Most of the major banks have popped rates in the last few days. RBC, for example, added almost a quarter point to its fiver. Tangerine blasted its 10-year loan higher by a hefty 70 basis points. It was all too good, too cheap, too insane to last.
Five-year Canadas are pushing 1% again, so this may be just the beginning. US jobs numbers blew the doors off Friday morning. Combine that with two million vaccinations a day now taking place and the Fed wimping out and the future seems fairly predictable. Up. Way up.
CIBC’s cuddly little economics guy, Benny Tal, now says Canadians have never been more threatened by interest rates. We’re not ready for what’s coming, he’s been telling anyone in the media who’s listening (not many). No wonder. Mortgage debt went up 5x faster than inflation last year. We borrowed almost $120 billion more when rates were at levels impossible to maintain. Ticking. Time. Bomb.
The world is awash in money now after governments spent $20 trillion globally (the size of the entire US economy) to fight the virus and debase currencies. Ottawa is running a deficit of at least $400 billion, with cash spewing from every orifice. Household borrowing has hit a crescendo, but so have savings. Weird. Credit card balances and LOCs have been paid down. Housing debt has exploded.
Well, the impact of loosey-goosey monetary policy, spendy politicians and myopic borrowers is now all around us. In explicit detail. Like the famous garage that went on sale in Toronto this week – a 20-foot-wide, ill-placed lot for $729,000. It was last listed at $600,000. Here it is.
It’s not just real estate, either. Bicycle prices are nuts. Boats, RVs the same. Home exercise equipment. Building materials. Homeowners who can’t justify moving have created an insatiable demand for drywall, studs, PEX, paving stones, even paint.
Then of course, there’s the GFPI – Greater Fool Puppy Index. As breathlessly detailed here, Golden Retrievers have tipped the $3,000 mark in most parts of the country and breeders of everything from wee terriers to lumbering Newfs have a year(s)-long waiting list. Now we have a new record high. On Kijiji, no less, where the desperate shop…
What’s all this called? Ah yes, inflation. Prices you never thought you’d see are now the norm. And topping the list are houses which, hourly, seem to be slipping the surly bonds of earth. Economists are flummoxed. Even realtors are calling current conditions a textbook bubble. Canada has never seen a seller’s market like this, in almost every city and region simultaneously. In fact, it’s continent-wide. People with housing assets to sell are reaping windfalls. Those buying are probably straining and sacrificing to get in at the very top. And already there have been historic consequences.
This week came some evidence from property-flogging Zoocasa. It confirms what we’ve reported here since the slimy little pathogen arrived on our shores – lots of Millennial buyers have fled the germy city, convinced themselves that WFH is forever, loaded up on debt and bought detached houses in the distant burbs and hick cities where they can breed, age and domesticate.
The consequence: price escalation in places hours away from the city cores and a big drop in real estate affordability everywhere. Yup, more inflation. The survey found a third of buyers ended up in areas they never would have considered before Covid. Of these folks 70% admitted their new digs were further away than expected and half report they live in a spot with fewer people. Almost 80% of all buyers understand that the pandemic has caused suburban and rural prices to inflate “at an unsustainable rate.”
Moreover, the kids get it. Low mortgage rates, they agree overwhelmingly, have driven up prices rewarding owners and locking out the rest – at least for a while: “aspiring buyers felt the obstacles from the pandemic set them back 1-5 years.”
The reality of our times, then, is obvious. Fiscal (government) and monetary (central bank) stimulus have combined to create an everything-bubble. Houses, taps, Harleys and puppies are growing more dear daily. It’s exacerbating the wealth divide and having negative social consequences. As the vaccines flow and the economy reopens, more inflationary pressures will come from increased demand as unemployment fades. Along the way, the cost of debt will rise as interest rates reflect inflationary pressures and hunkier yields in the bond market. At the same time, governments will have to cut back on their largesse. Maybe even start the tax grind higher.
It’s a formula for clash. So don’t expect things to remain as they are.
Worth repeating: (a) if you have floating debt, lock it up. (b) If you’ve been thinking about selling and cashing in your real estate lottery prize, do it now. (c) If you are a prospective buyer, cool your jets. Wait for inventory to build, rates to increase and the bidding wars to end. (d) Remember you’re always better off having less debt at a higher rate than vice versa. (e) Don’t count on a WFH future. (f) And if you crave a dog, wait. Empty shelters won’t be that way six months from now. Leave the canine pirates looting on Kijiji and find a friend in need.
140 comments ↓
– Blog Dogs were chattering about New boat shortages? Timing: this CanCon co just went public, BOAT.TO
https://limestoneboats.com/
— “According to Statistics Canada numbers from September 2020, more than 25,000 businesses have already closed in Ontario alone.”
***********************
— This explains it. Kanada. A well-connected immigrant does good and tries to get ahead. Finds out everyone is working for The Party. The fellow name’s is noted as as T—-
https://palladiummag.com/2019/09/19/how-not-to-build-a-country-canadas-late-soviet-pessimism/
“This is not what an economy with unemployment at 3% looks like,” he says. “For Canada, anything under 5% is structural unemployment,” he continues, “but there’s something that doesn’t make sense. Salaries haven’t budged. If unemployment were really at 3%, firms would be killing each other over workers.”
…“What happened? How can corporate leadership be so lacking in thumos?”…
He then launches into one of his favorite stories about his lunches with the top guys at the Canadian Pacific Railway, one of Canada’s economic jewels and the primary engine behind the settlement of the western frontier during the 19th century. A naive and younger T——— had tried engaging his sexagenarian audience with things like “western economic development,” “resource transportation infrastructure to meet Asian demand,” and “provincially supported railway extensions.” It went over their heads. Within minutes, the conversation had switched to golfing and vacationing at their lake houses.”
Canada is a holdout of Brezhnevism. T———’s apparatchiks aren’t very different from their Soviet predecessors: frail old men in buffoonishly baggy suits from the 1990s, complete with black (Volga-like) sedans and dachas in the countryside. When they aren’t vacationing in said dachas, their main occupation is making sure that things are as stable as possible, which realistically means making sure nothing new ever happens.
———-
Our Health Kare System. The Party rules over us with an Iron Fist, in the Blocs of Kanada:
https://palladiummag.com/2019/09/19/how-not-to-build-a-country-canadas-late-soviet-pessimism/
“It’s not just housing and construction which suffer from this institutional rot. The MRI shortage in British Columbia is a particularly acute example. To appreciate the seriousness of the shortage, it’s important to note that the U.S. has 38 MRI scanners per million people, while Japan has 35. In Canada, that number is a critical 10 machines per million people.
As of the writing of this article, the wait times for a screening have been reduced to a commendable average of 48 days, half of the previous average of 96 days. How were these wonderful results achieved? By running the MRI machines 24/7 and scheduling appointments at 3 or 4 a.m. for those in critical need. You might be dumbfounded by this story. Couldn’t the number of machines simply be increased? A few physicians attempted to procure the MRI machines themselves and charge very low rates for screening. They were immediately ordered to cease and desist operations by health authorities. You see, determining the need for MRI machines is a core competency of a specific health commission in the British Columbia health care system, and at the time, the commission had not yet determined that there was a need for more machines”
More gross dog tongues!
here in 604. Seems his daughter wanted a pup for a graduation present from University. He had to travel up to 150Mile House and meet up at a gas station (the breeder said they lived too far in the bush to meet there) to pick it up. All seemed fishy to me but he said they are happy with the new Ausiedoodle. At least it will be well cared for. Didn’t have the heart to ask him the price …
KABOOM
Taking Ryan’s suggestion and adding PFF, making it a permanent part of the portfolio. Hopefully it will still work out long term, in a rising rate environment.
Good day everybody!
#102 Leftover on 03.04.21 at 8:13 pm
#33 The West
Yup, the Kootenays rock. Sell your Kelowna dump for $1 million and get a beautiful place in Rosland plus a condo in Cabo. Rent the Rosland place to skiers while you play on the beach and never work again.
Sounds good to me.
_______________________________________
First of all, you’re not touching my place for anything near $1 million. But you are right, that would only buy you a dump here in Rutland. I think you missed the purpose of yesterday’s blog and the extreme cost of real estate in the paradise known as Kelowna.
For someone so big on “Rosland”, you’d think you could at least learn to spell it correctly!
If I bought in Rossland, I would have to live in Rossland … and that would a dealbreaker. Quite often I blink when I drive through there on the way to somewhere nice and I miss it completely.
Speaking of beaches, you don’t have a real beach anywhere near Rossland, so now I see why you need to buy a condo in Cabo to get to a beach. (how many hours driving to get to the international airport in Kelowna? You must have to pass Big White and Costco on your way!)Me, I just take a two minute walk to enjoy 270 kms of pristine beaches.
Remember, its …..location, location …. forget it, you obviously haven’t figured it out yet!
