The next one

It’s another big week, kids,

Three more sleeps until the central bankers show us how much spine they possess. Markets are betting the BoC rate jumps a fat half-point Wednesday morning (with more to come). That’ll jack the bank prime to 3.7%, give VRMs a three-handle and hike the cost of HELOCs – all hundreds of billions of them.

So prepare. (The US Fed moves soon, too – June 15th – with a halfer coming there.)

Also, what about stock markets? After seven weeks of serious shedding, last week was a forest of green arrows with all major indices advancing. Was this a dead cat bounce? Or did we hit bottom when the S&P 500 was down 17%? Is the correction over, now there there’s the faintest of signs inflation has topped and CB rate hikes might pause (but not reverse) come September?

Unknown. We’ll see. But here’s a really nifty indicator – doing the reverse of what most people are busy with.

This blog has detailed the extreme bearish sentiment among investors. We even gave you a chart. Doug, Ryan and I have all commented on (a) how short-term many people think and (b) how folks always seem to get things wrong. The latest example is a stunner: Canadians pulled $5 billion from mutual funds last month in the middle of the equity-selling storm. What a reversal from the previous few months, when people were buying in bulk.

Now, we hate mutual funds (so should you). The fees are crazy. They can be very tax-inefficient. Hardly any beat the market. They can lack liquidity. But the fact remains Canadians have $1.914 trillion in these suckers, and they make up the bulk of most retirement savings.

The point is clear, however. When markets are rising, people buy funds at ever-higher NAVs. When markets reverse, fall, slid into correction and clouds gather, they bail. Buy high. Sell low. Worse, many sellers must pay even more fees (in the form of deferred sales charges) just to get their own money back from the mutual fund prison.

Human nature. It’s not on our side.

Now, houses. Same story. In February it was buy-anything-at-any-price, with rampant FOMO, multiple offers, rapacious realtors holding blind auctions, scant inventory, intense competition and historic valuations – especially in hick, rural and exurban locations, for the first time ever. Since then listings have ballooned, prices have dropped, the competition has gone, offer nights are getting no offers – and buyers have retreated.

All it took was a few rate hikes. Not more houses (we don’t have a supply problem). Not creating more demand (like with that crazy FHSA, coming in the spring). Not kicking out foreign buyers (who never moved market prices). Just the obvious – that when credit costs more, people will use it less. With interest rates rising, houses must become cheaper merely to maintain the existing affordability level.

By the way, for those readers who follow the GTA and its surrounding Bunnypatch, here’s a chart of the latest price declines, courtesy of realtor John Pasalis (who still hates me).

Source: John Pasalis, Realosophy. Click to enlarge.

Oh, and this is an interesting tweet from a broker running a real estate operation in the east end of the metropolis. She asked followers who had purchased a home in the last six or eight months if they were feeling buyer remorse at having (obviously) paid too much during a period of buyer insanity.

A few hundred people responded thusly:

Finally, while people can buy mutual fund units (or ETFs or equities) with a few hundred bucks, real estate was been shoved into the stratosphere by (a) cheap rates, (b) Covid cocooning and WFH (c) the Bank of Mom and specking, plus (d) our weird tax system which whacks capital gains on a portfolio but hands over house profits untouched. Until a politician grows a set and ends the distortion, properties will stay out of reach for the young.

For example, National Bank is reporting it now takes an income of $228,100 to afford the average Toronto house and earnings of $144,644 to buy and carry a condo. A new BNN survey underscores the insanity of what we’ve done with 40% of homeowners saying they’re worried about finances and fewer than half stating they could afford $200 more in monthly mortgage costs. And yet almost four in ten families with mortgages are facing renewals in the coming months, at rates which have damn near doubled from five years ago.

As this blog predicted some days ago, financial markets will recover far sooner than will real estate. Once rate hikes end later this year (should that happen), we will be setting new record highs. But mortgages will not have declined, house debt will not have diminished and incomes will not have shot higher.

Ask your neighbour or the guys at work what they think you should do. Do the opposite.

About the picture: “Your change in pictures theme have reminded me,” writes Sasa,  “that I’ve got some to offer. No comments necessary; the pic speaks for itself. This is the cat walk at Santorini Promenade.”

94 comments ↓

#1 Felix on 05.29.22 at 4:59 pm

Finally, some respect.

#2 Søren Angst on 05.29.22 at 5:01 pm

With all this RE price drops talk thought I would revisit Wealth of Cdns. Here is the data I sliced and diced from StatCan.

Overall Cdn Wealth Table. LHS are Total Numbers with Median & Average per Person on the RHS.

https://twitter.com/bsant54/status/1530994225164189702

StatCan reference in Tweet for the adventurous.
—————————
BIG PICTURE

When the Mean or Average is >> Median, you have skew like this:

https://twitter.com/bsant54/status/1530995893893210112

—> Wealth concentrated in the hands of the few.

Captain Obvious when you look at CRA 2019 tax filer income brackets (27,847,910 tax filers total, All Ages):

1.3%, 364,140 tax filers make $202,800 or more.
1.6%, 451,420, $142,353 – $202,800.
5.7%, 1,595,340, $91,831 – $142,353.

and for comparison…

66.2%, 18,421,660, $45,916 or less

Wealth in the HANDS OF THE FEW.
—————————
NEXT CAPT. OBVIOUS, most of Cdn wealth is in RE. Took a look at what happens if RE asset values drop by 20%, 30% and 40% (above ref. table, bottom right, yellow highlighted) and at a 30% drop this much wealth is wiped out, Average or Median:

—> About 1/3 ONE THIRD

If that puts Cdns in an ugly mood I don’t know. But it cannot be good for the psyche.
—————————
OTHER tidbits I found interesting, look at the Numbers or %’s:

– Cdns do not like Mr. Market (Mutuals, Stocks & Bonds) – uphill battle for you Garth *.
– Cdns prefer putting money into RRSPs than TFSAs.
– Entrepreneurial high enough (Equity in Business).
– 1/2 of Cdns DO NOT have a company pension plan (EPP) & for those that do, the $ values are not that high.
—————————

Those are the numbers. Argue Gov handouts during Covid with RE prices up since then but so were mortgages, in $ terms. Reasonable snapshot of what will happen to Cdn wealth if RE prices drop.

The FEW will feel pain, the MANY will feel much more pain.

* Considering that only 10.3% of Cdns own Stocks or Bonds, how many of you that read this Blog are doing so vicariously?

#3 Felix on 05.29.22 at 5:07 pm

Correction:

The phrase is “dead dog bounce”

#4 Born in Hamilton on 05.29.22 at 5:15 pm

Are there no “Indexed” Mutual funds in Canada? South of the border we have tons of them to choose from.

#5 crowdedelevatorfartz on 05.29.22 at 5:16 pm

It’s gonna be an interesting next 6 – 12 months in the Real estate game.

#6 Irish Stew on 05.29.22 at 5:20 pm

Listings show the date accepting offers.
After that date passes – the listing is updated to remove the comment.

There are no multiple offers higher than asking any more in our SW region.

#7 Søren Angst on 05.29.22 at 5:21 pm

But the fact remains Canadians have $1.914 trillion in these suckers, and they make up the bulk of most retirement savings. – Garth

————-

Seems on the high side Garth, i.e., big chunk of change of private pension assets. Also, mutual funds and the like $424,558,000,000 or $424 billion.

