The disquiet

Hal’s a doc. “Don’t use my name,” he implores, “or my patients will know.”

Know what?

Hal’s a daytrader. Addicted. He brags of a 29.53% return in his all-stock portfolio . Yup, luck played a role. Hal gets that, plus embracing risk. “Compared to my expectations, I’ve done incredibly well and am quite thankful to be financially secure for the long-term.  All of my assets are in my portfolio (still renting, no real estate, not even a car!) and are at one bank.”

The doc has stopped his practice for personal reasons (and more time to trade), says he has followed this blog for ten years (!) and sends me one, single heartfelt question – now that the world seems to be coming unglued at the edges.

My question is if there is another banking crisis in the future, I understand that the CIPF is quite limited (for my particular case) in protecting my assets.  The legislation back in 2018, to convert bank debt into new equity in the event of a crisis at a systemically important bank, does that protect my excess assets (cash, stocks, options) beyond CIPF from being utilized by the bank to issue new equity? Or should I diversify my assets among multiple banks?

To be clear, the Canadian Investor Protection Fund covers cash balances folks might have on deposit in trading accounts with a financial institution. Compared to deposit insurance – a measly $100,000 – CIPF covers a full one million. In other words, if your broker went paws-up, you’d be reimbursed (by the industry) to that amount for uninvested funds. There’s no guarantee for assets owned within an investment account that may drop in value or be otherwise pooched. (Which is the case everywhere.)

So that’s the CIPF. Google it. Now what about bank bail-in provisions? Is it true, like some nimrods say on Twitter and in the Reddit swamp that bankers can take your savings in an emergency and convert the money into bank equity in order to survive?

Of course not.

A bail-in is the opposite of a bail-out. If a bank were to wobble, the intent is that it would recapitalize itself instead of sucking money out of taxpayers. This became a thing following the 2008 credit crisis which creamed a bunch of Wall Street banks and scared the poop out of regulators. So now there’s a plan to rescue a Big Six bank if one fails. Ottawa has given CDIC the power to take over a bank in that instance (for up to five years) and convert its bail-in debt to common stock, providing the liquidity to survive.

What’s bail-in debt?

It’s not assets in an investment account, which are publicly-traded securities in your name, regardless of whether a bank brokerage manages them or they sit in a self-directed vehicle. Nor are savings, chequing accounts, GICs or any other deposit instruments included.

Bail-in debt was issued only after September of 2018 and is clearly identified as such. It is senior, tradable debt and it’s highly unlikely you own any of it.

So the doc’s answer is simple. Relax. Nobody’s taking your stuff. Furthermore, no Canadian bank is failing. Not in this lifetime.

Now, we should talk about what’s coming next week and beyond. Way murkier.

Mr. Market has been telling us since last Friday that sharks are in the water. That speech by the Fed boss changed much. The ‘soft landing’ rhetoric was replaced by ‘pain.’ CBers are making it clear they’re out to crush inflation, regardless of the cost to the economy and debtors. Failure to do so will lead to worse long-term damage, they say. It’s now or never. Time to make up for the extraordinary and weird policies of the Covid years.

This means what?

The Bank of Canada is expected to increase its rate another 75 beeps after the weekend, on top of the full 1% road apple it dropped in July. The US Fed will do the same two weeks later. And the chatter now is that this is just a prelude. The current CB rate of about 2.5% in both countries may have to increase much, much more, economists mumble.

Earl Davis, of BMO, believes the rate will rise to 6% in Canada – a shocking 3.5% more than now, taking the chartered bank prime to more than 8% and wreaking havoc among those with variable-rate mortgages. That would be enough to not only freeze the housing market but lead to the largest price reductions in modern history.

First, Davis says, there would be a move higher to 4% (a 1.5% hike from now), a pause, then a surge higher. The tightening cycle could last into 2025. Meanwhile inflation in the UK is headed for 19% and the ECB will also be jacking rates. It’s global retribution for pandemic policy which delivered an outsized housing boom – now looking very temporary and fleeting.

Finally, there’s also talk of the Taylor Rule. It’s an economic formula dictating what a central bank rate should be. Here it is: r = p + 0.5y + 0.5(p – 2) + 2. ‘R’ is the CB rate, ‘p’ is inflation and ‘y’ is the deviation between current GDP and the long-term trend.

So what? Do the math. It gives us an answer of 11%.

Maybe it’s time to ask your Dad about 1982.

About the picture: “Check out my work from home colleagues!  (Ginny and Gemma),” writes Nancy. “My husband follows your blog and has been reading it daily since November 2019. He often shares your posts with me – you have helped him stay balanced and diversified throughout the pandemic. I have been working from home since the start of COVID in March 2020. Needless to say our cats have become a constant presence on Teams calls and at staff meetings. If it were up to me, I’d work from home indefinitely.”

179 comments ↓

#1 bcPaul on 09.01.22 at 1:41 pm

How does a doctor have time to be both a physician and a day trader?

#2 Theory of nothingburger on 09.01.22 at 1:48 pm

According to the “Theory of Everything”….

“Young people were punished in the most ridiculous ways possible. I realized it right away. The young are realizing it now. They won’t forget. Why shouldn’t they hold a grudge?”

I should be holding others accountable for the 20% interest rates that Garth speaks of, back in the early 1980s. Which government did that to me? I want names.

Not to mention the next to zero job openings around that time … in the year that I graduated with a meaningful degree. I guess I was supposed to put my hands up and surrender given the multiyear tumult in the economy, like Theory. I didn’t realize at the time how they were punishing me! I should have just given up, sulked and held a grudge for 40 years! Silly me for accepting things and bearing down through difficult times … that were over a few years later.

#3 A01 on 09.01.22 at 1:49 pm

No safe assets at the moment, can’t park in cast because of inflation. Only answer is to have time on your side. If you need the money soon, better cash out what you need.

#4 Prince Polo on 09.01.22 at 1:50 pm

Canadians love to be price-gouged all the way to the poor house. Thus, if Cdn banks fail, it probably means alien invasion or zombie apocalypse. At least we stand a chance against zombies since we’ve been fighting real estate ones for years!

#5 Søren Angst on 09.01.22 at 1:51 pm

Other rule of thumb was:

Raise rates to match inflation to kill if off.

Taylor Rule eloquent Math version of the above.

2 Kid generations about to find out what Dad or us Paleos went thru in the late 70s thru the 80s.

A lot of crazy sh!t about to happen Kids, like…

Disco.

#6 Doug t on 09.01.22 at 1:51 pm

KABOOM – fasten your seat belts and prepare for turbulence

#7 Peggy Sue me on 09.01.22 at 1:53 pm

Garth, surely you must be getting tired of the ongoing Sail Away and Faron nonsense that is wasting both your time and blogspace.

It just goes to show you what type of people they are that they air their differences on a public forum, thinking that others would have an interest in their diatribe.

Dont’ they both live on the island? Can’t they settle their differences like grownups. You know … guns and knives!

#8 PeterfromCalgary on 09.01.22 at 1:56 pm

John Taylor is a very smart guy. However, he made this Taylor Rule almost 30 years ago. A lot has changed since then. On August 22, 2022 John Taylor told Bloomberg News the Fed should aim for a Fed Funds Rate of 5%.

Link to source:

https://www.bloomberg.com/news/videos/2022-08-23/stanford-s-taylor-says-fed-should-aim-for-5-funds-rate

#9 Faron on 09.01.22 at 2:07 pm

#7 Peggy Sue me on 09.01.22 at 1:53 pm

guns and knives

Physical violence — that’s more Sail Alway’s department. Regardless, I am open to being banned if that’s Garth’s wish. Have at ‘er.

#10 PeterfromCalgary on 09.01.22 at 2:16 pm

#2 Theory of nothingburger on 09.01.22 at 1:48 pm
“I should be holding others accountable for the 20% interest rates that Garth speaks of, back in the early 1980s. Which government did that to me? I want names.”

Arthur Frank Burns is the name. Here is a 2021 article explaining the mistakes he made and comparing them to the mistakes the current Fed was making before it pivoted to its current more hawkish stance on inflation.

https://www.marketwatch.com/story/the-ghost-of-arthur-burns-haunts-a-complacent-federal-reserve-thats-pouring-fuel-on-the-fires-of-inflation-11621971073

#11 Nonplused on 09.01.22 at 2:17 pm

“So the doc’s answer is simple. Relax. Nobody’s taking your stuff. Furthermore, no Canadian bank is failing. Not in this lifetime.”

Probably true. Canadian banks are so similar that it’s hard to imagine one failing unless they are all in similar trouble. But our banks are fairly conservative. After all, they can print money without taking a lot of risk. So why would they?

“CBers are making it clear they’re out to crush inflation, regardless of the cost to the economy and debtors. Failure to do so will lead to worse long-term damage, they say. It’s now or never. Time to make up for the extraordinary and weird policies of the Covid years.”

Well, it is often said that something that cannot go on forever usually doesn’t. But I don’t know. Doesn’t a return to a world where asset values reflect their economic utility, house prices reflect their cost to build, a house is a home and not an investment strategy, the money supply reflects economic demand for money, investors and businesses can rely on price signals, inflation is contained, work is more rewarding than government handouts, and growth is organic rather than artificial sound all that bad?

But as I’ve argued here before I don’t think the CB’s can do it by themselves. Monetary policy is only half the equation. Fiscal policy also needs to be addressed.

“Finally, there’s also talk of the Taylor Rule. It’s an economic formula dictating what a central bank rate should be. Here it is: r = p + 0.5y + 0.5(p – 2) + 2. ‘R’ is the CB rate, ‘p’ is inflation and ‘y’ is the deviation between current GDP and the long-term trend.

So what? Do the math. It gives us an answer of 11%.”

r = p +2 is probably good enough. Managing a “deviation… from the long term trend” is pointless. Still looks like about 11% though.

“Maybe it’s time to ask your Dad about 1982.”

Well, I did, and I don’t know if you are going to like his answer. He lost everything right about 1982 because he was using leverage to try and escape the limits of the work-a-day reality, and it didn’t work. Once the storm blew over, he dusted off his shoes, went back to work, and immediately reemployed all the leverage he could. This time it worked, mostly because assets were cheap, the banks couldn’t find anyone to take distressed assets off their hands, and the trend to lower interest rates lasted these long 40 years. I don’t know that he is any better prepared for a repeat of 1982, but he had a good run.

What lesson is to be learned from that example? Is it the Buffet approach: “Be fearful when others are greedy, and greedy when others are fearful”? Or is it a case of “even a blind squirrel finds a nut now and then”? I think my dad would say he was just rolling with the punches.

So fear not, folks! As long as we eventually solve the climate/energy/population/pollution/inflation/virus/war/political crises (“the crisis” for short) all will be fine. Even after you lose everything, the sun still rises to another day. Building back after a storm is what we do.

#12 alexinvestor on 09.01.22 at 2:17 pm

Wouldn’t a 6% rate lead to a 7% GIC ? At 7%, I would be tempted to some of my portfolio from risky stocks into safe GICs. At 11% … I would move everything. 11% for 5 years is 70% more !

#13 Captain Uppa on 09.01.22 at 2:19 pm

If all that is speculated in this post comes to pass, that would be one of the greatest financial thefts EVER. I say this because the rich who know, will bail and not lose a dime. Then when the pickings is ripe, they will swoop in.

The everyman has no clue.

Now I know people made their own beds, but let’s be honest, the low rates by CBs was them dumping gasoline on what started as small embers.

#14 Grateful in Victoria on 09.01.22 at 2:26 pm

for those who don’t want to ask their dad, I lived through 1982 and yes we lost our home and we were left owing more than we got for our house. It took years to pay off.
We did not get back into the housing market until 1993. Even then mortgage rates were above 10%. That was considered normal. The rule of thumb was 4 per cent above inflation. This time we are mortgage free because we are retired and having lived through the first 35 per cent correction, I truly am grateful!

#15 TurnerNation on 09.01.22 at 2:30 pm

Treasury Blondes reflect this.

https://finviz.com/futures_charts.ashx?t=ZB&p=m1

—–I posted exactly that here, in Q2 2020. Global WW3 kicked off March 2020. Our local governments leading the charge (against us).

