Chilling

The market rally continued. Up almost 6% in two days. The biggest bounce since the BeforeTimes. Hope you were invested.

If you’re wondering why the September slaughter abruptly turned into an October orgy, look no further than Canadian real estate. It’s all you need to know about the likely future.

Higher interest rates, engineered by the CBs, are killing houses. On purpose. It’s a planned euthanasia. The impact is the same on property as it’s turning out to be on employment (dropping) and manufacturing stats (stagnating). In short, monetary policy is working.

This week, for instance, we learned about the plop in BC.

In Vancouver sales fell abruptly by 10% from August. The crash year/year was astonishing – more than 46%. Last September 3,149 transactions took place, while last month that fell to just 1,687. One of the worst Septembers on record.

“With the Bank of Canada and other central banks around the globe hiking rates in an effort to stamp out inflation, the cost to borrow funds has risen substantially over a short period,” said the realtor cartel. “This has resulted in a more challenging environment for borrowers looking to purchase a home, and home sales across the region have dropped accordingly.”

Prices are following suit, falling on an annualized rate of more than 24% in the last few weeks. Sellers unwilling to chop their ask are seeing homes sit idle and ignored. Inventory is building.

In Victoria sales have also cratered. The year/year decline was 32% for detacheds, 49% for townhouses and a whopping 62% for condos. Last month a scant 410 pieces of property sold in the whole region, the second-lowest number in the last 20 years and just 15 units above the all-time bottom. Inventory has doubled as this shifts into a buyer’s market.

Says the head MLS wizard: “This year sales have dropped month-over-month since May and we saw a reluctant September with some of the lowest sales numbers for that month in decades.”

In Calgary, prices have held steady (at far lower levels than in Vancouver of Toronto), but sales are taking a hit despite the province’s marketing campaign to suck in Ontarians. Sales in September fell 12% from last year. Detached properties saw a 23% decline and semi-detached property deals were 27% lower.

On Wednesday the GTA board – still the largest in North America – releases its numbers. Look for a plop in sales… the formal death of the once-strong autumn market… and more bleating by realtors that we need to end the mortgage stress test and build oodles more houses.

As we’ve reported, detached homes in Toronto have declined on average by more than $150,000, and discounts in the soulless suburbs have been even greater. The impact of mortgages rising from 3% or less to the 5-6% range has been incredibly swift and profound. The latest Nik Nanos poll found consumer sentiment is lower than a Dachshund’s private parts.

Canadians have rarely been so pessimistic about the economy since the index was launched in 2008. Half of Canadians expect the economy will weaken over the next few months, with only 14 per cent anticipating a stronger economy. The slide has almost fully erased a mini-rebound in sentiment in August and suggests households are buckling under the weight of rising consumer prices, higher borrowing costs, a housing correction, plunging stock markets and growing talk of recession.

Nanos unearthed the widest margin ever other than the worst Covid weeks between those who think real estate will fall further (37%) and those who expect an increase (26%).

Now, consider net worth. Most people are getting poorer, says the government.

Click to enlarge. Source: Statistics Canada

In short, it took only a few months of rational, required, deliberate central bank tightening to scare the crap out of people, drop asset values, scare markets, impact personal finances and turn this blog’s steerage section into a quivering collection of terrified, wussified widdle bears. Many of the key indicators the bankers were watching are on the dip. Employment. Wholesale prices. Used car values. Real estate valuations. Factory activity. Energy prices. And the biggie – consumer sentiment.

This suggests inflation numbers may soon follow. It also hints that if the CBers don’t let up sometime soon the outcome could be an economic reversal nobody wants. Hence, a good reason why investors have been doing more buying than selling this week. The betting is that the Fed and others will temper future rate hikes, keep them smaller and pause sooner. Even the United Nations has been lobbying for this, warning of global consequences if the basis points keep piling on.

“What changed?” asks analyst Ed Pennock.

The market looked at the real numbers around Inflation. House transactions are way down. Prices are off. Inventory is the highest in several years. In Toronto, we are told that some condo developers are returning the deposits. Not because of lack of demand. They can’t deliver them at the stated price. Aren’t markets wonderful? The supply of new cars has surged. Don’t need the oldies anymore. The highest lot inventory in a year and a half. Shipping rates around the world are collapsing. Port congestion is easing up. The CVD demand has passed. We are going back to trend. Reverting to the mean… Things are cooling off so quickly that the FED playbook will have to change.

