On Wednesday the Bank of Canada failed to pulled the trigger. The first in a string of interest rate increases has not occurred, despite overwhelming market belief it would take place. It appeared the world was about to change as a result. Worse at first, better later. But for a while, the same.
Here’s the context going forward. As a result of today’s wimping out in Ottawa, there’s even more of a move likely in March. If you didn’t take the mortgage advice from a certain pathetic blog, there is still time. Here’s why we’re at a precarious moment.
House prices are nuts. Not just once-in-a-generation ridiculous. This is more Biblical. Average families can’t afford average houses on a scale hitherto unknown. Prices nationally went up 27% last year. Inventory collapsed. Household debt hit new levels of absurdity. The biggest bank says it now takes 70% of pre-tax earnings (and a 25% down payment) to buy a house in Vancouver. In other words, nobody can.
Things are 50% more unaffordable than just five years ago when governments went nuts about a ‘housing crisis’ and brought in tough new measures. They failed. It’s worse now. And as you can see since the last federal election in September, politicians have largely given up.
This is where your central bank comes in. The crude and blunt hammer of interest rates is the last, best chance of rescuing the fading dream of home ownership. But to get to a better place, there will be rivulets of blood running in the gutters. Lots of people who do not prepare will get whacked.
Blameless, but dumb, they bought properties with huge dollops of leverage taken at teaser rates. Parroting conditions that preceded the US housing collapse of 2005-6, millions of Canadians now have variable-rate mortgages they took only for one reason – they needed to cheapest rate possible in order to get into a home.
Look at this chart. More than half of all new borrowings are VRMs.
What’s it mean?
VRMs have an interest rate tied to the bank prime, now 2.45%. Lenders have been offering variable-rate loans at deep discounts of, for example, prime minus 1%, or less than 1.5%. That’s a huge discount over the rate on a conventional mortgage, which is fixed for five years. But variable-rate loans have, gee, variable rates. Who knew? Every time the central bank raises its benchmark, the prime hikes and so does the cost of a VRM. Sometimes this is passed through in higher monthly payments. Often the payment stays the same but interest charges jump and debt repayment stalls.
The problem is that the next rate hike will be just the start. There could be four or five in 2022, and additional moves in 2023. People with VRMs must then either convert to a fixed-rate and pay a stiff penalty to do so (three monthly payments), or wait until renewal and get hit with a bomb.
Meanwhile posted mortgage rates that rise along with the CB’s tightening schedule will absolutely cool the real estate market. After an initial flurry of panicked buying by those people trying to grab low rates, there is no alternative. Fewer and fewer can afford to purchase now, even with a 1.5% variable-rate loan and 20x leverage. So how many buyers will be left when the least expensive mortgage has doubled? It is inevitable prices correct in order for the market to function – especially if Ottawa in the meantime takes aim at investors who have been scooping up 25% of available properties. And as prices start to flatline then fall, listings increase. Owners will try to get out at the best price before conditions worsen. More listings and higher rates are a recipe for lower prices.
So what happens if the value of the property you bought in 2021 with a VRM and 5% down starts to decline and your effective interest rate rips higher?
Exactly. My Bay Street buddy David Rosenberg and I don’t share a lot of views, but he was close to the mark this week in saying this: “If the Bank of Canada goes at least as far as what the rates market has priced in, you’re going to have arithmetically at least a 25 per cent plunge in residential real estate values.”
The parallels to the American real estate plop (that led to the 2008-9 credit crisis) are just too compelling: A housing boom based on cheap money and rampant speculation. Lenders offering huge leverage, partly because of government loan guarantees. Investors, usually leveraged to the hilt, helping to financialize homes. House porn everywhere in the MSM (“House gets 100 offers, sells for $669,000 over asking…”). Rampant household debt accumulation. Lenders pushing teaser interest rates destined to rise in the future. Blog comment sections teeming with people saying, ‘’Rates will never rise,” and “The government won’t allow it ‘cuz everyone’s in debt”, and “Real estate will never go down…”
What happened? US house prices, on average, fell 32%. It took ten years for them to recover. In some area codes (Phoenix, Vegas, Florida), values plunged 70%. The financial system shuddered, because America had adopted policies promoting home ownership and allowed residential real estate to become too big a piece of the GDP.
Well, we’re way beyond that. And while our banks are strong and most of their mortgage portfolios are taxpayer-backed, there’s much danger on the streets of Kelowna, Brampton, Milton, Halifax and everywhere. Risk lies on the shoulders of borrowers, those who are leveraged, with scant equity and floating mortgages, or reckless amateur investors with home equity lines of credit they used to invest in a second property.
The moment you denied is still coming. Do not squander the reprieve.
About the picture: “Our Pandemic Pitbulls pause for a pic prior to playing passionately on the playground,” writes Andrewsi. “Siblings Gibson the Grey & Brindle Bala celebrate their 2nd birthday on January 27th – tomorrow. They’ve brought our family nothing but joy. We picked up the pair for only $100. Best C-note I’ve EVER invested!”
293 comments ↓
Unbelievable. Can’t believe they chickened out. By all means, let inflation get worse. What could go wrong? ♂️
The spineless gastropods in Ottawa have shown their jellyfish stripes.
When this housing market fantasy is neck deep in financial underwater victims….
Will True-dough and Free-cash be standing in front to take the blame?
Hopefully a major correction happens during his “leadership” and he’s hammer relentlessly in the press , The House of Commons, and the street.
His stutter was getting so much better.
Now be honest Garth; did you have two posts ready to hit SEND on? One if rates rose and one if not? :) Clever lad.
Proof positive BOC is not independent. The ‘stall’ is a decoy to push Trudeaus next hundred billion spending TBA in the coming budget. It’s time for the Loyal Opposition to light some fires. Trudeau-Inflation is a disaster.
What’s it mean?
It means that whoever bought a house even a year ago, did the right thing.
Isn’t it obvious even now after so many years, that the BoC is considering the indebtness of the population?
Maybe it’s te to consider this as well when giving advices?
While the prudent thing to do would be to mercilessly raise rates, it looks like there’s nobody prudent in Ottawa. Therefore, I believe a 50yr amortization mortgage is going to be announced by those damn fools in the House of Parliament. Why would they act responsibly now???!!!
Good morning,
Thanks for the early post, BoC rate announcement must have displeased you a bit and summoned your writing spirit.
No-one can reasonably predict interest rates, I believe Peter Lynch said you only needed to predict them few times in a row to become a billionaire.
I am actually quite pleased that they did not cut any further like China did because politically there is still an excuse to do so.
However, if you are portfolio diversified, balanced etc, you are fine.
It’s very simple… The epic everything bubble cannot be burst by raising rates. Too much inflation? Suck it up and deal with it! The CB and government are ALL IN.
The last time I checked, real estate, rental, and leasing represented something like 14% of Canada’s GDP. That itself is a stupidly high number for a country to be investing in a sector that is basically non-productive, but when you add in related industries like construction and finance the total number must be north of 20%. In other words, the biggest part of Canada’s economy is HGTV. And you wonder why the OECD expects Canada to underperform for the rest of the century. ¯\_(ツ)_/¯
Woowww gros gros choke de la BOC aujourd’hui
Hahaha……You’ve been writing this for 20+ yrs… still waitng!
But yeah house prices nutz… inflation now rampant.
As expected – the last stream of confidence feeding the liquidity hose is not going to be compromised. House prices to the moon… no, make that Jupiter
It must be exhausting being a housing bear.
Hate to say it but..
TOLD YOU SO.
No need to apologize for calling me silly for ever thinking the BOC will do a max of 2 when they can’t even do ONE.
NOT EVEN ONE. So typical. So predictable.
The great thing about having depression on bellcanwetalk day of all days is that you see through the BULLSHIT much easier of what these thieves do and say.
God bless us all….it’s over people. Totally over.
I see after this many years we are still pushing home prices will correct and it’s a bubble? Let’s get real here rates can’t go up because that would bankrupt half the nation. I guess the questions now are how long can we stall and who is to blame?
Not at all shocked, no one should be. They couldn’t find a way to normalize rates during good times.
And sorry but I don’t believe the BOC is operating independently from the Government. This is coordinated policy. Inflate away the debt.
Strawberry you want? Chocolate you get.
#15 Stevenson on 01.26.22 at 10:48 am
Let’s get real here rates can’t go up because that would bankrupt half the nation.
_______________________________________
Trudeau would never leave a job half done….
@#9 Caffeinated Monkey
“That itself is a stupidly high number for a country to be investing in a sector that is basically non-productive, but when you add in related industries like construction and finance the total number must be north of 20%. ”
+++
You left out all three levels of Govt bureaucracy that suck countless billions of taxpayer dollars year in and year out, for what amounts to , essentially, being in the way .
Then we get to pay for their pensions after decades of essentially, being in the way.
A far bigger waste of taxpayer money.
Garth:
Get over the fact that they can or ever will raise rates.
THEY CAN’T. AND THEY WON’T until they are ready to squeeze humanity to the breaking point.
You are thinking logically in a world full of bankers who are pathological sociopaths. THEY DON’T CARE about anybody except who they enhance financially.
You mean well I know but until the bastards are ready to drop everything they will do NOTHING.
A new perspective based on reality please Mr. Turner.
And can you admit for once that you were WRONG.
Just once.
A pair should have been grown by the BOC and was not.
imagine if we had areal opposition to the government and not just cheerleaders of the #karenconvoy #flutruxklan
It seems that BoC will not do anything until we hit a serious monetary crisis.
Garth,
Good call, the BOC won’t move before the FED!
This spring market in Canada will break all records and then force government to act by summer. Canadian Home prices cant keep going up forever. Trees don’t grow to the sky and they never will…
Seems to me like they were always going to wait for the US to act, then copy.
It seems the only thing these guys are capable of doing.
I’ve said it before and I’ll say it again, central bankers would rather eat glass than raise rates. There’s always a reason not to do something and these guys are masters of abdicating responsibility. I’ll quit smoking next week, I’m joining a gym and getting in shape, I’ll get off the junk but just one more hit. Sure pal.
Listening to Tiff’s message is a warning to the over indebted that interest rates need to rise to combat inflation. You have weeks to get your finances in order.
‘Interest rates must/will rise…’
They did stop the QE punch bowl today if I heard correctly, or is that a scheduled slowdown.
Considering the markets had expected a rise today, and priced it it, does that mean we are about to see the CAD drop in value over the next few days?
The new world Garth. It’s leaving your old ideas behind. Get with the times!
Rather than slit their wrists by raising rates they will carry on as they have been for the last decade and let inflation rise and the dollar fall and blame it all on covid and hope for the best. I laughed when i heard about the five or six rate hikes.
Tiff Macklem is an absolute disgrace to this country… A cowardly, pathetic waste of air…
Well, the rate will not increase in March.
If anything in the middle of 2022 where by the end of 2022 there can be one at best.
I am no one.
Saturday already?
I’m starting to feel a little sorry for all the people who sat on the sidelines waiting for housing prices to go down to a level that their budget could handle. Sitting…brooding…wasting…whining. As long as there is an expectation of growth, status (good luck without a lawn) and isolation the herd will continue to buy – regardless of rates.
Hey, I have some advice! Why don’t you get on with life…before you DIE. Houses are actually like a ball and chain. Ones that DON’T give a little mushi when you talk nice.
Canada is a nice country for inept, entitled wannabees scraping ice from their Tesla’s. But when it comes to quality of life, like smiling? Losers.
Branch out peeps. Take some of those millions y’all got and open your miiiiiind…hugging can help!
Og
Sigh. Guess we’ll see what the fed does.
In the meantime, I’ll enjoy the green wash in the markets…..I was actually enjoying the red wash more….
It seems that the Bank of Canada does not have independence, and it adheres to the position of a government that is out of touch with reality and squanders money left to right. They do not care that the people is increasingly drowning in debt, that high inflation burns savings, but the laws of the market are harsh and you will have to pay in full for everything
Demonstrates the strength of our economy to the World!
See, after reading stuff like this I have a hard time believing BOC is a politically impartial institution.
Totally agree Garth—this was a bad move and will lead to real shake downs on RE and Stock markets in the Spring and summer.Nobody ever wants to chase inflation but that is exactly where we’re going and it’s going to reek havoc.I guess gov’t is hoping inflation will just balance itself or something along those lines but ignoring a problem works….like never.
HA!
https://www.youtube.com/watch?v=9ivn0C8oebg
Our Ruling Class: Asset Inflation Good — Wage Inflation very bad.
Notice how prices and assets are allowed to rise with inflation but only when we see Wage Inflation will it be stopped dead in it tracks with aggressive Interest Rates hikes.
Working Class and Middle Class Wage Earners (& Small Business) – all the forces of the ruling class are aligned against you.
“It’s a club and you’re not in it”
BoC (as usual) waiting on “Big Brother” south of the border to lead the way. The notion that leadership in Canada has, in any way, some semblance of independence from the 900 lb. gorilla is fantasy. Grow a pair……
And when you lose control, you’ll reap the harvest you have sown.
What this means is I have lost all faith in the Canadian dollar. They’re going to just let inflation rip. Cash is trash and I’ll never be able to own a home in this country. Turning my dollars into gold and Bitcoin from this point forward as I work a plan to expatriate by years end to somewhere warmer where I can afford more than 400sqft.
So the BoC isn’t getting the early jump on the Fed. The Fed has a more succinct plan for rates in 2022 all packaged up and ready to go beginning in March.
The BoC will follow right behind.
The BoC eliciting dramatic rate moves before the Fed leading the way is not as a succinct a plan by them now at all. Not with the planned minuscule US Fed rate increases for 2022. Kick the can down the road and leave the rate drama for next year and beyond.
On that note, economists need to consider just how late its getting … old tricks won’t continue to save the economy with quite the same effects the last 12 years have had. Nothing can go on forever.
We will all get to see how astronomical and unprecedented debt levels reaching unmanageable and unsustainable conditions changes the machinations of economic quick fixes of the past by 2023 and beyond.
For now… The Fed has a succinct plan for the current year with pats on the back for a job well done all around in dodging the bullet for another year successfully kicking the can further still down the road.
That day of reckoning is coming and and is now looming , inching closer, even closer than many think.
I, like everyone, was surprised they didn’t raise rates today. One final chance for people to get their financial affairs in order.
Canada wreaks with weak politicians. They did not want to move until the US is ready. Always following, never leading. New boss… same as the old boss. The FED will have to decide for us.
MACKLEM: WE RAN A SIMULATION IN WHICH GLOBAL GOODS PRICES PLUMMETED BY 30%, BRINGING INFLATION TO JUST UNDER 2% NEXT YEAR.
Is the 30% global goods price decrease what they’re basing their rates decision on, because inflation will be a 2% without any BoC action? That’s insane, no?
And just as predicted, the Tiffster does absolutely nothing. You can never go wrong betting on the central bankers embracing neo-feudalism and the economic ruination of the next generations.
Garth, you can’t seriously still expect the central bankers to act to rein in inflation. We’ve had a year of dramatically above target inflation, and yet they still won’t act even in the slightest. How much more evidence do you need? March is a long time. I’m sure they’ll find another excuse by then to do nothing.
It’s time to face reality – the Bank of Canada has no interest or intention in following its mandate. The central bankers no longer act in the best interests of society at large. The wealthy are making money hand over fist in the housing and other markets – why would the central bankers ever take away the punchbowl? Do we really think they care one iota about the middle and working classes and something as mundane as the cost of living?
