Suck & blow

What a year. House prices, family debt and inflation are all surging. Wages and incomes flat. Still a pandemic (getting worse) and we seem teetering on the verge of more government restrictions (a bunch came to Ontario Friday afternoon). Now the CBs say interest rates will swell. New taxes coming. All we need to finish us off is an Adele-Drake tour.

As some old white male dude prepares to violate your chimney next week, here’s the latest:

No extra stress:
The regulator has decided to leave the mortgage stress test where it lies – at 5.25%. That means borrowers have to prove their ability to service a mortgage at that level, regardless of what cheaper rate a lender offers.

Said the cops:

“In an environment characterized by increased household indebtedness and low interest rates, it is essential that lenders test their borrowers to ensure that mortgages can continue to be paid during more adverse conditions.”

When five-year home loans were 1.9%, this test looked extreme. Now five-year money sits between 2.5% and 3%, and central banks are expected to increase 3-4 times next, taking mortgages closer to 4%. The moaning and wailing among brokers has stopped, and we just had a record month for house sales. The excessive borrowing continues.

One bank sucks, one blows.
Do we have a shortage of houses (active listings have crashed) or a surplus of buyers (sales are hitting new record)? It’s a key question, to understand how the problem might be fixed.

This week the head of CIBC (CEO Victor Dodig) says governments must act now to create more stock. That can happen by building better roads and rails to satellite cities, speeding up construction approvals and using federal money to throw up rentals. But over at BMO, economist Robert Kavic says phooey. The issue is not supply, he argues, but demand. Interest rates are too low, he suggests, encouraging too many people to buy multiple properties as investments. Therefore government should reduce available credit, not build stuff.

And let’s review what is Ottawa doing.

Yup, creating more demand, with the FHSA, an enhanced closing tax credit for newbie buyers, the higher Home Buyer’s Plan limit and 411,000 newcomers. The way to deal with our “crisis”, says Toronto broker Joh Pasalis (who hates me) is to seriously restrict credit. Tough love. T2 won’t do it. The CB will.

Huh?
A new survey finds about a third of Canadians have no idea what rising interest rates will do to their finances. Specifically, their mortgage. Seems a lot of folks who bought homes in the last few years of dirt-cheap money don’t quite grasp what swelling bond yields and tighter monetary policy mean.

And why should they? Nobody teaches this stuff. Sadly.

It’s interesting what while 30% don’t know the impact of this, exactly the same number of Canadians have opted for VRMs – variable rate mortgages – because of a lower monthly cost. Of course as the Bank of Canada hikes, the prime at the chartered banks rises in lockstep, and that ups the rate on variables. Either monthly payments increase proportionately, or they remain the same and the principal amount owing goes up. Either way, you pay more.

Some VRMs allow for a seamless and cheap switch into a fixed-rate mortgage, while others require the loan to be broken first. Figure on a penalty equal to three monthly payments in that instance. And speaking of mortgage break fees, this poll found 34% of borrowers have no idea that it exists, or what the burden might be.

It’s all about the IRD, of course – interest rate differential. That’s the gap between the rate you paid and the posted rate at the time of the break, over the period left to the end of the mortgage term. It can easily run into the thousands, or tens of thousands. It’s a good reason to ensure your loan is portable (and most variable-rate loans are not).

So what comes next?
We told you the rush into housing is not about to let up, now that CBs have indicated clearly rates are to rise. Those who got cheapo pre-approved loans seem determined to spend them. Omicron ain’t helping much either, as this short-term virus scare is rekindling nesting emotions and extending WFH.

But it will all pass.

Say RBC economists this week: “We believe many buyers are rushing in before higher rates take purchasing budget room away from them. The latest market statistics now suggest this phenomenon might have longer to run, possibly into the first few months of 2022. We still think, though, that rapidly deteriorating affordability and easing pandemic restrictions will gradually cool demand and moderate price growth over the course of the coming year.”

Of course, no politician can now keep his/hers hands off real estate, promising the spring budget will be a corker.

About the picture: “When Cochise came to the Humane Society in 2018, he had fleas and mange, was severely underweight and was missing fur,” report Kris and Colleen. “In December of that year, though, he found his forever home! His dad reports that “he’s a great companion and very good boy” and loves to go for car rides. He got a sister a year later and is the best big brother. “He also likes to sit on the chair at the kitchen table to ‘be part of the conversation,'” his dad says. “We love him to the moon and back!”

96 comments ↓

#1 Dolce Vita on 12.17.21 at 4:30 pm

The Blog was funny and excellent today. Cheered me right up?

——————-

Completely choked esp. C’EST UNE BOMBE

UK breaks Covid record for third consecutive day with 93,045 new cases. Yesterday there were 88,376 new cases reported and 78,610 new cases the day before.

Omicron, at >50%, winning over the alveoli and bronchioles of Londoners:
https://i.imgur.com/0ebNMFt.png
[what exponential looks like]

London hospitalizations:
https://i.imgur.com/nREyUjW.png
[near exponential]

Omicron NOT MILD:
https://www.ft.com/content/48931667-cbb5-481d-acef-b2263bb74f80
[Occam’s Razor…if all the other Covids weren’t mild, why would this one be?]

«SI C’EST VRAI, C’EST UNE BOMBE»
https://i.imgur.com/n1ZFuZg.png

THE WORST POSSIBLE news in 2 years.

Next Comment I will tell you why that Danish data is the WORST (if you can’t figure it out).

————————–

DIVERSION Google Arts & Culture – Virtual Tour Quirinale Palace, Rome.

https://artsandculture.google.com/project/palazzo-del-quirinale

You, via the little yellow dude, can walk and look around inside the palace. Just don’t touch anything Canada, most of it is priceless.

#2 Dolce Vita on 12.17.21 at 4:32 pm

Let me begin by:

It’s been nice knowing you Garth.

My prior comment Danish Omicron table data explained by an expert in the field:

https://www.lefigaro.fr/actualite-france/au-danemark-le-variant-omicron-touche-t-il-davantage-les-triples-vaccines-20211215

Omicron becomes Adele-Drake tour (coming to a stadium near you Canada and Italia):

All we need to finish us off is an Adele-Drake tour.

#3 crowdedelevatorfartz on 12.17.21 at 4:33 pm

With all the Interest rate excitement in Liberal Land…
I was pleasantly surprised to read that the Communists are losing money as well.

https://www.reuters.com/world/china/sp-dumps-chinese-property-giant-evergrande-into-default-2021-12-17/

#4 Sail Away on 12.17.21 at 4:35 pm

“When Cochise came to the Humane Society in 2018, he had fleas and mange, was severely underweight and was missing fur,” report Kris and Colleen.

———

That describes most steerage when they first stagger onto this blog.

