope to get all Canadians vaccinated this year we need to ramp up the program by a considerable amount, because at the current rate – some 21,000 jabs per day – we will only have managed to vaccinate about 9 million Canadians by the end of 2021. That includes the ones who already have received at least one dose, of course.

#53 cramar on 02.12.21 at 4:55 pm

#25 Calgary Rip Off on 02.12.21 at 3:13 pm

Also https://www.globalresearch.ca/clinical-lab-scientist-covid-19-fake-wake-up-america/5737013
Why would a scientist list his name and publish such an article?

———–

Even though this has a recent date attached, when did he actually write this? it has the feel of being a year old.

I’d like to drag this clinical research scientist into a hot zone ICU to see the people on ventilators and tell him to convince the doctors and nurses there that COVID-19 is FAKE! That this is just another influenza virus!

I’d like to ask him myself, if you are correct and this is just an influenza virus, then what are all these healthy people dying of? There have been plenty of younger, healthy people that have died and that does NOT happen with influenza. Reality is a bitch! This virus is different.

First, because of yearly influenza outbreaks there is a certain level of pre-existing immunity limiting the outbreak of the disease. No one had an immunity to covid, so it spread beyond what an influenza virus could.

Secondly, there are no lingering effects with influenza, yet a certain percentage of covid sufferers have severe lingering effects. This virus has caused long-term lung, heart, kidney, and brain problems that are absent with any form of influenza.

Thirdly, a few people have been infected with both influenza and covid. They are not the same virus.

#54 Winterpeg on 02.12.21 at 5:04 pm

The government issues bonds and other debt instruments in long and short durations which are purchased by individuals, institutions, pension funds, other central banks and (during periods of QE) our own CB. Yes, when rates rise the cost of servicing our debt – now $1 trillion – also rises. It will happen. – Garth

Thanks for that , Garth. I thought the Government borrowed from banks. It issues its’ own bonds etc, then.

I did know that BOC was separate from Government, but unsure of how that worked.

More from the list of “There are no stupid questions ” another time.

#55 mark on 02.12.21 at 5:17 pm

The virus is not going anywhere.

Bond yield rise, price craters, sell bonds?

#56 cmj on 02.12.21 at 5:23 pm

Garth, every now and then you share a slice of your life. Today bloggers received another piece. It give me even further respect for your facts and personal views of real estate, markets, governments and Covid. They are all interrelated. I value your wide angle lens and your sources when writing the daily blog

#57 Stone on 02.12.21 at 5:23 pm

#40 Drinking on 02.12.21 at 4:21 pm

There is so much debt out there I agree with very small increase in interest rates but it will not be like on what we experienced in the past. When Danes offer 20 yr mortgages at 0 %, link was posted in a previous post of mine, I just cannot see drastic increases in rates. Wait and see I guess..

An increase does not need to be ‘drastic’ to be a game-changer. – Garth

———

Has no one noticed what’s happening with preferred share ETFs. Uppa! Uppa! Uppa! Still don’t think interest rates are going up? I think a lot of people with a boatload of debt don’t see the swift kick that’s coming for their nads. As for my balanced and diversified portfolio, sitting at 6.29% YTD. Prefs sure are pulling their weight. Where will prefs be by year end? Uppa! Uppa! Way Uppa!

#58 Brian Ripley on 02.12.21 at 5:26 pm

“…adding to the bullishness is a heap of pent-up demand…” Garth

My chart of Single Family Detached house prices in the 6 biggest Canadian metros is up with the January data:
http://www.chpc.biz/6-canadian-metros.html

It looks like those pent up consumers have already blown their wad on their detached potential dream house; especially in Vancouver, Toronto and Ottawa.

Will all that CERB money and consumer loans now go to the renovation requirements to get that open plan kitchen and heated bathroom floors?

Sorry, I have been watching HGTV. It looks so easy.

#59 Ustabe on 02.12.21 at 5:36 pm

#38 Penny Henny on 02.12.21 at 4:11 pm

#167 Sail Away on 02.11.21 at 11:07 pm

You think I’m incoherent? Should’ve heard your mother last night.

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

Hey weren’t you the one whining way back when to leave family out of it?

The most juvenile, immature and lame of the Internet jokes…the “your mom” joke in any of its variations.

Hey, Sail Away, you know that Hitachi appliance your wife uses for her “migraines”? Its not really migraines, its you.

#60 NoName on 02.12.21 at 5:36 pm

just something funny

https://twitter.com/laque_tess/status/1360353694450143235

#61 Cowtown Cowboy on 02.12.21 at 5:37 pm

#159 Ustabe on 02.11.21 at 10:31 pm
#109 Cowtown Cowboy on 02.11.21 at 6:57 pm

And you wonder how liberals ever get elected…

Stupid is as stupid does

Actually I spend my time wondering how the Conservative Party of Canada allowed themselves to transform into a party that is not electable.

From Scheer and now O’Toole, the leadership does not inspire, the policy is not current, nor does it represent the majority of Canadians. Not even close. The whole mess is poorly represented by Kenny, Mo and Ford’s shenanigans.

When your view is that folks who don’t or won’t vote for your guy are stupid and you allow that world view to inform your guy…well enjoy opposition status because Canadian’s are not stupid.

I mean have you seen Thumb Boy’s latest television ad? He sure isn’t talking to me and I identify as a conservative…Progressive Conservative I’ll give you but there are more of me than of you. Get your guy talking policy that appeals to all the ones the CPC has left behind and see what happens.

But, I suppose it is easier to call your fellow Canadians stupid and bitch and moan about liberals than do the hard work of actually forming policy, developing strategy that appeals, etc.

————————————————————-

Well I’m actually on the BoD for our constituency and was at the founding AGM for the UCP in Alberta. Spending a day listening to people debate the wording of some obscure policy is not my bag, leave that to the lawyers to argue over, I’m more of a big picture guy.

I’m small c conservative and just want to see the country run like a corp…you know, don’t spend more then you make or you won’t be in business for long…

Leave the virtue signalling and social justice to the fringe, Canadians don’t need to be told how to live.

#62 mark on 02.12.21 at 5:39 pm

Garth they just announced an ETF for Bitcoin Canada beat the US regulatory agencies and approved it from what I’m reading it is now mainstream.

#63 Barb on 02.12.21 at 5:40 pm

Great photo!

What interesting and diverse careers you’ve created, Garth.
Your second name is likely Fortitude. Well done.

You obviously respect your friend’s points of view. Hope he’s not too optimistic on the vaccine for Canada. Surprised, though, that he didn’t throw a few darts at T2’s ongoing ineptness.

We do need new leader(s)…B.C. too.

#64 Tulips on 02.12.21 at 5:50 pm

Garth, you have said multiple times that you expect these inflated suburb valuations to hold, no crash. Given that prices are still moving up and to the right, I think that justifies buying now even if the buying is largely driven by FOMO. For buyers who aren’t in over their heads and know they can handle renewing at higher rates while saving and growing something on the side, why not?

#65 Damifino on 02.12.21 at 5:52 pm

#47 Do we have all the facts

The rapid shift towards electric cars will have an impact on the value of Canadian oil…
—————————-

I think you’re short on a few facts.

Electricity doesn’t come from nowhere. The lion’s share comes from burning hydrocarbons in both Canada and the USA (not to mention Russia & China). Electric cars are powered by remote combustion.

Given that wind and solar don’t have a hope of replacing oil, an immense source of cheap, abundant, reliable and scalable energy, there’s not much to be concerned about.

Canada holds valuable energy cards. The biggest worry you should have is that we’ll never elect a government with enough courage and foresight to play them.

#66 Faron on 02.12.21 at 6:04 pm

#35 Dolce Vita on 02.12.21 at 4:02 pm

Classic Pump and Dump.

Aurora
Tilray
Sundial – no hedge fund activity.

Nope, I disagree (except for the hedge fund part). Not a classic pump and dump and probably not hoodies although there is probably a factor there. These are driven by the options market and are termed gamma attacks.

