The fear

Is a recession in the cards?

Some brainy economists are giving 35% odds the US economy (and ours) will see negative growth in a year or so. The former CEO of Goldman made headlines this week saying he thought a reversal is a “very, very high-risk factor.” Others, including most central bankers, think they can engineer a soft landing – a slower economy with less inflation. Deutsche Bank econoguys believe the downturn will be here in late 2023 or early 2024.

The last recession, you’ll remember, was in 2020. Covid did that. Unemployment went nuts and GDP shrank. Inflation went below zero. Rates plunged. Government spending soared. It looked like the pandemic would eat the economy.

The stock market dumped into bear market territory in just weeks. Down about 35%. Then sanity prevailed. Investors realized all pandemics end and the economy would eventually rebound, taking corporate profits with it. Meanwhile a bunch of people figured how to milk a pandemic (Peloton, Amazon, Shopify, Wayfair, Netflix), and the stock market rebounded.

On March 20th of 2020 the S&P 500 sat at 2,300. Now – even after the current slide – it’s at 4,090. Do the math.

The lesson is simple. If you don’t like volatility, stay invested and stop looking at your portfolio. Just ensure you have good balance. Decent diversification. Eschew holding individual stocks. Buy the whole market with an ETF. Never think you’re the smartest dude in the room. You’re not. Mr. Market will always win. And never, ever bet against America.

What could throw us into another recession?

Not the war in Ukraine. That’ll end, too. Not the crazy Covid lockdowns in China. They will be over soon as Beijing understands the damage being done. And not the sad polarization in politics we’re seeing in both the US (Trump) and Canada (PP).

The biggest threat is inflation, fed by a crapped-out supply chain, surging energy costs and the unleashing of hundreds of billions in consumer spending – the result of government Covid payments and pandemic cloistering. This has resulted in a sharp retreat by central bankers, now methodically dumping bonds and raising benchmark rates. The tightening cycle has just started and will last at least a year. The next bump in Canada comes in two weeks. On June 2nd the chartered bank rate will leap to 3.7%. Home equity lines of credit will be at 4% and five-year mortgages will likely pushing 5%.

This CB volte-face has hit tech and meme stocks hard and helped crypto bleed out. Pandemic excess, caused by easy credit, crazy-cheap money and investor recklessness is being wiped away quickly. The Canadian real estate market gives us a good example. We have arrived at a ‘what-was-I-thinking?’ moment.

Look at recent price trends in York Region – lately once one of the hottest property markets in Canada.

York Region gets a rude awakening…

Source: the Habistat. Click to enlarge.

And as realtor Peter Kiriazopoulos points out, we should also shed a tear form all the suckas who spent $1.8- $2.0 million buying a house in the semi-Bunnypatch GTA suburb of Stouffville in March, when they could have had the same place for $500,000 less in May.

This is what recessions are made of. Prices reverting to the mean. It hurts. But is it a bad thing?

…as recent Stouffville buyers are skewered

Source: Peter Kiriazopoulos. Click to enlarge.

Downturns are inevitable, and necessary to blow off social foam. Like stock market corrections they help realign asset values to incomes. They don’t last long – on average about 11 months. In the last 65 years, for example, the US economy has been in a growth phase 85% of the time, and in contraction the other 15%. That means if you invest reasonably and fugeddaboutit for a few years, odds are really, really high you’ll do fine.

The same holds true for real estate, as you know. Time heals all. The big difference between financial assets and property is leverage. Most people buy houses with debt. Lots of it. Sometimes a 20x ratio. In Canada all mortgages reset at least once every five years, and those who bought since 2020 will be facing financing charges that could double.

Another key factor: assets like stocks, bonds, trusts or ETFs can be sold anytime with the click of a mouse. They’re 100% liquid. A trade is always waiting. But in a recession, in a downturn, finding a buyer for your house can be a grinding experience. If you’ve lived through one of those times of illiquidity, you know. If you’re a first-time homeowner, you have no idea.

As usual, the future’s murky. The current times are unique. But the outcome will not be different.

Looks like you have many months to prepare. Or not.

About the picture: “I’ve been reading your blog on and off since moving to Canada in 2010,” writes Andrew, “and find it a haven of reasonableness in an online world otherwise apparently consumed with rancour. I read A Random Walk Down Wall Street in around 1990, worked my way through some of the math of MPT, and have been a B&D investor ever since. Please keep spreading common sense and investment advice, the world needs them more now than ever! Oh, and here’s a photo of our wonderfully good natured eighteen month old Springer Spaniel Jerry (what else could a Springer be called?) staring at a squirrel on our deck here in Toronto.

140 comments ↓

#1 Matt on 05.17.22 at 3:49 pm

Recession is around the corner. As David Rosenberg stated, this recession is going to be nasty with rates increasing to highest level since Great Recession. During Great Recession Dow bottomed at around 6000 and S&P at less than 1000. It will happen again as the rates are going back to 2008 levels.

You can always sell your stocks and etfs now and buy it later in 2023 when it finally bottoms.

So stocks will lose 80% of their value in a period of post-pandemic expansion with full employment and robust corporate earnings? Delusional. – Garth

#2 Old Ron on 05.17.22 at 3:54 pm

Recessions prevent Depressions.

A periodic tapping of the economic brakes is a good thing. The longer the Central Banks put off the recession the greater the risk of a Depression.

Politicians hate recessions because it hurts their re-election chances. That is why Central banks must remain independent of politics.

Clearly the Banks and the PM over reacted to Covid. Now comes the unwinding. It will be painful for some, but a good thing in the long run.

#3 Adam on 05.17.22 at 3:55 pm

I think we are headed for a recession. Today’s Walmart earnings were a huge indicator something is not right. If Walmart is struggling then be prepared. I think it will be a long drawn out affair, with some ups but more downs. Nothing like March 2020. Huge growth stocks like Apple and Google still have a ways to fall in my opinion. The PE ratio of the S&P 500 index as a whole is unsustainble in an inflationary environment where 10 year treasury yield could hit 4% or higher. This “recession” if it happens could test peoples patience. Stay calm and buy the dips.

#4 Pylot Project on 05.17.22 at 4:00 pm

It was bad enough that gas was $2.32 when I filled up yesterday. I noticed that the front right tire was quite low, so I went to the air pump and they wanted $2 to fill the tires with air…. now THAT’S inflation.

#5 Bezengy on 05.17.22 at 4:02 pm

Inflation has many causes. At least some of it also has to be attributed to inefficiencies in our own workforce. Every sick day, every two hour lunch, every transport in the ditch, every botched job not done correctly has to be paid for by somebody and adds to inflation. We need to work harder and smarter, train better, and eliminate waste in our own workplace. More production, less inflation.

#6 Caffeine Monkey on 05.17.22 at 4:05 pm

The other thing to consider is that real estate cycles have a much longer timeline. Even with the 2008 crash, the S&P had recovered in a couple years.

Not so with real estate, where you might be waiting more than a decade for your home value to recover to pre-crash levels.

#7 Dave on 05.17.22 at 4:06 pm

Individual stocks are better than ETFs. With ETFs you pay higher fees. With individual stocks you pay $10 to buy ad sell, which is nothing. You can diversify with about 15-20 stocks and get similar results to an index over long periods of time. Even if an ETF has a .5% fee, that’s 5 grand a year you are paying in fees. Stocks are the best hedge against inflation. For xxhe sake, stay out of bonds!

#8 K Hoover on 05.17.22 at 4:06 pm

Based on the rate of inflation most people are already experiencing a recession — in real terms.

#9 Honest Realtor on 05.17.22 at 4:09 pm

Garth, it would be nice if you could be a little more positive and respectful of our industry, which is really the cornerstone of most Canadians’ lives.

Especially today, which is National Real Estate Day.

A day to commemorate the Canadian dream of homeownership.

https://trreb.ca/index.php/buying/hot-consumer-topics/national-real-estate-day#:~:text=National%20Real%20Estate%20Day%20Over%20the%20last%20year%2C,Real%20Estate%20Day%20with%20us%20on%20May%2017%21

Anyone concerned about home values today will be delighted with the returns over the next decades. Don’t be scared, and don’t miss out.

#10 Søren Angst on 05.17.22 at 4:10 pm

Cdn RE disease caught CB.

Many a financial death coming as prices drop. Bank ICUs soon to be overflowing. CB caught with pants/panties/Bill C-16 undergarments down.

[Amazon.ca should sell Cdn RE Speculation Seppuku Kits]

yeah Kids.

————–

Threadbare as my portfolio is I think I got the B&D thingy down. Yesterday 3 down, 2 up…today 3 up, 2 down and today, both

yeah ⛽
yeah 🍁

————–

Andrew.

Springer Spaniels. Hyper. A ton of love and slobber. Had one, black & white male, in Cowtown early 80s. Trained him to hunt pheasant (also Hungarian Partridge). He responded to whistle, hand signals and verbal commands. Purebred. Local Springer Spaniel Club reckoned the way I had him trained I could easily sell him for $1500 back then (like I would, he was my kid).

Trained him to be nice to everyone.

Mistake.

Dog kidnapping ring then, he got stolen. I lost my kid.

Never bought a dog since.