The idea that housing prices would fall 25% is laughable. In fact, I’d bet there’s a higher probability of them increasing another 25% this year than declining 25%. The Bank of Canada is ignoring their mandate, and if things get really bad the Liberals will just up immigration levels even further to increase demand.
As a fiscal conservative and socially liberal guy most of the time, I often vote Liberal. I did not vote Liberal last election, and Trudeau has pretty much sworn me off the party forever at this point. Colossal mismanagement doesn’t even begin to describe it. Society is falling apart while policy makers are boasting about an illusory wealth effect. What a truly sick society – and I’m not referring to COVID.
I hope the baby boomers have robots lined up to take care of them in there last years. Because young people sure as hell won’t be able to afford to.
Oh wow. To be fair, only average families who don’t already have a house cannot afford a house, and stats show that home ownership sits around 65-70%. Why would Tiff screw over the majority ?
It seems to be a BoC tradition of caving in the more important moments of monetary policy. I remember a few years ago when Poloz could not muster the strength and courage to pull the trigger on rates and here we are with a new governor that has the exact same character traits. I don’t know if it is fear, incompetence, paralysis by analysis or influence from the federal government but they better hike in March before inflation is embedded.
This isn’t the Tao te Ching here! Doing nothing is actually doing something in this case. They are basically saying that they endorse the erosion of the value of money, the inequality that is growing every day from out of control house and asset prices and the overall destruction of the quality of life here in Canada.
Last time inflation was this high in ’91, interest rates were around 10%. Yeah we have higher debt now, mostly because it has been over a decade of loose monetary policy and now the chickens have come home to roost. They can’t even do a measly .25%! This is crazy..
Go figure. That sly old devil Doug Porter was right after all, predicting no BOC increase this time. But the morning papers are full of ominous tidings such as these snippets:
“A new real estate report says Canada’s record-low supply of real estate is being compounded by an emerging trend: baby boomers who won’t let go of their homes. They are aging in place.
Although the trend was underway in Canada, and has been well-documented in the U.S., the COVID-19 pandemic has exacerbated the problem here, according to Engel and Volkers’ 2021 year-end real estate report. They are increasingly valuing the size of their homes during lockdowns.” +++
And then there is this from Howard Levitt: ( Red warning light flashing!)
“With the lifting of capacity limits comes another warning to employers: recall employees to the workplace before it’s too late.
We wrote on this topic in October, when we cautioned that permitting employees to work from home longer than legally necessary risked making that a permanent term of their employment.
In such a scenario, an employee who was later forced back to the office could claim the move amounted to a constructive dismissal, refuse to attend and sue for wrongful dismissal if the employer did not back down.
The time to recall employees to the office is limited.
❚ Employers should document these communications: a phone call is not sufficient protection.
❚ And finally, if remote work is the new norm, employers should offer new contracts that include workfrom-home rules. Employers legally have a choice of offering employees their jobs back at the office at their existing remuneration but offering a lesser amount if they prefer to work from home.” +++
Covid is being run out of town and life is returning to normal, n’est pas?
Those weasel boomers might now see their opportunity to cash in and then housing supply might open up and peeps might be called back into the office. Normality returns and joins hands with rate hikes.
Here is some sound financial advice: Place one hand on your wallet and the other on your pistolla.
So how independent IS the BoC? One headline suggested that the BoC won’t raise rates ‘until the CPI is back to 2%’. So is this just pandering to the masses who would be creamed by rates rising which would be a political disaster for JT & crew; taking the optimistic view that inflation will regulate as Covid fades OR a bold choice to stay the course & do nothing rather than try to time when would be best to intervene? Though I’m not sure about the ‘bold’. Right now I’m going with ‘wimpy’ because if the anticipated inflation self regulation does not occur, methinks the BoC bus will be plunging off a cliff…..
#27 DON on 01.26.22 at 11:15 am
Listening to Tiff’s message is a warning to the over indebted that interest rates need to rise to combat inflation. You have weeks to get your finances in order.
‘Interest rates must/will rise…’
They did stop the QE punch bowl today if I heard correctly, or is that a scheduled slowdown.
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Always better to judge people on what they do, not say. Tiff had an opportunity to add a microscopic 25bps to the overnight rate and held off. He is right, they must rise, but he clearly doesn’t have the sack to make that move. If not today, then why in March? And what if the Fed doesn’t raise at 2:30?
No good reason not to raise today, he has once again signaled they have no appetite to truly normalize rates. The idea that the BOC is independent is ludicrous and we drop that canard ASAP.
On top of that, it looks like we got us a convoy, heading for Ottawa.
We are stuck with low interest rates. They cannot increase without causing political suicide (the BOC is influenced by government no matter which way you look at it). Canada will experience decades of slow deflation just like Japan where both the Nikkei and home prices have not recovered from 1989 highs. Throw in higher taxes, we are screwed.
Anyone young should leave Canada and do not even consider moving back until a few years after Trudeau is gone.
Imagine how indebted we must be as a nation that the BoC chooses not to raise rates a measly 0.25% to 0.50% in the face of full employment, a strengthending economy, well known and understood RE pricing risks, a waning pandemic and 5% inflation.
Think about that for a second…they feel that a 0.25% increase can’t be easily managed.
We are so screwed
#42 IGiveUp on 01.26.22 at 11:49 am
What this means is I have lost all faith in the Canadian dollar. They’re going to just let inflation rip. Cash is trash and I’ll never be able to own a home in this country. Turning my dollars into gold and Bitcoin from this point forward as I work a plan to expatriate by years end to somewhere warmer where I can afford more than 400sqft.
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Move to Red Deer. Prices havn’t changed in years.
Two more weeks (months)!
Interest rate folk are starting to sound like the new QAnons. An interest rate hike is about as likely as Trump secretly still being POTUS (and is starting to sound about as wacky).
BIG HAPPENING in “Two More Weeks”
Anybody ever see that gif of a truck racing towards a bollard, forever, and never striking it?
Boy, would I ever like to know the behind the scenes discussion and influence from political leaders that would result in such a momentous mistake as to leave the rate unchanged. Gutless Tiff should have acted 6 to 8 months back at least to squeeze the rate up in the hopes that we could have a softer landing.
I believe you are right Garth …the landing will be much harder then people imagine.
Sort of like in the book/movie “the Big Short” in that so many people blissfully believe that this artificial level of prices can be sustained and we will be just fine “after” Covid!!
#21 Sailedaway
Someday you will understand how evil and oppressive socialism is. Either in this life or the next, we all have to face the truth. Your attitude is indicative of Canada’s failed education system. All the best to you. You have a lot of maturing to do.
Garth and everyone,
Today, January 26, is a special day for those suffering with mental and emotional issues.
https://letstalk.bell.ca/en/
There are some very frequent commenters here who are clearly suffering and disturbed, and we all encourage you to reach out for help today.
Sail Away (mommy issues), TurnerNation (dystopian schizophrenia and paranoia) and crowdedelevatorfartz (psychopathic delusional narcissism) are all severely suffering and could benefit from professional help.
Please reach out fellows. Commit to spending more time this year getting help for your obvious issues than hanging out and posting all those multiple weird comments on this blog.
Find professionals who will care. Don’t feel stigmatized for your mental illnesses.
Let’s Talk.
https://letstalk.bell.ca/en/our-initiatives/
Gutless. All we heard 70,80% rate hike! Pfffffft,,, Hear that. Nothing but gas escaping. Let the axe fall where it may
The politicians and the BOC are corrupt and in collusion.
But they are not stupid.
There is a massive asset bubble- that is undeniable.
The best way to puncture it, is not by puny rate hikes, but rather by adding an accelerant to the flames.
At .25 BPS it would take decades to bring prices down, but at several hundred-thousand-dollar increments of price appreciation, it won’t be long before the crash, consequently the corrupt cadre won’t be blamed.
That’s just an opinion.
But most of the world’s central bankers, and more importantly, the Fed’s spread sheet, has expanded by trillions, that is math, not opinion.
Canada cannot act alone, so interest rates won’t be going up anytime soon.
“#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.”
Central banks have painted themselves in to a corner. Looks like jawboning is all they’ve got left in the toolbox.
Let the dead bury their dead. My man Tiff picks light over darkness, steak over tofu. True to himself, he chooses P in P&L. Let it burn, baby.
@”#14 Billy Buoy” +1, same here.
Let’s not forget that this isn’t about introducing higher real interest rates, but about putting an end to crazy negative interest rates when inflation is already very high.
They simply won’t do it because it can’t be done.
I agree with Garth that those who have VR mortgages are hosed – all true, but that’s precisely why real interest rates can’t be raised to anything even close to 0% in coming years.
Now that neither the government nor most voters can pay back their debt, how much appetite for positive real interest rates is there?
Yeah, sure, there may be several 0.25% hikes in 2022 but how’s that going to stop runaway inflation?
I bought some SIL ETF shares today.
BoC has stated that inflation is supply chain issue only, it will run back down to 3% by the end of the year, so no rate increases coming this year. Maybe next year when inflation moves past their three percent they might. I am sure something else will come up by then, always has always will and you can take that to the bank!
A great video explaining VIX and why interest rates are likely going down.
https://www.youtube.com/watch?v=HaMOK9zPAY0
No they’re not. – Garth
Serious question. Is anything being done to protect the people running the Bank of Canada, Ministry of Finance and Ministry of Housing? The secret service is protecting past and present US government officials and their families. Things have gotten so out of hand, there is a less than zero chance someone will take their anger and rage to the people causing their misery and pain.
Perhaps you can speak to this Garth, you were that guy in Canada for a little while.
It seems to me the 80s solution of “spiking rates” succeeded because at that time federal balance sheets in the western world were still sane. All of that accrued debt (whether it is on a taxpayers home, vehicle, credit card or their government’s balance sheet) is still fake value. Does the government not have an interest rate that they are pegged to as well? In other words, if the BoC raises rates – does this not also drastically affect the finances of nations as they need to borrow to meet obligations AND future liabilities.
In other words (as many of us have droned on here in steerage) there is a new feudal system in place. As “God” dominated medieval Europe – the new divine right to rule is access to the printing press. There is no more wealth outside of that.
Cheap money is keeping the total economy (from Bay Street to Main Street) greased, because the wheels have been falling off, even before COVID.
And it doesn’t take a degree to understand what follows global recessions. Many believe that in an age of nuclear weapons nation vs nation conflict is unthinkable.
Robert E Lee mused in his final journal entries that “The advent of rapid, repeating fire weaponry will end large scale conflict forever. The consequential devastation modern firearms could bring to the battlefield would leave no room for war on a large scale.”
And here we are again on Europe’s eastern front. The nature of war is always evolving, human nature will never change.
Not sure the Ukraine will go hot within this current media frenzy but, rest assured both sides are serious in their contention for what they want. Economies dwindle, governments wobble and new “Gods” are required to form the people and lead them to heaven.
(From threes ago):
https://www.youtube.com/watch?v=YeNwyVG8Egs
Today’s lesson:
“Predictions are difficult.”
You’re Welcome.
So what happens if the value of the property you bought in 2021 with a VRM and 5% down starts to decline and your effective interest rate rips higher?
Exactly. My Bay Street buddy David Rosenberg and I don’t share a lot of views, but he was close to the mark this week in saying this: “If the Bank of Canada goes at least as far as what the rates market has priced in, you’re going to have arithmetically at least a 25 per cent plunge in residential real estate values.”
but they didn’t
They know they should but they didn’t. Cowards.
So who are they? The Bank of Canada, the Liberal Party of Canada, Justin Trudeau.
And why do I reject and scorn them so? Because they claim to care for the country. But they are like the hired hand. When the wolf comes. He runs.
You know what’s pathetic besides this blog? The fact that the worst crash in Canadian history (I.e. 35% or so) would take us all the way back to…..2020 prices. wow.
#59 AB on 01.26.22 at 12:42 pm
#21 Sailedaway
Someday you will understand how evil and oppressive socialism is. Either in this life or the next, we all have to face the truth. Your attitude is indicative of Canada’s failed education system. All the best to you. You have a lot of maturing to do.
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In then end their all on the same team. Democracy and free markets are now just an illusion.
T2 has plans he’s been given and you Canucks are not going to like them.
Yes they want a 100million piled into Kanada so they can keep up their spending.
Socialism is a fail model but full speed ahead on that.
Its going to take a hellova lot to dump the housing market here. The USA had tons of underlying issues before it tanked. I called it 6 months before and warned my family and they didn’t believe me….3 lost their homes.
A few rate hikes ain’t going to do it.
If we do wipe out there’s no way in hell any of those bone head politicians taking any responsibility. That never happens.
When the Feds in the U.S. begin to normalize their rates Canada will follow … this will happen in March.
Meanwhile, the truckers are in charge.
Here’s a comment from a Canadian-based discussion forum:
“Personally I don’t mind cause I benefit from it lol”
This is it, in a nutshell. This is why we have the government we have. This is a textbook example of the fool being played for pennies on his VRM while dollars are siphoned from his retirement savings.
This is the modern-day Canadian who’s vote is worth as much as yours.
We’re screwed.
I have zero debt, so all this does is screw me over. Here comes more inflation in prices, thank you Bank of Canada for screwing over people who minimize risk in their financial choices by eschewing debt.
Of course they didn’t raise rates because they want to pay off the massive debt with cheaper money. They will delay as long as possible and the increases won’t be as frequent as Garth is stating. Also if housing drops by 25% then our economy will go into recession because of the role that housing plays in the economy. In that case, rates will come tumbling back down.
It takes skill to make so many mistakes in merely 65 words. – Garth
Hey Garth,
So what’s your take on recreational real estate? I would assume that a lot of it’s been purchased by refinancing the principle residence. Does this mean that cottage country will be the first to drop? Looking to pick up a nice lakefront place when the stuff hits the fan.
56 Ronaldo on 01.26.22 at 12:42 pm
#42 IGiveUp on 01.26.22 at 11:49 am
What this means is I have lost all faith in the Canadian dollar. They’re going to just let inflation rip. Cash is trash and I’ll never be able to own a home in this country. Turning my dollars into gold and Bitcoin from this point forward as I work a plan to expatriate by years end to somewhere warmer where I can afford more than 400sqft.
—————————————————————-
Move to Red Deer. Prices havn’t change
—————–‐————-
You missed the “warm” part.
#50 jag
Here is some sound financial advice: Place one hand on your wallet and the other on your pistolla.
——————————-
What’s a wallet?
#47 Concerned Citizen on 01.26.22 at 11:55 am
==============================
Your not wrong. Their not concerned as you think about affordability. Actually they could give a sh!t. The greater plan is you can’t afford to live n a big bad house, travel freely and globally. Your too hard on the environment. While they do as they please.
The hope is you can just afford to live in your cubical in that large complex and eat worms. Cows are bad oils bad. Better get on board. T2 is a UN puppet.
#53 Alberta Ed on 01.26.22 at 12:23 pm
On top of that, it looks like we got us a convoy, heading for Ottawa.
————————
A “Convoy of Fools”.
Gentlemen,
Watched an interesting interview recently with David Rosenberg. He basically said that with the amount of debt being carried by Canadians the central bank won’t be able to raise interest rates too much before discretionary spending collapses. This will lead to a slowdown in the economy and therefore shrinking corporate earnings forcing the central bank to reduce interest rates. Sounds reasonable, no? In that case he recommended buying long term treasuries. VGLT has already come off it’s highs in anticipation of rate hikes. My plan is to wait until central banks start raising rates, which should further hit long term treasuries, and then start averaging into a position on VGLT. Continue to collect the interest payments until rates start dropping, which should increase the price of long term treasuries and cash out. Any thoughts?