Waves of purchasing of near the money call options with a end of week expiry force the market makers (institutional sellers of options) to purchase the underlying stock to hedge risk. With names that had become sleepy, liquidity is low to begin with. As more and more pile into buying near the money calls, upward market moves force ever more rapid buying of the underlying stock and the exploding demand far outstrips supply and the price rockets. There are 158 million shares of Tilray stock. The volume of Tilray on the 10th was 199 million shares. Assuming that some holders didn’t participate that means the same share was bought and sold multiple times that day.

Near the money calls with a near-term expiration are cheap when not too far out of the money because the likelihood of them expiring worthless in a couple days is high in a normal market. But, they rapidly become worth more as the underlying price increases, the rapid increase is the gamma of the gamma squeeze. The higher prices then force more market maker buying in a feedback loop. Because the calls start out cheap, it’s pretty easy to YOLO a few contracts because the amount of risk is relatively low, even for hoodies. So, low price and low volatility stocks make prime targets to get the hoodie crowd involved.

A similar options dynamic has worked to get TSLA up as high as it is. The difference here is that the underlying narrative for TSLA is much stronger, so there is greater likelihood that the stock is held. When TSLA split in September, it’s price dropped and that put it back more firmly in the sights of options punters who could then afford to fund gamma attacks like this.

If high underlying price makes a stock less susceptible to gamma attack, I wonder if we will see some reverse splitting to defend against such. I just can’t imagine it’s good PR to have your name dragged through social media like has happened recently.

These dynamics have effects on the markets as a whole and knowing where market makers need to buy and sell to stay hedged informs on where ceilings and floors are. Nerd out:

https://squeezemetrics.com/download/The_Implied_Order_Book.pdf

And if you want an explanation of why the S&P rallied at close today, here is a prediction from yesterday that this is exactly what would happen!

https://threadreaderapp.com/thread/1359449395587121152.html

#67 never trust an economist on 02.12.21 at 6:08 pm

i never bother reading what an economist has to say. they’ve never been right about anything. they usually state the obvious way after the fact.

#68 joblo on 02.12.21 at 6:12 pm

Game changer of the century:

The guy who ate the bat in Wuhan.

#69 Cj on 02.12.21 at 6:16 pm

Anybody that believes any forecast especially one that specific and then actually acts on it is an idiot.
As much as I like Garth for his financial advise he has been wrong wrong wrong on housing and interest rates. He’s a smart guy but nobody knows the future, this year should prove that.

Not my forecast, but thanks for the disrespect. – Garth

#70 Long-Time Lurker on 02.12.21 at 6:27 pm

DELETED

#71 Long-Time Lurker on 02.12.21 at 6:27 pm

DELETED

#72 domi on 02.12.21 at 6:28 pm

Hey, Garth had a portfolio posted years ago – Millennial portfolio. If you rebalanced that one begining of January you should be good to go. If not, rebalance now, its not too late.

The canadian allocation (banks, mining, oil and gas heavy) will probably get some more love this year. International will follow. He even had some reits in there. Yay! (I still think dumping all the bonds for reits is better – but what do I know, Garth is 100% smarter than me so listen to him first, I am just a bit of a deviant).

#73 Figmund Sreud on 02.12.21 at 6:32 pm

Friday morning he [Mr. Holt] dropped an 8,000-word epistle on the nation.
______________________________

May I ask: What’s Mr. Holt’s wager, … risk (a sum of money or valued item) against someone else’s on the basis of the outcome of such unpredictable set of pronouncements?

I’m asking above question, … pointing out a central detail worth noting, that is, that Mr. Holt wont lose much by making such declarations if those won’t come true, …

Best,

F.S. – Calgary, Alberta.

He is the chief economist of a Big Five bank. No creds, no job. Unlike yours, his comments do not flow lightly or unresearched. – Garth

#74 Billy Buoy on 02.12.21 at 6:35 pm

Sounds good Garth

Who is going to support the masses when rates hit 2% ?

No one thus can’t happen unless you want mass homelessness, riots, etc.

Hope you have enough home security. Feel lucky?

#75 earthboundmisfit on 02.12.21 at 6:39 pm

Right-o. As we sleepwalk into a third, and much more devestating third wave, come April. The politicians own this one totally. Major league fustercluck from the get go.

#76 Sail Away on 02.12.21 at 6:43 pm

#66 Cj on 02.12.21 at 6:16 pm

…nobody knows the future

———

Wrong, but those of us who know aren’t supposed to say anything.

#77 Regjeg on 02.12.21 at 6:48 pm

Well, Holt the phone. Not a cloud in the long range economic weather forecast. Let’s all chill out like we know how to do in SK, especially these days!

#78 Yukon Elvis on 02.12.21 at 6:52 pm

#64 never trust an economist on 02.12.21 at 6:08 pm

i never bother reading what an economist has to say. they’ve never been right about anything. they usually state the obvious way after the fact.
……………….

…….And they think that the inflation rate is 2%.

#79 Pete on 02.12.21 at 6:56 pm

I would say all bets are off if they go ahead with shutting down pipeline 5 that feeds Ontario and Quebec. Regardless, when everybody starts commuting to work again, the increasing cost of gas will put many under. Hence, to your point, there will another exodus. This time from small towns back to the big smoke. I can smell the fumes from idling commuters already.

#80 Sail Away on 02.12.21 at 6:56 pm

#56 Ustabe on 02.12.21 at 5:36 pm
#38 Penny Henny on 02.12.21 at 4:11 pm
#167 Sail Away on 02.11.21 at 11:07 pm

You think I’m incoherent? Should’ve heard your mother last night.

———–

The most juvenile, immature and lame of the Internet jokes…the “your mom” joke in any of its variations.

Hey, Sail Away, you know that Hitachi appliance your wife uses for her “migraines”? Its not really migraines, its you.

———–

Watch it, buddy. You’re throwing shade on a classic.

And don’t call me a Hibachi.

#81 crowdedelevatorfartz on 02.12.21 at 6:59 pm

@#65 Joblo
“The guy who ate the bat in Wuhan.”

++++

Ozzie did a concert in Wuhan?

#82 Kat on 02.12.21 at 7:02 pm

Buy over priced now and pay a mortgage that is less than rent and in five years when it is hopefully up to at least 6 percent rate it will still be less than the cost of rent for most of us in the larger cities. More than likely all the pent up demand will just keep making housing even more expensive. Do you see rates going past six percent in the next ten years because if not this is here to stay. We have wanted to move to the east coast for a few years now and held off, prices in NB used to be crazy low for homes. Now even there it is rising dramatically years over year and very little work. I guess all we can do is see what happens. Jump in if you can afford it as you have always said.

#83 Nonplused on 02.12.21 at 7:07 pm

#41 Faron on 02.12.21 at 4:27 pm

This is for Nonplused who mentioned that O+G are the “cheapest” source of energy. Aside from gov’t subsidies which are huge you have externalities.

———————————

Did I say “cheapest”? I’m not sure they are the “cheapest” as wind and solar are competitive. What I meant was “indispensable”, at least for the foreseeable future. You’d have to cover an area the size of Ireland in wind “turbines” every single year just to keep up with forecast demand growth, to say nothing about replacing existing energy production.

And it remains the case that wind and solar are intermittent. The sun doesn’t shine at night. Thus the gas turbines must stay on standby. (That is until some sort of electric storage technology is invented that will scale to the size of the problem.) As California has found out, the limit the grid can manage is less than 30% intermittent power, and then you get brownouts every time it isn’t windy enough or too windy. And the costs of having the backup generation on standby gets distributed across all rate payers, which is a considerable subsidy to the wind and solar guys that will not last. Once everyone has solar on their roof, the cost of the power they need at night or on cloudy days will all but negate any savings they gained during the sunny days.

