The hawk

Well, that was no surprise.

The Bank of Canada has thrown another fat log on the rate fire. The second of three 50-bip hikes is now official. The next comes in mid-July,  then we’ll likely see the pace of increases slow.

What does this mean?

The chartered bank prime climbs to 3.7%. In six weeks it will be 4.2%. By late autumn, the prime at the Big Six ascends to almost 5%. The last time that happened was 14 years ago, just before the credit crisis hit.

Variable-rate mortgages are in the crosshairs now. The CB rate has risen to 1.5%, and most economists believe it will not top out until we reach 2.5% to 3%. That means a VRM today carrying an effective rate of 2.5% would jump to 4% by Halloween. And odds are it will stick there for quite some time. Too bad more than 51% of new borrowers opted to go variable. (We told you in no uncertain terms to lock in when fivers were sub-3%.)

For your reference, here’s what seems to be coming.

  • Today – up 50 bips
  • July 13 – another 50. Bank prime rises to 4.2%. HELOC rate at least 4.7%.
  • September 7 – 25 bips with a prime of 4.45%.
  • October 26 – another 25, with prime rising to 4.65%. Secured lines of credit at 5.2%.
  • December 7 – too early to forecast. Another small hikes, or no change. But a drop is not expected.

By the way, the CB went all hawky in its statement today. “The risk of elevated inflation becoming entrenched has risen,” it said. “The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well anchored.”

The bankers cite Putin, China’s crazy Covid policy, soaring energy costs, a robust US economy and market volatility as risks they are weighing. Plus the Canadian economy is on steroids with 5.2% unemployment, record job openings, labour shortages, excess demand and prospects for more growth. We all must remember, they seem to say, that inflation and swelling rates are the fruit of a strong economy that needs cooling, not a weak one requiring fertilizer.

Here’s all you need to know, from the bank’s official statement:

“With the economy in excess demand, and inflation persisting well above target and expected to move higher in the near term, the Governing Council continues to judge that interest rates will need to rise further. The policy interest rate remains the Bank’s primary monetary policy instrument, with quantitative tightening acting as a complementary tool. The pace of further increases in the policy rate will be guided by the Bank’s ongoing assessment of the economy and inflation, and the Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target.”

“More forcefully”? More than three half-point hikes in a row? Seems the boys in the stone palace on Wellington Street have found their spine, finally. Rates will continue to rise at least at the pace listed above, plus quantitative tightening will continue – which means rolling a ton of bonds off the bank’s balance sheets, letting market yields increase (which will be reflected in mortgage rates). In fact the five-year Canada bond surged giddily on the initial news. Says TD’s chief economist: “Looking at the bond market reaction today, it is clear that market participants are preparing for even more from the BoC, with the Canada 2- and 10-year yields up 15 basis points and 10 basis points, respectively this morning.”

The Bank of Canada acknowledges that housing has been affected by the hikes so far. But it also says you can deal with it. Actually this is a gift to politicians who have been floundering and flopping amid public pressure to “do something” about unaffordable home prices. Suburban valuations have dropped $100,000 or more in a month and today guarantees that will continue. Not so much in the urban core, but as absolute mortgage costs inflate, price appreciation will evaporate everywhere.

The big question: will this CB aggression tip the economy into recession?

At this point, the answer is no. Too much growth going on. High oil good for Canada. The labour market drum-tight. Wages and price spiral starting. Bank profits robust. Canadian equity market holding up. Post-pandemic reopening continues. Household savings rate at 8%. The bank figures it can be hardass now for months to come, after years to feeding our borrowing habit.

The kiddos, newbie buyers and non-believers said it could never happen. The grizzled among us reply, just wait.

202 comments ↓

#1 TurnerNation on 06.01.22 at 10:52 am

It’s still a sellers markets. In official GreaterFool merchandise. Especially after yesterday’s highly publicized celeb encounter on Front St.
I have have a signed, lightly thumbed copy of Money Road up for grabs. Ask is up to $600. Inquire within.

Ideal if your name also is:
“To: Numnutz, shove off from my blog. All the best, G”

(Kidding :-)

—-
Control over our Feeding. Only the best lab made food for we the tax slave animals on the tax farm.

.Fury over plans for gene-edited ‘Frankenfoods’ to be sold UNLABELLED in UK: Scotland and Wales vow to reject move as supermarkets refuse to confirm if they will even sell altered crops (dailymail.co.uk


Kanadian Kommunism. Hard to ignore it.

“Prime Minister Justin Trudeau’s government has adopted 72 secret orders-in-council — hidden from Parliament and Canadians — since coming to office, CBC News has learned.
A review by CBC News of nearly 8,900 orders-in-council (OICs) — or cabinet decrees — adopted by the federal government shows the number of secret or unpublished OICs has been rising since Trudeau came to power in 2015.” (cbc.ca)

#2 KNOW IT ALL on 06.01.22 at 11:00 am

Now what can we do about increases in RENT?

“London renters look at new data from city hall. They agree, renting is no longer affordable”

Anyone got a large shoe my family and I can live in?

https://www.google.com/amp/s/www.cbc.ca/amp/1.6468685

#3 None on 06.01.22 at 11:04 am

The newbie buyers only believed housing would always go up because the grizzled convinced them so. They learned from their parents.

Don’t underestimate the power of narratives and sentiment to drive poor decisions not supported by data.

#4 George on 06.01.22 at 11:08 am

All the breathless news about rates going up for immediate future will sustain home prices for the entire summer. Psychology 101

#5 Ponnaps on 06.01.22 at 11:09 am

Sold Feb-22 : 1.836M
Sold May-22 : 1.525M

https://housesigma.com/app/en/listing/10QqypNJK653LGlV/3944-Beacham-St-Mississauga-L5N6S9-W5621731

Deals gone sour… More of these to follow?

#6 The joy of steerage on 06.01.22 at 11:11 am

You’re hilarious.

#7 Caffeine Monkey on 06.01.22 at 11:11 am

If history is any indication, this a down slope that marks the beginning of a two decade price cycle: prices won’t recover to their current prices for roughly twenty years.

A question in my mind is how deeply entrenched in Canadian culture is house horniness? It wasn’t really a thing in the 90s. I wonder if young Canadians in the 2040s will still be watching HGTV and lusting after whatever will be the equivalent of granite and stainless steel.

#8 West New West on 06.01.22 at 11:28 am

So Elon Musk told his employees to return to the office for minimum 40 hours per week or else move on….

The end of WFH is now here.

#9 Daveyboy on 06.01.22 at 11:29 am

Just got back from Toronto/Windsor after not being there for 2.5 years. People are real estate crazy! I heard stories of mortgage fraud, taking money out of their retirement savings to invest in flipping homes. Spending 80 percent of their income on housing and everyone is doing a renovation. Its so different from the U.S.

My cousin in-law in Windsor is 30. He told me a lot of his friends bought a home in the last year. He no longer sees them because all their money goes toward the house.

400k homes on 36k wages . Good luck Canada.

#10 Faron on 06.01.22 at 11:36 am

Just chatted with a guy who returned his $90k Tesla because of crap quality. Bought an Audi etron for another $30k and absokutely loves the car. The Tesla pales in comparison. Check the valuations on TSLA…

#11 Puzzled on 06.01.22 at 11:42 am

#102 Saw Movie on 05.31.22 at 10:34 pm

Let’s make a deal.

Tomorrow, the Bank of Canada will NOT raise interest rates, because of political pressure from Justin Trudeau’s political constituencies.

You have 24 hours to complete the puzzle

_____________

Contestant: I’ll take “idiots on the GF blog”, Alex?”

Alex: “renowned for being the biggest one of all, he now has to stop posting on this blog”

Contestant: “who is Saw Movie, Alex”

#12 Summertime on 06.01.22 at 11:44 am

1.5 % rates with CPI 5 times that and growing faster than the rates (and real inflation as measured in the 70-es and 80-es: 2 times CPI, 10 times the rates) is apparently ‘very hawkish’.

And they blame everyone else, but not themselves – for the idiotic monetary policies of keeping the rates far too low for far too long.

#13 Ponzius Pilatus on 06.01.22 at 11:55 am

#10 Faron on 06.01.22 at 11:36 am
Just chatted with a guy who returned his $90k Tesla because of crap quality. Bought an Audi etron for another $30k and absokutely loves the car. The Tesla pales in comparison. Check the valuations on TSLA…
—————————
I think you’re on to something.
Was at a Nissan dealership to other day the check out the much hyped Nissan Leaf.
My daughter would love to have one.
Turns out the backlog is so bad that they can’t even say when you could get one.
And they just jacked up the price by 12k!
This is insane.
Time to cancel the subsidies, they just make the dealers rich and fat.
Nary a used gas car in sight.
But the lot was full of used Teslas.
Harbinger? (As CEF likes to say).

#14 Ray Skunk on 06.01.22 at 11:57 am

Lovely stuff.

Now, when will we see these rises reflected in our “high interest” savings accounts?

No messin’ when it comes to sticking it on my VRM, crickets on the other side of the equation…

#15 Happy Housing Crash Everyone! on 06.01.22 at 12:04 pm

WooHoo!

Shysters, better put your Audis on the market while you starve for clients for the next few years.

68,000 Realtor Shysters in the GTA need work – Garth, are you still hiring?

#16 millmech on 06.01.22 at 12:04 pm

The 50 basis point hikes will continue until the end of the year, we are beholden to Powell and what he does we do.
The “wise” investors who have used HELOCs to buy tech are getting wiped out now with higher rates and catastrophic returns.
I wonder how the Bank of Mom feels about watching their loans sink like the Titanic along with asset value that was used to prop up their sense of self worth. They know that their spawn took that “loan” and once house one was secured, smart offspring bought another investment that never goes down.
Many parents gifted over $500k and are now going to be paying 5% on that gift and when junior is squeezed they will not be able to offer assistance as they themselves will be in the same (life)boat.

#17 Dave on 06.01.22 at 12:05 pm

Now we all want real estate decline stats. I think we’ve earned it

#18 tbone on 06.01.22 at 12:07 pm

Forget the E-Tron , you are jack bait .
Get a 10 year old camry with some dents in it .

#19 Søren Angst on 06.01.22 at 12:07 pm

America tells the truth unlike the obsequious Bank of 🍁.

https://twitter.com/thehill/status/1531800193674387456

“I was wrong then about the path that inflation would take. As I mentioned, there have been unanticipated and large shocks to the economy […] that I, at the time, didn’t fully understand.”

– Secretary Janet Yellen
78th Secretary of the Treasury. Former Fed Chair. Always an economist.

——————-

Ya think?

No worries Janet, they got it right in Canada.

#20 David Greene on 06.01.22 at 12:11 pm

You’re making a big leap in logic there. While I agree Tesla has had some real quality issues lately, just because there are a bunch of Teslas on a lot doesn’t necessarily indicate qulaity problems.

It could just as easily be the result of owners unloading them because they can’t afford them in this economy.

We’d need more data points to know.
—————————————————–

#13 Ponzius Pilatus on 06.01.22 at 11:55 am

#10 Faron on 06.01.22 at 11:36 am
Just chatted with a guy who returned his $90k Tesla because of crap quality. Bought an Audi etron for another $30k and absokutely loves the car. The Tesla pales in comparison. Check the valuations on TSLA…
—————————
I think you’re on to something.
Was at a Nissan dealership to other day the check out the much hyped Nissan Leaf.
My daughter would love to have one.
Turns out the backlog is so bad that they can’t even say when you could get one.
And they just jacked up the price by 12k!
This is insane.
Time to cancel the subsidies, they just make the dealers rich and fat.
Nary a used gas car in sight.
But the lot was full of used Teslas.
Harbinger? (As CEF likes to say).

#21 David Greene on 06.01.22 at 12:12 pm

Sorry, I mean to say lack of buyers/proponents. And I spelled quality wrong. Too many things to do in too little time.

#22 Doug t on 06.01.22 at 12:22 pm

#10 faron

I don’t understand why people get an electric car at this time at all – my business partner bought the Ford Mustang E and does nothing but complain about it = $85k lol – I’ll wait at least 5 years thank you very much – and I would NEVER pay that kind of money for 4 wheels gas or electric

#23 Søren Angst on 06.01.22 at 12:34 pm

High oil good for Canada. – Garth

Amen & yeah oil.

——————

Not so good for Putin.

Basically the European Union had rapidly decreased is Russian oil imports before its announcement yesterday. See 2nd chart:

https://www.cnbc.com/2022/05/31/these-charts-show-russias-invasion-of-ukraine-has-changed-global-oil.html

In lieu, Russians trying to sell that unloved oil to India and China, 3rd chart, via Suez Canal by tankers.

Costly for them as World underwriters not underwriting these ships as a part of sanctions and of course, not via pipeline. Still, they are getting USD $95/bbl vs. Brent at $119/bbl.

https://edition.cnn.com/2022/05/31/energy/india-snapping-up-russian-oil-intl-hnk/index.html

Italia’s 2nd largest oil refinery in Siracusa, Priolo (owned by Russian Lukoil Group), 293,000 bbl/day may have to shutdown – no tanker oil from Russia permitted:

https://www.corriere.it/economia/aziende/22_maggio_31/petrolio-cosa-cambia-le-sanzioni-ue-grana-raffineria-russa-priolo-8-mila-posti-rischio-27c6b93a-e0d1-11ec-a138-4bfa3d154041.shtml

Italia may nationalize the oil refinery to save about 7500 jobs. It’s a large petrochemical complex with an added value of:

€700 million/year.

Now THAT would be a sanction!

Putin. Master Strategist.

#24 Don Guillermo on 06.01.22 at 12:35 pm

#10 Faron on 06.01.22 at 11:36 am
Just chatted with a guy who returned his $90k Tesla because of crap quality. Bought an Audi etron for another $30k and absokutely loves the car. The Tesla pales in comparison. Check the valuations on TSLA…
*******
Never could understand why, until recently, EVs were designed to look so fugly. The new Porsche and Audi electrics are beautiful.