.Pope declares mankind is ‘experiencing the outbreak of World War Three’ (dailymail.co.uk)

— –The Rules are a permanent fixture. But what to do if you have the flu??
I plan on rolling with the established Infection Prevention Rules this wintertime. Yes, I will stand outside my grocery store in -10c weather for 20 minutes. 6-6-6 apart from anyone else. This is how we maintain health Comrade? Did last two winters not teach you?

https://www.blogto.com/city/2022/08/ontario-new-rules-people-covid-backlash/

— Control over Travel. Did ya really thing the global governments will allow you unfettered travel again? Nope stick your crowded, fetid UN Smart City Comrades.
March 2020 marked the end.

.Charging electric vehicles in Britain soon will be more expensive than filling up gasoline-powered cars thanks to soaring electricity costs (washingtontimes.com)

.Fully vaccinated Windsor, Ont., man told to quarantine after U.S. visit says he was ‘retroactively punished’ (cbc.ca)

#16 Mr Happy on 09.01.22 at 2:30 pm

aaahhhh 1982…

I was single, in Grade 12 and drove a top end sports car with a loan interest of 22 3/8% !! I was already in full entrepreneurship mode. Spent more time working than in school. Ended up dropping out. My parents were furious until I paid off their 18% mortgage a short while later. My sister was in banking and told us stories of people throwing their keys on the bank managers desk and saying “all yours” and walking away. The world got reamed something fierce. Millenials have no idea want is in store. Those with a good memory and sitting on cash know what’s coming…and the possible money we will make! It was bad then. I believe it will be much worse this time around.

#17 Blair on 09.01.22 at 2:34 pm

If interest rates go up considerably, what does this mean for a balanced and diversified portfolio?

#18 Dr V on 09.01.22 at 2:37 pm

“Finally, there’s also talk of the Taylor Rule. It’s an economic formula dictating what a central bank rate should be. Here it is: r = p + 0.5y + 0.5(p – 2) + 2. ‘R’ is the CB rate, ‘p’ is inflation and ‘y’ is the deviation between current GDP and the long-term trend.”
————————————————————-

Not to be confused with Taylor’s theorem

https://en.wikipedia.org/wiki/Taylor%27s_theorem#Taylor's_theorem_in_one_real_variable

The rule is interesting. I presume all percentages are entered at face value (ex 8% as 8 and not 0.08) Many posters have said the bank rate must be higher than inflation in order to lower inflation.

In the equation though as ‘p’ is currently greater than 2% all terms on the RHS are positive except possibly the one containing ‘y’. Now if GDP trends down, that lowers ‘r’. Could have some fun with this.

#19 PeterfromCalgary on 09.01.22 at 2:48 pm

I made a list of smart people to follow using Google Alerts. I occasionally modify it and find these folk are pretty good at understanding the stock market or monetary policy.

In the case of David Tepper I had to put stock market behind his name because I was getting too many articles about his football team. With John Taylor I had to put economist behind his name because that is also the name for the Duran Duran drummer.

John Taylor economist
Mohamed El-Erian
Brian Schwartz, Oppenheimer
DAVID TEPPER STOCK MARKET
Gerard Cassidy, RBC Capital
Glenn Greene, Oppenheimer
James Bullard
John B Taylor economist
Quinn Bolton
Richard Davis Canaccord Genuity
Robert Kaplan
Stephen S. Roach
Tiff Macklem

#20 Don Guillermo on 09.01.22 at 2:48 pm

HappyAlberta Day all. Beautiful summer. Bumper crops. Record royalties. Best one ever!
YeeHaw!!

#21 Søren Angst on 09.01.22 at 2:50 pm

#8 PeterfromCalgary

Rather than referencing a 1 paragraph article by some Australian Bloomberg MSM hack and in your case the “moving right along, that solves that crowd”

you might want to take a look instead at how the US Fed uses the Taylor Rule, if at all.

https://www.atlantafed.org/cqer/research/taylor-rule?panel=1

Click on “Create Your Calculation” and compare rule usage to past Fed Rates. Those are Sensitivity Analysis calculations.

2022Q3 Taylor Rule range:

5.3% to 7.18%

Taken seriously by the US Fed. Tells you the current US Fed is Dovish in reality.

May yet bite them in the heine again raising rates to low and slow with high inflation taking off again.

————-

Still not infallible, it’s an after the fact calculation, i.e., did not predict the Demand Surge, post pandemic – just what rates should be to stomp down the resulting high inflation.

Thus, the Earl Davis, of BMO “Future Shock” calculation may yet happen.

#22 Søren Angst on 09.01.22 at 2:54 pm

#11 Nonplused (about Dad)
#14 Grateful in Victoria *

THAT was good.

#23 VanIslander on 09.01.22 at 2:59 pm

Dad here, bought first house in fall of 79, sold in spring 81. Price almost doubled. Even at 23 I knew it wasn’t sustainable. Sold after first 10% drop. Bought similar place in 83 for 40% off in Victoria. Smells like 82 all over again. I’m all cash watching the daily cuts. Maybe by next fall I’ll rebuy.

#24 Søren Angst on 09.01.22 at 3:11 pm

#17 Don Guillermo

What?

Bumper crops?

Environment Canada says you should be SCORCHED EARTH ALBERTA by now along with the “Climatologists” and their Spawn.

Like today at CNBC – view the Po River photo, 3rd photo down:

https://www.cnbc.com/2022/09/01/europes-evaporating-rivers-wreak-havoc-for-food-and-energy-production.html

Took them to task and their SCORCHED EARTH narrative in my Tweet to them:

https://twitter.com/bsant54/status/1565224489574596609

Po rising. More thunderstorms on the way (as in the past 2 weeks). The Po river will heal itself except at CNBC.

——————–

For all you SCORCHED EARTH afficianado’s Greenie “Carbon Brief” keeps track of the “Climatologist” Models and Predictions vs. what actually happened:

https://www.carbonbrief.org/analysis-how-well-have-climate-models-projected-global-warming/

Scroll past all the pretty charts to the Summary Table near the bottom.

Ridiculously bad climate predictions.

——

Yet, the knuckleheads that they are, “Narrative Blinded”, conclude:

“Climate models published since 1973 have generally been quite skillful in projecting future warming.”

What fanatics are like. They cannot be reasoned with even using their own data.

Occam’s Razor Fail. Common Sense not so common.

#25 1982 on 09.01.22 at 3:11 pm

What a year I am!

Chernobyl didn’t happen yet.
Space shuttles didn’t kill a teacher yet.
DSOTM was relatively fresh still.
Concorde was flying. So was SR-71
You could get a proper Porsche coupe with a V8…in the front!
FaceBook or social media cancer didn’t exist yet. You can thank 1984 (obviously!) for Zuckerberg.
Ms. Pac Man ruled arcades. Pinball!

So much more!

You know you love me, if you were there to enjoy me.

You don’t have the balls to tell me to my face that you don’t wish it was Sept 1, 1982 today.

#26 PeterfromCalgary on 09.01.22 at 3:14 pm

#21 Søren Angst on 09.01.22 at 2:50 pm
“Rather than referencing a 1 paragraph article by some Australian Bloomberg MSM hack”

I reference that “MSM hack” because she was interviewing John Taylor. That is the guy who invented the Taylor Rule.

#27 Flop… on 09.01.22 at 3:15 pm

After all these years on the blog, there’s one mystery I still haven’t worked out.

Why do posters tell other posters not to do something, and then the very next day, do the same things they admonished the other people for the day before?

I mean, they obviously aren’t getting the help they need, or else I would have seen them at the last Hypocrites Anonymous meeting in Phoenix…

M48BC

#28 The Original Jake on 09.01.22 at 3:18 pm

The FED usually gets it wrong, but who can blame anyone for trying to predict the future.

Their transitory call was way off. Now, they plan to go ballistic with rate increases and avoid another Volker moment. Will they get it right? Who knows.

My bet is inflation is going to hang around for awhile and rates will need to go a lot higher than what many think. Not 1982 again, but close to double digits. Housing and energy will need to drop another 40-50% from current levels.

#29 Don Guillermo on 09.01.22 at 3:21 pm

#157 Gravy Train on 09.01.22 at 2:36 pm
#156 Nonplused on 09.01.22 at 1:43 pm
So, Don, do you dispute the findings presented by the Frazer institute? Do you have access to an alternate finding? Are you willing to share it with us?

How about Statistics Canada’s Labour Force Survey, July 2022?
https://www150.statcan.gc.ca/n1/daily-quotidien/220805/dq220805a-eng.htm

#####
Employment among public sector
employees fell by 51,000 (-1.2%) in July, the first decline in the sector in 12 months.

Haha, good one. Yes those Libs were going all fiscal in July.

#30 willworkforpickles on 09.01.22 at 3:21 pm

The spend mad government assures inflation is here to stay.

#31 Melinda on 09.01.22 at 3:28 pm

I appreciate the 2 stories from 1982 in the comments section from “Grateful in Victoria” and “Mr Happy”. I love hearing from the people who lived through that era as adults (or the correction in the GTA in 1989). I think part of the problem during the FOMO frenzy was that the realtors and speculators were controlling the narrative, i.e. the young people kept hearing things like “interest rates will never rise”; “Canadian real estate will never fall”; “buy now or you’ll never be able to afford to buy”; etc. I still hear realtors saying silly things like it doesn’t matter what you pay as long as it’s your forever home.

Hoping for more stories from the 50, 60, 70+ year olds.

#32 Crystal Ball futurist on 09.01.22 at 3:31 pm

Too much tightening and the pain will be unbearable. Too loose and inflation will run havoc. Balance is the key here.
Last tightening cycle ended at 2.4 something. This time we will flatline around +-3. We will stay there for a long time.
Houses will soon be affordable 3.5x household income. Stock market will correct some more not as bad as housing.

#33 chalkie on 09.01.22 at 3:31 pm

There is no safe haven for funds, everything’s a risk. Even a buried club chewing tobacco can will be found at some point in time, if I could only find my grandfathers buried treasure, those old coins must be worth a fortune now.
Some people believe in everyone else taking the risk and for themselves to enjoy reeking the benefits of security. Investing is not for everyone, then there are those that set on top of the fence and complain when someone else does financially well, why not themselves, the answer is blowing in the wind.

#34 Søren Angst on 09.01.22 at 3:33 pm

#18 Dr V

Having taught Calculus at University I was waiting for someone to show off their prowess with Taylor’s Theorem instead.

It is used to approximate with a formula, rate of change data. Ignore Google Search, some Physicist must work there and has gone berserk also trying to show off how clever they are.

Mandatory in 1st year Engrg Math Calculus texts and not for some US Fed rate prediction.

And I doubt you will have fun with linear differential equations such as Lagrange, which I have also taught.

Scroll to “Example” and see what Taylor’s Theorem seeks to do, precisely what I told you it is used for:

https://en.wikipedia.org/wiki/Taylor%27s_theorem#Taylor's_theorem_in_one_real_variable

Still, knock yourself out because MATH IS FUN at the end of the day.

And that’s a good thing.

#35 IHCTD9 on 09.01.22 at 3:35 pm

11% Doh! Just imagine if something like that happens. I see the CBC is already trolling Reddit looking for folks on a variable who are feeling the squeeze to do an interview. It’s only just got off the ground.

The wages of Covid and Trudeau soon to be paid…

#36 Iremeberthat on 09.01.22 at 3:37 pm

1981-82.

Well kiddies I was 24 yrs old. In January 1981 I lost my job, my house and my wife all in one month. And, unemployment was 13%, plus there was no CERB.

My grandmother who survived the 30’s depression and WW2 told me, when one door closes another opens.

So I pressed on.

Now I have a better house, a better wife, and found a better job (now retired)

Chin up and carry on.

#37 AM in MN on 09.01.22 at 3:38 pm

I’ve never believed the fear of customer assets being seized. That only happens in Countries that don’t print their own currency, like in the EU.

It just means that we would all pay through more inflation once the BoC bails out the banks.