Right now the wholesale electricity price in most regions of North America is set by the price of natural gas (mostly because gas co-generation plants are the most efficient and cleanest burning). The dirty coal plants run at much lower capacity than they once did but they still run to provide baseload power and also will be ramped up to meet peak demand periods (for example winter). Oil plants only really run on the very coldest days to meet extreme loads.

As for externalities, particulates in particular (see what I did there), most of that has been cleaned up in North America. Even diesel engines hardly produce any particulates anymore (unless some idiot has “chipped” his truck to “burn coal”, which I think should be illegal). However what they are doing in China I am not so sure. I bet they don’t even put catalytic converters on their cars.

Plus wind and solar have a lot of externalities too. In addition to killing lots of birds, do you know where the turbine blades go at end of life? The landfill. They cannot be recycled because they are made of carbon fiber and resin. Solar panels also don’t last forever and not much of them is recycled, maybe the silver and the lead, and the aluminum frame.

And I don’t get where everyone gets the idea O&G is subsidized. Oh counterair, O&G companies pay the government for the land leases, and then royalties on the production itself, and then corporate income taxes, as well as all the personal income taxes the employees pay. If O&G were subsidized, how did Saudi Arabia and Norway get so stinking rich? The cash flows the other way.

Anyway I am not against solar and wind, we may as well do everything we can. But anyone who believes we are going to have a “carbon neutral” economy by 2035 has found a particularly powerful strain to smoke.

Personally I think the real improvements are going to come from small GenIV nuclear plants, but widescale deployment is many years away and they face formidable regulatory and NIMBY hurdles.

#84 Sam on 02.12.21 at 7:14 pm

Loving the short snippets about your career Garth. I am a recent immigrant and glad one of my mentors recommended your blog. I don’t have any real estate or investment related questions. Just wondering though – what was your mindset/goal as you were building your careeer/life. What was your ‘why’ all along?

#85 Long-Time Lurker on 02.12.21 at 7:27 pm

Remember this?

“Saddam Hussein has weapons of mass destruction.”

I’ll never believe the “authorities.” Distrust and verify.

You mean like, “I won the election in a landslide”? – Garth

#86 Tron Light on 02.12.21 at 7:28 pm

DELETED

#87 Dogman01 on 02.12.21 at 7:29 pm

https://youtu.be/FC_wos7MwHo

Finally watched, “We Scandal” on 5th Estate. Surprised CBC would air this.

The obvious conclusion; someone ensured it became known as the “We Scandal”. One brand needed to be tarnished and die, it was not going to be the “Trudeau Scandal” or the Liberal Party Scandal”. The consequences and the lasting name of the incident go on the charity whom are roadkill to keep the Liberal Party Brand and the Trudeau Brand from becoming a euphemism for poor governance, bad judgment and cozy insider relationships.

Good spin doctors and media connections in the PMO.

“We are societies of altruists governed by psychopaths, that those who claim to represent us, those who get into positions of power, are very often wildly different in that psychology to those whom they claim to represent.” – George Monbiot

#88 crowdedelevatorfartz on 02.12.21 at 7:35 pm

@#64 never trust
“i never bother reading what an economist has to say. they’ve never been right about anything. they usually state the obvious way after the fact.”

+++++

Jimmy Carter once commented in an interview,
” I could never get a straight answer out of an economist.
If I wanted to know how the economy was really doing I’d call my brother Billy and ask him what the guys in the local bar were saying.”

#89 Sheesh on 02.12.21 at 7:36 pm

#25 Calgary Rip Off on 02.12.21 at 3:13 pm

You have questions – here are a couple sources for answers:

https://vaxopedia.org/2020/12/16/deaths-following-covid-19-vaccination-understanding-background-rates/

https://sciencebasedmedicine.org/covid-19-vaccines-as-dangerous-continue-apace-vaers-edition/

#90 Nonplused on 02.12.21 at 7:37 pm

#181 Dharma Bum on 02.12.21 at 8:38 am

You can get to a ski hill in 2 hours from Red Deer? You must have a fast car with traction control.

That said it is a lovely town, anyone who has a ski boat, RV, quad, snow mobile, riffle, fishing rod, canoe, or a 4×4 truck would love it there. Most of the base industry is oil patch and farming though, so they aren’t doing that well.

My personal picks would be Cochrane or Sundre. But if I had to live in Red Deer I wouldn’t be too put off. And you can cheer for either the Oilers or the Flames! And the Stampeders or the soon to have a new name formerly known as the Eskimos! (I don’t understand all this “woke-ness”. If a team named themselves “the Dutchmen” I would not be offended. Maybe complemented. Well of course unless I reflected on their World Cup efforts, then I might be embarrassed.)

Cochrane doesn’t have a Costco yet but they have a Walmart and the hugest Canadian Tire I have ever seen that even sells garden tractors and guns. And Scout Christmas trees. The community spirit is strong with these ones.

(PS if you are counting COP as a ski hill I can get there in ten minutes. But I count it as a “training hill”.)

#91 Cici on 02.12.21 at 7:40 pm

#45 Paulo

Not a chance. Restaurants in my city are starting to boom, even under lockdown.

Daily case numbers and hospitalizations are dropping, the sun is shining brighter and longer each day, and the rutting season is fast approaching. Pent up demand is about to explode and the peeps, who are burning out from restrictions, are about to lose control.

Last Friday I was craving takeout but didn’t want to risk pickup with my son in tow. So I tried to Doordash an order from our favourite local restaurant, but it was so busy management temporarily suspended the Doordash option.

Just wait for the spring melt, it’s coming.

#92 Nonplused on 02.12.21 at 7:48 pm

#172 Stoph on 02.12.21 at 1:21 am

“Will ICEs be around in 50 years? Probably for some applications, but I doubt that will include the commuter car.”

Given a 50 year timeline I will agree with you but I see most of the power to charge said cars coming from GenIV nuclear (or by that time V, VI and VII), not wind and solar.

#93 Bonds? on 02.12.21 at 7:50 pm

I agree that interest rates are likely to climb. Does it still make sense to buy bonds now, if needed for the purpose of balancing a portfolio?
Decreases of valuation of bonds could happen however- the interest on the bonds will increase- thus giving overall gains? or buy bonds anytime for a balancing/moderation effect?

#94 Wrk.dover on 02.12.21 at 7:56 pm

#7 Doug t on 02.12.21 at 2:19 pm
How bout that new timmies egg sandwich eh

——————————————————-

I’ve always enjoyed gorfing down an egg mcmuffin or two, and took my chance on a Timmy version but once.

My taste buds opined that the egg had been laid somewhere on the eastern seaboard prior to five weeks later being put in a blender before being poached in Indiana. It was served to me many more weeks after that at a little less than room temperature, through a window in Halifax.

The bun had certainly originated thousands of kilometers from the take out window too.

Some business model right there Folks!!!!

So yeah, How ’bout that new sandwich…any good?

Worth catching a potentially deadly virus to get one?

#95 Drinking on 02.12.21 at 7:59 pm

#72 Nonplused

Cochranes Crappy Tire does rock as well as the ice cream store. Sundre is beautiful but half way there is Water Valley, just a gem of a place. Further up we have Caroline and excellent camping in Nordegg.

Witnessed the most spectacular Northern light show in Caroline, with sound, kid you not, winter camping years back, school outing, froze our butts off even with the warm rocks that we placed by the fire in our sleeping bags. Woke all of us up, no words to describe it, this was before cell phones, will never forget it!

#96 Nonplused on 02.12.21 at 7:59 pm

#161 Dr V on 02.11.21 at 10:35 pm

Like, $7,000 pedal bikes? Holy crap! Forgive my confusion because the most sought after 250’s have eclipsed that pricing point years ago. They sell for that used now. Ya sure you can get a KLX250 new for $5,500 (plus tax), but people want the KTM’s and they will pay much premium to get them.

#97 Cottagers STAY THE HELL AWAY! on 02.12.21 at 8:14 pm

“Think twice before you sauté in debt and move to Hick City.”

And stay the hell away from cottage country!

We don’t need inbred southern hillbillies compromising our health care systems.