Regardless, STAGGERING amounts of CASH.

——-

2019 per StatCan.

Const 2019 $ x 1,000,000

Private pension assets 3,945,309 comprised of:
– RRSPs, RRIFs, LIRAs and other * 1,432,188
– Employer-sponsored Registered Pension Plans EPPs 2,513,121

Financial assets, non pension 1,544,715 comprised of:
– Deposits in financial institutions 384,039
– Mutual & investment funds & income trusts 424,558
– Stocks 197,227
– Bonds (saving and other) 27,891
– Tax Free Saving Accounts (TFSA) 248,859
– Other financial assets** 262,142

Total:

$5,490,024

* Other includes Deferred Profit Sharing Plans (DPSPs), annuities and other miscellaneous pension assets.

** Includes Registered Education Savings Plans (RESPs), treasury bills (1999 and 2005 only) mortgage-backed securities, money held in trust, money owed to the respondent and other miscellaneous financial assets, including shares of privately held companies.

https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110001601

#8 JOHN PICKETT on 05.29.22 at 5:23 pm

Kind of odd that when I took a bike ride through a new 50 lot subdivision that there were 3 new For Sale signs on 3 of the new houses. People have barely been in them a year and they are selling them. Maybe there is some truth that we are going to get hammered with declining house prices. Again. My sister bought a semi-detached in the early 1990’s and she was under water for over 10 years. We have to go back to what houses are for: shelter. Not a get rich scheme. I always worry that North American markets are like the Nikkei in 1989. Too many problems in the world to be heavily in the stock market: war in Ukraine, Biden confiscating other people’s assets (yachts, oil tankers etc.). Kind of makes Fidel Castro look like in 1959 to be an honest politician. JOHN PICKETT

#9 islander on 05.29.22 at 5:24 pm

Greek cats rule!
..and yes ,Garth, – “our weird tax system which whacks capital gains on a portfolio but hands over house profits untouched” is totally unfair to renters.

https://www.theglobeandmail.com/business/rob-magazine/article-the-homeowner-tax-exemption-isnt-fair-to-renters-and-should-be/

“Homes today are absolutely an asset class. They provide financial security for retirees, income streams for Airbnb hosts or, indirectly, tax-free investment vehicles … Contractors, realtors and speculators buy, renovate and flip houses to drive up their resale value, while developers market condos to investors.”

How is this NOT taxable?

#10 Sam on 05.29.22 at 5:28 pm

Bear market bounce. Rates stop going up in September. Rates start to go down in 2023. Stocks and real estate resume upward trend. Rinse repeat until endless fiat money printing truly ends or people lose faith in the fiat money. Oh am asteroids are getting closer to earth. We are just small organisms in the universe.

#11 Gen Z on 05.29.22 at 5:40 pm

If I was as rich as Elon Musk by inheriting wealth from a mine in apartheid South Africa, I would have wagered a bet that the BOC will NOT raise interest rates from now on.

They might even CUT rates because what about the HELOC Boomers who took second mortgages to fund their vacations while the entire Canada is locked down for their health and safety?

#12 Søren Angst on 05.29.22 at 5:45 pm

A lot of wealth is going to get wiped out Garth.

I mean your chart of RE price drops, that’s just after 1 measly 0.5% rate hike?

What happens by the end of the year?

It does not look good to me Garth. Pretty sure Cdns are going to dig in their spending heels which will not bode well for the economy, 60% of GDP Consumer driven in Canada.

There may well be a recession next year. Maybe earlier?

————–

That informal survey, that floored me. 1/2 can’t afford to buy. No kidding with incomes as they are vs. home prices. Have to see if Sellers are willing to take the hit on price?

40% renewing next 4 months at higher rates, may end up with people getting out at any selling price as mortgages are unaffordable?

Very good Blog today. Lays it on the line what is coming from where Canada is at today. Heady (scary) times to come.

#13 Flop… on 05.29.22 at 5:53 pm

Flop Drops.

Recently shared an article about the minuscule amount of real estate in Greater Vancouver, and Canada for that matter under 200k

There are a few condos here and there, normally with lease agreements.

I showcased the cheapest options in Vancouver proper, most of which are leaky condo types of projects.

One that was asking 283k, went for 240k, but it’s hardly a bargain when the new owners have to stump up another 240k combined in 3 special assessment payments.

Under 300k happens occasionally in Richmond, Surrey and beyond, leaky condos on the Eastside, so this studio on the Westside priced at 299k to get the competitive juices of of potential buyers was enough to Earn the Flop Drop Price Sticker, so we’ll click on the love heart tab and see how high above the asking price it actually goes for.

The place is only 20 years old, so it’s not ancient by any means, a similar sized place in Flopville just went for 417k, but they couldn’t fire sale it because they overpaid for it in 2018.

Let’s focus on this one for now.

The details…

PH4 1503 w 65th Ave, Vancouver.

Asking 299

Assessment 357

Tried to offload it for 419, back in 2019

So, if the market is holding it should go for close to what they wanted back in 2019, any less than that means the Westside/ Eastside line is getting more blurred.

It’s only 417 square feet.

Advantage of living in such a small place include less time spent looking for the car keys…

M47BC

https://www.zealty.ca/mls-R2691155/PH4-1503-W-65TH-AVENUE-Vancouver-BC/

#14 VladTor on 05.29.22 at 6:06 pm

Garth….Was this a dead cat bounce?

*********
Fed res printed unbelievable in human history (starting from dinosaurs era) amount of money.

How they going to fix this problem? No solution for now.

So, I would say … it can be dead dog bounce!

Central banks do not print money. Pepe is wrong. – Garth

#15 Søren Angst on 05.29.22 at 6:06 pm

You really struck a chord with me today Garth (liked it all a lot). This data here you mentioned:

40% renewing next 4 months at higher rates.

THAT is a lot of people. Went back to the StatCan table (prior Comments) and got this (Economic Families + Persons not in an Economic Family) – NUMBER OF:

Own a RE Asset:
Principal residence 9,850,000
Other real estate 2,789,000

Have a Mortgage:
Mortgage on principal residence 5,500,000
Mortgage on other real estate 1,055,000

So, 6.555 Million families, persons @ 40%

= 2.622 Million renewing in the next 4 months.

——————–

This will not end well Garth.

It won’t. Some will have to bail. Prices will drop a lot more than people think and faster. Especially when you consider 2/3 of Cdns make $46K or less a year.

#16 Ponnaps on 05.29.22 at 6:09 pm

8% on average drop across the gta… not a lot considering prices have shot up 30%+ over the last year and prices rise 6-8% yoy (ave over the last decade).

What’s basically happening is individual home prices are holding steady, people are just dropping down the affordability chain.. resigning to the reality of having to settle for lesser house based on reduced affordability .. this pattern will continue as long as there are buyers in the market and that pipeline is still strong ..

A drop pf 8% in a month… is in fact, a lot. And look at the boonies. – Garth

#17 VladTor on 05.29.22 at 6:09 pm

Garth…. realtor John Pasalis (who still hates me).

**********

As I understand this is a funny joke. He is probably in reality one of yours friends.

BUT…. Garth, you repeated this sentence so many times in blog. Can you briefly tell us what reason was to born this joke.

#18 Grunt on 05.29.22 at 6:10 pm

Ask your neighbors & coworkers. Do opposite.

