Blame game

Let’s play Connect the Dots.

As this pathetic blog has tried to underscore, everything is related. Friday gave a great example.

Dot. First, the stock market freaked out a little. That happened after an important US central bank dude (James Bullard) said romping post-Covid inflation could cause interest rates to start ascending in 2022, earlier than anticipated. That happened after the Fed began talking, earlier in the week, about tapering back its rate-dampening bond-buying program. No date yet but we all know it’s coming.

More dots. Bond yields started to rustle and arouse. For example, five-year Government of Canada bonds (which largely determined fixed mortgage rates) which were down at .8% on Monday were close to 1% on Friday (up 2% that day, to .96%). In the bond world, that’s positively Kardashian.

More dots. Look at the vax rate. Incredible. My scheduled second dose was moved up a full five weeks. Yesterday Ontario passed 20% fully-dosed and every province is flirting with 70-75% of the population with at least one jab. The supply of Moderna is about to erupt. The reopening will be epic.

More dots. On Friday the government told us about mortgage debt. Up the wazoo. In one month alone (April) we house-horny little beavs added $17 billion to the pile, which now stands at a towering $1.69 trillion. This is the fastest rate of new debt-accumulation in more than a decade and comes with interest rates rate at an historic low. So, yes, financing costs will only go higher, and never lower. Do people get that?

More dots. TD is reporting benchmark prices for DT condos in the Big Smoke have increased at the strongest rate since 2018. In fact, every month recently there have been gains, with the strongest ones coming in the last 90 days. Since 2017 condos have gained 44% in value, compared with 21% for detached. We told you in November a 20% prices drop for these units was an aberration and would be wiped away as Covid faded. And, yup, here we are. Plus it’s a safe bet to assume a slew of these have been snapped up by investors. Says TD: “Moving forward, it’s forecasted that solid growth in condo sales will continue as pandemic restrictions ease.”

And more. Market survey company Urbanation confirms the suburban tsunami has started to swell back into the city. In the first quarter of the year apartment sales were restored to (almost) pre-pandemic levels. In fact, in the city core, they’re above that. “The downtown Toronto condo market turned the corner in the first quarter of the year on low borrowing costs and renewed optimism regarding the outlook, but also partly due to chain reaction after suburban home prices soared 30% over the past year and put the spotlight back on urban properties,” says the company.

Extra dots. Pandemic-inflated real estate has swelled so much in value that 75% of Canadians who don’t own, but want to, say it’s hopeless. A new Manulife survey paints a dark picture of home ownership, with one shining light at the end of the tunnel: Mom. “With the housing market pricing many Canadians out of the market, younger generations are forced to turn to their parents to close the gap,” says Manulife Bank CEO Rick Lunny. Incredibly, of those younger buyers who have taken the plunge 46% of Millennials and 47% of Gen Z homeowners say they were financed by the Bank of Mom & Dad.

Final dots. Well, as Manulife’s Lunny suggests, the above could, “actually be exacerbating the problem” of real estate that most people can no longer afford to buy. And this brings us to Core Developments, the Toronto-based firm which caused national leftie outrage this week by announcing it wants to buy 4,000 detached homes over five years in five provinces to duplex and create 8,000 new rental units.

The media crapstorm has been intense, and even spilled onto this manly blog. Critics somehow think house prices are being forced higher by corporate ownership, depriving Canadians of affordable accommodation, when the opposite is true. For context, about 550,000 properties a year change hands, which is 3.3 million over the next five. So Core’s potential purchase of four thousand is .12%. Meaningless to the market. And it’s not firms providing clean, renovated rental space to people who cannot buy that are the bad guys, or the investors snorfling up the downtown condos the WFH crowd foolishly abandoned. Maybe we should be blaming Mom, instead. Without parental loans, gifts and freebie downpayments there would be significantly less demand, and diminished price pressure.

Well, you can see how real estate messes people up. These days they think owning some is a right. It’s not. Mr. Market is in the process of making that clear.

About the picture: “You mentioned that you are always looking for a canine to share with the pack. So, I would like to introduce to you & the pack Leo,” writes Mary. “Leo is a five-month-old Shiba Inu, who is a huge greeter to everyone in his neighbourhood. Leo was born in Chatham-Kent and decided to make his way to the big city of Etobicoke, ON.”

94 comments ↓

#1 Deep Thoughts on 06.18.21 at 3:02 pm

#104 Sail Away

You ever wonder if all this philosophy by men (mostly for some reason) is just a never ending spiral of grand statements, often contradictory, trying to define a very fine line no human being can possibly adhere to?

#2 FREEDOM! on 06.18.21 at 3:09 pm

King Kenney fully releases all the cowboys and cowgals July 1………… let er rip……..

#3 Mike in Calgary on 06.18.21 at 3:24 pm

I always viewed these low interest rates as one of the greatest opportunities in the history of modern banking to get out of debt because so much more the the payment went to principal rather than interest.
Even if rates went to zero, you still have to pay back the loan, so why indenture yourself and your future to the banks. It just never struck me as a good idea.

#4 Dolce Vita on 06.18.21 at 3:31 pm

I hate RE.

2 generations that will be debt slaves.

Irresponsible parents that deliver them into the hands of bank servitude.

What a country!

Reap what you sow.

————–

…back to England vs. Scotland.

#5 ElGatoNerodeYVR on 06.18.21 at 3:34 pm

#84 Shawn Peters on 06.17.21 at 9:19 pm
I will never be a bank shareholder. I only believe in the credit union model. Deposits with banks, trust companies, credit unions okay but never a shareholder of banks
===========
The problem with the credit unions is that they are terrible at integration of services.
I attempted to oen an investment account at my CU ,one of the biggest 2 in BC and they wanted me to fill out the forms at home then mail it to quest trade ,they said they are not allowed to send it themselves and I should ask Questrade for a refund of mailing fees. Ofocourse I went into my TD account online, fill it electronically, made an appointment online at my local branch, dropped, by signed the papers and all was done next day at no cost to me or inconvenience. RBC is just the same at handling investment accounts.
Let’s keep in mind that TDAM and RBC Investing are separate entities from the banking divisions.
Not even going to talk about getting a credit card which is not even branded with their name.
I find the BC credit unions to be good at regular banking services ,but when it comes to credit cards and investments they keep bouncing you around to various partners with no particular benefit to me,so why complicate my life ?
Their mortgage offers are terrible as well compared to TD and RBC,just shopped around so it is fact.
I keep them for their free banking account and that is all.
As for being a shareholder ,my FIE ETF is doing just great , same with the Canadian Dividend funds( a lot of of financials in them) as compared to my membership shares in my CU which are basically useless .
If you own any Canadian funds you may want to hit Morningstar and check their holdings and you may find that actually you are a shareholder.