The world is not ending. Govern yourself accordingly.

About the picture: “Love your blog,” writes Rachel. “Our husky Joyce is a serious couch potato who is just chilling waiting for the markets to improve. We adopted her from the NWT SPCA and she has been the best dog we have ever had.”

138 comments ↓

#1 rs on 10.04.22 at 3:49 pm

In Calgary prices have remained steady, but with so much more expensive mortgages, affordability has gotten significantly worse. People who bought at very low interest rates are currently ahead in Alberta it seems.

#2 Søren Angst on 10.04.22 at 3:55 pm

“The world is not ending. ”

It is for Elon Musk.

——————————–

As I type:

Twitter Inc
$51.58 +21.25% +9.04 Today
Oct 4, 3:51:32 PM UTC-4 · USD · NYSE

8 min left until Mr. Market closes. Like watching a Vegas slot machine spin.

Why?

Elon Musk Suggests Buying Twitter at His Original Price
https://www.nytimes.com/2022/10/04/technology/elon-musk-twitter-deal.html

Revenge is a Dish Best Served Cold … as if.

Clearly they’re not a TWTR shareholder like me.

Albatross about to be sold tomorrow. HOPE it holds!

#3 Steve Martin on 10.04.22 at 3:57 pm

If I had one wish it would be first to the comments!

#4 Sail Away on 10.04.22 at 3:57 pm

Heh. Closed out my Twitter arbitrage. +19% in 5 months. Not a bad time to gain a big whack of investable cash… not bad at all.

Let’s see how that correlates with market action over the last 5 months? Oh. Oh my.

Thank goodness for Elon. My man.

#5 Linda on 10.04.22 at 3:59 pm

‘Joyce’ looks like one plush puppy:)

The drop in wealth is telling, in that the lowest & second lowest quintiles lost the greatest percentage of wealth overall – 12%. Presumably that reflects the greater amount required to pay for necessities vs. actual income being received. Also telling is just how much those lowest quintiles have in comparison to those with more robust financial assets. The middle of the road 3rd quintile has 6.5 to 6.8 times more wealth overall despite not exceeding $500,000 in total net worth. I may be wrong, but I think most people would not consider someone whose net worth is under $500K ‘wealthy’. I’d expect them to be described as ‘well off’ with the underlying expectation that those folks have enough $ to pay their bills & have a reasonably good standard of living. Heck, I’m not even sure if folks in the 4th quintile would be considered wealthy given that a million dollars doesn’t go far these days.

#6 Dave on 10.04.22 at 4:00 pm

“Prices are following suit, falling on an annualized rate of more than 24% in the last few weeks. ” Certainly not in in Vancouver or Victoria. Prices have fallen about 5% and many are simply taking their properties off the market.

#7 Captain Uppa on 10.04.22 at 4:01 pm

Oddly I am seeing an uptick in homes being sold at very high prices 1.5M-1.8M in my GTA suburb. I follow the market on HouseSigma (when I’m bored). Two on my street have sold in just a few days of listing.

But also, I am seeing a lot of houses sitting for a very long period of time.

I cannot find any discern why in any meaningful as to these opposites (apart from the obvious ones; priced way too high, not renovated at all, bad area, etc.)

Very confusing.

Anyways, hope the market really goes down to screw these specu-flippers!

#8 Captain Uppa on 10.04.22 at 4:02 pm

*I cannot discern why in any meaningful way

#9 Gordon McKenzie on 10.04.22 at 4:06 pm

DELETED (Anti-immigrant)

#10 crowdedelevatorfartz on 10.04.22 at 4:08 pm

Sales and prices are falling like bombs on Russian tanks.

#11 chalkie on 10.04.22 at 4:09 pm

It’s been a nice Market Bounce today and over the past couple of Days. Everyone have been wishing for an October rally and hoping it intensifies for a period of time, but Denis Gartman says the Bounce won’t last, he may be right, but spring is coming and investments will sore in the sky, think long term.

Thousands of Russian Troops have reportedly turned to a hotline Kyiv set up for Moscow’s conscripts who wish to lay down arms and live in Ukraine.