Forget about any Family Day weekend trips up here.

Just.

Stay.

Home.

#98 Captain on 02.12.21 at 8:14 pm

Derek Holt’s a smart egg…

He’s an egg with no shell. He’s a Schmuk.

That idiot at the Bank of Canada is even more of a Schmuk. They think that what they say means something? It means Nothing!

Unfortunate, are the many innocent lives that were taken and continue to taken from this manufactured virus.

#99 The Greatest Fool on 02.12.21 at 8:15 pm

#1 Peter McLean on 02.12.21 at 1:58 pm
#2 Peter McLean on 02.12.21 at 1:59 pm

Ok, that’s all fine and dandy, but should I sell my GameStop stock, or keep holding? My coworker says it’ll go back up.

_______________________________

Peter, no need to repeat yourself. I heard you the first time.
You made no mention, at least in this post, of how much you paid.
Yes, you should have sold…. When the stock was $450.
Regardless, Gamestop’s heyday has come and gone. Time to move on.
It will revert to its intrinsic value or thereabouts.
Your question should be… Should I buy now?
The fact that you are even contemplating selling leads me to believe that both you and your colleague are in fact, the Greatest Fools!

#100 Drinking on 02.12.21 at 8:19 pm

#57 Stone

I agree with Garth that they are going up and also agree that it does not take much to do alot of damage to those who are living on a thin line.
My position with the debt load out there is that they will raise it to weed out the irresponsible but not enough to create another 2008/2009.
Who knows, I could be very wrong but it would affect the whole world and we just do not have enough resources to go through that again. Nothing will surprise me any longer, nothing makes sense, but hey, the sun was shining today!

#101 SSZ on 02.12.21 at 8:37 pm

Inflation will rise, not because of economy is getting hot, but due to supply constraints (just looking at all chip shortage which reduced car production! And obviously you have to pay more for the one available on the lot). And unemployment will rise, because all the stuff Biden is doing (just look at keystone XL). Lastly interest rate will rise, not because economy is getting hot, but because investors are losing confidence in the ability of CBs’ monetary policy! (just look at how many years of low/negative interest rate policy? Did it work? Have they learned anything? I remember someone said stupidity is if something is not working, just try again and again till it works!)

We did not get a virus depression. So obviously pouring on monetary stimulus was a valid move. – Garth

#102 Wrk.dover on 02.12.21 at 8:52 pm

#83 Nonplused on 02.12.21 at 7:07 pm
Personally I think the real improvements are going to come from small GenIV nuclear plants, but widescale deployment is many years away and they face formidable regulatory and NIMBY hurdles.

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

The PHD nuclear physicist I am related to says we could all have a nuc gen set the size of a toaster in our homes right now, except someone would inevitably tamper with one. Same with the full size ones. Not as safe as current carbon monoxide byproduct technologies. Conundrum. Face it.

Disclaimer; I do strongly believe man made climate change is our biggest legacy problem. Every thing else is abstract. Although I live rurally remote, We only burn 1,000 litres of gas/year, have a solar roof array producing the exact number of KWHRs we consume, a big garden for supplimental (spell it for me Sail Away) food, and heat with 300 cu ft of dead decaying wood in an EPA approved/certified device.

What’s your effort? Telling me about the back up needed for my solar? I already told you, twice, we have local hydro for that. Valves open on demand. Then close. Automatically! Electronically!

So yeah, what is you personal effort to ameliorate the situation we have? Do tell.

I’m real fun in a bar, honest. I’m sure you are too. Peace.

#103 Where's My Money Going Greedeau? To private investigators to dig up dirt!!! on 02.12.21 at 9:05 pm

Re: #81 Dogman01 on 02.12.21 at 7:29 pm
https://youtu.be/FC_wos7MwHo

Finally watched, “We Scandal” on 5th Estate. Surprised CBC would air this.

The obvious conclusion; someone ensured it became known as the “We Scandal”. One brand needed to be tarnished and die, it was not going to be the “Trudeau Scandal” or the Liberal Party Scandal”. The consequences and the lasting name of the incident go on the charity whom are roadkill to keep the Liberal Party Brand and the Trudeau Brand from becoming a euphemism for poor governance, bad judgment and cozy insider relationships.

Good spin doctors and media connections in the PMO.
++++++++++++++++++++++++++++=
Have you noticed if you go to https://www.cbc.ca/fifth/ and try to watch the episode, you can’t!!! It’s only on youtube and you can’t comment on it.
Now who’s getting their $600MM worth now……But how much have they paid youtube?
Now there’s a story, Canadaland (the one who broke the story) get on it!!!!!!
Especially in the show it’s shown that the WE org hired private investigators to get dirt on Canadaland’s employees, including their KIDS!!!!!!
Absolutely obscene, I was floored when I saw that info….Trudeau really lies with snakes!!!!
Everyone has to see this….

#104 Figmund Sreud on 02.12.21 at 9:26 pm

#73 – He is the chief economist of a Big Five bank. No creds, no job. Unlike yours, his comments do not flow lightly or unresearched.
_______________________________________

Ah, Mr. Turner, I didn’t mean any disrespect to Mr. Holt. Far from it. Mr. Holt does what he does most excellently, … and provides us plebeians with a most worthy service. All true, …

Anyway, what prompted me to write what I wrote is that – in my long life and experience, among cheerleaders of infinite economic progress, non-wager bets are standard gimmicks. And a fascinating thing about it all is that in every case such bets only went one way.

Best,

F.S.

#105 TurnerNation on 02.12.21 at 9:29 pm

– It finally happened – a sht Bung in Long Branch cracked a cool million bucks. Oh to be a millionaire, I can only dream of this opulence :)
https://www.realtor.ca/real-estate/22800286/55-thirty-sixth-st-toronto-long-branch

Once again this is the New GLOBAL System we are in . Every Former First World country is following the same plan, yes CV did that. The Old System we knew and loved went bye-bye in March 2020. Kaput
All the countries are saying the same thing. Limiting our TRAVEL is KEY to the New System.
In fact the globalist govt cancelled all flights to nice warm destinations. They do not want us sunny at all.
Buckle up we will see changes non-stop. Laws upon laws upon rules. All the CV rules are to break us, train us.
Mandatory. Compliance.

https://www.autocar.co.uk/car-news/industry/german-states-want-ban-petrol-and-diesel-cars-2030

….
Late last year all those conspiracy theories about CAMPS being put out to tender. You pay your own way this time:

Hotel quarantine for travellers to begin Feb. 22, Trudeau says (globalnews.ca)

….

Keep an eye on the food supply – this new system is of course all about control over our Feeding, Breeding and Movement/Travel – as if we were cattle to be fenced in and tagged.

Yep CV does this too. Remember, all famines are man-made (government-made). Same old same old:

https://www.dailymail.co.uk/news/article-9253595/UK-coronavirus-Australia-style-border-shutdown-mean.html
The disruption has also hit farms, with landowners reporting that crops have been left to rot in the fields due to a shortage of pickers, with the situation expected to get worse unless 26,000 workers can be found soon.

#106 Sheesh on 02.12.21 at 9:33 pm

#27 Calgary Rip Off on 02.12.21 at 3:13 pm

Regarding the spike protein produced by the mRNA vaccines, here’s an explanation as to why they won’t cause the inflammation/clots/organ damage. Cool stuff.

https://m.youtube.com/watch?v=9EfToFXwx98

#107 Do we have all the facts on 02.12.21 at 9:35 pm

#65 Damifino

Keystone XL is on the ropes and now Michigan wants to shut down pipeline #5 blocking the transmission of oil to Eastern markets. The future of Canadian oil may not be as rosy as you are predicting.

Electric cars is all about reducing CO2 emissions not whether gasoline is an economic alternative. If Canada does not catch the wave they may find themselves clinging to yesterday’s news. My point was India has become a major player in new technologies while Canadian investment in R & D seems to be shrinking.

Resting on our liquidation laurels is not a strategy for economic growth.

