Bear brains

My friend Max seemed morose. ‘Taking daughter to Jax Jungle. Can’t talk,’ he texted. So I asked what a Jax Jungle is.

“Indoor playground,” he replied, “where defeated parents take their children.”

Max has company. Defeat’s everywhere now. Funk abounds.

Rarely have people been so morose, pessimistic or dark about the future as at present. Even during the lowest, scariest, most unknown moment of the global pandemic, public sentiment was not this waning. Now we’re scare about inflation. Gas and food. Mortgage rates. The value of RSPs and investments. House prices. Recession. And meanwhile the media throws Putin, Zelenskyy, Biden-with-Covid, hockey sex abuse and Monkeypox in our faces.

Irony abounds, though. Real estate is getting cheaper to buy. Unemployment is at rock-bottom. Wage growth is robust. There are more job openings than people looking to work. Financial assets cost less to acquire. And we have an inflation/rate event because the economy is running hot, not cold.

So it this a time to be defeated? Or does this widespread nihilism pose an opportunity?

First, wow, two charts to underscore our crappy mood. This one is a measure of fear, showing the proportion of people willing to take a risk (for which confidence is required) has sunk lower than during the days of Covid, now sitting at levels unseen since the 2008-9 credit crisis.

Fear levels today rival those of the Credit Crisis

Source: BofA Global Fund Manager Survey

And below (from Bank of America) you can see where money’s gone. Yup, out of equities (growth assets) and into cash (safe haven). Once again investors’ fear has pushed them into a more defensive stance than during Covid, and back to those terrifying days of 2008 when historic financial outfits were toppling on Wall Street.

More people fleeing to cash than during Covid

Okay, what does this tell us?

Defeat, of course. Peruse the comments on this pathetic site and you can smell it for yourself. Once again human nature is the enemy of investing. People buy assets that are rising, and pay too much. They fold and sell when stuff drops and turn paper losses into real ones. They shelter in cash when securities are cheap. They allow feelings to trump logic. And they sure don’t pay much attention to history, since everyone believes they live in unique times, when things are different.

But that’s not now. And in time key bits of information will become apparent. Maybe some are already obvious.

Bond yields have retreated in recent weeks – so much that longer-term mortgage rates have been trimmed. At least one lender shaved 40 bips off last week. Mr. Market is pricing in slower economic growth and betting CBs’ bark  will be far less than their bite.

Inflation may well be peaking. Oil and gas have given up ground. The latest 8.1% print in Canada was actually lower than econs expected. “The Bank of Canada was probably still pleased,” says Stephen Brown of Capital Economics, “to see that an average of the three core measures rose by only 0.1 percentage-point in June, the smallest increase in eight months.” Supply chain bottlenecks get a little looser every week. Interest rate increases aren’t over, but that 1% assault may well have been the biggie. Not to be repeated.

In fact, 90% odds last week the US Fed would jump its rate a full 1% in a few days have retreated. A Reuters poll of economists found the vast majority (98 of 102) expect a 75-bips move. And what of recession? There’s a 50% chance of one with two years, they say, but nine in ten believe it will be mild or very mild. Even if negative economic growth happens, the US jobless rate is predicted to stay around 4% – virtually full employment.

Back to the bears. As BMO’s Ron Kavcic spells out, they’re everywhere. Look at the American Association of Individual Investors, which constantly measures sentiment. “On net, the difference between bulls and bears is right around the worst (i.e., most bearish) on record in recent weeks,” says Kavcic. “Comparable past readings occurred in 1990 and 2009. Readings in 2003 and 2020 were deeply bearish as well, but not this bearish.”

Similar results emerged from a survey done by Investors’ Intelligence. And a Conference Board poll found only a quarter of people expect higher stocks in twelve months – the lowest confidence level in 14 years.

But wait. These bearish yowls have been heard before. In 2020, for example, when Covid was eating the world. In 2011, during the US debt ceiling crisis. In 2009 in the waning months of the financial and credit crisis. And before that, in the aftermath of Nine Eleven. The dot-com bust. And Y2K.

“Each of those periods,” the banker points out, “marked the tail end of significant equity market drawdowns.”

Hmm. So imagine if inflation is peaking. If rate hikes will be largely done by late autumn. If the bond market’s right. If employment stays robust and any downturn is short and shallow. If the equity rebound last week was a harbinger. And if you bought quality assets now at a 15% or 20% discount.

Would you have the confidence?

About the picture: “I’ve been a fan since 2008, and I always look forward to reading your blog when I come home from work(okay, usually at work too),” writes Jen. “I find your your unique combination of government, business and personal financial experience invaluable. The loveable rescue mutt pictured here is Fionn, fresh from his latest Furminator brush-out. That is actually about a quarter of the undercoat that came off of him this afternoon! He is a loving and loyal friend, and has quite literally saved my life. Long story. Best wishes and thanks to you.”

 

117 comments ↓

#1 Concerned Citizen on 07.24.22 at 2:05 pm

“Irony abounds, though. Real estate is getting cheaper to buy. Unemployment is at rock-bottom. Wage growth is robust. There are more job openings than people looking to work. Financial assets cost less to acquire. And we have an inflation/rate event because the economy is running hot, not cold.”

*****

With a paragraph like that, how can I not play along? Here goes:

Real estate is getting more expensive to buy or rent, as higher interest rates have more than offset declining prices. Wage growth is not keeping up with inflation, leading to decreasing purchasing power. There are plenty of jobs that don’t pay a living wage (hey, I hear the Egyptian slaves had full employment too). Financial assets cost less to acquire, but are still extremely expensive on a historical basis (e.g. 10-year bonds are yielding 500 basis points less than current inflation). The U.S. economy could very well be in a recession right now, and who knows how long it will last.

Your cherry-picking proves the point well. Emotion defeats logic. It makes us human. And keeps us less. – Garth

#2 baloney Sandwitch on 07.24.22 at 2:10 pm

“Prosperity ends in a crisis. The error of optimism dies in the crisis, but in dying it gives birth to an error of pessimism. This new error is born, not an infant, but a giant.”
A.C. Pigou, Industrial Fluctuations, 1927

#3 Jimmy Doolittle on 07.24.22 at 2:15 pm

Mr Garth Turner,

1) Are there any circumstances under which you would personally sell investment holdings (equities, bonds etc.) at your net worth and risk tolerance?

2) Would you concurrently post that decision on this blog?

3) As someone who has had some (realized) success in the US Equity market, I feel I may have just been born at the right time, or just a successful gambler, not an investor. At this point, rather than analyze company performance in macroeconomic conditions one must intuit what Mr Jerome Powell and associates will do next. I do not believe the system is rigged. They are attempting to do what is “best” in a very complicated world, unfortunately with some unreasonable investors attempting to impose their worldly needs onto the stock market, not the other way around !

4). I consider you a “poor man’s Jack Bogle” But I believe Mr Bogle today might revise his indexing only advice to some selective stock picking (and a lot more cash!)

5) Also, could you could inform us in steerage how the shares held by Vanguard etc. are voted in corporate proxy elections? Do you know what total percentage of shareholders actually vote their shares?

6) Finally, my wife and some friends are currently visiting Montreal. You folks are wonderful neighbors. Some day the United States will again be a good neighbor, with much more humility.

Thank you.

#4 Terry on 07.24.22 at 2:18 pm

“Rarely have people been so morose, pessimistic or dark about the future as at present.”

By design, the Americanization of Canada is now complete. Fear and consumption is the new normal. Don’t go out at night, lock your doors and stay inside. Canadians now know what its like to live in America without even moving there. Good job Globalists!
I miss Trump.

#5 crowdedelevatorfartz on 07.24.22 at 2:20 pm

@#104 Don
“They are getting resumes, why the lack of hiring. If training is a problem…train them. Maybe the Ferries should go back to their core practice of getting people to their destinations and stop trying to be a cruise ship line.”
+++
Seems there is no shortage of political appointees to gorge at the trough of highly paid upper management jobs.
Unfortunately ……
Down in the trenches the staff morale hasn’t improved with the endless pc “beatings”.

I was vacationing on the East coast
Got back yesterday.
Govt employees ( municipal, provincial and federal) here and on the East coast ( and I suspect every province in between) are expected to start every meeting, every school day, every announcement with the self flagellating apology of …..” I recognize we are on the unceded lands of ( fill in designated First Nations Nation)”
Even the Air Canada in-flight entertainment screens acknowledge that the airline is flying over unceded lands before any entertainment starts.

The brainwashing continues ad nauseum.

Good luck hiring and keeping staff in govt when the private sector seems to be a much more sane place to work.

#6 espressobob on 07.24.22 at 2:21 pm

Markets are soft, big deal. You learn over time to buy when the herd has dumped their positions and no one wants to touch it with a fifty foot telephone pole.

Contrarians know the game, it’s what we do.

#7 Look out below on 07.24.22 at 2:27 pm

Can’t wait for Soren to post 15 comments that nobody cares about with links to Italy and nothing to do with the nature of this blog.

#8 Chris L. on 07.24.22 at 2:35 pm

DELETED (Conspiracy nut)

#9 DON on 07.24.22 at 2:37 pm

#3 crowdedelevatorfartz on 07.24.22 at 2:20 pm
@#104 Don
“They are getting resumes, why the lack of hiring. If training is a problem…train them. Maybe the Ferries should go back to their core practice of getting people to their destinations and stop trying to be a cruise ship line.”
+++
Seems there is no shortage of political appointees to gorge at the trough of highly paid upper management jobs.
Unfortunately ……
Down in the trenches the staff morale hasn’t improved with the endless pc “beatings”.

