Pain therapy

So now we know. The bank rate swelled another 75 bps Wednesday morning. That was aggressive. Not crazy lethal, but enough to inflict pain.

That’s exactly the point. Pain. This has been a serious tightening effort, raising the CB rate from one quarter per cent (a ridiculous pandemic level) to 3.25%. Yes, inflation’s still double that, but an increase of 1,200% in the bank rate in a few months hurts. Given the fact Canadians have sautéed themselves in debt and sent house prices to the moon makes this what it is… painful.

The prime rate at the chartered banks will therefore be 5.45% tomorrow. If you have a variable-rate mortgage, a HELOC or a demand business loan, you’ll feel it. New buyers will be able to finance and afford less. Folks renewing 2% mortgages at more than double will be impacted. The object and intent of the Bank of Canada is to discourage borrowing, make credit more expensive, put the brakes on consumers and shut down the real estate market.

Until and unless that happens, the cost of money will continue to rise.

This week the CB made it clear that this misery is not about to end soon, despite what everybody on Reddit thinks.

Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further. Quantitative tightening is complementing increases in the policy rate. As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target. The Governing Council remains resolute in its commitment to price stability and will continue to take action as required to achieve the 2% inflation target.

So what’s happening in the real world after a spate of rate hikes, including that mamma of a 1% move in July? Is housing rolling over enough that The Man will ease up and not jack things again in October and December?

Well, it was promising for a while. As this pathetic blog has detailed, price declines of 22% for detached homes in Toronto, for example, were eclipsed by crumbles of up to 40% in the surrounding Bunnypatch as sales crumbled. In Van and the LM prices have moved less than double-digits, while areas like the Fraser Valley and OK have been whacked more. Sales in Montreal and Halifax have just slowed dramatically, but valuations haven’t seen GTA-type reductions. In many markets there’s a Mexican standoff between buyers, waiting for blood, and sellers, convinced crazy prices will return.

But all that might have changed as house lust once again stirs Millennial loins. For example, listen to what the spokesguy for Re/Max has been telling the media: “This fall is going to be interesting. What the Bank of Canada does with interest rates, that’s really going to be what dictates the remainder of the year. There is lots of speculation that this will be the last rate hike until the end of the year. If that is true, I think we’ll have a little bit slower… start to the fall than normal. But I think come early to mid-October, things will pick up in a big way.”

Now ponder the latest stats from the country’s biggest real estate board. The Frankenumber for sales in the GTA dropped for a few months, then abruptly stabilized in August even after that massive rate hike mid-summer.

Check out this tabulation of sales to new listings ratio by realtor/stats freak Scott Ingram. It suggests the slide in buyer activity came to an end in the past few weeks as people absorbed a higher-rate environment and cheerily loaded up on new debt.

Ingram says the expectation of higher rates is already “baked in” to buyers’ brains. “So I think there’s a good chance the market keeps on this slow tightening trend. Though one thing I’m watching is many sellers pulled listings in spring/summer that just weren’t selling, with idea of re-listing in fall when they hoped things would be better. So it’ll be interesting to see if we see a quicker and larger than normal buildup of listings.”

BMO economists have said a whole lot of what our central bankers do depends on whether or not the housing market finds a price floor – as Ingram and Re/Max are now suggesting. If sales climb higher (happening) and prices begin to stabilize (also occurring) the Bank of Canada will be forced to raise the cost of money again twice more before the end of 2022. Realistically, that would push the chartered bank prime to 6%.

In that world, fixed-rate mortgages would all jump above the 5% mark. VRMs taken at 1.5% a year ago would have an effective cost three times that, seriously reducing equity growth. HELOCs would be a disaster. And then the CB could rejoice, having achieved a historic level of pain. And did I mention unemployment and locusts? Plus mass suicide on Reddit?

Makes you wonder what carnage would happen if a generation ever faced 18% mortgages. Oh wait…

About the picture: “In regards to your recent incident in downtown Toronto here are a few words of encouragement and advice,” says Bob, in Hamilton. “I am slowing down enough to realize I too, probably would have had a hard time defending myself in the situation you faced this past weekend. As a senior you can’t take it for granted any longer that you will be safe in this once peaceful Dominion. You need a well trained dog who will be your constant companion and guardian. I’m not a crazy dog lover but my boy gives me a huge re-assurance when I go anywhere, anytime. He is 100 LBS of muscle and teeth, not trained, but smart enough to keep an eye on me and my wife. Everyone who comes in contact with him gets checked out immediately…but not kids…he likes kids and does not feel ill at ease around them.  Get a well trained dog, big enough and intimidating enough so guys like “Pony-Tail” will steer clear of you and your wife in future. Re-group and carry on. Don’t be fearful but be careful. Here’s a four year old German Shepherd that we got off a farmer in rural Ontario in 2018 and is possibly the best decision we have made in our time here in Hamilton. Every day this guy gears up willingly for our daily 12 km walks (cumulative) and is ready to go regardless of the weather. We can’t imagine the house without him…at all.”

194 comments ↓

#1 Arctic Gringo: Qalunaaq on 09.07.22 at 10:08 am

Good morning.

#2 crowdedelevatorfartz on 09.07.22 at 10:14 am

These rate hikes should have started last year.
Similar to ;
Closing the barn door after the horse has bolted ….
Or giving Ponzie correct info after he has erroneously posted….

#3 Big Bear on 09.07.22 at 10:19 am

Here in the north end of Nanaimo, for sale signs have been up for months with no action. Some have actually come down but not because they sold.

Avg price here is ridiculous

Most have no idea about all the balls in the air right now either. We poked the Bear and the Bear roared.

Europe is in big trouble now. No more cheap Russian gas and Powell is hiking rates in the US much to Lagarde’s chagrin.

The world is changing rapidly and massively as 87% have decided to line up on the DragonBear’s side of the economic divide. They don’t want to be at the whims of the US and its foreign policy and petrodollar bullying anymore.
The global south want prosperity and Putin/Xi have been telling them they will accommodate them with the BRI New Silk Road.

All those USD are now coming home chasing fewer goods. Biden and his idiot advisors did this and the media have helped cover it up.

Neocons like Bill Kristol, Mike Pompeo, and John Bolton betrayed Trump the first time around. RINO Neocons like Liz Cheney are being voted out.

Buckle up… MAGA Trump supporters will take the house and Senate in November and he will have a deep deep pool of loyalists to help him clean the rest of the neocon hawks out next time around.

The US electorate are wide awake. They know Trump is their only choice to avoid global war v Russia / China

Powell is firmly with Trump on this.

Ukraine was the first casualty… Europe is next

We are geographically lucky we have the US beside us. A self sufficient Canada / US antiwar economic alliance is the best possible outcome – but the greens will be apoplectic at all the money flowing into Oilberta

We are truly blessed to be living in such extraordinary times

#4 François l on 09.07.22 at 10:23 am

Detached in Montreal are down 9% (580k to 525k) since the peak in may. Wondering if it will go back up or down in the next 6 months.

#5 Westcoaster on 09.07.22 at 10:23 am

The carnage will be severe for some. Hard to feel sorry for the leveraged speculators for whom greed is the prime motivator, but there will be some for whom this is a huge financial tragedy. We have friends (solidly into their senior years) who were looking to move and bought a townhouse a couple of months ago – full price, no conditions. “We had to have it ’cause it was perfect for us. But we arranged a long closing date on possession, to give us lots of time to sell our house” he said. So far crickets on their place because they “need to make the numbers work.” I figure they’re losing $1k/day and that by the end the differential, had they done it the other way around (which they were advised to do) will be at least $250K. NB: they definitely cannot afford to carry two places. The BoC move today will no doubt exacerbate their situation.

#6 The Original Jake on 09.07.22 at 10:23 am

3/4 is good and at least we didn’t get a wimpy 1/2. But 1% would have been the right medicine to slow the inflation train down. Pull the bandaid off type healing.

#7 Ballingsford on 09.07.22 at 10:24 am

That would suck having a VRM and most of your biweekly or monthly payments going mostly to interest and not the principal.

I wonder how much people have curbed their spending. Not much if the credit card debt keeps rising.

And yes Garth, get a Shepherd. Maybe we all should get one.

#8 AK on 09.07.22 at 10:26 am

Not enough. Should be at least 2% higher.

#9 The Original Jake on 09.07.22 at 10:41 am

#8 AK on 09.07.22 at 10:26 am
Not enough. Should be at least 2% higher.

Unfortunately, there were too many irresponsible people gorging on cheap money for years despite the warnings so now the fiscal policy guys have to tip-toe gently at taking the punch bowl away. The goal is a soft landing, not induce a deep recession which an instant 2% hike would create.

#10 Bigger Bear on 09.07.22 at 10:48 am

#3 Big Bear

We are truly blessed to be living in such extraordinary times

I agree with most of what you say. Though this has been in the making for decades. We always knew things would come home to roost. You can’t put ballet dancers and drama queens in charge of nations and expect greater outcomes other than handing out free cash to all to buy popularity.

I took the family to Tsawwassen Mills on the way home to Nanaimo over the weekend. Holy smokes. We had never been there. There was no curbing of spending in there. I have never seen lines and activity like that in any mall before. The inflation beatings will continue for now. People aren’t getting the message.

I like to say we are living in fascinating times. I still cannot believe it. Our lifetime.

#11 Ponzius Pilatus on 09.07.22 at 10:52 am

Apparently, liar loans and no down mortgages are back in the good ole USA.
Sounds familiar, does it not?
Bring to mind a quote by Einstein about “insanity”.

#12 Crystal ball futurist on 09.07.22 at 10:56 am

The debt burden is now unmanageable for a lot of speculators. Expecting the panic phase to begin soon.
CBs truly rule the world.

#13 Sail Away on 09.07.22 at 10:58 am

Well, my TSX-centric HELOC borrow to invest portfolio from May and June is right at par, so slightly under based on interest at this point. Keep or close out? Hmmm…

Let’s reduce by half and see what happens.

#14 mitzerboyakaQueencitykidd on 09.07.22 at 10:59 am

attaboy Garth

ain’t no ponytail guy gonna stop a wirey guy

looks like you’re back in the saddle again
let er buck get er done

#15 TurnerNation on 09.07.22 at 11:05 am

The trap is set, now you’se cant leave? I’ve never seen so many luxury cars on the roads.
What happened to having an ordinary station-in-life wagon?

.Total consumer debt hit $2.32 trillion in Q2, up 8.2% from year ago: Equifax | Consumer insolvency rose to the highest level since the start of the pandemic. (investmentexecutive.com)

———-

Control over Travel/Movement is designed to be permanent. Free travel ended March 2020.
But we will be so healthy!! Such health will be enjoyed.

https://emploisfp-psjobs.cfp-psc.gc.ca/psrs-srfp/applicant/page1800?poster=1840486
Seeking Registered Nurses for Quarantine Officer positions
Various Locations across Canada including Ports of Entry across Canada
Perform Health assessments of international travelers at various points of entry (airport, land, marine) and make determinations on the public health risk.
•Perform telephone health, safety, isolation/quarantine and compliance assessments of people that have travelled internationally, making decisions around next steps based on the risk they pose to public health.

#16 CHERRY BLOSSOM on 09.07.22 at 11:06 am

The mantra of the millennials is, “I Want What I Want and I Want it Right Now” And this philosophy is biting them big time now. I have been patiently waiting to see this and now I just smile and think, “You got more than you wanted”

#17 chalkie on 09.07.22 at 11:07 am

Told you so 5th straight rare hike, up, up and away, setting our policy rate at 3.25, BOC has to and will continue to keep rising the rates, my best guess would be on top of todays ¾ percentage point rate hike, you will see another ¼ percentage point on October 26th and another ½ percentage point on Dec 07th, from there the markets will cruise into 2023 with a pause to allow for a setting period of successes and failures before the first BOC announcement increase in 2023, you may even see a couple of pausing periods for the first half of 2023. Your call, buy your home now and cry later or cry now and pay later, the real savings is many quarters out down the road. “Higher rates mean higher monthly mortgage payments for now, which result in less buying power for home shoppers. Prospective homebuyers today will not be able to afford as large a mortgage as they would have just a few months ago, unless”. If you are smart and need to sell, just keep shopping for that right MLS realtor that will settle for 3% or less on selling your home, don’t allow anyone to pull you down the garden path, keep your offers low on any new purchase and the ¾ percent today, may/will work out not effecting your monthly payment any different than the old yesterday’s bank rate after your realtor savings is factored in. Think smart, it’s your money. Did you know that Canada is larger than the United States, making it the second-largest country in the world. However, despite our vast territory for a relatively small 39 million population, more than 90 percent of Canadians live within 150 miles of the US border. The economies of Canada and the United States are similar because both are developed countries. While both countries feature in the top ten economies in the world in 2022, the U.S. is the largest economy in the world, with US$24.8 trillion, with Canada ranking ninth at US$2.2 trillion, Canada being the second biggest country in the world and yet less than 10% of the American economy and so folks, the lesson learned here is, size does not always matter. When you see that stretched limo or Audi drive by you, smile and thank the man above that you are not behind the wheels of their problems. The happiest people/country in the world is Finland and there most registered car in the country is Kia, followed by Volvo. There is an old saying, money don’t bring happiness, but there is sure a lot of people willing to gamble on that one, its your money, protect it, be savvy and strong and don’t give it freely to any realtor. Did you know that the highest earing realtors in Canada is Burlington Ontario, “oh well” now you do.