Right on Garth. Most haven’t heard. Don’t know.

Me sis still thinks her Leslieville row fixer upper is worth 1m.

#19 The Regulator on 05.29.22 at 6:24 pm

# 1 – Felix, please consider the coolest cat of all: Fat Freddie’s cat, kitty. You can find her on YouTube under “Freak Brothers”. Enjoy!

#20 Søren Angst on 05.29.22 at 6:27 pm

#10 Sam

Rinse, repeat.

#11 Gen Z

Cut rates.

———————-

Neither of you understand what high inflation does to an economy. Recall 10 days ago what happened to retailer stocks, profit with lower earnings due to inflation & supply side issues.

Inflation: People buy less. Wages go up.

“Retail giant Target reported a shocking 52% fall in profits for the first quarter of this year, blaming supply chain disruption and the fall in consumers’ buying power for the decline. On Wednesday alone shares in Target fell by 25%, the company’s worst day on the stock market since 1987.

Similarly Walmart’s stock recorded its worst day in 35 years earlier this week after posting a poor earnings report. The company’s financial outlook also worsened due to the increase cost of labour and shipping.”

—————-

Neither of you have lived thru high inflation times like us Paleos.

CBs will not stop until inflation is stomped down for obvious reasons lost on the 2 of you.

You are living in Netherland if you think rates are coming down any time soon. And it takes years to bring inflation down.

No magical wand for either of you, sorry.

#21 Linda on 05.29.22 at 6:37 pm

Very fine cat walking:)

The RE chart provided by the one who hates is revealing. Richmond Hill has declined by very little whereas Oshawa & Milton have dropped substantively in valuations. This is why location matters when purchasing RE. Also revealing is the survey results regarding buyer’s regret. Somewhat reassuring that over 50% of those who responded said they couldn’t afford to buy. While that may be frustrating for them presumably it also means they are not carrying more debt than they can manage, so perhaps it won’t be the apocalypse as rates rise for those folks.

‘hundreds of billions’ of HELOCs? Say it isn’t so! Do people actually have multiple HELOC’s? Can one get more than one per house? Surely the lender of choice would make sure they were the one & only when it comes to loans of that nature?

#22 Quintilian on 05.29.22 at 6:47 pm

As the cost of money rises, inevitably non-productive assets sensitive to interest rates should drop.

Makes sense, however I don’t think the sales and price drops in some areas are caused by the latest rate hikes.

In fact, the hikes nudged the sideliners to jump in.

Jump in before the rates head higher thinking.

Faulty logic, but that is how most prospective purchasers afflicted with FOMO reason.

The drop in sales and prices was coming.

I think once, what is now, a diminishing pool of “rushers before rates go up” dries up; the drop in prices and sales may displace the stock market plunge headlines.

Tick Tock, Tick Tock.

#23 Russ on 05.29.22 at 6:47 pm

VladTor on 05.29.22 at 6:09 pm

Garth…. realtor John Pasalis (who still hates me).

**********

As I understand this is a funny joke. He is probably in reality one of yours friends.

BUT…. Garth, you repeated this sentence so many times in blog. Can you briefly tell us what reason was to born this joke.
===============

Hey V lad,

It is good of you to ask for clarification on things you don’t understand. No shame there.

Their relationship goes back to the time when Smoking Man was still alive, when Christ was a cowboy or Harper was relevant.

Try reading through 2008 archives, go with God my son…

Cheers, R

#24 Flop… on 05.29.22 at 6:58 pm

I’ve documented on here how working for monied people on the Westside of town during The GFC late in The Noughties Decade, people were paying attention to the real estate meltdown south of the border, it was enough for a small correction here, before the market caught fire again and roared towards 2016.

I’ve seen the odd report about things get overheated down there in recent years, Covid nuked the international business for markets like New York and Los Angles.

Daily Mail is hardly the go-to place for real estate news but when I went to check out the footy scores the other day the US Hompage come up instead.

Anyway, it’s been doing the social media circuit since, problems in places like Boise, Idaho, probably won’t get to many excited but when places like Portland, Philadelphia, and New Orleans supposedly is getting the wobbles, the latter hardly known for luxury real estate, then a few more might start taking notice.

The article noted various sources including a recent report from Moody’s and as Realtor.com noted the national average has risen by more than 30% in recent times

“Despite sellers lowering prices across the country, the average house price in the United States in April was $425,000, up more than 30% from 2020, according to Realtor.com.”

Moody Blues.

“A Moody’s study found that in 392 of the largest housing markets in the US, over 95% have house prices that are overvalued against local incomes. 

The study highlighted Boise, Idaho, where house prices are a whopping 73% above what Moody’s say they should be.”

They don’t have Bunnypatch, but there’s a town in Washington State named Humptulips, so we’ll just tell everyone to go Humptulips if the want affordable real estate…

M47BC

https://www.dailymail.co.uk/news/article-10862005/Sellers-slashing-prices-levels-not-seen-pandemic-market-rapidly-cools.html

https://en.wikipedia.org/wiki/Humptulips,_Washington

#25 Flop… on 05.29.22 at 7:04 pm

I didn’t cite or criticize the National Association of Realtors, for various reasons in my previous post.

National Rifle Association, National Association of Realtors, doesn’t matter, if you mess with either organization you’re most likely to get your head blown off..

M47BC

#26 45north on 05.29.22 at 7:06 pm

Søren

Søren (Danish: [ˈsœːɐ̯n̩], Norwegian: [ˈsøːɳ]) or Sören (Swedish: [ˈsœ̌ːrɛn], German: [ˈzøːʁən]) is a Scandinavian given name that is sometimes Anglicized as Soren. The name is derived from that of the 4th-century Christian saint Severin of Cologne,[1] ultimately derived from the Latin severus (“severe, strict, serious”). Its feminine form is Sørine, though its use is uncommon. The patronymic surname Sørensen is derived from Søren.

https://en.wikipedia.org/wiki/Søren

#27 45north on 05.29.22 at 7:07 pm

Søren

A lot of wealth is going to get wiped out Garth.
I mean your chart of RE price drops, that’s just after 1 measly 0.5% rate hike?
What happens by the end of the year?

that’s what I think

Garth: A drop pf 8% in a month… is in fact, a lot. And look at the boonies.

8% a month is huge. I’d say the market is in freewill.

#28 Nonplused on 05.29.22 at 7:17 pm

“plus (d) our weird tax system which whacks capital gains on a portfolio but hands over house profits untouched. Until a politician grows a set and ends the distortion, properties will stay out of reach for the young.”

I still fail to see how taxing primary residences will make them cheaper. All it will do is hoover up retirement money from home owners. Some things to consider:

– A primary residence is not a business or a financial investment, it is a consumer product. People don’t buy their primary residence to make money (at least not normally), but to avoid rent by eventually owning the property outright. It’s no different than buying a car rather than leasing, except the house lasts longer.

– Primary residences are already taxed at the municipal level and the tax is substantial. Few if any people actually make much money on their primary residence once all the taxes are accounted for.

– Outside of bubble areas like YYZ and YVR, much of the rise in house prices can be explained by inflation. Taxing inflation is terrible policy.

– Speculative and investment real estate is already taxed. So are cottages, although I have questions about the logic of that as well. Unless the cottage is being rented out it too is a consumer item, and if it is being rented out it is the income that should be taxed, not the structure.