Garth and every sucker Canadian get ready to get a 50 cents dollar to the US dollar. Maybe Canadians should look into if Trudeau and others thar are his buddies hint hint Bank of Canada guy even have anymore Canadian dollars or are they doing a Paul Martin US dollar shipping company do over. Yes, they are sinking Canadian dollar in coming months. High inflation coming.
#55 Waystar Royco Shareholder on 01.26.22 at 12:33 pm
Imagine how indebted we must be as a nation that the BoC chooses not to raise rates a measly 0.25% to 0.50% in the face of full employment, a strengthending economy, well known and understood RE pricing risks, a waning pandemic and 5% inflation.
Think about that for a second…they feel that a 0.25% increase can’t be easily managed.
———————————————————-
Exactly. A number of us have been saying for years that the BOC will never have the guts to significantly raise. They have had a decade to do it, and here we are, massive inflation and all the risks associated with it and they push it down the road. This is a very clear signal as to what we can expect in the future.
Nope. – Garth
my mom/pop rental list I am following continues to show increasing stress so there will definitely be hell to pay…
their ‘investor’ units are sitting long DOMs (multiple months and longer), they are dropping their ask price (indicating they HAVE to rent to carry) and still do not transact…
this tells me it is getting really tough to find qualifying tenants – prospective tenants simply cannot support the rent ask…
and so those silly ‘investor’ mom/pops gonna have to subsidize their tenants big time or sell…
POP
If you CAN’T fight the FED…
Take their MEDS!
More EZ-CASH please.
Wait a minute… is the sky falling or is the sky not falling? Or did it already fall?
So confusing. I’ll leave it up to steerage to decide since I’m unfortunately beset today with debilitating attacks of involuntary chortling.
I would not be surprised of $3.00 a liter gas coming in the next 12 months. All the medical news is all a distraction of what they are really screwing Canadians big time.
It does not matter because so these current today’s January-26-2022, 2.6% to 3.0% top GIC rates will be 5.2% to 6% in the next 24 to 36 months and if they still let inflation get really bad, we are going back to 1994 to 1996, 7.5% to 9% GIC rates. It is good they are still not increasing interest rates so the market will do so.
Excellent post Garth.
Leverage never ends well.
Just saw a listing for a 2 bedroom, 1,000 (ish) sq foot condo listed in Whistler.
$6,500 / year in taxes plus another $650 / month in strata fees.
Built in 1990. Over $1,950 sq foot.
Multiple showings in 1 day I’m told.
Not sustainable IMO.
Yep – You always want some Treasury Blondes in your portfolio.
Big mistake, they should have raised rates to slow inflation. Tiff was talking from both sides of his mouth. On one hand things are good and close to pre pandemic levels. And the other hand, inflation is high and ready to take action. To me it seems like he is just making excuses to not raise rates, but using strong words to say he is raising them.
Here is something to think about, and I hope it never happens. I believe if Russia invades Ukraine, it will be after the Olympics. That would be close to the end of February, because Putin wants to go. If that happens, it will give China the opportunity to invade Taiwan.
That will then give the BoC another reason to not raise rates In March. Anything can happen to keep kicking the can down the road.
The majority of Canadians don’t pay attention anymore to this CB charade. Its done ,we accept low rates forever. Play VRM game and sell whenever you reached your financial goal and sell your real estate for retirement.
Sure inflation will get higher but we can handle it, low income and people without a sfh will suffer. Its the Canadian way, always be !
#88 Sail Away on 01.26.22 at 2:05 pm
Wait a minute… is the sky falling or is the sky not falling? Or did it already fall?
So confusing. I’ll leave it up to steerage to decide since I’m unfortunately beset today with debilitating attacks of involuntary chortling.
—————————-
The World is waiting for Putin.
If he invades, the Xi will probably invade.
Then the least of our worries will be interest rates and inflation.
In Garth post at 24 Jan I responded:
**********
#86 VladTor on 01.24.22 at 8:29 pm
Stefane Marion, chief economist at NBF:
“If the BoC chooses to keep its policy rate unchanged this week, it will be because of geopolitical concerns (Ukraine), not because of a lack of strength in Canadian economic data”
***********
O my God!!! What an incredible delirium. Have they all (in BoC) lost their minds? Is this dude really an economist?
************************
I was sure on 99% that BoC will keep overnight rate same.
Only 99%! Not 100%. I left 1% b’s I’m a optimistic guy.
Today I’m happy – show must go! We don’t need Netflix anymore. Just do research everyday through RE web’s.
Canada need super crash as treatment for all next 5 generations.
Best solution to save situation is closing BoC and create something new. They supporting speculators against they mandate – to keep economy healthy.
Now my forecast for next overnight – 95% will stay same.
It’s the only way to help developers to sell an incredible amount of new built homes.
“Well, we’re way beyond that. And while our banks are strong and most of their mortgage portfolios are taxpayer-backed”
Ok sure, but remind me who backs the (already overtaxed) Canadians taxpayers… Yeah that’s right, nobody!
Plus last time I checked the CAD was no reserve currency.
Garth, have a gut feel that Cdn RE will tumble mid-year about 25%. Maybe by 35% end of year.
You and Rosenberg same rationale.
2020 = AD 0 for investing, life in general.
Expect the unexpected is all we can say 2 years later with great certainty.
It’s a brand new ballgame.
——————-
Getting worse in Denmark with BA.2 or Stealth Omicron. Hospital up and (choke) deaths as well.
https://twitter.com/bsant54/status/1486109727742472196
Sweden getting nailed by BA.2 like Denmark and they are worried – same conclusions as I have made past week or so by them as well:
https://twitter.com/bsant54/status/1486304088354603013
————
Lungs are lungs people. Mother Nature doesn’t care where they reside as long as they are human lungs.
Canada, your testing is still atrociously low:
https://i.imgur.com/L0uB8xQ.png
The ONE saving grace for Canada is that she is sequencing her buttocks off, since Jan 10:
https://i.imgur.com/1gZVbsw.png
But, sequencing takes time. BA.2 is fast moving, very fast. Go to the 2nd Tweet link above and look at Denmark, Sweden new cases…the time scale was widened. At defaut, the curves are near vertical.
Also, called Stealth because difficult or near impossible to detect using PCR.
*********************
So CAREFUL fellow Blog Dogs & Garth et. al.
Of all your columns this is the most succinct and accurate in describing the state we have gotten ourselves into.
Mr. Macklem has proven himself to be a very weak governor.
Mr. T “No they won’t.”
We shall see….it’s all in the timing.
Like I said before 2 .025% increases, high vix returns and rate hikes reverse just like they have so many times in the past as noted in the shared video.
Maybe they will shock us all but….who do bankers save?
OIL is the key here. Demand is exceeding supply.
Unless we get a big crash, oil prices are only going UP which we all know influences the price of EVERYTHING.
Get used to high inflation folks. The glory years are over unless someone finds an alternative to oil. Not just a band aid solution, but a true replacement. Good luck.
Hope your long Canadian oil stocks. Once Justy is out of office, they will fly.
Forget saving the planet. People need to eat and keep warm in order to survive. Long Oil.
Kicking the proverbial fincial can down the road is a great canadian past time, penny wise pound foolish
I would’ve been shocked if they went up today. And I’m going to be shocked if they go up in March. The central bank (and the government) know what’s going to happen. They knew before this but they decided to just ignore it. It’s coming home to roost and nobody wants to be the one in power when shit hits the fan. Combine this with China’s current real estate issues/Evergrande and this could be monstrous.
I’ll believe it when I see it.
#95 Ponzius Pilatus
Vancouver to Ukraine = 8875 km
Lunenburg to Ukraine = 6830 km
Italia to Ukraine = 1680 km
I put my trust in the EU, Uncle Sam, Brexit and NATO.
As for Xi, too busy putting out Covid fires and they are hosting the Olympics.
I’d didn’t read the comments but let me guess what we have so far:
– Trudeau’s fault for interest rates, debt, the sun isn’t shining today
– BOC’s wrong because Joe from Winnipeg has a better handle than the BOC.
– Canada sucks, we should all move
– Lockdowns suck, we should be free
– Pointless insults back and forth
How’d I do?
Tesla earnings today. Go Elon. My man.
#100 Billy Buoy
yeah oil.
God Bless…
oil future spot contango
and its 34.21% dividend yield.
—————
Long it is.
I was so surprised this morning. Though, a cheap thrill at being so dumb is still a thrill.. I miss Economystic. Guiding us in the ways of economystical baffle gabble.
My 4 month old goldendoodle just suddenly puked up all of his lunch and breakfast when I turned on Jerome Powell’s live broadcast.
Just a coincidence I’m sure.
DELETED
Real Estate Rental and Leasing and GDP
#9 Caffeine Monkey on 01.26.22 at 10:42 am
The last time I checked, real estate, rental, and leasing represented something like 14% of Canada’s GDP. That itself is a stupidly high number for a country to be investing in a sector that is basically non-productive, but when you add in related industries like construction and finance the total number must be north of 20%. In other words, the biggest part of Canada’s economy is HGTV. And you wonder why the OECD expects Canada to underperform for the rest of the century.
***************************
As you say Real estate rental and leasing (and property management) is large at some 14% of GDP.
And right, that excludes the actual construction and financing of real estate.
You call it non-productive. Most of this renting and leasing and property management is for commercial real estate. Those paying the rent must find it produces for them.
For thousands of years nothing has so easily identified a strong economy and civilization more than cities and buildings. Real Estate is HIGHLY productive.
I find it interesting that an owned house that is paid for was counted in GDP when built and financed. But the value in lieu of rent of an owned residential property is not in GDP.
The same residential house if owned by a corporation will be counted as rent in GDP forever in addition to being counted at time of construction and financing. This is my understanding.
What is dangerous is reading too much into the 14% figure. Real Estate rental and leasing and property management is a crucial industry. Who knows what the percent should be? As sort of free marketers we should trust the market to sort it out.
AND of course rising values of existing homes do not enter into GDP because yes a house that rises in price by double is the same house. The financing and real estate fees do enter into GDP.
From what I see as a very ordinary Canadian is that everything happens in slow motion. The financial wellbeing of a good chunk of Canada’s middle class and lower households has been in slow decline for decades. The opposite is true for a much smaller but still quite numerous group at the higher income levels.
Canada still has some very good points, but the cracks are sure starting to show.
Learn to live a very simple life .
I told you it would happen. Look in previous posts.
5% NEGATIVE REAL INTEREST RATES (official rate less inflation) in Canada mean that government debt and spending devalues at 5% annually.
Canada printed 18% of its empty dollars in 2020/2021.
3 more years like that and problem solved. Yea!
Amazing, how debt devalues and 100% mortgaged properties triple in value over 7 years.
And we are not alone, most developed countries have negative real interest rates now. Its just most of the countries do not have laws that strips banks of loans risk and puts it on the shoulder of taxpayers. And most countries do not have 1.5-2% net immigration levels like Canada has.
FOMO in real estate rules for a reason here.
I had a bad vibe that the BoC would not have the balls to pull the initial trigger. When the Fed said recently that it would be March not now, I wondered if the BoC would wait so they can blame rising interest rates on the U.S. Fed and the BoC has no choice to follow suit (as in the past). Spineless. Let the RE band play on as the iceberg gets ever closer.
#88 Sail Away on 01.26.22 at 2:05 pm
Doh! My attention was elsewhere and I missed this SAGI for a 2% return. Too late. Don’t lament missed trades.
#104 Love_The_Cottage on 01.26.22 at 2:58 pm
I’d didn’t read the comments but let me guess what we have so far:
– Trudeau’s fault for interest rates, debt, the sun isn’t shining today
– BOC’s wrong because Joe from Winnipeg has a better handle than the BOC.
– Canada sucks, we should all move
– Lockdowns suck, we should be free
– Pointless insults back and forth
How’d I do
****”*********
Other than Trudeau has no control over the sun (I’m sure he wishes or thinks he did) you got the rest correct.
#105 Sail Away on 01.26.22 at 3:01 pm
Could this be a SAGI too? So many gifts.
But TSLA is oversold and earnings will be hot. It’s never easy folks.
#110 Shawn
Real Estate is HIGHLY productive.
*****
Building and leasing out boxes in office parks might be productive, but I don’t know if I would call it highly productive. At least not compared to, say, high tech and manufacturing, in which Canada seems to always lag. Canadians are very proud of their houses and the oil they mine out of the ground, but everyone in Vancouver is driving one of those new fangled Teslas. What hope do I have that Canada will ever produce a company like that? None, I’m afraid.
If those in control had any interest in cooling this housing market why would they increase CMHC insurance to 1.25 million from 1 million. They want this housing bloat to continue. It’s all they got. A complete joke. And I very much doubt we will see them even increase rates in March. The more things change, the more they stay the same. Been hearing this now for going on 14 years. If the rates climb too high they will go back to what they were doing back in the early 2000s and offer prime minus mortgages on fixed rates. As a result we have had stinking low rates for the past 20 years. And every once in a while the banks CEOs come out with a statement that they are concerned about the debt, etc etc but in reality all they are concerned about is market share. We have seen this game play out how many times now? And that is why we are where we are now.
Said it before…may as well say it again.
For now… The Fed has a succinct plan for the current year with pats on the back for a job well done all around in dodging the bullet for another year successfully kicking the can further still down the road.
Meaning…
…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… have no effect on real inflation numbers by years end.
The hard medicine comes in 2023.
Hence…kicking the can down the road again…breathing a sigh of relief their plan for 2022 will suffice. Leave all future headaches for 2023 and later. We are the US Fed. We are good. We give you another 11 months of bliss.
As for next year…lets just pretend next year never comes and enjoy the next 11 months shall we.
This message…as always, will self destruct (in the minds of those only able to absorb implacable volumes of smooth talk and bucket after buckets brimming over with sheer boffo great news , today, tomorrow and forever) and all within the usual 5 seconds.
The attention span of a great many.
RE: #4 Aces High on 01.26.22 at 10:27 am
Proof positive BOC is not independent. The ‘stall’ is a decoy to push Trudeaus next hundred billion spending….
=======================================
Nothing to do with T2. The BOC is just following the US FED like they usually do.
#105 Sail Away on 01.26.22 at 3:01 pm
Tesla earnings today. Go Elon. My man.
======================
Saleo…
Earnings are priced in. Nothing new here. Markets and stocks are forward looking…
Can you read a chart? You know TA?
Its fallen to the long term uptrend. Tesla’s bonds a junk status.
Don’t Look Up.
Starring;Tiff,Justin and Christia
#38 Big Bucks on 01.26.22 at 11:44 am
Nah. Will not happen. They will just find a way to adjust the inflation calculation and “poof” just like that, the official inflation rate will start to go down.
A Supreme Court vacancy coming up.
Biden pledged to pick an Afro American woman.
If he does, he’s finito.
Donald Trump, part II in 2024.
#108 Meh
“My 4 month old goldendoodle just suddenly puked up all of his lunch and breakfast when I turned on Jerome Powell’s live broadcast.
Just a coincidence I’m sure.”
………………………………………………………………………………………………..
My rotti growls and farts at the same time whenever he comes on.
