Should you worry?

Next week the Fed will raise its rate again. Bigtime. Seventy-five bps. Disabused of the idea inflation is moderating, stock markets laid an egg Tuesday. Bond yields surged. Sentiment wilted. The bears roared. Elon and the boys lost a bundle.

The news is simple: America’s economy still runs hot. Thus far the CBers have been unable to contain it. So the cost of money will continue to rise. Equities hate this because high rates make it harder for companies to earn profits, leading to layoffs, real estate despair and less economic activity (just what central banks want). Meanwhile surging bond yields lure a lot of capital into fixed-income assets and out of stocks. The result: a plop on Wall Street (and a mini-plop on Bay). At least temporarily.

Should you worry?

After all, Canada just tumbled on a global list of good places to live during retirement. Does this stock market volatility make the situation more precarious? Or is our reaction to it the real problem? (Spoiler alert: in a minute you will arrive at the five things you really need to fret over.)

First, the news. In the States prices climbed 8.3% last month. It was an increase when a decrease was expected. Since oil and gas prices have dropped a lot, this was worrisome as ‘core’ inflation advanced strongly. Food is up the most (11%) since 1979. Electricity – not helped with all those damn Teslas sucking it up – jumped almost 16%, the most in 41 years.

High rates will now last into 2023. Perhaps we will not see a pause until early 2024. Too early to tell. It will continue to be gruesome news for all those folks who took out oversized 2% five-year mortgages in 2020 and 2021 destined to renew at twice the level. RBC economists just told clients, “we think a soft landing is becoming a distant prospect.” That means some kind of recession and the biggest impact in a downturn is upon jobs. Hence yesterday’s cautionary words about job hopping, quiet quitting, the great resignation, WFH lust and other cringeworthy Millennial ailments.

The prognosis for residential real estate in Canada (as you might imagine) just got worse. Those who boldly forecast things would rebound in October and the spring market would 2017 all over again are delusional. Buying now – given what the central banks have warned us is coming – is an exercise in knife-catching. No wonder there’s a tsunami of pre-con condo assignments hitting the market. It’s a precursor to potentially-large price fades.

The first casualty, as usual, is the equity market. A new Bank of America survey of professional money managers (who are paid to think short-term) found 52% are underweight in stocks and 62% are overweight in cash. A bigger concern than the American economy is that of Europe, thanks to Putin’s thumb on the gas supply. But then, Zelenskyy is kicking butt, so things might change.

As we have detailed on this pathetic blog a few times, the more bearish the sentiment of investors becomes, the better prospects look. So those buying on days like Tuesday are betting on a nice year-end rally. And we all know that more than 80% of the time, equity markets advance, rewarding those who shrug when others sweat.

This brings us to financial strategies. What should you do when bears prowl, the comment section is a cacophony of moans and wails and fear replaces reason?

Nothing, of course. If you ignored the 2008-10 credit crisis and sat in a B&D portfolio you ended up making money. If you slept through Covid, it was all cool. That same with Nine Eleven, Black Monday, Y2K or the US debt ceiling crisis. It’s a lesson which keeps repeating, and most people keep ignoring. But here we go again – in the middle of the Great Tightening of ’22.

Canada just dropped five positions on the Natixis Investment Managers global retirement index. We are Number 15, far behind such paradises as Iceland, Norway and the Czech Republic. “In a year on track to be one of the worst on record to retire,” says the report, “the market downturn coupled with runaway inflation and successive interest rate hikes poses an immediate threat to retirees and suggests the need for new thinking about retirement planning and policy.”

Canada lagged in terms of three “key indicators of material wellbeing,” namely income equality, per capita income and employment. Our problems include taxes that are too high and a rapidly-aging population. Oh yeah, and we live too damn long.

The biggest risks to our financial health, however, don’t come from the CRA or the Bank of Canada. Instead they flow from the five retirement planning mistakes we little beavers make. Here they are (and the % of people afflicted):

1. Not understanding how long you will live (65%)
2. Underestimating the impact of inflation (61%)
3. Not preparing for healthcare costs (60%)
4. Failing to understand sources of retirement income (51%)
5. Being too conservative (48%)

Recall what this blog has said, time and time again: the biggest risk is not losing money (on a day like Tuesday) but running out of it. Life is long. It costs a fortune. Retirement ‘s costly. And most people are financial wimps. So get over it.

About the picture: “Hello Garth, here’s my son’s 1 year old Schnauzer “Cash” riding in the back of his Jeep,” writes John. “He looks serious and convincing. He’s an awesome dog with great potential. Just enjoying a summer ride.”

162 comments ↓

#1 Bdwy on 09.13.22 at 2:46 pm

Feel like everyone is trying to squeeze thru a small door. Could be an epic last hour.

#2 jess on 09.13.22 at 2:55 pm

“normalcy bias,” which is “the belief that if something terrible were to happen, a responsible party would intervene and stop it, and that if no one is intervening, the terrible thing must either not really be happening or must not be as bad as it seems.”

e.g….. the GOP thought he would eventually pivot from his extremist positions. They said this before /after the primaries, and they said it even after the GOP convention …

, They Knew: How a Culture of Conspiracy Keeps America Complacent, describes Donald Trump as a “transnational career criminal.”

Geoffrey Berman, a Republican, reinforces Kendzior’s thesis with the revelation that Trump’s Justice Department was weaponized “to aid the President’s friends and punish his enemies,” both foreign and domestic.

#3 Linda on 09.13.22 at 2:57 pm

Will be interesting to see what Canada’s official inflation rate will be next week. Apparently the government intends to introduce new measures to assist lower income earners with inflationary concerns. Assistance for things like rent, for instance. Ingeniously, our PM claims doing this won’t stoke the inflation fires. Economists disagree. Does sound very chicken vs. egg. Does handing out yet more public money keep inflation going, or is it simply a way of dealing with what already exists?

The feds just announced $4.6 billion in new spending to offset inflation. Once again politicians feed the problem. Thanks, Jag. – Garth

#4 ogdoad on 09.13.22 at 2:58 pm

Financial wimps, political wusses, duped zombies, a joke to other FW countries, pot and liquor junkies (pretty beer cans, tho)…I’m sure I’ve missed a few…

Anywho, at least we’re not at war…hahaha, that would be funny…

Happy day before hump day!

Og

#5 Chris on 09.13.22 at 3:02 pm

I am sure the MSM will be all over a 1000 point drop and it may even be a bigger story to them today then Chuck throwing another tantrum in Belfast today because the fancy pen he had was leaking ink.

If I had a large variable rate mortgage, or other debt, I would probably be very stressed. Although I am working now, I hope I am still working next year. I think we will soon find out there will be too many workers and layoffs may be around the corner. Based on the latest news, interested to see if your team still thinks inflation has peaked or not.

#6 Johnny Canuck on 09.13.22 at 3:06 pm

That dog is waaaayyyy too small to be wearing a harness that big. Unless he’s going to haul a dog sled by himself.

#7 Bdwy on 09.13.22 at 3:07 pm

The feds …new spending to offset inflation.

More spending will kill inflation forever!!!

Buy usd.

#8 Wrk.dover on 09.13.22 at 3:08 pm

Instead of a ” stay away from the cottage ” guy, we need a STOP BUYING FANG STOCKS guy.

Always the biggest declines on days like this.

With their stellar capitalization, they drag the entire index with them, breeding fear, feeding the sell off.

#9 A01 on 09.13.22 at 3:08 pm

Canada just tumbled on a global list of good places to live during retirement.
—————————————————————–

Garth where is the reference to this study/article?

Google is your pal. – Garth

#10 Søren Angst on 09.13.22 at 3:08 pm

1. Not understanding how long you will live (65%)

http://www.deathclock.com/

1 less planning mistake. Only 4 left.

#11 Linda on 09.13.22 at 3:15 pm

Garth, LOL. Although in reality it isn’t funny. About the 5 things, the #1 issue being ‘understanding how long you will live’. Have to say, if we actually knew when our best before date was it would be a whole lot easier to plan for the future!

#12 Condochick on 09.13.22 at 3:16 pm

My spouse works in healthcare and has been busier than ever throughout the pandemic. He’s tired but there is so much work and so many patients to care for. As we hear about impending recession/layoffs, we are grateful for seemingly unlimited work…but the job demands are exhausting. Certainly a double-edged sword. Indeed, there are interesting times ahead for the heavily-leveraged. (Very happy we have no debt and a paid-off mortgage).

#13 Søren Angst on 09.13.22 at 3:19 pm

Electricity – not helped with all those damn Teslas sucking it up

————-

Well, it appears I am not the only one that has figured out the electrical grid cannot support a complete changeover to EVs without a whack more hydro plants in need of building.

Make your own electricity … 1st Tesla V4 Supercharger, all Solar:

https://twitter.com/EvaFoxU/status/1569442199867203589

Smart.

What Public Utilities will undoubtedly fail to do, Private Enterprise will if they want to grow future Revenues.

Good on Tesla.

#14 CL on 09.13.22 at 3:21 pm

“RBC economists just told clients, “we think a soft landing is becoming a distant prospect.” ”

Pretty sure I said this here many months ago that there would be no soft landing and I didn’t even get paid for it like the now genius “economists” do. How do you tame inflation at over 8% with a current 2.5% or even 4% CB rate?

My other previous prediction will come to fruition as well, the elimination of the stress test. Only a matter of time.

#15 jess on 09.13.22 at 3:21 pm

Putin cutting of gas revenue ? shooting himself in the foot

Key lessons and next steps
https://www.bankofengland.co.uk/stress-testing/2022/results-of-the-2021-climate-biennial-exploratory-scenario

Climate Policy Relevant Sectors (CPRS) financial assets are exposed to climate-related transition risk,
Physical risk refers to the economic costs and financial losses from the exposure of human and natural systems to climate-related events. These climate-related events include acute weather events (e.g. flash floods) and more gradual, long-term changes in climate patterns (e.g. gradual melting of polar ice sheets).
48 Transition risk refers to the economic and financial costs of the adjustment to a low-emissions economy, including those induced by policy changes, technological breakthroughs, and shifts in investor preferences and social norms. 49 CPRS has also been adopted by other institutions to analyse transition risk. Examples include the European Central Bank’s Financial Stability Reviews of May 2019 and November 2020, and the IMF’s Global Financial Stability Report of October
2021.

#16 Tom on 09.13.22 at 3:22 pm

The reason Canada is lagging is because it is a place to park money through real estate. THe government has done nothing to stop the flow. Also, we are brining in more people a year than any G7 nation–during a housing shortage. Half a million a year, most which end up in TO or Van. So of course housing is ridiculously expensive.

#17 TurnerNation on 09.13.22 at 3:22 pm

Supply chain. Almost back to normal?

https://smart-union.org/smart-td-blet-joint-statement-on-rail-embargo/
CLEVELAND — Late on Friday, September 9, the nation’s largest railroads began warning major shippers that they are declaring an embargo on certain types of new shipments five days in advance of the end of the federally mandated cooling-off period at 12:00 AM EDT September 16. They further advised that all rail shippers could be blocked from making any rail shipments well in advance of next Friday’s deadline for a lockout or strike. This completely unnecessary attack on rail shippers by these highly profitable Class I railroads is no more than corporate extortion.