I was vacationing on the East coast
Got back yesterday.
Govt employees ( municipal, provincial and federal) here and on the East coast ( and I suspect every province in between) are expected to start every meeting, every school day, every announcement with the self flagellating apology of …..” I recognize we are on the unceded lands of ( fill in designated First Nations Nation)”
Even the Air Canada in-flight entertainment screens acknowledge that the airline is flying over unceded lands before any entertainment starts.

The brainwashing continues ad nauseum.

Good luck hiring and keeping staff in govt when the private sector seems to be a much more sane place to work.

*****
All I can say is YUP!

Note: The BC nurses contract comes up for renewal Sept/October and cost of living is on their minds.

#10 Søren Angst on 07.24.22 at 2:39 pm

Would you have the confidence?

Hell ya.

Juicy tomorrow div tomorrow. DRIP’ng it.

Good read Garth. Had me going with the Left Brain, Right Brain until the end.

Could not agree more with you. Have not sold.

Still hanging on TWTR, damn the torpedoes and waiting until October for nutbar Musk to squirm in US Court in front of what amounts to a hangin’ judge that couldn’t care less about his billions.

——————-

#7 Look out below

Some too lacking to realize their Comment falls upon its own sword.

#11 Philco on 07.24.22 at 2:39 pm

#104 crowdedelevatorfartz on 07.24.22 at 12:57 pm
God bless the imagined ravings of a spendthrift Socialist

https://nationalpost.com/opinion/satire-dear-diary-jagmeet-singh
————————————
Ya…..ya can’t even IMAGINE bigger idiots in control to completely destroy a country.
JT and JS….IDIOTS

#12 The Woosh on 07.24.22 at 2:40 pm

#7 Look out below on 07.24.22 at 2:27 pm
Can’t wait for Soren to post 15 comments that nobody cares about with links to Italy and nothing to do with the nature of this blog.

———————————

Don’t…feed…the wild animals! You just know he’ll go over that just because! Sigh

#13 Philco on 07.24.22 at 2:45 pm

Freedom of speech being clobbered. New controls on Inet.
No real critical media.
A bucket of coins is worthless.
IDIOTs with no accountability.

#14 Flop… on 07.24.22 at 2:51 pm

Flop Drops.

What do I know about Surrey?

I try and only go out there once a year and get my taxes processed, so naturally I don’t like it.

Seeing the detached market slide back below the mental million marker, some dramatic price reductions going on, let’s see what’s happening with this one.

The details…

16160 Brookside CRT, Surrey.

Original ask 1.49

Now asking 999k

Assessment 1.17

https://www.zealty.ca/mls-R2691148/16160-BROOKSIDE-COURT-Surrey-BC/

So they just took the hatchet to the dream bamboo, and whacked 500k off the asking, it was probably a little over ambitious, but as they say timing is everything, and it probably would have flown in February or March of this year.

It’s now pretty much on the bottom rung of Surrey detached, and they are probably hoping to get something in 1.2 range, as it looks at little nicer than some of the other starter houses out that way, but it’s on the Flop Drop list and we’ll see what happens with it.

It’s only asking some might say, but I just showed one the other day in nearby Port Coquitlam down the bottom that was originally asking 1.4, that actually sold for only 950k.

I recall this happening in a lot of markets in the 2017 roll-back, prices surged down towards the million marker, sometimes pausing for significant amounts of time as sellers drew a line in the sand, and then when they realized that other properties were being let go below the million marker, the floodgates opened before being firmly shut around a year later.

A bargaining drought has ensued the last 5 years, but this guy has managed to capture market sentiment this year.

https://mobile.twitter.com/eresc79/status/1550988447552114688/photo/2

Now that I’m no longer a sole proprietor, this years trip to do the taxes in Surrey wasn’t as painful, I actually got a small cheque back, it’s attached to the fridge as I’m unsure what to do when the government gives something back.

Please advise, am I supposed to hose it or pose it…

M48BC

#15 Søren Angst on 07.24.22 at 2:54 pm

Okay, what does this tell us?

Defeat, of course. Peruse the comments on this pathetic site and you can smell it for yourself.
– Garth

————-

Besides being the IMMORTAL ONE add James Farragut to the list of talents as in…

“Damn the torpedoes, Full speed ahead!”

Garth says XMas. I say Halloween. We both say it’s just a matter of time before Mr. Market turns around.

CHI LA DURA, LA VINCE. They who endure, win. Or for the Classical among you:

VINCIT QUI PATITUR, OSSIA.

[Ignore Google translate, they are Mangia Cakes but try hard]

Dad saying to me as a kid, he was correct and he will be again (as will Garth).

#16 PeterfromCalgary on 07.24.22 at 3:03 pm

The US has a panel of 8 people who decide if that country was officially in a recession. They are part of a private, non-profit organization called the National Bureau of Economic Research.

They don’t automatically declare a recession after two consecutive quarters of the economy shrinking but look at a lot of other metrics as well. A recession is not declared in real time but rather after is has already happened. This lag is necessary because most data is not in real time either. So even if we are in a recession we will not know for a few months.

So my question is this. Is 6 months of negative growth really a recession if we also have a labour shortage?

Unrelated question: Are the people who make digital spell checkers unaware the in most English countries labour has the letter u in it?

#17 Søren Angst on 07.24.22 at 3:05 pm

#12 The Woosh

Woosh.

Sigh.

——————

Think it thru.

Start with onomatopoeia.

#18 TurnerNation on 07.24.22 at 3:06 pm

We really needed Smoking Man – to slap us around the smirk of middle class veneer, and intone some street wisdom.
He did like giving Gartho a friendly chuck on the chin, online and in real life.

—– WE pay high taxes for our border patrol! Totally worth it.
Meanwhile try leaving and returning yourself, legally via an airport. What am impossible hassle.

“As noted by Brian Lilley, writing for the Toronto Sun, this is more interceptions in six months than all of 2019, with June and May being the “second- and third-highest months on record, surpassed only by August 2017.”
https://torontosun.com/opinion/columnists/lilley-trudeau-continues-immigration-games-as-roxham-road-sees-record-numbers

—ERMMM March 2020? Published in 2018. Our rulers know what they are doing;
https://intellectualtakeout.org/2018/03/hannah-arendt-on-how-loneliness-breeds-terror/
But loneliness is preceded by social isolation, and it is in this first stage of isolation where the first seeds of terror and totalitarianism are sewn, Arendt said.
“Terror can rule absolutely only over men who are isolated against each other… Therefore, one of the primary concerns of all tyrannical government is to bring this isolation about. Isolation may be the beginning of terror; it certainly is its most fertile ground; it always is its result.

——– Our rulers want us even eating each other!! Remember, there no longer is news only the Manufacturing of Consent

https://www.nytimes.com/2022/07/23/style/cannibalism-tv-shows-movies-books.html
A Taste for Cannibalism? A spate of recent stomach-churning books, TV shows and films suggests we’ve never looked so delicious — to one another.

#19 Dave on 07.24.22 at 3:14 pm

Main Fear – Putin is a master planner. Russia China and India are united along with Brazil Iran and others.

They will send Epic Inflation to the West….carving the way to a new money order.

Possible or impossible???

#20 The General on 07.24.22 at 3:25 pm

Freedom of speech is flourishing. That is if it’s the correct kind of free speech. Meaning that as long as you go along with the program, you can say whatever you want in our “free” society. And God forbid, if you stray from the official narrative. Being a contrarian these days is getting dangerous. Think of it as being dog-piled. Meanwhile, since his new haircut, the p.m. has created a bowl shortage.

#21 Søren Angst on 07.24.22 at 3:28 pm

TRAVEL TIP:

For those that will be travelling to the Mediterranean this Summer, a map that shows where the heat is *:

https://twitter.com/US_Stormwatch/status/1550967976395845632

Brought to you by:

Misery Loves Company, America.

* They got the N. Adriatic wrong. 36C in NE Italia, 33C in Venezia, 35C in Split HR today. Mercifully, in a couple of days, temps dropping to the low 30s.

For those of you in Europa now, relief coming.

As for the rest of you 🍁 Canadesi:

Eat your hearts out Igloo/Ark land dwellers.

#22 uncle dave on 07.24.22 at 3:41 pm

An easy way to lift your mood is to not watch CityPanic24.

#23 Steve on 07.24.22 at 3:47 pm

I sold all my bonds from my 60/40 portfolio. I was like since they’ve lost so much, why not put it in stocks and prefers. I know you said never exit an asset class, but I have huge time horizon to keep them.