Lucky you with Jerry. My guy was called “Rocky” (CKC name was “Rocroi” from the battle an excuse to call him Rocky, other 2 names from his parents) – that trumps the name “Jerry”, sorry, but it does.

Enjoy Jerry, he looks a treat to me!

#11 Bipolar on 05.17.22 at 4:10 pm

I find readers spend a lot of time and energy making market predictions in the comment section. The predictions cover almost every possible future outcome of the market. This is very confusing for me. I think I’ll just forget all about it and go for a walk. My portfolio will look after itself while i’m gone.

#12 Steven on 05.17.22 at 4:10 pm

I love reversion to the mean….S and P 3400..let’s go.

LONG OIL, when it ever gets under $100 again…

$4 gallon in all US States, 6 estimated this summer.

Remember Powell is still jawboning the market….watch what he does not what he says…

#13 Oakville Stinks on 05.17.22 at 4:16 pm

What will happen to the 20% of families in the GTA that own a second investment property?

#14 PeterfromCalgary on 05.17.22 at 4:18 pm

The United States has an estimated 145000 gasoline stations. Each one advertises the price of a US gallon of gasoline in big bold numbers.

The best and the brightest advertising geniuses on Madison Avenue could not put together an ad plan for the Republican party that would be more effective than those gas price signs. Gas prices are going to mean the Republicans do very well in the midterm elections. These newly elected Republicans will vote no on any inflationary spending and inflation will fall.

#15 Andrewski on 05.17.22 at 4:20 pm

Garth, kudos to you to continue to bang the drum on maintaining your head…

“If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;

If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise

If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;

If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;

If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the will which says to them: ‘Hold on!’

If you can talk with crowds and keep your virtue,
Or walk with Kings – nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much;

If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And – which is more – you’ll be a Man, my son!”

― Rudyard Kipling, If: A Father’s Advice to His Son

#16 Ballingsford on 05.17.22 at 4:21 pm

How depressing that would be having your house depreciate $500,000 a couple of months after buying it.

#17 Sail Away on 05.17.22 at 4:23 pm

Recession? Maybe, but more likely not. It is very hard to say.

Remember this from the Royal Bank of Scotland in 2016? Sell everything, they said…

https://www.google.com/amp/s/amp.theguardian.com/business/2016/jan/12/sell-everything-ahead-of-stock-market-crash-say-rbs-economists

#18 baloney Sandwitch on 05.17.22 at 4:26 pm

Remarkably interesting post today, Garth.
Fear is a much more powerful emotion than greed. You can see that in bear markets which happen 3 to 5 times faster than bull markets. This is likely to be a mild recession – we should be out of it within a year.

Covid in new variants will be back – it’s endemic now and we have to live with it like flu, zika, malaria and all that unpleasant stuff.
The war in Ukraine will grind on for years – Russia will be bogged down and increasingly isolated unless they get rid of Putin. Here is a great interview on this topic worth watching. https://www.morningstar.com/articles/1090749/bill-browder-a-scared-putin-will-only-escalate-the-conflict

#19 Adam on 05.17.22 at 4:27 pm

#7 Dave > Individual stocks are better than ETFs. With ETFs you pay higher fees. With individual stocks you pay $10 to buy ad sell, which is nothing. You can diversify with about 15-20 stocks and get similar results to an index over long periods of time. Even if an ETF has a .5% fee, that’s 5 grand a year you are paying in fees. Stocks are the best hedge against inflation. For xxhe sake, stay out of bonds!

——

Worst advice I’ve seen on here. The MER for VFV (Vanguard S&P 500 index) is only 0.08%. That means a fee of $80 per year per $100,000 invested. If that bothers you, then switch to USD using Norbert’s gambit and invest in VOO (same thing) which has an MER of just 0.03%. So $30 fee per $100,000 invested. Buying “15 or 20 stocks” is silly. You would spend more in fees on rebalancing those plus the time spent and still not have the same exposure. 95% of people who try and beat the S&P 500 index’s gains will fail. You aren’t warren buffet, and neither am I, so let’s not pretend to be!

#20 Søren Angst on 05.17.22 at 4:27 pm

If a recession comes, it comes.

It will be the weirdest recession in memory. As Garth said Earnings Up, Full Employment and Retail Trade up (60% of Cdn GDP), Wholesale/Mfg Sales Up, etc.

I don’t see a recession coming anytime soon in Canada.

Then again, 2020 was Year 0 and since then…

Expect the Unexpected. *

—————

* Inflation was expected by me. With Govs handing out free cash like there was no tomorrow (there was) and historically low borrowing rates that people “snorfled debt” as Garth would say.

No, inflation WAS expected. I expected it. Complained to the CB about it at least a year ago on Twitter and other times since then.

Hate to say it Garth, but on inflation the CBs were SO ASLEEP at the wheel. Thought they could tippy toe there way thru a huge asset bubble with no consequences. ESPECIALLY Poloz and his acolyte Tiff.

Same reason Mr. Market doesn’t trust the CBs to tippy toe there way past a recession with rising rates.

Why I maintain Tiff et. al. ought to be replaced.

Their replacements can do no worse than the damage that has been done already (asset bubbles they created with ultra cheap money).

#21 Linda on 05.17.22 at 4:41 pm

Today’s blog dog ‘Jerry’ is much more worth watching than the human bearing the name. Only ever watched that show once & only for about 5 minutes.

So what I’m wondering is, what impact does recession have (if any) on anyone who is in the fortunate position to be debt free & has a secure income stream independent from employment? If someone is retired & receiving pension income, what if any are the negative effects of a recession regarding their finances? Inflation I get – things cost more so living on a fixed income may be gnarly – but what I’m not sure of is whether a recession is anything to be worried about.

#22 Søren Angst on 05.17.22 at 4:42 pm

#11 Bipolar

“…My portfolio will look after itself while i’m gone.”

————

Lucky you.

I get gobs of dividends 2X a month. Then I have to decide how to DRIP the heck out of my Threadbare Portfolio in the hope of making it Quasi-Threadbare.

24X a year of bother vs. your “look after itself”.

I like being bothered 24X a year with an annualized dividend yield, weighted avg. last month of 32.1%, this month will be higher.

Set it and forget it, true, but with a wary eye…called Rebalancing if Garth et. al. admonitions are to be believed. I am a believer.

#23 Brett in Calgary on 05.17.22 at 4:50 pm

My god there is a “day” for everything. Dream of home ownership is about right though…
———————————–
#9 Honest Realtor on 05.17.22 at 4:09 pm

Especially today, which is National Real Estate Day.

A day to commemorate the Canadian dream of homeownership.

#24 The Regulator on 05.17.22 at 4:57 pm

# 09 – Honest Realtor : Hone$tly, realtor$ are the $alt of the earth. $o upright, $o up$tanding, alway$ doing their job$ in the be$t intere$t$ of their client$. We need a National Real Estate Month, because a day doesn’t do it justice.

#25 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 05.17.22 at 4:58 pm

“As usual, the future’s murky. The current times are unique. But the outcome will not be different.”

Yessir, especially in the Torontoilet!

Look at this – Toronto Make Believe loser Mitch Marner getting carjacked by GTAHole thugs!

https://www.thestar.com/news/canada/2022/05/17/multiple-reports-say-marners-suv-was-stolen-in-an-armed-carjacking-in-west-toronto.html?li_source=LI&li_medium=star_web_ymbii

Toronturds are SO civilized and friendly, even to their hockey heroes!

Mitch, all you need to do in the Torontoilet for financial success is get a fat life insurance policy. They came after you with guns and knives this time, and you survived. Next time maybe not so lucky. So leave a pile of cash to make your family rich when they get you. Best investment ever!

After all, that’s life in the GTA……

#26 Faron on 05.17.22 at 5:04 pm

#22 Søren Angst on 05.17.22 at 4:42 pm

#11 Bipolar

Then I have to decide how to DRIP

DRIP means something specific. DRIP-ing is automatic. All I have to do is select the option with my broker and it just happens. There is no “deciding”…

#27 pPrasseur on 05.17.22 at 5:10 pm

“Full employment” doesn’t tell you anything, what matters is why and the main reason is unbridled debt/stimulus driven consumer spending, and no it is not something new due to Covid, it’s been going on for many years. The other reason is population ageing and that too is not new and affects most of the developed world, including (and that’s important) China.

Inflation is here to stay and deep global recession seems unavoidable.

#28 The real Kip (Ret) on 05.17.22 at 5:15 pm

Hahaha, pump those markets back up. I need my DB pension big and fat. Powell will fold like a cheap suit long before the housing market folds.

#29 longtime lurker on 05.17.22 at 5:24 pm

It’s easy to sneer at China’s lockdowns, except for this thought:

China is doing the lockdowns because they are making a bet that zero covid will put them at an economic and social advantage in the long run.

#30 Ponzius Pilatus on 05.17.22 at 5:26 pm

#156 Matt on 05.16.22 at 6:29 pm
Thanks to all that replied to me (Shawn, PeterfromCalgary, etc.) about housing in CPI. I get that rental prices are already included, and yes a house is a long-term purchase. There’s a certain pure “economics as science” argument to be made there, I guess.
——————————
There’s a reason why they call Economics the “dismal science”.
Also, if you torture stats (like CPI) long enough, they will always tell you what you want to hear.
The “seasonally adjusted” employment rate is another good example.
Caveat emptor, always.

