Chill

“God,” she said. “Now you’ll be insufferable.”

Dorothy just finished plowing through a few hundred comments posted to the blog yesterday after I mused about the future of this pathetic site. She gave a look that said, “…well, you got them fooled…” and went off to do some actual work. No wonder I love her.

So all that feedback was helpful. Instructive. The majority opinion seemed to be: (a) keep it lit, (b) feel free to punt the comments section and (c) we’ll forgive you for writing fewer times a week. This advice is worth mulling. Will let you know. As soon as she allows me back in.

In the meantime, what’s the deal with markets that were supposed to be completely freaked out by scary Mr. Omicron? How will 2022 – a year of rising interest rates, a dysfunctional US election, Chrystia the Impaler’s first bloodletting budget, record equity values, insane house prices and widespread RTW – treat your portfolio?

More on that in a minute. First we go to balmy Calgary where Mike and his squeeze are members of the most hated cohort in the nation – wealthy Millennials. Rich, but still needy.

“I’ve been reading your blog for over 7 years now, and can’t tell you enough how much I appreciate your work (and all of the ample dog content),” the MSU says (don’t tell D). “It has helped me immensely over the years.”

There are both early thirties, engineers, one kid. House is worth $750,000 with a mortgage of three hundred at 1.59%. Twenty grand on a car loan. Household income is $420,000 with a savings rate of 60%. “We try to live within our means,” he says. Investible assets of $1.2 million, all of it in registered accounts – RRSPs, tax-free and RESP for the squirt. Overall, 70% in growth assets.

So why write? What’s the issue?

“We now have more cash to invest than we have room in our registered accounts, a problem many of your 1%er readers likely share. My question is, what should we do with our extra cash going forward? I would like to invest it, but what is the best strategy for investing in non-registered accounts? Are we better to hold tax efficient assets in the non-registered accounts (Canadian dividend paying equities) or should we hold a little bit of everything for simple rebalancing? Should we just pay off the car loan just because we can? Or even consider allocating some of our extra cash to the low-cost mortgage? We fully realize how fortunate we are to have this problem.”

No guff. We lack info on what pensions these engineers have, but odds are there are DC (defined contribution), group-type RRSPs in place, probably in vanilla Sun Life mutual funds. Nor do we know if there are more spawn planned, eating into household income with another mat leave, or if Mike and spouse want to upsex their house. Maybe they plan to retire at 38? No idea.

Regardless, here are points to consider. First, always max registered accounts (Chrystia – remember?) but do not restrict yourself to them. Non-registered (or ‘taxable’) ones are immensely valuable not only for tax-efficiency but in planning the flow of retirement income. Recall that taxes on capital gains are currently the lowest of all – even for high-income earners who will pay a max of 26% and retain 74% of all profits. Also in a non-reg account you can collect dividends and claim the tax credit. Plus any losses may be deducted from gains to reduce tax – and carried into other years to gain that advantage.

As for retirement planning, people with assets should never cash in RRSPs early (or TFSAs, for that matter) but live off a non-registered account and let the tax-sheltered ones grow. Those retirement accounts need not be converted into RRIFs until age 71, then just a tiny amount need come out as income – which can be stuffed into a TFSA.

So, Mike, go non-reg now with the extra cash. Get with the 60/40 model. Safe stuff in RRSPs. Growthiest in TFSAs. Balance in the non-registered. And make it a joint account. You might be able to income split, and you can certainly protect your family because if anything happens to you all funds become her property immediately. No will. No probate. No delay.

Pay off the 1.59% mortgage? Of course not. Inflation is damn near 5% and your assets can earn more than that. Let the bank sweat over a loan they gave you too cheap. Pay the car loan? Pffft. Even worse idea. A depreciating hunk of metal is not an investment. Besides, lease the next one.

Now, the markets.

Most of the time since 1930 a Santa Claus rally has lifted stocks in the last few days of December and the first few of the new year. Yup, that’s now. And we have one. Fresh record highs this week even as Omicron rips through the US population, grounds flights, shuts schools and decimates small businesses.

Huh? New infections in Ontario, for example, have hit 10,000 a day when the previous Covid high was four thousand. Aren’t things getting worse?

Nope, says the market. It’s the opposite.

Omicron is massively contagious but significantly less harmful than its evil brother, Delta. Second, vax rates are escalating. Canada sits around the 80% mark and American inoculations are ramping up again. Boosters are being jabbed everywhere. Third, this wave has whacked the young the hardest – and they’re the most resilient. Big change from the old folks being mowed down a year ago. Fourth, no more lockdowns. Governments learned that lesson, and with mass vaxing there’s no reason to do so. Besides, the cost to the economy and to the public treasury is just too high. Fifth, if O does end up being more like a bad flu than a cuddle with the grim reaper, the herd can gain extra immunity without the health care system buckling. And look – the US just cut quarantine times in half for the infected.

In short, the betting is Omicron is a prelude to the AfterTimes.

Okay, now I must go and be humble.

About the picture: “I was introduced to your blog about 2 1/2 years ago by a good friend of mine here in the nation’s capital,” writes Tony, in Ottawa. “You gave me the courage and knowledge to open my own self-directed fund accounts full of ETF’s. I was able to sell and move my high MER mutuals, behind my “advisors” back. He was not happy. Thanks for everything you do. I have told everyone I know to read your blog, many Millennials. I don’t know how you do it. My wife and I have had a Golden retriever, 4 Nova Scotia Duck Tollers, 1 rescue poodle in our over 40 years together. This is our second Border Terrier, Ms Thelma. We can all learn from her, she is “super chill”

99 comments ↓

#1 Corleone Wisdom on 12.28.21 at 3:34 pm

Just when ya think yer out…. they pull ya back in….

#2 mitzerboyakaQueencitykidd on 12.28.21 at 3:43 pm

It’s a little nippy out here in the northern plains with daytime highs of -30
It keeps the wokesters in their mom’s basement

not to much chatter from the anti-oil people and natural gas haters on 40 below 0 nights

#3 Mike in Airdrie on 12.28.21 at 3:47 pm

Let’s hope this is the end of the darn pandemic. One typo today:

Second, vax rates are escalating. Canada sits around the 80% “market” …and American inoculations

#4 Russ on 12.28.21 at 3:50 pm

Hi Garth

While I was reading yesterdy’s post I thought it was a nice yer end summary.
But near the end where you asked for input I thought, “Oh, no. He’s trolling for 400 comments today.” And then it blew past that like a house price rising in the GTA.

So, I’m with Dorothy on this one. And thanks for retaining the steerage section on this pathetic blog, it’s the second best part.

Cheers, R

#5 non-sense on 12.28.21 at 3:52 pm

“God,” she said. “Now you’ll be insufferable.”
——————–
Hey Garth, are you getting your happy Vitamin D for this time of year?

https://www.healthline.com/health/food-nutrition/benefits-vitamin-d

#6 Just fire Justin and make me King on 12.28.21 at 3:54 pm

Here’s a comment I think you can appreciate. I copied it from twitter.
Thoughts of Dog®
@dog_feelings
·
Dec 24
SOMEONE LEFT A FULL PLATE OF COOKIES. AND A GLASS OF MILK. RIGHT BY THE FIREPLACE FOR ME. I AM NOT KIDDING. WHAT A NIGHT

#7 TurnerNation on 12.28.21 at 3:55 pm

The cheapest SFH in all of Southern Ontario. Blech.
https://www.realtor.ca/real-estate/23905323/5-easton-st-cambridge

— War on Small Business. Only the CV Rules matter, It will be a cold winter – and the UBI is lurking. Listen to what this Non-Essential Gentleman has to say:

https://www.cbc.ca/news/canada/manitoba/restrictions-new-years-palomino-restaurant-manitoba-liquor-sale-capacity-restriction-1.6299076
“It’s not shaping up to be a happy new year once again for bar owners and restaurateurs in Manitoba, after the province introduced new public health restrictions that further cap gathering sizes and put the sale of alcohol on a curfew. “Well New Year’s can’t happen,” said Christian Stringer, owner and general manager… ”


— Science in Kanada. The #s are too high for some! So let’s change the testing methods wink wink.

.(Dec 27) Manitoba – the type of test will now be based on a person’s vaccination status, Health Minister Audrey Gordon said in a news release on Monday

.(Dec 27) Nova Scotia – To be eligible for a PCR test you must have symptoms, or have been identified as close contacts, and be one of the following…Unvaccinated (less than full vaccine series) and age 12 or older.


