Froth

We talk much about the real estate bubble. It’s real. And dangerous. Fueled by emotional buyers, greed and fear.

What about a financial bubble? Is that real? Also a looming risk?

Lately equity markets have been at record levels. The Dow. The S&P. The tech-heavy Nasdaq, even Bay Street. New York markets are up more than 40% year/year. The TSX has gained 35%. The recovery from the pandemic has been exactly twice as fast as the trip back from the 2008-9 credit crisis, despite being deeper, wider and a lot slimier.

Balanced and diversified portfolios are stable, growing and have gained a year’s worth of ground in a couple of months. Bond yields surged, then stabilized. P/E ratios (the relationship between a company’s stock price and its earnings) are at an historically high level, leading some worried people to believe things are bubbly and wobbly. They also point to the incredible amount of stimulus that has been thrown at markets and economies since Covid arrived – $20 trillion in fiscal spending by governments around the world, plus crashed interest rates and massive bond-buying by central banks.

This, they say, makes financial assets just as imperiled and gossamer as a $1.8 million suburban particleboard palace.

But wait. P/Es are high for a reason. Mr. Market is expecting big things. In fact, it sees the Roaring Twenties.

Is this rational? Aren’t we in the middle of a Third Wave with lockdowns, quarantines and desperate health care workers? Why would investors and markets be so blindly optimistic? And if financial assets are going parabolic, why can’t house prices do the same?

First, some of the reasons Mr. M is so aroused these days.

Look at the latest jobs numbers. In the States almost a million new hires (916,000) in March – the most since August. It was 50% higher than anyone expected. The jobless rate is back down to the 6% range. One year ago – April of 2020 – that number stood at 14.8%. This is an unprecedented labour market recovery. Ditto in Canada. We added 303,100 jobs last month, atop the 259,000 regained positions in February. It means of the three million jobs Covid incinerated, all but 296,000 have been recovered – even with the travel, tourism and hospitality sectors still  hobbled. Our unemployment rate has dropped from 13% to 7.5%.

Next, vaccines. They have changed, or will change, everything. The US is jabbing up to four million people a day in an inoculation campaign that has rocketed ahead with the Biden administration. In Canada we 21% of  beavers are now dosed (at least with the first jab) and our supply of vax is ramping up fast. Herd immunity in both countries should be achieved by late summer. Reopening fully will, the market believes, be upon us by autumn.

Next, profits. Expectations for corporate performance in the coming months are blazing. The latest guess is a jump for the first quarter of this year of about 18%, and for Q2 of between 45% and 55%. This comes on the back of surging consumer confidence, a record heap of cash in personal bank accounts and central bankers that will start to ease up on stimulus but promise to keep a lid on rates.

Meanwhile inflation is a threat, but remains low. April is a traditionally strong month for financial assets. The pace of vaccinations will explode higher over the next eight weeks. In the US Biden is spending huge gobs of money – $4.5 trillion more between the Covid bill and the infrastructure program – while in Ottawa we’ll learn next Monday how much more spending the T2 gang has planned. Expect a lot.

The Vix (that measure of fear and market volatility) has cratered over the last year, now at the lowest point since February of 2020 – when you never thought about virus. WFH will start to dissipate by the end of 2021, and the reopening trade in urban areas will be a major economic wave next year. Currently almost all of the 11 subsectors of the S&P 500 are flashing green. The latest factory data is awesome. Business activity, new orders and wholesale prices are all increasing. It’s the Biden Supercycle. The Roaring Twenties.

In short, invest. Stay invested. Be balanced and diversified. Try not to be a cowboy. Stop reading doomer websites. Wash your hands, keep the mask on, get a shot, focus on your dog and look forward to what’s coming.

Now, what about real estate?

Yup, the gasbag isn’t done yet. Cheap rates, WFH, nesting, suburban flight, tawdry realtor tricks and now FOMO & speculation have created a sad outcome.

But, wait. Economic reopening will eventually bring higher rates, which always impact housing. Absurd prices will narrow the universe of potential buyers. The enhanced stress test will reduce the amounts newbies can borrow. The winding-down of WFH (it won’t disappear, but seriously diminish) will hit suburban and rural values. The recent rapid rise in household debt has used up much future demand. And as markets stabilize, then correct, FOMO will be so gone.

It’s always good to remember what a bubble is. It’s created by a surge in prices driven by exuberant market behavior. In a bubble, assets sell for a huge premium over intrinsic value. And therefore, it never lasts.

We have one bubble now. It’s not stocks.

About the picture: “Blog dog Robin here, to introduce my little gal Lola, from Mexico.  Approximately 6 yrs old and possibly a Jack Russell/Beagle X,  Lola thinks she won the dog lottery when she met me and immigrated to Canada from the streets of Cabo 2 years ago now. Feel free to use her photo in your wonderful blog.  Thanks for all the advice and humour.  I never miss a day.”

166 comments ↓

#1 Doug t on 04.12.21 at 12:49 pm

COME ON BUBBLE JUST BURST ALREADY – 30% in Victoria please and thank you

#2 Jerry on 04.12.21 at 12:53 pm

It’s just a matter of time before this thing blows. The question is how long people wait till it does blow.

#3 household built on 04.12.21 at 12:54 pm

Infrastructure spending,,, seems good for RE prices,,, further gains likely…

#4 Honest Realtor on 04.12.21 at 12:56 pm

Real estate has been the backbone of economic hope in Canada over the last difficult year, and will be so for generations ahead.

Thanks to all the Realtors out there who have made such a difference during these challenging times.

#5 Doug t on 04.12.21 at 12:59 pm

#4 honest (?) realtor

hahahahahahahahahaha stop your killin me LOL

#6 Fortune500 on 04.12.21 at 1:07 pm

Anyone following the Twitter feed by John Pasalis (always pretty even keeled and data based) going after Adam Vaughn MP, Secretary for Housing, after the train wreck of an interview on Agenda?

Vaughn basically admitting that the federal governments policy is to make our real estate market attractive to foreign investors at the expense of Canadian buyers. Also saying they won’t allow any correction to occur.

Wild stuff: https://twitter.com/TOAdamVaughan/status/1381317928574976002

#7 alexinvestor on 04.12.21 at 1:10 pm

A crash in the Canadian housing market will crash the Canadian economy. The housing bubble right now is expanding Canadian money supply, so guess what happens when the money supply shrinks.

#8 TurnerNation on 04.12.21 at 1:10 pm

-Life behind a Virtual Berlin Wall on the Least Coast.

“N.B. Loses 1,000 Full-Time Jobs As Unemployment Rate Rises… unemployment rate up 8.9 percent to 9.2 percent in March.

Solution? More communism. Look they WANT us poor and dependant upon the State. As per Agenda 2030.

“On Friday, Federal Minister Ahmed Hussen announced that the Trudeau and Higgs governments made a combined $98.3-million investment to create the New Brunswick Housing Benefit.
The benefit will support nearly 6,700 low-income families over the next seven years, with payments that range from $300 to $475 per month for a maximum of three years.”

——-
Montreal: business being destroyed. This is WW3.
https://twitter.com/EtienneFG/status/1381416875540819969
Large curfew protests there: https://twitter.com/search?q=montreal%20protest&src=typeahead_click

….
C’mon this is straight up communism. WW3, we lost it. Fell in one week, March 2020.

https://thepostmillennial.com/heres-what-doug-ford-considers-non-essential-in-ontarios-new-restrictive-lockdown
“Lightbulbs, for example, have been deemed “non-essential.” So have other electrical supplies, such as extension cables and the power bars people likely depend on as they work from home.”

…….
Life in Kanada in your new UN Smart City:
– Many police and bylaw decend on a group of families playing in a playground. Durham region
https://twitter.com/veroniquepoir12/status/1381252636767219715?
-Meanwhile in Toronto Saturday night there were three seperate shootings.

….
The tax slaves are revolting.

.Chicago Govenor Lightfoot Booed At White Sox OpenerGood news (youtu.be)

.Los Angeles Mayor Eric Garcetti Loudly Booed at Dodgers Opening Day (twitter.com)

#9 Bram on 04.12.21 at 1:10 pm

We have a great agent keeping an eye out for us around the GTA. As soon as the meltdown starts will be time to strike.

“Eventually, people will stop paying $950k for a $700k house.”

#10 Jenna on 04.12.21 at 1:15 pm

Real estate gains have been far more significant and reliable then stocks without the roller coaster drops.

Can’t beat the added plus of tax free capital gains of real estate. Period.

#11 Berkshire Gamestop on 04.12.21 at 1:28 pm

“But, wait. Economic reopening will eventually bring higher rates, which always impact housing.”

………………………………………………….

Not if the BoC, with the green light from the federal Liberals, continue to buy bonds. The B0C represents 40% of the Bond market.

Too late. Already happening. Bond-buying will scale back. – Garth

#12 Dolce Vita on 04.12.21 at 1:33 pm

Nice to read someone like you (and me on Twitter) celebrating the March Labour Force Survey numbers which were outstanding.

Online MSM barely gave it coverage.

Expecting doom due to current lockdowns I suppose.

Rather, celebrate the here now and not dwell on the future.

The latter is always uncertain.

Again, a primaryful* Blog today My Liege.

*So Realtors can understand my gist.

——————-

Cdn MSM keeps blaring “dire straits” about variants, new cases. Well, not when it comes to vax’ng on weekends:

https://i.imgur.com/CPy0acL.png

“Dire” only on weekdays.

PS:

And, add “don’t screen” to “Don’t test, don’t count BC.”

I mean WTF, UK has been doing variant screening since LATE LAST YEAR. What would they know?

News travels slow to Canada esp. to Western Canada.

Lost on dullard Provinces like BC and AB, ON sees the light as does La Belle Province – nothing like giving a FALSE SENSE of SECURITY to a populace there AB and BC?

Canada
https://i.imgur.com/ZT6Ka5p.png

BC*
https://i.imgur.com/uoSErl1.png

AB
https://i.imgur.com/w7OpfKt.png

ON
https://i.imgur.com/tdcQTT0.png

La Belle Province
https://i.imgur.com/79dUI8K.png

…but you know, wouldn’t want to bust the BC Covid Norse Gods of Valhalla and AB No More Church of Bigotry Fences down now would we?

Kudos to ON and La Belle Province for telling the truth.

As for the rest, DULLARDS.

—————————-

*For the “don’t test” part go here (at least AB got that part correct):

https://health-infobase.canada.ca/covid-19/?stat=rate&measure=tests#a2

Oh ya BC, forgot the in “self-isolation” ’cause you know, they’re just fine:

11,989 people across B.C. who are in self-isolation because of COVID-19 exposure

https://www.cbc.ca/news/canada/british-columbia/covid-19-update-dec-1-1.5976074

Now go here BC and try and find out “how many”, where “Who, How Long, How To” answered easily ‘cept for “How Many”:

http://www.bccdc.ca/health-info/diseases-conditions/covid-19/self-isolation

-The Truth shall set you free, or lock you down.

#13 Ballingsford on 04.12.21 at 1:35 pm

Real Estate Bubble has to end soon, once the supply of people out there who could afford inflated prices runs out.

Maybe a week or two. sarc/end

#14 Ken on 04.12.21 at 1:37 pm

The best time to invest was long ago…today would be good, also.

#15 household built on 04.12.21 at 1:43 pm

15 years ago I bought a house and my mortgage was $1,200 a month,,, where my brother was paying $1,200 a month to rent someone else’s house… Today I’m still paying $1,200 a month while my brother’s rent is $2,200 a month… My mortgage is like your rent except my cost goes down where your rent always goes up… And I’m building that sweetest of things,,, equity…

#16 Concerned Citizen on 04.12.21 at 1:45 pm

I disagree – stocks are definitely in an epic bubble.

Headwinds for stocks:

– highest valuations in the last 100 years (not just the cyclical metrics like P/E; P/S, P/B, you name it, all at or near all-time highs).