—- What was I ranting about. That, this global new system as of March 2020 – will be run by the big corps?
Bloomberg is on it:

https://www.bloomberg.com/opinion/articles/2022-09-12/china-s-surveillance-state-will-be-the-west-s-future-too
Opinion – Adrian Wooldridge
China’s Surveillance State Will Be the West’s Future, Too
Under Xi Jinping, business and government are together weaving a web of surveillance that no Chinese citizen can escape. But even in the West, the arc of the digital revolution is bending toward tyranny.

#18 Melinda on 09.13.22 at 3:23 pm

Wow. This housing crash is going to be catastrophic for people who bought in Feb 2022 with VRM. Looks worse and worse every month. I think we will surpass 1989 records for losses and foreclosures.

#19 Faron on 09.13.22 at 3:23 pm

Here’s a cool chart comparing Shiller PE against CPI. Note the excursion from 100+ years of normal data leading to today. Data suggest a big drop in multiples at these inflation levels.

https://mobile.twitter.com/IanRHarnett/status/1566383237064179714/photo/1

Also shows that deflation and inflation are both bad for equities with the sweet spot near the fed target inflation rate.

#20 Senator Bluto on 09.13.22 at 3:26 pm

Just a word about Poilievre taking the reins: I know that he has been slagged for being a “populist” by the elites. I find that curious, as a populist does what the vast majority of the unwashed and impure of thought want. But I’m still not really sure why doing what most people want is any issue.

Unless what the unwashed throngs want is threatening to the few, the arrogant and the entitled.

Then I can see the problem.

#21 Ponzius Pilatus on 09.13.22 at 3:28 pm

The US inflation rate for last months is a little lower.
Around 8.5 percent.
Looking a the details, I see inflation rate for new cars at around 10.50 percent.
We may be looking at the problem here.
People still are buying more new cars at crazy prices.
Advice.
Break your new car addiction.
The new car smell does not last long.
Drive your beaters to the ground.
And you don’t need another car.
Your garage and driveway is already full.

#22 Dogs Not Barking on 09.13.22 at 3:31 pm

DELETED

#23 Father's Daughter on 09.13.22 at 3:31 pm

There are many solutions to higher prices, but many people have no skills in being frugal
-eat less meat, waste less food, rice and beans (healthier for you anyways) A recent report said due to inflation families were buying less juice, candy, and snacks – GOOD. We now expect to show up at a grocery store, fully stocked with food from all over the world, tropical fruits, etc. during all seasons. And whatever we want should be affordable.
-get a smart thermostat (upfront investment of $200) but keep heat/cool off when away and at night
-stop getting take out. I know someone who is applying to the Rent Bank in Toronto today that eats Uber Eats approximately 2-3 times a week. I hope they audit bank accounts. More CERB-like spending won’t save people from their own dumb decisions. When there is ample work (you can get paid $30/hour now for babysitting, pulling weeds, standing in line) there is some confusion as to why people can’t make their bills.

Real estate – the areas that I’ve been following have had virtually no sales for weeks. I saw one sold conditional, but it fell through. My neighbour was going to list his okay, unrenovated old house for $2M, but decided to wait until spring. Good luck with that.

Do not get me wrong – I am very sympathetic to lower income folks who cannot make their bills due to inflation. However, I really do wonder what people expect from their living wages. If it’s a nice apartment, fashionable clothes (seriously, enough with endless fashion trends, it’s wasteful and stupid. At least shopping at VV is considered cool), and UberEats in cities like Toronto, then we have a reckoning on the horizon.

Oh and living too long, get a good POA who won’t keep you alive when your quality of life is down to zero. Or at minimum, take care of yourself so your old old years are pleasant and not riddled with avoidable illness

#24 Physicist on 09.13.22 at 3:35 pm

Enjoying a nice vacation in France right now….in burgundy at the moment. Inflation be damned…leave it in the b&d and be done with it….

#25 JPN on 09.13.22 at 3:38 pm

#6 Johnny Canuck .. specially designed harness for his size.. he’s strapped in … not to “bounce out” That’d be a bummer…

#26 Covid Variant Math on 09.13.22 at 3:43 pm

#15 jess on 09.13.22 at 3:21 pm
Putin cutting of gas revenue ? shooting himself in the foot

Key lessons and next steps
https://www.bankofengland.co.uk/stress-testing/2022/results-of-the-2021-climate-biennial-exploratory-scenario

Climate Policy Relevant Sectors (CPRS) financial assets are exposed to climate-related transition risk,
Physical risk refers to the economic costs and financial losses from the exposure of human and natural systems to climate-related events. These climate-related events include acute weather events (e.g. flash floods) and more gradual, long-term changes in climate patterns (e.g. gradual melting of polar ice sheets).
48 Transition risk refers to the economic and financial costs of the adjustment to a low-emissions economy, including those induced by policy changes, technological breakthroughs, and shifts in investor preferences and social norms. 49 CPRS has also been adopted by other institutions to analyse transition risk. Examples include the European Central Bank’s Financial Stability Reviews of May 2019 and November 2020, and the IMF’s Global Financial Stability Report of October
2021.

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

I know one is supposed to accept as Gospel the Climate Testament, but I have one simple question.

What is the scientific formula that captures the essence of the role of CO2 in climate?

We’re all familiar with E=mc2, so what is it’s climate equivalent?

If it’s an existential threat, some scientist would have developed it and collected a Nobel Prize. But they haven’t.

As a matter of fact, the IPCC can’t even factor in the effect of clouds, and every second grader on knows that cloudy days are cooler than sunny days. But computer models can’t even sort that out.

My opinion is that there’s a bit of a hole in the science that needs to be filled in before we commit to spending $100 trillion. Or maybe not; why let science get in the way of a fat payday for the entitled elites?

#27 Ponzius Pilatus on 09.13.22 at 3:43 pm

Apparently, Covid put a dent into life expectancy world wide.
US dropped by about 2%, mostly in the poorer neighborhoods. No surprise there.
As for your own life expectancy, have a look what’s in your Jeans.
I understand insurance actuaries use many variables and algorithms to calculate it for each major policy holder.
Life span of your forefathers and ethnicity are major indicators.
Can’t just hope to live as long as the royals.

#28 West New West on 09.13.22 at 3:45 pm

Just watched Trudeau tell us that he was going to spend more money to combat the inflation caused by all the money he spent to combat inflation.

#29 Dogs Not Barking on 09.13.22 at 3:45 pm

#22 Dogs Not Barking on 09.13.22 at 3:31 pm
DELETED

I expected that one to get deleted, but the joke was just too hilarious. I hope you smirked just a bit before hitting delete.

#30 PBrasseur on 09.13.22 at 3:45 pm

Should you worry? – Garth

Lets see…

You spent a huge chunk of tomorrow’s wealth on buying homes and stuff. As a result, household debt has exploded, home prices are insanely high, most people could not even afford their own home.

Government spending is out of control, (fed+prov) owe near 120% of GDP. Corporations close to 82%.

As a whole Canada is one of the most indebted nations on the planet. Wouldn’t be so bad if much of that spending had went to supply side to boost our productivity, but just the opposite happened.

Your health care monopoly system is imploding while demand and costs are exploding due to ageing. Burden on governments is going to increase rapidly and if the system worsens even more it will soon become a problem for the economy and investment (for example who wants to setup a head office in a place where you can’t find a doctor?).

People are retiring in droves while not enough people exist to replace them. This is a structural problem that will last decades. The resulting tight labour market makes it difficult to use stimulus without creating inflation. (I suspect the markets themselves are soon going to correct to partly solve that problem by making it near impossible for a great many to retire, but the hurt, the anger…).

Per capita investment in productive activities and innovation is severely lagging behind other developed nations. It is the reason the OCDE is predicting the least growth of all developed nations.

Canada is not part of a huge (too big for investors to abandon) economic bloc that can protect the currency and/or provide a bailout in the event of a major crisis.

Our dependence on commodities makes our currency vulnerable is case of a very probable world wide economic slowdown (China currently crashing, many emerging nations near default, recession in the Eurozone, etc). This could eventually make inflation worse than it already is.

Buffett said “Only when the tide goes out do you discover who’s been swimming naked.”

Apparently the tide is turning. So yeah, collectively I think we should worry.

#31 alexinvestor on 09.13.22 at 3:46 pm

Life can be long, and inflation can be brutal. Thankfully the CPP is indexed fully to CPI and guaranteed for life. And remember, the CPP is also increasing in the future due to higher threshold amounts ! All good.

#32 Søren Angst on 09.13.22 at 3:47 pm

But then, Zelenskyy is kicking butt, so things might change.

———————–

When Farmers (all salt of the Earth) start bitching, you know things are going well.

This Ukrainian Farmer supplementing income by farming Russian battle tanks and not happy with the Ukraine Defense:

https://twitter.com/saintjavelin/status/1569455628049063938

Other soon to be disgruntled Ukrainian Farmers:

https://twitter.com/AnonOpsSE/status/1568964034891759622
https://twitter.com/mcpherson_niall/status/1569267740917235714
https://twitter.com/JimmySecUK/status/1568968826959843330

Ukraine Defense plan for the repossessed Farmed Tanks …

https://twitter.com/bsant54/status/1569772952052273153

————-

PS:

Russia complaining about all the Western military aid sent to Ukraine. Ukraine Defense response:

https://twitter.com/bsant54/status/1569774206220488704

SLAVA UKRAINI

#33 Ponzius Pilatus on 09.13.22 at 3:49 pm

#25 JPN on 09.13.22 at 3:38 pm
#6 Johnny Canuck .. specially designed harness for his size.. he’s strapped in … not to “bounce out” That’d be a bummer…
———————-
The breed is a Houdini.
Hard to contain.

#34 XEQT and chill on 09.13.22 at 3:58 pm

S&P 500 is down 4.5% as I type this.

Maybe June wasn’t the bottom :S

#35 Faron on 09.13.22 at 4:09 pm

#26 Covid Variant Math on 09.13.22 at 3:43 pm
#15 jess on 09.13.22 at 3:21 pm

What is the scientific formula that captures the essence of the role of CO2 in climate?

We’re all familiar with E=mc2, so what is it’s climate equivalent?

If it’s an existential threat, some scientist would have developed it and collected a Nobel Prize. But they haven’t

Gold ribbon for dumbest comment of the week! Congrats.

The absorption of wavelengths of light by gaseous species is described by quantum physics. The integral of this absorption across relevant wavelengths and mixed gasses is also mathematically defined. I’m guessing e=mc^2 came to mind because it’s simple algebra and on your level. The physical world contains mathematical complexity way outside your league.

If you want to look at the math as it appears in climate models, the code is all open source. Have at ‘er. Maybe Russ can help LOL.