#31 Ponzius Pilatus on 05.17.22 at 5:30 pm

Renault sells its business in Russia for 1 Ruble!
And writes off 2.5 billion.
So does MacDonald.
Russia brings back the “Moskwitch”.
Can’t wait to order one.
But probably dead by the time it arrives.
Then leave it to my relatives.
So they think of me every time it breaks down.
Signed
Evil Ponzius
https://kurier.at/wirtschaft/nach-renault-rueckzug-fuehrt-russland-moskwitsch-wieder-ein/402009309

#32 Stone on 05.17.22 at 5:37 pm

#11 Bipolar on 05.17.22 at 4:10 pm
I find readers spend a lot of time and energy making market predictions in the comment section. The predictions cover almost every possible future outcome of the market. This is very confusing for me. I think I’ll just forget all about it and go for a walk. My portfolio will look after itself while i’m gone.

———

Well said!

#33 Stone on 05.17.22 at 5:40 pm

#7 Dave on 05.17.22 at 4:06 pm
Individual stocks are better than ETFs. With ETFs you pay higher fees. With individual stocks you pay $10 to buy ad sell, which is nothing. You can diversify with about 15-20 stocks and get similar results to an index over long periods of time. Even if an ETF has a .5% fee, that’s 5 grand a year you are paying in fees. Stocks are the best hedge against inflation. For xxhe sake, stay out of bonds!

———

Really? 15-20 stocks? Pray tell! I’d love to know what these 15-20 perma-stocks are.

You don’t actually invest, do you? You don’t give me the impression of that. No real investor actually talks like that.

#34 Ponzius Pilatus on 05.17.22 at 5:40 pm

Just heard that the 10th most popular male baby name in the States is HARPER!
Well does not surprise me.
Probably Sailos 30+ cousins all named their male offsprings HARPER.
HARPER SAILO, has a good ring to it.
What a Gong Show.
Faron, time to rescind your American citizenship, and swear allegiance to the Great White North?

#35 Squire on 05.17.22 at 5:41 pm

I read today the floor on oil is $100 p/B not the ceiling. The recent release of strategic oil just kicked the can down the road a few months. We will feel the real cost by end of summer.
‘Convergence’ To all that bought in bunnypatch and thought WFH was foreva. Convergence of a perfect storm. High gas prices, rising rates, inflation, home price reductions, increased borrowing costs. I can’t help but feel some pity. Buckle up, make some decisions before it’s too late.

#36 Nihilist on 05.17.22 at 5:44 pm

Let the real estate crash some more!

#37 DON on 05.17.22 at 5:46 pm

This inflationary period is putting fast food out of reach for the average family. Friends and co workers are already cutting back on stuff. Good thing the pendemic got us used to staying close to home.

Camping used to be a cheaper option…not with current gas prices though. People are putting off road trips.

And then there’s the cold start to Spring (historically). Crops are being affected in non war torn areas also. North and Central India are facing 50 degrees celcius this week.

Walmart having issues. Airline costs expected to go up. Unions AND Non union staff are asking for cost of living increases.

The most important question is how long tilll gasoline and diesel move back under $1.49 a litre. And how long can the average family keep up with inflation…before cutting back on all non essentials.

Try selling a gas guzzling truck or boat this summer…lol.

#38 Squire on 05.17.22 at 5:47 pm

#29 longtime lurker on 05.17.22 at 5:24 pm
It’s easy to sneer at China’s lockdowns, except for this thought:

China is doing the lockdowns because they are making a bet that zero covid will put them at an economic and social advantage in the long run.
—————————————
That would work if we were living in the 1800’s and very little travel but not in the current world.
Can’t stop omicron and locking down causes a lot of collateral damage and postpones the inevitable. Besides, do you really believe everything the CCP says?

#39 You know Val on 05.17.22 at 5:48 pm

PP out classes Trump by a Canadian country miles. Not to mention he has had T2 running scared a few times as WE all have witnessed..say by to sunny ways and let’s get on with restoring credibility.

#40 Reality Check on 05.17.22 at 5:53 pm

1 Matt
As David Rosenberg stated, this recession is going to be nasty with rates increasing to highest level since Great Recession
——————————
Two points

1) I am sure David is a smart guy, but he is a perennial bear and has been perennially wrong. People who have taken advantage of his advice over the last decade have missed out on massive moves upwards in the stock market.

2) as for rates going to the highest level since the Great Recession?? Strange statement as that would still leave rates at historically low levels. You’d have to look back to the 1940s or 1950s to get rates anywhere near those of the last 12 years.

1)

#41 J on 05.17.22 at 5:59 pm

#70 morrey on 05.16.22 at 9:56 pm
PS to all you weirdos pushing Cryptocurrency like the PeePee Brained PP: Why This Computer Scientist Says All Cryptocurrency Should “Die in a Fire”. google it
———————————————————-

morrey – so, I googled it. Thanks for this. It was an excellent article detailing an interview of a Berkeley Computer Science Prof who has carefully studied crypto, blockchain, and NFT’s for over a decade.

The prof’s conclusion, based on ample data and thoughtful analysis, is that these inventions are useless and destructive.

Interestingly, the prof thinks that if existing laws were enforced, crypto would never have gotten off the ground and reached this absurd level, and he says that if things are left to their own devices, then “It will implode spectacularly”. He borrows a term Garth has enshrined in this pathetic blog, and says the party is up once they run out of “greater fools”.

For those interested in the details: https://www.currentaffairs.org/2022/05/why-this-computer-scientist-says-all-cryptocurrency-should-die-in-a-fire

#42 crowdedelevatorfartz on 05.17.22 at 6:01 pm

Housing is so far off everyone’s radar right now…

Gas prices will crush people’s spending.
Can’t afford to fill the car to go to the beach.
Cant afford to fill the car to go to the cottage?
Cant afford to fill the Motorhome. The boat.
The airplane ride is too expensive?
Food prices?
Restaurants?

This economy aint seen nuthin yet.
Let’s see how we do this summer with these nose bleeding prices.

#43 Lumber on 05.17.22 at 6:05 pm

Back in 2020, we looked at buying the house next door in our sleepy little Nova Scotia town – a beautifully renovated cape cod with a classic ‘Lunenburg Bump.’ Totally adorable, and reasonable, we figured. Our plan was to buy it, take a couple months to move, then list ours. Like so may others in NS, we were outbid by $100k by Toronto folks. When they finally became our neighbours, we want to be friendly, but couldn’t help but tell them they outbid us, by a LOT. ‘Well, it was cheap to us!’
Huge lesson there for me – cheap to you is very expensive to someone else.
Fast forward: the pricey new neighbours have been called back to Ontario, and a For Sale sign appeared on the lawn a couple weeks ago -with an insane listing price, I’m told, along with an optimistic offer date that has come and gone. Crickets.
Our bunny patch has been raided, then abandoned.

#44 Shawn on 05.17.22 at 6:05 pm

McDonalds wants to sell its 850 locations in Russian. They would strip the golden arches and apparently not be allowed to offer the McDonalds’ menu. It’s hard to imagine what brand of fast food outlet could successfully operate out of those locations. Western world brands are not about to go there. The sad truth is the 62,000 employees are probably out of work and most locations are likely to be shuttered rather than rebranded.

Hopefully this and all the other negative impacts of the Ukraine war will put pressure on to oust Putin. Bet that’s probably wishful thinking.

#45 Shawn on 05.17.22 at 6:09 pm

Walmart’s issues were on the cost side. They say they gained market share. Costco is constantly gaining market share.

I wonder what U.S. grocery chains are losing market share?

#46 Shirl Clarts on 05.17.22 at 6:11 pm

But in a recession, in a downturn, finding a buyer for your house can be a grinding experience. If you’ve lived through one of those times of illiquidity, you know. If you’re a first-time homeowner, you have no idea. – Garth

My last couple of purchases I was thinking 2 main questions.

1) What is my exit strategy? Will someone want to buy me out one day? Never think this is your “Forever” home. Those don’t exist.

2) What are my monthly operating costs, such as taxes, insurance, strata fees, utilities, repairs, etc., considering how long I ‘think’ I’m going to stay? And are these fees competitive? Remember, if the Strata fees or the taxes are significantly higher than comparable properties, it will impact question 1. Those fees rarely go down.

#1 rule – Location. Location. Location. Those in Bunnypatch that want to sell might have to wait for the next housing boom. This last boom is officially over.

#47 The Regulator on 05.17.22 at 6:16 pm

# 31 – Ponzious Pilatus : Is a used Renault even worth a ruble? What do the AudiCartel think? I can’t see an Audi owner lowering themselves by being seen in a McDonald’s drive-thru. Renault owners, not so much.

#48 PeterfromCalgary on 05.17.22 at 6:27 pm

Inflation started rising long before Putin invaded Ukraine on February 24, 2022. The invasion made it worse but most of this inflation is made in Canada. Trudeau-Biden, Bank of Canada-US FED upped demand with massive fiscal and monetary stimulus at the same time COVID19 was restricting supply.