– high balance sheet leverage (was high pre-COVID, even higher now)

– unsustainably high fiscal deficits, which in regular times would imply higher taxes going forward (although today the new hotness is to print infinite amounts of new money)

– cyclically low interest rates, which in regular times would imply higher interest rates/lower NPV of future cash flows going forward, and hence lower stock prices (although today the “emergency” low interest rates are likely with us forever – see Japan).

People are buying stocks not because of fundamentals like book value, earnings, cash flows, but because of TINA (there is no alternative). If that isn’t a sign of a bubble, I don’t know what is.

The one thing stocks have going for them is perceived central bank life support – the idea that the central banks will never let them fall. Also known as moral hazard on steroids. The central banks are ushering in a new gilded age as we speak – at warp speed.

#17 Mattl on 04.12.21 at 1:50 pm

And how will say the SP500, with 30% tech exposure, react to rising rates?

This is why I think rates are going to stay low for much longer. RE and markets will take a dump if/when they start to normalize rates.

#18 BIG B on 04.12.21 at 1:51 pm

Maybe these housing prices are cheap right now. If the budget passes on Monday and we see pharmacare, free daycare, a universal basic income? Who likes having disposable income anyways once taxes get raised for all the freebies. Start the money printing press and let the hyperinflation begin. The dollars will be flowing.

#19 Ballingsford on 04.12.21 at 1:55 pm

I’ve been contributing to my B&D portfolio regularly in the last while. I know we shouldnt try to time the markets, but should I sit on some cash for awhile and wait for it it pop and then invest? The numbers aren’t sustainable.

#20 Dogman01 on 04.12.21 at 1:56 pm

So many things so wrong in Canada, but this pretty much sums it up.

City of Calgary employee charged nearly $95K in overtime
https://www.cbc.ca/news/canada/calgary/city-councillor-overtime-bill-ray-jones-calgary-council-1.5983061

A big “screw you taxpayer!”.

The waste in government with the COVID excuse must be incomprehensible; an ongoing looting expedition of the corpse that is out post national state.

#21 Classical Liberal Millennial on 04.12.21 at 1:58 pm

TurnerNation sure seems to be doing his best to make this a doomer website.

Give it a rest, dude.

#22 Dr V on 04.12.21 at 1:59 pm

10 Jenna

“Can’t beat the added plus of tax free capital gains of real estate. Period.”

Jenna – do you own a house (as a principal residence)
and have any investments?

Full disclosure – I own both, and have made gains on both. Many posters here have.

How would you realize the gain on your PR? You’d have
to sell it, and then either buy back in, or rent. If the former, there is no net gain. If the latter, then your stance is contradictory. Regardless, difficult to sell a
small portion of it.

My investments however, can be sold in small pieces, and still at a significant tax advantage. I have already sold some of those acquired in the downturn last year.

#23 I'm not a doc on 04.12.21 at 1:59 pm

Where did all these new hires get sucked up at? Amazon… None the less I hope you’re right Garth. BTW my cottage goes up on the market this week. Will buy back in when I move up North on a full time basis. Off the lake this time but with lots of land for dogs to roam and a big workshop.

#24 Prince Polo on 04.12.21 at 2:04 pm

https://allisonschrager.substack.com/p/known-unknowns-63a

Innovation is hard, and it’s risky by nature. And it seems that we’ve adopted a mindset that if the government is the primary innovator, then the risk goes away. But that’s not true. The risk just goes somewhere else, and the difference is that the people making the risky choices don’t bear the cost. And that’s important to note. Facing downside risk from an investment gone wrong is both how we make good choices and also how innovation thrives. Accurate prices are what allow innovators to test the market and see what works, and then move quickly in response.

#25 Crazy in MTL on 04.12.21 at 2:13 pm

In a Montreal newspaper this morning: 2-bedroom shoebox in what used to be a very working class neighbourhood: 1.2 mil. Oh, by the way, the bedrooms are in the basement. Municipal evaluation:400k in 2021. What i would love to know: who is actually buying this?https://www.realtor.ca/real-estate/23036008/7264-rue-boyer-montr%C3%A9al-villeraysaint-michelparc-extension-villeray

#26 Millennial 1%er on 04.12.21 at 2:13 pm

Its really easy to make money. All you have to do is ask for tech company equity and watch you rocket into the biggest tax bracket.

#27 Grandv!ew on 04.12.21 at 2:14 pm

#6 Fortune500 on 04.12.21 at 1:07 pm

Anyone following the Twitter feed by John Pasalis (always pretty even keeled and data based) going after Adam Vaughn MP, Secretary for Housing, after the train wreck of an interview on Agenda?

Vaughn basically admitting that the federal governments policy is to make our real estate market attractive to foreign investors at the expense of Canadian buyers. Also saying they won’t allow any correction to occur.

Wild stuff: https://twitter.com/TOAdamVaughan/status/1381317928574976002

There is a number of people following disastrous statement by Canada’s Housing Minister. Calling for his resignation.

https://twitter.com/StephenPunwasi/status/1381433374074626049

Naturally it would be foolish to expect any meaningful MSM coverage.

https://twitter.com/StephenPunwasi/status/1381393210992422914

#28 leebow on 04.12.21 at 2:22 pm

Did you ever ponder why God presented himself as a burning bush to Moses? Would it not be enough to do just a speaking bush appearance?

May be it’s because he tried a speaking/no burning bush before and it didn’t work out. People ignored him thinking “meh, a speaking bush, whatever” and just moved on.

But when it burns – people stop by to see what’s happening. That’s different. Moral of the story – you can’t get people’s attention with a good word. To get attention you need burning and crashing things, or some other sensational crap.

Neighbours are unloading what looks like a million dollars worth of 2x4s. Either finishing the basement or hoping to resell the 2x4s for profit in a year. Tough time to be a professional clown.

#29 SoggyShorts on 04.12.21 at 2:22 pm

#19 Ballingsford on 04.12.21 at 1:55 pm
I’ve been contributing to my B&D portfolio regularly in the last while. I know we shouldnt try to time the markets, but should I sit on some cash for awhile and wait for it it pop and then invest? The numbers aren’t sustainable.
*******************
Are you investing for just a few years?
If your retirement horizon is 10+ years out, then historically it’s basically always better to go all in.

It’s been posted here a few times, and I’m sure you can find it with some googling, but roughly speaking:
A portfolio that missed both the 10 best days on the market and the 10 worst over 10 years (almost?)always has inferior returns compared to the portfolio that hit them all.

It’s super hard to actually accept if it’s a large lump, but you have to be dispassionate about it.
Your post says

1. I know we aren’t supposed to try to time the market
2. Should I stay in cash and try to time the market?

Why do something you “know” is wrong? If you do the “right” thing you remove the guilt of having possibly made the wrong decision.
If the outcome can’t be guaranteed then the emotionally sound choice is the one without emotion.

Earlier this year my PF went out of balance due to returns (80/20 became 85/15) and that’s my rule for when to rebalance. I did agonize over whether I should just let the bonds fade and keep riding that equity train.
Faron and SailAway both reminded me that sticking to my decision that was made for a good reason is the logical emotionless move and even though equities have flourished while bonds lagged, I feel no stress over it. I did the right thing and it’s easy to be comfortable with the decision, no second-guessing.

#30 Linda on 04.12.21 at 2:23 pm

Lola definitely won the lottery! She looks very happy.

Our B&D portfolios are definitely showing positive results. So much so that it seems too good to be true. That may be why folks are feeling antsy about a possible financial bubble. As for housing prices coming down, not sure what it will take for that to occur. If the post Covid era is another ‘Roaring 20’s’ seems possible these crazy prices are going to stick around for quite some time to come.

#31 tkid on 04.12.21 at 2:25 pm

Turnernation, you can order lightbulbs at Walmart.com and they will bring ’em out to your car.

Garth, there is an article out that the South African variant can evade the Pfizer jab: https://m.jpost.com/health-science/israeli-study-pfizer-covid-vaccine-less-effective-against-sa-variant-664762

#32 Math is confusing on 04.12.21 at 2:26 pm

How do 800,000 new jobless claims each and every week for 14 months with millions of small businesses that comprise 72% of the labour market gone forever, add up to 6% unemployment?

https://www.google.com/amp/s/www.cnbc.com/amp/2020/04/14/7point5-million-small-businesses-are-at-risk-of-closing-report-finds.html

#33 Sara on 04.12.21 at 2:28 pm

This $H!+ is getting real! A pox on all the anti-masker, anti-vaxer, and ‘COVID’s no biggie’ types out there.

Ontario hospitals may have to withhold care as COVID-19 fills ICUs: https://www.reuters.com/article/health-coronavirus-canada-hospitals/ontario-hospitals-may-have-to-withhold-care-as-covid-19-fills-icus-idUSL1N2M22CM

#34 Mattl on 04.12.21 at 2:39 pm

I’m in a similar boat, mortgage payment has never been close to comparable rent. Houses that will accept 2 dogs and are in good neighborhoods rent for the equivalent of cost to carry 1MM mortgage, 4K a month. I should say, would rent, with the amount of inventory available (basically none), no one is taking two dogs.

#35 TurnerNation on 04.12.21 at 2:43 pm

If Yellow Tractor Guy has a YouTube channel it probably would be like ‘Zip Ties and Bias Plies’s’ in Alberta.
(If you like 1puglife) That guy is off the charts.

Yay I found some good news. That this post I wrote almost *one year ago* still holds today! Nothing has changed.

#201 TurnerNation on 05.07.20 at 8:55 am
The new life in Kanada 2020:

– Wake up in your 350 square foot “Smart Condo”
– Eat your delivered breakfast ration and watch the State AM news update.
– You work at home for one of the banks, one of the few employers remaining.
– Your job there involves garnishing the wages of debtors. Initially you were apprehensive, one garnashee lives in your building even. But as time went on you become quite good at your job; achieving the most files handled per day. Your boss rewards you greatly.
– The corner of your PC screen has the live Covid numbers score. Win-Lost-Tied. You are pleased your Prefecture is keeping its numbers down.
– Evening is your delivered dinner; watching the State news PM update.
– Entertainment tonight is a virtual tour of a really cool place overseas your friend told you. So impressed were you that you made this place your new social media backdrop. It garnered many likes.
– You tend to your virtual anime dog – with its cheeky demeanor ; it has become so needy lately; you consider selling or trading it on the online market place for a more relaxing virtual pet.
– Next week you will vote online, for the Red party of course. They are the best choice as their actions resulted in very few new Covid cases this week

#36 Ballingsford on 04.12.21 at 2:45 pm

#29 Soggy Shorts.
*****
Thank you for that. I dont know what to say when they ask if I’m investing long or short.

I’m a boomer and will only touch the money if I need to. Use the in-between money in the meantime.

Hopefully spend it before I croak.

#37 George S on 04.12.21 at 2:51 pm

I wonder of the price of OSB could be used as an indicator of construction activity in the real estate sector. I was at the local building centre this morning and the price of a 4X8 sheet of 3/8″ OSB is now $70.00. Earlier in the spring it was $56.95. Last year it was $8.50.
OSB is a sheet of thin chips of wood mixed with resin pressed together into a cake. It is generally regarded as the cheapest building material on the planet and is used for the outside sheathing of everything built by normal wood frame construction.
Right now the price is similar to marine or kitchen cabinet plywood.

#38 Billy Buoy on 04.12.21 at 2:51 pm

As long as interest rates are near ZERO, CB keep pumping TRILLIONS and the FED says “there is no inflation” cough the unique kind that they only measure.

THERE WILL BE NO BURSTING OF BUBBLES.

Why? What else does ANY COUNTRY have for GROWTH?

They have to keep the masses, fat and happy.

As simple as that as the alternative is pitchforks and rope. The 1% enjoy living and attempting to GET IT ALL and won’t stop til you have NOTHING.

Keep buying EVERYTHING. There is NO ALTERNATIVE.

Please enlighten me if you see it differently. Thank you.

#39 Quintilian on 04.12.21 at 2:53 pm

Just wondering how useful it might be at reducing costs, for someone to put online a website which private home sellers could list their homes without charge?

Maintaining the website would be strictly on a volunteer basis. It might help buyers, and more importantly it might give the busy realtors a bit of a brake, so they could rest after this frantic spring market.