But Garth you were so sure rates were going up and homeowners should be worried!!!!! Rates will never rise again so let’s stop predicting that they will.
The BoC surprised all economists today. Given the Fed comments this afternoon, you can rest assured March will bring different news. Stop making silly comments. – Garth
Caffein Monkey
Canadians are very proud of their houses and the oil they mine out of the ground, but everyone in Vancouver is driving one of those new fangled Teslas. What hope do I have that Canada will ever produce a company like that? None, I’m afraid.
*******************
Shopify? Like Tesla, Share price is volatile but their huge success is undeniable.
#121 All lies and manipulated u decide on 01.26.22 at
Tesla’s bonds a junk status.
——–
https://www.youtube.com/watch?v=wujVMIYzYXg
TINA and RE both got a boost from Powel.
Then the markets migrated to the flat line!
Next? INFLATION
#123 Ineptocracy
#38 Big Bucks on 01.26.22 at 11:44 am
Nah. Will not happen. They will just find a way to adjust the inflation calculation and “poof” just like that, the official inflation rate will start to go down.
………………………………………………………………………………………………………….
Won’t affect the steady rising price of food and everything else any. So no, that can’t work.
Just my opinion, it may be wrong, but an increase of a quarter point today would probably have an insignificant effect economically. But it would be a significant symbolic gesture that they are actually serious about getting on the path towards some form of normalization. Now we have two more months of agonizing speculation. But confidence that they will do not only what is expected, but right, is decreasing.
Can politicians or bank bosses get jail time for failing to act in the best interest of Canadians? I mean what a disaster this is…$700k asking… Inflation through the roof…. Parents buying kids homes using retirement savings…. Truckers can’t cross the border
wait… Nevermind … I just remembered Justin is still PM after multiple ethics inquires.
Getting worse in Denmark with BA.2 or Stealth Omicron. Hospital up and (choke) deaths as well.
https://twitter.com/bsant54/status/1486109727742472196
Hahahahaha, they even vaccinated the dead people in Denmark.
I guess it’s the vaccine that is working as expected, Trudeau wants the same in Canada.
Kicking the can down the road just builds a bigger, badd’er bubble. The BOC screwed up today.
And surprise, surprise, the Fed does nothing either!
Why would they? What’s 7% inflation to them when they’re making bank day trading stocks to the moon and flipping homes? If it means their butlers and maids need to live in a cardboard box under a bridge, well, that’s just the “free market” at work.
Institutional failure. Call a spade a spade.
Well, we are on the pathway to 50 to 100 year mortgages.
Spread that huge debt over time by in debt for life and you can inherit mom and dads mortgage. Japan has them.
The BANK will own you from cradle to grave. Total enslavement. All for some 2×4 shack. The total mess goes back to 2008 crash when interest rates tank cus they policy makers where scared of the people turning on them. The 1929 depression taught the policy makers lessons on how to stay in power. It’s not true capitalism, it’s socialism lite and mills love it.
Sadly, capital has replaced labour as the key to upward mobility. A single family detached house in Ontario now makes more in a year than the average salaried wage. Look at any of the ‘Principal Residence’ flips I have posted here over the last two months and then look at the average salaried wage in those towns.
to #110 Shawn on 01.26.22 at 3:09 pm
….For thousands of years nothing has so easily identified a strong economy and civilization more than cities and buildings. Real Estate is HIGHLY productive.
… Real Estate rental and leasing and property management is a crucial industry….
*************
Congratulation!
You just creating new economy theory – like MMT. Nobel prize will waited for you.
Work on it!
Just don’t forget to add money printing to your theory.
So, better to close all factories, agricultural sector, mining b’s they not engine of economy. With RE only we will have strongest economy in the world. I will voting for you as liberal party MP
Lets just build , buying and selling houses. We can exchange houses also for food, appliances etc. and even exporting them to China. Why not? Disassembling, exporting and Chinese will assembling again. We will receive rice for us.
You will own nothing and be happy.
Live in the pod, eat the bugs.
Let’s be clear, Trudeau is going to pump housing until the BOC must choose between blood in the streets, or destruction of the Loonie.
That’s cool, I got patience, and I know the BOC will choose to save the currency in the end. I look forward to watching the specuvestors bleed out, and I’ll definitely be here to twist the knife when that day comes.
Until then, I’ll occupy myself with cutting my tax remittances, and my COL. I’m happy to let the Trudeau voters foot the bill, and it’s gonna be a big bill – heaped on a bunch of stupid broke Canadian idiots. That’s today’s Canada, nimrodville led by a bunch of monkeys.
#135 Concerned Citizen on 01.26.22 at 4:50 pm
And surprise, surprise, the Fed does nothing either!
Why would they? What’s 7% inflation to them when they’re making bank day trading stocks to the moon and flipping homes? If it means their butlers and maids need to live in a cardboard box under a bridge, well, that’s just the “free market” at work.
Institutional failure. Call a spade a spade.
*****************
What happened last time when inflation was soaring and they didn’t act right away?
Even Japan is now seeing inflation and talking about rate increases.
That’s right! the MMTers love ‘huge dollops of leverage’ and rates are effectively negative.
You should of paid closer attention to Europe, GT.
Banks lending rates will be going to ZERO or close to it (0,05%).
CMHCronies are not even in the game of providing affordable housing anymore – as stated during the parliamentary housing committee hearing last week.
This corp was put in place in 1946 and their mandate was quite clear. But as the useless twits were answering the questions, they couldn’t even hide the obvious that their mandate now is to make the banks and shareholders richer by providing risk free and at no cost to them the digitized dollars needed to issue massive debt in the form of mortgages AND at the expense of all Cdn tax payers.
I urge folks to listen to the whole committee hearing on CPAC and as to what an absolute joke these people running the country’s finances are. COULD NOT or WOULD NOT answer simple questions.
(Top 1% now own 25% of the assets valued within CDN GDP)
We are exactly in tune with USA with these so called ‘free market’ crony capitalism.
But GT, this is not a critism towards your blog. You do provide valuable info to those who want to pay attention, it’s such a shame that the elected MLAs and MPs in this country can’t even keep the public informed by publishing content online. Everything is a backroom deal; ‘vote for me and I’ll set you free’ they come at your door steps once every 4 years. And then, they’re gone…
#136 DR on 01.26.22 at 4:57 pm
Well, we are on the pathway to 50 to 100 year mortgages.
Spread that huge debt over time by in debt for life and you can inherit mom and dads mortgage. Japan has them.
The BANK will own you from cradle to grave.
—- –
Only the idiots who stay here will live like this. If you’re an educated youngster, you’ve gotta have rocks in your head to try to build a life in post-Trudeau Canada. This country is euchred. 1+ mil for some gta dump? I say it again, only the most stupid ape brained twits will hang around in this backasswards dump country. We voted for the destruction of one of the best countries on the planet. Boy did we ever get what we asked for.
#128 Sail Away on 01.26.22 at 4:20 pm
#121 All lies and manipulated u decide on 01.26.22 at
Tesla’s bonds a junk status.
——–
https://www.youtube.com/watch?v=wujVMIYzYXg
—
Sail Away, you are wrong here which legit surprises me.
In October, ’21 TSLA’s credit rating was raised, but remained at the high end of “junk”. Importantly, though, Tesla holds fairly little debt, so the point is somewhat moot. The debt it does hold has a relatively low interest rate befitting a huge market cap that would enable an equity sale to raise funds to cover.
https://www.wsj.com/articles/tesla-has-won-over-equity-investors-but-not-ratings-firms-11635437400
#138 VladTor on 01.26.22 at 5:03 pm complimented me as follows:
to #110 Shawn on 01.26.22 at 3:09 pm
….For thousands of years nothing has so easily identified a strong economy and civilization more than cities and buildings. Real Estate is HIGHLY productive.
… Real Estate rental and leasing and property management is a crucial industry….
*************
Congratulation!
You just creating new economy theory – like MMT. Nobel prize will waited for you.
Work on it!
Just don’t forget to add money printing to your theory.
So, better to close all factories, agricultural sector, mining b’s they not engine of economy.
******************
Thank you. But last I checked factories occupied buildings (real estate). I don’t have a theory. It’s an observation. Where there is much economic activity there is lots of buildings. Real estate, that is, much of it rented. (New York, London, all the big cities. There is also a massive amount of residential real estate in such places. What percent is real estate leasing, renting and property management of GDP of those places?
@#56 Ronaldo.
“Move to Red Deer. Prices havn’t changed in years.”
+++
I used to party on the weekends in Dead Rear with some friends who were rig pigs.
Its not a surprise to me why prices don’t change there.
Tiff if I recall correctly was picked by JT to take over the B of C position, as a candidate that is firmly behind Climate Change, a prerequisite for the Top Banking job. While I realize our Leaders have been trying to stave off a Depression, there is no justification for not moving a 1/4 percentage point, to start a Normalization of Financial conditions, that will permit future advancements Economically for Canada. The only rationalization, is that short term increases will not help the recovery, or deter Housing Price escalation. Sadly these so called experts, have been saying this since 2010, when removing Emergency rates, should have been priority one. Financial Repression of the Credit markets, can only distort the balance and equilibrium, in any Economy. Why don’t these guys get it… Corruption?
Todays BOC decision was the correct one.
As expected, omicron shut downs are still wreaking havoc on supply chains. The is where the lions share of inflation is coming from. The recovery is robust, but not complete yet. In other words it’s not the time to start tightening..yet. But they have signalled that the next time will be. Hikes will be slow and measured, since (hopefully) in the next few months, covid will fade and inflation will drop off sharply as a result.
Real estate in large city centres isn’t going anywhere. Especially the single family detached. Too much demand, too many factors that were not present in the US in 2008 to compare. Housing is in a new paradigm worldwide.
That doesn’t mean there isn’t a crisis. There is a housing crisis alright. It started a while ago, actually. The thing is it’s going the other way than most expect, with house prices accelerating upward faster and faster. Those waiting for a 2008 repeat are going to be disappointed.
As always. Buy dirt (when you are able to afford it). Invest in the markets as soon as you have the cash. The financialization of housing and everything else is just getting started.
What about Pierre Poilievre’ s math of being paid to borrow at a variable mortgage rate? 4.8% inflation – 1.5% vrm =-3.3% when adjusted for inflation. Should we all not be buying at $1M homes?
https://twitter.com/PierrePoilievre/status/1486459150313967618?t=GD9tAHsGv48gubrXG3rq9w&s=09.
Garth, you clearly see the bubble in housing but not the bubble in the S&P 500 and the bond market. They are all joined at the hip. I think they are all going down. Keep some powder dry. A buying opportunity is coming.
The S&P has zero to do with houses in Vancouver. – Garth
#143
Only the idiots who stay here will live like this. If you’re an educated youngster, you’ve gotta have rocks in your head to try to build a life in post-Trudeau Canada. This country is euchred. 1+ mil for some gta dump? I say it again, only the most stupid ape brained twits will hang around in this backasswards dump country. We voted for the destruction of one of the best countries on the planet. Boy did we ever get what we asked for.
*****
Pretty much. If you’re an early 20’s adult just out of university or trade school with in demand skills, you’re looking to move away from this economic disaster. The country had better hope they move to another province rather than another country.
I am really concerned about the future of this country – it looks incredibly bleak. The policymakers have us on the path to serfdom at warp speed. Not only do they not see a problem, but they appear to think it’s a good thing. Truly scary times, and I’m not being hyperbolic.
#98 Søren Angst on 01.26.22 at 2:42 pm
Garth, have a gut feel that Cdn RE will tumble mid-year about 25%. Maybe by 35% end of year.
—————————————–
LOL I’ll take a $10,000 bet on that not happening.
Last Decade…. milk the Savers, and of course that includes even prudent folks, trying for a Down Payment well, for a Home, Business, Dreams… now that the decade is passed, time to clean up in the Residential RE market, as defaults, foreclosures, Penalties etc. fund the next round of non Productive, events. Canada could be a remarkable country if we could use common sense, and if we made decisions, that increase our productive competitive place Globally. Where is our MP’s and our Debate. Why no opposition. Where is the Media, to challenge, some of these ideas? Where is O’Toole?
Almost like they can’t because there’s too much debt. It is now becoming scary to me at this point so many still don’t get this. Absolutely rate hikes are coming as CB’s try to salvage some credibility, but they will be slow, with lots of delays & many excuses (just like we’re seeing here and with the Fed today). On net, they will be WAYYY behind the inflation curve as real rates go deeply negative. The end.
#107 fishman on 01.26.22 at 3:04 pm
“I was so surprised this morning. Though, a cheap thrill at being so dumb is still a thrill.. I miss Economystic. Guiding us in the ways of economystical baffle gabble.”
I miss Economystic too. Maybe he/she/they got covid. Or maybe he/she/they is/are too busy setting central bank policy and drafting government economic covid response policies via Zoom to post? I wouldn’t be surprised if his/her/zee’s major focus right now is “Build Back Better”. It must cause hezin/shezin/theyzin significant angst that there are so many econoliteralists stuck in the dark ages who still believe in things like supply and demand, scarcity, physics, or the value added theory of labour and do not embrace the infinite consumption without corresponding production that can be so easily achieved via economysticism.
I’m sure he/she/they/it/zee/krkpthbt will be back when the situation warrants and time allows. What’s that phrase? “When the student is ready, the teacher will appear.” Something like that anyway.
Until he/she/zap/gurgle/blaziod reappears we should remain calm and trust that blob/zang/neutral/star is working hard to ensure that there is “a free lunch for everyone and no one working in the kitchen”.
I think bing/sham/gaboing is also busy working on energy policy. After all only a sage wizard level economystic could achieve national energy abundance using only a few pinwheels, a solar powered calculator, and a rechargeable 9 volt battery. “Net zero” and “economystics” seem like they must have came from the same “entity”.
Hey can we replace all the pronouns with the word “entity” from now on? “Where did “entity” go?” ““Entities” voted Liberal and NDP and now there is no store.” “Would “entity” like a free lunch?” Use it something like that.
As expected, Tesla killed it. Beats across the board. New factories coming online. Consistently and reliably profitable. Best-selling EV worldwide by far.
Firmly cemented as the most valuable auto company ever after beginning from nothing a few short years ago and still operated by the founder. Elon’s vision and execution is staggering.
And SpaceX, too. Mind-boggling.
And congratulations Quebec for continuing to violate democratic principles, as well as science now…
https://www.marketwatch.com/story/walmart-costco-and-other-big-box-stores-in-canada-begin-enforcing-vaccine-mandates-and-some-shoppers-arent-buying-it-11643135799
Walmart, Costco etc., will be barring entry to unvaccinated shoppers starting Jan 24th.
That government has courage. – Garth
hmmm,
Maybe they don’t wanna raise rates too quickly b/c companies have to lure back whiny employees with plusher wages. Higher employee wages plus higher overhead costs (lending rates) means lower bottom line…means less employees..and the cycle of ‘growth’ continues…
Get the people feeding first. Then foot’em bill
Og
BoC
absolutely gutless.
zero credibility.
#148 I don’t know on 01.26.22 at 6:13 pm
========================
Yup….and you do know.
Energy prices are going up. Their taxing the hell out of them along with carbon tax. Its all inflationary.
You cant build squat without burning up a lot of energy. Raw materials and Transport costs gone way up.
I’m kicking off a new commercial build right now.
If I for every million I put in, I will have cash flow of $12,000 monthly. Houses are poor investments at this point.