#6 Nana on 06.18.21 at 3:37 pm

Garth,

Read a piece today about grand parents gifting children money to buy a house with!

https://www.theglobeandmail.com/investing/personal-finance/young-money/article-pre-teens-getting-money-for-a-house-down-payment/

I was laughing so hard.

Here is the outrage about BOM, and instead of BOM closing shop for reasons of common sense, BOGM opens up to underpin BOM.

Now that people are living longer, watch out for openings of BOGGM and children as young as 0 being given downpayment money…annually.

How long before government opens up a program where such gifts are matched…for the future. Why only education? Home ownership should be a plan too.

….now that I typed this, I fear it will become reality.

#7 X on 06.18.21 at 3:40 pm

The sooner the better rates rise. Plain and simple.

#8 Sean on 06.18.21 at 3:42 pm

Garth, with all do respect. Would you please speak to the positives aspects of real estate ownership? You and the majority of Canadians have personally benefited from the massive windfall of home ownership over the last decade. Your tone always leave readers feeling at financial risk by owning and rates rising. Being priced out is a real risk that many first time owners are now currently facing. Renting forever has some serious financial risks too. Thank you for your time.

#9 Penny Henny on 06.18.21 at 3:43 pm

Was Leo at the Canadiana bar last Sunday Mary? I was sitting at the next table.

#10 Lumber on 06.18.21 at 3:47 pm

Let’s hope all goes according to plan, and future covid variants don’t become a problem…

#11 Classical Liberal Millennial on 06.18.21 at 3:50 pm

If it pisses off leftists, it’s almost certainly good policy.

#12 Brian Ripley on 06.18.21 at 3:52 pm

My charts (7 with May data) of CANADIAN PROVINCIAL EMPLOYMENT and UNEMPLOYMENT RATES 1976-2021 are up:
http://www.chpc.biz/employment.html

I plot 10, 20, 30 and 40 year changes in a table and the 10 year plot of Employment is negative in all provinces except for BC, and Unemployment growth is all positive over 10 years except for PEI, QC and BC.

One can also see that Alberta has been experiencing the biggest shift down in the change of their employment rate and the biggest shift up in the change of their unemployment rate.

On my Employment Class of Worker table, “Accommodation and Food Service Workers” had the biggest percentage increase Y/Y.

I personally am not keen on venturing out to restaurants or travelling especially when the Delta variant is continuing to increase its reach and countries are giddy with opening up transnational borders which makes no sense to me during a GLOBAL pandemic.

Not only that, but more data are coming out about risks increasing for kids under 12.

I don’t think this thing is over yet. Last summer we had people out and about and that led to another big wave in the fall. Parents… take heed.

#13 Linda on 06.18.21 at 3:52 pm

Ah, but is ‘Leo’ a home ‘owner’ or a lowly renter? Inquiring minds yearn to know:)

As to the firm looking to purchase houses (not condos?) & convert to rental units, given how many folks have commented on how difficult it is to find decent rental accommodation one would think this would be a cause for celebration. Instead, the concern seems to be that somehow all these putative rentals will all of them be ones folks could ‘still afford’. Doubtful, especially since the plan is to covert all of them to duplex units prior to renting them out. Nothing stopping folks from doing the legwork to search out & purchase these apparently desirable properties prior to the corporation snapping them up. Or even emulating the proposed model, except they would own instead of rent. Since the sharing economy is apparently a thing with the younger cohorts seems like this would be right up their alley. Or not!

#14 Tick Tock on 06.18.21 at 3:57 pm

They know the real deals come after everyone else has gone broke during the chase and the homes will eventually hit the market at fire sale prices down the road. Good things come to those that wait.
Never pay more than you can afford to lose.

#15 yvr_lurker on 06.18.21 at 4:02 pm

Bad typo: Need to replace “with —> without”

“With parental loans, gifts and freebie downpayments there would be significantly less demand, and diminished price pressure.”

However, it is increasingly clear that without family help and inter-generational $$$ transfers, being able to make a first purchase is much more difficult than in the past (even for a very high earning couple with no kids).
Not a good situation.

You know what I mean. – Garth

#16 Ballingsford on 06.18.21 at 4:10 pm

Any newbie without a bank of mom and pop are shut out forever unless the have a really good job and save for many years.

Nice looking dog picture! So clean looking.

#17 Vlad on 06.18.21 at 4:12 pm

If the rates are going up and perhaps sooner rather than later, why are the US treasures on fire the last two days?
Gold dropped 3% yesterday, but why TLT is not falling?

Short squeeze or the bond market is trying to tell us the this inflation is transitory like the FED said and we are not going to see higher inflation soon.

#18 cuke and tomato picker on 06.18.21 at 4:18 pm

The Dow is down 533 plus and the Dow futures are down
380 plus the TSX is down 142 plus. Is this the beginning
of a downward trend?

#19 The Woosh on 06.18.21 at 4:22 pm

It’s time to see the optometrist when you see dots everywhere. Might be a sign that you need a new prescription.

#20 Cottagers STAY THE HELL AWAY! on 06.18.21 at 4:28 pm

Take Garth’s advice:

STAY IN THE GTA AND GO SHOP FOR A CONDO!

Just don’t come up here this weekend, all you slimy little pathogens.

Besides, the weather will not be good anyway.

Cottage season 2021 is a write off. Get over it.

Just.

Stay.

Home.

#21 ogdoad on 06.18.21 at 4:31 pm

Phew, Garth. Your stats are staggering. I put the dots together in my head and the picture is….hmm. Lol!

Happy Friday!