#40 Billy Buoy on 04.12.21 at 2:55 pm

LOL>..Green shoots…Keep PRINTING POWELL & CB’s.

Keep BUYING People..the CB’s have your back.

https://www.zerohedge.com/markets/march-deficit-blowout-us-spends-35x-more-it-brings-ytd-deficit-biggest-ever

#41 Sail Away on 04.12.21 at 2:56 pm

BC’s 2021 morel mushroom season approaches! Love this time of year- it kicks off the annual outdoor gleaning season. We always take the tipi and find a spot next to a trout lake near last year’s wildfires and set up for a week or two.

This year looks like the Castlegar/Nakusp area. Mid-May through the end of the month. Can’t wait.

Mushrooms and trout don’t care about housing, financials or timing.

#42 Zxcvbnm on 04.12.21 at 2:57 pm

Actual inflation is probably somewhere north of 7%. Which is why we have asset bubbles. Cash is trash.

#43 Dave on 04.12.21 at 3:03 pm

If there is a War in Ukraine…how will that impact markets?

Russia military is bad @ss

#44 Ballingsford on 04.12.21 at 3:05 pm

To add to my previous post as I get older, there are less things I want or need to spend my money on. Going thru the drive thru at Tim’s makes me happy and sitting in the car by myself, sipping a coffee, having a cig, and reading this blog, brings me great joy.

Can’t go anywhere with the pandemic on and unlikely to return to normal soon.

#45 Billy Buoy on 04.12.21 at 3:11 pm

Love your blog Mr. turner but for the love of GOD, PLEASE stop with DEFINITIVE statements.

Once re-opening rates WILL rise…how about “more than likely” instead….

Realistic, fair and leaves you an out for something you have at best an ‘educated” guess at knowing with the certainty of a WILL a 50-50 outcome.

You have been logical on the housing market for years BUT conditions constantly changed out of your control to make definitive statements……like interest rates.

Rates will rise. You have my word. – Garth

#46 espressobob on 04.12.21 at 3:17 pm

Investing is a bitch.

Throwing a pile of coin down on a bet and expecting upside is actually out of ones hands. Control is lost while the emotions percolate that can result in decisions one has which is usually the wrong one.

A contrarian understands this mechanism regardless of the fundamentals pointing in one direction or the other.

We fear upside by skimming profit when the opportunity presents itself while building a war chest in the event things swing south.

Not a perfect science.

Mr. Market delivers a right cross and a contry retaliates with an undercut.

Doing the opposite is a battle of strategy. Tough to say over time who wins?

#47 LTRFTW on 04.12.21 at 3:18 pm

“P/E ratios (the relationship between a company’s stock price and its earnings) are at an historically high level, leading some worried people to believe things are bubbly and wobbly.”

As our economy improves and more people return to work, earnings should increase. If earnings increase and the price of stocks stays the same, won’t the P/E ratios decrease ?

Just asking ?

Bingo. – Garth

#48 Where's My Money Going Greedeau? Not To Cheaper Housing! on 04.12.21 at 3:25 pm

Re: #117 Damifino on 04.11.21 at 5:50 pm
#64 Pfff

What rent control? Where?
————————-

Right here. In Lotus-land. Comrade Horgan has made it so. I’m a tenant and I actually think my landlord has been screwed over to a certain degree lately.

I haven’t had a rent increase since Nov, 2019. By current legislation, there won’t be another one until at least Jan, 2022. Even then, it will be limited to whatever the Provincial Government decides is fair. Maybe about 2%. Glad I’m not a landlord….
++++++++++++++++++++++++++++++

Not where I rent. I moved in 2 years ago and now find another tenant in a lower floor in the same 1 bedroom is paying 20+% more than I’m paying. More than 10% rent inflation per year.
How is that rent control?
How do you counter that when they can kick you out in 60 days on month to month leases, which land-people all want after the first year.

#49 mike from mtl on 04.12.21 at 3:29 pm

#25 Crazy in MTL on 04.12.21 at 2:13 pm

What i would love to know: who is actually buying this?
///////////////////////////////////////////////////////

Either an idiot or a flipper. The prior owner, original 1910 390k shoe-box sold to its current owner in 06-2019 and renovations completed sometime this year given the small 2021 tax assessment.

There used to be lots of those cute style homes around Villeray, Rosemont (east end) areas. Most have been torn down and replaced with flat-faced fugly triplexes.

It is not worth half of that asking price.

#50 Love_The_Cottage on 04.12.21 at 3:31 pm

#46 espressobob on 04.12.21 at 3:17 pm
Doing the opposite is a battle of strategy. Tough to say over time who wins?
______
Not tough at all. Study after study shows that a balanced and diversified portfolio of ETF’s will outperform 98% of the time, and the other 2% is luck and not repeatable.

#51 Don Guillermo on 04.12.21 at 3:33 pm

#41 Sail Away on 04.12.21 at 2:56 pm
BC’s 2021 morel mushroom season approaches! Love this time of year- it kicks off the annual outdoor gleaning season. We always take the tipi and find a spot next to a trout lake near last year’s wildfires and set up for a week or two.

This year looks like the Castlegar/Nakusp area. Mid-May through the end of the month. Can’t wait.

Mushrooms and trout don’t care about housing, financials or timing.
****************************************
My dad used to live for fishing and mushroom picking in that area. He would move on to huckleberries and hunting in the fall. He truly loved the Kootenays.

#52 Do we have all the facts on 04.12.21 at 3:51 pm

If we set all the cheerleading aside for a minute or two the simple fact is that real inflation exists. At some point in the near future interest rates will have to be increased and this increase will impact the value of many assets including equities.

There is no doubt that governments around the world realize the impact that quantitative easing and low interest rates have had on economic recovery. However it is important not to lose sight of the fact that average growth of Canadian GDP over the past few years is below 2.0% per annum. Surely the increased profits projected for the balance of 2021 have been baked into current price levels.

What hasn’t been baked in yet is the impact of rising interest rates will have on current stock prices. Have you noticed how Central banks around the world are doing everything possible to avoid discussion of that impeding possibility.

As mentioned yesterday you can’t hide real inflation from the public forever and once real inflation is acknowledged interest rates will definitely increase.

Suggesting that the stock market will benefit from rising interest rates seems just a touch antithetical.

#53 Carrie on 04.12.21 at 3:51 pm

Ditto on the comments re TurnerNation. Ugh to the long winded automatic response to every single post published.

#54 Ballingsford on 04.12.21 at 3:52 pm

#47 LTRFTW on 04.12.21 at 3:18 pm
“P/E ratios (the relationship between a company’s stock price and its earnings) are at an historically high level, leading some worried people to believe things are bubbly and wobbly.”

As our economy improves and more people return to work, earnings should increase. If earnings increase and the price of stocks stays the same, won’t the P/E ratios decrease ?

Just asking ?

Bingo. – Garth

One can imagine a child letting go of a helium balloon, it soars and soars, and the child gets more excited! He invites his friends to watch. Will it reach the clouds they exclaim?!?! Probably, look at it go they say excitedly!

POP!

#55 Ballingsford on 04.12.21 at 3:56 pm

Garth, can you put asterisks or hyphens after your bingo in what I just posted? I got too excited watching the balloon rise and forgot to do that.

#56 Trojan House on 04.12.21 at 3:59 pm

31 tkid on 04.12.21 at 2:25 pm

Ordering a light bulb online then going to pick it up in your car is the stupidest thing I’ve ever heard.

#57 BC Doc on 04.12.21 at 4:05 pm

Cape Schiller PE ratio is at it’s second to all time high with data going back to the 1870s. Not a tool for market timing but man, it sure makes equity valuations look pricey.

https://www.multpl.com/shiller-pe

#58 Rook on 04.12.21 at 4:08 pm

#33 Sara on 04.12.21 at 2:28 pm

This $H!+ is getting real! A pox on all the anti-masker, anti-vaxer, and ‘COVID’s no biggie’ types out there.

————————–
It’s really not.

Population of Ontario: 14.5 MILLION

Number of people in ICU: 408 as of this writing

https://covid-19.ontario.ca/

The fact the province is in shut down for 410 ICU cases for a population of 14 million is ASTOUNDING. Does it make sense to have 400 ICU beds for a population of 14 million? This is a problem with the healthcare system, not a problem with how serious the virus is.

#59 BC Doc on 04.12.21 at 4:10 pm

Last link for the day (from Bloomberg).
Another bearish article— unrealistic earnings growth expectations. At the same time, interest rates expected to go up. Bad combo for valuations .

https://www.google.ca/amp/s/www.bnnbloomberg.ca/stock-bulls-bet-it-all-on-earnings-guesses-with-troubled-record-1.1588536.amp.html

The economy is reopening. Why would markets stumble? If you lack confidence, don’t invest. But why sow your fears in others? – Garth

#60 IHCTD9 on 04.12.21 at 4:14 pm

#35 TurnerNation on 04.12.21 at 2:43 pm
If Yellow Tractor Guy has a YouTube channel it probably would be like ‘Zip Ties and Bias Plies’s’ in Alberta.
(If you like 1puglife) That guy is off the charts.
____

Much prefer “DEBOSS GARAGE” (from Ontario!) on YouTube. He has a sweet project going on involving a CAT 3126 and a Southern OBS F350 Quad Cab 4×4. It’s going to be super-cool when done, even though it’s a Ford. Love the colour of the engine too.

#61 Stone on 04.12.21 at 4:16 pm

In short, invest. Stay invested. Be balanced and diversified. Try not to be a cowboy. Stop reading doomer websites. Wash your hands, keep the mask on, get a shot, focus on your dog and look forward to what’s coming.

———

Yes sir! My balanced and diversified portfolio sitting at 10.32% ytd. Rub tummy!

#62 Flop... on 04.12.21 at 4:18 pm

Opened up a letter from ICBC.

Car insurance behemoth sent me a COVID rebate cheque of $170.

Don’t remember what happened after that as I blacked out…

M46BC

#63 crowdedelevatorfartz on 04.12.21 at 4:19 pm

@#203 BillyBob

“But in Canada in 2021? Approval for the CPC either openly or tacitly is hardly the same thing. When you read the Liberals statement about Taiwan it’s so ambivalent one could almost think Taipei was the aggressor for not wanting to fall under the jackboots.

Disgraceful.”

+++

Stay tuned.

Trudeau isnt finished in the groveling appeasement dept yet.

Embarrassing, cringe worthy, nauseating, laughingstock are but a few of the adjectives to add to the list of our dear leaders’ foreign policy gaffs.

#64 Linda on 04.12.21 at 4:25 pm

#37 ‘George’ – oddly enough I can tell you why OSB has shot up in price. Remember that Texas freeze? One guess as to where the bonding agent for OSB is manufactured. If you said ‘Texas’ you are a winner! Have an acquaintance who is a home builder who passed along the news that the manufacturing facilities for the OSB bonding agent had to undergo major repairs as a result of the Texas freeze. Estimated time for those facilities to get back online is 6 to 9 months. Home builders are being informed that there will be major shipping delays/supply chain shortages for many building materials. As a result expect prices to remain high & competition for supplies to be fierce.

#65 espressobob on 04.12.21 at 4:37 pm

#50 love the cottage

I only wish I was literate enough to write a book on this. It’s true that index investing masters like John Bogle nailed this issue on the head. That’s a non issue to a contrarian.

Investing is in fact based on strategy whether buy and hold or those that rebalance.

Would one call that market hold or timing?

It’s true that profit taking might be premature or opportunity buying the same, but if one understands the risks either way while maintaining core positions why is this problematic?

I like my food spicy.

#66 Doug in London on 04.12.21 at 4:42 pm

@alexinvestor, post #7:
What you said is TOTALLY 100.00% WRONG. If housing crashes the prices come down, making Canada a more cost competitive place to live. Why do you think Encana packed up and left Canada last year? Simple, it’s TOO DAMN EXPENSIVE to do business in Canada anymore. If I were looking for a place to start up a business like manufacturing, I would look to the United States. I recall someone posted a link to house prices in Buffalo, where you can get a fixer upper for 100 grand or even less, and 200 grand will buy you a nice place. Good luck with that in Toronto, and other places like Hamilton, Kitchener, or London aren’t much more affordable. I’d be across the Niagara River so fast I’d be breaking windows anywhere in sight of the Peace Bridge with the sonic boom.