#18 Søren Angst on 09.07.22 at 11:07 am

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
– Winston Churchill.

Look at a Prime Rate vs. Inflation Rate chart for Canada since 1970 and you will find the ONLY TIMES inflation whacked down is when the Prime exceeds the Inflation Rate – in almost all cases by a factor of

2, TWO, DEUX

Let that sink in Kids and the Immediate Gratification crowd.

BoC is taking Baby Steps to try and get their “Soft Landing”. Not buying it one bit if history is indeed a good teacher (and she is).

As good as any on the Web (T-Bill yield vs. Inflation, close enough for “Government Work”), see Chart 9:

https://www.cansofunds.com/canadian-inflation-and-the-prospects-for-real-return-bonds/

#19 Søren Angst on 09.07.22 at 11:22 am

#13 Sail Away

Dump your Twitter holding and you’ll be more than fine since you bought lower than the price today.

Ya, selling into dung storm but one way to solve your conundrum.

Still hanging on to my $50/share Twitter Albatross single stock purchase. Waiting to see what happens to Musk before his appointed October RSVP with the Delaware Chancery Court and Hanging Judge Kathaleen St. J. McCormick.

Pretty sure that $7B of Tesla stocks he recently sold is for an out of Court settlement. You may want to wait until then. That’s what I’m doing. $7B should take care of their -270M earnings in 2nd Qtr 2022 just fine I’d say. Increases their Mkt Cap by 22%. Or will end up a nice bump to their share value (about $9/share = $7B divided by shares outstanding).

#20 Victor Llearna on 09.07.22 at 11:24 am

If rates go up enough stupid sheep that bought in last 2 years won’t be able to renew their mortgages and be forced to sell cheap. for now that isn’t happening, but in 5 years there has to be wave of sheep flocking to the exits.

#21 Quintilian on 09.07.22 at 11:24 am

“Makes you wonder what carnage would happen if a generation ever faced 18% mortgages. Oh wait…”

No need for 18, when most of my immediate crowd owes over 15k on the Home Depot card, and 900k mortgage with Vancity.

#22 Faron on 09.07.22 at 11:29 am

#13 Sail Away on 09.07.22 at 10:58 am

Let’s reduce by half and see what happens.

I have questions:

1) the HELOC port was just a timing the market (AKA gambling) short term thing? If it was short term, why the hell didn’t you sell ~6% higher?

2) You are even, what is different now than 4 months ago when you first invested?

3) Coulda sworn I was told the recession was cancelled. Shouldn’t equities respond in kind?

I know the answer to all of these questions [emotion], but want to hear your reasoning.

#23 TurnerNation on 09.07.22 at 11:30 am

Welcome to Toronto.
Pony tail guy also drives a car? Or his ilk.
Advise our forum host to buy another Hummer this time with an armoured turret in the rear.

https://www.cp24.com/news/cyclist-injured-after-alleged-unprovoked-road-rage-incident-in-high-park-1.6057179

He told CTV News Toronto that their paths hadn’t crossed prior to the interaction, and that the driver started yelling profanities as he approached an intersection, telling him that all cyclists should get off the road.

Zierfuss then said the driver tried twice to use his vehicle to get him off the roadby swerving towards him.
….
“He decided to slam his brakes on, which caused me to crash headfirst into the back of his car at speed,” Zierfuss said. “He fled the scene. I was left there bleeding on the ground.”
“It was a hit and run. It was a violent assault.”

#24 mj on 09.07.22 at 11:32 am

either the bank of Canada is lying, or they don’t know what they are doing. First they say that they won’t raise interest rates until the end of 2023. Then they said they want to get to a neutral range between 2-2.5. Then a couple weeks ago the Fed said they have to get to 4 percent or above. Seems like a big rug pull to me. I agree rates need to be higher to bring inflation down, but I don’t like the way they are doing it.

#25 JT Dawg on 09.07.22 at 11:33 am

July’s rate hike of 100bps isn’t even baked in yet. Most major banks in Canada offer 120 day rate holds? This latest 75 point rate hike won’t be fully baked in until January. In the mean time some people will have money burning a hole in their pocket and feel the need to buy during the fall season. This may help stabilize the market and slow the decline somewhat. Come January however with trigger rates hit and no more free money things may get really interesting!

#26 millmech on 09.07.22 at 11:38 am

#17 Chalkie
The rate hikes will all be at least 50 basis points and I would not be surprised to see 75 basis points until the end of the year, lots more to come in the New Year.
The BoC only cares about inflation and not the over indebted homeowners who have painted themselves into a very dark corner now and if inflation does not get under control soon the rates may be moving at a faster pace.
History does not repeat but it does rhyme.
https://wowa.ca/bank-of-canada-interest-rate

#27 willworkforpickles on 09.07.22 at 11:39 am

BANNED (Abusive)

#28 Stealth on 09.07.22 at 11:42 am

Thanks for the post.

What is the correlation between prime rate impacting vrms and say fixed rate mortgages based on bond yields?

BOC raises , vrms up, how and when does that correlate with bonds yields? Does it just raise short term bonds yields and then if long term rates don’t budge we get inverted yield curve?
Anyways I am looking for a relationship.

Thanks

#29 Søren Angst on 09.07.22 at 11:45 am

Off topic.

California doesn’t want any more new gasoline cars sold by 2035.

I’ve been making calcs showing good luck with the existing power grid if everyone goes EV.

Well, guess what?

That day of Infamy (or Irony) has arrived already much to my surprise (or not).

https://twitter.com/hugh_mankind/status/1567257731765080070

It’s OK Tesla Owners, if you want to get rid of your on the Honda Portable Gasoline Generator grid EV … just do what this Owner did in Germany AND the Court AGREED (basically, it’s autopilot drives like a drunken sailor):

https://electrek.co/2022/03/29/court-orders-tesla-buy-back-car-from-customer-autopilot/

#30 Ray Skunk on 09.07.22 at 11:45 am

So when will banks start raising rates on their savings products?

VRMs keep going up and up, but my “high interest”(sic) Savings Account still pays out the princely sum of 1.00%.

I mean, it’ll never be great and I try to keep the amount in there low – but there’s always a need to have emergency cash on hand that’s not locked up somewhere. So why are we in this “head I win, tails you lose” situation?

Anyone?

#31 Millennium fool on 09.07.22 at 11:45 am

1 to 4 percent in one year … is like 10 to 40 percent in the 70s or 80s.

I don’t think everyone understands the magnitude of these hikes … this is a black swan event.

The way the math works .. it’s going to get scary!

#32 Sail Away on 09.07.22 at 11:51 am

#19 Søren Angst on 09.07.22 at 11:22 am
#13 Sail Away

Dump your Twitter holding and you’ll be more than fine since you bought lower than the price today.

———

Naw, that would be emotional. I will hold as long as Elon owns a big stake and ride the wave.

#33 Faron on 09.07.22 at 11:57 am

#29 Søren Angst on 09.07.22 at 11:45 am

I’ve been making calcs showing good luck with the existing power grid if everyone goes EV.

Just FYI Mr. Lava Tubes, not selling new ICE cars doesn’t mean a sudden fleet replacement.

This bunk idea that switching to EVs means all cars are instantly incinerated and replaced is beyond stupid Koch brothers propaganda.

#34 k on 09.07.22 at 11:59 am

a wide gauge solid steel walking stick is a great companion on walks.

#35 Søren Angst on 09.07.22 at 12:03 pm

#32 Sail Away

Just a thought SA. Holding on to TWTR, to the bitter end.

One of the lucky few with lower cost shares and a Tesla EV … well, until the electrical grid gives way.

A good time to use surplus HELOC funds to buy Gasoline Electrical Generator manufacturer shares (and for your Tesla).

#36 Randy on 09.07.22 at 12:03 pm

Don’t have a mortgage or HELOC…What did I miss out on ?

#37 bankish on 09.07.22 at 12:09 pm

Inflation is a world wide problem right now. For those that blame our government or any single government world wide please slam your forehead into a brick wall repeatedly until you reset your common sense.

#38 Søren Angst on 09.07.22 at 12:10 pm

#33 Faron

The only thing stupid here is people that do not know how to calculate the extra power strain EVs in the coming years will put on the existing power grid. I have shown calcs numerous times here.

Using 2018 grid data, the max number of Tesla 3s (avg EV) using surplus power in ALL OF CANADA would be 13M. 36M registered vehicles that year.

Where are your calcs? All I read is Lefty hot air balloon rhetoric and not much else from you.

To meet all EV vehicles by 2035 means Canada is short about 23 Hoover Dams at a min. total cost of $26B.

Think they’ll build that many by then?

#39 Sail Away on 09.07.22 at 12:14 pm

#22 Faron on 09.07.22 at 11:29 am
#13 Sail Away on 09.07.22 at 10:58 am

Let’s reduce by half and see what happens.

———

I have questions:

1) the HELOC port was just a timing the market (AKA gambling) short term thing? If it was short term, why the hell didn’t you sell ~6% higher?

2) You are even, what is different now than 4 months ago when you first invested?

3) Coulda sworn I was told the recession was cancelled. Shouldn’t equities respond in kind?

I know the answer to all of these questions [emotion], but want to hear your reasoning.

———

Well. The reason, my dear ‘I want an answer and I want it right now!’, is that my bailiwick is not necessarily B&D, and I’ve been testing the waters mainly to gain experience in another financial strategem, gaining 5% on B&D last year, closing it out just prior to the big downturn as legitly recorded here, not revisionist history.

Now, I feel it’s likely recent Fed actions will depress or flatline B&D for the next while. Ergo, we will keep more $ in reserve as extra leverage power for arbitrage situations in a Buffett-esque manner. Warren always leaned on arbitrages to keep profits up in unsettled times.

Observe, evaluate, act slowly.

#40 Søren Angst on 09.07.22 at 12:18 pm

#33 Faron

Mr. Lava Tubes.

Go to Herculaneum, ask the Archaeologists there about your theory efficacy and get back to me – you know, the people actually digging there.

You are an exasperating individual that likes to spout out disinformation based upon a 10s Google Search of like minded Narrative individuals/outfits by those that clearly do not travel much or heaven forbid, use the Scientific Method of Observation and of course, disinformation butters their bread.

Go there, speak after and not before.

#41 Leftover on 09.07.22 at 12:23 pm

I know that math is hard, but when listings (the denominator in a sales to new listings calculation) crater, even a weak sales number yields a “win” for the RE bulls.

Until listings speed up, Wile-e Coyote is still airborne.

#42 Caffeine Monkey on 09.07.22 at 12:24 pm

#3 Big Bear
“MAGA Trump supporters will take the house and Senate in November and he will have a deep deep pool of loyalists to help him clean the rest of the neocon hawks out next time around.”
——
While they’ve favored to win the House, they probably won’t take the Senate. In any case, I don’t see how Trump is going to do much of anything from a prison cell.

#43 Faron on 09.07.22 at 12:25 pm

#36 Søren Angst on 09.07.22 at 12:10 pm

You don’t have a grip on basic facts (eustatic sea level, magma chambers, compound interest, now EV rollout) and cannot be convinced that is the case so why would I try to show you?

Hint: The 14M registered cars in California are not suddenly going to become electric. It’s hot air to pretend that a ban on sales of new EVs equates to an instant electrification of the fleet. You and others use the all-at-once-or-nothing tactic to dissemble frequently. You don’t even seem to recognize this.

To be clear, a ban on new ICE cars places a burden on the grid, no doubt, but in 10 years it should be doable in Cali if not easily so.