#24 Dogman01 on 07.24.22 at 3:52 pm

#89 Concerned Citizen on 07.24.22 at 9:18 am

Interest Rate and Inflation
Canadians are pickled in debt and fragile financially, even a minor rise in the Interest rate will kill cash flows so much so that TPTB believe minor moves will impact Inflation. Secondly much of the Inflation is caused by “supply chain fragility”, just in time efficiency we have optimized with globalization, that once the chains of supply normalize after Covid disruption some of the Inflation will go away as demand can be met.
I think one of Garth’s minions did a % breakdown of where they think the Inflation is coming from, good article.
Example if this is our 8% Inflation :
2% Ukraine War
2% Supply Chain Disruption
2% Consumer Demand
2% High O&G prices
The rising Interest rate pressures only impact the bottom 2 as they curb demand. The Supply Chain will work itself out and the Ukraine war will only end when Putin is given a face saving way out or a victory (or he is deposed internally)

“it’s a club, and your not in it”

Our Establishment protects it’s Own.
Throughout my life I have observed people in high positions protected by their system even when they are grossly incompetent or borderline corrupt, Severance Packages to the sky are ensured, then a clean slate after a small time in a Penalty box. While minimum wage employees are mercilessly kicked to the curb with impunity at the least transgression.
Look at Gerald Butts, largely the author of Ontario’s disastrous green boondoggles. Then into our PM’s Inner Circle, he then fell on his sword for one of the Trudeau scandals (I can’t remember which one maybe “WE” or maybe SNC), now he is back in the inner circles imposing some kind of WEF power grab draped in a Green veneer.

What you do not realize is our establishment elite are simply a better class of people than you, they went to the right schools say the right thing and protect each other.

If you question this too much you must be a conspiracy theorist , a right wing radical, a Russian Troll , a climate change denier or have a mental health problem….

#25 The real Kip (Ret) on 07.24.22 at 3:52 pm

You are asking us to believe that the biggest debt binge in history will simply be wiped away by a few insignificant rate hikes. I don’t buy it. Rates must rise more, a lot more before inflation is back to 2%.

You are as confused as a retired crane operator. No CB even tries to reduce debt. And, yes, inflation will moderate with the current tightening cycle – which is more than half done. – Garth

#26 Quintilian on 07.24.22 at 3:58 pm

“Rarely have people been so morose, pessimistic or dark about the future as at present”

Not me.
And while I don’t like the direction of the US 10yr, I don’t think it’s because inflation is under control, it’s just a reading on the fear scale.

As stated, many times before, “investing” in the stock exchange, is gambling.

Slow growth, high inflation calls for action to preserve capital.

If you have been a “cowboy” up to now, it’s best you stay in the market.

If you stayed out, stay out.

All of which has little to do with a balanced and diversified portfolio. Never has this blog counselled owning individual equities. Try to keep up, son. – Garth

#27 The Original Jake on 07.24.22 at 4:07 pm

Wow, that chart is scary. Strangely, the VIX currently does not coincide with that level of fear as it did during the financial and covid crises. Good to have alternative data to look at.

#28 Moses71 on 07.24.22 at 4:07 pm

I haven’t looked at my work-RRSP funds for months until now and am happy to see I’m still depositing 1-2x/month. Hope it stays longer so I can make more on the ride up!
And still TFSA’s every pay day.
Golden Goose will cometh

#29 Chris L. on 07.24.22 at 4:13 pm

DELETED (Conspiracy nut)

#30 Gr on 07.24.22 at 4:17 pm

I always enjoy your take on the bigger picture, and with your track record that I’ve seen, your usually correct about most things that will happen. I’m sure your words are helping more than a few people that have been listening to you and your team.

regarding bears, I saw a baby bear in some wild woods a few weeks ago, thankfully mom was on the opposite side but move my direction I did a 180 and kept walking. But that hasn’t keep me from going back, I just say bear out loud now so they know I’m around and they have some time to get out of the way. LOL

If you’ve seen one bear market, you know it won’t last
forever. Walking away from investing is not the thing to do in this case. You will bear to regret doing so.

#31 Shawn on 07.24.22 at 4:28 pm

Fear of markets and my experience

I simply rode out 2000 era dot com crash (I had no dot com garbage) without much fear. 100% stocks. But my my portfolio was roughly 1.5 times my income and I had lots of time to recover. Kept investing more.

2008 I also rode out the crash 100% stocks with not too much fear or at least not enough to cash out. I lost 20% but Toronto was down I think closer to 40%. Huge recovery and gains after March 2009 and 2010 or 2011 and never looked back.

2020 I saw the crash coming to some extent but I was too attached to my stocks to sell much. After 20 years I grow attached to the little buggers. Went in close to 100% equities . Mistake. I will admit to some panic selling. Garth I know never wavered. In 2020 I found that when a 20% loss was four times what I ever made working or 12 times my pension (and it was far worse than that at the bottom) it was one heck of a lot different than when 20% was a half years salary. That’s my story of 2020.

Luckily I bought back bargains a month later and also improved the quality of my portfolio. Was up 5% for the year in 2020 but missed out on a huge opportunity by not having some cash in March 2020. I’m a never long-bonds guy but I like some fixed income.

My regrets from 2020 were some panic selling and not going in with 20 to30% cash to bargain hunt. I saw no point to the low returns on most fixed income then and was okay to just hold cash at 0%. Like I said, I ultimately came out of with a gain on the year. (And probably three years taken off my life due to stress)

2022 I entered with fairly ample cash but have now largely deployed it. Also entered with some short-term fixed income and have added to that. I have felt no panic and not much fear at all. A month ago I was regretting having deployed too much cash too early. But it all seems to be working out okay.

If I was starting fresh I would use more ETFs but I’m still emotionally attached to a bunch of stocks that I have been following extremely closely for a long time. I’m a sucker for an apparent bargain. It’s worked out well over the years but is riskier. It’s been a slice.

#32 Mr Fox on 07.24.22 at 4:38 pm

Maybe I’m not looking straight at the situation, but now when I’m putting some more money into my portfolio, I’m balancing it to 70/30 (sock ETFs/bond ETFs). Can it go down more? Yes! Will I care much? Well.. it might make me sad for a while, but I don’t believe the market will go down and stay there for a long time. We’ll see how right/wrong I am.

#33 Dragonfly58 on 07.24.22 at 4:46 pm

Mr. Fartz, you got even a glimmer about how long it takes to train up Marine Professionals. Not the parking lot or cafeteria group. The ones who operate and maintain the ship. 3 years at college then you start the ladder of many licences. TC certificates and world wide credentials alll marine officers must posess. Both Deck and Engine. 10 – 12 years in you are getting about mid level. Deck and Engine. 15 – 20 years in if you work hard and are a pretty bright light you are at senior officer level. There is a world wide shortage of these people and the Ferries pays peanuts compared to most Marine Operators.

#34 Summertime on 07.24.22 at 5:01 pm

And, yes, inflation will moderate with the current tightening cycle – which is more than half done. – Garth

Yep, pretty much aligns with my predictions, peak rates at 3.5-4 %, with inflation of necessities at 20 % and with fake CPI 10 %. The central banks in ‘full control’.
Sure.

Why were the rates in the 80-es 15 – 18 % then with pretty much the same inflation or less (12 % at the time translates to 6-7 % now)?

We have seen nothing of inflation yet. And ‘peak’ inflation proved to be pretty much a giant lie to far.

Wage inflation, if materialized in the US will push inflation further up. Short of positive real rates, we are facing Argentine-ization of the west with all the consequences for the ‘standard’ if living.

#35 Correct me if I am wrong on 07.24.22 at 5:03 pm

So, after missing the Covid dip buy that ended March 23, 2020, start deploying the 65k I have sitting in USD right now into equities, like asap?

There could be further softness in the coming months, but looks like the bottom is in.

Canadian housing will bottom next spring and trade sideways with no meaningful gains for 10-12 years unless the Fed starts cutting rates to zero again.

Yes, you are wrong. Invest when you have money. Be diversified. Be balanced. Stay invested. Stop being emotional. All you need to know. – Garth

#36 Summertime on 07.24.22 at 5:04 pm

#31 Shawn on 07.24.22 at 4:28 pm

And after all these years of successful investments you retired at the Versailles or the Buckingham palace? Ok, maybe Mayfair?

#37 What Could Go Worse on 07.24.22 at 5:17 pm

Toronto and its surrounding suburbs face a pest epidemic, and experts are raising alarm bells about how our work-from-home habits may be fuelling an explosion in the populations of unwanted houseguests like rats, roaches, and dreaded blood-sucking bed bugs. This is all according to Rebecca Morton of Toronto-based Armour Pest Control.

Apparently rats in search of food when restaurants were shutdown headed for the Bunny Patch.

#38 Summertime on 07.24.22 at 5:18 pm

https://www.nytimes.com/2022/07/21/opinion/paul-krugman-inflation.html?

Paul Krugman was wrong about inflation. And I was right.

Pretty much gives you an idea of the competence of the ‘economists’ and ‘central bankers’ whom you are forced to trust with your labor cost and savings.

And yes, they will subdue inflation. Sure.

#39 Grunt on 07.24.22 at 5:19 pm

His holiness is here. A darn good bit of shameful for canadian & catholic. Time to join the wall.

As for investing. Sitting tight and doing nothing.

#40 Reality Check on 07.24.22 at 5:22 pm

This one is a measure of fear, showing the proportion of people willing to take a risk (for which confidence is required) has sunk lower than during the days of Covid,
——————

Except here in Victoria where people continue to pay near peak price for real estate. Oblivious to the fact it is one of the most expensive small towns in North America and prices are correcting hard everywhere.

But after all, Victoria has it all. Huge homeless/petty crime problem, civic taxes spiraling out of control, and health care system in chaos.

#41 On the Ground in Kelowna on 07.24.22 at 5:41 pm

We are on the ground in Kelowna this weekend where we are checking out open houses and recently listed properties to find out in person wtf is really going on.

On average, there are about 4 to 5 couples showing up to newly listed open houses that were open this weekend.

