The shock

The country’s major bank (the one with the lion) says Canadian housing values could possibly decline in value by 30%. Oxford Economics believes prices will probably fall 24%, but that could turn out to be 40%. Capital Economics simply says real estate in Canada “will topple.”

Can the housing market withstand a return to pre-pandemic mortgage rates, even though prices have risen by more than 50 per cent in the interim? The answer is a firm ‘no’. With house prices now so elevated versus traditional valuation metrics, the risk is that an initial decline could trigger a downward spiral of lower house prices and lower house price expectations.”

Hmm. Why would economic sentiment suddenly turn from benign to alarmist, while Joe Frontporch is still out there, riddled with FOMO and desperate to buy property?

Simple. The pointy heads are using logic. Joe is all emotion. All indications are we’re about to witness an epic example of the Greater Fool theorem in action.

It’s all about the rapidly shifting ground upon which our real estate empire is built. Inflation has not been this outta control since Kevin O’Leary had hair (or credibility). Oil is stuck over a hundred bucks a barrel. The European war is immensely inflationary and the supply chain is whacked. Shortages breed higher prices. So do protectionist trade conflicts, disruptions, tribalism and the cost of ammo. The more the Ukrainians resist, fight and thwart the invaders, the more intense it becomes – and just imagine what reconstruction will cost, and the immense economic disruption in caring for four million refugees.

The bottom line for us here in safe, house-horny Canada, is a jump in financing costs the Millennials never dreamed of when they fled Covid to bid up houses in Bunnypatch. Central banks are freaking out, understanding quickly what they face. The post-pandemic economy opened hotter than expected. Full employment came with alarming rapidly. More jobs than unemployed to fill them. Wage pressures exploded. It dawned that rates had been too low for too long, encouraging speculation, overborrowing and asset inflation.

Then war. Oil at $110. Gas at $2 a litre. Material shortages. Economic sanctions. The international order knifed.

In the bond market investors are demanding an inflation premium. Yields have spiked and prices tanked as a result. The Government of Canada five-year was yielding 0.8% six months ago. This weekend it sits at 2.5% – an increase of more than 200%. TTake a look for yourself…

Here’s why mortgage rates are rising weekly

Source: Investing.com

If you’ve been trying to buy a house, or thinking of selling one, this is why the bond market matters. That govy bond charted above is the determinant of five-year mortgage rates. They have now been increasing weekly. “Unless there is a radical change in the world on Monday,” tweeted veteran mortgage guy Ron Butler on the weekend, “then 4.04% five-year fixed rates are here.” A truce in Ukraine would help relieve some pressures, he notes (correctly) but there’s no sign that’s happening. Putin is too out of control. Zelensky too ascending.

By the way, RBC’s ‘discounted, most popular’ five-year rate is now 3.720%, and due to increase again this week.

And what does this mean to buyers? Well, two months ago a mortgage of $800,000 (if you bought the average detached in 905 and had $1 million cash to put down) cost $3,794 a month at 3.02%. Last week that monthly was $4,100, at 3.69%. Total interest on a 25-year amortized mortgage increased from $338,253 to $422,442.

And this is just the start, it seems.

The Bank of Canada’s deputy boss gave a speech last week which was aggressive in its tone, and has led many to believe the next increase – on Wednesday, Aril 13th – will be a half point. The US Fed is expected to do the same in May. In fact both banks will be increasing between four and six times by the end of 2022. At that point five-year home loans could easily be in the 5% range.

So that $800,000 mortgage would require monthly payments of $4,653, or $1,000 more than when the year began. It’s hard to see how this squares with survey after survey showing most middle-class Canadians have scant free income. Already up to a third of recent homeowners struggle with their finances. Given the giant increase in the cost of food, gas these pressures will augment. Meanwhile RTO means more families face commuting charges and, of course, the cost of new pants. Ontario’s Metrolinx system just announced a slew of extra GO trains being added to routes to accommodate passengers who did WFH for the last two years.

So, inflation. Rates. War. Now some people are even dragging out the R-word. A recession is still unlikely, but if one did occur you can rest assured Canadian real estate – now judged to be about the most overvalued residential asset on the planet – would not fare well.

Some people think as rates rise and house prices fall that hordes will rush in to buy and support valuations.

They have a shock coming.

About the picture: “I’ve been reading you for years with a combination of admiration, irritation and delight,” writes Jay, in a lukewarm MSU. “This is Angus. He was supposed to be a mini Golden Doodle. He isn’t. He is a Golden Wookie complete with the Chewbacca noises. Up the hill behind us every day and out for a walk with my boys every evening. He likes his water.”

146 comments ↓

#1 Chad on 03.27.22 at 11:05 am

After 10 years of reading this blog, will the greater fool finally appear?

#2 Daveyboy on 03.27.22 at 11:16 am

The winds of shit, are coming! lol

https://youtu.be/OQufxG1GcAk

#3 mitzerboyakaQueencitykidd on 03.27.22 at 11:19 am

Dogs are great
beer is good
people are funny

happy spring sunday

#4 How to float a boat on 03.27.22 at 11:32 am

I’m feeling that now be a good time for the family to invest in a boat. It maybe up to $50,000. Aluminum boats seem to be the way to go for sheltered ocean – they tend to last forever and keep good value.

What’s the best way to finance such a necessity? I don’t want to pay cash.

Anyone got one of these super-hawks? Ridiculous you can’t test drive before buying. Lol.

https://www.crestliner.com/deep-v/fish-sport/super-hawk.html

#5 TurnerNation on 03.27.22 at 11:33 am

This is the future our rulers have planned, for us.
Control over travel? Energy.
Control over feeding? Energy inputs – food production.

It went into overdrive the world-wide, March 2020. Hey we will go back to normal — any day now!

Serfdom is back.

https://www.pbo-dpb.gc.ca/en/blog/news/RP-2122-032-S–distributional-analysis-federal-carbon-pricing-under-healthy-environment-healthy-economy–une-analyse-distributive-tarification-federale-carbone-dans-cadre-plan-un-environnement-sain-une-eco

“Most households in provinces under the backstop will see a net loss resulting from federal carbon pricing under the HEHE plan. That is, household carbon costs will exceed the Climate Action Incentive payments households receive”


— What is used to control, divide and passify society, specifically our minds?

What cannot the people afford?
Food. Travel. Fuel. Shelter. Electricity.

What do your rulers and the large global corps. give you for FREE?
Wifi
Social Media
Online Pr0n
Sports
Injections
“News”. A Telescreen is everywhere in the public places.

#6 Dogman01 on 03.27.22 at 11:33 am

#74 Nonplused on 03.26.22 at 10:52 pm

“in the blink of an eye the US can and will seize any foreign reserves they have access to on a whim. Supposedly because they don’t like what you are doing, but realistically power does not need reasons. Power, by its very nature, is independent of reasons. Power is the reason. Always was.
Politics has no place in banking, not even during a war. Prepare for titanic shifts in the global currency system. Say goodbye to unfettered globalization. “

—————————————–

Years ago I raised an eyebrow when I saw Visa\Master Card\American Express – tell me I could no longer donate to Wikileaks.
Then I saw the growing wave of de-platforming due to “inappropriate thoughts” that went against an “approved message”.
Then I saw my government seizing bank-accounts of people engaged in non-violent political action.

All these things have illustrated to me that the system will use all its levers (law, media, banking) to maintain the system.

As time goes by I find that my values and perspective place me as a dissident, and as I am largely powerless, I have only two viable strategies:
“live quietly amount the masses” and “be slippery and difficult”

However If I was India, or China, Saudi or Russia I would see that the US Dollar system has been weaponized and has become a tool of “system control” for a rules based order designed to benefit the power of a fraudulent “Western Elite”.
With the west at its weakest point in 80 years and the shift of our finance to ideologically-control, as such a powerful actor I would indeed be working with other like-minded actors to create a “morally-neutral” system of commerce.

This is why Bitcoin has such appeal.

#7 Nanaimo tide on 03.27.22 at 11:35 am

We learnt long ago that the tide never goes out in Nanaimo. We only surge upwards with Vancouver and surrounds freeing up cash in their homes and moving to Canada’s best and warmest Island. The sheep will soon realize it’s infinitely better than smoky Kelowna and we even have orcas and islands.

#8 Captain Uppa on 03.27.22 at 11:40 am

I have heard some rumblings lately from number crunchers to Frank Stronach, that Canada is at serious risk of default ala Greece.

Is this realistically possible, Garth?

#9 Ponzius Pilatus on 03.27.22 at 11:48 am

Meanwhile RTO means more families face commuting charges and, of course, the cost of new pants. Ontario’s Metrolinx system just announced a slew of extra GO trains being added to routes to accommodate passengers who did WFH for the last two years.
———————————
I noticed increased ridership on my regular bus rides.
Could also be cost of gas.
That’s what happens when people react with emotions rather than have a long term plan, and stick to it.

#10 Reality is stark on 03.27.22 at 11:51 am

Trudeau had the opportunity to walk away a genius.
Start reigning in spending as the economy recovers.
All that debt he financed for cheap.
Instead he aligns with the NDP to spend more. He is an idiot.
The war played into his hands, commodities on fire and royalties rocking and he is going to piss the money away.
Just like his father pulled the ultimate stunt on us by giving us 13% mortgages while our America neighbours paid 7% Justin wants to repeat the insanity.
Here we go again, we learned nothing.
The only saving grace is that we will be welcoming hard working young Ukrainian women to the country to repopulate the next generation. Hopefully they have seen enough socialist/communist experiments to tell the social justice bunch to go to hell.

#11 Saint Herb on 03.27.22 at 11:55 am

“All indications are we’re about to witness an epic example of the Greater Fool theorem in action.”

From your blog to Dog’s ear.