The issue on interest rates ignores the bigger issue of balance sheet size, and potential reduction. A reduction by the CB dries up liquidity, causing many to sell and hold cash.

We’ll see how long the Fed keeps at the US$95B/month sale rate. There are a lot of leveraged accounts that will need to hit the sell button all at once. Even at $100B/month, it would take a while to unwind $6-7T worth of debt into the open market. With $600T+ of global derivatives out there, the pain could come quick for many. You wouldn’t want to be the fund manager trying to unload a large junk bond portfolio.

That pain would hit hard on those expecting a comfortable government pension for decades to come.

The good part is that it may cause some people to move from the consumer side of the economy to the producer side. Maybe even willing to move up north?

#38 Faron on 09.01.22 at 3:39 pm

#18 Dr V on 09.01.22 at 2:37 pm

Well, if you take d r/d y what expression do you get? Also, why isn’t the equation simplified to

r = 1.5p + 0.5y

#39 Russian roulette on 09.01.22 at 3:40 pm

They dont make them like they used to!

https://www.cbc.ca/news/business/russian-oil-exec-falls-from-window-1.6569444

And just in case anyone doubts this …

https://www.snopes.com/fact-check/window-strength-death/

#40 Dave on 09.01.22 at 3:42 pm

Interest rates keep going up….real estate crash

So everyday stocks are also crashing.

What’s going to be left….Whats increasing in value???

#41 Linda on 09.01.22 at 3:43 pm

Fur friends make for the ‘best’ co-workers:) Yet another reason to support WFH!

Funny how talk regarding inflation has changed in such a short time frame. It went from being a ‘temporary’ issue to a ‘must take action’ issue. Now it appears that CB’s (& presumably governments) are agreed that inflation isn’t going to go down without continuing to raise rates. I’ve been of the opinion our official inflation numbers have been understated; rather sounds like those who study such things are confirming that.

1982. Gadzooks! Brace yourselves kids. If history repeats itself, not going to be pretty.

#42 Fear Jesus on 09.01.22 at 3:46 pm

The Canadian housing market is too big to fail. Where will the oil tycoons park their “hard earned money” in Toronto real estate?
Canadians are suffering homelessness because of kleptocrats and drug dealers looking to wash dirty cash. The RCMP even has a report on it in the 1990s.

#43 the Jaguar on 09.01.22 at 3:46 pm

“Mr. Market has been telling us since last Friday that sharks are in the water.” -GT ++

Sharks? That sounds a bit like ‘Doomerism’…..can we be sure they aren’t just Big Bass Bum Biters? Ouch! I think I just felt a little nibble..

In 1982 I was a fresh arrival in the GTA being lectured that hour long commutes were just part of the privilege of living in the big smoke. I never did buy that line of B.S.. I recall a very grim job market during that period. Lots of people out of work. Thank dog my movie star good looks and lucky star kept me on dry ground in those days.

Northland Bank, Canadian Commerical Bank went under, and Bank of British Columbia and Continental Bank were scooped up by two foreign banks. For all you non Boomer’s out there, yes indeedy, it wasn’t always a bed of roses.

Hey Don G! Happy Alberta Day! September 1st, 1905. Things are really hopping in Calgary these days. I thought it was just the tourist season, but I am advised otherwise. It’s like that old line from Ian Tyson’s Four Strong Winds “Think I’ll go out to Alberta, weather’s good there in the fall. I got some friends that I can go to workin’ for……”..

Oh what the heck. Here’s the whole thing for you.. 1986 Canada’s Wonderland concert. I was in the audience that night.

https://www.youtube.com/watch?v=B3m7ckGhnsc

#44 TurnerNation on 09.01.22 at 3:47 pm

BAHA they will own nothing and be happy! Our global Tax Slave farm country.

https://financialpost.com/real-estate/mortgages/canada-to-fund-rent-to-own-program-under-c2-billion-housing-plan
“Canada to fund ‘rent-to-own’ program under $2-billion housing plan
The funding would go toward creating some 17,000 new homes across the country”

——-

All you will be reading about in the “news” is Corvid and Climate. Nothing else. The two things used to re-shape the world, bring it to heel, since March 2020.
Bats and Wet markets right?


— For Dolce & The Data Mongers.

https://www.wsj.com/articles/latest-covid-boosters-are-set-to-roll-out-before-human-testing-is-completed-11661679003
Latest Covid Boosters Are Set to Roll Out Before Human Testing Is Completed
The FDA and vaccine makers say they are confident that shots targeting Omicron subvariants will work safely

#45 Gentlemen prefer brunettes on 09.01.22 at 3:49 pm

#15 TurnerNation on 09.01.22 at 2:30 pm

Treasury Blondes reflect this.

https://finviz.com/futures_charts.ashx?t=ZB&p=m1

_________

I was so disappointed when I clicked on the link above. So hoping to see one of them there Treasury Blondes you spoke of.

#46 Don Guillermo on 09.01.22 at 3:59 pm

#24 Søren Angst on 09.01.22 at 3:11 pm
#17 Don Guillermo

What?

Bumper crops?

“Climate models published since 1973 have generally been quite skillful in projecting future warming.”
******
Maybe so but no one can predict like Al Gore!

Four Strong Winds, must have been a great concert Jag. I’ll listen when I get home.

#47 Søren Angst on 09.01.22 at 4:01 pm

#26 PeterfromCalgary

The US Fed example shows a 5.3% number for this Qtr along with 7.18% which

the MSM Hack

you so willingly believe and defend (with no data of yours to the contrary) neglected to mention the upper range and rounded down the lower range to 5%, something their mind can wrap around.

2 bricks short of a full load MSM…as usual.

And their “swallow hook, line and sinker” devotees.

#48 Faron on 09.01.22 at 4:06 pm

#24 Søren Angst on 09.01.22 at 3:11 pm

Ridiculously bad climate predictions

Oh, wow. Almost as bad as your lava tubes statements. Just stop buddy. For your own good. It’s tempting to drag you across the coals on Twitter, but I won’t go there. Best of luck.

#49 kommykim on 09.01.22 at 4:08 pm

Some preferred shares offered by the banks are of the “bail in” type. If you see NVCC in the name, that’s them. Read the prospectus. These shares also make up a proportion of popular Canadian preferred share ETFs which track the PS index… Should you be scared? Nah, not really.

#50 Søren Angst on 09.01.22 at 4:10 pm

#36 Iremeberthat

THAT was good.

The Legendary Phoenix made real.

———–

Also #20 Don Guillermo and Others here:

yeah Alberta, yeah oil, yeah AB Day

My Province of Birth. All is well and getting better I read. So very good.

#51 Sail Away on 09.01.22 at 4:11 pm

#27 Flop… on 09.01.22 at 3:15 pm

After all these years on the blog, there’s one mystery I still haven’t worked out.

Why do posters tell other posters not to do something, and then the very next day, do the same things they admonished the other people for the day before?

——–

Well, as an analogy: A dog that refuses to stop humping your leg eventually has to be shaken off.

#52 Shaggy!!! on 09.01.22 at 4:22 pm

Buffet’s gone on an epic spending spree lately.

Just sayin’….

#53 Shaggy on 09.01.22 at 4:26 pm

Oh, and the S&P 500 was at a touch over 120 back in 1982.

As Garth says, it’s all noise…invest to your risk tolerance, but stay invested.

#54 an investor on 09.01.22 at 4:30 pm

If the CB rate is going to hit 11% according to the Taylor Rule, I’ll take my BD portfolio and convert it to GIC’s … because markets don’t do well during insurrections.

Did you read Doug’s post? – Garth

#55 pBrasseur on 09.01.22 at 4:35 pm

Mass layoffs in the US clearly ahead!

https://youtu.be/rMDt45ITv2w

Also WFH layoffs is now a thing!

https://youtu.be/lSW1ofbEfGA

How could Canada be different?

#56 Don Guillermo on 09.01.22 at 4:36 pm

Thanks Jag

Hey Don G! Happy Alberta Day! September 1st, 1905.

My mother’s family farm received a Centennial award in 2005. The Vulcan area farm had been in same family for over 100 years. Great stuff.

#57 DON on 09.01.22 at 4:38 pm

#24 Søren Angst on 09.01.22 at 3:11 pm
#17 Don Guillermo

What?

Bumper crops?

Environment Canada says you should be SCORCHED EARTH ALBERTA by now along with the “Climatologists” and their Spawn.

Like today at CNBC – view the Po River photo, 3rd photo down:

https://www.cnbc.com/2022/09/01/europes-evaporating-rivers-wreak-havoc-for-food-and-energy-production.html

Took them to task and their SCORCHED EARTH narrative in my Tweet to them:

https://twitter.com/bsant54/status/1565224489574596609

Po rising. More thunderstorms on the way (as in the past 2 weeks). The Po river will heal itself except at CNBC.

——————–

For all you SCORCHED EARTH afficianado’s Greenie “Carbon Brief” keeps track of the “Climatologist” Models and Predictions vs. what actually happened:

https://www.carbonbrief.org/analysis-how-well-have-climate-models-projected-global-warming/

Scroll past all the pretty charts to the Summary Table near the bottom.

Ridiculously bad climate predictions.

——

Yet, the knuckleheads that they are, “Narrative Blinded”, conclude:

“Climate models published since 1973 have generally been quite skillful in projecting future warming.”

What fanatics are like. They cannot be reasoned with even using their own data.

Occam’s Razor Fail. Common Sense not so common.

*******
Didn’t those thunder storms hit the scorched earth and turn into raging flash floods throughout the World a couple weeks back? We know what happens when Calgary gets too much rain. Great for Canada that the crops haven’t been affected our lands but judging by the lack of good crops in the the rest of the World, food prices are going up unless Canada pulls an India and prohibits wheat exports. Good that Canada can help the World though.

Who controls our Wheat board and potash, I honestly forgot.

#58 DON on 09.01.22 at 4:44 pm

#14 Grateful in Victoria on 09.01.22 at 2:26 pm
for those who don’t want to ask their dad, I lived through 1982 and yes we lost our home and we were left owing more than we got for our house. It took years to pay off.
We did not get back into the housing market until 1993. Even then mortgage rates were above 10%. That was considered normal. The rule of thumb was 4 per cent above inflation. This time we are mortgage free because we are retired and having lived through the first 35 per cent correction, I truly am grateful!

******
Thanks for the truth…I am happy you rebounded.

Happy retirement!

#59 Scott in Gibsons on 09.01.22 at 4:49 pm

Garth, would you please comment on how a real estate correction would play out at the CMHC? How would a moderate to severe correction be funded and how would the insured lenders fare? Thank you

#60 crowdedelevatorfartz on 09.01.22 at 4:56 pm

@@5 Soren
“A lot of crazy sh!t about to happen Kids, like…

Disco”

+++
Disco was dead in the early 80’s

Devo baby!

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

#61 Linda on 09.01.22 at 4:56 pm

#31 ‘Melinda’ – my partner & I were young adults, both working full time & with no debt. Renting. Wondering how our peers were able to buy houses, cars, toys, have children etc. We’d resigned ourselves to never owning a home; interest rates were 20%+ & we simply couldn’t afford to buy when rates were so high. Then the bloodbath. All those folks we’d wondered about had achieved the house, car, toys on credit. When they lost their jobs that was it. Banks wouldn’t consider renegotiating mortgages, so jingle mail became the norm. Lots of anger, bitterness. Folks leaving not infrequently trashed the house on the way out. So many bankruptcies, complete financial wipeout was normal. Lots of folks ended up moving back home/in with their folks. In Calgary, it took over two years for all the repossessed properties to be sold off by the banks.

As for my partner & I, we waited a couple of years for rates to come down & then purchased when we could afford to. We also kept in mind the lessons learned from viewing the financial carnage & paid off our mortgage asap. Financial institutions are not your friend. If they are offering you ‘deals’ that will see you continuing to be their debtor, keep in mind that ‘deal’ is meant to benefit their bottom line, not yours. Act accordingly.

#62 Ottawan on 09.01.22 at 5:11 pm

Pfft, the Taylor rule is outdated when it ignores the general level of ‘Poochedness’. All it takes are rates high enough to encourage capital to flow back to creditors rather than chasing goods and services.

