Epiphany

Will people give up on housing because conditions are, well, insane?

The latest real estate board stats (later this week) may shed some light on that. But the anecdotal evidence is sure flooding in. Realtors report fewer showings, a decline in bidding wars and ‘offer nights’ where an expected deluge of paper during a blind auction turns into a trickle of one or two contestants.

And look at the latest measure of consumer sentiment in the States – where WFH, the virus and cheap rates have created the same bubble as here. According to the University of Michigan (credible) when people are asked ‘is this a good time to buy?’ the results are staggering. It’s the lowest level in thirty years, with the seond-biggest monthly plunge ever.

The largest decline was a year ago when Covid hit and everybody prepped for a depression. Now they’re freaking over runaway prices, vendor greed, bidding wars and omnivorous realtors. Say the charts: it has never been a better time to sell. Never a worse time to buy.

Hmm. This is interesting. Especially in light of the most recent news.

First, there’s a new, scarier stress test as of today. The bar is raised even higher. Another 5% or so of buyers are knocked out of the market. An absolute minority of Canadians (estimated to be about 15%) can now afford real estate – of any kind.

Second, did you catch the latest GDP stat? Huge. The economy grew at 5.6% in the latest period. Think hippo. No, elephant. Maybe dirigible. This kind of economic spurt is not routine, and the OECD just said it will pass 6% for the year. The last time we had that kind of excitement was back in 1973, when the top song was “You’re so Vain”. My theme.

Runaway economic, post-pandemic-everybody-dosed growth means more inflation and therefore higher interest rates. Mortgage broker/blogger Rob McLister says he’s planning on eight (8!) Bank of Canada increases over the next few years. And this is exactly what the higher stress test is designed to do – prepare people for what’s ahead, when 2% mortgages turn into 4% and 5% home loans.

Here are some comments from CIBC economist Benny Tal, which McLister gathered last week: “These are emergency interest rates. When the economy is rising by 6-7% a year, it’s not an emergency. If inflation takes off…and the Bank of Canada and Fed try to chase inflation because they were late [in tightening monetary policy], they will raise interest rates very, very quickly.”

Meanwhile, keep on eye on the States. President Biden is one spendy guy, and the budget he dropped last Friday for 2022 is a humdinger. Trillions and trillions in new expenditures are planned – on green initiatives, critical infrastructure and social program spending. There is no way the Fed will sit on its hands and keep pumping out monetary stimulus (cheap rates and quantitative easing) when government is doing the heavy lifting and the economy’s whirring. Already inflation stateside is running at the highest level in a quarter century. Canada will follow. Interest rates, in other words, could double.

Now, cue the masses. Most people in the steerage section and on the subway will swear that, ‘rates can’t rise,’ that ‘the government won’t allow it’ and also that ‘the economy will collapse’ if this occurs.’ They’re wrong. It will happen and the negative consequences will be heaped upon those who overextended themselves. That includes more than fifth of all new borrowers who now have debt-to-income ratios of 450% or more. They’re pooched. No, they will not default. Just whimper a lot.

For most folks a doubling of mortgage rates will reduce borrowing power by about 20% (and possibly 25%) which will have a predictable impact on the real estate market. Like a dude in a lake, expect shrinkage. There is no other logical outcome. We’re already in extreme territory. Prices rose by a third in a year. Double that in some places (like Nova Scotia’s South Shore). Incomes have hardly budged, so buyers are stretching badly.

Also remember that as the vax defeats the bug, the country is changing. WFH will not be as much of a thing. Workplaces will gradually reopen. Cities repopulate. Some of the reason that home prices in Armpit and Bunnypatch exploded and supply disappeared will be gone.

Hey, look at the survey from Right at Home Realty which found only a small portion (18%) of people considering selling want to live in the sticks.  The reasons are simple – lack for work and the negative implications WFH has on a career path. “While the work from home outcome of the pandemic is undoubtedly impacting the housing market, we believe calls for a significant exodus from larger city centres and drastic shifts in the urban housing dynamic during and post pandemic are overstated,” says the company. “The vast majority of Ontarians have no plans to move or change city locations as a result of these new dynamics.”

So how many people did the pandemic actually send out of the big smoke? Maybe 3%, these guys claim. A nothingburger, even though the exodus was enough to poison house prices far beyond the city.

In summary, it’s a mess. And thus the conclusion many are reaching. Sell high. Buy low. This is high.

About the picture: “Here is a picture of Dexter – as the untrained 8 month old  we adopted 13 years ago, and as the handsome old man he became,” write Duncan and Emma. “He has survived 2 cruciate surgeries, and having my F150 driven over him (always check under your truck if you have an old dog!). He just got handed a lymphoma diagnosis that unfortunately he won’t survive, so we are enjoying our last days with the old boy. He always loved charming the humans so I was wondering if he could charm a few from the pages of your blog.”

121 comments ↓

#1 Don Guillermo on 06.01.21 at 11:27 am

#129 Don Guillermo on 06.01.21 at 11:16 am
#126 45north on 06.01.21 at 10:28 am
Nonplused I bought my son an e-scooter some years ago. It had a useful life of 3 years and he didn’t ride it that much, but it was plugged in trickle charging the whole time so who knows how much electricity it used. Now, the whole thing is dead and I don’t know what to do with it. I can probably get new batteries at a specially store but he’s too big to ride it now. Do I recycle the whole dang thing? Where?

you got to recycle the batteries otherwise they end up in the landfill – toxic metals

I don’t know where you live – Vancouver? There’s

Battery World Vancouver
1749 Boundary Rd

Vancouver Battery
2192W Broadway

you should be able to take the batteries out – if not take the whole thing to the battery store and they’ll figure something out.
****************************************
Nonplused – The e-cycle next to Wild Rose is the place. Good excuse to enjoy a IPA on a beautiful hot patio day!!

#2 NSNG on 06.01.21 at 11:33 am

Toronto,

You need to break the jinx.

You haven’t won a cup since you ran Frank Mahovlich out of town on a rail.

APOLOGIZE!

#3 nicklabixa on 06.01.21 at 11:33 am

first. been awhile. agree w/articlye.

#4 SOMETHINGS UP!! on 06.01.21 at 11:39 am

That’s Ridiculous!

https://www.youtube.com/watch?v=zGUX_ip-7EU

#5 Mithan on 06.01.21 at 12:06 pm

I work for a telecom. In my division department of about 160 people, at the peaks, 80% of people were working at home, most of the time it was about 60%.

We are expected to all be in the office by mid August. A permanent telework situation is coming, but they expect less than 25% to take them up on it, and that will be a roughly 60/40(office) split.

All my work at home friends in other companies are reporting the same thing, except with some Lee way here and there.

#6 Steven Rowlandson on 06.01.21 at 12:10 pm

“Will people give up on housing because conditions are, well, insane?”

For those who drank the Kool Aid the answer is no how and no way.

Those of limited means and sound fiscal management principles wouldn’t touch the real estate market with a pole the length of the diameter of the universe.

#7 WTF on 06.01.21 at 12:11 pm

Traffic getting more sclerotic on Highway 1 daily here in the self proclaimed BPOE. As of 2 weeks ago The code monkeys are back partying Friday nites on the roof at the Microsoft lab across the street DT Van.

things are slooooowly normalizing

#8 NSNG on 06.01.21 at 12:19 pm

The most important question that will affect your assets over the next decade is:

Will central banks raise rates more than 3/4% or will they AGAIN welch the minute markets start convulsing?