Finally, a Nobel prize went to the scientists who described the reaction between CFCs and Ozone that lead to the ozone hole. Not a climate change issue per se, but relevant to your stupidity.

#36 Broader Mind on 09.13.22 at 4:11 pm

Today’s tidbits. A can of regular Campbells soup has for years cost $1 , today I noticed at Sobeys that it is $3. That is one hell of hike on low income folks.

#37 crowdedelevatorfartz on 09.13.22 at 4:13 pm

@#33 Ponzies Pal Putin

Hey Ponzie.

Do you think Putin is sleeping with one eye open these days?

https://www.reuters.com/world/europe/russian-council-faces-dissolution-after-call-putins-removal-2022-09-13/

I dont think I’d want to be his taste tester right now.

#38 The real Kip (Ret) on 09.13.22 at 4:17 pm

And all this happens at the same time governments pour on more stimulus. The cheaper gas referenced is because the central government (Washington) is stimulating by releasing 1m bpd from the strategic reserves and it’s pushing prices down. Wait till November. Elections cost money.

#39 Do your math on 09.13.22 at 4:18 pm

“ Nothing, of course. If you ignored the 2008-10 credit crisis and sat in a B&D portfolio you ended up making money. If you slept through Covid, it was all cool. That same with Nine Eleven, Black Monday, Y2K or the US debt ceiling crisis. It’s a lesson which keeps repeating, and most people keep ignoring. But here we go again – in the middle of the Great Tightening of ’22.”

You conveniently avoided one decade. The 70ths. A full decade where stocks lost money on “real terms”. Bonds did even worse.

“Nothing of course” sounds like a recipe for disaster for those retiring in a decade and hoping for a 7% real return in a balanced portfolio. Notice: “real” not “nominal”.

And it is so easy, to diversify inflation risk.

#40 Ponzius Pilatus on 09.13.22 at 4:20 pm

#35 Faron
Great to have an expert on board.

#41 rampant inflation on 09.13.22 at 4:21 pm

34 XEQT and chill on 09.13.22 at 3:58 pm

S&P 500 is down 4.5% as I type this.

Maybe June wasn’t the bottom :S
_____________________________________

lol.

no… no it wasn’t

i keep posting where the bottom will be in both time and price, but our host doesn’t like it so he doesn’t post it.

but that’s ok. he knows where it’s going. i told him.

#42 The Original Jake on 09.13.22 at 4:26 pm

Surprised to read everyone’s shock about today’s selloff. Sept-Oct is notoriously bad for equities and anyone who is buying groceries these days should know the FED is not winning the war yet.

The news always talks about cars, energy, housing… the big ticket items. These have dropped. But, the small everyday items are going up, up, up. Went to Costco yesterday, muffins use to cost $7.99 pre-pandemic, then $8.99 during covid and now $9.99 as of this week. A 25% pop in 2 years.

My local bakery (ya, I have a sweet tooth) upped his danishes from $1.20 to $1.90. A 58% pop. I could go on. The FED will win but at much, much higher rates. As for real estate… houses need to drop another 40% or get back to 2014 prices.

#43 Robert B on 09.13.22 at 4:32 pm

Garth
“The feds just announced $4.6 billion in new spending to offset inflation. Once again politicians feed the problem. Thanks, Jag. – Garth”

Do they think they can spend their way out of stagflation??

#44 John on 09.13.22 at 4:37 pm

It’s not necessarily missing the best 3-4 days of the year the Market raises for investment but missing todays massive loss of 1200 plus points. Never have I experienced a one day gain of this magnitude and properly never will.

You have a very short memory. The Dow gained 2,112 points on March 24, 2020. Stop with the drama. – Garth

#45 an investor on 09.13.22 at 4:45 pm

“Trudeau Says New Spending Won’t Fuel Inflation. Scotiabank Disagrees” Bloomberg

Canada is done and the States is close behind. The communists have won.

#46 Jim on 09.13.22 at 4:50 pm

The thing with Canada is that you are one false accusation away from a job loss.
Just one accusation and they can you in the Toronto public sector if you are not represented by a union. Guess what?
The new crop of jobs in the public sector are contract jobs so easy to get falsely accused by a unionized employee and they tell you don’t come back to work the following day.
This is the future where due process and false accusers run amok.

#47 "NUTS!" on 09.13.22 at 5:06 pm

MY WORD!!!! What the heck is wrong with JT and Jag!!??? Seriously, more stimulus? I’m starting to wonder if those two brains combined have the capacity to fog up a mirror.

#48 Meanwhile...in Britain on 09.13.22 at 5:08 pm

Yesterday, police arrested a 22-year-old man in Edinburgh after Prince Andrew was heckled as he walked behind the Queen’s coffin. “Andrew,” the shout was heard, “you’re a sick old man.” Hand on heart, I’ve heard worse. And if Prince Andrew hasn’t, he certainly will. Money and position and expensive lawyers can insulate you from a huge number of consequences in our imperfect world, but if some boy in the streets wants to go full Emperor’s New Clothes on you, you might just have to suck it up, even if it is bad manners in the circs.

Oh, hang on. You don’t actually have to. The man – he looks like a boy – was cuffed and later charged. There could be more to it than currently meets the eye, but it is arguably not hugely encouraging that a heckle may be deemed illegal when burglary effectively isn’t any more. Then again, do remember that this year’s Police, Crime, Sentencing and Courts Act increased the minimum term for various serious sexual assaults to four years, and the maximum term for assaulting a statue to 10 years. If women are going to get sexually assaulted, we should strongly consider doing so while dressed as a living statue of Winston Churchill. That way we can seek the full force of the law as applied to inanimate materials, as opposed to the lesser versions typically offered to female flesh and blood.

So yes: the mores and codes of UK society can seem esoteric – but please consult your Bumper Book of British Etiquette for precise guidance on how to behave on all occasions. There is a time and a place for shouting at men who have paid out many millions of dollars to settle sexual assault cases, you will note, and the experts say it’s not while they’re walking behind their mother’s coffin alongside some bereaved siblings who haven’t paid out many millions of dollars to settle sexual assault cases. And fair play to the experts. However, a breach of etiquette is not a breach of law. If we started arresting people for not showing decorum, our courts system would collapse. Sorry – collapse more.

Arguably, vast and vocal antipathy towards even suspected wrong ’uns is a cornerstone of The Great British Way. Come to that, vast and vocal antipathy towards any number of things is a cornerstone of The Great British Way, which is why it really ought to be expected that a section of people won’t be that crazy about the whole 10 days of events mourning the Queen and transferring the crown to her son, and may even decide to make their voices heard publicly about the subject in a variety of ways. In fact, if people feel only one emotion is state-sanctioned, they may feel far more minded to give vent to others. They may be in the minority, you or I may disagree with them, and they may even have ghastly manners – but so what? How their protests are handled by the police tests not just the latter’s responsibility with their powers, but our democracy itself.

Unfortunately, we are only a few days into the official mourning period, and various tests are being failed. The man in Edinburgh was slammed down on to the pavement by two members of the public who appeared keen to go further. Instead of arresting him for his words, perhaps it would have been better for the police to speak to the two guys who physically floored him?

This isolated incident, in police parlance, is not an isolated incident. In Oxford, a man was arrested then de-arrested for shouting “Who elected him?” at the local proclamation of the new king. In Westminster, a police officer was filmed demanding the details of a man who had held up a blank sheet of paper. The man (a barrister) asked what would have happened if he’d written “Not My King” on it, at which point the officer requested his details, “because you said you were going to write stuff on it that may offend people around the King … it may offend someone.” Hmmm. Thank you, PC Brains. The idea that the UK is a cradle of free speech is one of those comforting stories the country likes to tell itself, when all manner of things from the libel laws to teachers being hounded to the Daily Mail devoting its entire front page to outrage that a comedian mocked Liz Truss says differently.

#49 Pain_Trade on 09.13.22 at 5:09 pm

“You have a very short memory. The Dow gained 2,112 points on March 24, 2020. Stop with the drama.” – Garth

Yeah, and guess who came to the rescue for that. You still believe it?

#50 Faron on 09.13.22 at 5:22 pm

#40 Ponzius Pilatus on 09.13.22 at 4:20 pm
#35 Faron
Great to have an expert on board

Thanks, but I failed to mention the statistical mechanics that bridge the quantum effects of individual molecules to the macro world. Anyhow.

Everyone here has expertise and I believe that there is no such thing as an unskilled worker. Sometimes we see wheat separate from the chaff like when good morning Minnesota (AM in MN) described electricity flows with some alacrity.

Onward.

#51 Jonh on 09.13.22 at 5:23 pm

Garth your much like a wife, supposedly never wrong. DOW down 2997 on March 16 and up 2113 on March 24. Still a difference of 885 to be bad. You neglected to put that in your foot notes. As I said, much like a wife with half truths.

Read the post. I was 100%. – Garth

#52 Faron on 09.13.22 at 5:25 pm

#43 Robert B on 09.13.22 at 4:32 pm
Garth
“The feds just announced $4.6 billion in new spending to offset inflation. Once again politicians feed the problem. Thanks, Jag. – Garth”

Do they think they can spend their way out of stagflation??

Great way to slow inflation? Wack the 10% with higher taxes. Yes, I would say this regardless of my income.

#53 crowdedelevatorfartz on 09.13.22 at 5:27 pm

@#27 Ponzie’s Predictions
“As for your own life expectancy, have a look what’s in your Jeans.”
++++
My wallet ?

#54 Expensive Canada on 09.13.22 at 5:27 pm

CPP is really the Canada Poverty Plan. It is so low compared to one’s working salary, wages. It should be really 50% of most incomes to a maximum of $30,000 a year instead of this ridiculous maximum today of $17,000 a year. I know there is OAS but that is only a $8,000 a year so it is not really helping enough most Canadians in this high cost of living, inflation country of Canada under Trudeau, Jag Liberal, NDP forced up partnership.

#55 NOSTRADAMUS on 09.13.22 at 5:29 pm

WHOA! WHOA! AND A TRIPLE WHOA!
Garth, from your lips to my ears.” The biggest risks to our financial health, however, don’t come from the CRA or the Bank of Canada.”
While sitting on his throne, Not 6 months ago, the Bank Of Canada Governor Tiff Macklem, prophesied that interest rates would not be rising until well into 2023.
Unfortunately, over 262,000 little people listened to this Mini- God and purchased real-estate. This, I suggest will prove to be the most negative, costly life altering expenditure of their life. Today they are all sleeping with the fish.
Back last month, Tiff told the Canadian Federation Of Independent Business that high inflation was going to be a problem for a while- a few months at least- but the country’s small businesses could do their part to bring inflation down by not negotiating wage hikes into contracts for their employees. UNBELIEVEABLE!
However, despite not meeting their inflation targets of two percent for more than a year, The Bank Of Canada( whose bonus structure is supposed to be based on hitting those targets) gave raises to over 1,800 employees in 2021 and bonuses to more than 1,600. UNBELIEVABLE! Talk about not heeding his own advice.
Since the Trudeau government spent more per capita on pandemic subsidies than any other western government- The Bank Of Canada printed them all the extra money they needed- it could be argued that Macklem has aided and abetted the worst inflation in four decades, Tiff Macklem now wants Canadian entrepreneurs , workers and consumers to bear the brunt of the pain the bank’s theories have caused. He thinks you should accept a lower standard of living to cover for the bank’s mistakes. UNBELIEVABLE! Finally a voice of reason.

