The long & short of it

Michael’s dilemma. “I am faced with a mortgage renewal in six months. Help.”

So [email protected] is offering this: five years fixed at 2.8% (although M thinks he might get a 2.6% deal). Or he can go variable at prime minus .95%. That would give him a five-year rate of 1.5% which is sexy, of course, but would change with each prime rate move.

“The discount for variable looks more substantial than I have seen it at any renewal,” he says, “so, I am actually wrestling with this decision.   I know rates are expected to go up several times in the next year or so, but that would still leave me at or below the rate of a 3 year and certainly below a fiver. What to do?”

First thing to remember is that this is free money. The inflation rate is 4.8% (in reality, much higher) and the sweet thing at the bank is offering Mike a load of cash at less than 3%. It’s an historic opportunity to build net worth, especially when so much of a low-rate mortgage payment goes to retiring principal.

So this agonizing question is really not so serious. Unless Michael bought more house that he can afford, and needs the cash flow.

Beats ne. But let’s answer the question about fixed vs VRM, given the world we are entering next Wednesday morning at 10 am Eastern time.

The latest news is not good for mortgages. This week we heard inflation continues to nudge 5%, the highest level in over twenty years. Meanwhile health officials say there are ‘glimmers of hope’ that Omigodicron is starting to crest, and will then fade. Ontario just announced Covid restrictions will be slashed in ten days.

As a result yet another bank (National) has chimed in, forecasting a rate hike next week while markets are giving 80% odds it will happen and more economists embracing the notion of six jumps by Christmas. Scotiabank predicts our CB is about to become aggressive with this agenda: a quarter-point increase next week, another in March, a half-point jump in April then three more quarter-point moves by year’s end. That’s the equivalent of seven normal hikes, and would jump the benchmark rate to 2%.

The chartered bank prime would, in this case, travel to 4.2%, and Michael’s VRM (if his bank sticks with the discount) would be 3.25% by the end of the year. More to come after that, economists say – at least another fifty basis points in 2023, following a series of hikes by the US Fed.

In short, a VRM choice would end up costing Michael bigly. From 1.5% to 3.75% or thereabouts within 24 months. Ouch. Suddenly that fixed-rate of 2.6% for five years looks a whole lot better.

Meanwhile, what will a mortgage rate eruption do to the real estate market?

Well, first remember there’s an inverse relationship between rates and prices. One up, the other down. There’s also a distinct impact on sales. A new study by the BC Real Estate Association’s chief economist (Brendan Ogmundson) quantifies the likely result. “In the past, Bank of Canada tightening has usually led to falling home sales and flattening home prices, so it wouldn’t be a surprise to see the same happening in the upcoming round of tightening,” he says.

In fact if the B0C raises its rate just five times (not the seven many others now believe) the BCREA sees sales tumbling by 25% at the end of two years. And: “If the Bank does raise its policy rate more aggressively in response to an overheating economy, then our models show that home sales would decline more significantly.”

Falling sales usually mean wilting prices. Humans being the odd animals that they are, FOMO drops like a stone when sales/prices go limp. Rather than rushing in to snap up relative housing bargains, people retreat to the sidelines and moan about it being a bad time to buy. It last happened in April of 2020, when prices took a tumble, then again in November when condo prices dropped 20% and sales evaporated.

Well, back to Mikey.

Variable-rate mortgages look cheap and history tells us that about three-quarters of the time they save borrowers money. But these days nothing’s normal. A pandemic is ending. CBs panicked, crashed rates and are now behind the curve. Inflation threatens to become structural. Debt has exploded. House prices are insane. We’re on the cusp of a tightening cycle that will last a couple of years, be intense, and yet merely take rates back to historic norms. In other words, this is not a one-and-done thing. More like ten-and-done. You may never again in your lifetime see home loans handed out like candy (or cannabis edibles) at half the rate of inflation.

Regarding VRMs, by the way, also factor in mortgage-break penalties. With a variable loan it generally costs three months’ interest to get out, while a fixed-rate loan can set you back much more since an IRD (interest rate differential) levy may be involved. So if Mike is planning on selling and moving in the next year, staying variable is a viable option. If he’s there for five years, it’s a poor one.

Six more sleeps. We’ll see.

About the picture: “Longtime reader first time caller, my wife is increasingly tired of hearing “But Garth says…” as my rebuttal to buying a home. I truly appreciate the education you provide through your blog and the work you have done in service to our country. My wife has finally worn me down and we are looking at putting an offer on a home. We are following the Garth Turner rule of 90 and buying a home we can afford both now and in 5 years. I am a very burnt out ER doc trying to find a balance between supporting my family and regaining my happiness in life. Here is our pandemic rescue, Frankie, when we got her from the humane society last spring. While she has quintupled in since she remains just as cute.”

152 comments ↓

#1 Repurchase Disagreement on 01.20.22 at 2:37 pm

Garth, Rex is right

https://nationalpost.com/opinion/rex-murphy-why-is-it-canadas-duty-to-destroy-its-economy-and-confederation-in-the-pursuit-of-net-zero

And yes Faron, I actually do have a degree in Atmospheric Science.

#2 Dave on 01.20.22 at 2:40 pm

Will the BOC be even more aggressive with interest rates if oil goes over $100? Is it quiet possible if there is a war in Ukraine?

#3 Repurchase Disagreement on 01.20.22 at 2:42 pm

Dr. Koonan explains the reality of the science well:

https://video.foxbusiness.com/v/6242107592001#sp=show-clips

#4 gravycanuck on 01.20.22 at 2:52 pm

Can you help me understand his logic in the article?

“The increased flow of newcomers and their suitability for the needs of the job market “will work to provide the Bank of Canada with some flexibility in the pace of monetary tightening due to the taming impact of new immigrants on wage inflation,” Benjamin Tal

but for housing….
“Tal also said household formation and the subsequent impact on housing demand could be understated due to the government’s increasing use of permanent residents as a source of immigration.”

immigration will help with wage inflation as there will be more workers, but for housing it won’t be as bad as they are already here as permanent residents? Wouldn’t they be working here already?

#5 ElGatoNerodeYVR on 01.20.22 at 2:53 pm

My personal take is that the forecasted market correction will happen more outside of the core Metropolitan areas. I am looking at listing under 1.6 mil in Surrey,Langley, Abbotsford and there are very few decent listings , and whatever pops up sells like pretty much same day.
If south of Fraser there are almost no SFH under 8 years for less then 2 mil I am doubtful that higher rates will crash prices. Maybe some will panic but I think most will stay put same as now.
Until higher supply of SFH priced around the 1 mil hits the market doubt much will happen .
If one pulls the property assessments, one sees that land is twice as much as buildings ,so if the City of Surrey or the Langleys( township and city)think a standard lot is 1- 1.4 mil, how will the prices come down significantly under assessment?
Not saying it can’t theoretically happen ,just my experience in 3 different countries has been that housing always follows REAL inflation, not the made up number by governments.
Do your own math on that.

#6 Network Admin on 01.20.22 at 2:57 pm

We also recently renewed mortgage, decided to go with variable because it is likely we will need to move within 5 years, and in general the penalty is just 3 months interest, which is easy to calculate. By the way Prime – 0.95 is a little high, we got Prime – 1.3%.

#7 Arcticfox on 01.20.22 at 3:00 pm

Variable has done well for almost 40 years due to rising bonds/declining yields. I think that’s going to change or is changing right now in a secular manner. Sticking my neck out..risk on is about to explode to the tune of 35/40% catapult in equities shortly. After that, will be very interesting(think Japan except they had prolific domestic savings to gobble up local dept issuance). I fear the headline Western indicy numbers may not be revisited in our lifetimes. Emerging will be the local to allocate capital ..

#8 Dogman01 on 01.20.22 at 3:02 pm

Great Themes in the Comments! – Our Ruling Class

#43 SunShowers on 01.19.22 at 5:11 pm
“all modern employment really is. A capitalist exercising feudal control over their personal fiefdom, relying on the disgusting imbalance of bargaining power between themselves and the serfs, who must either submit to the capitalist’s will in order to survive, or engage in that same identical relationship with a different capitalist, hoping it will be somehow better.”

———————————–

Advice for the wage earners, just doff the cap, be subservient, please your feudal lords; always remember:

“Behavior is paramount; it’s 100 times more important than getting things done efficiently and productively. Ingenuity takes a huge back seat when compared to decorum and appropriate behavior” – Smoking Man

The Post WWII Social Contract; work hard, support the system, achieve middle class, win-win ; was betrayed by our Ruling Class with “Global Free Trade” between unlike economies.

That initiative, shattered the social contact, and they knew it: https://www.youtube.com/watch?v=4PQrz8F0dBI

Our Ruling Class constructively and deliberately threw their own populations under the economic Bus. They have become immensely Wealthy at the expense of their society…they created parasite capitalism. A Global elite, with no loyalty to the societies that enabled and sustain their immense wealth.

“So, let’s remember. There are those among us who, in serving themselves, serve no one”. – Garth Turner

#9 Roial1 on 01.20.22 at 3:03 pm

Pup looks like ours coming up to 2yrs 5 June.
Now over 90lb and still room to grow.
Enjoy yours as are we.

#10 Dave Ahem on 01.20.22 at 3:08 pm

Going five year fixed has been the correct decision once in the past 50 years. I believe it was 1988?

I was variable 4 years ago when rates were poised to rise. We locked in for a 4 year fixed and then things stopped dead in their tracks and reversed. It was a mistake that cost us probably 30K in interest. I am variable now and will never go back to fixed.

You can base your decision on what you know or what you fear. Every time we think rates will finally return to “normal”, another calamity befalls humanity (tech bubble, Russian ruble collapse, sub-prime mortgage crisis, COVID, etc…) we put rates back in the toilet.

#11 Yukon Elvis on 01.20.22 at 3:13 pm

Bought a potato this morning. One potato. Cost me $3.26. For one potato. Not a sack of potatos. One potato. Sure,ok, it is a nice potato. Good lookin’ potato. Big potato. People will look at that potato and say wow dude that is one good lookin’ potato, you should frame it. Maybe I will. But $3.26 fer one potato? WTF is goin’ on here ?

#12 Jason on 01.20.22 at 3:20 pm

Garth with all due respect, if there’s going to be a price drop (in GTA at least), it’s going to be minimal.
The RE prices in Canada go up very fast and go down very very very slow.
I agree with them flattening for a short while, but after waiting 9 years to buy (I know, right?) I don’t believe we will see prices going to what they were even 1 year ago.

#13 Linda on 01.20.22 at 3:24 pm

‘Frankie’ is indeed a cutie!

So, inflation. I’m still very much of the opinion our government is underestimating the actual inflation rate. If the USA, with 9 times Canada’s population, robust employment etc. is posting inflation at 7%, how can Canada with its much higher cost of living, smaller population & which imports a lot of its goods from the USA claim inflation here is still under 5%?

I’d say ‘Mikey’ would be wise to go with a fixed rate. IF he & his squeeze intend to stick around in their current locale maybe even look over the 10 year fixed rates. Call me cynical, but if the bank is pushing variable in advance of the expected CB increase I’d say that makes it a slam dunk to go fixed. Banks are in the business to make $, so makes sense that they’d flog the product they most expect to provide the best ROI.

#14 Love_The_Cottage on 01.20.22 at 3:30 pm

Variable-rate mortgages look cheap and history tells us that about three-quarters of the time they save borrowers money.
____
I couldn’t find the study but I thought the number was over 85% of the time the variable rate ends up being cheaper.

#15 ogdoad on 01.20.22 at 3:32 pm

So, how far in advance of renewal should you be shopping for a mortgage – 6 months? Google it you say? Too lazy say I.

