The angel

Is it possible to be a conniving, profit-motivated capitalist buccaneer yet still have a heart? You know, like the wokesters, greenies, Tesla owners or bicycle-riding (“socially just transport”) NDPers lay claim to?

Yes. If you’re Greg. Make money. Help people. Bada boom.

“Thanks for all the great advice over the years, I love coming here everyday,” he says (MSU).  “Here’s my question/problem…

“I own a rental unit, and have wonderful senior with a dog for tenants.  I would like to sell it, and invest those funds (market value is approx. 500k, and I owe 40k on the mortgage).  But rentals on southern Van Island are hard to come by, especially with a dog,  so I can’t seem to bring myself to sell it and remove someone from their home.  Does it make sense, with rising rates, to pull out equity and invest?  Or bite the bullet and wait until my tenant moves out and sell then?”

Ah, nice. Greg understands owning a rental property is not only a business, but also a responsibility. Yes, rentals are scarce. They’re dear. Oldies have a hard time finding a place, moving, settling and dealing with all the stress that entails. Since we’re all going to be old some day (well, most of us, as I am immortal) best to treat folks as you hope they shall treat you.

Options?

Of course. With a rental prop, whether a SFD or an apartment building, owners can suck out equity growth, tax-free, through refinancing. This is in stark contrast to selling, when capital gains are heaped on earned income in the year of sale, often pushing you into a traumatic Trudeau tax bracket.

But setting up an equity loan (65% LTV), or arranging a new mortgage for up to 80% of the value provides the flow of taxless money that can be used for investing. Yup, interest rates have swollen like Pepe’s vibrating ego, but recall that 100% of the interest on an equity loan, and a big hunk of a mortgage payment is deductible from taxable income. That’s if the funds are invested, and hopefully in a nice B&D portfolio taking advantage of current bargains.

Greg keeps the property and avoids selling it into a storm while escaping capital gain tax. He sucks off the equity to make more wealth. He sets up a new tax deduction. And he keeps a wrinklie and a dog snug in their home.

I wonder how many needy people are housed by lefties with their own capital. The system works.

*     *     *

Scary stuff to know:

  • Last week the CB jacked rates by 1% (huge) to 2.5%. The prime went to 4.7%. Now Scotiabank says there is at least another 1% to go, while Bank of America predicts our central bank will add 1.5% before stopping. This will take the chartered bank prime to somewhere between 5.7% and 6.2%, pushing HELOCs towards 7%, make the mortgage stress test about the same and seriously impact variable-rate home loans.

Remember the day this blog suggested you lock into a 10-year loan when available in the 3% range? The comment section reared in disbelief because fivers were 2% at the time and, you know, the government would never, ever allow rates to increase.

  • The worst is yet to come for housing, says BeeMo. This year will be brutal. 2023 will be swful. The rate run-up, especially for VRM borrowers, “is a massive pill for the market to swallow,” writes econ Robert Kavcic. The stress test at 7% is a hurdle that far too few new buyers can leap.
  • And this from RBC: “Our view is that property values will come under increasing downward pressure across Canada over the coming months with pricier markets on the front line of that trend.”

The national MLS Frankenumber HPI – even manipulated as it is – fell at an annualized rate of 23% last month. The biggest-ever monthly decline and double the tumble experienced in April.

Where is the blood flowing thickest? Bunnypatch, of course. In Ontario that included London, Woodstock, K-W and Cambridge. In BC the Interior and LM are now eroding. Everywhere sales are slower, buyers scarcer and sellers recalibrating their prices or taking properties off the market.

As mentioned here yesterday, there are now more delistings than sales in Toronto. Sellers are waiting for buyers to return with multiple offers and FOMO in their eyes.

So cute.

About the picture: “I’m a long time reader, and I’ve written to you before with thanks for all you’re doing,” says Meagan. “My husband and I both enjoy your blog and truly appreciate your unrelenting quest for financial truths and education of the masses (what an undertaking!). Here is the obligatory fee of sending an email – a picture of our aging Golden, Farley. He’s taken on a bit more white these days with a toddler in the house, but that doesn’t deter his love for cuddling in the hammock! (his handkerchief is from a campaign to help offer mental health resources and support dogs to first responders).”

75 comments ↓

#1 Leichendiener on 07.19.22 at 3:43 pm

Greg, Garth is right on.

#2 That Guy on 07.19.22 at 3:46 pm

Interesting, but there’s been so much focus on residential real estate lately.

I’m curious, what about commercial real estate? I’m sure that retail space is going down (who goes to the mall any more?) but that’s also location dependent. And those power centers that have a bland sameness across the country always seem full.

#3 Captain Uppa on 07.19.22 at 3:49 pm

I want more INTEREST RATE HIKES! MOORREE!

Tank the greedy, but I feel sorry for the “innocents”.

#4 TurnerNation on 07.19.22 at 3:50 pm

REITS came alive today. Finally.

—-
Implosion – High taxes…and the Former First World Countries are being wound down.
Almost back to normal? From the Killing us Softly Dept:

https://globalnews.ca/news/8998826/er-doctors-health-system-collapsed-patient-surges-emergency-room-closures/
“Doctors say health system has ‘collapsed’ as patient surges fuel ER closures”

— What’s the latest push with heat waves? Why it’s State Control over your home and thermostat.
Don’t even think of charging your Tesla. It will be like house arrest, no travel allowed.
Say was 2020 a test of this?

https://abc13.com/smart-thermostats-disable-lower-temperatures-texas-energy-conservation-heat-wave/12059404/
Smart thermostat owners might lose ability to control during concerning heat wave in Texas

— All global travel is being wound down. Standby for next step.