We staked out one open house for the couple of hours it was open (start to finish) and counted 5 couples the first day and one couple the second day – which was today.

We asked some boomer neighbours (who literally spend all day at home counting people) that were out in their yard next to recently listed properties in some of the nicer neighbourhoods around town for information on what they are seeing with viewings – feedback we are getting for some of these listings that were listed in the past five days is that there have been around one to two couple buyers show up with their agent in total…so far.

However, we cannot discount the possibility of sales happening as swaths of recently listed properties (within the past month) in many of these nice neighbourhoods have sold signs on them. There is double the inventory to check out from last year this time(around 2,200 properties listed), but many sales are still happening.

So, stuff is unbelievably still selling even though rates have doubled this year. The market is not frozen yet.

Also, we looked at the sales history of recently listed stuff and some were exchanged/sold as recently as 2020 (during Covid) at a price of typically 400k less.

You heard that right. Since 2020, a house in Kelowna is listing and selling (even at present with rates above 5% on fixed mortages) for 400k more when rates were half the amount in 2020. I was told it was 600k more in February during the peak of prices (when lower rates to finance could be had).

None of the houses we checked out were listed at under a million and the assessed values on these homes at present is around 800k and these homes are really standard (nothing special) with a footprint of around 1,800sqft to 2,800 sqft.

The bottom of the barrel houses in lower end neighbourhoods are listing around 1 million and the nicer homes in more desirable neighbourhoods (not extravagant – just normal boxes) are listing at around 1.1/1.2 million. This is down from almost 1.4 million in February.

Rents are absolutely insane. A one bedroom in a crappy apartment is typically $2,400. One lady told me she was renting her 1 bedroom and den in a cheap lower mission apartment for 2,750 per month that was purchased by the owner of it for 219k in 2015. These are cheaply built timber-frame apartment buildings, 4-6 levels.

A full house in a nice neighbourhood was observed at $5,000 per month for the whole house or $3,000 for the top level and $2,400 for the lower level from what we checked out.

It was a fun weekend and happy to report good summer weather around 32C (tons of sun and blue skies) with nice clean air and no smoke (at least not yet) and the beaches and lakes were amazing. Picture perfect. Locals tell me not as many boaters this year due to soaring gas prices. 4 hours on the water in a speed boat can easily run you $900 for gas at current gas prices. No thanks. Electric or paddle board it.

We noticed some new shiny sky scrapers popping up as the core along the lake is looking to transform into a Vancouver like city. Very flashy, high end concrete towers with beach and beach-side restaurants right outside the door.

An area called South Pandosy reminds me of Kitslano during the 2004/05 era with beaches and nice restaurants all over.

Would I move to Kelowna? No. Simply because I do not make 220k per year, which is how much I would need to make to live here and do not have enough wealth to knock that living cost down where I could support a family on the typical 60k per year job that one could obtain in Kelowna.

Off to YLW where we jet set off to YVR next to find out wtf is going on in Vancouver on our West Coast journey to find out if the West Coast is the best coast.

#42 Reality check on 07.24.22 at 5:42 pm

26 Quintilian on 07.24.22 at 3:58 pm
As stated, many times before, “investing” in the stock exchange, is gambling.
—————

You maybe confusing short term trading in equities with longterm investing.

The stock market, over the long run, and by that I mean 5+ years, has always performed better than more conservative asset classes. And that’s backed by data for the last 100+ years.

Could it be different this time? It’s possible but very, very improbable.

After all do we truly believe the world is in a worse predicament than all the other economic crisis of the last 120 years. I.E. WWI, Great Depression, dust bowl, WWII, inflation of the 1970/80s, dotcom, 911, Great Recession, covid.

Nope today’s world crisis are just another blip in road to continued world economic growth and innovation.

#43 JSS on 07.24.22 at 5:53 pm

A fabulous time to buy the S&P500 index.

#44 Almost off the ground in Kelowna on 07.24.22 at 5:56 pm

Another important point I forgot to mention from the weekend observations is demographics.

People viewing properties in the boomer age group were hard to come by from what we saw. No boomers anywhere at these open houses.

90% of what we observed were millennials with young kids viewing properties this weekend in Kelowna.

And like Victoria, tax prices on these Kelowna properties are around $4,000 per year and ratcheting up.

#45 jess on 07.24.22 at 5:59 pm

bitcoin airport bitcoin beach?

Nayib Bukele’s Broken Bitcoin Promise
El Salvador’s Embrace of Bitcoin Didn’t Bring Prosperity — It Rode in With Waves of Repression

https://theintercept.com/2022/07/22/bitcoin-crypto-el-salvador-nayib-bukele/?utm_medium=email&utm_source=The%20Intercept%20Newsletter

https://www.reuters.com/investigates/special-report/fintech-crypto-binance-dirtymoney/

#46 NOSTRADAMUS on 07.24.22 at 6:00 pm

” DO YOU FEEL LUCKY, PUNK?”
Driven by euphoria and record low mortgage rates Canadian house prices have risen by a staggering 40% since march of 2020. Fear and greed are addictive, which means that what goes up fast can come down fast. Thus when this cycle turns, fear may serve the same sort of accelerant to the downside as greed did to the upside. A 40% loss in your real estate portfolio and a 20% loss to date in your stock portfolio, begs the Clint Eastwood’s question in the movie Dirty Harry, “Do you feel lucky punk, well do you?” Steady Lads, hold the line.

#47 THE DANDADA on 07.24.22 at 6:02 pm

“Hmm. So imagine IF”

“Only IF”

“IF”

“I” don’t “F”-n know.

#48 KLNR on 07.24.22 at 6:30 pm

@#20 The General on 07.24.22 at 3:25 pm
Freedom of speech is flourishing. That is if it’s the correct kind of free speech. Meaning that as long as you go along with the program, you can say whatever you want in our “free” society. And God forbid, if you stray from the official narrative. Being a contrarian these days is getting dangerous. Think of it as being dog-piled. Meanwhile, since his new haircut, the p.m. has created a bowl shortage.

fine line between free speech and hate speech.

#49 The Grim Reaper on 07.24.22 at 6:36 pm

Rarely have people been so morose, pessimistic or dark about the future as at present. Even during the lowest, scariest, most unknown moment of the global pandemic, public sentiment was not this waning. Now we’re scare about inflation. Gas and food. Mortgage rates. The value of RSPs and investments. House prices. Recession. And meanwhile the media throws Putin, Zelenskyy, Biden-with-Covid, hockey sex abuse and Monkeypox in our faces.

__________

Nothing like a life-threatening diagnosis to put things in perspective and let them see how fortunate they really are…despite how they perceive all of the “noise”.

#50 Secret of my success on 07.24.22 at 6:57 pm

#44 Almost off the ground in Kelowna on 07.24.22 at 5:56 pm

That’s too bad you decided NOT to stay here in Kelowna.
We were so looking forward to being your neighbours.

https://www.castanet.net/news/West-Kelowna/368803/Parole-revoked-appealed

We would be happy to share our secrets of success.

#51 crowdedelevatorfartz on 07.24.22 at 7:17 pm

@#33 Dragon
“Mr. Fartz, you got even a glimmer about how long it takes to train up Marine Professionals.”
+++
Uhhh.
Yeah.
I’m aware of how long it takes to get “marine certified” …..
Several friends have worked ocean ships, tugs, Ferries, etc.
ALL in the engine room or on the bridge.
BC Ferries pays less than most and is a crappy place to work.
Seaspan, Blue water ships, etc are poaching experienced BC Ferries engineers almost on a weekly basis.
It’ll get worse before it gets better.
A recession might help slow the employee bleed.

#52 Shawn on 07.24.22 at 7:24 pm

My biggest groupie Summertime asks:

#36 Summertime on 07.24.22 at 5:04 pm
#31 Shawn on 07.24.22 at 4:28 pm

And after all these years of successful investments you retired at the Versailles or the Buckingham palace? Ok, maybe Mayfair?

*****************************
Well Buckingham Palace was otherwise occupied. I’m doing okay. It’s documented online I am not going to share the link here on Garths blog for you. Just know that our investments are worth more than our two career government DB pensions.

I shared my experience with fear. You’re welcome a-****. Now cease or I shall get a restraining order.

Actually I don’t care. You just add to my amusement while I am visiting family with some spare time.

#53 1255 on 07.24.22 at 7:34 pm

Yeah well it’s not stopping people from asking $2.7 million for a house that was >just< a million a couple of years ago!

#54 Dragonfly58 on 07.24.22 at 7:39 pm

Hi crowded, good to see we are on the same page. Pays quite a bit less than most, and most surely is a crappy place to work. Engineers are expected to perform miracles on a regular basis.
Old ships for the most part. Well past their best before date. Spotty spare parts back up. 90 % of the repairs take place in the middle of the night , on your 10 th, 11 th , 12 th day straight worked. You can barely count to 10 you are so tired and you have something quite complicated, and quite broken spread out all over the work bench. And it all has to fire up and run all day at 6 AM.

#55 Reasonable on 07.24.22 at 7:40 pm

Fortune favors the brave. Time to make some long term investments.

#56 Dragonfly58 on 07.24.22 at 7:45 pm

The poaching is only the 1/2 of it. The officers are generally well up there in age and very few young , capable people are interested in this sort of of work, and particularly for those sort of wages. Everyone retires some time. The Officers component was trying to tell the brass this 2 decades ago. Fell on deaf ears. Chickens have come home to roost.