#67 Black Swan Song on 04.12.21 at 5:01 pm

Enough with all the rainbows and lollipops. Too much saccharine for my likings.

I’m counting the days down to the next black swan event to take advantage of a once-in-a-lifetime opportunity. Rinse and repeat.

Pity the fool on the wrong side of the tracks.

#68 wallflower on 04.12.21 at 5:01 pm

To:
#15 household built on 04.12.21 at 1:43 pm
In response:

15 years ago I put some money into an equity fund and it almost doubled every 6 years. If your brother is not stupid, he did the same and is now ahead of you on net worth.

So, I think you are trying to tell us that you are a one-asset investor, which is precisely what this blog is all about:
NOT BEING A ONE ASSET INVESTOR

#69 Sail Away on 04.12.21 at 5:10 pm

#51 Don Guillermo on 04.12.21 at 3:33 pm
#41 Sail Away on 04.12.21 at 2:56 pm
BC’s 2021 morel mushroom season approaches! Love this time of year- it kicks off the annual outdoor gleaning season. We always take the tipi and find a spot next to a trout lake near last year’s wildfires and set up for a week or two.

This year looks like the Castlegar/Nakusp area. Mid-May through the end of the month. Can’t wait.

Mushrooms and trout don’t care about housing, financials or timing.

———–

My dad used to live for fishing and mushroom picking in that area. He would move on to huckleberries and hunting in the fall. He truly loved the Kootenays.

———–

Great country. Picking fire morels leads to much exploring since different areas burn every year. Last year Oliver, 2019 Osoyoos, 2018 Riske Creek, etc.

Big trout. Nothing better than a fat 8lb rainbow on a chironomid.

#70 Handsome Ned on 04.12.21 at 5:15 pm

#69 Sail Away

Nothing better than a fat 8lb rainbow on a chironomid

Wrong, nothing better than a fat 8lb rainbow on a caddis fished dry.

#71 Drinking on 04.12.21 at 5:18 pm

Bubble, ha, weak leadership means ” keep on buying folks” we have your back until they don’t, this is not going to end well for the current generation. Hey at least some of old folks recognize this and are warning you, why, because we really do care! This once was a country that I was proud of now it has become another reality show.

Younger ones’, do not fall into this trap, move on if you must, my advice, do so!!!!

#72 Sail Away on 04.12.21 at 5:34 pm

#70 Handsome Ned on 04.12.21 at 5:15 pm
#69 Sail Away

Nothing better than a fat 8lb rainbow on a chironomid

Wrong, nothing better than a fat 8lb rainbow on a caddis fished dry.

———

Haha, true.

#73 Erick on 04.12.21 at 5:36 pm

Taking into account the geopolitical factors, the Roaring Twenties seem rather unlikely. I am expecting the Scary Twenties :(

#74 Joe Rosser on 04.12.21 at 5:39 pm

Garth, the stock market checks every bubble indicator that exists. Euphoria is everywhere, SPAC’s, NFT’s, buying at any price indicates the very peak of the market.

John Hussman writes that future returns have been pulled forward, so at best you can expect about -6% return from stocks if you invest now.

I just can not fathom why you would advise to invest in stocks now (if one is not invested) when surely a better entry point cometh. Cash is also an investment when facing sky high market valuations. Not forever cash, but not sinking it into one of the biggest stock market bubbles ever.

NFTs are not stocks. Learn the difference. ETFs are not individual stocks. Learn the difference. A balanced & diversified portfolio is, ah, balanced and diversified. More for you to learn. And financial markets do not crumble when the economy is exploding higher after a crisis. Invest or stay in cash. I don’t care. – Garth

#75 Loonie Doctor on 04.12.21 at 5:40 pm

#58 Rook on 04.12.21 at 4:08 pm
#33 Sara on 04.12.21 at 2:28 pm

This $H!+ is getting real! A pox on all the anti-masker, anti-vaxer, and ‘COVID’s no biggie’ types out there.

————————–
It’s really not.

Population of Ontario: 14.5 MILLION

Number of people in ICU: 408 as of this writing

https://covid-19.ontario.ca/

The fact the province is in shut down for 410 ICU cases for a population of 14 million is ASTOUNDING. Does it make sense to have 400 ICU beds for a population of 14 million? This is a problem with the healthcare system, not a problem with how serious the virus is.

—————————————————————–

It really is. There were 619 covid patients in ICU today. That does not include the people in the ICU for regular reasons. Your data saying 400 are just the patients on ventilators from Covid. Life support comes in many forms. We avoid the vents if at all possible.

Opening ICU beds is not as simple as space and equipment. It is the human resource. It not only requires people, but people with special skills, and also more of them per patient with the acuity of the Covid respiratory failure population. You cannot create that out of thin air or simply throw money at it. We have increased capacity by over 50% in the last year.

However, the threat of outstripping our capability is extremely real this wave. I know that is hard to believe for some people. Especially since there were false alarms in the first couple of waves for Ontario. New York and Italy were not so lucky. I was also skeptical for those waves. I am not for this one. There are more patients, a higher rate of spread, the patients coming in are younger (think 50s-60s), the mortality with the new variants is higher, and everyone is sick of public health measures and less likely to comply. I know first hand what I am talking about. The other problem is that ICU bed usage lags by a couple of weeks from time of infection. By the time even the deniers cannot deny there is a problem, we are too late.
-LD

#76 crowdedelevatorfartz on 04.12.21 at 5:52 pm

@#62 Flop
“Opened up a letter from ICBC.
Car insurance behemoth sent me a COVID rebate cheque of $170.
Don’t remember what happened after that as I blacked out…”

+++

Be careful.
As you blackout you may fall and hurt yourself and you won’t be able to sue for bodily injury.
ICBC is STILL some of the most obscenely expensive car insurance in Canada ( 100% BC govt cash cow monopoly) AND if you’re hurt in a crash….
Don’t worry.
THEY will take care of you…..

#77 Ponzius Pilatus on 04.12.21 at 5:57 pm

#41 Sail Away on 04.12.21 at 2:56 pm
BC’s 2021 morel mushroom season approaches! Love this time of year- it kicks off the annual outdoor gleaning season. We always take the tipi and find a spot next to a trout lake near last year’s wildfires and set up for a week or two.

This year looks like the Castlegar/Nakusp area. Mid-May through the end of the month. Can’t wait.

Mushrooms and trout don’t care about housing, financials or timing.
——————–
Last year we got chanterelle mushroom from a Chinese couple, who said they brought it in from Williams Lake.
The shrooms were kinda bigger and not as golden as I remember from the days as a youngster in Austria when my family were collecting mushrooms, and sold them, just to make ends meet.
Creamy chanterelle goulash. Delish.
Porcinis too.

#78 Bert on 04.12.21 at 6:07 pm

https://www.cnbc.com/2021/04/12/who-says-covid-pandemic-is-growing-exponentially-at-more-than-4point4-million-new-cases-a-week.html

#79 Ponzius Pilatus on 04.12.21 at 6:10 pm

#20 Dogman01 on 04.12.21 at 1:56 pm
So many things so wrong in Canada, but this pretty much sums it up.

City of Calgary employee charged nearly $95K in overtime
https://www.cbc.ca/news/canada/calgary/city-councillor-overtime-bill-ray-jones-calgary-council-1.5983061

A big “screw you taxpayer!”.

The waste in government with the COVID excuse must be incomprehensible; an ongoing looting expedition of the corpse that is out post national state.
———-
That shows you how hard working our civil servants are.
I think he should get a medal, instead of getting harassed.
Even CEF would agree.
Or maybe not.

#80 Ballingsford on 04.12.21 at 6:11 pm

Sunshine, lollipops, and rainbows.

Feel free to refute any data I presented. Or carry on being a jerk. – Garth

#81 Brian Ripley on 04.12.21 at 6:20 pm

My chart is up of Average Prices of VANCOUVER & TORONTO Single Family Detached Houses, BITCOIN and GOLD all Denominated in USD
http://www.chpc.biz/bitcoin-gold–re.html

Froth yes… exuberant froth.

#82 The Woosh on 04.12.21 at 6:24 pm

#9 Bram on 04.12.21 at 1:10 pm
We have a great agent keeping an eye out for us around the GTA. As soon as the meltdown starts will be time to strike.

“Eventually, people will stop paying $950k for a $700k house.”

——————————————

It’s great to have dreams. Let us know when you see the Easter Bunny come by.

#83 Terry on 04.12.21 at 6:25 pm

The vaccine disaster is still on the books. This will change everything in ways no one could ever imagine. Just wait for it………..it’s coming.

#84 espressobob on 04.12.21 at 6:29 pm

#67 black swan …

The glass half empty?

#85 Looking up on 04.12.21 at 6:41 pm

83 Terry on 04.12.21 at 6:25 pm
The vaccine disaster is still on the books. This will change everything in ways no one could ever imagine. Just wait for it………..it’s coming.

————-

Oh the drama. Relaaaaaax.

#86 Wrk.dover on 04.12.21 at 6:44 pm

#62 Flop… on 04.12.21 at 4:18 pm
Opened up a letter from ICBC.

Car insurance behemoth sent me a COVID rebate cheque of $170.

Don’t remember what happened after that as I blacked out…

M46B

——————————————————

Can I borrow that $170 to insure one of my beaters for the next six months, please?

M67NS

#87 alexinvestor on 04.12.21 at 6:46 pm

@Doug in London post #66:
Housing prices have nothing to do with Encana’s cost structure. My company didn’t give me a 50% raise because GTA houses were up 50% this year. Now, if house prices collapse and we get a 65cent dollar, that might help the cost structure soon.

#88 Flop... on 04.12.21 at 6:51 pm

Crowdie, don’t worry about ICBC the finance ministers parents did Canada a huge disservice.

Chrystia Freeland’s middle name is Alexandra.

If they had the foresight to give her the middle name of Elizabeth then we could have had a blockbuster on our hands.

Chrystia Elizabeth Freeland and Crowded Elevator Fartz would star in this movie.

I will give you the movie trailer dialogue in a deep voice.

From the same delinquent director of the smash hit Metrosexual Messiah and the award winning sequel Sock Sucker, Flop Studio’s is proud to complete the trilogy event of the century…

CEF vs CEF…

M46BC

#89 VladTor on 04.12.21 at 6:53 pm

Garth: ….It’s always good to remember what a bubble is. It’s created by a surge in prices driven by exuberant market behavior. In a bubble, assets sell for a huge premium over intrinsic value. And therefore, it never lasts.

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

Mr. Garth, I completely agree with last sentence. But, can you tell me, please next. When you talking about RE bubble – you always so sweet, mild, friendly, try to be polite to everybody. Why! Are you sure that we have RE bubble. I’m completely disagree. Just look at this:

https://www.blogto.com/real-estate-toronto/2021/04/160-morse-street-toronto/

Just think about this $3 million – one digit number. What about $ 3000000. Scare! 7 digits! And for that barn?

Do we have RE bubble. NOoooooooo!
WE have RE SUPERrrrrrrrrr bubble.

Looks like folk don’t understand what does it mean even $ 1000000 and lost yours mind forever.

p.s. as usual nice post.
I disagree only with added jobs here and USA. Need to show numbers by industries. Than will see and tell us how many jobs was recovered as permanent vs part-time.
May be real situation far away from expectations:

https://www.washingtonpost.com/business/2021/04/02/wall-streets-fixation-quick-profits-wreaking-havoc-real-economy-report-says/

https://www.investing.com/economic-calendar/redbook-655

https://www.investing.com/economic-calendar/trade-balance-286

worse and worse.

#90 Ballingsford on 04.12.21 at 6:55 pm

#80 Ballingsford on 04.12.21 at 6:11 pm
Sunshine, lollipops, and rainbows.