#44 happyrenter on 09.07.22 at 12:25 pm

Wouldn’t the real estate rally cry in August be solely attributed to the fact that people are trying to make the most of their ‘low’ mortgage approval rates – before the July hike…and now September? I thought we expected to see the effects of the July hike only in October?

#45 al on 09.07.22 at 12:26 pm

The sweet innocent days of September 2022 when the CB rate was only 3.25% and ppl got all bothered. Well revisit.

#46 HammockMan on 09.07.22 at 12:31 pm

Why does it have to be an M-word standoff? Why not just a standoff? People bring race into everything. Glad the rates popped though!

#47 Tom from Mississauga on 09.07.22 at 12:34 pm

BoC can’t stop now, the integrity of the institution is at stake. They should have started hiking spring of 2021 and are in hindsight now well aware of it. The next reform of this agency will be forthcoming.

#48 Faron on 09.07.22 at 12:35 pm

#39 Sail Away on 09.07.22 at 12:14 pm
#22 Faron on 09.07.22 at 11:29 am
#13 Sail Away on 09.07.22 at 10:58 am

Well. The reason, my dear ‘I want an answer and I want it right now!’,

First, asking questions is how discourse works. Otherwise it’s just blurting opinions. And, yes, asking a question usually implies that the asker wants an answer at some point. Unless it’s a rhetorical.

Second, thanks for answering. Honest discussions of strategy are helpful. I largely agree with your view and would add that there are markers of increasing stress globally that don’t bode well for equities. However, Market psychology (put/call ratio, positioning) is dour at this local low, so a small rally seems likely.

#49 Franco mazzuca on 09.07.22 at 12:36 pm

I believe a large contributing factor is the government defecits. They are a large portion of the runaway borrowing. If they reduced their spending sooner the central bank may not need to have raised rates so aggressively.

#50 Jason on 09.07.22 at 12:38 pm

So when will banks start raising rates on their savings products?

VRMs keep going up and up, but my “high interest”(sic) Savings Account still pays out the princely sum of 1.00%.
——————————————————-

Most FIs are offering GICs / Term Deposits that are cashable (i.e. redeemable with no penalty) after 30 days for significantly higher interest than savings accounts.

#51 Steven Rowlandson on 09.07.22 at 12:40 pm

Folks renewing their 2% mortgage for something higher were all over 18 to 21 and knew exactly what they were doing.
If they thought they can make someone else rich and get away with putting themselves behind the 8 ball then they are old enough to put it to the touch to win or lose it all if rates go up. If they bet wrong they can take the pain and disgrace for it. In the real life Monopoly game Canadians seem to be in love with some one has to win and some one has to lose.
Spectators get to watch the greater fools.

#52 Dr V on 09.07.22 at 12:46 pm

17 Chalkie

Paragraphs, please. Paragraphs.

#53 Ponnaps on 09.07.22 at 12:46 pm

Expecting sales to rise in the traditionally slowest time of the year with all of the rate headwinds. Fascinating!

PS – Garth, hope you arent being taken in by realtor spin

#54 crowdedelevatorfartz on 09.07.22 at 1:02 pm

@#40 Soren.
“Go to Herculaneum, ask the Archaeologists …”
+++
Sadly, as much as I’d like to see Faron book a flight and report back.
You’re closer.
Take pics.
Avoid the tap water.

#55 Dave on 09.07.22 at 1:03 pm

What does it take for HELOCs to not be interest only payments?

#56 Raj Marwa on 09.07.22 at 1:08 pm

DELETED

#57 Faron on 09.07.22 at 1:15 pm

#40 Søren Angst on 09.07.22 at 12:18 pm

[Puts hand gently on Soren’s shoulder] Bud, it doesn’t matter how many blogs you read, when you don’t grasp two very basic Geology 101 concepts (the construction of stratovolcanoes and drivers of sea level) you don’t have any grounds upon which to make geological claims. I know the Pleistocene and Holocene sea level records quite well. You are not right. You will only get support for your wackhjob bleating from other non geologists.

This has nothing to do with narrative, the MSM or whatever else you can dream up to try to discredit my correct view that you are out to lunch. Many meters out to lunch.

#58 Faron on 09.07.22 at 1:20 pm

#54 crowdedelevatorfartz on 09.07.22 at 1:02 pm
@#40 Soren.
“Go to Herculaneum, ask the Archaeologists …”
+++
Sadly, as much as I’d like to see Faron book a flight and report back

Wait, this sounds good. Oh man, Soren, can you buy me a ticket so you can show me the facshual facts? Winter please. I promise I won’t deke off to Sardinia to go surfing. I swear. Promise. 100% honest I won’t bring a wetsuit and board.

#59 Ponzius Pilatus on 09.07.22 at 1:22 pm

38 Søren Angst on 09.07.22 at 12:10 pm
#33 Faron

The only thing stupid here is people that do not know how to calculate the extra power strain EVs in the coming years will put on the existing power grid. I have shown calcs numerous times here.

Using 2018 grid data, the max number of Tesla 3s (avg EV) using surplus power in ALL OF CANADA would be 13M. 36M registered vehicles that year.

Where are your calcs? All I read is Lefty hot air balloon rhetoric and not much else from you.

To meet all EV vehicles by 2035 means Canada is short about 23 Hoover Dams at a min. total cost of $26B.

Think they’ll build that many by then?
————————
Relax Dolce,
I assume you drive a Moped like most Italiani.
I saw an electric Moped at a PNE exhibition.
Was 2,000 beaver dollars.
500 off as a PNE special.
Was tempted to buy one.

#60 Randy on 09.07.22 at 1:26 pm

yet the central banks hedge their bets and continue to buy gold https://www.msn.com/en-ae/money/news/central-bank-demand-for-gold-remained-robust-in-july-world-gold-council-says/ar-AA11xFTj

Qatar and India. Who cares? – Garth

#61 Ponzius Pilatus on 09.07.22 at 1:26 pm

#42 Caffeine Monkey on 09.07.22 at 12:24 pm
#3 Big Bear
“MAGA Trump supporters will take the house and Senate in November and he will have a deep deep pool of loyalists to help him clean the rest of the neocon hawks out next time around.”
——
While they’ve favored to win the House, they probably won’t take the Senate. In any case, I don’t see how Trump is going to do much of anything from a prison cell
——————
Haha,
Trump has more moves and tricks than Houdini.
He could just rule from a posh prison cell, like the Mafia bosses used to.

#62 Concerned Citizen on 09.07.22 at 1:27 pm

In my neck of the woods, home prices have stabilized at best. No sign of the 20% declines you’re talking about. Just my luck, I guess.

The Bank of Canada should be aiming for outright deflation in housing for a couple years at least. Housing remains simply unaffordable for most Canadians that don’t already own a piece of the pie. This is a disaster for social cohesion, mobility, and possibly social stability the longer it continues.

#63 Shawn on 09.07.22 at 1:31 pm

Wither inflation?

Curtailed borrowing (due to higher interest rates) means less money creation. Curtailed access to spendable cash.

Accelerated debt repayment (also spurred by higher interest rates) reduces cash in deposit accounts and so reduces the money supply and spendable cash.

Lower spendable cash means lower demand for just about everything and the laws of supply and demand dictate that this will cause price reductions on average.

So, watch for inflation to come down as intended by the Bank of Canada.

#64 Linda on 09.07.22 at 1:32 pm

So what i’m wondering is whether the most recent rate hike is an reflection on what the next official inflation numbers will be. Have to believe that if anyone gets the inside scoop on inflation it would be the BoC. September 20th is when the big reveal takes place.

#65 Pain on 09.07.22 at 1:33 pm

You shouldn’t use the S word Garth. As much schadenfreude as it is to have with those who foolishly over-extended against all good advice, the number of S’s will rise if rates must tighten to double digits to tame inflation.

Broken families, job losses, home losses, drug and alcohol abuse, domestic abuse, divorce are the foreseeable effects. Along with those S’s.

#66 Ponzius Pilatus on 09.07.22 at 1:45 pm

#61 Concerned Citizen on 09.07.22 at 1:27 pm
In my neck of the woods, home prices have stabilized at best. No sign of the 20% declines you’re talking about. Just my luck, I guess.

The Bank of Canada should be aiming for outright deflation in housing for a couple years at least. Housing remains simply unaffordable for most Canadians that don’t already own a piece of the pie. This is a disaster for social cohesion, mobility, and possibly social stability the longer it continues.
————————————
Agree.
The current move by the Central Bank is like “detox” to an addict which is harsh and painful.
After that the addict must undergo rehabilitation to rid the addict of the disease.
This process can be quite long, depending on the addict and the seriousness of the addiction.

#67 Bell Tell Us Rogers on 09.07.22 at 1:46 pm

The job losses of Biblical proportions are a myth and exaggerated

A large Big 3 cable provider shut down their warehouses which hired through an agency which paid minimum wage to mainly staff who were BIPOC and newcomers desperate for a job.

This was waaay before the 1% rate hike. They don’t lay off their executives though. Time for the guillotines.

#68 Confused on 09.07.22 at 1:58 pm

When they state average debt per consumer numbers in the media, what exactly do they consider to be a consumer? Is it everyone, including those with no debt whatsoever? Or is it just those consumers with outstanding debt? What I am getting at if my wife and I have no consumer debt and my best friend and his wife have no consumer debt, does someone else have 5x the stated average? I am willing to bet that you or one of your readers no the answer with possibly a bonus link to the explanation! Thanks all.

#69 AM in MN on 09.07.22 at 2:05 pm

The BoC needed (and needs) to save some credibility.

Going to need at least 3 or 4 similar moves to kill inflation and bring the value of the C$ back up, unless the Lib/NDP have a huge change of heart and allow the industrial economy to grow.

I think PP is having more effect than the Libs and elites want to acknowledge. Can’t wait for the show when he’s the Leader of the Opposition and gets first questions to grill the numerically challenged Finance Minister and the I don’t think (know) about monetary policy PM.

The other issue is the balance sheet, especially of GoC bonds. The BoC is indemnified by the GoC against the losses on the ones it bought during Covid. Now carrying that (unpaid) loss at $35B+ and counting. Is Freeland going to be honest and add that to the deficit this year?

#70 Waystar Royco Shareholder on 09.07.22 at 2:20 pm

Just wait until February 2023 when the RE boards release their YoY numbers. Listings will be way, way up by then, while YoY sales and prices will be absolutlely abysmal.

Looking forward to see the REALTOR ™️ positive spin in the MSM (“It’s just a small gully!”)

Happy Housing “Recalibration” Everyone!

#71 Nonplused on 09.07.22 at 2:25 pm

In the end of the day, interest rates are just one more thing nature don’t care about. It’s human behavior, that is all. Yes, low interest rates inspire people to borrow more, and high interest rates inspire people to borrow less. But houses, food, cars, and energy neither appear nor disappear as a result. I checked the river this morning after the rate rise and the water was still flowing. Prices may change, but that is the point. Prices are getting out of hand, which is distorting the relationship between labor and consumption. But again, prices are a human construct, so nature don’t care. We do though.

In theory, there is a zero boundary on interest rates where loan activity goes to infinity. This is because if you don’t have to pay any interest, if it costs zero to borrow, why wouldn’t you borrow everything and just never pay it back? The money is literally free! New houses, boats, fancy cars, dingle balls for the back of your truck, vacations, it’s all free!

On the other hand there is also an upper boundary on interest rates where the inability to finance new capital projects can retard economic growth. However we are nowhere near that limit.

So near-zero interest rates could not last because they implied near infinite loan carrying capacity, which in turn would lead to a near infinite rise in the money supply over time, causing prices to head for infinity. This clearly could not last. And as they say, “things that cannot go on forever, usually don’t”.

So let’s all stop whining that the average house in Canada is no longer going up in price by more than the average annual wage. Anyone who passed high school math, even “dot 3”, (10.1, 10.2, 10 “dot 3”) knew that couldn’t last. Sure, it was fun while it lasted, sort of like having an affair, but now it’s reconciliation time. Time to return to reality. The excitement and clandestine meetings are over, and it’s all divorce lawyers from here.

#72 AM in MN on 09.07.22 at 2:31 pm

Not sure how EV’s became part of today’s discussion, although the whole subject of energy use and production is vital to the economy in bigger ways most people have no idea about.

Here’s my two bits worth, as a Chevy Silverado man who might one day get a hybrid but never an all electric.