#108 Faron on 02.12.21 at 9:42 pm

#83 Nonplused on 02.12.21 at 7:07 pm
#41 Faron on 02.12.21 at 4:27 pm

Did I say “cheapest”? I’m not sure they are the “cheapest” as wind and solar are competitive. What I meant was “indispensable”, at least for the foreseeable future.

Hmmm, lets review the tape:

#94 Nonplused on 02.10.21 at 7:37 pm

And it turns out the lowest cost is often associated with the least environmental damage.

Lowest cost, cheapest. Same same.

But, if you consider that renewables are cost competitive which you note, then your earlier words combined with tonight’s words are about right. Low cost, renewable tech will result in the least environmental damage. Add in that there are explicit and major implicit subsidies with O+G and it becomes a no brainer. Just have to find jobs for the Albertans who will need them.

I’m glad I could help you put your thoughts together to the benefit of humankind and our wee planet. Happy polar vortexing!

#109 Faron on 02.12.21 at 9:53 pm

Because facts are facts.

O+G Subsidies:

https://generation180.org/the-absurd-truth-about-fossil-fuel-subsidies/

https://www.iea.org/topics/energy-subsidies

https://www.pembina.org/reports/fossil-fuel-subsidies.pdf

I will note that there are green energy subsidies, but O+G far outweighs them. BY FAR.

#110 DON on 02.12.21 at 10:09 pm

#79 crowdedelevatorfartz on 02.12.21 at 7:35 pm
@#64 never trust
“i never bother reading what an economist has to say. they’ve never been right about anything. they usually state the obvious way after the fact.”

+++++

Jimmy Carter once commented in an interview,
” I could never get a straight answer out of an economist.
If I wanted to know how the economy was really doing I’d call my brother Billy and ask him what the guys in the local bar were saying.”

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

Yup! Go to the source.

#111 SoothSayer on 02.12.21 at 10:13 pm

#27 Calgary Rip Off on 02.12.21 at 3:13 pm

My Dearest SoothSayer,

what were you thinking? obviously you were sleeping at the switch when you let this post thru. Anti-vax if I’ve ever seen it. He spoke about the negative consequences (eg. death, in this case) that people suffered after taking the vaccine. Sure, he posted his sources, but I did too a few days back and you deleted my comments.

If nothing else, it would be nice if you could be consistent!

#112 David on 02.12.21 at 10:16 pm

I rank economic forecasters right up there with weather forecasters. How about critiquing his forecast a year from now? His view on the vaccine rollout will miss the mark badly.

#113 Stoph on 02.12.21 at 10:19 pm

#92 Nonplused on 02.12.21 at 7:48 pm
#172 Stoph on 02.12.21 at 1:21 am

“Will ICEs be around in 50 years? Probably for some applications, but I doubt that will include the commuter car.”

Given a 50 year timeline I will agree with you but I see most of the power to charge said cars coming from GenIV nuclear (or by that time V, VI and VII), not wind and solar.

—————————————————————

Judging by the bit I’ve read up on GenIV nuclear, it seems quite promising. The whole nuclear industry faces an uphill PR battle however, as no one wants to live close to a nuclear power plant.

A while back another poster mentioned the natural gas Allam power cycle which intrinsically allows for the capture and sequestration of CO2. It seems quite promising as well, though I don’t know enough about carbon capture to judge if it’s a long term solution and if it could be used to store the CO2 from all fossil fuel power plants for the next couple centuries.

A sooner milestone that I think could be hit for EVs is that the majority of urban and suburban two-car households will have one EV in 20 years, though this may only happen in jurisdictions with government subsidy. The tech for this is already there – it’s just a matter of cost. Yes, fossil fuels will be powering many of these EVs, but unless EV tech is developed in tandem with emission-free power plants, we’ll be driving gas cars that much longer.

#114 Dr V on 02.12.21 at 10:23 pm

96 nonplused – you can have both! One of my buddies actually has the $7k pedal bike and a KTM!

#115 Dr V on 02.12.21 at 10:28 pm

Oh nonplused – and thank you for not “rolling coal”. Really kinda gross and something I just don’t get.

#116 Doug in London on 02.12.21 at 10:30 pm

Yes, I remember that TV show, Investment TV, on Global quite well and watched it regularly. I also remember Derek Holt on that show and have seen him on other shows and read his postings. He appears to really know his stuff about business and economics. I’ve also read from other sources what’s posted here about how a fast recovering economy could bring on higher interest rates sooner than expected. Once again it could be a good time to buy bond funds when they go on sale. Last but not least I’m glad I didn’t pay a premium price for a place in Punkeydoodles Corners.

#117 fishman on 02.12.21 at 10:52 pm

#46 AGuyInVancouver should be kinder. Its Valentines Day Sunday. That one special day in this especially dreary year where one can unabashedly show his love. I love the Trumpster & on this is one day for mere mortals when Love is Blind. As far who is a better human being. In San Francisco the’ve started a process to abolish the Abraham Lincoln & George Washington named schools. History can decide that question. Which one for a neighbour? I want those 8″ stilettos, slavic wide set green eyes that get slitty like a cats, & that Slovakian purr. No contest against “Dr. Biden”.

#118 Nonplused on 02.12.21 at 11:01 pm

#102 Wrk.dover on 02.12.21 at 8:52 pm
#83 Nonplused on 02.12.21 at 7:07 pm

What’s your effort? Telling me about the back up needed for my solar? I already told you, twice, we have local hydro for that. Valves open on demand. Then close. Automatically! Electronically!

So yeah, what is you personal effort to ameliorate the situation we have? Do tell.

————————————

Hydro is better but can also be intermittent in the case it doesn’t rain or it rains too much. And not everybody has hydro on scale. Alberta is pretty much tapped out and it is used mostly for daily peak generation.

What do I do? Well, the incremental things for now. I’ve switched to all LED lighting (even my Christmas lights which I have been mocked here for before). I just recently put in a high efficiency furnace. Next step will probably be to blow some more insulation in the attic because that is cheap to do and provides good returns. Windows I am not so sure, yes, 3 pane is better than 2 pane but holy crap is that expensive. I have not one but two fancy thermostats that cut the heat back at night. I don’t have an air conditioner and just open the windows. I ride my motorcycle when I can. I do have a truck but I only really use it when I have something of volume or mass to move. I don’t fly for vacation. I’ve switched to all rechargeable batteries (thanks Ikea and Costco) so I am not throwing as much toxic waste in the garbage. I buy locally sourced rye so that cuts down on transportation. I recycle. I am not all evil. I am not cutting down any rain forests to heat my house.

I also have solar panels but they are all on my RV. More of a convenience thing. They work when it is sunny, but for all you saints out there that is because I also have batteries and don’t use the A/C. And I still have a generator on standby in case it rains. Even with solar and batteries you still need a generator. And propane. Lots of propane.

I tried messing with one of those little wind turbines but came to conclude I just wasted $600 bucks on something that hardly works. Well, $1,800 bucks once you build the tower. If you have room for it, it needs guy wires and all. Like a radio transmitter.

The all renewable folks are smoking weed and living in strawberry fields.

As to you Ph.d friend, me thinks he exaggerated when he said we could all have a toaster size reactor that would run our air conditioner. But he is right about people being stupid. I read about a kid who caused problems trying to build his own reactor using the trace Americium found in smoke detectors. So ya people being stupid as they are is definitely also hindering GenIV. Shame.

#119 Drinking on 02.12.21 at 11:09 pm

This is true Canadian spirit; although damn harsh, good on them!

https://www.cbc.ca/news/canada/edmonton/longest-hockey-game-alberta-cold-1.5911917

#120 Nonplused on 02.12.21 at 11:14 pm

#95 Drinking on 02.12.21 at 7:59 pm
#72 Nonplused

“Witnessed the most spectacular Northern light show in Caroline, with sound, kid you not”

The Northern Lights do not make sounds, they occur in space and space cannot transmit soundwaves. But other winter phenomena do make sounds that are often confused with the Northern Lights because they are happening at the same time.