Feel free to refute any data I presented. Or carry on being a jerk. – Garth
*******
Too sensitive Garth. Lighten up.
https://youtu.be/XQmBXEZEYtg

#91 Leftover on 04.12.21 at 6:56 pm

#10 Jenna on 04.12.21 at 1:15 pm

Real estate gains have been far more significant and reliable then stocks without the roller coaster drops.

Can’t beat the added plus of tax free capital gains of real estate. Period.

———————————–

Personal B&D RSP return since the mid-1990’s is 9% CAGR, while my house is up 6X in the same period (CAGR = 8%). Both are “tax-free” capital gains since selling within an RSP attracts no tax.

Both have been cyclical but are also long-term, which smooths out the bumps.

Best bet is to have some of each.

#92 Tony on 04.12.21 at 6:57 pm

So housing is a bubble but stock market is not.

So the market went up last year because it priced in a brighter future

So the market is going to rise further because it has not yet priced in a brighter future?

Confused

#93 tbone on 04.12.21 at 6:58 pm

I got a pfizer shot today , didnt hurt a bit .
No line ups either .

#94 espressobob on 04.12.21 at 7:02 pm

#83 Terry

Roll up your sleeve as soon as the opportunity presents itself,

Don’t look back.

#95 Sara on 04.12.21 at 7:03 pm

@LoonieDoctor #75

Thank you for your efforts to wake up the loonies.

#96 crowdedelevatorfartz on 04.12.21 at 7:05 pm

Well Floppie.
Lighting does strike twice.
I received my ICBC Covid rebate ( 50% fewer collisions last year so “Icky Bicky” is graciously handing 10% of my insurance aka dinner scraps back)

I fainted, hit my head, woke up bleeding, concussed, but I willed myself to crawl to the keyboard, log on …..to let Ponzie, Sara and Faron know……. I’m ok.

#97 Sheesh on 04.12.21 at 7:07 pm

#58 Rook on 04.12.21 at 4:08 pm
Number of people in ICU: 408 as of this writing
…..
Nope, 619. Once people are in ICU for covid, they tend to stay awhile.
https://covid-19.ontario.ca/data/hospitalizations

#98 Sail Away on 04.12.21 at 7:09 pm

#77 Ponzius Pilatus on 04.12.21 at 5:57 pm

Last year we got chanterelle mushroom from a Chinese couple, who said they brought it in from Williams Lake.
The shrooms were kinda bigger and not as golden as I remember from the days as a youngster in Austria when my family were collecting mushrooms, and sold them, just to make ends meet.
Creamy chanterelle goulash. Delish.
Porcinis too.

———-

Interesting fact about porcini, the king bolete (Boletus edulis) and other boletes: these are, in all cases, riddled with small white black-headed worms, and I assume eggs. This isn’t necessarily a problem as the worms are not dangerous to humans, but just know that if you’re eating porcini, you’re eating maggots as well. Hopefully well-cooked or well-dried. Next time you get a bag of dried porcini, shake them and carefully examine the dried bits at the bottom. 100% certainty there will be crunchy little worms.

Now, several other popular mushrooms: chanterelle, pine (matsutake), morels, hedgehog, lobster, for example… do not have this worm infestation. The high protein content in boletus mushrooms make them irresistible to flies.

If you’re like me and don’t mind a little extra wriggly protein, here’s a tip: king, queen, birch boletes can be found in great profusion at high elevation (Mt. Washington, Mt. Seymour, Grouse Mountain) in June and July. Good luck.

Chanterelles are ok. My favourite mushroom is probably the shrimp russula (Russula xerampelina).

#99 Nonplused on 04.12.21 at 7:12 pm

#37 George S on 04.12.21 at 2:51 pm
I wonder of the price of OSB could be used as an indicator of construction activity in the real estate sector. I was at the local building centre this morning and the price of a 4X8 sheet of 3/8″ OSB is now $70.00. Earlier in the spring it was $56.95. Last year it was $8.50.
OSB is a sheet of thin chips of wood mixed with resin pressed together into a cake. It is generally regarded as the cheapest building material on the planet and is used for the outside sheathing of everything built by normal wood frame construction.
Right now the price is similar to marine or kitchen cabinet plywood.

—————————————

I believe it is mostly supply chain problems that should subside sometime over the next year.

It’s not just building materials. Everything from computer chips to washing machine parts are in short supply. It is so bad that it is causing auto manufactures to temporarily shut down lines. (There are a lot of little computers in a modern car, up to 50 of them.)

My washing machine broke some months back and the repair guy said the required part was backordered and they didn’t expect them to be available for at least six weeks. At least. So I bought new ones. Even I won’t re-wear my underwear that many times.

So I would wager that OSB is not going to cost $70 a sheet for long. The two major inputs, wood chips and resin are not terribly hard to come by. If what is going on at the lumber yard is an indication of something permanent, houses are cheap and you should buy now. I don’t think it is going back to $8.50 though. Whenever something like this happens some part of the price increase sticks. It has something to do with consumer expectations.

It’s sort of like when Costco has a “sale” on something, say maple syrup, regular price $14 – $3 off at the till. But then you think “hey wasn’t the regular price $11 last time?” And then you think “how does it cost $14 dollars to fill a plastic bottle with tree sap?” Then it becomes clear why so many people buy artificial syrup. But unfortunately once the artificial syrup starts rising in price there are no more substitutions to be made and you have to skip breakfast. That’s alright, I could use to lose some weight anyway.

#100 crowdedelevatorfartz on 04.12.21 at 7:13 pm

@#79 Public Payrollllll
“That shows you how hard working our civil servants are.”

+++++

In the immortal words of that martyr of all “Civil” Servants…. Mr David Dingwall

https://www.facebook.com/TaxpayerDOTcom/videos/david-dingwall-im-entitled-to-my-entitlements/10155072888603910/

The credo of the bureaucrats.
“We are Legion…..”

#101 Regjeg on 04.12.21 at 7:15 pm

Assuming my TNT holding doesn’t blow up, I’m gonna reallocate a bunch of it to ZQQ after it (ZQQ) corrects 25%.

#102 Ponzius Pilatus on 04.12.21 at 7:18 pm

Roaring Twenties coming back?
Interestingly,
Just saw a report from the Russian/Ukraine war zone.
Looks like straight from WWI.
Trenches separate the two sides, just 3 meters apart.
That’s why nuclear weapons could be useless in the next major armed conflict.
Mano a Mano.
Time to read “All quiet on the Western front” again.
What say you IHTCD9?

#103 Drinking on 04.12.21 at 7:18 pm

DELETED (Anti-vax)

#104 Diamond Dog on 04.12.21 at 7:18 pm

#37 George S on 04.12.21 at 2:51 pm

It has to be on the back of the minds of home buyers, the cost of building materials and the cost of new construction elevating values of the entire market place. Wood is not an infinite resource. The chips used to make up chip boards has been long thought of as recycled wood waste. The fact that prices have soared with chip board is telling.

Extended forest fire seasons and continued growing populations coupled with systemic multi decade over cutting, has resulted in tight supplies dramatically increasing prices of press board or chip board over the last year and wood used in construction in general. The price increase has been dramatic, catching the entire industry flat footed. Sure to follow is ingenuity of new building products or rediscovered refined older products, an example being industrial hemp or the use of “hempcrete” as a financially viable alternative construction material with certain advantages as some youtube videos suggest:

https://www.youtube.com/watch?v=cm23l_VLyp4

https://www.youtube.com/watch?v=9d_wsoZS6j0

Will the price of chip board or press board come down as the construction industry adjusts to constructing homes with different materials and cheaper products? Absolutely. The bottom link suggests that “hempcrete” is about 20 to 30% more expensive than wood products in 2018. With such a run up on wood construction products, hempcrete could be 50 to 60% cheaper than wood by comparison forcing a lasting change in the industry.

#105 Victor V on 04.12.21 at 7:20 pm

There’s no ‘magic switch’ to reset home values: Liberal MP

https://www.bnnbloomberg.ca/there-s-no-magic-switch-to-reset-home-values-liberal-mp-1.1589287

One Liberal MP argues that a housing correction may not be the silver bullet solution needed to fix Canada’s mounting housing affordability crisis.

“When people tell you they want to cut housing prices by 10 per cent… there is no magic switch in the Finance Department or the Bank of Canada where you just go to it and reset everybody’s home equity rates and housing prices across the country,” Spadina-Fort York MP Adam Vaughan, whose portfolio covers housing issues as parliamentary secretary for the Liberal government, said in an interview.

“Nor can you compel people to sell for less than the house is worth.”

Vaughan added that a home price correction would also have adverse impact on many of the recent homebuyers.

“You’ve got to look at it from the perspective of the homeowner: people who own a single home to live in with their household, their families… you can’t just go around sort of targeting their equity as the solution,” Vaughan said.

“It’s not fair to those individuals who just bought a house to suddenly find themselves below water with a mortgage…”

#106 Do we have all the facts on 04.12.21 at 7:32 pm

#47

The price of many stocks became disconnected from economic metrics some time ago. With billions of dollars of excess cash looking for optimum rates of return the stock market became a preferred destination.

At the end of March 2020 the market cap of the S & P 500 was $21.4 trillion. By the end of March 2021 the market cap of the S & P 500 had ballooned to $33.6 trillion.

I am pretty sure that additional investment of $12.2 trillion in one year had very little to do with the increased profitability of the 500 American companies in the index.
The 57% increase in market cap in just one year was not solely based on economic fundamentals but on FOMO and cheap credit.

Same hype that is driving current increases in the housing market.

Once that environment adjusts, and it will, the stock market will also move closer to intrinsic values.

Perhaps you should look at this. – Garth

#107 Nonplused on 04.12.21 at 7:46 pm

#43 Dave on 04.12.21 at 3:03 pm
If there is a War in Ukraine…how will that impact markets?

Russia military is bad @ss

————————————-

I do not predict a war between Russia and Ukraine. Ukraine does not have anything the Russians want that they haven’t already taken. Ukraine is a basket case and cannot support a drawn out land war. Russian military doctrine centers around two things, preventing another land invasion (which always comes through Ukraine for geographical reasons), and nuking the US if the US nukes them first. They are well prepared for either scenario.

I’d be much more worried about Israel launching a surgical strike against Iran’s nuclear facilities that maybe doesn’t go according to plan and results in a major Middle East war. We’d be back to something like the oil embargo. Or the Chinese deciding to take Taiwan. This is exactly the time to strike because the US is in no position to ramp up military spending and fight a major war thousands of miles away. The US would basically have to fight with what they have in inventory against an opponent that has the largest industrial output on the planet.

The US is in a position right now that they can’t even build a fighter jet for less than $100,000,000. That is no way to fight and win a war. Oh and then you have to have a certain number of transgenders flying them and they can wear their hair long now so the helmet doesn’t fit. I think at this point the rest of the world is laughing at the US military.

#108 Yuus bin Haad on 04.12.21 at 7:53 pm

WOW! Loblaws has the greeting cards hermetically sealed off and I didn’t dare go near to read the sign for an explanation ’cause it had like a hazmat symbol or something.

#109 josh on 04.12.21 at 7:56 pm

15 years ago I bought a house and my mortgage was $1,200 a month,,, where my brother was paying $1,200 a month to rent someone else’s house… Today I’m still paying $1,200 a month while my brother’s rent is $2,200 a month… My mortgage is like your rent except my cost goes down where your rent always goes up… And I’m building that sweetest of things,,, equity… response: But why does your home go up in value? Human activity in the community around you? did you earn that? The human lives coming and going all around you? Would you be surprised that it is policy for this to occur, for all human gains to be absorbed by land value? Did your brother know this? That the game is rigged?

#110 robert brown on 04.12.21 at 7:58 pm

“When people tell you they want to cut housing prices by 10 per cent… there is no magic switch in the Finance Department or the Bank of Canada where you just go to it and reset everybody’s home equity rates and housing prices across the country,” Spadina-Fort York MP Adam Vaughan, whose portfolio covers housing issues as parliamentary secretary for the Liberal government, said in an interview.

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

Actually there is a “magic switch” called interest rates. The central bank uses it all the time.