#12 millmech on 03.27.22 at 11:57 am

The big problem will be when housing stops going up in value and is no longer perceived as a safe haven of ever growing gains. A lot of people are funding their lifestyles and that of their children as well through HELOCs and when that income stream is stopped and repayment increases it will have a big effect on investment psychology.
Depending on outstanding HELOC balances of a maximum 65% of equity, a 35% decline puts one in a precarious position as no margin of safety for the banks as home is 100% financed. This leaves nothing for the banks to recover if default occurs and this will not happen, as prices decline HELOCs will have to be paid back to keep the equity ratio of 65% to market prices.

#13 Doug t on 03.27.22 at 12:00 pm

50% CRASH please and thank you

#14 Big Bucks on 03.27.22 at 12:02 pm

Now with the NDP running the show can a UBI be far off.Instead of $0 the UBI($18300)becomes the new floor and everything adjusts accordingly.Inflation of 20-25% after introduction(and imagine mortgage rates).The Liberals wouldn’t bring in a UBI themselves but now that they can blame someone else?Look for it to be talked about(a lot)over the next 3 1/2 -4 years.Logic dictates that it happens eventually.

#15 tbone on 03.27.22 at 12:02 pm

Thats why i never drink from a fountain in a park .
Bring beer.

#16 Bring it on baby , can't wait on 03.27.22 at 12:03 pm

I can’t wait for this to happen, the day of reckoning for the frozen shithole called Canada

But wait, isn’t Trudeau going to import 500000 nuclear scientists, doctors, economists and software engineers from Botswana year after year to offset this RE holocaust???

Rolling on the floor laughing, and F…CK all the so called Laurentian elites, the corrupt imbeciles that destroyed this country..

I love it..

#17 Guldip Singh on 03.27.22 at 12:07 pm

Point taken and proven, real estate should never be used alongside ‘net worth in a sentence’ because unless your trading in real property, it’s non fungible shelter. And sorry suckers, but I have no sympathy for those who yoo-hoos that traded ‘up’ from a paid off home into a Suburban Debt Albatross . Real estate, in real terms, is worth nothing.

Fools abound. Remember how over the past several years we all got brainwashed into thinking the planet was dying in nine years and us along with it. Yeah, that was as stupid as buying real estate.

Anyone else subscribe to Oil Price News? Those who do know what’s coming in the Green Fairy Land. If you know you’re making bank.

#18 I don't know on 03.27.22 at 12:08 pm

Rising rates are going to make affordability worse, not better.

Why? It’s still prudent to take on debt when interest rates are lower than the official level of inflation. The actual mandate of the BoC is slightly inflationary, after all. There won’t be deflation, just lowered levels of inflation.

This has generally been the case for the past decade, and especially the last 2 years already. The statistics about everyone being “over-leveraged” therefore need to be taken in this context.

What is going to happen is, increasingly, only those with means will have access to large sums of capital and be able to borrow to buy real estate. The result? Worse affordability and continued division between home owners and none-home owners.

This is of course ignoring the myriad of reasons why demand is so high for real estate, including demographics, urbanization, family formation trends and so on.

Poorly informed and sitting in quickly depreciating cash? Hoping to join the incredibly crowded real estate trade? Hoping interest rates will turn back the clock to 2012 when you didn’t buy?

Good luck.

There is a housing crisis coming, but it won’t look like the 80’s or 2008.

You buy when you can afford to, preferably with dirt, and in an urban area. You always ensure it fits into a diversified portfolio as well.

IDK

#19 Søren Angst on 03.27.22 at 12:10 pm

You read my mind today.

And, you are SO, SO correct Garth.

I will go one step further to the end game of what you said:

RECESSION.

There is no way the CB will gingerly step between raising rates to avoid recession AND stomp down inflation.

Same outfit that let inflation run away from it by not raising rates fast and early.

Same outfit that kept rates low to pump GDP by letting RE run rampant during the pandemic.

So what have we got now?

Run away prices. Unaffordable RE for all.

For those that think it will be Sugar ‘N Spice, Everything Nice…

Raise your glass of Hemlock, give a toast to Socrates and swallow.

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

For once, Ted Cruz’s Clown Car admonition applies:

Thank you Bank of Canada for your incompetence and short sightedness.

The lot of you should be fired. Your replacements can do no worse than you have already done.

#20 Søren Angst on 03.27.22 at 12:17 pm

Corollary.

I made fun of CTV News using an image of Trudeau with the EU stars surrounding his head as if a deity, a beatified Saint.

Well, I didn’t tell you the entire EU reaction to his speech.

Cat’s outta the bag. Not a fan of Lilley but he needs do no talking in this video of his.

“Dictatorship of the Worst Kind”

My reaction pretty much describes how we see your Dear Leader Canada.

https://twitter.com/bsant54/status/1508013407534030851

Well Toronto and Montreal, still happy you voted him into power?

Poor Canada. A GREAT nation and people humiliated internationally by one man.

#21 crowdedelevatorfartz on 03.27.22 at 12:18 pm

Rising inflation, rising interest rates, rising debt.

Trudeau and the effete snobs that run this country will be dragged kicking and screaming to balance the budget.

Free dental?
Free child day care for all?
In your dreams.

Either he balances the budget and starts paying down the debt or our currency is worth more as toilet paper.
Take your pick.

#22 Søren Angst on 03.27.22 at 12:21 pm

Predicted every recession since 1955.

https://fred.stlouisfed.org/series/T10Y2Y

0.18

Saw toothing its was down to 0 or less.

At breakneck speed.

#23 crowdedelevatorfartz on 03.27.22 at 12:28 pm

@#73 Ponzies Precarious Predictions.

“The motto is “Surrey, the future is here”.

+++

The motto was for where the bulldozer blade would start digging the next drug rehab center….

#24 JSS on 03.27.22 at 12:33 pm

This has happened before. High oil prices has caused inflation. And high oil prices will cause the next recession. The incomes for everyone are not going up high enough to sustain the economy, and to absorb inflation. If the inflation is structural, and not transitory, it’s unlikely this upswing in prices of everything will last too long.
It will be interesting to see how the economy adjusts each time interest rates are ratcheted up. I wouldn’t be surprised to see interest rate cuts sometime in 2024.

#25 Inadequate on 03.27.22 at 12:37 pm

I am heavily exposed to energy plus financials. Oil will stay high and interest rate wiĺl move higher. Bring it on.

#26 Sam on 03.27.22 at 12:45 pm

More importantly, Garth do you believe house prices will crash by 30-40%? I recall you saying you aren’t expecting a housing crash, especially in GTA when I’ve questioned your alarming blogs on housing. So to this I ask what are you expecting in the housing market, Garth? Me personally I don’t see any significant drop of any at all. In fact I predict steady increases into 2023.

#27 Ponzius Pilatus on 03.27.22 at 12:46 pm

#90 Satori on 03.27.22 at 10:55 am
#73 Ponzius Pilatus on 03.26.22 at 10:29 pm
#72 Flop… on 03.26.22 at 9:49 pm

I am sorry to hear that your town is booming.. what you can look forward to:

A ton on new builds going up, traffic nice and slow, streets blue with exhaust, unused bike lanes, loud car music, crowds of happy drunks screaming outside late at night, lots of druggies, stranger attacks, homeless, mental health issues, car alarms, several people piling in expensive rental units, line ups, break ins and so it begins
————————
Where did I say that it is a good thing?
Only time will tell.
It’s kinda a “if you can’t beat them, join them” thing.
Can’t beat reality.

Realty

#28 SwanPardis on 03.27.22 at 12:48 pm

Keep repeating something for more than a decade and it finally may, just may, come through. Such is the tiring voice of this blog. (And Mr. Turner, don’t repeat your usual, old retort of ‘then why are you here?,’ as we are here in the hopes of some new material. Alas …

#29 No more buyers on 03.27.22 at 12:49 pm

The low interest rates pulled forward so much demand that there won’t be many buyers left. Prices will remain stable through the spring, but once summer hits and supply starts to increase, then prices will start to drop. Expect a slow steady decline in home prices over a couple of years.

#30 Gloater fool on 03.27.22 at 12:50 pm

Wow bear blog makes a bear call. More at 11.

You need a place to live. Rent at your peril, as rents rise with inflation.

Don’t get cute with your home. People listening to bear calls have had their lives ruined. Just buy something within your means and you’ll be fine.

#31 I don't know on 03.27.22 at 12:59 pm

#6 Dogman01 on 03.27.22 at 11:33 am

Russia’s economic prosperity has always been in trade and relations with Europe. The animosity towards the west is so incredibly misplaced it’s painful.

Instead Russia looks like it’s increasingly beholden to China.

Since the end of the cold war the west has tried to trade economic prosperity (trade) for peace with the east. There was also the hope that the idea of freedom and democracy would grow out of increased economic opportunity.

Some countries like Japan and South Korea listened.

Others appear to be incapable. It’s not suprising since history has clearly shown autocracies eventually turn on themselves and others.

Regardless of the gripes of those who attack the west and its leadership (always while living here and reaping its benefits), the majority of the world’s scientific, technological and industrial progress comes from western companies, institutions, and individuals.

Membership increasingly appears to have to be earned to be maintained.

By the way, Bitcoin’s only appeal is for people to make a quick buck. Other than that, all the other touted benefits are just a cover.

IDK

#32 Drill Baby Drill on 03.27.22 at 1:02 pm

Saudi sheiks are making a lot of noise lately about using the Chinese renminbi for oil trades and so are the Iranians and Russians. If this happens then the US dollar hegemony will be seriously weakened if not eliminated. When this occurs the USA will have lost it’s most important international hammer (econ sanctions). US dollar interest rates will then skyrocket. Can you say 15% rates anyone?

#33 TurnerNation on 03.27.22 at 1:15 pm

A pull back means little. From 1.5 mill for rotten slanty 100 year-old semi down to ‘only’ one mill? Where do I sign up….

————-

I am an obedient tax slave! To our globalist run government (which exist only to execute and enforce the will of the Global Corporations.)
This 4th Re…Revolution is run by them.

