Brace yourself

Ah yes. Here we go.

Two days ago T2 gave his top two priorities for the third Socks Dynasty. First, the climate emergency. Second, reconciliation.

If you think either of those will come without massive new spending, atop a historic deficit and eye-watering debt, you’re naïve. The Covid gush may pale in comparison to what staggers back from the land of Scotch (by the way my grandmother was a Dewar – but sadly from the sober, penurious side of the family). Remember. Our new enviro minister once hung a ‘CLIMATE KILLER’ banner from the top of the CN Tower. It takes a unique person to consider such a thing.

These two top federal agenda items also send out this drumbeat: more tax.

Then the Bank of Canada admitted inflation is outta control; that it must quickly throttle back stimulus spending; and interest rates are going up a whole lot sooner than it said a couple of months ago. Immediately bond yields spiked. Mortgage rates will likely rise again in a week or so. The third time in a month.

Now we get this: “Starbucks Canada says it’s raising wages and benefits amid “critical staffing shortages” and a renewed commitment to the well-being of its workers.”

Beginning in January, the company says its starting wages will be increased to a dollar above provincial minimums, while workers who have been with the company a year will receive a six to 10 per cent pay hike. It says the wage boost, which will impact about 20,000 workers, will bring the hourly pay for baristas to between $13 and $20.45, depending on location and tenure, while shift supervisors will earn between $15.85 and $24.95.

Starbucks also says it’s providing every hourly worker in Canada with three paid shifts off per calendar year for sick days or family care, along with ongoing perks such as free coffee, a subscription to a meditation app and health and dental care. The higher wages and benefits come as the coffee company says it has added recruiting specialists to address “critical staffing shortages and difficulties” in some markets.

Admittedly this is but one company, yet an important and influential one. The move comes a few days after the news that 157,000 new jobs were created in September – a huge number – and we’re back to BeforeTimes employment levels. Our jobless rate has dropped by half from little more than a year ago. GDP growth in 2021 will be 5%. The stock market has added 30%. Houses are out of control. Natural gas prices just went up 8%. And here is irrefutable proof – from a notoriously low-wage part of the economy – that wage pressures are real.

This is what structural inflation is made of. When people expect prices to keep rising, they do. They ask for higher incomes. They accelerate buying intentions (it’s already Christmas). They save less. In an economy like ours, 60% determined by consumer spending, it’s all about the price of strawberries, bungalows, insurance premiums, gasoline and Canada Goose coats. Plus those ridiculous Starbucks drinks.

The conclusions:

  • Mortgage rates will continue to rise until they have doubled from current level. This may take a year or more, but plan on that outcome when contemplating renewal. You will be wise to throw more money at the principal.
  • Interest-bearing deposits and savings vehicles are soon to receive the first transfusions in more than two years. So don’t lock into a five-year GIC. In fact, shun any non-cashable liquid or near-cash investment. Rates of return will more than double.
  • Completely ignore those who tell you the cost of money ‘cannot’ rise by much or that it will fall back quickly. The rate-increase period will be lengthy (at least two years) and involve a minimum of eight to ten hikes. This will be in line with past CB actions. The enemy now is inflation. Nobody cares that you borrowed too much.
  • Rising rates will hurt real estate, obviously. Purchasing power falls quickly as monetary policy changes. The rate increases will initially spur more activity, followed by a slump. If you’re buying, wait.
  • No, stock markets will not crash as the cost of money increases. Inflation comes with economic growth, post-pandemic reopening, supply chain issues, exploding consumer demand and increased profits. Over 80% of companies currently reporting earnings have sailed past expectations. History shows us markets do just fine during periods of escalating interest.
  • It’s a bad time to have variable-rate debt, like HELOCs, personal lines of credit or VR mortgages.
  • It’s a great time to own preferred shares, which increase in capital value (the rate reset kind) as interest rates augment, while paying a tax-advantaged income stream. Get an ETF with a basket of quality prefs.
  • Been considering commuting a pension? Then know the value will fall with every interest rate increase, whether from the CB or the bond market. Waiting until next year could end up being a costly decision.
  • And remember that the Socks Dynasty, being fixated on social engineering, climate fear and unbridled spending, will just make inflation worse with increased taxation. Your best friends will be the TFSA, the RRSP, a RRIF, your kids’ RESP or that weird new FHSA. Fill ‘em up with diversified, low-cost, liquid ETFs and ensure you have enough balance to withstand the inevitable whipsawing of equity markets as valuations wobble higher.

Now, time for a dram. The show begins.

About the picture: “I thought I would share a picture of Red, our beautiful 7-year old Chihuahua that we rescued from Texas,” writes Michael. “He is adapting well to life in Ontario, though this will be his first full Canadian winter. I thought this would be a great pic to  pair nicely with your recent articles on inflation and the coming mortgage hikes. Thanks so much. I continue to read daily and appreciate the wisdom, and caution, that you provide.”

174 comments ↓

#1 Dogman01 on 10.28.21 at 1:36 pm

#134 Nonplused on 10.28.21 at 12:13 am

“If Trudeau succeeds in shutting down the fossil fuel industry, the whole country will be too broke to pay attention, but certainly any transfers that would occur will flow from Ontario and maybe Quebec to the western provinces. That’ll be a cold day in hell when that happens. The very year Quebec has to pay in to the program it will be cancelled and they will finally file for divorce. You can think of transfer payments as the “confederation tax”. It’s what we pay to make it look like Quebec is still a part of Canada.”

——————————————-

In one posting you covered the entire dynamic of why Canada exists. Like a beast of burden much of Canada captured and squeezed by a Quebec based elite

“To be prime minister of Canada you have to know French. To be governor general of Canada you have to know French. To be chief justice of the Supreme Court you have to know French. This is an awful lot of power to concentrate in just 17 per cent of the population. If you heard of some third world dump where a linguistic minority of less than 20 per cent held a permanent, legally-protected monopoly on all of the country’s top jobs, you’d probably think it wasn’t much of a democracy.” J.J. McCullough

“Let Them Learn French”: Canada’s Bilingual Elite Hold All the Power https://www.huffpost.com/archive/ca/entry/bilingual-elite-canada_b_4977174

https://www.youtube.com/watch?v=KitLiKbIsSU&t=292s

I have come to the conclusion that the current destruction of wealth in Western Canada is actually a stratagem to ensure that Western Canada cannot ever challenge the Quebec’s elites hold on Canada. People don’t realize that when it comes to a choice between “Maintaining Power” or “Increasing Prosperity” our establishment will choose power every time.

Climate Change being a nice “green house gas screen”, you can see through by noticing the Imports of Fossil Fuels from such friends as Saudi Arabia while they landlock Alberta’s O&G energy.

#2 Slanty Semi on 10.28.21 at 1:49 pm

I’m really appreciating the increased presence of chihuahuas on the blog!

#3 604sam on 10.28.21 at 1:52 pm

I’m 34 years old. My rrsp is maxed out. If I pull 40k from my TFSA and put it into the FHSA, and I don’t buy a house before I’m 40, and then the FHSA is eventually rolled into my (still maxed) RRSP, will I be penalized for over contributing? Would I be forced to buy a house? Would that money be added back to my income??? Can’t find any good info online about this…

#4 Prince Polo on 10.28.21 at 1:53 pm

And never forget the tried & true: live quietly amongst the masses!

#5 Cote Vidal on 10.28.21 at 1:54 pm

I was watching some Johnny Carson from early 80s yesterday on a retro channel to avoid the news. Gore Vidal was on.

Here, check it out – he comes on at 31 minutes:
https://www.youtube.com/watch?v=6PLYguHx4vA

To me it is shocking that he is saying the things he is saying 40 years ago. It is all so relevant today, you can apply it all exactly to either US or Canada. So on point. So same then as it is now.

Banks, oil, corporations, choosing presidential candidates in US, regardless of the side. Conflict of interest everywhere. We the people getting candidates that are distasteful – no real choice. Voters disgusted. Nothing changes regardless of who gets the post. So sad for this dialogue to be going on for so long, all the way to today, unchanged.

This look back at these conversations is sobering. The more things change the more they really do stay exactly the same. Or worse.

Made me look up other Gore Vidal videos, and here is one on our CBC with George recently, 2007 I believe.

https://www.youtube.com/watch?v=UcO4WD5Z81c

He is so right about habeas corpus in the western world today.

Democracy is rotting, right before our eyes.

Our rights and freedoms departing along with it.

Maybe that’s why they want everyone to consume more more more and have a big fat mortgage. Nothing adds to one’s ability to toe the line and ignore the rot as big debt chains. Skin in the scheme.

#6 Faron on 10.28.21 at 1:59 pm

#100 Nonplused on 10.27.21 at 7:38 pm

#60 crowdedelevatorfartz on 10.27.21 at 3:25 pm
Anyone want some slightly soggy Christmas decorations, Sofas, car parts and paddle Boards?

Somewhere off the northern tip on Vancouver Island….

https://theprovince.com/news/local-news/coast-guard-says-106-containers-not-40-fell-off-cargo-ship-near-victoria

———————————–

The doublespeak is impressive. Let me translate for you:

No, please don’t. Having you translate is akin to having someone who speaks klingon translate for you in italian. A useless language in a useless application.

Containers fall off all the time.

https://gcaptain.com/shipping-containers-lost-at-sea/

And it often happens in the kinds of horrific seas that were present during the first bomb cyclone last week (there were two and they occupy the one and three spots in the record books now). And, guess what, when multi-ton hunks of steel filled with god-knows-what tumble, there’s a lot of friction. Where there’s friction there’s fire. Apparently where there’s fire there’s a Nonplused conspiracy abrewin’.

Not everything is a zerohedge conspiracy Nonplused. I know it makes your boring life more interesting, but that’s about all the truth there is to it.

Oh, while I have you, let’s talk your mark-to-market nonsense. Someone sold off $1.2 Billion in TSLA shares today. And, lo and behold, the stock went… up! By that evidence, the uber rich will actually be richer once they cash their assets. Good lord man.

#7 IHCTD9 on 10.28.21 at 2:05 pm

Two days ago T2 gave his top two priorities for the third Socks Dynasty. First, the climate emergency. Second, reconciliation.
____

Imagine, imagine, you can imagine…

Total la-la land. Trudeau is not fixing anything to do with Climate Change, nor will he reconcile with the indigenous. Still, let’s go slide down a rainbow and climb magic mountain.

This is why I am reducing my tax remittances. Sockhead will blow 10’s of billions on this garbage and not one single Canadian will benefit. Why finance this guy? Look what he does with it.

I’ve said Monkeys would do a better job running Canada than the Trudeau Liberals, and here you can see why. Monkeys would just sit around eating bananas all day, which is much less damaging to Canadians than what Trudeau does all day.

#8 Shawn Allen on 10.28.21 at 2:12 pm

Faron on Tesla

“Someone sold off $1.2 Billion in TSLA shares today.”

************************
Was that someone or someones?

In any case, clearly someone(s) else bought each and every share sold.

Share price go up when potential buyers have to bid them up in order to pry them loose from current holders.

Share prices go down when the preponderance of trading is current holders having to discount the shares in order to entice other to buy from them.

The amount sold always equals the amount bought. Sometimes the company itself is a buyer or a seller but that is usually a minor part of the trading adn even so the number bought always equals the number of shares sold.

I am not suggesting you said any different but you did mention only one side of the trade.

#9 Blasphemious on 10.28.21 at 2:13 pm

Two days ago T2 gave his top two priorities for the third Socks Dynasty. First, the climate emergency. Second, reconciliation.

_____________________________________________

Of course they are. They are such nebulous items with no way to quantitatively measure them (unlike reducing Canada’s debt). . . how can they fail? They will be huge successes … by their own yardstick!

#10 Ponzius Pilatus on 10.28.21 at 2:14 pm

#156 Michael in-north-york on 10.28.21 at 1:16 pm
#122 John Frick on 10.27.21 at 9:19 pm

We know how effective a tool it is for Liberals to jam a few million hopeful desperate immigrants into a vote bloc and spoon feed them welfare in exchange for votes . Of course it’s paradise compared to Afghanistan and Somalia, Pakistan, Punjab etc.
===

That’s a massive overstatement. Many immigrants, including those from the places you mentioned, have jobs and pay quite a bit in taxes. Middle-aged and older immigrants who settled in the suburban parts of GTA often vote for the Cons; they don’t have much trust in the government and prefer to pay less in taxes, rather than have more government handouts that may or may not reach them.