10 days, eh? that means gyms will be opening. Can’t wait to see all the hotties again. Reason for living – doing things that I like.

Sorry, basement dwellers. You need to be double vaxxed for entry. Window shop if ya want but it’ll just make you angrier. The shows inside.

Og

#16 Elon Fanboy on 01.20.22 at 3:45 pm

Holy cow. So yesterday Biden said Russia could take a little bit of Ukraine, but not too much! Of course the Ukrainian government went ballistic.

VP Harris was sent out to do damage control and basically said listen to her, not her boss.

What the…..I can only imagine the reaction if Trump had said that. The Dems would have been lining up around the block to impeach him again.

Getting the nasty feeling we’re leaving a pandemic behind and heading straight into a war.

#17 Chameleon on 01.20.22 at 3:46 pm

Time for a non-dog picture please.

Asked a dog owner to leash his dog recently is an area where it is clearly posted dog should be leashes and he threw a bunch of swear names at me like I’m the one being inconsiderate to others.

Fascinating creatures these dog owners. Amazing how these innocent dog creatures bring out the best in these animal loving humans.

#18 James on 01.20.22 at 3:50 pm

Lock it in at 2.6% fixed and tough it up. Anyone going VRM is gambling hard. My father and I were discussing his mortgage back in the 1980’s when they were fixed at 9% to 11% and zoomed to over 18%. He said there was pandemonium in the streets. I would have shit myself at just the thought of 9%. Could you imagine what a predicament the millennials are now in?

#19 Ronaldo on 01.20.22 at 3:52 pm

Variables have been the way to go for the past 20 years imo given that back before the GFC of 2008 banks were offering prime minus mortgages of up to prime minus 2%.
If he can get a fiver for 2.6% I would not think about it too much. I would jump at it. 5 years is a long time.

#20 James on 01.20.22 at 3:54 pm

#1 Repurchase Disagreement on 01.20.22 at 2:37 pm

Garth, Rex is right

https://nationalpost.com/opinion/rex-murphy-why-is-it-canadas-duty-to-destroy-its-economy-and-confederation-in-the-pursuit-of-net-zero

And yes Faron, I actually do have a degree in Atmospheric Science.
___________________________________________
This is due to selfie boy and his larger than his manhood ego.

#21 zxcvbnm on 01.20.22 at 3:56 pm

@#10
I spent almost $8 on six tomatos. A dollar a tomato would be a discount. And they weren’t even special or big tomatoes. Simple Romas. It’s effed up.

#22 ogdoad on 01.20.22 at 4:01 pm

#17 Chameleon on 01.20.22 at 3:46 pm

Maybe you could get one, bypass the ‘owner’, and just speak directly to the dog?

https://www.nomorewoof.com/

Og

#23 the Jaguar on 01.20.22 at 4:04 pm

To the ER Doc. Thank you for your service to our country and community. +++

RE : Michael’s dilemma. “I am faced with a mortgage renewal in six months. Help.”++++

Well Mikey. Here’s my two cents:
You’ll never borrow money again this cheaply, so don’t just look at a five year term, see if they have a ten year. Go with a major Bank, not the ‘also ran’ players. Ask about ‘portability’. You don’t always have to pay a penalty when you can ‘port’ your mortgage to a new property or offer that to somebody who wants to buy your house. Confirm it’s Canada-wide.

Remember also that variable rates are monthly versus semi-annual compounding so the effective rate is a smidge higher, and if you go variable keep an eye on rate increases so you don’t ‘grow’ your amortization.

Finally, rush out and buy this book which will scare the pants off of you. Say hello to a new ” Mr.” on this blog. He’ll become more familiar to you. His name is ‘MR. INFLATION’.
‘The Lords of Easy Money: How the Federal Reserve Broke the American Economy’ – author -Christopher Leonard
“A small excerpt provided below ( edited a bit by me). “:::

“Easy money” policies, meaning that the Fed keeping interest rates so low that borrowing was cheap and easy.
Economists call this phenomenon “too many dollars chasing too few goods,” meaning that everybody is spending the easy money, which drives up the prices of the things they are buying because demand is high.

Easy money policies don’t just drive up the price of consumer goods, like bread and cars. The money also drives up price of assets like stocks, bonds and real estate.

It all came to an end in 1979, (he period that has come to be known as the Great Inflation, a period in the 1970s characterized by long lines at gas stations and price hikes at grocery stores that came so fast price tags were replaced midday..), with a severity that has never been repeated. Paul Volcker became chair of the Federal Reserve and he was intent on beating inflation by hiking interest rates. Under Volcker, the Fed raised short-term interest rates from 10 percent in 1979 to 20 percent in 1981, the highest they have ever been.

In a 2004 report, the Fed economist Edward Nelson wrote that the most likely cause of inflation during the ’70s was something he called “monetary policy neglect.” Basically, the Fed kept its foot on the money pedal through most of the decade because it didn’t understand that more money was creating more inflation.”

“The real danger comes from [the Fed] encouraging or inadvertently tolerating rising inflation and its close cousin of extreme speculation and risk taking, in effect standing by while bubbles and excesses threaten financial markets,” Volcker later wrote in his memoir.

#24 TurnerNation on 01.20.22 at 4:04 pm

Congrats, we are China now. Yes, that model brutal regime so loved by our Globalist Rulers, is here.

– Tyrannical government. Check

– Secret Detention Sites. Check. Our have the cutesy name “Isolation Sites” Voluntary, wink wink.
No expenses spared building these (but the hospital capacity guys?)

– Ruled by global Big Tech companies. Check. Microsoft, Cisco are big suppliers to the Great FireWall of China.
Today we get the QR code.

– DE-humanization. Check. In Kanada you are masked, smile-less bodies known only by you QR code.
Line up 6-6-6 feet apart comrades. Prison camp style. If you comply you will be allowed entry to buy your daily rations. Do not linger, do not sing or hum. Do not stand out. Compliance is required.

– 24/7 Surveillence. It’s common knowledge that your “Smart” devices are always on, the algos recording everything. Then you bring the Microphones, err I mean Speakers into your home: Siri, Alexa, Echo.

– Human Rights suspended. The Charter was trashed that cold week, March 2020 when the world fell.
BC just explicitly stated that “organized gatherings are banned”. Travel, association, strictly controlled via State edict and QR code (if you submit). Third year running.

– All old Culture is cancelled. Sports, social gatherings, family events . We have 24/7 Corona news. There is nothing else left.

– Control over breeding? Check. China one-child policy. We have…inflation and job insecurity. Who can afford 3-4 children anyway? Stick to a single child Comrade. In Kanadian schools children are kept in a mask, down only to eat lunch – where talking is forbidden. I’m not joking this has been reported from many parents.

#25 Faron on 01.20.22 at 4:10 pm

#1 Repurchase Disagreement on 01.20.22 at 2:37 pm

And yes Faron, I actually do have a degree in Atmospheric Science.

Sure bud. Even less excusable then and makes me more embarrassed for you. Koonin either lies or is uninformed. His facts are mostly dead wrong or, at best, were lost in the 1950s.

BTW, y’all like to haul Koonin out as an Obama admin guy who supports your views. To be clear, he was undersecretary of science in the DoE which has a massive and vested interest in climate change denialism. Prior to that he worked for BP!

#26 Faron on 01.20.22 at 4:13 pm

#3 Repurchase Disagreement on 01.20.22 at 2:42 pm

Dr. Koonan explains the reality of the science well:

Frankly, this should be deleted in the same way as anti-vax garbage is. It’s loaded with lies and misinformation that, ultimately, will be incredibly destructive. Blows my mind that a certain segment of people is still at this level with this issue.

#27 wallflower on 01.20.22 at 4:18 pm

Pls send Garth photo pic of your potato.
Need to see…

#11 Yukon Elvis on 01.20.22 at 3:13 pm

#28 Ustabe on 01.20.22 at 4:21 pm

#6 Network Admin on 01.20.22 at 2:57 pm

We also recently renewed mortgage, decided to go with variable because it is likely we will need to move within 5 years, and in general the penalty is just 3 months interest, which is easy to calculate. By the way Prime – 0.95 is a little high, we got Prime – 1.3%.

Actual Prime or Bank Prime?

Back in the day, late 70’s or early 80’s when mortgage rates were in the high teens, touching on low twenties if you were unlucky, we sold a house that held a transferable “loan on real property” from a CU on it.

At the time Credit Unions weren’t allowed to place mortgages so this loan on real property was a work around.

The fact that the 7 or 8% transferable loan was available entered into the sale very strongly. We had multiple offers in a day and age when it was hard to sell a house, interest rates were through the roof and things looked pretty dismal.

And here we are.

Harken back to previous days’ posts: If you depend on a paycheque signed by someone else for your income you need to listen to Garth….not 100% but listen, cherry pick, plan.

Me? I worked for the same guy for 50 years probably. Hard to think about the last time I took a paycheque from another. My llc, however, took lots of cheques.

Think our host takes a paycheque from another entity? Or even has done so in decades?

Trading your hours for their money is so last century.

#29 Brian on 01.20.22 at 4:22 pm

Ukraine’s President Admits ‘Russian Invasion’ Fears Driven By “Big Hype”, Blames Media

https://www.zerohedge.com/geopolitical/ukraines-president-admits-russian-invasion-fears-driven-big-hype-blames-media

#30 cuke and tomato picker on 01.20.22 at 4:22 pm

A potato for $3.26 what my mother would say if someone
complained about the price of something at our fruit stand in Osoyoos B.C. “YOU CAN ALWAYS GROW YOUR
OWN”

#31 Billy Buoy on 01.20.22 at 4:24 pm

Forget interest rates, housing values, your employment ot retirement funds….

How are you going to fund your fuel use going forward?

THAT my friends IS the Elephant in the room that NO ONE in office has the cajones to inform the public about.

https://ourfiniteworld.com/2022/01/18/2022-energy-limits-are-likely-to-push-the-world-economy-into-recession/

#32 Balmuto on 01.20.22 at 4:24 pm

I say if you’re comfortable with the fixed rate payments, lock in.

Buy insurance when you can, not when you need to.

#33 crowdedelevatorfartz on 01.20.22 at 4:30 pm

@#191 Ponzies Platonic Partnership

“CEF reminds me of my x-wife.”
+++

Nah, I’m prettier.

#34 RockiesDoug on 01.20.22 at 4:31 pm

Not much chance of him ever having to pay an IRD if he’s renewing at 2.6% or 2.8%. He’ll pay 3 months interest, same as with the variable. That said, if rates do go up substantially as I believe they will -and should, to help quell inflation- then folks signing up for and renewing mortgages need to consider IRD if there’s any chance of them breaking their contract.

#35 Squire on 01.20.22 at 4:32 pm

Go variable at your own risk.
Next up, climate change lockdowns. But first, a bit of freedom from covid and then more restrictions for the sake of mother earth. Enjoy your summer folks.

#36 Stone on 01.20.22 at 4:33 pm

Michael’s dilemma. “I am faced with a mortgage renewal in six months. Help.”

So [email protected] is offering this: five years fixed at 2.8% (although M thinks he might get a 2.6% deal). Or he can go variable at prime minus .95%. That would give him a five-year rate of 1.5% which is sexy, of course, but would change with each prime rate move.

“The discount for variable looks more substantial than I have seen it at any renewal,” he says, “so, I am actually wrestling with this decision. I know rates are expected to go up several times in the next year or so, but that would still leave me at or below the rate of a 3 year and certainly below a fiver. What to do?”

———

I always wonder what goes on in the minds of the lemmings that make up the majority of the population. Apparently, not much. Seems like their heads are full of vacuous space.

Seriously, Michael, can you do math? You already know rates are going up. Bigly. Where’s the dilemma?