#111 greaterfool on 04.12.21 at 7:59 pm

Bubbles with financial asset is fine and unavoidable, the ordinary people with no or low leverage can survive the bubble burst.

House is different, it has another name called “Home”. everyone needs a home, but not everyone needs financial assets. It is ok that average income people can not afford a financial assets, but when they can’t affort average homem, it is a problem; 5x or 10x leverage with investment properties is another problem, both of them need to be addressed by government, but our government is too busy with changing “master” to “primary”, oh, and UBI, other than adding huge debt to governance, what other benefits it brings? When everyone gets $2000 a month, everything is going to be more expensive. you still won’t be able to afford those you can’t afford today. You need real special IQ to bring this idea up and believe this is going to do good to you!

the root cause of he House issue is the ‘multi-properties ownership’, too many with multiple investment properties, it is a sort of the “land merger” issue. Once it gets to the extreme, when average income people can’t afford the average home, it causes political and social instability.

One of the solution (a working one) is to tax more on non-primary property, both carrying cost and exit cost (capital gain), it helps to achieve the basic human rights (everyone is entitled for a home)

It is disappointed when a nation is proud of house price and real estate agents (no offence, it is just a job)

#112 Prince Polo on 04.12.21 at 8:00 pm

https://www.cbc.ca/news/politics/air-canada-financial-relief-1.5984543

#113 I’m not a doc on 04.12.21 at 8:01 pm

#105

“It’s not fair to those individuals who just bought a house to suddenly find themselves below water with a mortgage…”

History has a funny way of repeating itself. I think I will be around long enough to see a three peat…

#114 SoggyShorts on 04.12.21 at 8:14 pm

#106 Do we have all the facts on 04.12.21 at 7:32 pm
#47
At the end of March 2020 the market cap of the S & P 500 was $21.4 trillion. By the end of March 2021 the market cap of the S & P 500 had ballooned to $33.6 trillion.
I am pretty sure that additional investment of $12.2 trillion in one year had very little to do with the increased profitability of the 500 American companies in the index.
The 57% increase in market cap in just one year was not solely based on economic fundamentals but on FOMO and cheap credit.

*****************************
Measuring from the panic sell-off low point is a little disingenuous.
For a fair(er) comparison Old high vs New high of 3300 to 4100 is 24% which is still impressive but makes more sense. The pandemic has obviously been hardest on small businesses, so why wouldn’t the biggest ones have outsized returns?
——————————
I don’t have as much optimism as some but I sure hope this turns out to be the roaring 20s. All of my retirement portfolio calculations are based on worst-case scenarios… I don’t think I’ve ever even simulated what would happen if my first 10 years had great returns.

#115 Apocalypse NOW on 04.12.21 at 8:16 pm

The markets are far from stable and safe, Garth.

The enormous scope of the problem will be revealed in full to the general public for the first time on April 14, 2021.

That’s when two of the largest banks, JP Morgan Chase, and Wells Fargo, report earnings on the same day.

Between these two banks, there is $5.1 TRILLION in assets, which is an astounding 23% of US GDP.

The world will be holding its breath to see those numbers because it will be a signal of what’s to come.

And when the news of the ugly chain of corporate/personal defaults and the resulting massive holes in the big banks’ balance sheet hits…

Panic will set in…

And global liquidity is going to start drying up… just like it did in 2008 when Bear Stearns and Lehman Brothers troubles became public.

And stock markets will crash in a spectacular fashion…

#116 Yakety yak on 04.12.21 at 8:21 pm

Do you think perchance we could limit the yakety yak to issues related to the blog’s raison d’etre. It’s selfish of you …. and you know who you are … to hijack this blog for your own reasons. The vast majority of us have no interest in anything but the topic at hand. Besides, you are wasting Garth’s time as well. He has to read all of the posts.

If you really need this type of social interaction so badly, get a dog. Or another one. Better yet … get your own blog.

#117 crowdedelevatorfartz on 04.12.21 at 8:25 pm

@#102 Patton’s Playground
“Mano a Mano.”

+++

It always starts that way but in most NATO war games the Russian army bulldozes its way through Europe and the American military strategists invariably rely on low level nukes( if there is such a thing) to stop them….

Current Polls in Europe indicate the reluctance to fight with the US against Russia or China.
The Europeans prefer to sit this one out….until possibly things get real ugly.

#118 KaleyCat on 04.12.21 at 8:34 pm

#15 household built

Oops, you forgot to include your property taxes and insurance in your mortgage calculations. You’re paying $1200/month plus extra fees brother doesn’t pay.

Here’s your challenge. Track how much you spend this month on bedding plants. Maybe add in the new flooring in the kitchen, the drapes in the bedroom, the updated lamp shades in the livingroom to match the new paint, and the brickwork in the backyard….compare that to your brothers.

I’ve owned a (paid for) house for 30 years and I rent now. Even without a mortgage I can tell you renting is much much cheaper. And that’s before you calculate in your brothers investment account – because he had to do something with the extra money, as he didn’t have to pay someone to cut his grass while he went on holiday. The cost of home ownership only starts with the mortgage.

#119 crowdedelevatorfartz on 04.12.21 at 8:35 pm

Well now I understand why Japan has been stockpiling the worlds Bluefin Tuna.

https://www.citynews1130.com/2021/04/12/japan-to-start-fukushima-water-release-to-sea-in-2-years/

Forget the Pacific Gyre…..I want glow in the dark salmon sushimi

#120 Jalapeno on 04.12.21 at 8:36 pm

#19 Ballingsford on 04.12.21 at 1:55 pm
I’ve been contributing to my B&D portfolio regularly in the last while. I know we shouldnt try to time the markets, but should I sit on some cash for awhile and wait for it it pop and then invest? The numbers aren’t sustainable.

________________________________________

As tempting as it is … I would say to you “steady as she goes”.

First, depending on what you invest in, you could be giving up dividends and distributions that invested money would earn.

Second, timing has two parts to it. Take money out today and you could be leaving lots of cash on the table. And how will you know when to get back in? Do you have a crystal ball? AND the kahunas to put money in a market that might continue to tank from where you jump in? If you time it perfectly, it will probably just be luck. Chances are you will get neither perfect and will have regrets for your action.

Third, to your statement “the numbers aren’t sustainable” I say to you , “the markets can remain irrational longer than you can remain solvent.” [John Maynard Keynes]

Fourth and maybe the most importantly. Do you want to waste time every day following the ups/downs in great detail to determine the special day where you take action? Or would you prefer to live life doing things that you enjoy. If you found out you had 3 months to live … is this what you would choose to do?

**** Bonus points – For you, and only you. Don’t worry about having cash on the side. If for some reason you need to pick up a “hot deal” in a hurry but don’t have cash on the side, make sure you are set up with a margin account AND a HELOC from the [email protected]

#121 crowdedelevatorfartz on 04.12.21 at 8:42 pm

@#116 Yakety Yak

Years ago ( apologies to Ponzie…I’ll be brief) I was at the Vancouver Game Farm and walked up to a herd of Yaks standing right next to the fence.
Calmly chewing on the bale of hay next to the sign describing what they were and other trivia.
The very bottom of the sign stated, ” Caution! Yaks are know to spit when irritated, angered…..”
Too late…….

#122 Do we have all the facts on 04.12.21 at 8:45 pm

Garth the chart you provided indicated that with the exception of 2020 corporate profits have been hanging around $2 trillion per year since 2013. My point was that the investment of an additional $12.2 trillion in market cap of the S&P 500:between March 31 2020 and March 31 2021 (57%) would seem to indicate that corporate profits might increase from $2 trillion to $3 trillion in the foreseeable future.

If this proves to be true I can only imagine the level of inflation associated with a 50% increase in corporate profits. My main point was that the stock market has become separated from traditional economic metrics and thst policies increases have stock values has more to do with FOMO and low interest rates than corporate performance.

Exactly what one would expect coming out of a deep recession. – Garth

#123 Buford Wilson on 04.12.21 at 8:45 pm

Intrinsic value of any asset, Garth, is whatever a buyer is willing to pay for it. So said Milton Friedman.

#124 Apocalypse NOW on 04.12.21 at 9:02 pm

So, blog dogs, are you prepared for the worst-case scenario when April 14, 2021 hits?

Because here’s what it will look like on the ground…

Due to crashing capital markets and banking failures, joblessness and poverty are likely to explode, first in the USA then in Canada.

This will cause government tax revenues to plummet as income falls off a cliff and capital gains disappear.

This will send the US national deficit soaring.

Welfare and social security programs will face massive cutbacks, leading to social unrest.

The Federal Reserve will fire up the printing press yet again to expand their debt monetization programs.

But it will just be pushing on a string.

There will be no demand or supply to boost the economy and keep markets afloat.

The U.S. government will step in to help support the most systemically dangerous banks…

But after the massive Wall Street giveaways of 2008, there’s no public appetite for more billionaire bailouts.

And gargantuan government funding will be difficult with record deficits and paralyzed global capital markets.

That’s when economic catastrophe sets in.

As the financial contagion spreads, countries across the world would turn inward…

Decreeing draconian lockdowns to preserve resources and protect their own supply-chains.

Bank losses would be so big that policy makers would resort to depositor bail-ins (banks confiscate your account) and wealth taxes.

But that won’t be enough to keep banks from failing.

As people realize their savings are at risk, this will cause a run on banks…and another bizarre explosion in cryptos and NFTs.

Many people will lose access to their money. Lending may grind to a halt.

The Fed will have to finance business activity through stock purchases…

And it will finance the government by buying Treasuries at absurd levels.

With all this money printing, the dollar will drastically decline in value, leading to terrifying levels of inflation!

That will drive up the prices of gas, food, and consumer goods to unattainable levels.

Crime and desperation will increase as competition for limited resources becomes intense.

As the government policies fail, what little faith is left in institutions will evaporate completely… leading to outright anarchy.

At this point, our entire financial system and societal structure will collapse.

And the fate of 350 million Americans will be in God’s hands, if they are lucky.

Canadians will be even worse off, as our real estate bubble will collapse almost immediately.

April 14.

36 Hours Away.

PREPARE

US bank profits set to outperform, beat expectations, says economist. – Garth

#125 BIG B on 04.12.21 at 9:10 pm

114 SoggyShorts on 04.12.21 at 8:14 pm

Measuring from the panic sell-off low point is a little
I don’t have as much optimism as some but I sure hope this turns out to be the roaring 20s. All of my retirement portfolio calculations are based on worst-case scenarios… I don’t think I’ve ever even simulated what would happen if my first 10 years had great returns.

‐—————-

I like your style! Playing it smart. Turtle vs the hare. Quit chasing the quick money. Slow and steady wins the race. Build yourself some generational wealth (hopefully) and let the suckered take the fall for the bad decisions they make (markets or housing) let’s just hope the feds don’t bail them all out and we all pay for it with our good logical decisions.

Ride er till she bucks or don’t ride at all!

#126 Ponzius Pilatus on 04.12.21 at 9:17 pm

#123 Buford Wilson on 04.12.21 at 8:45 pm
Intrinsic value of any asset, Garth, is whatever a buyer is willing to pay for it. So said Milton Friedman.
————–
I see your Friedman,
And raise you one Buffett:
“Price is what you pay, value is what you get”

#127 Maggie the Teck Writer on 04.12.21 at 9:23 pm

Sail Away #9 11 April: Dang. And just as I was about to read ‘Master and Commander’, it’s being burnt on the ideological altar along with Dr. Seuss.

Who cares? Read it anyway. Read all of them. Then read them again. After a course of Horatio Hornblower, go back to Jack, the Doc and Diana. Genre fiction can be truly excellent, and you may actually learn something.