.Biden could declare climate emergency as soon as this week, sources say. White House officials are scrambling to advance the president’s environmental agenda (washingtonpost.com

#5 None on 07.19.22 at 3:57 pm

Or Greg could just sell and gift 50K to the oldie. Seems like an easier (and possibly more lucrative for everyone involved) plan.

#6 Ian B on 07.19.22 at 3:59 pm

I second your thoughts, Garth. I was very tempted to list a rental townhouse I own near Vancouver but couldn’t bring myself to displace the young family with two small children when I know they’d basically be on the street with the near zero vacancy rate in the area. I fortunate to be in the position I am, I won’t get greedy and harm other to stand a bit taller. I sleep well at night and that’s priceless.

#7 Søren Angst on 07.19.22 at 4:06 pm

Garth’s Blog today becomes SuperStore with:

NO NAME

for the Subject.

Stealth.

#8 TurnerNation on 07.19.22 at 4:07 pm

Control over Feeding. You WILL be eating the bugs.

https://www.cargill.com/feedingintelligence/innovafeed-leroy
“Norway’s Lerøy Seafood Group is working to find more efficient and sustainable means of raising fish.
Cargill and InnovaFeed have partnered to support producers like Lerøy through insect protein – a more sustainable ingredient in animal feed.
High-quality insect meal saves 25,000 tons of CO² emissions per year with each 10,000-ton-production unit¹ by feeding insect meal to animals.”

—— Free passage/Travel? Fuggedaboutit. Ended, March 2020. KAPUT. This is being engineered

https://www.iata.org/en/pressroom/2022-releases/2022-07-15-01/
“Montreal – The International Air Transport Association (IATA) is once again calling on the Canadian Government to urgently discontinue the current COVID-19 related travel restrictions. These are now out of step with the global trend of lifting travel restrictions and are partly responsible for the ongoing delays and disruption affecting air travelers across Canada.”

.ArriveCan ‘glitch’ ordering vaccinated Canadians into quarantine without reason (torontosun.com)

—– TRAVEL: A reminder that in summer 2020 you could hop on an airplane to most anywhere. No mask, no QR code, no app. Today? Not a hope in hell.

https://nationalpost.com/news/politics/arrivecan-has-been-a-disaster-for-our-community-app-glitches-leave-travellers-in-limbo
The executive director of the Niagara Falls Canada Hotel Association, Doug Birrell, made the same pitch, arguing the government needs to back away from ArriveCan or tourists won’t make the trip to his community. “Unless the government reverses course and allows normal tourism entry through land borders and air corridors, we will never get our business back.

#9 Søren Angst on 07.19.22 at 4:07 pm

OK, you snuck

ANGEL

in there on me for the subject. My bad prior Comment.

#10 boomerHelper on 07.19.22 at 4:08 pm

Garth, you should think about adding a media query to your CSS that will resize the blog’s content for viewing on smartphones. Ask your favourite millennial :)

#11 just a dude on 07.19.22 at 4:09 pm

People like Greg give me hope for humanity. I suspect there are many like Greg amongst us but I bet they don’t like drawing attention to themselves like so many whiny wokesters do.

Way to go, Greg!

And Hon. Mr. Turner, I sincerely hope you are immortal … thank you for all you do!

#12 westsider on 07.19.22 at 4:14 pm

When the Cb rate went up 1%, the interest on my line of credit went up 1% immediately, but the interest rate that the bank pays on term deposits did not!! It’s a wonderful world, innit??!!

#13 Søren Angst on 07.19.22 at 4:15 pm

I think the Win10 weather app has been watching me bitch that with high temps we get no warning in NE Italia other than:

Sunny

Well today at 36 deg C we got:

Extreme High Temperature – Yellow

Checked with our Protezione Civile and no such warning, so you know, SJW Microsoft not wanting me to feel left out.

The day before same temp, no warning from Microsoft – change of heart by them. Thank you Microsoft.

———-

Misery Loves Company.

#14 Shawn on 07.19.22 at 4:21 pm

Bulldozer guy asked me:

How about a 40 billion annual debt servicing bill?

How about 50 billion? 60? At some point, even just the interest alone is a problem.

40% of working Canucks pay zero net income tax. Labour participation rate hangs in the low 60% zone. That doesn’t leave many working folks to pay the ever-increasing tab…

*********************************
Not to worry, we gonna borrow the interest too if needed. Add it to the tab.

#15 Søren Angst on 07.19.22 at 4:24 pm

PS Garth:

I think a more appropriate title for today’s Blog would be:

Lefty Alt Greed Specuvestors.

I’m just sayin’.

If your intent was to draw them out of the woodwork today in the Comments section, I’d say it’s working.

Everyone wants a pat on the head.

As if.

#16 Sarcastic Sally on 07.19.22 at 4:30 pm

Toronto is a world class city.

Every year we bring in a quota of hardworking indentured labourers, I mean newcomers to work for minimum wage, I mean work for Canadian dollars to make the elite richer, I mean to contribute to this great city of ours.