Garth, I have serious doubts this Michael dude is for real. Who are these people who email you? Don’t they read your blog? Lord thunderin jesus, it’s even all over BNN, your most beloved business news broadcaster. When even Jon Erlichman is hitting the panic button on central bank rates and their impact on mortgage rates, you know the interest rate shit is going to hit the fan. That’s all they’re asking their guests.

If the majority of the population thinks like this and is frozen in indecision, I can’t wait to see what happens in the next few years as people renew their mortgages.

#37 RG on 01.20.22 at 4:36 pm

Here’s my two cents on IT & WFH. I am a web developer and in the last 22 years in the business I have been WFH for 75% of the time. Having worked for only 4 employers over that span, I am what Garth might consider ‘loyal’ and agree with him about the pros of being so–if the employer reciprocates.

Additionally, I have been heavily involved with hiring at my last two companies.

It is rare, when vetting resumes of anyone under the age of forty, to see job tenures of two or more years. Six months to one year is the norm. This may be due to ‘selfishness’ but the unwillingness of corporations to take on full time employees is a significant factor.

WHF, which pre-pandemic was mostly the privilege of IT professionals due to the nature of our work (opaque and non-human interaction focussed), has now spread to every white collar profession. Our company, and I am sure most, will go with a hybrid model for office attendance, but that may involve as little as two to three days a month.

Another reason WFH is sticky: on my Zoom meetings there will be attendees from Warsaw to Vancouver to Sao Paolo and all points in between, on both client and vendor sides. All white collar work is remote now and will remain so, so the office in that context is irrelevant.

Regarding WFH as a stepping stone to outsourcing, this has been threatened for over two decades and has never happened in any meaningful way. Companies learn again and again that you get what you pay for, especially in positions where the challenges are greater. And nations like India have their own domestic tech industries anyway which suck up the better talent. In the meantime IT and related salaries rise and rise with no end in sight, because demand is outstripping supply and companies are desperate to retain competent workers. Last year I got a $25k raise for this reason.

Finally, for the top tier of talent, WFH has become WFA, work from anywhere. My company recently instituted a policy allowing this, since it was happening anyway. I spent a week last November doing it on the Mayan Riviera, where a colleague had been a digital nomad for most of the year.

I recognise the privileged position I and my colleagues are in. It is hard for me to see how any of this can be substantially unwound–a global recession perhaps, but the pandemic recession was, as we all know, a boon to IT.

#38 Billy buoy on 01.20.22 at 4:40 pm

#1 Repurchase agreement

Thank you for sharing Rex’s article.

I’ve never ever been one for conspiracy theories but the ACTIONS of JT just have to be considered so extreme that they must be a part of something so large that we can’t get our heads around the problem.

Yes we want to save the planet but shooting Canada in the foot will do NOTHING to decrease birth rates and growth world wide..NOTHING.

Creating money and debt at JT’s pace does NOTHING to help the country in the long term. NOTHING.

The ONLY thing JT can do is WAKE UP, allow Canadian oil to flow as long as it can, protect our natural resources like fresh water and minerals.

BUT WHY ISN’T HE? WHY? WHY?

There has to be something far larger and sinister behind his actions. I cannot believe he is consciously that dense and naive to think what he is doing is in the best interests of the country and the long term world overall.

Please anyone, feel free to logically explain his actions….Anyone?

#39 RichardTO on 01.20.22 at 4:43 pm

Garth, inflation is between 20-30%, as I’ve discussed in the past.

I don’t know why you continue to play along with the 5% charade peddled by the current regime…

Read my words. And, no, it is not 20%. – Garth

#40 crowdedelevatorfartz on 01.20.22 at 4:44 pm

@#11 Yukon Elvis
“Sure,ok, it is a nice potato. Good lookin’ potato. Big potato. People will look at that potato and say wow dude that is one good lookin’ potato,”

+++

I love a person that appreciates a good looking potato.

Obviously no warts.

https://www.saltwire.com/atlantic-canada/news/potato-wart-found-in-pei-for-second-year-in-a-row-100659641/

#41 Repurchase Disagreement on 01.20.22 at 4:46 pm

Faron, you sound a little threatened by facts and push back against your Orthodoxy. Ergo, the vitriol you spew.

Blog Dogs, you would be shocked how many honest degreed Atmospheric Scientists are on the same page as Koonan (and i). But the Orthodoxy forces shut mouths. You know you won’t progress in your career at EC/get funding if you speak up.

The “consensus” is the biggest lie of them all.

#42 Faron on 01.20.22 at 4:52 pm

Wild day befitting monthly options expiration.

On the 4th I called for a correction before end of Jan. NASDAQ is there. Russel 2000. ARKK (LOL). SPX, XEQT, DOW not there. TSX has held up well. Lots of cash cows in that index.

Sources suggest that the bulk of the selling is behind, but reckon ARKK and ilk will continue to wither perhaps after a big bounce to rope in new buyers. A whale came in yesterday and Tuesday buying Feb expiring call spreads on ES totalling 40,000 contracts (notional $18.4 Billion). The DIX indicator has been strong past two days. Not out for today yet.

Others argue that SPX is destined to land back at Jan, 2020 levels which would be a true bear market.

In a higher rate environment you need to own companies that bleed cash. Long credit ain’t gonna cut it when the fed starts raising.

#26 Faron on 01.04.22 at 4:52 pm

Different year for markets. Not down, per se, but confronting the inflation and high rate realities in a reducing QE regime. Anyone want to wager that we see an equity correction before January is out? Sometime Jan 20th or later?

#43 BC Renovator on 01.20.22 at 5:01 pm

@Garth

I’ll be impressed if your prediction on rate increases plays out. Every other Economist or Investor I follow says we won’t get past 3 or 4.

“if we get 5 rate hikes the Debt Bomb will Detonate. Then its back to Zero”

Gonna be an interesting 24 months

Not my prediction, as clearly stated. Go argue with all major Canadian bank economists. – Garth

#44 fishman on 01.20.22 at 5:03 pm

I was a player in the late 70’s Van west side R/E goldrush. Some significant % of the R/E appreciation was Hong Kong & Taiwan money. Yankee dollars looking for a home. Compliments of Johnson/Nixon keeping the Vietnam pump primed. Do we see a pattern here?

#45 Sam on 01.20.22 at 5:07 pm

No gonna happen. Prices will higher next year this time.

#46 Ponzius Pilatus on 01.20.22 at 5:07 pm

#11 Yukon Elvis on 01.20.22 at 3:13 pm
Bought a potato this morning. One potato. Cost me $3.26. For one potato. Not a sack of potatos. One potato. Sure,ok, it is a nice potato. Good lookin’ potato. Big potato. People will look at that potato and say wow dude that is one good lookin’ potato, you should frame it. Maybe I will. But $3.26 fer one potato? WTF is goin’ on here ?
———————
You sure it is not Karl Malden’s nose?
Put it on the Internet.
There ‘s a big market for famous Potato noses.

#47 Sail Away on 01.20.22 at 5:09 pm

#26 Faron on 01.20.22 at 4:13 pm
#3 Repurchase Disagreement on 01.20.22 at 2:42 pm

Dr. Koonan explains the reality of the science well:

———

Frankly, this should be deleted in the same way as anti-vax garbage is. It’s loaded with lies and misinformation that, ultimately, will be incredibly destructive. Blows my mind that a certain segment of people is still at this level with this issue.

———

Wow, apparently you’re way smarter than yet another person far more prominent than yourself, Faron.

Shocking. This barely ever happens all the time.

Oh, miners +10% since August, handily outperforming the SPY (+1.65% with div) you were trumpeting as a better choice the other day. Or is that wrong too?

#48 DON on 01.20.22 at 5:11 pm

#23 the Jaguar on 01.20.22 at 4:04 pm
To the ER Doc. Thank you for your service to our country and community. +++

RE : Michael’s dilemma. “I am faced with a mortgage renewal in six months. Help.”++++

Well Mikey. Here’s my two cents:
You’ll never borrow money again this cheaply, so don’t just look at a five year term, see if they have a ten year. Go with a major Bank, not the ‘also ran’ players. Ask about ‘portability’. You don’t always have to pay a penalty when you can ‘port’ your mortgage to a new property or offer that to somebody who wants to buy your house. Confirm it’s Canada-wide.

Remember also that variable rates are monthly versus semi-annual compounding so the effective rate is a smidge higher, and if you go variable keep an eye on rate increases so you don’t ‘grow’ your amortization.

Finally, rush out and buy this book which will scare the pants off of you. Say hello to a new ” Mr.” on this blog. He’ll become more familiar to you. His name is ‘MR. INFLATION’.
‘The Lords of Easy Money: How the Federal Reserve Broke the American Economy’ – author -Christopher Leonard
“A small excerpt provided below ( edited a bit by me). “…..

**********

Here you go ER Doc a summary article from Leonard. Very meaty informative perspective from an ex fed official.

https://www.politico.com/news/magazine/2021/12/28/inflation-interest-rates-thomas-hoenig-federal-reserve-526177

This is worth a read as it discusses inflation today and in the 1970’s from an ex Fed official (lone wolf) with experience who can see patterns. Looks like he was right when he voted against easy money a decade ago.

#49 Quintilian on 01.20.22 at 5:11 pm

“You may never again in your lifetime see home loans handed out like candy (or cannabis edibles) at half the rate of inflation.”

Mortgage loans have been handed out at less than half rate of inflation for a long time, resulting in a housing bubble.

That is unlikely to change in a significant way. Predictions of 5 and 7 rate hikes is no more science than horoscopes.

I would go for the variable, until the curve flattens at which time, you will be able to get a fixed term for less than the variable.
Of course your house will be worth a lot less by then.

tick tock, tick tock

#50 Ponzius Pilatus on 01.20.22 at 5:14 pm

See, Faron.
The minute you get distracted by Putin, the Anti Climateers are sneaking back in again.
That’s their plan.
The ole Divide and Conquer.
Stay with the program.

#51 Faron on 01.20.22 at 5:16 pm

#41 Repurchase Disagreement on 01.20.22 at 4:46 pm

Faron, you sound a little threatened by facts and push back against your Orthodoxy. Ergo, the vitriol you spew.

There were few to no facts in Koonin’s Fox Business shill. Get it? Pretty hard to be threatened by something that was non-existent.

When my house is on fire, I feel threatened that I might burn alive. When someone comes and tells me lies about my burning house, “hey, that’s just burning toast… Hey, fire isn’t thaaaat hot. Hey, did you know that there were house fires 100k years ago?” I get angry. Get it?

Because you are raising the issue, the burden of proof is on you to show me who all of these “atmospheric scientists” are and how you have gleaned a notion that there is “no consensus”? Then I would appreciate you running me through the equations of radiative transfer in the atmosphere and show me where increased CO2 absorption of IR isn’t an issue.

If you do that, then we’ll talk. I am 100% confident that you can’t. If this was an investment play, I would take 20x leverage and stake my entire retirement account and retire tomorrow to a small surf town on the Oregon coast.

#52 RichardTO on 01.20.22 at 5:28 pm

@Garth
>Read my words. And, no, it is not 20%. – Garth

If a company issues an extra 20% of the entire float, what happens to the value of the existing shares? Why am I to believe that it’s magically different with money supply?

#53 Søren Angst on 01.20.22 at 5:30 pm

7-day rolling average new cases UK and Italia:

https://i.imgur.com/Yu5Yc05.png

You look at that and think UK going down, down and Italy has peaked about 2 weeks behind the UK. Nice.

The reality of the so-called “7-day average peak” is this (yo-yo):

https://i.imgur.com/pI17Hw8.png

Above to Jan 19.

Todays Jan 20 numbers:

Italia dropped a bit to 188.8K and
the UK went sideways at 107.4K.