Things which keep me in line:
QR code compliance.
Climate Compliance.
Muzzle compliance.
Fear of being put on the secretive ‘No fly list’.
Fear of unlimited detention without trial for being deemed a ‘t3rrroist’ due to ThoughCrimes.
Injection compliance.
Fear of of being de-platformed by the handful of (anti) social media companies running the world.
Fear of having my posts censored by the Algo ‘Fact Checkers’ for have a thoughtful opinion.
Fear of having an electric car remotely disabled, at the government’s behest, for anything from being branded a Protestor or Anti-Regime, to unpaid taxes and fines.
Fear of having bank accounts or assets frozen, seized for supporting a charity, or protest, or as hailing from a certain country.

I am free to leave at any time though! At any time.

#34 crossbordershopper on 03.27.22 at 1:25 pm

yes rates should rise, with the real inflation rate where it is, quarter here, half here, fine.
but this constant talk of people with new mortgages etc and paying more, I would of thought since 2008 some 14 years later most people would of paid off there houses with super low interest rates. dont people have debt repayment backed in the cake.
these interest rates are people at the margins, the new people etc, most of us have inheritance coming, pension plans, tfsa, and paid off houses.
75% of all canadians own a home, and of those 50% at least are paid off in full, and sliding scale for the rest, but given 14 years of low rates, i am sure even with a 100 or 200K mortgage on a 1.3m dollar house doesnt seem to be that bad, if prices drift lower or go flat for 2 or 3 years what does that mean for most, nothing, still paid off house, or 4% principal decline yearly. with small principal relative to value.
way too much concern over interest rate differentials, i was always concerned in my life of getting access to capital, not the rate. the rate was inconsequential to me. without the money nothing happens and in Canada other than real estate, nothing is happeing. even the oil patch is subdued at these higher oil prices.
Canada will officially be a socialist basketcase moving forward, so if you like it stay, if not, go to florida.

#35 don't poke the bear on 03.27.22 at 1:28 pm

the only shock is going to be how high commodities rise this year and how fast we go into a recession.

grains, as high as they have risen, are on the verge of exploding again.

North Europe Rebar prices at 1250/euro, from 450 in 2020. they exploded higher again this past week. watch Steel and Iron Ore prices in the coming days.

excellent page with a whole host of commodity prices. not just your typical headline ones.
https://tradingeconomics.com/commodities

Next? get ready for North American Nat Gas prices to go vertical. if you haven’t locked in your home nat gas supply, you may be in trouble. something minor, but could save you $1000-1200 a year on a small home of 1500 sq ft. for some households, living on a tight budget, every savings can help them.

CPI is raging at 20% now. visit the FED’s own website. go to the right “Edit Graph” button. Click 3rd choice in drop down menu ” Percent change from year ago, Index 1982-1984″

https://fred.stlouisfed.org/series/CPIAUCNS

this does a proper comparison. something the talking heads on tv and at central banks don’t tell you.

5-6% CPI in Canada is a lie
8-10% CPI in the US is a lie.

the reality is twice that.

energy is life.
windmills and solar panels are useless…
ESG is dead.

#36 Flop... on 03.27.22 at 1:29 pm

Uncle Ponz, yesterday some time.

“You saw correct, Floppie.
Surrey is a’booming.
The new immigrants are coming with lots of money.
House prices are a’rocking, surpassing Richmond now.
Drive by shootings are way down.
And they are planting trees like crazy.
The motto is “Surrey, the future is here”.
Can’t argue with that”

////////////////////////////

I would have gone with this motto.

Surrey, we plant lots of trees, so you’ve got something to hide behind when the shooting starts…

M47BC

#37 Quintilian on 03.27.22 at 1:34 pm

#14 Big Bucks on 03.27.22 at 12:02 pm

“Now with the NDP running the show can a UBI be far off.Instead of $0 the UBI($18300)becomes the new floor and everything adjusts accordingly”
Actually, that would be a good thing.

It would be fiscally prudent.

When you consider the expense of running all those “handouts” ie welfare, EI, , etc etc,

A UBI would be the most efficient cost-effective way to give a helping hand to those who need it.

As I told Crowdy, resistance if futile.
Line up with us angels, we have a lot of work ahead of us and could use the help.

#38 Bdwy on 03.27.22 at 1:39 pm

How to float a boat on 03.27.22 at

Aluminum boats seem to be the way to go for sheltered ocean – they tend to last forever and keep good value.

……….
After 25 summers of summers living on an island and running fiberglass boats on beautiful howe sound its a mix of both types of hulls out there maybe 70-30 fg to Au. Ive often thought/researched about why alum over fg.

Alum
Pro:Lighter , indestructible and hold value
Con: rougher ride . price

Fg
Pro *smoother ride* still hold good value and still mostly indestructible. Low price.

Con. Higher fuel consumption

Ive got a 70s double eagle hull that seems as solid as the day it was built . No mtce done. (Paid 1k for the hull in 05)

Also a late 80s hourston daily driver. Same thing. (Paid 1.5k in 2017) .

If you plan on plowing into a rock at full speed the fg is marginallly safer.

new canvas, motor service and repair, moorage, bottom paint can all run 2-5k+ each.

For me the smoother ride is the most important and the near free hull is second.

My friend tried to dospose of an old fg hull by crushing it with an excavator. He kept smashing it over and over but it kept bouncing back to shape as if it were rubber.

#39 YVRTechGuy on 03.27.22 at 1:39 pm

I think North Vancouver has already dropped significantly. I watch the SFH market there closely. For pretty much the past year, almost all homes listed were priced $400-500k above assessed, then sold within a few days for another $400-500k above that.

Since 18th Feb pretty much nothing selling anymore – the only 1 or 2 sales I’m s
eeing are sold for a few % under the asking price.

If you only watch asking prices you won’t see it – but if you watch the actual s
ales prices then they’re already down 15-20% from the peak.

#40 Barb on 03.27.22 at 1:41 pm

Angus is happy you’re not a purebred either, Jay.
There’s some serious intelligence in his eyes.

“Central banks are freaking out, understanding quickly what they face. ”
Doubt I’d call their understanding to be quick…
Looking beyond their noses seems a rarity.

#41 DON on 03.27.22 at 1:42 pm

#26 Sam on 03.27.22 at 12:45 pm
More importantly, Garth do you believe house prices will crash by 30-40%? I recall you saying you aren’t expecting a housing crash, especially in GTA when I’ve questioned your alarming blogs on housing. So to this I ask what are you expecting in the housing market, Garth? Me personally I don’t see any significant drop of any at all. In fact I predict steady increases into 2023.

***********
Did you miss the ‘things have changed’ comment?

How did you miss the last 6 months of news?

Did you just wake us from a long Winter’s nap?

#42 Ponzius Pilatus on 03.27.22 at 1:43 pm

#20 Søren Angst on 03.27.22 at 12:17 pm
Corollary.

I made fun of CTV News using an image of Trudeau with the EU stars surrounding his head as if a deity, a beatified Saint.

Well, I didn’t tell you the entire EU reaction to his speech.

Cat’s outta the bag. Not a fan of Lilley but he needs do no talking in this video of his.

“Dictatorship of the Worst Kind”

My reaction pretty much describes how we see your Dear Leader Canada.

https://twitter.com/bsant54/status/1508013407534030851

Well Toronto and Montreal, still happy you voted him into power?

Poor Canada. A GREAT nation and people humiliated internationally by one man.
——————-
You talking about Biden?
Someone here mentioned that Putin had the support of 60% support of Russians.
By calling Putin a “Butcher”, Biden has just made sure that that number will go uppa.
No big fan of that guy any more.
No clue how European politics work.
Selensky will find out soon, too.

#43 Satori on 03.27.22 at 1:44 pm

#7 Nanaimo tide on 03.27.22 at 11:35 am
We learnt long ago that the tide never goes out in Nanaimo…
————————————-
Ferries, pulp mill smells, expensive food and on Maclean’s magazine’s “most dangerous place to live”…. no orca sighting can make up for that.

#44 Happy Housing Crash Everyone! on 03.27.22 at 1:49 pm

Don’t worry, Realtor Shysters, as the market collapses there will be a special CERB just for you!

NOT! Lolololololol!

#45 Satori on 03.27.22 at 1:52 pm

#26 Sam on 03.27.22 at 12:45 pm
More importantly, Garth do you believe house prices will crash by 30-40%? I recall you saying you aren’t expecting a housing crash, especially in GTA when I’ve questioned your alarming blogs on housing. So to this I ask what are you expecting in the housing market, Garth? Me personally I don’t see any significant drop of any at all. In fact I predict steady increases into 2023.
——————————————————

Sounds to me like you won! The highest bidder on a new home, that you bought this year, congratulations…?

That might explain the blind optimist-ism.

#46 Ponzius Pilatus on 03.27.22 at 1:59 pm

Anybody noticed that the USA just passed the 1million deaths from COVID mark.
Death per capita, 3 times higher than Canada’s.

#47 Kato on 03.27.22 at 2:00 pm

#33 TurnerNation on 03.27.22 at 1:15 pm
A pull back means little. From 1.5 mill for rotten slanty 100 year-old semi down to ‘only’ one mill? Where do I sign up….
—————-
It means quite a bit to the person who bought for 1.5….

#48 Ponzius Pilatus on 03.27.22 at 2:08 pm

#31

Regardless of the gripes of those who attack the west and its leadership (always while living here and reaping its benefits), the majority of the world’s scientific, technological and industrial progress comes from western companies, institutions, and individuals.
———————-
depends on what point in history you’re talking about.
And also there’s more to “progress” than producing the most goods the fastest.
For me, no one beats the ancient Greeks.

————-

#49 neptunian on 03.27.22 at 2:43 pm

rate will not be high enough to burst the RE bubble.

the real/potential risk is T2 and NDP deal, T2 has to give NDP something, and T2 is not smart enough.