#5 twofatcats on 12.17.21 at 4:40 pm

Dec 17 Today’s flipped ‘Principal Residences’

https://housesigma.com/web/en/house/eVbOYEpwXz53x2P0/317-LAKEWOOD-Avenue-Crystal-Beach-40173660

https://www.zolo.ca/burlington-real-estate/484-cumberland-avenue#sold-history

https://www.zolo.ca/burlington-real-estate/4008-longmoor-drive#sold-history

#6 Ponzius Pilatus on 12.17.21 at 4:40 pm

Some VRMs allow for a seamless and cheap switch into a fixed-rate mortgage, while others require the loan to be broken first. Figure on a penalty equal to three monthly payments in that instance. And speaking of mortgage break fees, this poll found 34% of borrowers have no idea that it exists, or what the burden might be.

It’s all about the IRD, of course – interest rate differential. That’s the gap between the rate you paid and the posted rate at the time of the break, over the period left to the end of the mortgage term. It can easily run into the thousands, or tens of thousands. It’s a good reason to ensure your loan is portable (and most variable-rate loans are not).
————————————
Last spring, after some research, and listening to your advise, we broke our mortgage and took the medicine. (About 3K)
Now we’re sitting on a 1.69 fixed for more than 4 years to go.
And have enough in the Kitty to pay of the mortgage should interest rates go through the roof in 5 years.
Be prepared, GrassHoppers.

#7 mj on 12.17.21 at 4:40 pm

If you go on realtor.ca they show how many properties for sale on the main page. The beginning of the year was over 225,000 and now just under 160,000 across Canada.

#8 Ian on 12.17.21 at 4:42 pm

Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?

#9 TurnerNation on 12.17.21 at 4:43 pm

XBI.US finally seems ready to buy.

–Year 2: of the global reset until 2025. We must get daily changes and Strict New Rules. Daily.
But the hospital capacity guys!

https://tnc.news/2021/12/16/provinces-sacked-almost-10000-health-care-workers-over-vaccine-mandates/
“True North estimates that nearly 10,000 unvaccinated health care workers across Canada have been placed on unpaid leave or had their jobs terminated by health authorities as of Dec. 16. This number comes from official provincial government data as well as media reports over the past few months. ”


— We pay high taxes (and trillion dollar deficits) for all the cool stuff we get in Kanada! Totally worth it.

https://financialpost.com/opinion/opinion-health-care-waits-are-now-the-longest-ever
“Opinion: Health-care waits are now the longest ever; Although the COVID-19 pandemic has contributed to longer wait times, it does not account for almost three decades of documented wait-time increases”

https://twitter.com/Golden_Pup/status/1471838345663860747
“2) Ontario is also reporting 5 new deaths with COVID-19 today. 4/5 deaths were 90+ year olds.
3) Based on the age distribution of the cases reported today, and using their case fatality rates from wave 3, 99.68% of the cases announced today would be expected to survive.”


— We knew this was coming weeks ago. There is no more news only the ‘predictive programming’. 2022 wink wink.

.Nov. 24th: The Liberals are proposing to send income-support payments of $300 per week to workers who find themselves off the job because of a “Covid-19-related public health lockdown in their region” between now and spring 2022. (investmentexecutive.com)

#10 Faron on 12.17.21 at 4:49 pm

#4 Sail Away on 12.17.21 at 4:35 pm

5.

Can you please opine for us some more about addiction and choices and self-control?

Trust me, I’ve been there (pot and kettle and the whole deal). Regardless, I detect that you actually don’t have effective control over your compulsion to comment here. Almost as if it’s a disease of some kind. Contact me, I know where you can get help. every clippy is worthy of leading an addiction-free life.

#11 Garth's Son Drake on 12.17.21 at 4:49 pm

Most companies that I know have indefinitely suspended the return to office.

You see the R-value happening in NYC?

Get ready for the worst of lock downs yet. But they won’t respond hard enough during the travel season, which is the time to step up and unfortunately is going to cause the worst outcome yet. Huge spread.

So, watch what happens to start the new year.

Are we going to print another 500 billion?

If not, I expect the consumer spending lights to go out swiftly in the very near future.

Better hope you are not in the restaurant business.

The worst case scenario for this pandemic has arrived.

We are toast.

#12 crowdedelevatorfartz on 12.17.21 at 4:52 pm

@#6 Ponzies Parable

“Be prepared, GrassHoppers.”

+++

Ants prepare.
Grasshoppers play.

http://read.gov/aesop/052.html

#13 Dolce Vita on 12.17.21 at 4:54 pm

#8 Ian

What’s the worry?

Inflation.

#14 SunShowers on 12.17.21 at 4:59 pm

“Too many people buy multiple properties as investments. Therefore government should reduce available credit.”

This is like suggesting that too many people shoplift, therefore the government should mandate reduced store inventory levels instead of oh, I don’t know, doing something that actually prevents people from shoplifting?

Speculation taxes and making it impossible to claim the principal residence exemption on flips are steps in the right direction.

There is no PR exemption on flips. – Garth

#15 Ponzius Pilatus on 12.17.21 at 5:01 pm

#119 IHCTD9 on 12.17.21 at 12:10 pm
#109 Ballingsford on 12.17.21 at 10:40 am
Maritimers and Newfoundlanders speak English. I’ve always enjoyed the way people from NFLD speak. Stay where you to, come where your at, going to store to get a bun of bread, etc.
My history is NFLD and Cape Breton, so I relish all of it.
_______
Here is a NFLD’er who has developed some of the best sheet metal working techniques I’ve ever seen. Some amazing vid’s doing some complicated work. Well worth having a look if you like watching a guy who is a master plying his trade. Check out the comments too. This guy just drips talent and experience.
https://www.youtube.com/watch?v=_u31t13QO6A
You’ll get your fill of our East Coast dialect at the same time too!
“I justs weldser up and grindser up, nutin fancy, se?”
—————-
Great story.
Reminds me of my step brother.
An amazing stone mason. Little education. Just created pieces of art.
Was in great demand. Hardest worker you’ll ever see.
Unfortunately, we lost him early to the disease called alcoholism, which burnt like wild fire on his side of the family.

#16 Linda on 12.17.21 at 5:01 pm

‘rapidly diminishing affordability’ – seriously? In what universe do todays insane RE prices equate with being affordable in regards to your average Canadian? Even those in the top tier of income earners are struggling to come up with enough $ to purchase a place. I’d laugh, but it really isn’t amusing to see folks effectively enslave themselves to debt for the rest of their lives – or until they offload that very unaffordable purchase for at least as much as they paid for it.

People will doubtless demand ‘the government’ protects them from rising rates. JT & crew just might do it, too. All in the name of ‘fairness/inclusion/equality’ of course! Not to mention securing those all important votes. The inability of so many regarding the impact rising rates will have on their personal balance sheets is sad, but not surprising. I’d imagine many of those self same folks believe the budget will balance itself. After all, if it works for the government why wouldn’t it work for them personally?

#17 Dolce Vita on 12.17.21 at 5:03 pm

On the Omicron not mild link, if you can’t get to the article here is the gist of it (marked up by someone else from the Twitter Hive):

https://i.imgur.com/2Ftw8lP.png

#18 Ontario on 12.17.21 at 5:04 pm

WOW Ontario. 3,124 cases today!