Og

#22 The Totally Unbiased, Highly Intelligent, Rational Observer on 06.18.21 at 4:36 pm

DELETED (Anti-vax)

#23 DON on 06.18.21 at 4:37 pm

“This is the fastest rate of new debt-accumulation in more than a decade and comes with interest rates rate at an historic low. So, yes, financing costs will only go higher, and never lower. Do people get that?”

Nope….their agent or parent told them otherwise.

“A new Manulife survey paints a dark picture of home ownership, with one shining light at the end of the tunnel: Mom. “With the housing market pricing many Canadians out of the market, younger generations are forced to turn to their parents to close the gap,” says Manulife Bank CEO Rick Lunny. Incredibly, of those younger buyers who have taken the plunge 46% of Millennials and 47% of Gen Z homeowners say they were financed by the Bank of Mom & Dad.”

Yikes…what happens when life gets more expansive and expensive in the next while?

#24 Yolo on 06.18.21 at 4:38 pm

Why did WELL drop like Wile E Coyote?

#25 capulene on 06.18.21 at 4:44 pm

#103, 06-18-21
Sail away
Re larger than normal dips.
What did I miss? Where was the dip?
All my ETf,s and the few stocks I own were pretty much status quo yesterday.
Thanks

#26 The Totally Unbiased, Highly Intelligent, Rational Observer on 06.18.21 at 4:48 pm

DELETED

Go away. – Garth

#27 Sail Away on 06.18.21 at 4:50 pm

#104 Sail Away

You ever wonder if all this philosophy by men (mostly for some reason) is just a never ending spiral of grand statements, often contradictory, trying to define a very fine line no human being can possibly adhere to?

——-

Of course. Everybody loves the soap box. Steinbeck expounds more than others and he definitely didn’t live up to his own lofty ideals.

Still, I like the way he says it.

#28 Sail Away on 06.18.21 at 4:54 pm

But nobody expounds philosopical ideals more than John Galt. And it was Ayn Rand who made him babble for pages and pages and pages.

#29 Don Guillermo on 06.18.21 at 4:58 pm

#4 Dolce Vita on 06.18.21 at 3:31 pm
I hate RE.

2 generations that will be debt slaves.

Irresponsible parents that deliver them into the hands of bank servitude.

What a country!

Reap what you sow.

————–

…back to England vs. Scotland
***************************************
20,000 Scotsman in London’s East End. Gong show.

I was in the Wallace Whisky Bar in Mexico City a few years ago.(https://www.tripadvisor.co.uk/Restaurant_Review-g150800-d6956215-Reviews-Wallace_Whisky_Bar-Mexico_City_Central_Mexico_and_Gulf_Coast.html) There was a World Cup so called friendly tune up match between Scotland and Mexico the next day at Azteca Stadium. Scotland was on a Latin American tour and they were packing around 200 fans with them. A large group of them came into our pub that night. They were out of control crazy and weren’t even WC qualifiers. I can’t imagine London tonight. Check the Daily Mail for the graphic details.

https://www.dailymail.co.uk/news/article-9700213/Tartan-Armys-night-carnage-Scotland-fans-trash-Leicester-Square.html

#30 There is a padded room for you at CAMH on 06.18.21 at 5:01 pm

Please go there, they are waiting for you and they will fit u immediately with a straight jacket and a couple of calming jabs..

++++++++++++++++++++++++++++++++++++++
Take Garth’s advice:

STAY IN THE GTA AND GO SHOP FOR A CONDO!

Just don’t come up here this weekend, all you slimy little pathogens.

Besides, the weather will not be good anyway.

Cottage season 2021 is a write off. Get over it.

++++++++++++++++++++++++++++++++++++++++

Just. Stay.Home at CAMH where u belong…

Loool

#31 Ponzius Pilatus on 06.18.21 at 5:11 pm

#106 Faron on 06.18.21 at 11:45 am
#101 Ponzius Pilatus on 06.18.21 at 10:32 am

You need to give those guys more credit. CEF and Sail Away are a lot of things, but poorly read doesn’t seem to be one of those things.
——————–
Everyone can read with their brain.
Reading with the soul is the thing.
And becoming a better person through it, is.

#32 Deep Thoughts on 06.18.21 at 5:15 pm

#28 Sail Away

Say this to yourself….say it out loud.
-> “philosophical ideals”

Think about how ridiculous that sounds.

Most people here appear to be dog owners – thus apparently animal lovers by extension, right?

How many would enjoy having a nice 45 day aged 12oz sirloin this weekend? Maybe with some nice red? How many had 3-5 servings of meat this week? I certainly did!

Hey Bow, you want a sirloin too boy? …incredible…this dog has no ideals either!

#33 crowdedelevatorfartz on 06.18.21 at 5:15 pm

Got my second vax today.

Astra Zeneca.

I laugh at so called, conflicting “expert” advice telling me otherwise.
My tinfoil hat is screwed on tightly and conspiracies be damned.

#34 James sees on 06.18.21 at 5:20 pm

Current home price gains will continue to reflect the new normal.

Wages will increase so that people can afford to own or rent (yes..even rent. Landlords will expect a fair ROI).

To pay for those increased wages that support the increase debt load (or rent) needed to keep a roof over your head , the cost of goods must rise (inflation).

Raising interest rates will have limited effect. Too little too late.

Analogy, to make the room taller you can either raise the roof or lower the floor. Think of this as raising the roof rather than lowering the floor.

Prudent, cautious, savers and investors will suffer as their investment returns have not seen anywhere near the (tax free!) gains of real estate.

One day you will hear them mutter “I was a millionaire back when it meant something”

#35 Faron on 06.18.21 at 5:30 pm

Anyone want to lay bets on whether Cottagers STAY THE HELL AWAY! is IHTCD9?

#36 Yukon Elvis on 06.18.21 at 5:39 pm

So Core’s potential purchase of four thousand is .12%. Meaningless to the market.
…………
Meaningless to you. For now. Not meaningless for the FOMO crowd. Scary. If you don’t own you are a peasant. And you always will be. Good luck getting a girl. Or finding a dog that likes and respects you.