RE at current price is fragile, everyone knows it is high, but everyone is afraid it will be even higher (which has been the case in last 10 years). any stupid NDP driven government intervention could be “the last straw that broke the camel’s back” to our FOMO addicted amature-genius-RE-investors. Once the first-short-selling starts, it wouldn’t be pretty considering the steep upward curve in last 2 years.

so those who voted for T2 since “liberals will make the RE even higher” will regret, they didn’t realize who they voted for is ‘always photo ready but not smart…’

#50 Dogman01 on 03.27.22 at 2:54 pm

#31 I don’t know on 03.27.22 at 12:59 pm

I agree with you that the West has been a superior system for quite some time, but it is declining. I argue due to a corrupted ruling class that do not understand or uphold the values and principles that got the West to its pinnacle.

“The inner rot of all empires is very, very slow and quite insidious. Usually, the military ceases being a citizen’s obligation and becomes a mercenary operation that is increasingly expensive and increasingly useless for defense, good only for looting distant provinces or neighbors while the core of the empire rots away. The tipping point isn’t military spending overhead. The tipping point is up at the top: do the elites see the empire as a road to personal wealth? When they decide this, they go on an internal looting expedition, cutting their own taxes while increasing taxes on the lower classes. Rome did this, Spain did this and the UK did this. All empires do this.” – Niall Ferguson

IMO our ruling class is throwing in the towel on such fundamentals as: merit, free markets, prudent government finances, free-speech, racial equality, quality education system, surplus trade balances etc. All the indicators seem to be both a moral and economic decline.

WRT Russia and Europe, the tragedy is Russia was forced to decided that their security (no NATO\Western satellite in Ukraine) was worth giving up the economic ties to Europe. Hopefully China does not make the same decision wrt Tiawan.

I think people in other Authoritarian states might have a different perspective on Bitcoin, it is like Gold but much more portable and concealable.

#51 wallflower on 03.27.22 at 2:58 pm

Angus is glorious

#52 Michael in-north-york on 03.27.22 at 3:07 pm

#32 Drill Baby Drill on 03.27.22 at 1:02 pm

Saudi sheiks are making a lot of noise lately about using the Chinese renminbi for oil trades and so are the Iranians and Russians. If this happens then the US dollar hegemony will be seriously weakened if not eliminated.
===

This is correct. The size of Chineze economy allows them to set their currency as a new international trade instrument, competing with the U.S. dollar. And that’s not necessarily bad. The Western nations will adjust to the new environment.

If the history is any guidance, U.S. became the worlds largest economy in the beginning of the 20-th century. At that time, the British pound was the leading international currency. It took a few decades for the U.S. dollar to take the role.

The new balance of economic power should lead to the new international trade system, even if after some lag.

#53 mj on 03.27.22 at 3:08 pm

I thought the CB would crash the market. But now it looks like it will be the 5 year bond. Once mortgages go over 5 percent, you will see things change. Prices will drop, and a recession will be more clear. Once we pass this, I see a long bull run of everything again

#54 dosouth on 03.27.22 at 3:11 pm

Give credit where it is due. After several articles on your blog and after weighing all the pro’s and con’s of our newly completed build carrying costs. Locked in our VRM in February (for the first time ever in 25+ years) and voila….pay more now but saving a heck of a lot over the next 4 years.

Best advice is considered, weighed and then actioned. Thanks Garth..

#55 Dave on 03.27.22 at 3:18 pm

Re # 7 Nanaimo , otherwise known as Surrey by the Sea, with its drugs, greasy bikers, strip malls and homeless. You can have it!

#56 Ace of Hearts on 03.27.22 at 3:18 pm

Did Kevin O’Leary ever have hair? I think not.
Credibility?
Are you making reference to his latest foray into crypto and de-fi? Or his childlike attempts to appear hip with his manifold BoobToob videos?

#57 THE DANDADA on 03.27.22 at 3:18 pm

15 years ago I purchased 6 properties all within a 2 year period.

Yesterday there was a survey out on youtube and people from 20 to 40 were responding about how they will likely never own a home. If they do it will have to be handed down to someone else when they pass because they won’t be able to pay it off in their lifetime.

It’s kind of sad when I think about it.

#58 IHCTD9 on 03.27.22 at 3:18 pm

#4 How to float a boat on 03.27.22 at 11:32 am
I’m feeling that now be a good time for the family to invest in a boat. It maybe up to $50,000. Aluminum boats seem to be the way to go for sheltered ocean – they tend to last forever and keep good value.

What’s the best way to finance such a necessity? I don’t want to pay cash.

Anyone got one of these super-hawks? Ridiculous you can’t test drive before buying. Lol.
———

Look at Silver Streak, I like the Challenger:

https://www.silverstreakboats.com/boats/18-6-challenger-hard-top/

Super nice, top quality, do almost anything boat.

#59 Diamond Dog on 03.27.22 at 3:23 pm

30 year mortgages in the U.S. have risen 48 basis points in the last 10 days with a healthy 24 basis point hike on Friday, now sitting at 4.95%:

https://www.cnbc.com/video/2022/03/25/mortgage-rates-move-higher-30-year-fixed-at-4-point-95-percent.html?&qsearchterm=30%20year%20mortgages

The same trend is hitting Canada. Goes without saying, as the cost of credit goes up, the price of housing goes down. The Fed talked about 6 more .25% rate hikes last week for this year with some potential for .5% hikes. We are looking at a 2% Fed rate by year’s end. 30 year mortgages in the U.S. could be around 7ish?

Canada’s famed 2% mortgage stress test should be breached by year’s end. Duh, maybe they shoulda had it higher.

Canadian 5 year terms could be around 6% by year’s end. A 24 to 40% housing drop with rates at 6% sounds right. Inflation crushing purchase power… mortgages pushing past the “stress test”… the poverty effects of war, a housing bubble collapse, bond bubble collapse, stock market bubble collapse, finally the straggler commodities… anyone feel that, it’s starting to get a bit of a breeze out there now.

Perhaps someone should tell Kevin O’Leary 9% returns aren’t in the cards this year. Like, who knew:

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

#60 Clark Dick on 03.27.22 at 3:35 pm

#1 Chad on 03.27.22 at 11:05 am

After 10 years of reading this blog, will the greater fool finally appear?
________________

Chad, if you have to ask that question, I think the greater fool has appeared. Next time you are in front of a mirror, look long and hard!

#61 Ustabe on 03.27.22 at 3:38 pm

#51 wallflower on 03.27.22 at 2:58 pm

Angus is glorious

Angus is in serious need of a good brushing out, perhaps even the attention of a qualified groomer.

If you are going to keep an animal at least provide it with a basic standard of living.

#62 Kel own ya on 03.27.22 at 3:43 pm

#7 Nanaimo tide on 03.27.22 at 11:35 am
We learnt long ago that the tide never goes out in Nanaimo. We only surge upwards with Vancouver and surrounds freeing up cash in their homes and moving to Canada’s best and warmest Island. The sheep will soon realize it’s infinitely better than smoky Kelowna and we even have orcas and islands.

Last time I checked, Kelowna RE prices were rising significantly faster than Nanaimo’s. And their prospects for future growth were also significantly better according to recent Western Invsstor article.

Apparently 3rd most expensive place in Canada to rent. Which tells you where people really want to be. Obviously not petting your orcas.

I’m truly sorry you made the wrong choice. Still, there are worse choices, just not sure what they are.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://infotel.ca/inhome/kelowna-passes-victoria-as-third-most-expensive-place-to-rent-in-canada/it89555&ved=2ahUKEwi-orrPhef2AhVKHzQIHXR6BAQQFnoECBQQAQ&usg=AOvVaw3obDdJop0EaMAKWeOKbIaj

#63 The Original Jake on 03.27.22 at 3:45 pm

A ray of hope on the war front as Zelenskyy is ready to discuss neutrality.

https://www.cnbc.com/2022/03/27/russia-ukraine-live-updates.html

#64 Bdwy on 03.27.22 at 3:46 pm

Look at Silver Streak
…..
For sure a sweet and very popular choice. Tons of em out here.

The hard top is what you want for cooler /ugly weather.

As a seasonal boater i like a canvas top that is super easy to fold up on warm sunny days. A convertable so to speak. Also allows standing for best view and easier solo docking . i can flip mine up or down in 3 seconds while at speed.

For cold months get a hardtop.

#65 bdwy on 03.27.22 at 3:53 pm

A soft top does have the problem of dying in 10 years or so unless you can keep it indoors. More expensive long term.

Priceless is the warm wind smells and sights directly in your face on a sunny dead calm day.

#66 PeterfromCalgary on 03.27.22 at 4:18 pm

The two Ps (pandemic and Putin) broke our globalized, low inflation, low interest world. Markets will adapt as they always do. Unfortunately, a lot of lives will be destroyed in the process. Calm and prudent planning and investing is more necessary than ever.

#67 Shawn on 03.27.22 at 4:28 pm

How to Misinterpret Inflation

Don’t Poke the Bear at 35 said aghast:

CPI is raging at 20% now. visit the FED’s own website. go to the right “Edit Graph” button. Click 3rd choice in drop down menu ” Percent change from year ago, Index 1982-1984″

https://fred.stlouisfed.org/series/CPIAUCNS

8-10% CPI in the US is a lie.

*******************************
Sigh. Yeah, Inflation at 7% today would be 20% if calculated as a rise compared to 1984 prices.

In no way is this suggesting inflation is 20% no matter that you want it to read that way. Don’t ya think that woulda been in the news?

#68 Vincenzo Lorenzo on 03.27.22 at 4:31 pm

So…the clock is ticking it seems. Sell now or I can squeeze another year before moving to the East coast?

#69 schoolie on 03.27.22 at 4:32 pm

Welp, looks like debt pickled little Joe Frontporch is about to take some hard BOC moves in the back door.