— Control over travel/movement? You bet.

https://www.motorious.com/articles/features-3/uk-eliminating-car-ownership/amp/
UK Inches Closer To Eliminating Private Car Ownership

#8 Stroller on 12.28.21 at 4:00 pm

“lease the next one”

That’s not what I expected you to say. Are they in a postion that makes lease costs a deduction?

#9 WTF on 12.28.21 at 4:06 pm

Some help for the comments section. Time to ditch Emma Zahn and her union….clearly not up to snuff.

https://www.bing.com/videos/search?q=terry+tate&docid=607997297199634668&mid=C14EB8A6815A52C05D98C14EB8A6815A52C05D98&view=detail&FORM=VIRE

#10 Brandon on 12.28.21 at 4:16 pm

Garth, can you elaborate on why people with assets should never cash in RRSPs early?

If I were to retire at say, 55, with 1M RRSP and 1M taxable, I thought it would be best to take from RRSP first so that I could spread the taxes out over a longer period of time

#11 TurnerNation on 12.28.21 at 4:35 pm

Life in Kanada. Today I witnessed people in a long line outside a bakery in the cold, for bread. 2022.

https://www.rbth.com/history/331276-lines-soviet-union
“What things did people stand in line for in the USSR? (PHOTOS)”

— The next time you drive by your local hospital remember, your life, your slim remaining freedoms, and your future freedoms depend upon one thing and only one thing. The “Hospital Capacity” at that hospital.

https://brightlightnews.com/ontario-loses-1000-icu-beds-during-pandemic/
“”Ontario Loses 1,000+ ICU Beds During “Pandemic”
Government and Covid-19, Vaccine Mandates & Passports / By Gord Parks / December 26, 2021
Incredibly, during the middle of a supposed pandemic, the province of Ontario has managed to lose 1,114 adult ICU beds from May 13, 2020, to Dec. 24, 2021, according to the province’s own data.””
Most alarming in this new information is the fact that the Ontario govt increased its $39.6 billion 2020 budget (“$16.3 billion to protect people’s health and $23.3 billion to protect the economy”) in its COVID-19 Action Plan to $51 billion for 2021. Nowhere to be seen are the 500 new “surge” beds that Premier Ford promised Jan. 18 for Toronto, Durham Region, Windsor, Ottawa, and Kingston.


– I’ve said this New System – circa March 2020 – is all about Control over our Feeding, Breeding, and Travel/Movement. They’re not even hiding it.

https://www.nytimes.com/2021/11/20/style/breed-children-climate-change.html
“To Breed or Not to Breed?
In a world of pandemic chaos, political strife and climate catastrophe, some would-be parents see the future as too dark to procreate.”

#12 Dolce Vita on 12.28.21 at 4:49 pm

“the US just cut quarantine times in half for the infected”

They figured out that too many in quarantine, self-isolation will be a drag on the economy. The faster they are back to work, the better for the economy and services, essential or non-essential and supply chains.

The Brits first to lower their time (10 to 7 d). Americans doing the same but with more haste, panache.

Speaking of the Brits, so far Omi continues to not hospitalize or kill many but like a buzzsaw in its ability to infect.

UKHSA Omicron Dec. 28 Report, Cumulative, (braces = daily increase vs. prior report), England:

Confirmed Cases = 159,204 (+16,133) *
Hospital = 668 (+261) or 0.42% of Confirmed Cases
Deaths = 49 (+10) or 0.031% of Confirmed Cases

* Unconfirmed, i.e., SGTF cases **:

355,714 (+38,458)

in which case % hospital, % deaths LOWER yet.

** S-gene target failure, used in a PCR test to detect Omicron, i.e., probably Omicron, to be confirmed by genetic sequencing.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1043908/20211228_OS_Daily_Omicron_Overview.pdf

——————

Mr. Market getting it CORRECT in my view and KUDOS to Govs UK and USA for dampening the economic drag by letting people get back to work sooner post OMI.

Israel started its 4th jab trial today (2nd Booster).

https://www.france24.com/en/video/20211228-a-fourth-shot-of-covid-vaccine-israel-tests-second-booster

#13 Cat lady on 12.28.21 at 5:00 pm

Enough of the cat pics. This is supposed to be a dog blog!

#14 Dolce Vita on 12.28.21 at 5:03 pm

RE: “the US just cut quarantine times in half for the infected”

Not all pleased with the CDC’s 5 day isolation period, another Twitter Hive gold plated source:

https://twitter.com/EricTopol/status/1475841625637097477

Québec trying to outdo the UK and US CDC by letting the OMI positive keep working (healthcare workers), your basic ZERO DAY ISOLATION PERIOD:

https://montrealgazette.com/news/quebec/quebec-announces-infected-health-care-workers-will-continue-to-work-under-certain-conditions

…sorry La Belle Province, but that’s messed up.

Ottawa and NB hospitals about to get a whole lot busier with Les Québécois seeking humanitarian refugee status.

#15 Ed on 12.28.21 at 5:09 pm

Its nice to be back in Arizona
No one mentions Covid
No one cares
No mask requirements…most people don’t bother with them
Guns are OK even for Canadians in case anyone “needs” killin

#16 Loonie Doctor on 12.28.21 at 5:21 pm

We also have a personal taxable account (in addition to TFSA/RRSP/RESP/Corp). One of the other nice things about the taxable account is funding big purchases. Importantly, we don’t invest money we’ll need in the next five years. However, if we have a juicy taxable account that has been doing well, then we also have less psychological barrier to spending a bit extra on a splurge and using some money from that account to fund it since the tax bite is minimal.
-LD

#17 cramar on 12.28.21 at 5:24 pm

Wow! Mike and family are the coveted millennial rich. A rare breed of Canadians these days. But I don’t know why they are carrying a car loan and why Garth told them it is a bad idea paying it off. What interest rate are they paying on a depreciating asset? It’s only 20 grand, but get rid of the debt. Worth it to not be concerned about the debt.

#18 THE DANDADA on 12.28.21 at 5:26 pm

BRILLIANT!

#19 Dolce Vita on 12.28.21 at 5:33 pm

#15 Ed

Ed, do they not have radio, tv and/or internet in Arizona? Do they practice Votive Silence there like in Retreats?

https://www.kold.com/2021/12/24/omicron-is-now-dominant-variant-arizona/

https://news.yahoo.com/omicron-cases-explode-arizona-see-151330047.html

https://www.fox10phoenix.com/news/arizona-hospital-official-avoid-new-years-gatherings-amid-omicron-surge

When FOX News figures it out and say so, you know it’s for real.

#20 Tripp on 12.28.21 at 5:40 pm

Cases/status in Ontario, all ages, major change over the past 30 days prior to the most recent reporting date:

December 24:

Unvaccinated 31.93
Partially vaccinated 29.43
Fully vaccinated 32.93

November 25:

Unvaccinated 10.43
Partially vaccinated 4.69
Fully vaccinated 2.65

Source:

https://covid-19.ontario.ca/data/case-numbers-and-spread

#21 Shawn on 12.28.21 at 5:40 pm

Most hated cohort?

Rich millennials? What? I thought it was early retired couples with two fattish government DB pensions plus also two fat RRSPs. But you are right, being rich AND young rightly evokes more jealousy.

#22 Shawn on 12.28.21 at 5:44 pm

Just a tiny amount need to come into income from RRSP / RIF at age 71??

No it’s $54,000 PER million to start! And goes up from there with age.

Poor Shawn with his $1 million RRSP and government defined benefit pension that he brags about. Now you know why I advise people against it. – Garth

#23 IHCTD9 on 12.28.21 at 5:45 pm

#17 cramar on 12.28.21 at 5:24 pm
Wow! Mike and family are the coveted millennial rich. A rare breed of Canadians these days. But I don’t know why they are carrying a car loan and why Garth told them it is a bad idea paying it off. What interest rate are they paying on a depreciating asset? It’s only 20 grand, but get rid of the debt. Worth it to not be concerned about the debt.
——

I think the idea is, why liquidate 20k to pay off a car worth 15k with a 4% loan when you can grow the 20K over the duration of the car loan (5-7 years) at 6-7%.