#37 NOSTRADAMUS on 06.18.21 at 5:44 pm

LEPROSY!
I’ve been going on and on about debt since telegrams were in style. Having been the recipient of a bankers spanking ( I couldn’t sit down for 10 long years) gave me the up close, personal perspective on the consequences of being overindebted when the tide went out. Being broke and shell shocked presented me with the painful opportunity to high school the cause of my downfall and subsequent bout with leprosy. Fair weather friends avoided me because of my affliction. Upon reflection, I came to realize the core problem was the lack of a financial education in my formative years. Plus” a failure to communicate”. ( Line in a Paul Newman movie). Moving along, a well deserved pat on the back to Garth who has been ringing his school bell , urging the students on his blog to come to class , to listen and learn about the pitfalls in the financial jungle. Listen up grasshoppers, the bankers are taking their belts off, making ready to take the overindebted out to the woodshed. It’s the truth, and should be nailed to every church door. That’s all I have to say on that (debt) for now.

#38 crowdedelevatorfartz on 06.18.21 at 5:54 pm

I always considered the Grapes of Wrath the hangover after drinking “Card-Bordeaux” out of the box….

#39 Faron on 06.18.21 at 5:58 pm

#18 cuke and tomato picker on 06.18.21 at 4:18 pm

The Dow is down 533 plus and the Dow futures are down
380 plus the TSX is down 142 plus. Is this the beginning
of a downward trend?


Here’s my take:

Nothing is ever certain, but there was a better than average chance of a decline this week and into next. This week was a known caution period for some time with the Fed speech and monthly options expiry. The first was a potential catalyst and options expiration can unpin the market and allow for bigger moves regardless of direction.

There have been a fair number of technical breaks over the past week or two in various indexes, but a bigger catalyst is needed to drive a bigger drop. Impossible to say what that may be. Bitcoin collapse via revelation of various associated fraudulent entities like Tether, unexpectedly horrible economic data, big geopolitical event, Uptick in COVID infections in the US, ARK implosion, poorly worded fed statement etc.

Market is locally stable still meaning that it is resilient to small and medium sized whacks — plenty of buy the dip greed and still a decent amount of dealer positioning that will force buying, but a hard kick can send it down the hill. This is always the case, but right now it would take a slightly smaller whack. People are staring at huge Y.o.Y. gains and will be quick to (try) to take profit if things go south.

If equities stay stable for the next week and a bit, it’s likely that they will do okay until the next monthly opex in July. As time passes, we get closer and closer to hearing taper talk from the Fed and that could trigger a decent size correction.

In case it’s not clear, don’t sell. If anything, take this note as a reminder to tune out the news so you don’t do something rash if the market has a whoopsie.

#40 truefacts on 06.18.21 at 6:09 pm

# 2 Freedom…Alberta open July 1…
______________________________________

And here in Ontario, schools closed for the rest of year, business failures, postponed surgeries, huge restrictions…

I voted for Doug Ford thinking we would get another Mike Harris, instead we got a Liberal-Lite Patrick Brown – type…may was well have kept Kathleen Wynne…

And Ford’s big slogan – “Open For Business”

Yeah right!

#41 CJohnC on 06.18.21 at 6:13 pm

#12 Brian Ridley
“Delta variant is continuing to increase its reach and countries are giddy with opening up transnational borders which makes no sense to me during a GLOBAL pandemic……….I don’t think this thing is over yet. Last summer we had people out and about and that led to another big wave in the fall. ”

I agree with you Brian. There is a false sense of safety developing and it might come back to bite.

#42 Don Guillermo on 06.18.21 at 6:18 pm

#33 crowdedelevatorfartz on 06.18.21 at 5:15 pm
Got my second vax today.

Astra Zeneca.

I laugh at so called, conflicting “expert” advice telling me otherwise.
My tinfoil hat is screwed on tightly and conspiracies be damned.
***************************************
Is AZ android compatible? Hope you don’t go magnetic ;>)

I had an AZ 1st and a Pfizer 2nd. They’re all good.

#43 Felix on 06.18.21 at 6:37 pm

Happy Feline Friday!

Did you know..

A group of kittens is called a “kindle.”

Compared to the size of their heads, cats have the largest eyes of any mammal.

Cats can be trained to do a variety of tricks – it just takes a bit of patience and creativity.

Napoleon is rumored to have had ailurophobia – that is, he was scared of cats. Like most in the comment section here.

Cats can see with only one sixth the amount of light needed by humans.

Domestic cats arrived in North America with the pilgrims.

When cats scratch things, they deposit a scent that other cats can detect.

Many ships in WWI and II had cats aboard – some even had their own hammocks.

Cats can hear ultrasonic sounds that rodents make to communicate

#44 Freedom First on 06.18.21 at 6:55 pm

#37 NOSTRADAMUS

Well said!

Freedom First

#45 crowdedelevatorfartz on 06.18.21 at 7:00 pm

@#31 Ponzius Pilatus
“Reading with the soul is the thing.”

++++
Well..
I must admit I find someone prattling on about one’s “soul” while taking a blog name similar to Pontius Pilate somewhat ironic.

What level of Hell did he end up in for ordering Jesus’s crucifixion?

As for MY soul….. you’ll find it here

https://www.youtube.com/watch?v=FTWH1Fdkjow

#46 Grandv!ew on 06.18.21 at 7:03 pm

#8 Sean on 06.18.21 at 3:42 pm

Garth, with all do respect. Would you please speak to the positives aspects of real estate ownership? You and the majority of Canadians have personally benefited from the massive windfall of home ownership over the last decade. Your tone always leave readers feeling at financial risk by owning and rates rising. Being priced out is a real risk that many first time owners are now currently facing. Renting forever has some serious financial risks too. Thank you for your time.
———————————————————————————————

I have to disagree Sean. Garth is unbiased and even keeled in his advise towards real estate. Always has been. Buy the real estate if you can afford it and without ruining your finances. Presently Canadian real estate market has moved from gobbling down first tier of purchasers (first time home buyers)(none left who can or want to buy anything) into the second tier of purchasers (bank of mom and dad). Soon enough that avenue will be exhausted and taps will shut since the money well is going to run dry. After all, there is only so many HELOC’s that can be tapped. In past times this was avoided by banks and would not be allowed. Understandably with current geopolitics we can not afford to kill the golden goose(real estate market) and the party continues. The question is for how long.
Any type of the intervention to make things somewhat normal is too late. The structural damage to the economy is already done and social cohesiveness of the society is wobbling. All choices are painful from this point on. Many people understand this and they are standing aside watching what will happen next. The risk of buying into the Canadian real estate market or staying invested at the present time is enormous.