I make it my business to have a deep and intricate knowledge of how the power grid works and where the energy comes from. A particular focus on grid stability and resiliency. A secondary expertise on all of the different sources of energy that get converted into electric power and sent through the grid.

Making some good money these days selling electrical equipment for large battery projects in the deserts of California and Texas these days. They tend to be mounted along with large solar projects.

Just bid a new one outside of LA for 500MW x 4hr, a stand alone battery system using Lithium Phosphate batteries from China. Finishing a 700MW x 2hr at Edwards AFB in the Mohave that sits next to 5000 acres of solar (1000MW peak). Dozens of these jobs are on the drawing board.

At $2 natural gas, it was hard to make the case, separate from CO2 and tax credits. At $9 natural gas, there’s a land rush for component supply.

Eventually, the price signals will need to be incorporated such that it only makes sense to charge an EV when the sun shines (10AM – 2PM) or the wind is blowing at night, or there’s excess nuclear which doesn’t like to throttle down.

Note, in spring and fall on weekends California generates enough excess solar that it needs to send enough power north to power all of Seattle and Vancouver, at negative prices, and then buy it back in the evening for US$ 8c/kWh more, hence the price arbitrage for storage. Ontario Hydro used to pay Mich. and NY to take its excess power at night, but now it just blows steam into Lake Huron so that it doesn’t need to throttle back the reactors.

If the market is left to move on it’s own, it will move the way of more solar, storage and EVs. The technology is there to control smaller grids, no need for more high voltage transmission just to stabilize and balance, only if it needs to transmit bulk power.

It can and will develop like the internet on a region by region basis. Just need local pricing, not nationwide strategies.

The idiots that want to ban ICE cars in CA will have as much sucess as the UK is having in figuring out how to heat everyone’s home this winter after telling them they could do it with windmills.

People need and want reliable cost effective electric power and transportation. That exists now, so for politicians to take it away, well you get what you vote for.

#73 Pain indeed on 09.07.22 at 2:38 pm

#65 Pain on 09.07.22 at 1:33 pm

You shouldn’t use the S word Garth. As much schadenfreude as it is to have with those who foolishly over-extended against all good advice, the number of S’s will rise if rates must tighten to double digits to tame inflation.

Broken families, job losses, home losses, drug and alcohol abuse, domestic abuse, divorce are the foreseeable effects. Along with those S’s.

—————

Not my problem. Bring the pain.

#74 PBrasseur on 09.07.22 at 2:43 pm

Canadians still compensating with more debt… The long overdue correction hasn’t even started!

Honestly, the way things are going with Europe, China, crashing, emerging nations on the brink of default and of course the mega debt bubble in Canada I wouldn’t be surprised to see a recession lasting years.

Dear millennials, enjoy those 15$ margaritas while you still can ;)

#75 Winterpeg on 09.07.22 at 2:44 pm

Catching up on Summer blog reading.
Very sorry hear about your attack. Hope you are on the mend, Garth.
Re: the B & D posting a few days ago:
Cash, 1% (high-yield security)
Bonds (short term, floating rate, provincial, corporate), 26%
Preferreds (active Canadian, hedged North American), 13%
Canadian equities (TSX, dividend, 5% REITs), 22%
US equities (S&P hedged, S&P 500, small cap, value, biotech), 20%
International equities (global index, global dividend, emerging), 18%
Wondering why low U.S.equities? was this for a non registered account? Same mix for TFSA?
Thx

#76 wallflower on 09.07.22 at 2:54 pm

Tsawwassen Mills
Way cheaper than Toronto or Vancouver prices. I go there everytime I go to west coast. Do all my clothing shopping there.

#77 Broader Mind on 09.07.22 at 2:57 pm

Wow, BOC rate 3.25, 5 year bond yield 3.23 and dropping. This doesn’t pass any smell test possible. Massive manipulation and totally unsound policy. I guess budgets really can balance themselves if you cheat.

The government, or the CB, do not set bond yields. What ‘manipulation’ are you hallucinating about? – Garth

#78 Cash is King on 09.07.22 at 3:11 pm

People in Canada need to start getting real. If you are 85 or 90 do you really need to live in 2200 square feet with 3 bathrooms???

What does age have to do with it? Old people don’t deserve space? – Garth

#79 Dr V on 09.07.22 at 3:14 pm

59 Ponz

“Relax Dolce,
I assume you drive a Moped like most Italiani.
I saw an electric Moped at a PNE exhibition.
Was 2,000 beaver dollars.
500 off as a PNE special.
Was tempted to buy one.”
———————————————————–

E-mobility devices create another tier of transportation which our infrastructure is not designed for. Faster than many Human-powered cycles, but slower than the typical motor vehicle. They also add congestion to
existing bike lanes.

https://www.nytimes.com/2021/10/11/nyregion/electric-scooters-bikes-new-york.html

I am not against e-bikes when used by experienced
cyclists, but many e-bikers and mobility device users have no experience with traffic of any kind.

I have not ridden my bike in Italy, but my friend has, and he says it was great. You get a certain amount of respect, in turn you have to know what you’re doing.

#80 Dr V on 09.07.22 at 3:20 pm

55 Dave

“What does it take for HELOCs to not be interest only
payments?”
—————————————–

When the bank says so.

HELOC is a demand loan and can be called at any time.
Historically the banks have not done so if they are confident you can make the interest payment. With the rate increases, this could all change.

#81 Love_The_Cottage on 09.07.22 at 3:26 pm

#20 Victor Llearna on 09.07.22 at 11:24 am
If rates go up enough stupid sheep that bought in last 2 years won’t be able to renew their mortgages and be forced to sell cheap. for now that isn’t happening, but in 5 years there has to be wave of sheep flocking to the exits.
_________
History shows us this rarely happens. People will cut back on other expenses before selling. Banks will restructure loans to continue payments. Sounds like from your repeat of the word sheep this is what you are HOPING will happen. This will be painful for those who are living pay to pay, but selling is rarely the answer.

#82 crowdedelevatorfartz on 09.07.22 at 3:29 pm

@#78 Cash
“If you are 85 or 90 do you really need to live in 2200 square feet with 3 bathrooms???”

+++
At that age your bladder is the size of a pea.
The more bathrooms the better.

#83 We protect dogs, not the other way round on 09.07.22 at 3:31 pm

To anyone thinking of having a dog as a protector, I urge you don’t. Any dog that attacked someone may end up being destroyed. The police and the animal shelters take a dim view of dogs that are used for this purpose, and rightly so.

I do not ever want to put a dog at risk. In a fight with a human, there is a very real possibility that the dog may be hurt and afterwards, the dog may be seized because it is seen as a threat. It is not fair to the dog.

Now cats, that is a different story. An attack cat can be easily carried, it can be concealed in a bag, under your hat, or inside your jacket, and it can be thrown at your attacker with vicious effect. Cats are natural born killers and will happily dispense of anyone that threatens their food provider. That Bicycle Bum would have been sent screaming into the night if only Garth had had an attack cat.

Or a donkey – talk about lethal, a donkey can rip an attacker limb from limb. They are used to protect herds. Imagine that, an ass used to beat another ass. Poetic justice.

#84 Brian on 09.07.22 at 3:34 pm

I have a friend who use to work for Ontario Hydro. His job was to monitor the base loads on the system. His lasy few years he was counting the days until retirement. He said before the push for green energy is was easy to adjust the loads of either exporting or importing electricity as temperature changes affected the use. When wind turbines and solar panels arrived it was a huge headache due to cloudy or low wind days. He is now retired and does not miss the stress of the past few years!

#85 Kat on 09.07.22 at 3:51 pm

Garth,

Real estate is now experiencing what I would consider a bull trap. Price increased with a deep decline to follow. Would be great if you could go over the the bull trap cycle as if relates to the Canadian real estate market

Kat

#86 Ballingsford on 09.07.22 at 3:53 pm

#78 Cash is King on 09.07.22 at 3:11 pm
People in Canada need to start getting real. If you are 85 or 90 do you really need to live in 2200 square feet with 3 bathrooms???

What does age have to do with it? Old people don’t deserve space? – Garth
******
Yes, when we get that old and even before then, the more washrooms the better. Bladder isn’t what it used to be when young.

#87 Bob on 09.07.22 at 4:07 pm

What does age have to do with it? Old people don’t deserve space? – Garth

I believe his point is that they don’t need the space. Meanwhile, families with multiple children are crammed into two bedroom apartments. (Yes, I personally know a few.) This is a classic market failure (and also a flagrant violation of human rights).

That’s funny. Maybe people “with multiple children” should be a tad more careful about their choices. And no, a house is not a human right. – Garth

#88 PeterfromCalgary on 09.07.22 at 4:14 pm

Higher for longer is what the central banks seem to be messaging. They will keep raising rates until inflation goes down and keep the rates at that plateau indefinitely.

#89 Epic Rug Pull on 09.07.22 at 4:17 pm

So let me get this straight… They cut rates to zero and kept them there for years, got everyone snorfled in cheap debt up to their eyeballs, now they jack up rates!!!

Hahahaha suckers!!!

#90 SW on 09.07.22 at 4:32 pm

Houses are still moving in Burlington where I’m from where the average detached is still well over 1 mill. Burlington has some affluence but mainly middle class. Who in their right mind would want a million dollar mortgage and pay a minimum 60k/year just in interest even if the average Joe could come up with 500k for a down payment? Crazy and a waste of money. Canadians are funny people.

#91 Johnny Canuck on 09.07.22 at 4:35 pm

# Big Bear
Buckle up… MAGA Trump supporters will take the house and Senate in November and he will have a deep deep pool of loyalists to help him clean the rest of the neocon hawks out next time around.
……………
You wish. With all the damage he’s done to his country, he should go straight to jail. Trump will be wearing a suit with horizontal stripes in the near future.

#92 NOSTRADAMUS on 09.07.22 at 4:35 pm

THIS IS YOUR CAPTAIN – MAN THE LIFEBOATS!
I think a lot lot highly leveraged speculators are somewhere between hitting an iceberg, panicking, and running for the lifeboats. “GET OUTTA MY WAY.” Forget the women and children, it’s no time to be acting foolish, it’s every man for himself. Whoa! the lifeboats are gone. Look, the bankers are rowing away, hard. Another life lesson, he who panics first, panics best. Oscar Wilde,” When I was young I thought that money was the most important thing in life, now that I am old I know that it is.” Are you not entertained?

#93 Caffeine Monkey on 09.07.22 at 4:44 pm

#3 Big Bear “Mike Pompeo, and John Bolton betrayed Trump the first time around.”

And who appointed these traitors? There’s DOZENS of them. I’ll give you a hint: he told Americans that he’s great – the BEST! – at hiring people.

#94 Ordinary Blog Dog on 09.07.22 at 4:44 pm

I do not understand why so many believe silly things and disbelieve real things. I use Garth’s blog to confirm my thoughts (and others ideas) so as to keep me in the know. Garth also has context to add which is invaluable. I do not recall Garth being erroneous – if he does not know he tells you. I appreciate Garth’s willingness to proffer this info, and trust his judgement. I am amazed people want to critique him who: have no credentials, are not in
the business, do no research, do not read other credible articles … etc. I think some just write silly things to create controversy. So – CB’s all over will raise rates to combat inflation. These rates will affect other stuff … as Garth has told us. And Garth, hope you are getting over your recent attack. Best wishes to you and Godspeed with any recovery you need.

#95 Ponzius Pilatus on 09.07.22 at 4:48 pm

#79 Dr V on 09.07.22 at 3:14 pm
59 Ponz

“Relax Dolce,
I assume you drive a Moped like most Italiani.
I saw an electric Moped at a PNE exhibition.
Was 2,000 beaver dollars.
500 off as a PNE special.
Was tempted to buy one.”
———————————————————–

E-mobility devices create another tier of transportation which our infrastructure is not designed for. Faster than many Human-powered cycles, but slower than the typical motor vehicle. They also add congestion to
existing bike lanes.

https://www.nytimes.com/2021/10/11/nyregion/electric-scooters-bikes-new-york.html

I am not against e-bikes when used by experienced
cyclists, but many e-bikers and mobility device users have no experience with traffic of any kind.

I have not ridden my bike in Italy, but my friend has, and he says it was great. You get a certain amount of respect, in turn you have to know what you’re doing.
——————-
Mopeds have been around forever in Europe.
And in Asia, I think.
When I was 16, I had an older friend who had one.
They usually are 2-seaters.
Great fun, even on the back seat.
The girls liked it, 
I was  in Sorrento, Italia, when the Azzuri  won the soccer Worldcup.
It was crazy.
The whole city was full with Mopeds with the Italian Flag racing through the narrow cobble stone streets.
I know it takes skill, but also reckless bravado.