#25 West New West on 06.01.22 at 12:45 pm

#10 Faron on 06.01.22 at 11:36 am
Just chatted with a guy who returned his $90k Tesla because of crap quality. Bought an Audi etron for another $30k and absokutely loves the car. The Tesla pales in comparison. Check the valuations on TSLA…
—–

When I saw the youtube videos of mechanic shops having to wash out 20 pounds of dirt from inside the fender of a Tesla before they could start repairs, I knew it then.

#26 IHCTD9 on 06.01.22 at 12:46 pm

Haha! Great pic. Those Geese can really lay the smack down if you get out of line (ie. look at them the wrong way.) I have to wonder what percentage of North America’s population of Canadian Geese have no fear of humans anymore. They’ve pretty much moved right in with us along with all the Mallards, pigeons, and Swans.

Last night here at the bunker complex, we had a family of Eastern Screech Owls pop out of the tree for the first time. One ended up on the ground. There’s another bird that’ll let you know when you’re getting too friendly. I was getting dive-bombed constantly the minute I stepped off the deck – you can’t hear them coming either. These little Owls are getting more and more common out here.

Looks like the BOC is getting a little ornery too – ’bout time.

#27 Summertime on 06.01.22 at 12:49 pm

https://ca.finance.yahoo.com/news/bank-of-canadas-mandate-and-why-so-important-120703143.html

CPI is NOT the inflation, let’s stop that giant lie first, please.

————————————–

High oil good for Canada. – Garth

Not really. High oil = high gas prices everywhere, except Alberta. How that is good is beyond me. Let’s have oil at 200 bucks (coming soon) and see how that is good, shall we?

Good for oil sands stock holders, not for Canada.

Our nation’s largest export. Very good for us. – Garth

#28 Søren Angst on 06.01.22 at 12:57 pm

Italia Tourist Tip *:

No Green Pass needed to enter Italia as of today.

https://www.adnkronos.com/green-pass-da-oggi-ingresso-in-italia-e-libero-cosa-cambia_1lXTwoByTfzKlc6jV1YU4t

And the Left Coast made front page news at RAI this morning:

“Canada, British Columbia decriminalizes the use of small amounts of hard drugs”

https://www.rainews.it/articoli/2022/05/canada-la-british-columbia-depenalizza-luso-di-piccole-quantit-di-droghe-pesanti-7ded5c0a-ef32-4299-acda-2b2af60a0f98.html

So Canada, and especially if your source airport is YVR, if you get some strange looks in Il Bel Paese…well, now you know why. Hopefully the Carabinieri will leave you alone. Be less Hipsterish in the line up at the Dogana.

—————-

* Ditch the Tilley Hats in Italia, you can wear them in tawdry Fifth Base for a tourist $ Spain, France or the UK (Greece too, but that goes without saying).

#29 Sail Away on 06.01.22 at 1:07 pm

Dear Diary,

This year, being my 50th on God’s green earth, I decided to reduce annual weight fluctuation and stay within plus/minus 5 pounds of fighting fit. Boxing in the Army in the 1990s I fought light-heavy, which, in the amateur division is 178 lbs. Factoring in weigh-in water loss of 7-8 pounds, this was a standard day to day weight of around 185. So, being a bit less muscular in middle age, 175-180 seemed about right.

Monitoring with weekly weigh-ins, this has been easy to maintain. Packed on an extra 5 lbs over the holidays, which evaporated in 2 weeks with a little discipline.

My take? Physical capabilities change far less quickly than most people think. I personally feel as good and can run a marathon at about the same pace as 25 years ago.

Warren Buffett says: You only have one body. Take care of it. Take care of your portfolio similarly.

#30 Summertime on 06.01.22 at 1:10 pm

More on CPI Lie:

https://www.zerohedge.com/markets/stockman-inflationary-pressure-worse-they-say

Global food index increased by 58 % in 2 years, rents increased by 24 % in a year, oil increased by over 3 times/300 % in the last 2 years and ‘inflation’ is sub 10 %?

Reminder: Rates are at the ‘astronomical’ 1.5 % nominal, combined with ‘hawkish’ central banks while real rates are minus 15 % + .

#31 Ponzius Pilatus on 06.01.22 at 1:27 pm

24 Don Guillermo on 06.01.22 at 12:35 pm
#10 Faron on 06.01.22 at 11:36 am
Just chatted with a guy who returned his $90k Tesla because of crap quality. Bought an Audi etron for another $30k and absokutely loves the car. The Tesla pales in comparison. Check the valuations on TSLA…
*******
Never could understand why, until recently, EVs were designed to look so fugly. The new Porsche and Audi electrics are beautiful.
————————
I always liked the kidney grill on the BMW’s.
Iconic.
Sadly, I find the one on their E-cars not appealing.

#32 Søren Angst on 06.01.22 at 1:29 pm

#24 Don Guillermo

Agree but not all fugly – 1,900 horsepower Nevera electric sports car.

“Croatian EV supercar maker Rimac raised 500 million euros to make parts for Big Auto rivals”

https://www.cnbc.com/2022/06/01/croatian-ev-supercar-maker-rimac-raises-500-million-euros-.html

Look to be the real deal attracting the likes of:

Ferrari, Jaguar, Mercedes-Benz, and Porsche.

yeah Croatia.

#33 rampant inflation on 06.01.22 at 1:30 pm

what a joke.

you want them to grow a spine?

raise rates 1% each meeting

they are cowards

Canadian CPI 7%

Bank of Canada policy rate 1.5%

incompetent cowards

real rates are more negative today than a year ago.

this is all hot air

inflation is RAMPANT

#34 Mark Rypen on 06.01.22 at 1:38 pm

This gasbag has a long way to go. The other day, I was looking at a house in Orleans (a suburb of Ottawa) to buy as a landing pad for when I return home to Canada, with the idea to rent it out until I return. List price=750K.

Assuming 30% down (non resident), monthly mortage = $2400 a month based on the current posted closed variable rate.

Agent tells me the max rent I can get is 2300. So, $100 subsidy right out the gate. Add property tax, opportunity cost on the down payment, land transfer taxes, insurance, and maintenance, and this is an absolute nightmare.

How much of current real-estate is owned by “investors”. How much of recent activity, including condos, was due to “investors”. These people are going to get creamed.

And to think, Tiff was telling people 12 months ago that interest rates were going to stay low for a long time. Only in this kind of a job could someone be so bad at it and get to keep it.

Pierre is right. Time to take out the trash.

#35 Ponzius Pilatus on 06.01.22 at 1:42 pm

127 Shawn on 06.01.22 at 10:59 am
Grocery Inflation data out today

Year over year inflation as of April:

Highest inflation items:

Vegetable oil, 3 liters – up 67% to $10.67
3 limes, up 48% to 99 cents
Pork shoulder cuts up 31%

7 of the 77 items were up over 30%

A few items decreased in price.

Biggest decrease was potatoes down 15%

Bizarrely, watermelons were not singled out!!

https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810024501

The point is StatsCan looks at all this stuff. Nothing is manipulated in the data. There is zero evidence of manipulation or political interference – which is really.
————————-
I always wonder where the StatsCan people are shopping.
My local grocer prides itself in fresh meat.
Every meat item that is within 2 days of best before date, is discounted by about 30%.
And most stores have weekly specials.
Probably no political interference, but the data collection process seems suspect.

#36 TheDood on 06.01.22 at 1:44 pm

#18 tbone on 06.01.22 at 12:07 pm
Forget the E-Tron , you are jack bait .
Get a 10 year old camry with some dents in it .

____________________

I know right?

Tesla’s and E-Trons are ‘key magnets’.

#37 Don Guillermo on 06.01.22 at 2:16 pm

#28 Søren Angst on 06.01.22 at 12:57 pm

* Ditch the Tilley Hats in Italia, you can wear them in tawdry Fifth Base for a tourist $ Spain, France or the UK (Greece too, but that goes without saying).
***********
Went to the dermatologist a few weeks ago. He took about a dozen precancerous spots of the top of my head and face. I looked like I’d been mugged in a back alley by Tyson. He asked if I wore a hat. I said always and point to my Jays ball cap. He rolled his eyes and said “those are useless. You need a wide brimmed Tilley hat”. I cringed as I’ve always hated them. I now have one. It’s a little more stylish than the original Tilley bucket hat but it’s still a Tilley. Oh well.

#38 Richard L on 06.01.22 at 2:16 pm

Good to see Macklem finally taking inflation seriously. Better late than never.

#39 crowdedelevatorfartz on 06.01.22 at 2:18 pm

@#22 Doug t
“my business partner bought the Ford Mustang E and does nothing but complain about it = $85k lol”

+++
The electric ford “mustang”?
Pffft.
Ugliest Mustang ever produced.
It looks like an SUV with a “Mustang” label on it.

You business partner will have fun trading that piece of crap in.
His troubles aren’t over.
Huge loss on the trade in.

#40 Søren Angst on 06.01.22 at 2:19 pm

The kiddos, newbie buyers and non-believers said it could never happen. The grizzled among us reply, just wait.
– Garth

You got that bang on.

No Magic Wands kids. Us Paleos’ been there, done that.

It started in the 80’s, high inflation, and it carried on until the early 90’s. All the while the CBs were trying to stomp inflation down with high rates.

10, TEN YEARS.

The so called “higher rates” you have now are nothing. They’d be higher if it weren’t for the fact that far too many Cdns have pickled themselves in debt.

When I look at Cdn Wealth numbers from StatCan I conclude this:

Asset rich (the bulk of it in RE) but Cash flow poor. *

The only threat I see coming for Canada in the years to come is the Cash Flow poor thing.

* 2019 Net Cdn Wealth per Economic Family & Individuals, StatCan:

Avg $329,900 (largest asset is RE = $400,000)
Median $738,200 (largest asset is RE = $598,500)
Total Pension assets = $158,700 Median, $345,400 Average
Company pension plan = $164,900 Median, $313,500 Average – ONLY 50.4% have this.

—> Can you spell HELOC, LOC?

Individual Tax Statistics by Tax Bracket 2020 Edition (2018 tax year), 28,356,480 tax filers, CRA:

$46,605 or less = 18,674,790 Cdns, 65.9% of total tax filers
$46,605 – $93,208 = 7,211,410 Cdns, 25.4% of total tax filers

The other 8.7%, the +$93,208 crowd (like me, Paleo Pensioner) = 2,470,340 tax filers.

———————–

As always, Cash is King. Watch Consumer Spending in the coming years. That will be the litmus test.

Not there yet.

#41 millmech on 06.01.22 at 2:24 pm

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

#42 Rook on 06.01.22 at 2:28 pm

If one is considering a job change, or career move, to capitalize on the cost/wage spiral you mention, are there any economic signals one should be looking at so they can maximize their salary over the next 2-3 years?

Or is this sort of a ‘now’s as good a time as any’ type thing?

#43 Sail Away on 06.01.22 at 2:28 pm

#28 Søren Angst on 06.01.22 at 12:57 pm

So Canada…

Be less Hipsterish in the line up at the Dogana.

———

https://knowyourmeme.com/photos/830691-hipster

#44 Søren Angst on 06.01.22 at 2:43 pm

Paleo Pensioner Tax Bracket Stats, 65 yrs older.

A total of 7,588,920 brave souls that made it this far in life, CRA 2020 Edition:

$46,605 or less, 6,026,300 Cdns. 79.4% of the total.
$46,605 – $93,208, 1,242,890 Cdns. 16.4% of the total.

The OTHER 4.2%…

$93,208 – $144,489, 177,650 Cdns. 2.3% of the total.
$144,489 – $205,842, 66,830 Cdns. 0.9% of the total.
$205,842 or more, 75,260 Cdns. 1.0% of the total.

Cash flow poor for the most part.

——————-

Oddly? 11,120 Cdns that make $205,842 or more are 85 yrs old and over (past their due date if you were to ask me, then again if I ever get there, I’d so no).

BUT they are the REAL Bank of Grandma & Grandpa (where the Bank of Ma & Pa go).

Hats off and cheers to you, you old Crogan’s!

#45 Emily on 06.01.22 at 2:43 pm

“I would not let Canadian home prices go down” Adam Vaughan is steaming mad today like an incel.

Probably on suicide watch these days.

#46 Brian on 06.01.22 at 2:50 pm

#23 Søren Angst

Russia will do fine with their oil exports. Europe not so much! India increases purchase of Russian crude. As far as tankers go, they load the ships, transfer to tank on land in foreign country, reload onto another ship from western country and sell it in Europe. Of course it will be sold at a much higher price. Greek and Cyprus shippers do it all the time.

https://oilprice.com/Energy/Crude-Oil/How-The-Ukraine-War-Completely-Upended-Global-Crude-Flows.html

https://www.cnn.com/2022/05/31/energy/india-snapping-up-russian-oil-intl-hnk/index.html

#47 millmech on 06.01.22 at 2:53 pm

Forgot to add this to previous post, an article well worth reading about 1989 bubble bursting.
https://urbaneer.com/blog/when-dreams-of-domesticity-became-nightmares-steve-fudge-urbaneer-bosley-recounts-the-1989-toronto-housing-market-crash

#48 paul on 06.01.22 at 2:53 pm

#27 Summertime on 06.01.22 at 12:49 pm
https://ca.finance.yahoo.com/news/bank-of-canadas-mandate-and-why-so-important-120703143.html

CPI is NOT the inflation, let’s stop that giant lie first, please.

————————————–

High oil good for Canada. – Garth

Not really. High oil = high gas prices everywhere, except Alberta. How that is good is beyond me. Let’s have oil at 200 bucks (coming soon) and see how that is good, shall we?