– I would challenge anyone to come up with a case where taxing something made it cheaper. I know of not one case.

– If anything, taxing primary residences will put upward pressure on list prices as sellers attempt to recover some portion of the tax. After all, somebody has to pay it.

– Real estate gains are seldom real gains. You can’t sell the house you have, buy another one similar, and show a profit. They all go up together. Therefore a house is a house is a house. They don’t reproduce like cattle or show increasing profits like successful businesses. Therefore we can conclude that taxing primary residences would not be much different than taxing checking accounts.

I know governments would like nothing better than to tax inflation. What’s not to like? They create the inflation by printing too much money, and then take half your house based on the inflated price.

Nothing that does not turn a profit should be subject to capital gains. Chances are it’s just inflation. The dividend hasn’t gone up, but the cost of ownership probably has.

#29 Chris on 05.29.22 at 7:27 pm

Remember: if you follow the herd, you’ll end up stepping in poop

#30 wallflower on 05.29.22 at 7:28 pm

Did that cat get dickswan?
I mean, swan?

#31 Ian on 05.29.22 at 7:33 pm

Hi Garth,

Would love to hear your thoughts on retirement for millennials and Gen Z who don’t and will never afford real estate. We all know CPP and OAS are really top ups, but even for a lot of millennials, paying off school, high rent with roommates, there is little left for savings at a rate that would sustain a retirement. I’m not saying it can’t be done, but I don’t believe the average renting millennial has a balanced and diversified portfolio, rich parents and scheduled savings rate or pension. We are years out, but eventually this large voting block might start to realize they need more to retire then they have saved or could have saved. Let’s be honest, a lot of boomers were facing a similar situation before housing took off and it’ll save a bunch of them. What of the next generation who can never buy, or save a few million,… each!

#32 wallflower on 05.29.22 at 7:36 pm

Are there no “Indexed” Mutual funds in Canada? South of the border we have tons of them to choose from.
?????
Dude, that is just super weird.

Why would ANYONE buy an indexed MF when loads of
index ETFs are available?

#33 BCWally on 05.29.22 at 7:36 pm

I have to ask on just what stats support no shortage of housing. That must be a population to homes built ratio.
I’m assuming those stats don’t include the 31% of homes in Ontario and BC that are owned by persons who have a home already (multi home investors), at least according to a fed gov’t survey started in 2017 and reported by no other than Bloomberg.
That figure was before Covid struck. Wonder what it is now.

#34 Dr. Doolittle on 05.29.22 at 7:37 pm

Fantastic cat photo! Sissy that walk!

#35 Søren Angst on 05.29.22 at 7:38 pm

In the wouldn’t that be something Department:

“Vladimir Putin may be dead with body double taking his place, MI6 bosses claim”

https://www.dailystar.co.uk/news/world-news/vladimir-putin-dead-body-double-27089711

[I love UK tabloids, all the dirt, entertaining no matter what – when it comes out on BBC, then I will believe]

—————–

More likely this from Oz:

“Vladimir Putin sick with cancer “has three years to live”

https://www.youtube.com/watch?v=SeWB8Gu9Z5s

3 more years of Putin.

Only the good die young.

#36 Marc Roger on 05.29.22 at 7:41 pm

What would happen if the CG inclusion rate were lowered to 25% but made to apply to house sales as with other investment gains?

#37 Price Dump Math on 05.29.22 at 7:43 pm

It always amazes me that people think that you need a 30% drop in prices to get back to the same place that you started at after a 30% jump in prices.

Let’s do the math:

Initial starting point: $1,000,000
add in a 30% jump = $1,300,000

OK so far?

Now lets knock 30% off:
$1,300,00 x 0.7 = $910,000

Whoa! You lost an additional $90K!!

In fact it only takes a 23% retrenchment to knock out a 30% gain.

A 50% retrenchment knocks out a 100% gain.

Math is funny. The numbers aren’t.

#38 millmech on 05.29.22 at 7:48 pm

Good take on the market and rising rates.
https://www.youtube.com/watch?v=U3m904j2RtM

#39 BC Doc on 05.29.22 at 8:00 pm

Dead cat bounce.

Get your bell bottom jeans out of the attic, Garth— we’re going back to the 1970s!

BC Doc

PS— I’m old enough to remember when gas was 25 cents a gallon, lining up at the gas station during the Arab Oil Embargo (allowed to fill up on odd/even days depending on the last number of your license plate), Archie Bunker playing on our TV set, and…. gee, our old LaSalle ran great.

#40 Ponnaps on 05.29.22 at 8:18 pm

A drop pf 8% in a month… is in fact, a lot. And look at the boonies. – Garth

It is a lot.. but doesn’t mean the next rate hike will precipitate things further leading to a compounded downward spiral as one may impute.. what we are seeing now is a market in shock,trying to figure things out ..which it will ..like it always has.. prices will level set ,then continue to ascend slowly and assuredly

June 1st and after will prove whether this hypothesis is right.

#41 Summertime on 05.29.22 at 8:32 pm

Re: Watermelon prices/deflation stupidities from Shawn

Shawn, this is exactly what I would expect from you or from a person with your intellect and ignorance in terms of thinking.

Watermelon prices are seasonal and depend on source – import vs, local.

Watermelons are also quickly perishable products and as of that have no global markets.

It also is a raw product with no additional refining.

Majority of food – grains, milk derivatives etc. is not that quickly perishable and has global markets. Good luck in seeing deflation in that. You as a local, individual consumer have absolutely no saying in what the global price will be.

And yet the prices of many perishable products like fruits and vegies is going up an up an up, if we exclude seasonality.

Please stop posting stupidities, is is so embarrassing.

Deflation occurs only in your brain.

#42 Shawn on 05.29.22 at 8:34 pm

25 cena a goolon gasoline?

#39 BC Doc on 05.29.22 at 8:00 pm
Dead cat bounce.

Get your bell bottom jeans out of the attic, Garth— we’re going back to the 1970s!

BC Doc

PS— I’m old enough to remember when gas was 25 cents a gallon, lining up at the gas station during the Arab Oil Embargo (allowed to fill up on odd/even days depending on the last number of your license plate), Archie Bunker playing on our TV set, and…. gee, our old LaSalle ran great.

***********************************
Not sure I believe 25 cents per gallon. Maybe 50 cents circa 1972? Seems to me it was close to $5 for 5 gallons of gas and a quart of oil to mix with the gas for the old two stroke snowmobiles circa 1972.

Gasoline was about 25 cents per liter in the early metric days circa 1979.

And what of it? The minimum wage was under $2.00 in 1972 and it probably took more hours of work to fill the gas tank than today. Certainly gas was cheaper in terms of hours of work until this recent rise. Add in better fuel efficiency and gasoline is certainly cheaper (takes less hours of work to go 500 km) today than in 1980.

#43 Linda on 05.29.22 at 8:36 pm

#31 ‘Ian’ – TFSA. Open one & make the maximum contribution every year. Don’t just leave it in cash, invest it as Garth has outlined in more than one column. NEVER touch it for ‘stuff’ you don’t need. Let it grow.