Remember that Canada gets relatively few refugee immigrants; a lot of immigrants are pre-selected based on qualifications.

GTAs left-leaning voters are mostly younger adults, of all ethnic backgrounds but either Canadian-born or Canadian-educated.
————-
Agreed.
Most immigrants are from HongKong, China and the Punjab.
They are well off and mostly well educated.
They look after their communities and very few will end up on welfare or on the streets.
The times of the boat people are long over.
Immigration is very focused and organized now.

#11 James on 10.28.21 at 2:14 pm

#1 Dogman01 on 10.28.21 at 1:36 pm

#134 Nonplused on 10.28.21 at 12:13 am

“If Trudeau succeeds in shutting down the fossil fuel industry, the whole country will be too broke to pay attention, but certainly any transfers that would occur will flow from Ontario and maybe Quebec to the western provinces. That’ll be a cold day in hell when that happens. The very year Quebec has to pay in to the program it will be cancelled and they will finally file for divorce. You can think of transfer payments as the “confederation tax”. It’s what we pay to make it look like Quebec is still a part of Canada.”

——————————————-

In one posting you covered the entire dynamic of why Canada exists. Like a beast of burden much of Canada captured and squeezed by a Quebec based elite

“To be prime minister of Canada you have to know French. To be governor general of Canada you have to know French. To be chief justice of the Supreme Court you have to know French. This is an awful lot of power to concentrate in just 17 per cent of the population. If you heard of some third world dump where a linguistic minority of less than 20 per cent held a permanent, legally-protected monopoly on all of the country’s top jobs, you’d probably think it wasn’t much of a democracy.” J.J. McCullough

“Let Them Learn French”: Canada’s Bilingual Elite Hold All the Power https://www.huffpost.com/archive/ca/entry/bilingual-elite-canada_b_4977174

https://www.youtube.com/watch?v=KitLiKbIsSU&t=292s

I have come to the conclusion that the current destruction of wealth in Western Canada is actually a stratagem to ensure that Western Canada cannot ever challenge the Quebec’s elites hold on Canada. People don’t realize that when it comes to a choice between “Maintaining Power” or “Increasing Prosperity” our establishment will choose power every time.

Climate Change being a nice “green house gas screen”, you can see through by noticing the Imports of Fossil Fuels from such friends as Saudi Arabia while they landlock Alberta’s O&G energy.
____________________________________________
Agree with you hundo P.
Captain Socks, Selfie Boy of just simply T2 is a putz. A clown in a suit without the funny flower and coloured hair. He gravitates to anything that gives him a social platform except that the rest of the world already thinks Canada is a joke.
I say cut the west loose and let them create their own country and direct their own fossil fuels future. They will be better off without the dumb asses in the Capital trying to kill their livelihood.
As for the continual begging and blackmail for money from Quebec give them their own country and take back the land transferred from the NWT in May of 1912. Cede a corridor to the east along the eastern townships and send Quebec packing. Then dump them off our dollar. bonne nuit!
Oh and by the way take Captain Socks with you. He claims to be a true Quebecer even though he was born in Ontario.

#12 Rudolf Samoszynski on 10.28.21 at 2:14 pm

What does “commuting a pension” mean? (commute)???

Taking a lump sum payout and managing the funds yourself (or with an advisor) rather than leaving them with the pension plan and receiving a monthly benefit in retirement. We have mulled the pros and cons of this strategy several times on this blog. – Garth

#13 James on 10.28.21 at 2:18 pm

#7 IHCTD9 on 10.28.21 at 2:05 pm

Two days ago T2 gave his top two priorities for the third Socks Dynasty. First, the climate emergency. Second, reconciliation.
____

Imagine, imagine, you can imagine…

Total la-la land. Trudeau is not fixing anything to do with Climate Change, nor will he reconcile with the indigenous. Still, let’s go slide down a rainbow and climb magic mountain.

This is why I am reducing my tax remittances. Sockhead will blow 10’s of billions on this garbage and not one single Canadian will benefit. Why finance this guy? Look what he does with it.

I’ve said Monkeys would do a better job running Canada than the Trudeau Liberals, and here you can see why. Monkeys would just sit around eating bananas all day, which is much less damaging to Canadians than what Trudeau does all day.
___________________________________________
Trudeau is going to create the largest underground economy this land has ever seen.

#14 Air Science on 10.28.21 at 2:19 pm

Here is an interesting tidbit of information for home owners in cities, the air you’re breathing in your million dollar slanted-semis sucks.

Number of studies have been conducted and street level pollutants, NO2 diesel emissions and other health impacting fine particulates are twice the level at 4th floor and below vs. above that 4th floor level.

Just by living higher, your air in cities is 50% cleaner and lacking these emissions. One for condos I guess, as long as you can open a window. Going higher in cities has benefits.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3163303/

And of course by going higher you don’t have to deal with that 2nd highest cause of lung cancer either. You know, the one that’s hanging in everyone’s home basement: radon, it ain’t ‘rad’ at all.

#15 Edward DiamondHands on 10.28.21 at 2:19 pm

Mortgage rates will continue to rise until they have doubled from current level. This may take a year or more, but plan on that outcome when contemplating renewal. You will be wise to throw more money at the principal.

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

No thanks … I’ll stay the course with my silly variable rate mortgage. This is NOT a one size fits all solution. Steady as she goes!

#16 Summertime on 10.28.21 at 2:23 pm

Reduced my tax exposure to the thieves to 0/ZERO.

liquidating all my assets in Canada fast, including RRSPs.
Waiting for increased withdrawal rate when out of country. I will leave NOTHING to the thieves, not a single Penny.

Seriously considering revoking citizenship in order to cash in CPP contributions NOW, it is clear that it will be paid in absolutely useless, piece of trash currency. Not even gas money. Won’t pay for even decent funeral.

1-2 % indexing with 10 % + real inflation.

Climate change policy is a death sentence to Canada. Try surviving the cold winters with ever increasing heating and gas prices.

But hey, we have a ‘housing’ ministry.
When government decides to do nothing, they appoint a minister.

The very presence of the sock’s boy at the helm of this country is an insult to every/ even primitive intelligence.

Stupid, limited intellectually, opinionated.

As for BoC leadership and their constant lies about inflation: you are also an insult to this country.

#17 Squire on 10.28.21 at 2:24 pm

I predict T2 will go down like Dalton McGuinty. https://www.macleans.ca/politics/ottawa/dalton-mcguinty-resigns-his-critics-swirl/
But not until more damage is done. The fall person you ask ? Well, no other than Chrystia Freeland. Just like Kathleen Wynne. Then we’re stuck with a huge green plan failure and all associated costs. Finally, a majority conservative government to clean it all up. It likely won’t be O’Toole. What happened to Rona Ambrose ? we need a woman with cajones as the men no longer have any.

#18 Squire on 10.28.21 at 2:28 pm

And the person behind all this ? None other than Gerald Butts. Same as with McGuinty’s failures.

#19 WACCjob on 10.28.21 at 2:28 pm

Garth, care to take a stab at how REITs will perform over the next few years in the face of your expected increasing interest rates. BTW, you were very wrong about what would happen to apartment REITs a year ago when I put forward the question then. This is your chance to redeem yourself!

Most well-run REITs “pigged out” on the lowest rates and longest terms they could get (extremely low WACCs). More often than not, apartment REITS tend to fare quite well despite a long held belief otherwise … increasing interest rates mean that the economy is doing well, so rental rates go up as well.

REITs will do just fine. A 5% portfolio weighting seems about right. And apartment REITs have had a nice ride. – Garth

#20 Sean on 10.28.21 at 2:28 pm

> The rate-increase period will be lengthy (at least two years) and involve a minimum of eight to ten hikes.

We will see about that. Maybe I have poor imagination but I cannot imagine how things can possibly work with nominal interest rates 2% higher than now (8 x 0.25%).

If real interest rates remain negative then raising interest rates ten times (even in 0.5% increments) won’t stop inflation. If they become positive, it’s even less likely that economy can withstand them for more than 1-2 quarters. It’s not impossible that CB somehow manages to introduce and sustain positive real interest rate, but I’d give them not more than a 10% chance.

Just a hunch but I bet you are under 40 and do not recall 8%, 12% or 18% mortgage rates. We survived. – Garth

#21 Soviet Capitalist on 10.28.21 at 2:29 pm

All true, I also have a feeling we may experience a few months when both stocks and bonds will go down as high inflation erodes EPS and raises yields.

Inflation will not erode earnings, but higher bond yields will attract capital. – Garth

#22 TurnerNation on 10.28.21 at 2:34 pm

Standing by my call of a severe consumer recession 2023-24. Karbon taxes will kill us, think $3l of gas – and everything trucked, train-ed in.
Control over our Travel/Movements right?

———-

Keep an eye on the USA. See, all the other Former First World Countries are under permanent electronic lockdown by way of QR code. (Yes, your Apple I0S, Samsung Pay, etc. all have support for the “Health Pass”. That was fast eh?) USA’s downfall will be going a little differently.

.Trash is piling up in NYC and sanitation workers blame de Blasio’s vaccine mandate (nypost.com)

https://nypost.com/2021/10/27/covid-vaccine-mandate-could-force-20-of-fdny-companies-to-close/
“Vax mandate could force FDNY companies to close, as NYPD faces street cop shortage”


— Winding down in the Former First World Countries. Yep CV can do this too.

1. Kanada: The mandates are designed to bring us to our knees. ‘Temporary’? You mean like ‘2 weeks to flatten the curve’?

.Toronto Star -TTC plans service cuts starting in November because of workers who haven’t complied with vaccine mandate Temporary cuts for November and December are designed to protect the service on the busiest bus routes.

2. The Hospital capacity guys!!

.4,000 BC Healthcare Workers Placed on Unpaid Leave (vancouversun.com)

2. Australia: Watch the Bankers. Is it still true Australia, NZ are the testing ground for all of this?

https://twitter.com/zerohedge/status/1453539328567693315
zerohedge @zerohedge
Australia’s 2Y Bond Just Blew Up After The Central Bank Unexpectedly Refused To Buy It

#23 Linda on 10.28.21 at 2:43 pm

I await with trepidation the tax hikes to come. Our local municipal government will be faced with its first post election budget this November; the previous administration managed to hold the tax hikes down pre-election (mainly by dipping into reserves & reducing services) but I fully expect the new Council will have to raise taxes substantially. Ditto the other levels of government. I fear Christmas is going to deliver some tax related coals to Canadian households this holiday season.

#24 Quintilian on 10.28.21 at 2:44 pm

The girlie man running the BOC will continue the farce, as portrayed in the Wizard of Oz, and do a light show, but nothing of substance.

Canada will have to stay in line with the rest of the Central Bankers, otherwise our dollar will climb so high we won’t be competitive.

Thank God, Chrystia is taking over, she will competently control inflation with higher taxes.
But that doesn’t imply that if you over paid for the house, that you can relax- you are in big trouble.

Higher taxes bring increased operating costs and wage demands. They are not deflationary. – Garth

#25 Immigrant man on 10.28.21 at 2:56 pm

Ha-ha, funny dog photo! So appropriate.

Our woke sock emperor scares me with his anti-energy stance. The only thing I see as a positive is that our “green future” requires a staggering amounts of natural resources to build up renewable energy generation and EVs + the massive upgrade of the electricity distribution grid. So, nickel, cobalt, copper, lithium, rare-earth metals, graphite, you name it. Oh yeah, and steel to erect power lines. That’s right hippies, “green” means big hungry machines digging into the ground!

#26 Leichendiener on 10.28.21 at 2:59 pm

#18 Agree fully. Gerald is the power behind the throne.

#27 Dave on 10.28.21 at 3:04 pm

Garth has repeated said real estate corrections are 10% to 15% maximum.

Prices for old crack shed in Vancouver is $2M….so after the correction $1.8M. What a deal what a joke.

Once covid ends….rich immigrants will push prices higher

#28 Dolce Vita on 10.28.21 at 3:05 pm

#15 Edward DiamondHands

Historically, a very safe bet.

Since 1975 there were only 4 years where the 5 Year Fixed Rate was less, Variable rate vs. 5 Year Fixed rate:

1979: 11.70% vs. 11.25%
1981: 19.20% vs. 18.13%
1989: 13.20% vs. 12.00%
1990: 13.95% vs. 13.25%

91.5% of the time, the Variable Rate will be lower (43/47 years).