Good for oil sands stock holders, not for Canada.

Our nation’s largest export. Very good for us. – Garth
—————————————————————–
I guess that’s why we didn’t finish the pipeline, cant have it too good!

#49 Mike in Cowtown on 06.01.22 at 2:56 pm

Do you think the CB will continue raising if real estate prices decline more than 20%?

I guess what I’m asking is can they continue to battle inflation if real estate is a smoldering hole in the ground?

After inflating 45% in two years how on earth is a 20% correction “a smoldering hole in the ground”? Get a grip. – Garth

#50 Søren Angst on 06.01.22 at 2:56 pm

#32 Sail Away

THAT was good.

I liked the tiny feet and sawdust bedding bits. Though, they forgot the plaid shirts and hair bun parts.

PS:

Good on you, your 50th but wait until you hit the late 60’s. Skin gravity, body that eats its own muscle. You won’t feel so buxom then.

I’m still dealing with Pandemic Paunch. It takes ages to get rid of the older you get.

Keep staying fit, it will stead you well +65 yrs old. And eschew muscle mass, it turns into fat later on then your body eats it.

#51 Shawn on 06.01.22 at 3:00 pm

StatsCan is suspect?

#35 Ponzius Pilatus on 06.01.22 at 1:42 pm said:

I always wonder where the StatsCan people are shopping.
My local grocer prides itself in fresh meat.
Every meat item that is within 2 days of best before date, is discounted by about 30%.
And most stores have weekly specials.
Probably no political interference, but the data collection process seems suspect.

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

What is suspect about that besides maybe your nearly expired meat? Am I supposed to guess what is suspect here? Or does it just “seem suspect” because you would like to think it is suspect for some reason?

#52 Søren Angst on 06.01.22 at 3:01 pm

#46 Brian

Ya, ya. BS walks and money talks.

Russia implodes economically by the end of the year. Sanctions unravelling their industries.

Their only tank factory can’t make tanks, Western sanctions.

They’re hauling out their museum piece T60 tanks as a last resort (where 60 = the number of years old those tanks are).

Ya, they’re gonna be just fine. Sure they are. That and 2-bits will buy you a cup of coffee (in Moscow).

#53 Philco on 06.01.22 at 3:05 pm

A great EV. Bought 1.5yrs old 10,000km $31,000.00
About 1.2 cents a KM to drive. Pro Pilot to boot. The other cars are overkill.

https://www.youtube.com/watch?v=OVjhRW77czc

The dealer tried to buy it back for $10,000 more.

#54 Observer on 06.01.22 at 3:12 pm

#34 Mark Rypen on 06.01.22 at 1:38 pm

And to think, Tiff was telling people 12 months ago that interest rates were going to stay low for a long time.

^^^^^^^^^^^^
Interest rates are low and won’t be high anytime in the forseeable future.

#55 Matt on 06.01.22 at 3:17 pm

Only a fool will buy a Tesla Car and the there is no shortage of fools in the world. There are better quality electric vehicles at lower prices you can buy from other Auto companies. Prices of electric cars will drop due to increasing competition. Every auto manufacturer has invested heavily in Electric Vehicle Manufacturing.

#56 Faron on 06.01.22 at 3:18 pm

#22 Doug t on 06.01.22 at 12:22 pm

I would NEVER pay that kind of money for 4 wheels gas or electric

Me neither. 2005 Toyota Echo was my most expensive car at $5k. 2006 matrix (current) was my half of $6k. Both great cars. Cheap to own.

Eventually the gas fleet will need to replaced, so electrics will need to come in. But scammy, poorly built Teslas? Nope.

Defense of the mach-e is that they’re a new assembly line. 1st year cars can suffer. No excuse for an old Tesla model being built like crap.

#57 Diamond Dog on 06.01.22 at 3:22 pm

The big question: will this CB aggression tip the economy into recession? – Garth

Inflation is lower here than the U.S., but we generally follow their lead 90% of the time. I don’t see much cause for deviation right now? I would agree with Canada not sliding into recession at least, for this year. The U.S. will be in recession before year’s end but not officially. It depends on how technical one wants to define recession, it takes 2 quarters of back to back negative growth to officially call it a recession, but the U.S. will on the street be in a recession beginning in Q4, Q1 at the latest.

It’s shaping up to be a recession in Europe, the next closest thing to it in China and a recession beginning in the U.S. in Q4. Inflation is running hot across the western world… it’s looking like a recession is brewing globally. Commodities rely on growth, but there have been supply shocks from war and lingering shocks from Covid. We may see persistent high energy prices into next year regardless of economic circumstances but that will change as demand wanes.

Agricultural commodities are reliant on rainfall. The globe is still in La Nina like conditions:

https://climatereanalyzer.org/wx/DailySummary/#sstanom

We’ve had 2 years of La Nina like conditions. Odds are things will flip to neutral or an El Nino at some point but until La Nina fades which may extend past this growing season, Ag commodities should stay strong through this year but it’s not certain. This next 4 to 6 weeks will tell the big story on Ag commodities in the prairies and south of the line far removed from Putin’s war.

Metals and fert pricing will also continue to be highly impacted from Putin’s war. No one really knows other than God how long this thing will last… it looks like it will drag out considering Putin’s recent moves to raise volunteer military age limit to 65 years for men and 60 years for women if this info is correct:

https://www.defconlevel.com/news/2022-05-28/russia-extends-military-service-age-to-65-years-of-age.php

Russia already has conscription in Russia. If this upper age limit is expanded to include conscription on top of voluntary enlistment, it speaks volumes in terms of how damaging the war has already been to Russian troops and how much longer the war can continue on. This is no longer a young man’s war.

But I wander. Until we see a meaningful slide into negative economic growth world wide and certain supply shocks normalize, commodities will continue to stay strong. Y’know, until. This doesn’t mean commodity prices won’t slip later into this year or early next if and likely when global economic conditions deteriorate. Canadians should brace for recession sometime in early/mid 2022.

How bad could it get? We should take note of what Jamie Dimon said today:

https://www.cnbc.com/2022/06/01/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html

There’s lots of liquidity out there. Too much, unfortunately. The signs of an overheated, overstimulated economy are everywhere. There’s a 2 trillion dollar reverse repo market few are talking about. A stock market that doesn’t want to reverse course because the cash is there waiting to jump in. From the rapid increase in the money supply evidenced by zero rates and unprecedented Fed bond buybacks and govy deficit spending, sure, employment looks great but it always does when there is excess liquidity. With rising rates and QT, that will change.

The effects of tightening credit conditions is predictable. So are the effects of inflation, what the Fed will need to do to reverse it and how long that will take if investors have been paying attention. On that note, the recessions that are coming in the U.S., here and across the globe won’t be mild and won’t be over quickly. If we’ve been Kevin O’Leary optimistic, it’s because we don’t understand the cause/effects of inflation. We’ve heard the oft used analogy of “landing the plane to avoid recession”, it’s more like needing a Sully to land the plane to avoid severe recession. After all, Dimon used the word “hurricane” to describe what’s coming. We could see a depression if this is not properly handled.

Investors need to be defensive, if there’s such a thing as investing defensively. There is, but it provides answers most will not want to hear at least, for now and that’s all the time I have. Could go on about housing, but it will be well covered here. Anyone with a mortgage calculator can see where this is going. Percentages up for renewal, reversed wealth effect etc., ummm… yeah.

#58 Søren Angst on 06.01.22 at 3:26 pm

#37 Don Guillermo

I’d get a new dermatologist.

I hope you are OK and in good spirits otherwise – you read as if you are. That was hammer blow to the head, literally.

YOU, and ONLY you, are allowed to wear the updated yet still ridiculous Tilley Hat in Italia – World Capital of Fashion and pretty much everything else.

Caput Mundi.

——————

Take care of yourself DG, I mean it. That would slay me.

#59 The Regulator on 06.01.22 at 3:31 pm

In other news : Deutsche Bank DWS unit CEO Asoka Woehrmann resigned over greenwashing raid. Greenwashing : The dissemination of disinformation to present an environmentally responsible public image. Wrist slap.
Europol issues dire warning about the huge amount of weapons being pumped by the west into Ukraine. Europol director Catherine De Bolles said that the flood of weapons to the Ukraine/Russia battlefield could end up in the hands of criminal groups for years to come.
Finally, W.E.F. technocrats are urging people (meaning everybody but them) to ditch meat and other foods deemed harmful to the planet and instead consume “climate beneficial foods” such as seaweed, algae and cacti. Mmmmmmmm. Next to eating bugs and drinking reprossessed sewage water, what’s not to like?

#60 Don Guillermo on 06.01.22 at 3:32 pm

Wife drove me to the YYC airport yesterday morning during rush hour. I’m back in Mexico today to take care of some medical appointments. The back log and wait times in Calgary were too frustrating. Anyways, different story. We were going opposite of miles of stop and go traffic heading into the downtown core. Haven’t seen that for over 2 years. Never thought gridlock could look so good.

#61 Justice for Johnny! on 06.01.22 at 3:38 pm

That’s the end of that spring blockbuster.

She owes Johnny $8.35m

Now what will we pay attention to?

HALF A POINT? Pffff!

#62 Justice for Johnny! on 06.01.22 at 3:39 pm

This surely means Johnny is BACK in

…Pirates 6!

#63 Faron on 06.01.22 at 3:41 pm

The governor of Texas, Greg Abbott, shared McConnell’s view. “Canada’s solution to gun violence ignores the fact that people who shoot people inside buildings first have to enter those buildings,” he said. “The problem isn’t guns—it’s doors.”

Republicans Blast Canada for Insanely Responding to Gun Violence by Banning Guns https://www.newyorker.com/humor/borowitz-report/republicans-blast-canada-for-insanely-responding-to-gun-violence-by-banning-guns

#64 The Regulator on 06.01.22 at 3:43 pm

# 52 – Soren Angst : Those tanks you claim Russia is dragging out of museums? Probably newer than anything Canada has. Mabey we have some surplus Sherman tanks we can donate to Ukraine? Or some Sea Kings?

Are we invading someone? How exciting. – Garth

#65 One Point Five on 06.01.22 at 3:43 pm

1.5%

…this is supposed to scare people?

Big Deal!

The fact there is so much tough talk about it behind the increase to scare people, it will have some of the desired effect without the bank needing to increase higher.

Interesting how people confuse the bank’s benchmark rate with commercial lending rates. – Garth

#66 Søren Angst on 06.01.22 at 3:50 pm

#47 millmech

Good to read you are doing research into what is coming based on what has happened (like to Paleo’s like me).

I was living in Trauma at the time of the article, people frenzied with RE and then…in about a month…

the lights went out, last call, party over. Pick up the pieces.

Some wounded financially for a decade. Wisely, and not luckily, I was renting a very nice townhome on Keele Street a 1 min walk from the subway station. Used to bike thru High Park and up the Humber River valley as far as you can go, and then back. 23 mile bike ride, need for speed racing bike.

The owners, well, it did not go well for them financially (one was a hotshot Accountant). Had to sell the place a year or so later. I just moved on to another place just as nice. Cheaper too.

——————

Good you are educating yourself. History is a good teacher. Few pupils, save you. It will stead you well for a lifetime.

#67 Sail Away on 06.01.22 at 3:52 pm

#50 Søren Angst on 06.01.22 at 2:56 pm
#32 Sail Away

Good on you, your 50th but wait until you hit the late 60’s. Skin gravity, body that eats its own muscle. You won’t feel so buxom then.

I’m still dealing with Pandemic Paunch. It takes ages to get rid of the older you get.

Keep staying fit, it will stead you well +65 yrs old. And eschew muscle mass, it turns into fat later on then your body eats it.

——–

We’ll see. My father-in-law still joins camp for a 3-week grouse hunt at 85 and does ok, although he often chooses to stay in camp to read or fish, or if we’re lucky, whip up a feast. Speaking of… the giant western puffballs should be good if this summer is damp. Although a single one of those beasts is enough for a few days.

The hunting dogs can usually do 15km runs / half day hunts up until about age 12, then hit a quick decline over a couple of months and croak.

Pretty much a perfect life.

#68 JPN on 06.01.22 at 3:55 pm

#24 Don from # 10 .. That’s because the original EV’s
were designed by tech company’s not car manufacturer’s .. Now you are starting to see the real designs come through the automotive industry.

#69 crowdedelevatorfartz on 06.01.22 at 3:58 pm

@#56 Justice
“That’s the end of that spring blockbuster.
She owes Johnny $8.35m”

+++
It could be worse.
She could be a Qatar Princess in the midst of a divorce.

https://abcnews.go.com/International/wireStory/qatar-princess-found-dead-home-southern-spain-85103993

Now?
Back to the real world of work, commuting, traffic jams taxes, and housing prices.

#70 Don Guillermo on 06.01.22 at 3:59 pm

#57 Søren Angst on 06.01.22 at 3:26 pm
#37 Don Guillermo

I’d get a new dermatologist.

I hope you are OK and in good spirits otherwise – you read as if you are. That was hammer blow to the head, literally.

YOU, and ONLY you, are allowed to wear the updated yet still ridiculous Tilley Hat in Italia – World Capital of Fashion and pretty much everything else.

Caput Mundi.

——————

Take care of yourself DG, I mean it. That would slay me.
****
Thanks Soren. Next time I’m Italy I’ll wear a tag on my hat that says “by Doctor’s Prescription” in English and Italian.

#71 Søren Angst on 06.01.22 at 4:09 pm

#58 Søren Angst

(…) I’d get a new dermatologist etc.

——————–

Thank you Garth for the (…). You’re a good man. You really are.

Grazie mille. E ciao d’Italia.

PS:

I’ve given up on trying to sneak one by you. You’re too sharp and I’m glad for it.