#49 Sam on 05.17.22 at 6:27 pm

Not sure where this data is coming from. Townhouses in burbs still selling for $1.4Million. https://www.zolo.ca/vaughan-real-estate/30-millhouse-court

#50 Maud Flanders on 05.17.22 at 6:29 pm

Won’t someone think of the speculators and upper class Millennials who own their first or second homes?

#51 Doug t on 05.17.22 at 6:38 pm

#42 fartz

Yup its all coming at us like a tsunami- head to high ground and prepare accordingly

#52 FO on 05.17.22 at 6:39 pm

“They will be over soon as Beijing understands the damage being done”

But for one thing – mian zi.

#53 AK on 05.17.22 at 6:51 pm

“Is a recession in the cards?”
=============================

Not during the midterms.

#54 crowdedelevatorfartz on 05.17.22 at 6:56 pm

@#37 Don
“Try selling a gas guzzling truck or boat this summer…lol.”

+++
I’m already seeing them parked and “For Sale” signs on them.
Can’t give them away right now.
Imagine a motor home at 5km a liter.
Vancouver to Calgary 1000km
Good luck with that.
Or a Cabin cruiser boat. $2000 to fill….for a weekend of cruising….
Good luck with that.
The kids wanna Jet ski for the day …..$100 bucks.
Yep
Gonna be a long, hot summer.

#55 km on 05.17.22 at 6:58 pm

Thanks #7 Dave

I think the rest of us will stick with advice from someone who has decades of experience and a business that clearly is not doing too badly. Jeesh

#56 Court TV on 05.17.22 at 7:05 pm

Recession?

Who cares?!

Depp v. Heard trial is on CourtTV and it is exciting.

#57 Ustabe on 05.17.22 at 7:09 pm

@ Faron:

nothing so relaxing and pleasurable as a calm weather day on a good sail boat.

Loads of time for conversation, relaxation, etc. Take a good book, Natalie Wood’s biography would be a good pick. Not too puffy, not too deep either.

#58 Sail Away on 05.17.22 at 7:15 pm

Beautiful dog, Jerry.

He would looooove the Chilcotin. It’s bird dog Shangri La.

#59 fishman on 05.17.22 at 7:15 pm

44 Shawn. They have a local fast food chain in Russia. Like our taco joints but Russian dumplings & borscht. Their booming. Getting rid of the competition is good for business in a capitalist economy. But the best part is what they call themselves; in English means little potato. I love it. Little Potato signs all through Russian malls & city streets.

#60 My Body My Choice on 05.17.22 at 7:19 pm

The number one investment strategy should be “finding value”.

Mr. Poilievre made a fatal rookie mistake when he, without realizing it, tied his political career to the price of Bitcoin. He may never recover. I still think he’s the best of the bunch to represent true blue conservative values but he lacks maturity and doesn’t come across as Prime Ministerial. Sure, he can win the Con leadership, but the average voter in urban, suburban Canada may not feel he is up to the challenge. Con voters must ask themselves “who can defeat Trudeau and the Liberals in the GTA, Vancouver, Montreal and Atlantic Canada?”

Political success is always about consensus, compromise and co-operation, especially in a country as large as Canada. I believe Charest is the only one who can deliver and defeat the Liberals.

“And not the sad polarization in politics we’re seeing in both the US (Trump) and Canada (PP)”

When has politics not been polarizing? Look at the HATE spewed by Trudeau, Liberal MPs, the CBC presstitutes and their neo-Marxist bullies every single day. Look at what the sleazebag Patrick Brown said about PP. Brown is a Trojan Horse, slimy as a reptile and has a creepy grin. He’ll never win.

#61 Ed on 05.17.22 at 7:34 pm

@32

Really? 15-20 stocks? Pray tell! I’d love to know what these 15-20 perma-stocks are.

You don’t actually invest, do you? You don’t give me the impression of that. No real investor actually talks like that.

I’ve lived off my investments the last 14 years of retirement at 52. I only have 16 individual equities other than some preferred’s all on the TSX .

Account is close to all time highs even though I spend like a sailor…(I am a sailor haha)

Of course I’m not a real investor…

#62 Faron on 05.17.22 at 7:41 pm

#110 Sail Away on 05.17.22 at 4:08 pm

#108 Faron on 05.17.22 at 2:48 pm

Perhaps. My previous boat, rigged for offshore, is in Pedder Bay. I think the owner’s planning a circumnav of VI this summer, so I’ll check about renting for an excursion.

Okay.

#63 Quintilian on 05.17.22 at 7:42 pm

#9 Honest Realtor on 05.17.22 at 4:09 pm
“Garth, it would be nice if you could be a little more positive and respectful of our industry, which is really the cornerstone of most Canadians’ lives.”

It’s about perception and expectations.

Most people perceive realtors as human beings, and have expectations of them consistent with their observation.

Clearly it is the fault of taxonomy which failed to create a classification between humans, and a sub species which look like humans in most aspects, but lack the innate capacity for scruples

#64 Faron on 05.17.22 at 7:46 pm

#57 Ustabe on 05.17.22 at 7:09 pm

Sounds like a perfect biographical fit.

#65 Ponzius Pilatus on 05.17.22 at 8:02 pm

#44 Shawn on 05.17.22 at 6:5 pm
McDonalds wants to sell its 850 locations in Russian. They would strip the golden arches and apparently not be allowed to offer the McDonalds’ menu. It’s hard to imagine what brand of fast food outlet could successfully operate out of those locations. Western world brands are not about to go there. The sad truth is the 62,000 employees are probably out of work and most locations are likely to be shuttered rather than rebranded.

Hopefully this and all the other negative impacts of the Ukraine war will put pressure on to oust Putin. Bet that’s probably wishful thinking.
———————-
Of course it is wishful thinking by a North American who has no clue what’s going on in Eastern Europe.
Putin just got the prize that he probably was most after.
The Mariupol harbour and the Steel factory, which is the largest steel producer in the World.
Sad, but true.

#66 Mr. Subtlety on 05.17.22 at 8:07 pm

#4 Pylot Project on 05.17.22 at 4:00 pm

It was bad enough that gas was $2.32 when I filled up yesterday. I noticed that the front right tire was quite low, so I went to the air pump and they wanted $2 to fill the tires with air…. now THAT’S inflation.

——–

Duh! Usually when you put air in your tires, you expect them to inflate.

#67 crowdedelevatorfartz on 05.17.22 at 8:09 pm

@#60 My Choice
“Con voters must ask themselves “who can defeat Trudeau and the Liberals in the GTA, Vancouver, Montreal and Atlantic Canada?””

+++
Trudeau will defeat Trudeau.
Reminds me of the old saying.
“Gift the devil a horse….and he’ll ride it straight to Hell.”
The best Trudeau will do will be another Minority Govt.
Sad.

#68 Mattl on 05.17.22 at 8:15 pm

The stock market dumped into bear market territory in just weeks. Down about 35%. Then sanity prevailed. Investors realized all pandemics end and the economy would eventually rebound, taking corporate profits with it.

——————————

Not sure sanity prevailed, rather centrals injected trillions into the global economy. So much so in Canada that people prospered. Which makes no sense.

We never really paid any economic price for the pandemic. That bill has come due.

#69 Earl on 05.17.22 at 8:16 pm

I just have one question: Will this end well?

#70 Two-thirds on 05.17.22 at 8:16 pm

Well said. A couple of points, though:

1) Garth, the polarization in Canada began some years ago, circa 2015. It is at best disingenuous, and at worst, spiteful, to suggest that a fairly unknown opposition MP, who only entered the big leagues in the past couple months is the cause of the polarization and division that our country is experiencing.

Responsibility for that rests on our PM’s shoulders, as the most visible politician and arduous promoter of Canadian sinfulness, shame, and its myriad aggravated identities.

Polievre has a loud bark, but so far zero bite. He might not even become leader of the opposition at all, while most Canadians did not even knew about him before this spring, so: how is it that someone with such an insignificant political footprint is responsible for the broken country that Canada has become under the current government, pray tell?

2) As for housing prices reverting to the mean… well, many will be disappointed when/if that happens. Using Stoufville’s graph as an example, a drop back to the trendline will still be in the 1-1.1 million range, a significant hit to the 2022 greaterfools no doubt, but still about 20% above 2017 prices, as per the chart.

Will the coming correction make housing affordable at $1 million in this town? Doubtful, especially with interest rates climbing to their historical 5% range, given local incomes.

The bigger irony in all of this is that the desire for prices to crash is espoused most vehemently by those who wish to buy, buy, buy. Supposing the correction takes place AND that the moisters are able to afford the 5% plus mortgage, what would all of this pent-up demand do to prices?

Without Canada significantly increasing its housing supply to match its strong demand and actually overcome its well-documented under-supply, prices are likely to remain sticky and unaffordable to most.

In other words, reversion to the mean, will NOT mean that housing in Canada will become affordable, not in most places outside of bunnypatch!

All pain for all and no gain for the moisters. Is that the soft-landing that is to come?

Well done Tiff!!!