#24 NOSTRADAMUS on 12.28.21 at 6:03 pm

SHOPPING, TILL I DROP, IN THE CLEARANCE AISLE!
Cash is trash, keeps on echoing down the financial corridors. Every time I mention that I have put a few dollars away for a rainy day, I end up getting “Bit*h Slapped.” Fool, as Mr. “T” would say. Allow me to put on my contrarian glasses and peer into the future. With the roaring 20’s just around the corner, why would I be so naïve? Welllll, (my what a long wellll you have.) Imagine, if you may, the nay sawyer’s are right, and over the next 10 years my rainy day fund depreciates by 30%. That is a scary, scary thought. Fool, as Mr. “T” would once again say. However, imagine in your worst nightmare, the stock and housing markets collapse within the next year, by 30% or more, and horror of horrors , don’t bounce back in time for your retirement party? Well, as to the fool, I will take my “trash cash” and put it to work looking for bargains galore in the clearance aisle. Pennies on the dollar ,enter my foolish mind. Do the math, sleep tight my little beauties.

#25 Cheese on 12.28.21 at 6:13 pm

It is said that comparison is the thief of joy….

this maxim is inadequate for the pain it causes.

#26 IHCTD9 on 12.28.21 at 6:31 pm

I’m, Good. And. Ready. For Covid to end. It’s gone on long enough. At some point we’ll either have to stop all the precautions and let life carry on, or start planning around the idea that there will be no end to successive variants and where do we go from here.

#27 Taco Devil on 12.28.21 at 6:36 pm

DELETED (Anti-vax)

#28 ogdoad on 12.28.21 at 7:02 pm

HAHA – fooled ’em ’cause so many people left comments most of which saying to ditch the comments?

Great – another pompous, know-it-all engineer. I have advice for you – make friends! Ya. then, you can brag to them….oh wait, lips are moving faster than my brain again…

Dudes got a car loan….hmmm….fell into money…congrats!

Welcome back, Garth!

Og

#29 the jaguar on 12.28.21 at 7:02 pm

So many posted that they disliked or did not care to read the comments. Something to reflect upon.
Maybe it does make sense to cancel them.

#30 Sue Me on 12.28.21 at 7:06 pm

Filing under the “nice to have” problems – when will we hear more about the 2022 luxury tax? I’m interested in a premium vehicle, and there are several that top the $100K cut-off (cut-in?) for this new tax.

If that tax becomes mandatory I can assure you I’ll simply change my purchasing plans. Not that I couldn’t afford the additional charge, it’s just that it would mentally “X” that idea right off my list.

Once again, it seems like a hairbrained scheme that ends up creating the opposite of what it intended. Too bad.

Garth / Dogs – this blog has mentioned several times that leasing a car is a good idea. I can’t find any way to run the numbers to show leasing is even remotely financially prudent. That’s counting a business write off and assuming mega repairs on a used purchase. Even against a new vehicle which I sell privately in the same timeframe leasing seems to be the most expensive overall with the most risk placed on the owner (i.e. unknown end of lease fees, etc.).

Thanks!
J.

#31 Ford Clown show - almost over on 12.28.21 at 7:09 pm

Can someone help me understand the White House strategy now?
I know they’re dumb, but are they this dumb?

Guys, I don’t know how to say this any more clearly: it is OVER.

The Omicold (pronounced Immacold) variant is about to bring this clown show to its inevitable conclusion.

I know none of our supposedly non-racist public health authorities were willing to believe the South African numbers, but we now have almost a month of data out of Denmark.

Between Dec. 13 and Dec. 20, Denmark reported approximately 50,000 confirmed Omicron cases.

Given the approximately one-week lag between infection and hospitalization, those people should be flooding into hospitals.

EXCEPT THE NUMBER OF OMICRON PATIENTS IN DANISH HOSPITALS HAS NOT RISEN IN THE LAST WEEK.

You read that right. 50,000 positive tests the week before, no change in hospitalizations. Admissions have risen slightly, but patients are being discharged as fast as they are being admitted.

The result: as of Dec. 21, Danish hospitals had 47 Omicron patients, with under five (the report is not more specific) in intensive care.

As of Dec. 27, the hospitals had 51 Omicron patients, again with under five in intensive care.

The question is no longer whether Omicron is a cold. It’s whether it’s as dangerous as a cold.

(And, again, this has nothing to do with Covid vaccines; most South Africans are not vaccinated, and the pattern there was the same.)

The only sane political move at this point is to drop ALL mandates – vaccine and otherwise – and ALL asymptomatic or quarantine testing (dropping all non-hospital testing would be even better) – and declare victory and go home. Even if the country weren’t burned out on scare stories and sick of being lied to, the reality of these figures is already obvious to most people. (Including LeBron James.)

When your media water-carriers have to write articles explaining the difference between Covid and a COLD… it’s over.

So why won’t Uncle Joe just say so? Because the current strategy isn’t working – not politically, and not for the country. It’s time to surrender to the ro like you did to the Taliban and to inflation. At least this time admitting the problem will fix it.

#32 To the point. on 12.28.21 at 7:17 pm

Sheesh, Garth. I took yesterday off and you chose to scare your readers!

So, a day late, one more recommendation for the future. Please consider limiting a commenter to ONE COMMENT/DAY. It should serve to focus people’s minds and make them THINK before hitting send. The quality of commentary may actually increase;) After all, they are supposed to be commenting on what you posted and not entering into secondary (boring for everybody else) chatter with each other!

Thank you and the best for the new year.

#33 Save Birchcliff Village on 12.28.21 at 7:23 pm

Garth!
Trudeau is importing millions of undesirables into our neighbourhood! We need to stop the construction of condos in our community.

#34 Ed on 12.28.21 at 7:24 pm

#15 Ed

Ed, do they not have radio, tv and/or internet in Arizona? Do they practice Votive Silence there like in Retreats?

I guess nobody listens too much anymore.
Works for me & we are all doing just fine.
Heading to Baja in 2 weeks…most there haven’t heard of Covid yet….can’t wait.

#35 KaleyCat on 12.28.21 at 7:49 pm

For your young engineers: sounds like they’ll be high net worth retirees some day. Here’s an excellent interview that accurately reflects Canada’s tax system for people like them, with suggestions for how to invest accordingly.
https://www.tawcan.com/living-off-dividends-tax-free/

#36 Ballingsford on 12.28.21 at 8:07 pm

I read.through all the comments from yesterday’s post and I didn’t think it was a majority to get rid of the comments. What’s the percentage for and against?

If some don’t like the comments they don’t have to read them.

#37 Haas Say Yhoo on 12.28.21 at 8:09 pm

Growthiest in TFSA. Balance in non-registered. And make it a joint account. I do not have a family member to make it joint .. any other suggestions? Cheers

#38 Ballingsford on 12.28.21 at 8:09 pm

Mike and his squeeze are braggarts too!

#39 Winterpeg on 12.28.21 at 8:17 pm

Arrived late to yesterday. Probably all the bases covered re: blog revamp.
Limit the blog to 2-3 days a week. Let your guys continue to do Saturday. Take Sunday off. Limit comments to 50 comments max/day, or one per blog dog as mentioned above.
If you cut this comments section altogether, I might miss some of the banter back and forth between CEF, Ponzi, Faron and cheeky Sail Away, etc, etc, but could probably get over it.

#40 Sail Away on 12.28.21 at 8:17 pm

#29 the jaguar on 12.28.21 at 7:02 pm

So many posted that they disliked or did not care to read the comments. Something to reflect upon.
Maybe it does make sense to cancel them.

———–

Those seemed to be mostly people who don’t read comments anyway and were trying in their own way to save Garth’s mental health.

No point in taking music advice from the deaf.

There’s lots of relevant and valuable info in the comments from people who have experience with specific issues.

#41 Shawn on 12.28.21 at 8:34 pm

Poor Shawn with his $1 million RRSP and government defined benefit pension that he brags about. Now you know why I advise people against it. – Garth

***********
You seem to mention that more that me. And as long as you are mentioning it, don’t forget the wife has the same. And what a strange thing to advise against.

Just doing my part to keep the boomers in contention for most hated cohort.

The advice is not to force-feed RRSPs when you have a DB pension. Enjoy your RRIF, and new tax bracket. – Garth

#42 Armpit on 12.28.21 at 8:50 pm

Thanks Garth,

I had a strong sense 8 days ago regarding Omicron and unofficially declared the Pandemic to be over.