Oh:

Are we invading someone? How exciting. – Garth

Too funny. 😉

#72 crowdedelevatorfartz on 06.01.22 at 4:10 pm

@#52 Soren
“Ya, they’re gonna be just fine. Sure they are. That and 2-bits will buy you a cup of coffee (in Moscow).”

+++
Starbucks coffee?

The 3 month war in Ukraine is entering the next phase of the Russian “meat grinder”.
It usually take 18 months for Russian military “tactics” to pound everything to rubble
As I have stated before Russian leader and his generals will pour tens or hundreds of thousands of troops into the grinder to wear down the “enemy”.
Out die them , if you will.
They lost millions in WWII but ultimately “out killed” the Germans.
Afghanistan was another 10 year butcher fest.
Chechnya. The other “Stans”, Georgia….
It matters not to a dictator like Putin and his generals….they can “out die” the Ukranians.
As for replacement tanks, helos’ jets.
I’m sure the Chinese factories will work overtime for the free Russian oil, potash, grain etc in trade.

Lets see how eager the US and Nato is to supply Ukraine modern arms when Kyiv falls and the leadership is on the run.

#73 Shawn on 06.01.22 at 4:20 pm

Meaning of Bank of Canada Rate

Interesting how people confuse the bank’s benchmark rate with commercial lending rates. – Garth

*******************
True, as Garth would know, the Bank of Canada rate is a target for overnight lending (the shortest possible term) between financial institutions which are considered the most credit worthy entities.

https://www.bankofcanada.ca/2022/04/understanding-policy-interest-rate/

In theory the banks / financial institutions can borrow directly from the bank of Canada at the policy rate. In practice they borrow from other financial institutions. The banks all have deposits the Bank of Canada that pay interest of 0.25% less than the Bank rate. Very few to almost none have any borrowings from the bank of Canada at this time. See assets on bank of Canada balance sheet and there is little or no advances or loans of any kind due it seems.

https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/

(Apologies for bringing facts to an emotional topic)

As far as any person or non -financial institution borrowing at the bank of Canada rate even for overnight much less for say a 5 year term. Forget about it.

#74 Søren Angst on 06.01.22 at 4:23 pm

#67 Sail Away

Good DNA. Me too actually. Long lived family except for Dad, died at 65 but was a heavy smoker and welder in the days they had no helmet breathing equipment (welded some of the nastiest stuff there was, Alberta WCB autopsied him before I could bury him).

I like the hunting parts you write about. Brings back great memories for me of duck, pheasant, grouse and partridge hunting in Alberta with my Springer Spaniel that got stolen, cause I had trained him to well (and to like everyone).

Also, loved fishing in the Rockies and Foothills for splake, trout and whitefish (perch too) – yum, yum (dig hole next to stream in gravel, fill with water, catch fish, put alive in hole, fire up skillet, bonk fish on head, gut, put into skillet, 2 min later…taste bud heaven..it does not get fresher or better than that).

But alas, those good times behind me.

Enjoy these time SA, they are precious and when you become a Paleo like me you will wax and pine with a smile on your face as I do – or you become the FIL, better yet.

You have the right mindset. Savor the times.

Carpe Diem!

#75 Schadenfreude on 06.01.22 at 4:27 pm

Here’s all you need to know, from the bank’s official statement: … more forcefully if needed to meet its commitment to achieve the 2% inflation target.”
——————————————————————–
And anyone with a brain cell left is supposed to believe these doofus?? The BoC was comfortably sitting on cruise control for over a decade with super accomodative rates to satisfy their 0.01% club members and all the while praising how inflation was low eventhough everyone outside the empire club was witnessing the spiraling costs of housing in particular that was creating unecessary stress and for what? So that the dividends would keep flowing to the insiders?

Never, ever take any words seriously coming out of such morally bad and wicked individuals.

Pepe is correct to threaten their very existance and if he can’t do it, public opinion will still rally around someone who eventually will.

#76 Shawn on 06.01.22 at 4:27 pm

Sarbucks in Moscow, not anymore

#72 crowdedelevatorfartz on 06.01.22 at 4:10 pm
@#52 Soren
“Ya, they’re gonna be just fine. Sure they are. That and 2-bits will buy you a cup of coffee (in Moscow).”

+++
Starbucks coffee?

*****************************
Starbucks had a few hundred stores in Russia. Not a big deal for them. They announced last month that they are permanently pulling out of Russia and will pay their employees for 6 more months to stay home. I suppose they are on the hook though for rent for the full term of the leases. There will be a noticeable write-off next earnings report.

I still like Starbucks as an investment right now. But if they ever feel forced to leave China that would be very ugly. They are huge in China.

By the way in thinking about whether big corporations should pull out of China or Russia I can almost guarantee that if you own a bunch of shares in the subject company, it’s not as easy to say oh yes they should pull out. Asking big corporations to take huge losses is different than asking yourself to take even a small loss. Interesting how morals can feel different when it’s your own money.

#77 YVR Renter on 06.01.22 at 4:35 pm

#47 Millmech-
Great article. It was published in March I think, before the s**t started hitting the fan. We lived through it all, and I’ve been saying it here for months. History is repeating itself. In the 80’s we had a home then traded up, were miffed by all the watercooler bragging by folks about these new investment things they had called condos. The bragging came to an abrupt halt, lots of desperation and sheepishness. People couldn’t give their investment condos away, no tenants forthcoming, some had to sell their homes to cover. A few divorces ensued. Nary a crane over Toronto for almost a decade. Avarice will always meet it’s day, bubbles always blow up.

#78 Søren Angst on 06.01.22 at 4:37 pm

#72 crowdedelevatorfartz

BS walks. Money talks. And so do long range weapons, farther than Poor Z has.

https://twitter.com/andersostlund/status/1531872385007341571

Winning side scorecard:

https://twitter.com/bsant54/status/1531895053085548544

Vlad will go blind soon enough:

https://twitter.com/bsant54/status/1531909298497921025

And in conclusion for the delusional that think Russia will be fine economically:

“Russia heading for worst recession since end of cold war, says UK”

https://www.theguardian.com/world/2022/apr/08/russia-heading-for-worst-recession-since-end-of-cold-war-says-uk

And that was April 8th, before they hauled out their 60 year old tanks for cannon fodder in the Ukraine. It has only gotten worse for Poor Z and Putin since then.

——————

And on a lighter note, the damn Austrians are invading my favorite beach:

https://twitter.com/bsant54/status/1531194475980247041

For their treatment of Italia during the Pandemic, I would ban them from Italia.

https://www.bbc.com/news/world-europe-51815907

But alas, Italia is not like them. We didn’t ban them when their small population had more Covid cases for weeks on end than all of Italia.

And no, we don’t need their tourist dollars. 9 million people piss ant country of yodelers like the Bankers next door to them.

#79 Joseph R. on 06.01.22 at 4:40 pm

#64 The Regulator on 06.01.22 at 3:43 pm
# 52 – Soren Angst : Those tanks you claim Russia is dragging out of museums? Probably newer than anything Canada has. Mabey we have some surplus Sherman tanks we can donate to Ukraine? Or some Sea Kings?

Are we invading someone? How exciting. – Garth

————————————————————–

Canada operates Leopards 2 A4 is the main battle tank. A modern tank. Russia operates T-72 with Explosive Reactive Armour.. They were bad in Syria and that are bad in Ukraine.

Further giving reasons to Garth that you are Russian Troll.

#80 Brian on 06.01.22 at 4:41 pm

#52 Søren Angst

So it turns out that India is buying Russian oil and a significant percentage of that is then being sold at an additional premium back to the EU.

India is buying record amounts of severely discounted Russian crude, running its refiners above nameplate capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe. In short, the EU policy of tightening the screws on Russia is a policy win, but the unintended consequence is that Europe is effectively importing inflation to its own citizens.

https://www.marketwatch.com/story/why-india-is-set-to-win-big-as-eu-bans-russian-oil-imports-11654021874

Finland still buying Russian gas but paying more!

https://www.urdupoint.com/en/business/finlands-gasum-still-importing-russian-lng-1519209.html

Italy importing more Russian Oil!

https://apnews.com/article/russia-ukraine-politics-economy-global-trade-b0c193007210592123112e2db1069461

#81 Shawn on 06.01.22 at 4:45 pm

Credit Default Swaps on Russian Debt

A ruling today apparently means that $1.5 billion in credit default swaps will pay out becasue Russia failed to include an extra $1.9 million when interest was paid late recently.

Nothing to worry about here? Credit Default Swaps were no problem in 2008 right?

Actually it probably is a small amount even at $1.5 billion. But somebody someplace is surely crapping their pants over this today having made the wrong bet.

For some bonds Russian will be forced to default because of U.S. embargoes against paying or accepting payment on Russian bonds in U.S. dollars. Hardly fair, but oh well.

#82 Shawn on 06.01.22 at 4:48 pm

#55 Matt on 06.01.22 at 3:17 pm
Only a fool will buy a Tesla Car and the there is no shortage of fools in the world. There are better quality electric vehicles at lower prices you can buy from other Auto companies. Prices of electric cars will drop due to increasing competition. Every auto manufacturer has invested heavily in Electric Vehicle Manufacturing.

***********************
What about the superior bragging rights for Tesla owners? You gonna impress anyone with an Electric KIA?

If bragging rights were not a thing then Rolex for example would not exist. Cache matters.

#83 Søren Angst on 06.01.22 at 4:48 pm

#70 Don Guillermo

👍

And when you do, Benvenuto in Italia!

Incolumem. Bonus salus.

#84 Dina on 06.01.22 at 4:59 pm

My parents sold their 3 bedroom townhouse in GTA for $755,000 gross, after all expenses, commissions $715,000. This was back in March-2022. If they still owned it is is only worth $667,000 now. They moved back to Nova Scotia buying a nice house way in the country for $449,000 and invested the rest left over after expenses, gas etc. now $260,000 in a 10 year GIC 4.35%, getting $11,310 a year annual interest income coming in their bank account. They are retired both at 60, $1,700 a month early CPP coming now. Their TFSAs, RRSPs, non-registered are now compounding also at 4.35%, 5.30% after compound interest taken into account which will be growing $43,700 a year compound interest. They are making the same money retired now $75,000+ a year, live in abetter house, place and have a much higher net worth, no debts either but after taxes way ahead. You got to love these higher, rising interest rates .

We also like truthiness on this blog. Interest is paid annually (sometimes) and most often upon maturity, with imputed payments taxable annually. The average monthly CPP payment at age 60 is $532. – Garth

#85 -=withwings=- on 06.01.22 at 4:59 pm

Don’t worry, the Realtors fake House Price Index which has showed rampant growth by using YoY comparison is being rejigged. Why? To show little slowdown. Home prices will now be compared to a rolling average of the last FIVE years, instead of just last year.

https://trreb.ca/index.php/news/news-releases/1861-changes-to-the-mls-home-price-index

#86 crowdedelevatorfartz on 06.01.22 at 4:59 pm

@ Beth
“People getting a second job, is that so unheard of in Canada? Cause the way the peeps in this comment section talk its like 1980 all over again. ”

+++
The 80’s recession was like throwing a light switch.
Everyone in construction was busy busy busy.
Then crickets.
I knew several very experienced housebuilders that went flat out building subdivisions….then…12 months later were glad to be working nights as janitors pressure washing bus stops.

We havent started to see the ramifications of the rising rates yet. A big fat portion of our economy is Housing and the trades that go with it.
Give it 6 months ( Christmas? or the New years Visa hangover?) and come back with your assessment.

#87 Shawn on 06.01.22 at 5:19 pm

Doofus?

#75 Schadenfreude on 06.01.22 at 4:27 pm

Here’s all you need to know, from the bank’s official statement: … more forcefully if needed to meet its commitment to achieve the 2% inflation target.”
——————————————————————–
And anyone with a brain cell left is supposed to believe these doofus??

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

“The plural form of doofus is doofuses or doofi”

So now who’s a doofus?

#88 Don Guillermo on 06.01.22 at 5:19 pm

#83 Søren Angst on 06.01.22 at 4:48 pm
#70 Don Guillermo

And when you do, Benvenuto in Italia!

Incolumem. Bonus salus.
***
Thank you. I love Italy!

When my brother in law picked me up at the airport yesterday afternoon I could tell he was snickering at my new hat. I yelled out Tutti Bastardos! He still gave me a ride. I don’t think his Italian is that good :-).

#89 Shawn on 06.01.22 at 5:23 pm

CPP amounts

The average monthly CPP payment at age 60 is $532. – Garth

***************************
Government workers tend to get much more, close to or at the max CPP in many case, Unless they retire early at 55. 60 is enough for the max in many cases.

Another reason to hate government workers.

CPP is based on earnings/contributions/time, right? No special formula for public sector workers. – Garth

#90 Dear Søren Angst on 06.01.22 at 5:28 pm

You are the king of feeble minded.

Garth relay this message please.lool

#91 Shawn on 06.01.22 at 5:29 pm

House construction as percent of GDP

rowded at 86

A big fat portion of our economy is Housing and the trades that go with it.

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

Look up gross domestic product by expenditure account. I happened to be looking at it today. In between commenting on far too many items today.

The investment in residential structures (houses and apartments) amounts to 8% of GDP as of Q4 2021. That is significant. A 25% drop in residential structure construction would tale 2% off GDP by itself. Yep, significant.

#92 Shawn on 06.01.22 at 5:33 pm

CPP is based on earnings/contributions/time, right? No special formula for public sector workers. – Garth

**************************
Yes indeed you are right of course.

But a lot of government workers including teachers, nurses, police, armed forces (maybe) and managers of all kinds spend their whole career making more than the CPP max. So they collect more CPP than the the typical private sector worker.

Of course many private sector get the max too. Just saying government workers tend to be higher than the CPP average.

Very few people are precisely average. Probably a pretty wide bell curve.