Raising as fast as Canadian inflation!

Full 2/3s in the double jabbed too.

Fear and loathing in Las Canadas.

#19 Ponzius Pilatus on 12.17.21 at 5:12 pm

#142 Sail Away on 12.17.21 at 3:39 pm
#126 Faron on 12.17.21 at 1:54 pm
Oh, and opinion’s are not reporting.
——–
‘opinions’
No apostrophe.
——————
Just what I thought.
Sailo is a grade 4 teacher.
Just like our Honourable PM.

#20 Omicron is Coming on 12.17.21 at 5:13 pm

The feds need to quit worrying about housing. That is going to be taken care of with what is coming. That is probably why the consensus was to not touch the stress test.

Rents are going parabolic to finance irresponsible borrowing and owners are hunkering down, while investors are gambling on every extra home they can get.

If the stimulus does not come hot and heavy, like by next month, you won’t have to worry about lack of supply and home price increase FOMO.

This will reverse fast.

And then you add on increasing interest rate hikes.

I think we are going sideways for a bit. If money printer does not show up, the cracks in the market will and we will get the mother of all housing downturns that many predicted at the start of the pandemic.

Investors will dump, over-leveraged will dump. What is that – 45% of the housing market right now?

My bet is the Feds bend the knee and fire up the printer again. However, they might not. Trudeau just re-adjusted his time window and they could take a hard stance here and let the reset happen or some pain happen.

Nobody knows right now, but we are going to find out in about 2 months or less because of Omicron.

Also, it looks like there is no Santa rally in the markets this year and has Crypto finally peaked at the same time stimulus ended in the US? The prediction was for 100,000 BTC by year end. That does not look to be happening.

Everything is under-performing. This is all tied to the real Santa (the CBs) giving out gifts. Have they turned Grinch?

Things are changing fast.

#21 Usain Bolt on 12.17.21 at 5:15 pm

I am offloading assets right now.

I will ask questions later.

#22 TurnerNation on 12.17.21 at 5:16 pm

EVERY Former First World Country is getting the same treatment this winter. The remaining small storefront businesses will fail. This is the Reset. Standby.
Wow they managed to cancel Christmas AND New years eve. NO fun is allowed in in the New System.
So when is the UBI coming? My prediction here, always has been 2022.

(cp24.com)
– all coming into effect this Sunday, December 19
– – social gatherings limited to 10 for holiday gatherings
– 50% capacity at ALL indoor settings, except religious settings
– no food or drink to be served at sporting events, concert venues, theaters, cinemas, casinos, bingo halls. etc.
– limits on the hours of operation of bars, restaurants, nothing served at 11pm, alcohol sales stop at 10pm
– MAX 10 PEOPLE CAN SIT AT A SINGLE TABLE AT RESTAURANT/MEETING AND EVENT SPACES AND WOULD REQUIRE PATRONS TO REMAIN SEATED
– PATRONS MUST ALSO REMAIN SEATED AT CONCERT VENUES, THEATERS AND CINEMAS
– PROHIBIT SINGING AND DANCING EXCEPT FOR PERFORMERS
– outdoor gatherings limited to 25 people

– the notion of rapid testing guests before they enter your house
– doubling the vaccine capacity to administer
– no decision on whether schools will all close after winter break
– government has not yet ruled out the closing of bars and restaurants

#23 Sail Away on 12.17.21 at 5:16 pm

#6 Ponzius Pilatus on 12.17.21 at 4:40 pm

Last spring, after some research, and listening to your advise, we broke our mortgage and took the medicine. (About 3K)

Now we’re sitting on a 1.69 fixed for more than 4 years to go.

Be prepared, GrassHoppers.

——-

Yes, same here. The Sail Away clan carefully examined mortgage infatuation and amour-tization rates, penalty kicks and the thyme value of seasoning.

Then we too decided to break free. Of the life of quiet desperation, that is, and moved on to peaceful contentment. Now we live quietly and harmoniously, thrilling to the eternal song of nature. Like hobbits. Well, hobbits with guns, anyway.

#24 BigD on 12.17.21 at 5:17 pm

#8.

$575 a month higher mortgage payments on a $650,000 house, that’s the worry!

#25 Cici on 12.17.21 at 5:19 pm

Why do you always say that John Pasalis hates you?

He seems like a very smart, knowledgeable and reasonable guy. In fact, he seems like one of the most decent and honest realtors out there. And I can’t imagine him hating anyone.

#26 Dolce Vita on 12.17.21 at 5:23 pm

#11 Garth’s Son Drake

UK R-value:

3 to 5

https://youtu.be/_T6C-2FNy8I?t=145

#27 NOSTRADAMUS on 12.17.21 at 5:24 pm

I’M CALLING A BULL SH*T ON REALTOR SALES STATISTICS.
With inventory (listings) at an all time low, how can the Real Estate Cartel toot their horn that sales are at an all time high? If you have no product to sell, it’s a pants on fire statement to suggest otherwise. Now, if they are really devious, they could be lumping in pre-sale unit sales from the builders. However builders have their own sales staff, so these unit sales never hit the MLS system. On the other hand, they could be doing a Rope- A- Dope, by referring to dollar sales volume. With the recent 30% plus price appreciation this will be the go to response if questioned. In the final analysis , I do not for a minute believe sales are up, the only thing up is the dollar amount per unit. The cartel is using the dead cat strategy to mislead the public. When things are at their darkest , throw a dead cat on the table to deflect attention away from the damaging issue at hand. Amen Brother.

#28 Pandemic Is Over on 12.17.21 at 5:25 pm

CIBC guy makes sense.
BMO – not so much.

#29 Michael in-north-york on 12.17.21 at 5:27 pm

#8 Ian on 12.17.21 at 4:42 pm

Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?
===

Individual circumstances vary, the bulk rule cannot take all of them into account. Some families qualified at 5.25% but will be actually struggling at 4%, since they have financial needs not taken into account by the qualification rules.

Some will have lost a job / got their income reduced after they got their mortgage. That doesn’t “disqualify” them from owning the home they already have, but the rate increase will make it harder for them to keep making the payments. Some might decide to sell because of that.

The rate increase will not affect everyone, but it can affect a large enough portion of homeowners to tip the market balance.

#30 Catalyst on 12.17.21 at 5:32 pm

T2’s mandate letter to the housing minister has in what the reader wants to see. This sentence for example:

“Develop policies to curb excessive profits in investment properties while protecting small independent landlords”

Literally wants to protect small landlords (ie. all the speculating canadians with a few condos). Not sure how you can curb investment properties without hurting this group as they are the group. Sounds like maybe a veiled comment on hedge funds buying 100s of properties which is a non-factor today.