Wait, my phone just rang …… sorry, that was my real estate agent. Seems like the price of my place went up BIGLY in the time it took to educate you!
My boomer parents have decided to sell their modest 905 bungalow after 47 years of residence, property tax, maintenance, renovations, etc., and it should be added to inventory in time for the spring market. It’s just much house for people in their early 70’s, and they’ll take their principal residence exemption gain with them down the QEW to the Garden City, drop the gain into some nice monthly dividend-paying ETFs, rent a new build apartment, and pay rent with the divi’s. Pretty straight forward strategy.
P.S. Boomers do listen to the sage and gratis-free advice provided here.
AGQ
Garth, the wall street carnage is giving my husband ulcers now….he was heavily invested in growth stocks…no balanced and diversified strategy here….and his ask was “support me” so I kept silent this time….actually, no, I did give him a couple nudges here and there with the hope he’ll wakeup and not fall for all the noise…but heck, he thought he’s an expert based on text messages with friends to “expertly” choose the investments….they are all collectively suffering now. I am so mad but have to hide it (because I am supporting him ), now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified” strategy….25k later. Great! I want to say “I told you so” but that won’t help….we’ve been sipping bailey’s for breakfast every day of this week.
Tell him to call me. I’ll snicker. That should help. – Garth
How does 379,000 jobs (almost all hospitality) added in February stack up against 800,000 to 1,000,000 (with 750,000 just yesterday) new jobless claims every single week for months on end? The claim that unemployment is 6.3% is laughable and easily double that. Oh and fun fact, government jobs never used to be counted as part of the work force a while back. And why aren’t stocks part of the gasbag list caused by the likes of Joker Jerome? I shouldn’t be up 90% since April on my Nasdaq index fund.
The mysteries of life. But not really.
There have been those “prophets” that kick around on these pathetic boards now and again.
Here’s the long and the short – if you don’t have access to a printing press, your quality of life is about to decline….ramble on all you boomers about your portfolios and how you’ve made “millions”.
The delusions are over.
GM will be charging an extra $1000 on new orders of the C8 Corvette. This would be for a 2022 model year since you are unlikely to be able to land a new 2021 here in Canada.
What’s the world coming to? Say it isn’t so!
Farther, reading the blog is where the nudges from me were coming from, so he didn’t listen. I suggested hiring paid advisor, 6-7% return is way better for me than a 20% loss but I am too “risk averse” so here wer are. I suggested your firm earlier this week, let’s see if he bites. He is suffering. I hate being “right” this time!
Bubbles Every where.
Powell is not concerned, it is “temporary inflation”.
What is his defintion of temporary? Or it is temporary until we adjust and get used to it?
The price at the pump just went up on a temporary basis. The price of groceries temporarily went up? With that much debt out there, how can average indebted families make it through…’temporary’? It only takes a few to wreck a party.
Today in the Financial Post…Tiff admits housing is the driver of the CDN economy…and is in a mother of a bubble…but due to current weak economy doing anything would be bad for the economic recovery. I get the timing is evetything lime of reasoning…but now the bubble popping on its own is way worse to our economic well being. It takes time to get momentum back.
I check for new listings in my Calgary hood weekly out of curiosity and there is just nothing new. When there is, it is nothing special and they go quick.
Such crazy times to be in. My wife and I both being able to work from home without incomes affected is a blessing. There is lots to be stressed about in the world but sometimes you have to take a step back to see how good you have it. Life is better that way.
One small increase to interest rates is just a tiny bump on monthly payments.
Wake me up when there is 2 more bumps….by then it will be 2022
Really, you call this what we have interest rates. When I see 5% bond and GIC rates on the government bond side then I will believe this about what is coming.
#10 The West on 03.05.21 at 2:12 pm
There have been those “prophets” that kick around on these pathetic boards now and again.
Here’s the long and the short – if you don’t have access to a printing press, your quality of life is about to decline….ramble on all you boomers about your portfolios and how you’ve made “millions”.
The delusions are over.
_________________________________
brrrrrr…. .
can you hear the printing presses??
brrrrrr…..
non stop…
brrrrrr….
So they found out they CAN live without specialty coffee, kombucha, and $10 multigrain bread.
Just a little warning from Hamilton: there is no Whole Foods here FYI.
Let’s see how long they enjoy shopping at Metro.
Yes it looks like the stimulus has really been overdone; an over-reaction based on too little information at the time. They could have dialed it up as needed rather than turn on the taps full blast right away. We have people like the cake lady who earned much more on CERB than they did while working. And now I read that CERB recipients may actually have to pay income tax for the first time in their lives (oh the horror) because they earned so much more on government handouts than they ever did while working.
https://www.citynews1130.com/2021/03/04/cerb-2020-income-tax/
#6 $Green$ with envy
I’d rather live in “Rosland” (Sp) than Surrey on the Lake any day.
Don’t need no education to figure that out.
The ever present threat of federal intervention has yielded nothing but price increases after 10 years of policy initiatives.
There is only one thing you need to know – which is that there is only one sector generating revenue during the pandemic, and that sector constitutes 25% of the economy.
Every other sector has been pinched with pandemic restrictions, creating a loss of revenue for the feds on top of their conscious attempts to bailout every Canadian with hundreds of billions in payouts.
It takes a certain type of naivety to think that this government will touch the market that is paying its weight in gold into the economy.
It will, instead, announce a grandiose policy change that will be nothing but window dressing – as all have been in the past – and this ‘change’ will then be put on a pedestal as heralding the end of the market.
Of course, that announcement will not take place until AFTER the election in the fall and the pandemic waters have full receded – since you don’t want to take away people’s bailout funding and rain on an economic recovery parade.
Rinse, and repeat…..since 2010.
I think that picture and ‘wow factor’ behind a POS in the GTA selling has been used a half dozen times in the last 10 years to show how ridiculous the housing bubble has been for a decade…and yet prices keep going up!
Next stop – Brazil – and the complete decimation of the middle class and the entrenchment of a class divide forever…..unless some effective measures are brought in.
My wifes friend intends on selling her pups for 3000 to friends in her network. A yappy cat of a dog for 3K.
Hard to leave a spontaneous life if you are a responsible dog owner.
#17 printing press imitator
brrrrrr…. .
can you hear the printing presses??
brrrrrr…..
non stop…
brrrrrr….
—————-
get your hearing tested.
The printing presses go:
ka-ching
ka-ching
#9 Comments! on 03.05.21 at 2:11 pm
How does 379,000 jobs (almost all hospitality) added in February stack up against 800,000 to 1,000,000 (with 750,000 just yesterday) new jobless claims every single week for months on end? The claim that unemployment is 6.3% is laughable and easily double that. Oh and fun fact, government jobs never used to be counted as part of the work force a while back. And why aren’t stocks part of the gasbag list caused by the likes of Joker Jerome? I shouldn’t be up 90% since April on my Nasdaq index fund.
The mysteries of life. But not really.
****************
Yup
#23 Ponzius Pilatus on 03.05.21 at 2:39 pm
nope.. they go brrrrr
https://brrr.money/
#14 Guy in Calgary
Same with my wife and I. And I agree with your sentiments.
#18 Dry and Fold
Every other sector has been pinched with pandemic restrictions, creating a loss of revenue for the feds on top of their conscious attempts to bailout every Canadian with hundreds of billions in payouts.
——————
Still waiting for my billions of payouts.
Then I finally can move out of the basement and buy a nice house in the burbs.
#8 Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now….he was heavily invested in growth stocks…no balanced and diversified strategy here….and his ask was “support me” so I kept silent this time….actually, no, I did give him a couple nudges here and there with the hope he’ll wakeup and not fall for all the noise…but heck, he thought he’s an expert based on text messages with friends to “expertly” choose the investments….they are all collectively suffering now. I am so mad but have to hide it (because I am supporting him ), now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified” strategy….25k later. Great! I want to say “I told you so” but that won’t help….we’ve been sipping bailey’s for breakfast every day of this week.
Tell him to call me. I’ll snicker. That should help. – Garth
———
Good story. I’ve witnessed it many times. I find Garth’s retort even better.
I know. I know. It’s not after 4 pm yet but so far today, my B&D is 6.32% YTD. Balanced and diversified is definitely the way to go.
Frankly, selling pets on Kijiji and other online impulse-shopping sites should be illegal. I suspect at some point in the future it will be.
Expect thousands or tens of thousands of homeless pets in the next year.
The pest on people who run puppy mills.
And stiff fines on people who buy from them.
Hmmmmm …. the Puppy Index….
I think you are onto something there….
Here, the local SPCA has no pups, of any age, and a 17-20 person wait list, last I heard….
And mixed breed new pups going like ….. well, hot cakes? from $2500 and up, if you are lucky enough to locate one…..