#43 Nonplused on 12.28.21 at 9:04 pm

Well, here it is, in terms that should surprise nobody:

https://www.theepochtimes.com/housing-unaffordability-feds-try-to-increase-supply-without-cooling-demand_4172490.html?utm_source=morningbriefnoe&utm_medium=email_MB&utm_campaign=mb-2021-12-27&utm_content=News_Housing_Unaffordability:_Feds&est=bkGIze04wIpdV0BSJ%2F2XYaXEt3rH4WFTTbsUM8UIfD5cqsA6o5Cy8w0WcA3m6R6bYHNeUQ%3D%3D

“In “Hitting Too Close to Home: Lack of supply and the housing affordability crisis in Canada,” authors Murtaza Haider, a professor of data science and real estate management at Ryerson University, and Stephen Moranis, a former president of the Toronto Real Estate Board, found that persistently low construction rates have left Canada with about 1.8 million fewer dwellings than what the country needs to be in line with the G7 per capita average.”

“about 1.8 million fewer dwellings than what the country needs”

Considering Canada only has about 37 million people, most of whom share a residence with at least one other person. 1.8 million units is an absolutely huge number.

How did we get here? Well, of course there is NIMBY and the developer cartel. Absolutely incompetent urban planners helped. But a big driver is immigration. But, you say, “immigration isn’t that high, Canada has lots of land!” No, it doesn’t. Canada only has two habitable cities in the eyes of immigrants: Toronto and Vancouver. Nobody is going to try and live in the lands North of Edmonton, because it is near uninhabitable, and it is most of the Canadian land mass. Nobody wants to immigrate to Calgary because Ottawa has declared war on the City, and so long as Ontario and Quebec can import Saudi and Norwegian oil it looks like Ottawa might win. Nobody wants to immigrate to Quebec unless they are French speaking. Manitoba and Saskatchewan? We can include all of it with the lands north of Edmonton; uninhabitable. Same with the great Canadian shield which makes up much of Ontario. Most of Canada is land that Dog never meant for humans.

So, the housing crisis in Canada will not go away until someone, somewhere builds 1.8 million new units above and beyond the number that are currently being built. But “somewhere” is important too; they all have to be in or near Toronto and Vancouver. Prices in Calgary are high, but not really an existential crisis like in Toronto and Vancouver. Canada is adding about 301,000 units a year, which barely keeps up with growth. Adding an additional 1.8 million units, even over a 10 year period, seems an insurmountable task. Putting them all in Toronto and Vancouver, which is where they need to be, even more so.

#44 Nonplused on 12.28.21 at 9:09 pm

“Pay the car loan? Pffft. Even worse idea. A depreciating hunk of metal is not an investment. Besides, lease the next one.”

With cars lasting an average of 12 years these days, owning makes sense if you can keep the car for a long time. Even if you take 5 years to pay it off, on average you still have 7 years of payment free driving ahead.

The sweet spot is to buy a lease back. It’ll be 2 years old and have approximately 40,000 km on it, not more. And it’ll be about half the cost of a new one. Well maybe more these days because of the craziness in the auto market, but in normal times you can get most of the car for half the price. Let the guy who is leasing it suffer the majority of the depreciation.

#45 Cici on 12.28.21 at 9:20 pm

#9 WTF on 12.28.21 at 4:06 pm
Some help for the comments section. Time to ditch Emma Zahn and her union….clearly not up to snuff.

https://www.bing.com/videos/search?q=terry+tate&docid=607997297199634668&mid=C14EB8A6815A52

_____________________________________________

LMAO = You get the 2021 Best Comment Award for that little gem of a link!

#46 crowdedelevatorfartz on 12.28.21 at 9:24 pm

@ #29 the jag
“So many posted that they disliked or did not care to read the comments.”

+++

I used the scroll wheel on my mouse.
It’s my way to prepare for my New Years exercise resolution…

As for the two 1% ‘er Millenials.
Sounds like they have their financial sh!t together.
Keep doing what ever it is you’re doing.
Just play at being poor before the inlaws crawl out of the wood work.

#47 crowdedelevatorfartz on 12.28.21 at 9:35 pm

Another 6pm “News Hour” with breathless reporting about “record infection numbers in BC, Ontario, the US and Britain……”

No mention of Hospitalisations or deaths.
Because they’re either level or dropping….

Cut to commercial.

#48 mike from mtl on 12.28.21 at 9:36 pm

#31 Ford Clown show – almost over on 12.28.21 at 7:09 \

When your media water-carriers have to write articles explaining the difference between Covid and a COLD… it’s over.
////////////////////////////////////////////////////////////////

No need to waste paragraphs, we know, eventually this will burn out. Despite all the lockdowns, bans, leaky vaccinations, Vaxpasses, and general human stupidity.. nature will eventually balance out.

Delicious narrative smashing that Om does not give one fig if vax / boosted or not. Go waste your time delaying the inevitable, but nature always wins.

#49 Taco Devil on 12.28.21 at 9:47 pm

DELETED

#50 Nonplused on 12.28.21 at 9:51 pm

#29 the jaguar on 12.28.21 at 7:02 pm
So many posted that they disliked or did not care to read the comments. Something to reflect upon.
Maybe it does make sense to cancel them.

——————————–

Only 10 million people in North America ski. Should we cancel ski resorts?

#51 A penny saved on 12.28.21 at 9:51 pm

“A penny saved is a penny earned.” – Benjamin Franklin
I’d pay off the 4-5% car loan. Being debt free has served me well. I’ve been retired for 12 years and still invest 4 figures a month.

The loan is 3.5% and why use money earning double that to pay off debt on a tool? Buy what appreciates. Rent what depreciates. – Garth

#52 Diamond Dog on 12.28.21 at 9:58 pm

So…. while the Covid porn haters sick of this annoying bug are pining away to cancel Covid or even any mention of it (can’t blame them really), this pestilent bug is still effecting macro economics globally meaning one shouldn’t leave it alone.

I found a couple Canadian news clips last night that lend weight to the market missing something. (can’t blame investors either, Omicron wasn’t a word weeks ago) The science adviser for Ontario is suggesting that 2 poke vaccines removed from keeping us from getting Pneumonia are dropping down to 15% efficacy against infection:

https://www.youtube.com/watch?v=ghOw-aQKmyI&t=3s

A health expert from Quebec weighs in on just how contagious Omicron is. His worry is a surge in cases in January leading to a surge in hospitalizations in early to mid Jan:

https://www.youtube.com/watch?v=7TcAeistWGI

We do know that Omicron is more contagious than Delta. A study from the Imperial College of London suggests Omicron is 5.4x more contagious than Delta. A study out of Japan indicated 4.2x more contagious. The rest so far, are small sample study outliers.

Delta was being compared to Chickenpox pre Omi on CNN. The comparisons floating around today? The measles (for those that don’t know, the most infectious disease to human beings we know of, full airborne and super contagious is the measles).

Here’s what we know about it’s relative comparison in Delta. Delta skull & cross boned 841,648 Americans so far:

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

The CDC came out with estimates that were 25% higher than this number (lack of autopsy, misdiagnose. Compare the bump in fatalities and you have your smoking gun). Delta would appear to have a death rate of 2% but there are at least as many asymptomatic cases out there. Back in March, the Red cross tested it’s blood for antibodies and found 20% at a time when Covid19 reported cases were at 10%.

So, Delta and past variants had a death rate in the U.S. of around 1%. This number removed from Omicron was poised to drop over time as wearing masks, cleaner social practices, vaccine roll outs, improved health care practices, better tech and a change from Trump to Biden evolved.

There have been 3 studies of repute that compared Omicron vs Delta so far: South Africa, England and Scotland. There is a sizable study from researchers at Imperial College of London analyzing data in England that included 56,000 cases of Omicron and 269,000 cases of Delta. This study compared Omicron vs Delta with the unvaccinated that suggested (not from the link below) that Omicron was 11% less severe than Delta.

This runs counter to a South Africa study that suggested Omicron is 70% less severe than Delta (but this study didn’t compare Omicron vs Delta with unvaccinated only, key point). The South Africa study was a large sample but! Done in a nation approaching southern hemisphere summer with a young demographic and plenty of sunshine (Vitamin D). These factors do not mirror the Northern Hemisphere reality at present.

A small preliminary study comparing Omicron vs Delta was done in Scotland and $ media ran with positive news from South Africa and Scotland while cherry picking the Imperial college study to bolster the “Omicron fears melt” narrative and it worked:

https://www.politico.eu/article/omicron-delta-study-coronavirus-variant-restrictions-hospitalization-vaccine/

– 70% fewer cases of hospitalized among double vaccinated young people.