Our public servants deserve a 50% pay raise. We should be paying cops more than doctors because the lives of citizens are in a cop’s hand.

#17 Stuck In NB on 07.19.22 at 4:30 pm

Been watching the market near YFC – the madness continues. Relatively new 4 bed/3 bath SFDs used to be 270-ish five years ago, 340-380 in 2021, 420-500 in 2022. Nothing available at the moment, new builds of similar size are 500+. Still cheap compared to ON and BC. Perhaps more bugs, but fewer junkies, and there is a Costco within the driving distance.

#18 Habitt on 07.19.22 at 4:40 pm

Thanks for the reminder Mr Turner in these uncertain times. Best to give if we are able. So many in need. Plenty with a hand out but others too proud to ask. God bless

#19 Squire on 07.19.22 at 4:41 pm

#4 TurnerNation on 07.19.22 at 3:50 pm

————————————————
https://www.youtube.com/watch?v=PeDJbe9WOk4
UN and WEF announce to accelerate Agenda 2030.

I wonder what our PM will pull out of his sleeve before autumn. Gonna be interesting….

#20 Andrewski on 07.19.22 at 4:50 pm

Greg, if you’re a believer in Karma, keep the house for now. You’ll be the happier man! Garth’s idea is completely viable.

#21 chopper on 07.19.22 at 4:51 pm

Ian and Greg: good on you for keeping in check that investments involve real live people (your tenants) who are always worrying in the back of their minds with FOBH (fear of being homeless) from you selling and/or doing a renoviction etc….esp given the average way is 70k/yr give or take…nuts!

just read the average range for a 1bdrm rental in vancouver and toronto is from $1800/2300/mo…a 20% increase from a while ago (do a simple craigslist search)…how nuts is THAT….add that we’re bringing in 400, 000 more immigrants and opening the doors again to international students…and I get it on the immigration levels/students: education is opening up again, we have severe labour shortages, a graying crowd who decided to take early retirement when covid hit, etc…but govt and business of all levels have to get really serious, really fast and creatively on creating more (affordable) housing options (esp for the middle class), both for the local renters and newcomers needing to rent….i just don’t know what is to happen.

#22 IHCTD9 on 07.19.22 at 5:06 pm

#14 Shawn on 07.19.22 at 4:21 pm
Bulldozer guy asked me:

How about a 40 billion annual debt servicing bill?

How about 50 billion? 60? At some point, even just the interest alone is a problem.

40% of working Canucks pay zero net income tax. Labour participation rate hangs in the low 60% zone. That doesn’t leave many working folks to pay the ever-increasing tab…

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

Not to worry, we gonna borrow the interest too if needed. Add it to the tab.

———-

Sounds like reality. But, that track will meet an absent bridge too. Do we change course, or do we swan dive into the canyon we know lies ahead?

Fact is, we can’t borrow our way out of our collective stupidity forever. At some point, the bond market just won’t believe it anymore.

#23 yvr_lurker on 07.19.22 at 5:24 pm

Yup, interest rates have swollen like Pepe’s vibrating ego, but recall that 100% of the interest on an equity loan, and a big hunk of a mortgage payment is deductible from taxable income. That’s if the funds are invested, and hopefully in a nice B&D portfolio taking advantage of current bargains.
—————-
In this climate, I think that this would be a huge risk. I’d wait for a year or 18 months to see where the market is. There is an implicit assumption here by Garth that a B+D will generate enough over this time frame to cover the re- mortgage… Seems not at all a sure thing over the next year–18 months when about 75% of the experts are predicting an upcoming recession. I’d just wait until there is a little more clarity that we are not going down in a B+D another 10% over the next year.

Sure. Wait until markets go up and your money buys fewer assets, plus you’ve missed the recovery surge. Good thinking. (Remember what I said about emotion being your enemy?) – Garth

#24 IHCTD9 on 07.19.22 at 5:30 pm

#17 Stuck In NB on 07.19.22 at 4:30 pm
Been watching the market near YFC – the madness continues. Relatively new 4 bed/3 bath SFDs used to be 270-ish five years ago, 340-380 in 2021, 420-500 in 2022. Nothing available at the moment, new builds of similar size are 500+. Still cheap compared to ON and BC. Perhaps more bugs, but fewer junkies, and there is a Costco within the driving distance
————

Yep, Canada is going to $h!t from Bonavista to Vancouver Island. Our Southern Ontario Podunk saw 300k average sfd’s turn into 600k average. Nice house is 7-800k. No Costco, bugs aplenty. Homelessness is very noticeable today where 10 years ago it was statistically zero. Small town Ontario where living was great prior to Trudeau and Covid, now not so great. The Libs really should not have sat on their hands while RE went ballistic.

I hope the BOC redeems itself, blood needs to run if prosperity is to ever return (GTA and GVRD excluded, they are permanently euchred obviously).

#25 Ed on 07.19.22 at 5:34 pm

As usual we will lead

Alberta Health Services no longer requires COVID-19 immunization for its workers

AHS says COVID-19 vaccines available to date target the original strain of the virus.

It says evidence shows that immunization without boosters has limited effectiveness in reducing transmission of the Omicron variants currently circulating.

Crazy that any government body in Canada is following the science.

Meanwhile the Libs are bringing back Covid testing to vaxed travellers in an attempt to slow down flights even more.