Nowhere did I say Polievre created political division. He just adroitly exploits and feeds off it. – Garth

#71 Windbag on 05.17.22 at 8:19 pm

#40 Reality Check on 05.17.22 at 5:53 pm
1 Matt
As David Rosenberg stated, this recession is going to be nasty with rates increasing to highest level since Great Recession
——————————
Two points

1) I am sure David is a smart guy, but he is a perennial bear and has been perennially wrong. People who have taken advantage of his advice over the last decade have missed out on massive moves upwards in the stock market.

————–
I will agree with your first statement. David Rosenberg really is a fart smeller.

#72 jess on 05.17.22 at 8:19 pm

Investigators said the managers began misleading investors as far back as 2016,

“The victims of this misconduct include teachers, clergy, bus drivers and engineers, whose pensions are invested in institutional funds to support their retirement,” said the S.E.C. chairman, Gary Gensler. “This case once again demonstrates that even the most sophisticated institutional investors, like pension funds, can become victims of wrongdoing.” (nyt)

https://www.allianz.com/en/press/news/financials/business_results/220517_Allianz-SE-announces-resolution-of-US-governmental-investigations-concerning-Structured-Alpha.html

#73 april on 05.17.22 at 8:40 pm

Very few condo listings in Metro Vancouver bc…so far.
Asking upwards of 400 thous and over for a cubby hole.

#74 Paul on 05.17.22 at 8:48 pm

Well looks like the State are looking for another conflict/war ??

Biden approves plan to redeploy US troops to Somalia

#75 Ponzius Pilatus on 05.17.22 at 8:52 pm

#42 crowdedelevatorfartz on 05.17.22 at 6:01 pm
Housing is so far off everyone’s radar right now…

Gas prices will crush people’s spending.
Can’t afford to fill the car to go to the beach.
Cant afford to fill the car to go to the cottage?
Cant afford to fill the Motorhome. The boat.
————————-
Don’t panic, Buddy.
As long as we can fill the beer Stein, we’re fine.
In BC liquor stores, the price of beer is still ok.
So was it in Ontario and Quebec.

#76 Elon Fanboy on 05.17.22 at 8:57 pm

Gas hit $2.26 here in my local hood of Nanaimo. My custom ordered f150 is supposed to be arriving in about 2 weeks. Just slightly over 3 months from order. I was expecting a wait of at least 6.

A lot can happen in 3 months; War, market corrections, and price of gas thru the roof.

This F150 has a 36 gallon tank. That’s gonna be eye watering the first time I fill it up.

#77 DON on 05.17.22 at 8:59 pm

#35 Squire on 05.17.22 at 5:41 pm
I read today the floor on oil is $100 p/B not the ceiling. The recent release of strategic oil just kicked the can down the road a few months. We will feel the real cost by end of summer.
‘Convergence’ To all that bought in bunnypatch and thought WFH was foreva. Convergence of a perfect storm. High gas prices, rising rates, inflation, home price reductions, increased borrowing costs. I can’t help but feel some pity. Buckle up, make some decisions before it’s too late.

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

Convergence is right.

I have empathy for stupid but not greedy people.

#78 tbone on 05.17.22 at 9:08 pm

I live off individual stock dividends in retirement .
Mostly TD and ENB , but i have positions in the other banks and and oil ETF .
Dont even use the B & D portfolio .

#79 DON on 05.17.22 at 9:08 pm

#54 crowdedelevatorfartz on 05.17.22 at 6:56 pm
@#37 Don
“Try selling a gas guzzling truck or boat this summer…lol.”

+++
I’m already seeing them parked and “For Sale” signs on them.
Can’t give them away right now.
Imagine a motor home at 5km a liter.
Vancouver to Calgary 1000km
Good luck with that.
Or a Cabin cruiser boat. $2000 to fill….for a weekend of cruising….
Good luck with that.
The kids wanna Jet ski for the day …..$100 bucks.
Yep
Gonna be a long, hot summer.

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

I’m driving most of the Island hwy in two weeks will let u know if the side of the highway is littered with trucks and toys for sale. Might be too early yet…but that seemingly long summer is in the cards.

Soon we’ll need therapists and pot/liquor stores to be co located with gas stations and money lenders to ease the pain.

#80 Phylis on 05.17.22 at 9:19 pm

Can we call PP something different like P^2 or P2? Thanks in advance.

#81 canuck on 05.17.22 at 9:31 pm

Others, including most central bankers, think they can engineer a soft landing
_____________________________________________

Yeah, no. Just like they thought they could hold off on raising rates. This smells a lot like 1980. This time next year will be very tough for many… and it has to happen.

#82 I don't know on 05.17.22 at 9:57 pm

“So stocks will lose 80% of their value in a period of post-pandemic expansion with full employment and robust corporate earnings? Delusional. – Garth”

-Of course it’s delusional.

Our weekender Doug said it best when responding to a particularly delusional post this weekend:

“The problem with inexperienced investors is that they speak always in terms of certain outcomes. Nothing’s inevitable. To make such conclusions is vanity, or fear.”

When someone says the market (stocks or real estate) will fall 80%, it’s a good to idea to do the opposite of what that person says to make money.

IDK

#83 Yukon Elvis on 05.17.22 at 10:04 pm

#69 tbone on 05.17.22 at 9:08 pm
I live off individual stock dividends in retirement .
Mostly TD and ENB , but i have positions in the other banks and and oil ETF .
Dont even use the B & D portfolio .
++++++++++++++++++++
Same but no etf. Only blue chip dividend payers mostly bought during dips.

#84 truefacts on 05.17.22 at 10:10 pm

@29 Longtime Lurker:

“China is doing the lockdowns because they are making a bet that zero covid will put them at an economic and social advantage in the long run.”
________________________________________

The CCP uses excuses to solidify their power and control – the Covid scare is the excuse – power is their ultimate goal. Look at how they derailed their tech darlings such as Alibaba – not smart economics, but a good way to increase their iron grip…which is the Communist Party’s most important goal.

#85 Ponzius Pilatus on 05.17.22 at 10:15 pm

76 Elon Fanboy on 05.17.22 at 8:57 pm
Gas hit $2.26 here in my local hood of Nanaimo. My custom ordered f150 is supposed to be arriving in about 2 weeks. Just slightly over 3 months from order. I was expecting a wait of at least 6.

A lot can happen in 3 months; War, market corrections, and price of gas thru the roof.

This F150 has a 36 gallon tank. That’s gonna be eye watering the first time I fill it up.
————————-
Haha,
Once gas hits 3 bucks, you’re putting almost 500 down that bottomless tube.
Why not double up and buy a house for good measure.
Would be even more eye watering.
Or maybe not, you could always sleep in the truck.
I heard it comes with a mattress now.
More comfortable than a Tesla.

#86 DON on 05.17.22 at 10:32 pm

#68 Mattl on 05.17.22 at 8:15 pm
The stock market dumped into bear market territory in just weeks. Down about 35%. Then sanity prevailed. Investors realized all pandemics end and the economy would eventually rebound, taking corporate profits with it.

——————————

Not sure sanity prevailed, rather centrals injected trillions into the global economy. So much so in Canada that people prospered. Which makes no sense.

We never really paid any economic price for the pandemic. That bill has come due.

*********
The bill and more:

The CRA has formally announced it is kindly asking uneligible recipients to return the CERB money without penalty and negotiable payment plans.

Bad boys, bad boys…

#87 DON on 05.17.22 at 10:37 pm

#82 I don’t know on 05.17.22 at 9:57 pm
“So stocks will lose 80% of their value in a period of post-pandemic expansion with full employment and robust corporate earnings? Delusional. – Garth”

-Of course it’s delusional.

Our weekender Doug said it best when responding to a particularly delusional post this weekend:

“The problem with inexperienced investors is that they speak always in terms of certain outcomes. Nothing’s inevitable. To make such conclusions is vanity, or fear.”

When someone says the market (stocks or real estate) will fall 80%, it’s a good to idea to do the opposite of what that person says to make money.

IDK

***********

Do you work for CNN? Fox News or CREA?

#88 The Regulator on 05.17.22 at 10:41 pm

McDonalds is leaving Russia, explain to me how this “harms” them? They’ll probably live longer now. As the gold backed ruble sits at 65.000/U.S. $. What was it again 2 months ago? 150/1 ? Hopefully, Bin Salman starts taking Bidens’ calls. To all Canadians : Alberta paused it’s 13 cent/l gas tax, what have your governments done for you?

#89 Observer on 05.17.22 at 10:41 pm

#62 Faron on 05.17.22 at 7:41 pm
#110 Sail Away on 05.17.22 at 4:08 pm

#108 Faron on 05.17.22 at 2:48 pm

Perhaps. My previous boat, rigged for offshore, is in Pedder Bay. I think the owner’s planning a circumnav of VI this summer, so I’ll check about renting for an excursion.

Okay.

^^^^^^^^^^^^^^^^

Faron, dude, are you crazy? You might not make it back! At least let us know which day this “excursion” will be happening so we can file a report if you fail to show up at this blog afterwards.

#90 crowdedelevatorfartz on 05.17.22 at 10:41 pm

@#71 Windbag
“I will agree with your first statement. David Rosenberg really is a fart smeller.”

+++
Your name and the subject matter is uncomfortably close to MY territory.
Well done.