(Lucky for us, we found our Pup over 6 yrs ago, and she is keeping us calm, walked, and Loved :))))
Agreed with your “everything bubble” but why did you not include the stock market in your list of examples? Surely equities have inflated with government largesse given the historic highs? Asking for a friend…
“(f) And if you crave a dog, wait. Empty shelters won’t be that way six months from now. Leave the canine pirates looting on Kijiji and find a friend in need.”
You’re a good man, Garth! Can you share with us if you’ll be getting another 4-legged partner in crime soon?
#10 The West on 03.05.21 at 2:12 pm
Here’s the long and the short – if you don’t have access to a printing press, your quality of life is about to decline….ramble on all you boomers about your portfolios and how you’ve made “millions”.
The delusions are over.
———–
Actually, W, the thing of it is…
By the time those millions have been made, our hero has gained sufficient savvy and market education to protect the gains.
However… if it makes you feel better to think the fat cats are now becoming thin cats, it is your prerogative to think that way.
A warning, though: Approaching your life with the philosophy that someone else must lose in order for you to win will turn (keep?) you bitter and envious.
It’s possible for all involved to win- haven’t you ever watched ‘A Beautiful Mind’?!?
WFH anyone ?
https://financialpost.com/executive/careers/howard-levitt-after-a-grim-year-new-set-of-workplace-challenges-await-canadians-in-post-covid-era
I know i’m quite often more productive at home versus the office distractions and small talk. However, I can only speak for myself and there’s a good chance many people are not very productive at home.
Once again JT a.k.a. sock boy drops the ball. Mostly due to his pandering to the CCP. Even Barbados is way ahead of us with vaccines. We are # 42 in the world…shameful
https://nationalpost.com/news/growing-number-of-canadians-say-trudeau-doing-bad-job-on-vaccine-rollout-even-as-pace-of-deliveries-quickens
#8 Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now….he was heavily invested in growth stocks…
….now he is selling at 15-20% loss
———–
Wow, Cheese is your husband!
And here I thought he was making things up yesterday.
#25 printing press go brrrr
https://www.youtube.com/watch?v=O1hCLBTD5RM
Stone, trading stocks rarely works out. I was naive and young at 21 years old, 6 years ago now 27 years old and learned my lesson. All it took is a loss of $3,000 on $25,000 investment at my weekly stock trading at TD direct investing.
Now, I just make sure I max out my RRSP’s, TFSA’s and build up my non-registered account which I have done for years now. I am not making huge returns, mix of 1/3 GIC’s, provincial bonds, strips, 1/3 corporate bonds, strips, 1/3 Canadian bank stocks, preferred shares which are in my non-registered accounts.
All in all, I am averaging straight annual return of 5.3% over the last 6 years or total return of 36.32%, interest, capital gains, dividends. I am content with this overall after compound, reinvesting annual return of 6.0533% per year. I have no complaints here.
#177 Howard on 03.05.21 at 12:44 pm
#170 printing press goes brrrr on 03.05.21 at 11:39 am
It’s on Howie
Nope. Absolutely incorrect.
Get over yourself bitter man. I don’t like the rigging any more than you. Deficit spending, monetary policy/money printing etc has been around longer than me and maybe you. I’m “woke” enough to education to know your line of thinking is in the delusional realm of internet ramblers and has no real place in our present situation. I’ve learned that dismantling of central banks would be catastrophic at this point, even if I too would prefer that our economy operated differently. Yours is the talk of rambling imbiciles who are incapable of holding the duality that central banks right now are both helping to enrich the rich while also helping keep this garbage pile from melting into a sea of burning turds. No one serious in any form of policy or think tankery, except maybe the uber uber rich who can just hole up on a private island, talks about just getting rid of the banks’ role in rates. Stop the QE, sure. Stop rate setting? Absolutely fricking not. Not at this point at least. If that happened right now, you would see panic in the largest market in the world (bonds) that underpins the funding of almost everything. I guarantee you that’s a world that you nor I want to live in.
Well, it certainly isn’t anyone who wants unhinged market forces to run rampant for a couple of years to decades. It’s not righty who wants to do away with every possible social support for low earners because it eats into their ability to buy baack shares and prop up equities and pump their bonuses. It’s not righty who wants to deregulate the hell out of the economy because money “trickles down” or the “wealth gap isn’t real” if you are nonplused. It’s not righty who wants to privatize healthcare among many other social goods to move to something more pull yourself up from your boot straps-ey.
Again, don’t use my words to push your view. Mr. brrrr was talking about ASKING THE CENTRAL BANK TO LIFT RATES. That is not natural rate equilibrium, that’s asking a central bank to do one’s bidding and is asking for manipulation because he doesn’t like the manipulation. Dumb.
Trudeau and Anand crowing on Twitter how they are getting 1.5M more doses from Pfizer in March & 1M additional doses in both April & May, for 2M more in Q2.
Pfizer does not rule the roost in the EU, the EU does. If Pfizer does not meet EU needs first, this happens:
“EU blocks export of AstraZeneca COVID-19 vaccines to Australia”
https://www.dw.com/en/eu-blocks-export-of-astrazeneca-covid-19-vaccines-to-australia/a-56774362
EU export controls in action. I reminded both of them about that and:
“Don’t count your chickens before they hatch”
——————–
BETTER Gov Canada should be making deals with American vax manufacturers instead for a post May deluge of vax from there if the Americans are done by May as they say they will be.
[Today in Canada, variants up 142% in total cases in the past 13 days. No hospital, ICU beds filling up fast. A GOOD thing]
https://i.imgur.com/JMq1WJh.png
#32 Faron on 03.05.21 at 3:07 pm
#177 Howard on 03.05.21 at 12:44 pm
The working and middle class voters would be wise to figure out who is on their side.
Well, it certainly isn’t anyone who wants unhinged market forces to run rampant for a couple of years to decades.
—
If you want to see what that looks like, take a peek at the depression. A decade of hell that lead to a world war that killed millions. Sure, current policy and the path we are on may lead us there, but the key is may. I’ll, by a country mile, take the possibility that our current path wont go there over the 100% likelihood that letting it unravel right now by taking the hands off the wheel would lead us to a second depression. What a joke.
If GTA is ever going to realize it’s potential of Monaco Norf, Photo-op Minister (PM) Socks is going to have to bring 75-year amortizations to the table.
Step right up, folks! Your $200K annual household salary plus commitment to child offspring and offspring’s offspring, qualifies you for $10M mortgage! Oh please wake me up once the music stops.
“US job numbers blew off the doors this morning.” I blew milk out my nose reading this line.
Do you work for the FED? CNBC? CNN? Yahoo Finance?
379,000 new jobs – 75% in restaurant industry. Real high paying jobs vs. 748,078 NEW Unemployment claims last week.
So is this the NEW MATH that we follow Garth?
Lose 2 jobs for every 1 crappy job gained and all is roses? USA USA USA????
C’mon Garth, your better than being a cheerleader.
Please.
#8 Hubbydoesntlisten
As I type:
Dow Jones +508.48 pts +1.6%
S&P 500 +62.95 pts +1.66%
NASDAQ +164.96 pts +1.29%
Vix –3.79 pts -13.3%
Set it and forget. Sound advice given by this Blog’s Author.
Hubby should have listened.
[Why is it I hear a snickering in the background?]
Yield curve control.
It will be a cold day in hell when rates climb over 3% and all the debt has to be paid back or defaulted on.
What is the obsession with rates going up that would kill the golden goose that has been so carefully plumped up by stimulus, smoke and mirrors over the past 11 years?
You REALLY think the big boys don’t have this all under control or are they just setting up the world of greater fools for the rug pull?
Evil may be evil but it’s not that stupid.
#179 printing press goes brrrrrrr on 03.05.21 at 12:59 pm
The central banks Are the problem and should be ABOLISHED.
—
Ah, yes, getting rid of the massive, central, unbiased and hyper liquid store of safe reserves that facilitates movement of capital in mass quantity for the sake of the economy that our lives depend on would be a fantastic idea! Brilliant.
Whatever happened to “diamond hands”?
If one can’t handle his/her wings being clipped, one shouldn’t pretend to be a soaring eagle!
Good ol’ 60/40 – save me from these suffering fools.
Food delivery prices are also beyond silly. A couple pizzas is $60 and Chinese food is $20 a dish. A fast food burger combo runs $14.
These prices will not be coming back down so this is the new normal.
Be careful who you buy your pup from. Some are stolen from rightful owners and resold, particularly on Kijiji.
#43 Billy Buoy on 03.05.21 at 3:20 pm
Lose 2 jobs for every 1 crappy job gained and all is roses? USA USA USA????
—
Sigh,
Different numbers bru. Monthly number is net. Weekly is number of new jobless claims ignoring new hires. We’ll know in Apr, but the reality is probably 700+k new claims with 1M new hires. Lots of churn, but uppa.
#20 leftover
“Surrey on the lake” lol never heard that one before. Truer words have never been spoken.