#56 Craig on 09.13.22 at 5:31 pm

Would have loved to bought into the market today but insane Putin has made me procrastinate. Another dead tycoon/ oligarch , I’ve lost count now 7 or 8 in the last few months. He will do ANYTHING to stay in power. In his current frame of mind I’m very worried that he will start limited nuclear strikes in Ukraine, damn the consequences. This vile excuse for a human being has to be removed from office.

#57 Shawn on 09.13.22 at 5:32 pm

A perhaps minor point:

“Equities hate this because high rates make it harder for companies to earn profits,”

I think the main reason equities hate higher interest rate is the lower present value. Even with the same earnings growth as before the value has to go down. Simple present value math. The “discount”rate is higher. Higher interest rates lower the value of a dollar that will be received in future.
The impact on earnings is secondary. But the main point stand Equites as well as bonds hate higher interest rates.

I’ve quoted Buffett before who has often pointed out that higher interest rates lower the value of all financial assets and that includes houses and farmland (all else equal). He has long said, tell me the future of the ten year rate and I can maybe tell you the future of the stock market. But he says in any case in the long term the stock index goes up. Short term is anybody’s guess. And Buffett refuses to even guess. Yeah, do nothing is exactly what Buffett does for the most part. Just invests the always massive new cash and very occasionally trims some holdings.

#58 crowdedelevatorfartz on 09.13.22 at 5:32 pm

@#40 Ponzie’s passenger puckering
“Great to have an expert on board.”

++++

The SS Ponzerrelli takes passengers?
Where are you headed?
Delusional-ville?

#59 crowdedelevatorfartz on 09.13.22 at 5:34 pm

@#54 Expensive
” It should be really 50% of most incomes to a maximum of $30,000 a year instead of this ridiculous maximum today of $17,000 a year.”

+++
If you are just relying on CPP and OAS to survive….
Enjoy penury.

#60 Steven Rowlandson on 09.13.22 at 5:35 pm

That $3 can of soup is not because gold or silver went up in recent decades. It is because of excessive debt being contracted thus creating currency or credit out of thin air. The government and real estate market are the borrowers who are the biggest offenders.

#61 Pain_Trade on 09.13.22 at 5:38 pm

https://www.google.com/finance/quote/BMO:TSE?authuser=1&comparison=TSE%3ABNS%2CTSE%3AMFC%2CTSE%3ADFY&window=YTD

Can someone spot the liar game? One hint:She’s Canada’s very own ‘Nancy Pelosi’

#62 IHCTD9 on 09.13.22 at 5:39 pm

RIP Dyslexic Smoking Man, this day, two years ago. He’d be having a ball right now in today’s world. The steerage section just ain’t the same without him. “You can’t bend what you can’t offend”. Damn right.

https://tranquilitycremation.com/stojsin-dimitrios-jim-mita/

#63 Shawn on 09.13.22 at 5:39 pm

Boo Hoo about the CPP

#54 Expensive Canada on 09.13.22 at 5:27 pm
CPP is really the Canada Poverty Plan. It is so low compared to one’s working salary, wages. It should be really 50% of most incomes to a maximum of $30,000 a year instead of this ridiculous maximum today of $17,000 a year. I know there is OAS but that is only a $8,000 a year so it is not really helping enough most Canadians in this high cost of living, inflation country of Canada under Trudeau, Jag Liberal, NDP forced up partnership.

*******************
Well, CPP was only ever designed to replace about 25% of income and then only up to a maximum.

What else would you like? Surely every 7 year old should also get a pony on that birthday?

Many people would even like to opt out of CPP yet you propose it seems to double the contributions?

Why does the government even bother to offer CPP (we pay for that) and Old Age Pension (Universal no requirement to have ever paid a dime in taxes). No matter what the level of pension the vast majority of recipients who saved too little on their own just whine for more. It’s sickening really. Supposedly these people “built this country” Yet they failed to plan for their old age?

#64 chalkie on 09.13.22 at 5:43 pm

My prognostication is still at close to BOC settling down in 2023 at 5%, take it to the bank, it will happen, the writing has been on the wall all along and there is not enough soak at COSTCO to wash the marks off. Sure glad that my mortgage is in the rear view mirror.

Canada house prices set for sharp fall in 2023; BoC was hiked 75 bps on Sept 7/22. There is more hikes to come before we level off and hold for quite a period of time, US Feds is about to sting the world again and we are glued at the hips.

Canada’s soaring house prices will decline sharply next year (2023), but still not enough to make them affordable as the Bank of Canada is set to continue raising interest rates and keep them higher for longer, Reuters polls showed.

Average house prices are expected to slump another 7.8% next year, significantly more than the 2.2% fall predicted three months ago. If realized, that would be the biggest decline since at least 2005, when the Canadian Real Estate Association started collecting house price data.

“The pandemic may not be over but the pandemic-era housing market boom certainly is. And the bottom is likely many months away still as our central bank has more work to do,” said Robert Hogue, assistant chief economist at RBC.
Seventeen of 21 said once the BoC reaches its peak, it was more likely to hold rates for an extended period than cutting them relatively quickly.
“Even if benchmark house prices fall another 30% nationally, this will just put prices back to Feb 2020 levels (pre-COVID) which were not affordable at that time, but buyers will also be faced with higher interest rates compared to 2020.”
Interesting how homes were not affordable in Feb 2020, but governments did not intervein in the run-away train on home prices. There is an old saying, you get what you pay for, so I would have to assume our elected was not worth the value we paid at the polls.

5% real estate fees has got to go away, it was fine when homes were 2 or 3 hundred thousand dollars and your cost was 10 to 15 thousand a sell, but today those cost numbers to sell a home as ballooned into 40 or 50 thousand to sell a home. Be smart, negotiate and refuse to pay this ridicules realtor cost. Ask yourself, have you gotten a 300% raise in the past 8 to 10 years, “don’t think so”, So why would you agree to pay a hefty sum to the realtor for the same service.

#65 Tmac on 09.13.22 at 5:50 pm

You learn something new everyday.
I had no idea there was an index that rated retirement affordability in a country. My wife and I never considered it a possibility in this country and always planned on leaving. Now we have data to back it up.

#66 RG on 09.13.22 at 5:50 pm

Some of you don’t even read the blog. You go straight to the comments to post your… whatever it is. Otherwise you would not be whinging about the market! S&P500 is UP 0.59% over 5 days. As GT has said hundreds of times, do not look at your portfolio on days like this.

#67 Victor Llearna on 09.13.22 at 6:01 pm

Our incompetent over spending prime minister is largely responsible for Canada just droppeding five positions on the Natixis Investment Managers global retirement index.
If Liberals hold power for another 8 years Canada will be the bottom of all those indexes.

#68 Science Based Retirement on 09.13.22 at 6:06 pm

Fools Rush In

#1 Retirement Planning Mistake at 65%: “Not understanding how long you will live”.

According to the Statistics Canada 3-year average life expectancy tables (2018-2020: https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1310011401), the life expectancy of a 65 year-old male Canadian is 84.5 years, and of a 65 year-old female Canadian it is 87.2 years.

Note that these are the ages at which HALF of current 65 year-olds are still alive. So, yes, to clarify, the #1 mistake is UNDER-estimating how long one will live. This tendency has prompted many people to take CPP at 60 because they don’t think they will live long enough to break even.

Of course, 50% will not reach average age for various reasons. Smokers can take about 10 years off. So 50% of male smokers will be dead before reaching 74.5 years. Smokers have a reasonable argument for taking CPP early.

Unless you lead a high-risk lifestyle (smoking, excessive drinking, drugs, obesity, mountain climbing etc.) or are already ill from a life-shortening condition, you should consider delaying CPP (assuming, of course, that you don’t simply need the money!). But no matter your situation, only make a final decision after having had a full retirement income financial plan put together by a competent and unbiased planner who incorporates all your other sources of income, tax planning, and your lifestyle desires into the plan.

You could say that FAILING TO HAVE A PLAN is one of the biggest retirement planning mistakes, if not the biggest. Having a plan would make the other five pretty much disappear!

You need more than a hunch to make a decision on when to take CPP, and for such a decision you need more than platitudes like “bird in the hand” or that “the government” might “do something”. Absolutely, some people would learn that early CPP makes sense for them, but a lot more would find out that, all things considered, delaying is the option that makes most sense for their specific situation.

The longevity statistics are pretty clear on that.

#69 canuck on 09.13.22 at 6:10 pm

Wasn’t it just last week that Scotiabank CEO Brian Porter told us that he doesn’t see any recession on the horizon?

Banks are not your friend, they have to deliver to shareholders.

Most idiotic comment of the day. (So far.) Congratulations. – Garth

#70 Fact Checker Fred on 09.13.22 at 6:12 pm

Here’s a question that’s puzzling me.

On the one hand, financial experts and journalists and financial institutions (including Garth) often harp about the multitudes of people who are unprepared for retirement because they have not saved enough. Words like crisis and ticking time bomb are used. The scale of the problem is described with terms like ‘enormous’ and ‘many people’ or ‘most people’.

On the other hand we have the ‘quiet quitting’ and great resignation stories. Apparently huge numbers of 50+ folks are retiring early and the result is a serious shortage of workers.

Am I the only one who notices a disconnect between these 2 narratives? Are the financial people wrong, just selling there investments using fear. Or as someone recently joked are the quietly quitting soon going to be the loudly unemployed?

Look at the numbers. – Garth

#71 Observer on 09.13.22 at 6:14 pm

#36 Broader mind
How to beat Campbells at their own game and have soup for a week.:

Buy one chicken leg
Add 3 gallons of organic well water, or to taste.
Add noodles
Boil well

#72 Love_The_Cottage on 09.13.22 at 6:17 pm

DELETED (Anti-Queen)

#73 Shawn on 09.13.22 at 6:19 pm

Would you people please stop buying so much stuff?

Inflation is not going to go down as long as the malls are packed and people are willing to buy those $3 soups that were recently a dollar. If everyone cuts back and shops around and goes for lower priced options then inflation will come down. So far not much sign of it.

West Edmonton Mall was packed Saturday afternoon despite great weather to just enjoy the outdoors. (I went there only to show it to some out of town visitors)

#74 JJ on 09.13.22 at 6:19 pm

Shawn there, I always thought higher interest rates are a direct competition to other investments. If you get 6% or more in the bank, credit union whatever most people will say leave in the bank in a GIC, term deposit or savings account. This is especially true with people that don’t have a big lump sum size amount to invest and the expertise or someone that they know can manage their money well.