@#79 Don
“I’m driving most of the Island hwy in two weeks will let u know if the side of the highway is littered with trucks and toys for sale.”

+++
Time will tell.
I’m seeing more and more electric bikes and scooters being driven by older and fatter people.
Two years ago it was mostly kids and 20 somethings zipping about electrically.
Now?

#91 Ponzius Pilatus on 05.17.22 at 11:02 pm

#101 Yukon Elvis on 05.17.22 at 12:41 pm
#95 My Body My Choice on 05.17.22 at 11:06 am
Re: HUNGRY BEAR being banned

I want to reach out to HUNGRY BEAR, who has been banned from this forum for an incendiary comment a couple of days ago.

Dear HUNGRY BEAR, it sounds like your anger has been stoked by various news reports. Please take a deep breath, calm down a bit and read the following articles. Please keep an open mind.

https://tnc.news/2021/07/12/six-things-the-media-got-wrong-about-the-graves-found-near-residential-schools/

https://tnc.news/2021/12/19/the-misleading-claim-that-150000-indigenous-children-were-forced-to-attend-residential-schools/
+++++++++++++

Thank you for providing those links. I hope people take the time to read them and pass them around.
———————-
Well, I read them.
All I can say, check the sources.

#92 Tom from Mississauga on 05.17.22 at 11:05 pm

Putin will have the boys home by Christmas? Um, I’m gonna stick with my Canuck energy ETF NNRG, thanks.

China announces purchase of 3B MRNA vax or Canadian truckers storm Beijing I’ll believe lockdowns will end. My call? No Chinese immigrants, tourists or students this year.

#93 When gas hits 3 dollars a litre on 05.17.22 at 11:24 pm

The Canadian lemmings will elect Trudeau with 90 percent majority…lmao

#94 Barb on 05.17.22 at 11:32 pm

#88 The Regulator

“To all Canadians : Alberta paused it’s 13 cent/l gas tax, what have your governments done for you?”

———-
BC’s Comrade Horgan suggested we drive less, or call someone to arrange a rideshare. He won’t give up any of Victori’s shekels.

#95 Ponzius Pilatus on 05.17.22 at 11:45 pm

#94 Barb on 05.17.22 at 11:32 pm
#88 The Regulator

“To all Canadians : Alberta paused it’s 13 cent/l gas tax, what have your governments done for you?”

———-
BC’s Comrade Horgan suggested we drive less, or call someone to arrange a rideshare. He won’t give up any of Victori’s shekels.
———————-
What’s wrong with driving less?
You could save a lot of shekels, or rubles.

#96 tc-contra on 05.17.22 at 11:47 pm

A reminder of bear-market psychology – prudent for any investor to review and assess their own state:

Denial — In this initial stage, the prevailing view is that stock-market weakness is nothing more than a buying opportunity. Far from getting angry (see next stage), investors remain quite sanguine, since the market’s pullback offers an opportunity to buy stocks more cheaply than would have been the case had the bull market kept going.
Anger — Denial becomes increasingly difficult to sustain as the market’s pullback becomes too severe. Investors’ mood eventually morphs into anger, as they rail against the unfairness of the pullback. A hallmark of this stage is where investors see the pullback as a personal affront — as if the market cares whether you or I lose money.
Bargaining — In this stage, investors’ redirect their energies to figuring out if they can maintain their lifestyles despite the hit to their portfolio; retirees rejigger their financial plans. Investors promise to give up that fancy new car or the European vacation — the fat from their budgets — so long as they don’t have to cut bone.
Depression — As the market continues to slide, the realization sets in that cutting the fat isn’t going to be enough. Major changes in lifestyle will be required. Near-retirees work for longer than originally planned; retirees go back to work.
Acceptance — In this final stage, investors throw in the towel. They surrender to the bear market and stop even fantasizing about when it might end. They treat any sign of market strength as a suckers’ rally, luring the gullible into losing more money on the next leg down.

#97 Stone on 05.17.22 at 11:57 pm

#61 Ed on 05.17.22 at 7:34 pm
@32

Really? 15-20 stocks? Pray tell! I’d love to know what these 15-20 perma-stocks are.

You don’t actually invest, do you? You don’t give me the impression of that. No real investor actually talks like that.

I’ve lived off my investments the last 14 years of retirement at 52. I only have 16 individual equities other than some preferred’s all on the TSX .

Account is close to all time highs even though I spend like a sailor…(I am a sailor haha)

Of course I’m not a real investor…

———

Still waiting to know what these 15-20 stocks are. Still waiting…

#98 Yukon Elvis on 05.18.22 at 12:02 am

#88 The Regulator on 05.17.22 at 10:41

As the gold backed ruble sits at 65.000/U.S. $. What was it again 2 months ago? 150/1 ?
++++++++++
If the ruble sits at 65 /usd it means that the ruble is worth .017/usd. Two months ago it traded at .012 to the usd. Huge gains eh ?

#99 Yukon Elvis on 05.18.22 at 12:05 am

#91 Ponzius Pilatus on 05.17.22 at 11:02 pm
#101 Yukon Elvis on 05.17.22 at 12:41 pm
#95 My Body My Choice on 05.17.22 at 11:06 am
Re: HUNGRY BEAR being banned

I want to reach out to HUNGRY BEAR, who has been banned from this forum for an incendiary comment a couple of days ago.

Dear HUNGRY BEAR, it sounds like your anger has been stoked by various news reports. Please take a deep breath, calm down a bit and read the following articles. Please keep an open mind.

https://tnc.news/2021/07/12/six-things-the-media-got-wrong-about-the-graves-found-near-residential-schools/

https://tnc.news/2021/12/19/the-misleading-claim-that-150000-indigenous-children-were-forced-to-attend-residential-schools/
+++++++++++++

Thank you for providing those links. I hope people take the time to read them and pass them around.
———————-
Well, I read them.
All I can say, check the sources.
++++++++++++++++
Time for you to re check your rutabagas Ponz. Do u still keep them in that warm dark place?

#100 al on 05.18.22 at 12:12 am

“Investors realized all pandemics end and the economy would eventually rebound, taking corporate profits with it. ” Nah, they already knew that. A bunch of money was just dumped into the economy world wide.

#101 Dr V on 05.18.22 at 1:33 am

95 Ponz

“What’s wrong with driving less?”
—————————————-

F150 mileage since Mar 1st – 550km

Bike mileage since Mar 1st
Road(2 bikes) 1600km
Gravel (1 bike) 500 km

The irony? About half the truck mileage is driving to the
start of some of my rides…..

#102 Ed on 05.18.22 at 1:35 am

Still waiting to know what these 15-20 stocks are. Still waiting…
=========================

No secret…TSX blue chip dividend darlings.

#103 millmech on 05.18.22 at 2:31 am

Looks like a lot more rate hikes coming down the pipe.
https://www.cnbc.com/2022/05/17/powell-says-the-fed-will-not-hesitate-to-keep-raising-rates-until-inflation-comes-down.html

#104 Bird Dog on 05.18.22 at 6:07 am

DELETED

#105 earthboundmisfit on 05.18.22 at 6:08 am

#80 Phylis …”Can we call PP something different like P^2 or P2? Thanks in advance.

Don’t you think that “Skippy PP” has a prime ministerial ring to it?

#106 I don’t know on 05.18.22 at 6:36 am

#87 DON on 05.17.22 at 10:37 pm

I’ll say it again for you:

If someone takes a radical stance on the broad market like the s & p 500, and predicts a huge drop (like 80%), do the opposite of what that person says to make money.

Talking about individual stocks is a different story, I will concede.

tc-contra on 05.17.22 at 11:47 pm

Great post. Just exchange the word “investor” with “speculator” or “gambler” and it will no longer be useless.

IDK

#107 Summertime on 05.18.22 at 7:06 am

On inflation there were quite significant warnings on this blog for quite some time.

People who posted it were ridiculed at the time by financially illiterate simpletons and ignorants, the most dangerous being people with ‘credentials’.

On the central bankers actions it became I believe finally clear that leaving our money matters in the hands of incompetent politically dependent bureaucrats with no integrity whatsoever is a very, very, very bad idea.

What is really worrying for me is the BoC latest statements that the rate increases will depend on the housing market as mortgage payers are deeply indebted.

This is either blatant incompetence or an outright refusal to perform one’s duty as nowhere in their responsibilities is there an objective related to housing market.

Their objectives is debt management and price stability and they clearly failed in both.

Only an idiot would believe that the official CPI measures ‘the inflation’ but having 1 % rates while prices skyrocket is an insanity.
Lower real rates fuel the inflation, it is that simple, it does not fight it.

The ‘neutral’ rates of 2-3 % mantra is an utter BS and it will infamously disappear in history in addition to the artificially created narratives of transitory and peak inflation.

If rates really normalize we are looking at minimum 60-70 % drop in house prices combined with the currency weakening due to the inflation.
Propping or supporting an artificially overblown housing market through lies and deeply negative real interest rates is insane and central bankers should be hold accountable for it.

Ben Bernanke himself said a few days ago that central bankers kept the rates far too low for far too long and that they were wrong. And what are they doing now? Pretty much the same as real rates are actually going even deeper negative.