#31 Blacksheep on 12.17.21 at 5:36 pm

Dolce # 2,

“THE QUESTION . ” If it’s true, it’s a bomb .” On the CNews set, host Pascal Praud relayed the tweet of epidemiologist Martin Blachier who indicated, based on data from a Danish document, that the Omicron variant ” selects the vaccinated because the vaccine escape him confers an advantage in these people ”. ” Danish data at Omicron: 8% in triple vaccinated, 5.5% in double vaccinated, 1.2% in non-vaccinated “, abounds the media doctor on the social network, table in support.”
———————————
Gonna leave the little ditty you supplied right here…you just couldn’t make this shit up if you tried : )

#32 SunShowers on 12.17.21 at 5:36 pm

“There is no PR exemption on flips. – Garth”

There’s not supposed to be, but I’m in the industry and I deal with a lot of contractors who flip houses, “live” in them for a few months while they do the work (all the while having a whole other principal residence where they actually eat and sleep), and then claim the PR exemption on the sale.

Most of them probably stopped when CRA started asking about specific property acquisition/disposal dates and a PR designation every year on their tax returns, but it wouldn’t surprise me if a few think they can outsmart the taxman on this.

#33 Felix on 12.17.21 at 5:37 pm

Suck & blow

Dogs suck.

Cats will blow you away with their awesomeness.

Happy Feline Friday!

#34 Drago on 12.17.21 at 5:37 pm

To repeat something I said months ago…
The government debt is huge. Clearly the policies and decisions being made are designed to reduce that debt by INFLATING the cost of everything and causing a subsequent rise in incomes.

To illustrate by exageration: Imagine your personal debt is $100 million dollars and you earn $50K year. Big problem.

Now imagine that your debt is still $100 million but you earn $10 Million a year. Debt load ain’t so bad eh?

Inflate the costs of everything, then follow up with increased incomes (which really doesn’t improve your life you just spend more due to inflation), and make sure that tax incomes (based on percentages and income levels) go up.

Bingo…the debt LOOKS smaller (a relative thing), and gets paid with the increased taxes due to increased incomes, all while your lifestyle either remains the same or more than likely, is diminished.

#35 Clammydog on 12.17.21 at 5:43 pm

>>All we need to finish us off is an Adele-Drake tour

HAHA!! Geez Garth! You just made me spit out my scotch and soda!

#36 Omicron Kenobi on 12.17.21 at 5:45 pm

I am coming for you all, deplorables.

#37 S on 12.17.21 at 5:49 pm

#8 Ian on 12.17.21 at 4:42 pm

” Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?”

After making mortgage payments for 5 years the principle is barely touched. Almost 100% of each payment for first several years of a mortgage goes to interest servicing. Most borrowers will be refinancing same principle at much higher rates…

#38 AntMan on 12.17.21 at 5:59 pm

#12 crowdedelevatorfartz on 12.17.21 at 4:52 pm

Ants prepare.
Grasshoppers play.
——————————————

True.

#39 Drinking on 12.17.21 at 6:15 pm

I am just happy that you did not post an Adele,Christina pic today.
What could possibly go wrong with the exceptions of that Mill character and 30 percent of them crying on your blog next year that they did not see this coming, of course it’s all our fault?????

#40 Ponzius Pilatus on 12.17.21 at 6:21 pm

Talking about addiction, again.
(If I may)
Tiger Woods is back again.
Can’t stop feeding his ego.
And now he’s leading his son down the same path.
Addiction comes in all forms.
Workaholism is considered a “good” addiction.
Fact is, depression and addiction and short life is very high among modern star athletes.
That’s why my daughter is studying Sports Psychology.
Goldmine.
And to stay on RE:
FOMO and Day Trading is an addiction, too.
Spending most of your day checking RE listings and stocks is not healthy.
Stay balanced and diversified, blog dogs.
And don’t neglect your family.
x-mas is tough for many people.
I had a coworker who spent lots of time at work day trading at his company computer.
He had that “toggle “ where he could switch from his stock graphs to a spreadsheet instantly, when his supervisor came by.
He got caught eventually.
It did not end well.

#41 JRinVic on 12.17.21 at 6:32 pm

#17 Dolce Vita on 12.17.21 at 5:03 pm
On the Omicron not mild link, if you can’t get to the article here is the gist of it (marked up by someone else from the Twitter Hive):

https://i.imgur.com/2Ftw8lP.png
————————————————-
Seriously? ‘Dr’. Ferguson again? The same imbecile that at the beginning of Covid convinced the UK government and the world that there would be infinite deaths and lockdowns are the way to go? The same doctor that for decades has been completely over the top wrong on every prediction for every major health scare/breakout we’ve been alive for?
That is not credible evidence at this point, sorry.

How can Omicron be mild? Because most viruses mutate that way and find a way to mutate without killing their host. The vast majority of cases South Africa has found have been mild, and like every variant, the concern is typically in the 70+ age range and with comorbidities.
This should be a nothingburger, but instead, our federal and provincial governments are panicking like its March 2020 and enacting restrictions that have no basis in science. You notice how there is no mention of hospitalizations or deaths anymore, just the easy to manipulate number of cases…
It’s time to stop the fearmongering and get on with things. Hospitals are not overflowing, what’s happening now is increased burden for people needing treating for other diseases and ailments that we are ignoring.
Canada has completely lost their minds with Covid and unless there is more resistence they aren’t going to stop.

#42 Do we have all the facts on 12.17.21 at 6:42 pm

The combination of Quantitative Easing and lowering the overnight rate to 0.25% increased the net worth of all Canadian households by over $2.0 trillion in less than two years. Canadian households are currently sitting on more than $230 billion in cash ready to spend or invest in 2022.
Billions more are sitting as equity in residential real estate.

The fact that the Bank of Canada failed to anticipate the rapid increase in inflation in 2021 and their reluctance to admit that monetary policies they implemented actually helped to fuel inflation is disconcerting to say the least.

The suggestion that a series of modest increases in the overnight interest rate in 2022 and 2023 will return inflation to the 2.0 target range is looking more like wishful thinking than a realistic projection.

We entering unfamiliar ground with a toolbox developed long before Modern Monetary Theory inflated government debt around the world. It may turn out that inflation is just one measure of the collateral damage caused by MMT.

#43 Shawn Allen on 12.17.21 at 6:44 pm

#37 S Needs a new calculator

#37 S on 12.17.21 at 5:49 pm quoted and said
#8 Ian on 12.17.21 at 4:42 pm

” Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?”

After making mortgage payments for 5 years the principle is barely touched. Almost 100% of each payment for first several years of a mortgage goes to interest servicing. Most borrowers will be refinancing same principle at much higher rates…

***********************************
That’s false and has not been the case for years.

Try this site which will show that these days the majority of a mortgage payment goes to reducing principal from the very first month.

https://dominionlending.ca/calculators/payment-amount.php

At 2.5% 25 year amortization, the principal portion is 53% in the first month and after 5 years the principal has been reduced by 15% which is a lot more than nothing.

If you refer to 4% interest the principal portion is 37% and interest 63%. 63% is not “almost 100%.

After 5 years the principal is reduced by 13%.

Next time check the math first.

A 2.5% mortgage is not your father’s (10%) mortgage.