#57 Reality is stark on 07.24.22 at 7:48 pm

Canadian idiocy.
It doesn’t stop with pandemic bidding wars during periods of outrageous private debt.
Canadians are increasingly obese and the pandemic did not change behaviours. In fact they used the opportunity to become more obese.
This puts additional pressure on socialized medicine.
Our system works well because we allow people to die and live in extreme discomfort by rationing service. It has the effect of keeping costs down.
The geniuses who dreamt up this system are highly paid.
You pay $500,000 in tax and finally need a knee operation and they tell you to go to the USA to get it done and pay again.
They are too busy treating the obese.
We laugh at Americans who pay for service as we watch our system fall apart.
Please don’t go to the emergency department you may need to wait three days before we can process you.
Socialism doesn’t work.
If commodity prices deteriorate as the housing market implodes things will not be pretty here.
There is a reason the USA is great country and the US dollar is solid as a rock and we are a socialist backwater.

#58 fishman on 07.24.22 at 8:03 pm

Marine certification? Just spent the last month going through steamship inspection. Right at the end the DOT inspector starts asking for certification papers. I laughed at him. I made lots of men by signing off on their sea time. Their all gone. I can’t compete. Its back to the old ways; Shanghai an Indian from one of the reserves up the coast. Indians commercial fishing are invisible to DFO & DOT. At least I’ve never seen the Feds ask them for any paper when we’re on the water.

#59 Quintilian on 07.24.22 at 8:11 pm

#42 Reality check on 07.24.22 at 5:42 pm
“Nope today’s world crisis are just another blip in road to continued world economic growth and innovation.”

Sure, in fact nobody really jumped out of the windows to their death, even after the great crash of 29’, yes bad times come and go and life goes on.

However, that is looking through a long-term lens and those events you referenced are represented on a graph by a tiny trough, and doesn’t quite capture the real experience of the individual.

In the “long run” is a tired yarn, often used by RE pumpers, that in itself should tell you something.

Tick Tock, Tick Tock

#60 Phylis on 07.24.22 at 8:15 pm

How long before the people who should be looking for work actually start looking for work? Procrastinators want to know.

#61 Mme Guiollotine on 07.24.22 at 8:20 pm

I have been following you since your days as a financial editor at the Sun.
I bitched to you when you were my conservative MP and you patiently set me straight.
I cheered you on as you wore through one set of cowboy boots after another.
I was on your side as you faced up to the horrible Harper whilst conservatives insisted that you “tow” the line.
I sold my house in 2010 on your advice and I have absolutely no regrets as I took the proceeds and embarked upon a new direction and a new outlook on life so thanks for that.
I have repeatedly tried to educate you on the difference between cement and concrete.
From one crusty old fart to another I would just like to opine, for no other reason than to it put on the record, that while you may have been prescient in the past, I believe you are wrong about the future of finance in its current iteration simply because what is unsustainable cannot indeed be sustained.
Also while I realize it is not your field of expertise, I believe you were oh so wrong and somewhat patronizing about the whole covid thing.
Be well my brother and if the good Lord is willing and the creeks don’t rise I’ll check in again in 12 months.
We’ll see who is right.
I sincerely hope it’s you.

Damn I miss that Smokin’ Man!

.

#62 ogdoad on 07.24.22 at 8:25 pm

Defeated, eh? Isn’t that funny that our first world way of lives has lead us to feeling morose, pessimistic and dark…makes you feel like, ‘huh’, ‘Im a middle class, overweight loser whos goal in life is to sustain my menial existence..without judgement from other menial losers?’ ‘Oh’, you say…’I make 100k per year!!!’, ‘and my kids are top of their class!!’. ‘But isn’t there more?’ ‘I’m winning, aren’t I?’

Sorry, y’all suck. Yur kids are gonna be a desk jockies, stressed out doctors or schlepping coffee/burgs/schwarmas at the local joint. Just like you (happy?)…congrats! You’ve been duped. Oh, and yur gonna die…

You HAVE someone to talk to. ‘Og’. I excel at hugging.

I’d would ask the question what builds confidence these days..nice lawn, kid good at hockey, tesla, couple Mill in the bank. Or perhaps just my persona (*Og)? Tall, hair, ripped, smiley, wealthy, healthy…I think renters are the bomb, btw…blondes, too :)

Og

#63 KLNR on 07.24.22 at 8:29 pm

@#37 What Could Go Worse on 07.24.22 at 5:17 pm
Toronto and its surrounding suburbs face a pest epidemic, and experts are raising alarm bells about how our work-from-home habits may be fuelling an explosion in the populations of unwanted houseguests like rats, roaches, and dreaded blood-sucking bed bugs. This is all according to Rebecca Morton of Toronto-based Armour Pest Control.

Apparently rats in search of food when restaurants were shutdown headed for the Bunny Patch.

hmm, pest control company sounding the alarm about an explosion of pests.

#64 crowdedelevatorfartz on 07.24.22 at 8:36 pm

@#58 fishman
“Marine certification? Just spent the last month going through steamship inspection. Right at the end the DOT inspector starts asking for certification papers. I laughed at him.”
+++
DOT inspectors.
Dont get me started.
If they were allowed to wear guns they would in a heart beat.
Semi official little bureaucratic pissants with badges.
A pox on them all.

#65 Randy on 07.24.22 at 8:40 pm

Being forced to pay 50% of your (Ont) property taxes as an Education levy is 100% criminal and needs to end.

#66 crowdedelevatorfartz on 07.24.22 at 8:48 pm

@#54 Dragonfly58
“Engineers are expected to perform miracles on a regular basis.
Old ships for the most part. Well past their best before date.”
+++
I was back in PEI and NS for the past 2 weeks.
I took the 7am ferry off the Island on Friday.
I talked to the ticket booth person at 6am and asked how their crew staffing levels were.
“Not good”
I then told him about the ferry sailing cancellations in BC.

Then I got on the ferry and left.

Then 4 hrs later ….

https://www.cbc.ca/news/canada/prince-edward-island/pei-ferry-service-cancelled-weekend-fire-1.6530192

The fire burned for about 12 hours.
All the passenger cars and trucks may be a write off.
Smoke damage.
It’s been 35 cel for the past few days.
I can only imagine what the rotten food in the campers and coolers smells like in those air tight vehicles.

#67 Warren-the-lagging_indicator on 07.24.22 at 8:57 pm

I have to admit that I think my prediction of a market bottom a week or so ago is now going to be a local minimum. I figure another 10% down on B&D from here at least. Much trust has been lost but on the other hand faith has been gained. I figure Nasdaq down hard this week on crappy earnings. Oil stocks ok till new year, I mean the FCF is going to be insane in upcoming quarter. Covid cash plus forced savings run out in a couple months so….

#68 crowdedelevatorfartz on 07.24.22 at 8:58 pm

@#61 Mme Guillotine
“I have repeatedly tried to educate you on the difference between cement and concrete.”
+++
As a cement truck driver once corrected me…

“Cement comes in bags.
Concrete comes in trucks.”
Now?
Truck drivers call it Ready Mix.
The snobbery of the industry I suppose.

#69 Chaddywack on 07.24.22 at 9:34 pm

@ #5 crowdedelevatorfartz

Government worker here. Those land acknowledgements are getting to be extremely annoying. They do it at every single meeting. I even heard that they did it before social events (birthday party and summer party that I didn’t attend).

I can’t believe they do them on planes now too! Kind of reminds me of what I heard they do on Air Koryo (North Korean) where they give an acknowledgement to the “Dear Leader” before departing.

The first time I heard it made me think, but now I don’t hear them anymore even. They’ve lost all meaning to me. Semantic satiation basically.

A coworker of mine refused to do one and he was told that he would be disciplined and likely terminated if he didn’t do it. That has to be against some charter right (freedom of expression maybe?) to force someone to make a political statement under threat of termination, but he wasn’t willing to risk it so he gave in.

#70 Wrk.dover on 07.24.22 at 9:49 pm

Cement has burnt lime stone in it, with a dash of gypsum.

Concrete has cement, aggregate, sand and water in it.

Wrk.Dover has grade 12 from Etobicoke in it.

Next…

#71 Sail Away on 07.24.22 at 9:57 pm

#62 ogdoad on 07.24.22 at 8:25 pm

Defeated, eh? Isn’t that funny that our first world way of lives has lead us to feeling morose, pessimistic and dark…makes you feel like, ‘huh’, ‘Im a middle class, overweight loser whos goal in life is to sustain my menial existence..without judgement from other menial losers?’ ‘Oh’, you say…’I make 100k per year!!!’, ‘and my kids are top of their class!!’. ‘But isn’t there more?’ ‘I’m winning, aren’t I?’

———

Most people I hang out with are pretty happy. Four of us did a 6am mountain run yesterday. When I got home and mentioned to the wife that they were pretty fit, and she said, ‘well, they’re all 20 years younger than you.’ **How is that relevant?!?**

Anyway, life is very very good. When one lives in paradise, the neighbours are good friends and exciting events are always being planned, how could it be otherwise?

#72 Ponnaps on 07.24.22 at 9:58 pm

We were all sooo wrong about Zelensky.. the left liberal news media does know how to pull the wool over our eyes..

Ps – putins winning this one..

#73 yvr_lurker on 07.24.22 at 10:28 pm

#67 I have to admit that I think my prediction of a market bottom a week or so ago is now going to be a local minimum.
——-

With using the words “local mininum” coherently in one sentence it is clear that this fellow remembers Calculus really well. I am looking for being near the global mininum before I put my 90K infused cash back into the market. Must check daily to see what the second derivative is doing.