@#124 Ponzies Political Predictions
“Donald Trump, part II in 2024.”
+++
Well.
If one looks at the way the Republican party has been changing electoral rules in swing States to bully election VOLUNTEERS with jail….
Or the amount of non partisan Republicans who voted to impeach Trump that have been harassed, bullied and threatened to decide not to run again….
A Trump presidency in 2024 should come as no surprise to the rest of the horrified world.
The Grifter is certifiable.
If you haven’t been on you tube and spent 20 minutes watching any of the support videos for the truck convoy, you can not call yourself a Canadian.
This is incredible these people standing on the prairies in MB SK AL in January… average minus 20 and wind….
Some of the pictures from Winnipeg are wild…
Why main stream news isn’t actually giving this more support is a head shaker.
Freedom 2022 cheers
There is nothing to cheer in the actions of those prolonging this pandemic. And there is zero connection to ‘freedom’. Nobody has removed any freedoms. – Garth
DELETED
Martin Shields, a Conservative MP who represents the Alberta riding of Bow River, has said it’s time to put an end to the “Trudeau Liberal government’s mandates and freedom-curbing restrictions.” Shields has promised to meet with the convoy when it arrives in Ottawa.
——-
Must admit that I agree with the conservatives on this one. What is the point AT THIS LATE STAGE of holding a firm line on the 20% of unvaccinated truckers who are keeping our ass afloat by stocking our shelves etc… They cross the border bringing supplies across, sit in their trucks (its not like they are hosting a gathering at the convention center), and if they have omicron who frankly really cares at this stage.
All this when T2 refused for 7 weeks to shut down the flights from India to Vancouver last spring when Delta was raging in India. A shutdown would have bought us time with the vaccine that was effective versus Delta. There he did essentially zero.
Where is the CBC providing objective journalism asking questions? O’Toole is useless, and Jagmeet joins him in this sorry pool.
Better questions: vaccines are free and readily available and keep people alive. Why won’t the truckers do as 80% of us have done. Are they special? – Garth
There is nothing to cheer in the actions of those prolonging this pandemic. And there is zero connection to ‘freedom’. Nobody has removed any freedoms. – Garth
said like a politician
I am just a citizen sick of crybabies in big twucks. – Garth
Is there any truth to the rumor that the truckers appear to be picking up all the extremists along the way and there will be an attack on our capital like Jan. 6th in the
U.S.A?
#140 IHCTD9:
“Let’s be clear, Trudeau is going to pump housing until the BOC must choose between blood in the streets, or destruction of the Loonie.
I don’t think the destruction of the loonie is a factor.
Most other developed economies are running on the same system of printing money, so it’s an even playing field in that respect.
What has historically been known as a currency destruction exercise has now become an acceptable national economy management tool.
The housing bubble will collapse on its own, and the negative real interest rates will propel housing prices higher until there is no longer organic demand. The speculative driven demand has yet to run its course.
The regular folk will give up food, clothing, and the car before they default on the mortgage payment, but the investors, will exit fairly quickly, once the bull trap springs closed.
#161 crowdedelevatorfartz on 01.26.22 at 7:30 pm
========================
Sure and their so lucky they got Biden and big K. The most incompetent idiots hmmmm right along side T2. Socialist money pumping idiots.
They make Trump look like a nuclear physicist.
I know who I’d hire to run my companies.
Ill tell ya what you hire Biden Ill hire the Trumpster see who succeeds..
I look past his potty mouth. Piece out my man CEF ;-)
The latest scam from my Maroon Bank of Penguins…
“….Starting February 1, 2022, in addition to your current interest rate, you’ll have the ability to earn Smart Interest when your monthly closing balance is $200 or more than the previous month……Smart Interest is calculated daily on the total closing balance in all of your CIBC eAdvantage Savings Accounts…….Effective February 1, the Smart Interest rate will be 0.25% per annum…..”
I am just a citizen sick of crybabies in big twucks. – Garth
In your opinion – When would you call this “pandemic” over?
After the population has a 3rd booster? after 4 years of lockdowns and mask wearings?
after 2 million companies close their doors and place millions out of work?
or would you be like Boris Johnson, and say it is over when they come head hunting for you?
When is it over … going into the 3rd year and nothing gets better yet the masses are “jabbed” yet getting sick… common cold….
or is it over when people bring the fight to the “head” guy in Ottawa and drop it on his door step?
You honestly think if 100% of canada got a shot that we will end this crap?
Give your head a shake.
The only way out of this is vaccines and public health measures. Not 70 km of trucks. I think it’s your head that needs a whack. – Garth
166 cuke and tomato picker on 01.26.22 at 7:50 pm
Is there any truth to the rumor that the truckers appear to be picking up all the extremists along the way and there will be an attack on our capital like Jan. 6th in the
U.S.A?
*************
are you serious??
This is kinda funny…
Inflation is +20%, but the BOC is afraid to raise interests from 0.25% to 0.50%.
I think everyone understands that this increase won’t stop inflation, interests would still be at record lows.
The real question is, why are they so timid to bump it up to 0.50%? Its because they want inflation to happen. Its all smoke and mirrors.
They will only increase rates after the Fed makes a move, half of the time.
my 2 cents.
#162 kc on 01.26.22 at 7:30 pm
Some of the pictures from Winnipeg are wild…
————
The pictures don’t do it justice. I stood in disbelief alongside hwy #1 outside of Winnipeg. Fireworks, planes flying overhead, etc. Thousands of people lined up over 30 kms. Scary. Our Canadian version of the Capital Hill Riots perhaps?
I’m still waiting for the housing crash in mom’s basement.
Inflation is pricing my cheese whiz and video games out of reach. PS Im still single ladies…
Better questions: vaccines are free and readily available and keep people alive. Why won’t the truckers do as 80% of us have done. Are they special? – Garth
————–
I am pro-vaccine for sure, even though I wrestled with COVID in our household 10 days ago. Had booster on the weekend. But have a grown “new-agey” daughter from first marriage who refuses the vaccine, and some of my in-laws from Alberta refuse. I have given up trying to convince them.
At this stage we are dealing with omicron. Is there any point in FORCING the 20% of truckers crossing the border to be “vaccinated” against serious omicron illness, when if they haven’t had a vaccine already they are unlikely to do so? What is the point? If this was a much more lethal variant like Delta or something or Delta+ (we are running out of Greek letter) that will come to pass in the next year, I would support these fellows having to be vaccinated. It seems like T2 is playing a very hard line on the truckers now (when only omicron is raging) and gave a complete pass to the Air India flights raging with Delta flying into YVR and Toronto in April until he finally shut it down.
Bottom line, is that we need our stores having produce, food, goods, whatever that comes from the USA. It seems more of a problem if the stores have very low supplies than if T2 tries to force that the 20% of truckers get vaccinated…. because frankly the way it is they would rather burn on the stake than do it.
I am just a citizen sick of crybabies in big twucks. – Garth
======================
Come on Garth. I’m more sick of the fear pumping media.
You can shut that off no issues and a vast improvement in the quality of life occurs!
You shut the trucking down and good god, we starve. Ok we can dig up worms…YUM. lol
Where u gonna get your new fridge to store the grub you cant buy? These guys are twuckers they don’t mingle with the population.
Love your stuff!
@#151 Concerned Citizen on 01.26.22 at 6:21 pm
#143
Only the idiots who stay here will live like this. If you’re an educated youngster, you’ve gotta have rocks in your head to try to build a life in post-Trudeau Canada. This country is euchred. 1+ mil for some gta dump? I say it again, only the most stupid ape brained twits will hang around in this backasswards dump country. We voted for the destruction of one of the best countries on the planet. Boy did we ever get what we asked for.
*****
Pretty much. If you’re an early 20’s adult just out of university or trade school with in demand skills, you’re looking to move away from this economic disaster. The country had better hope they move to another province rather than another country.
I am really concerned about the future of this country – it looks incredibly bleak. The policymakers have us on the path to serfdom at warp speed. Not only do they not see a problem, but they appear to think it’s a good thing. Truly scary times, and I’m not being hyperbolic.
–
lmao, these posts are the definition of hyperbole.
#162 kc on 01.26.22 at 7:30 pm
If you haven’t been on you tube and spent 20 minutes watching any of the support videos for the truck convoy, you can not call yourself a Canadian.
This is incredible these people standing on the prairies in MB SK AL in January… average minus 20 and wind….
Some of the pictures from Winnipeg are wild…
Why main stream news isn’t actually giving this more support is a head shaker.
Freedom 2022 cheers
“There is nothing to cheer in the actions of those prolonging this pandemic. And there is zero connection to ‘freedom’. Nobody has removed any freedoms. – Garth”
The “truckers” have:
°Go Fund Me issues. Not a good sign.
°Not nearly as many trucks as advertised.
°My shelves are stocked, for what that is worth.
°Vast majority of truckers are, in fact, vaxxed.
°Unvaxxed truckers can not cross into the US anyway.
°Industry Associations have clearly disassociated themselves from this stunt.
°Looks like they are being co-opted by the political right.
°With the far right component turning this into another grift, separating money from the gullible.
°They are in for a wake up call when they hit Ontario, plenty of regulations as to what you can and cannot do on a highway in Ontario.
°Even I know how to frame a picture to show my 7 pound salmon looking like a 12 pounder. There aren’t as many “supporters” along the route as you need to believe.
°Mainstream media isn’t ignoring this, its not front page because its a juvenile stunt.
This is from Twitter:
Part of the convoy has tried to distance themselves from organizer Pat King (who previously promised “the only way that this is going to be solved is with bullets”) but this morning, King promised it’s all “due to the PR.”
He promises is the military is “on our side.”
Good people, on both sides, eh?
You know I used to wonder how the only major right leaning political party in Canada has been unable to elect a leader who can even lead a caucus or party, never mind a country, would go on status quo for so long. Not so much any longer.
Lost party, lost focus, lost
The BoC never raised rates? hahahahahaha
The BoC is behind closed doors right now working on the next stimulus package and rate cut.
They might do a few raises, but make no mistake about it – they are hell bent on keeping this gas bag going.
Never trust anything these talking heads say. They say one thing and do the other.
And the market will balance itself. Lets all have cake.
And those variable rate stats are unreal. They say one thing: the BoC is full of crap and rates are not going up.
I guess we will see. But for now people with variable are looking pretty smart in paying 50% less on their loan vs. what they would be paying if in a fixed term.
You know what they say about omelettes?
Sometimes you gotta crack a few eggs to get a rate hike…
M47BC
#167 Quintilian on 01.26.22 at 7:55 pm
#140 IHCTD9:
“Let’s be clear, Trudeau is going to pump housing until the BOC must choose between blood in the streets, or destruction of the Loonie.
I don’t think the destruction of the loonie is a factor.
Most other developed economies are running on the same system of printing money, so it’s an even playing field in that respect.
What has historically been known as a currency destruction exercise has now become an acceptable national economy management tool.
The housing bubble will collapse on its own, and the negative real interest rates will propel housing prices higher until there is no longer organic demand. The speculative driven demand has yet to run its course.
The regular folk will give up food, clothing, and the car before they default on the mortgage payment, but the investors, will exit fairly quickly, once the bull trap springs closed.
***************
Recently watched a journalist interview a family law judge. The judge was saying that business is up from prior years. He goes on by saying that the increased equity in their houses is encouraging couples to finally throw in the towel and part with a lump sum.
The soaring inflation, I don’t know, seems to be attributed to the massive stimulus….brrrrrrrrrrr among other factors. But mostly unprecendented money brrrrrrrrrr.
Oils up and adding to the pinch on all wallets. Day by day life becomes ever so more expensive and compounds. The over leveraged are hit the hardest and forced to make decisions based on the lesser of the evils within a new reality. A rush to the exits. Human nature and fear….yikes!
The BOC sees inflation taming while the Fed said things got slightly worse. Hopefully our dollar holds…we are making international headlines relating to household debt and house prices.
On a related subject…kinda…My bank just offered to raise my credit card limit 4K. I said ok but I don’t really need it…but it made the bank person happy.
Garth I agree housing prices are nuts. Stocks are up like the same amount why aren’t they nuts? Why do you hate a tax free asset class that seems unlike you? Why invest in apple with a boom value below $10 for $150 or any other stock right now for that matter. Everything’s a bubble. One of these you can live in.
to #145 Shawn on 01.26.22 at 5:41 pm
….I don’t have a theory. It’s an observation. Where there is much economic activity there is lots of buildings.
***********
Dear Shawn. I see you are in just at the beginning in creating theory. I would like to pay attention on some yours mistakes in observation.
1. When I was in farmers part of country I’ve seen only endless farm fields and believe me or not – too much economical activity around and – it is funny – pretty small farmers house.
2. Modern factories ( for example Mask’s GigaFactory – looks like a big garage. I would say look like a big GigaGarage) has same – huge economical activity with relatively small staff and… again funny things – not too much buildings, houses around.
3. Look at city like Toronto – in opposite – extremely huge amount buildings, houses with millions owners , millions renters – total economical activity in terms of profit probably less than have 10 car plants.
Interesting, is not it?
RE: @#157 DQ on 01.26.22 at 6:58 pm
That government has courage. – Garth+++++
Yes, real courage. Fueled by ‘solidarity’. Legault isn’t in it for the money or the glory. He’s a co-funder of Air Transit, for mucks sake. Got ‘bucks deluxe’.
He is courageous, he cares about Quebec, it’s future, it’s people. I really admire him. He stands for what he believes in and it comes across in spades whether one agrees or disagrees with his views. Is it any wonder Quebecois respond to his honesty knowing he acts not in his self interest but in theirs?
I am on record as a card carrying Albertan for life, but if I had to choose another lifeboat it might be Montreal. With a ‘pied -de- terre’ someplace warm for the winter months. (wink).
I’ve always been smitten, even if they scare the pants off me….
for 14 years almost rates have been almost zero, most people own there own homes outright by now.
not the old people who bought back in the 70 and 80 , much more recently.
14 years is a good chunck of a regular 25 year amortization. Millions of Canadians are millionaires. all they did was buy real estate.
I though in the towl long time ago, never run a business in Canada, gst audits for a business that does 100K in sales, like really. everything under the sun, fire department, health department, i was joking to my wife that I was waiting for social services to come to our cafe next, and yes, two ladies in the housing or welfare department or something came in the next day, but they were customes. I laugh. Long time ago, but it seemed like yesterday.
Canada is about flipping houses to each other, its 2022 now, and here we are, a quarter point hear or there dont mean anything.
all this stuff about balanced portfolio etc, means nothing when everyone in southern ontario makes 10K a month in tax free money from simply owning a home.
month after month after month, and then the wave of old people giving more millions to there kids(or adults).
then there are 400K people coming, about 300K of them every year will live 1.5 hours drive from Pearson where they land. I have no idea where they will all live, but if they want to buy in, bring a suitecase full of cash. is all I will say, and get in line with 15 other people for every house for sale.
Interest rates mean nothing when people come with cash. and need a place to live. Cities drag there feet for permits, costs of everything going up, labour and material. etc. crazy. My buddy spend 15K on a washroom makeover. i laughed and he said, ya man, its got nothing to do with materials or the labour rate, its just give me 15K cash and I will get you a washroom. and the guy is super busy wont get to it till May.
millionaire sub contractors who didnt finish high school make a couple hundred a year cash. Canada is a black market country, the people coming with suitecase of cash no questions asked to give to contractors for a washroom , no questions asked.
