Hard lesson

As a certain pathetic blog has told you in the past, reverse mortgages are wonderful tools if you hate your children.

Apparently lots of people do. Volumes have been growing even faster than regular home loans, despite the fact interest rates on these things run four times higher. Why?

Simple. Real estate lust, WFH and the slimy little pathogen have driven house prices squirrely. But incomes have not gained. Especially for retirees, whose beloved GICs and HISAs are now cruel jokes. Nobody can live off interest or government pogey as corporate pensions disappear into the ether. So a lot of people – masses of them, in fact – take out a reverse mortgage, sucking equity from their properties to provide living capital.

The trouble is these mortgages (unlike normal ones) get bigger every year. Yes, the money received is tax-free. Yes, there are no payments. And, yes, the principal need never be repaid until you sell or (more likely) croak. So this means your heirs’ inheritance dwindles annually as the reverse mortgage debt grows. In general, these are bad ideas. Most seniors would be better off to get a secured LOC at a lower rate, with more flexibility, then invest in a balanced portfolio of ETFs for routine income (plus the interest-only monthly payments would be 100% tax-deductible).

Or, better yet, sell that inflated house, collect your windfall profits from the hides of some nice young couple willing to choke down dollops of debt, and rent a luxury condo, snickering at a world gone mad.

But wait. Seems a new driver of reverse mortgages is parental guilt. HomEquity Bank (the largest RM outfit, now with $4 billion in loans outstanding) says the wrinklies are Hoovering their homes for the benefits of kids. These folks are taking loans at an average of 5-6% (as opposed to sub-2% for traditional ones) to generate downpayments for the kiddos. Of course, this transfer of wealth – from paid-for real estate to leveraged real estate – just fuels the housing bubble, driving valuations higher. The parents take on a growing liability. Their offspring buy into an inflated market and shoulder epic debt.

Nobody wins. Except the reverse mortgage company. And now teachers.

So this week the Ontario Teachers Pension Plan Board bought HomeQ Corp, which owns HomeEquity Bank. It’s a brilliant move, even though the teachers probably paid through the nose (the price was not disclosed). Not only does this bolster the pension’s board’s stable of financial assets, but it takes shameless advantage of a global pandemic. Fear of the virus and of seniors’ homes has convinced a lot of oldies to stay in their houses…forever…and yet the death of pensions and the collapse in interest rates has caused a heap of financial stress. “Nobody wants to move and they certainly don’t want to move into some sort of group setting,” says the company.

This (plus gifting money to kids) helps explain why reverse mortgage volumes have tripled recently. So far in 2021 alone, HomeEquity has papered a billion in new loans. Because these are 100% secured by real estate and carry a fat rate, they are financial gold. The only risk is a real estate collapse which – after the Trudeau romp on Monday – looks remote in the next few years.

Now for the irony part.

The pension board buying up these reverse mortgages, which drain equity from seniors who are almost always in financial stress and succumb to the Faustian loan, will use them to fund the defined benefit pensions of public sector workers. Yup, the golden ones. Those DB pensions are for life, indexed, and provide a steady, no-surprises income stream which amounts to at least 60% of the cash flow members earned when working.

So, seniors funding seniors. From the troubled to the privileged. A nation fueled by ever-more debt and social obsession with a single asset. Don’t scorn the teachers, of course. Just be careful around them.

%     %     %

It’s a trope now in the comments sections that ‘rates can never rise.’ That’s bunk. They can. They will. CBs cannot leave the cost of money in the ditch since it would be reckless and dangerous to do so. Assets inflate. Debt spirals. Bubbles happen. Plus, when the next downturn occurs, central banks will be out of bullets, unable to drop borrowing costs to get things moving. So what you see is not what we will get.

This week the US Fed declared as much. The stimulus tap will start to turn off by the first week in November, a prelude to rate increases commencing in one year. The benchmark rate will rise by about a quarter point each three months and, yes, the Bank of Canada will follow. It always does. It has to, lest our currency plop and inflation fly.

“We’re seeing a Fed that is getting more hawkish,” said a prominent US analyst as the latest monetary policy report was tabled. Borrow accordingly.

About the picture: “I owe my financial independence to learning from my wise parents, and reading money books including all of yours. I am eternally grateful,” writes Dianne. “This is 3 year old Baylee, rescued and adopted by her big hearted single mom, Jane. Baylee has just had one hip replacement surgery with ensuing complications, and will still be needing her other hip replaced, as well. She’s such a sweet, sweet, girl. Unwilling to ask for help or handouts, Jane instead set up a small online Etsy.ca business, under the name of FernwoodFashionista in an effort to fund Baylee’s surgeries and aftercare. She doesn’t know I’m making this request, but would you consider posting Jane’s business info, in case any of your dog loving followers would like to check out her Etsy store and help Baylee?”

160 comments ↓

#1 Tom Selleck and Kurt Browning are SOOOO Sexy! on 09.23.21 at 1:12 pm

Garth, if you wanna bash reverse mortgages and compete with these bros, you gotta lose that beard!

#2 Prince Polo on 09.23.21 at 1:16 pm

The benchmark rate will rise by about a quarter point each three months and, yes, the Bank of Canada will follow. It always does. It has to, lest our currency plop and inflation fly.

I can totally see our dear Photo-op Minister letting the Loonie get loonier (lower). His historical financial stewardship of this country leaves a lot to be desired. The traditional rules of finance do not appear to apply to how his brain works.

#3 Is anybody home? on 09.23.21 at 1:22 pm

If rates rise, down goes the economy, government defecits rise into a collapse of the whole system. Central banks have created a mess that they cannot get out of. First vaccine passports, then comes digital ID’s and then complete digital currency. Then comes the Great Reset comrades!

So many drama queens on here. – Garth

#4 Chris Serran on 09.23.21 at 1:22 pm

More importantly, what types of assets do you expect will do well in a rising rate future? Financials? Energy? Lets hear some ideas if your rising rate future comes to pass.

Equities do well traditionally during rising rate cycles. And rate reset preferreds are a no-brainer. – Garth

#5 Brett in Calgary on 09.23.21 at 1:28 pm

Garth,

I’d be curious to hear your thoughts on Evergrande, apologies if you dealt with it already and I missed it. Is this a one off? Too big to fail?

Brett

Nothingburger, unless you are an employee who took a condo in lieu of income. This is no Lehman moment. – Garth

#6 TurnerNation on 09.23.21 at 1:30 pm

— For the Carbon Connoisseurs
The global bankers – Blackrock et all – are running this world. Big game of Risk.

https://www.bnnbloomberg.ca/canada-needs-to-get-to-100-million-people-by-2100-blackrock-s-mark-wiseman-1.1337065
“Canada needs to get to 100 million people by 2100: BlackRock’s Wiseman”

———
– ALL the rulers are on this page. Gee where’d he come up with that figure?

https://www.cicnews.com/2021/04/former-prime-minister-wants-canadas-population-to-grow-to-100-million-0417708.html#gs.bz35jv
“Mulroney, who is remembered for tripling immigration over his term as prime minister, called for Canada to grow its population to 100 million by 2100. Last week, he spoke at a forum hosted by the Globe and Mail and Century Initiative, a think tank planning for Canada’s future prosperity.”

—-
— But you knew this already!
—-> From May 2020 <—-

https://www.greaterfool.ca/2020/05/29/what-matters-3/#comment-715452
#1 TurnerNation on 05.29.20 at 1:30 pm

Potential economic outcome for Kanada.
What is the end game? All those strip malls of dying small businesses, could be turned into Condos?
Notice that during the shutdown Ontario ordered Condo construction Open. They want condos.

Why do they want condos and who are “they”?
Right here – a cadre of mainly bankers and financeers pushing for 100 million population in Kanada.
Well we do need more tax slaves to pay down the debt they created.

https://www.centuryinitiative.ca/about/
Our Purpose Ensure an influential and prosperous future for Canada
Our Vision A competitive global nation of 100 Million Canadians unified by diversity and prosperity

#7 SP on 09.23.21 at 1:32 pm

I think BOC and government will try to avoid raising interest rates, and prefer fiscal methods to deal with inflation. Meaning, they’ll raise taxes as much as necessary to hoover excess money from the economy (and that should work – MMT got it right I believe).

Of course they’ll be extra careful not to pop the RE bubble… debtors and home buyers/owners will continue to enjoy unfair advantages.

And of course this’ll cause loonie to drop – but that may actually be a good news for investors who can properly diversify geographically (not putting all eggs into canadian basket)

#8 tooshort on 09.23.21 at 1:34 pm

Debt spirals. Bubbles happen. Plus, when the next downtown occurs, central banks will be out of bullets, unable to drop borrowing costs to get things moving.

Oh but the downtown has already started!

#9 cto on 09.23.21 at 1:36 pm

For all intensive purposes the CBs lowered rates to close to 0 back in 2008,…13 years ago. they raised them a tweek in 2018, and then proceeded to start dropping them again,…,then covid came.
Of course COVID was the perfect crisis to excuse for dropping rates to 0 again, and so they did.
I’ll bet they raise them again in 2022-2023 about, maybe 0.5% and then the next “crisis” hits,…and down they go again, maybe below 0, who knows…but these guys (CBs), do not seem too concerned about blowing big bubbles. They must lie about inflation and keep those rates pinned to 0, or the rich guys don’t make money, and when that happens, life gets uncomfortable for the CBs.
Ohhh,…what am i saying, …The CBs are the rich guys!!!!

#10 I dont know on 09.23.21 at 1:49 pm

Hey Garth,
The DB pensions are slowly erroding as well. OMERS has de-indexed its benefits(going forward). I’m thinking when it reaches a tipping point when most of your pension is not indexed people will start electing the lump sum(which leaves the investments poorer). That may lead to the end of the fund.

#11 Soviet Capitalist on 09.23.21 at 1:49 pm

Garth,

Thank you for all your efforts, but it seems to me the tapering will start in November and stop in December. It is something that happened before, hasn’t it? The system is completely broken now.

#12 Liquid Independence on 09.23.21 at 1:55 pm

They an certainly raise rates. But the question is by how much and how quickly?

When rates increased last time a few years ago many homeowners couldn’t afford to renew their mortgages by 2020.

The longer cheap money stays cheap, the harder it is to deleverage.

#13 Nonplused on 09.23.21 at 1:56 pm

I am reluctant in this case to be too hard on the teachers. There is, to my knowledge, no law preventing anyone who can get through a relatively average intensity university program and then go on to put up with your children 7 hours a day from becoming a teacher. The market is distorted somewhat by unions, but it is still free enough that it is subject to over/under supply if wages get too far away from what the invisible hand would consider “fair”.

So if you can’t beat them join them.

So now what of the OTPP buying up a reverse mortgage company? Are we now to have a list of assets that teacher’s (and I guess the police, nurses, etc.) pension plans can buy and those they can’t? Or should we be happy that if the investment works out it is that much less money the government may have to backstop?

I’m just really having a hard time seeing who the victim is here (except the people who take out reverse mortgages). And maybe the teachers themselves if they overpaid or aren’t going to be any good at running the company.

#14 Damifino on 09.23.21 at 1:58 pm

Or, better yet, sell that inflated house, collect your windfall profits from the hides of some nice young couple willing to choke down dollops of debt, and rent a luxury condo, snickering at a world gone mad.
——————————

Very few people get this. It’s not a simple question of innumeracy, although that’s certainly endemic in the nation. It’s really the ignorance of opportunity cost.

I know of several acquaintances who’ve sold homes and immediately harvested, on average, more than 2 million, tax free. A once-in-a-lifetime windfall.

When I tell them kind of income that much capital could provide they refuse to hear it. They are instead involved in a desperate scramble to buy another property. In retirement, yet. All to avoid the stigma of being a lowly renter, sharing walls with other unfortunates.

#15 Dave on 09.23.21 at 2:02 pm

My parents in their 70’s now both get CPP, OAS which is $3,400 a month. They both worked 43 years mostly full time so they probably get close to the maximum. I believe the maximum CPP, OAS combined is $1,829 a month or $3,658 a month per couple. They both retired at 65 years old.

They can pay all their income taxes, property taxes, living expenses etc. with 83% of their CPP, OAS. They have $30,000 RRIF income every year coming in and TFSA’s fully contributed to the maximum $185,000. They max out their TFSA each year and put the rest in laddered GIC’s which all of this is about $32,000 per year. Good thing they saved alot of their money decades ago and reinvested all their RRSP tax refunds compounding the GIC interest when rates were 5% to 12%.

They have no debt, mortgage for 35 years now and first heard of reverse mortgages back in 1987 in the US from some friends in Florida. Their friends told them they got a reverse mortgage because they wanted some money guaranteed from stock market crash as their home’s value would go up more securely than stocks. My parents obviously would like much higher interest rates from their GIC’s, RRIF GIC’s but they are satisfied with their age and risk at this point of getting an average GIC ladder rate of 3.11%. Reverse mortgages are for people that are house rich, cash poor. They don’t understand the benefits of having financially savings, investments so you can pay your taxes, bills, cost of living increases without going into debt or taking on more risk with locking your money in illiquid real estate.

The biggest take away from my parents is if you don’t have any debts, mortgage etc. of any type and you have live a modest, realistic life with 15 times your equivalent, inflation adjusted last year’s of employment income, you don’t need to make alot of yearly interest, returns. By the way, their combined income taxes last year was $8,200 on $73,000. This is 11.23% overall income tax rate or they get to keep 88.73% of their yearly income.

The claiming pension income tax credit for RRIF’s, the personal amount and age amount helps reduce their income taxes alot and keeps them in a lower income, modest income tax rate.

#16 TurnerNation on 09.23.21 at 2:17 pm

The War on Small Business. The new lockdown here is Permanent, Electronic, and Global.
QR codes are being rolled out at once globally. A.I. — Because humans might show some compassion.
This has been planned for a long time, getting all humans into the Blockchain ID system.