#29 TurnerNation on 10.28.21 at 3:06 pm

War on Small Business.

1. Mall in Barrie, ON is dead. When the Premier said “Open for business” a few year ago…well as usual flip what our leaders tell us 180 degrees to make sense. Closed up.

https://twitter.com/DonaldBestCA/status/1453087816204828675/photo/1

2.” Dan Kelly @CFIB – Did that happen? No. 68% of restaurants & 62% of arts/recreation businesses saw a FURTHER drop in sales after passports were implemented. Only 4%/9% saw an increase in sales. And over half of businesses in these sectors have faced abusive behaviour or increased costs.”
https://twitter.com/CFIB/status/1453426852396158977

———–
———–
Almost over guys! Almost back to normal. Any day now. (Cough, 2025)

.Covid: Moscow shops and restaurants shut in partial lockdown (bbc.com)

.Covid passes set to stay as Europe heads for winter (bbc.com)

.Minnesota surgeon fired after saying parents should make children’s healthcare decisions (news.yahoo.com)

—–

– I found the Green!! $$$

https://www.climatebonds.net/about/funders

#30 BlogDog123 on 10.28.21 at 3:09 pm

Trudeau having that enviro-zealot in charge of anything is like spitting in the face of Alberta.

I’d be incensed if I lived out west. Trudeau has found yet another way to provoke the crazies out there who will lash out.

You’re past your due date T2. For the good of the country, resign!

#31 Jesse on 10.28.21 at 3:11 pm

#146 Sail Away on 10.28.21 at 10:10 am
TSLA. Holy. Factories around the world. Top selling EV worldwide. Consistently profitable. 40% stock jump in last month. Awesome CEO.

Sorry, Elon haters, but this question is settled.
********************

Tesla has never had a profitable FULL YEAR. Once the big boys get serious about EV’s, watch out, Germany and Japan are going to eat Tesla for lunch! All Elon goes is sell mono-rails, err… I mean dreams… Tesla stock is the most manipulated stock in history, it’s more or less Tulip bulbs at this point. I don’t deny it as a great trading vehicle, but it’s valuation is completely divorced from reality.

#32 the jaguar on 10.28.21 at 3:12 pm

Red is adorable. His expression says ‘Damn the Torpedoes, full speed ahead!’

#33 gB on 10.28.21 at 3:13 pm

Garth would you be able to recommend an ETF with a basket of quality prefs?

I’m new to self directed investing (just opened a questrade account) and have been buying things based on my readings here.

(Thanks).

#34 Quintilian on 10.28.21 at 3:15 pm

“Higher taxes bring increased operating costs and wage demands. They are not deflationary. – Garth”

True, for a while, but eventually, it will also lead to higher prices, resulting in less consumption, lower demand, eventually leading to a slower growth, and therefore makes taxes deflationary.

#35 A Dollar is a Dollar is a Dollar on 10.28.21 at 3:18 pm

Yup. Change is on the way. Bigly.

Reconciliation.

Climate emergency.

Tax fairness with no exemptions for privileged sources of income.

Don’t pick on Garth and his team, folks.

There are probably no financial advisors anywhere on the planet ready to coach their clients about what is about to happen.

The reckoning is on its way……………..

#36 DWAC on 10.28.21 at 3:25 pm

DWAC is huge. Anyone in on this?

#37 renter in Surrey on 10.28.21 at 3:32 pm

Rates will double.
So RE prices will grow 15% per year instead of 30%.

#38 crossbordershopper on 10.28.21 at 3:33 pm

wow, with those wages i should stop working for cash and get a job.
or maybe just relax as taxes rise with those increase wages.
its a tax scam, jack up wages, so people are in higher brackets, inflation eats the purchasing power of it, and slow adjustments to tax rate changes.
all part of the plan

#39 Nick on 10.28.21 at 3:34 pm

I just got off the phone with my banker and locked in a 1.38% variable…after I saw this post, I panicked and went with the 2.44% fixed.

Feel like I can sleep better now!

#40 crowdedelevatorfartz on 10.28.21 at 3:38 pm

@#148 Regina East

https://nationalpost.com/news/world/noam-chomsky-says-the-unvaccinated-should-just-remove-themselves-from-society

+++++

Odd.
I thought the unvaccinated had already removed themselves from society…..

#41 Albertastrophe on 10.28.21 at 3:39 pm

Grab some tissues for Albertans. The next two weeks will be devastating.

#42 I'mshort_corpdebt on 10.28.21 at 3:41 pm

It’s coming. Zombie companies who lived off debt to fund their share buy-backs. Bubye!!

#43 fishman on 10.28.21 at 3:45 pm

A farmer friend in south Saskabush says last year was 1/2 the crop & twice the price. No canola next year. Fertilizer & chemicals way way up. Our tuna season? Twice the production & twice the price. Whats the price of other seafood? Doesn’t matter, fishman & friends bypass Soviet style country. Grab the cash: into the can: ship offshore. Jesus supplied the fishes, loaves & wine on the cheap. The deal on loaves & fishes seems to be over. That leaves cheap wine.

#44 Joseph R. on 10.28.21 at 3:45 pm

34 Quintilian on 10.28.21 at 3:15 pm
“Higher taxes bring increased operating costs and wage demands. They are not deflationary. – Garth”

True, for a while, but eventually, it will also lead to higher prices, resulting in less consumption, lower demand, eventually leading to a slower growth, and therefore makes taxes deflationary.

——————————————————–

Which taxes are deflationary?

Regressive taxes:

Sales taxes: increases the prices of goods, but don’t affect demand. Not deflationary
“Sin” taxes: Prices of beer and cigarettes go down?
Excise tax: Price of gasoline go down?

Income taxes:

Did cutting down taxes on the rich while increasing taxes on the middle class (Trickle-down economics) lower the cost of living for the middle class?

Wealth taxes:

Property taxes: the more your house is worth, the higher is your
Tax burden: didn’t reduce the price of houses?

#45 jimmy zhao on 10.28.21 at 3:50 pm

Speaking of ridiculous drinks, I went to Starbucks and ordered a Tall Blonde, with Legs, Extra Hot.

The Barista didn’t didn’t bat an eye and served me my drink.

#46 Soviet Capitalist on 10.28.21 at 3:50 pm

Garth, you are saying inflation will not erode earnings?

How about the following case?

Before:
Someone sells ice cream for 12$ with total costs of 10$ => Net Income = 2$

After:
Ice cream now sells for 15$ with total costs of 14$ => Net Income = 1$ .

Did you mean that it will not erode earnings for certain types of businesses only? Which kinds of businesses would you recommend as resilient to inflation (I assume banks will be in the list).

#47 IHCTD9 on 10.28.21 at 3:54 pm

So what’s next? I think 2.00/litre in BC for regular is on deck. Probably another 1/4 Trillion in Federal debt over the next 4 years. Will houses be cheaper? They probably won’t be cheap enough. Taxes will go up too. Rates will rise until inflation is checked while the RE market and loonie dance along.

So far sockhead only seems to have read the spending part of the MMT textbook. There is a tax part when inflation appears. Also a tax part when you just blew hundreds of Billions you never owned.

In short, it looks much the same – just even worse for the asset-less. Old stock Canucks will win again, while youth and newcomers continue to foot the Trudeau rent.

Costs go up for everyone, but asset inflation benefits primarily those 10 years+ into ownership – and bestows outlandish gains for those in 20+ years. Portfolios will grow more – for those that own them. For us old stock’ers – the gains far outstrip the increases in costs/taxes.

Sorry kids/new immigrants – just remember the face of the Man who did this to you.

#48 April on 10.28.21 at 3:57 pm

# 27 -must be a realtor

#49 crowdedelevatorfartz on 10.28.21 at 3:58 pm

@#24 Quintillian
“Thank God, Chrystia is taking over, she will competently control inflation with higher taxes.”

+++

Let me guess.
Zero investments.
In the bottom 10% of wage earners?

#50 Dolce Vita on 10.28.21 at 3:58 pm

Finally got that RE Price Index vs. Variable & 5 Year Fixed rates chart properly done to show effect of rate increases where arrows show a Price Index change, 1975 to 2021Q1 (prettier version than yesterday):

https://i.imgur.com/BnucJ1D.png

The point of the chart was to answer this question:

Are mortgage rate increases inversely proportional to RE Price (i.e., Rates go up, Prices drop)?

Table shows rate increase period, net increase in Variable/5 Year Fixed rates and if the Price dropped during or soon thereafter the rate increase (shaded), 1975 to 2021Q1:

https://i.imgur.com/lAOHl4F.png

Answer:

Yes, 80% of the time.

For the other 20% of the time, Price increased very little, 1997-00 data Stats:

Average = 57.76
Standard Deviation = 0.81
Sample Size = 16 (quarters)
95% CI Lower = 57.33
95% CI Upper = 58.19

—————

A lot of student-t, 1 tail (Google Sheets here) probability math to tell you this:

Little change in price (no effect) during 1997-00.

#51 Nonplused on 10.28.21 at 4:14 pm

“Two days ago T2 gave his top two priorities for the third Socks Dynasty. First, the climate emergency. Second, reconciliation.”

First, the climate emergency:

For socks, all win.

The effects of his efforts cannot be verified, so failure isn’t measurable. You can make up success and use terms like “global leadership” rather than pointing to any measurable decrease in global CO2 emissions.

Second, it creates a whole new class of millionaire grifters lining up to get tax breaks and grants (and make donations to the liberal party) to put solar and wind in places where they do not belong in quantities that make no sense at great taxpayer expense and to the detriment of grid reliability.

For everyone else, it will be an unmitigated disaster. Not only will you pay higher taxes to fund it, your power and other energy costs are going way up, and reliability is going way down. This has been proven everywhere it has been tried. Solar and wind don’t work. Carbon taxes don’t work. Electric vehicle mandates don’t work. They have failed at every opportunity they have been tried in all but a few specific applications. But they are expensive.

Second, reconciliation.

Another win for Trudeau because you really can be the hero by being all talk and no action. The natives can’t even decide among themselves which tribe owns what land. Ever seen one of those “acknowledgements” at the bottom of an email? Multiple tribes.

Or how about this guy:

https://calgary.ctvnews.ca/tsuut-ina-nation-disputes-claims-by-protester-of-south-west-ring-road-1.5629687

“In their statement Tuesday, the Tsuut’ina officials refuted those claims.

“Mr. Cardinal has intimated that his voice was not heard in the debate around the transfer of Tsuut’ina lands for the South West Calgary Ring Road,” it read.

“While Mr. Cardinal has family ties to our community, he is not a citizen of the Tsuut’ina Nation. Mr. Cardinal is a member of the Saddle Lake Cree Nation.”

There is no need to worry about “reconciliation” being anything more than a talking point for many years.

———————————-

But if Trudeau has proven himself to be anything, it is a cynic. These issues are but two of his many insults to the intellect of voters. It’s hard to remember them all but we got the 50% cabinet, Lavalin, the fired females, blackface, Indian costuming, reconciliation surfing, Bombardier (although no liberal will pass up an opportunity to grift Bombardier), and it goes on. But I do have to admire the brilliance. He knows his audience better than Trump did. It turns out the people really do want to be lied to. And he is good at it, the best there’s ever been. The devil won’t be winning any souls tonight. In fact, if I were the devil I’d be worried about my own soul.

#52 Nonplused on 10.28.21 at 4:19 pm

“Starbucks Canada says it’s raising wages and benefits amid “critical staffing shortages” and a renewed commitment to the well-being of its workers.”

I must apologize to liberal arts majors everywhere. I never thought they’d amount to much.

#53 Dolce Vita on 10.28.21 at 4:20 pm

Another statistical spin, to bore that pants off of you all:

Correlation Coefficient (here between rates and RE Price, 1975-2021Q1)

Is there a strong correlation between mortgage rate increases being inversely proportional to RE Price (i.e., Rates go up, Prices drop)?

Correlation Coefficients…

Variable Rates vs. RE Price Index = -0.71
5 Year Fixed Rates vs RE Price Index = -0.74

= negative correlation, price decreases as rate increases.

A correlation of -1.0 shows a perfect negative correlation, while a correlation of 1.0 shows a perfect positive correlation. — Investopedia

———————–

So ya and no kidding, Rates Up, Prices Down.