#26 No Brainer on 07.19.22 at 5:38 pm

Do you know what the best rental properties are?
The ones not bought/ saving years of payments, interest, repairs, replacements, property taxes, levies utilities, capital gains etc

#27 Overheardyou on 07.19.22 at 5:45 pm

I sure hope those delisted homes are not under pressure to sell. After looking at current listings in the GTA, I’ve noticed many are empty or clearly staged…

#28 Amok on 07.19.22 at 5:45 pm

I’ve watched a downtown Vancouver penthouse be listed and delisted over the past 15 months. Started at $6M, then $5.5M, then, $5M, then $4.5M… it was taken off two weeks ago and has just resurfaced at $3,999,000.
I know that is out of reach for most people, but it paints a common picture.

#29 IHCTD9 on 07.19.22 at 5:47 pm

#21 chopper on 07.19.22 at 4:51 pm
Ian and Greg: good on you for keeping in check that investments involve real live people (your tenants) who are always worrying in the back of their minds with FOBH (fear of being homeless) from you selling and/or doing a renoviction etc….esp given the average way is 70k/yr give or take…nuts!

just read the average range for a 1bdrm rental in vancouver and toronto is from $1800/2300/mo…a 20% increase from a while ago (do a simple craigslist search)…how nuts is THAT….add that we’re bringing in 400, 000 more immigrants and opening the doors again to international students…and I get it on the immigration levels/students: education is opening up again, we have severe labour shortages, a graying crowd who decided to take early retirement when covid hit, etc…but govt and business of all levels have to get really serious, really fast and creatively on creating more (affordable) housing options (esp for the middle class), both for the local renters and newcomers needing to rent….i just don’t know what is to happen.
————

Government can’t do that. They talk like they can, but they’re not doing the building. Businesses need to profit or they go kaput – end of discussion. Canadians fall for this tripe all the time.

If you want lots of affordable housing, we have to create conditions where no one wants to own any of it.

Immigration is not really working out well because everyone heads for their respective ethno/national burbs – in basically just 2 areas of the country. The rental demand fuels the RE market – especially where one can pile drive 10-20 international students into a single sfd without having to worry about getting shut down by the City for illegal rentals (same two areas). It’s dog eat dog.

It ain’t gonna change, because we don’t have a clue what we’re doing, and we’re not allowed to discuss it. Thus, Canada has become a country for the old stock home owning crowd, and the rich. The vast majority slaves at sub-par wages hoping to save up a down payment while living with room-mates into their mid-thirties.

Hopefully, you are on the right end of the divide.

#30 Reality Check on 07.19.22 at 5:59 pm

Small town Ontario where living was great prior to Trudeau and Covid, now not so great. The Libs really should not have sat on their hands while RE went ballistic.
———————-

And Ontario and Quebec will vote Trudeau back in next election.

Fool me once…….fool me 4 times and I deserve what ii get.

#31 Felix on 07.19.22 at 6:03 pm

Yes, and an actual Angel is blessing us all today!

BREAKING NEWS!

Canada is banning imports of dogawful mutts!

https://www.thestar.com/news/gta/2022/07/19/canada-is-banning-dog-imports-from-100-countries.html

There is hope for Canada, the future world’s greatest Feline Nation!

#32 Inflation Time on 07.19.22 at 6:12 pm

Still in most places in the GTA even though sales are way down, prices have not budged much at all, I have been looking at one townhouse in North York, it has been on the market for a couple of months now, price has not been reduced by one cent, all those sellers believe I only need one despardo to get my price so I will wait. It does not matter in the long run if prices drop big in Brantford or Innisfil, it’s what happens in the core and close surrounding area of the GTA, that is where most people work and want to live, so far no dice on large price drops, let’s see what happens in October, Drunkenmiller still sees a hard landing and he is the greatest trader alltime.

#33 NOSTRADAMUS on 07.19.22 at 6:31 pm

TAX SUCKING TICKS!
I suspect a lot of the overindebted are finally waking up after being anaesthetized by the Central Banks zero interest rate policy. It is a strange world they are waking up to. There is no bankers back stop. Perhaps they should have applied the George Constanza logic, they say one thing, you do the opposite, then you can’t go wrong. Hello Tiff.
New point. Beware, as in deathly scared. Revenue Canada is coming for you. These deeply embedded tax sucking ticks will never give up. They will follow you into the deepest darkest jungle. Into the Sahara desert, even Death Valley. They will deep dive for you in the Marinas Trench, Brrrr, cold down there. They will come for you by dog sled to the North Pole. These ticks are not human. Steady Lads, hold the line.

#34 yvr_lurker on 07.19.22 at 6:31 pm

Sure. Wait until markets go up and your money buys fewer assets, plus you’ve missed the recovery surge. Good thinking. (Remember what I said about emotion being your enemy?) – Garth
——————–
Most people don’t see any market recovery “surge” on the near-horizon, driven by what exactly? We had this discussion before, and I’d wait for 6–12 months as the likelihood of further declines or just limping along would be too high for me to take that risk. We have sufficient assets and there would be no need to take on that risk. To each their own, but this fellow could easily get burned by such a decision. 2 years ago it made sense. Now, not so much…

Did you enjoy missing the 2.5% surge today? – Garth

#35 Re-Cowtown on 07.19.22 at 7:02 pm

#30 Reality Check on 07.19.22 at 5:59 pm
Small town Ontario where living was great prior to Trudeau and Covid, now not so great. The Libs really should not have sat on their hands while RE went ballistic.
———————-

And Ontario and Quebec will vote Trudeau back in next election.