#75 The General on 09.13.22 at 6:20 pm

#35- Faron: Your comments here prove, once again, that parasites dwell here. The kind of comments that wouldn’t be said to a fellow human being in person, due to cowardice or self preservation. Please enlighten everyone with your latest I.Q. scores, Einstein.

#76 Midnight’s on 09.13.22 at 6:22 pm

Well,
1. Not understanding how long you will live (65%)
2. Underestimating the impact of inflation (61%)
3. Not preparing for healthcare costs (60%)
4. Failing to understand sources of retirement income (51%)
5. Being too conservative (48%)

Rental Properties check all these boxes to the positive.
Property increases to true inflation.
Rent increases to inflation
Tax advantages to income
One gets to keep the asset and it pays you a monthly dividend.
Property Managers and accountant are ones portfolio manager.
When one passes away the gift keeps on giving.

#77 Binder Dundat on 09.13.22 at 6:23 pm

#48 Meanwhile…in Britain

Plagiarizing an article is in poor taste. You can do better.

https://www.theguardian.com/commentisfree/2022/sep/13/britain-free-speech-heckles-prince-andrew?utm_term=Autofeed&CMP=twt_gu&utm_medium&utm_source=Twitter

Please peruse the helpful reminders from our blog host. It’s enough to have to listen to the usual climate deniers.

#78 cuke and tomato picker on 09.13.22 at 6:29 pm

How high will brain dead GICS go?

#79 The General on 09.13.22 at 6:30 pm

#56- Craig: Another blame Putin for everything guy, who gets his history lessons from msm? Putin caused your procrastination??? That’s one for the books.

#80 Adam on 09.13.22 at 6:31 pm

The market was giving an 18% chance that there would be a 100 bps hike by the fed next Wednesday. That was before this CPI report. My guess is the odds increase and we could indeed see them bump it up a full 100. I just don’t think they are going to mess around – not when core inflation is going up. If oil had stayed at 125 a barrel, we would probably be at an inflation rate above 10% now. Meanwhile countries continue to print money to combat inflation, including Canada. Seems like the central banks are at odds with the governments of their countries. Not a great situation.

#81 inflation is rampant on 09.13.22 at 6:33 pm

Nick Timiraos (WSJ)

Economists at Nomura Securities have changed their forecast and expect a 100 basis point Fed rate increase next week (followed by 50 bps each in Nov and Dec):

“The August CPI report … suggests a series of upside inflation risks may be materializing.”
__________________________

there you go folks. 100 bpts next week by the fed. they have spoken

#82 jess on 09.13.22 at 6:42 pm

6 Covid Variant Math on 09.13.22 at 3:43 pm

stress tests/modelling are necessary calculations financial forecasting – push pull factors

=========================
Since 1980, the U.S. has sustained at least 323 weather and climate disasters where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2021). The total cost of these 323 events exceeds $2.195 trillion.

https://www.ncei.noaa.gov/news/calculating-cost-weather-and-climate-disasters
https://www.climate.gov/news-features/blogs/beyond-data/2021-us-billion-dollar-weather-and-climate-disasters-historical

https://www.gatesfoundation.org/goalkeepers/report/2022-report/

#83 Theory of Everything on 09.13.22 at 7:00 pm

#3 Linda on 09.13.22 at 2:57 pm

Will be interesting to see what Canada’s official inflation rate will be next week. Apparently the government intends to introduce new measures to assist lower income earners with inflationary concerns. Assistance for things like rent, for instance. Ingeniously, our PM claims doing this won’t stoke the inflation fires. Economists disagree. Does sound very chicken vs. egg. Does handing out yet more public money keep inflation going, or is it simply a way of dealing with what already exists?

The feds just announced $4.6 billion in new spending to offset inflation. Once again politicians feed the problem. Thanks, Jag. – Garth

——————

Can we please stop pretending that politicians don’t know what they are doing?

Can we please stop pretending they are stupid and we know better?

They know EXACTLY what they are doing and why. Of that you can be sure.

They knew what they were doing when the held rates at emergency levels to make RE pick up the economic slack as western economies were shrinking.

They knew what they were doing when they spent all that money last few years, with nothing tangible to show for it.

They know what they are doing now spending more.

They certainly know what they are doing by not bumping rates up sooner or more.

Just stop thinking they don’t know better. They know EXACTLY what they are doing because they’ve been told by…well, you know…

#84 Jan on 09.13.22 at 7:11 pm

Well, CPP should be higher at least $10,000 more a year than it is now. I don’t know why this is not true now or is it because only other special class Canadians like government workers that get much higher pensions and other hard working Canadians should not. If you are not going to allow me to get a higher CPP than at least give me the choice to put an extra maximum $10,000 a year in my TFSA so I will not being relying on CPP or other government programs, support income. In 30 years my $10,000 annual TFSA contributions even with low to modest returns, 3.5% to 4.5% compounded will be $500,000+ which in turn will give me $20,000 to $25,000 a year income.

#85 Bdwy on 09.13.22 at 7:25 pm

Also did costco today. Coke from 11 to 13 to 15. Butter. Milk. Meat. Cheese. All uppa.

Like 10% over a couple months. Don’t think a single item in my cart had not jumped since June.

Forget cooking just get the teen burger!

#86 Faron on 09.13.22 at 7:27 pm

#75 The General on 09.13.22 at 6:20 pm

. Please enlighten everyone with your latest I.Q. scores, Einstein.

Wow, Einstein, thanks! I find it in poor taste to discuss I.Q. on financial blogs. It’s akin to discussing one’s weight. However, maybe you can join me at our next MENSA meeting. We will be talking about how the use of the acronym MSM correlates with low IQ. You might be interested?

#87 Brian on 09.13.22 at 7:28 pm

The headline yesterday here was ‘Wax On, Wax Off.’

The spike rally of the last two days was the ‘wax on.’

Guess what today was?

There is a triple witch option expiration on this Friday, based on the calendar.

In short, this was a trading setup for the quad witch. What a surprise.

We even had the usual talking heads muttering about a 100 bp increase by the Fed in September.

75 bp is baked in, the pivot is an delusion, and 100 bp is highly unlikely.

Stock market volume was nothing to write home about. No real panic.

This is another indication that this was a fairly cynical trading gambit.

And the volatility will get worse, as long as regulation stays so subdued, and the risk reward for cheating is so favorable.

So Jay, how is that ‘internal investigation’ coming along into that brazen insider trading by the Fed Governors?

#88 Don Guillermo on 09.13.22 at 7:33 pm

Scotiabank says new cost-of-living spending announced by Prime Minister Trudeau Tuesday is increasing the likelihood the Bank of Canada will need raise interest rates above 4%

Hahaha, Liberals doing what they do.

#89 Tao on 09.13.22 at 7:44 pm

All this comments about CPP and how much people should get. They should focus on their own investments. The best way for me and my wife to retire is put the max in our RRSPs, TFSAs and pay off debt while building our some cash investments. We have stuck to this mantra for 20 years now and are so far we are close to achieving our goals, 80% there. We are no spring chickens 49, 48, and even with modest 5% or so returns over this period. We also limited our stock market exposure to 35% and our primary residence exposure to 30%.

#90 Nonplused on 09.13.22 at 7:48 pm

“But then, Zelenskyy is kicking butt, so things might change.”

Who’s butt, where, and when?

Just the US alone has sent Ukraine enough money to build 4 of those fancy new Ford class aircraft carriers. So far. There is no end in sight. Just that fact alone, when thought about it as being equivalent to Russia having sunk 4 future US aircraft carriers, should sober minds. Economically it is the same.

This does not count all the money other NATO countries have wasted, nor what’s coming to their economies this winter. Even if Ukraine were to recapture all of their Soviet era territory, it won’t turn the gas back on. Even if Ukraine could capture all of Russia itself and try to subjugate the Russian people, there won’t be any gas in the pipelines come January.

Don’t get me wrong, I am no Putin apologist. But let’s look at this realistically. The west opened up a “second front” in this war, that being economic, and that looks like it has been an unmitigated disaster. A huge strategic blunder. All Russia has to do now is wait, and they will defeat all of Europe without firing another shot. Why on earth would they chose now to expend precious blood on 3 or 6 thousand square kilometers of unoccupied farmland of no real strategic importance? Winter is coming.

War, like investing, requires patience. Something the west, with its 30 second TikTok videos, sorely lacks.

———————————-

In the humor department, I read today that the Germans, fearful of not having enough gas and firewood for heating this winter, and mostly lacking the ability to use firewood anyway, have been stocking up on portable electric heaters! The irony!

#91 Wrk.dover on 09.13.22 at 8:12 pm

#66 RG on 09.13.22 at 5:50 pm
Some of you don’t even read the blog. You go straight to the comments to post your… whatever it is. Otherwise you would not be whinging about the market! S&P500 is UP 0.59% over 5 days.
__________________________________

You mean a post like this?
#8 Wrk.dover on 09.13.22 at 3:08 pm
Instead of a ” stay away from the cottage ” guy, we need a STOP BUYING FANG STOCKS guy.

Always the biggest declines on days like this.

With their stellar capitalization, they drag the entire index with them, breeding fear, feeding the sell off.

F – META negative 9.37% (-2.59 % five day)
A – AMZN negative 7.06% (+0.54 % five day)
A – AAPL negative 5.87% (-0.63 % five day)
N – NFLX negative 7.78% (-0.89 % five day)
G – GOOG negative 5.86% (-2.39 % five day)

One equals the S&P five day, the rest drag it down.

And they all slayed it today.

STOP BUYING FANG STOCKS!

#92 Craig on 09.13.22 at 8:27 pm

Re – The General #79 – Yes, Putin has caused my procrastination. Anybody that threatens the world with nuclear weapons tends to make me cautious. Do you get your news from TASS ?

#93 Concerned Citizen on 09.13.22 at 8:35 pm

Central bank policy the world over is still highly stimulative. Real rates remain highly negative. Quantitative tightening hasn’t even started or barely begun.

Until central banks get serious about addressing inflation, it will continue to rage. And who really thinks the central banks will do what it takes – and accept the pain to asset prices that would entail? Even with today’s plunge, the S&P 500 still isn’t even below 20% off its ridiculous high – the definition of a bear market.

Until central banks start behaving like they care about their inflation mandates, I can only conclude that high inflation is by design.

#94 crowdedelevatorfartz on 09.13.22 at 8:36 pm

@#79 General Mayhem
“Putin caused your procrastination??? That’s one for the books.”

++++
Putin causes my constipation.
International events affect the Markets.
Or did you forget that?

I wonder when the Ukrainian forces recapture the Crimean peninsula…. if Putin may resort to Nukes.

I’m sure “uncle Vlad” would rather see the last major Black Sea port for the Russian Navy “glowing in the dark” than flying a Ukrainian flag.