What you probably heard was snow and ice cracking as they contracted once the cold of night came in.

Regardless, the Northern Lights are beautiful.

#121 The Woosh on 02.12.21 at 11:23 pm

#43 Drinking on 02.12.21 at 4:21 pm
#25 Calgary Rip Off

I have been jabbed for the major illnesses from the past, no issues with that. But I am concerned on how quickly this is being phased out to the general public and how little is being said about all the adverse effects from the jab. For me, as long I can stay healthy I will wait as long as possible until we know more about the safety of the jab.

————————————————-

There is so much debt out there I agree with very small increase in interest rates but it will not be like on what we experienced in the past. When Danes offer 20 yr mortgages at 0 %, link was posted in a previous post of mine, I just cannot see drastic increases in rates. Wait and see I guess..

An increase does not need to be ‘drastic’ to be a game-changer. – Garth

——————————————————

Sure…but for how many? How many are actually over extended? Those few will be weeded out and the music will go on. Could ask a similar question about the mortgage deferral cliff. Haven’t heard a peep about that in months. What happened to all those homes that should have been dumped on the market by owners who could no longer make their payments?

#122 Mountain Camper on 02.13.21 at 12:03 am

If inflation rises,what will happen to stock prices?

Until March 2020 I was happily invested in a 60/40 portfolio.But decided to pick some individual stocks in TFSA room in my and wife’s account. I cannot believe how can making money be so easy ? Not a single stock has gone down in last year.Stocks that I have picked – EV/ Digital ad/ software are going gangbusters. I made same amount of money in last one year that I had saved working in last 10 years…I’m still fully invested and keep adding everymonth into my stock picks.

I think technology is going to further change the way we live our lives.Im more bullish on technology then simple COVID recovery stocks.

#123 the Jaguar on 02.13.21 at 12:14 am

Longest post ever. Shoot me, I have it coming……

I suppose the biggest thing Derek Holt has going for him is that he isn’t Benny T, though I’m unconvinced he is smarter than Doug Porter. It’s all Flotsam Jetsam at the end of the day.

These high level ‘What’s the poor old Central Bank to do once its foot is caught so deeply in the quicksand of its own creation’, and other poker bets on what ‘pent up demand’ might resemble in the months or year ahead are amusing. They all stay carefully away from the disaster looming known as ‘The Real Estate Bubble”. I see it as cowardly. ‘Please’, someone hand The Jaguar her Tarot Cards and we can proceed with a reading based on the Celtic Cross and other supernatural powers as yet unsubstantiated by science.

I submitt the following for the ‘Mutts’ on this blog ( note the capitalization to give you all some respect), with all comments based on zero research and only ‘feelings’, the principal goal being “How does this affect me”?

-Work From Home/BURBS versus core- ++ The exodus has been more about Boomers exiting the Metropolis for downsized living arrangements or Huntsville Incorp. Some peeps trading high rise condo for townhouse digs in the attached GTA, etc., but peeps have been commuting via GoTrain forever. Unlikely to change. Trading Milton for Port Credit won’t keep your ass out of the office in the core, unless the “Towers” relocate to suburbia. That’s a possibility, by the way…
.
-Travel- ++ A reversion back to the hippie era. RV’s, Campgrounds, etc. I can almost hear Peter,Paul & Mary singing ‘Blowin’ in the Wind” as I write this. Passenger train travel may see a resurgence which would be wonderful. It’s the future, really. Support Rail travel. Air Travel will be more expensive and selective, but demand won’t fall given the gap between have and have nots. Fewer sweat pants being a ‘blight’ on flights is how I see it….The difference will be which ‘class’ boards the aircraft.

-Food & Entertainment Industry+++ – Did interest in whole foods & home cooking surge during Covid?. Probably or maybe. But the general public are basically lazy bastards and will quickly revert back to expensive and less nutritional meals taken out, hot dogs and fries,etc., at all the vapid entertainment venues they are addicted to like bar flies during Hockey telecasts, etc. The better restaurants will regain their patrons. See above reference re ” who boards the aircraft”.

Industry/Economic Impact+++ – Repatriation of industries with important economic and National interest such as Big Pharma. Reinvestment in rail. (check out who has already invested in this industry, even before Covid…). More oversight on intellectural property and its protection. (bad old China). A growing realization even among the chattering classes that solar, wind, and other alternative energy cannot replace the world’s engine–FOSSIL FUELS. It will be like a head first crash into the windshield of reality, which surfaces in fall, 2021 when the world wakes up to a supply crisis.

Society – In short in can be summarized with the old adage ” The road to Hell is paved with good intentions”. The culture of ‘Identity Polictics”, BLM, Antifa, will continue to be exposed as divisive, fraudulent, and a diversion from real engagement and solutions.
The end result may be enhanced ‘Tribalism”. Tread carefully.

Over and out from the Gypsy Tarot card reader, also know as The Jaguar.
Individual readings available to those who make donations to the SPCA, Humane Society, with right of refusal at the discretion of the Tarot Card reader.
Anyone whose name begins with an “F” is an “F” followed by the word Ferret and need not respond. Over and out.

#124 the Jaguar on 02.13.21 at 12:21 am

Forgot this.

https://www.youtube.com/watch?v=9Osbub_iTZg

#125 Mountain Camper on 02.13.21 at 12:31 am

Nonplused

181 Dharma Bum on 02.12.21 at 8:38 am

You can get to a ski hill in 2 hours from Red Deer? You must have a fast car with traction control.
————-
Canyon ski hill is just 5 minutes east of Red Deer.Granted it’s not Lake Louise or Kananaskis but still a great setting on the river with high hill and many slopes for skiing.

#126 Bob Dog on 02.13.21 at 1:44 am

Bircon is now using as much electricity as Argentina to con fools out of their hard earned wealth.

For sale cheap. $40,000 USD.

8E09FD2BA6381B49A2B93BD57E371ADE5AB37B83BFEFEE53331DFE9B35AECA2C

#127 tkid on 02.13.21 at 2:47 am

I have yet to read the gentleman’s brief, but I have some worries. Going stir crazy, and with the morning off, I recreated the driving part of my morning commute from Niagara Falls to Burlington. Traffic was brisk and I was basking in the warm glow of pretending all was normal when I got to the Go station.

Half of the station’s parking lots were closed with permanent barriers up. There were 6 cars in the lot, no one standing on the platforms, and no trains in sight. It was a cold slap to the face. When things reopen, fares and gas prices are going up. Folks are going to have to pay to have the car serviced again. Lunches made. If everyone has maxed their budget on buying new digs in remote locations, how are they going to afford the commute? They won’t be relocating as they can’t afford to sell and move closer – they’ve already spent all their money on the new digs. Selling will be dicey as there is a damned good chance it’ll be at a discount because who now wants to buy in it-takes-five-hours-for-a-round-trip-to-commute-to-Toronto Niagara Falls.

I went into the local McD’s with a gift card. A quarter pounder combo is $12 and change. A egg mcmuffin combo is $7 and change. Fast food has almost doubled in price since the last time I visited there. Lots of other things will almost double in price. How is anyone with an already-maxed out budget going to afford any of this? Salaries always seem to be the last thing to go up, so I can’t see salaries keeping pace with the cost of living.

Any savings people have are going to get quickly depleted. I can see a quick burst of maybe six months of good times, followed by a lot of pain. I’d like to be wrong on this, but I don’t share yours or Mr. Holt’s optimistic vision.

#128 Lady Jane on 02.13.21 at 4:03 am

#7 Comments

“The vaccine isn’t even his doing, thank the arrogant orange man”.

Hold on now, no one that lives in the fact based world is going to thank the orange disaster for vaccine relief. Just because the arrogant orange man tried to take credit for the vaccine(s) doesn’t mean he had anything to do with them. In fact, he did nothing to warrant this claim. That he would try to take credit for their development is par for the course though, and that some would blindly believe it is sadly par for the course as well. Tsk tsk.