Garth, it will be DEATH BY A THOUSAND CUTS to beat down Omicron even on the downslope of the “peak”.

UK now with no restrictions…that will NOT END well. Hope it does end well for them.

But from what I’ve seen so far, it probably won’t. UK kids just went back to school yesterday…

https://twitter.com/DrEricDing/status/1484216418740621313

[Canada has approved a vaccine for that age cohort]

——————-

Hell, even Canadian Deer are getting Covid-19…

https://www.youtube.com/watch?v=fVPZTVfZ7Wk

I wonder if the Deer got their test results back fast? Will we soon see Canadian Deer case counts on Our World in Data? Will they vax the deer? Mask them?

#54 Omicron Kenobi on 01.20.22 at 5:39 pm

“Omigodicron”

I like that. It sounds respectful of your new master.

Obey me at all times.

#55 Wrk.dover on 01.20.22 at 5:40 pm

#38 Billy buoy on 01.20.22 at 4:40 pm
ACTIONS of JT just have to be considered so extreme that they must be a part of something so large that we can’t get our heads around the problem.
Please anyone, feel free to logically explain his actions….Anyone?
___________________________________

Always glad to help a friend.

The elimination of 1st World living standards will go a long way to reducing consumption.

Stage two will be elimination of 2nd world living standards, thus the pesky financial system goes out with them.

Then universal equality/lowest common denominator.

#56 Popeye The Sailor Man on 01.20.22 at 5:43 pm

Scotia Bank over the phone renewal 6 months early took only 15 min from home last night. Rate 2.72% lower than I had likely a tad more if I shopped around.

But then I would have to arrange a new secure LOC ect. With about 10% loan to Value it was not worth my time.

Bumped the payments by 8% at the same time too a round number just because, not looking to drill it down when I would rather spend or invest any substantial extra payments.

#57 willworkforpickles on 01.20.22 at 5:50 pm

You really can’t take into consideration much of anything historical, historically speaking when comparing the former to today’s condition. Except for…read on…
These are unprecedented times with unprecedented debt built up and building.
The all’s well or soon will be crowd ignore this.

We haven’t seen anything yet as far as inflation goes, or the end of rampant government spending no matter what comes out with a leaning to the contrary.

I am amazed that Garth used the H word today that so many around here utterly dread.
I have said many times over the past 18 months that out of control Government spending and unyielding Fed policy will have a high inflationary fallout down the road… we are now coming to.
I have used the term historically normalizing interest rates often in the last 18 months while projecting outcomes in the unprecedented times ahead.
I could see that rates had to begin an upward trajectory as far back as mid 2020 (and said so many times)… that they’d be starting about now moving on through 2023 with rates to gravitate toward historic norms.
No one else ever breathed a word of historic rate norms here before today. I knew someone would eventually.

The usual responses to historic rate norms when i went over them months ago were…impossible…are you insane…can’t happen…not in a million years, some even had near nervous breakdowns at the mere mention of the dreaded H word.
Then there was Garth today with (and i quote) “We’re on the cusp of a tightening cycle that will last a couple of years, be intense, and yet merely take rates back to historic norms.” (unquote).

Talk on the board the last few days that you can’t know what’s coming because nobody does is simply moot.
Understandable i guess from the talk of those who’ve never done a lick of research of their own from the all’s well or soon will be crowd.

#58 Yukon Elvis on 01.20.22 at 5:56 pm

#38 Billy buoy on 01.20.22 at 4:40 pm
#1 Repurchase agreement

Thank you for sharing Rex’s article.

I’ve never ever been one for conspiracy theories but the ACTIONS of JT just have to be considered so extreme that they must be a part of something so large that we can’t get our heads around the problem.

Yes we want to save the planet but shooting Canada in the foot will do NOTHING to decrease birth rates and growth world wide..NOTHING.

Creating money and debt at JT’s pace does NOTHING to help the country in the long term. NOTHING.

The ONLY thing JT can do is WAKE UP, allow Canadian oil to flow as long as it can, protect our natural resources like fresh water and minerals.

BUT WHY ISN’T HE? WHY? WHY?

There has to be something far larger and sinister behind his actions. I cannot believe he is consciously that dense and naive to think what he is doing is in the best interests of the country and the long term world overall.

Please anyone, feel free to logically explain his actions….Anyone?
+++++++++++++++++++

Demonic possession.

#59 Yukon Elvis on 01.20.22 at 6:01 pm

#27 wallflower on 01.20.22 at 4:18 pm
Pls send Garth photo pic of your potato.
Need to see…

#11 Yukon Elvis on 01.20.22 at 3:13 pm
+++++++++++++++++++++++++
Done.
It is not even an organic potato. Just a regular potato. My psychiatrist says it might be a Yukon Gold potato. I think those are redeemable in gold. I’m gonna take it to the jeweller and see what I can get for it.

#60 Juve101 on 01.20.22 at 6:07 pm

Garth, how high can rates go before it becomes a problem for our government to service its enormous debt?

#61 Network Admin on 01.20.22 at 6:07 pm

#28
#6 Network Admin on 01.20.22 at 2:57 pm

Actual Prime or Bank Prime?
Bank Prime. Currently 2.45%.

#62 Brian on 01.20.22 at 6:11 pm

#re38 Billy Bouy
#1 Repurchase agreement

Thank you for sharing Rex’s article.

I’ve never ever been one for conspiracy theories but the ACTIONS of JT just have to be considered so extreme that they must be a part of something so large that we can’t get our heads around the problem.

Yes we want to save the planet but shooting Canada in the foot will do NOTHING to decrease birth rates and growth world wide..NOTHING.

Creating money and debt at JT’s pace does NOTHING to help the country in the long term. NOTHING.

The ONLY thing JT can do is WAKE UP, allow Canadian oil to flow as long as it can, protect our natural resources like fresh water and minerals.

BUT WHY ISN’T HE? WHY? WHY?

There has to be something far larger and sinister behind his actions. I cannot believe he is consciously that dense and naive to think what he is doing is in the best interests of the country and the long term world overall.

Please anyone, feel free to logically explain his actions….Anyone?

Here’s the answer to your question:
https://www.weforum.org/agenda/2022/01/surprising-net-zero-transition-approaches-innovations-davos-agenda/

https://www.weforum.org/people/justin-trudeau
https://www.weforum.org/people/chrystia-freeland

#63 Barb on 01.20.22 at 6:17 pm

Awwwww…Frankie’s adorable!
And she’ll love that great new back yard you and your wife are buying.

#64 Ponzius Pilatus on 01.20.22 at 6:29 pm

#39 RichardTO on 01.20.22 at 4:43 pm
Garth, inflation is between 20-30%, as I’ve discussed in the past.

I don’t know why you continue to play along with the 5% charade peddled by the current regime…

Read my words. And, no, it is not 20%. – Garth
——————-
Hey Buddy,
You are what we call in the Bronx a “Smart Alec”.
Too big for your britches.
Next time show some respect.

#65 Ustabe on 01.20.22 at 6:31 pm

#41 Repurchase Disagreement on 01.20.22 at 4:46 pm

Faron, you sound a little threatened by facts and push back against your Orthodoxy. Ergo, the vitriol you spew.

Blog Dogs, you would be shocked how many honest degreed Atmospheric Scientists are on the same page as Koonan (and i). But the Orthodoxy forces shut mouths. You know you won’t progress in your career at EC/get funding if you speak up.

The “consensus” is the biggest lie of them all

So what you are saying in your scientist sort of way is I’m too much a fool to realize I’m being lied to?

Got it.

#66 John Foster on 01.20.22 at 6:35 pm

#38 Billy buoy

What on dog’s green Earth makes you think JT is smart enough to get his head around anything? At the centre of a conspiracy theory? You must be joking…

I’ll give you that the result of conspiracy vs incompetence is the same though.

#67 Damifino on 01.20.22 at 6:38 pm

#38 Billy buoy

Please anyone, feel free to logically explain his actions….Anyone?
——————————-

The PM isn’t all that well informed (or interested) when it comes to safeguarding the energy independence of our great country. There’s few votes to be mined on that front. If he thinks about it at all, he tends to embrace the dogma of Gerald Butts because, hey, Gerald’s a pretty smart dude, eh?

I heard Justin say recently that inflation is a global phenomenon and there’s little Canada can do about it. I wish he’d take the same stance on carbon emissions.

#68 TS on 01.20.22 at 6:53 pm

Every single the BoC has raised rates, they quickly retreat and set new lows. The cure to higher rates, is higher rates.

#69 VladTor on 01.20.22 at 6:58 pm

….We’re on the cusp of a tightening cycle that will last a couple of years…

*************
I would say: We’re on the cusp of a crash.

https://www.gmo.com/americas/research-library/let-the-wild-rumpus-begin/

#70 willworkforpickles on 01.20.22 at 7:01 pm

The debt vortex our governments have us caught up in taking us into a real debt spiral beyond return, will soon enough leave no means for the Fed and BoC to effect lower interest rates and keep them low as they did with QE before.
Times have changed. Really changed. These are unprecedented days of spiralling debt. Debt levels are going ever higher and are unsustainable.

The out of control debt spiral is nearing a point where real dollar index valuations can only be suppressed for so much longer….just not forever.

Then, with a devaluing dollar… the point when heaping on mountains more cash infusions to the existing debt pile no longer will have the counter effect of a lowering of rates , it becomes the next new norm.
This outcome will eventually rear its ugly head….while governments continue to bury theirs in the sand over debt in the meantime.

#71 Ponzius Pilatus on 01.20.22 at 7:04 pm

Faron,
I would not even bother responding to someone with the (non) credentials of the Repurchase person.
With such a moniker he obviously is a sales person.
Probably used cars, or (yak) Realtor.
Lots of posters quoting FoxNews today.
Who let them out?

#72 Reality Check on 01.20.22 at 7:08 pm

1 Repurchase Agreement
——————

Why is Trudeau hell bent on destroying the Canadian oil sector?

His father Pierre Trudeau tried to destroy the sector in the 1970/80 to cripple Alberta and maintain the Ontario/Quebec centric power balance. (Look up National Energy Program.

The current Trudeau again wants to put Alberta in its place. Although this time around it about maintaining/creating a Ontario/Quebec centric liberal woke/green paradise. Can’t have those crazy, business oriented Albertans pumping more oil and prospering. So Alberta just send Ottawa your equalization payments and shut up.

#73 Ponzius Pilatus on 01.20.22 at 7:13 pm

#67 DamnFino
I heard Justin say recently that inflation is a global phenomenon and there’s little Canada can do about it. I wish he’d take the same stance on carbon emissions.
———————
Well I’d like to interject politely, if I may.
Fixing inflation is a tiny bit easier than fixing carbon emissions and climate change.
Don’t you think.
The big inflation in the 80s was over in less than 2 years.

#74 Big Bucks on 01.20.22 at 7:13 pm

Hold on to your hats folks,we’re heading into a real bad storm—-like no one has ever seen,unless you remember 1929 which would make you over 100.We’re gonna get hit from every angle and there won’t be a thing we can do—there are no bullets left.In 2008/09 we didn’t dodge a bullet…we simply reloaded the gun and put it away for a decade.We also loaded a cannon in 2020/21 to finish the job.

#75 Billy Buoy on 01.20.22 at 7:15 pm

Thank you for the replies all…

Always amazed at the stupidity of the masses who voted for him.

It’s just the audacity or is it the fact he knows we are sunk energy wise long term and is moving us towards a world of zero expectations, dog eat dog and zero hope?

Just as his masters at Davos like….I’d like to see how quickly he is kicked to the curb when they are through using him to achieve their goals.