We must eat outside, as unclean animals. It will be a cold winter Comrades. St. Lawrence is closing indoor dining to all. This is the wholesale destruction of our way of life.

https://www.blogto.com/eat_drink/2021/09/st-lawrence-market-no-indoor-dining/


https://blackburnnews.com/sarnia/sarnia-news/2021/09/22/local-restaurants-close-indoor-dining-vaccine-passport-takes-effect/
“We believe that the government is trying to force small businesses out of business by their continued efforts to make us do their job,” the message reads. “We are not law enforcement, by-law enforcement or public health officers. We cannot afford to hire more staff to do the job of these agencies.”
The Bagel Factory on London Road in Sarnia announced plans to close indoor seating for the time being.
Marcin Bowl and Lizards Bar and Grill are permanently closing their doors.

https://energeticcity.ca/2021/09/21/local-restaurants-stretched-thin-harrassed-50-loss-of-income-after-first-week-of-vaccine-passport/
BC: “Local restaurants stretched thin, harrassed, and experience 50% sales loss after first week of vaccine passport”

…………….
………….
https://twitter.com/rpoconnor/status/1440765366439866378?s=21
@rpoconnor Lawyer/Partner at GTA law firm.
“As of September 11 (last day of data), 0.08% of Ontario COVID cases in “outbreak settings” relate to recreational fitness facilities, yet they are vilified by public health officials as a risk and subjected to mandatory vaccine passports.
Read the data: Gyms aren’t the problem”

#17 millmech on 09.23.21 at 2:17 pm

Why in the world would you send your loved ones to a retirement home, did no one watch the news and see how they abandoned the people to die in their own filth, what a horrifying way to go.
Not only that, by putting your parent in a group setting you will not be able to physically see them for up to two years if another outbreak occurs( for their protection of course). Meanwhile the average stay in those group homes is eighteen months before passing on, I guess if you want quicker access to the family fortune by all means ship them off.
The multi generational families have it right and care for their elders in their autumn years and refuse to outsource Mom and Dad care to a for profit facility.

#18 reverse mortgage going backwards on 09.23.21 at 2:17 pm

Reverse mortgage rates would double your debt every 11 to 14 years at 5% to 6% rates. I heard there are thousands of dollars in fees to get a reverse mortgage which is rolled into the reverse mortgage debt.

Also, you can only get about 50% to 55% of the house’s value as a reverse mortgage, so a $800,000 property maybe you can get $400,000 to $440,000. Going by their rates, your reverse mortgage balance will $800,000 to $880,000 in 11 or 12 years and keep growing, compounding, yikes!

#19 Philco on 09.23.21 at 2:18 pm

Hey Garth….
Ya I’m not a believer in reverse mortgages.
I wouldn’t sell my house its in a beauty spot and I’ve got a killer setup. I guess if one is short on retirement income makes sense to down scale.
Anywho……I guess a question for my accountant as well you guys?
Ask before…Do I sell the house to my RE company? Can just make a shareholders adjustment for a Mil plus. Company can pay all taxes repairs, I can write off new appliances. We can flow out the dough to me over long time and me get it tax free :-) Doable Ya or Nay?

#20 S.Bby on 09.23.21 at 2:20 pm

The FED will never raise rates to any substantial level. To do so would crash the stock market and the overall economy. They want low rates for government debt servicing and in their perfect world, high inflation as well to erode away the debt. They like to jawbone but there won’t be any action. It will be more delay tactics. The FED is a dishonest and corrupt organization as evidenced by their recent involvement with insider trading and no one can trust what that criminal organization says. Their end goal is to own everything and be the lender of last resort.

#21 Shawn Allen on 09.23.21 at 2:24 pm

Question About a Pension Plan Buying any Taxable Company

Home Equity bank (or parent HomeQ Corporation) is presumably taxable and pays income tax. Pension plans are not taxed.

Once owned by the pension plan it will in THEORY remain taxable. But they may be able to transfer the profits upstairs to their non-taxable self.

This can be done by loaning the subsidiary money at a high rate. Or perhaps by charging a high management fee. I have seen an actual example where Teachers did this years ago.

I have NEVER seen this potential tax loss discussed in the financial papers or anyplace else. I think I have seen discussions where it was assumed the acquired company would become non-taxable and that pension plans had an advantage in buying companies. I have never seen any objection to it.

In the case of a bank it may not be easy to move the profits upstairs. But there are many many other corporations that Teachers pension plan (and other pension plans) owns where they may be avoiding many millions in income tax through transfer arrangement.

I am not talking about when pension plans own shares in companies. In that case the company itself pays income tax. I am talking about where a pension plan owns the entire company and might be able to sharply reduce or eliminate income tax.

I object to it. Does it happen? Is it objectionable?

I think I recall that Garth has not seen this as a problem as I have brought it up in the past.

If you look at the financial statements of a pension plan, they must have special rules. They do not show an income statement. So I can’t see if they pay any income tax on their subsidiaries. They just say they are exempt. But surely a wholly owned subsidiary is not exempt just because a pension plan owns it?

#22 John on 09.23.21 at 2:28 pm

Homequity’s 5 year GIC rate is currently 2.00% but their reverse mortgage rate is 5.14% to 6.49% on their website.

No wonder they keep growing and making more loans in the billions. They also fees on top that with compound interest building on your reverse mortgage balance. Since they compound every 6 months, they are making alot of interest rate spread as more years go by.

A 2.00% 5 year GIC compounded is 10.408% total compound interest, their 5.14% 5 year reverse mortgage is 28.48% total compound interest and at 6.49% 5 years later is 36.49% total compound interest.

As with math, compound interest, 10, 15, 20 more years, compound interest multiples alot more. In 20 years, your 6.49% reverse mortgage will cost you 251.70% just in compound interest or 12.585% per year not the simple interest rate of 6.49% a year. Compound interest and math, you got to know how it can screw you up financially.

#23 S.Bby on 09.23.21 at 2:32 pm

I will add that the US economy is shrinking vs. GDP and initial jobless claims are up to 351,000 at Sept 12 so it’s not all good news in the USA.

US economic growth rate for 2021 expected to be 5.9%. Eat your socks. – Garth

#24 IHCTD9 on 09.23.21 at 2:37 pm

#208 KLNR on 09.23.21 at 1:07 pm
@#201 IHCTD9 on 09.23.21 at 12:34 pm
#121 KLNR on 09.22.21 at 6:38 pm
@#105 christian on 09.22.21 at 5:08 pm
Goodbye Canada. I will be taking my money to a different country. Its a shame what this place has become, my grandfather didn’t move here for this. Oh well, another lifetime.

good for your.
Canada is better off with you turncoats.
____

So your Indian/Chinese/Russian immigrant buds at work – do you call them turncoats too?

You and I both have Parents/Grandparents who left their native lands to come to Canada for a better life – they are turncoats as well?

There is no problem with looking for a better life elsewhere – Canada, and much of the Western World is jam packed with folks who have done exactly that.

quit being disingenuous.
most of the folks in here claiming they will pack up and leave are saying it out of spite because their man lost an election. Not because they are suffering any legit hardship.
___

I have several in my peer group who discuss retiring elsewhere – and they do this even when there is no election, and no matter who they voted for last time. Why? Obviously there are compelling reasons completely unrelated to politics.

What about all those Americans leaving big cities? 7-800 thousand folks have moved to Texas from Cali alone in the last decade. Were they all pissed because their man didn’t get in?

I don’t think so homie.

You and I have families that came here because Europe got shot-up too many times in one lifetime. Today folks from the 3rd world come to escape war – but also poverty and corruption. Also today – folks who are doing just fine move simply for more money, less taxes, better weather, cheaper houses, due to family and marriage, etc… Trivial stuff, but it happens all the time.

Sure some folks are pissed that Trudeau won, does that mean they’re all talking out their @ss when they consider leaving? I wouldn’t bet on it bro…

Some of the dogs here who have mentioned leaving are actual immigrants to Canada themselves. I think I’d take these particular folks pretty seriously no?

#25 Dolce Vita on 09.23.21 at 2:44 pm

Italia going to pot.

“Italy will be first to light up Europe’s weed biz”
https://www.reuters.com/breakingviews/italy-will-be-first-light-up-europes-weed-biz-2021-09-22/

Writes Reuters Lisa Juca a little too enthusiastically (she is from Milano).

500,000+ signatures achieved so that means it will eventually go to a national referendum expected next year.

Not so simple explains adnkronos (there is the killjoy EU hurdle):

https://www.adnkronos.com/cannabis-legale-referendum-cosa-succede-ora_3JbUNpfZCukwRGaKn9HiET?refresh_ce

Here is the referendum sign up main page (“You can make a difference”):

https://referendumcannabis.it/

And no Canada Équipe 420, you can’t vote.

But they’ll take your money. I used my Cdn credit card to donate €10:

https://www.associazionelucacoscioni.it/landing/dona-referendum-cannabis

There are 3 stores already in Pordenone (“Banji” is just 550 m, 6 min walk from my place):

https://i.imgur.com/LKg9ovp.png

Banji’s motto:
https://www.bangistore.it/

“Make the most of Indian Hemp seeds and sow them everywhere.”
-George Washington

[There is a large US Airbase nearby in Aviano]

——————–

THIS I have to see.

If italia can take some flour, tomatoes, milk, coffee beans, etc. and from that make a World beating cuisine, I cannot wait to see what Italia comes up with just a bit of hemp.

#26 My Body My Choice on 09.23.21 at 2:49 pm

Baylee, what a sweet dog. You stole my heart.

Get well my little dear.

#27 XGRO and chill on 09.23.21 at 2:52 pm

Rates cannot rise unless inflation gets so high the BoC cannot worry about employment as much. That’s what’s holding them back.

The neoliberal assault on workers that began under Reagan has destroyed wages, so there is no consumer driven inflation anymore. People are in crazy amounts of debt.

Absent wage inflation, the only things that cause price inflation will be supply issues: supply chain management issues (as we have seen due to Covid), and food price inflation due to climate change. But both don’t really cause CPI to go up, as the basket of goods CPI reflects is very broad and doesn’t care if the BC heat wave cooked all their fruit…

#28 SCD on 09.23.21 at 2:52 pm

I think gradually raising rates sooner rather than later is the best way to cool off the housing market. It is also great for seniors when they can get a higher return on their GICs. Savers have been punished with the low rates.

#29 Justin Thyme on 09.23.21 at 3:06 pm

#3 Is anybody home? on 09.23.21 at 1:22 pm
If rates rise, down goes the economy, government defecits rise into a collapse of the whole system. Central banks have created a mess that they cannot get out of. First vaccine passports, then comes digital ID’s and then complete digital currency. Then comes the Great Reset comrades!

So many drama queens on here. – Garth

____________________________________

I would expect no less from citizens of a country lead by one of the biggest drama queens ever!

#30 A01 on 09.23.21 at 3:07 pm

Seems to me a better approach would be the government to provide the reverse mortgage at prime plus a few points. It would essentially be a supplement to CPP. Remove the vultures…

#31 crowdedelevatorfartz on 09.23.21 at 3:07 pm

Hmmmm Maxime Bernier cut off Twitter for a few hours for “Harrassment”?

https://www.cbc.ca/news/politics/maxime-bernier-twitter-threatening-tweets-1.6186915

#32 Dogman01 on 09.23.21 at 3:09 pm

Holy Tintinnabulation!

#174 Bat Dance on 09.23.21 at 9:16 am
#111 PastThePeak on 09.22.21 at 5:34 pm
#19 Bat Dance on 09.22.21 at 11:54 am
STOP THE PRESS!
Holy Tintinnabulation!
https://nationalpost.com/news/world/wuhan-scientists-sought-to-infect-bats-with-coronavirus-18-months-before-first-case-documents-show
>>>>
Documents show that just 18 months before the first COVID-19 cases appeared, researchers submitted plans to release skin-penetrating nanoparticles containing “novel chimeric spike proteins” of bat coronaviruses into cave bats in Yunnan, located about 2,000 km southwest of Wuhan.
….
+++++++++++++++++++++
Of course it came from the lab.
https://thebulletin.org/2021/05/the-origin-of-covid-did-people-or-nature-open-pandoras-box-at-wuhan/

https://www.vox.com/22453571/lab-leak-covid-19-coronavirus-hypothesis-wuhan-virology-china

The question is no longer where it came from, the question is why is the world establishment and the media are downplaying what should be the “STORY Of THE CENTURY!

Avoiding war?
Threat that China will drop the first economic domino if explicitly blamed?
Perhaps the virus crisis is just so useful to those in power?

#187 Woke up this morning… on 09.23.21 at 10:22 am ; “more and more noise about the blame being placed for this pandemic where gut feeling told us from day 1 the blame was. However, China could simply say “try it and we’ll drop the domino economically and crush your economies.”

Canada’s Winnipeg lab shenanigans involved…certainly hope not?

No wonder a serious segment of the population simply dis-trusts the establishment.

“Because you are unwilling to ask this simple question… “What if it’s all a lie?”, and accept the possibility that maybe it is; that just maybe, the methods of mass media are under direct orders to: keep you distracted”.- Raymmar.com

“When it becomes serious, you have to lie,”- Jean-Claude Juncker

#33 Flop… on 09.23.21 at 3:11 pm

#154 Phylis on 09.22.21 at 9:52 pm
#148 Flop… on 09.22.21 at 9:11 pm
So The Liberals are going to raise the mortgage insurance ceiling from 1 million to 1.25, and then index this to inflation, but TFSA limit is stuck on 6k.

Seems fair…

M47BC
Xxxxxxx
Thought it was indexed but only at $500 increments. I do miss the 10k limit.

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

Hey Phylis, as always I could have made my point a little clearer.

At the current rate, from the time it was halved it will take over 30 years to the TSFA contribution back just to the measly 10k limit.

30 years of contributions and compounding gone just to help keep housing inflated.

But when it suits the Liberals they diddle the mortgage insurance 25% or 250k.

They really do hate the young…

M47BC

#34 Reverse cowboy mortgages on 09.23.21 at 3:12 pm

Sounds like someone is a tad jealous that they don’t sell reverse mortgages. It would be like taking candy from a baby … no hard sell, educating people, hand-holding …

What say Turner Investments add RMs to their portfolio? It would no doubt be your best income producer. Everyone has a price …. what’s yours? Obviously the Ontario Teachers’ pension knows theirs.

As I wrote, this is a very bad idea for most people. In any case, we sell nothing but help. – Garth

#35 Quintilian on 09.23.21 at 3:12 pm

“The only risk is a real estate collapse which – after the Trudeau romp on Monday – looks remote in the next few years.”

Not sure how you square that circle.
Although demand is stoked, and artificially supported, it is nonetheless, borrowed heavily form the future.

Is it not a race between interest rates, exhausted demand, and price appreciation as to which reaches the crash scene first.

And won’t the victims of the wreckage include both generations?

#36 Gramps on 09.23.21 at 3:16 pm

Hopefully there is a better reason than “reckless and dangerous” to not leave interest rates in the ditch. Cause that hasn’t stopped em so far.

#37 Faron on 09.23.21 at 3:16 pm

#23 IHCTD9 on 09.23.21 at 2:37 pm

Pssst. Lil secret: Texas and California are BOTH in the US. ‘tween you and me bromie. Moving to Austin because it’s trendy and Bend, Oregon is full. Been happening for decades, you just now heard about it.