– 15 to 20% reduced risk in hospitalization compared to Delta.

To summarize: We need more studies. It’s early days and what investors have to go by isn’t definitive. Omicron has really only been around for a month but it has shown itself to be highly infectious, at this point one would wager more infectious than Chickenpox and potentially comparable to the measles. That says a lot!

https://en.wikipedia.org/wiki/Measles

The Measles, in case most don’t know once again, is the most infectious virus known to humanity. When subjected to Measles, it would infect 9 out of 10 without previous immunity. This means if you walked into a room shared by someone who had the measles up to 2 hours before, 9 out of 10 of you caught it just by breathing the air. If Omicron is comparable to the Measles, it means Omicron has gone full airborne but this comparison is still speculative. Even so, one cannot rule this out.

2 Studies outside of South Africa have shown Omicron (London, Scotland) to be 10 to 20% less severe than Delta to the unvaccinated. With what little we know, the big risk to the world from Omicron is still the unvaccinated population:

https://ourworldindata.org/covid-vaccinations

Currently, Canada ranks #6 in vaccinations with 2 dose vaccinations at 83% (we can be proud of that). The United States, 73%. The world? 2 dosed around 48.6%.

Here’s the problem with these numbers. Even when vaccination rates in Canada are at 83%, 17% is unvaccinated with no protection, rolling the dice with a dose of Pneumonia from a disease that is still spreading potentially through 85% of the rest of the vaccinated or natural immune population. This means herd immunity is at present anyway, a myth. We need herd immunity, remember that? 100% wrong.

Because Omicron is significantly more contagious, we could still see half or more of 17% get infected since it’s still widely spreading through the general population. Lets say it’s 10% over 2 months and half that number is asymptomatic which is 5% unvaccinated getting sick. If this small number is concentrated over a short timeline, it can still overwhelm hospitals albeit briefly as the timeline is compressed. As a consequence, in the U.S. more specifically, Omicron still has the potential considering first studies to overwhelm hospitals and more so across the world.

If the numbers of infected get compressed into January as rates of infection indicate (look at how quickly Omicron is replacing Delta), we could still see hospitals overrun here in Canada even with 83% vaccination rates as it comes down to ICU capacity and system shock.

What would this do to the markets? It wouldn’t help. As time unfolds, the lost sick days with the vaccinated comes into play never mind over run hospitals and the same industries that got beat up 18 months ago will get beat up again. Globally, we may be in for some bigger surprises (places like China that haven’t been hit hard, good luck stopping an airborne virus that compares to measles).

A flat or negative Q1 GDP quarter could be coming across the world one more time as this still ongoing pandemic compresses and bites into production from a bump in sick days and closed doors. The markets will unfortunately have to price it in.

While the Fed continues ongoing bond buybacks and low rate policy even in the face of 6.8% core inflation which is near term highly positive for the markets, the rest of the macroeconomic bear market fundamentals are unchanged:

A Russia/Ukraine war that could potentially happen within weeks, A slow burn potentially disorderly real estate collapse in China (20% vacancy, pretty hard to fix that with paper. Nike had a 20% drop in sales in China last quarter, worth a mention), a continued dropping work force percentage shrinking production (as boomers retire presumably to be replaced over time by automation), core inflation giving anyone without physical assets a haircut devaluing cash and widening wealth inequality, asset inflation offsetting core inflation but further augmenting risk, increased debt levels sure to test deregulation policy at some point (btw, credit card debt is swelling), real estate, bond market, commodity and stock markets comparative to past bubbles, (a phenom seen through much of the western world as a consequence of low rates), potential bond market disruption across the future timelines as sovereign bonds come up for renewal, ongoing environmental degradation from pollution that the world still refuses to price in and finally Omicron, compressing it’s vitriol with a new twist in contagion with risk that only now is beginning to be more fully understood… to name a few.

Investment has always been about risk vs reward. Does the investor try to hang in for another 10 to 20% in stocks with P/E’s at 40 riding a low rate Fed policy (which has pretty much always delivered) coupled with reinforced bull herd behavior, is the long bull trend is our friend? Or does the investor play it safe with less bountiful (sort of) but safer alternatives exercising patience knowing at some point, fundamentals come front and center.

Time tells all but looking at below numbers post Christmas, they suggest we may not long to wait:

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

#53 Barry on 12.28.21 at 10:11 pm

Why the 60/40 portfolio? Never understood that since I love bargains and bonds just don’t cut it presently. Preferreds? Perpetuals were a bargain in 2009. I bought a slew but once they hit $25 that’s it … no growth. I sold them. Nope – at nearly 69 and many years investing it’s CDN dividend growth stocks for the long haul in your non registered accounts. Stick your US stocks in your RRSP. No 15% withholding tax on American dividends. That’s where you put JNJ and Microsoft … the only two triple AAA companies in the US.

#54 cmj on 12.28.21 at 10:12 pm

#36 “If some don’t like the comments they don’t have to read them”
this is where the energy draining is for Garth. Doug and Ryan. Going through the blog comments depletes energy. We are trying to conserve their energy to continue posting a new blog article without getting taken up with many of the egotistical comments

#55 Coastal gal on 12.28.21 at 10:21 pm

Love the blog Garth and am addicted to it – read daily and read the comments too. You could post a few days less per week for more family and dog time as I realize how much work your blog is.
Your blog is so informative on real estate, finance, politics…. like to get your perspective.
Keep the comments please. I have gotten good information from the comments and like the discussion on different perspectives. I rarely comment but read the comments daily.

#56 The Woosh on 12.28.21 at 10:42 pm

#52 Diamond Dog on 12.28.21 at 9:58 pm
So…. while the Covid porn haters sick of this annoying bug are pining…

——————————————————

And here’s a good reason to dump the comments. I sprained my finger scrolling past this useless overly long comment! Who’s going to pay for my 6 months of finger physio? Yikes!!!

#57 Ponzius Pilatus on 12.28.21 at 10:43 pm

#15 Ed on 12.28.21 at 5:09 pm
Its nice to be back in Arizona
No one mentions Covid
No one cares
No mask requirements…most people don’t bother with them
Guns are OK even for Canadians in case anyone “needs” killin
———————-
Posters like you make the steerage section looks bad.
Get lost.

#58 Danger Dan on 12.28.21 at 10:50 pm

Missed yesterday, thanks for being here all this time Garth and just want to add my vote for lower frequency of posts.

Can always fill the freed-up time moonlighting as a political cartoonist ;)

#59 Ponzius Pilatus on 12.28.21 at 10:51 pm

40 Sail Away on 12.28.21 at 8:17 pm
#29 the jaguar on 12.28.21 at 7:02 pm

So many posted that they disliked or did not care to read the comments. Something to reflect upon.
Maybe it does make sense to cancel them.

———–

Those seemed to be mostly people who don’t read comments anyway and were trying in their own way to save Garth’s mental health.

No point in taking music advice from the deaf.

There’s lots of relevant and valuable info in the comments from people who have experience with specific issues.
————-
Agree with you Sailo.
The other day, we had people giving advise on how to tile bathrooms.
Very informative. And a money saver.
But you’re off on your point on deaf music teachers.
Beethoven had lots of pupils.

#60 Ponzius Pilatus on 12.28.21 at 10:58 pm

#52 Diamonds post are forever.
Could you please have an Executive Summary preceding your lecture.
Could lead to people actually reading your stuff.
And would make Garth’s job easier.

#61 Ronaldo on 12.28.21 at 11:36 pm

#23 IHCTD9 on 12.28.21 at 5:45 pm
#17 cramar on 12.28.21 at 5:24 pm
Wow! Mike and family are the coveted millennial rich. A rare breed of Canadians these days. But I don’t know why they are carrying a car loan and why Garth told them it is a bad idea paying it off. What interest rate are they paying on a depreciating asset? It’s only 20 grand, but get rid of the debt. Worth it to not be concerned about the debt.
——

I think the idea is, why liquidate 20k to pay off a car worth 15k with a 4% loan when you can grow the 20K over the duration of the car loan (5-7 years) at 6-7%.
—————————————————————–
If they are going to keep the loan why not pay it off, borrow it back, invest in some equities and at least now the loan is tax deductible. Makes sense to me.

#62 Calvin Merkel on 12.29.21 at 12:14 am

RE: a rich person’s concern, shameful over concern above the Energy Poverty that millions of Canadians are suffering because if. The ‘distraction by propaganda’ in our media is disgraceful.