#46 Faron on 03.05.21 at 3:26 pm
#179 printing press goes brrrrrrr on 03.05.21 at 12:59 pm
The central banks Are the problem and should be ABOLISHED.
—
Ah, yes, getting rid of the massive, central, unbiased and hyper liquid store of safe reserves that facilitates movement of capital in mass quantity for the sake of the economy that our lives depend on would be a fantastic idea! Brilliant.
———————-
Congrats Faron.
You hold every spot of the top 10 dumbest comments of the week.
Let’s talk about dogs. Specifically purebred hunting dogs, if you’ll indulge me.
A conscientiously-bred hunting dog will be the most functionally and physically sound specimen available. Reputable breeders identify faults and continually adjust pairings to eliminate these. Expect to be on a years-long waiting list for proven breeders.
The reason the above is important is because dogs, like people, will breed indiscriminately on their own, with no concern for heritable diseases and genetic conditions. Sure, the pound dogs are cute and lovable. But so are purebreds. And in the end, a functional purebred hunting dog (NOT a show dog! Show breeders are the worst) is far less likely to be a ticking genetic time bomb that will drive your family to destitution and despair.
Much like choosing tools- avoid the cheap sh*t people are giving away since it’s going to cost you much more in the long run. We’ve all seen the 1 year old hip dysplasia’d German Shepherd trying to keep up with the pack and the hopeful owners. No good ending to that story.
There’s the negative gamma at work. Daily range of 3% in the S+P. Yow. Don’t know if this dip was enough to wipe out the old narrative. As reflected here, there was some serious pain in the momos, but probably not enough to spark real fear.
Agree with Lea Wright and others here wrt to hubby doesn’t listen post:
1. Balance, diversified
and Garth’s
2. “Set it and forget it”
Are the WAY TO GO. Hands down.
BUT ETFs whether global, Pref’s, US Markets, whatever are boring BUT what I primarily hold in my MEAGRE small potatoes portfolio.
Like I said before it’s a Pandemic, bored in locked down in Italia and in need of excitement so I also BOUGHT Pandemic no brainer single stock picks (Vax, US Death). That gave my overall meagre ETF portfolio a nice BOOST (single stock = minority %):
Last 12 months:
TFSA +23.94%
Non-TFSA +15.21%
Temporary for this year as when pandemic over, %’s will drop more in line with regular ETF gains, slow but steady. Will seel Pandemic no brainer stock and get back into boring ETFs.
——————-
Slow steady, ETFs, Vax bounced back today, US Death stock slightly down. Must have been the US job numbers…American’s figure they’re not going to die as much today like they did the past 4 days?
[Garth still snickering, this time at meagre, small potatoes me]
#46 Faron on 03.05.21 at 3:26 pm
_____________________________
communist to the full eh? prefer central planning to free markets do you? lol
brrrrrr there go the presses… brrrrrr
fear mongering about a second depression without the central planners are you? let it happen. we need a reset. clear out the economy properly…
brrrrrr… brrrrr….
I’m selling my house in Whitby 3600 SQFT for $1.8 million do I have an offer? :)
Hmm…
The prospect of perhaps earning money breeds competition. So what does that make most of the people who read this blog (as your quizzes may show)? Lonely?
Reminds me of hysteria or mania. Tulips. Seriously jeopardize station in life in fear from the risk that you won’t be deemed as successful ($$$$$) as the people around you…hehe… would hate the see what would happen if media and realtors halted their klappers for a month.
Pleasure as always,
Og
#2 IHCTD9 on 03.05.21 at 1:50 pm
More gross dog tongues!
^^^^^^^^
More obnoxious comments!
#56 printing press go brrrr on 03.05.21 at 3:55 pm
#46 Faron on 03.05.21 at 3:26 pm
_____________________________
communist to the full eh?
—
Grow up. Recognizing the utility of a component of a capitalist system is a far cry from communism. A social democracy (Sweden) is not communism (Chinish).
#28 Stone on 03.05.21 at 2:47 pm
#8 Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now….he was heavily invested in growth stocks…no balanced and diversified strategy here….and his ask was “support me” so I kept silent this time….actually, no, I did give him a couple nudges here and there with the hope he’ll wakeup and not fall for all the noise…but heck, he thought he’s an expert based on text messages with friends to “expertly” choose the investments….they are all collectively suffering now. I am so mad but have to hide it (because I am supporting him ), now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified” strategy….25k later. Great! I want to say “I told you so” but that won’t help….we’ve been sipping bailey’s for breakfast every day of this week.
Tell him to call me. I’ll snicker. That should help. – Garth
———
Good story. I’ve witnessed it many times. I find Garth’s retort even better.
I know. I know. It’s not after 4 pm yet but so far today, my B&D is 6.32% YTD. Balanced and diversified is definitely the way to go.
———
Markets are now closed. B&D is at 6.59% YTD. Can we get over 7% next week? Let’s hope so.
Weekly/daily tabulations of portfolio are a really, really bad idea. Focus on when in your life you need the assets. It’s not a game. – Garth
#20 Leftover on 03.05.21 at 2:31 pm
#6 $Green$ with envy
I’d rather live in “Rosland” (Sp) than Surrey on the Lake any day.
Don’t need no education to figure that out.
*****************************************
Spent many childhood winters on Big Red and many summers at Christina Lake. It was great. LOL, “Surrey in the Lake” is funny!
…so what are going to do Garth ?
We are witnessing our purchase power declining day after day , houses unaffordable , heaps and heaps of debt .
What is the end game ? How can we prevent a epic meltdown?
Legitimate questions , waiting for your input please … and by the way would it make sense to sell and move somewhere cheaper or stay put and get further into debt? … aw life !
SLIPPING…”… THE SURLY BONDS OF EARTH…”
Here is the rest of the poem…
…penned by RCAF Pilot Officer John Magee, in 1941, three months before he was killed in a training accident in his fighter aircraft over Britain. He was just 19-years-old.
High Flight
by
John Gillespie Magee, Jr.
Oh! I have slipped the surly bonds of Earth
And danced the skies on laughter-silvered wings;
Sunward I’ve climbed, and joined the tumbling mirth
Of sun-split clouds, — and done a hundred things
You have not dreamed of — wheeled and soared and swung
High in the sunlit silence. Hov’ring there,
I’ve chased the shouting wind along, and flung
My eager craft through footless halls of air . . .
Up, up the long, delirious burning blue
I’ve topped the wind-swept heights with easy grace
Where never lark, or ever eagle flew —
And, while with silent, lifting mind I’ve trod
The high untrespassed sanctity of space,
Put out my hand, and touched the face of God.
Our over-extended debtors may one wish they could touch the face of God, but it’ll only be instead their lenders-in-chief to tell them that they were idiots. And to pay, pay, and pay summore.
Precious metals may come back into vogue?
#20 leftover
“Surrey by the lake”
and they will get upset again…
MURPH THE SURF!
Old man Murphy has been sleeping for some time now. In fact a lot of speculators think he has died. I can assure you he is alive and well and in fact is starting to stir. Murphy will always get the last laugh. In fact he has a nasty habit of never allowing a fools behavior to go unpunished. Well, that is all I have to say about that, for now.
GFSI- (Greater Fool Squirrel Index) Need to top up my ETF’s; we have too many around my neighborhood, will trap them and sell for $50 a pop, great bargain, they are a little temperamental, need some training, may chew your face off if you do not provide them with a steady diet of nuts. Let me know who is interested! :)
The price of most goods and services is increasing and the purchasing power of your money is decreasing and yet our government insists that inflation is nothing to worry about.
In what world can you increase total money supply by hundreds of billions of dollars through additional debt without consequences. The fact that the carrying charges on household debt are low should not be baked into the cost of living index. Inflation is all about an increase in prices and the loss of purchasing power not about the ability to borrow money at temporarily low rates.
Drug dealers get customers hooked at attractive rates before revealing the true cost of addiction. Our financial institutions our issuing mortgages at extremely inflated values when they know these values cannot be sustained.
Our government is guaranteeing these inflated mortgages knowing that a correction towards intrinsic values is inevitable. Back scratch fever.
The level of complicity in this Ponzi scheme palpable.
And fuel prices too.
B.C. Delivered price of marked diesel for our business property’s bulk tank today:
610.1 litres
Price/litre .97 = $592.41, plus
FET .04/litre = $24.40, plus
PFT .03/litre = $18.30, plus
PCT .10/litre = $62.41, plus
GST 5% = $34.88
TOTAL $732.40
Ridiculous.
has anybody seen the price of a kettle ball lately?
I went to walmart, and then canadian tire beside walmart. Cheapest price for 20 lb kettle ball is $50.
decided to not buy. what a rip. I’m now just using a flat tire that i’ve had sitting beside my house for a few years. weighs around 20 lbs or so. Just making good use of it.
Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now….he was heavily invested in growth stocks…no balanced and diversified strategy here….and his ask was “support me” so I kept silent this time….actually, no, I did give him a couple nudges here and there with the hope he’ll wakeup and not fall for all the noise…but heck, he thought he’s an expert based on text messages with friends to “expertly” choose the investments….they are all collectively suffering now. I am so mad but have to hide it (because I am supporting him ), now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified” strategy….25k later. Great! I want to say “I told you so” but that won’t help….we’ve been sipping bailey’s for breakfast every day of this week.
Tell him to call me. I’ll snicker. That should help. – Garth
**************
25k or 15-20% loss isn’t that bad of a loss if he was willing take the risk chances. It’s like lending someone $100 and you dont really care if you get it back.
Yes… Toronto housing prices have zoomed on FOMO sparked by sub-2% mortgage rates, but Vancouver is keeping apace as well. Toronto single family detached sellers need to get an additional $493,000 to “catch up”.
My comparison chart of Vancouver and Toronto housing FEB data is up:
http://www.chpc.biz/compare-toronto–vancouver.html
VAN SFD is valued 36% higher than a TOR SFD
10 year inflation rate of SFDs VAN: 120% TOR: 137%
VAN T-House is valued 19% higher than a TOR T-House
VAN Condo is valued 8% higher than a TOR Condo
Ratio of SFD to Strata
1 VAN SFD = 1.9 VAN Town Houses
1 TOR SFD = 1.7 TOR Town Houses
1 VAN SFD = 2.6 VAN Condos
1 TOR SFD = 2.3 TOR Condos
VAN 1 bdrm rent down 9.8% Y/Y
TOR 1 bdrm rent down 23.0% Y/Y
VAN 2 bdrm rent down 12.0% Y/Y
TOR 2 bdrm rent down 21.5% Y/Y
TOR has 1.0 x more Listings than VAN
TOR has 2.9 x more Sales than VAN
Inventory Sold Each Month: TOR = 126% VAN = 45%
Months of Inventory: TOR = 0.8 VAN = 2.2
Average Annual Payroll Earnings (DEC Data 2mo Report Lag)
ON: $59,472 and BC: $57,823
JAN 2021 Unemployment Rate
Not Seasonally Adjusted (NSA)
BC = 7.4% and VAN = 7.6%
ON = 9.0% and TOR = 10.6%
JAN 2021 Employment Rate (NSA) Charts
BC = 59.7% and VAN = 61.8%
ON = 58.3% and TOR = 59.7%
Earners needed to buy an average SFD:
VAN = 3.6 and TOR = 2.7 earners (see website notes)
Annual Precipitation VAN:TOR = 2:1
I should elaborate to my last comment. I was referring to a life lesson. If you dont het the 100 back, you dont lend that person again.
Hubby should have learned a 25k lesson. Dont do it again. That lesson is water under the bridge now.
#61 Stone on 03.05.21 at 4:17 pm
Markets are now closed. B&D is at 6.59% YTD. Can we get over 7% next week? Let’s hope so.
————
Cool, I’ll play. At the beginning of January my three buys posted here were: TRP, NNO.V, CHP.UN. Not balanced and diversified in any way.
These have returned an average of +9.3% for the year, but were +11% last week. Oh, and I bought VUS this morning- it’s +2% for the day.
What are our takeaways??
#63 Larry App
There is no end game. Just enjoy the ride. When they build decks, you build wealth. One day the tide will turn. It’s all about good seamanship.
The Bank of Canada is to blame for this.
I’ve said it before and I’ll say it again….
Governments in Canada have a new act now. They allow for situations such as the obvious inflation of assets experienced recently. Once SHF they’ll get on TV like Doug Ford did early in the pandemic (after he failed to place travel restrictions prior to March break) and scold the average person for making poor choices and say now, their hand is forced and tough action must follow. Shame on us all they’ll say.
You can’t see that? JT getting on the tube and stating “my friends, when your gross family income was $80,000 a year, how did you ever think it responsible to take out a mortgage on a $1M home?!”
That’s why they’re all standing on the sideline right now. Tiff. Trudeau. All of them. They’ll let the average man dig a deep hole then come out with the condescending finger wagging and sigh in exasperation, shooting a disapproving look at us all as the take to “fixing” the mess we all made.
No tough political decision making. No risk on their part.
#8 Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now……. now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified”
***********************
This almost scared the crap outta me. Despite my best intentions I look at my PF just about every day and was tensing up to find that a new “buying opportunity” had munched 20% of my retirement fund.
The daily change was +1.49% for me with the S&P up almost 1.8%
Where is the “wall street carnage”?
I’m nowhere near as diversified or balanced as others with my 80% equity-almost- all- S&P500 PF
WTH was hubby doing? All in on 2 or 3 stocks?
#52 Comments! on 03.05.21 at 3:45 pm
#46 Faron on 03.05.21 at 3:26 pm
#179 printing press goes brrrrrrr on 03.05.21 at 12:59 pm
You hold every spot of the top 10 dumbest comments of the week.
—
Why, because I don’t toe the line of your libertarian hellscape? I guess depicting a world without central banks would be too taxing for you, so here you are.
A related aside: I read some discussion yesterday with this choice comparison: “Seeking investment advice from a site like Zero Hedge is a bit like wife hunting on PornHub”. Play to the LCD gewgew-gagas. There is very good, free and abundant research including white papers on markets written by very smart people who work in the markets. I’ll take their critiques of CB actions over yours (collective) 100,000 to one. Takes some mathematical ability tho.
I’ll repeat this again for the dense: my original argument was against brrr’s notion of having CB’s bring the overnight to 3%. My stance on CBs is that you have to take the bad with the good. They aren’t perfect, nothing is. A more nuanced argument than “CBs BAD. CBs MUST DIE” will be met with less vitriol from me.
Seen a story today about a house in Kingswood, Suburb of Hfx. Sold for 250 G above asking . ?
$8,000 for a spoodle in Australia. Bonkers.
Stone you remind me of the guy that makes ‘six figures’ and thinks anyone should care. Guess, what, everyone does.
Wow, you are returning 6%, 2-3% over true inflation. Amazing work, 13 year bull run, insane QE and you’ve been able to produce 6%. Welcome to a club that includes everyone other then the dumbest investors.
Now tell us about that Honda Civic.
74 Sail Away on 03.05.21 at 5:11 pm
#61 Stone on 03.05.21 at 4:17 pm
Markets are now closed. B&D is at 6.59% YTD. Can we get over 7% next week? Let’s hope so.
—
What are our takeaways??
—-
The takeaway is that this is a site dedicated to B+D, so talk of sub annual returns is off topic. Second takeaway is that if you post numbers on the up, you better be able to laugh at yourself and post your losses on the way down.
I am deeply concerned about the central bank policies of negative real rates and asset purchases over the last decade plus. These policies reward wealth and speculation, and punish work and sound investment. They also highly disadvantage the young – one might even go so far to call it inter-generational warfare. These were supposed to be emergency measures, and yet here we are 12 years after the GFC and the policies never really went away even before the pandemic.
Housing is now well beyond reach for even upper middle class families in many parts of the country. Most stocks – especially in the U.S. – are firmly in bubble territory, at least if we are to give any credibility to traditional valuation measures which are unanimously flashing red.
Why on Earth are the central banks continuing to buy mortgage debt, or government debt for that matter? Why on Earth is the overnight rate still at 0%? It is infuriating to hear the central bankers argue they are doing this to: 1. Promote inflation, and 2. Help the unemployed. Re: #1, there is obviously massive inflation just about anywhere you look. Re: #2, the people suffering most from this pandemic are low income service workers that don’t own any assets. I agree these people need help, but that help should come through fiscal policy (as it has with CERB, etc.). Monetary policy is a blunt instrument. How does higher inflation and bubble asset prices help the unemployed low-income service worker? The obvious answer is that it does not – in fact it does the opposite. These jobs will come back when the pandemic ends, and the central banks have no control over when that is.
Higher asset prices mean higher debt. If government and the majority recklessly pile on the debt, then you have no choice but to pile on the debt if you want the same things as the majority (like a roof over your head). It is shameful and immoral in my opinion that the central banks have lead us to this situation. And however well-meaning their policies have been, they are squarely to blame for where we are now.
The only way to deal with these asset bubbles is to bring about positive real interest rates. New regulations – on housing, for example – may help, but as long as the central banks encourage rank speculation with so-called “free” money, the bubbles will inflate ever higher. And yes, that would mean some pain for asset holders. But the reality is that asset holders have essentially had a guaranteed ride for 12 years and have reaped immense rewards – surely they can afford some pain. The central banks job is to promote stability, not guarantee asset values or future returns. How is housing increasing 20% in a year promoting stability? How are major equity indices up 50-100% in a year signs of stability?
I honestly don’t think any of them are thinking beyond today. Or perhaps their plan is to just continue inflating these bubbles in perpetuity while the quality of life declines for most Canadians.