Psst pssst: nother secret hombro: your friends are probably just moving to a warmer climate where they are insulated from the given nation’s economic nightmare by their wealth i.e. Don G. Not actually a solution to anything. They’ll come cryin’ back home when they get sick.

#38 When is the.. on 09.23.21 at 3:23 pm

DELETED

#39 Moral obligation on 09.23.21 at 3:27 pm

#155 facts on 09.21.21 at 8:15 pm
#146 Get your facts straight!

At the time of this writing, there are only 18 (not 24) ridings in which the Conservatives would have won if they had ALL of the PPC vote. That still means LIB 140 vs CON 137 which ultimately changes nothing – Liberal minority.

Your guy is the prince of nothing and the spoiler of much. The biggest egomaniac in Canadian politics.
_____________________________________

Some guy (not my guy, as you suggest), actually sums it up more succinctly……

Maxime Bernier
@MaximeBernier

At this point, anyone who still believes the Peoples’ Party and the Conservative Party have a similar platform and that we ‘split the vote’ is just delusional. Or arrogantly believes that these votes belong to the CPC.
9:54 AM · Sep 22, 2021

#40 Dolce Vita on 09.23.21 at 3:29 pm

“Nothingburger, unless you are an employee who took a condo in lieu of income. This is no Lehman moment.”
– Garth

Local problem. Evergrande represents 4% of their RE market I learned today.

Vanguard in for +$100M in bonds then you look at VFV alone with 6 Billion shares outstanding, $100 a share and you come to realize that any Evergrande bond losses will amount to rounding error for them. Same for BlackRock.

Admittedly the markets were jittery for a day until investors looked at the foreign exposure numbers and concluded what you did.

#41 Phylis on 09.23.21 at 3:31 pm

#32 Flop… on 09.23.21 at 3:11 pm
Gotcha, thx.

#42 Don Guillermo on 09.23.21 at 3:36 pm

#36 Faron on 09.23.21 at 3:16 pm
#23 IHCTD9 on 09.23.21 at 2:37 pm

Pssst. Lil secret: Texas and California are BOTH in the US. ‘tween you and me bromie. Moving to Austin because it’s trendy and Bend, Oregon is full. Been happening for decades, you just now heard about it.

Psst pssst: nother secret hombro: your friends are probably just moving to a warmer climate where they are insulated from the given nation’s economic nightmare by their wealth i.e. Don G. Not actually a solution to anything. They’ll come cryin’ back home when they get sick
****************************************
Would never come crying back to Canada if sick. It would be the last thing I’d do. I know many snowbirds that have flown back into Mexico just to have knee, replacements, hip replacements etc. (with no 2 year plus waits). I have a friend who had a terrible prostrate surgery done in Toronto put right in Mexico. You obviously have no idea of the quality of health care available in Mexico or many other parts of the world. Yes, it’s a two tier system and the wealthier can afford the best. Not much different in Canada as most wealthy Canadians, including many of your favorite politicians, will pay to be treated in the US.

#43 Dr V on 09.23.21 at 3:47 pm

15 dave – it sounds like your parents are fully taxed on their pension income (CPP/OAS/RRIF). I suggest talking to a FA to have a non-registered account collecting mainly cdn dividends which are tax free at that income level.

https://www.eytaxcalculators.com/en/2021-personal-tax-calculator.html

#44 IHCTD9 on 09.23.21 at 3:48 pm

#14 Damifino on 09.23.21 at 1:58 pm
Or, better yet, sell that inflated house, collect your windfall profits from the hides of some nice young couple willing to choke down dollops of debt, and rent a luxury condo, snickering at a world gone mad.
——————————

Very few people get this. It’s not a simple question of innumeracy, although that’s certainly endemic in the nation. It’s really the ignorance of opportunity cost.

I know of several acquaintances who’ve sold homes and immediately harvested, on average, more than 2 million, tax free. A once-in-a-lifetime windfall.

When I tell them kind of income that much capital could provide they refuse to hear it. They are instead involved in a desperate scramble to buy another property. In retirement, yet. All to avoid the stigma of being a lowly renter, sharing walls with other unfortunates.
____

Yep – it’s good to step back and take in new developments and possibilities as fundamentals change. Our long term retirement plans have always involved living in a house, but as time rolls on we see the potential for absolutely stupid net worth numbers (for regular working folks anyway) looming.

The increasing potential to make our kids multi-millionaires by the time we check out is pretty compelling – and liquidating and renting would make it so, so long as we keep electing dingbats like Trudeau
– and everything holds together for the next ~15 years of course…

Not a hard decision, fabulously wealthy kids/grandkids, or a new mortgage…

#45 Linda on 09.23.21 at 4:00 pm

‘since it would be reckless and dangerous to do so’. Isn’t that the new way of doing things? Taking on epic debt, gambling that RE will ‘always go up’, reverse mortgages et al? Why do I keep on visualizing a mass of lemmings headed towards the nearest cliff these days?

#46 Md on 09.23.21 at 4:06 pm

It’s a trope now in the comments sections that ‘rates can never rise.’ That’s bunk. They can. They will.

There was a time when i would agree with this statement Garth. However seeing the dire circumstances of many Canadians with massive mortgages makes me think otherwise. To raise interest rates would be a huge disaster and the BOC and government know this.

Why else would they give our 2000 dollars a month to anyone with just a few clicks of mouse? Because they see how screwed the vast majority of Canadians are. And the can’t afford to have this RE part to end. This is for sure!

Love your blog by the way.

#47 ogdoad on 09.23.21 at 4:11 pm

Not surprised, really. As far as I’m concerned the people steering the ship are doing so one, for the best outcome of their clients and two, because of the great possibly for growth and expansion – with a liberal government supporting them. Sounds like capitalism. Should exploitation to gain wealth for others be any sort of surprise? Who has the most wealth in this (or any 1stster) country?

Wrinklies using the $$$ in their home to finance the future of their offspring? Do you push the old water buffalo into the croc ridden water for the greater good of the herd? Or let me decide for himself?

Og

#48 IHCTD9 on 09.23.21 at 4:17 pm

#41 Don Guillermo on 09.23.21 at 3:36 pm

Would never come crying back to Canada if sick. It would be the last thing I’d do. I know many snowbirds that have flown back into Mexico just to have knee, replacements, hip replacements etc. (with no 2 year plus waits). I have a friend who had a terrible prostrate surgery done in Toronto put right in Mexico. You obviously have no idea of the quality of health care available in Mexico or many other parts of the world. Yes, it’s a two tier system and the wealthier can afford the best. Not much different in Canada as most wealthy Canadians, including many of your favorite politicians, will pay to be treated in the US.
___

Yep, I know a couple dudes who went to the USA to get medical procedures done – one incidentally also with Prostrate Cancer. Yeah it cost money – so what? No crime in paying for a job well done, and completed on schedule. Preferable actually, IMHO.

So there’s another reason to add to the list for why Canadians may come good on their threats to leave, ie. not because their Man didn’t win: To live where they can quickly access top quality health care. Can’t blame ’em a bit.

Totally legitimate reasons for leaving are just piling right up!

#49 Ustabe on 09.23.21 at 4:18 pm

Does anyone know of a rental place or even an old folks home that would allow someone to process 50 lbs of salmon through two smokers going on for days?

Or those same smokers pumping out pulled pork for the boys to consume while watching HNIC on a Saturday?

Or have room for a teardrop trailer, a utility trailer, two kayaks, two smokers, an electric bike and a cedar picnic table?

Asking for a friend…

#50 Dolce Vita on 09.23.21 at 4:19 pm

Took a look at Federal Debt vs. Program Spending.

You have to go to page 329 to finally find it in the Budget 2021:

https://i.imgur.com/uy48OdL.png
https://www.budget.gc.ca/2021/pdf/budget-2021-en.pdf

For 2020-2021 you have this, $ Billions:

Revenue = 292.6
Program Spending = 614.5
Interest on Debt = 20.4
Federal Debt = 1,079.0

So they’re paying 1.89% interest on the debt and interest is 3.3% of program spending. Interest payments eat up 7% of Revenues. Low all around.

2025-2026, $ Billions:

Revenue = 437.7
Program Spending = 426.7
Interest on Debt = 39.3
Federal Debt = 1,411.0

So they’re paying 2.785% interest on the debt and interest is 9.2% of program spending. Interest payments eat up 9% of Revenues. Again, low all around.

Yet on page 328 they say this:

“Public debt charges have increased to reflect higher expected interest costs on interest-bearing debt due to higher interest rates, and a revised financial requirement”

——————-

Basically I believe they will be paying more on interest 4-5 years from now than they are showing. If you believe Gov Canada, it means lending rates will be going up by about 1% in 4-5 years time.

Oh ya, forgot to mention that in 4-5 years time Gov Canada will be $1.4 TRILLION in debt.

In August there were 20,414,100 Canadians in the workforce. Do the Math on your own.

#51 Left GTA on 09.23.21 at 4:20 pm

@ Dr. V. I thought that the non reg acct. dividend income would increase your taxes payable because it would reduce the age amount benefit from age 65 onwards?

#52 Bat Dance on 09.23.21 at 4:22 pm

#31 Dogman01

It appears that we may have reached a point where anything removed from Social Media or by Creepy Silicon Valley as fake news, misleading or conspiracy theory, has a pretty good chance of being the truth. How crazy is that?

FYI “Holy Tintinnabulation!” is from the original Batman TV show, which is full of gold “Holy” lines of course.

And Bat Dance of course is a Prince master piece! …from the 1989 movie.

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

#53 The West on 09.23.21 at 4:24 pm

Garth,

A serious question about “the rates”.

How can they raise them now on the all the money that governments (all over the world) have borrowed? We are seeing the problem in the US as Yellen demands the printing press truck in a lot more ink. At some point does this not severely affect the governments ability to keep a credit rating where they can continue to borrow for all those unfunded liabilities they pile onto the books every year?

Would this not mean a total currency collapse?

Interested in your take as you sat in that office.

#54 PastThePeak on 09.23.21 at 4:27 pm

Mr. Turner, you often make statements as though you are living in the pre-2008 world.

If the CBs are in charge, the interest rates will rise extremely slowly, and not go very far. If you believe the US Fed chair-of-peoplekind, then 2023 is earliest for a .25% move.

It is unlikely that BoC moves much differently from the Fed as they will not want a spike in the Loonie.

How high might rates go? The peaks (of short term rates) in the last cycle were 1.75% for BoC and 2.5% for the Fed. Then the markets and economies started rolling over – long before engineered novel viruses were escaping in Wuhan.

So that was quite a few $trillion in debt ago. IMO max they can take their short term rates is to 1% this time – and I doubt they get there.

Now, mortgage rates are ultimately set in the market and not directly controlled by the CBs, so it is possible in a few years that CBs lose control over rates to a degree. I certainly would not be taking out $1M+ in debt believing that market rates may never rise…but it will not be the CBs that purposely raise them…

#55 KLNR on 09.23.21 at 4:40 pm

@#9 cto on 09.23.21 at 1:36 pm
For all intensive purposes the CBs lowered rates to close to 0 back in 2008,…13 years ago. they raised them a tweek in 2018, and then proceeded to start dropping them again,…,then covid came.

I believe the term is ‘for all intensive porpoises’
or ‘for all intents and purposes’ if you will.

#56 Ustabe on 09.23.21 at 4:49 pm

I prefer sockeye but failing that almost any salmon type except chinooks. Pinks are usually too small, chum is…well, its OK. Find sockeye.

Dry brine for a short time, couple of hours. 4 cups brown sugar, 1 cup pickling salt. Rinse, dry to a pellicle forming, place in low temp smoker ( 160° ) for an hour and move to 200° for another hour. Lots of low heat smoke please.

Now remove from smoker and place into salmon jars, add a thumbnail clipping sized piece of your favourite hot pepper to each jar, a scant tablespoon of salsa, cap and process.

The longer you can let it sit on the pantry shelf the better but when you open a jar drain off most of the liquid, add one more tablespoon of salsa and thoroughly mix. Makes a wonderful accompaniment to your tapenade on your charcuterie tray, right?

Even makes No Name soda crackers taste good. No Name as in Loblaws yellow branded product, not No Name the poster here.

#57 it's over on 09.23.21 at 4:54 pm

rising rates eh? i don’t think so. real rates are negative.
until they actually go positive, rates are not rising. they’re just less negative. asset prices will still inflate. house prices will still go up. and debt will continue to grow.

this is why central banks have been a failed experiment. run by crooks who trade their own accounts, front running central bank operations. criminals propping up firms that should have gone bust years ago. financing broke governments at the cost of workers..

rates will be rising when nominal yields are higher than inflation. until then, you got nothing.

#58 NegativeRates on 09.23.21 at 4:54 pm

Rates are already negative.

Considering 0.25% and the inflation rate we have, rates are what? -4.75%?

#59 Politics on 09.23.21 at 4:58 pm

“Psychologist Oliver James identifies the dark triadic personality traits (psychopathy, narcissism and Machiavellianism) as of central significance in understanding office politics.”

I’m not sure this extends only to office politics. I believe it is politics in general.

#60 ts on 09.23.21 at 5:08 pm

Don’t worry about high price of real estate, increase in interest rates etc. Mark Carney has everything under control:

In his book Value(s): Building a Better World for All, Mark Carney, former governor both of the Bank of Canada and the Bank of England, claims that western society is morally rotten, and that it has been corrupted by capitalism, which has brought about a “climate emergency” that threatens life on earth. This, he claims, requires rigid controls on personal freedom, industry and corporate funding.

Carney’s Brave New World will be one of severely constrained choice, less flying, less meat, more inconvenience and more poverty: “Assets will be stranded, used gasoline powered cars will be unsaleable, inefficient properties will be unrentable,” he promises.

#61 Ponzius Pilatus on 09.23.21 at 5:18 pm

#14 Damifino on 09.23.21 at 1:58 pm
Or, better yet, sell that inflated house, collect your windfall profits from the hides of some nice young couple willing to choke down dollops of debt, and rent a luxury condo, snickering at a world gone mad.
——————————

Very few people get this. It’s not a simple question of innumeracy, although that’s certainly endemic in the nation. It’s really the ignorance of opportunity cost.
——————
Yeah, Ye Olde Opportunity Cost.
Even some of my accounting colleagues don’t get it.

#62 Is anybody home? on 09.23.21 at 5:23 pm

I wonder what Dougie’s reply will be?
https://www.jccf.ca/justice-centre-gives-ontario-final-warning-over-vax-passports/

#63 april on 09.23.21 at 5:28 pm

#17 – a retirement home is not the same as a care home/nursing home. I had a friend who lived in a lovely retirement home for 6 yrs before she died of congestive heart disease at the age of 89. Did not have dementia, it was her choice to move in to a retirement home.