#47 crowdedelevatorfartz on 06.18.21 at 7:07 pm

@#35 Faron
“Anyone want to lay bets on whether Cottagers STAY THE HELL AWAY! is IHTCD9?”
++++

Nah.
Apocalypse2017,2018,2019,2020,2021 would be more my guess.
He’s gone and “Stay Away From My Hell” is beating the same mind numbing mantra.

#48 Faron on 06.18.21 at 7:07 pm

#39 Faron on 06.18.21 at 5:58 pm

#18 cuke and tomato picker on 06.18.21 at 4:18 pm

Update on my previous. Lots of “dark pool” buying today according to:

https://squeezemetrics.com/monitor/dix

Highest since mid March which was followed by a couple choppy days and then the late March, early April rip. That plus relatively light GEX due to opex (corresponds to slippery market conditions) usually means S&P will rip in the near future. Eyeballing, the set-up from that point of view looks a bit like Jan 4th that was followed by almost three weeks of upward melt. certainly not the time to take the risk of being out of the market.

Of course, your best bet is to not think about this and enjoy the fantastic weather the island is experiencing right now. Check your portfolio next time you have to rebalance.

#49 G on 06.18.21 at 7:10 pm

Hi Garth, nice to hear about your new family member on the way.

For persons not allowed Dog in the building, this might get you part way to having one. But certainly not the same a the real thing I’m sure.
https://spectrum.ieee.org/automaton/robotics/robotics-hardware/unitrees-go1-robot-dog-looks-pretty-great-costs-just-usd-2700

#50 Km on 06.18.21 at 7:13 pm

As a renters, more rentals built solely for that purpose run by professionals makes way more sense. The ones crying are the landlords declaring no tax on their illegal gains or the people who are speculating. We have been looking for a house for rent in Vancouver for a year and 100 percent of them tell us after we ask several times that yes in fact they will be selling or tearing down in the next few years. They do not want to let that little fact out as they want to make rent while they wait for permits etc. Quite sneaky and shows how little people care for others just about the dollar on their pockets. Why move when you have to move again, we would definitely move into a townhouse run as a rental by a large corporation that has this as their business model. Lends way more stability to renting especially when kids are involved and changing schools etc.

#51 Nonplused on 06.18.21 at 7:19 pm

I don’t know if the bank of mom makes all that much difference. The money will get handed down eventually. And if it comes out of one house and goes into another, what has really changed? There is no more money, just higher prices.

No, the underlying cause of the house inflation has to be new money, not the so called “gains” on existing housing stock, because the “gains” stay in the house until it is finally sold for good. Even “move up” buyers aren’t really cashing in any equity because all the money they supposedly “made” on the house they sold just gets plowed back into the one they bought. No actual profits can be realized until one “moves down” or exits the market completely.

Instead, the main driver is probably that 17 billion of new borrowing in April alone. That’s the sort of numbers that can move a market. And due to the way fractional reserve banking works, most of that money did not exist until the bank wrote the mortgage.

The fact is we are living through an inflationary $hit-storm. Even the tortured CPI is up to worrying levels. Governments are borrowing insane amounts of money and spending it willy-nilly, but that money ends up in the economy regardless that there is a long dated bond associated with it. The bond and the interest are long dated obligations, but the cash hits the economy now. And all that money has to go somewhere. Since there really hasn’t been an increase in the amount of available goods and services, prices must go up until everything reprices to absorb all the new money.

It’s happening all around us. My friend just sold a 3 year old truck for the same price he bought it for new. Of course we have discussed the covid supply chain constraints but those constraints should have been transitory, with things like lumber prices showing the expectation that in the future prices would normalize. This has not happened to the extent it should. If it had, there would have been more of a demand response as people delayed projects to a future date when building materials were more affordable. Not every fence needs to be built today. I’m really good at delaying such projects as I am sure are most of you.

The gas station and the grocery store are also bringing unwanted price increases and the CEO’s are all saying there’s more to come.

The inflation won’t be “transitory”, unless “transitory” means “permanent”, because the new money will not be withdrawn from the system. Inflation may go back to 2% once the reserve banks start raising interest rates, but most of the price changes we see right now during the “transitory” phase will not go away. Pe=MV. The M just went up huge. e did not and V probably didn’t move much either. In fact the easing of covid restrictions could mean a large increase in V is awaiting us. Thus, P must rise until the equation is back in balance.

(P = general price level)
(e = economic activity sort of like GDP)
(M = money supply)
(V = money velocity)

(Of course you can’t really put numbers into the equation without V becoming a fudge factor but it is useful for thinking about where things are going.)

#52 Concerned Canadian on 06.18.21 at 7:25 pm

DELETED

#53 TurnerNation on 06.18.21 at 7:38 pm

TLT.US long bond ETF has gone bonkers past few days.

……

Hey Immigrants thinking of coming to Kanada?
Hey Emigrants thinking of leaving Kanada?

1. Welcome to Occupied North Kanada. We fell that one cold week in March 2020. No wonder Canada Day is cancelled.
Laugh or Cry:

https://kitchener.ctvnews.ca/mobile/growing-concerns-as-underground-market-for-hair-cuts-takes-shape-1.5473453
WATERLOO — There are growing concerns in Waterloo Region about an underground market for hair cuts, with stylists choosing to work under the radar of the province’s pandemic restrictions.

2. In order to be seen at a hospital you first must prove that you…are not sick. Got it? Then they send you home. It’s survival of the fittest here.

https://www.cbc.ca/news/canada/nova-scotia/halifax-family-questions-care-delay-after-19-year-old-son-dies-of-meningitis-1.6068149
He was eventually seen by a doctor just before midnight, when they did a COVID-19 test, blood work and discharged him

3. 28 more days!

.Canada-U.S. border closure extended again, until July 21(globalnews.ca)

————-
From the Control over our Breeding Dept. As if T levels are not low enough – after years of hormone and endocrine disruptor chemicals saturating this world.
CV can do this too. (Swimmer counts are already at record lows in men.)

https://www.nytimes.com/2020/04/27/health/coronavirus-estrogen-men.html
Can Estrogen and Other Sex Hormones Help Men Survive Covid-19?
Men are more likely than women to die of the coronavirus, so scientists are treating them with something women have more of: female sex hormones.