It requires a mostly financial illiterate population for central bank hikes(or cuts) to have the desired effect. This is why I believe it isn’t taught in schools.

#63 Ottawan on 09.01.22 at 5:11 pm

Pfft, the Taylor rule is outdated when it ignores the general level of ‘Poochedness’. All it takes are rates high enough to encourage capital to flow back to creditors rather than chasing goods and services.

It requires a mostly financial illiterate population for central bank hikes(or cuts) to have the desired effect. This is why I believe it isn’t taught in schools.

#64 The General on 09.01.22 at 5:11 pm

We sure showed Russia who’s boss with the sanctions. Weren’t sanctions supposed to hurt them, not us? Where are the peace-niks of old, who countered the warmongering propagandists among us? I refuse to hate an entire nation of people, just because I don’t agree with the actions of their leaders. And one sided “news” in the west, is no different than that of the adversary in his country. Ginny and Gemma rock.

#65 Faron on 09.01.22 at 5:11 pm

#50 Sail Away on 09.01.22 at 4:11 pm
#27 Flop… on 09.01.22 at 3:15 pm

After all these years on the blog, there’s one mystery I still haven’t worked out.

Why do posters tell other posters not to do something, and then the very next day, do the same things they admonished the other people for the day before?

Well, I find replicating behaviour that was condoned here but expressing the opposite stance is a great way to reveal hypocrisy. A few doggos will reply with a factual rebuttal, others will launch into ad hominem and then still other newly minted trolls/screen names will get really vile when anything remotely liberal is written here.

Does that answer your question?

#66 SW on 09.01.22 at 5:11 pm

If you are into charts, the inverse and shoulders pattern on the $TNX would give a price projection of a minimum 7% and it’s just shy of 3.3% at the moment. 7% was resistance in 1996 and 2000 and support in 1986 and 1977 and the mean from 1963 to 2000. So going by that, a mortgage of 10% seems fairly realistic in a few years.

While I never trade / invest off of price projections, I do give some value in h&s patterns if it is coming off a long trend and $TNX has been in one huge downtrend since it’s peak in 1981. We shall see if this works out.

#67 crowdedelevatorfartz on 09.01.22 at 5:17 pm

@#31 Melinda
“Hoping for more stories from the 50, 60, 70+ year olds.”
+++
I have oodles of stories but Ponzie rolls his eyes and is very dubious of my adventurous yoof…..

Car loans in 1982 for young kids. 24.75 %
IF you were lucky enough to have a stable job.
Renting your own place?
Fuggedaboutit.
Shared accommodation was the rule.
Beer was 25 cents a glass in the pub.
Phone calls were made from phonebooths, offices or homes.
Teachers could hit students that deserved it.
Cops could hit punks, criminals and kids that deserved it.
Judges put you in jail.
No one texted …they talked to each other.
Global warming was a holiday “down south”.
etc etc etc.

#68 45north on 09.01.22 at 5:18 pm

Maybe it’s time to ask your Dad about 1982.

1982, I was wrapping up my career at Stats Can. We had just finished the 1981 Census of Housing and Population. Interest rates went to 20%. My boss at the time, went all in and borrowed money to buy bonds. I didn’t. I was interested in finding a new job because despite having had a key role in the Census, I failed the board for a promotion. I remember Diane Miller telling me that I should have got it. So all-in-all I was just about oblivious to the financial world.

#69 DON on 09.01.22 at 5:20 pm

#54 pBrasseur on 09.01.22 at 4:35 pm
Mass layoffs in the US clearly ahead!

https://youtu.be/rMDt45ITv2w

Also WFH layoffs is now a thing!

https://youtu.be/lSW1ofbEfGA

How could Canada be different?

******
If this comes true…Yikes!

Just checked Bloomberg news and three articles in a row talked about calling workers back

Scotia Bank, RBC, Goldman and Morgan Stanley and Jefferies.

Lately, I’m getting the feeling that the first car on the roller coaster is crossing the peak of the steep incline Hold on!

#70 Victor Llearna on 09.01.22 at 5:24 pm

Fed should just raise rates to 100% just for the hell of it. Imagine that. you take out a 200k mortgage and a year later you owe 400k, and to add insult to injury your house price goes down.

#71 Blair on 09.01.22 at 5:31 pm

Could Faron and Sail Away be banned from commenting on here?

#72 DON on 09.01.22 at 5:33 pm

My reply from this morning/yesterday’s blog.**

#158 DON on 09.01.22 at 3:48 pm
#156 Nonplused on 09.01.22 at 1:43 pm
#142 DON on 09.01.22 at 12:19 pm
#137 Don Guillermo on 09.01.22 at 11:00 am
Report says the high employment numbers in Canada are mostly due to additional public sector jobs while public sector service has declined. Private sector employment employment is actually down when adjusted for population growth.

“It is clear that the government sector is dis- proportionately driving Canada’s labour market recovery. Private sector total employment is now only slightly above pre-pandemic levels and once an adjustment is made for population growth, private sector employment is in fact lower than it was in February 2020.”
fraserinstitute.org
FRASER RESEARCH BULLETIN

************
Ah the FRASER Research….ha ha ha.

The nutty right wing’s source of truth.

——————————————

So, Don, do you dispute the findings presented by the Frazer institute? Do you have access to an alternate finding? Are you willing to share it with us?

*****
Just maybe the public sector openings are replacing a lot of people retiring and people moving to the higher paying private sector jobs??

No one seemed to care that our pubic sector nurses etc were falling behind in the last 10 years while the private sector experienced a boom.

It must have been the nut bar comment that triggered some folks. Who funds the Fraser Institute and the CDN Tax payer organizations?

#73 YVR 60% Crash on 09.01.22 at 5:39 pm

Taylor Rule … 11%.

—————————————

Oh my! My type of math. Gotta Love It.

#74 Don Guillermo on 09.01.22 at 5:54 pm

#43 the Jaguar on 09.01.22

Hey Don G! Happy Alberta Day! September 1st, 1905. Things are really hopping in Calgary these days. I thought it was just the tourist season, but I am advised otherwise. It’s like that old line from Ian Tyson’s Four Strong Winds

Oh what the heck. Here’s the whole thing for you.. 1986 Canada’s Wonderland concert. I was in the audience that night.

https://www.youtube.com/watch?v=B3m7ckGhnsc

********
Thanks again Jag. Incredible. How appropriate today. Ian’s a beauty. A Victoria born boy enjoying a great life in the beautiful Southern Alberta foothills.

We lived in Toronto around the same time but unfortunately I missed that concert.

Saludos y Feliz Dia de Alberta!

#75 The General on 09.01.22 at 5:54 pm

While austerity ripples through the E.U., Russia’s crude and products export tally is down merely 600,000/day from last year. They collect $ 20 billion a month compared to the $ 14.6 billion in 2021. Um, I thought sanctions were supposed to bring them to their knees. I therefore believe we have shot ourselves in the foot. I refuse to HATE an entire country and their citizens, for the actions of their leaders. No matter how much the owned msm beats me over the head to the contrary.

#76 jess on 09.01.22 at 5:54 pm

Did the goodly doc take the covid wage money?
https://www.cbc.ca/player/play/2067813955845

“noble” indeed
Project OEmpire
https://www.newswire.ca/news-releases/joint-rcmp-investigation-leads-to-fraud-charges-against-four-individuals-839288506.html

#77 Shawn on 09.01.22 at 5:55 pm

Does a former Revenue Minister or anyone else care about corporate income tax evasion (okay avoidance)?

Restaurant Brands the owner of Tim Hortons, Burger King and Popeyes reports that only 12% of its revenues came from other than Canada or the U.S. the past two years. Yet they reported 66% of pre-tax profits came from outside these two in 2021 and 75% in 2020.

By somehow transferring their profits to tax havens they got their effective tax rate down to 8% the past two years. They paid zero current U.S. federal tax in 2021 – in fact got a refund. They paid just $16 million in current taxes to Canada in 2021 despite that Tim Hortons is their biggest money maker. They paid $84 million to foreign countries other than Canada and the U.S. (low tax foreign countries where they magically had transferred their profits to).

This is outrageous tax evasion (okay avoidance) and almost no one notices or gives a crap.

Meanwhile I understand Garth Turner reports he pays a 53% average income tax rate because of special rules for advisors that prevent such clever tax avoidance.

Someone has to fund government spending and if its not corporations it has to come from personal taxes.

If a highly profitable corporation pays no income taxes does anyone hear about it? Clearly, no.

#78 DON on 09.01.22 at 5:57 pm

https://www.theguardian.com/us-news/2022/sep/01/democrats-sarah-palin-mary-peltola-alaska-special-election

Thank Dog, Palin didn’t get back in.

#79 Shawn on 09.01.22 at 6:03 pm

It’s Alberta day

In celebration, the $13 billion surplus is sitting in a money bin in Edmonton and all citizens are invited to dive in and splash around in the cash for the day.

Next week the money bin will be drained and used to pay down debt and invest in the Heritage Fund.

#80 The General on 09.01.22 at 6:05 pm

Might I add: Putin is more popular worldwide, than our Virtue signaling manchurian candidate of a P.M., Mr. Trudeau. Good looks and nice hair can only carry you so far. Style without substance comes to mind. Kind of like Zelensky. What’s a house worth in Odessa these days?

#81 Steven Rowlandson on 09.01.22 at 6:09 pm

“deviation between current GDP and the long-term trend.”
Is there a link to a source for this data?

#82 NOSTRADAMUS on 09.01.22 at 6:09 pm

SUEZ CANAL!
For a great number of people , I suspect today is much like yesterday, still stuck in the Suez Canal and going nowhere. When belts are tighter than ever, we are forced to leave the little luxuries behind ” Little people little luxuries.” and sadly, there is a good chance they will not be waiting for us on the other side.
New point. I find myself in somewhat of a quandary, why for most sellers it is so easy to rationalize and readily accept a $60,000. increase in their home value, but they are bewildered, even insulted by a subsequent $20,000. decrease in value.? Could this in fact be a true ego investment? Finally the voice of reason.

#83 Steven Rowlandson on 09.01.22 at 6:14 pm

“Someone has to fund government spending and if its not corporations it has to come from personal taxes.”

I have a better idea. Austerity for the government. They spend less except for paying down debt. Everyone else pays about the same as usual until the debt is gone.
Sound fair?

#84 Something missing on 09.01.22 at 6:15 pm

No house. No car. Just a stock portfolio. And he’s quit his practice. Something missing here. Nobody goes through the rigours of med school to simply quit and day trade at the first opportunity, before even buying his first house or his own set of wheels.

#85 Dr V on 09.01.22 at 6:16 pm

Soren/Faron – Taylor’s theorem was oh about 35 years ago for me. I do recall it helped explain one particular application very well, but I would have to find that text book.

Yeah linear equations were a head scratcher. Passed the course but nothing sticks out in my mind.

The ‘p’ terms of Taylor’s rule simplify to 1.5p + 1. Not sure why its not written that way or if Garth has
expressed it correctly. And dr/dy = 0.5 as p is treated as a constant.

I’m surprised that any of this stuff actually made sense to me at one time. Musta lost some brain cells since then.

#86 Faron on 09.01.22 at 6:18 pm

#60 Faron on 08.31.22 at 6:31 pm
2 more things:

1. ES gamma is bottom decile negative thus amplifying index directionality up or down. Markets gonna MOVE tomorrow. I believe a collar would be the appropriate trade in such a circumstance.

Well, that proved correct except the strategy would have been a long strangle. 1.76% range in ES. Still negative gamma territory, so moves amplified. Friday’s often crush the VIX, so I’d lean toward big up tomorrow. Likelihood of being correct in direction about 58%.