#64 Ponzius Pilatus on 09.23.21 at 5:33 pm

#24 sweetheart

If italia can take some flour, tomatoes, milk, coffee beans, etc. and from that make a World beating cuisine, I cannot wait to see what Italia comes up with just a bit of hemp.
————-
Most Italian dishes are ancient, and the noodles they stole from the Chinese.
Even the Wiener Schnitzel they copied from the Austrians.
And I think, the modern Pizza is rooted in Chicago.

#65 Faron on 09.23.21 at 5:43 pm

#47 IHCTD9 on 09.23.21 at 4:17 pm

#41 Don Guillermo on 09.23.21 at 3:36 pm

https://ourworldindata.org/grapher/healthcare-access-and-quality-index

Hover and weep.

“I know a guy” is what we call anecdotal evidence and, well, it’s worthless. Regardless, it might work for your buds with $$$. But, not a reason to crap on Canada.

Frankly, I could care less if the jabromies leave. There are plenty of takers for their slot and, as IHCTD9 has pointed out, they are fantastic people willing to work their asses off.

#66 tkid on 09.23.21 at 5:51 pm

The US Fed isn’t going to taper (and neither will the BoC), and the raising of interest rates is always going to be a year away.

The Bank of Canada has already substantially reduced its asset purchases. Try to keep up. – Garth

#67 Ponzius Pilatus on 09.23.21 at 5:52 pm

Yep, I know a couple dudes who went to the USA to get medical procedures done – one incidentally also with Prostrate Cancer. Yeah it cost money – so what? No crime in paying for a job well done, and completed on schedule. Preferable actually, IMHO.

So there’s another reason to add to the list for why Canadians may come good on their threats to leave, ie. not because their Man didn’t win: To live where they can quickly access top quality health care. Can’t blame ’em a bit.

Totally legitimate reasons for leaving are just piling right up!
———————-
Homie,
You’ve been moping quite a while now about leaving Canada for greener pastures.
Time to jump into action and join hombre Donny G. in Mechiko, home of honey and superior health care.

#68 Faron on 09.23.21 at 5:58 pm

#41 Don Guillermo on 09.23.21 at 3:36 pm

…two tier system … Not much different in Canada … will pay to be treated in the US.

Uh, that means it’s not a two tier system in Canada. It’s a two-nation system for the small minority loaded enough to pay out of pocket for a surgery in one of the most expensive healthcare jurisdictions in the world. Probably approaching 6 figures for that prostate surgery…

#69 Faron on 09.23.21 at 6:00 pm

#55 Ustabe on 09.23.21 at 4:49 pm

I love your food posts Ustabe. Can you share any recommendations for dining on the Island north of Nanaimo?

#70 ts on 09.23.21 at 6:05 pm

Sorry, forgot to add above excerpt taken from National Post.

#71 kommykim on 09.23.21 at 6:20 pm

The private fund buying up these reverse mortgages, which drain equity from seniors who are almost always in financial stress and succumb to the Faustian loan, will use them to fund the dividend’s, pensions, and salaries of board members, CEOs, and investors…

Does that sound better?

Reverse mortgages are a bad idea in almost all circumstances, as I have made clear. – Garth

#72 Unpinned on 09.23.21 at 6:30 pm

Older fragile and vulnerable parents going into debt to get their children into a home would be wise to read the 19th century classic “Le Pere Goriot” by Honore de Balzac. An old tail but familiar and full of love and dedication and hard work by Pere Goriot giving his wealth to his ungrateful daughter who sucks up every last breath and effort out of Pere Goriot. At the end Goriot is reduced to extreme diminished poverty. Alas it is not a short tiktok or utube video so most people are too lazy to go and get the book free from their local library so maybe Garth can tell refer them for some free financial wisdom from the 19th century.

#73 Faron on 09.23.21 at 6:33 pm

#32 Dolce Vita on 09.22.21 at 12:25 pm

#114 Faron on 09.21.21 at 5:36 pm
“Can someone enlighten me as to why the cap gains inclusion rate should be anything less than 100%?”

Yes, but doubtful you will pay attention nonetheless here a video by Steve Forbes for your enlightenment, 2:57 min:

I tried to watch your video and made it to 1:13 before vomit started to percolate into my esophagus. First, Steve Forbes has a net worth of nearly $500 million. He has a platform in his magazine and directly stands to lose money from an increased cap gains tax. So, his view is EXTREMELY sus. not to mention very outdated. Maybe it made sense in the high rate world of the ’80s.

Second. As I said before, the argument that investment needs to be encouraged for the sake of innovation R+D and productivity gains right now is utterly bogus. First, corps are buying back their own stock at breathtaking rates (after a brief COVID pause). If they truly cared about being innovative, they would plow that money back into their business rather than drive up their share price to benefit their CEOs (who are compensated with stock). Furthermore, while the current avg dividend yield is fairly low, there is still a massive amount of dividend cash being handed out to shareholders in a totally non productive way. Again, if it was really important that corps be capitalized for productivity etc. then they wouldn’t be barfing out dividends left right and centre. The only good thing about divvies vs. buybacks is that the divvie cash has at least some chance of finding its way back into the real economy esp if its spent by retirees and the like.

Glad you brought up the banks. They are perfect examples of bloat if they can shell out dividends of ~3% on average while sponging fees off of their customers at an absurd rate. (fees disproportionately hit the poorest BTW). Banks in Canada are disgustingly profitable because they have a oligopoly (like many Canadian industries) and thus lacking competition can charge whatever they want. Again, a 3% surtax sounds great. I’d be happier with measures that promote competition in this and many other sectors in Canada (telecomms for example).

Here’s one potentially novel idea about cap gains inclusion: It should be indexed somehow to the central bank overnight lending rate. Here’s why: during low rate periods such as right now, anyone with half a brain cell is up to their neck in equities if they can afford to invest. TINA, there is no alternative. Thus, there should be zero additional encouragement for putting money into equity markets when everyone is rushing headlong into them. Rates do the job that Steve Forbs thinks cap gains exclusion should be doing.

When CB rates rise, the cap gains inclusion rate should drop proportionately. This would organically drive investment back into equities when the risk free rates are high and equity markets may be starved for capital. Of course, this is too simplistic and would lead to distortions unless thought through carefully, but I think it’s the way that makes the most sense.

Right now, in this low rate and bubbly market, cap gains inclusion should be 100%. You haven’t disabused me of this view.

Regarding monetary velocity — I use that as a proxy for money going to where it is needed most. There’s no disagreement that dollars are best put to work to drive innovation and improve the lives of people. These things tend to increase the velocity of money, so a low velocity environment means that dollars are getting lodged into non-productive eddies like real estate and equity prices. this should be discouraged. Upping the cap gains inclusion is a great way to discourage putting money into a non-productive backwater while rates are low. More so if that exclusion includes RE profits. /rant

#74 NOSTRADAMUS on 09.23.21 at 6:33 pm

CATALYST, ON THE HORIZON!
Garth be careful on your comment, ” Evergrande is a nothingburger”. Evergrande has the potential to be the long overdue catalyst that will rapidly move out from the center (China) to engulf the wishful thinking of investors world wide. Once the herd becomes “Risk Adverse” there is no going back to the Fonzie’s, happy days.” Beware The Ides Of November At Your Peril”. I am on my throne and I will not step down.

#75 Is anybody home? on 09.23.21 at 6:56 pm

When will the liberals shut us down. Melbourne, Australia shuts down internet and cell phones to block images of lockdown protests!

https://www.investmentwatchblog.com/blanket-censorship-now-in-melbourne-australia-internet-shut-down-power-cut-cell-phones-cut-mainstream-media-protest-coverage-cut-gov-asks-facebook-to-ban-livestreams/

#76 crowdedelevatorfartz on 09.23.21 at 7:01 pm

@#64 faron’s Friends
“Frankly, I could care less if the jabromies leave.”

+++
From one jabroni to another…..
Are those the jabroni’s with acid reflux?
Or jabroni bros?

#77 Baffled on 09.23.21 at 7:02 pm

Yet you wonder why the have nots have such disdain for the have who just keep getting more.

I once sat in one of those tiny chairs across from one of these teacher’s union members and asked why is this marked correct on this test when the answer is wrong (math test) he said (no shit) it’s not important that she gets the right answer but she learns to do the problem. I said if she had learned to do the problem she would have gotten the right answer. He looked me me with a strange expression on his face. Pretty sure he was thinking about saying something smartassed but also thinking that long hair, beard, mustache and damn he’s big, maybe best not. He never did reply any further. These geniuses pull down $70,000 to 100,000 a year plus benefits work a total of what eight months then get that big DB pension.

#78 Woke up this morning... on 09.23.21 at 7:06 pm

#52 The West

….Would this not mean a total currency collapse?

————-

So…the key thing is COORDINATION!

If the CBs get together like a cartel, and all drop rates and do all they did as they did in 2008, there is no where to run to baby. No where to hide.

You will live with it. THE END.

Same is true when they turn on the presses.

Have you thought about the $20 trillion they borrowed to spend here, and the money supply quintupling?

You think the amounts for each western country/region were random? Arbitrary? Coincidental?

I highly doubt it.

And so, if many key currencies print, there will be no where to run to baby. No where to hide. LOVELY.

If you’re going to print and devalue currencies, devalue in coordination!

I think we’re really starting to see how the capitalist sausage is made.

Free markets are not free.
Deception is rampant.
And I feel the western economies are heading for collapse. How much longer can this house of cards stand?

#64 Faron – RESPECT! I didn’t hear that word used since the The Iron Sheik used it in the WWF – but I think it is jabroni.

Finally, a joke. In the morning, on the way to the office, I was listening to CBC news and John Tory was on talking about how Toronto is some $94M short but won’t cut services.

Whatever happens with funding from other levels of government, Tory said the shortfall won’t be made up by cutting services, or increasing property taxes beyond the rate of inflation.

OH how I laughed at that last part. 5% tax increase then? 8%? What’s it gonna be?

#79 crowdedelevatorfartz on 09.23.21 at 7:16 pm

@#63 Perplexed Ponzies Pasta prehistory

“Even the Wiener Schnitzel they copied from the Austrians.”

+++

No one “copied” weiner schnitzel…
Its was forced upon us by barbarian hordes from the east.

#80 Diamond Dog on 09.23.21 at 7:37 pm

CBs cannot leave the cost of money in the ditch since it would be reckless and dangerous to do so. Assets inflate. Debt spirals. Bubbles happen. Plus, when the next downtown occurs, central banks will be out of bullets, unable to drop borrowing costs to get things moving. So what you see is not what we will get. – Garth

So true.

Obviously, the Fed zero’d rates to save a badly injured economy from collapse but the result is asset, market and debt bubbles that have been inflating for some time now. We are there now. We can debate the measure of the size of the bubbles we have now in relation to history and management going forward, but they are there.

Surely, the Fed is buying time for economic self recovery and it has somewhat. But still, they have to pull back on stimulus and raise rates or risk leading the world’s largest economy into ruin by way of the Japanese example. The U.S. economy is somewhat wobbled now, although the extent of it is up for debate.

Will a pullback happen quickly, I think not. Will rates rise to high single digits? I don’t see it. Would rates in the 3 to 4% range be an economy killer? I think not and it could take 2 years or more before we see it. Is this something that needs to happen? Definitely. Is the 3 to 4% range enough for the Fed to react to the next true crisis? Probably and it’s worth pointing out, look at where the Fed is right now, vulnerable and trying to recover with a new set of problems, i.e. bubbles that their own policies as side effects to pandemic risk management, created.

Where are the future risks? A currency crisis in the U.S. or Canada? Closer. As early as 2024 perhaps, but not tomorrow. War? Doubtful. A global shrinking economy? Also doubtful. The current bubbles we have now? A spike in rates would crash housing, but its not expected. Inflation? Yes, there is risk there. Unsustainable debt on the public side? It’s more possible than ever, but depends on how far the Fed rate goes. Unsustainable consumer debt? Risk is up, but linked to housing and rates. Corporate debt? Risk is also up but it’s sector by sector.

Environmental risk? We (i.e. markets) don’t even calculate this really, the cost of man made pollution, environmental degradation and biodiversity loss (sexy phrase for loss of life), but the risk keeps going up. A 2019 study pegged air pollution costing the states $790 billion in 2014. We likely hit a trillion this year, some 5% of the U.S. economy.

I think we’ll see climate change as thee #1 risk in the mid to late 2020’s, erupting into massive world crop failures in the 30’s and all that follows, crushing peak people numbers in 2028, but it’s not next year. Next year will simply be a repeat of this one with ever higher emissions and consumption of fossil fuels in spite of what anyone says to dramatically reduce it.

Environmental news that didn’t become mainstream was Russia’s wildfire season being the worst since sat records began burning 20% of the size of Ontario (too distracted by the west coast fires and smoke in North America, one hopes). Btw, this was just forest, not grassland. This isn’t just Russia’s worst wildfire season, its the largest known wildfire season by area since the recorded history of civilization (beating out 2012 by a hair). The entire nation of Russia was covered in thick, dense smoke and none of this made headlines in North America. Canadians would be beyond foolish to think it climate change can’t make that happen here in time:

https://www.themoscowtimes.com/2021/09/21/russias-2021-fire-cover-widest-since-imaging-began-greenpeace-a75099

https://www.theguardian.com/world/2021/sep/22/russia-forest-fire-damage-worst-since-records-began-says-greenpeace

The statistics do not record other types of fires taking place outside Russia’s forests. “If we counted all the fires – grass, reed, tundra, where there is no forest fund – then we would see an even higher number,” wrote Grigory Kuksin, the head of Greenpeace Russia’s firefighting project. The total area could be as high as 30m hectares, he said, an area the size of Italy or Poland. – The Guardian

But I digress.

Market bubble risk? Definitely elevated. The higher equity values rise relative to inflation, the higher the risk and always will be. Markets are volatile, this current bubble everyone is quick to not call a bubble is govy engineered and just as quickly it can deflate through government policy. Of course, we all hope we can simply grow our way out of it without the extra negatives of inflation and currencies deflating real value (and good luck with that) or government help, but the risk is always there for contraction. All it takes is for unemployment to rise, corporate earnings to fall and GDP to disappoint and down she goes.

Ah, but for whatever happens, I wouldn’t miss it for the world.

#81 Yukon Elvis on 09.23.21 at 7:45 pm

Nothing wrong with moving on to greener pastures/countries and living the dream. Been there done that. One word of caution: healthcare. Especially of you are a senior. The quality of care varies greatly from country to country and even region to region within a country.Some is good, some is atrocious by our standards. You need to do some research and should have some really good insurance. Side bar….took a friend to the dentist in the second largest city in the Philippines in about 2014 for a filling. Was asked if we would like anesthetic cuz it cost extra. Said yes. Filling fell out 2 days later. Went back to dentist. Explained filling fell out when eating a burger and fries. Soft food.Had to pay for another filling despite protest. Can’t stress the research/insurance angle enough.