#93 Søren Angst on 06.01.22 at 5:34 pm

#80 Brian

Do you live in a self-happy Russian safe place?

I commented a week or so ago about the oil imports from Russia up 4X. That was for the oil refinery, huge, in Syracuse, Sicily owned by the Russians…to build inventory and keep it going.

As of the other day, no more Ruskie oil imports – EU accord. Gov Italia knew that was coming and acted accordingly beforehand. Do not misinterpret that as you have.

Which I commented about today. But of course, you are in your own little Russian bubble World manifesto and heaven forbid you would:

try to keep up.

The Russian owned oil refinery will be probably nationalized and then sold off to other Italian oil industry firms. To save about 7500 jobs and a whack of added value in the region of €700M/yr.

And fab Putin, Master Strategist, will drive Russia this year into the ground with a GDP forecast of:

-10 to -15%

and that is per the Bank of Russia. So, it’s probably going to be worse. Vlad does not like bad news. *

Now you can return to your Netherland Bubble of Make Believe.

PS:

US sending these besides the longer range (HIMARS rocket systems) than Russia has:

https://twitter.com/Flash43191300/status/1532098063677935625

* Putin just fired 5 of his Generals, cause, it’s going SO WELL in the Ukraine (and he doesn’t like bad news).

https://www.newsweek.com/putin-fires-five-generals-russia-military-failures-ukraine-continue-1712053

#94 Sam on 06.01.22 at 5:42 pm

12 years to get to 1.5%. Quite the hawk.

#95 Doug t on 06.01.22 at 5:49 pm

#82 Shawn

Well bloody sad and shallow if you live trying to have “bragging rights” for a car or watch – thank god my ego/self worth isn’t that pathetic

#96 Yorkville Renter on 06.01.22 at 5:52 pm

starting to see house asking prices coming down… actually saw a property list for $950k

yes, it’s a dump on a busy street but I haven’t seen anything sub-$1mm for quite some time (not including the fake $999k asks).

#97 NoName on 06.01.22 at 5:54 pm

I actually went down the road and hit all garden centers in search of melons, didn’t found any in vegetable section but i did found cantaloupes just besude cucumbers, i guess because they are cousins. Just keep on mind GI of watermelon is 72, everithing above 70 is consider high, and potato’s are rated at 82…

Here is an interesting read about Watermelon man and Cantaloupe island (unrelated to vegetables).

https://blog.uvm.edu/tgcleary/2020/03/10/from-watermelon-man-to-cantaloupe-island-and-beyond-herbie-hancocks-ingenious-reinventions-featuring-caves-of-the-island-an-original-tune-based-on-cantaloupe-island/

and bonus music while you are reading

Watermelon man
https://youtu.be/RzPZvKSdN7g?t=210

Cantaloupe Island
https://youtu.be/2VN8zH366M8

Side note GI of watermelon is 72, and potato’s are rated at 82, everything above 70 is consider high.

#98 The Original Jake on 06.01.22 at 5:54 pm

“High oil good for Canada”

Sure, but not for the biggest consumer in the world. Gas pumps in the US have already cracked $5/gallon. For now, the consumer is bearing it, but longer term high oil prices will crack the back of the US consumer and as they go we go to. High oil prices eventually implodes on itself. Boom and bust sector.

#99 Søren Angst on 06.01.22 at 5:57 pm

#91 Sam

Zen.

THAT was good. 😅

#100 Yukon Elvis on 06.01.22 at 5:57 pm

Noises from within the oil industry….lack of demand for Russian oil and gas….storage facilities fill up…..pipelines will back up and wells will shut down…when wells drilled in the permafrost shut down it will take years to restart or drill new ones. Insurance companies will not insure Russian cargos of oil….Hard times ahead for Russian oil and gas….Opportunities for politically stable oil and gas….maybe here in North America.

#101 Don Guillermo on 06.01.22 at 5:59 pm

Europe has known they’ve been hostage to Russian energy for decades. I was involved with 2 Combined Cycle NG fired power station projects in the late 90’s. Enron specials. We had to provide up to 2 weeks worth of liquid fuel tankage for when (not if) the gas was blocked off over some political tiff. They then had 2 weeks to sort it out … or more if they started hauling liquid fuel. Commissioning the auto fuel swap systems was super fun.

#102 Søren Angst on 06.01.22 at 6:05 pm

#88 Don Guillermo

Thank you. I love Italy!

—————–

Me too. So much so, I moved there.

Still, all my cash & Threadbare Portfolio is in 🍁.

Don’t trust the Italians with my meagre patrimony. Keep only a couple thousand €’s on hand here and only because I have to (need an Italian bank account to get phone/Internet and utility services).

In Canada I TRUST.

#103 Søren Angst on 06.01.22 at 6:11 pm

#100 Yukon Elvis

I think that (opportunities) has happened already and will only get better.

I mean, look at today. Mr. Market in the Red across the board except for my ETF/ETN in “yeah oil”.

That doesn’t happen because all is well with Russian oil exports diverted to to India and China and World supply overall.

You nailed it I think in the situation at hand in just a few sentences.

#104 jess on 06.01.22 at 6:16 pm

Dimon said that the economy is “distorted” by inflation.

economic hurricanes? quantitative tightening, at the same time it is raising interest rates.
=====

say what?

Top Doug Ford Adviser Sent Premier’s Office Backchannel Message About Meeting With Russian Government

https://pressprogress.ca/top-doug-ford-adviser-sent-premiers-office-backchannel-message-about-meeting-with-russian-government/

Leaked emails show Russian officials sought help of Ontario PC insiders in an effort to flow Russian money into Ontario amid US sanctions

#105 Tim Hortons Surveillance Team on 06.01.22 at 6:22 pm

Garth, as you may have heard, we have lots of data, so if you need to track where the steerage deplorables have been hanging out, please just let us know and we’ll be happy to share.

https://www.cp24.com/news/tim-hortons-app-collected-vast-amounts-of-sensitive-data-privacy-watchdogs-1.5927281

No wonder Justin loves us!

#106 Ed on 06.01.22 at 6:23 pm

The grizzled among us are preparing for recession, personally it means doing nothing different.

#107 Søren Angst on 06.01.22 at 6:23 pm

#91 Shawn

I get that S. But it will not happen as fast as you might think.

Today GDP reports from StatCan:

+0.7% GDP in March 2022
– Gross domestic product by industry, March 2022

1st Qtr 2022 GDP +0.8% (3.1% annualized)
Household saving rate +8.1%
Household disposable income +3.3%
– Gross domestic product, income and expenditure, first quarter 2022

Still a lot of slosh in Canada. Inflation wears you down over time, years. Lived it. You will see in time that is true but not today.

——————-

Go here, look at the Key Indicators on the RHS and also click “More key indicators”:

https://www.statcan.gc.ca/en/start

Not in a while will the Cdn economy sputter. Like I said, inflation takes its time wearing a populace down. Give it years.

The only thing that I see derailing Canada before that is the Asset Rich, Cash Flow poor thing since too many Cdns pickled in debt and hell bent on RE.

On the latter, who knows if and when?

Still, not today.

#108 TurnerNation on 06.01.22 at 6:25 pm

And so it begins. The Furrrrst hike.
‘Now you’se can’t leave’

EQB – Equitable Group increases prime rate to 3.70%
[2022-06-01 18:19]
Equitable Group Inc. has increased its prime lending rate by 50 basis points from 3.20 per cent to 3.70 per cent. more…

#109 Elon Fanboy on 06.01.22 at 6:27 pm

#103 Soren Angst “I mean, look at today. Mr. Market in the Red across the board except for my ETF/ETN in “yeah oil”.

The 20%+ divi from that oil ETN is gonna pay for my electric car…..

#110 Yukon Elvis on 06.01.22 at 6:31 pm

#103 Søren Angst on 06.01.22 at 6:11 pm

That doesn’t happen because all is well with Russian oil exports diverted to to India and China and World supply overall.
+++++++++++++++++++++++
It will be hard for Russia to move oil anywhere by tanker now since insurers will not insure Russian oil cargo. Russian pipelines flow west to Europe not south and east to China or to India. Tough spot for China too. And don’t get caught violating sanctions by “transfer at sea”. Could be trouble for that.

#111 Barb on 06.01.22 at 6:33 pm

#1 Turner Nation

“Kanadian Kommunism. Hard to ignore it.

“Prime Minister Justin Trudeau’s government has adopted 72 secret orders-in-council — hidden from Parliament and Canadians — since coming to office, CBC News has learned.”

————————————

Wish Garth would tell us what he thinks of T2’s 72 OiC.
I’m betting he’s disgusted at the lack of transparency.

#112 The Regulator on 06.01.22 at 6:35 pm

# 79 – Joseph R : Our leopard 2a-4 CAN (upgraded) tanks, which were bought from Dutch surplus, equal 100. With 20 being upgraded to 2a-4M versions. On the other hand, Russia has ordered 2300 Armada(2014) tanks. They also have 2260 T-90(1992) tanks, 400 T-80 (1976) versions. Finally, your museum pieces, the T-72, were upgraded in the 1980’s, now T-72B (1700), and 1300 T-72 B/BA and 750 B-3’s. Do you understand sarcasm?

#113 ABC123 on 06.01.22 at 6:36 pm

#49 Mike in Cowtown on 06.01.22 at 2:56 pm
Do you think the CB will continue raising if real estate prices decline more than 20%?

I guess what I’m asking is can they continue to battle inflation if real estate is a smoldering hole in the ground?

After inflating 45% in two years how on earth is a 20% correction “a smoldering hole in the ground”? Get a grip. – Garth
——————————-

Funny how the math works here Garth. A 45% gain on a million dollar home takes it to 1.450 mill but a 20% decline now has it at 1.160 mill.

I think mike may have a point and the BOC could back off on its hawkish stance if drop in housing prices get much worse.

I certainly hope not . Need to kill the beast that is the housing obsession for good

#114 The Regulator on 06.01.22 at 6:46 pm

# 93 – Sore and Agnst: Netherland bubble of make believe? Works both ways. When will you be back from your vacation there?

#115 Exxon Shareholder on 06.01.22 at 6:50 pm

Exxon Mobil is not dumb. The signed a 2% royalty deal with Guyana and magically discovered 15 billion barrels of offshore crude oil in 5 years after signing the deal.

#116 Søren Angst on 06.01.22 at 6:50 pm

#90 Dear Søren Angst

You are the king of feeble minded.

——

My IQ off scale. +165. Tested numerous times. Mensa IQ vs. Correct Answers chart if I project well, well off to the right, in the +200 territory. But you can’t do that. No reliable measure beyond 165 (80s, 90s tests). Book smart part.

EQ in the 95 percentile. Street Smart part.

——————–

Care to share your IQ, EQ?

Ya, I thought so.

Now, go thrill your like minded friends. Oh,

lool

#117 Truthiness on 06.01.22 at 6:56 pm

Err… that’s not a hawk…..but a symbolic goosing does seem appropriate.

#118 crowdedelevatorfartz on 06.01.22 at 7:02 pm

@#93 Soren’s Angst
“Putin just fired 5 of his Generals, cause, it’s going SO WELL in the Ukraine (and he doesn’t like bad news).”
+++
Nice try.
All 5 of the Generals had nothing to do with the fighting in Ukraine.
They were “Russian Ministry of Internal Affairs” generals… ie the guys in charge of keeping ordinary Russians under the thumb.
NOTHING to do with the fighting that is going on in Ukraine.

Russian govt controlled media has now moved to more shrill propaganda where “you are either with us or with the enemy”. Internet is controlled. Outside information attacked or blocked.
Several army recruiting centers have been firebombed and antiwar graffiti is pervasive.

That being said .
The current fighting in Ukraine is no going well for the Ukrainians.
The Russian army will keep pounding the cities to dust and according to Ukrainian President Zelensky ” we are losing between 50 and 100 soldiers PER DAY.
The Russian military doctrine is very basic.
Pound them with artillery, overwhelm them with men….keep pushing forward.
March and April were a minor set back in the inevitable butchery to come.. Putin believed his lickspittle, corrupt generals who are now gone, replaced with hardened veterans of Chechnya. Ruthless, cold blooded and without any sympathy for the “enemy”.
These generals know. Failure for Putin ….is not an option if they want to stay out of prison.
The real war is just getting started.

#119 Nora Lenderby on 06.01.22 at 7:08 pm

#37 Don Guillermo on 06.01.22 at 2:16 pm
Sorry about your skin condition.

No need to be in a Tilly hat though. A gentleman (or lady) should have a collection of stylish hats. I recommend Beauchapeau.com (no connection, just a satisfied customer).

A Tilly hat is good for bottom painting…the boat, that is…and it can allegedly survive the digestive tract of an elephant, so there is that.

#120 Nora Lenderby on 06.01.22 at 7:15 pm

#50 Søren Angst on 06.01.22 at 2:56 pm
As for Dolce Vita’s pandemic paunch, I recommend rowing. Italy has world class courses and rowers, including recreational rowing, iirc.

#121 Søren Angst on 06.01.22 at 7:22 pm

#105 crowdedelevatorfartz

Delusional.

King of Non Sequitur.

But, hey in your make believe World if you’re happy, I’m happy for you.

Do you work in Ottawa for MFA Russia?

‘Cause your Comments read a lot like their Tweets.

#122 Søren Angst on 06.01.22 at 7:30 pm

#120 Nora Lenderby

Thank you Nora.

I’ll buy a rowing machine. My favorite at the gym when I lived in Canada and was buxom.

My aquatic days behind me, had a Lifeguard thingy but the World’s slowest swimmer. If the boat capsizes, it will take me a month of Sundays to get to the shore. Strong swimmer but oh, so, slow.

Great idea. I completely forgot about rowing and how much I loved it.