#70 Golden Bear on 03.27.22 at 4:36 pm

#30 Gloater fool on 03.27.22 at 12:50 pm
Wow bear blog makes a bear call. More at 11.

You need a place to live. Rent at your peril, as rents rise with inflation.

Don’t get cute with your home. People listening to bear calls have had their lives ruined. Just buy something within your means and you’ll be fine.

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

*Yawnnnnn – mmmmph*

Nicely sized well diversified portfolio paying a sweet treat dividend stream that I can liquidate in 15 minutes. Performance has vastly outstripped the RE and inflation silliness. Also own a very sweet older Porsche that has jumped nicely in value.

No house, and I sleep great at night because I’m not dreading the taxes jumping, the AC packing it in, or the roof leaking.

Excuse me if I just ignore your need for validation of your risky life choices and go for a nap.

**Snort- yawn-ahhh*

#71 Emily on 03.27.22 at 4:39 pm

Adam Vaughan said on TVO that he will never let Canadian real estate prices fall. This will be bad for “global investment” (the oligarchs, the oil dictator from a third world country, the Mafia trying to launder monies, etc)

He did not say that. – Garth

#72 Linda on 03.27.22 at 4:39 pm

‘Angus’ the golden Wookie:)

As I commented a few posts ago, even if the price of RE plummets by the predicted 40% the ‘bargain’ price would still be more than $1 million dollars for a house valued at today’s blog example of $1.8 million. Still well beyond reach of the ‘average’ household income of $65K. Besides which whoever owns said property will only sell as a last resort, because they won’t want to take such an epic loss. The mortgage issuer who granted that example $800K mortgage isn’t going to give the seller their $1 million downpayment back if the house gets repossessed/sold. Let alone the $ spent for those lovely land transfer taxes, legal fees, or any $ spent on home renovations. So your putative owner could end up losing that $1.8 million house, all the costs associated with the original purchase & any subsequent home renovations undertaken during occupancy AND still end up owing $ to their financier to boot. Question: if a house is seized for non-payment & sold, would any penalties for ‘breaking’ the mortgage apply? Talk about salt being rubbed into the wound…..

#73 crowdedelevatorfartz on 03.27.22 at 4:40 pm

An excellent comment from Masha Gessen’s book “The Man Without a Face: The unlikely rise of Vladimir Putin”

Former dissident and head of the Human Rights Museum in Moscow Yuri Samodurov commented in 2000 as Putin consolidated his power at the top,

“What a shitty time we’ve lived to see where we have to stand up in defense of people we don’t like.

We once lived in a totalitarian state that had two main features, total terror or total lies.
I hope that total terror is no longer possible in our country, but we have now entered a new era of a total lie.”

#74 Bdwy on 03.27.22 at 4:41 pm

How does this go …

Ponzies precarious presentations,
 On 03.27.22 at 1:59 pm

Anybody noticed that the USA just passed the 1million deaths from COVID mark.
Death per capita, 3 times higher than Canada’s
.,…………

Do you think their nearly 2x obesity rate has any input?

#75 Wasted boater on 03.27.22 at 4:44 pm

Poor proofreading

If you plan on plowing into a rock at full speed the **aluminum** is marginallly safer

#76 Elf on Shelf on 03.27.22 at 5:08 pm

Nobody believes what the Fed says…but everybody responds to what they do.

30% or more drop is happening. It will be painfully obvious by December.

#77 Linda on 03.27.22 at 5:18 pm

So I did a bit of research to find out whether foreclosure would be considered ‘breaking’ one’s mortgage. Seems not, so no fees for ‘breaking’ the mortgage would apply. However it appears most mortgages have legal clauses that state the cost of the foreclosure process undertaken by the mortgage holder are the responsibility of the homeowner. So that means the homeowner has to pay for the banks lawyer & the costs associated with the foreclosure process undertaken by the bank as well as their own legal fees. Should the property in question undergo a ‘short sale’, where the bank agrees to accept a lower price than the assessed value of the property, then the former owner may be on the hook for the difference between the assessed value of the property being sold & the price actually paid. Apparently deals have been struck where the bank, anxious to recoup their investment asap, offer to forgive the difference if the former owner agrees to let the sale proceed for the lower price. If however no such deal can be reached prior to the property selling, the difference between the assessed & actual sale price is owed by the former owner. Ouch.

Short sales are American. – Garth

#78 45north on 03.27.22 at 5:18 pm

Some people think as rates rise and house prices fall that hordes will rush in to buy and support valuations.
They have a shock coming.

story: young girl at Ottawa U needs a place to stay so the family from Brampton buys her a condo.

Everything is a real estate transaction.

#79 45north on 03.27.22 at 5:20 pm

DaveyBoy The winds of shit, are coming! lol
https://youtu.be/OQufxG1GcAk

never saw it

#80 45north on 03.27.22 at 5:21 pm

millmech The big problem will be when housing stops going up in value and is no longer perceived as a safe haven of ever growing gains. A lot of people are funding their lifestyles and that of their children as well through HELOCs and when that income stream is stopped and repayment increases it will have a big effect on investment psychology.

Depending on outstanding HELOC balances of a maximum 65% of equity, a 35% decline puts one in a precarious position as no margin of safety for the banks as home is 100% financed. This leaves nothing for the banks to recover if default occurs and this will not happen, as prices decline HELOCs will have to be paid back to keep the equity ratio of 65% to market prices.

sounds just like a margin call

#81 Dave on 03.27.22 at 5:28 pm

How long does it take for 20% correction?

Months or years?

#82 NOSTRADAMUS on 03.27.22 at 5:38 pm

BEING SIMPLE MINDED.
On a number of occasions, I have warned that Evergrande, China’s second largest real estate developer was in dire financial straits. This I felt to be the proverbial canary in the coal mine for World Wide Real Estate Values. I was corrected, being of simple mind, Evergrande was explained to me as being a nothing burger and would soon disappear from the news world. Move along, I was scolded, nothing to see here. MMMM… It would appear that Evergrande was in fact, only the tip of the Chinese debt iceberg. It is now reported that Evergrande is only the first of many large real estate developer’s in big, big, and bigger financial trouble. Across China, there are now hundreds of unfinished developments stalled out with thousands upon thousands of vacant units for sale. All, with no buyers. Contractors and suppliers are are not being paid. If they are not paid, the impact will ripple through the entire construction industry. One of the largest in China. The wee little people, with their life savings are all trapped, the exit doors are chained tight. Horror of horrors, speculators are also trapped and bleeding out. For years I have beat the drum, when liquidity, meaning readily available “CASH” is withdrawn from the system the game is over. As in tilt.
New point. Heading south, USA, new home sales declined in February,” That’s before mortgage rate hikes.” Existing home sales have taken a deep dive, down 7.2%, wiping out January’s big month.
New point. Moving forward, here in Canada, the events unfolding will be recorded as a sharp reversal for 2021-2022, when speculators went on a shopping spree to expand their investment portfolios. Open your eyes. Times are a changing. Canada’s real estate industry, once the breeding ground for new millionaires will shortly suffer the same fate unfolding in China and the USA. A minefield of murky debt risk that threatens its status as a pillar of economic growth. Being a grey beard, I still have flashbacks, nightmare’s of the way real estate values dropped 30% +++ back in the the 90’s , Hang on there, someone’s at the door.

#83 Linda on 03.27.22 at 5:38 pm

#74 ‘Bdwy’ – unfortunately Canada’s population has a very high rate of obesity as well. It is still lower than the USA – some 26.8% of Canadians are obese compared to 36.5% of Americans – but once the percentage of overweight individuals are factored in the numbers of overweight/obese in Canada is very similar to the USA. Canada totals some 63% of the population as obese/overweight; the USA is roughly 2/3rd so around 66 or 67%.

#84 Reality Check on 03.27.22 at 6:01 pm

74 Bdwy
Anybody noticed that the USA just passed the 1million deaths from COVID mark.
Death per capita, 3 times higher than Canada’s
.,…………

Do you think their nearly 2x obesity rate has any input?
———————

Yes, obesity is a factor, but real science says the much lower vaccination rate in the US accounts for most of the difference.

#85 Downward Slope on 03.27.22 at 6:05 pm

Garth you had already used this photo previously.
I distinctly remember commenting that
a) don’t let your dog drink from a public fountain
b)men should never wear footwear that exposes their toes unless the are on the beach or sitting by a pool.

I guess I’ll have to submit my doggy photos so you don’t have to use reruns again.

#86 Ponzius Pilatus on 03.27.22 at 6:06 pm

#61 Ustabe on 03.27.22 at 3:38 pm
#51 wallflower on 03.27.22 at 2:58 pm

Angus is glorious

Angus is in serious need of a good brushing out, perhaps even the attention of a qualified groomer.

If you are going to keep an animal at least provide it with a basic standard of living.
————
And first of all:
Never call a dog Angus.

#87 under the radar on 03.27.22 at 6:08 pm

#72 Question: if a house is seized for non-payment & sold, would any penalties for ‘breaking’ the mortgage apply? Talk about salt being rubbed into the wound

In Ontario when a mortgage goes into default the balance is due in full. There is conflicting case law but, if the default occurs during the term of the mortgage , and the Lender issues a Notice of Sale the Mortgages act permits the lender to add a 3 month penalty but not the IRD. Plus, the Lenders costs to obtain possession and sell the property are recoverable against the Borrower.

#88 I don’t know on 03.27.22 at 6:17 pm

#52 Michael in-north-york on 03.27.22 at 3:07 pm

Unlikely.

To sit at the superpower table you have to project both power and leadership, as well as economic opportunity. The US has centuries of experience here.

Watch the current crisis closely. Who are people looking at for leadership? Who are people rallying behind?

Who is stepping up to the plate?

Most importantly, who is not?

China’s economy is slowing (but is still hot), and is inextricably linked to the west. A splintering of trade blocks isn’t in anyone’s best interest, especially China.