#76 kc on 01.20.22 at 7:19 pm

21 zxcvbnm on 01.20.22 at 3:56 pm

@#10
I spent almost $8 on six tomatos. A dollar a tomato would be a discount. And they weren’t even special or big tomatoes. Simple Romas. It’s effed up.

*************

Be thankful you can buy some tomatoes… wait a week and you will be wishing the stores had any for sale….

#77 Shawn on 01.20.22 at 7:23 pm

So, be a capialist then

#43 SunShowers on 01.19.22 at 5:11 pm
“all modern employment really is. A capitalist exercising feudal control over their personal fiefdom, relying on the disgusting imbalance of bargaining power between themselves and the serfs, who must either submit to the capitalist’s will in order to survive, or engage in that same identical relationship with a different capitalist, hoping it will be somehow better.”

*******************************
If so, our mission is clear, save and invest and become an owner, a capitalist.

No need to continue to be a victim.

#78 DonQuixote on 01.20.22 at 7:25 pm

Seen recently on the Calgary transit – the City govt. is conducting a surveillance project tracking all cellphones as soon as you enter the station, to ‘study usage’ of transit services.

Hard to fathom the justification behind this. Can’t they just track number of tickets/monthly passes sold?

#79 TurnerNation on 01.20.22 at 7:26 pm

Hey Dolce remember when they used to call them “Breakthrough” Cases? That term sure got memory-holed real fast.

— Amazing, our rulers have convinced us that “Indoor dining” is a thing, a privilege – to be held over our heads. I call it just “Normalcy”.
This WW3 really is for our minds.

— Economic Shutdowns. We are this close to back to normal! For the Greater Good comrades your rights are suspended.

.N.B. moves to strictest level of its COVID-19 Winter Plan (atlantic.ctvnews.ca)
““Over this two week period we are going to be re-evaluating what other restrictions we need to put on to encourage people to be part of protecting the greater good,” said Higgs on Jan. 13.”

.’Out of options’: Sask. restaurants closing, scrambling due to effects of COVID-19; Restaurants Canada calls for end to vaccine mandates, more support (cbc.ca)


— The QR code is permanent, global and forms the basis of the permanent electronic lockdowns. If your papers are not in order.

“Liquid Avatar Technologies Inc., with its partner, the Ontario Convenience Stores Association (OCSA), a non-profit organization that represents convenience stores across Ontario, has successfully completed an end-to-end, live working test of the Smart Age program. The Smart Age program provides digital age verification, supported with biometric authentication for restricted product sales like lottery tickets, tobacco, alcohol and other goods and services through a mobile device using verifiable digital credentials and biometrics without a user divulging any personally identifiable information to the store clerk. The system will next be deployed at in-store pilot programs before becoming available to over 8,000 store locations in Ontario. This first-of-its-kind technology solution will also be extended to other business sectors that require age verification and other kinds of critical information verified as authentic, such as vaccination, healthcare, membership and enrollment, and other online and offline verification”

#80 Sail Away on 01.20.22 at 7:27 pm

…while Jag discusses ethics wearing his bejewelled, Lululemon-branded turban and carrying a Gucci manpurse

#81 DonQuixote on 01.20.22 at 7:48 pm

Link from AB govt health page showing stats vaccinated/unvaccinated…

Currently hospitalized share of unvaccinated 32.8%, not ‘the vast majority’…whereas triple dosed make up app. 20%!

https://www.alberta.ca/stats/covid-19-alberta-statistics.htm#vaccine-outcomes

Whereas the unvaxed make up app. 15 percent of those 12 and over

If we assume kids 5 and under are at least 4% of population, and 12 and under at least 10%, and those with medical reasons who can’t receive the shot must be at least 2-3%, and v. Good reason not to force these experimental shots on children, there are hardly any holdouts…

Also everybody is going to get Omicron, so where is reason to continue QR coding us?
How did Tam come up with recent stat saying unvaxed 19 times more likely to end up hospitalized?

There is no justification for continued vaccine passports legal or health wise….

#82 Nonplused on 01.20.22 at 8:00 pm

The advice on mortgages seems sound. Any time the interest rate offered on a loan is less than the rate of inflation the differential is in essence free money.

But are 5 or 7 rate increases really in the bag? Is the economy really overheating? How much of the inflation is “made in Canada”?

Yesterday I introduced a concept that I haven’t fully developed, people seem to hate long missives, but the jist of it is that if you “inflation adjust” prices, the prices of things never really changes. Lettuce up 15%? Well inflation adjusted it is only up 10% but when weighted against the whole of the CPI your total inflation is only 5%. “Inflation adjusted” of course your overall expenditures are exactly where they were 1 year ago. Inflation adjusting is a scam. Prices are up or they aren’t.

And here is why it is a scam: Wages are not keeping up with inflation. Neither are pensions. Those on fixed incomes are in worse shape every year. And as incomes do go up, so do taxes, so wage increases aren’t even dollar for dollar when compared to inflation. And taxes like the HST do go up with inflation, compounding the problem. Workers are falling further and further behind.

A better measure would compare the CPI to after tax wage growth. But that measure isn’t pretty.

But this leads to some interesting questions, namely “If wages are not growing as fast as inflation, is the economy really booming?” Wages are not solely driving inflation, that much is clear. There is a whole bunch of inflation in the numbers that is not rising wages, although wages are a component.

So what’s causing all this inflation, aside from wages? Well, in order to be brief I will jump right to the answer: It is in two components; rising energy costs and the wealth effect created by too low interest rates.

It is my opinion that Canada, that great northern wasteland of but 37 million souls, cannot do much about interest rates without shooting ourselves in the foot until the rest of the world, namely the US, acts. Will the US act? Probably. But it looks like the policy of being a day late and a dollar short will continue.

What about energy costs? Well, we already shot ourselves in the foot with the carbon tax, but that money doesn’t leave the economy it stays in country and gets spent somewhere else, so I’m going to say it has winners and losers. Joe the plumber is experiencing a great deal of energy cost inflation. Others are seeing the benefits of government largess.

But the actual cost of energy without taxes is not “made in Canada”, it is international (with some exceptions like natural gas). Fact is we can’t really do much about what oil trades for in Europe or Texas. Especially since our “made in Canada” energy policy is to restrict with a view to shutting down our own production whilst importing from Saudi Arabia and Norway.

So here is my forecast: Wages will continue to lag inflation and even more so on an after tax basis. Energy prices will remain high as the whole world seems to be short. And interest rates will lag, and thus be slow to curtail the inflation.

Buy all the things. And ask for a raise.

#83 Garth's Son Drake on 01.20.22 at 8:03 pm

Warning to all readers.

The selloff has started.

The S&P is going down to 2500 (48% haircut).

Canadian housing will be in a full swing price decline in the first part of 2023 and I will pull this date forward into last half of 2022 if the rate hikes that you are talking about actually materialize.

#84 Faron on 01.20.22 at 8:04 pm

#47 Sail Away on 01.20.22 at 5:09 pm

Oh, miners +10% since August, handily outperforming the SPY (+1.65% with div) you were trumpeting as a better choice the other day.

Poor guy…

#153 Sail Away on 01.18.22 at 12:39 pm

Not a bad morning for buying. Around 6 month low for NasdaQ.

#162 Sail Away on 01.07.22 at 11:47 am

Picked up some NASDAQ index today

Feeling a little injured because you BTD and chased the NASDAQ into oblivion on two separate occasions in the latest plop and that your chirping about TSLA happened 18% ago? I do wonder how much ARKK you are bag holding. Seems right up your alley.

w/re miners, you forgot:

#65 Faron on 01.12.22 at 6:24 pm

Sorry bud, embarrassment, not fury…my embarrassment on your behalf…OMG, LOL. If writing a coherent (with my August views) take on why your indiv stock investment choices were poor then (were very good more recently and are probably very good choices in coming months)

Anyhow, there there, we all make mistakes. To be fair, I also called bottom at 4655 on SPX which then bounced before plummeting to 44XX. See? Admitting that is called integrity.

W/re Koonin: Sure, there are plenty of smart people who are also shills. Being critical of someone can, but doesn’t always mean addressing their intelligence. Koonin revolved out of oil and just happened to take a stance that perfectly benefits large oil corporations. What are the odds?

You, Sail Away, are a shining example of how, like Koonin, intelligence and Integrity don’t align. I’ll let you decide which attribute you posses.

#85 Cici on 01.20.22 at 8:08 pm

#17 Chameleon on 01.20.22 at 3:46 pm
Time for a non-dog picture please.

Asked a dog owner to leash his dog recently is an area where it is clearly posted dog should be leashes and he threw a bunch of swear names at me like I’m the one being inconsiderate to others.

Fascinating creatures these dog owners. Amazing how these innocent dog creatures bring out the best in these animal loving humans.
_____________________________________________

Dog bless, I feel for ya. Humans really are the nastiest animals out there. Out cross-country skiing the other day, I had the “nerve” to inform a women who was speeding at me in the wrong direction (and who almost crashed into me in the process) that she wasn’t travelling in the right direction and to please let me pass. She was really nasty, refused to budge and yelled at me to go around her. I don’t waste time on idiots, so I did. But I regret it. I should have just stayed there. But seriously, there were trail markings with little arrows everywhere all along the path and even a map with directions at the head of the trail. But no, not only could she not follow simple directions or admit her mistake, she also couldn’t get out of the way for the safety and security of others. Bless all those poor, darling dogs who rely on “humans” for care and kindness!

#86 sean on 01.20.22 at 8:13 pm

re: With a variable loan it generally costs three months’ interest to get out, while a fixed-rate loan can set you back much more since an IRD (interest rate differential) levy may be involved.

—————————————————-
But isn’t an IRD only levied for a fixed rate mortgage if the bank’s current fixed rate is lower than the one you locked in at (i.e. in a falling rate situation)?

My understanding of the (stated) rationale behind the IRD is that the bank wants you to compensate them if you terminate your mortgage and they end up having to reinvest their money in someone else’s mortgage at a lower rate.

In a rising interest rate situation, the bank could presumably reinvest their cash in someone else’s higher rate mortgage and thus would not need to be compensated.

If you are convinced that rates are going to rise, I don’t think that the IRD is an issue.

#87 Dave on 01.20.22 at 8:17 pm

Still no post/comment on the HELOC impact due to rising rates? “Back of the napkin” analysis on all our neighbors suggests the HELOC ATMs are maxed out.

#88 KindOfSmart on 01.20.22 at 8:27 pm

#84 Faron on 01.20.22 at 8:04 pm

“You, Sail Away, are a shining example of how, like Koonin, intelligence and Integrity don’t align. I’ll let you decide which attribute you posses.”

Yup, there’s no correlation between sociopathy and IQ level. The most dangerous ones are the smart ones.

#89 Sail Away on 01.20.22 at 8:27 pm

#84 Faron on 01.20.22 at 8:04 pm

———

Never have I ever held AARK- don’t know why you would assume (hope?) such a thing. It does not meet my longevity criteria.

Regarding index-absolutely I’ve been loading up and will continue to do so at every dip or correction. Here’s hoping for more drop.

#90 cuke and tomato picker e on 01.20.22 at 8:29 pm

I hear food prices are going up it is hard to believe but
when I was about 12 years old and beyond my grandfather let me grow tomatoes and cucumbers on a small piece of his land in Osoyoos B.C. I looked after the plants weed, water by ditch irrigation and fertilize the plants. I sold the tomatoes for a dollar an apple box and the cucumbers for 75 cents cash cash no receipt.

#91 Ponzius Pilatus on 01.20.22 at 8:36 pm

#80 Sail Away on 01.20.22 at 7:27 pm
…while Jag discusses ethics wearing his bejewelled, Lululemon-branded turban and carrying a Gucci manpurse
———————-
Haha.
Yeah, trophy wife, new kid.
Got it made.
Next Prime Minister, for sure.
But Sailo, you could be like him, too.
It’s the Canadian Dream.