#54 Sail Away on 10.28.21 at 4:25 pm

#31 Jesse on 10.28.21 at 3:11 pm

Tesla has never had a profitable FULL YEAR.

——-

Sigh. All caps is not a substitute for accuracy, J.

#55 cuke and tomato picker e on 10.28.21 at 4:27 pm

Sad to hear that John Horgan is undergoing tests for cancer hopefully all will be fine. My son took delivery of a new Tesla yesterday went for a spin a very nice car. He is a workaholic with multiple degrees a real success story.

#56 Nonplused on 10.28.21 at 4:30 pm

#1 Dogman01 on 10.28.21 at 1:36 pm
#134 Nonplused on 10.28.21 at 12:13 am

“If Trudeau succeeds in shutting down the fossil fuel industry, the whole country will be too broke to pay attention, but certainly any transfers that would occur will flow from Ontario and maybe Quebec to the western provinces. That’ll be a cold day in hell when that happens. The very year Quebec has to pay in to the program it will be cancelled and they will finally file for divorce. You can think of transfer payments as the “confederation tax”. It’s what we pay to make it look like Quebec is still a part of Canada.”

——————————————-

In one posting you covered the entire dynamic of why Canada exists. Like a beast of burden much of Canada captured and squeezed by a Quebec based elite

——————————-

Brevity is not usually my strongpoint, but thanks! I imagine as I go further through the comments I’ll also hear from the people who have drank the Kool-Aid.

#57 NOSTRADAMUS on 10.28.21 at 4:34 pm

SERIOUSLY AMUSED.
The Devil must be seriously amused trying to figure out why hard working Canadians continue to struggle to make ends meet while our elected politicians provide “Billions” of dollars in foreign aid, plus countless millions in social welfare to those crashing our borders. Tears of laughter, the size of Horse B*LLS rolling down his cheeks as he contemplates the lavish pay raises along with hefty perks, our masters lavish on themselves endlessly. Don’t worry be happy. Much like the series, Peaky Blinders, Tommy (Justin) has a plan, set the attack dogs at Revenue Canada loose and they will bring in lots of money.” If not I suspect a lot of overindebted will shortly be carried out on a gurney to the nearest psychological ward to begin intensive therapy as to why. Amen Brother.

#58 wallflower on 10.28.21 at 4:36 pm

#33 gB on 10.28.21 at 3:13 pm
=========
read more, dude/dudess
get off yer butt

#59 CL on 10.28.21 at 4:36 pm

It’s no exaggeration when I say it’s astounding to me that voters keep voting to be taxed to death.

Convicted criminals make it to high ministerial positions, journalists become finance ministers, drama teachers who have been caught and found guilty of more ethical breaches than all other prime ministers combined just float through and are applauded and voted for.

I am stunned by this more and more everyday.

#60 Mosey on 10.28.21 at 4:38 pm

Before any rate hike takes place, central banks have to consider two things. One, what impact does higher interest have on government loans. Can they be paid if interest rates rise, or will countries be forced to default, causing all sorts of headaches. Two, what impact will rate changes have on markets? Just a couple of years ago JayPow tried to increase rates and had to backtrack because markets started tanking (taper tantrum, worth looking up if you aren’t familiar with the term)
So those two considerations tell the observer that while there may be some token interest rate increases to make it look like they are trying to tame inflation, it will only be for show. By the time they realize they have a serious inflation problem and move to make meaningful rate increases, it will come far too late. They are between the devil and the deep blue sea. Letting inflation go, as they are right now, is the only option they have. Transitory inflation has such a nice ring to it, will not be surprised if they are saying it two years from now.

#61 kommykim on 10.28.21 at 4:41 pm

RE: #33 gB on 10.28.21 at 3:13 pm
Garth would you be able to recommend an ETF with a basket of quality prefs?

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

ZPR is full of decent quality (~3% P1, 73% P2, 24% P3) rate resets.

#62 Oilbertatsan est fini....... on 10.28.21 at 4:48 pm

Our new eco minister in action!!

https://twitter.com/CGalipeauTJ/status/1453167218775179273

#63 Joe on 10.28.21 at 4:51 pm

Deflation is coming. Not inflation. Don’t expect rates to rise or real estate to crash.

#64 Barb on 10.28.21 at 5:03 pm

“…the land of Scotch (by the way my grandmother was a Dewar – but sadly from the sober, penurious side of the family).”

—————————
Ah…the land from which hubs hails.
Sober? Nae.
Actually, the family left Ireland for Scotland generations ago.
Double whammy.

#65 The joy of steerage on 10.28.21 at 5:04 pm

30,000+ eco-acitivists FLY to Glasgow to revel in the rubbish and rat invested city!.. and then blame it all on everyone else…

It’s called ZOOM ………sheesh….

https://www.theglobeandmail.com/world/article-thousands-to-arrive-in-glasgow-for-cop26-amid-garbage-strike-protests/

#66 Doug t on 10.28.21 at 5:15 pm

#55 cuke and tomato picker

I feel sad for your son – being a workaholic is a horrible existence- everyone around such a person suffers – hope the tesla is makes him happy ???

#67 AntMan on 10.28.21 at 5:17 pm

Great, so when will OSFI (i.e. the finance minister i.e. the PM) stop throttling bank dividends. Or have they decided to just cut to the chase and nationalize the banks?

#68 Ponzius Pilatus on 10.28.21 at 5:18 pm

#55 cuke and tomato picker e on 10.28.21 at 4:27 pm
Sad to hear that John Horgan is undergoing tests for cancer hopefully all will be fine. My son took delivery of a new Tesla yesterday went for a spin a very nice car. He is a workaholic with multiple degrees a real success story.
—————————-
Yeah, hope Hulk Horgan is okay.
BC, and in the future, Ottawa, needs him.
About the Tesla delivery:
Did it drive itself to his house.
And I hope he bought the optional Asbestos Suite.

#69 The joy of steearge on 10.28.21 at 5:20 pm

40% reduction from 2005 levels in just 8 years!!!

Hey, that’ll be simple….. apparently unlit cold caves are the future the T2 gang have in mind…..

“Wary of arriving at the party empty-handed, many of them – including Canada, which earlier this year boosted its commitment to a 40 per cent reduction from 2005 levels by 2030, from 30 per cent previously – have done just that.

“Let’s be clear,” says former environment minister Catherine McKenna of Ottawa’s new target. “We knew we had to do more for this COP, so we did.”

#70 Nonplused on 10.28.21 at 5:21 pm

#6 Faron on 10.28.21 at 1:59 pm

It would have been shorter to just say you agreed with me.

“Containers fall off all the time.”

Yup. This one made the news though and there was a fire.

“Oh, while I have you, let’s talk your mark-to-market nonsense. Someone sold off $1.2 Billion in TSLA shares today. And, lo and behold, the stock went… up! By that evidence, the uber rich will actually be richer once they cash their assets. Good lord man.”

What’s TESLA’s market cap again? Google says $1.026 TRILLION! So let’s see, $1.2 billion divided by $1.026 trillion, got to watch the zeros here these numbers don’t fit in a regular calculator, hmmm, I get 0.12%. Much less than a daily swing in price expressed as percent.

I wouldn’t be proposing any policy based on that one single data point. Words like “trivial”, “meaningless” and “statistically irrelevant” come to mind.

In any case, I’m thinking any “unrealized capital gains” will be met with “unrealized charitable donations”. Why not? If the premise is future things that haven’t happened yet can be taxed, why can’t they be deducted?

More seriously will be the question of what happens where someone’s M2M net worth drops in a year. Is that tax deductible? How many years can you carry it? Can you write one loss off against another gain?

And what price do you start counting the “unrealized capital gains”? Right now it is hard enough, but does it get reset every time you pay tax on unrealized gains that have been taxed? The very act of paying the tax in essence realized the gain, so it isn’t an “unrealized gain” anymore.

And all this just to bring the date the taxes are payable forward. It won’t do anything to increase the total amount paid.

I do have to say that it is always fun to see what you come up with though.

#71 Millennial 1%er on 10.28.21 at 5:22 pm

Garth,

your sense of humor always makes me smile. Comedy in the face of absurdism. The country can burn down, but at least we’ll be smiling while we’re on fire.

#72 The West on 10.28.21 at 5:23 pm

#1 Dogman01

Yes. The English paid a heavy, heavy price in making sure Quebec’s loyalty would remain to King George III in May, 1812.

The ol’ Thirteen Colonies were moving north and Napoleon looked invincible. The English could not afford to lose control of the Atlantic Ocean. Heavy concessions were demanded by the French governors for what the English had done 50 years earlier. A deal was struck and Quebec was essentially granted nationhood as a protectorate under the English Crown.

In the opening days of the war of 1812 there was a big push amongst the general population in Quebec (who had suffered mightily under English occupation) to join the Americans. But their leaders were bribed and insurrections were put down in Montreal and Quebec City when the decision was made to levy logistics and soldiers on behalf of the English against the Thirteen Colonies.

Quebec is a unique remnant of the English Empire’s world tour. That will not change, so long as Canada remains a functioning colony of London’s Commonwealth.

The stratagem to kill oil & gas (in all of the Anglo American Establishment’s influence) is the return to a time of Feudalism (Garth’s blog title from earlier this month), where economics, and the logistics that drives them, is centralized under the establishment that runs the western world.

Interestingly enough on your assessment of western Canada being under the boot of eastern Canada (and it is) – do you know where the vast majority of the settlers between 1865 and 1880 who came to Manitoba and the Northwest Territories (as it was called then) were from? They were refugees from the defeated southern states looking to escape from centralized authority in Washington. That is glossed over in grade school “social” studies. We are told that the RCMP were created to keep “whiskey traders” out. In reality ,they were created to ensure the new settlers didn’t get any ideas.

“Canadians” don’t really understand where they come from or how they got here. We understand very little of our history because there has been zero political turmoil. Conflict and darkness, more than we realize, but the rulers have never changed. There is nothing called into question. A little white paint and it all gets covered up. Understanding our place in the world would open a lot of eyes. This land is not the “friendly giant” that it is perceived to be.

The sun is setting (on the British Empire) but it is not dark, yet.

#73 Quintilian on 10.28.21 at 5:23 pm

Curmudgeon says:
“Let me guess.
Zero investments.
In the bottom 10% of wage earners?”

What are the odds your guess is correct?

Your assumption is that all left leaning people are all
poor ?

Remember that in the last election the combined left rejected your 19th century style economics and ideology.

Libs and NDP are a reflection of proportional representation.(although not by design)

Enjoy the tax increase.
I don’t mind them; I look at the bigger picture.

#74 tbone on 10.28.21 at 5:27 pm

# 33 GB

ZPR.TO

This one gets tossed around as a good etf .
Its had a run up the last year so you my want to wait for a dip .
It has a 4.69 % yield right now.

#75 Ponzius Pilatus on 10.28.21 at 5:29 pm

#59 CL on 10.28.21 at 4:36 pm
It’s no exaggeration when I say it’s astounding to me that voters keep voting to be taxed to death.

Convicted criminals make it to high ministerial positions, journalists become finance ministers, drama teachers who have been caught and found guilty of more ethical breaches than all other prime ministers combined just float through and are applauded and voted for.

I am stunned by this more and more everyday.
————————
Don’t be stunned.
Open the window and yell : “I’m mad as hell, and I won’t take it anymore”.
Or join IHTDG9 and CEF on the street corner.
They have extra “The End is nigh” signs.

#76 Nonplused on 10.28.21 at 5:35 pm

#31 Jesse on 10.28.21 at 3:11 pm
#146 Sail Away on 10.28.21 at 10:10 am

Re: EV’s

The lithium wall approaches.

#77 crowdedelevatorfartz on 10.28.21 at 5:35 pm

@#62 Oilbertastan cest fini.

https://twitter.com/CGalipeauTJ/status/1453167218775179273

++++

Wow!

What a big “FU” from Trudeau to Alberta while pandering to Quebec votes.
Unbelievably stupid.
Another spike in the Alberta Separation coffin.

Trudeau is an utter disaster… with Butts whispering in his ear… Dalton MiQuinty part deux..

#78 Arcticfox on 10.28.21 at 5:36 pm

Y curves flattening around globe. 20/30’s US inverting, never happens. 2nd/3rd derivative stuff going on..might actually be a little different this time re unprecedented cb intervention..