Anyway, as you can tell, I’m extremely dismayed at the current situation. Thanks for the opportunity to rant – I greatly enjoy your blog, Garth.
Significant life changing domestic growth (US) isn’t foreseen by the CBO (Congressional Budget Office) post-pandemic. At least nowhere near approaching some new golden age of prosperity the way many over hyping optimists in the public eye are seeing things.
The U.S. economy is actually projected to grow between 1.6% to 1.8% a year this decade…about half the rate it did on average yearly for approx. 70 years before the pandemic.
When the global economy recovers, investor demand for US dollars could weaken significantly with problematic growth as most new dollars created now go to servicing the debt instead of rebuilding the economy.
That in itself will drive treasury yields up along with interest rates.
Combine it with low/er (real) growth and ever more need for additional stimulus and we get a compounding upward effect on rates eventually.
#39 Faron on 03.05.21 at 3:07 pm
Your response employed the exact same modus operandi as every other post you’ve ever made.
You take an extreme position (“Central banks should rig the economy forever”) and assume I’m as big of an extremist as you but in the opposite direction (“Do away with central banks”).
I’d be quite content with central banks to go back to their mandate as it was before Greenspan : sound money and price stability. If they stuck to that, I would consider them a welcome and necessary part of a modern society.
And your comment about the Great Depression is ironic since you don’t understand that the reason it was so interminably long and only broken due to the onset of war was BECAUSE of Central Bank and government meddling. You probably don’t know this, but there was an earlier depression in 1920. It was a short, sharp deflationary bust that lasted all of 18 months. It cleared out the market excesses and the deflation created a runway for the roaring 20s. The Fed (created only 7 years prior) did nothing. Government did very little. The market was permitted to self-correct. The pain was harsh but brief.
Your prescription of permanent Central Bank driven bond rigging is a recipe for devalued currency, continued misery for the working and middle class and obscene wealth inequality. You can stop pretending to care about “the poor” since you advocate for policies that would turn Canada into a northern Brazil with a Gini coefficient in the 40s.
https://www.wsj.com/articles/the-depression-that-was-fixed-by-doing-nothing-1420212315
#50 Faron on 03.05.21 at 3:44 pm
#43 Billy Buoy on 03.05.21 at 3:20 pm
Lose 2 jobs for every 1 crappy job gained and all is roses? USA USA USA????
—
Sigh,
Different numbers bru. Monthly number is net. Weekly is number of new jobless claims ignoring new hires. We’ll know in Apr, but the reality is probably 700+k new claims with 1M new hires. Lots of churn, but uppa.
—————
Take a breather dude. The US has been facing nearly 1 million new jobless claims PER WEEK. Can you read?
Garth seriously shut this guy down for a while.
There is a 5×6 storage locker for sale in my friends building for $16,000 in Yaletown Vancouver
Pooch picture #1 – looks to be having way too good a time. Pooch picture #2 – adorable but methinks too good to be true. Adorable puppy sales scams are apparently a real thing. So is being mugged by pooch poachers.
That 20 foot garage lot – is that actually a legal lot where one could build an livable if skinny abode? Or is the idea one lives in the grungy garage? Can that even be done or would various officials descend with cease & desist orders the moment they found out about it? I’m just presuming the plan would be to replace the current structure with a shiny new compact home.
#60 Faron on 03.05.21 at 4:14 pm
_______________
You’re far closer to communism than you think.
Or you’re a banker feeding at the trough.
Either way, you’re not a capitalist.
Keep on printing.
Brrrr……
Question: who still has toilet paper in the closet that was bought last year? Anyone else wondering how the rush to stockpile toilet paper made the hyperspace jump to housing?
This wasn’t by accident. I think its a consequence of the brain’s ancient alarm system, which was triggered when the pandemic arrived, government’s response, govt cash flowing so that people think its desperate times, continuing pandemic restrictions, and media. Human beings in the pandemic are operating from ancient brains. Our decision making this past year and bias for action and control is a result of the primitive brain taking the driver’s seat for so many people. I suggest if the ancient brain is kicking in for you, be good to yourself, buy toilet paper, books, soap, chocolate, booze, coffee beans- the cheaper stuff your ancient brain craves for security. Just make sure you are buying low dollar amounts, eg in the tens – and not in the hundreds of thousands.
“(f) And if you crave a dog, wait. Empty shelters won’t be that way six months from now. Leave the canine pirates looting on Kijiji and find a friend in need.”
I definitely agree. I never understood the “pure bred” thing. A dog is a dog. But then again I never understood Porches either. Or $3,000 hand bags. Or Sub Zero fridges.
Our dog is a pure bred “Morley” (meaning he was found in a ditch on the Morley reserve and is part German Shepard, part Collie, and maybe part Husky). He’s been great. Awful furry though.
Latest from the small city with big city real estate prices:
House #1, “Sellers will consider offers Feb 26th”, 5 offers, all smoke, house still on the market
House #2, “Won’t Last” (likely a flip), just knocked the price down 10%
I dunno
#22 DON on 03.05.21 at 2:38 pm
“Hard to leave a spontaneous life if you are a responsible dog owner.”
Define “spontaneous” because I doubt it’s for me anyway.
We do most of our recreating in an RV and our dog seems to quite enjoy it. What’s not to like? 3 walks a day, hikes sometimes, new smells, leftover bbq.
“The fed wimp out”. Well, maybe. I took it as a change in attitude – and a smart move. No more candy kids you’ve had enough.
A few days ago I compared the bond market as Godzilla in Tokyo. Even then I didn’t think the Fed would just step aside but now I’m convinced they really mean to step back and let ‘er rip. Next will be Tiff with that pleasant smile saying things are just fine, what problem?
There’s a huge silver lining to this. The re-emergence of the been there done that gang in mainstream media.
I admit, this is schadenfreude, but when guys like Charlie Munger say something it feels like a cool breeze. It makes me realize how badly lacking we are in this country for steady, wise responsible fiscal leadership.
That’s why I like this blog so much.
Garth, thanks for the sound advice all the way through this which I’m sure has helped alot of people to keep things on an even keel and not loose too much of their hard earned or their minds.
The warning bell is never really rung at the top of a market bubble is it? Maybe a tinkle that few notice and most never hear.
#42 Prince Polo on 03.05.21 at 3:19 pm
If GTA is ever going to realize it’s potential of Monaco Norf, Photo-op Minister (PM) Socks is going to have to bring 75-year amortizations to the table.
Step right up, folks! Your $200K annual household salary plus commitment to child offspring and offspring’s offspring, qualifies you for $10M mortgage! Oh please wake me up once the music stops.
————————————
Play around with an online mortgage calculator a bit. Even a 75 year amortization only gets you so far, even at 0% interest. So my mortgage calculator won’t do 75 years, but 10M, 45 years, and 1% gets you $23,000 a month in payments.
So it turns out that there is a limit to what they can do with rates and amortizations before the principle repayments take over. We are probably about there now.
Weekly/daily tabulations of portfolio are a really, really bad idea. Focus on when in your life you need the assets. It’s not a game. – Garth
——-
I am working towards ‘High Score!”
1 TurnerNation on 03.05.21 at 1:44 pm
Great Article:
https://palladiummag.com/2019/09/19/how-not-to-build-a-country-canadas-late-soviet-pessimism/
RE: #23 Ponzius Pilatus on 03.05.21 at 2:39 pm
#17 printing press imitator
brrrrrr…. .
can you hear the printing presses??
brrrrrr…..
non stop…
brrrrrr….
—————-
get your hearing tested.
The printing presses go:
ka-ching
ka-ching
=======================================
More like the steady whir of the fans in the banks’ server rooms as new money is created in memory and then flushed to disk.
rise of interest rate + BIG surprise property taxes, 50% higher (7k now will be 12k+ yr).
#10 The West on 03.05.21 at 2:12 pm
There have been those “prophets” that kick around on these pathetic boards now and again.
Here’s the long and the short – if you don’t have access to a printing press, your quality of life is about to decline….ramble on all you boomers about your portfolios and how you’ve made “millions”.
The delusions are over.
I’m GenX and made millions, does your comment apply to me?
Actually anyone who’s averaged over $100k a year for two decades has made millions.
Final thought, I don’t remember too many boomers on this blog bragging about making millions… your millennial doctor will be in this wealth group soon (if not already) so better wish them well!
#73 Ballingsford on 03.05.21 at 5:08 pm
I should elaborate to my last comment. I was referring to a life lesson. If you dont het the 100 back, you dont lend that person again.
Hubby should have learned a 25k lesson. Dont do it again. That lesson is water under the bridge now.
—————————————
Never lend a friend or relative money if you value the relationship more than the money. You won’t be getting one or the other back.
If you must help, give, no strings attached. If you can’t afford to give, you can’t afford to help.