The Insiders, Green Goons, Fashionably Fake Climateers, and Rich Sychophant Followers, want not to talk about the ‘layering on’ and ‘ creeping ratchet’ of inflation on low income and fixed income person’s. They are ‘Legion’ but being ghosted by a wall of protection that hides the truth about a massive political attack and a failure of opposition to this question of ‘heat or eat’..

Our main concern should be hurled into the media cesspool on the point of a spear. If you’re giving government a pass on this, shame on you. The thousands of extra dollars per month- per year the globalists are sucking out of student, seniors and families budgets is criminal.

Increased taxes on top of soaring inflation? Greening the planet with ineffective windmill contracts is one thing. Doing it on the backs of the poor from your yacht in St Bart’s is beyond the pale.

Might I suggest everyone wake up and admit that our government is on the wrong path using the wrong methods to manipulate power . Speak up for the poor.

#63 Charity on 12.29.21 at 1:17 am

Hey Garth had an idea, turn comments off and on.
When it’s a barn burner topic day, indicate comments are open.
Otherwise keep them off which will keep idiots like apocalypse now out of them.
Cheers

#64 Gotta Get Out of Calgary on 12.29.21 at 2:09 am

Mr. Turner, I discovered your blog about 4 years ago when a link appeared in the results during an internet search for something else. I read that post, flipped forward and read a few of the current posts of the time, flipped back to the very beginning of the blog and read a few posts, then picked random ones in the years in-between. Your insight and advice convinced me to become a daily reader.

Thank you for sharing your wisdom and wit. Your posts have confirmed the financial things I am doing that work and some that I need to initiate. I have learnt much from this blog. (And greatly enjoyed the dog photos and cat cameos, especially those of the real-life blog dogs.) The variety of topics keeps it interesting — finance, real estate, politics, the Dr. Garth letters. The glimpses into your life, your amazing wife, and the anecdotes about Bandit added an endearing personal touch.

When I saw that you not only wrote a daily post gratis but also moderated all the comments, I thought that was incredibly generous or incredibly insane.

I enjoy the blog the way it is but am fine if you wish to reduce the number of weekly posts. You have given tremendously to all of us and are well-deserving of gaining a little more time. The posts from Ryan, Doug and Sinan are helpful too and offer an interesting change of voice.

I have also learnt tips and useful things from some of the comments and would be happy to see those continue.

Full disclosure: I don’t read all the comments but rather, scroll through and pick key words to see if worth reading (and check for your comments/rebuttals). Some blog dogs are always worth reading (and would be missed), some are never worth reading. I use the scroll button a lot.

Perhaps assistance in moderating the comments would be beneficial —- someone with an iron stomach and a firm constitution considering how many comments you need to delete/ban.

Regardless of your decision, thanks to you and Dorothy for caring about the citizens of Canada and its future.

#65 Faron on 12.29.21 at 3:27 am

Hey Dolce, do you still think Omicron is going to tank the equity markets now that Lord Turner has chimed in?

#66 Diamond Dog on 12.29.21 at 4:13 am

#54 cmj on 12.28.21 at 10:12 pm

Can’t speak for others of course, but I do feel compelled to let readers know I consider this every time I submit an unusually long, long comment knowing full well it comes authored from someone who is flawed, (myself of course) sometimes in error on one or more levels, but I still do it and offer this explanation.

To speak plain, I wish to see Garth Turner succeed. I’ve been invested in this since 06′ when Garth was booted out of Harper’s party for doing what he does best, communications & media. Harper was such a control freak he wouldn’t allow a message he couldn’t fully control which was, ironically this blog and I’ve been off and on here since at times, sometimes quite regularly.

I believe in Garth as an individual and I too, believe in wealth creation/preservation i.e. prosperity because I know how important it is to people, many of us having worked for it much of our lives. There’s more to prosperity measured in numbers obviously, but there is no other angle or objective really. The effort can get a bit… creative at times (obviously sugar coating some of it) but that’s it, that’s all there is. When someone does good things in this world, others will respond in kind so it’s karma really, and nothing more.

I’m well aware of Garth’s age at 72 and what this typically means for those who approach elder hood. I have a father at 84 and we talk/see daily for the last 12 years so I’ve seen firsthand what follows the progression of time. No one beats father time, not on this dimension but I also know “use it or lose it” doesn’t apply only to muscle but to the brain. Retire? To what? If we don’t have an equal passion lined up to fill the void, it may become a big mistake.

Of course it’s about energy and time management, it always is and burnout plays a factor but it’s also about objectives, dreams and playing your strong suit, of fulfilling our greatest potential of who we are meant to be. For some, for certain writers in particular, there is a potent evolution to it that comes only through devotion and experience and for a few, the best works come late. (like the Apostle John at 95) Until Garth slurs his words and can’t spell, no one will find me telling Garth to slow down. I will not derail that train if it’s in the cards :).

Garth as some may not know, was a business editor of Baton Broadcasting and CTV among his twenty something books plus endless volumes on this blog:

https://en.wikipedia.org/wiki/Garth_Turner

What it might take the average lamen to do in hours, (proof read, edit, write) Garth has likely learned to do from years of experience in a third to a fifth of the time presumably, because he’s simply smart. Today, writing is far easier with voice software. References can take more time than words, even with books if the words are already in one’s head.

Most threads here, I read the meat and potatoes within 20 minutes. It’s like a large coffee house conversation of sorts. Another couple minutes here or there from me won’t hurt, especially if it offers insights not easily seen. Like earlier today and the 26th.

A few hours a year, if I put readers like Garth through that or a 2 minute annual filter for some, its no great burden. Should remind, I have a day job and a life and can go months without a word. Thus, I am not a daily contributor.

Having said all that, not that anyone needs my approval or consent, I’m fine with Garth spending less energy here and spending more time on his businesses or projects or social life or even if the comment section ends (this writer has other passions) but one must also acknowledge that this blog & Turner investments is intrinsically linked.

After all, this blog is brand name recognition for a billion dollar client base promoted by the mind of one of the most brilliant, consistent, balanced and informative writers I have ever had the privilege to read. In the narrowed context of business and finance, I have found none online who remotely compare. As a blog, still none. As a writer, Garth has the “it” factor. Couple this with a sharp business intellect and what more is there to say? Readers here are blessed.

While flirting with compliments, I feel compelled to give feedback on a couple comments yesterday labeling similar praise toward Garth as coming from brown nosing ass kissers. Would they prefer the crude, ignorant and loser criticisms toward Garth the rest of us have had to endure from this blog since 06′? Yes, 06′. (2 years missing in the archives, long story, one that should be told)

Life doesn’t have to be this hard. And I quote, “even the nose of a very modest idol … cannot remain entirely untickled by the sweet smell of incense!” – J.R.R. Tolkien

Most of the comments I found yesterday were fine but I also found comments suggesting Garth kill the comments section yesterday because they personally don’t read it themselves coming across as quite self serving. If you don’t read comments, how can you advise or criticize? Cancel culture defined, I suppose. “I don’t use so therefore cancel.”

Garth burning out on a blog, I can relate to but berating or cancelling something because one doesn’t use it themselves, not so much. Otherwise, subpar behavior, and petty back and forth, its at the dinner table, at work, at the bar, on the streets, in nature, its life. It’s not a perfect world. If it’s not our thing, it’s called a filter, just use and skip.

It’s a finite existence and so Garth, some advice which you’ve already heard or thought of but it’s a reminder of progression. Most learn every facet of managing a business until it outgrows us and we are forced to learn to become managers of managers, further exercising leadership, delegating responsibility and authority to those who are hopefully as like minded and talented as ourselves or more so if we are lucky, so says the man with the chair.

#67 under the radar on 12.29.21 at 5:30 am

30 – does the new luxury tax apply only to new vehicles. ? I bought my 2019 S63 with 2 thousand kilometres on it. (fantastic car) I usually look for a car one or two years old with next to no mileage and then trade what I have against it, which is always low mileage and pristine. Next trade will be the S63 against a used Continental or Mulsanne. Leasing is more expensive .

#68 willworkforpickles on 12.29.21 at 6:03 am

One warning …to the gullible (to a large extent- the anti comment and one time posters) (sheep) – all should be heeding, rather than blindly allowing yourselves to be misled about the future of your money… is of the end of the dollar and the abyss that awaits it.
In turn, the sacrifices you are making with your money now that will be turned to ash. Not cash.