Wait for things to cost more so you buy less. Genius. – Garth

#74 Sail Away on 07.24.22 at 10:31 pm

Regarding investing:

This will probably be a week of buying. We’ve been sitting on our hands for awhile and the funds have been building. Nothing seems super compelling, so probably will plug cash into existing stuff.

We have 20-ish core stocks that just keep rocking steady at around 11% per year. A few have been punted, a few have gone private, some have changed, but in general, these remain- the railways, Berkshire, energy, waste management, auto parts, utilities, groceries, banks, major index tracking ETFs.

Tesla isn’t part of the core although it has far and away outpaced anything there.

An interesting result during recovery from the 2020 Covid plummet was that the major indices recovered equivalently to individual stocks. My expectation was that the individual stocks would have rocketed up faster, but, in general, that didn’t happen.

#75 DJT on 07.24.22 at 10:45 pm

Trudeau has just announced he will be following the WEFs instructions on a immediate %30 reduction in fertilizer use for farmers, so you can add going hungry to the list.

Another conspiracy nut. Go away. – Garth

#76 Steven Rowlandson on 07.24.22 at 10:50 pm

“Defeat’s everywhere now. Funk abounds.”
Of course! People from top to bottom have made some big mistakes over the decades and they are finding out that it is going too bite them in the rear end and it could be terminal. Never the less most will just have to find out the hard way as they don’t really want to hear or read about it…..

#77 BCWally on 07.24.22 at 11:08 pm

Yes I saw those stats too….kind of more a lack of leadership problem. No politician looks competent enough to provide confidence that everything is being handled in this country and the US.
I like this blog entry. Why? It explains money.
Money doesn’t care about opinions or emotions. It follows economic laws only. Like supply and demand. Like price compared to earnings.
It is the single most non prejudiced thing we have on earth. It doesn’t care who you are, what you look like or what you believe in.
It is the perfect disciplinarian. There are few things that govern behavior as well as money.
It sounds brutal and it is. Takes a while to learn those facts too.
Hence, I just threw another 40K in to the market.

#78 Jarrod Mitchell on 07.24.22 at 11:53 pm

Yup, all these prognostications may well come true, but for “right now” investors, remember the single most important adage, “ don’t fight the Fed”. Cash is still king until the Feds stop raising rates and then we’ll re-examine the base case for individual equities and other asset purchases. The old saw is this “ your government can continue to do stupid things longer than you can stay liquid”. ‘ Don’t fight the Fed’? I’d rather say “Don’t trust the Fed”. Yes, I agree that the sun will shine another day, if not today, then maybe the day after tomorrow, but if you put money into the market while geniuses like Trudeau and Biden are running rogue, we’ll, good luck with that. For today, it seems prudent to kick back and wait until we have a better handle on the barometer.

#79 AACI Homedog on 07.25.22 at 12:17 am

Fionn looks so cool and happy !

#80 Nonplused on 07.25.22 at 1:36 am

“Now we’re scare about inflation. Gas and food. Mortgage rates. The value of RSPs and investments. House prices. Recession. And meanwhile the media throws Putin, Zelenskyy, Biden-with-Covid, hockey sex abuse and Monkeypox in our faces.”

You forgot about Trudeau. If all the fake-woke wasn’t enough, and the hair-brained carbon taxes, now he wants to more or less ban fertilizer! Something about nitrogen. Last I checked the atmosphere was 80% nitrogen, but apparently that’s just too much so we have to stop growing food! I don’t know whether the man is diabolically evil or just plain crazy, but people of Ontario please stop voting for this menace to society, before it’s too late!

Next thing you know he’s going to ban hydrogen-dioxide! And the people of Ontario will still be voting for him! I have to imagine when he’s not dressing up in blackface for Halloween his second favorite costume is “The Joker”.

#81 Summertime on 07.25.22 at 2:19 am

#52 Shawn on 07.24.22 at 7:24 pm

What I am trying to tell you is this:
1. You pretend to be an authority while ignoring important inconvenient facts, i.e. the inflation.
2 You believe that whatever ‘works’ for you is the correct solution for everyone.
3. You are very persistent in your views and not opened to any other opinions.
4. You come up with an ‘I know it all’ attitude that is very annoying, as it is not covered by expert knowledge and with somehow limited style.
5. You keep pushing your ‘authorities’, i.e. the Fed, Buffett, which implies lack of independent thinking.

I understand that this is very typical for the limited intellectual environment of ignorance and lack of critical thinking in some places of the Great White North and still insist on opening your mind to alternative views, it could only enrich you.

#82 Sherry on 07.25.22 at 6:41 am

My opinion is the Bank of Canada and Trudeau socialist liberals did not create 750 billion in new debt Canadian dollars in 1 to 1.5 years. It is more like $1.5 trillion to $2 trillion and this is why we are seeing 8.10% inflation rate in Canada which is as usual understated like all StatsCan inflation rates since they existed.

They blame it on everyone else but they created the mess and inflation will stay high for years. I would say by 2030, a total cumulative inflation of 60% the minimum.

#83 Brian on 07.25.22 at 8:32 am

Canada’s housing market headed for ‘historic correction,’ says RBC

https://financialpost.com/executive/executive-summary/posthaste-canadas-housing-market-headed-for-historic-correction-says-rbc?utm_term=Autofeed&utm_medium=Social&utm_source=Twitter#Echobox=1658751946

#84 crowdedelevatorfartz on 07.25.22 at 8:36 am

69 Caddywhack
“A coworker of mine refused to do one and he was told that he would be disciplined and likely terminated if he didn’t do it. That has to be against some charter right (freedom of expression maybe?) to force someone to make a political statement under threat of termination…”
+++

Yep.
Only a matter of time before someone in this great unceded land decides enough is enough and refuses to parrot the pc pabulum the pc govt gestapo demand we spew forth.
It reminds me of when I was a kid and we had to stand and sign the National anthem at the start of every school day.
The fact that school teachers everywhere in “Cant-a -duh” are forced to repeat the unceded mantra it before the start of every school day makes me wonder how we got here in 6 short years of “Sox” rule.

It also makes my viewing of the 6pm “news” a rather brief nightly experience.
I change channels every night when another story of unmarked graves, Residential schools, billions in repayments, etc etc etc….. is endlessly beaten into the fontal lobe of our colonial consciousness.
The Pope’s pc pr campaign is the icing on the cake.

The batteries on my tv remote need replacement and judging from the Main stream “media’s” plummeting ratings numbers…….
I’m not the only one tired of the endless blame session aimed at viewers.

#85 Summertime on 07.25.22 at 8:42 am

#82 Sherry on 07.25.22 at 6:41 am
My opinion is the Bank of Canada and Trudeau socialist liberals did not create 750 billion in new debt Canadian dollars in 1 to 1.5 years. It is more like $1.5 trillion to $2 trillion and this is why we are seeing 8.10% inflation rate in Canada which is as usual understated like all StatsCan inflation rates since they existed.

They blame it on everyone else but they created the mess and inflation will stay high for years. I would say by 2030, a total cumulative inflation of 60% the minimum.

—————————–

60-100 % will be the ‘official’ cumulative inflation, the real one will be 150-200 % +.

Well deserved bonuses for BoC.

https://tradingeconomics.com/canada/money-supply-m2

M2 is 5 times that of 2000, 2.5 times that of 2010.

Pretty much in line with 6-8 % + annual real inflation which is my humble observation.

#86 Dharma Bum on 07.25.22 at 8:44 am

#54 Dragonfly

You can barely count to 10 you are so tired and you have something quite complicated, and quite broken spread out all over the work bench. And it all has to fire up and run all day at 6 AM.
—————————————————————————————————-

I know all about it.

Everything I needed to know about life, I learned from Star Trek.

https://www.youtube.com/watch?v=0xD9qEdHFIE

#87 Brian on 07.25.22 at 8:53 am

Brian Masse, NDP Member of Parliament sees what the ArriveCan app is all about — it’s not about health, it’s about surveillance.

I always fight for safety 1st, #ArrivCan is not that. It’s being used as a back door to permanently track all border crossing. MPs need to speak up now or it will destroy our tourism industry, frustrate & create longer line ups when the technology fails.

https://www.cbc.ca/news/canada/windsor/windsor-arrive-can-app-border-1.6527437

#88 robert james on 07.25.22 at 9:23 am

#44 Almost off the ground in Kelowna on 07.24.22 at 5:56 pm

That’s too bad you decided NOT to stay here in Kelowna.
We were so looking forward to being your neighbours.

https://www.castanet.net/news/West-Kelowna/368803/Parole-revoked-appealed

We would be happy to share our secrets of success. ………,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,This lovely couple are rumored to be opening up a Day day care in their neighborhood when they get their legal problems solved .

#89 Roofer on 07.25.22 at 9:38 am

“Irony abounds, though. Real estate is getting cheaper to buy. Unemployment is at rock-bottom. Wage growth is robust. There are more job openings than people looking to work. Financial assets cost less to acquire. And we have an inflation/rate event because the economy is running hot, not cold.”