#44 Nonplused on 12.17.21 at 6:49 pm

Well, the correct solution is probably to both “suck” and “blow”. But I figure the only way to properly address a supply shortage is to increase supply. Works every time. It doesn’t matter what they do with interest rates, although that will certainly have an affect, prices will remain high until supply catches up with demand, which means building more units.

Increasing rates won’t increase supply. It will reduce demand. But is that really what we really want? Reduced demand due to high rates still means people priced out of the market, who otherwise might want to buy a house but can’t afford the monthly at the higher rates. So if the goal is to make affordable housing available to the masses, raising rates won’t do it even though house prices might fall. There still won’t be any more houses. The monthly won’t change.

It is simple econ 101. Rising prices send a price signal to producers to increase supply. Supply and demand then work back into balance. But in Canada supply is very much restricted at the municipal level. Nearly every city is surrounded by a cartel of land developers around it and inside the city NIMBY reigns supreme, so only very restricted development can occur at a very controlled pace. That’s good for the developers and the city’s tax department, but it ain’t how you fix a supply-demand problem.

And I don’t buy the line that mom and pop investors are distorting the markets. European immigrants have been planning their retirement around owning a rental or two since the end of WWII. They never affected the market before. They still got to rent them out, so someone still has a place to live. The fact is that investors of any kind, small, medium, or large, cannot do much to the supply and demand equation anywhere near as serious as a massive increase in supply would. What are they gonna do? Buy all the new units up and then leave them empty?

So there is only one way to truly do anything about the high cost of home ownership in Canada. Get the bull dozers out and pave some land, cut down and mill some trees, and pour some concrete. Absolutely nothing else will work.

#45 Sheesh on 12.17.21 at 7:02 pm

#31 Blacksheep on 12.17.21 at 5:36 pm

Improper research technique there BS. Keep reading to the end, don’t stop at the part that you want to be true.

#46 Reality is stark on 12.17.21 at 7:02 pm

Markets can stay crazy longer than you can stay solvent.
Unfortunately real estate markets will likely rise another 20% over the next 3 months due to Omicron.
Gen Xer’s are getting hammered. All the work government does to level the playing field has been destroyed. The parents with the 3 million dollar home can Heloc $800,000 to the one child they had despite the fact that the child was an under performer.
Covid exacerbates the inequality.
Couple that with latent gender polarization (listen to Cardi B WAP to get a sense of the underlying anger) and you can see why only the top 20% have a shot at not being victims of divorce.
The divide is so great that it is becoming feudalistic.
Inherited wealth is the only way out of the urban ghetto.
I suppose that will likely be the next shoe to drop.
The only way to conduct a responsible government would be to impose an immediate 50% tax on all inherited wealth starting immediately.
To hell with the voters, shove it down their throats.
Avoidance nets you a minimum 5 years in jail.

#47 Stoph on 12.17.21 at 7:03 pm

#8 Ian on 12.17.21 at 4:42 pm
Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?

————————-

No worry for bank shareholders.

Mortgage holders though may experience a new level of ‘house poor’. Sure some may have gotten raises since they qualified for the mortgage, so could actually withstand even higher rates; others however could have gone on parental leave, got laid off or maybe even quit their job to go back to school.

Good thing I read this blog and could prepare. Thanks Garth!

#48 Nonplused on 12.17.21 at 7:04 pm

From everyone’s favorite TV personality:

Great advice from Tucker Carlson: “If you find yourself living in a place where people are still talking about Covid nonstop two years in, it is time to move. Not just because your neighbors have been brainwashed – though obviously, they have been – but because they are boring.” pic.twitter.com/rzjbD1BqlG

— Scott Morefield (@SKMorefield) December 17, 2021

I’m talking to you TN! Ya sure everyone knows it’s real but it’s pretty clear we know how to manage it (mostly) now so let’s stop the fear porn. The crisis is over, now it is just an ongoing major inconvenience. A deadly one, no doubt, but still. Jabs, masks, social distancing, WFH, proof of vaccine, tracking, cohorts, isolating when sick, it’s all working. The sky isn’t falling. At least not anymore. Now it’s just news, and we all should know by now the news is fake.

#49 DON on 12.17.21 at 7:05 pm

#37 S on 12.17.21 at 5:49 pm
#8 Ian on 12.17.21 at 4:42 pm

” Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?”

After making mortgage payments for 5 years the principle is barely touched. Almost 100% of each payment for first several years of a mortgage goes to interest servicing. Most borrowers will be refinancing same principle at much higher rates…

**********

There is also a segment of people who fibbed about their details.

#50 DON on 12.17.21 at 7:08 pm

Ponzie

3.6 earth quake in the Georgia Straight of Duncan 4 am. I woke up around that time.

Dog forbid!

#51 Cheese on 12.17.21 at 7:09 pm

Only make 35k/yr working at the hospital, car just broke down today, so goodbye Christmas budget. No one in my strata of society will ever have a house, perhaps not even a family, save what you can, balanced and diversified; and try to enjoy life now, because it won’t get any better.

#52 NEVER GIVE UP on 12.17.21 at 7:10 pm

#1 Dolce Vita on 12.17.21 at 4:30 pm
«SI C’EST VRAI, C’EST UNE BOMBE»
https://i.imgur.com/n1ZFuZg.png
=============================

Here is clarification of what he really said.
He did not say that Triple vaxed people are more susceptible. Rather triple vaxed people are more likely to get the milder Omicron virus rather than the Delta virus. That translates to good news for Vaccinated people.

https://www.mcgill.ca/oss/article/covid-19-pseudoscience/are-triple-vaccinated-people-more-likely-be-infected-omicron-variant-unvaccinated

#53 In Flat Ion on 12.17.21 at 7:11 pm

You know, I keep reading all this crap about how inflation is calculated, and how it is as bad as every other number we look close at.

Realtors have their Frankenumber, and Inflation is just like that – scrubbed, massaged, rotated, pivoted, squeezed to fit.

And while they think that we will just choose ground beef instead of steak, do they consider that we’ll just have less buying power or choose to buy less?

I can afford things, but I’m in no mood to be paying for crap I don’t need. I found cuts to crap I got in the habit of buying. It’s not like I need all this crap I buy. Still got a PlayStation 4 that I bought 2 years ago and never opened.

Oh sure, necessities are costing more, but this will only pinch the other discretionary spending segments.

#54 Two-thirds on 12.17.21 at 7:12 pm

For sure, rates will go up. In the past decade, according to BOC, the rate has not exceeded 2%:

https://www.bankofcanada.ca/rates/interest-rates/canadian-interest-rates/?lookupPage=lookup_canadian_interest.php&startRange=2011-12-17&rangeType=dates&dFrom=2011-12-19&dTo=2021-12-17&rangeValue=1&rangeWeeklyValue=1&rangeMonthlyValue=1&series%5B%5D=V122530&ByDate_frequency=daily&submit_button=Submit

Therefore, 1.5 percentage points is almost assured, which is equivalent to six 25 bps increases, assuming a return to pre-covid levels.