#9 Leftover on 06.01.21 at 12:22 pm

I keep track of a certain kind of house in a certain part of town. What’s happening?

Well, listings are up 49% and prices have, ever so slowly, begun to shrink. “Price Changes” of 2%, still peanuts, but not the kind of news that sellers like to hear.

It could be that silent click of the market ratcheting down or, if Garth is right and interest rates double, a loud crack.

It’s happened at least four times since the Leafs won the cup. Some things never change.

#10 tkid on 06.01.21 at 12:28 pm

Dexter has my vote as Dog of the Year

#11 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 06.01.21 at 12:30 pm

‘So how many people did the pandemic actually send out of the big smoke? Maybe 3%, these guys claim.’
__________________________________________

Sad words, indeed. If more had left before the Make Believes predictable implosion, there might be a meaningful reduction now in TDS.

(Toronthole Derangement Syndrome)

But it’s different there everyone, so get in that blind auction and BUY, BUY, BUY!

#12 Sail Away on 06.01.21 at 12:37 pm

Shepherds are great family dogs. Thanks for the pic. Dexter is a regal gentleman. Sorry about the hard times coming; that’s the deal we make, but it doesn’t make it any easier.

#13 Shirl Clarts on 06.01.21 at 12:59 pm

You’re so vain. You probably think this blog is about you. Don’t you!

Wrong!!! It’s about the dogs!!!

#14 Millennial 1%er on 06.01.21 at 1:00 pm

“COTTAGERS STAY THE HELL AWAY”, are you around? I’m looking for a cottage to buy as a summer home & potentially some rental income. Any townships you recommend looking into?

#15 Wrk.dover on 06.01.21 at 1:21 pm

Since 1973, you say?

That year it was extremely hard not to get a job!

But the govt. of the prime minister of the day did have pogey available after eight weeks of employment…..

#16 Richard L on 06.01.21 at 1:23 pm

Canadians are fixated on the following 3 things:

1. Selling houses to each other

2. “Free” healthcare

3. Hockey

#17 KLNR on 06.01.21 at 1:23 pm

Here in the west end of TO its only getting crazier.
at the lower end houses that were 2mil in my hood are now over 3mil.

#18 Billy Buoy on 06.01.21 at 1:24 pm

No worries about rates going up over 1.5%.

Too many people will suffer and the gov’t does not have the cash to care for them unless we go to war.

Pretty simple…if people are spending most of their disposable income on their house and food to live, what else is left to drive any form of growth.

We are toast unless this thing crashes and re-sets.

No other option for the masses….

#19 Roial1 on 06.01.21 at 1:29 pm

I can see by the pictures that Dexter grew into his ears.
My Max is almost there.
Don’t those pictures bring tears to your eyes. just going back to the years that you shared?

Garth, have you started your search for your new puppy?

It is inevitable.

#20 wallflower on 06.01.21 at 1:37 pm

gonna be epic!
also, add in countries like Japan and China reducing treasuries acquisitions … usa gotta raise rates to keep pace

this is interesting too
Link Deleted

#21 ogdoad on 06.01.21 at 1:42 pm

How many people are actually going to regret moving away from the city when they find out how boring it is in the sticks? Or 1 horse towns? And if you have kids? Get your divorce lawy(yaaaaawn)er ready on execulink. Not only that, but in a 1 horse town, like whatever-ford, everyone wants to know you b/c they’re BORED! Lol!

At least in the city we’re just another silly human with LOTS of issues. No body cares. Which is actually ZEN…unless you’re really, really needy…in which case don’t move to the sticks, btw. And, and, and – Hug group! Lumberjacks don’t hug well…Lumbersexuals on the other hand…:)

Og

#22 islander on 06.01.21 at 1:48 pm

Forget the house: now you won’t be able to even afford the couch!

“Thinking of buying a new couch? The price may have just quadrupled!”

https://www.cbc.ca/news/business/furniture-tariffs-1.6043863

#23 Rinse and Repeat on 06.01.21 at 1:49 pm

So much for April peak housing! Another glimmer of hope dashed with ever rising house prices.

The market is still smoking hot thanks to Boomers cashing out and saddling their young with excessive debt. They then spread to every corner with their undeserved gains and jack the prices up for every manner of housing.

The May stats show another record month of sales and price increases, down 1% in sales from the record smashing April this year. There is no slow down, apart from that generated by few listings.

No longer confined to the GTA or MetroVancouver, you are witnessing a complete socio-economic shift where homeowners are the now the landed gentry. The divide has become so entrenched there is absolutely no going back. Bidding wars and over asks are still the norm in the all the desirable communities and regions surrounding the core.

The stress test is another failure in a long line of failed initiatives in the last 10 years. The new stress test reduces buying power by a whopping 4% and impacts a negligible 5% of buyers – this after a 40-100% increase in prices.

Good thing the federal housing minister admitted that they created a market for foreign buyers and that it would be catastrophic for prices to retreat a mere 10% despite a 40% increase. At least the feds acknowledged up front where they stand – defence of homeowner equity at all costs.

And while people like to think parabolic price increases are not sustainable, there is absolutely nothing, and I mean nothing, on the horizon that will prick the bubble:
– no meaningful federal initiatives since everything they do is window dressing;
– no feared recession after the withdrawal of federal benefits as Canadians have tons of accumulated savings waiting to be unleashed;
– no spike in foreclosures as homeowners equity massively increased;
– no curtailing of immigration as the backlog hundreds of thousands of immigrants and international students will soon be processed;
– no 1980s inflation increases, as rates will rise slowly without overwhelming mortgage renewals (take the time to do the math);
– no end to the intergenerational transfer of wealth to keep the party going, as the Bank of Mom and Dad keeps getting bigger with each price increase and the young keep getting bigger BOMAD down payments that fuel the prices increases.

The stress test is another ‘nothingburger’ and the market remains smoking according to statistics, not anecdotes, with no end in sights and the fundaments remain unchanged.

Actually, Mr. Realtor, May stats have yet to be published. And Canada does not have a ‘federal housing minister.’ – Garth

#24 Ponzius Pilatus on 06.01.21 at 1:49 pm

Economy up, virus down.
All good in God’s country.

#25 Sail Away on 06.01.21 at 1:58 pm

Hmmm… is Blackberry returning as a Canadian success story? Nice to see the business fundamentals are being recognized.

#26 Ponzius Pilatus on 06.01.21 at 1:58 pm

7 WTF on 06.01.21 at 12:11 pm
Traffic getting more sclerotic on Highway 1 daily here in the self proclaimed BPOE. As of 2 weeks ago The code monkeys are back partying Friday nites on the roof at the Microsoft lab across the street DT Van.

things are slooooowly normalizing
————————-
Brings back memories of leaving work early Friday’s and partying with the buddies either at “The Jolly Taxpayer” (now a Condo tower), or at “Steamworks”.
And then rushing to catch the last Westcoast Express.
WFH just can’t replicate that experience.

#27 Shirl Clarts on 06.01.21 at 2:01 pm

“Like a dude in a lake, expect shrinkage.”

LOL!

Or the pool!!
https://youtu.be/ldUZvxjKMGs

#28 Outrage on 06.01.21 at 2:02 pm

The emergency rates for the last 12 years will never end. Just like Japan they are here for forever. 10 year rates will be 0.25%.Wait to lock in !