#96 Chimingin on 09.07.22 at 4:49 pm

#87 Bob

Hahahaha, Bob thinks a walk-in closet is a human right. What a sense of entitlement, sucka!

PS – Garth, I am sorry you were essentially mugged for your space to exist as a human being. These are weird days.

#97 The real Kip (Ret) on 09.07.22 at 4:49 pm

The puny little rate hike will do nothing but encourage more borrowing. Bank rate is still below inflation, it’s still free money.

#98 Gen Z realist on 09.07.22 at 4:54 pm

A few butt hurt wannabe landlords and specuvestors got deleted or what?

Check PFC Reddit lots of whiners who bought in the 2021 and early 2022 prices.

#99 Bob on 09.07.22 at 4:57 pm

That’s funny. Maybe people “with multiple children” should be a tad more careful about their choices. And no, a house is not a human right. – Garth

That’s right. All those people I mentioned are ne’er-do-wells who made bad choices in life. None of them are stuck due to unaffordable housing. And while a house isn’t a human a human right adequate housing is. And that means (among other things) adequate space.

#100 You know Val on 09.07.22 at 5:04 pm

Pain is pain…lethal or not…it hurts

#101 Big Bear on 09.07.22 at 5:05 pm

#3 Big Bear “Mike Pompeo, and John Bolton betrayed Trump the first time around.”

And who appointed these traitors? There’s DOZENS of them. I’ll give you a hint: he told Americans that he’s great – the BEST! – at hiring people.

Wilbur Ross and Jared Kushner would have told Trump to keep his friends close and his enemies closer.

Same reason Obama put Hillary in at Foggy Bottom

The swamp was (and still is) deep

Mid terms will bring new faces.

There are no good guys… just bad choices

#102 Left GTA on 09.07.22 at 5:05 pm

Holy I had to go back 2 days because I missed the post on Garth getting beat up!! CRAZY. Sorry to hear that. Hope for a speedy recovery for you. Just awful. My kid is a dog trainer they train mostly GSD’s for family protection. We have 2 GSD’s best decision ever! Message me if you ever plan to get one.

As for the BOC good on them I hope inflation is slowed down real soon. As for those who live off their HELOC to buy all their toys… I don’t feel sorry for them. And you know its a large percentage of people as I am surrounded by $90,000 suvs daily and have no idea who exactly can afford these… because they can’t.

#103 Squire on 09.07.22 at 5:16 pm

Wow, the comments. I have a right to own a home, you have to go give it to me. Kick the old people out, they are useless because I want that house they have. OMG, talk about psychosocial issues with some people.

#104 crowdedelevatorfartz on 09.07.22 at 5:16 pm

@#99 Bob
“And while a house isn’t a human a human right adequate housing is. And that means (among other things) adequate space.”

+++

I worked with a guy with 7 kids.
Born again Christian.
Always broke with his small army of mouths to feed.
Went in and told the boss he needed a raise to be able to afford his kids.
“Maybe you shouldn’t have had so many kids.”
“It’s Gods will”.
“Then ask God for a raise…..”

#105 Stoph on 09.07.22 at 5:17 pm

#72 AM in MN on 09.07.22 at 2:31 pm

————————–

How much has the price of battery storage come down in recent years? Is it mainly a matter of the tech maturing and then taking advantage of economies of scale to bring the price down some more? Or is a completely different battery tech needed to make it significantly cheaper?

Cheers

#106 jess on 09.07.22 at 5:31 pm

Garth ,
I would like to express my concern regarding your recent unfortunate aggressor. Have you ever heard of this?
https://www.cbc.ca/radio/day6/kiwi-farms-online-forum-1.6565229

#107 Mattl on 09.07.22 at 5:36 pm

BMO economists have said a whole lot of what our central bankers do depends on whether or not the housing market finds a price floor – as Ingram and Re/Max are now suggesting. If sales climb higher (happening) and prices begin to stabilize (also occurring) the Bank of Canada will be forced to raise the cost of money again twice more before the end of 2022. Realistically, that would push the chartered bank prime to 6%.
——————————————————-

You’ve been pretty clear on these pages that Central’s don’t care about housing prices. You’ve responded verbatim to me, “why would the BOC care about RE?”. The above seems to contradict that. Why is the BOC tracking to housing prices when their mandate is the inflation rate? Are they also tracking equity markets?

This is why a lot of us think the Centrals are a joke. The time to cool housing markets was more then a year ago.

#108 Elon Musk on 09.07.22 at 5:38 pm

They said people were 200 dollars away from insolvency. It was bs. People had places to hide.

The recession hits in the first quarter of 2023.

Home values are tanking.

No more places to hide.

And once the job market goes into cardiac arrest, the bottom is in.

First half of 2023. And it is going to be a whopper.

#109 under the radar on 09.07.22 at 5:53 pm

Very few new deals coming in. My title searcher is crying as he has no work. Inflation and the increasing cost of debt service is making it difficult for the middle.
I noticed a lot of young people lined up at a food bank on College Street. Hard times are here for a lot of folks.

Good fortune has come to me and I will be paying off my brothers mortgage this month. He struggles and I can’t ignore it. He does not know what I am doing .

#110 AM in MN on 09.07.22 at 5:55 pm

#72 AM in MN on 09.07.22 at 2:31 pm

————————–

How much has the price of battery storage come down in recent years? Is it mainly a matter of the tech maturing and then taking advantage of economies of scale to bring the price down some more? Or is a completely different battery tech needed to make it significantly cheaper?

——————————————————

It’s coming down. The newest Chinese ones are about US$150k/MWh for the batteries, then add at the converters, transformers, switchgear, project costs etc., let’s say $300k/MWh installed. Good for a 4hr cycle once per day at about 80% eff.

The main competitor would be a simple cycle gas turbine at about $500k/MW.

One plays an arbitrage market, one pays for natural gas, but both supply power at the most expensive times of the day, from about 3PM to 7PM.

Gas turbines often add a secondary steam cycle made from the exhaust, called combined cycle, when they run base load. This takes the eff. up from about 40% to the mid-50’s, depending upon the ambient temp. Both max output and efficiency go way down on hot days.

They are nameplated rated for 15 deg.C ambient, but the grid really needs power at 40 deg+, so a better comparison is the rating at that temp. Batteries are air conditioned, so just some small aux load increase that takes away from the rating. These are being mounted in the desert at 50 degC ratings.

Neither needs water (in simple cycle mode), which is a big advantage over steam systems (coal, nuclear, combined cycle). The power generation industry consumes huge amounts of water.

The big advantage with batteries is that they don’t need to be large systems. They can be flexibly installed in the distribution grid down around 5-10MW, and sited where it makes sense. The big problem is that the utilities don’t have people that can deal with what’s coming.

This is much like the transition from analog to digital in the phone system. It allows for decentralization, which is and will be fought tooth and nail by the utilities and other vested interests (Power Workers Union!).

It’s a big subject, more later.

#111 jess on 09.07.22 at 5:56 pm

NEW YORK (Reuters) – The $258 billion racketeering lawsuit accusing Elon Musk of running a pyramid scheme to support the cryptocurrency Dogecoin has expanded, adding seven new investor plaintiffs and six new defendants including his tunnel construction business Boring Co.

According to an amended complaint filed on Tuesday night in Manhattan federal court, Musk, his electric car company Tesla Inc, his space tourism company SpaceX, Boring and others intentionally drove up the price of Dogecoin more than 36,000% over two years and then let it crash.

By doing so, the defendants “profited tens of billions of dollars” at other Dogecoin investors’ expense, while knowing all along that the currency lacked intrinsic value and that its value “depended solely on marketing,” the complaint said.

#112 The Guillotine is God on 09.07.22 at 6:00 pm

The real trouble will start when banks start changing loan parameters in response to falling prices…especially when some of their loans begin to sink underwater vs appraisal and nearby sale values. The banks are doing the same in commodity finance in response to volatility – paring back loan books. When you see this in response to falling home prices, that is when things will really become interesting.

#113 ogdoad on 09.07.22 at 6:01 pm

Pain Therapy, eh? Connecting with loved ones….RICE…V-Star…smile hunting…distracting my PFC *Og (little blues help…) and laughing.

That’s good for a start. Phase two involves hugging, btw…and fault shifting.

Og

#114 Wrk.dover on 09.07.22 at 6:02 pm

I gave that dog’s great great grandmother a good home.
She thought I was a very nifty guy. Man I miss that era.
We travel way too much to house a dog, since marriage.

A real treat to see that photo!

#115 Gregor on 09.07.22 at 6:17 pm

We sold our house in mid summer.
We plan to rent for the next 6 to 18 months, depending on what inflation and the BOC rate do.
We may need the cash for a home purchase at any time, we are now cash buyers.
Question – where should we keep the cash in the meantime?

#116 Cash is Kinger on 09.07.22 at 6:21 pm

#78 Cash is King

People in Canada need to start getting real. If you are 85 or 90 do you really need to live in 2200 square feet with 3 bathrooms???

What does age have to do with it? Old people don’t deserve space? – Garth

We’ll have to work on Garth. I think it’s recency bias. Just because boomers have squandered big space until now doesn’t mean they should in future.

I’ve long said we need about 350sqft to live each. In my street alone almost all homes are occupied by 2 individuals 65+ in years – so around 1,250sqft minimum per. Most of them sit in one room all day.

Young families need the space and it’s not meaningful for them to spend hours commuting each day into the office while oldies in West, North and South Van sit on all the space in their retirement years.

Let’s keep the system moving. Perhaps energy costs will be the straw which breaks their back.

Envy and jealousy are blinding emotions. You should work on that. – Garth

#117 Ballingsford on 09.07.22 at 6:59 pm

#117 Quintilian on 09.07.22 at 6:26 pm
“The government, or the CB, do not set bond yields. What ‘manipulation’ are you hallucinating about? – Garth”

Garth, did you actually write the above?

Is that not like saying “drunk drivers don’t kill-cars do.

I hope that made sense on your planet. – Garth

******
That was funny Garth! I am an old guy sitting in a Tim’s parking lot having a coffee and it made me want to pee after I read it. And there’s no washrooms close enough. They should have 2 or 3 in the parking lot. Or, more bushes.

#118 jim on 09.07.22 at 7:01 pm

@ #52 Dr V

Yes…I scroll right by them…too long

******

Good move by the BoC…but still not there yet…a lot of people out still spending money…mall was full

#119 Linda on 09.07.22 at 7:16 pm

Laughing my head off at these commenters who are pointing the finger at those old folks living in huge spaces. Has anyone thought about how much room walkers, wheelchairs etc. might take up? Or the fact said oldsters worked like dogs to get what they now occupy? Oh, they ‘only’ paid $5K for those digs? Yes – but they also ‘only’ made about $100 per week working full time. Plus usually had at least two & usually 3-4 kids.

Yes, envy raises its head. And said crowded families can fork out the $ to buy said 2,200 square foot space – or not. I also laugh at the story of woe. Growing up, I shared a room with at least 2 or 3 others right up until I left home. We had exactly 1 bathroom for a family of 7 & the house was under 1000 square feet. When I was ‘on my own’ I shared space with up to six others – we could afford a place to live that way. Yeah, it sucked but pretty much everyone I knew lived the same way. Having a place to oneself was rare. Note I’m talking rentals, not owned houses. Owning a place was a whole different ball game.

#120 Reese on 09.07.22 at 7:43 pm

Bank of Canada interest rates are still too low, 3.25% peanuts. It should be minimum double that 6.5%. Inflation will be here for awhile because they interest kept rates too low and government spending too high.

#121 jess on 09.07.22 at 7:48 pm

neobank online only promoted by regulators and gov.

competition , high interest rates , inflation is blamed

https://www.reuters.com/business/finance/australias-first-neobank-volt-shut-deposit-taking-business-return-licence-2022-06-29/

======
Nice Tuan

Company: Nice Tuan

Select VC investors: Alibaba Group, GGV Capital, DST Global

Total disclosed funding: $1.2B

“As it expanded into small towns, costs rose disproportionately. Goods were sold at below cost to entice customers. Fake buyers appeared at the end of each month to meet sales targets. Regulators were alarmed.

https://www.cbinsights.com/research/biggest-startup-failures/

#122 Don Guillermo on 09.07.22 at 7:49 pm

Meant to post this today

#59 Sail Away on 09.06.22 at 8:21 pm
It’s irritating that the truly great self defense tools are illegal in Canada. Two of the best are an extendable spring baton and tazer. But nope- illegal. So what’s allowed? A knife. More dangerous. Goofy rules.
@@@@@@@
I purchased a 16″ collapsible police force tactical baton on line 3 or 4 years ago to bring to Mexico. Before the Ponze gets too excited no it wasn’t for fighting off those evil Mehican banditos. I go for hikes 3 or 4 times a week and have been occasionally challenged by aggressive dogs. I’ve never had to use it but it makes me feel better.