Again, thank you for the idea. Going to clear out my 2nd bedroom of junk storage and that’s where it’s going (A/C and kitchen reno next few weeks, then lots of space).

#123 Brian on 06.01.22 at 7:30 pm

#116 Søren Angst

Quote by Stephen Hawking: “People who boast about their I.Q. are losers.”

#124 You know Val on 06.01.22 at 7:32 pm

Hey let’s be like New York bring on more immigrants can’t afford to live here suck and blow

#125 crowdedelevatorfartz on 06.01.22 at 7:38 pm

@#121 Soren’s Angst
“Delusional.
King of Non Sequitur.
But, hey in your make believe World if you’re happy, I’m happy for you.”

+++
I didnt realize we had an Italian military genius in our midst.
That a long row to hoe judging from Italy’s exemplary military experiences in WWI and WWII.
Just sayin’

#126 Søren Angst on 06.01.22 at 7:45 pm

#123 Brian

Couldn’t care less what he said.

Facts are facts.

Despite what the Physicist who has no training in IQ testing says. *

Even he engaged in what is known as a

Non Sequitur.

You should have rationalized that out on your own but alas…

* Probably trying to be magnanimous for Children of a Lesser Mind. I do not share his SJW PC ways. It is, what it is…despite what the Physicist says. Mother Nature decides, not the Black Hole guy.

#127 Faron on 06.01.22 at 7:46 pm

Some podcasts:

Ezra Klein. He does a fantastic job having discussions across the center of the political spectrum and hosting widely varying views. Highly recommended. His most recent with a woman arguing against abortion rights has some pretty cringe logic from the pro-life side. But still an illuminating discussion. The woman, Erika Bachiochi, seems charged with the task of selling abortion restriction to the centrists as benefiting the ladies.

https://www.nytimes.com/2022/05/31/opinion/ezra-klein-podcast-erika-bachiochi.html

Top Traders Unplugged. I was drawn to this one because of the Elon Bashing title, but they spend very little time talking about Elon. it’s a fantastic look from very smart people at the effects of central bank actions, erosion of confidence in institutions even highlighting the serious problems coming down the pipe for Canadian real estate and the warning flags regarding the crash of the Yen.

https://www.toptradersunplugged.com/podcast/grant-williams-global-macro-series-june-1st-2022/

Finally, I lost 30 lbs in a week. ASk Me HoW!

#128 Don Guillermo on 06.01.22 at 7:47 pm

#119 Nora Lenderby on 06.01.22 at 7:08 pm
#37 Don Guillermo on 06.01.22 at 2:16 pm
Sorry about your skin condition.

No need to be in a Tilly hat though. A gentleman (or lady) should have a collection of stylish hats. I recommend Beauchapeau.com (no connection, just a satisfied customer).

A Tilly hat is good for bottom painting…the boat, that is…and it can allegedly survive the digestive tract of an elephant, so there is that.
*******
My own fault. Too much sun abuse in my 20s and 30s. Bullet proof you know. You’d think the Italian designers could come with some dope stylish hat with SP 50 rating. I’d be a loyal customer. Until then, Tilley on.

#129 Faron on 06.01.22 at 7:47 pm

#123 Brian on 06.01.22 at 7:30 pm

#116 Søren Angst

Quote by Stephen Hawking: “People who boast about their I.Q. are losers.”

Wait, Søren doesn’t live in Nanaimo…

#130 Don Guillermo on 06.01.22 at 7:54 pm

#119 Nora Lenderby on 06.01.22 at 7:08 pm
****
Oops, my bad. I didn’t look at your hat site before responding. Lots of interesting styles there. Might have to order something. Thanks.

#131 Faron on 06.01.22 at 7:54 pm

#24 Don Guillermo on 06.01.22 at 12:35 pm

#10 Faron on 06.01.22 at 11:36 am

Never could understand why, until recently, EVs were designed to look so fugly. The new Porsche and Audi electrics are beautiful.

Guy said the build quality was fantastic. Sound-proof, lifting suspension, better charging system etc. etc. It’s a real car made by a company who knows how to make them. e-tron isn’t my cup of tea cosmetically, but does have style.

Yeah, the Leaf looks like an ugly shoe.

#132 Hanna on 06.01.22 at 7:58 pm

I would not be surprised if we get 5% 5 to 10 year GIC rates by year end, 2022.

#133 Mark on 06.01.22 at 7:58 pm

what a joke. the real cost of borrowing on secured lines is still negative 3% in real terms. this is ‘forceful action?’ looooool.
if they end free money the world will implode. they just need to do enough to shake out the bottom 5%, then the party can continue. hold on to your bicycle!

#134 Ballingsford on 06.01.22 at 8:05 pm

#84 Dina on 06.01.22 at 4:59 pm.
They are retired both at 60, $1,700 a month early CPP coming now.

We also like truthiness on this blog. We can find no 10-year GICs paying 4.15%. Interest is not deposited into a holder’s bank account monthly. Interest is paid annually (sometimes) and most often upon maturity, with imputed payments taxable annually. The average monthly CPP payment at age 60 is $532. – Garth
*****
Thanks for calling the blog dog out on this Garth. I was thinking he or she was full of poop or I did something wrong with my monthly CPP payments which is about $527 or so after they deduct 20%.

#135 Yukon Elvis on 06.01.22 at 8:10 pm

#118 crowdedelevatorfartz on 06.01.22 at 7:02 pm

The current fighting in Ukraine is no going well for the Ukrainians.
The Russian army will keep pounding the cities to dust and according to Ukrainian President Zelensky ” we are losing between 50 and 100 soldiers PER DAY.
The Russian military doctrine is very basic.
Pound them with artillery, overwhelm them with men….keep pushing forward.
March and April were a minor set back in the inevitable butchery to come.. Putin believed his lickspittle, corrupt generals who are now gone, replaced with hardened veterans of Chechnya. Ruthless, cold blooded and without any sympathy for the “enemy”.
These generals know. Failure for Putin ….is not an option if they want to stay out of prison.
The real war is just getting started.
+++++++++++++++
My prediction : Russian army and economy go bust by end of summer and Ukraine drives back the Russian army to pre Feb.24 positions. Stalemate ensues.

#136 Søren Angst on 06.01.22 at 8:17 pm

Republic Day today (Thursday) in Italia.

https://twitter.com/bsant54/status/1532150450434330625

#137 Quintilian on 06.01.22 at 8:20 pm

https://storeys.com/boc-rate-hike-is-nothing-compared-to-exorbitant-home-prices/

He said this with a straight face:

“Soper thinks market activity will heat up, at earliest, this fall, or by spring 2023 at the latest. He added that Wednesday morning’s rate hike, while not negligible, won’t much affect the market.”

#138 Søren Angst on 06.01.22 at 8:22 pm

#129 Faron

👍 😅

THAT was good. 😉

#139 crowdedelevatorfartz on 06.01.22 at 8:26 pm

@#135 Dolce’s Angst
“Republic Day today (Thursday) in Italia.”
+++
Pretty colors.
When was the last time an Italian air force jet actually shot an enemy plane down?
1942?
1918?

#140 Don Guillermo on 06.01.22 at 8:27 pm

#131 Faron on 06.01.22 at 7:54 pm
#24 Don Guillermo on 06.01.22 at 12:35 pm

#10 Faron on 06.01.22 at 11:36 am

Never could understand why, until recently, EVs were designed to look so fugly. The new Porsche and Audi electrics are beautiful.

Guy said the build quality was fantastic. Sound-proof, lifting suspension, better charging system etc. etc. It’s a real car made by a company who knows how to make them. e-tron isn’t my cup of tea cosmetically, but does have style.

Yeah, the Leaf looks like an ugly shoe.
*********
Yes, the Tesla build quality looked suspect when I viewed one close up. I made an off handed joke a couple of years ago to SA when I pinched my thumb in my car door when putting it away for the winter. I think I said something like “if it had been a Tesla I probably wouldn’t have noticed” – paraphrasing. I did lose my nail. It took 6 months to grow back. The joke was probably bad. BTW, I quite like Sail Away.

#141 Shawn on 06.01.22 at 8:32 pm

Low rates = free money?

#133 Mark on 06.01.22 at 7:58 pm

what a joke. the real cost of borrowing on secured lines is still negative 3% in real terms. this is ‘forceful action?’ looooool.
if they end free money the world will implode. they just need to do enough to shake out the bottom 5%, then the party can continue. hold on to your bicycle!

********************************
I always found that debt had to be paid back with nominal dollars. Are these borrowers getting raises equal to or higher than CPI yearly?

It may be that debt will be easy to pay off.

But I know when was briefly out of work in 2002 it was great that I had just sold two rental properties and my mortgage had been paid off in about 8 years. (Those were the days of $100k mortgages to buy a decent house in Edmonton).

And I could have made good money if I kept those rentals. But I ended up doing well in the markets and never once did a stock call me to fix a toilet, though a couple small ones in the early days did go down the toilet. Lesson learned there.

Inflation or not, having zero debt is more comfortable than owing a pile.

No, those payments are not going to feel like free money. I can’t even imagine owing like six times annual gross pay on a mortgage like some young people today. Or even four times.

#142 Søren Angst on 06.01.22 at 8:33 pm

#125 crowdedelevatorfartz

You’re exasperating.

Pretty sure I’m not the first to tell you that.

Then again, happiness takes many forms. Yours in one of them.

On WWI, Italia defeated the Austro-Hungarian empire and could of walked into Vienna unopposed. 800K of their army threw down their weapons and surrendered. Italia did not want them for good reason.

WWII, Italia torn. My families on Partisan side. We lost one.

So, careful with your thoughtless admonitions.

Now go back to your make believe World where you are a star of your own making.

#143 Francis on 06.01.22 at 8:35 pm

There are a whole lot of 10 year GIC rates out there above or at 4%, Motive Financial 4.75%, Canadian Western Bank 4.30%, EQ Bank 4.35%, Equitable Bank 4.10%, BMO 4%. You can choose annual or compound interest for non-registered, TFSA, RRSP, RRIF etc. shop around GIC rates the best ones are going to 5% or close to 5%.

CPP early gets reduced by 6% per year before 65 so highest are $1,230 so early $800 to $850 a month CPP payments at 60 is quite possible for millions of Canadians that worked full time making decent salaries for decades.

#144 Greg on 06.01.22 at 8:37 pm

If the Saudis could send tankers over with a huge oil supply in 2020, and plummit the oil price to zero within a one week time frame, then why can’t they can do it this year too? Would be a very welcomed event.

https://www.npr.org/2020/05/04/850026351/saudi-arabias-oil-tanker-flotilla-is-reaching-the-u-s-despite-some-objections

#145 Joseph R. on 06.01.22 at 8:38 pm

#112 The Regulator on 06.01.22 at 6:35 pm
# 79 – Joseph R : Our leopard 2a-4 CAN (upgraded) tanks, which were bought from Dutch surplus, equal 100. With 20 being upgraded to 2a-4M versions. On the other hand, Russia has ordered 2300 Armada(2014) tanks. They also have 2260 T-90(1992) tanks, 400 T-80 (1976) versions. Finally, your museum pieces, the T-72, were upgraded in the 1980’s, now T-72B (1700), and 1300 T-72 B/BA and 750 B-3’s.

Do you understand sarcasm?

———————————————————

No.

#146 Silent Watchtower on 06.01.22 at 8:43 pm

Bank of Canada “Governing Council is prepared to act more forcefully if needed to meet its commitment to achieve the 2% inflation target.”

“The overall tone is above and beyond hawkish,” said Doug Porter, chief economist at BMO Capital Markets, adding the central bank could be hinting at a larger than 50-bps move at their next decision in mid-July to tame price increases.
“Clearly they underestimated inflation even as recently as the past meeting, and they’re basically trying to make up for lost time now,”

Source:
https://archive.ph/mHa8O#selection-519.0-523.136

#147 DON on 06.01.22 at 8:45 pm

With food, gas and rate increases lately…this is shaping up to be the ‘Summer of Despair’ for everyone on some sort of a budget or cares what they spend and especially the over leveraged. Food prices are set to increase again. Reality bites!

Mad TV’s skit ‘Lowered Expectations’ comes to mind. People have cut back on driving aside from the back to job site crowd.

The scholars and experts appear to be gravitating to the ‘Who knows what’s next’ opinion and complimentary shoulder shrug sentiment. Mrs. Yellen’s admission was telling, what was her last job again. Geezus. Or is this a political skit for Biden to say he was ill advised and come to the rescue until the midterm elections are over?

It’s a good thing hope is right around the next corner.

#148 cramar on 06.01.22 at 9:01 pm

#8 West New West on 06.01.22 at 11:28 am

So Elon Musk told his employees to return to the office for minimum 40 hours per week or else move on….

The end of WFH is now here.

======

In case anyone wants a link:

https://www.cnbc.com/2022/06/01/elon-musk-reportedly-tells-tesla-workers-to-be-in-office-full-time-or-resign.html

#149 Søren Angst on 06.01.22 at 9:02 pm

#109 Elon Fanboy

Good one. I like your style. If I drove (no need to in Italia where I live) I’d go EV in a heartbeat. Fresh air to breathe a good thing.

BTW, if you hold that oil ETN May’s dividend annualized was about:

49%

Good on you if you own it. Oil prices still in Contango. More of that to come.

And with less risk, yet in oil, there is always the Maple ETF:

NXF

Sure you can find the YTD, 1 year price performance on your own. That is my lowest div ETF/ETN (6.7% in May – retiree, in need of cash flow). Still, the price appreciation is why I hold it – supposed value stock which is in reality performing like a growth stock.

46.23% YTD total return.

A breath of “fresh air” in the current Mr. Market. Hopefully one day soon, oil won’t matter but today, it does.