Fool me once…….fool me 4 times and I deserve what ii get.

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

Mr. Socks didn’t fool more than a handful of us out here in Alberta, yet we’re all stuck getting what Ontario and Quebec deserve to get, good and hard.

Next time people in Ontario and Quebec might want to think about the rest of Canada when they vote as they’re actually voting for all of Canada, not just themselves.

Who knows, they or their kids might want to move out here some day.

#36 JacqueShellacque on 07.19.22 at 7:20 pm

“Sure. Wait until markets go up and your money buys fewer assets, plus you’ve missed the recovery surge. Good thinking. (Remember what I said about emotion being your enemy?) – Garth”

Garth, I think you’re forgetting that the age of cheap money is over. Higher interest rates = lower PVs for all assets. There is literally trillions of dollars real estate and financial assets need to shed to be in line with this new high rate future. A 2.5% one day gain or loss, presumably, doesn’t mean anything in the B&D paradigm anyway. You’re supposed to just file and forget, so I’m not sure why (other than the fact that it’s your blog and you can do whatever you want) that single day data point would be given in favor of a particular strategy. There’s also path dependency: a whippersnapper maybe could stand to lose 30% and the end result won’t change that much, but a 55 year old getting in now stands a chance of getting creamed. I think it’s time to consider the unthinkable – B&D works when everything is rising. Anything works when everything is rising.

Invest when you have money. Stay invested. Stop being emotional. The three rules for success. – Garth

#37 Laurie Fujiki on 07.19.22 at 7:36 pm

But some houses are still selling well over asking in Toronto. What’s up with this??

45 Highcroft Rd, Toronto, ON – Detached Sold price | HouseSigma https://housesigma.com/bkv2/landing/rootpage/listing?id_listing=GMnKYqpnX4d3w1Qr&utm_campaign=listing&utm_source=user-share&utm_medium=iOS&ign=

How do people still fall for the list-under-market trick? – Garth

#38 Wrk.dover on 07.19.22 at 7:49 pm

What will Mr Mkt do over a 1% US rate hike next week?

Hissy fit plunge yet again?

#39 Drill Baby Drill on 07.19.22 at 8:08 pm

I think anyone or any financial institution that states that interest rates are only going to go up another 1 or 1.5% are completely out to lunch. I am a survivor of the Paul Volker assault on inflation from the early eighties. My first home mortgage was 18% VAR ’83. This was after the peak of 21% VAR in ’81. The only major factor then was middle east Oil price rises and the Iran / Iraq war. Today we have Russia / Ukraine and oil price elevation also many more people on this planet all clamoring for oil. (sorry greenies) China will be ramping up the tension as well not including the collapse of trade routes. We will see 10 – 12 % VAR mortgages within 18 months.

#40 april on 07.19.22 at 8:17 pm

#32- you can’t go by the listed price…. wake up!

#41 yvr_lurker on 07.19.22 at 8:19 pm

Did you enjoy missing the 2.5% surge today? – Garth
———-
One single day. A smart fellow like you will know it means zip. The bet is still on that the TSX will be nowhere near what the BMO fellow predicted by Christmas.

#42 Millennial 1%er on 07.19.22 at 8:49 pm

Hey garth

Just wondering, do you ever get sick of being right?

#43 Stone on 07.19.22 at 9:21 pm

#36 JacqueShellacque on 07.19.22 at 7:20 pm
“Sure. Wait until markets go up and your money buys fewer assets, plus you’ve missed the recovery surge. Good thinking. (Remember what I said about emotion being your enemy?) – Garth”

Garth, I think you’re forgetting that the age of cheap money is over. Higher interest rates = lower PVs for all assets. There is literally trillions of dollars real estate and financial assets need to shed to be in line with this new high rate future. A 2.5% one day gain or loss, presumably, doesn’t mean anything in the B&D paradigm anyway. You’re supposed to just file and forget, so I’m not sure why (other than the fact that it’s your blog and you can do whatever you want) that single day data point would be given in favor of a particular strategy. There’s also path dependency: a whippersnapper maybe could stand to lose 30% and the end result won’t change that much, but a 55 year old getting in now stands a chance of getting creamed. I think it’s time to consider the unthinkable – B&D works when everything is rising. Anything works when everything is rising.

Invest when you have money. Stay invested. Stop being emotional. The three rules for success. – Garth

———

Jacque,

A B&D portfolio always works. I assume you’re not retired. I’m B&D and am not sweating what is currently happening or that interest rates are rising. Dividends keep coming in for my portfolio. Temporary retrenchments in its capital value are normal. When that happens, rebalance and enjoy the supersized gain thereafter.

Garth is right. Park your emotions at the door. They don’t do you any good when it comes to investing.

#44 A.C on 07.19.22 at 9:23 pm

Told me sis, she should lock in 10 year with 4%. Or 5 year! She instead took variable cause thats what her friends said despite it being in the press rates were gonna rise.

LOL.

#45 Kelowna on 07.19.22 at 9:27 pm

Just got my hands on the Kelowna real estate report.