VRMs in the 1.5 range are available now, which could mean a doubling of rates could be in the cards in 2022! (more likely into 2023)

That said, a 3% VRM is still very affordable by historical standards. If people qualified at 5.25%, surely 3% should prove doable?

Does anyone here see more than 6 rate increases in the cards in 2022, or is this a worse case scenario?

#55 Sheesh on 12.17.21 at 7:12 pm

For Dolce and Blacksheep:

https://www.mcgill.ca/oss/article/covid-19-pseudoscience/are-triple-vaccinated-people-more-likely-be-infected-omicron-variant-unvaccinated

Sorry to burst your bubble.

#56 Sail Away on 12.17.21 at 7:16 pm

#12 crowdedelevatorfartz on 12.17.21 at 4:52 pm

Ants prepare.
Grasshoppers play.

———

Ah, grasshoppers. Envision a Thompson River raft trip:

A breeze carrying the scent of hot sage riffles the surface as the grasshopper alights at the edge of the run and dances past, disappearing in a swirl just above the pool; the weight of the trout sends a shock up the line and through the rod when the fish turns and rockets downstream past the sandbar, across the tailout and over the edge, snapping the leader with an almost inaudible ‘pop’ in the desert air.

#57 Barb on 12.17.21 at 7:26 pm

If I’ve looked at that picture of Cochise and his sister once, I’ve looked 10 times.
Delightful…absolutely delightful.

#58 Controller on 12.17.21 at 7:35 pm

Hey Garth, quick question after the obligatory suck up…..You’re soooo good looking. I’m an Air Traffic Controller, not an Economist, so pardon a possible stupid question…..What are your thoughts on a 2-Tiered Mortgage System, market interest rates if you live in the property and Market Plus 3% if it’s an investment property? Would that cool the market? Too easy to cheat? Merry Christmas.

#59 Waystar Royco Shareholder on 12.17.21 at 7:42 pm

#8 Ian on 12.17.21 at 4:42 pm

Even if rates swell to a 4% mortgage rate on renewal. These buyers still qualified at 5.25%. So with 5 years of principle paid down and a rate still below the stress test they qualified earlier with. What’s the worry?
________________________________________________________________

Becasue many of those qualified buyers knew they weren’t actually going to have to pay 5.25%, so after closing, they bought cars, furniture, campers, etc, all on credit

Many more borrowed money for renos, remodeling. Etc..

#60 Drinking on 12.17.21 at 7:50 pm

#33 Felix

Feline pic (for me) = Christina (bad,bad,) news like a typical Feline that blames the dog for all its wrong doing! :) smart but stupid, always get caught out in the end!

Adele= a cat (Feline) screeching like finger nails on a black board!!!

Drake= Not my generation; but I have heard that he has done alot for Canadian sports as I guess Adele has done for other charities??? Note sure; only for the fact that I have never heard if she has; not into her music or Drakes!!!! No offense, more into Led Zep, Pink Floyd, Tool, in the generation that I grew up in, amongst so many others when music and artistry was actually a thing!! Imagine that??

Nope, sorry, cannot stand a fricken cat jumping on my lap or head in the middle of the night, that sucker is going right out the window!!!!

#61 I don't know on 12.17.21 at 7:51 pm

#20 Omicron is Coming on 12.17.21 at 5:13 pm

A more likely scenario is that the pandemic wanes like all pandemics before it in the history of man have. Its also been known for months now that the vaccine requires three doses for optimal protection. The third dose is just being rolled out now, so will take some time to be effective. Preliminary statistics also seem to show that vaccines (even one dose) still help prevent serious illness and hospitalization.

Regarding interest rates, if what you say is true, and omicron slows down the economy through lockdowns and safety measures, that would actually reduce the need for rate hikes. You cannot have both an economic slowdown, which is deflationary, and the need for rate hikes at the same time. Like the title of this blog post says you cannot suck and blow. If the inflation we are experiencing is a direct function of the pandemic, than clearly its inevitable retreat will restore supply chains and reduce the bottlenecks that are a large reason for the inflation in the first place.

Also, if the pandemic drags on, so will the human desire and need for space and backyards. Housing could shoot much much higher.

#62 Grandv!ew on 12.17.21 at 7:59 pm

All on the taxpayers dime…….Sadly people are numb and too depressed to even care.

Canada’s Parliament is officially adjourned until Jan 31, 2022… because there is nothing serious going on in the world or country that needs to be dealt with?

https://twitter.com/DonRCampbell/status/1471673973503148032

#63 Rocket Scientist on 12.17.21 at 8:08 pm

“A new survey finds about a third of Canadians have no idea what rising interest rates will do to their finances.”

It wouldn’t surprise me to learn that the other 2/3rd had no idea either!

#64 Ohmygod virus! on 12.17.21 at 8:17 pm

Either monthly payments increase proportionately, or they remain the same and the principal amount owing goes up.

I’ve been waiting for you to finally explain this correctly. The end result of the latter type of payment will mean very few foreclosures … just more payments against interest over time. It’s a brilliant marketing strategy to squeeze out every drop of interest from borrowers.

Time to go long on the banks. They love this type of environment …high spreads and customers up to their eyeballs in interest payments.

#65 fishman on 12.17.21 at 8:18 pm

A couple escapees’ down in the desert phoned that they went in and got their third shot. Buy some pineapple juice & be prepared to take the next day off.

#66 Ponzius Pilatus on 12.17.21 at 8:19 pm

#50 DON on 12.17.21 at 7:08 pm
Ponzie

3.6 earth quake in the Georgia Straight of Duncan 4 am. I woke up around that time.

Dog forbid!
—————
Yeah,
I heard.
Did you run for the hills?
I’m high up here on solid rock.
Slept like a baby.
Be prepared, GrassHoppers.
And get you Booster shots.

#67 Caption for today's picture on 12.17.21 at 8:20 pm

If that cat so much as puts one paw on our yard, I’m having him for dinner!

#68 I don't know on 12.17.21 at 8:34 pm

#59 Waystar Royco Shareholder on 12.17.21 at 7:42 pm

They have been correct so far about rates. Also the remodeling and renos have drastically increased the appeal (and value) of the homes of those people. It’s been a really smart move.

#69 Ballingsford on 12.17.21 at 8:38 pm

I wonder how to frame this and not get lengthy in my post. I hope I make my point.
Just moved into a nice executive townhome (sounds nice, but actually it is nice). Few touch ups with paint and stuff.
Painter guy is from Columbia. Came to Canada with $3000.
Now owns his home and has a rental property.

We have formed a bond with this guy. Very personable. Sat outside with him and had a coffee and asked what are we Canadians doing wrong.

This post is getting long, so detour to Asians who seem to be snapping up property. Apparently a Chinese bank will give 3 million dollar mortgages easily, where we struggle for less than a million.

This post could have gotten more deeper.

#70 Daze of our lives on 12.17.21 at 8:45 pm

#40 Ponzius Pilatus on 12.17.21 at 6:21

I had a coworker who spent lots of time at work day trading at his company computer.
He had that “toggle “ where he could switch from his stock graphs to a spreadsheet instantly, when his supervisor came by.
He got caught eventually.
It did not end well.