#123 Tom on 09.07.22 at 7:49 pm

Believe it or not while meeting [email protected] today, she was shocked that the boc raised rates. Seriously. She thought it would be unchanged. How is this possible!?!??

Also, can we move a mortgage to another property we own? She didn’t know
How much is the penalty to break our mortgage? She knew that because she looked it up in the system but when I asked how it’s calculated? Doesn’t know

Oh, and pro tip- Mexican standoff is probably racist so watch it

#124 Unpinned on 09.07.22 at 7:49 pm

Quebec Premier Legault and party chief of the CAQ has laid a pickle today by commenting on immigration and the violence and extremism it could invite into “la belle province”. The CAQ’s solution is to limit immigration to Quebec to under 35,000 per year. Other Quebec crowding is in health care and housing where both are in short supply for the population so it is meaningful Premier Legault faults immigration because he has yet not located a fix for shortage of housing and health care workers.

#125 COW MAN on 09.07.22 at 7:51 pm

Never Trust a Central Bank for investment advise:

On July 15 2020 Tiff Macklem reassured home buyers not to worry about rising rates. This is covered in the following article. So far this year he has raised interest rates from .25 to 3.25 in nine months. That is 1300 per cent.

“Bank of Canada Governor Tiff Macklem assured Canadian households and businesses that borrowing rates will remain at historic lows for the foreseeable future.
“Our message to Canadians is that interest rates are very low and they’re going to be there for a long time,” Macklem said at a press conference Wednesday.
His comments came after the central bank announced it is holding its key interest rate at 0.25 per cent in response to what it calls an “extremely uncertain” economic outlook due to the COVID-19 pandemic.
“If you’ve got a mortgage of if you’re considering making a major purchase, or you’re a business and you’re considering making an investment, you can be confident rates will be low for a long time,” Macklem said.
The Bank of Canada’s July Monetary Policy Report (MPR) said growth will pick up beginning in this quarter, the third of the year, with the country recouping about 40 per cent of the drop in output from the first half of 2020.
Much of that will be driven by the reopening of businesses and partial rebound in spending, the bank said.
But after an initial, quick bounceback, Canada will enter what the bank calls a “recuperation phase” where the pace of recovery will slow.
“As reopening progresses, many people will probably continue to fear contracting the virus, and uncertainty about job security is likely to persist,” the report said.
“Both consumer and business confidence are therefore expected to remain subdued, restraining spending and employment, particularly in activities that involve in-person interaction.”
—With files from The Canadian Press

#126 Wrk.dover on 09.07.22 at 7:51 pm

#109 under the radar on 09.07.22 at 5:53 pm
Good fortune has come to me and I will be paying off my brothers mortgage this month. He struggles and I can’t ignore it. He does not know what I am doing .
_________________________________
If he doesn’t thank you, I do. Not enough people think like you! Good deal.

#127 Flop… on 09.07.22 at 7:57 pm

Probably a bad time to ask my brother for a loan…

M48BC
———————————————————-

“Aussie homeowners paying 29 per cent more now than five months ago.

One in four Aussie homeowners struggled to cover their repayments last month, and the latest double rate hike is only going to increase the pressure on the hip pocket.

Research by comparison website Finder has revealed Aussies will now be paying 29 per cent more on the average mortgage than they were in April, which equates to $3528 a month (up from $2727 in April) after the Reserve Bank of Australia (RBA) lifted the official cash rate 0.5 percentage points to 2.35 per cent this afternoon.

Annually, the average increase to mortgage repayments is $9608.”

Aussie state broking manager Karen Sorrenti said it was a stressful time for borrowers, adding that a “staggering number” had not taken any action since rates began to rise.

“Our latest research shows almost one in five Australians (18%) with mortgages are dealingwith ‘significant mortgage stress’, and a further four in five (81%) confirmed the rising cash rate and upward cost of living is a growing reality, placing unwanted tension on their household,” she said.

https://www.realestate.com.au/news/aussies-homeowners-paying-29-more-now-than-five-months-ago/?rsf=syn:news:nca:hs:spa

#128 Stoph on 09.07.22 at 8:30 pm

#110 AM in MN on 09.07.22 at 5:55 pm
—————–

Thanks for the informative post.

No doubt that there’s money to be made on the solar and battery storage front.

Times are very interesting indeed. I’m interested to see if distributed generation (ie. solar panels on people’s roofs + a power wall in their garage) will take off.

#129 TheDood on 09.07.22 at 8:35 pm

#81 Love_The_Cottage on 09.07.22 at 3:26 pm
#20 Victor Llearna on 09.07.22 at 11:24 am
If rates go up enough stupid sheep that bought in last 2 years won’t be able to renew their mortgages and be forced to sell cheap. for now that isn’t happening, but in 5 years there has to be wave of sheep flocking to the exits.
_________
History shows us this rarely happens. People will cut back on other expenses before selling. Banks will restructure loans to continue payments. Sounds like from your repeat of the word sheep this is what you are HOPING will happen. This will be painful for those who are living pay to pay, but selling is rarely the answer.
________________________________________

I question whether history is a good measuring stick this time around. RE has never cost this much before, and the salary/price ratio gap hasn’t been this high either. The numbers who’ve bought overextended on cheap credit probably number in the tens of thousands. Nobody knows what will happen, but the debt related circumstances have never been in this territory. I think this time around, cutting back on expenses won’t be enough.

#130 Joking aside on 09.07.22 at 8:43 pm

“ Makes you wonder what carnage would happen if a generation ever faced 18% mortgages. Oh wait…”

Mock all you want but when Volcker raised the fed rate to 20% in 1980, the US Debt-to-GDP Ratio was 32%. The generations dealing with this back then had it quite easy.
It is expected to reach 138.10% of GDP by the end of 2022.

All young people crave is a condo. Maybe we should talk about that. – Garth

#131 Nonplused on 09.07.22 at 8:56 pm

I shouldn’t really comment on Trump because it causes meltdowns, but the number of psychics and mind readers today and lately compels me to:

Do you really thing that after 7 years of investigations that have turned up nothing they finally got something substantial? That “the walls are finally closing in”?
He’s the most investigated president, and perhaps person, ever in history. So far, nothing.

Do you really think Trump would take stuff that would be criminal for him to possess and store it at his home? He had to know the FBI was coming. Not “if” but “when”.

Whether you want to see him in jail or not, you might want to reflect on the success rate so far. So far nothing has stuck to “Teflon Don”, and it isn’t for lack of trying. And some of the stuff like the “Russian collusion” allegations turned out to be outright hoaxes.

Here is a partial list of MSM propagated Trump related hoaxes perpetrated by the media over these last 7 long years. See how many you still believe:

https://twitter.com/scottadamssays/status/1545929648600596481

If you still believe 3-5 of these stories then you are suffering from MSM overconsumption, and you need to cut back. More than 5 and you have TDS. If you believe all 12 you are clinically insane.

Ya, Trump is an awful human being, no doubt. It would be best for everyone if he did not run for president again. But we may as well get used to the idea that he might not go to jail. If they start throwing ex-presidents in jail for mishandling “documents” that’s the end for US democracy, and indeed for the republic too. Even if you hate him.

#132 Ohm on 09.07.22 at 9:06 pm

Another good move to up the rates. I would like to see it between the 6 to 7 % range; whether that would happen all depends but it would bring a whole lot of stability in the longer term.

Those of you still pushing EV’s give your head a shake…

#133 crowdedelevatorfartz on 09.07.22 at 9:14 pm

33,000 BCGEU workers will now vote on their new contract.
1st year : 3.25%
2nd year: tied to inflation (5.5% to 6.75% max)
3rd year: 3.5%
Potentially about 13% over 3 years.
The Hospital Employees union (HEU) is negotiating the same agreement.
This sets the standard for 400,000 BC Govt employee unions.
Cost to taxpayers?
The low end of the agreement
11.5% increase = $8.7 billion over 3 years
13% increase = $10.6 billion over 3 years.

Taxes goin uppa uppa uppa.

#134 Good advice on 09.07.22 at 9:18 pm

DELETED

#135 Pylot Project on 09.07.22 at 9:26 pm

#46 HammockMan on 09.07.22 at 12:31 pm
Why does it have to be an M-word standoff? Why not just a standoff? People bring race into everything.

#123 Tom on 09.07.22 at 7:49 pm
Oh, and pro tip- Mexican standoff is probably racist so watch it.

===

I was going to leave this alone, but since two woke-sters needed to make a comment, I will rebut their statements.

Mexican is not a race or an ethnicity. It’s a nationality. Garth’s words are no more offensive than saying Canadian Standoff.

Perhaps watch The Good, The Bad and The Ugly.

#136 RE: Joking Aside/Garth on 09.07.22 at 9:36 pm

#130 Joking aside on 09.07.22 at 8:43 pm
“ Makes you wonder what carnage would happen if a generation ever faced 18% mortgages. Oh wait…”

Mock all you want but when Volcker raised the fed rate to 20% in 1980, the US Debt-to-GDP Ratio was 32%. The generations dealing with this back then had it quite easy.
It is expected to reach 138.10% of GDP by the end of 2022.

All young people crave is a condo. Maybe we should talk about that. – Garth

—-
Ok, let’s talk. Today’s young people are no different from those of the last 5 decades when it comes to their share of (or desire for) homeownership.

“ There is a strong regularity in the age profile of homeownership across generations of Canadians that is evident in data from Canadian censuses of population conducted between 1971 and 2006. Homeownership rises quickly with the age of household maintainers in the period before the age of 40, and continues to climb thereafter at a slower pace until reaching the plateau near retirement age. The homeownership rate changes little in the early years of retirement but starts declining in a person‘s late 70s. Thus the majority of seniors continue to receive the services associated with homeownership for more than 10 years after the age of 65.” [1]

What’s different however is the affordability of a dwelling. It has never been worse than know. There is enough blame to go around and older generations have contributed to this handsomely.

Let’s cut the kids some slack. We are no better.

[1]
https://www150.statcan.gc.ca/n1/en/pub/11f0019m/11f0019m2010325-eng.pdf?st=4qH6P6sQ

#137 Shawn Allen on 09.07.22 at 9:40 pm

COW MAN criticizes the Bank of Canada for having a cloudy crystal ball but COW MAN can’t do grade 4 math.

Tu wit:

#125 COW MAN on 09.07.22 at 7:51 pm

Never Trust a Central Bank for investment advise:

On July 15 2020 Tiff Macklem reassured home buyers not to worry about rising rates. This is covered in the following article. So far this year he has raised interest rates from .25 to 3.25 in nine months. That is 1300 per cent.

************************************
Actually, as Garth already pointed out above it’s a 1200 percent gain.

The formula is end value divided by beginning value minus 1 and times 100%. You have to subtract 1 for the initial value. For example when a price doubles that’s a gain of 100%, not 200%.

Lesson: Never trust a random blog dude when it comes to even simple math?

#138 crowdedelevatorfartz on 09.07.22 at 9:41 pm

Canadian Health “Care”
29% of Canadians report “chronic difficulty” accessing healthcare.
34% of British Columbians report “chronic difficulty” accessing healthcare.
6% of Americans report dissatisfaction with healthcare.
24% of Canadians report dissatisfaction with healthcare.

Our National Health “care”…. is…. broken.

#139 Warren-the-lagging_indicator on 09.07.22 at 9:42 pm

Way to go ‘under the radar’, I just know that is real. That is awesome, man. It makes me happy.
Now, if you dolts can stop with the whole freeze the Europeans thing that would be great.

#140 DJT on 09.07.22 at 9:59 pm

EVs – Government controls electrical power distribution and business controls gasoline distribution.
See where this is going?