#29 Hab Bit You Al on 06.01.21 at 2:03 pm

#2 NSNG

Patrick Roy

#30 crowdedelevatorfartz on 06.01.21 at 2:05 pm

@#26 Ponzies Pints.
“Brings back memories of leaving work early Friday’s and partying with the buddies either at “The Jolly Taxpayer””

++++

Ahh the Taxpayer.
Many fond memories swilling there in the 80’s and early 90’s on a Friday night.
Dickie the Bartender, Patrick the Aussie owner, Melanie, Lisa and the other waitresses all great to deal with..
The greasy food.
The pool table at the back.
Occasionally I’d help unload kegs in the Lane and roll them down into the basement.
The “basement” had a dirt floor, stone walls and the posts holding that old building up were original from the late 1890’s
Good times.

#31 Ponzius Pilatus on 06.01.21 at 2:06 pm

#23 Rinse and Repeat.
Will you want fries and coke with that Nothingburger?

#32 Ponzius Pilatus on 06.01.21 at 2:10 pm

Actually, Mr. Realtor, May stats have yet to be published. And Canada does not have a ‘federal housing minister.’ – Garth
——————-
Haha
Garth,
You’d make a a great “Federal Housing Minister”.
You’d kill that overgrown beast in no time.

#33 Gen Z on 06.01.21 at 2:12 pm

How low will the Loonie go if real estate collapses for the younger generations? The older generations have already cashed out and are living the life in Manila or Cancun.

Real estate will not crash. It could however stall, then deflate. And the impact on the dollar will be zero. (Such drama queens on this site.) – Garth

#34 alexinvestor on 06.01.21 at 2:17 pm

I’ve learned that economists are very good at spinning a story without fearing the consequences of being wrong or right. These guys believe that interest rates are going up ? Short the bond market … it’s literally free money. The most overvalued things out there are government bonds in a scenario where interest rates are going up 3%.

The rest of us have to make real life decisions with our money. So let’s see these economists put their money on the line. That’s the crucible of that they really believe.

#35 Classical Liberal Millennial on 06.01.21 at 2:30 pm

If I sell high, I’d just have to turn around and buy again. One of the drawbacks of small town living where rentals are almost non-existent outside of apartment buildings and small duplexes.

#36 BillyBob on 06.01.21 at 2:32 pm

#26 Ponzius Pilatus on 06.01.21 at 1:58 pm
7 WTF on 06.01.21 at 12:11 pm
Traffic getting more sclerotic on Highway 1 daily here in the self proclaimed BPOE. As of 2 weeks ago The code monkeys are back partying Friday nites on the roof at the Microsoft lab across the street DT Van.

things are slooooowly normalizing
————————-
Brings back memories of leaving work early Friday’s and partying with the buddies either at “The Jolly Taxpayer” (now a Condo tower), or at “Steamworks”.
And then rushing to catch the last Westcoast Express.
WFH just can’t replicate that experience.

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

Steamworks!

Man, I loved that place. Would sit on the leather couches with a couple buddies smoking cigars. Can you even imagine that now? Would be tackled to the ground and arrested on the spot. They had a nut-brown ale that was as superb as the scenery. Are they even in existence still?

The Vancouver of that era is long gone now though. WFH or not.

#37 Test Dummy on 06.01.21 at 2:34 pm

DELETED

#38 JSS on 06.01.21 at 2:40 pm

TSX breaks 20,000 yay!

finally about time.

#39 Barb on 06.01.21 at 2:46 pm

Dexter is one gorgeous looking pooch! Sad diagnosis, the last days with him will be full of love and bellyrubs and kisses. Damn F-150!

#40 Trojan House on 06.01.21 at 2:47 pm

We’ve been in emergency interest rates since 2008 have we not?

#41 Test Dummy on 06.01.21 at 2:47 pm

Any reason that got deleted Garth?

Not the focus of this site. – Garth

#42 Gino on 06.01.21 at 2:59 pm

Garth your real estate blogs sound like an apocalyptic prediction of a crash yet when a commenter references a crash you respond that you are not predicting one. So perhaps lighten up on the super negative RE blog commentary?

The commentary was factual and unemotional. I can’t help people’s flawed perceptions. – Garth

#43 The West on 06.01.21 at 3:16 pm

I don’t know who is ripping society off more. CERB recipients or Mitch Marner?

#44 Dolce Vita on 06.01.21 at 3:35 pm

Great news on GDP. Making up ground fast vs. pre-Covid:

Mar 2021 = $1,979.92M
Feb 2020 = $2,002.09M

https://www150.statcan.gc.ca/n1/daily-quotidien/210601/cg-a001-eng.htm

March 2020 to March 2021, All Industries:

+6.6%

Feb to Mar 2021:

+1.1%

Heck, even accommodation and food services was up:

Feb 2021 = $28,163M
Mar 2021 = $29,575M

+5%

Good for them. They’ve suffered enough.

——————-

PS:

Italia pretty much fully open today, the “official” day. Went out and it seemed as if the entire City of Pordenone was out on a passeggiata. So nice to see.

#1 and #2 Questions asked by Italians for today:

1. Are you allowed to drink at the counter in bars (in reference to a morning espresso).

2. Is there a limit to how many people can enter the bar?

Italians don’t ask for much other than this simple little dignity denied to Italians for so long:

https://i.imgur.com/U493C7d.png

…the poor things.

#45 Shortymac on 06.01.21 at 3:36 pm

Good, this might mean my husband and myself could afford a house one of these days.

Due to work from home the prices are roughly the same from Barrie to Toronto, so there isn’t an incentive to move out to the sticks. I still can’t wrap my head around who would pay 1 million for a regular house in Alliston, On.

Even tho my work has embraced WFH, my husband works in a lab and has to go in so we’re chained to Toronto. Currently we’re renting a 4 bed house for 2k/month so we’re stable for now.

#46 Hurtin' Albertan on 06.01.21 at 3:36 pm

Some remarkable anecdotes and statistics from south of the border via Redfin CEO, such as home bidder offers to name first-born after seller, there are now more realtors than listings…

craziness

https://twitter.com/glennkelman/status/1397189655326568450

#47 Debtful on 06.01.21 at 3:39 pm

#40 Trojan House

We’ve been in emergency interest rates since 2008 have we not?

—-

And did that motivate us to pay back the debt of add more debt?

We borrow money from the future.
We borrow resources from the future.
We borrow energy from the future.

We leave the kids debt, piles of garbage and nuclear waste they have to look after for thousands of years.

Hey, nothing personal kids, it’s just business.

Stay positive, happy and optimistic boys and girls. If you participate in The Machine YOU TOO can have an F150 pickup to pickup absolutely nothing with 99.9% of the time, and a slow heavy noisy Harley to wake your neighbours with. Hey, nothing says considerate and caring citizen and neighbour like driving by a street you don’t live on with your noisy Hog with your modified exhaust – because you’re an adult after all.

#STRONGERTOGETHER #EARTHDAY #LOVE

#48 NSNG on 06.01.21 at 3:40 pm

#29 Hab Bit You Al on 06.01.21 at 2:03 pm

#2 NSNG

Patrick Roy

Ha! I remember it well. I believe that was our first taste
of his infamous temper.

What a goalie!

#49 AM in MN on 06.01.21 at 3:42 pm

Runaway economic, post-pandemic-everybody-dosed growth means more inflation and therefore higher interest rates. Mortgage broker/blogger Rob McLister says he’s planning on eight (8!) Bank of Canada increases over the next few years.

———————————————–

No Garth, real economic growth does not cause inflation. The Fed buying US$120B/month in US Govt. debt causes inflation, with the BoC doing similar.

When they stop, or even start to wind down the balance sheet, inflation will drop…and the real pain hits.