#79 Humbled & Broke on 10.28.21 at 5:36 pm

Got the T2 Memo from Mr. Makeup. After 12 years, just went full John Galt.

Told my crew were done. The squeeze ain’t worth the vapours.

Hell , rrvery thing is my fault anyway.

Profit sharing, timely tax payments, bank loans, warranties, gender parity goald, keeping snow off the sidewalk, covi spread, personal pronouns, collecting my employee court garneshees for late alimony, Stats Canada’s timely export reports, water and air quality reports to municipality, extra liability and bond insurance for employee malfeasence risk , know-your-customer reports to the feds, late fees for the truck plates because license office was closed for 9 months (* hey not my problem gov. staff response) …any way that was Wensday.

Tommorrow is a different list.

Its not a labor or supply shortage problem, it’s a stupidity excess problem.

Well not my problem no more.

#80 Dolce Vita on 10.28.21 at 5:37 pm

Yup.

“No, stock markets will not crash as the cost of money increases. Inflation comes with economic growth,…History shows us markets do just fine during periods of escalating interest.” —Garth

——————-

CAPM tell you that (Investopedia).

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

“Inflation premium is the component of a required return that represents compensation for inflation risk. It is the chunk of interest rate which investors demand in addition to real risk-free rate due to risk of decrease in purchasing power of money.”

Means stock prices on the way up as inflation increases.

Bring it on.

#81 Yukon Elvis on 10.28.21 at 5:38 pm

#59 CL on 10.28.21 at 4:36 pm
It’s no exaggeration when I say it’s astounding to me that voters keep voting to be taxed to death.

Convicted criminals make it to high ministerial positions, journalists become finance ministers, drama teachers who have been caught and found guilty of more ethical breaches than all other prime ministers combined just float through and are applauded and voted for.

I am stunned by this more and more everyday.
++++++++++++++++
Talk the noble virtuous talk and give away free stuff. Nothing else matters.

#82 crowdedelevatorfartz on 10.28.21 at 5:52 pm

@#75 Ponzies Political Pandering
“Or join IHTDG9 and CEF on the street corner.
They have extra “The End is nigh” signs.”

+++

I’d rather tell the truth on a sidewalk than apologize for that useless twit of a PM.

The most incompetent dolt ever to grace to office.

I’m wondering how many Liberals want him gone gone gone because he’s going to destroy that party and Canada if he’s allowed to continue.

#83 Faron on 10.28.21 at 5:52 pm

#8 Shawn Allen on 10.28.21 at 2:12 pm

Faron on Tesla

“Someone sold off $1.2 Billion in TSLA shares today.”

************************
Was that someone or someones?

In any case, clearly someone(s) else bought each and every share sold.

It was a single seller (may be institutional) and comprised about 4% of the volume today. It was done as a block trade off the exchanges.

I think you have missed the thrust of my beef with Nonplused. He continually states that the wealthy are only wealthy on paper and that their mark-to-market wealth is much much less. He claims that uneven wealth distribution is a fantasy because of it.

The point is that marking one’s wealth to market and selling shares is very doable without denting the price all that much. And if it was the CEO, we won’t know until months later when regulatory filings are submitted and processed.

#84 Chaddywack on 10.28.21 at 6:04 pm

The John Horgan story is just another reason why I’ve long since deleted social media and have basically no internet presence. I can’t believe the disgusting things being said online about his diagnosis!

I’ve embraced digital minimalism.

I don’t care for his or any NDP politics but I don’t want him to die of cancer either. People are so disgusting these days….I swear within 5 to 10 years people will realize what social media and the news is…..all garbage that deserves no attention paid to it.

Except this site of course.

#85 Faron on 10.28.21 at 6:05 pm

#70 Nonplused on 10.28.21 at 5:21 pm

#6 Faron on 10.28.21 at 1:59 pm

It would have been shorter to just say you agreed with me.

“Containers fall off all the time.”

Yup. This one made the news though and there was a fire.

Are you kidding? You were implying that they were tossed off the boat because of the fire. Do you seriously not recall your conspiratorial hype? The kind of junk that is part of misinformation streams based on nothing? Your gaslighting is crazy making.

W/re TSLA. Your logic basically says that Elon could “mark-to-market” his half of TSLA over 500 days at full value and keep 80% of it after taxes so, roughly $200 B. Yet you also say that paper wealth isn’t wealth. Which is it? This looks like wealth to me?

I’m guessing you are amused by “what I come up with” because you are blissfully ignorant (Trump voting irregularities ring any bells? Derp). The smiling town fool without a care in the world and about as much comprehension of it.

#86 Michael in-north-york on 10.28.21 at 6:16 pm

#10 Ponzius Pilatus on 10.28.21 at 2:14 pm

Agreed.
Most immigrants are from HongKong, China and the Punjab.
They are well off and mostly well educated.
They look after their communities and very few will end up on welfare or on the streets.
The times of the boat people are long over.
Immigration is very focused and organized now.
===

Yep. In Canada, immigrants as a whole are net-positive for the budget, bringing in more in tax payments than they are consuming in services.

#87 Faron on 10.28.21 at 6:17 pm

#XX Faron on 10.28.21 at 5:52 pm

It was a single seller (may be institutional)

Correction: multiple sellers to an intermediary yesterday who then, apparently, offloaded them today. The filings are available soon after the fact or they leaked. Here’s two:

https://pbs.twimg.com/media/FC0AGv-XIAECmDm?format=jpg&name=medium

https://pbs.twimg.com/media/FC0AGwAX0AgFhsS?format=jpg&name=medium

Share prices there are $1036, the block price per share was $1049. That netted the bank $15,000,000 for the service.

#88 cuke and tomato picker on 10.28.21 at 6:17 pm

Doug t he will retire at 55 with his place in Victoria B.C. as
well his place in Hawaii.

#89 R on 10.28.21 at 6:22 pm

Faron: How is your financial hero Michael Burry doing on his Tesla short position ? Did you follow in his financial footsteps ?

#90 Michael in-north-york on 10.28.21 at 6:25 pm

#20 Sean on 10.28.21 at 2:28 pm

> The rate-increase period will be lengthy (at least two years) and involve a minimum of eight to ten hikes.

We will see about that. Maybe I have poor imagination but I cannot imagine how things can possibly work with nominal interest rates 2% higher than now (8 x 0.25%).

If real interest rates remain negative then raising interest rates ten times (even in 0.5% increments) won’t stop inflation. If they become positive, it’s even less likely that economy can withstand them for more than 1-2 quarters. It’s not impossible that CB somehow manages to introduce and sustain positive real interest rate, but I’d give them not more than a 10% chance.

Just a hunch but I bet you are under 40 and do not recall 8%, 12% or 18% mortgage rates. We survived. – Garth
===

Back then, consumers had much less debt (debt-to-income ratios were lower). More debt means more sensitivity to the interest rate. The debt payments go up with the rate, less money is available for new purchases, the economy slows down.

The base rate will surely go up somewhat, but it will not reach 8%. I doubt it will even reach 5%.

#91 BC Renovator on 10.28.21 at 6:28 pm

Completely ignore those who tell you the cost of money ‘cannot’ rise by much or that it will fall back quickly. The rate-increase period will be lengthy (at least two years) and involve a minimum of eight to ten hikes. This will be in line with past CB actions. The enemy now is inflation. Nobody cares that you borrowed too much.

Every Realtor, Investor and Mortgage Broker on Twitter disagrees with you. Cant wait to see, start popping the Corn, this will be a good show

#92 Mattl on 10.28.21 at 6:29 pm

#28 Dolce Vita on 10.28.21 at 3:05 pm
#15 Edward DiamondHands

Historically, a very safe bet.

Since 1975 there were only 4 years where the 5 Year Fixed Rate was less, Variable rate vs. 5 Year Fixed rate:

1979: 11.70% vs. 11.25%
1981: 19.20% vs. 18.13%
1989: 13.20% vs. 12.00%
1990: 13.95% vs. 13.25%

91.5% of the time, the Variable Rate will be lower (43/47 years).

—————————————————————

This is exactly why I’m in no rush to lock into a rate today that I may be at in 1-3 years with my variable. I do agree rates will go up but willing to roll the dice.

#93 Victorian on 10.28.21 at 6:31 pm

Garth, as we enter this next phase, does your stance change re: taking a HELOC to invest in blue chip dividend stocks/cheap Index ETF’s in a non reg account? I’m 44, and have a long(ish) time horizon. Thanks.

Trying to stay emotionless on the Coast

#94 COVIDIOT of the month on 10.28.21 at 6:38 pm

https://ottawacitizen.com/news/local-news/city-paramedic-charged-in-fake-covid-19-vaccination-certificate-probe

#95 IHCTD9 on 10.28.21 at 6:38 pm

#59 CL on 10.28.21 at 4:36 pm
It’s no exaggeration when I say it’s astounding to me that voters keep voting to be taxed to death.

Convicted criminals make it to high ministerial positions, journalists become finance ministers, drama teachers who have been caught and found guilty of more ethical breaches than all other prime ministers combined just float through and are applauded and voted for.

I am stunned by this more and more everyday.
———

Aye, the New Canada was built from the bottom up – 6 years and counting. We’ll keep seeing more of the same until something happens to change the thinking of Canadians. Up till now it’s been a free spending party with zero repercussions, but anyone with a functioning brain should understand this won’t carry on forever.

At some point it’ll have to get fixed and it won’t matter who gets voted in. I doubt Trudeau will stick around to face the music. The fix will be painful, and long winded.

#96 Ponzius Pilatus on 10.28.21 at 6:38 pm

#71 Millennial 1%er on 10.28.21 at 5:22 pm
Garth,

your sense of humor always makes me smile. Comedy in the face of absurdism. The country can burn down, but at least we’ll be smiling while we’re on fire.
—————–
Nothing is burning down, my friend.
I found, sarcasm is the best way way to deal with the debby downers here.
Unfortunately, sarcasm does not show well in print.

#97 Michael in-north-york on 10.28.21 at 6:38 pm

#34 Quintilian on 10.28.21 at 3:15 pm

“Higher taxes bring increased operating costs and wage demands. They are not deflationary. – Garth”

True, for a while, but eventually, it will also lead to higher prices, resulting in less consumption, lower demand, eventually leading to a slower growth, and therefore makes taxes deflationary.
===

Did anyone, in any country, ever observe that in practice?

It seems to me that you will have to allow a serious recession (not just “slower growth”), before you see any deflation in that scenario.

In a democracy, the government will resume or accelerate the money printing to avert the recession, thus you will never see deflation.

#98 Linda on 10.28.21 at 6:39 pm

#43 ‘fishman’ – hate to break it to you bud, but apparently there are shortages in the wine sector as well. Bad year for harvest; labor shortages plus supply chain issues for the wine producers to boot. Your basic bottle of wino plonk is likely going to be priced like upscale vino – add in those ‘sin’ taxes on liquor & up she goes!

#99 Don Guillermo on 10.28.21 at 6:57 pm

#59 CL on 10.28.21 at 4:36 pm
It’s no exaggeration when I say it’s astounding to me that voters keep voting to be taxed to death.

Convicted criminals make it to high ministerial positions, journalists become finance ministers, drama teachers who have been caught and found guilty of more ethical breaches than all other prime ministers combined just float through and are applauded and voted for.

I am stunned by this more and more everyday
*******************************************
True, I find it especially amusing when non Albertan Canucks get upset that Alberta doesn’t have a sales tax instead of question their own sales taxes. Back to the “killing Igor’s goat” analogy.

#100 Philco on 10.28.21 at 6:59 pm

Two days ago T2 gave his top two priorities for the third Socks Dynasty. First, the climate emergency. Second, reconciliation.
————–
So annoyed today i dropped this on the prior blog.
2 ridiculous and virtue signaling ideals.

1) Go get China to shut down coal burning 1st among 50 other things.

2) The amount of money pissed down for the drain on water issues for the Natives and many more. Put it this way in a few short years they will immigrate more people into Kanada than there are natives.

Sock the ass kissing fool.
With a ridiculous audit thrust on me I officially DESPISE the government. I shuttered my Telecom company I was making $350k net there. That’s why the audit prolly. Gov can suck eggs no more taxes for them why bother. Being poor or native maybe a better plan lots of FREE stuff that guys like me pay for.
Good Night!