This is the best report and data I have ever read on real estate. I wish all markets reported like this. The scary thing is Kelowna is a microcosm showing the real estate crash happening across Canada. I think many markets are going to be halved.

Mike Novogratz came out today and said he was wrong on crypto and overlooked how much leverage was in the system, which essentially has caused the mother of all crypto crashes as the margin calls pile up.

Hey Mike – that ain’t leverage…check out the Canadian housing market…now THAT is leverage. And the same fate is coming to Canadian housing.

#46 Victor Llearna on 07.19.22 at 9:33 pm

Shep trying to sell houses in bunny patch are learning that the only things that show up for bidding wars are crickets.
I’m Hoping to get a good deal on a sheep farm next year.

#47 ogdoad on 07.19.22 at 9:34 pm

Dear Greg….thanks for the ethical/high road line of thought. But, we all know that, you being human and subject to mass influences such as FOMO, biases, greener grass, feigned riches, thought of making someone jealous (ex. perhaps), ogdoad….that you’re going to sell…just so, perhaps, you can say to one person that you made a fortune and are so cool….and have a dog…

Sell that sucker and kick the losers to the curb…or don’t and be the nice guy…

Isn’t that the REAL problem?

I can help:). Just say Og three times

Og

#48 cramar on 07.19.22 at 9:58 pm

#6 Ian B on 07.19.22 at 3:59 pm

Two thumbs up to you and Greg!

I was just informed that one-year GICs that were paying 1% last fall are now at 4%—a 400% increase! Most interesting, but I figure it should go even higher in the coming months.

#49 Quintilian on 07.19.22 at 10:16 pm

“And Hon. Mr. Turner, I sincerely hope you are immortal … thank you for all you do!”

What a terrible thing to wish for a nice person.

Also why does Greg need to ask what is the right thing to do?

Moral immaturity

#50 Arctic Gringo: Qalunaaq on 07.19.22 at 10:36 pm

Tiff’s latest advice:

“So as a business, don’t plan on the current rate of inflation staying. Don’t build that into longer-term contracts. Don’t build that into wage contracts. It is going to take some time, but you can be confident that inflation will come down”.

My fellow union members eventually ratified our collective agreement on July 11, after voting began late April 2022. Union said that this was the best they could negoitate and to take it or strike.

Employer was reading Tiff’s mind.

#51 RS on 07.19.22 at 11:16 pm

I live in Victoria. I wish more landlords thought like this. Instead most think how can I possibly squeeze as much money out of a tight rental market as possible?

I posted on my social media the other day about 3 units that were particularly bad – a 2 bed 2 bath in Cordova Bay for $4000 a month, a 2 bedroom 1 bath in Sooke with a walk score of ZERO for $3000 a month and a 1 bed room bottom barrel basement suite for $2450 a month. Some have no conscience.

#52 True Dat on 07.20.22 at 12:58 am

Oh Green Goons, hypocrisy is thy name.

https://oilprice.com/Energy/Energy-General/Even-ESG-Funds-Are-Now-Buying-Big-Oil-Stocks.html

So what now? What do you do to save your desperate morality? Do ESG investors now divest themselves of all energy equities? Otherwise, aren’t you the worst of the planet killing capitalists? Owning ESG ETF shares makes you a worse hypocrite than the unsuspecting senior who invests for retirement, you are buying stocks you know are “ planet killers”. Now that ESG is the planet killer, isn’t it time you got out?

#53 under the radar on 07.20.22 at 5:22 am

The double edged sword of higher interest rates and falling home prices, rising rents. Be careful what you wish for.

#54 crowdedelevatorfartz on 07.20.22 at 5:56 am

@#28 Amok
“Started at $6M, then $5.5M, then, $5M, then $4.5M… it was taken off two weeks ago and has just resurfaced at $3,999,000.”

+++
When it re-lists at $3,888,000 and it STILL doesnt sell….
You know the market is doomed.
:)

#55 crowdedelevatorfartz on 07.20.22 at 6:15 am

@#39 Drill
“Today we have Russia / Ukraine and oil price elevation also many more people on this planet all clamoring for oil. (sorry greenies) China will be ramping up the tension as well not including the collapse of trade routes.”

+++

Yep.
The Summer of 1939 repeats in reverse?

Russia turning the gas taps off to Germany in the near future. (Margaret Thatcher warned Europe of this 30 years ago).
Russian military advancing deeper into Ukraine.
(When will they drop thousands of paratroopers behind Ukrainian lines in a typical Russian “leap frog” maneuver to really shake things up? Mid winter ? Spring?)

China foaming at the mouth in fury over any country that even meets with a Taiwan govt official.

Iran still dabbling with Nukes while pretending to negotiate with American and European jabberwocky wafflers….as Israel readies instant Nuclear retaliation.

Food prices skyrocketing as grain is held hostage.

Unprecedented heat waves worldwide.

Trump Jan 6 hearings prattling on with endless blame, conspiracies, finger pointing, and charges.
Nov mid term elections approaching.

We are sleep walking into a major, world wide escalation.
Hopefully Canada’s new politically correct, individualistic military with purple man bun hair, nose rings and what ever clothing they choose for the day’s battle…will be up to the task.

Good times.