#150 DON on 06.01.22 at 9:28 pm

#135 Yukon Elvis on 06.01.22 at 8:10 pm
#118 crowdedelevatorfartz on 06.01.22 at 7:02 pm

The current fighting in Ukraine is no going well for the Ukrainians.
The Russian army will keep pounding the cities to dust and according to Ukrainian President Zelensky ” we are losing between 50 and 100 soldiers PER DAY.
The Russian military doctrine is very basic.
Pound them with artillery, overwhelm them with men….keep pushing forward.
March and April were a minor set back in the inevitable butchery to come.. Putin believed his lickspittle, corrupt generals who are now gone, replaced with hardened veterans of Chechnya. Ruthless, cold blooded and without any sympathy for the “enemy”.
These generals know. Failure for Putin ….is not an option if they want to stay out of prison.
The real war is just getting started.
+++++++++++++++
My prediction : Russian army and economy go bust by end of summer and Ukraine drives back the Russian army to pre Feb.24 positions. Stalemate ensues.

***********
Let’s go back and read your other predictions.

Russia appears to be drawing a line in the sand in south east Ukraine, a new buffer zone and oil field included. They have been pounding what is left of the non soldiers maning the front lines with little or no direction. Wasn’t Russia’s economy spposed to be crushed already. Just because some Canadians don’t think thing through doesn’t mean the rest of yhe World does. Russia ain’t the Taliban.

#151 Need advice on 06.01.22 at 9:38 pm

If you signed the waiver of conditions, is there a time period when you can retract your e signature?
Or does the contract become binding as soon as you click Complete Signing?
Asking for a friend.
I understand the right way is to talk to a lawyer.
Just looking for pointers.
Thanks for your suggestions.

#152 Ponzius Pilatus on 06.01.22 at 9:39 pm

125 crowdedelevatorfartz on 06.01.22 at 7:38 pm
@#121 Soren’s Angst
“Delusional.
King of Non Sequitur.
But, hey in your make believe World if you’re happy, I’m happy for you.”

+++
I didnt realize we had an Italian military genius in our midst.
That a long row to hoe judging from Italy’s exemplary military experiences in WWI and WWII.
Just sayin’
——————
Ouch,
Good one, CEF.
Mussolini was Hitlers mentor.

#153 Ponzius Pilatus on 06.01.22 at 9:43 pm

Dolce Vita and Donny G.
The “Odd Fascist Couple”.

#154 crowdedelevatorfartz on 06.01.22 at 9:50 pm

@#142 Dolce’s Angst
“WWII, Italia torn. My families on Partisan side. We lost one.
So, careful with your thoughtless admonitions.
+++
Nah.
I was just thinking of the thousands of Canadian soldiers buried in Italy killed while driving the Germans out after the Italian army evaporated, hid their Mussolini wall Photos, burnt their uniforms and stood aside and waved Allied flags to the real heroes marching through their cities, towns and villages unopposed……

#155 Doug in London on 06.01.22 at 9:53 pm

For the longest time I’ve read a lot of “experts” here who said interest rates won’t go up because the government doesn’t want to bring down house prices. Does anyone still believe that rubbish?

#156 crowdedelevatorfartz on 06.01.22 at 9:55 pm

@ Dolce’s Angst

Lest we forget.
Italy WWII
26,000 Canadian casualties.
6000 dead.

https://www.veterans.gc.ca/eng/remembrance/history/second-world-war/italian-campaign/history/pish#:~:text=Sacrifice,War%20Cemetery%20south%20of%20Rome.

#157 Chumming the water on 06.01.22 at 10:13 pm

Trudeau’s gut rate loans had a cohort of buyers thinking the MMT gravy train would never end with him in office. His WEF handlers had been keeping misdirected and I’ll informed Canadians complacent while they ( the WEF) used Canada as ground zero for the Great Reset Social and Financial Experiment. While Canadians were tricked into complacency they thought the destruction of their energy and resource industries were part of a modern miracle and not the highway to a farce socialist SEG hell we see before us today. He’s ( and they) have lost that plank and change is coming. Thank God. The invisible hand reasserts itself.

#158 Ponzius Pilatus on 06.01.22 at 10:14 pm

#154 crowdedelevatorfartz on 06.01.22 at 9:50 pm
@#142 Dolce’s Angst
“WWII, Italia torn. My families on Partisan side. We lost one.
So, careful with your thoughtless admonitions.
+++
Nah.
I was just thinking of the thousands of Canadian soldiers buried in Italy killed while driving the Germans out after the Italian army evaporated, hid their Mussolini wall Photos, burnt their uniforms and stood aside and waved Allied flags to the real heroes marching through their cities, towns and villages unopposed……
—————————-
Yep.
And then Italia was rewarded beautiful South Tyrol from Austria for “helping the Allies in defeating the Nazis”.
Canadian soldiers had more courage in their little finger, than the Italians in their whole bodies.

#159 Melissa on 06.01.22 at 10:24 pm

Faron :
2005 Toyota Echo was my most expensive car at $5k. 2006 matrix (current) was my half of $6k. Both great cars. Cheap to own.
———
We all figured you lived in a trailer.

You’re that guy who has an old stained note pad in the glove compartment because you calculated your monthly gas use and mileage. Do tell us more!

#160 Robert B on 06.01.22 at 10:25 pm

Ah…higher interest rates….now we get to see where the
bodies are buried.

Good riddance speculators

#161 Garth's Mentor on 06.01.22 at 10:56 pm

After sucking in everyone with cheap rates like forever this is going to be an epic reversal.

Anyone thinking that this is not significant is going to get a good reminder in the coming months. A recession in Canada will not be avoided when the housing market is melting down.

Elon Musk also just said either get back to the main office or resign.

Bunny-patch remote living officially died today. Unfortunately people working for corporations are still slaves and must do what is told.

Not a fan of what is happening but this is going to be an epic reversal.

#162 Re: Doug in London on 06.01.22 at 11:01 pm

I think the argument was rates can’t rise so that the economy does not get wrecked. Housing in Canada is the economy.

Well, it looks like the economy is going to get wrecked and the show goes on.

Thanks for playing.

Buyers, get ready for Black Friday sale on housing.

#163 baloney Sandwitch on 06.01.22 at 11:10 pm

Tiff needs to do a Volker – (the legendary Fed boss who broke the back of inflation for a generation in the 80’s) and jack the rates up to 7%. No body has those kind of cojones anymore.

#164 What Could Go Worse? on 06.01.22 at 11:33 pm

Canada Quietly Changed Its First-Time Home Buyer Program To Limit Its Losses

Canada is changing a first-time home buyer program to limit its exposure to losses. The Canada Mortgage and Housing Corporation (CMHC) made unannounced changes to the First-Time Home Buyer Initiative (FTHBI). The program, which sees the government take a stake in a successful applicant’s home purchase, is now limiting its downside exposure. Only a few months ago, when it was thought home prices would only go up, taxpayers were going to have unlimited upside. Now that prices are falling, Canada quietly updated the program to limit exposure to losses.

#165 the Jaguar on 06.01.22 at 11:36 pm

Meanwhile, back at the Ranch, wondering what GT thinks about Jamie Dimon’s (JPMorgan Chase) weather predictions. The jungle drums are beginning to beat louder by the minute. Where did I place my smelling salts? Help me Obiwan Kenobi…..

Speaking of inconvenient truths, where is Ponzi P., who might be able to translate this for us:

‘„Die Russen haben lokal eine bedrückende Überlegenheit erzielt“. Some quote from a German guy.

Oh never mind. That would or might be misinterpreted as ‘tacit approval’, instead of genuine concern about how none of this ever had to actually happen with no root cause analysis required. Send in the Clowns in real time.

Mama Mia! Forgot I was not supposed to be posting as it might attract the ‘it-rubs-the-lotion-on-its-skin’ types. Holy Mother of Dogs, I still cannot contain my laughter.

Oh….O.K. back to my prison cell I go. Loved the Fishman gun post. Unfortunately, I wouldn’t be able to allow any of those things in my household. It’s just me, my rolling pin, indignation, and the Doug Rowat ‘Take no Prisoners” tactical maneuver’. I confess I just love Doug. Even those hairy legs.

Some things never change. For everything else, there is MasterCard.

#166 Don Guillermo on 06.01.22 at 11:49 pm

153 Ponzius Pilatus on 06.01.22 at 9:43 pm
Dolce Vita and Donny G.
The “Odd Fascist Couple”
******
Aw PP, thanks for caring. You’re keeping up with Captain Stereotype.

#167 Philco on 06.01.22 at 11:50 pm

#13 Ponzius Pilatus on 06.01.22 at 11:55 am

Just saw that.
Yes EVs got jacked. When everyone was in the cocoon I bought 2 cars. Dealers sold below cost. I had to get a tow truck to get one across the boarder because we couldn’t cross.
Good luck now price went straight up.. It will cool but fuel ain’t going back so here we are.
I’ve had 3 Leaf’s. rock solid cars.
Th Pro pilot is a rock star little car. The others….. lol why do you need massive HP and torque. This cars at 60mph in 6… Good enough.
It gets groceries for cheap.

#168 DON on 06.01.22 at 11:53 pm

#162 Re: Doug in London on 06.01.22 at 11:01 pm
I think the argument was rates can’t rise so that the economy does not get wrecked. Housing in Canada is the economy.

Well, it looks like the economy is going to get wrecked and the show goes on.

Thanks for playing.

Buyers, get ready for Black Friday sale on housing.

**********

There were two arguments.

The politicians wouldn’t raise rates cause the stock market and or housing would fall.

If the economy gets wrecked the housing market will get murdered in its sleep.

#169 DON on 06.01.22 at 11:56 pm

#152 Ponzius Pilatus on 06.01.22 at 9:39 pm
125 crowdedelevatorfartz on 06.01.22 at 7:38 pm
@#121 Soren’s Angst
“Delusional.
King of Non Sequitur.
But, hey in your make believe World if you’re happy, I’m happy for you.”

+++
I didnt realize we had an Italian military genius in our midst.
That a long row to hoe judging from Italy’s exemplary military experiences in WWI and WWII.
Just sayin’
——————
Ouch,
Good one, CEF.
Mussolini was Hitlers mentor.

*******
A little melody a war vet taught me when I was a kid.

Hitler was a jerk
Mussolini pulled his weenie now it dosen’t work!

#170 DON on 06.02.22 at 12:10 am

#165 the Jaguar on 06.01.22 at 11:36 pm

You are right this didn’t need to happen. So many lives wasted and forever affected. Meaningful diplomacy was skipped here.

Well, it’s alright, even if they say you’re wrong
Well, it’s alright, sometimes you gotta be strong
Well, it’s alright, as long as you got somewhere to lay
Well, it’s alright, everyday is judgment day

#171 Faron on 06.02.22 at 12:19 am

#159 Melissa on 06.01.22 at 10:24 pm

You’re that guy who has an old stained note pad in the glove compartment because you calculated your monthly gas use and mileage. Do tell us more!

Haha, almost. Bought the echo to commute from Duncan to Vic. Weighed buying a leaf, but didn’t do it for me financially. Spent a couple months documenting mileage on fuely, and stuffed the receipts in the ash tray (remember those?) Gave up on it. Computing 42mpg again and again got old.

#172 Ponzius Pilatus on 06.02.22 at 12:38 am

#166 Don Guillermo on 06.01.22 at 11:49 pm
153 Ponzius Pilatus on 06.01.22 at 9:43 pm
Dolce Vita and Donny G.
The “Odd Fascist Couple”
******
Aw PP, thanks for caring. You’re keeping up with Captain Stereotype.
———————-
I care.
Guilty by association.
Stay away from the Neo-Facists.
You’re better than that.

#173 Summertime on 06.02.22 at 7:25 am

https://twitter.com/thehill/status/1531800193674387456

.
@SecYellen
on inflation being transitory: “I was wrong then about the path that inflation would take. As I mentioned, there have been unanticipated and large shocks to the economy […] that I, at the time, didn’t fully understand.”

They /the central bankers/ did not know what they are doing…

#174 Bezengy on 06.02.22 at 7:51 am

It’s too late to save yourself Bill. You’ll go down as the the worst finance minister is Canadian history. And yes, somebody should do something.

https://www.bnnbloomberg.ca/trudeau-s-ex-finance-minister-says-canada-is-misfiring-on-growth-1.1773518

#175 Dharma Bum on 06.02.22 at 8:41 am

#24 Don G

Never could understand why, until recently, EVs were designed to look so fugly.
———————————————————————————————————–

They were designed to match the faces of the virtue signalling SJWs that buy electric cars and believe that they are saving the environment.

Poor, misguided naifs.

#176 Dharma Bum on 06.02.22 at 8:47 am

#29 Sailo

Warren Buffett says: You only have one body. Take care of it.
———————————————————————————————————–

Hahaha…as he quaffs Coca Cola, slurps Dairy Queen poison, and does zero exercise.

The guy is an oracle, with good DNA. He certainly doesn’t “take care” of himself. Lucky SOB. So smart.

He’s my hero.

#177 Blame Trump on 06.02.22 at 9:32 am

Trump cajoled the FED to lower rates, so that Inflation would make his Debts go away sooner.

A Tinpot president…

#178 F the media on 06.02.22 at 9:34 am

My prediction : Russian army and economy go bust by end of summer and Ukraine drives back the Russian army to pre Feb.24 positions. Stalemate ensues.

Yep it’s full of Trudeau sized brains on this blog..

#179 Quintilian on 06.02.22 at 9:49 am

It looks as if the foolish bulls are “priced in” no point in selling now. It may just be prudent to cost average down, but remember it’s not by choice, but rather a remedial effort to reduce your losses.

The output gap is positive, full employment, real interest rates at (negative – 5%), yet share prices keep dropping.

When will you learn the stock market is a derivative, and not a measure of solid business/economic fundamentals but a mere casino?

#180 No free riderz on 06.02.22 at 10:18 am

Here is the fix for Canada socialist economics problems.