#128 Farm Wife on 04.12.21 at 9:33 pm

may be a little off topic but after 30 years of living in the same place and being a home owner in others (since 1971)I am now thinking renting is the best option as basic things such as fire fighting services no longer completely covered by property taxes. Just found out third party called Fire Marque decides what the costs are and bills insurance company. Here’s the kicker…a new little county bylaw that reads like this

10.7 The owner’s insurer may remit payment of costs or fees charged by the Fire Department for services rendered pursuant to this bylaw directly or indirectly to the County on the owner’s behalf. Where fees or charges payable under this bylaw are not remitted to the County, the amount may be added to the tax roll of the property to which the costs or fees relate.

https://edmonton.ctvnews.ca/beaver-county-resident-faces-62-000-fire-fighting-bill-1.5382626

It’s not just here in Alberta but in every province across Canada. Seems people who have a fire are held hostage by some fancy a$$ed collection company in sheep’s clothing that has sold towns and county’s on the doing the 70% for you 30% for us split and tax payers be damned. Check your bylaws and I hope it’s not where you live.

#129 Stone on 04.12.21 at 9:36 pm

#122 Do we have all the facts on 04.12.21 at 8:45 pm
Garth the chart you provided indicated that with the exception of 2020 corporate profits have been hanging around $2 trillion per year since 2013. My point was that the investment of an additional $12.2 trillion in market cap of the S&P 500:between March 31 2020 and March 31 2021 (57%) would seem to indicate that corporate profits might increase from $2 trillion to $3 trillion in the foreseeable future.

If this proves to be true I can only imagine the level of inflation associated with a 50% increase in corporate profits. My main point was that the stock market has become separated from traditional economic metrics and thst policies increases have stock values has more to do with FOMO and low interest rates than corporate performance.

Exactly what one would expect coming out of a deep recession. – Garth

———

And if for some strange reason, things tank southward, that’s why you should have a balanced and diversified portfolio so that you can rebalance and take advantage of the tasty discounted prices. I’m not sure why everyone is so dense and panicked. We just went through that a little over a year ago. I rebalanced at that time from my fixed income to equities and also swapped my bond ETF for a pref ETF making 11.15% overall for 2020. I’m so happy to drown out all the hysteria. I prefer to focus on my 10.32% ytd return for 2021 instead. Keep growing B&D. I kinda get the feeling there won’t be any rebalancing needed for 2021.

#130 Lead Paint on 04.12.21 at 9:38 pm

If Garth didn’t exist, we’d have to create him.

#131 Garth's Son Drake on 04.12.21 at 10:18 pm

I said this a few months back.

What if we get a variant that bucks the vaccine?

That would be the real Oh…^#@! moment.

I mean. Look how we just got caught flat footed literally easing restrictions a few months back.

Pretty sure the markets never anticipate these black swans.

China just admitted their vaccine is not working so well anymore and are now scrambling to build a new mRNA one.

This is a whole new pandemic.

Things are 4 times more dangerous in Canada than last year this time. Everyone I know getting sick right now.

Can’t believe the leaders in BC sitting on their hands right now.

Let’s see what kind of a gas tank the Canucks have after the whole team caught covid. It is not good.

Pushing profits like this in the face of serious health risks is a disgrace.

It is going to be pretty messy over the next few months but no doubt markets will keep going up.

If didn’t have to be this way. But everyone jump the gun including media creating the narrative that this thing is in rear view mirror. Not even close. Maybe by fall we can have this discussion.

#132 Nonplused on 04.12.21 at 10:27 pm

#174 NSNG on 04.11.21 at 11:44 pm

Oh and Canadian Tire is going to have a PR nightmare rebranding the “Mastercraft” line of tools. “Maybe they can switch to “Peoplecraft”.

Nope. They’ll change it to witchcraft.

——————————————–

That would be cultural appropriation, offensive to witches.

#133 Cici on 04.12.21 at 10:28 pm

#41 Sail Away on 04.12.21 at 2:56 pm
BC’s 2021 morel mushroom season approaches! Love this time of year- it kicks off the annual outdoor gleaning season. We always take the tipi and find a spot next to a trout lake near last year’s wildfires and set up for a week or two.

This year looks like the Castlegar/Nakusp area. Mid-May through the end of the month. Can’t wait.

Mushrooms and trout don’t care about housing, financials or timing.

____________________________________________

So cool!!!!!
Have fun!!!!

I am soooooooo jealous ;-)
Will be thinking dreaming about feasting on trout and morels in cream sauce while sweating away in my makeshift WFH office ;-(

#134 DON on 04.12.21 at 10:29 pm

#107 Nonplused on 04.12.21 at 7:46 pm
#43 Dave on 04.12.21 at 3:03 pm
If there is a War in Ukraine…how will that impact markets?

Russia military is bad @ss

————————————-

I’d be much more worried about Israel launching a surgical strike against Iran’s nuclear facilities that maybe doesn’t go according to plan and results in a major Middle East war. We’d be back to something like the oil embargo. Or the Chinese deciding to take Taiwan. This is exactly the time to strike because the US is in no position to ramp up military spending and fight a major war thousands of miles away. The US would basically have to fight with what they have in inventory against an opponent that has the largest industrial output on the planet.

The US is in a position right now that they can’t even build a fighter jet for less than $100,000,000. That is no way to fight and win a war. Oh and then you have to have a certain number of transgenders flying them and they can wear their hair long now so the helmet doesn’t fit. I think at this point the rest of the world is laughing at the US military

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

Countries are certainly testing boundaries, in this mutlipolar moment in time. Opportunity calls.

25 Chinese Fighter Jets cruised by Taiwan today. Is Taiwan ready? They better be.

Iran and Israel are the ongoing saga. Iran friendly with China and Israel with the US. Good possibility of a flare up and proxy war.

The West was not ready for WW2 just coming out of the Depression. Thank Dog for our parents and grandparents (World wide). We are starting our roaring 20s with very high debt levels and rising prices.

#135 Doug in London on 04.12.21 at 10:46 pm

@alexinvestor, post #87:
Housing costs are a component of the cost of living and will affect wage demands. In a cheaper locale, you’ll be able to keep staff, where as in a higher cost locale you’ll have staff turnover and higher wage demands. Why did GM leave Oshawa, Ford leave St. Thomas, and Electromotive Diesel pack up and leave London for Muncie, Indiana? Simple, the cost of doing business in cheaper in The States. It’s the same reason many businesses are leaving California and moving to Texas.

#136 Wrk.dover on 04.12.21 at 11:37 pm

Hey Flop; Thanks in advance for considering my request for a loan, but I just found out our property tax is still $1200/yr, so I can manage to insure not one, but all of my beaters for the summer driving season with out borrowing your rebate!

Antique plates are up to around $20.00 here though….

#137 BillyBob on 04.13.21 at 3:09 am

DELETED

#138 Do we have all the facts on 04.13.21 at 6:20 am

#129 Stone

The Federal Reserve had some room to move in March 2020 and were able to drop interest rates to O.25% and to increase the M2 money supply by over $7 trillion. These remedial actions resulted in a rapid increase in the purchase of assets that had a history of increased value. Do you really believe that any Central bank will be able address a possible correction in stock market valuations in the future by substantially increasing M2 money supply again.

Many countries have tried to print their way out of a recession without success. You can only hide inflation from the general public for so long before interest rates have to be increased. Wait too long and hyperinflation becomes a distinct possibility.

A quick peak at economic cycles over the past hundred years will confirm that best way to control periods of inflation is to increase the cost of borrowing. Real inflation is becoming evident to the general population of North America and even a modest increase in interest rates will result in the need to rebalance investment portfolios.

My point was that the inevitable increase in interest rates will probably result in an adjustment in the price of equities towards their intrinsic values. It might be prudent to consider keeping a portion of your powder dry before any correction of stock prices occurs.

Just one mans opinion for what it might be worth.

#139 BillyBob on 04.13.21 at 7:03 am

Hmmm.

Deleted for…?

Granted the linked (mainstream press) article wasn’t related directly to today’s topic, but I’m pretty sure when China invades Taiwan it will be a bigger story than inflated Canadian RE.

Or was it the use of a word meaning literally “a person who behaves obsequiously to those in power”?

Surely this is an accurate descriptor for the current power dynamic between the two nations?

At some point countries are going to have to make a choice and take a stand over where their loyalties lie. Not support the status quo just so they can get a cheaper garden hose at Walmart.

#140 crowdedelevatorfartz on 04.13.21 at 8:12 am

@#139 Billybob
“Or was it the use of a word meaning literally “a person who behaves obsequiously to those in power”?”

+++=
LOL
I prefer Kowtow when mentioning our PM’s dealings with the dictatorship known as China.
But I do agree that most will sell their soul for a cheaper plastic garden hose sold at Wal-Mart.

#141 crowdedelevatorfartz on 04.13.21 at 8:23 am

Would a simultaneous war with Russia and China be considered a Black Swan event?

https://www.reuters.com/article/us-ukraine-crisis-russia/russia-calls-u-s-an-adversary-warns-its-warships-to-avoid-crimea-idUSKBN2C00WD

As our fearless leader wheezes, stutters, stammers and dithers.

#142 the Jaguar on 04.13.21 at 8:27 am

@#139 BillyBob on 04.13.21 at 7:03 am
+”At some point countries are going to have to make a choice and take a stand over where their loyalties lie. Not support the status quo just so they can get a cheaper garden hose at Walmart.”+
———-
I wonder if this isn’t already happening in some small and big ways. A retreat of sorts back to home ground and north america. That container ship debacle in the Suez Canal was a supply chain wake up call…. These two news snippets from this mornings National Post caught my eye:

“Bank of Montreal agreed to sell its Europe, Middle East and Africa asset-management unit to Ameriprise Financial Inc. for 615 million pounds ($1.08 billion), marking chief executive Darryl White’s biggest move yet to trim the bank’s portfolio of non-core businesses.
White, who took the reins of Canada’s fourth-largest lender in 2017, said in January that BMO was looking to “harvest investments” in businesses where the returns weren’t good enough or where the bank didn’t see a path to a leadership position, and then redeploy that capital toward better opportunities.”

and this, which in my humble opinion is the biggest business news story of the year:

“CP Rail, headquartered in Calgary, announced its blockbuster $25 billion merger with Kansas City Southern, making it the first railroad to span Canada, the U.S. and Mexico (if regulators approve). Last June, Alberta powerhouse ATCO announced it has been selected to upgrade and operate Puerto Rico’s electric system.”

( I left the bit about ATCO in the paragraph to give them the plug they deserve. )

Bring it on home.

#143 Crazy in MTL on 04.13.21 at 8:38 am

I really enjoy reading this blog, especially that it comes out daily. Thank you for writing.
But i am not convinced about the housing bubble, and neither about the stock market non-bubble.
I believe the government will do everything in their power to keep prices from going down, but i am afraid that they will lose control as per Taleb warns in The Black Swan.
Also, there is no actual rent control. I heard of landlords at the mercy of tenants, but I’ve seen tenants being renovicted, landlords keeping apartments empty for months (almost an entire year), and rents being doubled overnight.
Ultimately, we know very little of what is going on. The data is kept hidden, and i believe this is the key to keeping up all this charade. We are ignorant and we are surrounded by people and opinions that benefit from us spending as much money as possible. The book Thinking Fast and Slow by Kahneman describes the behaviour that we see perfectly. The Lorax by Dr. Seuss does too.

#144 Ballingsford on 04.13.21 at 8:55 am

#120 Jalapeno
*****
Thank you! To be honest I dont know the first thing about setting up a margin account.

As for the money already invested, I wouldnt take it out and park it, just holding off on new investments.

Missing dividends was a good point.

#145 crowdedelevatorfartz on 04.13.21 at 9:15 am

@#142 the jaguar
““CP Rail, headquartered in Calgary, announced its blockbuster $25 billion merger with Kansas City Southern, making it the first railroad to span Canada, the U.S. and Mexico (if regulators approve). ”

+++

I read that last week and was somewhat surprised that there has never been a tri-national spanning North America railroad company from Mexico to Canada.

In 150 + years of railroads…no one has ever thought of this?

#146 Sail Away on 04.13.21 at 9:31 am

#142 the Jaguar on 04.13.21 at 8:27 am

and this, which in my humble opinion is the biggest business news story of the year:

“CP Rail, headquartered in Calgary, announced its blockbuster $25 billion merger with Kansas City Southern, making it the first railroad to span Canada, the U.S. and Mexico (if regulators approve). Last June, Alberta powerhouse ATCO announced it has been selected to upgrade and operate Puerto Rico’s electric system.”