#141 Kato on 09.07.22 at 10:16 pm

#99 Bob on 09.07.22 at 4:57 pm
That’s funny. Maybe people “with multiple children” should be a tad more careful about their choices. And no, a house is not a human right. – Garth

That’s right. All those people I mentioned are ne’er-do-wells who made bad choices in life. None of them are stuck due to unaffordable housing. And while a house isn’t a human a human right adequate housing is. And that means (among other things) adequate space.
‐—————

Define adequate. My mother grew up without running water and sharing a room with 2 siblings. She’s doing okay. I shared a room with my brother for many years. Didn’t feel my human rights were trampled.

If there is a set sqft requirement per human I haven’t seen it. And not to speak for Garth but I think he was hinting that we choose how many kids we have. If I bring home 6 dogs I won’t get a lot of sympathy if I complain that my house is full of dogs.

#142 Carla on 09.07.22 at 10:16 pm

Off topic, but I hope you’re feeling better, and on the mend, Garth. Been praying for you, as well as Dorothy and Nova. May your spirit remain whole despite what happened a couple of days ago.

#143 Nonplused on 09.07.22 at 10:17 pm

#135 Pylot Project on 09.07.22 at 9:26 pm

“Mexican is not a race or an ethnicity. It’s a nationality. Garth’s words are no more offensive than saying Canadian Standoff.”

How do people who speak Mexican communicate with people who speak Spanish?

And what the heck is a “Canadian Standoff”??? I have images of Bob and Doug Mackenzie doing their SCTV show on the railroad tracks. Either that or maybe it involves 18 wheelers. Maybe Bob and Doug in an 18 wheeler. Full of beer.

#144 Nonplused on 09.07.22 at 10:22 pm

Joke time:

“Q: What do you call a Californian Tesla owner? A: A pedestrian!”

Does anybody know what the towing capacity of a Tesla is? I figure you get yourself a utility trailer with a 50 kW generator on it and problem solved.

#145 David on 09.07.22 at 10:22 pm

Good Evening Mr. Turner,
This is not intended as a comment but rather an effort to seek advice.
My wife passed away in February this year.
She had/has an RRIf and TFSA account with RBC for many years.
After much hassle I forwarded to RBC all the documentation they requested which they confirmed receiving. Her Death Certificate, her last Will and Testament, Her RRSP and TFSA beneficiary designations and my RRIF and TFSA account numbers which accounts are also with RBC.
Bottom line they refuse to transfer the securities in kind to my accounts.
They say because the value is over $50,000 their policy insists on probate. If the value was less than $50,000 they would pay it out.
My lawyer says this is ” Wrong!”.
However they still refuse to transfer the funds.
Is this what senior citizens who are grieving the loss of a spouse are now to be subjected to?
Do I now need to retain the services of a lawyer to compel RBC to do what they are required to do by law?
An additional quirk is since the account is many years old it was RRSP. My wife was 72 so the RRSP had morphed into an RRIF they say the RRSP designation is ” invalid”.
What are my options?
Thank you.
David,
In Oshawa.

Call me, David. – Garth

#146 Don Guillermo on 09.07.22 at 10:33 pm

#135 Pylot Project on 09.07.22 at 9:26 pm
#46 HammockMan on 09.07.22 at 12:31 pm
Why does it have to be an M-word standoff? Why not just a standoff? People bring race into everything.

#123 Tom on 09.07.22 at 7:49 pm
Oh, and pro tip- Mexican standoff is probably racist so watch it.

===

I was going to leave this alone, but since two woke-sters needed to make a comment, I will rebut their statements.

Mexican is not a race or an ethnicity. It’s a nationality. Garth’s words are no more offensive than saying Canadian Standoff.

Perhaps watch The Good, The Bad and The Ugly.

###$$$
I’ve lived decades of my life in Mexico. Most couldn’t give a rats ass about all the woke bullshit. Big reason why I love it. Stop the woke madness gringos.

#147 Tom from Mississauga on 09.07.22 at 10:41 pm

Well, the EU is finished…
https://youtu.be/Vr_q6nNJ764

#148 cuke and tomato picker on 09.07.22 at 11:01 pm

Number 144 Nonplused my son has owned a TESLA since
Oct. 27th2021 and so far everything has been excellent.

#149 Ponzius Pilatus on 09.07.22 at 11:33 pm

46 Don Guillermo on 09.07.22 at 10:33 pm
#135 Pylot Project on 09.07.22 at 9:26 pm
#46 HammockMan on 09.07.22 at 12:31 pm
Why does it have to be an M-word standoff? Why not just a standoff? People bring race into everything.

#123 Tom on 09.07.22 at 7:49 pm
Oh, and pro tip- Mexican standoff is probably racist so watch it.

===

I was going to leave this alone, but since two woke-sters needed to make a comment, I will rebut their statements.

Mexican is not a race or an ethnicity. It’s a nationality. Garth’s words are no more offensive than saying Canadian Standoff.

Perhaps watch The Good, The Bad and The Ugly.

###$$$
I’ve lived decades of my life in Mexico. Most couldn’t give a rats ass about all the woke bullshit. Big reason why I love it. Stop the woke madness gringos.
——————————-
Not trying to be condescending.
But Mexico is still low on Maslow’s Pyramid of needs.
Therefore, some basic needs still have to be satisfied.
Also, the Latino Male Macho culture may have something to do with it.

#150 Nonplused on 09.07.22 at 11:38 pm

#148 cuke and tomato picker

Watch the first 2 minutes of this:

https://www.youtube.com/watch?v=nbxc1O1uI0Q&t=283s&ab_channel=ScottyKilmer

And then also watch this:

https://www.youtube.com/shorts/XV9ijKAubfU

But yes I get that you were being sarcastic.

#151 The Joy of Steerage on 09.07.22 at 11:44 pm

The 70’s redux… break out the bell bottoms.. from T1 to T2! zap you’re frozen!

Nope this is not inflationary at all!!.. there is no way other unions won’t demand the same…
Inflation is completely out of control…. disco dollarama

“The tentative agreement, reached after about seven months of negotiations between the BC General Employees’ Union (BCGEU) and the government’s Public Service Agency (PSA), offers general wage increases of between 10.74 and 12.99 per cent over three years, from April 1, 2022, to March 31, 2025.”

#152 GameWarden on 09.08.22 at 12:01 am

#46 HammockMan on 09.07.22 at 12:31 pm

Why does it have to be an M-word standoff? Why not just a standoff? People bring race into everything.

———-

Muskox Standoff?

#153 DON on 09.08.22 at 12:37 am

#143 Nonplused on 09.07.22 at 10:17 pm
#135 Pylot Project on 09.07.22 at 9:26 pm

“Mexican is not a race or an ethnicity. It’s a nationality. Garth’s words are no more offensive than saying Canadian Standoff.”

How do people who speak Mexican communicate with people who speak Spanish?

And what the heck is a “Canadian Standoff”??? I have images of Bob and Doug Mackenzie doing their SCTV show on the railroad tracks. Either that or maybe it involves 18 wheelers. Maybe Bob and Doug in an 18 wheeler. Full of beer.

*****

Ha ha…two drunk Canucks peeing on each others shoes.

#154 DON on 09.08.22 at 12:54 am

#129 TheDood on 09.07.22 at 8:35 pm
#81 Love_The_Cottage on 09.07.22 at 3:26 pm
#20 Victor Llearna on 09.07.22 at 11:24 am
If rates go up enough stupid sheep that bought in last 2 years won’t be able to renew their mortgages and be forced to sell cheap. for now that isn’t happening, but in 5 years there has to be wave of sheep flocking to the exits.
_________
History shows us this rarely happens. People will cut back on other expenses before selling. Banks will restructure loans to continue payments. Sounds like from your repeat of the word sheep this is what you are HOPING will happen. This will be painful for those who are living pay to pay, but selling is rarely the answer.
________________________________________

I question whether history is a good measuring stick this time around. RE has never cost this much before, and the salary/price ratio gap hasn’t been this high either. The numbers who’ve bought overextended on cheap credit probably number in the tens of thousands. Nobody knows what will happen, but the debt related circumstances have never been in this territory. I think this time around, cutting back on expenses won’t be enough.

******
To add…given the increase in credit card use most people are slow at cutting back, which should be happening now to some extent. It may be too late to cut back later and the financial stress is a relationship breaker leading to the big D.

I have a bad feeling about the months ahead, I hope I am totally wrong, but my gut is saying Yikes!

#155 DON on 09.08.22 at 1:30 am

#109 under the radar on 09.07.22 at 5:53 pm
Very few new deals coming in. My title searcher is crying as he has no work. Inflation and the increasing cost of debt service is making it difficult for the middle.
I noticed a lot of young people lined up at a food bank on College Street. Hard times are here for a lot of folks.

Good fortune has come to me and I will be paying off my brothers mortgage this month. He struggles and I can’t ignore it. He does not know what I am doing .

******
Nice!

#156 DON on 09.08.22 at 1:34 am

#107 Mattl on 09.07.22 at 5:36 pm
BMO economists have said a whole lot of what our central bankers do depends on whether or not the housing market finds a price floor – as Ingram and Re/Max are now suggesting. If sales climb higher (happening) and prices begin to stabilize (also occurring) the Bank of Canada will be forced to raise the cost of money again twice more before the end of 2022. Realistically, that would push the chartered bank prime to 6%.
——————————————————-

You’ve been pretty clear on these pages that Central’s don’t care about housing prices. You’ve responded verbatim to me, “why would the BOC care about RE?”. The above seems to contradict that. Why is the BOC tracking to housing prices when their mandate is the inflation rate? Are they also tracking equity markets?

This is why a lot of us think the Centrals are a joke. The time to cool housing markets was more then a year ago.

**********
All I heard was “BMO economists have said…ReMax are now suggesting”. Why the daggers?

#157 Dr V on 09.08.22 at 1:58 am

148 cuke – man you Kill me!! :)

#158 Allan on 09.08.22 at 2:35 am

Since it came to extra taxing non residents for owning a house or condo in Canada, since nobody is against heavy taxing owners of empty, unrented real estate, then why not to TAX seniors and others who live in too big houses? Or make them tohoste needy immigrant family with children?
Too much wealth in one hands of few is cleary no good for society.

#159 SoggyShorts on 09.08.22 at 3:30 am

#146 Don Guillermo on 09.07.22 at 10:33 pm
#135 Pylot Project on 09.07.22 at 9:26 pm
#46 HammockMan on 09.07.22 at 12:31 pm
Why does it have to be an M-word standoff? Why not just a standoff? People bring race into everything.

#123 Tom on 09.07.22 at 7:49 pm
Oh, and pro tip- Mexican standoff is probably racist so watch it.

===

I was going to leave this alone, but since two woke-sters needed to make a comment, I will rebut their statements.

Mexican is not a race or an ethnicity. It’s a nationality. Garth’s words are no more offensive than saying Canadian Standoff.

Perhaps watch The Good, The Bad and The Ugly.

###$$$
I’ve lived decades of my life in Mexico. Most couldn’t give a rats ass about all the woke bullshit. Big reason why I love it. Stop the woke madness gringos.

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

It just means a 3-way standoff where the first person to [shoot] loses.
If A shoots B then C shoots A while A is busy.

@Don G: one of my favorite woke instances is when they canceled Speedy Gonzalas because “it was offensive” and then the backlash from Mexicans who love Speedy was so great that they had to reverse it.

#160 macduff on 09.08.22 at 4:01 am

Watching this from the Philippines, where I will be hanging out for the next six months before returning to Canada (my retirement routine). Despite inflation, costs are cheap here: the dinner that I am cooking will cost about $0.50. Life is simple but also considerably less stressful. Lots of happy smiling people too, a nice change from back home.

#161 Rico Suave on 09.08.22 at 8:08 am

#149 Ponzius Pilatus on 09.07.22 at 11:33 pm

Not trying to be condescending.
But Mexico is still low on Maslow’s Pyramid of needs.
Therefore, some basic needs still have to be satisfied.
Also, the Latino Male Macho culture may have something to do with it.

—————————-

Your condescension does at least very well explain that Western Wokesters are simply the result of basic needs being so well filled that they’ve had to replace actual needs with invented problems.

After all, people just trying to find food and shelter aren’t usually obsessed with which pronoun to use or endlessly pontificating about critical race theory.

The good news is that the fat, lazy society of Canada is about to find out what true deprivation really is. Identity politics will be revealed for the first-world indulgence that it is.