#83 Faron on 03.05.21 at 5:42 pm
74 Sail Away on 03.05.21 at 5:11 pm
#61 Stone on 03.05.21 at 4:17 pm
Markets are now closed. B&D is at 6.59% YTD. Can we get over 7% next week? Let’s hope so.
———-
What are our takeaways??
———-
The takeaway is that this is a site dedicated to B+D, so talk of sub annual returns is off topic. Second takeaway is that if you post numbers on the up, you better be able to laugh at yourself and post your losses on the way down.
———-
Naturally. As always… no revisionist history here… it’s just no fun to post losses, so why would anyone voluntarily do that?
#86 Howard on 03.05.21 at 5:48 pm
#39 Faron on 03.05.21 at 3:07 pm
Your response employed the exact same modus operandi as every other post you’ve ever made.
—————————————-
Howard, once you get to know the online character that is Faron, he’s actually kind of fun. Try and imagine John Cleese as a French guard at the top of the castle in Monty Python’s “The Quest for the Holy Grail”.
French Soldier: I don’t want to talk to you no more, you empty-headed animal food trough wiper! I fart in your general direction! Your mother was a hamster and your father smelt of elderberries!
Sir Galahad: Is there someone else up there we can talk to?
French Soldier: No, now go away or I shall taunt you a second time!
$20 trillions no biggie
never gets paid off
colleague wondered if Spain has paid off Columbus’s debts from 1492?
Hmm….
#34 Sail Away on 03.05.21 at 2:58 pm
Your best post yet! Informative, supportive with just a hint of smugness.
Or maybe there’s nothing overly self-satisfied, and I’m just reading too much into it based on past posts – it’s your inner benefactor shining through.
#87 Comments! on 03.05.21 at 5:50 pm
#50 Faron on 03.05.21 at 3:44 pm
#43 Billy Buoy on 03.05.21 at 3:20 pm
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Take a breather dude. The US has been facing nearly 1 million new jobless claims PER WEEK. Can you read?
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Crisis is about a year old. Lets say a million new jobless a week using your math (a low number when the first weeks multimillions were filing) That’s at least 52million new jobless over the year in the US using your calc based on weekly new jobless. Now go look up the real number.
I’ll wait…
A lot less, right? 10 million in the hole. Not good, but better than the 20+mil at the worst of it. That’s because weekly newly unemployed and monthly net jobs are different numbers. We have monthly gains but high weekly new filing. That implies lots of churn. The kind of thing you expect in an open close open close pandemic. But maybe you calculate your bank balance by adding up all the withdrawals and leaving it there? YDY!
You are choking on your foot. This is like that Sail Away/Dolce Vida thing on compounding.
#102 Lead Paint on 03.05.21 at 7:18 pm
“Actually anyone who’s averaged over $100k a year for two decades has made millions.”
Minus taxes and cost of living, so probably just squeaking by.
Billy Buoy, when they lose control like any other time in history from Germany to Venezuela, USSR, Zimbabwe, Cuba, Chile etc. etc. high to hyper inflation does not mean QE, yield control, MMT and any other voodoo economic policies and upside down monetary policies will stop reality.
Billy Buoy, they control it until they can and then let it all get destroyed. This is what liberals, NDP, green party, democrats, labour party, lefties, marxists, communists do today. Don’t think they can control everything. Sometimes they would rather let it all fall apart. An closed mind is a dangerous thing.
I lived in Kelowna for years. Its nice to be close to the beach…especially if you are a drug user or dealer.
“I believe that banking institutions are more dangerous to our liberties than standing armies,” If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”
“The issuing power of currency shall be taken from the banks and restored to the people, to whom it properly belongs.”
Some dude named Thomas Jefferson wrote that.
#86 Howard on 03.05.21 at 5:48 pm
#39 Faron on 03.05.21 at 3:07 pm
Your response employed the exact same modus operandi as every other post you’ve ever made.
You take an extreme position (“Central banks should rig the economy forever”)
—
That’s not my position. Go back and read. I’m simularguing with brrrr who wants them gone, I think that’s a terrible idea.
Again. If the banks didn’t step in with low rates and QE in March, we would be in a depression. Period. We are not in one now. Period. I’ll take the latter over the former while also realizing that fed actions are imperfect. It’s only with the latter that the economy has a platform fo change from. Burn it down isn’t an option. And who suffers the worst effects in a downturn? Riiiiight, not the 10% that’s for sure.
Is this a can kick down the road to later hell? Maybe.
Again, brrr’s original argument was for CB intervention to bring rates to 3 immediately which would not be wise. His was a dumb statement and now he’s just taunting because he has no rejoinder.
#94 Nonplused on 03.05.21 at 6:50 pm
#22 DON on 03.05.21 at 2:38 pm
“Hard to leave a spontaneous life if you are a responsible dog owner.”
Define “spontaneous” because I doubt it’s for me anyway.
We do most of our recreating in an RV and our dog seems to quite enjoy it. What’s not to like? 3 walks a day, hikes sometimes, new smells, leftover bbq.
******************
You are a responsible dog owner…you take your RV. Should have said young and spontaneous.
https://www.zerohedge.com/energy/myths-green-energy
This should set Faron into a conniption.
#61 Stone on 03.05.21 at 4:17 pm
#28 Stone on 03.05.21 at 2:47 pm
#8 Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now….he was heavily invested in growth stocks…no balanced and diversified strategy here….and his ask was “support me” so I kept silent this time….actually, no, I did give him a couple nudges here and there with the hope he’ll wakeup and not fall for all the noise…but heck, he thought he’s an expert based on text messages with friends to “expertly” choose the investments….they are all collectively suffering now. I am so mad but have to hide it (because I am supporting him ), now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified” strategy….25k later. Great! I want to say “I told you so” but that won’t help….we’ve been sipping bailey’s for breakfast every day of this week.
Tell him to call me. I’ll snicker. That should help. – Garth
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Good story. I’ve witnessed it many times. I find Garth’s retort even better.
I know. I know. It’s not after 4 pm yet but so far today, my B&D is 6.32% YTD. Balanced and diversified is definitely the way to go.
———
Markets are now closed. B&D is at 6.59% YTD. Can we get over 7% next week? Let’s hope so.
Weekly/daily tabulations of portfolio are a really, really bad idea. Focus on when in your life you need the assets. It’s not a game. – Garth
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But it is fun…everyone needs a hobby. Nothing wrong with that.
#70 JSS on 03.05.21 at 4:57 pm
has anybody seen the price of a kettle ball lately?
I went to walmart, and then canadian tire beside walmart. Cheapest price for 20 lb kettle ball is $50
//////////////////////////////
Don’t worry about the price of a kettle ball JSS.
Pro tip.
Grab an old kettle.
Fill it to the brim with water.
Start doing bicep curls.
Cost?
Nothing.
Get the old school kettle from the 70’s with the heavy duty cord that would leave weird marks on your backside if your old man belted you with it, that every kid in gym class would observe and try to work out what was going on…
M46BC
#84 Concerned Citizen
Good words!…maybe the central bankers will be held accountable by the next generation whom they are slowly boiling like lobsters in a pot.
Alas….but not likely..what is likely is they have built a nice cushy comfortable lifeboat for their family, kids and grandkids.
The great divide between the many without financial security and the few (becoming fewer) with it, continues to grow wider and wider.
2 Mattl on 03.05.21 at 5:40
Lol.
I like Stone but that was a bit of a truth bomb.
Real estate owners are notorious for that logic.
“Hey look how smart I am!! My house went up in value!
…sure dude, endless QE, endless stimulus, zero interest rates for nearly a decade. Of course your house went up. Everyone’s did. Hilarious.
MF
SoggyShorts on 03.05.21 at 5:34 pm
#8 Hubbydoesntlisten on 03.05.21 at 2:08 pm
Garth, the wall street carnage is giving my husband ulcers now……. now he is selling at 15-20% loss , not buying the dip because he is scared….and finally considering the “balanced and diversified”
***********************
This almost scared the crap outta me. Despite my best intentions I look at my PF just about every day and was tensing up to find that a new “buying opportunity” had munched 20% of my retirement fund.
The daily change was +1.49% for me with the S&P up almost 1.8%
Where is the “wall street carnage”?
I’m nowhere near as diversified or balanced as others with my 80% equity-almost- all- S&P500 PF
WTH was hubby doing? All in on 2 or 3 stocks?
————
I shouldn’rlt call it wall street carnage…its more of a “high growth ETF/Tesla/Ark carnage for our investments….way too much exposure in Tech and clean energy. Zero…zero in S&P 500 and the likes. Thankfully we also have some mutual funds…high fees but didn’t lose the 25k that self investing led to!!!
Eric Weinstein right now has his finger on the pulse of everything important. He’s on the money about our reality. Interview with Ryan Roxie this week is incredible.