#56 Love_The_Cottage on 07.20.22 at 7:47 am

#37 Laurie Fujiki on 07.19.22 at 7:36 pm
But some houses are still selling well over asking in Toronto…
How do people still fall for the list-under-market trick? – Garth_______________
#54 crowdedelevatorfartz on 07.20.22 at 5:56 am
@#28 Amok
Started at $6M, then $5.5M, then, $5M, then $4.5M… it was taken off two weeks ago and has just resurfaced at $3,999,000
+++
When it re-lists at $3,888,000 and it STILL doesnt sell….
You know the market is doomed.
___________
Repeat this every morning until you get it… “The listing price is irrelevant”…

Shawn remember you only look smart in comparison. Damned with faint praise.

#57 Habitt on 07.20.22 at 8:23 am

35 cowtown liberals won the most seats in all Maritime provinces, Ontario, Quebec and BC. Libs were second in Manitoba. The libs got 35 seats in Quebec but not a majority of seats there. The real damage was done in Ontario and Atlantic Canada. 21 seats in western Canada. Just saying

#58 Dave on 07.20.22 at 9:01 am

Yippee….June CPI up to 8.1%. Interest rates to the moon. Yowza.

#59 Dogman01 on 07.20.22 at 9:16 am

Greg is an example that helps confirm that at the ground level we could be a society of Altruists.

but…

“You have to make a choice from 3 options. Become as ruthless and heartless as “they” are and most likely enjoy all the worldly comforts and pleasures that life has to offer, be a silent cog and live with some small security and comfort and don’t get involved, or suffer a life of poverty and possible alienation for your principles. You only have one life, no second chances.” – BigAl (Original)

“We are societies of altruists governed by psychopaths, that those who claim to represent us, those who get into positions of power, are very often wildly different in that psychology to those whom they claim to represent.” – George Monbiot

#60 Dharma Bum on 07.20.22 at 9:25 am

Joe Rogan – the most popular neanderthal in the world of broadcasting (gotta had it to the dude, going from uneducated amateur ju jitsu fighter to comedian to sitcom actor to reality host show to UFC commentator to the number one podcaster worldwide) calls out Trudeau for the dictator he is and Canada for the backwater that it is.

https://www.youtube.com/watch?v=swevbnpn5vw

I mean, the guy’s no rocket scientist, but he does have a point.

https://nationalpost.com/news/canadas-f-d-joe-rogan-criticizes-our-covid-19-lockdowns

Joe is the most popular media figure in the world, and this story got global press.

Whaddaya know Joe?!

#61 Dharma Bum on 07.20.22 at 9:30 am

DELETED (Language)

#62 jess on 07.20.22 at 10:32 am

certified?

fake news/ reviews incentivized

…” a company based in Germany offering ‘review campaigns’ that it claims will ‘help your products become best sellers’. It has a large army of reviewers: 62,000 globally,

https://www.cnn.com/2021/06/25/tech/amazon-google-fake-reviews/index.html
..”The probe is the latest in a string of investigations piling up against tech giants around the world, as officials and policymakers scrutinize claims of anti-competitive behavior. The investigations could result in hefty fines and increase pressure on companies including Facebook (FB) and Apple (AAPL) to change the way they do business.”
Some sites had additional reward or loyalty schemes, where reviewers could earn points or ‘coins’ –

#63 TheDood on 07.20.22 at 11:07 am

#51 RS on 07.19.22 at 11:16 pm
I live in Victoria. I wish more landlords thought like this. Instead most think how can I possibly squeeze as much money out of a tight rental market as possible?

I posted on my social media the other day about 3 units that were particularly bad – a 2 bed 2 bath in Cordova Bay for $4000 a month, a 2 bedroom 1 bath in Sooke with a walk score of ZERO for $3000 a month and a 1 bed room bottom barrel basement suite for $2450 a month. Some have no conscience.
______________________________

Different landlords and different circumstances.

The ridiculously high rents are to cover a ridiculously high mortgage payment. Lots of those in this country for sure. How many amateur landlords in Canada anyway? How many people jumped on the bandwagon and bought an investment property to capitalize when prices were skyrocketing? These are most likely the ones who will be selling at major discounts as rates continue to rise. What are they gonna do at renewal time? As for 10K in rent??? (LOL!). For those looking to vulch, these are the ones to keep an eye out for.

#64 Sail Away on 07.20.22 at 11:23 am

Never accept wokeism. Patanjali K. explains the danger from a minority perspective.

Time for SJWs to disappear- luckily for reasonable people, their nutty antics have strengthened conservatism.

https://www.msn.com/en-ca/news/world/patanjali-kambhampati-my-lived-experience-tells-me-that-diversity-inclusion-and-equity-is-antithetical-to-human-liberty/ar-AAZMZcC?ocid=msedgntp&cvid=552ac062d9a6422e9586372d46b7aed2

#65 jess on 07.20.22 at 11:46 am

Who is he ? Tabra

who is Tabra?
….”the 57-year-old tobacco trader is now detained at a police station in Baghdad’s “Green Zone,” sources say, as he negotiates charges related to his arrest in Turkey last year.
… Tabra’s family runs Al Nibal, but its Canadian branch is registered in Tabra’s name.

Al Nibal currency exchange, Tabra was the director of a high-end jewelry store in London and an exchange house in Toronto, and remains active in tourism and trade companies in Jordan. He also holds shares in an oil company based in Iraqi Kurdistan.