#162 crowdedelevatorfartz on 09.08.22 at 8:40 am

“Sanctions don’t work”, Ponzie Pedantic

https://www.reuters.com/world/asia-pacific/nkoreas-parliament-meets-effort-build-socialist-fairyland-2022-09-08/

Seems the “great Leader” of NK is still squandering billions on weapons production as millions starve in the socialist fairyland.
70 years of a socialist “utopia”.
Ironic when one consider his Dictator grandfather and Dictator father ran the country before him.
One wonders if China will have any food or coal to lend it’s communist neighbor this winter.

#163 Steven Rowlandson on 09.08.22 at 8:41 am

RE#71
Yes the money is free until the bank demands repayment and cuts you off from more loans… There really isn’t a free lunch unless it is a gift.

#164 Dharma Bum on 09.08.22 at 8:44 am

#65 Pain

Broken families, job losses, home losses, drug and alcohol abuse, domestic abuse, divorce are the foreseeable effects.
——————————————————————————————————

And those are just the good parts.

Also: 7% GICs by year’s end.

For all you savers out there.

#165 Dharma Bum on 09.08.22 at 8:53 am

#144 Nonplused

Does anybody know what the towing capacity of a Tesla is? I figure you get yourself a utility trailer with a 50 kW generator on it and problem solved.
——————————————————————————————————-

Correct.

Electric cars are just gas guzzlers that use gasoline and oil and coal to create electricity to power the vehicles.

Whether you put the fossil fuel in the car’s tank or in the generator’s tank, or in the giant tanks that power turbines to generate electricity, it’s still fossil fuel use that powers our lives.

No escaping it in any of our lifetimes.

Plugging your car in is not saving the planet.

#166 tbone on 09.08.22 at 9:41 am

LOL , sure , i want strangers living in my house with me .
Like one big happy family. Aint gonna happen .

#167 TPain on 09.08.22 at 10:08 am

We were fortunate enough to sell our home in Kamloops and cash in at the end of July. We wiped out all our debt, bought a home free and clear one province over with money leftover in the bank. We feel like we stepped out of the way of getting hit by a train in the knick of time. The political unrest in USA will eventually come to a Mexican standoff in the next couple of years. If Trump somehow avoids jail, runs again and wins, will there be a transfer of power by the Democrats? This bit of inflation will be nothing compared to the US shutting down and going into a civil war.

#168 Bucky on 09.08.22 at 10:39 am

Setting up for a bear trap? The real estate industry is staging the recent price drops as bargains, however affordability is eroding with interest rates going back to normal. Give it a year.

#169 45north on 09.08.22 at 11:00 am

Concerned Citizen In my neck of the woods, home prices have stabilized at best. No sign of the 20% declines you’re talking about. Just my luck, I guess

concerned about his anonymity

#170 @J on 09.08.22 at 11:09 am

#78 Cash is King on 09.07.22 at 3:11 pm
#87 Bob on 09.07.22 at 4:07 pm
—————————————

Ageism has gotten worse in the past couple of decades. As ugly as racism. Yikes.

#171 Randy on 09.08.22 at 11:14 am

How come nobody ever complains that half of our property taxes are stolen from us to fund a Marxist Education System that provides no benefits other that glorified Marxist indoctrination camp and a babysitting service ? I didn’t sign up to be a debt slave for a system that I don’t use. How do I get out ??

#172 Ponzius Pilatus on 09.08.22 at 11:16 am

161 Rico Suave on 09.08.22 at 8:08 am
#149 Ponzius Pilatus on 09.07.22 at 11:33 pm

Not trying to be condescending.
But Mexico is still low on Maslow’s Pyramid of needs.
Therefore, some basic needs still have to be satisfied.
Also, the Latino Male Macho culture may have something to do with it.

—————————-

Your condescension does at least very well explain that Western Wokesters are simply the result of basic needs being so well filled that they’ve had to replace actual needs with invented problems.

After all, people just trying to find food and shelter aren’t usually obsessed with which pronoun to use or endlessly pontificating about critical race theory.
———————
Well, that’s the gist of it.
But the funny part is, that the poorer nations always try to emulate the culture of the richer ones.
And therefore will sooner or later become like them, too.
That’s just how the World turns.

#173 Faron on 09.08.22 at 11:30 am

#48 Faron on 09.07.22 at 12:35 pm
#39 Sail Away on 09.07.22 at 12:14 pm

Market psychology (put/call ratio, positioning) is dour at this local low, so a small rally seems likely.

1.6% on SPX, 1.2% TSX later… See if Friday brings a VIX crush rally.

#174 Faron on 09.08.22 at 11:37 am

#165 Dharma Bum on 09.08.22 at 8:53 am

#144 Nonplused

Correct.

Electric cars are just gas guzzlers

Nope, between renewables on the grid and the greater efficiencies in producing electricity on a large scale, electrification is anywhere from more to a hell of a lot more efficient than an ICE especially the derpy man-boy trux that a lot of you guys like so you can tow your man-boy toys to a crowded campground somewhere.

To be clear, I think the personal vehicle has to die, so EV cars/trucks are not all that helpful, but saying they are equivalent to the efficiency of a generator or a small ICE is a lie.

#175 Don Guillermo on 09.08.22 at 12:01 pm

#161 Rico Suave on 09.08.22 at 8:08 am
#149 Ponzius Pilatus on 09.07.22 at 11:33 pm

Not trying to be condescending.
But Mexico is still low on Maslow’s Pyramid of needs.
Therefore, some basic needs still have to be satisfied.
Also, the Latino Male Macho culture may have something to do with it.

—————————-

Your condescension does at least very well explain that Western Wokesters are simply the result of basic needs being so well filled that they’ve had to replace actual needs with invented problems.

After all, people just trying to find food and shelter aren’t usually obsessed with which pronoun to use or endlessly pontificating about critical race theory.

The good news is that the fat, lazy society of Canada is about to find out what true deprivation really is. Identity politics will be revealed for the first-world indulgence that it is.
@@@@@@@
Rico, I was going to respond to his condescending wokness but glad I didn’t. I wouldn’t have put together nearly this well. Gracias

#176 Stoph on 09.08.22 at 12:17 pm

#165 Dharma Bum on 09.08.22 at 8:53 am

Electric cars are just gas guzzlers that use gasoline and oil and coal to create electricity to power the vehicles.

—————————————————–

Luckily for the greenies in BC, less than 5% of the electricity is generated from fossil fuels.

https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/provincial-territorial-energy-profiles/provincial-territorial-energy-profiles-british-columbia.html

#177 IHCTD9 on 09.08.22 at 12:35 pm

#171 Randy on 09.08.22 at 11:14 am
How come nobody ever complains that half of our property taxes are stolen from us to fund a Marxist Education System that provides no benefits other that glorified Marxist indoctrination camp and a babysitting service ? I didn’t sign up to be a debt slave for a system that I don’t use. How do I get out ??
____

It gets worse. 2-3 kids combined with a lower NET (important) household income gets you a 5 figure tax free CCB payment from Trudeau that continues non-stop for 18 years. I don’t understand why childless Canadians who pay taxes are not screaming bloody murder about this, although they probably just straight don’t know what’s going on outside their field of vision. Over 22 Billion per year that only goes up.

I spent my CCB cheques at YAMAHA and GM (I had already budgeted to have kids like most folks do).

#178 Dragonfly58 on 09.08.22 at 12:39 pm

The person who states that ” the personal vehicle has to die ” is clearly a city dweller. Just what would anyone living / working in the other 99% of Canada do for transportation ?

#179 Marxist FTW on 09.08.22 at 12:44 pm

#171 Randy on 09.08.22 at 11:14 am

Gold ribbon for using Marxist twice in one comment

#180 Faron on 09.08.22 at 12:47 pm

Here’s a genius talking about downside convexity and the fattening left tail and retail put buying that could engender a downside gamma squeeze. Would love to work for Cem.

https://twitter.com/TDANetwork/status/1567882480383827968?cxt=HHwWgICxzeKznsIrAAAA

#181 Dragonfly58 on 09.08.22 at 12:49 pm

Something like 6.8 million Canadians are considered rural. E bikes perhaps ? Good luck getting 20 sacks of feed home in your pannier bags.

#182 Quintilian on 09.08.22 at 12:59 pm

#171 Randy on 09.08.22 at 11:14 am
“ [taxes ]are stolen from us to fund a Marxist Education System that provides no benefits other that glorified Marxist indoctrination camp and a babysitting service ?”

Even the conservatives on this blog would give a low grade for that one.

#183 jess on 09.08.22 at 12:59 pm

payback time….PPP loans
https://theintercept.com/2022/09/07/bank-of-america-ppp-loans-finance-charges/?utm_medium=email&utm_source=The%20Intercept%20Newsletter

https://www.law360.com/articles/1523335/bofa-misled-small-cos-on-ppp-loan-forgiveness-suit-says

#184 Wrk.dover on 09.08.22 at 1:06 pm

Like my parents did, I attended public school for free. Now I pay tax to educate the next generation.

It’s all good.

In Jamaica for a comparison example, school for one child costs the equivalent of one week of minimum wage/month. Plus supplies and uniform.

I love the CDN system!

#185 baloney Sandwitch on 09.08.22 at 1:14 pm

Well its still a mild hangover, nothing another drink won’t cure.

#186 Ponzius Pilatus on 09.08.22 at 1:27 pm

178 Dragonfly58 on 09.08.22 at 12:39 pm
The person who states that ” the personal vehicle has to die ” is clearly a city dweller. Just what would anyone living / working in the other 99% of Canada do for transportation ?
————————————
Getting a smaller, more fuel efficient vehicle would be a start.
Use public transit.
I took the bus/sky train to work for almost 20 years.
Raised two kids.
Never needed no SUV or MiniVan.
The money I saved went straight into a B&D portfolio.

#187 Zed on 09.08.22 at 1:34 pm

I see that the Trudeau/Singh governement is really not understanding the inflation thing. Upcoming announcement of $650/year/kid for dental visits for family earning -$90k, increasing GST rebate and upping rent subsidy.

I know some people have less money than other but giving my tax dollars to others is very frustrating.

I pay from my own pocket (no insurance) $150 per yearly visit at the dentist. The government with this new measure will just increase my dental cost since now all those kids will go to the dentist with a big budget. Way to go to control inflation! Maybe $150/kid/year would have been a good start.

GST rebate increase; more money in the economy, more inflation = more interest rate hikes. Way to go!

Rent subsidy; renters will have money = landlords can increase rents. More inflation. Way to go!

What a bad government!

#188 jess on 09.08.22 at 1:39 pm

Charles is now King of the United Kingdom RIP QE

#189 Faron on 09.08.22 at 1:42 pm

#177 IHCTD9 on 09.08.22 at 12:35 pm

I spent my CCB cheques at YAMAHA and GM

Which stimulated/strengthened the economy just as intended. But, actually, you spent the money on your kids. Or did the cost you less than your CCB check? A dollar is a dollar after all.

#190 Raise the AOC to 99 years on 09.08.22 at 1:45 pm

Hike the rates some more!

Hike some more!

Haha to the speculators, real estate agents and Hoomers. HAha.

Raise em high!

#191 Gravy Train on 09.08.22 at 1:59 pm

#176 Stoph on 09.08.22 at 12:17 pm
Luckily for the greenies in BC, less than 5% of the electricity is generated from fossil fuels.

You forgot to mention that hydropower generates 94% of Quebec’s and 97% of Manitoba’s electricity. (Per your link.)

#192 Dragonfly58 on 09.08.22 at 3:30 pm

#186, Ponzius Pilatus. I used to work 12 Hr. days, either 3 -3 or 4-4, Skytrain ? In your dreams. Even in the city lots of people have jobs that just don’t allow the use of public transit. 9 – 5 jobs are great, but lots of things need doing outside of ” office hours”.
Yes, I have always driven small, fuel efficent cars.
What does Skytrain or the bus have to do with someone living 40 minutes outside 100 Mile House ?

#193 Observer on 09.08.22 at 6:44 pm

I noticed all the nasty comments at CBC regarding the Queen’s death. Anti-Trudeau, anti-monarchy, yet same commenters accuse CBC of moderating their commets and being Liberal shrills. Sickening. It’s good that CBC lets them through though.

#194 Steven Rowlandson on 09.09.22 at 6:52 am

Should I have sympathy for people who jacked up home prices and prompted me out of financial survival to put my life(hearth and home, wife and children) on hold since 1983? No freaking way! Let the interest rates go medieval on mortgages and government bonds. Those genocidal criminals deserve it and more! The age of deficits ,cheap borrowing and outrageous home prices must end.