I hope you at least got a severance package!

#71 crowdedelevatorfartz on 12.17.21 at 8:58 pm

@#56 Sail Away

I did a 6 day raft trip from Chilco Lake , down the Chilcotin into the Fraser about 20 years back.
Late August.
Perseides Meteor showers at night.
Salmon were starting to run upriver.

@ #56 Barb

Which one IS Cochise?
Big Horn sheep on the cliffs on the Fraser.
Amazing trip.
Coulda spent another 2 weeks on the river.

#72 Drinking on 12.17.21 at 9:07 pm

#69 Ballingsford

That’s the thing, many of us know this but cannot say a word without being labelled???? So many words out there cannot keep up!!! It is all a shite show!!!!

#73 That Guy on 12.17.21 at 9:10 pm

Yowza, I wonder if that survey is biased at all?

Example: the 1/3 who don’t know are the ones who admit they don’t know. The 2/3 who SAY they KNOW are the ones who are too ignorant/scared of looking bad to admit that they don’t know?

This is too important to be tested in the schools, looks like it’s the school of hard knocks for far too many of us!

Robert Kiosaki, whatever his flaws, highlighted something very important when he pointed out that a house can be considered a liability and not an asset based on the cash flows. Lesson #2 for the school of hard knocks.

–#63 Rocket Scientist on 12.17.21 at 8:08 pm
“A new survey finds about a third of Canadians have no idea what rising interest rates will do to their finances.”

It wouldn’t surprise me to learn that the other 2/3rd had no idea either!–

#74 Ponzius Pilatus on 12.17.21 at 9:12 pm

#70 Daze of our lives on 12.17.21 at 8:45 pm
#40 Ponzius Pilatus on 12.17.21 at 6:21

I had a coworker who spent lots of time at work day trading at his company computer.
He had that “toggle “ where he could switch from his stock graphs to a spreadsheet instantly, when his supervisor came by.
He got caught eventually.
It did not end well.

I hope you at least got a severance package!
—————–
No, actually when they took a closer look, they found out that he embezzled the company for some serious coin to finance his gambling (day trading) addiction.
Spent some time behind bars.

#75 BC Doc on 12.17.21 at 9:16 pm

My double vaxxed (Pfixer) son lives in the Big Apple.
He had a get together 10 days ago— his friends all double and triple vaxxed. One of his guests (a numbskull) came with a “cold” ( said he didn’t get tested because it was “just a cold”). Five days later, 12 out of the 13 people in attendance, all of whom are in their early 20s, came down with CV. My son also had CV back in March 2020. He said symptomatically this time was much worse than the first. My point in disclosing this— get ready for an interesting few weeks. I am pro-vaccine, triple vaxxed, and work on the front lines here on the West Coast.

Cheers,

BC Doc

#76 Sheesh on 12.17.21 at 9:23 pm

#41 JRinVic on 12.17.21 at 6:32 pm
‘How can Omicron be mild? Because most viruses mutate that way and find a way to mutate without killing their host’
….
Delta was not more mild than the original strain. Viruses don’t care if they kill you or not, just so long as they can replicate find a new host first. This has never been a problem for sars cov 2.

They are erring on the side of caution, since with exponential case growth even a mild version would still send a huge number of people to hospital. The good news is that we will know soon enough how bad it will be. If it turns out it is a nothingburger we’ll be back to business as usual. If it turns out to be bad, we’ll be glad we took these precautions.

#77 Ballingsford on 12.17.21 at 9:24 pm

#70 Daze of our lives on 12.17.21 at 8:45 pm
#40 Ponzius Pilatus on 12.17.21 at 6:21

I had a coworker who spent lots of time at work day trading at his company computer.
He had that “toggle “ where he could switch from his stock graphs to a spreadsheet instantly, when his supervisor came by.
He got caught eventually.
It did not end well.

I hope you at least got a severance package!

******

Bravo for you being a tattle tale. I think people will dislike after this.

#78 Doug t on 12.17.21 at 9:45 pm

FUBAR we are indeed – it’s an interesting time we live in between the pandemic and the power struggle building between the U.S. and China – next five years will be epic

#79 George Kwok on 12.17.21 at 10:36 pm

Dishonest, dishonest, dishonest. Trudeau, Krystia, Tiff. These three think we’re stupid? Trudeau knows that his borrowed trillions will grind the economy to zero when Kyrstia can say no longer that borrowing is free of cost. Tiff is supposed to be independent by the BOC Charter but is actively vocally publicly supporting the spend regardless of the reality of “paying it all back” of which there is no chance. He’s acting as if he’s an elected official with lots of ( good ideas ). But he isn’t. He’s supposed to be on guard for excesses. He isn’t. He’s cheerleading. The swell of taxation and incremental loss of living standards are obvious to any child with a cheap calculator.

https://vancouversun.com/opinion/opinion-trudeau-government-spending-spree-comes-with-huge-costs

What is the consequence of dishonest government in Canada. It seems there is none. What happened to the “good government” clause in the Charter. Oh right, the weasel words mean nothing when one Trudeau hands off the baton to another.

#80 Sail Away on 12.17.21 at 10:43 pm

#71 crowdedelevatorfartz on 12.17.21 at 8:58 pm
@#56 Sail Away

I did a 6 day raft trip from Chilco Lake , down the Chilcotin into the Fraser about 20 years back.
Late August.
Perseides Meteor showers at night.
Salmon were starting to run upriver.

———

Nice! Our hunting camp overlooks the Chilcotin River about 15km above the confluence with the Fraser. Lots of grizzlies at Chilco Lake but only the odd wanderer by our place.

Full of salmon in August and September. Closed to fishing by non-natives, but they inexplicably seem to regularly end up on the grill. Mysteries, mysteries.

#81 watch the bank, financial fees, charges on 12.17.21 at 11:24 pm

My wife and I have always shopped around for the no to low fee banking and cut our bank, financial institution fees as low as possible. We don’t make alot money, probably average or maybe a bit above. Our 3 jobs both working together 100 hours a week, delivery, courier jobs keep us busy but have always tried to keep money in our pocket because it was our work, time we had to give up to earn and keep what we could. I read years back, in the early 90’s that the average Canadian spends $110,000 in bank fees during their average financial lifetime or 30 to 35 years where most of their fees are paid.

We have paid a minimal amount over 30 years on these fees when it came to our financial transactions. I would say tops we paid maybe $8,000 to $10,000 which was over years from mortgage, borrowing related items. So we saved at least $210,000 to $212,000 and putting that money in safe, guaranteed GIC’s at our local credit unions and other deposit insured financial institutions earning us in total at least for 30 years now have $377,000 in RRSP’s and $86,000 in TFSA’s. Believe or not this is the bulk of our future retirement, financial, investment savings. We have 2 more pots of money, $112,000 from some LIRA money from my previous 18 years delivery job that we just transferred two years ago and $60,000 savings account with a short term 2.00% rate until April-1-2022. Our house paid off 12 years ago now 30 years we live there. It is modest, $670,000 last value I checked 6 months ago. So we did not have alot of time 30 years married to save alot in 30 years paying down debt, mortgage, paying all our bills, cost of living, raising 2 kids, paying $55,000 for them in college over 2.5 years back in 2014 to 2017.