#151 Concerned Citizen on 01.26.22 at 6:21
Not exactly. If you are thinking of leaving Canada to snag a beautiful home in a highly desired urban area anywhere in the western world you will run into the same issues.
Housing entered a new paradigm post 2008. Everywhere building materials are up, supply chains are hindered, inflation is up, interest rates are low, urbanization is accelerating, more people are working from home, boomer children are in full family formation mode, families have fewer kids and take up more housing stock, and so on. We have Canada specific issues here for sure, but most of the causes of high real estate are worldwide and out of our control.
Most cultures on earth place a high value on land and real estate. The post ww2 ability of the average family to afford the average home was a short lived aberration. It’s been a reality in many countries for decades already.
One thing that has changed for the better is the ability for the average person to access capital markets. This is why it’s critical for everyone to invest as soon as possible moving forward.
#157 DQ on 01.26.22 at 6:58 pm
That government has courage. – Garth
/////////////////////////////////////////////////////////////
Garth with all due respect, you have no idea what it means to live under an openly racist and unabashedly collectivist government.
I dare you to open a branch office in Trois-Rivières and see how you fare? English staff, English spoken, no vaxxport oh no that won’t do we must fine them.
Speak for ON and NS folks okay I can understand, but QC is a special kind of stupid, or say wish this decade your empty 60 storey tower space gets occupied. Good luck with that.
Better questions: vaccines are free and readily available and keep people alive. Why won’t the truckers do as 80% of us have done. Are they special? – Garth
Maybe the truckers have asked questions about these “vaccines” like all responsible citizens should and haven’t got back enough satisfying answers.
*********
The British Medical Journal (BMJ) has urged public health regulators and pharma majors to immediately release all raw data from Covid-19 vaccine trials for independent scrutiny, arguing that “complete data transparency” was a matter of “public interest.”
https://www.rt.com/news/546851-vaccine-safety-data-transparency-criticism/
Ah yes, the epidemiologists, virologists and infectious disease specialists moonlighting as long-hail truckers. I forgot. – Garth
get out the army Justin…wait, what army? plan B..hide Justin
Leafs game has no fans folks? at least our truckers have a set, the rest of Canadians are well…u know
131 Diharv on 01.26.22 at 4:32 pm
Just my opinion, it may be wrong, but an increase of a quarter point today would probably have an insignificant effect economically. But it would be a significant symbolic gesture that they are actually serious about getting on the path towards some form of normalization. Now we have two more months of agonizing speculation. But confidence that they will do not only what is expected, but right, is decreasing.
*******
I think the next BOC meeting is March 3.
#166 cuke and tomato picker on 01.26.22 at 7:50 pm
Is there any truth to the rumor that the truckers appear to be picking up all the extremists along the way and there will be an attack on our capital like Jan. 6th in the
U.S.A?
******
Can you please get on twitter and tell all the BC Teachers to get vaxxed before the Parent’s step in?
#126 Sam…
…Stop making silly comments. – Garth
*********
Agree with you Garth. If even (I was surprised with leading economists alarming signals coming in last couple weeks) almost all banks RECCOMENDED to increase rate – I just imagine now how was all of them shocked.
Something is wrong in the Danish kingdom!
Maui real estate is also expensive
40 or 50 year old 600 square foot one bedroom unit in a tired old group of two story buildings with limited parking 12 minute walk to a nice beach selling for over $500,000 U.S. dollars.
Not much if anything available to rent for a week or two next winter under $200 U.S. a night. Nicer places are about U.S $500 a night for two bedrooms. Places are getting booked up fast.
Golf at Kapalua Maui $235 U.S. on the cheaper course, US $400 on the course the pros visit once a year. These courses are relatively busy.
Someone sure as heck has money. Lots of people. Mostly older people. The 10%, I guess. Lots of Canadians and of course Americans. Few if any people from Asia. Apparently they prefer Honolulu.
Sniff that it is all borrowed money if you wish. I don’t think so. In most cases probably just high incomes and large portfolios. Business owners. Entrepreneurs of all types. Well who knows really where they get the money but clearly loads of people have it.
@#166 cuke and tomato tosser
“s there any truth to the rumor that the truckers appear to be picking up all the extremists along the way and there will be an attack on our capital …”
++++
Attack of the Killer Tomatos?
I’d be happy if a few overripe veggies got tossed.
146 crowdedelevatorfartz on 01.26.22 at 5:52 pm
@#56 Ronaldo.
“Move to Red Deer. Prices havn’t changed in years.”
+++
I used to party on the weekends in Dead Rear with some friends who were rig pigs.
Its not a surprise to me why prices don’t change there.
**********
Probably says more about where you choose to party than Red Deer.
Garth: I am just a citizen sick of crybabies in big twucks.
Hah! Zing!
Am embarrassed , born Canadian. Correspond with Americans all work-related. Had a discussion the other day with one of them , he was shocked to know we had businesses closed, to re-open with restrictions next week. He asked :
‘i dont get it. Does no one complain?’
i paused, candidly i didnt have an answer. In reflection, how should have i answered?
are we that compliant person? dont challenge anything? that govt has the right to shut down a gym and leave Walmart open? we are okay with that?
#181 VladTor on 01.26.22 at 9:00 pm
to #145 Shawn on 01.26.22 at 5:41 pm
….I don’t have a theory. It’s an observation. Where there is much economic activity there is lots of buildings.
***********
Dear Shawn. I see you are in just at the beginning in creating theory. I would like to pay attention on some yours mistakes in observation.
1. When I was in farmers part of country I’ve seen only endless farm fields and believe me or not – too much economical activity around and – it is funny – pretty small farmers house.
2. Modern factories ( for example Mask’s GigaFactory – looks like a big garage. I would say look like a big GigaGarage) has same – huge economical activity with relatively small staff and… again funny things – not too much buildings, houses around.
3. Look at city like Toronto – in opposite – extremely huge amount buildings, houses with millions owners , millions renters – total economical activity in terms of profit probably less than have 10 car plants.
Interesting, is not it?
************************************
You are grasping at straws.
I suspect the GDP of Toronto is more than 100 car plants. Vastly more than 10 for sure.
Read a book called Triumph of the City.
I’m not anti driving sober. I’m just anti drunk driving laws. Freedom! My body my choice to drink and drive. /s
Watching today’s gong show in Ottawa and in the US, it’s pretty clear that they are only interested in “hinting at” rising rates while doing absolutely nothing in absolute terms.
Wishy-washy “forward guidance” offering absolutely no guidance at all with the only promising being that they will give themselves the room to do whatever they want and screw us all over by continuing to blow inflation higher. Am I paranoid or does this all point to inflating away the debt through financial repression? Feudalism is apparently the new normal.
And what to say about Jerome Powell’s speech… The delivery was impassionate and it sounded like he was being forced to speak at gunpoint. I’m betting that he doesn’t even want the job anymore but he’s not allowed to quit.
At this point, I’m pretty sure there’s a concerted Liberal/Democrat strategy to ensure neither party gets re-elected in Canada or the US, so they can let this debt bomb detonate in the hands of the unlucky “winners” of the next election. Who obviously won’t stay in power for very long.
In any case, I’ve dusted off my tinfoil crown, and will to continue to wear and polish it on a daily basis until I see any sign of change. And I may even start reading the painful posts by Nostradamus and TurnerNation. Something tells me those painful reads just might start to sound slightly more coherent.
A bit of overreaction tonight.
The first BoC rate increase was put off by 5 weeks (next meeting is March 2nd). Not the end of the world. This is much closer aligned with the expectation for US Fed first increase in their March meeting. The BoC (especially the Plozzer before Tiff) did/does not want to get out in front of the Fed.
I never thought that they would raise today, and neither did majority of analysts.
178 Ustabe on 01.26.22 at 8:42 pm
I guess we have to see how this plays out….
173 Bezengy on 01.26.22 at 8:16 pm
Cheers and wish I could buy ya a beer or warm coffee for your supporting this.
There will be no rate hike. You should’ve learned by now.
The B.O.C. choked! The FED choked!
I never heard so much uncertainty out of JPs mouth ever.
If the economy was in such good shape or was on-track to be in such good shape they would have raised rates.
Plain and simple.
@#178 Floppie
“Sometimes you gotta crack a few eggs to get a rate hike…”
++++
The BoC Governor has to get crackin?
Tiff Macklem should go up to a homeless person, pull out 25 cents, and promise to give it to the homeless person.
Then repeatedly put the quarter back in and out his pocket and find out what happens…
M47BC
@#195 Donny G
“Probably says more about where you choose to party than Red Deer.”
+++
Nah Dead Rear is a rough and tumble place.
Closed the bar one night and while standing outside waiting for my taxi….saw a drunk driver run a drunk pedestrian down.
The driver took off. The pedestrian took off.
And the police took statements from several of use witnesses….and arrested a drunk witness for being “Unlawfully at Large” on a Canada wide warrant.
( Sorry Ponzie, it wasnt me :)
Just another night in Dead Rear
#157 DQ on 01.26.22 at 6:58 pm
And congratulations Quebec for continuing to violate democratic principles, as well as science now…
https://www.marketwatch.com/story/walmart-costco-and-other-big-box-stores-in-canada-begin-enforcing-vaccine-mandates-and-some-shoppers-arent-buying-it-11643135799
Walmart, Costco etc., will be barring entry to unvaccinated shoppers starting Jan 24th.
That government has courage. – Garth
———
I agree. I look forward to step 2. Step 2 is when you need to be vaccinated and show your QR code to go anywhere. Including the grocery store and pharmacy.
Enjoy your overpriced instacart, you selfish holdouts.
Let’s hope the other provinces step up and follow Quebec’s courageous lead.
#176 All lies and manipulated u decide on 01.26.22 at 8:31 pm
I am just a citizen sick of crybabies in big twucks. – Garth
======================
Come on Garth. I’m more sick of the fear pumping media.
You can shut that off no issues and a vast improvement in the quality of life occurs!
You shut the trucking down and good god, we starve. Ok we can dig up worms…YUM. lol
Where u gonna get your new fridge to store the grub you cant buy? These guys are twuckers they don’t mingle with the population.
Love your stuff!
**********
FIL had a trucking company in Toronto…Truckers don’t mingle….ha ha ha. In and out of every diner, big box stores, manufacturing plant, farm etc. Father in law is all boostered up. Friend’s son is a trucker also…all vaxxed up. Maybe the term Trucker is too broad for the sensationalist media.
King Kenney appears to be riding in on a pony…playing with the US govenors in the background. More politics from the usual suspects.
In tesla’s earnings call, Elon Musk down played the smaller “$25,000″ sub compact. Tesla is doubling down on Full Self Driving FSD, and believes this software will double/triple the value of all current models. Elon then took a giant step further by saying Tesla will build the self directing humanoid robot ” Optimus Prime” . This robot will use the artificial intellegence software used in FSD. The TAM ( Total Adressable Market) for the humanoid robot is virtually unlimited .Think of labour substitution for an economy that is aging quickly and does not have a young labour force.
171 kc on 01.26.22 at 8:10 pm
166 cuke and tomato picker on 01.26.22 at 7:50 pm
Is there any truth to the rumor that the truckers appear to be picking up all the extremists along the way and there will be an attack on our capital like Jan. 6th in the
U.S.A?
*************
are you serious??
————————-
Given, the situation, I think that is a valid question.
Let’s of loonies out there.
Get the paddy wagons ready.
#166 cuke and tomatoes
Buddy please WAKE UP – the trucking industry in Canada isn’t full of redneck nutjobs lol – you sound like a worried Mr. Roger’s
It seems to me that everyone forgot about one fact – BoC set a target inflation threshold of 2% after which they must increase the rate.
Now it is 4% and what? This is real sabotage and wrecking! If there was a real opposition in Canada, then tomorrow a commission in parliament would be created to check the actions of the BoC and demand the resignation of the head of the BoC and at the same time to check whether this is sabotage in the interests of Putin or in the interests of comunist China to kill our economy.
By the way, the bank in Russia works very well and recently the rate was raised again following inflation.
If it were in the USSR under Stalin, then next week the head of the bank would receive a term of 15 years in the camps (if the judge were in a good mood) or shot (if he were in a bad mood)
Canada stepped in quicksand many years ago and we are slowly going down to be smothered by our governments lack of strength
One would hope that central banks are laser focussed on inflation at this point and will do “whatever it takes” to reign it in. It’s starting to really bite.
#210 R on 01.26.22 at 10:11 pm
In tesla’s earnings call, Elon Musk down played the smaller “$25,000″ sub compact. Tesla is doubling down on Full Self Driving FSD, and believes this software will double/triple the value of all current models. Elon then took a giant step further by saying Tesla will build the self directing humanoid robot ” Optimus Prime” . This robot will use the artificial intellegence software used in FSD. The TAM ( Total Adressable Market) for the humanoid robot is virtually unlimited .Think of labour substitution for an economy that is aging quickly and does not have a young labour force.
++++++++++++++++++++++
Musk has been promising, and taking money from customers, for FSD for the past 6 years. Still not here, and there is no empirical evidence in the betas that it is getting closer.
@ #186 I don’t know:
It’s true housing prices are up in other countries, but nowhere close to the craziness we’re seeing in Canada. But don’t take my word for it. There are widely available stats from reputable sources on this topic. The reason the situation is so bad in Canada is due to institutional failure – from the Bank of Canada, to all three levels of government over decades.
As for your idea that socking away money will solve all ills, well that sounds great. Where do you propose the young people (with decent jobs, mind you) that are forced to spend 50%-60% of their income just to keep a roof over their head come by that capital? Eat ramen for every meal until they’re 50? And if they happen to amass some capital, where do they put it? In bloated asset bubbles? Or perhaps government bonds with highly negative real yields? How do they save for a down payment when the size of the required downpayment rises much faster than their ability to save?
Home ownership is the path to the middle class for many in this country. We have now deprived essentially an entire generation from any realistic prospect of owning a home in most major centres – where the jobs are – in the country. And why? So that asset holders don’t see some air come out of their assets after miraculous windfall gains from money printing. I never thought I would see such greedy and short-sighted policy in Canada of all places, but here we are. Shameful.
First thing I noticed about the dogs was the blood on the snow and the raw toes. Was expecting this to be symbolic….
#211 Ponzius Pilatus on 01.26.22 at 10:12 pm
171 kc on 01.26.22 at 8:10 pm
166 cuke and tomato picker on 01.26.22 at 7:50 pm
Is there any truth to the rumor that the truckers appear to be picking up all the extremists along the way and there will be an attack on our capital like Jan. 6th in the
U.S.A?
*************
are you serious??
————————-
Given, the situation, I think that is a valid question.
Let’s of loonies out there.
Get the paddy wagons ready.
—————————————
PP, you are implying that CNN has an interest in this protest. The CBC is not known to be quite as active in managing events outside the opinion pieces. Not enough viewers so it doesn’t pay.
BoC did sing Don’t Pay the Reaper…
How do you get a job at the bank of Canada? Like it seems that they get paid pretty well and do absolutely nothing
#199 Observer on 01.26.22 at 9:46 pm
I’m not anti driving sober. I’m just anti drunk driving laws. Freedom! My body my choice to drink and drive. /s
+++++++++++++++++
Stop worrying. The Libs are working on a new infrastructure project to build a drunk driving lane on the highways so that everyone will be safer.