#95 Sydneysider on 09.13.22 at 8:44 pm

“America’s economy still runs hot. Thus far the CBers have been unable to contain it.”

The annual inflation rate is the sum of monthly inflation numbers measured over the last year, so it reflects the inflation 12 months ago as much as today’s.

In July, the rate was 0.0%, this month 0.1%. Both are an improvement over June’s 1.3%.

https://www.bls.gov/news.release/pdf/cpi.pdf

(Chart 1)

Inflation is but one measure of economic activity. – Garth

#96 Elon Fanboy on 09.13.22 at 8:49 pm

Sooo….Biden’s recent ‘Inflation reduction Act’ needs to be renamed methinks.

As for the comments on Prince Andrew.

https://www.newsweek.com/prince-andrew-interaction-princess-eugenie-raises-eyebrows-online-1741984

#97 RJ on 09.13.22 at 8:54 pm

Concerned Citizen, it looks like central banks are trying to make it look like they want to slay the dragon called inflation that they created out of panic and not doing their job properly. I guess they would rather see everyone lose value of their money than make sure that inflation is kept in check. Yes, governments mostly left leaning ones are creating a big mess for central banks higher interest rates now. The people all keep paying for it with higher cost of living from everywhere.

#98 Flop… on 09.13.22 at 8:58 pm

Flop Drops.

Got a neighbour, dropped the price 3 times from their February 2023 Wish Price, off the sales market, now heading for the rental market.

The bottom has found support lately at 1.4 million, but some people don’t want to mess around and the news gets more real each rate hike.

Liveable starter home in Vancouver just sold.

The details…

5058 Prince Albert St, Vancouver

Asking 1.29

Just sold for 1.22

Assessment 1.47

The Race To A Million won’t happen this year, there’s reason to believe 1.3 will be the new bottom in the next couple of weeks, takes more than one unicorn to make the market rainbow blink…

M48BC

https://www.zealty.ca/mls-R2711900/5058-PRINCE-ALBERT-STREET-Vancouver-BC/

#99 Ponzius Pilatus on 09.13.22 at 9:08 pm

I think the Federal Day off on Monday is bonkers.
It’s limited to Federal workers right now.
But could spread as the Provinces may come on “Board” (hello FURZ).
Far too little notice and very disruptive.
My son is still waiting for his passport.
Not a good move JT.

#100 TurnerNation on 09.13.22 at 9:15 pm

Just another day in the Former First World Countries.
Cutting supply lines — sounds like a war? I believe global WW3 was kicked off March 2020.
There is no Us and Them. Russia appears to be playing a key role in shutting things down. EU to start. Not a finger is being lifted to help Ukraine. Hint hint.

https://www.msn.com/en-us/news/politics/white-house-makes-fresh-push-to-avert-us-rail-shutdown/ar-AA11LH5L
“The White House on Tuesday made contingency plans seeking to ensure deliveries of critical goods in the event of a shutdown of the U.S. rail system while again pressing railroads and unions to reach a deal to avoid a work stoppage affecting freight and passenger service.

— Fresh round of tax slaves coming up. Dumber than ever. Just what our rulers wish for.

https://torontosun.com/opinion/columnists/furey-exams-becoming-a-thing-of-the-past-for-ontario-high-school-students
Ontario’s Ministry of Education has confirmed that high school students across the province are technically no longer required to write exams to pass and graduate.
“According to Ontario’s assessment, evaluation and reporting policy, a final evaluation does not need to be an examination. It could include one or a combination of the following: a performance, an essay, or another method of evaluation suitable to the course content.”
—-
—- Control over travel. Cities will slowly be very limited in travel. It’s coming.

.Toronto needs a congestion charge to fix its traffic problem (thestar.com)

#101 Ponzius Pilatus on 09.13.22 at 9:26 pm

They switched the Queens hearse from a Mercedes (what were they thinking) to a Jaguar.

#102 Flop… on 09.13.22 at 9:32 pm

I had a crap day at work today.

What’s that?

I’m getting a paid day off next Monday?

Like I was saying, I had a really good day at work today…

M48BC

#103 Tony on 09.13.22 at 9:46 pm

Re: #57 Shawn on 09.13.22 at 5:32 pm

In a wage price spiral wages always lag the price spikes so the consumer has less disposable income based on the daily inflation rate. This is one of the main causes of lower corporate profits.

#104 Tony on 09.13.22 at 9:49 pm

I hit the CPI report on the nose. I told them on the Wolf Street blog a few days ago.

#105 Shawn on 09.13.22 at 9:55 pm

Higher Interest Rates lower stock values

#74 JJ on 09.13.22 at 6:19 pm
Shawn there, I always thought higher interest rates are a direct competition to other investments. If you get 6% or more in the bank, credit union whatever most people will say leave in the bank in a GIC, term deposit or savings account. This is especially true with people that don’t have a big lump sum size amount to invest and the expertise or someone that they know can manage their money well.

*******************************
Absolutely. The rate at which you must discount future cash flows rises as interest rates rise. Same thing as saying a 6% GIC rate provides higher competition for stocks. Say a stock has a P/E of 20 or an earnings level of 5% of its value. If the GIC jumps from 4% to 6%, that P?E level is definitely coming down although there is no real formula for how much it comes down because it depends on risk and growth expectations for earnings.

#106 Faron on 09.13.22 at 10:15 pm

Time to root for your Blue Yays (dutch grandmother’s pronunciation). She and her husband immigrated to Canada after WWII ravaged The Netherlands. Her husband helped build the neighbourhood church. They raised 5 kids, one drifted to the US and the rest is history. Somehow she grew to love baseball and her infectious cheer and laughter would fill the living room when games were on. That’s a part of my love of the game.

Go Yays. Get them Yanks.

#107 Covid Variant Math on 09.13.22 at 10:17 pm

#35 Faron on 09.13.22 at 4:09 pm
#26 Covid Variant Math on 09.13.22 at 3:43 pm
#15 jess on 09.13.22 at 3:21 pm

What is the scientific formula that captures the essence of the role of CO2 in climate?

We’re all familiar with E=mc2, so what is it’s climate equivalent?

If it’s an existential threat, some scientist would have developed it and collected a Nobel Prize. But they haven’t

Gold ribbon for dumbest comment of the week! Congrats.

The absorption of wavelengths of light by gaseous species is described by quantum physics. The integral of this absorption across relevant wavelengths and mixed gasses is also mathematically defined. I’m guessing e=mc^2 came to mind because it’s simple algebra and on your level. The physical world contains mathematical complexity way outside your league.

If you want to look at the math as it appears in climate models, the code is all open source. Have at ‘er. Maybe Russ can help LOL.

Finally, a Nobel prize went to the scientists who described the reaction between CFCs and Ozone that lead to the ozone hole. Not a climate change issue per se, but relevant to your stupidity.

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

And not an answer to my very simple question. Nothing to do with it actually. And then you just hurl insults.

I’ll take the win.

Thanks for playing.

Next? Can anyone answer a simple question without resorting to word salad and cognitive dissonance?

#108 KNOW IT ALL on 09.13.22 at 10:17 pm

The inmates are running the prison.

They own all the finacial weapons so they get the last laugh.

Just imagine we still live in a society where we are suckered into calling people of supposed authority kings and queens.

Slavery is live and well. The Sheeple keep moving but dont know why.

#109 Covid Variant Math on 09.13.22 at 10:26 pm

#82 jess on 09.13.22 at 6:42 pm
6 Covid Variant Math on 09.13.22 at 3:43 pm

stress tests/modelling are necessary calculations financial forecasting – push pull factors

=========================
Since 1980, the U.S. has sustained at least 323 weather and climate disasters where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2021). The total cost of these 323 events exceeds $2.195 trillion.
++++++++++++++++

People building expensive mansions in dumb-a$$ places on the coast and on floodplains might have something to do with that.

Even the Natives were smart enough to know not to do that.

Nothing to do with weather. All about what people are building where. Just ask Calgarians in 2013. Everyone knew the high dollar houses were built on a flood plain.

And guess what? It flooded. Even my old house flooded. I don’t blame climate change, just the weather.

Not sure why this is a surprise to anyone, and even less sure how the NDP will re-direct the rain to where/when it is needed. And who decides who gets the rain?

#110 FAANGS ARE JUNK STOCKS - Ditch them on 09.13.22 at 10:26 pm

Ditto

#111 Winston 101 on 09.13.22 at 10:37 pm

The new war between the superpowers is not a direct conflict but rather suckering the other powers into an unwinnable proxy conflict elsewhere to drain their resources,economy, and fighting strength. Let’s call it the Proxy Quagmire Strategy or PQS. Recent examples,
Yanks against Vietnam(who were supported by Ruskies)
Ruskies against Afghans(who were support by Yanks)
Ruskies against Ukraine(who were support by Yanks)
Next up……drum roll please

China against Taiwan ( who will be supported by Yanks)
A state of perpetual wars and proxy wars just as in Orwell’s 1984.

#112 Earlybird on 09.13.22 at 10:37 pm

#62
Time flies..Sept 16th 2020 “Into the Smoke” RIP
Thanks for the link…quite the character!

Looking back over the blog posts in that time frame…lots of accurate inflation predictions.

I refer them to people that would be interested…I hope they stay digitally immortal as a learning guide….

#113 Earlybird on 09.13.22 at 10:44 pm

#36
Campbells Soup 540ml $2.00 last year
Campbells Soup 515ml $2.50 today….

Batched cooked and stored my own for about $1.25
Vote with your dollar…..
Screw shrinkflation….

#114 DJT on 09.13.22 at 11:00 pm

#107 Covid Variant Math.

Computer models are not science, they are computer models. And no, there is no science confirming AGM, only opinions.

#115 Faron on 09.13.22 at 11:02 pm

#107 Covid Variant Math on 09.13.22 at 10:17 pm
#35 Faron on 09.13.22 at 4:09 pm
#26 Covid Variant Math on 09.13.22 at 3:43 pm

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

And not an answer to my very simple question. Nothing to do with it actually

What??? You asked for the math, I directed you where to look. The math is extremely difficult. You are too arrogant (dumb?) to grasp what I told you. The end.

Of course you are from Calgary. Next we will learn you are some kind of engineer.

#116 Faron on 09.13.22 at 11:03 pm

#109 Covid Variant Math on 09.13.22 at 10:26 pm

Even the Natives were smart enough

Ooh, and a racist to boot. Real gem here.

#117 DJT on 09.13.22 at 11:06 pm

#107 Covid Variant Math.
Climate is complex, for modeling people should start out with something relatively simple, like the economy.

#118 Ponzius Pilatus on 09.13.22 at 11:29 pm

#109 Covid
People building expensive mansions in dumb-a$$ places on the coast and on floodplains might have something to do with that.

Even the Natives were smart enough to know not to do that.
What?
Well most “Natives” had no concept of a stationary home.
They just followed the Buffaloes with their light weight Teepees.
They invented WFH.
No mortgages to worry about.
Pretty smart.