————

Yes, this turned a nice little arbitrage when it was announced a month ago. Now getting close to full value with still the regulatory approvals needed. We shall see. Rail is profitable.

#147 IHCTD9 on 04.13.21 at 9:39 am

#66 Doug in London on 04.12.21 at 4:42 pm

Why do you think Encana packed up and left Canada last year? Simple, it’s TOO DAMN EXPENSIVE to do business in Canada anymore.
___

Yep, one of my best customers packed it in last summer and went to Houston. For 3 months I quoted job after job, and even with the CAD well in my favour, I got slaughtered. I didn’t get a single project. Labour way too high, government related costs too high, energy costs too high, taxes too high, and material costs WAY WAY too high. Texas has Ontario beat on every single front, it’s not even worth trying.

Canada has really lost its way, I expect most of the manufacturing and resource sectors to continue bleeding companies to the US. I guess we’ll just have to pump house prices up another 15% or so to make up for it…

#148 Flop... on 04.13.21 at 10:06 am

#136 Wrk.dover on 04.12.21 at 11:37 pm

Hey Flop; Thanks in advance for considering my request for a loan, but I just found out our property tax is still $1200/yr, so I can manage to insure not one, but all of my beaters for the summer driving season with out borrowing your rebate!

Antique plates are up to around $20.00 here though….

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

Morning Workie, after studying the ledger with ICBC since I arrived here the best part of 20 years ago, I think I know what I should do with the $170 rebate.

Out column = $50,000

In column = $170

I am going to frame it and put it up on the wall…

M46BC

#149 KLNR on 04.13.21 at 10:07 am

@#9 Bram on 04.12.21 at 1:10 pm
We have a great agent keeping an eye out for us around the GTA. As soon as the meltdown starts will be time to strike.

“Eventually, people will stop paying $950k for a $700k house.”

don’t hold your breath Bram.

#150 Sail Away on 04.13.21 at 10:07 am

#145 crowdedelevatorfartz on 04.13.21 at 9:15 am
@#142 the jaguar

““CP Rail, headquartered in Calgary, announced its blockbuster $25 billion merger with Kansas City Southern, making it the first railroad to span Canada, the U.S. and Mexico (if regulators approve). ”

———–

I read that last week and was somewhat surprised that there has never been a tri-national spanning North America railroad company from Mexico to Canada.

In 150 + years of railroads…no one has ever thought of this?

———–

Oh, it’s been considered. Regulators aren’t too excited about a monopoly. Approval decision hasn’t been granted in this case and is expected to take about a year.

Investors are optimistic, pricing the KSU stock at $261 today with full purchase price if approved $276. No arb room left.

#151 Sail Away on 04.13.21 at 10:24 am

Oh no. The nationalizing continues with Air Canada:

https://ca.finance.yahoo.com/news/air-canada-gets-billions-loans-232229458.html

Nothing good can come of this.

#152 Faron on 04.13.21 at 10:43 am

#133 Cici on 04.12.21 at 10:28 pm

#41 Sail Away on 04.12.21 at 2:56 pm

Yeah, sounds great! I’ve never done a dedicated morel hunt, but have found them in odd places. How do morels taste with trout? I can’t “picture” the flavour. I tune into mushrooms in the fall and have some good spots for various boletes, hedgehogs up the wazoo and a slope of chanterelles unlike anything. All up on San Juan ridge.

Spring for me is typically EOQ craziness at work followed by as many spring skiing jaunts as I can squeeze in if I’m not running regional trail races down in the US. This year it will be skiing for obvs reasons. Nothing beats making up for lost Vitamin D time by skinning up a snowfield in shorts.

#153 Ponzius Pilatus on 04.13.21 at 10:44 am

#139 BillyBob on 04.13.21 at 7:03 am
Hmmm.

Deleted for…?

Granted the linked (mainstream press) article wasn’t related directly to today’s topic, but I’m pretty sure when China invades Taiwan it will be a bigger story than inflated Canadian RE.

Or was it the use of a word meaning literally “a person who behaves obsequiously to those in power”?

Surely this is an accurate descriptor for the current power dynamic between the two nations?

At some point countries are going to have to make a choice and take a stand over where their loyalties lie. Not support the status quo just so they can get a cheaper garden hose at Walmart.
————————————
My Dr. is from Taiwan and still has relatives in Taiwan.
He says things are a bit more complicated than most westerners think.
And BTW, I never shop at Walmart. Never will.

#154 Doug in London on 04.13.21 at 10:54 am

@IHCTD9:
Well, someone here actually gets it. To keep the Canadian economy going by inflating the housing bubble and driving prices up, up, up is like curing hypothermia by drinking alcohol. In the short run it dilates blood vessels so your skin feels warmer, but in doing so it actually cools your internal organs more and worsens the problem. Similarly, higher and higher housing costs drive up our cost of business and will cost more jobs in the long run. The upside? Some of those jobs that left those rust belt states years ago may come back, at the expense of Canada of course. We must have a lot of Trump supporters here, because that will make America great again. I think I’ll get more U.S. exposure in my investments.

#155 Dharma Bum on 04.13.21 at 10:59 am

“Lola thinks she won the dog lottery when she met me and immigrated to Canada”.
————————————————————————–
I met her in a club down in old Soho
Where you drink champagne and it tastes just like coca cola
C-O-L-A, Cola
She walked up to me and she asked me to dance
I asked her her name and in a dark brown voice she said Lola
L-O-L-A, Lola
La-la-la-la Lola
Well, I’m not the world’s most physical guy
But when she squeezed me tight she nearly broke my spine
Oh my Lola
La-la-la-la Lola

#156 Ballingsford on 04.13.21 at 11:03 am

#145 crowdedelevatorfartz on 04.13.21 at 9:15 am
@#142 the jaguar
““CP Rail, headquartered in Calgary, announced its blockbuster $25 billion merger with Kansas City Southern, making it the first railroad to span Canada, the U.S. and Mexico (if regulators approve). ”

+++

I read that last week and was somewhat surprised that there has never been a tri-national spanning North America railroad company from Mexico to Canada.

In 150 + years of railroads…no one has ever thought of this?

********
You are smarter than that and know the answer. Of course there’s been lots of politics and capitalism involved why this wasn’t done before.

How hard was it for for just Canada to build the national railroad and TransCanada highway.

Millenials think things are easy to correct what us boomers and those before us did, but there’s been many great minds before them. With evolution, doesn’t necessarily mean we are smarter.

They shouldnt be so quick to judge. They should teach something to that effect in schools.

#157 Ponzius Pilatus on 04.13.21 at 11:08 am

#151 Sail Away on 04.13.21 at 10:24 am
Oh no. The nationalizing continues with Air Canada:

https://ca.finance.yahoo.com/news/air-canada-gets-billions-loans-232229458.html

Nothing good can come of this.
—————————-
Of course, there is.
IHTCD9 will finally get a refund for his cancelled vacation last spring.
And there are some people, like me, who think deregulation has gone too far, with consumers being treated like cattle.
Also, air traffic within Germany will soon be restricted.
High speed trains are cheaper, more comfortable and get you there faster. And greener.
China builds high speed trains that cover the whole country.
Unfortunately, Canada and the US have missed that boat.
Say thanks to the Kochs.

#158 Faron on 04.13.21 at 11:10 am

#107 Nonplused on 04.12.21 at 7:46 pm

#43 Dave on 04.12.21 at 3:03 pm

Oh and then you have to have a certain number of transgenders flying them and they can wear their hair long now so the helmet doesn’t fit. I think at this point the rest of the world is laughing at the US military.

First of all, no. Secondly, no.

What are you so afraid of?

#159 Ballingsford on 04.13.21 at 11:26 am

#149 KLNR on 04.13.21 at 10:07 am
@#9 Bram on 04.12.21 at 1:10 pm
We have a great agent keeping an eye out for us around the GTA. As soon as the meltdown starts will be time to strike.

“Eventually, people will stop paying $950k for a $700k house.”

don’t hold your breath Bram.

********
Is it his good eye?

#160 Flop... on 04.13.21 at 11:55 am

I still think my plan from about six months ago to get everyone vaccinated at their local Tim Hortons would have put us in a better position than today.

I knew I should have trademarked Roll up your sleeves to win…

M46BC

————————————————————-

“Visualizing One Year of Fluctuating Covid-19 Vaccine Stock Prices.

The coronavirus is reshaping the global economy in a lot of different ways, and it’s placed a spotlight on how pharmaceutical companies make money. After all, 1 in 5 Americans is now fully vaccinated against Covid-19. But a detailed look at the stock market performance of top vaccine stocks raises questions about whether they are still worth investing in.

* Novavax is easily the biggest winner in a portfolio of Covid-19 vaccine companies, returning +1,192% from a year ago and topping out in February at $319.93 per share.
*
* Other Covid-19 vaccine companies have seen positive share price results over the last 12 months, including Moderna (+341%), BioNTech (106%) and Johnson & Johnson (+31%).
*
* Not all Covid-19 vaccine makers are seeing outstanding shareholder returns, including Sinovac which is exactly flat at $6.47 over the last year.
*
* These movements in stock value should be placed in the broader context of a stock market that is high by historical standards, not to mention business models that rely on more than just the production of a single vaccine.

It helps to put some of these stock price movements into context. In general, the broader stock market is close to an all-time record high. Over the last 12 months, the S&P 500 is up +56.3%, beating half the companies in our visual. The price for a share of Slack is up +69.8%, and Zoom is up an eye-popping +158%. And don’t forget, Gamestop is still up +3,527% from a year ago.”

https://howmuch.net/articles/covid-19-vaccine-stock-prices-oscillations

#161 T on 04.13.21 at 11:56 am

So it is when we have recessions/pandemics housing prices spike, then when the crisis ends, everyone is employed etc thats when housing crashes.

Just confirming, as I have been reading about this crash for a decade now.

Actually 12 years—each year with more certainty.

#162 Wrk.dover on 04.13.21 at 1:09 pm

#148 Flop… on 04.13.21 at 10:06 am
#136 Wrk.dover on 04.12.21 at 11:37 pm

Morning Workie, after studying the ledger with ICBC since I arrived here the best part of 20 years ago, I think I know what I should do with the $170 rebate.

Out column = $50,000

In column = $170

I am going to frame it and put it up on the wall…..

———————————————–

Their offices should have a flattering portrait of you framed on their walls. Benefactor #1….

#163 crowdedelevatorfartz on 04.13.21 at 1:13 pm

@#153 Ballingsford
“Millenials think things are easy to correct what us boomers and those before us did, but there’s been many great minds before them. With evolution, doesn’t necessarily mean we are smarter.

They shouldnt be so quick to judge. They should teach something to that effect in schools.”

++++

How you segeyed into a Millenials vs Boomers debate is somewhat mystifying

I was thinking along the lines of 30 years of NAFTA, 30 years of multi billion dollar Mergers and Aquisitions all over the world and finally someone realizes,

“Hey! Maybe we could ship Mexican goods straight to Canada on our own rail line…..”

I’ll save the Mills vs Booms for another day.
Unless Faron gets snarky.

#164 Ballingsford on 04.13.21 at 1:13 pm

#132 Nonplused on 04.12.21 at 10:27 pm
#174 NSNG on 04.11.21 at 11:44 pm

Oh and Canadian Tire is going to have a PR nightmare rebranding the “Mastercraft” line of tools. “Maybe they can switch to “Peoplecraft”.

Nope. They’ll change it to witchcraft.

——————————————–

That would be cultural appropriation, offensive to witches.

*******
Or call it crap, but that’s offensive to poop.

#165 Ballingsford on 04.13.21 at 1:57 pm

#163 crowdedelevatorfarts
*******
The segue is not important. The point was for everyone. Trying to highlight that the millenials aren’t as smart as they think.

People had brains before them.

#166 Tudval on 04.13.21 at 6:19 pm

“an inoculation campaign that has rocketed ahead with the Biden administration” ??!! Oh please! This is the Trump vaccine and yeah, 6 month of ramping up production will result in ever higher numbers.