#101 Steven Rowlandson on 10.28.21 at 7:07 pm

Better pay supplies the means to obtain goods and services and that is good business.

#102 Work and Tumble on 10.28.21 at 7:08 pm

#1 Dogman O1

Lived in Quebec for 22 years and what you say is the truth and you understand Canada and the elephant in the room.

#103 Faron on 10.28.21 at 7:15 pm

#89 R on 10.28.21 at 6:22 pm

Faron: How is your financial hero Michael Burry doing on his Tesla short position ? Did you follow in his financial footsteps ?

I don’t think I ever claimed him as a hero. Sail Away has. The people I follow on FinTwit laugh at his antics. I despise his libertarianism as I do coming from anyone who is uber wealthy.

Regardless, all we know about his positions comes from regulatory filings. (when you see an article about his holdings it’s rarely mentioned that they are up to a quarter out of date and therefore may be useless to you). He purchased put options in Q1 and he is now out of them as of the most recent quarterly filing. Savvy investors use options as hedges and, for all we know, an ignorant reporter didn’t see that this was a straddle (long put short call) or some other more complex structure that benefits from stagnant prices. Maybe he was hedging a long TSLA share position seeing that rising rates were causing mega-cap tech to struggle? Who knows?

not knowing the strike price or expiration date of Burry’s puts makes it impossible to gauge whether the position turned out to be profitable or not.

https://markets.businessinsider.com/news/stocks/big-short-investor-michael-burry-no-longer-short-tesla-tsla-2021-10

#104 IHCTD9 on 10.28.21 at 7:20 pm

#82 crowdedelevatorfartz on 10.28.21 at 5:52 pm
@#75 Ponzies Political Pandering
“Or join IHTDG9 and CEF on the street corner.
They have extra “The End is nigh” signs.”

+++

I’d rather tell the truth on a sidewalk than apologize for that useless twit of a PM.

The most incompetent dolt ever to grace to office.

I’m wondering how many Liberals want him gone gone gone because he’s going to destroy that party and Canada if he’s allowed to continue.
—- —

Ponzie thinks everything is just fine these days with 100 billion dollar deficits and 2 Trillion in public debt.

He must have been doing cartwheels of joy under Harper…

#105 Faron on 10.28.21 at 7:21 pm

#78 Arcticfox on 10.28.21 at 5:36 pm

Y curves flattening around globe. 20/30’s US inverting, never happens. 2nd/3rd derivative stuff going on..might actually be a little different this time re unprecedented cb intervention..

Yet the shorter duration yields continue to go up while benchmarks are stuck at ~0. The steepening is going to demand a CB rate rise sooner than later as Garth continues to warn. Even if it doesn’t, the bond market might force higher effective rates before the CBs get around to it.

#106 DON on 10.28.21 at 7:28 pm

Completely ignore those who tell you the cost of money ‘cannot’ rise by much or that it will fall back quickly. The rate-increase period will be lengthy (at least two years) and involve a minimum of eight to ten hikes. This will be in line with past CB actions. The enemy now is inflation. Nobody cares that you borrowed too much.

**************
The over indebted are now a secondary concern as there’s a new enemy on the shores. The inflationary force.

#107 Billy Buoy on 10.28.21 at 7:28 pm

Just a hunch but I bet you are under 40 and do not recall 8%, 12% or 18% mortgage rates. We survived. – Garth

——————————————————————-

Umm, were government and household debt levels similar back in those days Garth?

I don’t think so…please correct me if I’m wrong.

It’s different this time…A complete different world than last time. Let’s see what happens if rates EVER dare to hit 3%. Anywhere.

It is illogical to believe a tightening cycles would stop after three or four moves. And it won’t. – Garth

#108 Ponzius Pilatus on 10.28.21 at 7:28 pm

If you don’t like it here, move to the States.

United States GDP Growth Rate | 2021 Data | 2022 Forecast | 1947-2020 Historical – Trading Economics
tradingeconomics.com › United States
The American economy expanded an annualized 2% on quarter in Q3 2021, well below market forecasts of 2.7% and slowing sharply from 6.7% in Q2.

#109 crowdedelevatorfartz on 10.28.21 at 7:35 pm

@#96 Ponzie’s Periodic Puns

“I found, sarcasm is the best way way to deal with the debby downers here.
Unfortunately, sarcasm does not show well in print.”

++++

That was sarcasm?
I thought you were trying out for the Austrian Comedy Awards.
Keep trying.

#110 Billy Buoy on 10.28.21 at 7:43 pm

It is illogical to believe a tightening cycles would stop after three or four moves. And it won’t. – Garth

—————————————————————-

Didn’t Mr. Powell reverse course during Trump’s reign by dropping rates when the market showed weakness, when he was trying to finally raise rates? And this was BEFORE Covid and the TRILLIONS created?

He tried but reversed…What is to say Central Banks wouldn’t do it again?

Inflation. – Garth

#111 Unpinned on 10.28.21 at 7:56 pm

The Covid pandemic and the ESG movement happening at the same time reveals an upcoming inflation crisis. Central Banks are keen to circumvent inflation shrugging off the landslide labelling inflation “transitory”. Regardless, with our new green world and higher taxes and prices in supply chain and transportation and manufacturing and labour ….give us a heads-up Garth where is the hidden opportunity here? Can’t go to oil; the consumer will be buried in over-charges and high cost of living and rising taxes; can’t go global as we the western world in charge of pushing our green agenda have morphed our problem onto continents still trying to figure out how to feed their natives; and we are hoping like the tramps did in the 1920’s to keep the rent paid and hide cans under the bed.

#112 Sail Away on 10.28.21 at 7:59 pm

#103 Faron on 10.28.21 at 7:15 pm

I don’t think I ever claimed [Burry] as a hero. Sail Away has.

——–

???

Not that I’m aware. I barely know anything about the man other than that he and I are both long in private for-profit jail companies. Good business that. People are killing to get in.

#113 Capt. Serious on 10.28.21 at 8:08 pm

“It’s a bad time to have variable-rate debt, like HELOCs, personal lines of credit or VR mortgages.”

But I have my VR mortgage at 0.99% and could pay it off tomorrow if I had to. I’m not convinced we’re going to get anything like a linear 8 x 0.25 % increase in rates over the next two years. And even so, that would finally make the rate I’m paying near the current 5 year fixed rate. VR is great if you’re not over exposed.

#114 crowdedelevatorfartz on 10.28.21 at 8:09 pm

@#6 Faron.

“And, guess what, when multi-ton hunks of steel filled with god-knows-what tumble, there’s a lot of friction. Where there’s friction there’s fire. Apparently where there’s fire there’s a Nonplused conspiracy abrewin’.”

+++

Actually I was thinking that the heavy seas tossing the ship back and forth crushed one of the weaker steel containers.
As the other containers collapsed and escalated the problem two chemicals in one container were crushed together ( epoxy paint base and epoxy hardener will do the trick in about 20 minutes after mixing) causing an exothermic reaction and then a fire.
I’ve mixed two epoxy units ( base and hardener) together in a one gallon can and after 20 minutes….you can’t hold the can with your bare hands…..and if you are crazy enough to mix the two units together and put the lid back on…..it’ll explode.

I’m thinking those chemicals were a Base and a catalyst and when the shipping container was crushed with hundreds of pounds of both chems…….the chemical reaction did the rest.

#115 Tripp on 10.28.21 at 8:11 pm

72 The West on 10.28.21 at 5:23 pm

Good to see some Canadians are still reading and understanding history. In an era of a two-week attention span, this is a great achievement.

#116 IHCTD9 on 10.28.21 at 8:23 pm

Whatever they decide to do in Ottawa, I’m looking forward to it. I know it’s coming because it has to. I like little projects around the house, and avoiding taxes is just one of the things I do in my spare time.

It helps that I’m close to a FNR where the range of products keeps getting bigger, and cheaper. Also tax free of course. As long as Trudeau runs the show, I’ve got no worries about this gravy train ever ending. They love us gringos stopping by, and the OPP can’t get on the reserve anymore without some kind of protest, so it’s pretty much a free-for-all now.

Dodging high energy costs and carbon tax has been pretty easy so far, this year is shaping up great. Last year’s rocket stove Christmas project is undergoing a redesign and is almost done, and I think it’ll burn that free skid wood long, and trouble free this time. It should take about 200 lbs of wood “chunks” per load, and burn a loong time before needing a refill. I’m adding a fan forced draught that puts the stove under a vacuum, outside fresh air intake, and choke on the intake end of the system. The free wood supply is indefatigable, I’m looking forward to putting it to good use. If all goes well this year, it’ll be moved outside, set up as a boiler, feed a radiator in my ductwork, and I’ll take a shot at making it my primary heat source for next year.

Then there’s the new truck that at this point is already cutting the fuel bill clean in half compared to the outgoing one. A few mods should sneak it into the 27-28 mpg range (USG) on the highway. Maybe even better. I might be content with this as-is. But, if not – it will run on just about any oil since it’s an old school full mechanical IDI’d diesel.

Fuel will have to get really expensive first, but look who’s effectively running the energy show in Canada now…

#117 ImGonnaBeSick on 10.28.21 at 8:30 pm

Long put, stock, short call is a collar.. not a straddle..

Straddle is long put, long call..

Now you can pretend to know even more Brick Tamland

#118 Doug t on 10.28.21 at 8:33 pm

#88 cuke and tomatoes

Cool – hope he lives long enough to get there

#119 crowdedelevatorfartz on 10.28.21 at 8:45 pm

@#116 IHCTD9

“Fuel will have to get really expensive first, but look who’s effectively running the energy show in Canada now…”

++++
Children in suits.

#120 Gb on 10.28.21 at 8:55 pm

Thanks to those that chimed in on my ETF inquiry back at #33.

I’ll look into ZPR.

I’ve recently added VBAL, VGRO and ZSP.

#121 Wrk.dover on 10.28.21 at 8:56 pm

#114 crowdedelevatorfartz on 10.28.21 at 8:09 pm
( epoxy paint base and epoxy hardener will do the trick in about 20 minutes after mixing) causing an exothermic reaction and then a fire.
I’ve mixed two epoxy units ( base and hardener) together in a one gallon can and after 20 minutes….you can’t hold the can with your bare hands
______________________________

In 1974 or 5 my father navigated an entry in the BC to Hawaii race. One of the other boats had a guy with a broken arm, which they cast with some fibre glass and resin.

Double ouch!

#122 Faron on 10.28.21 at 8:57 pm

#117 ImGonnaBeSick on 10.28.21 at 8:30 pm

Long put, stock, short call is a collar.. not a straddle..

Straddle is long put, long call..

Now you can pretend to know even more Brick Tamland

Oh, pardon me my excellency. You know, you could have just contributed to the discussion rather than acting like the ass that you are.

#123 mj on 10.28.21 at 9:11 pm

I believe the BoC did the right thing by stopping purchases. They will start raising rates next year, but I can’t see more than 4 increases. Tiff said we will see higher inflation in the coming months. Then he said it will come back down to 2 percent when the bottle neck is done. Once rates start rising, they may have to take a pause to not kill the economy.

#124 Two-thirds on 10.28.21 at 9:26 pm

Step 1 – Labour shortages put pressure on wages

Step 2 – Wages rise to meet labour demands

Step 3 – Increased wages make prices go up

Step 4 – Rates are increased to tame inflation

Step 5 – Debt gets more expensive at renewal but prices are higher too (see Step 3)

Step 6 – Fixed debt at old, lower prices is paid with more abundant dollars, for something that is priced higher now

Conclusion = old debt paid regularly with new increased wages wins?

#125 willworkforpickles on 10.28.21 at 9:45 pm

Truth is, the Fed is coming to the end of the road in keeping interest rates artificially low.
To build a buffer now in case of recession where the interest rate could again be lowered some, they will raise rates substantially by at least 2 points over the next year. That’s just in the next 12 months. Not to speak of where interest rates will be forced to ascend to beyond that point in time.
And truly indeed…nobody cares about those who bit of more than they can chew with RE purchases or those who yet will.
You have been played by the government, realtors and even the ill informed inflicted with FOMO madness.

#126 cuke and tomato picker on 10.28.21 at 9:56 pm

DOUG T IF THE GOAL IS CLEAR THE PRICE IS CHEAP

#127 Quintilian on 10.28.21 at 10:19 pm

#124 Two-thirds
“Conclusion = old debt paid regularly with new increased wages wins?”