#170 kc
Those truckers are hero’s. It has nothing to do with vaccination. It is truly about freedom. Junior needs an awakening ASAP. Not sure what else to say. Arrogance is oppressive and junior is the king of that. And Garth, we have good friends in New Zealand who are really ticked with that Comrade Jacinta and her socialist government. Read the New Zealand Herald today and see what they are doing to a Doctor and her family emigrating from the Netherlands. We had a taste of the iron curtain when we left there 23 months ago. Junior is of the same ilk. Sorry, we have no political bias, but we believe in freedom and people before ideology. You are entitled to your loyalty to the Liberals. And yes, we are vaccinated.
I complemented an article a few days ago as your best in years. Now you start spouting off this doomed talk…
Disappointing
Wow, very impressive I feel like watching the movie, Convoy.
Keep up the great work, love’n it! Thank a trucker for Trudeau’s downfall.
And for the comment,
Two more weeks (months)!
Interest rate folk are starting to sound like the new QAnons. An interest rate hike is about as likely as Trump secretly still being POTUS (and is starting to sound about as wacky
CLASSIC COMMENT…
So true.
So what most people are saying is that if interest rates increase house prices will fall, lmao. The New Dreamer Society.
People are living in a vacuum, as if the government gives a sh/t. It’s their own tail they’re worried about. The government is the biggest debtor. And how do they pay back this crazy debt.
-taxes
-fee’s
House prices rising is an offset of inflation not to mention not enough homes to sell with and increasing population and higher, labour prices, material prices, land prices, city fee’s, zoning fee’s etc.
there will be an attack on our capital like Jan. 6th in the
U.S.A?
*************
are you serious??
————————-
Given, the situation, I think that is a valid question.
Let’s of loonies out there.
Get the paddy wagons ready.
******
If that was an attack on the white house I would like to see a full on assault would look like? that to me looked like a bunch of school children walking into the halls of justice… little old ladies and guys with buffalo horns… really?? looks like the cops opened the doors for them and let them enter… more media hype than riots… we have become a group of over the top wussies…
I am not saying to do any harmful crap in Ottawa… just be cool and force trudue to leave office ….. it will be any nutter who destroy it… but then this blog’s people are pretty soft to begin with….
laters and cheers
The take away is threefold
– The US has to move first
– the government needs more revenue but new taxes on the middle class are suicide, so let’s use the most toxic and hidden tax: inflation
– we’re so indebted that minor rage increases will have dramatic effects and the BoC knows it. They’re going to be very cautious with increases. That’s why I don’t see more than a raise or two this tear- it’ll slam the breaks.
Hmmm…the day wound up a little red after all.
131 Diharv
“But it would be a significant symbolic gesture that they are actually serious about getting on the path towards some form of normalization.”
I agree. They just have to send one over the bow and
watch what happens.
I LOVE PIERRE Poilievre!!!
https://youtu.be/FOop6JrrEAw
Don’t worry. BoC and feds will have 50 bps come March.
250th? – Housing – is everything to do with it a rigged game in this country??
“The Globe and Mail reports in its Wednesday, Jan. 26, edition that real estate lawyers met with Charney Lawyers on Tuesday to explore a class-action lawsuit against Dye & Durham in response to price hikes on Monday, a year after raising them 400 per cent and guaranteeing the price would not increase for three years…
Last January, D&D raised the conveyancing fee to buy, sell or refinance the mortgage on a property from $25 per transaction to $129 per transaction in Ontario, after acquiring DoProcess, Canada’s largest provider of real estate practice-management software, from Teranet in late 2020 for $530-million. Those fees are passed on to home buyers as a closing cost. D&D clients in Ontario learned Monday that their transaction fee could rise to $249 next week, amounting to a 900-percent increase in just over one year.” (stockwatch.com)
—
— Almost back to normal guys!! 3rd year running. War on Small Business. NO Fun allowed in the New System
https://www.blogto.com/music/2022/01/toronto-concerts-cancelled-restrictions/
“Music lovers have been counting down the days until they can see their favourite artists but unfortunately artists are cancelling their Toronto shows even though they’re set to take place after some restrictions are lifted later this month.”
So this will be my third crash witnessed during my lifetime. Both so far (the 1st two were Toronto 1989 and LA 2009) were unbelievable to witness. This one will take the cake. Why? Because Canadians can’t walk from their mortgages and that drug Hubris that everyone is on .. has one helluva comedown.
@#206 Floppie
“Then repeatedly put the quarter back in and out his pocket and find out what happens…”
++++
Nah
I think the “Liberal Way” is to give the homeless person the 25 cents and then raise environmental fees on all disposable plastic food containers to get it back.
It creates work for more govt bureaucrats that way.
@#212 Doug tea
“the trucking industry in Canada isn’t full of redneck nutjobs lol ”
+++
I believe in these politically correct times.
The term “truckers” has been replaced with Logistics Operator.
Apparently.
Trudeau was confused as hell with all the reports of “Truckers” until he saw the convoy on tv.
His major concern was there were no women being interviewed and only upside down Canadian flags were displayed.
Nary a Rainbow in sight.
Snippets- NP +++
The two geezers ( Macklem and Powell) featured on the front page of the finance section this morning with the headline ‘Mission Accomplished’. Well, we know how that worked out for G.W. Bush.
These quotes are kind of interesting:
‘Federal Reserve Chair Jerome Powell said the central bank was ready to raise interest rates in March and didn’t rule out moving at every meeting to tackle the highest inflation in a generation.’ ( shades of Goldie Hawn’s “Sock it to me”!) +++
and from two Thursday morning quarterbacks:
“They are a little bit less credible now than they were yesterday,” Jean-françois Perrault, chief economist at Bank of Nova Scotia, said in an interview. “I think they’re behind the curve,” Perrault said. “I’m not sure how they’re going to be able to justify that given what they’re saying today.”
“I’m hesitant to call it a policy mistake, but it certainly appears like the bank is on the back foot in the fight against inflation,” said Taylor Schleich, a strategist at National Bank.
#155 Nonplused on 01.26.22 at 6:42 pm
“[…] Hey, can we replace all the pronouns with […]?” You’re such an intolerant bigot! I don’t know why Garth lets you blather on. :P
DELETED
The best way to ensure a 0-2% inflation mandate is to eliminate the indexing of BOC pensions and those of our politicians.
The majority of MPs never collect a pension. Bank of Canada salaries are 40% below comparable private sector chartered bank compensation. Don’t come here to comment unless you are prepared. – Garth
Peering into my crystal ball …
Rates will rise, but will be low. They will not dent inflation.
Inflation will continue till debt service becomes manageable. Not the household debt, but Govt debt service cost.
When the min wage is high enough, that the debt load is manageable, the CB will aggressively raise rates above inflation. Remember 1980s.
You don’t want to be in debt at this time.
When …… ?
The BoC follows the Fed 92% of the time. Rates are not set in Canada. Do not delude yourself. – Garth
Back in 1991 we bought our house in south Mississauga for $276k. The previous owner paid $379 only 18 months earlier. A 27% haircut. anyone under 50 wont remember that
Secondly, given that real estate makes up a huge % of our current GDP, what would a downturn do to GDP, incomes and government revenues?
Close to nothing. It would still be a big hunk of the GDP. It’s just homeowners who would get a massive haircut. They’d take the hit, not the economy. – Garth
Cici Watching today’s gong show in Ottawa and in the US, it’s pretty clear that they are only interested in “hinting at” rising rates while doing absolutely nothing in absolute terms.
Wishy-washy “forward guidance” offering absolutely no guidance at all with the only promising being that they will give themselves the room to do whatever they want and screw us all over by continuing to blow inflation higher. Am I paranoid or does this all point to inflating away the debt through financial repression? Feudalism is apparently the new normal.
And what to say about Jerome Powell’s speech… The delivery was impassionate and it sounded like he was being forced to speak at gunpoint. I’m betting that he doesn’t even want the job anymore but he’s not allowed to quit.
At this point, I’m pretty sure there’s a concerted Liberal/Democrat strategy to ensure neither party gets re-elected in Canada or the US, so they can let this debt bomb detonate in the hands of the unlucky “winners” of the next election. Who obviously won’t stay in power for very long.
I too think they’re not interested in raising rates. In fact, they’re terrified that they would have to. I like your term “debt bomb” because that’s what it is. Despite the efforts of the major political parties to delay the day of reckoning, cracks are starting to appear. One of them, is the call for affordable housing. There’s a kind of laziness here. It’s easy to think the private housing market has failed but the private housing market isn’t private. It is governed and controlled by public policy. Interest rates, CMHC regulations, buying mortgage-backed bonds from the banks and the FHSA tax shelter.
Still, I’m encouraged by the words of our former Minister of Revenue. Well, we’re way beyond that. And while our banks are strong and most of their mortgage portfolios are taxpayer-backed, there’s much danger on the streets of Kelowna, Brampton, Milton, Halifax and everywhere. Risk lies on the shoulders of borrowers, those who are leveraged, with scant equity and floating mortgages, or reckless amateur investors with home equity lines of credit they used to invest in a second property.
The moment you denied is still coming. Do not squander the reprieve.
Another kick in the can for Canadian senior citizens. The CPP increase was 2.8%, Toronto taxes going up close to 6% when garbage, sewers and water factored in. Why do we take this, no one speaks up for us and yet we’re a huge cohort.
Trudeau tucking tail and “self-isolating” away from the trucker convoy.
Who voted for this guy?
You expected him to address the rabble? To what end? The convoy is a dream event for the Libs and will extend their mandate. – Garth
As inflation gains momentum and the BOC sits on its hands, purchasing power deteriorates and inevitably resulting in an economic slowdown, which will lead to higher bond prices and lower rates.
If the BOC did the right thing and engaged in the battle against inflation, it would have to raise rates at higher increments very aggressively which would result in an economic slowdown, and eventually resorting back again to rock bottom rates.
Basically, this is a perfect example of malpractice, and theft, but as quoted before:
Frederic Bastiat:
“When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it”
Until you learn more about monetary policy perhaps it would be wise to stop posting. This is getting embarrassing. – Garth
DELETED
#223 AB on 01.27.22 at 12:18 am
#170 kc
Those truckers are hero’s. It has nothing to do with vaccination. It is truly about freedom
^^^^^^^^^^^^^^^^
Promoting “freedom” to prolong a pandemic and contribute to overwhelmed healthcare systems does not make one a hero.
Well Garth I have been reading about you telling us interest rates were going up for years..maybe almost 10 years. I am still waiting to see the central bank raise interest rates in a significant way and for a significant amount of time. Don’t you think with inflation of at least 7 percent per year which is the highest in 40 years that we should have interest rates at least near the inflation rate like back in the 70s? They have zero credibility in their mandate of price protection. Their main goal is to protect the asset bubbles they created from imploding be that the stock market or the real estate market. So they are trapped now. It will be fun watching them squirm over the next 6 months. I suspect they will raise interest rates 2 or 3 times before the whole financial system seizes up again. Its criminal that they have kept interest rates this low for this long and thats why house cost 1 million dollars in much of this country. Once again why have interest rates been near zero for so many years if our economy is so strong? Its all a facade Garth.
You quoted the US inflation rate, not ours. And rates will rise significantly, starting ion March. There will be no economic seize-up or stock collapse, just a lot of shocked real estate investors with negative cash flow.
Gifts. There are a handful of holdings I regularly enhance with full confidence and no concern. These include Somero, Berkshire, Tesla, SP500, Autozone, Republic Services, Costco, and railroads. When a dip occurs: brief research as to reason, and buy. Today’s gift is Tesla. I took profit at around this level a year ago when the company was less developed. Returned all of that this morning. It’s pleasant to finish a day’s work before 8.
Hmmmm, OK, I’ll try again…
Wow, how unfortunate that our illustrious leader had such bad luck and looks like he won’t be able to greet the convoy heading to Ottawa as I’m sure he was anxiously anticipating…luckily he is taking all the right precautions so as to be able to return to his duties as soon as possible and continue to lead our nation down the amazing path that it is currently on..
BETTER?
Of course he won’t meet with the rebels. But he still loves them. They’re helping Liberals win the next election by ripping apart the Conservatives. – Garth
Keep those nasty pit bulls where they belong: LOCKED UP IN A PIT.
Nasty creatures, pit bulls.
A pariah on the doggie world.
Killing machines.
Ban the breed.
#246 Observer on 01.27.22 at 10:41 am
#223 AB on 01.27.22 at 12:18 am
#170 kc
Those truckers are hero’s. It has nothing to do with vaccination. It is truly about freedom
^^^^^^^^^^^^^^^^
Promoting “freedom” to prolong a pandemic and contribute to overwhelmed healthcare systems does not make one a hero.
——————-
Again, the word “hero” is way overused.
This truckers are “slaves” to their own freedom, and are running rough shot over the freedom of others.
And they are insulting those who truly yearn for freedom.
You quoted the US inflation rate, not ours. And rates will rise significantly, starting ion March. There will be no economic seize-up or stock collapse, just a lot of shocked real estate investors with negative cash flow.
If we calculated inflation the same way we did in the 1970s it would be double what the official number is now. So if you want to play that game then its actually a lot higher than 7 percent. In any case, interest rates are clearly far far too low given what our inflation rate is. And why, pray tell, our the central banks so agonizingly slow in raising them just 0.25 percent. If things were so peachy then we wouldnt have interest rates again near zero percent. Everytime there is a hint of any problem in the stock market the central bankers freak out and drop the rates. This will be a fun show to watch this year..really fun because they are clearly trapped.
Re: trucker convoy
Why would anyone voluntarily travel from the west coast to Ottawa in January? And paying carbon taxes both ways. Baffling the things people do. A strange breed indeed.
#248 Sail Away on 01.27.22 at 10:53 am
Indeed. That was a 7% yielding SAGI yesterday. Your trading signals could make 9 to 5 a thing of the past.
There is a lot of conflicting talk on where the stock market is headed in 2022. Conflicting talk and opinion on a correction and/or a crash, the timing, the why’s and even why not .
Talk of the the Fed doing this, the Fed’s going to do that , or the Fed will do little or nothing at all.
It’s mostly conjecture.
Just about all of it … until the time comes to prove one or two of the many arguments accurate or even one of them bang on. Or maybe its all conjecture and nobody gets it.
I like to keep in mind 2 things looking ahead this year. The markets are always forward looking, and as 2022 unfolds…I expect the market to putter along into late summer and early fall under the Fed play of a few paltry near nothing rate increases at about the time the market becomes nervous about the real unabating inflation numbers and their broad reaching effects on society.
Then the Fed’s too little too late efforts to quell inflation come into question … looking ahead at the much tougher measures to come in being unavoidable , the markets begin to tank in anticipation of what will be come 2023 – in as early as late October or early November this year.
…just another synopsis to chew on for now.
Based on macroeconomics, monetary policy, pandemic progress and corporate prospects we expect a year of modest (but more normal), single-digit equity market returns. – Garth
#243 IHCTD9 on 01.27.22 at 10:23 am
Trudeau tucking tail and “self-isolating” away from the trucker convoy.
Who voted for this guy?
You expected him to address the rabble? To what end? The convoy is a dream event for the Libs and will extend their mandate. – Garth
___
Hell no. But running and hiding?
No prime minister would address a mob of truckers. Get real. – Garth
#253 Sail Away
“Re: trucker convoy
Why would anyone voluntarily travel from the west coast to Ottawa in January? And paying carbon taxes both ways. Baffling the things people do. A strange breed indeed.”