#87 jess on 09.01.22 at 6:19 pm

MAGA – make attorneys get attorneys!

https://www.investopedia.com/terms/t/taylorsrule.asp#citation-11

“The Taylor Rule has tended to serve as a fairly accurate guide to monetary policy during relatively calm periods marked by steady growth and moderate inflation, but much less so during economic crises. For instance, the Taylor Rule and its derivatives prescribed a sharply negative federal funds rate during the short, deep recession caused by the COVID-19 pandemic, while in practical terms the fed funds rate is constrained by the zero bound, the Federal Reserve noted in its June 2022 monetary policy report to Congress.6

https://www.federalreserve.gov/monetarypolicy/files/20220617_mprfullreport.pdf

Speech

November 13, 2012
Revolution and Evolution in Central Bank Communications

modified version of the original Taylor rule

Vice Chair Janet L. Yellen

#88 Flop… on 09.01.22 at 6:36 pm

Boobs.

That’s the only thing I remember about 1982.

First time I remember seeing a fully naked streaker at a sporting event.

My Football team Carlton was in the Grand Final against Richmond, and a young lady ran out onto the field and tried to place a scarf around my favourite player Bruce Doull.

She was given a large overcoat to put on and escorted from the field.

Don’t remember who won the game…

M48BC

https://m.youtube.com/watch?v=z1CGzVY47xU

#89 Ustabe on 09.01.22 at 6:44 pm

#70 Blair on 09.01.22 at 5:31 pm

Could Faron and Sail Away be banned from commenting on here?

Careful there Blair. If one could beseech the moderator to ban someone…well then somebody else could ask for your banning, eh?

That little wheel thing between the two buttons on your mouse is a scroll wheel, use it.

#90 Doing my Part on 09.01.22 at 6:49 pm

Do F and SA really bother you so much that you want them cancelled?
If you don’t want to read just scroll.

#91 espressobob on 09.01.22 at 6:50 pm

Day trading is still a thing? I thought this practice died a long time ago. No point in explaining non systemic risk along with sleepless nights for anyone who engages in this sort of activity.

Betting on sectors, commodities, or individual stocks is basically a crap shoot. Who knew the energy sector would explode this year after being dormant for years while other sectors picked up the slack?

Owning the major indices by market cap usually over time proves to have the upper hand compared to over confidence.

#92 IHCTD9 on 09.01.22 at 6:53 pm

Thinking about inflation, a melody popped into my head. For a time I could not place it, but then it came to me in a moment of clarity. It was Ludwig Vans’ #9, second movement. A paradox, as to a heavily mortgaged working stiff, it sounds like an armoured phalanx charging towards you. But, to the prudent financial steward of resources, it sounds like the dawn of a new day, with the promise of great things to come.

https://www.youtube.com/watch?v=mH8AFFSJkoM

#93 crowdedelevatorfartz on 09.01.22 at 7:05 pm

@#83 Somethings missing
“Nobody goes through the rigours of med school to simply quit and day trade ”

+++

Perhaps the endless govt bureaucracy sucked the life out our young doctor.
The legions of doctors that have either comepletely quit their practice and walk or closed their practice and taken a 9-5 at a walk in clinic all seem to have the same complaint.
Endless hours of paperwork.
Forgive me if I read between the lines and think that their might be a bit of frustration with Canada’s doctors dealing with Canada’s legions of bureaucrats.
Endless, pointless paperwork killing the last dregs of entrepreneurial spirit these self employed doctors had?
Move to the States or any other country that offers state subsidized and or pay as you go medicare.
Canada’s Healthcare is a national disgrace and its getting worse.
Much much worse.
1 million British Columbians without a family doctor….and all the politicians can do is promise they “empathize with our situation and are working on a solution.”

Here’s an idea.
Allow private clinics like we had 5 years ago before the NDP clubbed them down with lawsuits.
Let the people that can afford to pay….(gasp!)….pay!
Just like we pay for dentists, vets, massage therapy, psychiatrists, plastic surgeons, on and on and on.

No no.
God forbid the bureaucrats allow a few doctors to escape “the system”.

It might start a trend…….

#94 Reuters reader on 09.01.22 at 7:08 pm

Reuter’s reported that the highest rates will go is 3.75%?

#95 Steven Rowlandson on 09.01.22 at 7:15 pm

I think I found a source of data for long term deviation re GDP.

https://www.oecd-ilibrary.org/economics/real-gdp-long-term-forecast/indicator/english_d927bc18-en

I created a spreadsheet for figuring out what the CB rate should be for Canada. Not quite medieval rates but double digit. 10.505% assuming P = 7.5% inflation and a GDP deviation factor or Y of 2.00518939 measured between 2022 and 1990 or 1803949 and 899644 millions respectively. Not sure what chartered banks and investors want out of the deal but bond and mortgage rates should be significantly more than 11%.
Someone is living in a fools paradise and needs to get ready for a reality check.

#96 David W2 on 09.01.22 at 7:18 pm

So.. higher interest rates are bad for equities, bonds, real estate, and cash loses to nflation.

Would love thoughts on what one should do. Logic suggests going to cash but advice seems to be to stay investef and watch it all melt away. Wish I just had more TSFA room to keep buying and averaging down. January can’t come soon enough.

#97 Faron on 09.01.22 at 7:28 pm

#84 Dr V on 09.01.22 at 6:16 pm

Ah, yes, +1.

Questions for thought: should the rate of rate change in rates be a linear function of GDP deviation? What if r is quadratic in y? Exponential? If r=e^y you wind up with a natural zero bound on rates for horrible GDP and a very strong rate amplification when the economy is hot.

My guess is that Taylor’s law was formulated that way to illustrate multiple processes.

Cheers

#98 Steven Rowlandson on 09.01.22 at 7:35 pm

Basically if over the last 12 years at least if you have not made more than 11%PA you either gained nothing or worse you lost out to inflation and went backwards financially. Is it possible that if enough people embraced this as a fact we could be looking at the end of the world as we know it ? 14% mortgages ,car loans and government debt would be brutal and the whole idea of giving reprobate debtors a second chance with lower rates seems foolish in the light of history.

#99 epic bear on 09.01.22 at 7:36 pm

#90 espressobob on 09.01.22 at 6:50 pm

Day trading is still a thing? I thought this practice died a long time ago. No point in explaining non systemic risk along with sleepless nights for anyone who engages in this sort of activity.

Betting on sectors, commodities, or individual stocks is basically a crap shoot. Who knew the energy sector would explode this year after being dormant for years while other sectors picked up the slack?

Owning the major indices by market cap usually over time proves to have the upper hand compared to over confidence.
__________________________

there are no sleepless nights for day traders. it’s called day trading for a reason. not overnight trading. there are no overnight positions, hence, no sleepless nights.

lots of people rode the energy wave. George Noble, Peter Lynch’s #2 guy was front and center. Micheal Belkin, former Solomon brother’s trader was front and center. Vincent Daniel and Porter Collins of Seawolf Capital and Danny Moses (you may have heard of them … from the Big Short?) there were many others.

owning the major averages, gets you the average. good for you. keep at it.

#100 yvr_lurker on 09.01.22 at 7:37 pm

#86 “The Taylor Rule has tended to serve as a fairly accurate guide to monetary policy during relatively calm periods marked by steady growth and moderate inflation, but much less so during economic crises. For instance, the Taylor Rule and its derivatives prescribed a sharply negative federal funds rate during the short, deep recession caused by the COVID-19 pandemic, while in practical terms the fed funds rate is constrained by the zero bound, the Federal Reserve noted in its June 2022 monetary policy report to Congress.6
———

Yup. Let me see if I explain it quantitatively. Taylor rule —-> based on Taylor series —-> which means to first order a LINEAR approximation around some “base state”, assuming deviations from the base state (i.e. the target inflation rate of 2% say) is SMALL. If you are not in that regime, the formula is largely useless… for thos who remember their Calculus, if you have a function

f(x)=1/x on the doman x>0

then if you use a Taylor approximation neat x=2 you get

y = 0.5 + (-0.25)(x-2)

as the first approximation (y=f(2) + f'(2)(x-2))

if you stick in x=2.3 or something close to x=2 it is a decent approximation. If you put in x=0.5 or something far away from x=2 it is rather poor..

Upshot: the Taylor formula of economics I am sure is a good predictor when we are in a situation relatively close to some targetted base state (i.e. we want p=2% inflation). Then, it tells how to make corrections on the interest rate to get back to the target state. When we have 9% inflation, we are no where near the conditions for which the formula should apply.

Who remembers their Calculus?

#101 IHCTD9 on 09.01.22 at 7:49 pm

#83 Something missing on 09.01.22 at 6:15 pm
No house. No car. Just a stock portfolio. And he’s quit his practice. Something missing here. Nobody goes through the rigours of med school to simply quit and day trade at the first opportunity, before even buying his first house or his own set of wheels.
———-

They do. My last Doc quit the profession and started a Landscaping company. Lots of young Docs only want a part time gig too. Big headaches, some folks just aren’t willing to blow half their lives on piles of BS and stress. Placating employers, insurance companies, and government gets old real quick.

#102 Ponzius Pilatus on 09.01.22 at 8:05 pm

#92 FURZ

Here’s an idea.
Allow private clinics like we had 5 years ago before the NDP clubbed them down with lawsuits.
Let the people that can afford to pay….(gasp!)….pay!
Just like we pay for dentists, vets, massage therapy, psychiatrists, plastic surgeons, on and on and on.
——————————
CounterIdea!
Let’s tax the excessive incomes of plummers and raise the incomes of Doctors who are obviously underpaid in relation to plummers.
Sincerely, your Sozi Ponzi

#103 Flop… on 09.01.22 at 8:07 pm

Flop Drops.

Do you want a no-nonsense post?

Fair enough, I’ll deliver

“This home is priced at a no-nonsense price and will not last long so call now for your private viewing.”

They were right, it was only on the market for 5 days.

The details…

8336 Greenhill Pl, Delta.

Asking 1.17

Assessment 1.31

Just sold for 1.09

So the million dollar ring runs right up to the Fraser River and bends around to Coquitlam.

Vancouver, Richmond, Burnaby and North Shore are the remaining places left that you can’t get a detached house below the million marker.

For June and July, nearly 20k a week was coming off the bottom of the detached ladder, that has since slowed in August as the support showed up at 1.4 million.

A place for sale in Flopville, opposite a school, hasn’t sold as quickly as I thought it would.

What sort of barbarian parents make their kids walk more than 50 meters into the school nowadays…

M48BC

https://www.zealty.ca/mls-R2715896/8336-GREENHILL-PLACE-Delta-BC/

#104 Mattl on 09.01.22 at 8:10 pm

The roaring 20s was 2010-2022. What else would you call that decade of pure excess. I never believed there was more then that – I mean everyone owns 2 new cars, a trailer and a 1.5MM home. How could we roar further from that baseline? There was only one way this all plays out. Both RE and financial assets were ridiculously valued.

What comes after the roaring 20s again?

If Centrals are truly interested in getting inflation to the target, I’d expect SP500 to test 2300.

But I don’t believe the Centrals have the guts to push us into a market crash. Because that is what would happen if there are another 400-500bps to go.

Time will tell, I think we see a big correction and a long period of dead money.

#105 Maybe on 09.01.22 at 8:16 pm

I remember the early 80s. My dad locked in a 5 year fixed mortgage at 15%. Not sure if it was a good move but he needed the stability of a fixed rate. His coworkers laughed at him and told him he was crazy. My spouse remembers his parents facing 20% and sitting at the kitchen table with there heads in their hands because they weren’t sure how they were going to make the payments- and these were simpler times before credit cards were mainstream or helocs. Interesting times.

#106 willworkforpickles on 09.01.22 at 8:28 pm

BANNED (Abusive)

#107 espressobob on 09.01.22 at 8:30 pm

#99 epic bear

Feel free to predict and post your positions going forward. Please avoid past performance.

This always proves amusing.

#108 Ponzius Pilatus on 09.01.22 at 8:31 pm

Not sure what Biden is taking.
But I want some of it.
The guy is fired up.
I had my doubts, but he’s bouncing back big time.
The mid terms are not a shoe-in for the Republicans anymore.
Time for them to move towards the center.

#109 Steven Rowlandson on 09.01.22 at 8:33 pm

#31 Melinda
“Hoping for more stories from the 50, 60, 70+ year olds.”