#92 Nonplused on 01.20.22 at 8:38 pm

#52 RichardTO on 01.20.22 at 5:28 pm
@Garth
>Read my words. And, no, it is not 20%. – Garth

If a company issues an extra 20% of the entire float, what happens to the value of the existing shares? Why am I to believe that it’s magically different with money supply?

————————————–

Generally not much. That is because the issuing company generally sells the new shares for about the same price as the existing shares. They then use the money raised to invest in some hair-brained scheme or pay down debt. It is generally not dilutive to existing shareholders, or the shareholders would replace the board for being incompetent. Not that they aren’t incompetent either way, but the vote tends to follow the share price.

Selling new issues of shares or bonds in not the same thing as printing money. It can’t even be compared.

The trick that goes on at the central bank is unique in all of finance. They do actually create money to buy assets like government bonds. In theory the newly created money is backed by the government bonds, so as long as the government issuing the bonds is good for repayment, perhaps it all works out. But the bond and the money are both penciled into existence. With a corporate issuance, the shares are penciled into existence, but the money is not.

#93 Faron on 01.20.22 at 8:53 pm

#47 Sail Away on 01.20.22 at 5:09 pm
#41 Repurchase Disagreement on 01.20.22 at 4:46 pm

You guys are carrying on a fine new right tradition of just saying lies as if they are fact and hoping no one will bother looking up the truth.

I’m guessing that this is the garbage that Ustabe notes when he compares a conservative politic with integrity, that of Garth’s era +-, versus that of today. Sure, Liberals aren’t immune to outright lies, but the new wave of right politicians is latching right on to disinformation

Ponz, this is where climate change and Putin converge. Dissembling, gaslighting, disinforming.

#94 leebow on 01.20.22 at 9:00 pm

#85 Cici

Now this is truly shocking… Didn’t think cross-country can be that intense. I hope you guys don’t progress into biathlon.

#95 Damifino on 01.20.22 at 9:03 pm

#73 Ponzius Pilatus on 01.20.22 at 7:13 pm

#67 DamnFino
I heard Justin say recently that inflation is a global phenomenon and there’s little Canada can do about it. I wish he’d take the same stance on carbon emissions.
———————
Well I’d like to interject politely, if I may.
Fixing inflation is a tiny bit easier than fixing carbon emissions and climate change.
Don’t you think.
—————————
Yes, I do. But I think that only serves to strengthen my point. If he’s willing to gleefully take on such a gargantuan task as saving the world from the emissions of scofflaws such as Russia, China and India supposedly by “setting an example” for them, you’d think he wouldn’t be inclined to take a pass on the much “lesser” problem of inflation.

#96 Getting off easy on 01.20.22 at 9:03 pm

A 2.75% or 3.25% or 3.75% or even 4.5% mortgage rate variable or fixed is still getting off easy. Until we get close to even 2000 year levels of 7% to 7.5% mortgage rates, everyone with mortgage debt, line of credit debt, any other property, real estate debt is still getting off really easy. They are going to drown you in a debt pool and interest rate hikes of 1.5% point to 2.50% point over the next 2 years is just icing on the cake for them.

As for inflation, they have always lied about inflation for years by at least 2.5% to 3.5% understated it so the free money point is really not a valid long term point. Inflation since the Chretien, Martin Liberals stating under 3% inflation rates would not make them adjust the tax brackets, other tax credits, tax benefits was the start of this misleading government policy. Inflation was at last 4% to 6% a year for at least the mid 90’s to now 2022.

#97 Joseph R. on 01.20.22 at 9:04 pm

#81 DonQuixote on 01.20.22 at 7:48 pm

How did Tam come up with recent stat saying unvaxed 19 times more likely to end up hospitalized?

There is no justification for continued vaccine passports legal or health wise….

—————————————

You committed the base rate fallacy; you reached your conclusion using only the ICU numbers rather than understanding statistics.

You omitted to consider the base number of people that are vaccinated vs the base number of people that are unvaccinated.

See:
https://www.health.nd.gov/sites/www/files/documents/COVID%20Vaccine%20Page/COVID-19_Vaccine_Base_Rate_Fallacy.pdf

#98 Faron on 01.20.22 at 9:22 pm

#89 Sail Away on 01.20.22 at 8:27 pm

Never have I ever held AARK

How about AARP? I hear you get a free small cone at Micky-Ds if you show your card.

#99 Wrk.dover on 01.20.22 at 9:23 pm

#83 Garth’s Son Drake on 01.20.22 at 8:03 pm
Warning to all readers.

The selloff has started.

The S&P is going down to 2500
________________________________

And the floor Faron gave us the other night will be the now illusive ceiling?

#100 Ponzius Pilatus on 01.20.22 at 9:25 pm

Food prices are going up!?
Bring in the Cavalry.
Heads must roll.
Anyone still remember when the BigMac was as big as on the picture, and cost a buck?
Oh, the good old days.
But, alas, where did the time go?

#101 Sail Away on 01.20.22 at 9:34 pm

#93 Faron on 01.20.22 at 8:53 pm
#47 Sail Away on 01.20.22 at 5:09 pm
#41 Repurchase Disagreement on 01.20.22 at 4:46 pm

You guys are carrying on a fine new right tradition of just saying lies as if they are fact and hoping no one will bother looking up the truth.

——–

The only lie here is yours above.

I said no lie, made no claim, supported no position. Just mentioned you were acting far above your station again, as you frequently do.

#102 willworkforpickles on 01.20.22 at 9:36 pm

#90 cuke&tp
Excellent! …you started out an entrepreneur … did you finish as one?

#103 Cici on 01.20.22 at 9:41 pm

#94 leebow on 01.20.22 at 9:00 pm
#85 Cici

Now this is truly shocking… Didn’t think cross-country can be that intense. I hope you guys don’t progress into biathlon.
_____________________________________________

LOL! I know it sounds ridiculous and honestly I’ve never had an issue with any other cross-country skier ever. It’s generally a very peaceful sport and people usually ski in the directions indicated on the trails. And when they choose to go in the wrong direction, they typically leap out of the way of the other skiers who have right of way, and don’t barrel down at them on slopes. Just common decency.

Just like most dog owners don’t yell and swear at people who ask them to put Fido on a leash, especially when that’s the posted regulation. But the few nasty ones that do kind of give everyone else a bad rap.

#104 Jane24 on 01.20.22 at 9:42 pm

We were last in Montreal 2.5 years ago as last year’s bi-annual trip was cancelled by covid. At that time we were shocked at the cost of Canadian groceries. Now we were staying downtown but grocery prices were at least a third more than we pay in England and at least double what we pay when we stay at our Italian holiday home and Montreal is traditionally cheap. Strangely enough eating out was cheaper than England! How does that work. So we ate out every night as cheaper than buying groceries and cooking. Delicious.

We are back there this August and I will look out for a 4 buck potato. Yes for £2 you should be able to buy a small bag of them.

#105 Bronze Bullet on 01.20.22 at 9:46 pm

#13 Linda on 01.20.22 at 3:24 pm
‘Frankie’ is indeed a cutie!

So, inflation. I’m still very much of the opinion our government is underestimating the actual inflation rate. If the USA, with 9 times Canada’s population, robust employment etc. is posting inflation at 7%, how can Canada with its much higher cost of living, smaller population & which imports a lot of its goods from the USA claim inflation here is still under 5%?

Simple: here we have bigger lairs on the statistical side as we have bigger idiots to believe them, evident from the likes of the few posting here under the yesterday’s article who believe that we are at peak inflation of 4.8 %,

You keep repeating that with houses increasing 25 % for a year (12-15 % on average in the last decade) and comprising 50 % of a household expenses alone if nothing else changes would account for 12.5 % honest inflation numbers, that if you add to that the skyrocketing energy and food it is even higher and it keeps bouncing from their strong skulls and polished 2 bit, 2 neuron brains.

To eliminate the lairs you need to eliminate the idiots to believe them.

What is really amazing is the other idiots who are willing to take it on the chin and compete for non paying jobs with high taxes, super high cost of living and zero quality of life (check the misery index) with capped salaries and negative prospects of employment, housing, having kids, retirement in the today’s opportunistic open world.

To the minority left – normal, non-brainwashed folks:

You stand no chance to continue to be normal in a mental institution surrounded by strong heads who refute logic.

#106 Outrage on 01.20.22 at 9:47 pm

Yeah, big deal. The CB will probably raise rates twice with each a quarter point. The CB don’t flipping care if inflation runs hot for years to come The Canadian serfs deserve it. How long have we heard this broken record. We are what Japan is in, extremely low interests rates forever. Get used to it and suffer. 2009 was the year where it became that normal nominal interests rates will never be seen again. Work as much as you can, hoard and buy bulk to save on high inflation.

#107 Faron on 01.20.22 at 9:54 pm

#80 Sail Away on 01.20.22 at 7:27 pm

…while Jag discusses ethics wearing his bejewelled, Lululemon-branded turban and carrying a Gucci manpurse

TIL that Sail Away makes his own clothes. Who knew?

#108 I don't know on 01.20.22 at 9:54 pm

#57 willworkforpickles on 01.20.22 at 5:50 pm

“Talk on the board the last few days that you can’t know what’s coming because nobody does is simply moot.
Understandable i guess from the talk of those who’ve never done a lick of research of their own from the all’s well or soon will be crowd.”

-For research purposes, all one has to do is take a look through the annals of this blog’s comment section. Over a decade of prognostications are recorded for all to see.

The same can be said for any time throughout history.

Why? Human nature. Our biggest fear is uncertainty. The past is always looked at through rose coloured glasses because it’s already been written and is known. The future is an unknown, so is viewed with trepidation. The human brain tries to make likely predictions to cope. You’ll notice future visions of doom are never to occur tomorrow (too soon, unlikely to become reality), or ten years in the future (too far, too much can change). It’s always somewhere around a year, a year and a half. The brain’s most logical, comfortable prediction time frame.

Human nature. It never changes. One other thing that won’t ever change is that fortune favours the bold, and holding cash is not bold.

#109 crowdedelevatorfartz on 01.20.22 at 10:00 pm

@#73 Ponzies Predatory Payloans
“The big inflation in the 80s was over in less than 2 years.”

+++

Perhaps in Austria.
I seem to recall here the wind getting sucked out of the Albertan economic balloon in 1980.
(Someone mentioned Papa Trudeau’s National Energy Program as a contributing factor.)
Moved to the Lowerbrainland for fame and fortune (if yer gonna be unemployed ya might as well be sorta warm) in 1981.
High unemployment, very, very, very few job prospects…. until about 1984 as the construction for Expo86 geared up.
Expo put Vancouver on the map and the construction kept building but the rest of Canada didn’t really crank up until about 88 ( Calgary Olympics?)

Not 2 years Ponzie.
More like 5 to 8 years

Canadian Bank rate 1979 = 12%
1980 = 12.9 %
1981 = 17.9 %
1982 = 13.9%
1983 to 1988 = 9.6 %
1989 and 1990 = 12.5%

#110 CL on 01.20.22 at 10:02 pm

I have my doubts that they’ll raise as much as currently predicted. Anything is possible and maybe they fear a recession sooner than later because oil is going to go nowhere but up and they have no ammo.

Even if they raise and mortgage rates go up, I can see a 40yr amortization being reintroduced as an offset for real estate.