Modern day genius thinker. We need new ideas. Human capital that gets rewarded. Can’t be about who can borrow the most.
Hum..a dog at 6k.
I saw one last week, only 3k
Probably a dog with 3 legs.
A complete dog w 4 legs: 6k!
The conspiracy of Obama trying to take away our guns was a hoax.
However, Freeland raiding our bank accounts is not a hoax. Be prepared for dyed-hair rainbow sky economics.
“in the distant burbs and hick cities where they can breed, age and domesticate.”
The thought of hicks breeding……….. something seems wrong in that statement.
I cringe at the amount of “pets” that will be tossed to shelters ( or worse).
When the cute little puppies grow up to be eating and pooping machines that require attention, vet bills and expensive boarding fees when “Ken and Karen” go on a much needed vacation..
Our “toss away” culture makes the inevitable avalanche of unwanted pets a national disgrace.
What does the future hold? From what I gather from the ‘wrenchinthegears’ blog, and from what I see. One main goal of these new world order CV rules is in getting us used to entering our information…into the A.I.
One of the weekend bloggers once mention the BOTZ.US ETF
Examples new ‘mandatory’ data entries you must make:
– Constructions, banks workers etc must enter, daily health status into apps in order to work.
– As of today people in England wishing to fly outside must submit a govt form for approval.
– We have the same for the Least Coast here.
– Scanning QR codes into order to sit down and enjoy a meal. And/or a contact tracing form.
– The Bluetooth wearable shock/tracking collars now in use by the Ontario government, Air Canada, the 60,000 person strong Liuna Labour union; the drivers for the new Facedrive food delivery app are connected to real time temperature monitoring app.
– The instant the global lockdown began my city was torn up at every other downtown intersection with Rogers, Bell, their contractors laying 5-g fibre. Guess this was ‘essential’ work. What timing. It was literally days after the city was shut down, this began.
What do you think Tesla Skynet is for.
– I heard about this years ago, they are in your city. Forget wearing a disguise and leaving your Smart phone at home, Gait analysis (your walking style movements) is old news.
https://www.zerohedge.com/technology/big-brother-spying-you-thousands-ways-and-all-info-now-goes-centralized-fusion-systems
— Optional inputs, but not really if you must try and run your old business but online. Think of the massive amounts of data the A.I. is recording from us now, as if the ‘Smart’ Phones/TVs/Cameras/Cars/Gaming Consoles etc blanketing the Earth was not enough.
– Instagram, Tiktoc movies.
– Zoom and Teams calls. A trove of new data.
– Online schooling where every movement, click and answer of students goes into the behavior A.I. system.
Put it this way, in 2020 people spent more time online and inputting their personal info into the internet/A.I., than every before. We are forging our own shackles in this open air prison. ‘Anything you say can and will be used against you’. There’s no privacy online nor when talking loudly 6 feet apart. More fodder for the Smart phones. Our new Snitches.
…
Never forget that WE are the Internet of Things. You think this is all ‘for your health’ . Soon to be placed into the (cell) Block Chain, along with our DMA. Who keeps the DNA from all the CV tests…
Data Is The New Oil — And That’s A Good Thing – Forbes http://www.forbes.com › forbestechcouncil › 2019/11/15 › d…
Nov. 15, 2019 — Back in 2017, The Economist published a story titled, “The world’s most valuable resource is no longer oil, but data.” Since its publication, the …
Stone, dolce vita:
what do you have in your b&d portfolio?
i have:
vfv (us equities) 22%
vcn (canadian equities) 22%
vdu (developed equities) 22%
vee (developing world equities) 12%
VAB (bonds) 18%
cash 5%
any comments / suggestions? I have not incorporated preferred shares, and would that be a good idea?
cut down on VAb and own some preferred shares?
thanks in advance
#39 Faron
Holy Faron, you sure have been working hard tonight!
By the way, all great posts. I’m sure Garth appreciates having another voice of reason floating about to set the records straight in the comments section.
Have a good one and keep munching on that nutritious sourdough bread!
#112 Comments! on 03.05.21 at 8:01 pm
“private banks”
Adding to Garth’s list…
g.) If you think you may risk a trip overseas this year then get your foreign currency now. That Canadian dollar is going down guaranteed. Sooner or later that global ‘Powers That Be’ are going to notice what has happened in Canada. My poor CPP.
Do you want a free dog? About 2 hours drive north from our village in Italy is an Italian dog shelter. Stray dogs are a big problem in Italy. Italians buy them as puppies and when the dogs get too big for their small flats, where 90% of the population lives, the dogs just get dumped in the country or a town that is not theirs! Italian seem to think that companion dogs can care for themselves outside.
Well a Swedish friend of ours who lives in our Italian village drove the 2 hours there to get a free dog and came back with 3! She said that the shelter had 800 dogs and she didn’t have a choice, the dogs were just pressed on her, the shelter staff filled up her car for her. These will be the lucky dogs, my heart goes out to the 797 left behind.
#114 DON on 03.05.21 at 8:07 pm
#94 Nonplused on 03.05.21 at 6:50 pm
#22 DON on 03.05.21 at 2:38 pm
“Hard to leave a spontaneous life if you are a responsible dog owner.”
Define “spontaneous” because I doubt it’s for me anyway.
We do most of our recreating in an RV and our dog seems to quite enjoy it. What’s not to like? 3 walks a day, hikes sometimes, new smells, leftover bbq.
******************
You are a responsible dog owner…you take your RV. Should have said young and spontaneous.
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If you have kids for whatever mistake you made but now you have to deal with them, a dog isn’t much extra. (I recommend for men a vasectomy for your 18th birthday. Hopefully nothing happened earlier, it is a real joy kill.) Heck the dog entertains the kid and provides you time for a cigar and a scotch. And then the kid wants to come back and start the fire for smokies and smores. He’ll even chop the wood. And the dog just sits there hoping somebody couldn’t finish 2 smokies.
For those of us that are already tied down with kids and wives and RV’s, dogs don’t change much and add joy to an otherwise desperate life.
My son had a hedgehog for many years too. We took it camping too. Why not? RV. We won’t be doing that again though. Not nearly as fun as a dog it turns out.
Janet Yellen’s interview on Thursdays PBS News Hour:
Bottom line, right at the conclusion:
Deciphered/translated from her Wall Mart Greeter speak:
USA’s government debt as compared to GDP is wayyyy
less than the debt ratio of a Canadian house “owner”, so, we have a long way to go before Federal debt is a problem to be concerned about!!!!
( I watched it this evening and have been wide awake since midnight. )
You go Gurrllll !
#10 Only a few boomers here feel the need to obnoxiously brag about their gains or net worth , others don’t need too.
Firstly thank you for this blog, refreshing as beer.
As an expat returning back to my NS home from abroad this summer (after 15 years), just been watching from my kitchen window as this whole housing nonsense builds up to ever higher levels of silliness. Dont get me wrong, there are lovely places to live here in NS, but where do so many suckers in NS RE come from….past few months especially?! Just the other day a house in Halifax burbs sold 250,000 over solid listing price.
Appreciate your blog Garth as a former lurker.
The wife’s bugging me to shop around for new windows, and to get masonry work done on this 32 year old house.
I figure that we’re outta here soon anyway, so why bother. Slap some paint on the old rotting window frames, and glue some crumbling brick faces back on where necessary.
You think a greaterfool will know or care?
I don’t.
I’ll wait until the next big boom to sell.
How long ya figure that’s gonna take?
After all, houses only go up!
Amirite?
Anyone?
#130 Faron on 03.06.21 at 1:17 am
#112 Comments! on 03.05.21 at 8:01 pm
“private banks”
———————————–
What’s your point? The Federal Reserve banks all privately owned and cater to every whim of privately owned banks.
You really need to think and research before you comment.
“What’s all this called? Ah yes, inflation.”
Suggested edit; Ah yes, stupidity.
#136 Dharma Bum on 03.06.21 at 10:36 am
The wife’s bugging me to shop around for new windows, and to get masonry work done on this 32 year old house.
I figure that we’re outta here soon anyway, so why bother. Slap some paint on the old rotting window frames, and glue some crumbling brick faces back on where necessary.
You think a greaterfool will know or care?
I don’t.
————–
Hey, is your real name Bill? I’m pretty sure you sold us our current house in 2007.
The answer is yes. And I will eventually get it back out of his hide.
Why is the real estate industry exempt from Toronto’s draconian lockdown that’s driving other businesses into the ground?
Real estate agents get to bring themselves and their clients in and out of condo buildings every day with no screening. Why shouldn’t the real estate industry be shut down in Toronto like restaurants are?
By the way how much of the craziness can be placed at the feet of buyers willing to participate in a market that is divorced from reality. Am I an idiot, or if buyers stopped buying and overbidding wouldn’t that cool down the market in a hurry? When you make a choice you choose for everyone, you are endorsing it as how you believe everyone should behave.