Well Melinda in the early 1980s there was pretty good 5 year GIC rates to be had but the real estate debtors were hurting if they had to renew and as bad as the home prices were they were affordable for todays near minimum wage earners and my dad’s case his home cost him $47,000 in 1977 which was 1.5 years pay and he was in the air force. The next year I went into the second year Katimavik program and earned a dollar a day plus expenses. Many of us brought some cash with us but it was an exercise in austerity none the less and it seems like I have been living out of a duffle bag ever since. Real estate shot up like a rocket, all my investments during the 1990s went to hell and gold and silver went nowhere and didn’t go to zero yet.
Weird situation. Had cheap rent for 30 years and now I live in my Honda and have been building stairs since 1982. Something bad happened that was beyond my control and not my fault. I think this is not a time to take ill advised chances or deviate from basic rules of money management especially in respect to debt.
There is too much debt in the world and too much requirement to contract too much debt relative to income and that should give people cause to stop and think seriously about how much is too much debt.
I don’t have debt at all and given my insignificant income there are many things I wouldn’t touch with a 10 km pole. Too risky.

#110 The General on 09.01.22 at 8:45 pm

In Odessa , Ukraine, a 2 room apartment of €52 meters squared will cost you €35,365. Not bad for a war zone. A townhouse (57.2 meters squared) for €797/month with 50% down. A house sitting on 4.3 acres with a 57.2 meter house for 107,597. An about to become Russian city with good prospects moving forward. Sorry, Ukraine :(

#111 Steven Rowlandson on 09.01.22 at 8:50 pm

As I understand it CB rates are supposed to be like a credit claw back mechanism to deflate the system which is inflated through making loans to people, businesses and governments. The permanent currency supply is quite small relative to the debt created credit based currency supply. So given a lack of borrowing and a sufficiently prolonged period of positive interest rates the currency supply could nearly disappear or worse from servicing debt, paying debt or defaulting on debt. If there is a balance between debt contracting and repayment the system has a fluid stability providing its participants play by the rules…. Unfortunately too many don’t.

#112 Phylis on 09.01.22 at 8:54 pm

Where did all the gold people go?

#113 CJohnC on 09.01.22 at 8:55 pm

#92 CEF.
it is not entirely true that the NDP killed private health clinics. It Federal government that forced the NDP hand on it.
The problem is that Doctors are not being properly compensated for what they are required to do and the endless bureaucracy and paperwork is just an added burden and insult.
The problem with simply adding back the private clinics is that it would solve almost nothing. The doctors that would staff them would simply have a better life off the rich who could afford to pay, and you would still have a million people without a family doctor.

#114 crowdedelevatorfartz on 09.01.22 at 9:00 pm

@#102 Ponzie’s Plumber Problems.
“Let’s tax the excessive incomes of plummers and raise the incomes of Doctors who are obviously underpaid in relation to plummers.

+++
Ahahha.
I think most plumbers would only agree to “retrain” to a lower paying job such as a doctor if…… they never washed their hands ever again.
Just like they do after an expensive repair job in your house and they shake your hand for a job….welll done.
:)

#115 TMac on 09.01.22 at 9:05 pm

“Earl Davis, of BMO, believes the rate will rise to 6% in Canada – a shocking 3.5% more than now, taking the chartered bank prime to more than 8% and wreaking havoc among those with variable-rate mortgages.”

Can’t wait to see the bloodbath on those renewals. Variables will be the first to die but, even fixed at 8% with these debt levels would be devastating.
Key tossing party and then those positioned to do so can grab a nice foreclosure list and scoop up the deal.
The mils think owning a house is hard now? Wait until after a foreclosure and bankruptcy.

#116 Steven Rowlandson on 09.01.22 at 9:11 pm

Come to think of it 1990 to 2022 is 32 years not 12.
That is a long time but in that time period the GDP doubled and given the current estimate of 7.5% inflation we had our deflationary period of mercy for super debtors
and now given the math we should have a BOC rate of 10.5 to 11 %. Just goes to show that even a little inflation is dangerous and is often a bigger problem than it seems because it is created by debt and it leads to more debt and credit creation through higher prices.
Those prices are often payable by contracting more debt. It is like a chain reaction. You either use interest rates like control rods in a reactor or the inflation bomb goes thermonuclear…. BOOM! The nuclear fuel is the debt based currency.

#117 Doing my Part on 09.01.22 at 9:12 pm

If the government took plumbers under their wing and ran them like healthcare, we wouldn’t be able to get a plumber either.
I’ve been looking for a family doctor for more than 5 years, is this ok?

#118 Elon Fanboy on 09.01.22 at 9:14 pm

The 80’s….best decade ever.

Major feels…

https://youtu.be/Z0eflYLkI4A

#119 Linda on 09.01.22 at 9:16 pm

#79 ‘Shawn’ – LOL. I am no fan of the UCP, but using the surplus to pay down Alberta’s debt is a decision I can agree with. I’ll hold off celebrating until such time as said debt payment actually occurs. Show me where the money went!

#120 Old gringo on 09.01.22 at 9:19 pm

Another super rich Russian that disagrees with Herr Putin has leaped out of his 6th floor hospital window to join the last 5 suspicious deaths.
This guy is one sick puppy

#121 Phylis on 09.01.22 at 9:19 pm

#1 bcPaul on 09.01.22 at 1:41 pm
How does a doctor have time to be both a physician and a day trader?
Xxxx
So, you’ve never been to a doctors office?
Had to say it.

#122 Steven Rowlandson on 09.01.22 at 9:22 pm

Here is a link to a chart found at KWN.

https://kingworldnews.com/wp-content/uploads/2022/09/KWN-II-912022-1024×770.jpg

The implications for highly indebted sectors of the economy should be obvious and disturbing.
The capacity to service and pay debt is at risk and may be falling off a cliff. Nasty stuff if true.

#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm

@#113 CJohnC
“The doctors that would staff them would simply have a better life off the rich who could afford to pay, and you would still have a million people without a family doctor.”
+++

Wrong, so wrong.
Those patients would be “out of the line up” and the “million people waiting for a doctor”
Would be significantly reduced.

If I can pay for a MRI at a private clinic rather than wait 6,9 12,24 months in the ridiculous public line up….so be it.
And it reoves me from the ridiculous YEARS long test, consultations, operations.
Eventually.
After the govt bureaucrat donkeys protecting their govt turf are replaced.
Canada will be dragged kicking and screaming into a public /private two tier system like most first world countries….already have.

#124 crowdedelevatorfartz on 09.01.22 at 9:36 pm

@#120 Old Gringo
“Another super rich Russian that disagrees with Herr Putin has leaped out of his 6th floor hospital window to join the last 5 suspicious deaths.”

+++
Yep.
Putin has built quite a gilded cage for himself.
He is now ruling by fear.
How much longer is anyone’s guess.
I’m hoping the other corrupt Russian billionaires that are still standing…..
Realize…eventually….they are ALL next.
Time for Putin to be gone.
I was calling for his head on a pike by Sept.
30 days left.

#125 Don Guillermo on 09.01.22 at 9:37 pm

#117 Doing my Part on 09.01.22 at 9:12 pm
If the government took plumbers under their wing and ran them like healthcare, we wouldn’t be able to get a plumber either.
I’ve been looking for a family doctor for more than 5 years, is this ok?

######
And now the Libs/NDP want to put their mitts on dental care. Oh my. Sorry all those racists the Liberals are firing in August will be replaced by dental management folks from the minority groups. Hey Don, hopefully we’ll get a net zero in August.

#126 Faron on 09.01.22 at 9:53 pm

#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm
@#113 CJohnC

Maybe have a look-see at the life expectancy in the good ol US of A (private payer healthcare) vs public Canada and think it through. Hint, 4 years diff.

#127 CJohnC on 09.01.22 at 10:02 pm

#123 CEF

lots of private imaging clinics in BC. Not the same a private medical clinic so not shut down. At least 4 in Vancouver should you wish to enjoy a MRI.

#128 Doug t on 09.01.22 at 10:04 pm

#108 ponzius

He’s microdosing shrooms – he’s going to be like a superhuman ………

#129 The real Kip (Ret) on 09.01.22 at 10:27 pm

It’s going to take an 11% bank rate to knock out the inflation that they’ve created.

#130 Outrage on 09.01.22 at 10:35 pm

Remember our debt and the USA debt is huge. Both countries won’t raise interests rates where it’s not possible to service the debt. End of story. They would rather have high or hyperinflation than raise interest rates than destroy the housing and stock market. Central Bankers lie more than politicians if you can believe it.
No credibility at all.

#131 The General on 09.01.22 at 10:37 pm

#120- old gringo : Who are you referring to? Sick puppy? Junior high level thinking. Same with fartz, following the script of the msm, bought and paid for by Canadian taxpayers, who bailed them out.

#132 The General on 09.01.22 at 10:44 pm

#124- fartz: So you actually daydream about a fellow human beings’ head on a pike? And even have a time-table? You’re bad MOJO. Seek anger management, this isn’t medieval times we’re living in, bro.

#133 IHCTD9 on 09.01.22 at 10:46 pm

#121 Phylis on 09.01.22 at 9:19 pm
#1 bcPaul on 09.01.22 at 1:41 pm
How does a doctor have time to be both a physician and a day trader?
Xxxx
So, you’ve never been to a doctors office?
Had to say it.
——

From the original post:

“The doc has stopped his practice for personal reasons…”

#134 Ponzius Pilatus on 09.01.22 at 10:55 pm

#128 Doug t on 09.01.22 at 10:04 pm
#108 ponzius

He’s microdosing shrooms – he’s going to be like a superhuman ………
—————————
Thanks for the tip.
Sailo, can you supply me some of those shrooms.
For a guy pushing 80, Biden is quite something.
As long as he stays off a bike, he should be fine for another term.

#135 AM in MN on 09.01.22 at 11:02 pm

#126 Faron on 09.01.22 at 9:53 pm
#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm
@#113 CJohnC

Maybe have a look-see at the life expectancy in the good ol US of A (private payer healthcare) vs public Canada and think it through. Hint, 4 years diff.

—————————————————

As with all of these comparisons you need to make adjustments for a more accurate comparison.

If you take out the 13% black population from the US numbers, you have a different answer.

Canada doesn’t have as large of a 3rd world population living beside a 1st world one, so the numbers don’t get mixed.

Also, it varies a lot state by state. With Obamacare, basically the state controls the prices of insurance and payments, and private companies do the delivery. Kind of like ICBC for car insurance in BC.

These hospital and doctor networks are more and more becoming large networks, sometimes only 2 or 3 big ones in each state.

The main difference is that they have better facilities and equipment, as most government entities bow to the unions more, like US public schools.

#136 Ponzius Pilatus on 09.01.22 at 11:04 pm

#117 Doing my Part on 09.01.22 at 9:12 pm
If the government took plumbers under their wing and ran them like healthcare, we wouldn’t be able to get a plumber either.
I’ve been looking for a family doctor for more than 5 years, is this ok?
—————————-
Much of a plummers work, I can do myself.
How hard is it to unclog a toilet?
Just take a plunger and …….. plunge.
Try to unclog an artery yourself.

#137 Ponzius Pilatus on 09.01.22 at 11:28 pm

135 AM in MN on 09.01.22 at 11:02 pm
#126 Faron on 09.01.22 at 9:53 pm
#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm
@#113 CJohnC

Maybe have a look-see at the life expectancy in the good ol US of A (private payer healthcare) vs public Canada and think it through. Hint, 4 years diff.

—————————————————

As with all of these comparisons you need to make adjustments for a more accurate comparison.

If you take out the 13% black population from the US numbers, you have a different answer.
——————
Funny,
You’re making a case for public health.

#138 Sail Away on 09.01.22 at 11:39 pm

#134 Ponzius Pilatus on 09.01.22 at 10:55 pm
#128 Doug t on 09.01.22 at 10:04 pm
#108 ponzius

He’s microdosing shrooms – he’s going to be like a superhuman

———

Thanks for the tip.
Sailo, can you supply me some of those shrooms.
For a guy pushing 80, Biden is quite something.
As long as he stays off a bike, he should be fine for another term.