None want to hear the real world truth of it.
Smooth talk is preferred. A feel good scenario that awaits them future tense is all that can be allowed through their front doors. For now.

They want to know their money is safe and steadily growing and will always be there for them.
And that the sacrifices they are making now will pay off future tense…little unawares it could ever possibly be all for nought.
Reality? Truth? … only what best suits them can be.
A formulated, moulded, justified reality by which it has to be just for the asking.
Like the hopes of a much better Canada and USA to come as if it will be so…and , ah well…pretty much along those lines.
High unattainable hopes. Hopes and dreams for Nation that once were , but are really nothing more than pipe dreams now.
The deluded notion many possess, that the world can function perpetually and advance in perpetual motion through means of greatly escalating personal and national debt levels as if this alternate reality were the new norm.
Fact is (a fact unacceptable to many) this alternate world new norm to sustain life and the hopes and dreams of all, is just pure insanity at its highest ever national level.
This hyper-sonic debt bomb will come to a crashing fiery end. It is to. It will.

The truth doesn’t reside in this decade of lies.
The 20’s…this roaring train-wreck of a decade.

It all is what it is.
Meanwhile, before the train jumps the tracks now two tenths of the way down the steep winding mountain slope ahead as its picking up speed… to alternate reality we go.

If any think it can be helped…you haven’t done your homework.

This message will self destruct in 5 seconds.

#69 Ok boomer on 12.29.21 at 7:08 am

Maybe if you nixed the comments here for a month or two it would stop some of the nutters that comment multiple times on every post.

Since most of these comments are unrelated nonsense I really have to wonder about their mental health.

#70 Hard facts on 12.29.21 at 8:02 am

DELETED

#71 Love_The_Cottage on 12.29.21 at 8:15 am

Pay the car loan? Pffft. Even worse idea. A depreciating hunk of metal is not an investment.
__________
Whether you borrowed money for a car or a vacation or anything else makes absolutely no difference to whether you should pay the loan off early. Depends on the interest rate and any penalties. Period.

#72 crowdedelevatorfartz on 12.29.21 at 8:19 am

@#56 The sound a toilet makes

“I sprained my finger scrolling past this useless overly long comment! Who’s going to pay for my 6 months of finger physio? Yikes!!!’

+++

Apparently you haven’t been paying attention the last two years.

Trudeau gives money for nothing.
A sprained scrolling finger should be good for at least 12 months of max CERB

#73 crowdedelevatorfartz on 12.29.21 at 8:20 am

@#69 Ok Whiner
“Since most of these comments are unrelated nonsense I really have to wonder about their mental health.”

+++
Embrace the insanity.

#74 Bruce McCormick on 12.29.21 at 8:51 am

Have long enjoyed this blog by a witty and (presumably) fast writer. To ease his unpaid burden, would agree to scrap comments and reduce frequency.

There remains a vast – also regrettably unpaid – market for reporting/analysis of symbolic non-solutions invented by our elected betters, notably on RE issues. Mr. Turner is singularly qualified to do that as the MSM has failed us all on that one, although they “write” about it every day.

#75 YVR Renter on 12.29.21 at 8:56 am

Garth you deserve more time to yourself and Dorothy. I stopped reading the comments section as it has deeply eroded in value over the last couple of years. I used to enjoy it. You can punt it, and just update us 2-3 x/week!

#76 Sue Me on 12.29.21 at 9:14 am

#67 Yes it looks like new vehicles only (incl. boats and planes). I can see this boosting the used market for sure. Good call on the S63. J.

#77 the Jaguar on 12.29.21 at 9:22 am

@#52 Diamond Dog on 12.28.21 at 9:58 pm “A Russia/Ukraine war that could potentially happen within weeks,…” ++++

That’s if you believe western media. Here’s another view (D. Orlov). This ought to really annoy the ‘anti comments’ crowd.

“The Ukraine is looking most unsavory. Ever since its independence three decades ago it has been progressively dismantled by a rapacious oligarchy, its industry sold for scrap and its infrastructure decaying to truly dangerous levels.
Its major assets are as follows:

• 15 Soviet-era nuclear reactors which are being run flat out but there are rolling blackouts anyway, and which are due to be shut down for good, with no funds available to refurbish them
• Quite a lot of good farmland but a dire shortage of paved roads, locomotives or rolling stock to bring the harvest to the docks
• An aging and destitute population that has shrunk by about a third since independence since most able-bodied people have gone to work abroad, millions of them moving to Russia.
• A gas pipeline network that is technically obsolete, being five times less energy efficient than the newest Nord Stream 2, and that is having its redundant pieces cut up and sold for scrap even as some of it is still running.

Its liabilities include a very high level of external debt that is unlikely to ever be repaid using export revenues and a large crop of neo-Nazi meatheads with blood on their hands. Russia has already got almost everything it wanted from the Ukraine, which is Crimea and the Donbass.

The only thing Russia wants from the US regarding the Ukraine is a written security guarantee that the Ukraine will never be made part of NATO, or have NATO troops or weapons systems on its soil, or be allowed to enter into any other anti-Russian alliances that may crop up should NATO dry up and blow away. Putin asked the US to sign binding legal documents that will block any further encroachment on lands that border Russian territory. This would reduce the risk of an accidental war and allow Russia to focus less military strength on its western border.

However, such security guarantees are not something that Biden can provide without suffering a massive loss of face and destroying any sense of purpose that NATO has been struggling in vain to cultivate ever since the USSR collapsed three decades ago. But sometimes just making a demand is almost as good as having it acceded to. If the US fails to help Russia meet its perfectly reasonable security requirements, then that unties Russia’s hands to do so without US help, leaving the Americans free to simply ignore the situation (something they know how to do quite well) to avoid embarrassing themselves.”

(sound of footsteps running for cover….)

#78 Dharma Bum on 12.29.21 at 10:07 am

Sorry I missed yesterday’s post.

I was seriously hungover due to excessive Scotch consumption. Well, not that excessive, but maybe just for me. I’m kind of a lightweight as far as hardcore boozers go.

Anyway, this time of year tends to bring out the reflective and pondering side of many. Perhaps the sudden downtime triggers the latent depression lurking in our otherwise massively distracted souls. It’s not uncommon.

Here’s my suggestion Garth: Why dontchya take 3 days a week off. Let Doug, Ryan, and Sinan take turns writing once a week.

I will volunteer to write twice a week. My superior insight into all things financial, political, and philosophical will help set many of the twisted and seriously misguided minds that read this blog straight.

Y’all know who y’are, caballeros!

#79 Wrk.dover on 12.29.21 at 10:43 am

I assume the non-commenters that hold strong negative opinions about the off topic comments they “never read” love CBC talk radio, all-day-long.

Hmm.

Thanks for growth in my TSFA and the forum Garth

#80 Gerry in North Toronto on 12.29.21 at 10:49 am

Sorry I missed yesterday’s blog ~ if a late response is worth anything, I love your blog; read every one [just not daily]; enjoy the irreverent humour; insights to upcoming political moves; dog pics [with captions] are great. Really appreciate the work you put in and the knowledge/wisdom you share. I think Dorothy should give you a medal.
Comments section ~ very iffy

#81 IHCTD9 on 12.29.21 at 10:49 am

#61 Ronaldo on 12.28.21 at 11:36 pm
#23 IHCTD9 on 12.28.21 at 5:45 pm
#17 cramar on 12.28.21 at 5:24 pm
Wow! Mike and family are the coveted millennial rich. A rare breed of Canadians these days. But I don’t know why they are carrying a car loan and why Garth told them it is a bad idea paying it off. What interest rate are they paying on a depreciating asset? It’s only 20 grand, but get rid of the debt. Worth it to not be concerned about the debt.
——

I think the idea is, why liquidate 20k to pay off a car worth 15k with a 4% loan when you can grow the 20K over the duration of the car loan (5-7 years) at 6-7%.
—————————————————————–
If they are going to keep the loan why not pay it off, borrow it back, invest in some equities and at least now the loan is tax deductible. Makes sense to me.
——

Lots of ways to skin a cat these days with rates so low. Us older guys grew up with paying off debt asap imprinted into our brains due to high rates. Today it’s a different story.

#82 Penny Henny on 12.29.21 at 10:55 am

Brampton Mayor, Patrick Brown, was on tv today and was happy to announce that Brampton hospitals have only two Covid patients in ICU. Of the 20 people in hospital with Covid only half (10) were there because of Covid. The other half were there for other reasons and did not know they had Covid until after they were tested.