#119 Michael in-north-york on 09.14.22 at 12:02 am

#90 Nonplused on 09.13.22 at 7:48 pm
===

You are out of touch, Europe has enough gas stored for the winter. Putin’s gas war is just another blunder and he is losing it sorely.

Putin’s whole economy is walking on the crutches of oil and gas revenues. And he has lost his biggest customer.

#120 al on 09.14.22 at 12:16 am

Speaking of financial wimps, inflation continues to rise towards 9% and they plan to hold steady with the .75s? They Fed isn’t immune either, ha!

#121 Stoph on 09.14.22 at 12:39 am

#26 Covid Variant Math on 09.13.22 at 3:43 pm

——————————————

The temperature on the Earth is a combination of how much the sun heats the Earth via light which is largely in the visible spectrum, and how much heat the earth radiates away, which is largely in the infrared portion of the spectrum.

Gasses in the atmosphere are transparent to light in the visible spectrum, thus allowing light to penetrate the atmosphere and heat up the earth. Green house gases like CO2 absorb infrared light thus limiting how much heat escapes. The net effect is that the earth is warmer than it would otherwise be. As an aside, this is why Venus is so hot.

#122 The General on 09.14.22 at 12:52 am

#86- Faron: M.E.N.S.A.= Merely Entitled Nobodies Showcasing Assininity? Yeah, that makes sense.

#123 DON on 09.14.22 at 12:57 am

#112 Earlybird on 09.13.22 at 10:37 pm
#62
Time flies..Sept 16th 2020 “Into the Smoke” RIP
Thanks for the link…quite the character!

Looking back over the blog posts in that time frame…lots of accurate inflation predictions.

I refer them to people that would be interested…I hope they stay digitally immortal as a learning guide….

********
I agree…thank you for the reminder IH

#124 The General on 09.14.22 at 1:07 am

#94- Mr. Fart’s: Shall we therefore refer to you as Putin’sBrainFartz from now on?

#125 SoggyShorts on 09.14.22 at 2:32 am

#10 Søren Angst on 09.13.22 at 3:08 pm
1. Not understanding how long you will live (65%)

http://www.deathclock.com/

1 less planning mistake. Only 4 left.
*********************
If I believed that clock it would change my life.
I’ve been concerned that over the years I’ve gone from 200 to 230 pounds, but according to that clock it only makes a 1-year difference if I get back down to “fighting weight”
Terrible trade for the effort involved.

#126 Covid Variant Math on 09.14.22 at 2:35 am

Hint: The CO2 formula that I refer to has to do with the (alledged) multiplier or forcing effect of CO2 on temperatures.

In layman’s terms, every scientist in the world knows that CO2, by itself, is too weak of a greenhouse gas to change temperatures more than 1.2C. This statement is not in dispute; everyone knows this to be true, including the IPCC.

In order for there to be a crisis, CO2’s effects have to be amplified somehow, by something. So far nobody knows by what or how much. This is the missing piece of science that would win a Nobel Prize, yet no one wants to ask this question as the wrong answer would kill the Climate Change Industry. Pretty low credibility by all involved if they’re even too scared to ask a clear question on a $100 trillion investment. Bernie Madoff would have loved these gullible marks.

And BTW, Australia’s Great Barrier Reef is in better shape now than at any time in the last half century. You won’t see that good news story on the CBC. Not part of the narrative anymore, so no airtime for you!

#127 Steven Rowlandson on 09.14.22 at 6:51 am

If there is anything to worry about it is that rates won’t go high enough for long enough to do three things.
Reward savers and punish and roll back real estate prices.
Plus punish profligate governments and teach them frugality. If these things are not accomplished the whole exercise is a wasted effort and something crueler and more brutal is required which it probably is.

#128 Wrk.dover on 09.14.22 at 7:05 am

#126 Covid Variant Math
________________________

I’m outing you; Tucker Carlson!

#129 crowdedelevatorfartz on 09.14.22 at 7:18 am

@#118 Professor Ponzie Pontificates
“Well most “Natives” had no concept of a stationary home.
They just followed the Buffaloes with their light weight Teepees”

+++
Sorry to correct you oh wise, cynical one.

I believe the term is “hunter gatherers” … and they followed Bison….not African or Asian buffalo.

#130 Is anybody listening? on 09.14.22 at 7:21 am

DELETED (Anti-vaccine wingnut)

#131 Gravy Train on 09.14.22 at 7:33 am

#26 Covid Variant Math on 09.13.22 at 3:43 pm
What is the scientific formula that captures the essence of the role of CO2 in climate? We’re all familiar with E=mc2, so what is it’s climate equivalent?

Arrhenius’s greenhouse law for CO2 is stated as:
∆F = α ln(C/C0)

For more details about the equation, see the link below.
https://en.m.wikipedia.org/wiki/Svante_Arrhenius

See also the Komabayashi–Ingersoll limit. You can find the relevant equations in the link below.
https://en.m.wikipedia.org/wiki/Runaway_greenhouse_effect

If it’s an existential threat, some scientist would have developed it and collected a Nobel Prize. But they haven’t.

Syukuro Manabe won the Nobel Prize in Physics in 2021 “for the physical modelling of Earth’s climate, quantifying variability and reliably predicting global warming.”
https://www.nobelprize.org/prizes/physics/2021/manabe/facts/

Svante Arrhenius won the Nobel Prize for Chemistry in 1903.

#132 Dharma Bum on 09.14.22 at 7:54 am

Faron really seems to always need to have the last word. Like a kid in a playground repeatedly chanting: “I know you are but what am I?”.

So childish.

Not mature and highly intellectual like Ponzi, Crowdy, and, of course, yours truly.

Oh, and my pal Jag.

#133 the Jaguar on 09.14.22 at 10:08 am

@#132 Dharma Bum on 09.14.22 at 7:54 am ” Not mature and highly intellectual like Ponzi, Crowdy, and, of course, yours truly. Oh, and my pal Jag. ++++

Despite Ponzi’s defense of all things ‘Liberal” he makes the odd salient observation, and as long as Crowdy is thrown a beef steak of Trump or Putin into his cage daily he mostly behaves in a Rottweiler- like manner. ————–

No surprises in the snippets department this morning. ‘Soft Landing’ predictions are disappearing like a fart in a hurricane per this snippet:
“The Federal Reserve is likely to raise U.S. borrowing costs faster and further than previously expected after data on Tuesday showed underlying inflation broadening out rather than cooling as expected.” +++

Poilievre continues to get a lot of press, with hacks reporting that Trudeau intends to run for a third term. Should be better than the ‘Thrilla in Manila”. +++
This too, in the news:
“His finance minister, a potential heir apparent, may be looking for an exit. Chrystia Freeland, questioned about reports she’s angling for a plum job at NATO, didn’t exactly deny it. In fact, she didn’t deny it at all.” +++

On the WFH front : “Hundreds of New York Times Co. employees are working from home this week in defiance of the company’s renewed return-to-office push. More than 1,200 people.”…hmmm. I say pull out the old Reagan/Air Traffic Controllers playbook. +++

And finally, to add insult to injury there is this:

“The Belgian brewer of Delirium Tremens beer is facing a real risk of halting production for the first time in more than a century as Europe’s energy crisis creates unexpected ripple effects across the region. Carlsberg A/S said it might need to “significantly reduce” or halt beer production in Poland due to a shortage of liquid CO2. ”

Now that’s just downright mean.

#134 Desperate Realtor, part-time Passport Consultant on 09.14.22 at 10:14 am

Crash is coming, they say.

https://www.thestar.com/business/2022/09/14/a-soft-landing-more-like-a-crash-landing-say-economists-who-warn-bank-of-canadas-rapid-rate-hikes-will-likely-trigger-a-recession.html?li_source=LI&li_medium=star_web_ymbii

Recession, maybe. Crash, of course not. – Garth

#135 Philco on 09.14.22 at 10:15 am

Ya awesome gov. These idiots been running business out of the country for years. The list of stupid in a long one.

#136 Faron on 09.14.22 at 10:43 am

#126 Covid Variant Math on 09.14.22 at 2:35 am

Read the report. One good year does not a reversal make.

https://www.aims.gov.au/monitoring-great-barrier-reef/gbr-condition-summary-2021-22

every scientist in the world knows that CO2, by itself, is too weak of a greenhouse gas to change temperatures more than 1.2C

OMG LOL

#137 Confirmed on 09.14.22 at 10:51 am

#75 The General on 09.13.22 at 6:20 pm
#35- Faron: Your comments here prove, once again, that parasites dwell here. The kind of comments that wouldn’t be said to a fellow human being in person, due to cowardice or self preservation. Please enlighten everyone with your latest I.Q. scores, Einstein.

=============================

Could there be anything more confirmational of a low IQ than an endorsement from the Ponzi guy?

Quick point re: the Mercedes/Jaguar wheels for the Queen…”Saxe-Coburg and Gotha” is quite a bit more Gemanic than English…nein?

#138 Faron on 09.14.22 at 10:52 am

#131 Gravy Train on 09.14.22 at 7:33 am
#26 Covidiot Variant Math on 09.13.22 at 3:43 pm

What boggles the mind is that this person believes that nature owes him a simple mathematical expression for an incredibly complex set of interactions. This speaks poorly of the state of conservatism and discourse today: “if it’s complex, it must be wrong or a conspiracy.”

And, no, Arrhenius’ expression isn’t a fundamental description of physics in the way E=mc^2 is. It’s an empirical relationship that is a pretty good descriptor.

#132 Dharma Bum on 09.14.22 at 7:54 am

Yes, I will always seek the last word when I see misinformation or inaccuracies about things I’m well-versed in.

Doltism shall not abide, yet here you are.

#139 Shawn on 09.14.22 at 10:58 am

Tough year for pension funds

Most or many pension funds have seen asset value drop so far this year.

And they now have to increase pensions in January to reflect CPI. Most government DB plans index at 60% of official CPI. Their solvency ratios will go down somewhat. Luckily most or nearly all government DB pension plans were in fine shape entering 2022.

The Canada Pension Plan will increase to reflect the 100% of officially CPI using the average for the 12 months ending around October 2022. Ouch. This will be a hit to solvency but not any kind of mortal wound. Don’t worry CPP will always payout as promised. The CPP increase in January is going to be headline-grabbing. Probably in the order of 8%! Never enough for some whiners and too much for other whiners. (Whiners always whine, that’s what they do.)

Here’s how the first quarter went according to StatsCan (and Q2 will have been far worse when reported)

https://www150.statcan.gc.ca/n1/daily-quotidien/220914/dq220914e-eng.htm?CMP=mstatcan

#140 Ponzius Pilatus on 09.14.22 at 11:35 am

129 crowdedelevatorfartz on 09.14.22 at 7:18 am
@#118 Professor Ponzie Pontificates
“Well most “Natives” had no concept of a stationary home.
They just followed the Buffaloes with their light weight Teepees”

+++
Sorry to correct you oh wise, cynical one.