Check out the mess in 2006+. 17 straight rate hikes from the Fed at a quarter point each. This time they may need half point jumps. BoC will follow big brother.

#50 Duncan Elsey on 06.01.21 at 3:48 pm

Thanks Garth – he’s still enjoying his last few days of sunshine, very short walks and visits from his favorite humans.

#51 Dolce Vita on 06.01.21 at 3:58 pm

On the vax front Canada doing OK better if they replaced Minister Anand.

Here is her track record as of late in getting vax doses for Canada, shortfall of received vs. forecast*:

Apr 26-May 2: -499,830
May 17-23: -772,840
May 24-30: -2,134,120 (she predicted 4.5M for that week)
May 17-23 AZ: -655,200 (see below, some arrived today)

If she were in the World of Commercial Procurement she’d have been replaced or sacked a while ago.

*Data from:

https://www.ctvnews.ca/health/coronavirus/coronavirus-vaccination-tracker-how-many-people-in-canada-have-received-shots-1.5247509

https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/prevention-risks/covid-19-vaccine-treatment/vaccine-rollout.html

———————-

Conveniently, neither website goes back in time, well…for obvious reasons.

I like to keep track of it all every week.

I think what’s going on is the EU is trying to service Africa and India as well, both in dire straits. Probably cutting back a bit on Canada.

As of June 1:

90% of your vax Canada is from the EU.

————-

PS:

Min. Anand managed to get 10K doses of AstraZeneca in (today), still short about:

645,200

doses your forecast Minister.

May 12: “As some provinces halt the use of AstraZeneca, Canada confirms 655,000 more doses will arrive next week”

https://www.cbc.ca/news/politics/astrazeneca-shots-delivery-1.6024063

The 4.5M doses that didn’t come (actual/recv’d was = 2,365,880 doses):

https://i.imgur.com/q9re00c.png

#52 Linda on 06.01.21 at 4:07 pm

As per the mighty Google, the current population of the metropolitan area known as GTA is north of six million people. 3% of that is 180,000+ folks who have presumably purchased outside of the Big Smoke. Hence the extreme price increases of RE in the boonies. If house prices drop I’d expect it to be in said outer hinterlands, especially if employers mandate a return to the corporate office.

#53 Dolce Vita on 06.01.21 at 4:13 pm

RE: On the vax front Canada doing OK better if they replaced Minister Anand.

————-

Plebian me can easily track doses recv’d vs. forecast per my prior Comment.

So here are my questions to you Canada:

Is the Cdn MSM fast asleep holding Gov Canada to account?

Is Her Majesty’s Loyal Opposition fast asleep holding Gov Canada to account?

——–

I mean what’s 4 million doses of vax not delivered right?

No biggie in the middle of a Pandemic.

That’s just 2 million Cdns that didn’t get vax’d that could have.

No problemo.

#54 Brian Ripley on 06.01.21 at 4:18 pm

I have my 4 interest rate charts up with the May data:
http://www.chpc.biz/

Real long rates (30yr) have plunged well below the flat line with the CPI spike.

Ditto for the real 10yr bond.

The BoC has kept the Bank Rate at 0.5% for the last 14 months and on the yield curve chart, the nominal 10yr less 2yr bond spread has dropped 19 beeps since March and is tracking the same plot as 2Q 2009.

I expect we will see the real TSX Real Estate Index Y/Y plot which is on the yield curve chart as well, begin to detumesce soon.

#55 drydock on 06.01.21 at 4:20 pm

Fifteen days to flatten the curve:
17 March, 2020
442
days ago.

#56 Keeks Online on 06.01.21 at 4:33 pm

So sorry to hear about Dexter – such a handsome dog!

#57 Shakabra on 06.01.21 at 4:47 pm

What about government and corporate debt and rising rates? You only mentioned the effect of Joe Blow.

#58 Ponzius Pilatus on 06.01.21 at 4:51 pm

#36 BillyBob on 06.01.21 at 2:32 pm
#26 Ponzius Pilatus on 06.01.21 at 1:58 pm
7 WTF on 06.01.21 at 12:11 pm
Traffic getting more sclerotic on Highway 1 daily here in the self proclaimed BPOE. As of 2 weeks ago The code monkeys are back partying Friday nites on the roof at the Microsoft lab across the street DT Van.

things are slooooowly normalizing
————————-
Brings back memories of leaving work early Friday’s and partying with the buddies either at “The Jolly Taxpayer” (now a Condo tower), or at “Steamworks”.
And then rushing to catch the last Westcoast Express.
WFH just can’t replicate that experience.

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

Steamworks!

Man, I loved that place. Would sit on the leather couches with a couple buddies smoking cigars. Can you even imagine that now? Would be tackled to the ground and arrested on the spot. They had a nut-brown ale that was as superb as the scenery. Are they even in existence still?
————–
Going even stronger now.
It’s a gold mine right on the entrace to Gastown.
A big patio out in front.

#59 Andrewski on 06.01.21 at 4:53 pm

Sing it Carly!

https://www.youtube.com/watch?v=M8uU_4XBugA

#60 Faron on 06.01.21 at 4:55 pm

#25 Sail Away on 06.01.21 at 1:58 pm

Know what’s funny Sail Away? Knowing that BB is acting like a meme stonk and seeing the gamma squeeze not realizing in associated stonks on Friday, and knowing there is still some oomph in it (lots of call interest didn’t expire Friday) I bought at close-ish on Friday. I’m guessing the friday options expiration will be front-run this week so expect a peak earlier in the week this time and a lot of burnt premium at expiration.

Is BB a good long-term bet? Maybe. Probably? Is it a milk-laden cow in meme stonk land? Certainly. But, if you see crypto go back up, then may be time to exit memeland and take some profit to buy back in later.

#61 Brock on 06.01.21 at 5:11 pm

Separation: Thought in time- causes suffering.
Baby boomers feel separate from Millennials; rich separate from poor. It all leads to conflict.

Until we realize the great union there will be violence.

#62 The Nutty Epidemiologists - Covid party deserters on 06.01.21 at 5:12 pm

A downtown barren, the destruction of the service industry, poorer health outcomes because of closed gyms and arenas, and the ruination of 1000s of small businesses.

This is the legacy of Toronto’s pandering, theatrical, science fiction-based policy response to the pandemic.

Williams is being “retired” just in time not to be subpoenad when the chicken will come home to roost..

#63 WTF on 06.01.21 at 5:18 pm

All good. PM Oblivious has it under control.

https://www.bnnbloomberg.ca/trudeau-promises-cities-help-to-lower-high-cost-of-housing-1.1611266

What an idiot.

#64 Dave on 06.01.21 at 5:20 pm

DELETED. (Racist)

#65 crowdedelevatorfartz on 06.01.21 at 6:07 pm

@#63 WTF

https://www.bnnbloomberg.ca/trudeau-promises-cities-help-to-lower-high-cost-of-housing-1.1611266

=========

“Promises” Minister Trudeau primes the voter pump with breathless , meaningless nothings.

#66 Penny Henny on 06.01.21 at 6:08 pm

Regarding house sales and bidding wars. Here in the Niagara region biddings wars seem to be petering out. Unless you have something special to offer the buyers have lost interest in such foolishness.

#67 Sail Away on 06.01.21 at 6:24 pm

#60 Faron on 06.01.21 at 4:55 pm
#25 Sail Away on 06.01.21 at 1:58 pm

Know what’s funny Sail Away? Knowing that BB is acting like a meme stonk and seeing the gamma squeeze not realizing in associated stonks on Friday, and knowing there is still some oomph in it (lots of call interest didn’t expire Friday) I bought at close-ish on Friday. I’m guessing the friday options expiration will be front-run this week so expect a peak earlier in the week this time and a lot of burnt premium at expiration.