*****

With a paragraph like that, how can I not play along? Here goes:

Real estate is getting more expensive to buy or rent, as higher interest rates have more than offset declining prices. Wage growth is not keeping up with inflation, leading to decreasing purchasing power. There are plenty of jobs that don’t pay a living wage (hey, I hear the Egyptian slaves had full employment too). Financial assets cost less to acquire, but are still extremely expensive on a historical basis (e.g. 10-year bonds are yielding 500 basis points less than current inflation). The U.S. economy could very well be in a recession right now, and who knows how long it will last.

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

You are correct, in that we are in a recession. It hasn’t made news yet. The US is certainly in one right now but in Canada they will hide, mislead and pay off the media as long as possible to subdue reality. Major Employers are preparing for layoffs here in Toronto.

#90 IHCTD9 on 07.25.22 at 9:44 am

Ugly Stik combos are on sale till Thursday at CTC. A 7′ E-lite rod and a decent 5 bearing open face reel for 75.00? I’m onto that like a Dog in heat! I might get some new braid to go with it.

I visited an old fishing spot this weekend. Hadn’t been there since the early 90’s, road was so overgrown the truck barely fit through. Looked pretty abandoned, no “fishing junk” to be seen anywhere. There were a good 50 Swans cruising around, a bunch of Muskrats at work, a monster (and very curious) Snapper cruising the shallows, and Bass/Panfish everywhere.

In other news, the local MLS listings are expanding again, and average prices are down 11% March-June. It’ll be interesting to see where we’re at this time next year. Amazing to think the average house here went for 200K only 10 years ago. I’m going to steer clear of RE discussion for a year at least – I think tensions are rising.

#91 Torches and pitchforks on 07.25.22 at 9:48 am

Canada’s C19 response was, like so much in our society, unserious. It was nothing more than an utopian fantasy pedalled by authoritarian ideologues in public health and academia. They have destroyed far too much, and it’s time to stop and hold them responsible to account and be brought to justice.

#92 Ca...nada on 07.25.22 at 9:53 am

The push to UNDO is really on and gaining momentum.

https://www.theglobeandmail.com/canada/article-pope-visit-doctrine-of-discovery/

I find it all fascinating from many points.

Why is the media giving this issue so much light? It’s a fascinating campaign. And surely the 70% of home owners in Canada are confused and wondering if they really own anything at all. Good question!

It is hard to justify this historical land grab process as outlined in the Globe and Mail piece. Oh people try, but deep inside surely the other side of the coin has to be the unsettling realization that someone somewhere can make a ruling or a law and apply it upon some people and voila – you own nothing, and you have no rights. Oh wait a minute, didn’t we just get a taste of that past two years?

Maybe this why humans are so afraid of ALIENS! Just imagine, some alien, unbeknownst to us, somewhere dividing this solar system between themselves and their alien pals, and they arrive here with their authority and say “J∆ƒƒ∆Ǥ∆ʓ∆ɲI∆ɳ”, which means, “We are applying your Doctrine of Discovery and now own this planet. MOVE!”

#93 Summertime on 07.25.22 at 10:01 am

A bank said it:

https://ca.finance.yahoo.com/news/posthaste-canadas-housing-market-headed-115427064.html

verbatim:
Canada’s largest bank has downgraded its outlook for the housing market and now forecasts a “historic correction,” worse than any national decline seen in this country in the past 40 years.

40-50 % decline from the top pretty much backed in IMHO

#94 Shawn on 07.25.22 at 10:43 am

Summertime Inflation

#93 Summertime on 07.25.22 at 10:01 am
A bank said it:

https://ca.finance.yahoo.com/news/posthaste-canadas-housing-market-headed-115427064.html

verbatim:
Canada’s largest bank has downgraded its outlook for the housing market and now forecasts a “historic correction,” worse than any national decline seen in this country in the past 40 years.

40-50 % decline from the top pretty much backed in IMHO

***********************************
You got that worked into your inflation forecast?

P.S. appreciate you being my number one fan!

#95 Sail Away on 07.25.22 at 10:45 am

#92 Ca…nada on 07.25.22 at 9:53 am

It is hard to justify this historical land grab process as outlined in the Globe and Mail piece. Oh people try, but deep inside surely the other side of the coin has to be the unsettling realization that someone somewhere can make a ruling or a law and apply it upon some people and voila – you own nothing, and you have no rights. Oh wait a minute, didn’t we just get a taste of that past two years?

———

You own exactly what you can defend, using any and all tools available. At some times in life, your pocket gets picked and the only recourse is the contingency plan.

Trust nobody completely and always have the parachute packed…

#96 DON on 07.25.22 at 10:55 am

#92 Ca…nada on 07.25.22 at 9:53 am
The push to UNDO is really on and gaining momentum.

https://www.theglobeandmail.com/canada/article-pope-visit-doctrine-of-discovery/

I find it all fascinating from many points.

Why is the media giving this issue so much light? It’s a fascinating campaign. And surely the 70% of home owners in Canada are confused and wondering if they really own anything at all. Good question!

It is hard to justify this historical land grab process as outlined in the Globe and Mail piece. Oh people try, but deep inside surely the other side of the coin has to be the unsettling realization that someone somewhere can make a ruling or a law and apply it upon some people and voila – you own nothing, and you have no rights. Oh wait a minute, didn’t we just get a taste of that past two years?

Maybe this why humans are so afraid of ALIENS! Just imagine, some alien, unbeknownst to us, somewhere dividing this solar system between themselves and their alien pals, and they arrive here with their authority and say “J∆ƒƒ∆Ǥ∆ʓ∆ɲI∆ɳ”, which means, “We are applying your Doctrine of Discovery and now own this planet. MOVE!”

********

Do you see the irony in your last paragraph. Maybe that was your point.

#97 IHCTD9 on 07.25.22 at 11:13 am

#80 Nonplused on 07.25.22 at 1:36 am

You forgot about Trudeau. If all the fake-woke wasn’t enough, and the hair-brained carbon taxes, now he wants to more or less ban fertilizer! Something about nitrogen. Last I checked the atmosphere was 80% nitrogen, but apparently that’s just too much so we have to stop growing food! I don’t know whether the man is diabolically evil or just plain crazy, but people of Ontario please stop voting for this menace to society, before it’s too late!
_____

Trudeau lives on a different plane of existence where modern civilization was not built, and is not maintained by fossil fuels and modern agriculture. He’s just not too bright – that’s the root from which sprouted every calamity now heaped onto Canadians’ shoulders. An utterly weak, and obsequious fool – no other explanation is possible.

Best get ready for more, if PP wins then Trudeau wins. Trudeau’s ruinous and tragic reign would likely be extended again. The Liberals’ time in office has been a disastrous and heartbreaking wound to the social fabric of Canada. Some think normalcy and unification can still be restored, but every additional year of Trudeau is another 5 years removed from Canadian rehabilitation.

I plan on full LQOM, joke-level tax remittances, and watching the decline of Canada from a safe distance.

#98 TurnerNation on 07.25.22 at 11:21 am

87 Brian on 07.25.22 at 8:53 am

^^ Yep as I noted back in Q2 2020 the control over Travel/Movement is here to stay. A huge global goal. The A.I. + digital ID will be ruling us, QR code being rolled out over many countries.
ArriveCan is a soft sell, slow pedal. One step at a time.

— This is Permanent – in the Former First World Countries. Oddly as the government was to make us so healthy the past few years.
Smile!?

I honestly did not know that a flimsy dirty thing you keep crumpled up under the car seat or in your purse or hanging from car mirror collecting dust is all that is stopping us from ruin?

.University of Manitoba sticks with mask mandate (winnipegfreepress.com)

.Pleas for mask wearing as Australia ranks third worst for COVID cases and deaths (abc.net.au)

#99 Russ on 07.25.22 at 12:03 pm

Summertime on 07.25.22 at 10:01 am

A bank said it:

https://ca.finance.yahoo.com/news/posthaste-canadas-housing-market-headed-115427064.html

verbatim:
Canada’s largest bank has downgraded its outlook for the housing market and now forecasts a “historic correction,” worse than any national decline seen in this country in the past 40 years.

40-50 % decline from the top pretty much backed in IMHO

——————————————————

The article might need another reading.

The info I saw was a 40% drop in SALES over two years and typical 8 – 12% decline from peak prices, up to 14% decline inna couple o’ areas.

Again, over 2 years so maybe not that different than a B & D portfolio sometimes.

Cheers, R

#100 Damifino on 07.25.22 at 12:09 pm

#97 IHCTD9

Yeah, this nitrogen thing…

I admit, I don’t really get it so I tried to dig up info. Like you, I knew our atmosphere is about 80% nitrogen (as opposed to CO2 at 0.04%).

It seems the nitrogen in the air is completely unusable to plants in its native form (N2 gas) it must be turned into ammonia (NH3) to partake in process of life.

That process is largely accomplished by relatively few organisms that are key to the maintenance of the “Nitrogen Cycle”, and hence, all life as we know it. That’s the 10,000 foot view. Its actually far more complex than that.

Apparently, governments around the world feel millions of small-area farmers have been overusing fertilizers (really, nitrogen based compounds) thus causing too much nitrogen to enter the environment and therefore risking harm to the complex but delicate cycles upon which the world depends for food.

That much I’ve gathered. Now, I begin to speculate at the risk of sounding a bit like TurnerNation:

Governments of some countries wish to wrestle away control of food production from small local farmers (who, apparently, only know how to spread fertilizer) and hand it over to large corporations that can better manage nitrogen.