… three daughters live in Toronto, where they have a YouTube channel

#66 Linda on 07.20.22 at 11:57 am

#8 ‘Turner’ – I’m beginning to wonder whether countries in general want tourism to resume. So many headlines citing new fees, restrictions on visitor numbers to various popular destinations, even restrictions on travel to said destinations. Flights being cancelled, only being allowed to drive on a stretch of road on days corresponding to one’s license plate number (odd number, can drive on odd day; even number ditto) & more.

Regarding the Covid testing. I feel some sympathy for the government. If they lift the restrictions & another severe outbreak occurs, they will be excoriated for not protecting Canadians; if they continue to keep the restrictions they will continue to be excoriated for preventing all the various businesses related to travel from being able to make a living, which incidentally means their presumably Canadian employees can’t make a living, etc. A lose-lose situation, for sure.

#67 Apocalypse NOW on 07.20.22 at 12:37 pm

#55 crowdedelevatorfartz on 07.20.22 at 6:15 am

Yep.
The Summer of 1939 repeats in reverse?

Russia turning the gas taps off to Germany in the near future. (Margaret Thatcher warned Europe of this 30 years ago).
Russian military advancing deeper into Ukraine.
(When will they drop thousands of paratroopers behind Ukrainian lines in a typical Russian “leap frog” maneuver to really shake things up? Mid winter ? Spring?)

China foaming at the mouth in fury over any country that even meets with a Taiwan govt official.

Iran still dabbling with Nukes while pretending to negotiate with American and European jabberwocky wafflers….as Israel readies instant Nuclear retaliation.

Food prices skyrocketing as grain is held hostage.

Unprecedented heat waves worldwide.

Trump Jan 6 hearings prattling on with endless blame, conspiracies, finger pointing, and charges.
Nov mid term elections approaching.

We are sleep walking into a major, world wide escalation.

__________________

Correct.

Putin visiting Iran this week.

Why? Preparation for backup in global warfare.

https://www.bbc.com/news/world-europe-62234183

The BRICS are about to be thrown at the west.

The Summer of Hell is not just about the heat we feel today.

Power outages will rampage in the next weeks. Many deliberate.

The exodus from health care and escalating Covid waves will gut health resources within days.

Get away from major centres before month end. Go to the cottage if you have one. Stockpile everything, with lots of water and fuel.

Summer of Hell is here.

PREPARE

#68 Apocalypse NOW on 07.20.22 at 1:09 pm

Best to assume you will have limited, if any, access to the internet, as well as refrigeration, as of August 6.

PREPARE

#69 The Original Jake on 07.20.22 at 1:23 pm

“there are now more delistings than sales in Toronto. Sellers are waiting for buyers to return with multiple offers and FOMO in their eyes.”

So true, I have seen quite a few properties get taken off the market (GTA) as they likely believe buyers will be back en masse this Fall to line up again to place their overpriced bids. I have 1 week left to to go to close on a sale. Glad to be out, I do not want to be sitting with a listing in a couple of months.

The return of “Just Reduced” on For Sale signs is coming to a town near everyone very soon.

#70 Don Guillermo on 07.20.22 at 1:37 pm

#64 Sail Away on 07.20.22 at 11:23 am
Never accept wokeism. Patanjali K. explains the danger from a minority perspective.

Time for SJWs to disappear- luckily for reasonable people, their nutty antics have strengthened conservatism.

https://www.msn.com/en-ca/news/world/patanjali-kambhampati-my-lived-experience-tells-me-that-diversity-inclusion-and-equity-is-antithetical-to-human-liberty/ar-AAZMZcC?ocid=msedgntp&cvid=552ac062d9a6422e9586372d46b7aed2

******
Good read

#71 Linda - Government defeated on all fronts on 07.20.22 at 1:39 pm

So many headlines citing new fees, restrictions on visitor numbers to various popular destinations, even restrictions on travel to said destinations. Flights being cancelled, only being allowed to drive on a stretch of road on days corresponding to one’s license plate number (odd number, can drive on odd day; even number ditto) & more.

Loooooool

This was the Eastern Europe approach between 1980-1989, in the end all these regimes collapsed

It will eventually happen to Trudeau too if he tries more scams like the last two years..

#72 jess on 07.20.22 at 2:36 pm

migrations of a different kind?

Boeing and dozens of other companies have granted “conservation easements” on some of the most contaminated land in the U.S. Companies can save millions on cleanups, arguing that no one will ever live there. Neighbors of one site are up in arms.

https://www.reuters.com/investigates/special-report/usa-pollution-conservation-easements/

#73 Prince Polo on 07.20.22 at 2:50 pm

This blog entry didn’t even make it to 100 comments?! Did some get lost by Canada Post?

#74 earthboundmisfit on 07.20.22 at 5:40 pm

If you don’t watch BNN (as recommended by this blog’s author), you miss gems like today’s headline.

“TSX Recap: Investors react to sky-high inflation; pot stocks climb”

#75 DON on 07.21.22 at 12:41 am

#73 Prince Polo on 07.20.22 at 2:50 pm
This blog entry didn’t even make it to 100 comments?! Did some get lost by Canada Post?

******
Vacations…and Garth said to take a break, so for the most part everyone is easing off and enjoying the weather. What else can really be said on this point. Hide from reality for a while and HOPE for the best. The talk on the soccer pitch tonight was rising mortgage rates. Time to check out.