If you are going to say you can’t set aside $6,000 in any given year because life costs too much, I’d say examine how you spend what you earn. Do you buy yourself coffee, snacks, lunch etc. every day or do you brown bag it? Party much? Enjoy after work drinks with friends? Smoke? Wear the latest designer duds? How often do you go on vacation & where? What sports or hobbies do you participate in? And let us not forget bandwidth. Cell phones, internet, streaming services etc. can add up to one whopper of a monthly bill. YOLO is all very well when you are young, healthy & feeling frisky but unless you plan to croak before you are old enough to retire the only way to ensure those golden years are actually golden is to use the tools you were given. Keep in mind growth in any TFSA is also not taxable. $6,000 a year is $115 a week. The easiest way to ensure you save it is to have it automatically deducted from your salary. Then learn to live on what is left.

#44 Summertime on 05.29.22 at 8:46 pm

#28 Nonplused on 05.29.22 at 7:17 pm

Yep,

You are absolutely correct on inflation.

And yet your logic and reason stands no chance against the brainwashed idiots who say that there is no inflation or who think that they are richer and even wealthy as their decaying low grade and quality dwellings ‘rise in value’ while their kids’ standard of living (if they can afford any kids) can not afford s..t.

The value of the underlying measure called ‘money’ is quickly deteriorating, due to very, very bad monetary policies, that’s all. How is it called ‘money’ when it is not a long term store of value and has negative real interest rates are interesting interesting questions. It seems like coupons with expiration value to me.

The negative real rates is the killer here as central bankers will have rates topping at 2-2.25 % with CPI approaching double digits and real inflation as measured in the 70-es and 80-es doubles that and with global shortage of energy and fertilizers, soon food.

I am sick and tired of this ‘peak and transitory inflation
stupidities.

We are both hitting global resources limitation political instability and have been expanding the money supply rapidly and beyond any reasonable limits.

#45 crowdedelevatorfartz on 05.29.22 at 8:48 pm

@#39 BC Doc
“Get your bell bottom jeans out of the attic, Garth— we’re going back to the 1970s!”
+++

When doctors made house calls……?

#46 crowdedelevatorfartz on 05.29.22 at 8:58 pm

A recent poll in Asia asking parents why they were having fewer children.
1. Fewer marriages and children out of wedlock are almost unheard of.
2.The cost of raising children and the extra schooling/tutoring costs
3.The high cost of housing causes parents to delay having kids. ( for every $10,000 increase in housing led to a 2.4% decrease in fertility).

The perfect “balanced” “replacement” ratio is 2.1 children per couple. Where the population would remain constant.

China is currently at 1.3 children per couple.
Japan is 1.3
Hong Kong, Macao, Singapore, South Korea and Taiwan vary from 0.8 to 1.1.
Canada is 1.47.

Low unemployment rates may be with us for decades regardless of interest rates and inflation..

#47 Victor Llearna on 05.29.22 at 9:00 pm

Learned great new word ‘rapacious’ in this article. Going to try to use it 10 times in sentences at work tomorrow.

#48 The Regulator on 05.29.22 at 9:05 pm

B.B.C.B.C.N.N.B.C.B.S or SCTV. I trust the last one.

#49 DaveDorf on 05.29.22 at 9:18 pm

I hear some variation of the “X% of families are Y$ away from financial ruin” every month.

#50 PeterfromCalgary on 05.29.22 at 9:22 pm

” (d) our weird tax system which whacks capital gains on a portfolio but hands over house profits untouched.”

Shh don’t give Freeland any ideas.

#51 The Awakened One on 05.29.22 at 9:31 pm

Ha, Garth has posted a kitty pic! The market will do something funny; buy, buy, buy signal !

#52 crowdedelevatorfartz on 05.29.22 at 9:32 pm

New Liberal Gun Legislation announcement tomorrow.

I’m surprised they don’t wait until Jun 1st to hide the interest rate increase.

New gun regs on top of the multiple guns regs won’t make a bit of difference for illegally obtained guns especially when the gang offenders can immediately post bail or are handed a slap on the wrist upon conviction.

#53 LesserApe on 05.29.22 at 9:34 pm

our weird tax system which whacks capital gains on a portfolio but hands over house profits untouched. Until a politician grows a set and ends the distortion, properties will stay out of reach for the young.

This suggests to me that you think this would be a good thing, which surprises me.

If the government were to do this, you’d end up with reduced labour mobility. People would decline taking desirable jobs because they wouldn’t be able to sell their house and buy an equivalent new house in the new location.

Suppose you’re offered a promotion with an extra $50K a year attached to move from Vancouver to Toronto. You’d have to evaluate that against losing, say, $200K in housing taxes in the move. (Ignoring the adjusted cost basis, it would be 8 years to get back to even, because that $50K is a net $25K.) You end up with a less productive economy with people in non-optimal jobs.

Or even just people who, in middle-age, take a job in the burbs and suffer an insane commute for years because they don’t suffer the tax hit when they move closer to their job. People with changing life circumstances would be more likely to suffer longer with an inappropriate living space than sell to move to something more appropriate to their current lifestyle.

Seems like a terrible thing for both the economy and Canadians’ standard of living.

#54 Bob Loblaw on 05.29.22 at 9:47 pm

Finally Garth addresses the elephant in the room: the capital gains exemption on real estate. It’s long overdue.

#55 The joy of steerage on 05.29.22 at 9:55 pm

#45 crowdedelevatorfartz on 05.29.22 at 8:48 pm

@#39 BC Doc
“Get your bell bottom jeans out of the attic, Garth— we’re going back to the 1970s!”
+++

When doctors made house calls……?

That would be the 1870s….

#56 Ponzius Pilatus on 05.29.22 at 9:59 pm

The Next One is Connor McDavid.

#57 Gen Z on 05.29.22 at 10:04 pm

Soren Angst,
I was being sarcastic.
It is the home owners in deep mortgage HELOC debt who bought a tiny cottage in Wasaga Beach or Norland, ON for a million who are begging the BOC to cut rates.
Not me. I am a nihilist. I like to see a rate hike.

#58 Dr V on 05.29.22 at 10:29 pm

53 Ape 54 Bob

Maybe treat it similar to how the Americans do.

https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp

#59 kommykim on 05.29.22 at 10:49 pm

RE: #4 Born in Hamilton on 05.29.22 at 5:15 pm
Are there no “Indexed” Mutual funds in Canada? South of the border we have tons of them to choose from.

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

Yes there are.
TDB900, TDB902, etc from TD bank.
RBF557, etc from Royal bank.

But these are falling out of favor because there will be a ban on discount brokerages collecting trailing commissions from mutual funds. So now, most brokers will charge a trading fee which negates any advantage they had before.
Maybe still viable in a non-trading account…

#60 crowdedelevatorfartz on 05.29.22 at 11:24 pm

@#55 Steerage
“That would be the 1870s….”

+++
I remember being a very sick young lad with chicken pox in the 1960’s and the doctor paid a house visit. I couldnt go out of the house due to the pox.
Black bag, stethoscope, the whole rigmarole.

Today?
A Monkey pox diagnosis via Zoom and a vaccine dropped off by Amazon…..

#61 Km on 05.30.22 at 12:27 am

It seems we still have our resp in mutual funds with the nice lady at the bank. When would be a wise time to move them to our Etfs instead or does it even matter? We currently use wealth simple until we have enough for a professional money manager. Still doing better with them than we ever did with the bank.

#62 Bileth on 05.30.22 at 1:33 am

Disagree that foreign money has not distorted the market at all. If foreign money is out bidding high end properties, it trickles down to your entry level 1 br condo.

Genuinely interested in a rebuttal to the above theory.