Not if the debt is from inflated bubble prices and acquired at artificially low rates and has to be repaid with high rates,while prices deflate.

#128 DON on 10.28.21 at 10:53 pm

@Faron

Where are we with the 1000m rainfall. As you know its been raining hard for the last 24 hours.

#129 yvr_lurker on 10.28.21 at 11:01 pm

#114 Crowded
I’m thinking those chemicals were a Base and a catalyst and when the shipping container was crushed with hundreds of pounds of both chems…….the chemical reaction did the rest.
——-

As much as Mr. Crowded seems to dislike a proper formal education, I must admit that he is decent at chemistry. I think he has a good explanation here, Chem 101. Could have been a STEM guy or engineer with that mind.

#130 Sail Away on 10.28.21 at 11:02 pm

#122 Faron on 10.28.21 at 8:57 pm

Oh, pardon me my excellency.

——–

That should actually be: ‘Oh, pardon me, your excellency.’

#131 fishman on 10.28.21 at 11:15 pm

#98 Linda You mean I gotta keep coming back to Uncle Garth’s free blog for cheap wine? Oh well, at least there’s a never ending pour.

#132 Stealth on 10.28.21 at 11:32 pm

Good evening,

Lots of talk about preferreds this evening. Yes lots of positives, however just make sure you can withstand their volatility. If you think they are part of fixed income and then during downturn they decrease more the equities, there goes your concept of fixed portion safety.

If you understand that and that there is no free lunch, then yes go ahead.
Ryan, Garth’s colleague did a good post on this either earlier this year or last year.

Good night everyone.

#133 TurnerNATIONimitation on 10.28.21 at 11:34 pm

Soon we’ll all just be happy denizens of the metaverse. Living, socializing, working, traveling in a William Gibson novel. With all the drugs you want legally available to numb you in your eco-friendly cubicle apartment. Nobody will actually travel anywhere. This is to reduce the threat of climate change, pandemics and terrorism. Your government ID pass won’t even authorize you to leave your mandated living zone without permission. Instead you’ll live your life as a digital avatar placated by entertainment and distraction with all of your thoughts and opinions shaped by the media you constantly consume.

#134 Nonplused on 10.29.21 at 12:02 am

#85 Faron on 10.28.21 at 6:05 pm
#70 Nonplused on 10.28.21 at 5:21 pm

#6 Faron on 10.28.21 at 1:59 pm

It would have been shorter to just say you agreed with me.

“Containers fall off all the time.”

Yup. This one made the news though and there was a fire.

Are you kidding? You were implying that they were tossed off the boat because of the fire. Do you seriously not recall your conspiratorial hype? The kind of junk that is part of misinformation streams based on nothing? Your gaslighting is crazy making.

—————————————

I said more along the lines that I would be tempted to push a burning container off the boat, so it is plausible. Never said I knew it for fact, but it seems a reasonable thing to do.

#135 KLNR on 10.29.21 at 12:03 am

interesting

Tesla’s value tops $1 trillion after Hertz ordered 100,000 of its vehicles
It’s the single largest order of electric vehicles

https://www.theverge.com/platform/amp/2021/10/25/22744504/hertz-tesla-order-100000-vehicles-electrify-fleet

#136 Zen on 10.29.21 at 12:28 am

I was a young broker once and I worked alongside a lot of ‘old guys’ I might say. A fellow traveler said to me on one of those days when the Idiot Communists seemed to be winning “it doesn’t matter if you’re making it in rubles or dollar, you’re still making money”. And that sticks with me today when the Idiots seem to be winning and I’m still making baskets of cash every day. If you notice, it’s an uneven market, but even while the Green Goons are gushing nonsense about energy, the energy stocks are gushing cash. Energy stocks up 1000% in some cases. Even the timid XEG has doubled. The companies like SU and CVE have so much cash on hand they may buy themselves out and go private. SU btw just increased its dividend 100%. Moral of the story, when Trudeau says FU Canada….you just bark right back….FU Trudeau !! Dogs, it’s time to cash in.

#137 Al on 10.29.21 at 1:36 am

The Starbucks announcement reads like an article from the Onion lol. Free coffee and meditation app as health benefits , 6 to 10 cent an hour increases (while 5% official inflation) , too good lol

#138 Ponzius Pilatus on 10.29.21 at 2:19 am

Something for the anti climate changers to digest:

Damage due to air pollution’ leads to lower sperm counts
Previous studies have linked reproductive issues and a range of other conditions — including obesity and diabetes — to the harmful substances inhaled by humans.
Dave Yasvinski,
Oct 25 2021

#139 WillinSC on 10.29.21 at 3:52 am

Garth, thanks for all you do. But I do long for the old days of the comment section when it was helpful, entertaining and sometimes hilarious. Now it seems home to way too many self obsessed bickering blowhards. IMHO

#140 willworkforpickles on 10.29.21 at 6:03 am

Alice Cooper for President

https://www.google.com/search?client=firefox-b-d&q=alice+cooper+yeah+yeah+yeahhttps://www.google.com/search?client=firefox-b-d&q=alice+cooper+yeah+yeah+yeah

#141 willworkforpickles on 10.29.21 at 6:27 am

The hell with bustin our asses anymore…its all going to be for nothing after another three quarter decade anyway. Party on to the end of nation & sovereignty!

#142 Jay (Not that one) on 10.29.21 at 6:57 am

As long a politicians have no thoughts in their heads except what the latest polls tell them to think, reconciliation is impossible. How do you reconcile with someone with no consistent values except constantly claiming to believe in whatever they’re told to believe this week?

#143 secular bull and bear on 10.29.21 at 7:55 am

#90 Michael in-north-york on 10.28.21 at 6:25 pm
The base rate will surely go up somewhat, but it will not reach 8%. I doubt it will even reach 5%.
___________________________________________

that’s exactly where rates are going. 5-8% over the next decade.

this is Aug 1981 in the bond market in reverse.

#144 willworkforpickles on 10.29.21 at 8:00 am

Trudeau wants to lead the climate change pack. Meanwhile China and India are turning back to coal in a panic.
If Canada is going to survive the long haul as a nation (it won’t) it needs to reign in excess spending on futile programs with futile end results.
Other than pad the pockets of the few on the take, literally start by avoiding futile climate change policy. Instead give Alberta its due and push oil sands marketing and production to the max.
Someone needs to teach the boy some of the finer points of national economic survival.

#145 crowdedelevatorfartz on 10.29.21 at 8:04 am

@#139 WillinSC
“IMHO”

+++

For all the humble, opinionated people out there.

https://www.youtube.com/watch?v=mYKWch_MNY0

#146 IHCTD9 on 10.29.21 at 8:09 am

#129 yvr_lurker on 10.28.21 at 11:01 pm
#114 Crowded
I’m thinking those chemicals were a Base and a catalyst and when the shipping container was crushed with hundreds of pounds of both chems…….the chemical reaction did the rest.
——-

As much as Mr. Crowded seems to dislike a proper formal education, I must admit that he is decent at chemistry. I think he has a good explanation here, Chem 101. Could have been a STEM guy or engineer with that mind.

_______

I get the feeling Mr. CEF’s current work pays quite a bit better than a STEM guy or Engineer.

#147 Dharma Bum on 10.29.21 at 8:30 am

#149 Quintilian (from yesterday)

The crash is baked in.
—————————————————————————————-

The only thing baked is your cerebrum.

If ignorance is bliss, you must be ecstatic.

#148 Phylis on 10.29.21 at 8:40 am

#129 yvr_lurker on 10.28.21 at 11:01 pm
#114 Crowded
I’m thinking those chemicals were a Base and a catalyst and when the shipping container was crushed with hundreds of pounds of both chems…….the chemical reaction did the rest.
——-

As much as Mr. Crowded seems to dislike a proper formal education, I must admit that he is decent at chemistry. I think he has a good explanation here, Chem 101. Could have been a STEM guy or engineer with that mind.
Xxxxxxx
I’ll guess lithium powered scooters. No education needed.

#149 IHCTD9 on 10.29.21 at 8:54 am

#73 Quintilian on 10.28.21 at 5:23 pm

Enjoy the tax increase.
I don’t mind them; I look at the bigger picture.
______

That’s good that you don’t mind paying a lot of new taxes. As a Mil, it’s your demographic that is going to suffer the bill for Trudeau’s tenure – and that’ll be a bill which spans your entire career.

If you’re a GTA resident, you can pretty much forget about a house too, unless your parents/family can help you out there.

The bulk of your life will be spent in the “New Canada”, where asset-free individuals sink, and where crap policy and the cost of everything conspire to keep said individuals in the asset-free condition.

Does it not piss you off that us old stock Canucks bought houses for 2X income and were also able to build a decent portfolio, while government and the BoC have slammed that same door in your face?

Are you really cool with paying an inordinate amount of taxes for life to cover the bill for policy that has made us curmudgeons filthy rich?

If I were your age right now, I think I’d be fully cognizant of the sea-change over the last 6 years, and understanding the *REAL* big picture: Boomers and Gen-X are loaded down with free cash – and I have to service it. The big picture for me would involve a plan where I *DID NOT* foot that particular bill.

Well, here’s hoping you can maintain your positive outlook on new taxes for the long term.

#150 Franco on 10.29.21 at 9:01 am

History shows that people vote with their wallets and if JT takes away too much money to fund his hobbies, he will for sure lose the next election, the housing crisis is only going to get worse and lot’s of equity will be lost in houses as interest rates rise and JT will be blamed. We are a resource rich country and that is what keeps our dollar strong and if anyone doubts that, wait till they dismantle oil production without having something else to replace it. I just received an e-mail from my broker that I have dealt with mortgages and his company is advising people to get pre-approved and lock in rates at they will rise at least 3 times in 2022.

#151 Sail Away on 10.29.21 at 9:35 am

#128 DON on 10.28.21 at 10:53 pm
@Faron

Where are we with the 1000m rainfall. As you know its been raining hard for the last 24 hours.

——-

Don, I’m going to guess it’s pretty close. That one specific spot on Van Isle averages 7,200 mm or 23 feet of rain per year, and is the single rainiest place in North America.

https://www.vancouverisawesome.com/travel/henderson-lake-rainfall-north-america-1942496

#152 IHCTD9 on 10.29.21 at 9:39 am

#86 Michael in-north-york on 10.28.21 at 6:16 pm

Yep. In Canada, immigrants as a whole are net-positive for the budget, bringing in more in tax payments than they are consuming in services.
____

I feel bad for them.

On a purely selfish level, immigration covers all my entitlements and services going into the future – so that is good. On a personal level, these dudes are going to slave for life to get half of what immigrants could expect decades ago. They don’t know it, but Canada is transitioning into a raw deal for future newcomers.

#153 BillyBob on 10.29.21 at 10:29 am

Ya takes the good with the bad re: inflation.

Was commenting last night on the fact the company just announced overtime bonuses for the foreseeable future. Insatiable demand for air cargo makes being an Essential Worker quite lucrative. For €810/hr I just may be motivated to answer my phone on a day off. Just more to dump into the investment accounts for the 0%-taxed cap gains.

Tried to post last night but was a bit fuzzy celebrating Independent Czechoslovak State Day with Ms. BB and family + dog. Nice to be in a country proud of it’s heritage and a flag that doesn’t suffer from permanent ED.

#154 Faron on 10.29.21 at 10:38 am

#128 DON on 10.28.21 at 10:53 pm

@Faron

Where are we with the 1000m rainfall. As you know its been raining hard for the last 24 hours.

Yeah, pretty moist here in Victoria. Perfect alignment to get rain past the Olympic Mountains without getting caught on the mountains of VI.

Regarding the 1000 mm, I don’t think we pulled it on the island, or at least measured, but I haven’t added up the totals. The band of rain came in a bit south. There’s a decent chance that the mountains above the North Shore saw something close as they were favoured. I’ll add up some 10 day totals from our database and see what that nets.

#155 Faron on 10.29.21 at 10:40 am

#130 Sail Away on 10.28.21 at 11:02 pm
#117 ImGonnaBeSick on 10.28.21 at 8:30 pm

I feel sorry for you two. But am gladdened to see that the comments section of Garth’s blog has provided a community for you to gather.