———

Yes, if that’s your thing, I do know where several patches of both psilocybe varieties common to the island grow. Substances don’t affect me much, so I much prefer a good meal of oyster, shrimp russula or pine mushrooms.

#139 HateTiff on 09.01.22 at 11:44 pm

Inflation has already peaked! (Raise middle finger at the CB boss)

https://www.bloomberg.com/news/articles/2022-08-12/has-inflation-peaked-why-july-2022-inflation-report-is-better-than-you-think

https://www.cbc.ca/news/business/inflation-analysis-1.6526190

#140 Don Guillermo on 09.01.22 at 11:45 pm

#126 Faron on 09.01.22 at 9:53 pm
#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm
@#113 CJohnC

Maybe have a look-see at the life expectancy in the good ol US of A (private payer healthcare) vs public Canada and think it through. Hint, 4 years diff.
++++++
It’s not a binary decision. There are many countries that we can model. Canada and the US are at the bottom of most health care surveys. Why do we keep doing this?

#141 Dr V on 09.02.22 at 12:20 am

100 Lurker

Who remembers their Calculus?
—————————————————–

Stoke’s theorem baby! Sick stuff! Look at those integrals. Oh the horror!!

https://www.youtube.com/watch?v=0UvNF_cfBJ4&ab_channel=Dr.TreforBazett

#142 Faron on 09.02.22 at 12:29 am

#135 AM in MN on 09.01.22 at 11:02 pm
#126 Faron on 09.01.22 at 9:53 pm
#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm
@#113 CJohnC

If you take out the 13% black population from the US numbers, you have a different answer.

Canada doesn’t have as large of a 3rd world population living beside a 1st world one, so the numbers don’t get mixed

What the hell are you talking about? They are all Americans! You don’t get to slice out a chunk of the population to make ale the numbers look better. Holy crap. Won’t even touch the racist 1st world 3rd world nonsense. Dude, wow.

Look at any country with a half-decent social safety net and people live longer than the US. Streaming money into for-profit systems leads to overtreatment for those with insurance and poor to no treatment for everyone else. Canada would be making a massive mistake to regress here. I don’t care how long you waited to get your bunion looked at.

#143 fishman on 09.02.22 at 1:23 am

1982 was my breakaway year. I got a taste in 1978 with 16 days fishing the Adams sockeye. With that hit I bought a house in Dunbar. Went bigger & borrowed for more R/E & fishing licenses from my bank, the Bank of B.C. When interest hit 18% my “friendly” bank got taken over by the Bank of Hong Kong. Lets just say the Chinese took my financial virginity.
I hung on because I knew the Adams would come through every 4 years. But us north coast trollers had a big problem. 1982 was a contract year & the UFAWU was going to shut down the coast till the fish got through & then their union shore workers & fishermen in Johnstone Straights, the Gulf & Fraser river would get all the fish.
So we got some Japanese buyers to come up with the cash. We might have been a little crazy thinking we could get our fish through a coast wide strike down from northern Vancouver Island to Vancouver. But we were a lot desperate. The guys on strike didn’t come near us, except once right at first. Told us nobody was unloading. They didn’t bother us after that as I think they were impressed with our intensity of purpose.
Our biggest problem was we couldn’t get ice & trucks. The union had all the ice plants locked down. The truckers were scared of getting blackballed & losing their contracts with the unionized companies once the strike was over. We had arranged with the Yankee truckers to bring us ice from Washington. These cowboys came up with their big Peterbilt sleepers & their good looking wifes. How could they resist. New country. Now they weren’t supposed to haul fish back down to Vancouver where our Japanese buyers were. Dropping them off so to speak on their way to Washington state to pick up another load of ice. That hadn’t been discussed during our initial negotiations. But they did. How fancy Peterbilts with Yankee plates rolled up & down Vancouver Island, full of fish & ice & across on the ferries without the Feds sniffing around, I have no idea. They wore these expensive fancy cowboy boots & stuck out like a sore thumb. The sockeye ended up in Japan & the cash was in our pockets & that was that. I never looked back. Started up again borrowing money to buy R/E & fishing licenses. The union fell apart & got taken over by CAW then UNIFOR. The Adams kept coming every 4 years. I averaged 80k & my best was 135k. This year was a bust because DFO screwed up big time in 2018. They had to close everything down to get enough escapement for 2026. 2026 will be a good year if the feds quit making political decisions & leave fish management to the DFO scientists & fishermen. Huge ocean survival for sockeye all over the Pacific. Big big returns everywhere this year except here. I guess the point is that when everything is falling apart & seems quite hopeless, thats when there’s great opportunity.

#144 Ronaldo on 09.02.22 at 1:32 am

#108 Ponzius Pilatus on 09.01.22 at 8:31 pm
Not sure what Biden is taking.
But I want some of it.
The guy is fired up.
I had my doubts, but he’s bouncing back big time.
The mid terms are not a shoe-in for the Republicans anymore.
Time for them to move towards the center.
——————————————————————
One of the weakest speeches ever from any president. Pathetic. An embarrasment to the American people.

#145 Ronaldo on 09.02.22 at 1:41 am

#105 Maybe on 09.01.22 at 8:16 pm
I remember the early 80s. My dad locked in a 5 year fixed mortgage at 15%. Not sure if it was a good move but he needed the stability of a fixed rate. His coworkers laughed at him and told him he was crazy. My spouse remembers his parents facing 20% and sitting at the kitchen table with there heads in their hands because they weren’t sure how they were going to make the payments- and these were simpler times before credit cards were mainstream or helocs. Interesting times.
—————————————————————
Remember those times well. Started building a home in spring of 79 when rates were around 10.5% which I locked in. By the fall rates had climbed to around 14% and continued to climb to peak at around 22%.

A couple were interviewed on BCTV because they were rushing to get a mortgage at this rate. The host asked why they were doing this and they told him that they were afraid it would go higher.

I had locked in my mortgage for four years and when it came up for renewal the rate had come down to 14% which was still very high.

It was a couple more years before we saw rates back to normal at around 11%. Of course housing prices at that time were much much lower than they are today and you could still buy a place for 3 times your salary.

#146 Jane24 on 09.02.22 at 2:11 am

1982 we lost our first house and we had a new baby when the mortgage renewed at 18.5%. We had to move into a rental for a few years while we built our resources back up. Gave me great respect for debt and I have avoided it all the rest of my life. At least in 1982 there was a lot of affordable rental flats for us to choose from. We moved our baby into a lovely one.

Son has lived in Vietnam for the last 8 years and Vietnam has an open media. This now gives him a front row seat to the situation in China which is dire. Millions there are going bankrupt in a capitalist way due to plunging real estate, debt from toys and higher interest rates and their habit of closing down major cities for a few covid cases. China is the second biggest economy in the world and the impact of this will be global.

Britain has a mixed public/private health care system. You can wait for one or pay for the other. After waiting 2 years for a state rheumatologist, I am now seeing the top guy in a few weeks at 8.30pm at night for a £200 consultation. I think I have about 10 years left so I am not going to waste any more time. This will open up a space on the waiting list for someone else. If you want something minor done then the hospitals in Vietnam are top class and very cheap. I am getting some varicose veins done there in January!

#147 Kane Able on 09.02.22 at 2:55 am

Yup, 1982 . The winter of ’82- ’83 was a period we called ” The Great Darkness”. Man, real estate in Vancouver was sinking like a stone. Over 50% between 82 and 86. Stores closed in unison until entire blocks were boarded up. Late 87 a bit if light came through albeit slowly due to Expo ’86 and a rising number of ex pat Hong Kong refugees. But, speculating on penny stocks was gunning hot. Some made out like bandits. It was a painful time with high unemployment. If Trudeaus Recession really gets rolling ( depends on how many months it takes the Cerbians to have blown the wad) there is no rescue for the economy. Foreign investment is at zero. You’re a target for higher taxes. The cupboards empty otherwise.

#148 Gravy Train on 09.02.22 at 5:08 am

#120 Old gringo on 09.01.22 at 9:19 pm
Another super rich Russian that disagrees with Herr Putin has leaped out of his 6th floor hospital window to join the last 5 suspicious deaths. [Putin] is one sick puppy

I agree with you that Putin likely had 67-year-old Ravil Maganov defenestrated.

#149 Steven Rowlandson on 09.02.22 at 6:17 am

“Where did all the gold people go?”

Well Phylis, Garth persuaded us to be quiet but we are still here and there keeping the faith. We are like the Gods of the copy book headings that Kipling wrote of.

Yellow rocks are $200US lower in value than they were a decade ago, when this blog told you to sell and pocket the gain. – Garth

#150 Zippy Doodle on 09.02.22 at 6:53 am

Bloomberg reports Toronto house prices down 16% over five months. It could be more, and I believe it may be. That would mean the decline was already happening while the TRE Board was pumping the market and reporting rising prices, nasty.

Could it be an information liability issue coming out as a class action if someone is proven to be have been pushing a ‘pump and dump? Were young buyers being duped in the absence of truth?

Imagine, you’re a young couple realizing that you overpaid $250- $350 thousand too much believing the market was still moving in a positive direction according to TREB stats when in fact a collapse was in full swing?

What if that “young couple” cohort who’ve lost 16% or more are thinking they’ll sue to recover their losses after failing to close or get pre financing commitments and now fin themselves in the lurch?

#151 Westcdn on 09.02.22 at 7:40 am

I think a 75 point basis increase in the prime rate by the BoC is warranted – still stuns me power is dictated, aided by experts. I am too much of a contrarian to be part of the club. I want inflation to be broken lest I have to live with “free” government servitude. I pay too much for ineptness and I do not want to see it locked in though excessive wage and pension demands.

I see the Russian oligarch who publicly stated he disagreed with Putin’s Ukrainian war suffered a fatal defenestration while in a hospital. There are other ways usually by form of ostracization.

I think inflation will moderate quickly but 2% is going to take pain and time. The end of August was brutal for my investments and I still have to face Sept & Oct. Yet, I still sit on my hands but for reducing debt by RSP withdrawals. It seems to have been wise in my case. I am looking at floating rate Preferreds. I had a couple of redemptions and need to replace. My 2 option bets look to end in zero for one but the other did well – net plus.

It seems to me that God doesn’t care about the life of peoplekind. Particularly death. I have a strong belief there is a reason and it is for the survivors to pick up the mantle. She/He does me no wariness favours but seems to want me to stay around. I suffered at the hands of a-holes but now I am capable of making them feeling my wrath.

My daughters and related family still like me.

#152 crowdedelevatorfartz on 09.02.22 at 7:55 am

@#144 Ronaldo
“One of the weakest speeches ever from any president. Pathetic. An embarrasment to the American people.”

++++
He would have to lower the embarrassment bar several nothces to match “The Donald”.
Anything Trump says is cringeworthy.
His endless babbling, nonsensical bullsh!t reminds me of WWF wrestlers talking to the camera after a match and the adrenaline and steroids are still peaking.
Rude, crass bullsh!tting at its worst.

#153 Tim Mayer on 09.02.22 at 8:09 am

On several areas im watching on realtor, new listings have stopped in the last 1-2weeks, on the other hand the number of listings hasnt changed either, seems to be an impasse.

#154 crowdedelevatorfartz on 09.02.22 at 8:09 am

@#131-132 General Mayhem
“So you actually daydream about a fellow human beings’ head on a pike?”

+++
Your admiration for a murderous dictator is acknowledged.
Putrid Putin isn’t a “fellow” or a “human being” and deserves everything that is coming.
His lies, thefts, manipulations, invasions, wars with neighboring countries can’t last.
Fear and intimidation only lasts so long before his own people start pushing back.
His taste testers and body doubles can only save his goat for so long.
I’m sure I won’t be the only person cheering on his demise.
There’s 1000’s of Russian and Ukrainian families that had buried their loved ones for his ridiculous, purposeless “special military operation.
The basement of Lubyanka Prison should be the last place Putin sleeps.

#155 Rev Maven on 09.02.22 at 8:27 am

Slam dunk by Phillip Cross.

https://financialpost.com/opinion/philip-cross-stimulus-driven-income-gains-couldnt-last?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook#Echobox=1662114817

Caring and Green nonsense leading to collapse.