Is BB a good long-term bet? Maybe. Probably? Is it a milk-laden cow in meme stonk land? Certainly. But, if you see crypto go back up, then may be time to exit memeland and take some profit to buy back in later.

———-

I am pleased to see you have learned and are now following my lead. It’s a fine choice; your financial future will thank you.

As long as you’re clear, though: this action is 100% cowboy. Nothing B&D about it.

#68 Nonplused on 06.01.21 at 6:34 pm

#1 Don Guillermo on 06.01.21 at 11:27 am
#129 Don Guillermo on 06.01.21 at 11:16 am
#126 45north on 06.01.21 at 10:28 am

Nonplused – The e-cycle next to Wild Rose is the place. Good excuse to enjoy a IPA on a beautiful hot patio day!!

——————————–

Is that in Calgary? Google maps shows a Wild Rose Brewery in SW Calgary but no e-cycle. Will they take a Costco scooter (Razor)?

I can get the batteries out easy enough, I checked out if I can replace them and I can fairly easily. The are lead-acid so should be pretty easy to find at a battery store. But why spend the money if nobody is going to ride it? And new batteries would probably cost as I could get for the scooter at a garage sale even after fixing it.

In my mind it is just one more example of all the e-waste we are manufacturing. This thing is a fairly significant hunk of aluminum and steel and it is worthless without batteries that last 3 years. In fact, I have a whole shelf of “rechargeable” gizmos that no longer work that I am trying to figure out what to do with. A cordless drill, a spotlight, a flashlight, old laptops, a UPS, etc. all useless because the batteries no longer work. Oh and the electric start on my weed whacker no longer works either. Thankfully that also has a pull start.

#69 45north on 06.01.21 at 6:44 pm

For most folks a doubling of mortgage rates will reduce borrowing power by about 20% (and possibly 25%) which will have a predictable impact on the real estate market. Like a dude in a lake, expect shrinkage. There is no other logical outcome. We’re already in extreme territory. Prices rose by a third in a year. Double that in some places (like Nova Scotia’s South Shore). Incomes have hardly budged, so buyers are stretching badly.

we are in extreme territory. A 20% drop in borrowing power will put real estate into suspended animation which is a good thing.

#70 Nonplused on 06.01.21 at 6:46 pm

#25 Sail Away on 06.01.21 at 1:58 pm
Hmmm… is Blackberry returning as a Canadian success story? Nice to see the business fundamentals are being recognized.

————————–

I still can’t believe Blackberry screwed their dominant position in smart phones so badly. Their phones were way ahead of anyone else and I miss that little clicky keyboard. The last one I had had both a touch screen and a slide out keyboard, I loved that phone. I think it was the lack of apps that killed them.

But it goes to show nobody stays king in the tech world for long, as Tesla shall soon prove again.

#71 Shaggy on 06.01.21 at 6:52 pm

A little anecdotal evidence to back you up Garth (not that you need it, you do such a good job backing yourself up with stats). A colleague of mine’s family had outgrown their space and decided to trade up their tonhouse in the GTA for a new build detached. They put in an offer 3 weeks ago and ended up paying $50k over list for their new house. They were happy with that result as it was within their $100k over budget. They’ve spent the last two weeks emptying out and staging their townhouse, with lots of showings last week. A unit a little further down went for $200k over asking 3 weeks ago and this Sunday was their offer day…but unfortunately none came. A similar situation with a bungalow down the street. Where there were bidding wars a month ago, this one has sat and just had its first price reduction.

Luckily my colleague and her spouse make some good coin and didn’t over extend, but it does seem that this market is rolling over.

#72 Sail Away on 06.01.21 at 6:59 pm

#68 Nonplused on 06.01.21 at 6:34 pm

I have a whole shelf of “rechargeable” gizmos that no longer work that I am trying to figure out what to do with. A cordless drill, a spotlight, a flashlight, old laptops, a UPS, etc. all useless because the batteries no longer work. Oh and the electric start on my weed whacker no longer works either. Thankfully that also has a pull start.

———–

It’s not the fault of the tools. Just as many of us had a choice between learning car mechanics or walking, the current landscape requires knowledge of batteries or more consumerism. Choices.

#73 S.Bby on 06.01.21 at 7:03 pm

Vehicle prices are up as well due to micro-chip shortages and production cutbacks. Some newer used cars are selling for MORE than they were bought for a year ago. Expect this state of affairs to last for at least another year.

#74 Sail Away on 06.01.21 at 7:08 pm

One of the best bang for buck choices is between studying financial finagling intensely or working for wages an unnecessary 10-15 years. Choices.

#75 Sail Away on 06.01.21 at 7:18 pm

#70 Nonplused on 06.01.21 at 6:46 pm

…it goes to show nobody stays king in the tech world for long, as Tesla shall soon prove again.

——–

Elon is, and will remain king. His demise has been constantly predicted for 15 years over which time he made himself the richest person in the world. Elon wins. It’s sorta his thing.

Did you see my foe F is now mirroring my investments? It’s a wise choice. I bet he’s also quietly bought TSLA.

#76 Faron on 06.01.21 at 7:23 pm

#67 Sail Away on 06.01.21 at 6:24 pm

#60 Faron on 06.01.21 at 4:55 pm
#25 Sail Away on 06.01.21 at 1:58 pm

You reminded me of a meme stonk. Your influence ends there. I would hold BB over TSLA

by far

though.

#77 Faron on 06.01.21 at 7:24 pm

Ha. by far

Instant Karma. Love it.

#78 The Oracle of TO on 06.01.21 at 7:43 pm

I’m calling a top in real estate, the past week I went to about seven listings ranging from East York, North York & Richmond Hill. Out of the seven I visited, none of them sold, a couple had offers but they were not accepted. A couple had asking prices the same of similar comps that had sold 3 months ago, one in East York that agent called me and said there was not one offer and the house was reasonably priced and in a good location. I think Garth is being humble in saying no bust, I am calling for min 25% drop.

#79 Doug t on 06.01.21 at 8:14 pm

I got a love letter from CIBC today – and how timely since they just posted massive profits – their love letter said “dear sir (them,they,it) we have listed below a “change” in our fee structure effective July 1st – increases across the board to warm your heart ……..they couldn’t wait a couple of months till we kinda forget how much they make off our backs before sending this out ? LOL they actually enjoy shoving it in our faces – sadists

#80 Sail Away on 06.01.21 at 8:28 pm

#76 Faron on 06.01.21 at 7:23 pm
#67 Sail Away on 06.01.21 at 6:24 pm

You reminded me of a meme stonk. Your influence ends there. I would hold BB over TSLA by far though.

———

Is that because while they are clearly both the world’s best selling and most recognizable brands in their respective sectors, Blackberry is more desirable to John Public?

Oh, you’re a canny one!

#81 the Jaguar on 06.01.21 at 8:34 pm

‘When the economy is rising by 6-7% a year, it’s not an emergency. If inflation takes off…and the Bank of Canada and Fed try to chase inflation because they were late [in tightening monetary policy], they will raise interest rates very, very quickly.”

This is an interesting comment. People forget what those rapid interest rate rises were like in the high interest rate days, and the impact on the ‘psyche’ of the average Joe. It’s similar to the run on toilet paper during the early stages of the pandemic. Everyone racing to lock in a rate. White knuckles and eyes wide with fear everywhere one looked.
Love that Benny the media hound is planting the seed. We’ll see how many mutts are paying attention.