……………………………………………………………………………………………..
They want their January moment while its still January.
Look at the fuel these truckers used. Let’s put the exhaust fumes into the air I breathe. Go Fund pulled the plug !!!
223 AB on 01.27.22 at 12:18 am
#170 kc
Those truckers are hero’s. It has nothing to do with vaccination. It is truly about freedom. Junior needs an awakening ASAP. Not sure what else to say. Arrogance is oppressive and junior is the king of that. And Garth, we have good friends in New Zealand who are really ticked with that Comrade Jacinta and her socialist government. Read the New Zealand Herald today and see what they are doing to a Doctor and her family emigrating from the Netherlands. We had a taste of the iron curtain when we left there 23 months ago. Junior is of the same ilk. Sorry, we have no political bias, but we believe in freedom and people before ideology. You are entitled to your loyalty to the Liberals. And yes, we are vaccinated.
********************
Fully agree. I will defend your rights to disagree with my beliefs and together we will live free.
That is what is happening here. It has nothing to do with who is or isn’t “jabbed”. It has 100% to do with ending the Mandates that are restricting the lives of Canadians. You want to live in a “Eastern Bloc” country were you need to show your papers to enter a store? buy a loaf of bread? wait in l,ine for hours to buy anything from any store?
The turn out and support for this has nothing to do with any pandemic. It is about the free movement of the population.
Silence the man and you will live a life of slavery, this slavery will change your life with restrictions, ask anyone who is living in Quebec, and the lockdowns in Ontario.
Here in BC we have been slightly affected to all this “pandemic” slavery. Yes I miss going out, however I refuse to submit to the “show your papers” to enter any store, or establishment.
If you do not believe in the situation that is unfolding, prepare to live a life filled with “communist style” supression.
your freedom is being stepped on.
250 Ponzius Pilatus on 01.27.22 at 11:06 am
Promoting “freedom” to prolong a pandemic and contribute to overwhelmed healthcare systems does not make one a hero.
——————-
Again, the word “hero” is way overused.
This truckers are “slaves” to their own freedom, and are running rough shot over the freedom of others.
And they are insulting those who truly yearn for freedom.
*****************
READ ABOVE
You cannot hide from this.
Trump north. Nothing to be proud of here. And definitely not heroic. – Garth
No prime minister would address a mob of truckers. Get real. – Garth
****************
Do you have no idea of what is happening here?
A mob of truckers? It is a mob of Canadian and American voters, general population, and I will venture to guess a million people are going to be entering Ottawa in 2 days. Not a mob of truckers. A mob of people that are rallying behind the people who bring you everything you buy in any store across N. America.
It is real.
A mob is a mob. Eminently ignorable. – Garth
Woohoo! Started my CPP today. Took it early. Looked at different scenarios and it made sense to do so.
#251 PP
Look up the word hero in the dictionary. Good grief! Such drama!
#254 Faron on 01.27.22 at 11:34 am
———
Your obsessive fixation with all things Sail Away is quite something to behold, my friend. Not uncommon. A little clingy maybe, but ok.
“Based on macroeconomics, monetary policy, pandemic progress and corporate prospects we expect a year of modest (but more normal), single-digit equity market returns. – Garth”
………………………………………….
That falls in line quite well with the modest year ahead for the equity market i have projected also. Until November anyway. That and the play i have stated the Fed will put on it and what for and why they will do what they will do.
Close to nothing. It would still be a big hunk of the GDP. It’s just homeowners who would get a massive haircut. They’d take the hit, not the economy. – Garth
—————————————————-
Close to nothing? Not sure how you can so easily de-couple homeowners from the economy. Consumer spending represents 70% of GDP. Consumer spending the past decade has been driven by increases in RE equity and easy access / low carrying cost of debt.
If RE equity takes a big hit and debt financing increases significantly – a point you have made repeatedly – then the only result can be a material decrease in consumer spending. Which will have a significant impact on the economy.
Guess we will see, but I can’t foresee a scenario where the “bank of my house” runs dry and the economy skates through. We have a debt driven economy unfortunately, and that well is about to go dry
#261 Dr V on 01.27.22 at 12:13 pm
Woohoo! Started my CPP today. Took it early. Looked at different scenarios and it made sense to do so.
____________________________
FYI, you got a raise on your very 1st cheque!
#253 Sail Away on 01.27.22 at 11:19 am
Why would anyone voluntarily travel from the west coast to Ottawa in January?
___
Very true. Everyone here knows the best way to protest T2 is to sit at your desk and post mean words about him in Garth’s blog.
5,000+ of us Hamiltonians packed Centennial Pkwy overpass and adjacent streets this morning to support the truckers on route to Ottawa…incredible sight!
Thanks Garth!
Home Prices and GDP?
Secondly, given that real estate makes up a huge % of our current GDP, what would a downturn do to GDP, incomes and government revenues?
Close to nothing. It would still be a big hunk of the GDP. It’s just homeowners who would get a massive haircut. They’d take the hit, not the economy. – Garth
****************************
Close to nothing seems right. Why do people think that rising or falling house prices directly affects GDP.
The Real estate component of GDP is renting leasing and property management of existing real estate. Presumably that’s mostly commercial. The value of residences does not directly affect it. Commercial rents won’t change much in response to a drop in residential home values.
The construction of residential homes is a component of GDP as well. Would construction of new homes fall a lot if homes became more affordable? Maybe for a time. Then it would resume in response to demand.
Home renovations might fall, yes.
It is said here that 70% or whatever own their homes. Of those a tiny portion sell in a given year or even decade. Why would a change in the value of those homes, most already paid for or with not much owing have a big impact on GDP?
#263 Sail Away on 01.27.22 at 12:44 pm
Hey, it pays well. Sometimes ya gotta wade into the muck to get the $$$.
@#263 Sail Away on 01.27.22 at 12:44 pm
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Your obsessive fixation with all things Sail Away is quite something to behold, my friend. Not uncommon. A little clingy maybe, but ok.
+++
It could be clinically diagnosed and probably already has been…
#242 ‘Mick’ – the actual COLA for CPP in 2022 was 2.7%. As for the official inflation number I believe most would agree that the official number is not a true reflection of actual inflation. In regards to no one ‘speaking up’ for those on fixed incomes, haven’t you been paying attention to demographics? Boomers are no longer the largest demographic. Gen X,Y,Z/Millennials are now the ones in charge (& who will eventually see their children blame them for EVERYTHING). Check out Trudeau’s cabinet. If news reports are to be believed, all the ministers with ‘big’ portfolios have one thing in common – they are NOT Boomers. Politicians always cater to the largest base.
Wow lots of trashing our host today. Get a grip folks. Thanks Garth for another superb post.
Good, the Canadian dollar is lower again today, 78.5 cents to US dollar. I hope it reaches 62.5 cents like under the Jean Chretien, Paul Martin Liberals in the 90’s. The more the Bank of Canada lets inflation go up it is good for higher interest rates and good for higher inflation for years to come. It is about time.
Inflation increases for seniors
#242 Mick McClean on 01.27.22 at 10:11 am
Another kick in the can for Canadian senior citizens. The CPP increase was 2.8%, Toronto taxes going up close to 6% when garbage, sewers and water factored in. Why do we take this, no one speaks up for us and yet we’re a huge cohort.
*******************
The CPP increase in January reflected 100% of the average official inflation for the 12 monthly reports ended October 2021. The higher OFFICIAL inflation from November and December will automatically be fully reflected in January 2023.
Strangely, official inflation does include more items than just the property tax and utilities in Toronto.
Old Age security pensions, are increased every three months to reflect official inflation. 10% additional permanent increase for those over 75 just because…
266 Wrk.dover
“FYI, you got a raise on your very 1st cheque!”
———-
If it didnt show up in our account I was getting in my
truck and driving to Ottawa!
Of course he won’t meet with the rebels. But he still loves them. They’re helping Liberals win the next election by ripping apart the Conservatives. – Garth
Certainly speaks to his character/leadership…or lack thereof..
BTW, I have 2 doses, I got covid, and felt unwell for a few days and now I’m fine. What will a vaccine passport prove? Why should i have to show proof of anything to do something, what exactly does that accomplish? If I’m sick I can still transmit the virus, vaccinated or not…masks don’t really do anything, if I’m not vaccinated I can get the virus and continue to be fine and not transmit it….
It always comes down to protecting our fragile healthcare system which obviously isn’t very good despite the 10’s of Billions we pump into it every year
25% pshhhhhhhhhhhhhh
No prime minister would address a mob of truckers. Get real. – Garth
=====================
He has difficulty addressing anything.
Especially all of his scandals. Easier to kick the plug out of the wall on an interview.
Who voted for this guy?! But the other choices are dreadful.
#260 kc on 01.27.22 at 12:12 pm
No prime minister would address a mob of truckers. Get real. – Garth
****************
Do you have no idea of what is happening here?
A mob of truckers? It is a mob of Canadian and American voters, general population, and I will venture to guess a million people are going to be entering Ottawa in 2 days. Not a mob of truckers. A mob of people that are rallying behind the people who bring you everything you buy in any store across N. America.
It is real.
A mob is a mob. Eminently ignorable. – Garth
———
These losers are not truckers delivering goods. They are a small group of shit disturbers who are looking for attention. And who think they are special…but are not. Survey says nobody actually cares about what they are protesting about.
Get in your trucks and do the job you are paid to do…after you get vaccinated.
As for a million people going to Ottawa…ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!
Hold on, let me catch my breath.
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!
Old Age Pension
Maximum is $642.25. At 35% marginal tax bracket that’s $417.46 after tax per month. $835 a month for a couple.
Then for many claw back applies. 15% but that’s 9.75% after tax. Total marginal tax is 44.75% assuming a 35% marginal tax bracket.
Now we could be down to $710 a month for a couple. Complicates tax planning when you are in the clawback range.
@#280 Stone on 01.27.22 at 2:04 pm
#260 kc on 01.27.22 at 12:12 pm
No prime minister would address a mob of truckers. Get real. – Garth
****************
Do you have no idea of what is happening here?
A mob of truckers? It is a mob of Canadian and American voters, general population, and I will venture to guess a million people are going to be entering Ottawa in 2 days. Not a mob of truckers. A mob of people that are rallying behind the people who bring you everything you buy in any store across N. America.
It is real.
A mob is a mob. Eminently ignorable. – Garth
———
These losers are not truckers delivering goods. They are a small group of shit disturbers who are looking for attention. And who think they are special…but are not. Survey says nobody actually cares about what they are protesting about.
Get in your trucks and do the job you are paid to do…after you get vaccinated.
As for a million people going to Ottawa…ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!
Hold on, let me catch my breath.
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha!
–
Bwahahahahhahah!
What a bunch of idiots.
hope they enjoy the ontario gas prices lol.
@#268 FriedEggs on 01.27.22 at 12:59 pm
5,000+ of us Hamiltonians packed Centennial Pkwy overpass and adjacent streets this morning to support the truckers on route to Ottawa…incredible sight!
Thanks Garth!
–
hmm, thought the lunatic fringe in the hammer was much much larger.
@#256 IHCTD9 on 01.27.22 at 11:43 am
#243 IHCTD9 on 01.27.22 at 10:23 am
Trudeau tucking tail and “self-isolating” away from the trucker convoy.
Who voted for this guy?
You expected him to address the rabble? To what end? The convoy is a dream event for the Libs and will extend their mandate. – Garth
___
Hell no. But running and hiding?
No prime minister would address a mob of truckers. Get real. – Garth
–
boss move on JT’s part.
those ‘truckers’ are probably even more triggered now.
$1.65L for fuel for their trip back to Alberta.
Linda, so get ready to pay $5,000 more a year for your family in higher inflation because that what Biden did in 2021 and it is coming to Canada too. Their welfare child payments are so devalued now they are poorer are more ignorant then before.
UPDATE
Ontario Provincial Police reported 113 semi trailer tractors and 280 smaller vehicles entered Ontario.
That means over 2,600 people must be in each vehicle.
Some of you might remember the Yellow Vest financing mess from 2019. It was a lady by the name of Tamara Lich who ended up with that money, not the yellow vesters…and guess what? Tamara is now an officer of the Maverick Party, a fringe western party. Guess what?
She has positioned herself as the administrator of the current Trucker’s Go Fund Me. Now that Go fund Me has frozen disbursements from the fund guess what? Tamara is asking that folks direct donations to her personal accounts via ETF.
Jason LaFace (also sometimes uses LaFlace or LaFaci) is a member of the Soldiers of Odin a Norse mythology based group not known for their inclusive ability to promote race relations. He also as recently as 2019 called for Trudeau to be hanged. (hung?). Google it if you think I’m exaggerating.
He is emerging as one of the lead spokesmen for our trucker group as the radical far right extremists further penetrate the protest.
All the while numerous elected CCP members gleefully align themselves with this group.
What a Python-esque farce this is turning into, never mind the posters on here who seem intent on carrying water for these guys no matter how bizarre it gets.
Be sure to tune in for the next UPDATE, scheduled for late afternoon PST, early evening in the east.
#282 KLNR on 01.27.22 at 2:22 pm
These losers are not truckers delivering goods. They are a small group of shit disturbers who are looking for attention. And who think they are special…but are not. Survey says nobody actually cares about what they are protesting about.
Get in your trucks and do the job you are paid to do…after you get vaccinated.
=====================
Hmmmm Idunno… I didn’t interview them. But we do know everyone and their pooch has an axe to grind these days. Every bone head wants their special needs met cause THEIR SPECIAL.
Get back to work all you bums.
Glad to see CRA going after all the clowns that took the free money illegally.
Because the way I setup my 2 companies me and the wife could have took down a pile a free cash. BUT we didn’t….we good we always cashed up for major emergencies.
Socialism sucks unless your a bum and you want OPM. Until that runs out lol.
Then find a spot under a bridge.
#284 KLNR on 01.27.22 at 2:31 pm
w/re the KarenConvoy, this South Park clip comes to mind (very off colour and coarse language. Cartman doesn’t necessarily reflect my views).
https://www.youtube.com/watch?v=ipDmsxQVxIM
No prime minister would address a mob of truckers. Get real. – Garth
_______________________________________________
Because they’re cowards. Those truckers(citizens and voters) have a lot more support then you realize.
SALEOWAY.
See TSLA the earnings and the greed were priced in long waz ago. I said right here peal a pile off at $1200 now 838 today. Major double top at $1200 is major overhead resistance now. Long term uptrend is broken now…a birdy in hand…..
cheers bro.
Luv to see bitcon blow up. Bloody ponzi scheme at best.
For the fools that bought the top ya need 100% to break even….
#289 canuck on 01.27.22 at 3:12 pm
No prime minister would address a mob of truckers. Get real. – Garth
_______________________________________________
Because they’re cowards. Those truckers(citizens and voters) have a lot more support then you realize.
==============================
I think T2 is a coward with a big ego.
Anyway that’s how he runs stuff.
#290 All lies and manipulated u decide on 01.27.22 at 3:39 pm
SALEOWAY.
See TSLA the earnings and the greed were priced in long waz ago. I said right here peal a pile off at $1200 now 838 today. Major double top at $1200 is major overhead resistance now. Long term uptrend is broken now…a birdy in hand…..
cheers bro.
——–
We shall see. I make no recommendation. I bought @ $854 today
He’s got a bunch of PS5 games to play this weekend! Oh wait – that’s what’s on my pathetic agenda…never mind.