I believe the term is “hunter gatherers” … and they followed Bison….not African or Asian buffalo.
————————-
I wander why they called him “Buffalo Bill”.

#141 Gravy Train on 09.14.22 at 11:44 am

#138 Faron on 09.14.22 at 10:52 am
And, no, Arrhenius’ expression isn’t a fundamental description of physics in the way E=mc^2 is. It’s an empirical relationship that is a pretty good descriptor.

The point Arrhenius was trying to make—way back in 1896 no less—was that “if the quantity of carbonic acid [CO2] increases in geometric progression, the augmentation of the temperature will increase nearly in arithmetic progression.”

“Today’s climate-change skeptics would have us believe that the whole notion of global warming is a relatively recent, half-baked idea dreamed up by a cabal of liberal scientists bent on destroying the U.S. economy. However, the roots of scientific thinking about Earth’s temperature are buried in the 19th century.”
https://www.sciencehistory.org/distillations/magazine/future-calculations

#142 Ponzius Pilatus on 09.14.22 at 11:50 am

#133 Jag
“The Belgian brewer of Delirium Tremens beer is facing a real risk of halting production for the first time in more than a century as Europe’s energy crisis creates unexpected ripple effects across the region. Carlsberg A/S said it might need to “significantly reduce” or halt beer production in Poland due to a shortage of liquid CO2. ”
——————————
Liquid CO2?
Nasty. What about natural fermentation?
For me it’s beer brewed according to the Bavarian Purity law.
And a 100 year old brewery is pretty young for a brewery in Europe.

#143 PBrasseur on 09.14.22 at 11:55 am

RBC economists just told clients, “we think a soft landing is becoming a distant prospect.”

No kidding!

Credit grows insanely, driving house prices to insane levels which people use get more credit to buy more houses and more stuff. Works incredibly well as long as more money and more people enter the system.

What usually happens when people start leaving the Ponzi scheme? Governments take over with stimulus. Oh wait….

#144 Faron on 09.14.22 at 12:03 pm

Tidbits from The Market Ear on yesterday’s equity oopsies:

1. Apple AAPL was off nearly $155B today – in the top 10 worst single-day market value losses of all time, in equity market history. Greater wealth destruction than the bottom 450 companies’ total market cap inside the S&P 500.

2. The 240 handles in ES from high to low was one of the top five largest absolute bands in history.

3. Not a single one of the NASDAQ’s 102 members closed in the green on the day, the first time that has happened since the pandemic-fueled market crash more than two years ago.

#145 Linda on 09.14.22 at 12:04 pm

#54 ‘Expensive’ & #84 ‘Jan’ – the reason CPP isn’t higher is that the contribution rates are not that high. Right now, ‘enhanced’ CPP tops out in annual contributions at just over $3K per annum. So 30-40 years down the road, those folks paying the enhanced premiums will get roughly 1/3 of their working income in retirement. Or so they claim. Now I’ve already read any number of comments complaining about the enhanced CPP premiums. I agree what is paid out from CPP isn’t much, but if folks want more they will have to pay more – a lot more – to get those higher DB payouts upon retirement. My workplace pension plan is a DB plan; I see deductions off my salary of some $8K per annum for that plan which is in addition to the $3K per annum for CPP. So what do you think I get for paying almost triple the deductions for my workplace plan? If you guess I’d receive $48K in pension upon retirement you would be wrong. Under the rules of our DB plan, I will receive roughly $1K for every year worked, but that only applies to those who have contributed to the plan for at least 25 years or longer. Under 25 years – well, let’s just say the amount received would at best compare to CPP & not the maximum CPP either. Anyway, bottom line is if I retired after 25 years I’d get about $25K (before tax) from my DB workplace plan – but I would have paid in $8K or more per annum to get it. I agree CPP ‘should’ be more but folks, keep in mind the contributions would have to jump substantially to permit the payouts you are talking about. Plus CPP has 100% COLA. That is one expensive benefit & contributions would have to be high enough to pay for it. Lots of workplace plans have limited or ceased to provide COLA because of the costs involved.

#146 David on 09.14.22 at 12:06 pm

The Natixis Investment Managers global retirement index is BS. How do super expensive countries like Norway, Switzerland, Iceland, Ireland, and Australia make the top five? I was in Norway and Iceland over the summer and spent almost nothing because everything coast at least twice as much as in Canada. Same experience in Australia last year. Natixis is totally out of touch with reality.

#147 crowdedelevatorfartz on 09.14.22 at 12:21 pm

@#132 Dharma Transient
“Not mature and highly intellectual like Ponzi, Crowdy, and, of course, yours truly.”

+++
I am humbled.
I walk among giants.

#148 Ponzius Pilatus on 09.14.22 at 12:29 pm

About the picture:
Schnauzer is named after the German word for snout.
I always get a laugh when people pronounce it Snozer.

#149 crowdedelevatorfartz on 09.14.22 at 12:33 pm

@#140 Ponzie’s plodding predicament.
“I wander why they called him “Buffalo Bill”.”

++++
Two wrongs don’t make a right.
You “wonder” not “wander” unless, you are truly lost….?.

Bison are European or North American species.
Buffalo are African or Asian.

I think its a colonialist racism thing.

Lesson over.

#150 Faron on 09.14.22 at 12:37 pm

#141 Gravy Train on 09.14.22 at 11:44 am

Absolutely and Arrhenius’ insight was remarkable. My point is that the natural exponential is not the same thing as a ~law like Einstein’s.

We see eye to eye, I was arguing the details in the off chance that covidiot math was asking a good faith question (obviously he wasn’t, but benefit of the doubt and all).

#151 45north on 09.14.22 at 12:45 pm

chalkie Seventeen of 21

more usually written as 17 of 21

#152 Bdwy on 09.14.22 at 1:02 pm

Weak stocks performance today following the big dip.

Not a great sign. Feels like more red by close.

……
Oh, give me a home, where the buffalo roam
Where the dear and the antelope play
Where seldom is heard, a discouragin’ word
And the skies are not cloudy all day

#153 Russ on 09.14.22 at 1:07 pm

Ponzius Pilatus on 09.14.22 at 11:50 am

#133 Jag
“The Belgian brewer of Delirium Tremens beer is facing a real risk of halting production for the first time in more than a century as Europe’s energy crisis creates unexpected ripple effects across the region. Carlsberg A/S said it might need to “significantly reduce” or halt beer production in Poland due to a shortage of liquid CO2. ”
——————————
Liquid CO2?
Nasty. What about natural fermentation?
For me it’s beer brewed according to the Bavarian Purity law.
And a 100 year old brewery is pretty young for a brewery in Europe.
==================================

Hey Ponz,

No surprise really. Liquid CO2 is typically used in the bottling stage without impacting the quality of the beer.

Here is an image of a “hobby brewer” counter-pressure bottling system which yields clear beers similar to commercial brands.

https://hobbybrauer.de/bilder/Biermann/Melvico-1.jpg

Similar to the system I have but the welding gas bottle (stored as liquid CO2) and vapour (pressure) regulator is not visible, which supplies the bubbly part of the bottled beer.

——————-
And if Faron is still on today…

I am looking to retire Eudora. Do have an opinion on the Pandora email client?

Cheers, R

#154 PBrassseur on 09.14.22 at 1:08 pm

@#133 “Carlsberg A/S said it might need to “significantly reduce” or halt beer production in Poland due to a shortage of liquid CO2. ”

That’s right, no C02 means no life on earth and even worse, no beer!

#155 rampant inflation on 09.14.22 at 1:25 pm

i think the market just remembered that the SPR is going to run out soon and has to be refilled. maybe they will ask Putin for come crude.

George Noble, Peter Lynch’s #2 guy. 1 hour talk just recently. seems to have some interesting ideas about valuation and stock prices.

https://www.youtube.com/watch?v=LW52jgTfjw8&ab_channel=GeorgetownMcDonough

#156 Dr V on 09.14.22 at 1:51 pm

115 faron

“Of course you are from Calgary. Next we will learn you
are some kind of engineer.”
———————————————–

I have an engineering degree from the U of Calgary.

Do you have an issue with that?

#157 Oakville Rocks! on 09.14.22 at 2:22 pm

#90 Nonplused!

“Don’t get me wrong, I am no Putin apologist.”

Really? Just like you are not a Trump apologist but spent 3 months and countless posts telling us all about the “stolen election” and how Trump really won.
Tell us again about benford’s law and the Venezuelan hacked Dominion voting machines.

You are not a Putin apologist but I swear you have a side hustle regurgitating the nonsense from RussiaToday and based on your verbosity I am guessing you are paid by the word.

“War, like investing, requires patience. Something the west, with its 30 second TikTok videos, sorely lacks.”

How many wars have you fought? Let me guess, you read something about SunTzu’s Art of War on ZeroHedge?

TikTok? You know this is a Chinese app right?
Did you even think to check who uses TikTok?
#1 is the US.

#2 Indonesia. Do you know where Indonesia is? I have been there, it is on the other side of the world (not the west) and when it comes to patience, it is hard to beat an Indonesian.

#4 by the way is Russia and based on the differences in population size they are not that far off the US in terms of usage.

As little as RT pays you, they are still not getting their money’s worth.

#158 Faron on 09.14.22 at 2:24 pm

#156 Dr V on 09.14.22 at 1:51 pm
115 faron

I have an engineering degree from the U of Calgary.

Do you have an issue with that?

Congrats. And, no, of course not. It should be obvious that I don’t.

Here’s why: it’s not a good look for you to fail to understand the distinction between the statement that I do make: “the majority of climate-change denying nutters I hear from are engineers” and the statement I would never make “the majority of engineers are climate-change denying nutters.” Similarly, I would say “it’s more likely to hear from a climate-change denying nutter who is from Calgary” but I would never say “Calgarians are all climate-change denying nutters”.

¿Lo entiendes?

If you don’t get that distinction, please revisit basic logic and contact me later. Sorry for the snark, but for the love of the great spaghetti monster…

I get countless emails that start:

Dear Dr. so and so,

As a retired engineer…

In addition to O+G people trolling my LinkedIn… from Calgary. Further, my evidence is empirical, not definitive.

#159 Faron on 09.14.22 at 3:03 pm

#157 Oakville Rocks! on 09.14.22 at 2:22 pm

Bravo!

#160 oops on 09.14.22 at 3:06 pm

#156 Dr V on 09.14.22 at 1:51 pm

Bro, what are you doing?

#161 Is anybody listening? on 09.14.22 at 3:34 pm

DELETED (Anti-vaccine wingnut)

Garth I take issue with you calling me a wingnut as the comment was of a peer reviewed research report in a reputable medical journal!

You qualified long before that post was made. – Garth

#162 Is anybody listening? on 09.14.22 at 6:09 pm

DELETED (Anti-vaccine wingnut)

Garth I take issue with you calling me a wingnut as the comment was of a peer reviewed research report in a reputable medical journal!

You qualified long before that post was made. – Garth

So you must think I’m a racist mysoginist!

Do the right thing. Go away. – Garth