#129 BillyBob on 02.13.21 at 4:46 am

I read Holt’s brief, and agree with his overall thesis of an improving economy and rising interest rates.

But his substantiation of his position on Canadian vaccination rates is thin to non-existent. It might sound good to say Canada is “above average in terms of securing vaccine contracts” but it ignores to real problem: production shortages. And without domestic production capabilities until late 2021 earliest, Canada will be vulnerable to any shortfalls beyond “2021H2”. The US/UK/EU aren’t close to a surplus position and have already indicated Canada is back of the bus.

Repeating what is basically the government line of “Current roll-out plans point toward full inoculation of the Canadian population over 2021H2” needs to be honest about the woefully slow rate of procurement. A hoped plan is not the same thing as actual projections.

“The narrative that is heard in some quarters that vaccine roll-out has been a failure is patently false.” Is it? 2.5% is considered a success? Measured against Africa, I suppose so. Not so much with countries closer as economic peers. Not even against the US whose vax program started under Trump.

Some other “smart egg” economists with less self-interest than a Canadian bank economist have a markedly more data-driven opinion of vaccinations going well into 2022 and beyond for poorer countries.

https://eiuperspectives.economist.com/healthcare/eiu-report-warns-significant-delays-global-coronavirus-vaccine-rollout

Optimism is important and I’d much rather believe Holt’s assessment than the Economist’s but prudent risk management should plan closer to worst-case, not best-case.

#130 crowdedelevatorfartz on 02.13.21 at 6:54 am

@#129 Billybob
“It might sound good to say Canada is “above average in terms of securing vaccine contracts” but it ignores to real problem: production shortages. And without domestic production capabilities until late 2021 earliest, Canada will be vulnerable to any shortfalls…..”

++++

True enough.
Cap in hand , we patiently wait in typically polite Canadian fashion for a “train” that will eventually, sometime, maybe….arrive.
As Trudeau announces yet more vaccine purchases.
How many has Canada bought? 200 million, 300?
My Gawd.
And we received how many last week?
Zero?
And we havent even started the gong show of actually getting boots on the ground to jab 10’s of thousands of people per day in the arm….twice.
They have had a year to get this sh#t show organized and the bumbling, stumbling “organizers” are still talking about “who” get jabbed, “when” and “where” in vague rumour-like terms…
Never underestimate the Canadian bureaucracy to overcomplicate anything.

Its very evident that in a rapidly changing emergency…..you can download a govt app OR

Snowing in the Lowerbrainland this morning…..and its sticking.
You’re on your own .

#131 Gravy Train on 02.13.21 at 7:01 am

#102 Wrk.dover on 02.12.21 at 8:52 pm
“[…] Although I live rurally remote, we […] have a solar roof array producing the exact number of [kWh] we consume […]” How many solar panels are you using? And how many watts per panel? Did you get a rebate or subsidy? What’s your payback and how long are they guaranteed? Do you think we’re getting through to anyone? :P

“What’s your effort? Telling me about the [backup] needed for my solar? I already told you, twice, we have local hydro for that. Valves open on demand. Then close. Automatically! Electronically!” Facts don’t matter to Nonplused, and he can’t do basic math. He carps endlessly about the carbon tax, but still hasn’t figured out that he could cut his carbon taxes if he put solar panels on his roof! He’s so Trumpian. I just point and laugh at Nonplused!

“So yeah, what is [your] personal effort to ameliorate the situation we have? Do tell.[…]” Nonplused may be trying to break Donald Trump’s record of spreading disinformation and making false or misleading claims. :P

#132 Toronto_ on 02.13.21 at 7:30 am

Garth – thank you for this great blog and your educational insights. I appreciate your level headed and common-sense approach to things.

As an daily reader of your blog, I knew not to panic when the equity markets crashed in March 2020. Things always come back as you say. In fact, I was able to talk my mother-in-law out of going to cash, and just sitting and waiting for the recovery. I also invested a chunk at the market bottom in March/April, and have done quite well. Thank you for that.

I also fully agree with you that downtowns will repopulate, and that those who moved to hicksville will regret it big time, if they aren’t already – I know that long, cold, dark winters in crummy small towns are far different to the long beautiful summer days that likely lured those ppl in the first place.

#133 Gravy Train on 02.13.21 at 7:48 am

#118 Nonplused on 02.12.21 at 11:01 pm
“What do I do? Well, the incremental things for now.[…]” Any NRCan-registered energy advisor will tell you that solar panels are the best bang for your buck. :P

#134 Tron Light on 02.13.21 at 8:23 am

#86 Tron Light on 02.12.21 at 7:28 pm

Why was it deleted?

You bug me. – Garth

#135 LP on 02.13.21 at 8:29 am

#95 Drinking on 02.12.21 at 7:59 pm
#72 Nonplused

Witnessed the most spectacular Northern light show in Caroline, with sound, kid you not, winter camping years back, school outing, froze our butts off even with the warm rocks that we placed by the fire in our sleeping bags. Woke all of us up, no words to describe it, this was before cell phones, will never forget it!
*********************************

Thanks for that imagery. Is it true that close to the north when the aurora is flashing that it makes snapping, cracking noises? I read that somewhere.

F73ON

#136 Wait There on 02.13.21 at 8:42 am

The arrival of the mutations changes everything.
In january I called the situation a race against time.
The medical authorities know that the mutations have already set root in multiple provinces.

The author needs to MODEL the dynamic impact of the vaccine rollout over time vs. the R0 spread of the mutations.

He will be shocked because once you do that the probability of avoiding a third wave changes.

Models are not predictors but insiight into different scenarios. The key thing to understand is that an increased transmissibility of 30 to 50% changes the situation dramatically if you model it. Everything you thought of the pandemic and its spread and control 4 months ago is now incorrect.

You need to look at the situation like this. You have a large hole in your boat as the water comes in, it creates a bigger hole and the amount of water coming in keeps increasing. The vaccinations are chemicals that prevent the hole from getting larger but can only be applied at a certain rate. The increased rate of the hole is not simply 30-50% faster. It is faster 30-50% exponentially. What happens if your rate of return on an investment increased by 50% and it was compounded. ( think of it that way…that is why time is so critical)

Once the hole gets big enough, if the supply of the chemical and the rate of application ( Vaccinations) is slower than the rate of increase of the hole then you will sink. IF YOU SEALED the hole early, you would have been able to control it. Once the hole gets to a certain size before the patches come then you are going to sink. We are hoping that the hole has not gotten too large at this point. The other thing is that some vaccines we will be receiving is not as effective in stopping the hole from getting larger.

The two months we lost in December and January were extremely critical to the recovery…only time will tell. An economist is only guessing.

#137 Dharma Bum on 02.13.21 at 8:42 am

#17 Beetman

I don’t want to be a “Downer Debbie” but there is 4 things I don’t trust and not necessarily in order. Bankers, lawyers, politicians, and experts.
——————————————————————–

“Only 2 things in the world I’m scared of: Women & the POlice.”

https://www.youtube.com/watch?v=Kf5nWhOeV8k

#138 George on 02.13.21 at 8:53 am

The way I read this is that rates could remain low for another 18 months. If so, we could be in a sellers market during this time.
Something has to break the low inventory though. Maybe if the vaccine gives more potential sellers more confidence to allow strangers into their houses. Don’t really know.

#139 Inadequate on 02.13.21 at 8:58 am

#65 Damifino on 02.12.21 at 5:52 pm

Canada holds valuable energy cards. The biggest worry you should have is that we’ll never elect a government with enough courage and foresight to play them.
————————————————————————–

I wish more Canadian can realise this fact. The sooner the better.
EV = pollute some where else, not in my back yard. Plus the mess with making those batteries. I am an Engineer working in EV battery manufacturing.

The ultimate energy solution is uranium. In terms of energy content, 1 kg of uranium =14 million litres of diesel.