#82 Albertaguy in AB on 09.23.21 at 7:45 pm

Philco…a couple years ago i had the same idea, unload the house, and take the cash, let the corp cover the taxes, utils, maint, repairs, risk of downside value, etc etc however the proper way to keep cra away is more complex … with almost free money at the banks it didnt seem worth it and i gave up on the idea…let us know how it goes

How to Purchase a Primary Residence with a Corporation in Canada

https://www.youtube.com/watch?v=0_nEIL7jNsU

#83 30 year tax accountant on 09.23.21 at 7:48 pm

DR V, looking at what Dave stated in his comments and being an accountant for 30 years owning my own tax accounting business, his parents are paying pretty low taxes already. I think actually whoever is doing their taxes are not getting all their maximum tax refunds every year.

The personal amount, age amount, pension tax credit is making the income of $20,800 for each parent non taxable as they get non-refundable tax credits claiming each. This means $41,600 of their $73,000 is not subject to income taxes.

Also, dividends in RRIF income are taxed the same rate as GIC’s so that would not help the in anyway. They also have $185,000 in TFSA’s which at the information I am going by 3.11% average GIC rate he stated is another $5,753 interest tax free saving at least $1,300 minimum income taxes a year and in TFSA’s compound interest so it most likely grows every year meaning higher tax savings year after year.

If they start getting incomes above $45,000 to $48,000 a year that is when they will be in higher tax rates and lose a big portion of their age income amount. The way they are now is just not too high f a taxable income. They could benefit from income splitting of their RRIF and they maybe losing yearly sales tax, property tax and other Ontario tax credits which could be anywhere from $500 to $1,000 in annual income tax refunds they are not currently getting. I don’t have their individual details and income tax returns in front of me.

They are pretty smart maxing out their TFSA contributions from their RRIF GIC withdrawals income which keeps future tax bills smaller. The only any other tax savings in their current situation I can think of is if they have medical expenses being paid out of pocket more than $1,000 say $2,000 or more a year which could cut some income taxes by a few hundred dollars.

They could be paying $6,500 to $7,000 or less in yearly income taxes if they are not using these tax savings if they apply to them. This could mean paying only 8.90% total income tax rate on all their income. Hwoever, if you count the TFSA tax a total free interest income of $5,753, their income goes up to $78,753 and are really paying a total tax rate as low as 8.25%. This is pretty low.

#84 Al on 09.23.21 at 7:50 pm

The Fed will raise maybe an entire percentage and a half points (gasp!!, this blog will crow about it in terms of relative percentages and number of raises), Then the economy will weaken and that will be the end of it. Onto the next QE.

#85 Canadians Reverse Mortgages on 09.23.21 at 7:57 pm

Reverse mortgages are used to convince seniors that it is a good option if you only want to stay in your own home. They are attached to that place they have known their whole lives and don’t want change.

I don’t know the stats but I would not be surprised that alot of Canadian widows are using this because of lost CPP, OAS and other pensions due to the loss of their spouse’s pensions. today, it is a double hit because alot of seniors have still a small mortgage left or took on more debt in their seniors, retirees life. Now, with much higher taxes, inflation, cost of living than in almost 20 years. It will make reverse mortgages more popular out of sheer desperation and lack of savings seniors, retirees used to have in decades ago.

#86 Wrk.dover on 09.23.21 at 7:58 pm

#177 IHCTD9 on 09.23.21 at 9:45 am
#169 Wrk.dover on 09.23.21 at 6:42 am
#158 IHCTD9 on 09.22.21 at 10:34 pm

Migs are nice, but they are inflexible compared to stick. Switching electrode gauge/material/position takes one second with a stick. With a MIG you’ve got drive rollers, spools of wire, different gases, tips and nozzles to change
___________________________
Um, yeah my point was have both. My both includes a $200 CTC flyer mig on commercial soda fountain CO2, with solid .023 wire. Never reset or adjust anything, can fab headers etc or graft auto bodies, and do tiny finicky work. Probably have run 40lbs of wire through it.
All the stick I buy for my 40 yr old 225 is 1/8″
I rarely have to weld 3/8 thick. Mucho 1/4″ structural.

#87 BillyBob on 09.23.21 at 8:00 pm

#64 Faron on 09.23.21 at 5:43 pm
#47 IHCTD9 on 09.23.21 at 4:17 pm

#41 Don Guillermo on 09.23.21 at 3:36 pm

https://ourworldindata.org/grapher/healthcare-access-and-quality-index

Hover and weep.

“I know a guy” is what we call anecdotal evidence and, well, it’s worthless. Regardless, it might work for your buds with $$$. But, not a reason to crap on Canada.

Frankly, I could care less if the jabromies leave. There are plenty of takers for their slot and, as IHCTD9 has pointed out, they are fantastic people willing to work their asses off.

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

Priceless. From Victoria, Canada you tell a guy living in Czech Republic what’s what there, and a guy living in Mexico “how it is” there too.

Because, y’know, you “have a link that sez…” Because that has some serious weight, none of this first-hand experience for you, no sir! lol

I can’t even tell if you’re just a parody or actually serious.

One thing you are correct on…there are a lot of “takers” out there…

#88 the Jaguar on 09.23.21 at 8:02 pm

@#196 Don Guillermo on 09.23.21 at 12:08 pm

https://www.ctvnews.ca/politics/snc-lavalin-corporations-and-2-former-top-execs-charged-with-fraud-forgery-by-rcmp-1.5597229
RCMP’s timing is impeccable.+++++++++

Ain’t it the truth? Waited until the election was over. I suppose if they didn’t they would have been accused of something. ‘Meddling’ or some such thing. Poor old RCMP.

Don Guillermo, I know you are packing up those bags and supplies for the journey south. Sending you and Mrs. Don Guillermo a little packing music.

Los Tres Ases ( The Three Aces). One of those much loved Trios from a bygone age. The guitars, the harmony, and the nostalgia. They’ve still got a fan in me. Hasta Luego, amigo. Quizas puedo hacer una aparicion. One never knows……

https://www.youtube.com/watch?v=Wb80zFCO7LY

#89 Wrk.dover on 09.23.21 at 8:08 pm

On topic with Garth, I chatted with an Ontario nurse this AM looking fwd to a 77k DBP shortly.

I can’t even begin to imagine that! At all.

$211/day!

#90 yvr_lurker on 09.23.21 at 8:10 pm

#76 Baffled

—-
As expected, Garth’s article has opened the door once again to those who love bashing teachers and educators. One specific bad example put forth by Mr./Mrs. Baffled has been generalized to the entire population of teachers. Indeed, some are bad. My kid had a teacher in grade 4 who was struggling to understand why my kid wrote 2/5 on a math test when the answer to her was 4/10. However, over the years, he has had some fantastic teachers who been knowledgeable and engaging and who earn every penny of their salary and more.

In every profession there are dullards. I have been trying for 1 month with now 8 phone calls back and forth with BMO to LOWER my credit line limit that I share with a relative (who I have helped out in the past). I don’t want them BMO to increase it WITHOUT my permision. After now 1 month, they continually have *^^&%^&* up in reducing the limit back to what I had initially agreed to 6 years ago. Either incompetence, or somebody would not get their sales bonus… who knows… but after promises of sorting out it has still not been reverted back to what I intended….

in analogy, ergo all Banks are shit and they need to be taxed into the ground as the service they provide to the public is dire…

#91 PastThePeak on 09.23.21 at 8:22 pm

#57 NegativeRates on 09.23.21 at 4:54 pm
Rates are already negative.

Considering 0.25% and the inflation rate we have, rates are what? -4.75%?
++++++++++++++++++++++++++++++

Yes, about right (for the US) for short term rates. And that is with the highly manipulated “official” CPI. Quite possibly the highest negative real rates ever even with official inflation (more negative than the 70s, which had higher inflation but also higher nominal interest rates).

If you want to see what the inflation rate today would be if calculated as back in 1980 (or 1990), take a look at Shadow Stats

http://www.shadowstats.com/alternate_data/inflation-charts

Inflation today as calculated in 1990: About 9%
Inflation today as calculated in 1980: About 13% (yes – current inflation as measured back in the last decade of real inflation – is about as high as it ever was then).

By the measures of the 1970s – real rates are below -10%. And they wonder why house prices are out of control…

#92 Faron on 09.23.21 at 8:28 pm

#77 Woke up this morning… on 09.23.21 at 7:06 pm
#75 crowdedelevatorfartz on 09.23.21 at 7:01 pm

@#64 faron’s Friends
“Frankly, I could care less if the jabromies leave.”

Are those the jabroni’s with acid reflux?
Or jabroni bros?

Hah, you mean like jabromides?

I was simply being an arse regarding IHCTD9’s frequent use of homie and bro when he gets worked up. Tired of portmanteauing bro and homie so added in jabroni -> jabromie.

#93 crowdedelevatorfartz on 09.23.21 at 8:47 pm

@#90 Faron
“Tired of portmanteauing bro and homie so added in jabroni -> jabromie.”

+++

Makes sense.
Perhaps you have created a new word for jabroni bros and homies.

We read it here first

#94 Diamond Dog on 09.23.21 at 8:50 pm

#72 Faron on 09.23.21 at 6:33 pm

Have to disagree. Canadian governments have a spending problem. We need to cut spending, not raise taxes. It’s either that, or try to solve fiscal public spending through regulations that create a healthier general population and the low hanging fruit is pollution and the food supply.

Close to 70% of Canadian tax dollars are spent on health care and education. Most of this spending is in the hands of the provinces but this doesn’t abdicate the responsibilities of the federal government to keep our citizens healthy and safe. Everything we eat and drink, every breath we breathe, it’s quality depends on our federal government through regulation.

Does this mean Canadian politicians of all stripes should be pushing for a much higher quality food supply? It does. Pushing for more efficiency in homes and transportation? Absolutely. Same can be said for emissions at our plants (we work there, live down stream), all of it.

Two points. (ok, likely more) It’s not a mere binary choice of tax and spend, there’s also much to be done on the regulation side to fix our fiscal problems. Secondly, cap gains and dividend (no one ever mentions but should, it’s taxation has room to go up) tax increases are not a go to for fancy economic engineering but as a last resort to a currency disruption which I think is still avoidable, but not without making the food supply much safer than it is now.

Personal taxation is already high… corp tax rates aren’t competitive with our largest trading partner… where else does one generate revenue? Which, btw, exposes the NDP platform of increased spending by $ 20 billion or more annually with cap gain tax increases to 75% to pay for it, hasn’t anyone done the math on rate increases to a trillion in fed public debt? (Are they stunned?)

Note the date on this doc and how little has changed (other than diabetes now at double digits in adults and obesity over 40%, so there’s that):

https://www.youtube.com/watch?v=K3ksKkCOgTw

Some 75% of the 600,000 or so products on the grocery store shelves across America have added sugars (fructose). It’s so excessive and so dangerous to human health, it’s linked to 7 of the top 10 leading causes of death being heart disease, stroke, chronic pulmonary heart disease, cancers, digestive diseases (NAFLD), diabetes, dementia. (watch the 28 min mark in link above) It’s not just premature death, many of us are sick for a long time before we die and health care spending is ballooning because of it. Why do we endure this aside from corporate greed, propaganda and poor (I say rooted in grandfathered corruption at best, at worst, present corruption) government regulation?

The food supply wasn’t an election issue. I can’t think of any gov regulations that were mentioned during the election save some crumbs on housing which is telling. Either the opposition didn’t see any weakness there to attack the incumbent Liberals on regulation save the minimization/exaggeration of climate change policy, or the entire group of political parties are too myopic, unimaginative, misled and slow of wit to see the obvious. Y’know, the 40+% obese and 30% overweight Canadians waddling around out there in plain sight.

Nothing of course, is likely to change. Same old same old, consumer beware. When fiscal realities emerge, just raise taxes, it’s easy right? We’ll all just adjust? (to continued skyrocketing diabetes and obesity, it’s working out so well)

#95 Dr V on 09.23.21 at 9:05 pm

50 Left GTA

I’m not sure about what you describe, though I understand the dividend gross-up can cause a OAP clawback if people are not careful. A hefty chunk of
divvies required though.

https://iaprivatewealth.ca/insights/when-the-gross-up-means-a-clawback-the-impact-of-dividend-income-on-old-age-security

82 – 30 yr tax acct – thank you for that excellent post
and I absolutely have an accountant. I have set up our
RRSPs/TFSAs similarly, but get lost once my small
business corp is thrown in.

I understand any tax benefit is lost in the RRSP/RRIF.
I also had considered a meltdown of the RRSPs but my FA advised against it once she threw in all the income sources into the model. We’ll revisit that soon.

And TFSAs rock. They just don’t enter any tax equation.
Wondering if that will last……

Thanks again.

#96 Tripp on 09.23.21 at 9:07 pm

Approximately half of our income tax is covering healthcare. Still, people that can afford it and don’t have the luxury of waiting for too long, will go to US, or India, even to Eastern Europe. We do have a two-tier healthcare, it is just that the paid-for is happening outside of our borders, while we are stuck with ideology. Wouldn’t it be better for all this money to be spent in Canada?

———————————-

“This is my heart,” premier says of decision to leave Canada for procedure

https://www.cbc.ca/news/canada/newfoundland-labrador/williams-talks-about-u-s-heart-surgery-1.924467

#97 IHCTD9 on 09.23.21 at 9:10 pm

#66 Ponzius Pilatus on 09.23.21 at 5:52 pm

Homie,
You’ve been moping quite a while now about leaving Canada for greener pastures.
Time to jump into action and join hombre Donny G. in Mechiko, home of honey and superior health care.
———

Kidding right? Next year my house will be worth another 100k. The year after that – it’ll be 100k again. (Old) Canada has been great to me, and since this past Monday – I gotta feeling she ain’t quite done giving yet…

#98 IHCTD9 on 09.23.21 at 9:27 pm

#84 Wrk.dover on 09.23.21 at 7:58 pm
#177 IHCTD9 on 09.23.21 at 9:45 am
#169 Wrk.dover on 09.23.21 at 6:42 am
#158 IHCTD9 on 09.22.21 at 10:34 pm

Migs are nice, but they are inflexible compared to stick. Switching electrode gauge/material/position takes one second with a stick. With a MIG you’ve got drive rollers, spools of wire, different gases, tips and nozzles to change
___________________________
Um, yeah my point was have both. My both includes a $200 CTC flyer mig on commercial soda fountain CO2, with solid .023 wire. Never reset or adjust anything, can fab headers etc or graft auto bodies, and do tiny finicky work. Probably have run 40lbs of wire through it.
All the stick I buy for my 40 yr old 225 is 1/8″
I rarely have to weld 3/8 thick. Mucho 1/4″ structural.
—- –

I see, well if I ever had to do bodywork, that might have me picking one up. Beyond that, there’s a whole row of Miller Dynasty 350’s at work.