IDK

#89 Ponzius Pilatus on 03.27.22 at 6:34 pm

Kanata is in.
Italia is out.
Take that Dolce, or whatever you’re called now.

#90 Big Bucks on 03.27.22 at 6:37 pm

#37

Good luck getting rid of the 100’s of thousands of bureaucrats responsible for all the welfare programs.I agree with you a UBI may actually be more efficient but not when added to existing programs.In fact the way Canada works a whole new layer would be added to administer the UBI.I’ve heard we have 4 million public servants in Canada(at all levels)so add in a UBI and that would surely hit 5 million.Just saying.

#91 Rowdie on 03.27.22 at 6:54 pm

The writing is on the wall. By mid-summer house prices will start declining. They seem to be already here in Glen Valley BC. There will be a Recession, and the War in progress is a wake up call globally. Canada has oil, wheat to support the country, no worries there. Once the Trans Mountain Pipeline is back up, the USA will have enough oil supply. This Russia’s war not ours. The more backlash the West shoves out Putin shoves back.

#92 DON on 03.27.22 at 6:56 pm

Congrats to Canada’s World Cup Men’s Soccer Team.

#93 Grunt on 03.27.22 at 7:03 pm

The future is opaque.

I still think in the longer term the greens and the political will, will gather again behind WFH. When you think of the carbon footprint of twice daily commutes in all the cities on the planet. Well if we have that tech to reduce it why not?

Let’s hope the west coast doesn’t get the big one any time soon.

#94 WTF on 03.27.22 at 7:11 pm

#7 Nanaimo…..Dear God man
————————————————————–
At the risk of being accused of piling on, do you do “the FULL Nanaimo”?

“the full Nanaimo”

This refers to a man flamboyantly dressed in garish but questionnable taste.

It comes from a man named Frank Ney, who was the major of the city of Nanaimo, British Columbia in the 1980’s. He was a real character whose regular clothes used to feature white patent leather shoes and belt. After his tenure people started to refer to a man dressed to kill with ugly clothes as wearing the full Nanaimo.

#95 AK on 03.27.22 at 7:19 pm

“Oxford Economics believes prices will probably fall 24%, but that could turn out to be 40%.
============================

Soon we will find out who has been swimming naked.

#96 Satori on 03.27.22 at 7:27 pm

#82 NOSTRADAMUS on 03.27.22 at 5:38 pm
New point. Heading south, USA, new home sales declined in February,” That’s before mortgage rate hikes.”
———————————
Americans are smart. Canadians are emotional.

Buying Kimberly Clark Stocks… first there was a toilet paper shortage, next there will be a Kleenex tissue shortage…. something will have to catch all those Canadian tears.

#97 Brett in Calgary on 03.27.22 at 7:32 pm

Like Ryan mentioned in the comments of yesterday’s post, there are lot of moving pieces to the next couple years.

Demographics (i.e., labor participation) will be huge. Sure we have low unemployment, but the proportion of folks working is steadily declining.

The other piece I would like to see is more detail (beyond averages which hide a lot in distorted distributions) on the savings of Canadians. Median, quartiles by age group, etc. I think there are segments of Canada’s population that are very well off, but I would suspect that Joe/Jane average are not doing so hot. Who exactly has the savings and is this enough to keep the economy roaring?

I would also be curious to see the inputs of Ryan’s gold model. Particularly interested in how the amount of money in circulation (i.e. approx. 40% more than April 2020) is accounted for in the price of gold.

#98 Satori on 03.27.22 at 7:33 pm

#83 Linda on 03.27.22 at 5:38 pm
…unfortunately Canada’s population has a very high rate of obesity as well. It is still lower than the USA – some 26.8% of Canadians are obese compared to 36.5% of Americans…
———————————————
Case in point, just how many are getting up to brush their teeth after all that eating??

It’s like that arborist story where he needed a permit, and after all the costs that would be … the guy said ‘let it blow down, let the insurance will pay for it”.

THAT is exactly what ‘free’ dental care will be all about.

#99 Linda on 03.27.22 at 7:40 pm

Garth, it appears from the information below that while the terminology is different the concept of short sale does exist in Canada.

“What is more common in Canada as a way to collect on mortgage arrears is a process called a power of sale. In a power of sale, the lender goes to court to get permission to evict you from the property and then sell it. They do not own title to your home; instead, the court gives the lender the “power” to sell the property.

The potential financial outcomes for the homeowner in a power of sale vs foreclosure are very different. In a foreclosure proceeding, any “profits” go to the lender, but in a power of sale, if there is money left over after paying the mortgage and costs, it gets returned to the homeowner. Conversely, if there is a shortfall, a lender has no recourse under a foreclosure but does retain the right to sue the borrower in a power of sale.”

Courts have insisted power of sales cannot be transacted at less than current market value. Short selling has no such guardrails. The outcomes are quite different with the US procedure certainly helping to make the 2006-8 real estate meltdown in that country worse. – Garth

#100 Uncle Thomas on 03.27.22 at 7:42 pm

DELETED

#101 don't poke the bear on 03.27.22 at 7:42 pm

#67 Shawn on 03.27.22 at 4:28 pm

In no way is this suggesting inflation is 20% no matter that you want it to read that way. Don’t ya think that woulda been in the news?
________________________________________

real M1 grew at a 380% pace in 2020 (many many multiples higher than anything in FED history)

real M2 peaked at 25% yoy. (2.5X the peak rates in the 70’s)

Yes, inflation is at least 20%

next “headline” reading April 12
fake numbers will be close to 10%
real numbers much higher.

when 80% of ALL USD is printed in one year, trillions of debt added, stimulus cheques handed out to everyone,..

you honestly think “inflation” is 7%

#102 Sail Away on 03.27.22 at 7:45 pm

Welp, if RE prices drop, the SAs will just keep on plowing extra cash into desirable undeveloped parcels as always. No maintenance, stable store of value, and always available to a family member in an emergency.

Play the looong game. Canadian population will not decrease and nobody is making more land. Just closed on a high-elevation lot in Bralorne. Muley mecca.

#103 The Woosh on 03.27.22 at 7:52 pm

Hmm. Why would economic sentiment suddenly turn from benign to alarmist, while Joe Frontporch is still out there, riddled with FOMO and desperate to buy property?

———————————————

Hmm indeed…that’s because sentiment has NOT suddenly turned from benign to alarmist. RBC prepared three scenarios as they always do and the one you chose to promote is the alarmist version.

The benign version with minimal home price growth of about 0.5% for 2022 is the likely outcome with the following four years having a compound growth rate of 4.2%.

And then, why not mention the upside scenario of 10.9% for 2022, though that is far fetched at best just like a drop of 30%. Just so much click bait!

My statement was entirely factual and did not ‘promote’ anything. To wit: “The country’s major bank (the one with the lion) says Canadian housing values could possibly decline in value by 30%. Oxford Economics believes prices will probably fall 24%, but that could turn out to be 40%. Capital Economics simply says real estate in Canada “will topple.” – Garth

#104 Chris L. on 03.27.22 at 8:08 pm

BANNED

#105 crowdedelevatorfartz on 03.27.22 at 8:26 pm

@#81 Dave
“How long does it take for 20% correction?

Months or years?”

+++

I rented a house in the very early 1980’s that was listed to sell for 240k as the market popped.
No buyers.
Listed a year later for….80k.
Still no buyers.
Listing was pulled after 6 months of crickets.
Sold about 5 years later for 120k

#106 AM in MN on 03.27.22 at 8:35 pm

I’m in the 50% camp, or more.

I think people will be surprised at the speed of the change. One of the issues with instant communications and information is how fast trends can get picked up on.

There are a lot of people sitting on 2nd properties and others maxed out on HELOCs that might think now is the time to bail and wait, except that as soon as a significant number do this, the crash comes quickly and sentiment changes. It will be a long ride down over many years as the printed money gets mopped up.

A lot of small markets in the places where no one wants to live should do alright. A lot of money will be made in O&G, ag, mining.

#107 OK, Doomer on 03.27.22 at 8:40 pm

#81 Dave on 03.27.22 at 5:28 pm
How long does it take for 20% correction?

Months or years?
=======

Drops usually occur quickly compared to the run-up. People usually buy in slowly and carefully, but then stampeded for the exits. Reason is human nature; the motivation for a gain is far, far weaker than the fear of taking a loss.

Look at the collapse of Bre-X, Nortel, the US real estate market in 2008, etc. It’s a matter of loss of confidence. RE market dumb-assery has been running for about ten years, so the full blow off will probably take a year or so. I’d think the first blood will splatter into the gutter in the summer with a torrent by this time next year.

Also bear in mind that only 10% of homeowners in the U.S. got into trouble and that dragged the entire U.S. market down.

Given that 40% of Canadian homeowners were within a couple of hundred bucks a month of oblivion BEFORE the gasoline/inflation shocks, I’d say there’s a lot more downside risk than what the banks are stating. If so, it could blow off even faster.

I doubt that a 20% re-trenchment is realistic. Probably far higher. A 20% re-trenchment doesn’t even cover the run up in the last year, let alone the last decade of debasement and debauchery.

#108 Ed on 03.27.22 at 8:42 pm

I recently paid almost 70k for a new Jeep Wrangler…thats about what I paid for my house in Canmore in 1988.
The Jeep is much more fun though.

#109 The Woosh on 03.27.22 at 9:03 pm

#103 The Woosh on 03.27.22 at 7:52 pm
Hmm. Why would economic sentiment suddenly turn from benign to alarmist, while Joe Frontporch is still out there, riddled with FOMO and desperate to buy property?

———————————————

Hmm indeed…that’s because sentiment has NOT suddenly turned from benign to alarmist. RBC prepared three scenarios as they always do and the one you chose to promote is the alarmist version.

The benign version with minimal home price growth of about 0.5% for 2022 is the likely outcome with the following four years having a compound growth rate of 4.2%.