#54 Sara on 06.18.21 at 7:42 pm

#1 Deep Thoughts on 06.18.21 at 3:02 pm
#104 Sail Away

“You ever wonder if all this philosophy by men (mostly for some reason) is just a never ending spiral of grand statements, often contradictory, trying to define a very fine line no human being can possibly adhere to?”

======================
Deep thoughts?
I guess you missed Sail Away’s admission the other day that he is shallow.

#55 Faron on 06.18.21 at 7:46 pm

#42 Don Guillermo on 06.18.21 at 6:18 pm
#33 crowdedelevatorfartz on 06.18.21 at 5:15 pm

***************************************
Is AZ android compatible? Hope you don’t go magnetic ;>)

I had an AZ 1st and a Pfizer 2nd. They’re all good.

I thought Ms. Henry called for stoppage of second dose AZ? tempted to try to sneak in and get one if they are just going to be tossed out or, worse yet, administered to flatulent lowerbrainlanders.

#56 Nah! on 06.18.21 at 7:50 pm

I don’t for a minute doubt Garth’s words, however I would like to add that I recently did a calculation on insider trading in the stocks in my portfolio, i.e. Banks, utilities and other “safe” bets and came to the conclusion that for the last 6 months there is a lot of baling out by insider trading, in the order of 98% selling to 2% buying. Take care….

#57 mark on 06.18.21 at 7:54 pm

Gotta admit, I’d rather a larger landlord with resources and procedures, than an under capitalised amateur idiot weighing the costs of maintenance vs taking a cruise.

#58 Chameleon on 06.18.21 at 7:55 pm

#43 Felix

No one has, so I will say it…I really like Feline Friday.

Thanks Felix! Keep it up!

And hey…don’t waste so many at once or you’ll run out.

#59 Greek soup on 06.18.21 at 7:58 pm

We’ve only gotten to the delta…. it’s a long way to zeta….

#60 Faron on 06.18.21 at 7:59 pm

#47 crowdedelevatorfartz on 06.18.21 at 7:07 pm

@#35 Faron

–IHCTD9 lives in the relative boonies of Ontario as does CSTHA
–IHCTD9 seems to think COVID is bad and to be avoided as does CSTHA
–IHCTD9 doesn’t seem to much like cityfolk as does CSTHA
–IHCTD9 is fairly rational as is CSTHA if more annoying
–IHCTD9 posts under pseudonyms (i.e. MAPLE LEAFS incompetence guy; my understanding at least).

#61 Ustabe on 06.18.21 at 8:15 pm

Abigail Disney on protecting dynastic wealth.

https://www.theatlantic.com/ideas/archive/2021/06/abigail-disney-rich-protect-dynastic-wealth-propublica-tax/619212/?utm_source=digg

Basically she and Bezos, Musk, Buffett, et al are able to do something about their mistrust of the government handling money, we can’t. So they seemingly do not pay while the rest of us do.

We need to stop endlessly bitching and moaning and start driving competent persons into government who are willing to govern such that we do not mind giving them our taxes.

All of us…or we get O Toole, Trudeau II, Kenney, etc. How is that working out for you?

#62 BillyBob on 06.18.21 at 8:38 pm

#33 crowdedelevatorfartz on 06.18.21 at 5:15 pm
Got my second vax today.

Astra Zeneca.

I laugh at so called, conflicting “expert” advice telling me otherwise.
My tinfoil hat is screwed on tightly and conspiracies be damned.

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

The best Covid-19 vaccine is…

whichever one you can get soonest.

Even the Chinese one.

I got Pfizer’ed but would have taken the A-Z one in a second. Hell, Sputnik if that had been what was on offer.

https://www.sciencemag.org/news/2021/06/brazilian-town-experiment-shows-mass-vaccination-can-wipe-out-covid-19

#63 crowdedelevatorfartz on 06.18.21 at 8:50 pm

@#55 Faron
“I thought Ms. Henry called for stoppage of second dose AZ? tempted to try to sneak in and get one if they are just going to be tossed out or, worse yet, administered to flatulent lowerbrainlanders.”

+++

While I do admit that I’m a flatulent Lowerbrainlander…( spellcheck just melted).

I believe the local Health officials have stated that the AZ vaxx is just as effective as the others.
I think they’re just offering people another 2nd dose option to avoid the ensuing, obligatory lawsuits.

Let’s face it.

Now that ICBC has made personal injury Lawsuits obsolete….how are all those ambulance chasers going to pay their mortgages?

#64 crowdedelevatorfartz on 06.18.21 at 8:52 pm

@#62 BillyBob
“The best Covid-19 vaccine is…

whichever one you can get soonest.”

++++

Total agreement.
I have friends that got AZ as a 1st shot and are waiting for the Pfizer booster for another two weeks.

Screw that.

I’m noticing more and more people coughing and sneezing nonstop.
Allergies or Delta?

#65 crowdedelevatorfartz on 06.18.21 at 8:55 pm

@#60 Faron

Nah.
IHCTD9 is a gear head who enjoys living off the land cheap.

Cottage Stay Away guy is a dilettante who like to crank up the Torontonians ….like shooting ducks in a barrel….

#66 Dr V on 06.18.21 at 9:00 pm

18 Cuke and tomato

I wouldn’t think you would be too worried about the market one way or the other. You know, being charmed and all.

Yes it was a beautiful day on the South island.

Oh, and you do realize you are on a dog blog, and your moniker has an acronym of Cat P?

#67 Terry on 06.18.21 at 9:01 pm

DELETED (Anti-vax)

#68 mark on 06.18.21 at 9:02 pm

Markets in bubble territory, went to cash to day(money market t-bills, .001 interest lol.

#69 Immigrant man on 06.18.21 at 9:05 pm

…positively Kardashian
———-
Never heard that one! But thanks for putting a big plug for the Armenian nation.

#70 Nonplused on 06.18.21 at 9:22 pm

#61 Ustabe on 06.18.21 at 8:15 pm

“We need to stop endlessly bitching and moaning and start driving competent persons into government who are willing to govern such that we do not mind giving them our taxes.”