Every rod I have at home is surplus stuff from work, so I got a crazy selection: 7014, 7024, 7018, 6011, 6013, Ni Rod, 308, 309, and brazing rod out the wazoo!

#99 millmech on 09.23.21 at 9:28 pm

#67 Faron
It is a two tiered system, I have had private clinic surgeries including carpal tunnel from WCB, foot surgery(tumor removed, did not want to wait to get it tested) and elbow surgery(entrapped ulna nerve) done here in BC.
By getting these done privately on my own dime I freed up space for someone else to get in for their surgery quicker.
WCB repaired on of our guys hands after his fingers got amputated at a private clinic, said they were all wearing smocks from the hospital across the street.

#100 IHCTD9 on 09.23.21 at 9:44 pm

#55 Ustabe on 09.23.21 at 4:49 pm
I prefer sockeye but failing that almost any salmon type except chinooks. Pinks are usually too small, chum is…well, its OK. Find sockeye.
———

Chinook no good to eat? That’s pretty much all we got over here other than Coho.

On second thought, I’m not sure if I should be eating anything out of Lake O…

#101 Smengy on 09.23.21 at 9:51 pm

#33 Reverse cowboy mortgages on 09.23.21 at 3:12 pm
Sounds like someone is a tad jealous that they don’t sell reverse mortgages. It would be like taking candy from a baby … no hard sell, educating people, hand-holding …

What say Turner Investments add RMs to their portfolio? It would no doubt be your best income producer.
Everyone has a price …. what’s yours? Obviously the Ontario Teachers’ pension knows theirs.
_____________________________________________
hey RCM.. how old r u 30 or so? The last thing GT needs is me a 12 year lerker defending him but you need to read the last decade of his posts before you start spouting crap about his investing philosophy. Let me guess you voted NDP. Get out of Mom’s basement Disclosure.. I do not have any investments in Raymond James.

#102 Faron on 09.23.21 at 10:01 pm

#85 BillyBob on 09.23.21 at 8:00 pm

So you speak for all Czech ers? Your statement is absurd as an ocean swimmer saying they know better how the ocean works than an oceanographer who lives in Nebraska. Just cause you live in the CZ doesn’t mean you aren’t blind to many things that someone taking half a second to look up unbiased information can cudgel you with. This is why, at best, you are an applied technician. Save the science for people with half a clue and more than an oz. of curiosity over opinion or lone data points based on your personal feels.

Thanks for taking the time to tee yourself up for me yet again. It’s a pleasure.

#103 Do we have all the facts on 09.23.21 at 10:22 pm

A reverse mortgage is similar to getting money from a loan shark with the understanding that the beneficiaries of your estate are responsible for repayment.

A better idea might be to allow all homeowners to withdraw up to $50,000 from their RRSP to spend as they see fit without penalty. This would inject billions into the economy at a time when we need a boost and would not involve Shylocks.

When the principal residence was eventually sold the Government of Canada would collect compounded interest at 2.0 per year on the amount withdrawn from the RRSP. When the homeowner(s) turn 71 they would chose the best option to invest the balance of their RRSP.

The Government of Canada would lose some tax revenue when the RRSP was terminated but the economy would benefit from a big shot in the arm now.

Maybe the Government of Canada could create an incentive where the 2.0% interest charge would be waived if funds were invested improve the Canadian economy.

Just a thought to encourage economic growth.

#104 Nonplused on 09.23.21 at 10:26 pm

#20 Shawn Allen on 09.23.21 at 2:24 pm
Question About a Pension Plan Buying any Taxable Company

Home Equity bank (or parent HomeQ Corporation) is presumably taxable and pays income tax. Pension plans are not taxed.

———————————

Chill Shawn, your RRSP isn’t taxed either. Your withdrawals, as with teacher’s pensions, are. Where the needle is stuck in the body to suck out the blood may change, but the blood will be sucked out.

We spend way too much time in this comments section worrying about whether this or that person is getting enough blood drawn by the CRA. Don’t worry, they don’t miss much.

#105 Dr V on 09.23.21 at 10:28 pm

92 Diamond dog

“…and dividend (no one ever mentions but should, it’s
taxation has room to go up)…”

How so? I’ve explained many times that dividends are fully taxed same as regular income, or at least very close. The tax system is designed that way. What I see is tax rate creep over the coming years.

#106 Flywest29 on 09.23.21 at 10:30 pm

#85 BillyBob on 09.23.21 at 8:00 pm

So you speak for all Czech ers? Your statement is absurd as an ocean swimmer saying they know better how the ocean works than an oceanographer who lives in Nebraska. Just cause you live in the CZ doesn’t mean you aren’t blind to many things that someone taking half a second to look up unbiased information can cudgel you with. This is why, at best, you are an applied technician. Save the science for people with half a clue and more than an oz. of curiosity over opinion or lone data points based on your personal feels.

Thanks for taking the time to tee yourself up for me yet again. It’s a pleasure.

My God, you’re a tool.

#107 Nonplused on 09.23.21 at 10:32 pm

#52 The West on 09.23.21 at 4:24 pm
Garth,

A serious question about “the rates”.

How can they raise them now on the all the money that governments (all over the world) have borrowed? We are seeing the problem in the US as Yellen demands the printing press truck in a lot more ink. At some point does this not severely affect the governments ability to keep a credit rating where they can continue to borrow for all those unfunded liabilities they pile onto the books every year?

Would this not mean a total currency collapse?

Interested in your take as you sat in that office.

————————————–

I’m no Garth but my take would be that if deficits don’t matter when rates are low, they don’t matter when they are high either.

We already don’t pay the interest on the debt, we just roll it over into more debt. Given that Trudeau doesn’t seem to be phased by any level of deficit, expect more of the same.

Currency collapse? Naw. Just higher rates.

#108 Ian on 09.23.21 at 10:35 pm

I can see as more people get desperate and they need more cash out of their houses, real estate’s equity that these reverse mortgage companies like Homequity will raise interest rates and fees more than the Bank of Canada, bond market.

If they can charge 5.14% to 6.49% and mortgage rates g up only 1% point, they can easily charge 6.5% to 8% plus higher fees plus compound interest on top of that. Now you know why they made the principal residence capital gains tax free and lower interest rates so low. It was to trap you all real estate, debt junkies into losing your money, home and retirement savings, investments.

Alot of Canadian widows in GTA, Vancouver, Toronto, Victoria, Montreal etc. are for sure going to pay alot of compound interest and fees in the future. I can see their $1 million to $1.25 million homes being cash cows generators of $500,000+ compound interest+fees paid in just 11 years to Homequity and other reverse mortgage companies, financial institutions. I don’t still see how a house, condo you live in is an investment.

#109 Billy Buoy on 09.23.21 at 10:43 pm

Why the 1% don’t want Covid to end and interest rates not to go up.

Remember who the FED REALLY works for.

Read the article about the newest record of ALL TIME.

https://www.zerohedge.com/markets/has-be-mistake

#110 Woke up this morning... on 09.23.21 at 10:43 pm

bro and homie so added in jabroni -> jabromie.

Oh snap. That just happened. That is art.

No jokes. Brilliant.

Too much if we throw in Good Times? Ja-bro-mite!

…yeah, too much. Jabromie is maximum goodness.

#111 Shawn Allen on 09.23.21 at 10:44 pm

Reverse Mortgages?

I’d be okay with them in certain circumstances if the interest rate was a lot closer to normal mortgage rates.

Part of the reason rates are so high is that most banks won’t offer them becasue of the extreme hatred people have for them. The big banks don’t need the bad press that offering these would bring. To get lower rates, lighten up and encourage more competition in the business.

Hated of these loans benefits the few players who offer them as they can charge more due to lack of competition. I believe their reaction to the hated can best be summarized as “BELCH!!”

#112 Nonplused on 09.23.21 at 10:49 pm

#94 Tripp on 09.23.21 at 9:07 pm
Approximately half of our income tax is covering healthcare. Still, people that can afford it and don’t have the luxury of waiting for too long, will go to US, or India, even to Eastern Europe. We do have a two-tier healthcare, it is just that the paid-for is happening outside of our borders, while we are stuck with ideology. Wouldn’t it be better for all this money to be spent in Canada?

———————————-

“This is my heart,” premier says of decision to leave Canada for procedure

https://www.cbc.ca/news/canada/newfoundland-labrador/williams-talks-about-u-s-heart-surgery-1.924467

————————————

Seems two of the things Canadians are most proud of, our health care and education systems, also generate the most animosity from those same Canadians.

So far as I know if you got some serious issues you find yourself in the OR pretty quick. Boo-boos have to wait. And either way it is damn near free.

And you can get a world respected university degree without going $200,000 in debt. Maybe Sally is getting some questionable answers on her grade 5 math quizzes but the ones who can master calculus seem to do ok anyway.

#113 Ustabe on 09.23.21 at 11:24 pm

#98 IHCTD9 on 09.23.21 at 9:44 pm

Chinook no good to eat? That’s pretty much all we got over here other than Coho.

On second thought, I’m not sure if I should be eating anything out of Lake O…

Chinook, King, Spring…whatever you call them are wonderful to both catch and eat. I just don’t think they make the best smoked salmon.

Funny enough the farmed Atlantic salmon also makes great smoked salmon. The famous lox and cold smoked salmon out of Scotland is Atlantic salmon.

#114 crowdedelevatorfartz on 09.24.21 at 12:09 am

@#100 Faron
“Your statement is absurd as an ocean swimmer saying they know better how the ocean works than an oceanographer who lives in Nebraska.”

+++

No.
Billy Bob is saying that living in the Czech Republic gives him a unique perspective on commenting rather than someone who has never been there…. like and ocean swimmer knowing more about the Ocean than an Oceanographer from Nebraska that has never even SEEN the ocean.

All the Uni degrees, all the internet info, all the blogs, still wont tell you how the ocean tastes, smells, and feels….. you have to be there.

#115 Don Guillermo on 09.24.21 at 12:13 am

#86 the Jaguar on 09.23.21 at 8:02 pm
@#196 Don Guillermo on 09.23.21 at 12:08 pm

https://www.ctvnews.ca/politics/snc-lavalin-corporations-and-2-former-top-execs-charged-with-fraud-forgery-by-rcmp-1.5597229
RCMP’s timing is impeccable.+++++++++

Ain’t it the truth? Waited until the election was over. I suppose if they didn’t they would have been accused of something. ‘Meddling’ or some such thing. Poor old RCMP.

Don Guillermo, I know you are packing up those bags and supplies for the journey south. Sending you and Mrs. Don Guillermo a little packing music.

Los Tres Ases ( The Three Aces). One of those much loved Trios from a bygone age. The guitars, the harmony, and the nostalgia. They’ve still got a fan in me. Hasta Luego, amigo. Quizas puedo hacer una aparicion. One never knows……

https://www.youtube.com/watch?v=Wb80zFCO7LY

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

Thanks Jag. Yes, Ms. DG is organizing and I’m late to the table with packing as usual. We laugh about our early days when we first owned and thought we’d fly in and out with carry on and breeze through customs. Instead, we always have 2 large checked bags each filled with sheets, towels, depends etc. to pass on to orphanages, seniors homes and hospices. It’s a great feeling. Thanks for the music. Love it. Life is good.

#116 Faron on 09.24.21 at 12:38 am

#92 Diamond Dog on 09.23.21 at 8:50 pm

https://www.canada.ca/en/department-finance/news/2019/07/backgrounder–marginal-effective-tax-rates.html

effective tax rates have been crashing for more than 20 years. Tax rates are not too high. Sorry.

#117 Don Guillermo on 09.24.21 at 12:40 am

#86 the Jaguar on 09.23.21 at 8:02 pm
Jag.
Siempre serás bienvenido

#118 short horses on 09.24.21 at 12:52 am

Am I crazy or wouldn’t raising interest rates end the “housing crisis” that was central to the election no one wanted? Trudeau loves to scaremonger but none of the ideas from any of the parties really touched on the seemingly endless supply of cheap loans — the Liberals are taking steps to make them cheaper.

I hope Minister Freeland takes a lesson from Japan’s playbook and makes 100-year mortgages a reality for young Canadians. Wrinklies will know what comes next, but I don’t think there are TikTok videos that cover this.

#119 Don Guillermo on 09.24.21 at 1:05 am

#66 Ponzius Pilatus on 09.23.21 at 5:52 pm

Homie,
You’ve been moping quite a while now about leaving Canada for greener pastures.
Time to jump into action and join hombre Donny G. in Mechiko, home of honey and superior health care.
———

Kidding right? Next year my house will be worth another 100k. The year after that – it’ll be 100k again. (Old) Canada has been great to me, and since this past Monday – I gotta feeling she ain’t quite done giving yet…
*************************
Poor “I hate tradesmen” Ponzie , struggling to figure life out. Great accountant I’m sure … yikes!

#120 Ponzius Pilatus on 09.24.21 at 1:49 am

#98 IHCTD9 on 09.23.21 at 9:44 pm
#55 Ustabe on 09.23.21 at 4:49 pm
I prefer sockeye but failing that almost any salmon type except chinooks. Pinks are usually too small, chum is…well, its OK. Find sockeye.
———

Chinook no good to eat? That’s pretty much all we got over here other than Coho.

On second thought, I’m not sure if I should be eating anything out of Lake O
———————
For my discerning palate, only sockeye will do.
Used to have plenty on the Wetcoast, but it seems to be drying up.
Love lox and sashimi, but at 6.60 per 100 grams I gotta pass.

#121 Wrk.dover on 09.24.21 at 6:57 am

I have connections to players inside the Atlantic salmon industry. I suggest peanut butter as an alternative to that chem trail.

#122 crowdedelevatorfartz on 09.24.21 at 8:28 am

@#116 Faron
“effective tax rates have been crashing for years…”

+++++

“Effective” being the key word here.

How many Billions have politicians on all levels of govt squandered on “pet projects”?
Trudeaus social “Woke-ism” comes to mind.

Lets look at the previous comment.
“Close to 70% of Canadian tax dollars are spent on health care and education.”

And for that massive expense we have teachers that ignore the STEM subjects to teach such earthshattering concepts as “binary/trinary?”” inclusiveness, what colors to use for rainbow crosswalks, what books to burn, etc etc etc.