#156 Steven Rowlandson on 09.02.22 at 8:31 am

Re #129

11% would counter the inflation but it might also allow the status quo without causing serious deflation by causing debt redemption. There is a certain level of financial pain that people can learn to live with without giving up any bad habits or greediness. It might take much higher rates to do that. Remember chartered banks borrow at slightly better than CB rates and lend at even higher rates to their best customers. So 14% or higher is possible.

#157 Felix on 09.02.22 at 8:58 am

Happy Feline Friday!

Great pic to start the long weekend – keep it up, Turner!

#158 ImGonnaBeSick on 09.02.22 at 9:14 am

#72 DON on 09.01.22 at 5:33 pm

Sounds like you’re spouting some nutty left-wing conspiracy theories… Your speculations do not refute the article…

#159 DON on 09.02.22 at 9:21 am

#155 Rev Maven on 09.02.22 at 8:27 am
Slam dunk by Phillip Cross.

https://financialpost.com/opinion/philip-cross-stimulus-driven-income-gains-couldnt-last?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook#Echobox=1662114817

Caring and Green nonsense leading to collapse.

*********

Looks like he nailed the obvious. I got no new info from what he wrote.

#160 the Jaguar on 09.02.22 at 9:27 am

Snippet: (one wonders how ordinary European citizens might feel about “US led plans” given the approaching winter months…. Is the US in danger or running out of heating sources?) —-

“Oil declined by more than 20 per cent in the three months through August, overturning all of the gains since Russia’s invasion of Ukraine at the end of February. The slump prompted Saudi Arabia to signal that the Organization of Petroleum Exporting Countries and its allies could cut supplies. The group is scheduled to gather on Monday to discuss output policy.

Among the items that OPEC+ ministers may weigh up is a U.S.-led plan to cap the price of Russian crude in a bid to deprive Moscow of funds amid the war in Ukraine. The proposal has been gaining support, with the U.K. signalling its approval. Group of Seven finance ministers are to discuss the proposal on Friday” . +++

( Met with the following response):

“Russia will embargo countries that support the Washington-proposed price cap on its oil, Deputy Prime Minister Alexander Novak said on Thursday. “In my opinion, this is a complete absurdity… To those companies or countries that will impose restrictions, we will not supply our oil and oil products, because we are not going to work under non-market conditions,” he told reporters, commenting on a plan to limit prices on Russian oil currently being discussed by the Group of Seven (G7) countries.”

Conclusion: It’s oil, not a bag of cheese doodles…

#161 Dharma Bum on 09.02.22 at 10:03 am

#24 Soren Angst (aka Sweet Life)

Common Sense not so common.
———————————————————————————————————

You are CORRECT, sir!

https://c.tenor.com/YqyLmGCO7KUAAAAM/that-is-correct-that-is-exactly-correct.gif

Common sense is non-existent in the world of climate change emergency “the world-is-ending-we’re-all-gonna-die” fanatics.

#162 Dogman01 on 09.02.22 at 10:11 am

#155 Rev Maven on 09.02.22 at 8:27 am
Slam dunk by Phillip Cross.

https://financialpost.com/opinion/philip-cross-stimulus-driven-income-gains-couldnt-last?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook#Echobox=1662114817
Caring and Green nonsense leading to collapse.

——————————————–

Good article…

“Truth, when discovered, comes upon most of us like an intruder, and meets the intruder’s welcome.” – Charles Mackay

#163 Dttumpzterz on 09.02.22 at 10:15 am

Now I know why Trump said Canadian medical system is a mess!

#164 Sail Away on 09.02.22 at 10:15 am

#160 the Jaguar on 09.02.22 at 9:27 am

Re: Russia oil

Hmmm… let’s see how this plays out. I envision something like this:

Germany: Ve have decided to pay $60 and no more!
Russia: Have you heard of winter?

#165 DON on 09.02.22 at 10:22 am

#158 ImGonnaBeSick on 09.02.22 at 9:14 am
#72 DON on 09.01.22 at 5:33 pm

Sounds like you’re spouting some nutty left-wing conspiracy theories… Your speculations do not refute the article…

*********

Geezus….blank stare.

I have been following and watching the Fraser Institute’s findings for at least 20 years. Who funds them? And what exactly did I say that you took to be a nutty left source of information?

It is a fact on the ground that many people are retiring early and lots of public sector folks are being replaced (cause they think they can/pensions and all). Is the boomer wave of retirements only in the private sector? I ask again who funds The Fraser Institute?

I read a lot and sit in the center and have extreme disdain for bullshit from ekther the right or left. I don’t need anyone to back me up. Exactly what was your rebuttal? Do your own research the info is a click away.

FFS!

#166 Simplistic Reduction... on 09.02.22 at 11:17 am

…your stock in trade. Not just at your day job apparently.

The Twitter-threatening was a nice touch, really helps highlight what a passive-aggressive little…person…you are.

#126 Faron on 09.01.22 at 9:53 pm
#123 crowdedelevatorfartz on 09.01.22 at 9:22 pm
@#113 CJohnC

Maybe have a look-see at the life expectancy in the good ol US of A (private payer healthcare) vs public Canada and think it through. Hint, 4 years diff.

#167 DON on 09.02.22 at 11:30 am

#164 Sail Away on 09.02.22 at 10:15 am
#160 the Jaguar on 09.02.22 at 9:27 am

Re: Russia oil

Hmmm… let’s see how this plays out. I envision something like this:

Germany: Ve have decided to pay $60 and no more!
Russia: Have you heard of winter?

*********

I speculate that the G7 just took a collective GASP at your bang on comment. God forbid that would happen while a proxy war was going on and all the weapons and funding transfers.

What exactly was the line of thinking behind this well thought out policy. I guess we will just have to wait and see how this plays out. Perhaps a new learning moment. Then again Boris just told the people to buy new kettles if they want to reduce energy costs. My immediate thought…did Boris did buy shares in a kettle business?

#168 Ponzius Pilatus on 09.02.22 at 11:42 am

144 Ronaldo on 09.02.22 at 1:32 am
#108 Ponzius Pilatus on 09.01.22 at 8:31 pm
Not sure what Biden is taking.
But I want some of it.
The guy is fired up.
I had my doubts, but he’s bouncing back big time.
The mid terms are not a shoe-in for the Republicans anymore.
Time for them to move towards the center.
——————————————————————
One of the weakest speeches ever from any president. Pathetic. An embarrasment to the American people
———————-
It’s fascinating how the same thing looks different to different people.
That’s why there is no truth.
Only perception.

#169 DON on 09.02.22 at 11:53 am

#168 Ponzius Pilatus on 09.02.22 at 11:42 am
144 Ronaldo on 09.02.22 at 1:32 am
#108 Ponzius Pilatus on 09.01.22 at 8:31 pm
Not sure what Biden is taking.
But I want some of it.
The guy is fired up.
I had my doubts, but he’s bouncing back big time.
The mid terms are not a shoe-in for the Republicans anymore.
Time for them to move towards the center.
——————————————————————
One of the weakest speeches ever from any president. Pathetic. An embarrasment to the American people
———————-
It’s fascinating how the same thing looks different to different people.
That’s why there is no truth.
Only perception.

*****
I cringe when Biden talks and laugh at what Trump says. Maybe they both have some good points…but I wouldn’t vote for either.

#170 Yukon Elvis on 09.02.22 at 11:56 am

#164 Sail Away on 09.02.22 at 10:15 am
#160 the Jaguar on 09.02.22 at 9:27 am

Re: Russia oil

Hmmm… let’s see how this plays out. I envision something like this:

Germany: Ve have decided to pay $60 and no more!
Russia: Have you heard of winter?
+++++++++++++++++
China and India are buying Russian oil. They are demanding and getting a 30% discount. Their storage is filling up. Russia can not afford to shut down wells because they may not be able to restart them. The oil will continue to flow for now. We will see what happens there. Russians are already flaring gas into the atmosphere cuz they can’t sell it and can’t shut down the wells for fear that they will not be able to restart them. Interesting times.

#171 Climate change victims on 09.02.22 at 11:59 am

DELETED (Anti-vaccine)

#172 Sail Away on 09.02.22 at 12:01 pm

#167 DON on 09.02.22 at 11:30 am
#164 Sail Away on 09.02.22 at 10:15 am
#160 the Jaguar on 09.02.22 at 9:27 am

Re: Russia oil

Hmmm… let’s see how this plays out. I envision something like this:

Germany: Ve have decided to pay $60 and no more!
Russia: Have you heard of winter?

———

I speculate that the G7 just took a collective GASP at your bang on comment.

———

Almost certainly. Much like Solomon of old, I’ve gained a significant following for “wisdom and very great insight, and a breadth of understanding as measureless as the sand on the seashore” (1 Kings 4:29)

#173 Steven Rowlandson on 09.02.22 at 12:42 pm

Today the Canadian inflation rate is 7.6% which means given the GDP growth from 1990 to 2022 the BOC interest rate ought to be 10.605%. Mortgage rates ought to be north of that and GIC ought to be great again.

#174 Dr V on 09.02.22 at 1:02 pm

165 DON – good morning DON. The article is quite brief and basically just highlights the net job gains over that time period in the public and private sectors.

It doesnt appear to attempt to give any reasonings for
this disparity, nor does it state that the disparity is
undesirable.

It does cite Statistics Canada as the data source, though I have not reviewed the links provided.

With reference to the data, do you have another contradicting source?

#175 WTF on 09.02.22 at 1:07 pm

#166 Simplistic Indeed “Maybe have a look-see at the life expectancy in the good ol US of A (private payer healthcare) vs public Canada and think it through. Hint, 4 years diff.”

——————————————————————–

Yup trot out the USA health Care system comparison.

Specifically Ignore, France, England, Australia, Holland, Germany, Japan, S Korea Taiwan, ECT….. None are perfect but ignoring the fact that people receive better care in a more cost effective manner elsewhere is, Simplistic?

Canada is a broken balkanized system in dire need of an overhaul. One commonality. Every province is a mess.

Not sure Id be using life expectancy as a validation. Given the obesity rates in both US (36.2) and Canada (29.4) both now have the first generation that wont outlive the previous one.

If the 30% of obese had the discipline to reduce weight that would go a long way to addressing many health care interactions ergo reducing pressure on “the system(s)”. But calling obesity out?

Or put another way by a friend who is a physiotherapist. “Stop complaining abut your bad back when you have 50 lbs hanging off your stomach”

I know. I’m Triggering………

#176 Shawn on 09.02.22 at 1:13 pm

#173 Steven Rowlandson on 09.02.22 at 12:42 pm

Today the Canadian inflation rate is 7.6% which means given the GDP growth from 1990 to 2022 the BOC interest rate ought to be 10.605%. Mortgage rates ought to be north of that and GIC ought to be great again.

********************************
Calculated to three decimal places? Maybe time to brush up on the concept of significant digits.

#177 Felix on 09.02.22 at 1:29 pm

Happy Feline Friday!

Did you know:

Owning a cat can reduce the risk of stroke and heart attack by a third.

The CIA spent US$20 million in the 60s training cats to spy on the Soviets (Dogs were too busy sniffing bums to be of any use defending democracy during the Cold War)

Cats have the cognitive ability to sense a human’s feelings and overall mood.

Cats have 1,000 times more data storage than an iPad

#178 Steven Rowlandson on 09.02.22 at 5:58 pm

In case anyone is going to use the Taylor rule formula here is a source of Canadian inflation statistics.

https://www.bankofcanada.ca/rates/

#179 Steven Rowlandson on 09.03.22 at 12:21 pm

“Calculated to three decimal places? Maybe time to brush up on the concept of significant digits.”

Shawn does it really matter? If the FED ignores the Taylor rule there is a good chance the BOC will also.
The powers that be love to ignore their own rules when it suits them I did a calculation for the USA and came up with 11.68% or 12% if one rounds it up. Think they will adjust their rates to 12% because a formula calls for it? No way if they got orders or a choice in the matter. They will cheat to save the government and housing market. Call it politics and sell interest.