#140 Rossco on 02.13.21 at 9:21 am

Since Red Deer is in the spotlight I’ll mention Sylvan Lake 10 min. west, Gull Lake 20 min. north, Pigeon Lake 60 min. north, Pine Lake 45 min. east, Buffalo Lake 60 min. east.
I’d trade them all for BC’s Okanogan, Kalamalka, Wood’s Christina, Shuswap but the 7 hour drive across the Rockies is a bit tiring but the temperature is always 10 degrees warmer there and there are less mosquitos but more forest fires.

#141 Sail Away on 02.13.21 at 9:29 am

Re: noisy northern lights

Here, let me Google that for you:

Yes, the lights do indeed make noise. And no, they are not in space, actually the thermosphere.

https://www.nationalgeographic.com/news/2016/06/auroras-sounds-noises-explained-earth-space-astronomy/

https://scied.ucar.edu/learning-zone/atmosphere/thermosphere

#142 Sail Away on 02.13.21 at 9:34 am

#139 Inadequate on 02.13.21 at 8:58 am

The ultimate energy solution is uranium. In terms of energy content, 1 kg of uranium =14 million litres of diesel.

————-

So a normal month towing the RV around Alberta with my F850 triple tandem dually double double?

#143 SHANE GALLANT on 02.13.21 at 9:35 am

Garth, I think Holts projections seem overly optimistic. 5% growth?

Are you an economist? – Garth

#144 IHCTD9 on 02.13.21 at 9:50 am

#133 Gravy Train on 02.13.21 at 7:48 am
#118 Nonplused on 02.12.21 at 11:01 pm
“What do I do? Well, the incremental things for now.[…]” Any NRCan-registered energy advisor will tell you that solar panels are the best bang for your buck. :P
———

True… if you are grid tied. An intellectually honest argument would include the fact that you would not be owning any solar panels if grid tie was illegal, and you had to do a stand alone system. A real life workable solar system exists in a symbiotic relationship with the grid.

I’m not saying this is bad, but it is honest.

#145 Dharma Bum on 02.13.21 at 9:54 am

#90 Nonplused

You can get to a ski hill in 2 hours from Red Deer? You must have a fast car with traction control.
——————————————————————–

Red deer to Nakiska Ski Area (Kananaskis) takes 2 hours and 18 minutes if you drive 100 km/hr. It’s 235 km.

I’m sure you are aware of how fast the Albertans haul their jacked up rigs down the highway. Nobody drives 100 km/hr. 2 hours to Nakiska is easy.

Mount Norquay in Banff takes about 20-30 minutes longer, its another 35 km or so.

So, yah, 2-3 hours to get to Kananaskis or Banff area – you get the idea.

And you are right, Central Alberta is the place to have all the great redneck toys like ATVs, guns, Bobcats, boats, pickup trucks, skis, RVs, fire pits, backpacks, skis, snowmobiles, fishing gear, etc.

Like you said, some of the surrounding counties might be closer to the rockies, but you can’t beat the close access to Red Deer for the day to day necessities (Costco, plus more giant DIY hardware stores per capita than anywhere else on the planet). Plus PEAVEY MART!
https://www.peaveymart.com/

My kid lives in Red Deer, and the first time I visited, when he was showing me around town, I commented on the number of hardware/lumber stores and warehouses there were. He said: “That’s because everyone around here knows how to do things themselves, not like in Toronto”.

I got a laugh outta that one.

#146 tkid on 02.13.21 at 10:38 am

Mr. Jaguar, a rebuttal on your WFH vs Core. Niagara Falls is white hot right now. There are all kinds of demographics buying homes right now, not just the boomers. Hell, even my mother’s house sold. But none of ’em is gonna want to do the 5 hour round trip commute to Toronto once things open up.

Either businesses are going to move from downtown T.O to the ‘burbs, or folks will move back to Toronto.

#147 Sail Away on 02.13.21 at 10:39 am

Slovenian, but whatever.

European countries are pretty much interchangeable.

#148 Hamish42 on 02.13.21 at 11:00 am

My Trump-critical Albertan colleagues were confident last year that between the lousy US health system and said President the US would screw up the exit from this crisis. I told them never to get against the US to do something quickly. Sure enough the US invented vaccines and managed to vaccinate >10% of the population before Canada got to 3%. Having millions of doses on order is all very well but they don’t do anything until they are injected.

#149 Gravy Train on 02.13.21 at 11:14 am

#144 IHCTD9 on 02.13.21 at 9:50 am
“True… if you are grid-tied.” I’ve stated numerous times that I’ve signed a 20-year contract with my power company to buy and sell energy. I didn’t install the bidirectional meter on our home to measure our purchases and sales; our power company did.

“An intellectually honest argument […]” How is anything I’m doing dishonest, immoral, unethical or illegal? Explain it to me! Are you in the oil and gas industry? Am I muscling into your territory?

“[…] would include the fact that you would not be owning any solar panels if grid tie was illegal, and you had to do a [stand-alone] system.” I suppose you’d not be driving a gas-fueled car if gas was illegal.

“A [real-life] workable solar system exists in a symbiotic relationship with the grid.” So what? How is that relevant?

“I’m not saying this is bad, but it is honest.” Again, how have I been in any way dishonest, or done anything illegal? Explain it to me!

#150 Tron Light on 02.13.21 at 1:03 pm

#134 Tron Light on 02.13.21 at 8:23 am

Lol! I may bug you, that’s totally fine, but none of what I said was untrue. You can find the stats from the government, etc.

I can’t believe people like Dolce Vita, Faron, Sail Away, etc., don’t bug you either with their multiple daily comments.

#151 Job#1 on 02.13.21 at 1:23 pm

GravyTrain, Wrk.dover

Your systems work where there is room to deploy PV panels. This does not mean you can apply a similar solution to densely populated urban centres.
Most of the housing stock in this country is woefully inadequate compared to the standard required for the energy performance you state. The required retrofit $$ to bring houses up to a point where renewables can carry the load is beyond the vast majority of homeowners.
Leaky old houses, legacy apartment buildings, new concrete/glass condos…how is your solution going to translate to these places?
Just admit you’re one of the few who has found a working solution for your own situation. You cannot use your own experience to extrapolate the successful implementation of renewables across the entire remainder of the country.

#152 Sail Away on 02.13.21 at 3:26 pm

#150 Tron Light on 02.13.21 at 1:03 pm
#134 Tron Light on 02.13.21 at 8:23 am

Lol! I may bug you, that’s totally fine, but none of what I said was untrue. You can find the stats from the government, etc.

I can’t believe people like Dolce Vita, Faron, Sail Away, etc., don’t bug you either with their multiple daily comments.

———–

Casting aspersions on others does not strengthen your argument.

#153 b on 02.13.21 at 8:32 pm

Being quoted 1.65% from RMG mortgages for refinancing. All the T&C’s look the same as the big lenders… What an I overlooking? Seems too good to be true, tough I would say have good income, small mortgage and perfect credit history… Posted is closer to 1.9% at big lenders…

#154 Dumb take on 02.13.21 at 9:52 pm

Claiming Canada’s vaccination response is not bad at all because the experts were completely wrong about how quickly it could be developed (guess who said it was possible, was ridiculed for it, and then made it happen?) completely disqualifies Holt from any credibility. The obvious proper comparison is to other advanced nations, and Canada is not even in the game with the most backward nations on earth. Laughable.

#155 Scott on 02.14.21 at 8:17 am

From an article in the Globe this morning.

“Jeannie Taylor, a healthcare worker who grew up in Halifax, said the influx of outside money is easy to spot, with new luxury cars cruising the streets and ads for high-priced condo developments proliferating.

“There is a local feeling of panic,” Taylor said in a phone interview.

“(People are thinking) if we don’t purchase soon we will be forced out of the province in terms of competing with big money from elsewhere.” ”

As someone who lives in Halifax, the narrative rings true…home prices have popped since the lock downs started. In the long term, more people moving to this region from the rest of Canada is great, but losing their shorts in a “panicked” RE market isn’t.