Our Health care system is ranked second to last (14th out of 15) in the developed world as the lines grow longer for operations.

The other 30% of our tax dollars go toward funding endless bureaucracies that generate paperwork demanding the private sector businesses provide recipricating paperwork.

All as criminals are caught and released by a “justice” system that cant seem to keep murderers, rapists and thieves incarcerated longer that the paperwork it took to place them there.

Our “effective” taxes may be crashing because ….there is no “value added” reason for them to increase just to make another vain glorious politician feel good about themselves spending more future tax billions on social awareness projects that no one wants, no one needs and no one cares about.
Tax money that hasnt even been collected yet is being shoveled off the dump truck by…the…billions into a dumpster fire of debt.

#123 RE_Investor on 09.24.21 at 8:49 am

#103 Do we have all the facts on 09.23.21 at 10:22 pm
….A better idea might be to allow all homeowners to withdraw up to $50,000 from their RRSP to spend as they see fit without penalty. This would inject billions into the economy at a time when we need a boost and would not involve Shylocks…..

A much better idea, sell the house to a RE Investor, write an iron-clad legal doc, and continue to live in the same house on a multi-year lease for under market rent. The RE Investor buys the house below market for this deal and of course looks after all current expenses, while the home-owner doesn’t move and gets to enjoy the money now. They can invest it, or buy a house for their kids. I did 2 deals so far and the home-owners are the best renters I’ve ever had in my career as an RE Investor.

#124 Penny Henny on 09.24.21 at 8:53 am

#52 Bat Dance on 09.23.21 at 4:22 pm

FYI “Holy Tintinnabulation!” is from the original Batman TV show, which is full of gold “Holy” lines of course.
//////////////

Did you ever notice that many of the scenes in which the villains appeared were shot on an angle, because (of course) the crooks were crooked.

#125 IHCTD9 on 09.24.21 at 8:59 am

#113 Ustabe on 09.23.21 at 11:24 pm
#98 IHCTD9 on 09.23.21 at 9:44 pm

Chinook no good to eat? That’s pretty much all we got over here other than Coho.

On second thought, I’m not sure if I should be eating anything out of Lake O…

Chinook, King, Spring…whatever you call them are wonderful to both catch and eat. I just don’t think they make the best smoked salmon.

Funny enough the farmed Atlantic salmon also makes great smoked salmon. The famous lox and cold smoked salmon out of Scotland is Atlantic salmon.
___

Folks mostly call them Kings in my area, lots of catching but not a lot of eating from Lake Ontario.

From what I’ve read, Atlantic Salmon were just packed into lake Ontario in the early 1800’s and were totally gone by 1900. There is an ongoing effort to restock them though, and it seems to be having success.

#126 Prince Polo on 09.24.21 at 9:01 am

BMO chief investment strategist Brian Belski is predicting a big surge in Canadian dividend payouts,

“As we begin to ponder the stock market outlook for 2022 and beyond, we believe recent earnings strength places Canadian companies in a strong position to begin redeploying excess cash balances and cash flow in the form of both investments and cash distribution. In fact, the TSX has exhibited an epic positive surprise cycle that has translated into one of the sharpest earnings rebounds on record. This, according to our work, is likely to generate an impressive, if not ambitious dividend growth cycle that could see overall dividend growth surge well above historical averages over the next 12-24 months. As such, we believe investors should begin positioning in areas that are likely to increase dividends and share buybacks.”

the roarin’ ’20s! Are you buds with Belski?

#127 Dharma Bum on 09.24.21 at 9:44 am

I arranged my HELOC over 20 years ago, when my house was worth a fraction of what it is today. The maximum loan value amounts to 60% of the house as valued at that time.

Does anyone have any experience with updating a HELOC?

Back then, I was a working stiff, with a moderate employment income. Today, I am a retired bum, with a much higher income, but not from employment.

Will I be opening a can of worms by going to the bank and asking them for a much higher borrowing limit on my HELOC, since the value of the asset backing it has quadrupled?

Anyone? Anyone?

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

#128 millmech on 09.24.21 at 9:59 am

Faron
Just made your salary for this month on YANG, just like GME, watch for momentum get in and out after a few bucks profit. I did not need a quant or to look for a gamma squeeze to make 6k before work. It will be volatile for a while so get in and out within an hour and make your money. He who dares, wins!

#129 Dharma Bum on 09.24.21 at 9:59 am

#122 crowdedelevatorfartz

All as criminals are caught and released by a “justice” system that cant seem to keep murderers, rapists and thieves incarcerated longer that the paperwork it took to place them there.
———————————————————————————–

My son worked as a prosecuting attorney for a time. He quickly came to learn that the “standard of proof” for most criminal cases in Canada was unrealistically and intolerably high. The resultant effect is that cases brought forth to the crown pending prosecution were scrutinized by prosecutors to the point that 90% of them were rejected – even though it was painfully obvious that the accused was guilty as sin of the particular crime – for fear that the presiding justices would toss them for the most minute questionability of one technicality or another. The standard placed on the police and the crown is such that criminals have a HUGE advantage. Prosecutors care primarily about winning. They get paid the same whether they win or lose, so it becomes a game of reputation. They are judged and regarded by their “wins”. So they stack the deck in their favour at the outset by assessing the likelihood of a win based on how the case was handled, starting with “the arrest”. Most perps walk. Of those that are prosecuted, and convicted, the sentences are ridiculously light, and if jail time is involved, ridiculously short. Crowdy is correct. By the time the paperwork is completed, the criminal is back on the streets. It’s a joke. A political revolving door, which is now mired in a swamp of political correctness.

#130 DON on 09.24.21 at 10:11 am

#114 crowdedelevatorfartz on 09.24.21 at 12:09 am
@#100 Faron
“Your statement is absurd as an ocean swimmer saying they know better how the ocean works than an oceanographer who lives in Nebraska.”

+++

No.
Billy Bob is saying that living in the Czech Republic gives him a unique perspective on commenting rather than someone who has never been there…. like and ocean swimmer knowing more about the Ocean than an Oceanographer from Nebraska that has never even SEEN the ocean.

All the Uni degrees, all the internet info, all the blogs, still wont tell you how the ocean tastes, smells, and feels….. you have to be there.

*********

Yup.

Experience provides context.

#131 PastThePeak on 09.24.21 at 10:16 am

#92 Faron on 09.23.21 at 8:28 pm

“I was simply being an arse …”
+++++++++++++++++++++++++++++

…The most accurate and honest statement you have ever made…

#132 Left GTA on 09.24.21 at 10:31 am

@ Dr. V You mentioned to Dave they should consider non reg dividends. The non reg dividends before age 65 can reduce the taxes payable because of the dividend tax credit depending on income amounts however after 65 the grossed up amount of the dividends is added to the taxable income and will reduce the age amount tax credit which is different than OAS. But this applies to income amounts under around 87,000. In Daves case the combined income of cpp, oas as well as rif is around 70,000 for the couple so they are both under 35,000 income and would each qualify for age amount tax credit. If they had non reg div’s those would be grossed up and added to the taxable income reducing the age amount tax credit the dividend tax credit is not applied prior to calculating the age amount tax credit. Mind you its probably not much of an impact. It is just my understanding that non reg dividends are taxed more efficiently before age 65 and less efficiently after 65 depending on ones tax bracket. If one has room in their tfsa they could shift the non reg inv into the tfsa prior to age 65. Similar to the idea of withdrawing RRSP and moving it into tfsa.
Idea of shifting investments around for the most ideal taxation. That is my understanding of it but I may be wrong.

#133 Ponzius Pilatus on 09.24.21 at 10:43 am

#114 CEF
No.
Billy Bob is saying that living in the Czech Republic gives him a unique perspective on commenting rather than someone who has never been there…
—————————
Unique perspective?
For sure his unique perspective through his ideology tainted glasses.
Worse than someone who’s never been there.
Do you think Donny G. cares or understands what’s really going one in Mexico from his gated community.

#134 Left GTA on 09.24.21 at 10:54 am

@ worker dover to get that sort of DB amount the nurse would have to have worked over 45 years full time, or made over 100,000 a year for 5 consecutive years as well as over 40 years full time. In which case she either worked a lot of overtime in her later years / was a manager. Also have to consider if she had child bearing years and if so did she work/ contribute to her pension during those years. Her DB pension amount is well above average for most retiring nurses. Much thanks for her service and congrats to her!

#135 Ponzius Pilatus on 09.24.21 at 10:54 am

#129 Bum
I just hope your son is no longer in the “justice” system.
Seems like the apple did not fall far from the tree.
Btw, Alcatraz was closed some time ago.

#136 BillyBob on 09.24.21 at 10:54 am

#102 Faron on 09.23.21 at 10:01 pm
#85 BillyBob on 09.23.21 at 8:00 pm

So you speak for all Czech ers? Your statement is absurd as an ocean swimmer saying they know better how the ocean works than an oceanographer who lives in Nebraska.

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

Tsk tsk such a sad little straw man. Where have I claimed to speak for all Czechs? CEF got it. You’re trying to talk down to people with boots on ground because you did a Google search. MMmmK then.

From the guy telling others to stay in their lane. The guy who rails against the same internet research when it runs counter to his Klimate Klown Kreds. Can you blame folks for thinking you a tool?Maybe a shrink could unravel your self-conflict. Cause I’m not sure this comments section is working for you.

You are a reason no one who actually DOES things in the real world trusts scientists anymore. Which is a shame, because I actually think the world needs science desperately. Only makes your behaviour here even more – dare I say – deplorable.

But that’s fine, because in the real world I’m heading over to the Island today to enjoy what looks to be a beautiful day. It’s easy to travel when you’re an essential worker. Not that you’d know.

Gonna meet some buddies at Spinnakers if you’re free later. I’ll buy, I never hold grudges lol.

#137 Shawn Allen on 09.24.21 at 11:04 am

Shopping Around for best deposit rates including bank accounts and GICs

I brought up the need to shop around in order to pressure banks to offer better rates. But I said it’s hard or not practical for RRSP and RESp and TFSA accounts becasue you would have to open a new account at each new place you put your money. So I did it recently but only with cash in a margin account. And I only did a high-interest account (temporary offer of 2.0% at Simplii financial where I already had an account).

I’m curious do some of you actually go through the bother of opening multiple registered accounts to get better rates?

And by the way think about Open Banking. Why are the banks not letting us access the GICs of other institutions except for limited offerings? You can buy ANY stock in your RRSP but not any GIC. Actually, where are the regulators on this? Asleep?

P.S. I have never owned a GIC but I would still like the option.

#138 Don Guillermo on 09.24.21 at 11:10 am

133 Ponzius Pilatus on 09.24.21 at 10:43 am
#114 CEF
No.
Billy Bob is saying that living in the Czech Republic gives him a unique perspective on commenting rather than someone who has never been there…
—————————
Unique perspective?
For sure his unique perspective through his ideology tainted glasses.
Worse than someone who’s never been there.
Do you think Donny G. cares or understands what’s really going one in Mexico from his gated community
************************************
Gated community. Haha that’s rich. You obviously don’t know the street I live on. Do a google earth walk up Calle Pedregoso. Maybe Faron’s oceanographer buddy in Nebraska can help you with that. I heard he’s real good on that Interweb thingy.

#139 Philco on 09.24.21 at 11:11 am

Ponzi
Yes said barily a sockey to be had. 7 0or so years ago the buddy would drop 15 off at $12 ea I’d smoke 1/2 can the other 1\2.
Now $35 a side at Costco if their even there. Would pay that anyway.
Caught a few springs lately.

IHCTD9
My bros got an old cummins for sale in nice shape. To far from you….
Love those things i got a 491B in my Case 580SM.
2005 Durmax dually 4 door 4×4 mints 110k kms. Those babies are winners to. Just for hauling my Lance 2 slide unit weights 4800lbs with water and beer aboard.

#140 Dr V on 09.24.21 at 11:19 am

132 GTA – thank you for this info. It has never been mentioned by either my accountant or FA for that likely reason that it won’t really effect us at our income level either. My acct did warn me though of the extra tax I would incur from my non-reg while I was still working full time.

#141 BillyBob on 09.24.21 at 11:23 am

#133 Ponzius Pilatus on 09.24.21 at 10:43 am
Unique perspective?
For sure his unique perspective through his ideology tainted glasses.
Worse than someone who’s never been there.
Do you think Donny G. cares or understands what’s really going one in Mexico from his gated community.

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

Hmmm. Flattered as I am that you made the time to study my “ideology”…and even more surprised to learn that I have one lol…

…aren’t you the guy who can’t tell the difference between Mandarin and Cantonese even though you have a Chinese boyfriend or whatever?

Probably not the most credible one to be casting aspersions on cultural understanding, alas.

Ok gotta go, Harbour Air was full out of YVR so have to hop the SkyTrain to the harbour. Helijet as last resort. Standby travel is cheap but has it’s downsides.

#142 Philco on 09.24.21 at 11:31 am

Like Sockey salmon expensive as hell because there’s not enough of them.
https://www.bnnbloomberg.ca/toronto-broker-laughs-at-liberals-plan-to-improve-housing-affordability-1.1655486

#143 The West on 09.24.21 at 11:35 am

re: #78 Woke up this morning…

Your explanation stands to reason. If everything “collapses” at the same time nothing has really collapsed, the quality of life for all plebes just downgrades.

But, I would point out, this scenario would pretty much be a replay of what happened in the world from 1929 – 1945. The Germans under Hitler were not interested in joining the Bank of England’s war on the middle class. Of course the wedge issues will always be noted and the excuses will be surface level argument but, in reality, the German Establishment had a difference economic vision of the future than the English Establishment.

And I bring up this “rhyme” because we are seeing the London/Berlin disagreement playing out right before our eyes in the 2st century between Beijing/Washington. In so many ways it rhymes.

It’s going to be an interesting decade! Thanks for your thoughts.

#144 Ponzius Pilatus on 09.24.21 at 11:40 am

#138 Don Carleone
Gated community. Haha that’s rich. You obviously don’t know the street I live on. Do a google earth walk up Calle Pedregoso. Maybe Faron’s oceanographer buddy in Nebraska can help you with that. I heard he’s real good on that Interweb thingy.
——————————
Gated community too rich for the big shot from Alberta?

#145 Faron on 09.24.21 at 11:53 am

#136 BillyBob on 09.24.21 at 10:54 am

Learn the difference between a straw man and reducto ad absurdum. That goes for all the blog dogs who have continually failed to grasp that approach.

The point of my original comparison was to show that people dumping on Canada have no grounds. You have no grounds, Don G. has no grounds. I’ve shown that effectively by looking up the numbers because I understand that a singular perspective is meaningless for comparisons. Anecdotes aren’t authoritative.