I wouldn’t even trust the pope with more than 10% of my money.

Trouble is there are no humans capable of governing as you so desire. Power corrupts, and absolute power corrupts absolutely. It is a failing of the human condition. No one is immune. Anyone who says that if they or their preferred candidates were running the system then there would be justice and fairness for all really doesn’t know themselves or the world all that well, and should be dismissed out of hand.

There are no perfect leaders. The best we can hope for is checks and balances. And like diapers, change the politicians often, and for the same reason.

#71 crowdedelevatorfartz on 06.18.21 at 9:23 pm

Gee.
A sign of things to come?

https://www.nbcnews.com/news/us-news/entire-portland-police-crowd-control-unit-resigns-after-officer-indicted-n1271309#:~:text=The%20entire%20Portland%20police%20crowd,as%20a%20group%20on%20Wednesday.

THIS is what happens when social justice politicians ….throw the police force…… under the bus

#72 Billy Buoy on 06.18.21 at 9:23 pm

Interest rates cannot rise unless the bank’s wanna own everything which they do.

Bullard was jawboning..

But the dip, go long.

Rates cannot rise…Actions speak louder than useless words from any banker.

Giv it a rest please. Keep buying

#73 mike from mtl on 06.18.21 at 9:26 pm

#62 BillyBob on 06.18.21 at 8:38 pm
=======================================

The best Covid-19 vaccine is…

whichever one you can get soonest.

Even the Chinese one.

I got Pfizer’ed but would have taken the A-Z one in a second. Hell, Sputnik if that had been what was on offer.

https://www.sciencemag.org/news/2021/06/brazilian-town-experiment-shows-mass-vaccination-can-wipe-out-covid-19
///////////////////////////////////////////////////////////////

No doubt, but the real question is how long it lasts and how we handle the inevitable micromanaging “cases” come autumn. CDC already recommends a Ct of <28 for the "vaccinated" now, hmm odd asymmetry. Explain those who are fully vaccinated are magically testing positive or worse. I fully expect that 75% are fully vaccinated and we still have "cases" and issues come October and somehow this is a surprise.

Speaking as a Pfizer vaccinated guy, this Corona crap is getting a little too stupid and political.

Vaccines may not prevent an infection. Just death. Seems like a good choice. – Garth

#74 mike from mtl on 06.18.21 at 9:48 pm

Vaccines may not prevent an infection. Just death. Seems like a good choice. – Garth
//////////////////////////////////////////////////////////

I realise that since last year but try explaining that to the border goons, local restrictions, and stupid government(s) flowing the zero Covid playbook. Apparently CV19 is worse than airborne Ebola (which is not thankfully by the way). CV19 is treated like Ebola but is quickly becoming less than the flu here, so deal with it like a foreign disease as it is.

Imagine the panic a cube farm employee sneezing come January like every year? We’ve really lost our minds here and I doubt we can return to a normal life as the media has blasted us of human interaction. Canadians are a bunch of wussies.

#75 crowdedelevatorfartz on 06.18.21 at 9:53 pm

Gee
The 6pm Friday Global News
ALL the Canadian flags were at “Half Mast”…
The Rainbow Flags were at “Full Mast”…

A tad Freudian don’t you think?

#76 Moses71 on 06.18.21 at 10:07 pm

Wah to people who say they cannot afford to buy. In Calgary, everyone is living the good life. People making $20’s per hour are buying property like no one’s business. Tell the criers to move. Get over it Ontarians. I did.
Now I own 2 properties in Calgary (detached) & in Kelowna.
It’s called choices. Sorry some don’t consider that. Not all of us have Baby Boomer moists offering up free moulah.
So do it yourself. More satisfaction this way, anyways. Get over it

#77 Sail Away on 06.18.21 at 10:15 pm

#70 Nonplused on 06.18.21 at 9:22 pm
#61 Ustabe on 06.18.21 at 8:15 pm

Re:government

———-

Never trust government. The bigger they get, the more untrustworthy the institution. We US Americans accept a duty as citizens to overthrow government if needed. Our burden and privilege.

Can’t believe all these unchallenged unilateral decisions T2 is allowed to make.

#78 Sail Away on 06.18.21 at 10:21 pm

#71 crowdedelevatorfartz on 06.18.21 at 9:23 pm
Gee.
A sign of things to come?

https://www.nbcnews.com/news/us-news/entire-portland-police-crowd-control-unit-resigns-after-officer-indicted-n1271309#:~:text=The%20entire%20Portland%20police%20crowd,as%20a%20group%20on%20Wednesday.

THIS is what happens when social justice politicians ….throw the police force…… under the bus

———

Yep, another one of those violently peaceful arson-filled protests.

On the bright side, nobody needs to defund the police if they resign voluntarily en masse.

#79 AM in MN on 06.18.21 at 10:29 pm

The only party to “blame ” is the central bank and govt. programs like CMHC. They drive the market, and its distortions.

Nothing wrong with selling when the market is hot. I know a realtor in the YVR burbs who did 60 deals or so in 2015, all but one a white couple cashing out the place they had for 30+ years to a largely Chinese buyer. They took the cash and never looked back…or worked again!

Enjoy your life while you can, you never know when your health takes a turn for the worse!

My folks didn’t catch the peak, but did well back in 2014. Dad always liked trains, so they dumped a chunk into CP Rail for the dividends, which are healthy, but the stock has since tripled (or more). It’s not only houses that go up!

Those of us working have had a tough time with travel restrictions due to Covid, but what about all those retirees who’ve missed out on so many Cruises and trips to Europe!

#80 Hank on 06.18.21 at 10:30 pm

Nice picture of Leo !!,, The DodgeCoin Dog !

#81 BCWally on 06.18.21 at 11:02 pm

I just looked up the CHIP site on the conditions for reverse mortgages which is likely the most popular choice of mom and dad financing.
Whoa that is one lousy way of getting your kids a house. I wonder how many of those folks took the variable rate option. They probably think this is a great tax free way of giving an inheritance.
Maybe, but a bottle of whiskey and a pistol with one bullet might be the better option then living with them later because you are old, broke and have zero assets.
Is it just me or is this looking a lot like the American housing market, 2005 maybe 2006? A lot of boxes checked….particularly the vulnerability of the lenders.