So watching all theses fees really adds up over 30 years plus as the article I read over 30 years ago. This is just from not paying or paying very minimal bank, financial transactions fees. This is why most need to shop around and look at the big picture. The 3 things to do is not pay them, save that money do not spend on stuff you don’t really need and stuff them full with RRSP’s to the most you can, take your RRSP tax savings each year reinvest them in a TFSA or other tax protected account, RESP, another RRSP, TFSA if you have the RRSP room and make that interest compound.

As interest rates have lagged for 10 or so years, we still averaged 3.05% GIC rates during that time but we have averaged 4.65% over 30 years so even at 3.5% to 4% 5 to 10 years average GIC rates over the next 30 years and higher RRSP tax savings, TFSA tax savings, higher bank, financial transactions savings, in 30 to 35 years a couple can easily have $625,000 to $725,000 or maybe more. Be much smarter with your RRSP tax savings and planning of your money life people.

#82 Ballingsford on 12.18.21 at 2:09 am

Sail Away on 12.17.21 at 10:43 pm
#71 crowdedelevatorfartz on 12.17.21 at 8:58 pm
@#56 Sail Away

I did a 6 day raft trip from Chilco Lake , down the Chilcotin into the Fraser about 20 years back.
Late August.
Perseides Meteor showers at night.
Salmon were starting to run upriver.

———

Nice! Our hunting camp overlooks the Chilcotin River about 15km above the confluence with the Fraser. Lots of grizzlies at Chilco Lake but only the odd wanderer by our place.

Full of salmon in August and September. Closed to fishing by non-natives, but they inexplicably seem to regularly end up on the grill. Mysteries, mysteries
*****
There seems to be a lot of mysteries lately. A salmon landing on your grill might not be that unusual.

Fish jump for no explained reason.

#83 millmech on 12.18.21 at 2:17 am

#69
China starting to tighten up capital outflows.
https://wincountry.com/2021/12/17/exclusive-china-to-ban-online-brokers-from-offering-offshore-trading-to-mainland-clients-sources/

#84 Wrk.dover on 12.18.21 at 5:57 am

I’m wealthy. One of the wealthiest men ever. Maybe the most wealthy of them all. And by far handsomest.

I need you to pay my old legal bills though.

And then, rig the next election in my favor.

Sad!

#85 crowdedelevatorfartz on 12.18.21 at 7:40 am

@#80 Sail Away

“Nice! Our hunting camp overlooks the Chilcotin River about 15km above the confluence with the Fraser. Lots of grizzlies at Chilco Lake but only the odd wanderer by our place.”

+++

Yeah thats nice country.
We floated past Natives dip net fishing on the Chilcotin. They had they old style nets ( tree branches in a “Y”) and were scooping them out. Neat to see.

That last section of rapids from the Chilcotin down to into the Fraser is quite the boiler/washing machine. Narrow canyon with huge rocks to shoot around ( Big John Canyon? The guides called one area of the canyon “Sushi surprise” because a bunch of Japanese tourists puked from the endless roller coaster waves, twists and turns)
Lots of white water and huge drops then you end up in the wide , quiet Fraser in a huge canyon …..floating lazily along.
Great trip .
Lots of white water.
Hyak Tours does it.
They have the best safety record.

#86 Ballingsford on 12.18.21 at 8:22 am

Affordable Housing.

I’ve been thinking about this for a year or two now. My mind stops when I think that builders can’t price their homes cheaper. They have trades and costs to pay.

I grew up on the the other side of the tracks. Wealth on one side of the rail line, and poverty on the other side.

I think if the Gov’t would pay everyone’s 5-10% downpayment, that would make it easier to own. Coming up with the downpayment is hard for a lot of us. We pay our rent, and could afford maybe another $500/mth for utilities and property tax.

But back to the main issue. You can’t build more housing if you dont have the land and trades. The other issue which is a big one, if the govt can pay our down payments.

This post seems silly. But think about it.

#87 Ballingsford on 12.18.21 at 8:38 am

Try your hardest to not criticize my last post. The intent was to open it for discussion

#88 Ballingsford on 12.18.21 at 9:17 am

Just pay our downpayments and everyone will be happy.

#89 Meh on 12.18.21 at 9:41 am

It always confounds me as to why the coke dealers are asked why everyone has a drug problem.

These bankers are reptiles, each and everyone of them. They love every bit of this financial disaster and cry crocodile tears.

$230 trillion of global debt. What a joke.

#90 Dharma Bum on 12.18.21 at 9:43 am

#46 Reality is Stark

Inherited wealth is the only way out of the urban ghetto.
———————————————————————————————————

Evolution, baby.

Yes, reality IS stark.

Just sayin’.

#91 Dharma Bum on 12.18.21 at 9:58 am

#81 watch the bank, financial fees, charges

Can you please say “30 years” a few more times…….

https://www.youtube.com/watch?v=Z7nBeBtvXKs

#92 mattbg on 12.18.21 at 10:37 am

The Home Buyers Plan seems like a great idea to young buyers. I know, because I was one and I used it.

However, 15 years later, I have just finished “repaying” the amounts attributed to plan to my RRSP. I no longer live in that house anymore, and beside the lost compounding, I’ve also been foregoing bigger RRSP deductions in the majority of the years of repayment than I would have when I was younger with a starting salary.

It does still have some benefits to younger buyers given that the market is what it is (whether it was made that way by government policy or not). RRSP deductions and compounding on $20K over 15 years aren’t life-changing sums and I would probably do it again given the circumstances, but in absolute terms it’s not a great move. In fact, it appears that it benefits government revenue overall.

#93 Daveyboy on 12.18.21 at 10:44 am

Omicron may have started in the Netherlands.

https://www.reuters.com/business/healthcare-pharmaceuticals/omicron-variant-was-detected-netherlands-before-s-africa-flights-2021-11-30/

https://www.worldometers.info/coronavirus/country/netherlands/

#94 CHERRY BLOSSOM on 12.18.21 at 12:08 pm

RESTRICT CREDIT. You are correct I think it is the only way. The banks are now going to be paying more taxes to T2 so why not lower their income RESTRICT CREDIT. RESTRICT CREDIT Yes.

#95 dosouth on 12.18.21 at 12:40 pm

Banks suck and blow the money out of our accts. Just can’t make/take enough and with higher rates comes higher profits. Regardless of generation those rich get richer and the rest of us….well, rearview is too crowded to learn anything from….obviously.

#96 S on 12.18.21 at 2:28 pm

#43 Shawn Allen on 12.17.21 at 6:44 pm

Damn, you’re right! Having missed that is one of very few disadvantages of not having borrowed a penny for longer than 28 day billing cycle for the last 15 years.
Thanks for the correction.