Do you and Don have fine expat lives? Sure. That gives you zero basis for making broad claims about Canada. Zero. None. Additionally, your doom and gloom essays align with thousands of other doom and gloom essays from thousands of other hacks and none of them have any basis in truth or outsime. Just adult whining rooted in greed. No halfway solid policy analysis as to why we should care what you think. You’ve been wrong for decades.

If I were in town today, why the hell would I waste my time meeting someone who has accused me of being a domestic abusers? Why would I waste time with someone who has insinuated that they would like to take advantage of my partner? As for not holding grudges. What a laugh. Anyone reading your tirade above would have no trouble seeing grudge cubed. And to be shallow, why would I hang with a guy who drinks bBue Buck? The most cloying, crap beer to come out of Phillips.

#146 Sail Away on 09.24.21 at 12:01 pm

Perfect few weeks of bird hunting so far. In for shower and resupply. 18 mo Munsterlander is a true star.

Looks like the Canadian political landscape remains as before.

Noticed the sockeye posts- in Alaska, we would cast net them at Sweetheart Creek near Juneau which was a terminal fishery, meaning the river is stocked only as a put and take under a hydro agreement since a 50′ falls prevents them getting upstream, and sockeye need an intermediate lake for their life cycle. So a hundred thousand or so are stocked each year and residents can net 25 returnees a day. That’s a lot of fish. Directly into plastic screw-top barrels or the bears would take them.

#147 Jane on 09.24.21 at 12:12 pm

About the guy Dave and their parents tax rate is pretty low, my mother is widowed and has most of her savings in TFSA and RRSP GIC’s. Really all she has is CPP, OAS for her and the survivor portion from my father. Good thing these 2.85% GIC’s are in RRSP’s, TFSA’s are generating $6,500 a year in compound interest and taxes are being tax protected, 60% in RRSP’s tax sheltered, 40% tax free in TFSA’s for now. Her CPP, OAS is $2,225 a month and a joint GIC that was not anymore joint as it is in her name only now. The non-registered GIC with a credit union pays 2.75% interest per year but is paid monthly, $560 which she really makes all her CPP, OAS, non-registered GIC interest have a okay amount total taxable income of $33,420. She has no debts, mortgage in her old age which helps her now keep out of this coming debt, reverse mortgage trap. She is in the positive every month by $1,250.

She is eligible for all of the disability tax credit, personal amount, age amount which means $29,340 is not taxed due to these non-refundable tax credits since her taxable income is under $36,000 a year.

So really, she only to paid last year $1,278.25 in income taxes but she received $1,450 in Ontario tax credits and GST, HST credit which means a tax refund of $171.75. I prepare all her income taxes for years now and have been getting her the most benefits, tax credits for her as a senior. She has no taxes deducted from her CPP, OAS either. This helps her have more money every month.

My mother’s total income is almost $40,000 and paid no net income taxes this year but getting a $171.75 tax refund. I would say this, my mother and father did already pay alot of taxes over the 35 of their working lives, probably minimum $850,000 in income taxes, property taxes, sales taxes, GST, HST, tobacco, alcohol taxes, gas taxes, land transfer taxes, C.P.P, E.I. payroll taxes etc.

#148 Doug t on 09.24.21 at 12:16 pm

#145 faron

dude ya gotta chill dude

#149 Don Guillermo on 09.24.21 at 12:17 pm

#144 Ponzius Pilatus on 09.24.21 at 11:40 am
#138 Don Carleone
Gated community. Haha that’s rich. You obviously don’t know the street I live on. Do a google earth walk up Calle Pedregoso. Maybe Faron’s oceanographer buddy in Nebraska can help you with that. I heard he’s real good on that Interweb thingy.
——————————
Gated community too rich for the big shot from Alberta
********************************
The more you type the dumber you sound.

#150 Don Guillermo on 09.24.21 at 12:39 pm

You got the 1st word

Psst pssst: nother secret hombro: your friends are probably just moving to a warmer climate where they are insulated from the given nation’s economic nightmare by their wealth i.e. Don G. Not actually a solution to anything. They’ll come cryin’ back home when they get sick.
———————————————
and the last …

The point of my original comparison was to show that people dumping on Canada have no grounds. You have no grounds, Don G. has no grounds.

Happy?

#151 yvr_lurker on 09.24.21 at 1:06 pm

T2 and his gang are spot-on with regards to the need to regulate REITs and the financial industry from buying up loads of rental stock in Canada. One consequence of simply ignoring this issue would very likely lead to uber-high rents controlled by essentially an oligopy controlled by corporate boards perpetually seeking to increase profit. Local rents for an apartment in City X (i.e. Whitehorse) being decided by hedge-fund types city on Bay street or overseas. In the article below, City X=Berlin and financial groups in Stockholm control part of the show. By not being naive to the potentially severe consequences on affordability of rentals, this crazy situation going on in Berlin with regards to seeking expropriation of buildings can hopefully be avoided by putting in place strict Gov’t controls NOW.

https://www.cbc.ca/radio/asithappens/berlin-residents-to-vote-in-referendum-on-seizing-rentals-from-corporate-landlords-1.6185423

#152 Didi on 09.24.21 at 1:13 pm

Shawn Allen, GICs get a bad wrap but the 5 main things I like about GICs.

1. They are simple to understand at tax time, you know the interest you will get every year or at maturity and they can be laddered, staggered to mature short to long term, 30 days to 10 years deposit insured to a limit. This gives more chances to have you money available when you know it matures. This is why they appeal to savers more than investors. Today, it is easier to compare GIC rates and new financial institutions are becoming available every year.

2. They are RRSP/TFSA/RRIF and most other type of accounts eligible. Most Canadians can just buy RRSPs, TFSAs and shelter most of their interest income without paying higher tax rates during their higher income working years.

3.GICs can be compounded making money grow faster and not worrying about rates at reinvestment every year as well most preferred in RRSPs, TFSAs that don’t need annual interest income included in your yearly tax returns. Reinvesting the RRSP tax refunds in other RRSP, TFSA GICs if the maximum is not being utilized every year would make a good strategy to have more money later or in or near retirement.

4.They can be purchased directly with a financial institution and or with a GIC broker, agent, adviser if that is what the customer wants. Usually there are GIC rate promos, specials that may make it worth it to open a new account if if is at least for 5 years or longer term GIC.

5. They do not change in price, value everyday like other and gives some people a sense of security, safety but rates are not what they used to be.

The problem is not with GICs but the way the central banks, governments, corporations etc. expect low interest rates. These low interest rates GIC rates impacts people differently, I know some save much more to compensate to the lower GIC rates and some are buying less GICs for their portfolio to have a small portion 5% to 10% of all their assets, investments.

Shawn, for example, I am getting 2.5% to 3.0% on average with most of my 4 to 7 year GICs for the last 11 years. I used to be getting when I first started back in 2008, 3.75% to 4.25% GIC rates on average.

Now, I am saving 35% to 40% on average more to try to catch up with these lower GIC rates. I did get a bunch back in 2019, 2020 in the 3.4% to 3.6%. I am maxing out all my RRSP, TFSA GICs now and reinvesting all of my RRSP tax refunds in other compound GICs.

I used to only max out 75% of my RRSP and and a few years did not contributions to my TFSA. I am fully contributing to them now at 100% and taking all the RRSP tax refunds and buying longer term, higher, compound GIC rates.

The more I see things like these reverse mortgages and debt at all time high with older Canadians, it scares the hell out of me and makes me want to save more, cut more expenses and shop around for GIC rates, max out my RRSP, TFSA, compound GICs.

#153 IHCTD9 on 09.24.21 at 1:20 pm

#122 crowdedelevatorfartz on 09.24.21 at 8:28 am

Our “effective” taxes may be crashing because ….there is no “value added” reason for them to increase just to make another vain glorious politician feel good about themselves spending more future tax billions on social awareness projects that no one wants, no one needs and no one cares about.
Tax money that hasnt even been collected yet is being shoveled off the dump truck by…the…billions into a dumpster fire of debt.
___

All true. I’ll add there are an awful lot of hand outs and deductions that can be made too – especially if you have a few kids.

At our peak, we were getting near 20K/yr back from government between tax returns and handouts (like CCB). My bro who has more and younger kids and had a great ability to pound down his net income got back 33K between Tax return and handouts one year. We’re not rich, but not poor either.

We kept a rough running tally of how much we got back since Trudeau showed up in 2015 till this year and you’re looking at about a 1/4 million. 5 figure tax returns, and 4+5 figure CCB gifts every. single. year.

Add in RE equity gains since 2015 between us both and you can safely add in another ~1/2 million to that – for a grand total of 3/4 million dollars for two 6 figure HHI’s families, both with zero mortgages. All over just 6 measly Liberal (mis)managed years.

So if tax “rates” increase – so what? Our best (ie lowest) year was little more than ~12% on 120K income rough numbers. Less than sales tax.

Now… those days are going away. My kids are aging out of CCB, we no longer put a dime into RRSP’s, and some significant deductions we could make in the past related to children and education disappear completely come 2022. But Man – for about 10 years it was a hurricane of cash storming into our Bank account from Ottawa. I remember pounding cash into RRSP’s to lower our net income so our CCB benefit (which is based on Net income) would skyrocket. Is that ****** or what? How are we allowed to do this?

Waaaay too many handouts. CCB is a slayer of nations, and is wiiide open for abuse. Think it’ll get fixed?

#154 Frank B. on 09.24.21 at 1:47 pm

I thought the Fed was vague. Just more money printing. Why are things so expensive? The dollar ain’t worth what it was yesterday.

https://youtu.be/DVuD-LR79ac

#155 Joe on 09.24.21 at 7:28 pm

Didi, don’t forget about the annual fees on mutual funds that can be as low as 1% per year and as high as 2.5% per year and other fees that can be high as 2% for trading short term or quickly and 5% or more if redeemed early. I am guessing you never owned mutual funds so maybe you did not know that.

However, now there are much lower fee options of 0.50% to 0.75% per year with ETF’s but they must be factored in when comparing to GIC rates or any other return you get. A 2.6% GIC means that a 1.5% point annual fee mutual fund would need to earn 4.10% for you to make net 2.6% annual rate of return.

As for income taxes, yes GIC’s are simple at tax time because they do not have distributions from a fund or account which in one year can increase your income taxes and impact your net income and pensions, benefits calculations.

#156 Working Hard on 09.24.21 at 8:57 pm

Shawn Allen, I am 22 years old working full time in a delivery company in Barrie and all I have done is save in GIC’s. I am the opposite of you, all I have known is GIC’s. My RRSP and TFSA are now worth $50,000. I do have 20% of that as redeemable, cashable. I have been working 50 to 52 hour weeks for 3 years now. I do get every month 1 day off. I am very busy. The only way right now I can get ahead is save like crazy, 60% of my net income, I am a super saver and just keeping buying those 2.20% 5 year GIC’s in my RRSP’s, TFSA’s.

#157 Bob Dog on 09.25.21 at 12:34 am

Taking Canada from Canadians is like taking candy from a baby. Except the babies is an arrogant fool.

#158 Jodie on 09.25.21 at 10:00 am

Bob Dog, Liberals, NDP, Green Party and other socialists will go down in history as the destroyers of Canada. I don’t want here Canadians complaining about high inflation, high mortgage payments, high electricity, energy prices, high gas prices, high food prices, high rents and housing prices, high carbon taxes, 20%+ HST/GST and any other crap they just voted for, higher poverty, higher unemployment, more crime and more, less freedom, more ways to be living in dire circumstances. You voted for that and now pay for it, sucker Canadians.

#159 Diamond Dog on 09.25.21 at 1:44 pm

#105 Dr V on 09.23.21 at 10:28 pm

92 Diamond dog

“…and dividend (no one ever mentions but should, it’s
taxation has room to go up)…”

How so? I’ve explained many times that dividends are fully taxed same as regular income, or at least very close. The tax system is designed that way. What I see is tax rate creep over the coming years.

Dividends are 32% taxed as far as I know whereas cap gains are 50% taxed. Like I said, room to go up.

#160 Diamond Dog on 09.25.21 at 2:13 pm

#116 Faron on 09.24.21 at 12:38 am

You’ve missed the point. It’s easy math. Interest on a trillion in Canadian Fed public debt is 10 Billion per 1% increase in rates. Close to $400 billion is variable or in short term bonds while the rest come up periodically for renewal. Debt service over the next couple years is going up, likely to the tune of $ 20 billion annually or more. The NDP platform introduced what was it, $200 billion in new spending while raising cap gains to cover a portion of it.

Where else do you raise taxes? Highest tax bracket is already at 54%. Self employed also have to come up with a further 10% for pensions. The corporate side is where you can raise it, either through raising cap gains or dividends but it’s not enough. There’s room to raise dividends (which no one talks about) and room to raise gains but a 50% increase to 75% increase doesn’t cover half of the new spending the NDP had in mind plus there is no planning for expected increases in debt service.

As such, the NDP economic platform may has well been written in crayons because it doesn’t account for this. None of the platforms have in truth accounted for higher debt service but the NDP is introducing high levels of spending without the taxation to pay for it coupled with expected debt service costs coming is a recipe for runaway deficits and a looming currency crisis which we may not be able to avoid now anyway.

What we saw from the NDP platform economically was failed policy. It’s either broken promises, or a recipe for a currency crisis as Canada runs record deficits with no solution in site other than the obvious. Cut spending or raise taxes or both. I’m suggesting we go a third way through regulation. What I suggested concerning regulations would likely lead to a trade war of sorts with the U.S. concerning regulation but lets get real. Our food supply, much of which is U.S. imports and much of which is trade compliant with U.S. standards, simply sucks. We are, by enlarge an unhealthy people because of it and as a consequence, our spending on healthcare is becoming unsustainable.

To that end, we have one of 2 choices. Pay as you go and its everyone for themselves which suits mainly and only the rich, or this Fed Canadian government, whatever their political brand or stripe, whatever kind of government majority or minority or otherwise, get off its fat ass and goes to war and so they should. This isn’t merely about profit or system sustainability, it’s about the health and well being of our people. Not just Canadians I might add, but for Americans and the world over as U.S. food manufactures have a tremendous influence on the food supply world wide. If we went to war, we would have more, perhaps far more support south of the line than we think.

We wonder why it was a record low turnout for elections… this election was boring and largely uninspiring. Media and parties failed to do their jobs. The issues were poorly portrayed. Leaders are stale and unimaginative, unnecessarily adversarial, lacking virtue… platforms unrealistic… I’m going to save criticisms for more present comment threads, but there is large room to criticize, not just what was said but for all that wasn’t.