#156 Ponzius Pilatus on 10.29.21 at 11:08 am

#144 Pickled
Other than pad the pockets of the few on the take, literally start by avoiding futile climate change policy. Instead give Alberta its due and push oil sands marketing and production to the max.
Someone needs to teach the boy some of the finer points of national economic survival.
————————————
Economic survival?
For a few years, maybe.
Then the race will be on for the survival survival.
By the way, he’s not a boy, though he looks young for his age.
I think he will politely decline your advice.
He’s off to the G20 to mingle with people who really matter, and again dazzle the First Ladies.
Now over to you, CEF.

He’s off to the

#157 Shawn Allen on 10.29.21 at 11:13 am

A warning for Alberta

Could much of the oil and gas be left stranded in the ground? Sounds crazy.

But consider a past energy giant. Cape Breton Nova Scotia exported huge amounts of coal for decades. Mines and ports were busy. Today nada. The coal is still there but no longer mined. Since 2001 Cape Breton has imported all coal for the big Lingan coal Power station.

Somewhere starting around 1980 Cape Breton’s coal which is mostly under the ocean near the shore became uneconomic. The mines gradually shut down. Even a newer mine at Donkin proved uneconomic. A combination of the difficult location of the coal, probably poor management and maybe some union issues.

There was some accessible onshore coal and strip mines were proposed. The neighbors said NO. Specifically A Gardiner Mines proposal was kyboshed circa 1990. The Brogan family’s strip mine leases near North Sydney were not renewed.

The world kept burning massive amounts of coal but Cape Breton no longer produced it but instead imported it!

So Cape Breton decided to diversify the economy. Coal exports were replaced with… well mainly nothing despite heroic attempts. I can’t find the population figures from 1980 but 1996 was 156,000 Today about 137,000 and that’s despite a little increase with COVID.

So, yes, an energy source, especially a high cost one (oil sands) can be stranded and it is very difficult to replace a major export. Alberta has a huge competitive advantage in oil and gas by virtue of having it. What is its real competitive advantage in the new economy?

Alberta, Brace Yourself indeed.

A warning from an Albertan born in Cape Breton

#158 Quintilian on 10.29.21 at 11:16 am

#149 IHCTD9
“Are you really cool with paying an inordinate amount of taxes for life to cover the bill for policy that has made us curmudgeons filthy rich?”

Curmudgeons are not filthy rich, most working stiff boomers have nothing more than the house, which is a lotto ticket with an expiry date and it is a safe bet that most will not cash it in.

The Cons created the housing bubble, the Libs kept it going because if they hadn’t it would have been political suicide.

The Libs, like many other governments, from countries with housing bubbles, hoped a black swan event could pop the bubble.

Covid made it worse, but that doesn’t mean something else won’t pop it.

#159 Sail Away on 10.29.21 at 11:16 am

#155 Faron on 10.29.21 at 10:40 am
#130 Sail Away on 10.28.21 at 11:02 pm
#117 ImGonnaBeSick on 10.28.21 at 8:30 pm

I feel sorry for you two. But am gladdened to see that the comments section of Garth’s blog has provided a community for you to gather.

——-

Thanks. Your sorrow means a lot. My existence would indeed be meaningless without Garth’s comment community.

Laughing on the outside while crying on the inside.

#160 Ponzius Pilatus on 10.29.21 at 11:20 am

#152 IHCTD9 on 10.29.21 at 9:39 am
#86 Michael in-north-york on 10.28.21 at 6:16 pm

Yep. In Canada, immigrants as a whole are net-positive for the budget, bringing in more in tax payments than they are consuming in services.
____

I feel bad for them.

On a purely selfish level, immigration covers all my entitlements and services going into the future – so that is good. On a personal level, these dudes are going to slave for life to get half of what immigrants could expect decades ago. They don’t know it, but Canada is transitioning into a raw deal for future newcomers.
————————-
Lots of fairly new immigrants on my daughter’s hockey team.
We have team social get togethers frequently.
No one is complaining. They seem to have no trouble paying 20k after-tax for a hockey season.
And they drive nice cars, too.
But I’ll let them know that IHTCD9 feels for them.
Probably will laugh their heads off.

#161 Dr V on 10.29.21 at 11:30 am

151 Sailo

It’s now “Hucuktlis Lake”.

From the list in the article, you’ll see Ucluelet and Port Renfrew are not on the list. Tahsis and Ocean Falls are.
I worked mid-coast a bit, and a co-worker who had worked in Tahsis said the mid-coast location was wetter. But searching the Environment Canada site, there was only one weather station within 50k.

Hucuktlis Lake has that ideal geog-topography where the moist air is funneled as it enters the sound, the inlet, then finally the lake valley.

Our island has many mini/micro climates where precip can vary greatly over a relatively small area.

I think Faron’s point from a couple of days ago was that there could be wetter places due to these micro climates, but we do not have the data. But Hucuktlis Lake seems to be the standard.

#162 Damifino on 10.29.21 at 11:33 am

#139 WillinSC

…I do long for the old days of the comment section when it was helpful, entertaining and sometimes hilarious.
—————————–

Strange. I’ve been reading this blog since 2010 and can’t seem to recall any golden era of insightful feedback here in the steerage section.

#163 Moi on 10.29.21 at 11:44 am

Hey Garth, your advice for those with DB pensions has always been to eschew RRSPs, fill up the TFSA and consider holding everything else in a taxable account as the taxes paid on withdrawal of the RRSP might might mess with OAS and other funds from the Feds in retirement, whereas the 50% added of capital gains added to taxable income might work out to be less.

For those under 40 with DB pension, should this new FHSA thing be avoided if the plan might not be to actually buy a house with it?

#164 Doug in London on 10.29.21 at 11:45 am

This blog isn’t the only place I’ve read that as inflation goes up, interest rate increases will follow. There’s good news and bad news about what’s coming. The good news is these higher rates will put a cap on runaway house prices. Recently there was a post here about bonds and bond funds and how they add some stability to a portfolio. These bond funds will get cheaper. Now the bad news. This Liberal government has gone on a borrowing binge like that not seen since World War 2. When interest rates go up, the cost of servicing that horrendous debt will go up. We could see cutbacks in spending not seen since the days of Jean Chretien, Paul Martin, and Mike Harris in Ontario. How’s that for a scary Halloween story?

#165 Sheesh on 10.29.21 at 11:51 am

#114 crowdedelevatorfartz on 10.28.21 at 8:09 pm
@#6 Faron.

….Actually I was thinking that the heavy seas tossing the ship back and forth crushed one of the weaker steel containers.
As the other containers collapsed and escalated the problem two chemicals in one container were crushed together…..I’m thinking those chemicals were a Base and a catalyst and when the shipping container was crushed with hundreds of pounds of both chems…….the chemical reaction did the rest.

………

Ding ding ding…from CBC:

….two of the burning containers hold a hazardous material identified as potassium amylxanthate, which is listed as a “reactive flammable material” by the Canadian Workplace Hazardous Materials Information System. Two of the lost containers do as well….

Just add water!

#166 Faron on 10.29.21 at 12:10 pm

#151 Sail Away on 10.29.21 at 9:35 am

#128 DON on 10.28.21 at 10:53 pm
@Faron

Where are we with the 1000m rainfall. As you know its been raining hard for the last 24 hours.

——-

Don, I’m going to guess it’s pretty close. That one specific spot on Van Isle averages 7,200 mm or 23 feet of rain per year, and is the single rainiest place in North America.

Yeah, rainiest measured. There are almost certainly wetter pockets. It’s on my bucket list (no pun intended) to slog up to Effingham Lake with some manual rain gauges and try to verify the station up there during one of the heaviest precipitation events. I’m also curious to experience those precip rates.

#167 Philco on 10.29.21 at 12:17 pm

#149 IHCTD9 on 10.29.21 at 8:54 am
#73 Quintilian on 10.28.21 at 5:23 pm

Enjoy the tax increase.
I don’t mind them; I look at the bigger picture.
______
Ha your a brave man tackling that IHTCD9!
Im swammped today so I just say this.
Its NEVER enough. As my parter says.
” They could get a 100% and they still couldn’t balance the budget”
There was always enough taxes. Never mind the ones you dont even know about. Its that they feel entitled to yours with zero accountabilty.
Go look at how much waiste alone there is. They actully get away with this because they relize how passive and ingnorate most of the sheeple are. Also they supply themselve with virtually unlimited cheap money.
Just an completely idiotic statement in my view.
Later tader

#168 the Jaguar on 10.29.21 at 12:45 pm

@#153 BillyBob on 10.29.21 at 10:29 am

Damn it! I missed Independent Czechoslovak State Day ,
but Struggle for Freedom and Democracy Day is coming up on November 17th, so I get ready for that!

Nice to see a country appreciate these values instead of flag stealing, flag lowering, other forms of self flagellation…….

#169 IHCTD9 on 10.29.21 at 12:50 pm

Sockhead never saw this one coming:

https://www.cbc.ca/news/canada/prince-edward-island/flag-raised-remembrance-day-half-mast-1.6228449

What a freaking joke this country is. Absolutely ridiculous that we have to have problems like these.

Guaranteed: Whatever Trudeau decides to do about this problem now, will make it even worse. I guess he never conceived of Indigenous folks fighting and dying for Canada alongside everyone else that gave up their lives for this once great Country. Ooops, err, ahh, and what else is new.

Folks, don’t pay these idiots.

#170 WillinSC on 10.29.21 at 1:20 pm

@145 fartz

Thanks fartz, Mac’s great. It iS hard.

#171 j vdboom on 10.29.21 at 1:23 pm

Many comments about T2 and many thinking that with all the negative comments, a Con leader is bound to win the next round, coming soon. Not, unless there is a new convention, Ms. Freeland will be the shoe-in! my prediction. The gravy train will continue, who has the guts and the personality to turn everything around and give the electorate real transparency, on everything! stop the waste, focus to economic growth & production.

#172 crowdedelevatorfartz on 10.29.21 at 1:36 pm

@#169 IHCTD9
“Sockhead never saw this one coming:”

+++

yep.
Life move on.
Social awareness meets reality.

I noticed an interview on tv the other from New Brunswick and in the background on a govt building the Federal and Provincial flags were flying at full mast.

Apparently people are protesting the “wokeness” in their own private ways.

#173 crowdedelevatorfartz on 10.29.21 at 1:40 pm

@#157 Shawn Allen
“A combination of the difficult location of the coal, probably poor management and maybe some union issues.”

+++

“Union issues” are ALWAYS a factor in Cape Breton.
And the explosion / deaths in the Westray Mine Disaster certainly didn’t do the coal industry any favours.

https://en.wikipedia.org/wiki/Westray_Mine#:~:text=making%20his%20claims.-,The%20disaster,the%20lives%20of%2075%20miners.

Coal is dead.
Unless you’re China, India or freezing in the dark in Winter and the Wind Mills/solar panels just wont cut it.

#174 IHCTD9 on 10.29.21 at 1:45 pm

#160 Ponzius Pilatus on 10.29.21 at 11:20 am
#152 IHCTD9 on 10.29.21 at 9:39 am
#86 Michael in-north-york on 10.28.21 at 6:16 pm

Yep. In Canada, immigrants as a whole are net-positive for the budget, bringing in more in tax payments than they are consuming in services.
____

I feel bad for them.

On a purely selfish level, immigration covers all my entitlements and services going into the future – so that is good. On a personal level, these dudes are going to slave for life to get half of what immigrants could expect decades ago. They don’t know it, but Canada is transitioning into a raw deal for future newcomers.
————————-
Lots of fairly new immigrants on my daughter’s hockey team.
We have team social get togethers frequently.
No one is complaining. They seem to have no trouble paying 20k after-tax for a hockey season.
And they drive nice cars, too.
But I’ll let them know that IHTCD9 feels for them.
Probably will laugh their heads off.
____

I’d love to believe all new immigrants are loaded down with cash like you say they are – that would only solidify the safety net and help pay off Trudeaus monster pile of debt. Not to mention backstop our entitlements and benefits.

It’s just that…. every last single thing you read says they are not. Every single new immigrant I’ve ever met is not. My entire extended family is filled with immigrants, and when they showed up here – they were not.

Maybe you just live in a special place where new Canadians who are exclusively rich like to live?

I’ll let the 90/hr week working immigrants over here know that you and your rich acquaintances in BC are laughing their asses off at them. I’m sure they’ll appreciate it.