Now the important question becomes what will become of their actions’ victims – savers, people on fixed income etc. and how should central banking be reformed in order to avoid such major mistakes in the future.

#108 TurnerNation on 05.18.22 at 8:32 am

Tourism Industry.
As we approach a long weekend it is clear. The global control over our travel/movement, launched March 2020 is not going away. It’s not deigned to. For our health still or??

.Regular travel and current public health measures can’t coexist: Canadian Airports Council (cbc.ca)

.CDC adds Caribbean, African travel destinations to COVID warning list (thehill.com)

.Opinion: Why the return of travel in Canada now feels up in the air (theglobeandmail.com)

.US Set to Extend Covid-19 Public Health Emergency Past July (bloomberg.com)

.CDC to all domestic travelers: Test close as possible to departure time (cnn.com)


— Science in Kanada. Residents must obtain a QR code in order to board a train or plane in their own country.*
*EXEPCTIONS. Some Non Residents get free passage:

https://www.canada.ca/en/immigration-refugees-citizenship/news/2022/03/canada-ukraine-authorization-for-emergency-travel.html
-are exempt from Canada’s COVID-19 vaccination entry requirements, but must meet all other public health requirements for travel, such as quarantine and testing. With limited exceptions, all travellers to Canada, including anyone arriving under the CUAET, must also use ArriveCAN

#109 DON on 05.18.22 at 8:45 am

#106 I don’t know on 05.18.22 at 6:36 am
#87 DON on 05.17.22 at 10:37 pm

I’ll say it again for you:

If someone takes a radical stance on the broad market like the s & p 500, and predicts a huge drop (like 80%), do the opposite of what that person says to make money.

Talking about individual stocks is a different story, I will concede.

tc-contra on 05.17.22 at 11:47 pm

Great post. Just exchange the word “investor” with “speculator” or “gambler” and it will no longer be useless.

IDK

*********

What happened…ypu left out your little comment about real estate this time. It’s like watching a child play with mud.

#110 Rip-snorting on 05.18.22 at 8:46 am

Is Canada veering in communism? Acts of confiscation are on the table under Trudeau. Trudeau says Tech profits are “exorbitant” and want to squeeze tax paying employers for the boondoggles and vote pandering . Polls show youth abandoning Trudeau. Suck it up

Next, Trudeau is threatening struggling energy companies that create tax revenue and are fighting to keep employees , with ” windfall profit tax” to fund his vote buying policies. None of the windfall is earmarked for Trudeaus ‘ just transition’s. None !!

This is otherwise called nationalizing. The Communists Manifesto ideology is alive and well in Ottawa.

#111 crowdedelevatorfartz on 05.18.22 at 9:22 am

@#85 Ponzies petrol price predictions
“Haha,
Once gas hits 3 bucks, ”
+++
Can it be?
Has the world gone mad?
Ponzie agrees with Fartzie?
My prediction way back in march that gas would hit 3/lt by July 1st was poo poo’ed by Ponzie.
Now?
He dances and sings the same tune…..with his foot in his mouth?
Impressive!

#112 HUNGRY BEAR on 05.18.22 at 9:24 am

BANNED

#113 crowdedelevatorfartz on 05.18.22 at 9:27 am

@ # 95 Ponzie’s Pharmaceutical Ponderings
“What’s wrong with driving less?
You could save a lot of shekels, or rubles.”
+++
Most people can and do walk or drive if its possible.
Tough to do that on a bicycle if you’re an estimator or tradesman driving all over the city to different jobs.
The business wouldnt last long.

#114 crowdedelevatorfartz on 05.18.22 at 9:32 am

@#80 Phylis
“Can we call PP something different ….”

+++
That P letter hit a little close to home Phylis?
We could call him Pugnacious Pitbull , Prime Pitbull.
Puppy Pitbull…..

#115 IHCTD9 on 05.18.22 at 9:41 am

#111 crowdedelevatorfartz on 05.18.22 at 9:22 am

He dances and sings the same tune…..with his foot in his mouth?
Impressive!
____

Ponzie best be careful, the foot-in-mouth shuffle has been trademarked by Trudeau.

#116 Legal Beagle on 05.18.22 at 9:43 am

#105 earthboundmisfit on 05.18.22 at 6:08 am

#80 Phylis …”Can we call PP something different like P^2 or P2? Thanks in advance.

Don’t you think that “Skippy PP” has a prime ministerial ring to it?

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

Our group uses “Pepe” as none of us can bare to spell out his entire name every time. Likewise “Skippy” is too long and “PP” is already reserved for something else.

#117 Observer on 05.18.22 at 10:07 am

#114 crowdedelevatorfartz on 05.18.22 at 9:32 am
@#80 Phylis
“Can we call PP something different ….”

+++
That P letter hit a little close to home Phylis?
We could call him Pugnacious Pitbull , Prime Pitbull.
Puppy Pitbull…..

^^^^^^^^^^^^
I was thinking more along the lines of pied piper. Definition of pied piper
1 : one that offers strong but delusive enticement. 2 : a leader who makes irresponsible promises.

#118 Faron on 05.18.22 at 10:08 am

#110 Rip-snorting on 05.18.22 at 8:46 am

struggling energy companies

Wait, what? That’s a nice bit of gaslighting right there.

#119 Observer on 05.18.22 at 10:10 am

Inflation up again, to 6.8%, a 31 year high.

https://www.cbc.ca/news/business/canada-inflation-april-1.6457520

#120 Trojan House on 05.18.22 at 10:11 am

#18 baloney Sandwitch on 05.17.22 at 4:26 pm

Ha ha! An interview with Bill Browder? Do a little research into him, Ed Safra and Republic National Bank before you believe anything that troll says. It’s because of him Putin is in power so he has a bone to pick.

#121 Dharma Bum on 05.18.22 at 10:21 am

#56 Court TV

Depp v. Heard trial is on CourtTV and it is exciting.
——————————————————————————————————–

Best thing on the tube since the O.J. Trial.

Amber Heard is a combination of Evil and Crazy personified. A witch of demonic proportions.

An outright liar who is upset because she is a nobody and that things didn’t go her way.

Unless the jury is a bunch of feminazis, she’s toast.

As far as recession is concerned, don’t worry, it’s totally preventable. Just follow this proven advice:

https://elevatedentaltemecula.com/best-5-ways-you-can-minimize-gum-recession-at-home/

#122 Sail Away on 05.18.22 at 10:22 am

Greening the planet.

Consider significantly improving air quality, reducing CO2, reducing energy needs, and better protecting bonobos by the simple and elegant strategy of reducing 1/2 the current human population via starvation.

A simple path to reduced-footprint utopia. A bit messier than Thanos, but hey, that was a movie. In real life, you can’t make a delicious omelet without cracking some eggs.

A shout out to Sri Lanka:

https://www.aljazeera.com/news/2022/5/18/a-food-crisis-looms-in-sri-lanka-as-farmers-give-up-on-planting

#123 Summertime on 05.18.22 at 10:57 am

https://ca.finance.yahoo.com/news/inflation-canadian-continues-soar-6-8-per-cent-april-123755448.html

Inflation in Canada continues to soar

Note that everything quoted in that article increased by double digits, but the ‘cumulative CPI’/whatever that ‘measures’ is 6.8 %.

Is BoC reading this? Why are not rates in double digits already? It seems the whole show is just starting and inflation further accelerating. UK just reported jump in their CPI from 7 to 9 %.

#124 millmech on 05.18.22 at 11:01 am

https://www.msn.com/en-ca/money/topstories/worry-buyer-s-remorse-high-as-real-estate-market-slowdown-materializes/ar-AAXpsJj?ocid=msedgntp&cvid=4c18f011bb7946f9aed65cb309195680

#125 Shawn on 05.18.22 at 11:02 am

Ponzie points out North Americans have little knowledge of the world

#65 Ponzius Pilatus on 05.17.22 at 8:02 pm responded to me
#44 Shawn on 05.17.22 at 6:5 pm
McDonalds wants to sell its 850 locations in Russian. They would strip the golden arches and apparently not be allowed to offer the McDonalds’ menu. It’s hard to imagine what brand of fast food outlet could successfully operate out of those locations. Western world brands are not about to go there. The sad truth is the 62,000 employees are probably out of work and most locations are likely to be shuttered rather than rebranded.

Hopefully this and all the other negative impacts of the Ukraine war will put pressure on to oust Putin. Bet that’s probably wishful thinking.
———————-
Of course it is wishful thinking by a North American who has no clue what’s going on in Eastern Europe.
Putin just got the prize that he probably was most after.
The Mariupol harbour and the Steel factory, which is the largest steel producer in the World.
Sad, but true.

************************
Ponzie is a bit rude but I have long said that most North Americans and certainly the vast majority of Americans have little knowledge of the world.

Americans are very USA centric. Most of never traveled outside of the USA let alone outside of North America.

As a Canadian I will do my part by traveling more.

I wonder what will be left of that Steel plant. I certainly lack knowledge but my bet is still that Putin should regret the war in Ukraine.

Russian GDP will be down double digits and stay down. There won’t be enough income for very many of the 8500 closed McDonald’s to ever reopen as any fast food outlet at all.