And then, why not mention the upside scenario of 10.9% for 2022, though that is far fetched at best just like a drop of 30%. Just so much click bait!

My statement was entirely factual and did not ‘promote’ anything. To wit: “The country’s major bank (the one with the lion) says Canadian housing values could possibly decline in value by 30%. Oxford Economics believes prices will probably fall 24%, but that could turn out to be 40%. Capital Economics simply says real estate in Canada “will topple.” – Garth

———————————————

Sure, it’s factual. I like reading your blog for your excellent insights. Unfortunately, on the occasions when you only present one side of a story that suits your narrative instead of being balanced…well…you can’t expect me not to call it out.

#110 Flop… on 03.27.22 at 9:04 pm

So I go back to this Visualization from 5 months ago to see if any of the bubblies could have gotten the Wobblies.

To recap Toronto came in at number 2, in the Bubble Olympics.

Vancouver tried as it might, had to settle for sixth.

Europe where the destruction is happening, is the main reason I glanced back, and what do you know, Moscow features prominently.

Last year Moscow went to number 16 on the Bubble Billboard with a bullet, courtesy of a 20% price growth, and was classified as overvalued, has anything positive happened since then, nyet.

Dubai was listed as undervalued, maybe that’s why Thor Turner was sniffing around those parts.

This distorted, upside map is also the only time you will see Tasmania at the top of the world.

I like it, at least in that version we don’t look like a bum crumb hanging off the world’s backside…

M47BC

https://www.visualcapitalist.com/worlds-biggest-real-estate-bubbles-in-2021/

#111 Michael in-north-york on 03.27.22 at 9:12 pm

#88 I don’t know on 03.27.22 at 6:17 pm

“To sit at the superpower table you have to project both power and leadership, as well as economic opportunity. The US has centuries of experience here.”

IMHO, U.S. has 82 years of experience here, not a full century. Back in 1940, they threw their lot with the defending Britain, and started rolling into a war against the Axis powers. After the war, they emerged as a global superpower.

Prior to WW2, the U.S. largely stayed away from the global affairs, except for a few episodes including an important but brief involvement in WW1.

“Watch the current crisis closely. Who are people looking at for leadership? Who are people rallying behind?

Who is stepping up to the plate?

Most importantly, who is not?”

Well, both U.S. and China act in their own best interests.

As Putin’s Russia effectively declared a war on all the Western nations, those nations stick to their leader. The U.S., obviously. U.S. cannot backout, as that would nullify their numerous alliances all over the world.

China feels no loyalty to either side of this conflict and acts accordingly. Almost every outcome works for them. If Russia collapses, then China can seal its control over the resource-rich Siberia. If Ukraine falls, that’s an indication that the U.S. lacks the resolve to protect its allies, and then China can try something with Taiwan. If neither side gains a decisive victory, then the conflict will drag on, gradually weakening both sides and making China comparatively more powerful.

“China’s economy is slowing (but is still hot), and is inextricably linked to the west. A splintering of trade blocks isn’t in anyone’s best interest, especially China.”

That’s true, and may be the reason the renminbi hasn’t become the other global currency yet. Perhaps the Chinese government doesn’t want that because a weaker domestic currency helps the exporters. If that’s the case, then maybe they will skip the present opportunity as well. Not because they can’t, but because they don’t want to.

#112 Emma Zaun - GreaterFool Unpaid Intern #007 on 03.27.22 at 9:27 pm

Garth, as you must understand, we are taking most of the night off right now.

Much better to look at the lovely faces at the Oscars than all the hideous deplorables in the comments section.

#113 Alberta Nomad on 03.27.22 at 10:58 pm

I am curious how rising rates and falling private residential values will effect REITs, especially with the vague tax changes promised by the Liberals and NDP. I know those changes are supposed to be focused on homes, but all things are connected.

#114 Islander on 03.27.22 at 11:36 pm

“With the average one-bedroom listing for $2,176 in Vancouver, a prospective renter would need an annual income of $95,000 or more to meet that threshold. For a two-bedroom in the city, the required income nears $130,000.”
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-heres-the-income-you-need-to-afford-rent-in-major-canadian-cities/

Remember when the 30-per-cent shelter-costs-to-income ratio was taken seriously?

#115 Summertime on 03.28.22 at 12:07 am

If you do not have a large mortgage, hang on to your house for dear life.

With yield curve flattening and max possible increase of rates to 1.5 – 2 % and that temporary, there are 2 possible outcomes:

1. Meaningful stabilization of positive real rates as to fight inflation – in double digits, leading to outright depression – deflationary

2. Pretend and extend, all talk with rates close to zero and reported ‘growth’ of 3-4 % while underreported inflation is in double digits – at some point becoming inflationary depression.

Which option do you think central bankers will choose?
They have been following option 2 all along in the last 12-15 years.

All that talk about rate increases is just that: cheap talk. The time to act was 10 years ago.
If they were serious in their decision to fight inflation they would have acted long time ago.

#116 Summertime on 03.28.22 at 12:17 am

#101 don’t poke the bear on 03.27.22 at 7:42 pm

The guy/Shawn gets his inflation information from ‘the news.’. He considers it the ‘authority’.

Of course inflation is at least 20 % in the last year, officially if measured as in the 70-es and 80-es. The higher fake number is coming soon – over 10 % in the states.

The monetary inflation alone as stated is above 25 %. Price inflation follows and with velocity of money increasing post-pandemic, we need to take covers as it literally hits the fan.

0.5 % interest rates? Really? And we trust these guys?
Sure.

#117 Ronaldo on 03.28.22 at 1:07 am

#81 Dave on 03.27.22 at 5:28 pm
How long does it take for 20% correction?

Months or years?
—————————————————————–
If its anything like 1974 it can happen overnight. Like switching off a light. When the banks stop lending the party will be over. It only took 4 or so months for markets to drop 40%. Welcome to the 70s.

#118 under the radar on 03.28.22 at 5:20 am

99
The Court does not give the lender the power to sell.The mortgage does that as well as the enabling statute. In Ontario, it’s the Mortgages Act which permits the lender the enforce the mortgage upon 15 days default and 35 days written notice . The Court , after judgment grants the Lender possession.
The lender is required to sell for fair market value. Hundreds of cases on this. Borrower can sue the lender and claim an improvident sale where the lender sells for too little. The weight of authority is simply that the sale price must be in the ballpark given the circumstances .
The highest price is not required. Responsible lenders like Banks are fully armed with a couple of Appraisals and aim for getting full value . Ultimately, where a property is fully exposed to the Market for a reasonable period of time and then sells under market , Courts are reluctant to second guess a fair sale process.

#119 IHCTD9 on 03.28.22 at 7:50 am

If the BOC decides to grow some teeth, the housing market is going to get slapped like Chris Rock at an Oscar’s ceremony.

#120 Stanfield Index on 03.28.22 at 7:54 am

Dismal science best indicator:

https://lite.cnn.com/en/article/h_d23f086e68e99dbaecb757bb0ba44b38

#121 crowdedelevatorfartz on 03.28.22 at 8:00 am

@#112 Emma Yawn
“Much better to look at the lovely faces at the Oscars than all the hideous deplorables in the comments section.”

+++

People still watch 4 hours of the Oscars?

#122 NJ on 03.28.22 at 9:20 am

@ #115 Summertime
If you do not have a large mortgage, hang on to your house for dear life.

I agree with this! I owe around $340k on my house with a mortgage payment of $1,700/month and 18yrs left. My house could sell today for $850-905k. On one hand, it would be nice to sell and pocket that profit. But then what? Rent the same house for $2800/month (and rising)? Stand-by and watch the markets go up/down as rates rise? I think the safest thing to do right now in my situation, is nothing! Please chime in if you think otherwise.

#123 Chris L. on 03.28.22 at 10:25 am

BANNED (And a slow learner)

#124 Doug in London on 03.28.22 at 10:38 am

House prices dropping anywhere from 24 to 40%? Great, bring it on, it’s long, long, long, long overdue. It will be the first step to Make Canada Great Again!

@ Alberta Nomad, post #113:
I remember REITs like Realfund dropped during the 1990s, so it could happen again. If it does, great, it will be time to scoop up more REITs. Cap Reit could be a good buy again.

#125 Satori on 03.28.22 at 10:58 am

#122 NJ on 03.28.22 at 9:20 am
@ #115 Summertime
If you do not have a large mortgage, hang on to your house for dear life.
———————————————
Sadly Summertime and NJ, I disagree.

Cash out, put your money in an investment account. Earn $4,525 per month, at a modest low risk rate. Rent a gorgeous place for under that, cover your food costs with the extra and then save more and more and more…to invest.

Interest earned, your money working for you, bringing in a second income VS your house costs.

Property taxes, repairs, sewer, garbage pickup costs. Your money is costing you NOT working for you. Its just a house…what are you afraid of?

You buy into the Canadian dream of ownership. And don’t know basic math. It isn’t your fault, and this isn’t your dream, it the one your grandparents passed on to you… you can easily be Free… or you can stay but at very least get Informed, do some research before you start putting Fear into others.

Creatures of habit we are…

#126 IHCTD9 on 03.28.22 at 11:10 am

#112 Emma Zaun – GreaterFool Unpaid Intern #007 on 03.27.22 at 9:27 pm

Much better to look at the lovely faces at the Oscars than all the hideous deplorables in the comments section
———-

You meant *slap* all those lovely faces at the Oscars amirite?

#127 Ponzius Pilatus on 03.28.22 at 11:16 am

The crocodile tears of the West over Ukraine are drying out fast.
Now it’s back to:
Who wore the most revealing dress, and why did Smith hit Rock.
Zelensky, who?
America, the Shallow.