Nonplused, I have a new solution for how to keep cool during the southern Alberta heat wave. ( warning issued by Environment Canada. 31 tommorow, 32 on thursday).
We can do as Marilyn Monroe did, and keep our undies in the icebox! Mercy!

#82 Paul on 06.01.21 at 8:38 pm

#78 The Oracle of TO on 06.01.21 at 7:43 pm
I’m calling a top in real estate, the past week I went to about seven listings ranging from East York, North York & Richmond Hill. Out of the seven I visited, none of them sold, a couple had offers but they were not accepted. A couple had asking prices the same of similar comps that had sold 3 months ago, one in East York that agent called me and said there was not one offer and the house was reasonably priced and in a good location. I think Garth is being humble in saying no bust, I am calling for min 25% drop.
———————————————————————————————
Are you trying to buy a house, traveling to all those areas during a pandemic? Or are you a one person super spreader?

#83 VladTor on 06.01.21 at 8:50 pm

…Mortgage broker/blogger Rob McLister says he’s planning on eight (8!)

*********

My forecast was done couple weeks ago – five in two years. Probably two small this year – each 0.25. And I’m thinking two of five will be sharp increase – like 1%

#84 Ponzius Pilatus on 06.01.21 at 8:59 pm

#68 Nonplussed
Ever heard of build-in obsolescence?
I’m sure you do.
Stop buying useless crap made in China.
Do we really need battery driven can openers?
And nose hair removers?

#85 VladTor on 06.01.21 at 9:04 pm

….And this is exactly what the higher stress test is designed to do – prepare people for what’s ahead, when 2% mortgages turn into 4% and 5% home loans

*********
In my opinion this new stress test in reality about nothing.
Zoocasa calculated how these new rules conduct on mortgage affordability:
https://www.zoocasa.com/blog/impact-of-new-stress-test-on-homebuyers/

Look at table – in Toronto difference in income just $8000. Ridiculous ! Folk find this money or paper to prove that they have this money very easy.

Real stress test should create restriction on how much mortgage I can take with my income. For instance – my mortgage can’t be more than 4 times household income. That’s it!

Nobody interesting ! Nor banks, nor government, nor politicians.

More bubble ahead!

Have a sit and wait for RE crash. Too much fun ahead. I’m living close high-rise towers. May be one day I will see mortgage jumpers.

Sad!

#86 Garth's Son Drake on 06.01.21 at 9:11 pm

dirigible?

Think Hindenburg.

#87 willworkforpickles on 06.01.21 at 9:25 pm

“Most people in the steerage section and on the subway will swear that, ‘rates can’t rise,’ that ‘the government won’t allow it’ and also that ‘the economy will collapse’ if this occurs.’ They’re wrong. It will happen and the negative consequences will be heaped upon those who overextended themselves.”
………………………………………………………………………………………………….

Absolutely Garth and you are right and they are so wrong. (i too and a few others have said all of this again and over again right here in the past year).

There are many factors at work (went over many in over a hundred or so posts) that make this outcome inevitable…factors too lengthy in detail to cover in one post without starting a book… now I’m repeating myself.

#88 Chinese Checkers on 06.01.21 at 10:05 pm

All my work at home friends in other companies are reporting the same thing, except with some Lee way here and there.

____________________________________________

Lee Way used to work with me when I was at Nortel in Ottawa.

Also, Wai Hung Lo. True story … I swiped his office name plate when I left the company and displayed it proudly for years to come!

#89 Zen Investor on 06.01.21 at 10:33 pm

All the smart people I know are saying no rate increases, just a lot of moral suasion, jaw boning and wild hand wringing from the politically charged BOC. What the pols are trying to do is stop average people borrowing so they can borrow more to spend on Project Majority. This is highly inflationary for real estate.

FOMO is a real threat to Mills who don’t act. Monster mortgages are a fact of life. Likely mortgage relief will replace child care as the top priority for Mills who are not having children within the statistical norm projections. Mills report not having sex ( with people) let alone the cratering birth numbers among a generation of high tax and overstressed kiddies.

So, full blast inflation, roaring stock market, lots more M&A and deeply tanned rich old guys, desperate pasty youth…what a combo. I am looking at a lot of future scenario’s, all of them including me sipping cocktails ogling the Swedish Bikinis Team poolside.

#90 Cici on 06.01.21 at 11:12 pm

That sweet, beauty Dexter did charm me.

Poor sweetie, don’t let him suffer. If he’s in pain, have him put down. He will thank you for it. Good luck and give him all your love until he has to mosey off to an even better place.

#91 Al on 06.01.21 at 11:35 pm

“”You’re so Vain”. My theme.”

Do they call you Mr. Vain?…or Mr. Raider?

They hope and pray and die for men
Like you cause you’re the one
Begotten son that breaks the mould
Get a look at male epitome
Style has never seen
That makes you want to grab and hold
And squeeze real tight
Whose gonna be the one to save
You from yourself
When you wanna take a bite

#92 S.Bby on 06.01.21 at 11:57 pm

#79 Doug t

Same with TD.
Bastards.

#93 NSNG on 06.02.21 at 12:19 am

B.C.’s minimum wage increases to $15.20 an hour on June 1

The increase is an extra 60 cents an hour, going from $14.60 to $15.20 an hour on Tuesday.

Over the last four years, the province’s minimum wage has steadily gone up from $11.35 an hour in 2017 as part of the NDP government’s pledge to give the province’s lowest paid workers a pay boost.

After this wage hike, the minimum wage will be tied to inflation.

https://vancouversun.com/news/b-c-s-minimum-wage-increases-to-15-20-an-hour-on-june-1

#94 Ponnaps on 06.02.21 at 12:39 am

Garth,

This is no more the time to talk about prices stabilizing or even melting down .. we are at least 30-40% higher now compared to when that was predicted.. in order for that prediction to hold, shouldnt we now be unequivocally saying that a crash is imminent?

#95 Steve M. on 06.02.21 at 12:53 am

“My theme.”

XD

#96 Damifino on 06.02.21 at 12:58 am

#79 Doug t

Don’t hate the banks. Own them.

#97 Nonplused on 06.02.21 at 1:26 am

#84 Ponzius Pilatus on 06.01.21 at 8:59 pm
#68 Nonplussed
Ever heard of build-in obsolescence?
I’m sure you do.
Stop buying useless crap made in China.
Do we really need battery driven can openers?
And nose hair removers?

——————————-

Well that’s kind of where I am going with all of this PP.

I have many power tools that require the use of an extension cord but this isn’t usually a problem. Many of them are 30 years old and they still work like they were new. My son will probably still be using them 30 years from now.

But if it has a battery it is trash in 3-10 years depending on the battery type.

#98 Frank B. on 06.02.21 at 1:33 am

https://www.ourcommons.ca/members/en/votes/43/2/118

So, no elections when the pandemic is ongoing. Who says it’s over? Mr. Socks? When?

Are we technically in a dictatorship now?

#99 Nonplused on 06.02.21 at 1:34 am

#81 the Jaguar on 06.01.21 at 8:34 pm

Nonplused, I have a new solution for how to keep cool during the southern Alberta heat wave. ( warning issued by Environment Canada. 31 tommorow, 32 on thursday).
We can do as Marilyn Monroe did, and keep our undies in the icebox! Mercy!

——————————

Naw. Just keep ice in the rye and coke.