Putin’s popularity will drop. I guess if he likes moving towards a North Korea situation then he has won.

#126 Two-thirds on 05.18.22 at 11:02 am

“Nowhere did I say Polievre created political division. He just adroitly exploits and feeds off it. – Garth”

Fair enough.

T2 also exploits and feeds off it, so why shouldn’t fire be fought by fire?

The Cons chose a centrist leader to run in the last election and what did they get?

How would another centrist change the outcome next time around? Perhaps Canadians are tired of the same old, same old, and want someone different than the status quo.

Time will tell…

#127 IHCTD9 on 05.18.22 at 11:05 am

#110 Rip-snorting on 05.18.22 at 8:46 am

Polls show youth abandoning Trudeau.

________

Glad to hear they are starting to see the light. I’ve never seen a group so mercilessly pounded into oblivion take so long to pull out a calculator. I’ve been telling them Trudeau’s been making us 45+ folks filthy rich for years now – while they watched their dream of ever owning a home evaporate. Now they have a ton of debt to service (for life) on top of it all.

Frankly speaking, only the dumbest of the dumb young voters should remain as Trudeau supporters at this point. Houses, Debt, Fuel, Inflation, debt service, interest rates, are all way up over 100% since Trudeau took the helm.

It just keeps getting exponentially worse for them, while us crustomudgeons get wealthier by the week. Hey, I’ll take it, but Trudeau has been generous enough already.

I’d be surprised if a 30 year old today lived to see the kind of prosperity we all enjoyed under Martin, Chretien, and Harper prior to 2015. Such is the level of carnage our current crop of goofy Libs have created.

It’ll take a generation to fix.

#128 crowdedelevatorfartz on 05.18.22 at 11:13 am

@#117 Observer
“I was thinking more along the lines of pied piper. Definition of pied piper
1 : one that offers strong but delusive enticement. 2 : a leader who makes irresponsible promises.”

+++
Not bad.
That may catch on.

#129 Ponzius Pilatus on 05.18.22 at 11:20 am

101 Dr V on 05.18.22 at 1:33 am
95 Ponz

“What’s wrong with driving less?”
—————————————-

F150 mileage since Mar 1st – 550km

Bike mileage since Mar 1st
Road(2 bikes) 1600km
Gravel (1 bike) 500 km

The irony? About half the truck mileage is driving to the
start of some of my rides…..
————————
Good on you.
I’m sure your waistline and your overall health is thanking you.
But, why not go the whole 10 yards?
And see your waistline go down even further and your shekels go up even more.
Unfortunately, in my area, biking would be suicide.
But it’s great for walking.

WinWin.

#130 crowdedelevatorfartz on 05.18.22 at 11:21 am

@#121 Dharma

I haven’t been following it.
Watching celebrities air their dirty laundry ( literally) isn’t my cup of tea.
I always thought both of them were a tad nuts and the ramifications to both their careers will be an expensive lesson for many other celeb marriages.
Next up……. a Will Smith divorce debacle?

#131 Famine Follies on 05.18.22 at 11:24 am

Garth, at #122 we have a commenter seeming to make light of a growing economic and food crisis in Sri Lanka. Why wasn’t that deleted?

#132 Ponzius Pilatus on 05.18.22 at 11:30 am

#110 Rip-snorting on 05.18.22 at 8:46 am
Is Canada veering in communism? Acts of confiscation are on the table under Trudeau. Trudeau says Tech profits are “exorbitant” and want to squeeze tax paying employers for the boondoggles and vote pandering . Polls show youth abandoning Trudeau. Suck it up

Next, Trudeau is threatening struggling energy companies that create tax revenue and are fighting to keep employees , with ” windfall profit tax” to fund his vote buying policies. None of the windfall is earmarked for Trudeaus ‘ just transition’s. None !!

This is otherwise called nationalizing. The Communists Manifesto ideology is alive and well in Ottawa.
——————
Everyone and his dog are confiscating, nationalizing, sanctioning and seizing these days.
Watch out.

#133 Summertime on 05.18.22 at 11:31 am


May inflation ‘primed to pop’

BMO chief economist Douglas Porter wrote in a note following the release of CPI that April’s uptick came despite a brief respite in gas prices, showing that “inflation is spreading much more broadly and at clear risk of getting firmly entrenched.” Gas prices have since increased in the month of May, according to Natural Resources Canada, with the average price in Canada topping $2 a litre for the first time on Tuesday.

Porter wrote that he expects inflation to accelerate again in May, and that “at the very least, it looks like headline inflation is primed to pop above 7 per cent.”

“This is the relative calm before another downpour in next month’s report, as gasoline prices are tracking a double-digit increase for May alone,” Porter said.

“Barring a deep dive in oil prices in coming weeks and months, we expect that the worst is yet to come on the headline readings, and that inflation north of 6 per cent will still be with us by the end of this year.”

This is not encouraging at all. Why is BoC sitting on their behinds and doing nothing, while ‘waiting for their June meeting’? Are these people for real? Why are not real rates positive already?

Guess what is really coming if real inflation is indeed twice the rate of the artificial CPI as proposed by reputable sources and CPI is simply exploding?

If measured as in the 70-es and 80-es we have higher inflation now than the 70-es and 80-es and rates are at 1 % instead of double digits? What will happen if expected and predicted velocity of money increases sharply?

We have way passed the excuses (we are sorry) part
and need actions asap, both in indexing real incomes and in increasing rates to positive real rates, i.e. higher than inflation.

#134 Ponzius Pilatus on 05.18.22 at 11:37 am

#115 IHCTD9 on 05.18.22 at 9:41 am
#111 crowdedelevatorfartz on 05.18.22 at 9:22 am

He dances and sings the same tune…..with his foot in his mouth?
Impressive!
____

Ponzie best be careful, the foot-in-mouth shuffle has been trademarked by Trudeau.
————————-
The shuffle is public domain.
But doing it in Armani socks is trademarked.
I usually do it in my lederhosens and barefoot.
If you want me to yodel, it costs extra.

#135 Don Guillermo on 05.18.22 at 11:46 am

#112 Don Guillermo on 05.18.22 at 11:28 am
#92 IHCTD9 02.20.22
That’s hard to beat homies. Give thanks. Trudeau is a nimrod, but us old-stockers got a hell of a fat consolation prize for dealing with this embarrassing pr!ck. I’ll take it with a smile and a wink – while firing up the popper.

Any more comments with such childish name-calling will be deleted. This just weakens your argument. – Garth
**********
#70 morrey 05.16.22
PS to all you weirdos pushing Cryptocurrency like the PeePee Brained PP
*********
Pots and kettles all around!

#136 Shawn on 05.18.22 at 11:59 am

The Market Turn-Around in March 2020?

It was very specifically due to a $2 to $3 trillion rescue package from the U.S. government. I think there was some uncertainty about the total and how it should be counted but it was known to be at least $2 trillion. It took actually a couple days for the market to understand the implications of the package and it took off with a sharp rebound.

#137 Sail Away on 05.18.22 at 1:03 pm

#131 Famine Follies on 05.18.22 at 11:24 am

Garth, at #122 we have a commenter seeming to make light of a growing economic and food crisis in Sri Lanka. Why wasn’t that deleted?

——–

Hey FF, you should definitely also advocate for the ban of ‘A Modest Proposal’, a 1729 work by author Jonathan Swift in which he totally seriously suggested solving social inequality and hunger by eating the children of the poor.

https://edubirdie.com/examples/a-modest-proposal-by-jonathan-swift-sannibalism-and-the-eating-of-babies/

#138 RyYYZ on 05.18.22 at 1:59 pm

#86 DON on 05.17.22 at 10:32 pm
*********
The bill and more:

The CRA has formally announced it is kindly asking uneligible recipients to return the CERB money without penalty and negotiable payment plans.

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

I fully expect the CRA to concentrate its wrath on regular folks who may have received benefits in error, but honestly, while completely ignoring those who deliberately bilked the system. Rooting out the real fraud would take some work, as opposed to harassing those who made an honest mistake. SOP for the CRA.

#139 IsleOfVanMan on 05.18.22 at 3:24 pm

#138 RyYYZ
‘I fully expect the CRA to concentrate its wrath on regular folks who may have received benefits in error, ‘

RyYYZ – no idea why you think these people the CRA is going after ‘made an honest mistake’. Sorry but the qualifying rules were simple. The People who took it weren’t honest….they still had to apply for it… they read the rules and figured they could scam the system. Sounds like you are unaware of the fact there were no checks whatsoever for who CERB was given to…. so anyone could easily apply for and receive it. I know people who did exactly that, collecting CERB while they were still working. Sorry but these people are dishonest scammers and need to pay it back in full. Also i know wealthy people who are retired with massive pension income who took CERB and bragged about it. The word was out that anyone could collect CERB and lots took it with the hope that they could sneak it by.
I think it’s fantastic that CRA is going after some of the scammers.

#140 Greg on 05.18.22 at 9:50 pm

The lockdowns in China do not have to end. They have declared DEFCON so it’s not just about the Covid thangy. It appears they are actually getting ready for a real military conflict with the USA. Both China and Russia have stated their policies, and it seems the USA govtards in charge are not respecting that at the moment, hopefully that will change.