#82 Garth's Son Drake on 06.18.21 at 11:08 pm

Just like how BlackRock buying up the entire US housing market is a nothing burger? Add a few hundred of these corporations and lookout.

More dots. You start adding the potential for a Tsunami of home buying with REIT investing and all of the sudden regular families are competing against corporations and hedge funds with huge balance sheets.

I am hearing that these corporations close 2-3 hours after a house is listed and that they use algorithms to target the properties.

On another note and connecting some more dots, Michael Bury just said on Twitter that the mother of all crashes is coming.

#83 Yukon Elvis on 06.18.21 at 11:09 pm

#70 Nonplused on 06.18.21 at 9:22 pm

And like diapers, change the politicians often, and for the same reason.
……………….
And sometimes you have to flush more than once.

#84 baloney Sandwitch on 06.18.21 at 11:32 pm

So interest rates are rising, so when is the next shoe going to drop, capital gains taxes anyone? The US will probably include one soon with Canada to follow next budget.

#85 Ponzius Pilatus on 06.19.21 at 12:40 am

#71 crowdedelevatorfartz on 06.18.21 at 9:23 pm
Gee.
A sign of things to come?

https://www.nbcnews.com/news/us-news/entire-portland-police-crowd-control-unit-resigns-after-officer-indicted-n1271309#:~:text=The%20entire%20Portland%20police%20crowd,as%20a%20group%20on%20Wednesday.

THIS is what happens when social justice politicians ….throw the police force…… under the bus
———————-
What things to come?
That law enforcement officers should be held accountable for their actions?
Just like any other citizen.
Wearing a uniform does not give them immunity.
Forgot the Polish guy at YVR.

#86 NoName on 06.19.21 at 1:29 am

#33 crowdedelevatorfartz on 06.18.21 at 5:15 pm
Got my second vax today.

Astra Zeneca.

I laugh at so called, conflicting “expert” advice telling me otherwise.
My tinfoil hat is screwed on tightly and conspiracies be damned.

Now that you have figured out right or wrong, all that, tell us who is Milton mayor!?

#87 Mary Jane on 06.19.21 at 1:48 am

Central Banks…Could of, should of, but didn’t. Now back to real news.

#88 NSNG on 06.19.21 at 1:58 am

If you think the Delta covid variant is bad just wait until we get to the Surrey one.

#89 willworkforpickles on 06.19.21 at 2:06 am

Real Estate has all the earmarks of a cursed investment where it now sits.
For owners for sellers for buyers.
The least of all, for those who own with their mortgage paid off. If they sell they won’t buy after taxes without taking out a new mortgage, so many are afraid to sell.
Many wish they had this problem (being the least of them all).
Buyers should be getting nervous about buying at these prices and taking on their very own lifelong debt curse.
Today’s legion of the damned.
Sellers can buy in the boonies for less and discover after 2 years they want out.
At any rate…RE is destined to go sideways price-wise for a very long time as peak house and its saturation point is being reached.
Speculators will want out in the next few years when they can see that RE has become a poor investment only costing them money to carry with no upside to hold out for.
Real Estate is fast approaching an immovable point and flat-line prices.
After 3 more years we will see near historical normalized rates and the curse will deepen.

But never-mind that…back to sunny days..trading in those masks for rose coloured glasses and every-things just wonderful.

#90 NoName on 06.19.21 at 2:21 am

Ops wrong copy and paste in my previous comment… it was a question for Faraon and his who is who comment.

This typeing in cellphone is getting more and more trickier, especially in wee hours…

— +++

#33 crowdedelevatorfartz on 06.18.21 at 5:15 pm
Got my second vax today.

Astra Zeneca.

I was thinking same to double up on AZ especially if i could shorten a wait. Heck ill even take sputnik just to have a beers with my magnificent bastiges. Sputnik is good vax believe it or not.

#91 Prince Polo on 06.19.21 at 7:03 am

#107 Faron on 06.18.21 at 11:55 am
Ah, the usual Sail Away ink cloud as he darts away to slither into a crevice for safety.

Says the guy with a PhD in ink clouds…irony, perhaps?

#92 crowdedelevatorfartz on 06.19.21 at 8:21 am

@#85 Police Purging Ponzerrelli
“What things to come?”

++++

Oh gee.
I dont know.
Perhaps the weeks of arson , rape, murder in the Capital Hill area of Seattle last Summer comes to mind.

Utter anarchy because the politicians threw the police under the bus.
Lets see how long the Leftist agenda lasts when the mob comes for them.

#93 Sail Away on 06.19.21 at 10:25 am

#92 crowdedelevatorfartz on 06.19.21 at 8:21 am

Utter anarchy because the politicians threw the police under the bus.

Lets see how long the Leftist agenda lasts when the mob comes for them.

————

Not long, apparently. Not long at all, haha:

https://www.chicagotribune.com/columns/john-kass/ct-george-floyd-urban-politics-kass-20200603-swm4pkkxgrf6hcluirrngtcx6y-story.html

https://mynorthwest.com/1990713/rantz-insufferable-chop-hypocrisy-durkan/

https://www.outkick.com/after-a-year-portland-mayor-is-finally-over-the-mob-burning-down-the-city/

#94 Dharma Bum on 06.19.21 at 12:40 pm

I never buy individual stocks because I have zero idea how to really analyze a company. So I stick with a balance and diversified portfolio, primarily consisting of ETFs. Diversified among sectors.

Anyway, a friend recently was harping on the prospects of Meta Materials (MMAT) and their merger with Torchlight (TRCH). MMAT would be getting a NASDAQ spot by way of taking Torchlight’s spot. Whatever.

Just to get him off my back, I bought both stocks. There. Now leave me alone.

I bought MMAT at $3.50. In a month it went to $9.00.
I only bought 5000 shares. On a tip. As a goof. A lark.
$27,500.00 in a month.
Best casino win I ever had.
Whew.

Not my style, but, hey, sometimes you get lucky.
Now they’re saying Torchlight shareholders are going to get a 1 time dividend of around US $12 per share.
Not too shabby.
Too bad I’m gutless and didn’t buy more.

Oh well.
Beats working.