#111 expat on 01.20.22 at 10:07 pm

1. Garth’ huge mistake:
Real Estate insanity is intrinsic part of Kanadian system, Soviet Kanadastan communist regime, but not the isolated event.
2. Communist Kanadastan is on the fast path of self-destruction.
I was witness to self-destruction of the USSR, as I predicted 20 years before it happened.
Now I’m witnessing self-destruction of Communist Kanadastan, as I predicted many years ago.
3. Soon you will need to sell your house, to have money to buy ticket to run away from Kanada.
4. My respect to TurnerNation

#112 Bronze Bullet on 01.20.22 at 10:17 pm

The idiots who believe in made up inflation numbers give the irresponsible in charge of monetary policies more reasons to continue lying even bolder about inflation and to continue with their disaster policies, killing savers, retirees, people on fixed indexed income who have to live with 12-15 % increased cost of living and 2 % compensation for it.

The whole thing is becoming a real circus:

No, inflation is not 12-15 % but 4.8 % because I said so and only temporary because of supply shock and energy prices but not as for our bad policies, trust us, we can fight inflation by increase of rates to 1.5 % (potentially!), we have all the tool to contain it, we are watching carefully, concerned about it but in control,

while incentivizing with every possible means the continuation of the super credit bubble – ‘insurance’ of bad mortgages in order to protect lenders at expense of the taxpayers, stupid down-payment saving policies, hysterical bidding wars etc.

One of the reasons for the continuous increase in house prices is that sellers can see through the central banks utter BS and understand that prices of everything will keep going up, that inflation is just starting and will get much worse and withdraw inventory from the market reducing the supply to minimum and igniting bidding wars.

This is just starting.

#113 Bronze Bullet on 01.20.22 at 10:25 pm

#104 Jane24 on 01.20.22 at 9:42 pm

Grocery prices were a shock 12 years ago for visitors from the US.

The ‘lower’ restaurant prices that you experienced in the past were due to cheap slave labour, lower quality of ingredients, hidden costs of taxes/not included and the exclusion of mandatory tips.

Plus competition shrunk the profit margins.

#114 wallflower on 01.20.22 at 10:41 pm

Regarding price of food in Canada
#104 Jane24 on 01.20.22 at 9:42 pm

I first noticed things were really off in 2015. I travelled in Europe 2015, 2017, 2018, 2019. (Austria, Germany, Slovakia, Bulgaria, Czech, Spain, France, England)
Touring in Europe is cheaper than in Canada. Grocery shopping and restaurants are significantly cheaper (better quality as well).
Hotels are comparative except that in Europe there are many classy low cost options whereas there are zero in USA/Canada. Cheap here is still twice the price of Europe. No comparison on the quality. Also, transit is far more convenient and way cheaper in Europe. To get into downtown Sophia (Russian satellite until not too long ago) from airport is about $2 and convenient. Try doing that from Pearson into downtown. Try to even find city to city transit here.

Canada is very expensive and inconvenient. It is becoming like Switzerland in terms of cost. I do all my travel and most of my restauranting in Europe. Typically I go for a month so even with the flight factored in, I go further on my budget in Europe. For Canadians, off continent travel is becoming really cheap.

The only in-Canada travel I do is airfare (which is ridiculously expensive compared with same distances in Europe) to friends and family.

Cannot avoid grocery shopping here but it sure is a joy to do same in most European countries.

#115 Faron on 01.20.22 at 10:52 pm

#101 Sail Away on 01.20.22 at 9:34 pm

“I said no lie”

Your words: “you were trumpeting as a better choice” is an outright fabrication. I speculate you brought this up because a huge chunk of your portfolio is a smouldering hole after today’s trading and you are b*tt hurt.

“acting far above your station”

What kind of antebellum nonsense is this? Show me where in his CV Koonin was trained in Climatology, Atmospheric Science or anything else remotely related to climate and climate change or even having the remotest clue how Earth works? His work has been harshly rebuked by a vast array of scientists with stronger credentials than his on all levels and far more relevant (than particle physics… LOL). For example, one could just read the IPCC reports and the literal thousands of papers that contradict Koonin’s crappy claims again and again and again and again.

My “station” is to report on scientific fact as it’s known by leveraging the work of others and my own. Criticizing a shill like Koonin is precisely within my job’s arena.

I’ll add that you are in exactly no position to state what my or Koonin’s or anyone else in science’s station is. You have zero training and next-to-zero understanding of this issue. Information discernment is gravely lacking in you so when you watch Fox News and a goon like Koonin comes on, you are a sheep being led to slaughter. Same seems to be true with the other dolts I joust with in this crowd. I engage because it’s so incredibly jarring.

NQ_F is -1.53% as of this BTW. It’ll bounce soon, but I couldn’t be any more pleased.

#116 willworkforpickles on 01.20.22 at 10:57 pm

#108 I don’t know

I do much research on our ever changing economic picture…even from a global perspective.
Merely scratching the surface without getting into any detail here, I look into government debt balances, study inflation , watch the ebb and flow of interest rates, Fed and Government lies and corruption and in uncovering some of their extreme cover-ups just for openers.
Its easy enough with the right research, almost a no brainer at times to make calculated projections when you have enough of the pieces of the more oft than not highly obscure puzzle in front of you.
Predictions…I have no interest or time for mere guesswork that lacks substance and so i don’t make predictions.

#117 Flop… on 01.20.22 at 10:58 pm

Thousands of crimes I have committed against this blog.

Had some money in a HISA inside of my TFSA the last couple of years that I never got around to deploying properly.

The shame.

I see the slow slide in the markets, and I finally don’t have to go and see someone at the bank that speaks English as a second language, trying to move that HISA into a GIC.

Moving money from a HISA to a GIC, I’m low, but not that low, even investment hacks have got some standards.

TFSA overall is 80/20, a bit like my hindsight.

Didn’t get to enjoy the benefits of last year’s correction as much as I should have, but that’s partly what led to a 6 month Financial Facelift on both hemisphere portfolios.

Went crazy and set up one of them extra-curricular non- registered portfolios as well, so if the market continues down I can feed that monster as well.

Feeding the 3 portfolios should keep me out of trouble, staying away from RRSP, my Australian superannuation is my substitute for that but it’s not like for like.

If the Australian government tries to take 40% of that, I’ll send Novak Djokovic after them…

M47BC

#118 willworkforpickles on 01.20.22 at 11:15 pm

#102 – #90 cuke&tp
Excellent! …you started out an entrepreneur … did you finish as one?
…………………………………………………………………………………………………………..

On that note…people to a greater rather than a lessor extent these days may want to look into growing some of their own produce.
I just got back 2 hours ago from a local grocery mart of a large food store chain, and the shelves in a very expansive produce section were two thirds bare.
First I’ve ever seen those shelves that empty.
We may be entering in to many new norms than we ever anticipated and whether we like it or not…many of them permanent.

#119 expat on 01.20.22 at 11:18 pm

1. When COVID-19 will be finished, governments, politicians, Big Tech corporations, FDI, CDC, WHO etc. will introduce COVID-22, 23 and so on, because they are making money and enjoying their sadistic power.

2. It should be Nurnberg II to sue them for crimes against humanity, for murdering innocent people, which were killed not by covid, but by absence of health care and sadistic restrictions.

3. my respect to Bronze Bullet

#120 cuke and tomato picker e on 01.20.22 at 11:30 pm

Number 102 wiiworkforpickles (hopefully polskie
ogorki) yes very much so and fully retired at 62 travelled the world with my wife took my family to Disneyland 5 times now stalled because of covid.

#121 gfd on 01.21.22 at 12:42 am

Adele cancels Las Vegas concert series after half her crew gets COVID-19

#122 Bonobo on 01.21.22 at 12:43 am

Many of you wanted Trump to lose the last election. I am having a wonderful feeling of schadenfreude these days knowing that you made a bad choice.

Yes, Trump was not a pargon of virtue and is boorish, but at least he was a better manager than your buddy Biden is today.

What a mess.

You get what you deserve. Expect more horrible effects on your wallets in the coming years.

As for me and my house we are debt free with a paid off mortgage and one car in a triple car garage.

Get your heads on straight soon or pay the dire consequences of your choices.

I hope Trump runs in 2024 and gets the energy situation back on track starting with an ironclad deal to get Keystone XL back on track.

Albertan through an through!!!

#123 Laughing mortician on 01.21.22 at 1:05 am

Guys, the BOC is not going to adjust rates for the good of the country. The BOC is keeping rates at zero so that Trudeau can continue to loot the treasury. Wake up. By arguing among yourselves about every stupid thing the CBC spins out you’re just allowing the bandits to strip you faster. It’s not your duty to flush your country when no other country is willing to beggar its own. Look at Norway, screaming at banks and insurances companies that do business with Canadian companies, but at at same time doubles their pumping to historic levels. Is Norway importing millions of votes, shutting down entire industries? No it isn’t. So why does Trudeau want to import every crazy leftist experiment at your expense.

#124 ML on 01.21.22 at 6:08 am

Garth,
S&P500 comments or post, if the spirit moves you, would be much appreciated.
In your opinion – how much more of a drop, from all time hight (4800), are we still expecting?
Is there an approximate historian correlation between every 0.25% of interest increase and the % of market impact: how much the market would move for every 0.25% interest increase?

Thank you in advance,
M

#125 crowdedelevatorfartz on 01.21.22 at 8:02 am

@#104 Jane24
” I will look out for a 4 buck potato. Yes for £2 you should be able to buy a small bag of them.”

+++

Good luck eating out in the Land That Work Forgot.
The CERB suckers don’t seem to want to work at restaurants…..or any service industry for that matter.

Farms to grow potato’s?
Temporary foreign workers.
Truck to drive the product to market?
You are kidding.
Staff to stock the shelves?
Penniless retirees.

But look on the bright side.
Potato’s are about the only “fresh produce” Canada has year round…..warts and all.

Canada.
Drawers of Welfare and Hewers of EI.

#126 crowdedelevatorfartz on 01.21.22 at 8:14 am

@#100

“Anyone still remember when the BigMac was as big as on the picture, and cost a buck?
Oh, the good old days.”

+++

So.
You dont eat the buck fifty hotdogs at Costco but seem to know their price intimately.

You reminisce about “the good old days” of BIG burgers at Micky D’s for a buck

Now I understand why you walk 10kms per day.
Gorging on Timbits behind the wife’s back?

Have you every eaten a sidewalk Japadog?

http://www.japadog.com/

Speaking of which.
I think someone should file a Human Rights complaint.
The Japadog name seems racist.

#127 IHCTD9 on 01.21.22 at 8:40 am

RIP Meat Loaf

#128 willworkforpickles on 01.21.22 at 8:44 am

Once the market newbie weak hands have jumped ship , the markets can settle down and get comfortable with the Fed smoke and mirrors show of paltry interest rate incremental increases through 2022.
The bail-out newbs and weak hands don’t get it, they think the interest rates scheduled to come will hurt the markets.
This is where the Fed smoke and mirrors show comes into play that will to the contrary, prove to have a positive effect on the markets going forward.
Positive in that 3 paltry rate increases for 2022 (not 2023 yet) will give way to the dis-inflationary effect (illusion) the market needs right now to stay buoyed.
Persistent high inflation has always harmed the equities market.
Some dis-inflation (of sorts) is whats needed now regardless of the fact its only an engineered smoke and mirrors show for 2022 that will ultimately in real terms…actually have no effect on real inflation numbers by years end.
The hard medicine comes in 2023.
But the markets should get healthy after an initial sell-off blip and stay healthy for the rest of 2022, at least until the real unavoidable chit starts hitting the fan next year.

#129 willworkforpickles on 01.21.22 at 9:10 am

#125 CEF
“Farms to grow potato’s?
Temporary foreign workers.
Truck to drive the product to market?
You are kidding.
Staff to stock the shelves?
Penniless retirees.