#128 Linda on 03.28.22 at 11:19 am

Garth, reassuring to know that the courts insist on fair market value for a power of sale. The credit counseling website I found the power of sale information on made it sound like the courts would happily participate in rendering down the improvident homeowner for their gristle:

#129 Inflation aware mill on 03.28.22 at 11:24 am

“ jump in financing costs the Millennials never dreamed of ”

Canada (being a receptacle of immigration) has a non trivial amount of millennials born in countries where inflation has being far beyond what you have experienced Garth.

#130 Damifino on 03.28.22 at 11:28 am

I wasn’t even aware the Oscars were on.

Now they’re over. Perfection!

#131 crowdedelevatorfartz on 03.28.22 at 11:34 am

@#127 Ponzies pretend pain

“America, the Shallow”

+++

We embrace our conspicuous consumption.
It keeps the world economy ticking along.

Austria contributes what? Turnip stew recipes?

#132 Dharma Bum on 03.28.22 at 11:35 am

Perhaps the OPPOSITE of what everyone is so sure is going to happen, happens.

It’s happened before.

Eff Putin and Eff Will Smith.

#133 DON on 03.28.22 at 12:14 pm

#132 Dharma Bum on 03.28.22 at 11:35 am
Perhaps the OPPOSITE of what everyone is so sure is going to happen, happens.

It’s happened before.

Eff Putin and Eff Will Smith.

****************&

Isn’t that in fact what is currently happening…the OPPSITE of what had occurred in the past 10-15 years?

#134 earthboundmisfit on 03.28.22 at 12:26 pm

“I recently paid almost 70k for a new Jeep Wrangler…”

Calls to mind the old “fool and his money” adage, and certainly not something I’d be boasting about. Consumer Reports rates it the worst of the worst.

#135 Summertime on 03.28.22 at 12:43 pm

#122 NJ on 03.28.22 at 9:20 am

It is hard to give a specific advice considering lack of knowledge on income, personal risk tolerance, guaranteed cash flow, ability to quickly get some financing/help if needed. It is hard to quantify non-large mortgage size without that. So I only express an opinion. Not giving advices/disclaimer.

#125 Satori on 03.28.22 at 10:58 am

Are we sure that house prices will crash?
This is the n-th time I am hearing that in 20 years. And it always turned out wrong.

Consider the following:
1. Will rates rise meaningfully?

The expectation is: Not likely.

https://www.bloomberg.com/news/newsletters/2021-11-03/what-s-happening-in-the-world-economy-limits-on-interest-rate-hikes

All this talk about ‘potential’ 0.5 % rate increase in one step! The horror!
Why not raise rates to 3 % directly, then 5, 7 % to fight inflation now? Because they can’t!

2. For each mortgage there is a stress test that would allow for relatively easy weathering 1-1.5 % rate increases.

3. CHMC can become creative again – hello 30 years, 0 down/intergenerational mortgages?

4. New tax incentives can be created to stimulate further housing.

5. Can you stomach siting on your gains and renting while that house costs 1.5 – 1.7 millions 5 years from now?

Check South Korea, Seoul, price to income 46 times!
Don’t underestimate the psychology and FOMO.

These times are not normal, they are extraordinary.

Just my humble opinion.

#136 NJ on 03.28.22 at 12:47 pm

#125 Satori on 03.28.22 at 10:58 am

You buy into the Canadian dream of ownership. And don’t know basic math. It isn’t your fault, and this isn’t your dream, it the one your grandparents passed on to you… you can easily be Free… or you can stay but at very least get Informed, do some research before you start putting Fear into others.

Oh, I have definitely done a fair share of research. I just like to hear both sides. When I bought this house 5yrs ago, my close friends said they were planning to save up just a bit more, until the “market crashes”. Guess what? Those friends are still renting and at this rate, becoming a first-time home buyer in a market where starter homes are well over a million, is nearly impossible. How did renting and not buying work out for them?

We can all agree, we need a roof over our heads. How does paying someone else’s mortgage off make more sense that owning? Especially if for the cost of my mortgage AND property taxes, I can’t even get a tiny house in the sticks. People act like if you rent, you will have this massive excess of money to invest, but it is not the case. Renting is expensive.

The reality is that a mortgage or rent is your biggest monthly bill. When I get into retirement, I don’t want that bill. Having to fork out 2500-4500/month on rent when I’m living off investments would be brutal.

#137 Summertime on 03.28.22 at 12:49 pm

One example of house prices volatility:
A friend of mine bought a house in Miami in 2005 for 525 k USD, sold for 310 k USD in 2010 (took over 200 k USD loss as he had to move) and now that house is worth 740 k USD.

#138 THE DANDADA on 03.28.22 at 12:59 pm

The Shock….

https://www.cnbc.com/2022/03/28/el-erian-warns-of-cost-of-living-crisis-says-fed-rate-hikes-could-cause-recession.html

#139 Paul on 03.28.22 at 1:35 pm

#134 earthboundmisfit on 03.28.22 at 12:26 pm
“I recently paid almost 70k for a new Jeep Wrangler…”

Calls to mind the old “fool and his money” adage, and certainly not something I’d be boasting about. Consumer Reports rates it the worst of the worst
———————————————————————————————
Haha, thanks he really needed the update.

#140 bdwy on 03.28.22 at 1:39 pm

When I get into retirement, I don’t want that bill. Having to fork out 2500-4500/month on rent when I’m living off investments would be brutal.
———————

yep. also keeps the option to add couple million surplus to investments if you decide to relocate. tax free. i repeat, tax free.

/////////////////

chris rock is the man.

smith was an idiot. loser. low class.

the joke was up to the line but not over. jokes are supposed to. she’s f’ing bald, its not terminal cancer.

hope rock makes bank mocking smith in his shows.

i’ll buy a ticket.

————————-

shanghai flu lockdown puts wti on sale. last chance to get it while it’s cheap?

strategic reserves are only going in one direction

#141 BigAl (Original) on 03.28.22 at 2:30 pm

#50 Dogman01 on 03.27.22 at 2:54 pm
#31 I don’t know on 03.27.22 at 12:59

“The inner rot of all empires is very, very slow and quite insidious. Usually, the military ceases being a citizen’s obligation and becomes a mercenary operation that is increasingly expensive and increasingly useless for defense, good only for looting distant provinces or neighbors while the core of the empire rots away. The tipping point isn’t military spending overhead. The tipping point is up at the top: do the elites see the empire as a road to personal wealth? When they decide this, they go on an internal looting expedition, cutting their own taxes while increasing taxes on the lower classes. Rome did this, Spain did this and the UK did this. All empires do this.” – Niall Ferguson

IMO our ruling class is throwing in the towel on such fundamentals as: merit, free markets, prudent government finances, free-speech, racial equality, quality education system, surplus trade balances etc. All the indicators seem to be both a moral and economic decline.

….

I think people in other Authoritarian states might have a different perspective on Bitcoin, it is like Gold but much more portable and concealable.

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

The looting started with the Reagan/Thatcher/Mulroney deregulations that created the financialism that isn’t capitalism, started junk bonds and derivatives and magic accounting, dismantling protectionism and globalist trade that allows free flow of capital and goods (somewhat) but still held labour nationally and regionally prisoner (gee, wonder who loses in that setup?). And instead of wage growth we substituted that with credit growth coupled with the growth of the two income household. Then the looting took off like a rocket with QE. And here we are. ‘Looting’ is the very proper term for what this deregulated financialism has done to our great post ww2 gains of the middle class. Looting of the treasury, Looting of labour. And most of us on here I think we’re fortunate enough to have seen what was happening and ridden the coattails of the looters to give ourselves a chance. I’ve done it. but that doesn’t mean we don’t see it for what it is, and it doesn’t mean we like it.

As for crypto, the big drawback is governments on a whim can shut it down.

#142 Ontario driver on 03.28.22 at 2:38 pm

Just got $470 sticker rebate from Ontario government. I assume the QE 401 400 etc will become pay highways,thats what the new 5g towers are for

#143 Froggy on 03.28.22 at 2:43 pm

#31 l don’t know well there’s
a lot you don’t know let me give
you an example when you see
a child around 6-12 thats has everytbing imageable like a scooter nice choth a computer,mother and father with a car private school and so on and then north america incl. Canada burn mybe 30 per cent of all the energy there is in the world and profit from all the misery that comes with it . So l agree we live in a place that’s indetbed to the rest of the world. Oh and by the way what happened to the phillipines ,hati ,cuba ,afgan, mexico and many more because there in our backyard we have total control like the phillipines in our backyard where we have south korea snd japan in our pockets

#144 Six Figs Ain't What It Used To Be on 03.28.22 at 3:03 pm

“Middle class” people aren’t buying homes with million dollar mortgages, although some certainly are cracking those prices on the backs of huge downpayment support from the parental units… The people with million dollar+ mortgages are seldom the ones who can’t rub two pennies together for an unexpected bill.

#145 kappa on 03.28.22 at 7:03 pm

” The world cleaves into two giant factions – the pluralistic and the autocratic. The West and the East. The free and the not-free. The democratic and the dictatorships. And while the woke forces are telling us in this block to worry about gender identity, reconciliation for historic wrongs, pronouns and ESG, the other guys focus on unbridled growth and power. How does this end well? ”

You nailed it there Mr. Turner. I hate to say it but sooner or later there will be a military confrontation between the two (World War III). Putin is not alone out there; let’s not forget about Xi Jinping in China and Erdogan in Turkey and others un-named here in countries like Iran and Saudi Arabia. I probably missed a few more…
What Putin, Xi Jinping and Erdogan have in common: they hate democracies (power changes) for a few reasons but mainly: they know that if they loose power, the new governments may simply detain them and have them trialed and executed for the crimes they committed for so many years (just to stay in power.).

The West is culpable as well since they just continued to do business with them for decades. The main reason the Trudeaus and Bidens of these age keep pushing these outrageous agendas is so that their “slaves” are fighting with each other and do not have time to see what’s happening and where we are headed.

#146 Brad on 03.28.22 at 7:21 pm

But the Fed said it was only transitory lol