#63 BC_Doc on 05.30.22 at 1:51 am

Shawn on 05.29.22 at 8:34 pm
25 cena a goolon gasoline?

#39 BC Doc on 05.29.22 at 8:00 pm
Dead cat bounce.

Get your bell bottom jeans out of the attic, Garth— we’re going back to the 1970s!

BC Doc

PS— I’m old enough to remember when gas was 25 cents a gallon, lining up at the gas station during the Arab Oil Embargo (allowed to fill up on odd/even days depending on the last number of your license plate), Archie Bunker playing on our TV set, and…. gee, our old LaSalle ran great.

***********************************
Not sure I believe 25 cents per gallon. Maybe 50 cents circa 1972? Seems to me it was close to $5 for 5 gallons of gas and a quart of oil to mix with the gas for the old two stroke snowmobiles circa 1972.

Gasoline was about 25 cents per liter in the early metric days circa 1979.
*********************************************

This was in America. Boston, Massachusetts to be precise. Circa 1972-73, and yes, per gallon as Americans don’t do metric nor do they believe in Canadian style gas taxes.

By 1979, we’d move on to Donna Summers (a Dorchester, Massachusetts gal) and disco!

#64 BC Doc on 05.30.22 at 2:00 am

crowdedelevatorfartz on 05.29.22 at 11:24 pm
@#55 Steerage
“That would be the 1870s….”

+++
I remember being a very sick young lad with chicken pox in the 1960’s and the doctor paid a house visit. I couldnt go out of the house due to the pox.
Black bag, stethoscope, the whole rigmarole.

Today?
A Monkey pox diagnosis via Zoom and a vaccine dropped off by Amazon…..

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

My GP who’s a good old school doc still makes house calls to his frail, elderly patients.

I work ER so I always see my patients face to face, despite Covid, SARS, MERS, Ebola, TB, you name it….

Zoom unfortunately has been a pox in itself on the practice of medicine. William Osler gowned up and went into the small pox ward to see his patients– over one hundred years later, he continues to set the bar for me as to what it means to be a physician. Time for people to get back into the office.

#65 A.C on 05.30.22 at 2:27 am

So are rents gonna go up in the near future? With rising rates and all that?

#66 Diamond Dog on 05.30.22 at 4:52 am

Canadian and U.S. markets are different fruits, of course. Canada has been resilient because commodities have been on a tear. I mean, look at this chart:

https://www.cnbc.com/quotes/@CL.1

And this one:

https://www.cnbc.com/quotes/@NG.1

How could investors go wrong spreading it out on energy?

Or metals:

http://www.kitcometals.com/

China is wobbling from Covid restrictions and an unwinding property bubble and metals have slipped a mere 10%.

U.S. markets are another story. There will be technical rallies (had one last week, likely to continue for another week and change). That’s good right? Problem there is the Fed raising rates during a slowing economy. Doing it to fight inflation… finally with half point rate hikes monthly over the next few months unless something breaks. Wouldn’t it have made sense though to raise rates 9 months ago when the economy was still growing and inflation was rising then?

It really makes one wonder why the Fed slow rolled raising rates. When we explore the potential reasons:

1) Fed reserve in disarray (scandal)
2) Governor confirmations held up
3) The everything bubble
4) Working in co-ordination with the European CB and elsewhere
5) War in Europe
6) Politicization of the Federal reserve
7) Human error

There is an argument to be made for a Fed in disarray. The former vice chair Clarida and his right hand both set the course for monetary policy for the Fed until Clarida stepped down over scandal:

https://www.cnbc.com/2022/01/10/fed-vice-chair-clarida-to-step-down-early-following-scrutiny-over-his-trades-during-pandemic.html

Senate confirmation of Powell also took it’s sweet time as did 3 other governors of 7 governors total, up for nomination and term renewal:

https://www.cnbc.com/2022/05/12/federal-reserve-chairman-jerome-powell-confirmed-by-senate-for-a-second-term.html

What investor doesn’t enjoy a bloated gasbag? What a year of gains 2021 was. Seems so long ago…

Was the Fed stepping on the gas in co-ordination with CB’s around the world to pick up the slack left by China wobbled by it’s own property bubble collapsing and Europe sliding into recession from war? Seemed logical at the time until one looks at inflation running in the 8’s. The combination of pandemic supply shock with a rapid increase in the money supply had done it’s job.

At the end of the day, one has to ask how true those words are from one Milton Friedman, “inflation is always and everywhere a monetary phenomenon”. Are they true? They are. So, then. Lets get right to it. Was there a rapid increase in the money supply? Was the Federal reserve politicized by the Trump administration to create the mother of all wealth effects, a rapid increase in the money supply in an effort to buy an election?

Lets explore that. Does anyone think Trump wouldn’t try to politicize the Federal reserve in an effort to get re-elected? Of course he would. Trump incited a riot and attempted coup for the same goal. Did he have the means? Trump previously appointed 5 of 7 sitting governors through the pandemic. Trump appointed Powell, Bowman & Waller who are still acting governors in the Federal reserve and Trump appointed Clarida and Quarles who resigned, Clarida exiting early over scandal. So yes, Trump had the means especially with Clarida as VP of the Federal Reserve in charge of monetary policy.

Whatever we think happened or didn’t happen, human error or no, nefarious or good willed, one thing is certain. The U.S. monetary system went through a rapid increase in the money supply in 2020 and in 2021, inflation began to rise. And history repeats:

https://www.youtube.com/watch?v=GJ4TTNeSUdQ

#67 Bezengy on 05.30.22 at 7:09 am

#58 Dr V on 05.29.22 at 10:29 pm
53 Ape 54 Bob

——————————-

You bet we need changes in the primary real estate deduction. I recently had a convo with my RE lawyer bud who does quite a bit of work in the GTA. He tells me 99 percent of folks selling a house claim the PRE. I’ve googled this to find out compliance rates, but of course we have no transparency to find out if this is indeed a fact. At any rate I’m close enough to the action to see that tax evasion is a national past time in this country. Whether it is the PRE or the underground economy tax evasion is out of control. I don’t see any negative consequences for tax cheats, at all levels, and we know that audits are much lower than in previous years. Until the CRA can enforce the law with lightning speed and punish tax cheats with ruthless court orders, I can’t see more laws doing anything, seeing how we can’t enforce the laws we have now.

#68 Dharma Bum on 05.30.22 at 7:58 am

Look at the charts that track stock markets for the past 100 years or so.

They’re like beautiful landscape photographs or paintings of spectacularly magnificent mountain ranges with jagged peaks rising continuously up into the clouds.

The Himalayas, the Alps, The Rockies, The Sierra Nevada, The Andes, The Pyrenees.

Follow the lines, people. Up, up, and away.

Losers bail on the downturns.

The rich get richer.

Blame yourself.

#69 Doomsday prepar on 05.30.22 at 7:59 am

I don’t see it. I have been shopping for a “homestead property” in Ottawa’s bunnypatch for over 2 years now. Finally found one, listed at 999,900 with a bidding war, which I passed on joining. House had 18 showings, multiple offers, and sold for 150k over ask on offer night. The place needed a lot of work as well…
Doesn’t seem that Ottawa and surrounding area has experienced any slow down in real estate to me!