But look on the bright side.
Potato’s are about the only “fresh produce” Canada has year round…..warts and all.”
…………………………………………………………………………………………………

Yes … look on the bright side (if there is one) only just across the river (lake) from you, we make the best barbeque chips in the world bar none and Canada is welcome to them with football season in frenzied full swing to boot.

#130 Wrk.dover on 01.21.22 at 9:18 am

#120 cuke and tomato picker e on 01.20.22 at 11:30 pm
took my family to Disneyland 5 times now stalled because of covid.
_________________________________

ALL of the FUN is at Busch Gardens FYI

One of the very best days of our initial five month drive, through about forty of the states.

On a Thursday, five minute lines, max!

Followed by Daytona 500 Sunday. Not near as fun, but spectacular for the audio experience once in any lifetime.

#131 bdwy on 01.21.22 at 9:47 am

You dont eat the buck fifty hotdogs at Costco but seem to know their price intimately.
…………..

I would have you know that Costco offers BOTH a hot dog OR a polish sausage and drink for the super value of 1.50.

They are excellent. Live a little man!
(sadly i avoided them for 15yrs after a jammer, but have recently rediscovered their deliciousness)

……
Gorging on Timbits behind the wife’s back?

/////////

Timbits? Rookie stuff. I proudly demolish the better part of a dozen donuts while staring my wife directly in the eye, the dominance thing keeps her from reaching in the box!

#132 Sail Away on 01.21.22 at 10:10 am

Well, I continue to buy the indexes today- especially NasdaQ. Never one to dollar cost average, but love the dips. The bargains always arrive when patient.

#133 Dharma Bum on 01.21.22 at 10:24 am

I believe in climate change:

Spring – generally mild, rainy, fresh air

Summer – usually warmer, can be hot, some areas humid, some dry – longer daylight hours

Autumn – gets cooler, crisper – some areas have foliage with changing colours – daylight hours grow shorter – rainfall increases

Winter – climate turns very cold – the further north you go, the colder it gets – many areas receive precipitation in the form of snowfall; Ice formation is common in areas further north.

In spring, it warms up again, and the cycle repeats. Over millennia, there can be some slight variations in temperature.

See?

I am a (pseudo)scientist.

I believe in climate change, well, because the climate changes.

Always did, always will.

#134 Fight Back on 01.21.22 at 10:46 am

A conservative Maple portfolio might be the right thing to wait out the Trudeau calamity.

https://financialpost.com/investing/three-golden-rules-to-help-you-avoid-some-common-investing-pitfalls

#135 Ponzius Pilatus on 01.21.22 at 10:49 am

#126 crowdedelevatorfartz on 01.21.22 at 8:14 am
@#100

“Anyone still remember when the BigMac was as big as on the picture, and cost a buck?
Oh, the good old days.”

+++

So.
You dont eat the buck fifty hotdogs at Costco but seem to know their price intimately.

You reminisce about “the good old days” of BIG burgers at Micky D’s for a buck
————————-
Oh, CEF.
Always jumping into a conversation without getting the context.
I was pointing out that inflation has been around since people traded apple for oranges.
As a financial expert, I make it a habit to follow trends in the economy and comment on it.
You are an avid reader of the Economists.
So you’re probably aware that they publish the Big Mac Index, that tracks purchasing power in different countries based on the price of a BIg Mac.

#136 Damone Rittlesfield on 01.21.22 at 11:17 am

Trudeau continues to insist “ the budget will balance itself”.

“Fiscal expansion” he describes as a “thing”.

http://www.bnnbloomberg.ca/debt-strapped-canadians-brace-for-a-risky-rate-hiking-cycle-1.1711107

#137 bdwy on 01.21.22 at 12:22 pm

getting ugly for growth stonks and valueless bit(coin)s. hiding in brk.b and oil but still a bit scared here.

jp has everyone edgy.

…….
pumped to be off to visit London UK for the first time next week.
masking ends the day before we land!
Is there much of anything to see there?

#138 KLNR on 01.21.22 at 12:28 pm

@#111 #119 expat on 01.20.22 at 11:18 pm
1. When COVID-19 will be finished, governments, politicians, Big Tech corporations, FDI, CDC, WHO etc. will introduce COVID-22, 23 and so on, because they are making money and enjoying their sadistic power.

2. It should be Nurnberg II to sue them for crimes against humanity, for murdering innocent people, which were killed not by covid, but by absence of health care and sadistic restrictions.

3. my respect to Bronze Bullet

lol, you should stay off youtube.

#139 James on 01.21.22 at 12:37 pm

#135 Ponzius Pilatus on 01.21.22 at 10:49 am

#126 crowdedelevatorfartz on 01.21.22 at 8:14 am
@#100

“Anyone still remember when the BigMac was as big as on the picture, and cost a buck?
Oh, the good old days.”

+++

So.
You dont eat the buck fifty hotdogs at Costco but seem to know their price intimately.

You reminisce about “the good old days” of BIG burgers at Micky D’s for a buck
————————-
Oh, CEF.
Always jumping into a conversation without getting the context.
I was pointing out that inflation has been around since people traded apple for oranges.
As a financial expert, I make it a habit to follow trends in the economy and comment on it.
You are an avid reader of the Economists.
So you’re probably aware that they publish the Big Mac Index, that tracks purchasing power in different countries based on the price of a BIg Mac.
_______________________________________
If inflation is a problem then pay attention. I hear cat food is tasty!
I never hear of any complaints from cats about their dinner.

#140 Quintilian on 01.21.22 at 12:40 pm

“First thing to remember is that this is free money. The inflation rate is 4.8% (in reality, much higher) and the sweet thing at the bank is offering Mike a load of cash at less than 3%”

Banks pay depositors negative rates; they lend money at less than inflation.
What could go wrong?

#141 SunShowers on 01.21.22 at 12:54 pm

#77 Shawn on 01.20.22 at 7:23 pm
“Our mission is clear, save and invest and become an owner, a capitalist.
No need to continue to be a victim.”

So, your solution to the mass exploitation of the working class is…more exploitation?

Also, what do you think an economy where everyone is a capitalist and nobody is a worker would look like? Capitalists can have all the fancy machines they want, but without anybody to operate them, they’re useless.

#142 Respect agree 1000 percent on 01.21.22 at 1:11 pm

1. Garth’ huge mistake:
Real Estate insanity is intrinsic part of Kanadian system, Soviet Kanadastan communist regime, but not the isolated event.
2. Communist Kanadastan is on the fast path of self-destruction.
I was witness to self-destruction of the USSR, as I predicted 20 years before it happened.
Now I’m witnessing self-destruction of Communist Kanadastan, as I predicted many years ago.
3. Soon you will need to sell your house, to have money to buy ticket to run away from Kanada.
4. My respect to TurnerNation

Every smart person should leave this shi.thole now.

#143 IHCTD9 on 01.21.22 at 2:18 pm

#4 gravycanuck on 01.20.22 at 2:52 pm
Can you help me understand his logic in the article?

“The increased flow of newcomers and their suitability for the needs of the job market “will work to provide the Bank of Canada with some flexibility in the pace of monetary tightening due to the taming impact of new immigrants on wage inflation,” Benjamin Tal

but for housing….
“Tal also said household formation and the subsequent impact on housing demand could be understated due to the government’s increasing use of permanent residents as a source of immigration.”

immigration will help with wage inflation as there will be more workers, but for housing it won’t be as bad as they are already here as permanent residents? Wouldn’t they be working here already?
————

1. Tons of new immigrants will stifle wage increases for all.

2. Converting existing pr’s into Canadians instead of further increasing immigration will lessen the demand for housing. Already working, already housed. No impact on anything really. Sounds like Trudeau wants to talk about big immigration numbers, yet understands the damage it does to places like the gta. This way he can talk out both sides of his mouth.

Also, sky-high housing prices and rents means both groups will house-pack, which should lessen demand as well. One home inspection done by officials working for the City of Brampton revealed 25 international students renting there. That’s how you tackle the Canadian housing debacle when politicians won’t.

#144 Faron on 01.21.22 at 2:24 pm

#132 Sail Away on 01.21.22 at 10:10 am

thumbs-up-emoji

Bonds are being bought, so that should take the rate pressure off right? ;-)

#145 IHCTD9 on 01.21.22 at 2:38 pm

The local Metro has boneless skinless chicken breast on for 7.00/lb. Looks like I’m switching to pork.

#146 IHCTD9 on 01.21.22 at 2:43 pm

#141 SunShowers on 01.21.22 at 12:54 pm

Capitalists can have all the fancy machines they want, but without anybody to operate them, they’re useless.
————

Man, you are waaaay behind the times homie.

#147 DON on 01.21.22 at 2:48 pm

#137 bdwy on 01.21.22 at 12:22 pm
getting ugly for growth stonks and valueless bit(coin)s. hiding in brk.b and oil but still a bit scared here.

jp has everyone edgy.

…….
pumped to be off to visit London UK for the first time next week.
masking ends the day before we land!
Is there much of anything to see there?

*********

I hear they have a big circus in London.

Formerly known as Parliament and the Royal Family.

#148 Sail Away on 01.21.22 at 3:15 pm

Roses are red, chicken is grilled, millennial couple bike through ISIS territory to prove people are good… and get killed:

https://www.bizpacreview.com/2018/08/16/naive-millennial-couple-who-didnt-believe-in-evil-bike-through-isis-territory-it-doesnt-end-well-664559/

#149 Stoph on 01.21.22 at 3:19 pm

#145 IHCTD9 on 01.21.22 at 2:38 pm
The local Metro has boneless skinless chicken breast on for 7.00/lb. Looks like I’m switching to pork.

————————————————————-

Just wait, you’ll soon be switching to tofu.

#150 SunShowers on 01.21.22 at 3:26 pm

#146 IHCTD9 on 01.21.22 at 2:43 pm
“Man, you are waaaay behind the times homie.”

Lol my coworker operates a six-figure CNC router and it doesn’t do diddly-squat by itself.
He still has to program it so it knows what parts to cut for which finished units, the finished units still need to be entered into the program, and the raw material/finished parts still need to loaded/unloaded.

#151 All lies and manipulated u decide on 01.21.22 at 3:37 pm

Why worry?
Enjoy the ride…Peeps been talking down RE for eons here. Bumps in int rates will not collapse RE. These way to many things driving RE. WE have 2 nut bars at the helm with zero sense of monetary policy. People all over earth love Kanada and our banking systems is a rock. Raw materials are not going down. Oil is not going away or down.
One warehouse I bought cost $750k to build 2011. Now its 2 mil 2 build. money is trash and that’s going to stay that way until you fire T2s ass and put someone with a brain in charge.
Hold your ground don’t sweat it, keep knocking your debt down.

https://ca.finance.yahoo.com/news/where-new-home-prices-have-shot-up-most-canada-175242814.html

#152 All lies and manipulated u decide on 01.21.22 at 3:56 pm

#149 Stoph on 01.21.22 at 3:19 pm
#145 IHCTD9 on 01.21.22 at 2:38 pm
The local Metro has boneless skinless chicken breast on for 7.00/lb. Looks like I’m switching to pork.
————————————————————-
Just wait, you’ll soon be switching to tofu.
======================
Porks going up too. One buddy has a ranch. I buy free range eggs and were $4 just went to $5 ($7 or 8 at the store) and chicken $4.25 lb and way better than that production crap.. Chicken feeds up 100% in one year he said.
Just bought a side of beef from another farmer friend for $5lb cut and wrapped. $1500 for a side is dirt cheap these days. Just bought a box of lobster tail $385 works out to $15ea. pretty cheap.
So wages can rise but their squat compared to real life costs increasing. The $20 is the new $10.
Inflation rate is 4.8% is crap.
Steak and lobster Saturday with the kids. Lifes short you must enjoy.
Also my buddy said. Marry someone that can cook because the sex dies out and ya gotta eat.