#100 Nonplused on 06.02.21 at 1:37 am

#75 Sail Away on 06.01.21 at 7:18 pm

Elon is, and will remain king. His demise has been constantly predicted for 15 years over which time he made himself the richest person in the world. Elon wins. It’s sorta his thing.

————————-

His riches are mostly notional. Do I have to go over how that works again?

#101 A J on 06.02.21 at 7:23 am

I had a meeting with my manager last week. We’re not expected back at the office and can WFH going forward. That includes my department and multiple others. Many people I work with have moved out of the core during COVID and have excelled working from home. They also report being happier not working from downtown. I feel like those businesses expecting their employees back are trying to justify their managerial positions and thinking in an old school way. My job is taking a different more modern approach and I’m super grateful for that.

#102 Summertime on 06.02.21 at 7:28 am

Ever increasing bank fees, adding insult to injury (zero rates, high inflation of food, energy, everything that matters).

Housing at 15-20 years + annual net incomes with only 15 % able to afford it in the good new times, while it was 3 gross annual incomes in the bad old times.

Growth due to severely understated inflation and money printing, constant record deficits and we call this ‘smoking hot economy’?

How would we call then the economy of the bad old times when interest rates were over 5-6 %?

#103 Do we have all the facts on 06.02.21 at 7:49 am

Love the positive tone but you failed to mention that Canadian GDP still sits well below the pre pandemic levels. The significant growth of GDP in the first quarter of 2021 is certainly good news but a substantial portion of the gain was driven by inflated prices levels.

The injection of $500 billion of total government debt into the Canadian economy over the previous 12 months certainly contributed to GDP growth. It remains to be seen how a reduction of government injections will impact GDP growth in the future.

Our economy has become based on the delivery of services not on the production and sales of goods. The Canadian manufacturing sectors have shown little sign of recovering and continue to decline in real terms.

The impact of an increased dependency on services on future employment levels is not clear. What we do know is that as on line retail sales increase employment in bricks and mortar stores will decrease. Recent trends will have an impact on a number of economic sectors and I am not sure our governments are preparing for these inevitable changes.

The refusal to increase interest rates as inflation builds momentum is an example of their reactionary mentality.
Allowing central banks to decide on the right time to increase interest rates is equivalent to basing fire protection on the fighting of fires that occur instead of preventing future fires from occurring. We elect governments to protect our interests and it is time all governments started living up to their responsibilities instead of reacting to each crisis as if it came as a total surprise.

#104 crowdedelevatorfartz on 06.02.21 at 8:16 am

@#75 Sail Away
“Elon is, and will remain king.

++++

The only thing larger than Elon’s bank account is his ego.

Has he started mass producing that hideous Cyberpunk “truck” yet or will it continue to make guest appearances in Hollywood Marvel Movie Iron Man sequels…… as Ford kicks ass and takes names in the electric truck sales …thus continuing the truck sales trend they have conquered for 50 years?

#105 the Jaguar on 06.02.21 at 8:26 am

Snippet from this mornings NP

“Meanwhile, efforts by oilsands producers to reduce their carbon footprint could assuage the worries of some investors. Last week, Suncor Energy Inc. said it plans to cut its emissions by more than one-third.

Moves to cut emissions could “make Alberta very attractive” for institutions that may not have previously included the province in their provincial bond holdings,” said Earl Davis, head of fixed income and money markets at BMO Global Asset Management.

Canada’s biggest pension managers boosted their equity stakes in the country’s major oil sands companies in the first quarter of 2021.”

Some days I wonder why Kenney doesn’t have me on the provincial payroll as chief junkyard dog defending this province. Woo woo. Woo woo woo…

#106 Debtful on 06.02.21 at 9:07 am

Googled “Canada government debt” this morning. What is this?

>>>
For 2019 (the fiscal year ending 31 March 2020 <- before Covid spending?!?!), total financial liabilities or gross debt was $2.424 trillion crap ($64,087 per capita) for the consolidated Canadian general government debt (federal, provincial, territory, and local governments combined). This corresponds to 105.2% as a ratio of GDP.

So Canada is at $3 trillion total easily – surely.

#107 Woke this morning... on 06.02.21 at 9:13 am

Caught The National yesterday Garth.

Sir John A. Macdonald featured. Looks like he’s cancelled.

Wonder what’s next to be cancelled?

No one and no thing is too big to be cancelled in this woke world.

#108 Elon Muskvitch on 06.02.21 at 9:21 am

#68 Nonplused

Yeah Nonplused, the don’t make it like the used to.

Here, look at Jay Leno’s 100 year old electric car.

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

You think Tesla’s batteries will work 100 years from now just by adding some distilled water to give them another 3 years of operation? You think Tesla cars will run in 100 years? The electronics and capacitors will fail at quarter century mark, and off to the dump with Teslas. Engineered obsolescence indeed.

The thing is Elon knows about battery tech, yet he insists on doing the same old batteries for his car that don’t last as long as they could. Why not? Because they are aligning the battery to be swapped out once during the life of the car at most, if even that. Sad, because there is a way to make the electric car amazing and cheap. For example, why must we pay for giant batteries in the first place? Why can’t we buy a car with 100 mile range battery, and then have a swapped-out battery you pick up at a station, charged and changeable in 5 minutes?

#109 Sail Away on 06.02.21 at 9:53 am

#104 crowdedelevatorfartz on 06.02.21 at 8:16 am

Has he started mass producing that hideous Cyberpunk “truck” yet or will it continue to make guest appearances in Hollywood Marvel Movie Iron Man sequels…… as Ford kicks ass and takes names in the electric truck sales …thus continuing the truck sales trend they have conquered for 50 years?

———-

I remember in grade school, there were major feuds and fistfights between Chevy and Ford supporters. Ah, for the good ol’ days!

#110 Dharma Bum on 06.02.21 at 10:06 am

One of my kids recently bought a house in the GTA (ish). Over a 6 week period of looking and offering, the situation went from losing blind bids to the tune of $150K over asking to a single, negotiated offer on which they got the deal for $50K UNDER asking. There was a noticeable change in the market even within that 6 week period. More homes were on the market for 30 plus days. Stick to your guns. You’re still going to pay a historically obscene price, but not over asking. Boycott the obviously low asking prices to begin with and force the sellers to list at market.

#111 Trojan House on 06.02.21 at 10:11 am

#93 NSNG on 06.02.21 at 12:19 am

Before the pandemic (or should I say before government imposed lockdowns), my son was going to university in Australia – Gold Coast. He did have a part time job there as a server at a hotel. His hourly wage was over $20/hr. The minimum wage is around $20/hr I believe. Depending on length of service, a full time server could potentially make close to $30/hr.

The trade off to higher wages is higher prices for goods and services. According to him, everything there is at least 2 times more expensive (as you would expect). It is a very expensive country to live in.

#112 Bdwy on 06.02.21 at 10:46 am

#97 Nonplused on 06.02.21 at 1:26 am
#84 Ponzius Pilatus on 06.01.21 at 8:59 pm
#68 Nonplussed
Ever heard of build-in obsolescence?
I’m sure you do.
Stop buying useless crap made in China.
Do we really need battery driven can openers?
And nose hair removers?
….

But if it has a battery it is trash in 3-10 years depending on the battery type.

————

Stumbled onto a good battery hack the other day.

Saw a battery powered 8 foot pole chain saw at a giveaway price at crappy tire a couple years back, like 39 bucks. Did not read the box carefully , no batt included. 160 for a battery at the time, not worth it, so it sits in the box.