#70 Fortune500 on 05.30.22 at 8:08 am

Garth, is your prediction that Canadian real estate will never return to these prices a la Japan, or is this a U.S. 2008 kind of 10 year correction. Or is it Canada 2017? What’s your call?

#71 T Rex and the dinosaur clique on 05.30.22 at 8:12 am

Ontario’s MSM did exactly what I said they would do.

Ran a relentless propaganda campaign to try to install a woke Liberal/NDP coalition govt and unseat Doug Ford.

The Star even went so far as to run a full page propaganda piece by the “editorial board” setting out why Ford doesn’t deserve to win.

And it didn’t work.

They are now running articles calling the election, that hadn’t happened yet, “disappointing”.

Anyone who says our MSM outlets aren’t full on propaganda machines needs to watch what is happening in Ontario.

The more the MSM attack Ford, the more people love him.

Everyone knows they’re being lied to.

If the MSM had supported Ford it would have hurt his chances, not helped him.

We know they peddle lies.

#72 crowdedelevatorfartz on 05.30.22 at 8:30 am

@#64 BC Doc
“I work ER so I always see my patients face to face, despite Covid, SARS, MERS, Ebola, TB, you name it….”

++++
A BC Doc in ER.
So you get to see our Fentanyl crisis up close and personal.
Oh the stories.
What is the most times you’ve seen the same patient brought in to ER for a drug overdose?

#73 crowdedelevatorfartz on 05.30.22 at 8:35 am

@#71 TRex
“Anyone who says our MSM outlets aren’t full on propaganda machines needs to watch what is happening in Ontario.
The more the MSM attack Ford, the more people love him.
++++
Its similar in BC.
The endless politically correct non stop lecturing in the media seems to be having the reverse effect.
Very angry population.
Imagine if food and gas continue their upward rise…..

#74 Quintilian on 05.30.22 at 9:44 am

https://www.msn.com/en-ca/news/other/homeowners-face-absolutely-dreadful-prospect-of-losing-their-houses-as-cost-of-living-rises/ar-AAXSml2?ocid=finance-verthp-feeds&cvid=9c7f4d6e0ba74cc18518988a9573e1b9

Why I think Central Bankers should be charged with Moral Malpractice:

“I was excited to start new and actually, you know, live a decent life,” he said. “But that didn’t last very long.”

And….
“So what happens to them? Do they just sell their homes? Do they wait and try to ride it out? Some will be able to, and then others may lose their homes.”

Central bankers are not solely responsible for inflation. Do not fall for that simplistic pseudo social media meme. – Garth

#75 crowdedelevatorfartz on 05.30.22 at 10:22 am

@#74 Quinty’s Quandry
““So what happens to them? Do they just sell their homes? Do they wait and try to ride it out? Some will be able to, and then others may lose their homes.””

+++
Sorry Quint but people who buy/spend more than they can afford ……..only have themselves to blame.
Oddly enough, historically LOW interest rates……have a tendency to rise……

They have no one but themselves to blame.

Blaming the banks for high interest rates is like blaming the weatherman for bad weather.

They should sell while they still can and take a small loss as opposed to hanging on by their financial finger nails and then falling into the abyss of debt when the house is repo’d is much much worse.
The 1980’s were a real eyeopener for a lot of people..

I spoke with a friend the other day.
His house sold in late Feb. 100k down on deposit. Closes in June. He is moving to a rental .
No issues ….yet.

His neighbor sold in early Feb. 75k down….Closes in August.
They have already made an offer on another place and put a deposit down.
The purchaser of their house now wants their money back and or a reduction in the sale price.
Sh!t show.

#76 Shawn on 05.30.22 at 10:35 am

#41 Summertime on 05.29.22 at 8:32 pm responded

Re: Watermelon prices/deflation stupidities from Shawn

Shawn, this is exactly what I would expect from you or from a person with your intellect and ignorance in terms of thinking.

Watermelon prices are seasonal and depend on source – import vs, local.
…..

Please stop posting stupidities, is is so embarrassing.

Deflation occurs only in your brain.

*************************
Why would I stop posting when your response is so entertaining.

I’m not sure the watermellons in Edmonton in May are locally grown. Price went down because no one was willing to pay $17.99, or $11.99 for watermelons in a colder than normal May in Edmonton.

Point is you saw ONLY the price increases.

Point is they can’t charge you more for things you refuse to buy. Take action (or inaction as it were).

#77 TurnerNation on 05.30.22 at 10:36 am

Life in the Former First World Countries.
Remember, there no longer is any news only manufacturing of consent.
Almost back to normal right?? What oh what do the globalists have in store for us.

Real simply, guys: March 2020 kicked off the global control over our Travel/Movement, Feeding, and Breeding.

https://www.economist.com/leaders/2022/05/19/the-coming-food-catastrophe


From the Killing Us Softly Dept. Paying Our high taxation rate — so worth it! This is very malevolent.
Getting rid of tax slaves before they become a drain on the State.

. Expect more cancers to be found at advanced stages after diagnoses got delayed by the pandemic (cbc.ca)

#78 Raj kumariz on 05.30.22 at 10:43 am

What is the the attraction of immigration to Canada? Free second rate health care, education, lousy weather and food. Nice people though!

#79 TurnerNation on 05.30.22 at 10:52 am

Control over Travel/Movement – is permanent.
As I fully expected these manufactured slowdowns are cover to roll out the Permanent global Digital ID control solution.
This is mainstream news now, the Long Game is unfolding here.

“The Globe and Mail reports in its Saturday edition that Toronto Pearson’s boss is facing a crisis of clogged airport terminals and passengers held on parked planes amid a shortage of government contractors who conduct security, customs and COVID-19 checks. The Globe’s Eric Atkins writes that similar logjams are happening in Vancouver and Montreal, but the problem is most acute in Toronto. The delays have frustrated passengers and hindered airlines’ abilities to recover lost revenue and damaged Canada’s reputation in the global travel industry. With the busy summer season near, the need to solve the problem is urgent and the Canadian government needs to take action, Ms. Flint says. She is calling on the government to streamline the movement of people through the terminals by dropping some of the checks for COVID-19 and using biometrics to identify and expedite check-ins for trusted travellers. ” (stockwatch.com)

#80 Sandra on 05.30.22 at 10:53 am

So mutual funds are no good but they were all the talk and encouraged big time, pushed by the financial industry 90’s especially. Now how long until ETFs and others will be put in the same place. Why is nobody calling all the real estate, debt losers now real estate, debt refugees. Just like they called the back in the 90’s GIC refugees that were supposedly taking their GIC money out to put in mutual funds. All I know is my grandfathers, both 80 now are muli- millionaire net worth savers with just a house and with all in GICs, RRSP GICs, RRIF GICs, TFSA GICs and are completely without any debt.

ETFs do what mutuals did, but at a fraction of the cost with enhanced liquidity. BTW, the time to be a millionaire is not when you’re 80. – Garth

#81 Barry bilderberg on 05.30.22 at 10:55 am

DELETED

#82 Ponzius Pilatus on 05.30.22 at 11:01 am

4 BC Doc on 05.30.22 at 2:00 am
crowdedelevatorfartz on 05.29.22 at 11:24 pm
@#55 Steerage
“That would be the 1870s….”

+++
I remember being a very sick young lad with chicken pox in the 1960’s and the doctor paid a house visit. I couldnt go out of the house due to the pox.
Black bag, stethoscope, the whole rigmarole.