Although (some here might argue) it’s all in aid of taking nation control of food. It does sound like something Trudeau might like to get involved with since there’s little more to do than ban yet another thing for the greater good of the world.

Here’s a very good site about the nitrogen cycle.

https://www.nature.com/scitable/knowledge/library/the-nitrogen-cycle-processes-players-and-human-15644632/

#101 Summertime on 07.25.22 at 12:14 pm

#94 Shawn on 07.25.22 at 10:43 am

You got that worked into your inflation forecast?

Absolutely, watch rents, energy, food, services.
Just a reminder: Owner’s accommodation is only 16 % of the housing component in the official CPI:

https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001-eng.htm

(you should know better with your expertise)

This is how you got the 1-2 % inflation as houses rose 10 % + on average in the last 2 decades.

Now as assets houses will decline as will stock market, but as for the inflation of necessities, just watch out.

An I am not a fan, just your correctional officer.

#102 Summertime on 07.25.22 at 12:18 pm

House prices is actually 8.3 % of the official CPI.

Amazing, considering that housing expenses is over 50 % of the average household expenses.

Magic numbers.

#103 Steven Rowlandson on 07.25.22 at 12:26 pm

#80 I believe the chemical name you were looking for is dihydrogen monoxide H2O. And yes there was a petition done and it might have been done by Mark Dice that proposed that dihydrogen monoxide be declared to be a dangerous chemical. It was done to see how dumb Americans are.

#104 Philco on 07.25.22 at 12:45 pm

DELETED

#105 Philco on 07.25.22 at 12:57 pm

I you like food, fuel and life. Vote for T2 again.
He’s a world class idiot. I wish he would come to my place cause I hate talking behind peoples back.

#106 PBrasseur on 07.25.22 at 1:23 pm

If inflation has peaked we should be near the bottom, really?

I don’t known about the stock market immediate future, nobody does , but it’s the last place to worry about, companies are the wealth creators and they always come out on top, eventually. Medias focus on the stock market is pure laziness, expected from their part. If you own stocks of quality businesses you have nothing to worry about.

However where the economy is concerned, I’m convinced we are nowhere near bottom. When people and governments are drowning in debt, have been spending tomorrow’s wealth for decades, something’s got to give, and it very much looks like time is up!

#107 The Awakened One on 07.25.22 at 1:26 pm

I’ve been reading your blog for almost 10 years now since the day I decided to better my investing knowledge and stumbled on it.

Had a bit of a doubt in the past whether your contrarian prediction with RE would actually come true.. when it kept going up and up like a never-ending party.. while we were watching on the sideline and wondering if we did the right thing by renting and saving after crunching some numbers to see if it makes sense.

But here we are! We the Eager Beavers have done this to ourselves. Mea Culpa.. Mea Culpa..

https://www.theglobeandmail.com/canada/toronto/article-the-end-of-our-dreamy-little-wonderland/

We’ve been renting and enjoying not having a mortgage, just saving + investing (and camping).
So Thank-You for the prescient tips!

#108 Sail Away on 07.25.22 at 1:30 pm

#90 IHCTD9 on 07.25.22 at 9:44 am

I visited an old fishing spot this weekend. Hadn’t been there since the early 90’s, road was so overgrown the truck barely fit through. Looked pretty abandoned, no “fishing junk” to be seen anywhere. There were a good 50 Swans cruising around, a bunch of Muskrats at work, a monster (and very curious) Snapper cruising the shallows, and Bass/Panfish everywhere.

——–

Yes, fewer and fewer people are getting off the beaten track. It’s fantastic for those of us who hunt and fish remotely. A few years ago, we did a week-long hike into Yellowstone’s Black Canyon during the height of the tourist season, and were the only campers in a few of the sites. The backcountry Rangers said the number of people outside of wifi is almost zero these days.

Insane trout fishing in the Yellowstone River, btw. 4-5 lb cutthroat and rainbows are common. You’re actually required to kill all rainbow trout since they’re introduced and outcompete the native cutthroat. So bring a stove for trout fries on the bank!

The reduced tourist forays are bringing wildlife back. Jaguars are repopulating the southern US:

https://www.msn.com/en-ca/news/technology/a-few-jaguars-now-roam-the-arizona-borderlands-why-that-s-a-big-deal/ar-AAZW9lO?ocid=msedgntp&cvid=1d8e3f30935d472e9c20146e76e8428d

#109 Shawn on 07.25.22 at 2:10 pm

Shelter costs in CPI?

Absolutely, watch rents, energy, food, services.
Just a reminder: Owner’s accommodation is only 16 % of the housing component in the official CPI:

https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2017001-eng.htm

******************************
That is a nice link. Good work. Thank you.

Actually it is saying owned accommodation is 16.1% of the TOTAL CPI basket, and mortgage interest is a component of that (see the indent) and is 3.5% of the total basket used for CPI. These StatsCan tables have their own format and can be hard to interpret.

As many have said home prices do not come in directly but come in this way including the replacement cost component at 4.8% of the total CPI basket.

Look let’s call a bit of a truce on insults. See if what i say here makes sense after you think about it independently.

#110 chalkie on 07.25.22 at 4:01 pm

A lot of unknown feelings and speculation is in the Air right now, even the so-called experts will not give you a straight answer for fear of wearing egg on their face in a couple of months, listen to their response answers, its laughable. My good friend who is a will established Real Estate agent (30 years plus in the business), whom I will call Jack, has told me, he refused to take a listing last week, because the owner would not accept reality for today’s market value, the owner missed the boat for the days gone by on the inflated sales. The owner kept harping about what his neighbor got for his house in January and his is much nicer and newer. Another agent has the home listed now, at the sellers suggested price, for what Jack said is listed will over $300,000 market value in the real world, some people just don’t get it. An Honest agent will tell you the truth, but there are some who will give you the gears of hot air, to get a listing or make a sale. Buying right now, is like investing your money into ice cubes in the artic, you just don’t know, keep your cash, stay in control, your better days to purchase a home is further down the road, at least 18 months out, some will argue that we may go par or even below pre pandemic house prices, I am on the fence for that one, but I know, they have a long way to go yet. Based on what some people paid for their homes last winter, they are so far in the hole right now, there is not a piece of rope in town, long enough to pull them out of the hole that they are in.

#111 Faron on 07.25.22 at 8:45 pm

Got a climate change nut-job who has been polluting my e-mail inbox with all kinds of nonsense. Several recently, in fact. They seem “inflamed” at the notion that the scorching heatwaves in Europe that are killing thousands may have something to with climate change. Engineers. Of course.

Not all engineers are knuckleheaded knuckle-draggers, but a disproportionate number of knuckleheaded knuckle-draggers are engineers. Not quiiiiite smart enough to realize they are not the sharpest tools in the shed. Kinda hake-ish.

#112 Faron on 07.25.22 at 8:47 pm

#108 Sail Away on 07.25.22 at 1:30 pm
#90 IHCTD9 on 07.25.22 at 9:44 am

…those of us who hunt and fish remotely.

Is that, like, sitting on the pot reading Field and Stream? X-box “Deer Hunter”? Or when you use drones while sitting in the comfort of home in your jam jams? Many questions.

#113 Philco on 07.25.22 at 10:49 pm

Garth there’s no point in my second if my posted link was deleted from secondary comment.
https://trendnewsinc.cmail20.com/t/r-l-tykjidit-oahihdtky-d/

Choke energy/ fertilizer / let’s get a call in the next few months I’m busy as shit. Stop softballig the politicians here. Ther didn’t create a lot of inflation here. How proud they must be. No their all copy cat on the same glbale page. There’s no real thinker. CB…da go zero for a decade what the f do you expect?
I wish I had more time I’m swamped Makin dough. F T2 I got more than him and I’m a hick that build from the ground. He a piece of #[email protected]%

#114 Sonny Kang on 07.26.22 at 11:01 am

Scroll down for a picture of our esteemed host. :)

https://www.cbc.ca/news/canada/ottawa/ottawa-family-home-sale-price-market-1.6531055?fbclid=IwAR11TLAovitTCU9HCPlZgYBoPi-mFmc4lX8ws8VeS5S8FthPkeLhl-nbxsk

#115 Devon on 07.26.22 at 11:12 am

The CPI is the corrupt price index. This is what it really it is. Come on the last 22 years since 2000 do you know anything that has increased only 2.3%. Everything you paid for has increased more than 2.3%. What some electronics maybe was less, big deal. I found with my life and family, friends life experiences what every they said add 5% a year inflation, cost of living rate minimum on top of that.

#116 tc-contra on 07.26.22 at 11:28 am

Another ‘bear-brain’, but a brain with some clout nevertheless:

Nouriel Roubini, CEO of Roubini Macro Associates, says calls for mild recession are “totally delusional” due to Federal Reserve policy tightening in the face of a slowing US economy. “We have no fiscal space. So the idea that this is going to be short and shallow, it’s totally delusional,” he says on “Bloomberg Surveillance.”

#117 Philco on 07.26.22 at 11:51 am

#104 Philco on 07.25.22 at 12:45 pm
DELETED

#105 Philco on 07.25.22 at 12:57 pm
I you like food, fuel and life. Vote for T2 again.
He’s a world class idiot. I wish he would come to my place cause I hate talking behind peoples back.

https://torontosun.com/news/lilley-unleashed-trudeau-pushes-ahead-with-fertilizer-cut-as-farmers-and-provinces-cry-foul

Yes he has caused inflation…He’s a key factor with his failed policies.