So, why all the hysterics?

#83 Common Sense on 12.29.21 at 10:57 am

RE: #61 Ronaldo

This!

If you have the cash, pay off debt and borrow it back to invest for the tax write off. Your balance sheet is the same but you are in a tax advantaged position.

Their mortgage rate is so low there may not be a net savings – the math would need to be done on that, but converting the car loan into an investment loan should be worthwhile.

Garth does tend to give advice for the average person who would normally be uncomfortable with an investment loan, so I can see that not coming up here. His is advice for 6 million plus readers, who normally can’t sweat market volatility or losing money on investments backed by debt. Everyone says they can, until it happens.

Conclusion – pay off as much personal debt as you can that is advantageous given the different interest rates and your tax situation. Then borrow the same amount back and invest non-reg and benefit from the tax savings.

Same approach for when deciding what to pay off first if/when you have both personal and investment loans.

#84 willworkforpickles on 12.29.21 at 11:04 am

Debt is eventually going to destroy us. All the hopes and dreams of honest investors with it whether indebted themselves or not.
Its still smart to manage your money wisely in the meantime while there’s still time to do this.
The true barometer to watch and be on the lookout for is that of endless new debt being created.
As you hear the news of endless volumes of new money being printed – and you will over the next few years, about face adjustments to personal money management will be needed the further down the debt spiral we descend.
Locked and loaded immovable with a plan for your money for all time now is folly.
Believe that.

#85 willworkforpickles on 12.29.21 at 11:16 am

# 78 Dharma Bum
“I will volunteer to write twice a week. My superior insight into all things financial, political, and philosophical will help set many of the twisted and seriously misguided minds that read this blog straight.”
………………………………………………………………………………………………..

I for one nominate you to this lofty position.

You’ll need more scotch for the task. Right out of the barrel would be optimum.

#86 DON on 12.29.21 at 11:59 am

#66 Diamond Dog on 12.29.21 at 4:13 am

I agree.

Garth’s experience and wisdom will be needed in the not so distant future. The comments are Garth’s sounding board, even the bad comments (which we can do without) still serve a purpose.

That being said I think Garth could get some balance back. Less blogs, no weekends, comments on chosen blogs. In the last few months we have been in an information funk/blackout and Garth has filled the void, sharing news and shedding light on how the future may unfold.

If anything Greaterfool should transform into an old school online newspaper where journalists are bound to quality reporting. Of course with a great financial and investing section. Can even keep the Dear Garth column and a practical do it yourself section. Keep on keeping on…

Is anyone getting a sense of an impending shift?

Garth you are armed with 600+ comments…best of luck in your negotiations with Dorothy.

#87 Habitt on 12.29.21 at 12:34 pm

Some poster suggested Order of Canada for our host. Couldn’t think of anyone more deserving than Mr Turner. Thanks for including all income level folk here. The lower the income the more advice is needed.

#88 crowdedelevatorfartz on 12.29.21 at 1:12 pm

82 Penny Henny
“So, why all the hysterics?”

+++

Fear sells advertisements.

Our esteemed media have sold their souls to the almighty $$$$.

The truth takes a back seat to advertising revenue.

And they wonder why their subscribers, viewers, and listeners….are leaving them in record numbers.

#89 crowdedelevatorfartz on 12.29.21 at 1:18 pm

Have we factored in War with China in the next 2 years in our investment portfolios?

https://www.reuters.com/world/china/china-warns-drastic-measures-if-taiwan-provokes-independence-2021-12-29/

If Chinese jets endlessly buzzing Taiwan’s airspace and mock invasion drills are what China considers “peaceful reunification”….

One wonders what they will call tens of thousands dead in a war?

#90 Sail Away on 12.29.21 at 1:23 pm

#87 Habitt on 12.29.21 at 12:34 pm

Some poster suggested Order of Canada for our host. Couldn’t think of anyone more deserving than Mr Turner. Thanks for including all income level folk here. The lower the income the more advice is needed.

———-

It is easy to submit the Order of Canada nomination. Anyone can do it:

https://www.gg.ca/en/honours/canadian-honours/order-canada/nominate-someone

Maybe the many one-time commenters adamantly opposed to comments but in love with Garth’s sagacity can do something useful by releasing their pent-up words on nomination forms?

#91 vanreal on 12.29.21 at 1:29 pm

I find it hard to believe that two engineers in their early 30s pull in 420,000 per year. The highest salaries for engineers with over 10 years experience in Calgary are around 156,000 per year, not 210,000 per year as they claim. Also let’s say they do make 420,000 now. They haven’t made those salaries for the last 10 years so how do they sock away 1.2 million in assets plus 400,000 in equity on a Calgary house that has hardly risen in value in years. They would have had to bought with 300,000 down because maybe the house has gone up 100,000 but I doubt even that. As to their RRSPs, Even if they socked away 29,000 each per year in RRSPs over the last 10 years then that only comes to 580,000. they then would have had to double their money. I just don’t buy it.

#92 WTF on 12.29.21 at 1:58 pm

#52/66 Diamond encrusted fingertips?

Sucking up a lot of bandwidth to say diddly. The abundant use of “I ” speaks volumes.

Scroll Award Recipient

#93 John Charles Scaling on 12.29.21 at 2:06 pm

Dear Garth, thanks for writing your wonderful blog.
You make a lot of sense and I really appreciate your common sense writing. I REALIZE THAT writing every day or almost every day is a huge undertaking when there are many òther things in life to do. Maybe you should follow the example of John Dessauer who is older than you or I and writes a very good weekly “Hotliine”
Anyway Garth do what is best for your heath and that of Dorothy
Kind regards, Charlie

#94 ogdoad on 12.29.21 at 3:01 pm

#91 vanreal on 12.29.21 at 1:29 pm

Agreed, doesn’t smell right…something about a car loan but have a lot of unused/invested money sitting around? Engineer? Nope. Doesn’t scan.

Og

#95 mark on 12.29.21 at 3:10 pm

Well doctors are releasing data that after 6 months double vax people are basically no protection, aka about 15 percent.
Your obviously getting tired of writing it’s about the 3rd time you have queried about shutting down, or limiting comments, in past 10 years, what’s the point?

#96 IHCTD9 on 12.29.21 at 3:10 pm

#45 Cici on 12.28.21 at 9:20 pm
#9 WTF on 12.28.21 at 4:06 pm
Some help for the comments section. Time to ditch Emma Zahn and her union….clearly not up to snuff.

https://www.bing.com/videos/search?q=terry+tate&docid=607997297199634668&mid=C14EB8A6815A52

_____________________________________________

LMAO = You get the 2021 Best Comment Award for that little gem of a link!

——

Those were hilarious! Terry Tate is very Mr. T (ie A-Team Mr. T) like. I looked up the actor who played TT, Lester Speight. He’s listed at 6’-6”, 260 lbs. I’m having a hard time believing that dude is only 260.

#97 NoName on 12.29.21 at 3:23 pm

#89 crowdedelevatorfartz on 12.29.21 at 1:18 pm
Have we factored in War with China in the next 2 years in our investment portfolios?

https://www.reuters.com/world/china/china-warns-drastic-measures-if-taiwan-provokes-independence-2021-12-29/

If Chinese jets endlessly buzzing Taiwan’s airspace and mock invasion drills are what China considers “peaceful reunification”….

One wonders what they will call tens of thousands dead in a war?

Flying around taiwan is just distraction, for something else, what that else is i don’t know.

As it stands now any conflict in region regardless how quck or small will be disastrous, not just locally but world wide. Same applies to Ukraine.

Other day some airplane kabbomed some base somewhere and most feared and dreaded air defence didn’t even react. Maybe didn’t see it coming?

#98 Phylis on 12.29.21 at 3:44 pm

Garth, were you ‘texting’ at the table again?

#99 OutEast on 12.30.21 at 4:13 pm

Long-time reader and seldom commenter. I read every one of your entries although I am often a few days behind and catch up by getting a fix of 2 or 3 at a time (the reason I am only commenting on this on Dec. 30th).

I do hope you keep up the daily entries, but, of course, I understand if you have to cut back. If you do get away from the daily routine, my vote would be to cut down on the real estate talk as I think everyone understands your views on that – despite the repetitive questions you get in your “mail bag”. Put more focus on investing and macro economics (with a sprinkling of politics).

Thanks for the information (and entertainment)!