Today?
A Monkey pox diagnosis via Zoom and a vaccine dropped off by Amazon…..

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

My GP who’s a good old school doc still makes house calls to his frail, elderly patients.

I work ER so I always see my patients face to face, despite Covid, SARS, MERS, Ebola, TB, you name it….

Zoom unfortunately has been a pox in itself on the practice of medicine. William Osler gowned up and went into the small pox ward to see his patients– over one hundred years later, he continues to set the bar for me as to what it means to be a physician. Time for people to get back into the office.
———————-
Agree.
Thanks for your service.
We are lucky to have Doctors like you.

#83 Brent on 05.30.22 at 11:05 am

Wife and I put our house up for sale April 6 on Vancouver Island. Sold in 2 days 40k over ask to a cash buyer from Vancouver. 3 weeks later we put my mother in laws condo for sale in Calgary and it has been 5 weeks with no offers.

#84 Ponzius Pilatus on 05.30.22 at 11:14 am

#76 Shawn
Went to Costco.
So full.
You almost could not move.
Lots of watermelons in craters in the isles.
Which made the congestion even worse.
But they were huge.
Gotta have a large family, preferable weight lifters.
Not many takers.
Maybe that explains the price drop.
And it’s to cold to eat water melons.

#85 Quintilian on 05.30.22 at 11:17 am

“Central bankers are not solely responsible for inflation. Do not fall for that simplistic pseudo social media meme. – Garth”

Not solely, but mostly.
Expanded balanced sheet beyond anyone thought prudent.

#75 crowdedelevatorfartz on 05.30.22 at 10:22 am
“Sorry Quint but people who buy/spend more than they can afford ……..only have themselves to blame.”

Sure, parents give matches for the kids to play with and ………………….

#86 House Calls on 05.30.22 at 11:20 am

#55 The joy of steerage on 05.29.22 at 9:55 pm

When doctors made house calls……?

That would be the 1870s….

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

Not if you live in a civilized country, like…France. You know, one of Canada’s founding countries.

https://hipparis.com/2020/02/11/sos-medecins-french-house-calls-24-7/

Now everyone repeat after me, Canada’s healthcare is the super duper awesomest. If we say it enough maybe it becomes true!

#87 Ponzius Pilatus on 05.30.22 at 11:48 am

#86 House Calls on 05.30.22 at 11:20 am
#55 The joy of steerage on 05.29.22 at 9:55 pm

When doctors made house calls……?

That would be the 1870s….

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

Not if you live in a civilized country, like…France. You know, one of Canada’s founding countries.

https://hipparis.com/2020/02/11/sos-medecins-french-house-calls-24-7/

Now everyone repeat after me, Canada’s healthcare is the super duper awesomest. If we say it enough maybe it becomes true!
——————
In Austria, in an emergency a Doctor on Call comes first.

#88 Born in Hamilton on 05.30.22 at 1:17 pm

#32 wallflower

“Why would ANYONE buy an indexed MF when loads of
index ETFs are available?”

ETF’s are fine. I’m not saying otherwise. But there are many indexed mutual funds available here in the US with expense ratios that are just as low as a comparable indexed ETF, and in some cases even lower. Some are even free. (ER 0.00%) I was merely wondering why this wasn’t the case in Canada as well.

#89 Summertime on 05.30.22 at 1:20 pm

#76 Shawn on 05.30.22 at 10:35 am

local means close to home vs. originating from far, far away

No watermelons grown in Alberta yet this year and despite all the smart people I know who live there apparently there are some like you to help with the averaging the IQ/bringing it down to the average.

I remember you arguing last year about what the price of oil will be a few years down the road and how it is a proof that there is no inflation and now I am very surprised that the same person who failed more than miserably in that now has the guts to keep arguing about stupidities.

I keep poking you as I truly can’t believe how naïve and brainwashed and at the same time how pretentious of knowing-it-all you are.

I apologize, but this is mildest form that I can put it in.

#90 Russ on 05.30.22 at 1:48 pm

Vlad Poutine on 08.20.08 at 5:51 pm

DARN YOU GARTH MESSIAH TURNER!!!

CREDIT UNION FORECAST

Slump in U.S. housing market helps drag B.C. economy to new low
PATRICK BRETHOUR …
—————————–

Hey Garth,

I’m bored, sitting at the lake, waiting to go for a walk. We really like the off-leash area of the park. :)

And found the above in my reference stuff.
Is this old Vlad any relation to the new (rushin’) Vlad?

Cheers, R

#91 Prince Polo on 05.30.22 at 2:06 pm

#53 LesserApe on 05.29.22 at 9:34 pm

our weird tax system which whacks capital gains on a portfolio but hands over house profits untouched. Until a politician grows a set and ends the distortion, properties will stay out of reach for the young.

This suggests to me that you think this would be a good thing, which surprises me.

If the government were to do this, you’d end up with reduced labour mobility. People would decline taking desirable jobs because they wouldn’t be able to sell their house and buy an equivalent new house in the new location.

Suppose you’re offered a promotion with an extra $50K a year attached to move from Vancouver to Toronto. You’d have to evaluate that against losing, say, $200K in housing taxes in the move. (Ignoring the adjusted cost basis, it would be 8 years to get back to even, because that $50K is a net $25K.) You end up with a less productive economy with people in non-optimal jobs.

Or even just people who, in middle-age, take a job in the burbs and suffer an insane commute for years because they don’t suffer the tax hit when they move closer to their job. People with changing life circumstances would be more likely to suffer longer with an inappropriate living space than sell to move to something more appropriate to their current lifestyle.

Seems like a terrible thing for both the economy and Canadians’ standard of living.

A “greater”ape would probably understand that ever-increasing housing prices is a bad thing for the economy. Sooner or later, 100+% of one’s disposable income is going towards mortgage payments.

Good idea? (That’s rhetorical!)

#92 Satori on 05.30.22 at 2:25 pm

#83 Brent on 05.30.22 at 11:05 am
Wife and I put our house up for sale April 6 on Vancouver Island. Sold in 2 days 40k over ask to a cash buyer from Vancouver. 3 weeks later we put my mother in laws condo for sale in Calgary and it has been 5 weeks with no offers.
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I saw that, guess it’s just location. I could believe how cheap it is to live in Calgary!! …. and yet I know 2 different couples that moved to Calgary, got great places, but then moved back to BC in 2 years. Must be a location thing, the snow maybe or wind. Don’t understand it, it’s just a province away and in here all the complainers say everything is unaffordable in Canada … guess they never saw Alberta.

#93 Chris L. on 05.30.22 at 2:54 pm

My oil stocks are doing great. The cure for Covid, not so much. See ya later pfizer.

#94 Linda on 05.30.22 at 3:45 pm

#28 ‘Non’ – you make a good point about property taxes. They do add up over the years. If the government did decide to tax gains realized on the sale of a primary residence I wonder if they’d allow said gains to be offset by the cost of ownership? For instance mortgage interest, utilities, property taxes, upkeep/maintenance expenditures during the time occupying said property. Maybe not a paint job, but surely replacing a roof, furnace, windows or other such major expenses should count. Thing is, I get the impression that allowing that would cause a howl of outrage from those who have clamored for said taxation in the first place. However if profits for selling one’s PR are no longer going to be exempt from taxation because it is considered an investment, only fair that the costs associated with said investment be included in the calculation of taxes owed.