Health care. No longer free, 2000/year if Canadian citizen.

If new immigrant less than 5 years, Cost is 10k per year

If less than than 10 years, 5k per year

If you have at least one Canadian grandparent from 3 generations back, it is free.

Can follow similar cost structures for education, real estate etc.

Time to start rewarding pure lain Canadians for their loyalty and service.

#181 Don Guillermo on 06.02.22 at 10:27 am

#172 Ponzius Pilatus on 06.02.22 at 12:38 am
#166 Don Guillermo on 06.01.22 at 11:49 pm
153 Ponzius Pilatus on 06.01.22 at 9:43 pm
Dolce Vita and Donny G.
The “Odd Fascist Couple”
******
Aw PP, thanks for caring. You’re keeping up with Captain Stereotype.
———————-
I care.
Guilty by association.
Stay away from the Neo-Facists.
You’re better than that.
******
As a non Italian raised in the middle of a large mostly 1st generation Trail BC Italian community most of my friends were Italians and their mothers fed me well. But you’re correct, I am much better than generalizing a nationality. I learned a lot of juicy swear words as well!

#182 Sarah on 06.02.22 at 10:45 am

Is an 8% savings rate supposed to be good? My retirement savings alone are over 20%, and by my calculations I’m still going to be over 60 by the time I retire (I’m 26 now). That doesn’t even include my down payment, future car and travel savings.

But the system doesn’t favour the conservative saver, only the risk-taking spender.

#183 Shawn on 06.02.22 at 10:47 am

Warren Buffett’s eating habits

#176 Dharma Bum on 06.02.22 at 8:47 am
#29 Sailo

Warren Buffett says: You only have one body. Take care of it.
———————————————————————————————————–

Hahaha…as he quaffs Coca Cola, slurps Dairy Queen poison, and does zero exercise.

The guy is an oracle, with good DNA. He certainly doesn’t “take care” of himself. Lucky SOB. So smart.

He’s my hero.

****************************
He once calculated that he gets something like 15% of his calories from Coke and that therefore he was 15% coke.

He has repeatedly said that he eats what he enjoys and that if forced to eat spinach he might have died of grumpiness years ago.

He’s 91, healthy, mega rich and very happy. His brain is sharp with extremely excellent recall – just watch him respond to questions. You are giving him life advice?

He said a few years ago that the most important thing in a successful life is “Do the people around you that you would want to love you indeed love you?” In his case the answer is yes.

It’s not all DNA, happiness in life is mostly a matter of attitude. (Repeat that daily.)

#184 Sail Away on 06.02.22 at 10:48 am

#176 Dharma Bum on 06.02.22 at 8:47 am
#29 Sailo

Warren Buffett says: You only have one body. Take care of it.

——–

Hahaha…as he quaffs Coca Cola, slurps Dairy Queen poison, and does zero exercise.

The guy is an oracle, with good DNA. He certainly doesn’t “take care” of himself. Lucky SOB. So smart.

He’s my hero.

——–

Nothing better than a pile of Big Macs after a hard day. A&W if feeling rich. The dogs get cheeseburgers. Such bounty!

#185 Ponzius Pilatus on 06.02.22 at 10:57 am

Just watched a Mariachi band play at the memorial for the poor kids and teachers killed needlessly in Texas.
Pretty touching stuff.
Shows you that culture and heritage is important.
That’s why the “melting pot” of America can sometimes boil over.
I learned again that you should not judge what you don’t understand.

#186 Shawn on 06.02.22 at 11:01 am

Buffett

Actually I remember now it is Broccoli that he often mentions as the food he would not want to be forced to eat. My memory is not as sharp as his.

#187 Sail Away on 06.02.22 at 11:29 am

For the Tesla haters: it’s nothing to get too worked up about, it’s just a car. A pretty awesome car to be sure, but still, just a car.

Buy one to try it out and if you don’t like it, buy something else. Or don’t buy one, no biggie. Different folks, different strokes.

In grade school, there were sometimes fights between the Chevy team and the Ford team. It was dumb then, and seems exponentially dumber amongst middle-aged adults. But whatever.

#188 Gouging Can Fun on 06.02.22 at 11:47 am

News of the day.

a) CRA thinks your Covid test if provided by your employer is a taxable benefit, even though Trudeau mandated the testing.

b) New credit card debt has jumped 37%. “The fastest increase ever”, according to the credit agency.

c) 75 bps jump in July. The folks who were $200 away from dead broke before are already lined up at the food bank. It’ll get a lot worse .

d) Trudeau announced “We need more people to keep the real estate train chugging along”. Well, he also say he didn’t understand simple math.

Canada is fast becoming a rodeo of pain.

#189 Damifino on 06.02.22 at 11:48 am

#169 DON

Mussolini was Hitlers mentor.
——————————

Not exactly. Hitler admired Mussolini’s creation of a Fascist state in Italy. As for the man himself, not so much. Eventually, Hitler saw Il Duce as an unreliable burden when the war began to turn against Germany.

#190 Sail Away on 06.02.22 at 11:48 am

#127 Faron on 06.01.22 at 7:46 pm

Finally, I lost 30 lbs in a week. ASk Me HoW!

——–

Meth. And you sold both kidneys to get more. Whoopsie.

#191 Shawn on 06.02.22 at 11:54 am

Are Canadian Businesses Investing Enough?

Former Finance Minister Bill Morneau speeched to the C.D Howe institute (the choir) that Canadian businesses were lagging on investment.

This too low business investment is often claimed. Usually with no figures or evidence cited. Also it’s never clear exactly what businesses should invest in. But let’s say its true.

Meanwhile Bank of Nova Scotia reported that its commercial loans were up a massive 19% year over year in the quarter ended April. The other big banks had figures in the teens as well. That’s MASSIVE. Why would Canadian businesses served by the big banks be adding about 15% even 19% to their debt loads in a year?

And the President of Canadian Western Bank said this was not the big banks winning new customers (how could it be they already have almost all of the businesses?). It was existing big bank business customers taking out new loans and drawing down lines of credit.

So what for? Apparently not very much for added investment. Was it just added working capital due to inflation on inventory purchases? Was it to have cash in the bank? To buy stocks and bonds? (That is not capital investment). To pay dividends? What was the massive business borrowing for? Mystery? Maybe to pay income tax on recent massive profits – but then if the profits are massive why borrow to pay tax?

#192 Shawn on 06.02.22 at 12:02 pm

Consumer income and demand and GDP Math

So…most consumers are facing noticeably higher gasoline and heating / cooling costs. And grocery costs are up close to 10%.

A chunk of consumers (say 10%?) are on variable rate mortgages and just got increase with more to come.

Half of consumers claimed for a long time that an extra $200 in costs would put them under water. Well, gurgle.

Certainly a chunk of consumers are flush with case and eager to spend.

But its hard to imagine how the above adds up to overall excess demand that will keep pushing retail sales volumes up. Everything costs more (and wages not keeping up) and we are to pay the more on the old volume plus add new volume? And wage

How?

Maybe it’s more people getting jobs and coming back to the workforce? But wait unemployment is already record low. No new workers left.

Immigrants… maybe some impact.

Something does not add up. I say retail sales have to fall in volume. Recession probable.

#193 Yukon Elvis on 06.02.22 at 12:06 pm

#178 F the media on 06.02.22 at 9:34 am
My prediction : Russian army and economy go bust by end of summer and Ukraine drives back the Russian army to pre Feb.24 positions. Stalemate ensues.

Yep it’s full of Trudeau sized brains on this blog..
+++ +++++++++
Just watch them.

#194 Summertime on 06.02.22 at 12:09 pm

https://ca.finance.yahoo.com/news/bank-canada-says-rates-may-144710168.html

Governor Tiff Macklem in April raised the possibility the Bank could go above neutral, the 2%-3% range where interest rates neither stimulate nor weigh on growth. Beaudry’s comments make clear it is increasingly likely.

So with CPI of 7 % and real inflation double that, if measured as in the 70-es and 80-es we have ‘neutral’ rates of 2-3%, that translates to real rates of – (minus) 12-13 % minimum/deeply negative

Did Paul Volcker know that as he fought inflation of 12 % (lower than the current if we use the same measures as then) with 15 – 18 % rates?

How much longer will this people lie, after the transitory, peak inflation, now we have ‘neutral’ rates?

ZERO trust in their lies.

#195 Shawn on 06.02.22 at 12:17 pm

Earn 3.9% annually guaranteed for nine years?

Some of this in the form of a capital gain since the bond is selling at 90 cents on the dollar (Pity those who paid 100 cents probably last August)

I will pass, but almost for sure this issue will be bought up.

If you buy this be prepared to hold to maturity since you will face a fat bid/ask spread if you ever want to sell. As Garth would say buy bonds in an ETF. Still some people go for these offers and if you want to buy bonds at least new issues have no bid/ask spread hidden commission. The issuer (New Brunswick) pays the bank’s commission here and a fat one at that.

“TD Direct Investing would like to inform you that the following New Issue has just been announced.

Province of New Brunswick 2.55% 14Aug31 – June

Short Description: ReOpening of Provincial Bonds

Maturity: August 14, 2031
Coupon: 2.55% per annum
Accrued interest of approximately $7.55 (per $1,000 face value) will be paid by the client on the settlement date.
Price: $90.457 CND per $100 par value.
Yield to Maturity: 3.79% semi-annual ; 3.82% annual
Settlement: June 9 2022”

#196 Jay (Not that one) on 06.02.22 at 12:22 pm

Being on the front line, I believe that a “all hands on deck recession” is possible. That is, a recession with high employment and good economic indicators.

All that needs to happen is for worker productivity to collapse. For example, because of further supply chain disruptions, WFH being a scam for most people, or people employed but preoccupied by not knowing where their next meal is coming from or how they’re going to get to work or heat their homes for another week.

Employment would be a lagging indicator of this, because everyone would be caught off-guard thinking everything was ok right up until it wasn’t. Employment would only drop once it became clear that many employees weren’t actually doing anything productive either because there was no material, or because they talked themselves into answering emails from home.

I could be wrong, but in these times that the conventional thinking keeps mispredicting the future, I don’t think it’s unreasonable to go with some unconventional thinking.

#197 dragonfly58 on 06.02.22 at 12:24 pm

Sail Away, you are an Engineer. Consider this, good cars are light cars. I have always chosen the lightest cars I can afford. First MG’s, then as my earnings increased I moved up to first Lotus Europa’s and later TVR’s. Finally cashed in my overtime bank at retirement and splurged on my life long goal , a late 1970’s Lola Sports 2000. About as light a 2 liter, full width bodywork car as was ever made. Finally automotive nirvana. A Tesla weighs HOW MUCH !! Doesn’t that upset your inner Engineering sense of efficient design ?

#198 Satori on 06.02.22 at 12:27 pm

#182 Sarah on 06.02.22 at 10:45 am
Is an 8% savings rate supposed to be good? My retirement savings alone are over 20%, and by my calculations I’m still going to be over 60 by the time I retire (I’m 26 now). That doesn’t even include my down payment, future car and travel savings.

But the system doesn’t favour the conservative saver, only the risk-taking spender.
—————————————
True, unless interest rates rise. Many here missed the boat for twenty years. Pay attention, learn, you are young… when interest rates are low, buy a place and don’t wait for housing prices to ‘get lower’ because that usually means mortgage rates get ‘higher’.

People say housing is at a peak, here we are 20 years later. Especially these past few years. Homeowners with mortgages have made out like bandits!! (Hence the rubbing hands in the comment section of all the people who lost out not buying).

When money is cheap buy. Everyone has to live somewhere, unless you are like Faron living rent free under your mother.

#199 Sail Away on 06.02.22 at 12:38 pm

#74 Søren Angst on 06.01.22 at 4:23 pm
#67 Sail Away

Enjoy these time SA, they are precious and when you become a Paleo like me you will wax and pine with a smile on your face as I do – or you become the FIL, better yet.

You have the right mindset. Savor the times.

Carpe Diem!

——–

Thanks Dolce, and likewise.

I often hunt pheasants in Red Deer, because of family who own ‘The Mansion on Gull Lake’ as we call it, but remember your comment about Brooks.

It’s on the list.

#200 Ponzius Pilatus on 06.02.22 at 12:53 pm

#181 Don Guillermo on 06.02.22 at 10:27 am
#172 Ponzius Pilatus on 06.02.22 at 12:38 am
#166 Don Guillermo on 06.01.22 at 11:49 pm
153 Ponzius Pilatus on 06.01.22 at 9:43 pm
Dolce Vita and Donny G.
The “Odd Fascist Couple”
******
Aw PP, thanks for caring. You’re keeping up with Captain Stereotype.
———————-
I care.
Guilty by association.
Stay away from the Neo-Facists.
You’re better than that.
******
As a non Italian raised in the middle of a large mostly 1st generation Trail BC Italian community most of my friends were Italians and their mothers fed me well. But you’re correct, I am much better than generalizing a nationality. I learned a lot of juicy swear words as well!
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Dolce Vita is not an Italiano.

#201 Ponzius Pilatus on 06.02.22 at 1:16 pm

#193 Yukon Elvis on 06.02.22 at 12:06 pm
#178 F the media on 06.02.22 at 9:34 am
My prediction : Russian army and economy go bust by end of summer and Ukraine drives back the Russian army to pre Feb.24 positions. Stalemate ensues.

Yep it’s full of Trudeau sized brains on this blog..
+++ +++++++++
Just watch them.
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Comparing Selensky to Trudeau the Elder?

#202 opee on 06.02.22 at 2:16 pm

Garth, some benefit more than others when the winds blow. Please explain to readers WHO, or Firms, specifically, benefit directly on the now higher interest pymnts, as you mentioned. Was that the plan? Where there is a loser, usually there is a winner, who won? should taxpayers know?