Wanted a few high up limbs cut this spring, so i pull out this saw. 20v. Got plenty 20v batts from other tools. 8 inches of wire and 4 of the right size spade connectors fit tightly into the batt and tool slots. A touch of duct tape and volia, spinning saw. Just be sure to mark pos and neg on the wires from the tool.

#113 Sail Away on 06.02.21 at 10:50 am

#108 Elon Muskvitch on 06.02.21 at 9:21 am

Sad, because there is a way to make the electric car amazing and cheap. For example, why must we pay for giant batteries in the first place? Why can’t we buy a car with 100 mile range battery, and then have a swapped-out battery you pick up at a station, charged and changeable in 5 minutes?

———-

Nothing in front of you but air and opportunity, my friend.

Best of luck in your venture!

#114 NSNG on 06.02.21 at 11:21 am

#111 Trojan House on 06.02.21 at 10:11 am

The trade off to higher wages is higher prices for goods and services. According to him, everything there is at least 2 times more expensive (as you would expect). It is a very expensive country to live in.

Yep. This is the same thing that happened when women started entering the workforce in order to ‘get ahead’ of the Joneses. After a time, most households had two incomes instead of one. All this really did was just increase the price of everything because more money was chasing goods in the auction-based system.

I also posit that increasing minimum wages has nothing to do with increasing bottom-end worker’s earnings. If governments wanted to do that, all they would need to do is eliminated payroll taxes and raise the minimum tax threshold.

You can see why they don’t want to do that. It cuts into their income stream. So instead, they raise minimum wages. That increases their revenue stream via higher income and other taxes. What it amounts to is a stealth tax increase on business in the name of helping the little guy.

Where business would jump up and down (especially the politically powerful corporations) if the government came straight out and raised their taxes, what can they say to a higher MW? If they scream too loud it looks like they are attacking the poor and not the government. Politically, it is like using human shields to raise taxes on corporations.

It’s a very cunning strategy. Economics works best when you simplify, not complicate. Higher MWs and higher subsequent taxes just complicate things.

#115 Don Guillermo on 06.02.21 at 11:39 am

#68 Nonplused on 06.01.21 at 6:34 pm
#1 Don Guillermo on 06.01.21 at 11:27 am
#129 Don Guillermo on 06.01.21 at 11:16 am
#126 45north on 06.01.21 at 10:28 am

Nonplused – The e-cycle next to Wild Rose is the place. Good excuse to enjoy a IPA on a beautiful hot patio day!!

——————————–

Is that in Calgary? Google maps shows a Wild Rose Brewery in SW Calgary but no e-cycle. Will they take a Costco scooter (Razor)
*******************************************
WR is in Currey Barracks. It was originally an airplane hanger from WW1 era. They trained WW1 pilots in Currie back in the day. It began brewing WR products around 1996. They mostly brew elsewhere now but the hanger is the official taproom. Great place with a very eclectic crowd. All ages from suites to tattoos and dreadlocks. The recycle station is nearby. I haven’t been since I’ve been back this season but I assume it’s still there. Well worth a drive if you’ve never been. They’ve taken everything I’ve brought over the years but never tried an e-scooter.

#116 Exurban on 06.02.21 at 1:23 pm

Cities repopulate.

I’m currently commuting to work in downtown Vancouver. Because I’m essential :^). Many of my WFH colleagues tell me they absolutely do not miss the place. Do not miss commuting, do not miss the drug addicts living on the street, do not miss the appalling SkyTrain, do not miss the expensive parking. The eastern suburbs/exurbs are now laden with newly-built industrial parks. Businesses from Vancouver are moving into them.

Vancouver might “repopulate”. But it will be with different people. The hinterlands have gotten a long-term boost.

#117 Damifino on 06.02.21 at 1:44 pm

#107 Woke this morning…

Wonder what’s next to be cancelled? No one and no thing is too big to be cancelled in this woke world.
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The Queen, you think?

#118 Sal Disonne on 06.02.21 at 7:25 pm

Did you see that annuity like fund from purpose investments trying to convince it will payout 6.15% to attract retiree savers. This sounds like Manulife’s 5% income plus product.

All just gimmicks and the same old stuff to try to replace the massive long term interest rates manipulation of central banks, governments for decades now. There is no replacement of higher GIC, term deposit, government bond rates, yields, fixed rate annuities for retirees. There is a big difference between obligations versus objectives and actual interest yields, rates paid, accrued versus targeted annual payouts as an objective.

Be very careful there is a big difference interest paid and targeted payouts. There is also tax consequences and complications with these financial engineered products from these funds plus many fees involved also. A 2.75% to 3.0% provincial bond today is interest paid with principal left intact versus this supposed 6.15% targeted objective payout. Caveat emptor, buyer beware as said in Latin. This is very scary stuff if people think this will bail them out from low interest rates. It will deplete, finish your principal in less than a decade at the very least.

#119 Jill Bauer on 06.03.21 at 11:27 am

Hey Sal, good thing I bought those long term provincial bonds back in 2008, 2009. They are still kicking out 4.5% to 5% bond yields and don’t mature until 2036 to 2039.

You got to give these guys credit trying to make a 6.15% payout sound like it is a sure thing. I guess they are trying to capitalize on desperate, not too smart, not too informed saver retirees.

It is a payout rate, not an interest rate. As for your bond yields, they’ll be less than inflation before long while the securities also drop in capital value. Be careful. – Garth

#120 Jill Bauer on 06.03.21 at 12:33 pm

My current provincial bond values are in the $135+ and I paid $97 to $99 each below par. It has been over 13 years and the closest I saw their values come to what I paid for them is $116 to $118 each. I keep very close track to them. The inflation argument is a an old, lame one for decades now and the only real inflation that matters is one’s personal one as my living expenses are always 4 to 4.5 times less than my savings, wealth accumulation per year.

I would worry more about this Trudeau, Freeland Liberal government talking about tax policy changes to apply annual income taxes on equity, stock market, REIT, ETF etc. values appreciation and annual real estate values appreciation.

This is a real possibility with their marxist, leftism, progressive, liberal mindset on taxing annually via income taxes of much higher and higher physical and non physical real estate investments, stock, equity investments instead of waiting years using capital gains taxes giving the more wealthy much more wealth because of tax deferred growth.

This was already achieved since the early 90’s done with the annual income taxes now being payable on annual compound interest accrued on strip bonds, zero coupon bonds, compound GIC’s, term deposits, any compound annual interest securities. It was much different tax policy before that you would pay the income taxes on these compound interest investments when it was sold or at maturity.

Yes, this is a payout and of 6.15% annually for now and can be changed anytime by the fund which is likely in coming year, years and it is very unachievable these days without depleting your capital, original investment within 10, 15 maybe if your lucky 20 years. There is no obligation on their part to pay back all your original capital, investment without running out of money. It is an objective targeted 6.15% annual payout and that is it. There is no guarantee on their part they can pay this for many years, decades.

We are not in 4.5%+ interest rates environment and equities, stocks, other equity, real estate based investments being propped up will have to correct meaningful some time maybe by 20%+. This is especially true with higher taxes to come in some form.

You certainly sound defensive, God luck with that. – Garth

#121 Jill Bauer on 06.03.21 at 3:33 pm

Being defensive served me all my life very well. You never know when a shark attack can happen anytime. The probable coming Trudeau, Freeland Liberal tax policy changes Annual taxation from income taxes of appreciation, rising values of stocks, REIT’s, stock, equity ETF’s, mutual funds, physical real estate maybe even classical cars like they want to do under Biden, New York State should make Canadians worry and be very defensive too. Good luck to the future of all Canadians.