Putin must be chewing his finger nails down to the quick, due to the Ukrainian beating’s his troops are taking, loss of ground, equipment including morale confidence and the fall out exits of hundreds of thousands of his own people trying to avoid a draft.

Investors cheered on a fresh labor market reading that showed U.S. job openings slid by the most in the past two and half years, this was a welcome sign for Federal Reserve officials trying to tamp down outsized labor demand in the fight against inflation. The statement sounded like a statement out of a horror movie to people who do not understand, but in fact, that is how inflation is brought under control, labour market have to be reduced to get prices to come back to earth.

“Homebuilder confidence turned negative in August, driven by declines in all three components of the index: current single-family home sales, future sales expectations, and traffic of prospective buyers,” said Odeta Kushi, deputy chief economist at First American, a title insurer.

“Excluding the early months of the pandemic, homebuilder confidence is now at the lowest level since 2014”. “Housing is a primary transmission mechanism for the Federal Reserve, and as monetary tightening intensified, so has the impact to homebuilding.
Builders are responding to a pullback in demand, as rising mortgage rates have dampened affordability and caused would-be buyers to sit on the sidelines.”

But with the Fed trying to put the brakes on the runaway inflation, mortgage rates have doubled and also tripled for variable mortgages. Houses have become less affordable for many, dwindling hopes of ever owning a home.

What does all three negative sales components tell us, “Well” in fact it points out, better prices ahead for 2023 in the short term and perhaps beyond as sellers compete to sell their homes with less buyers willing to jump into the market.
The inflated housing market was driven mostly by FOMO as home prices skyrocketed out of control. This is not the first time this has happened, just that this time around it has happened on a much bigger scale with more people caught in the overpriced housing trap.

Financial Post reported: Canadian home prices set to drop by almost 25% by end of 2023. Desjardins Economics, reports a significant downgrade to its earlier forecast.

Home prices predictions are all over the map, very confusing for the most of us I know, but for the most part, we do know that the bottom is nowhere in sight yet.
Condos seem to be doing a much better job at holding their own value, perhaps due to the early retirements, as people try to downsize or rightsized. Try renting now and the rental rates are beyond disbelief.

Buying a home in the Canadian market has never been so unaffordable, as surging interest rates continue to drive ownership costs to record-high levels, according to Robert Hogue, assistant chief economist at RBC Economics. Robert Hogue could not have been more right, this mess is not going to end well for a lot of families, regardless of all the hype of positivity being preached on some TV channels, most often done by people who has something to gain by delivering positive news in a continuous downward negative housing environment.
Keep your money, there are better home buying opportunities ahead.

British Columbia and Ontario top the list for being the most unaffordable markets in Canada, followed by Quebec and Nova Scotia.

According to BNN Bloomberg, about a quarter of Canadians are losing confidence in the stock market and are now looking to cash out their investments, a new survey has found, “wow, that is a lot of people”.

The survey, conducted by personal finance comparison website Finder, found that those looking to cash out amid recent market volatility may also be doing so because they’re feeling a pinch in their budget.

Romana King, a personal finance expert with Finder, said Canadians are feeling the pressure when it comes to rising costs and may be looking to increase the amount of money, they have on hand to make ends meet. Money on hand, this would make sense, but a major mistake to cash out. Borrow against your equity If you can for your shortfalls, the down markets appears to be short term ahead of us and borrowing short term, would end up for you, much-much cheaper, stay invested, be brave, stay the course.

Cashing out is a mistake, for those of us that have been around the block a few times, understands the turbulence and we are here for the long term. In fluctuating or down markets, the best move has always been to do nothing, ride the storm out, calm waters always return and pay a nice dividend for waiting.

Feeling a little pinched for cash on your $16.00 an hour job, just as an FYI, Justin Trudeau had a salary of $371,600 in (2021). Not sure who can live on a measly $30,916.00 per month, but somehow, Justin manages to do it. According to Jobs on Monster, Justin has a net worth of $85,000,000.00 and $50,000,000.00 of that money was inherited from his ancestors, Now you know.

Quote of the day: “Rich people choose to get paid, based on results. Poor people choose to get paid, based on time.”

#12 calgary on 10.04.22 at 4:11 pm

Will Fed pivot?

#13 Søren Angst on 10.04.22 at 4:12 pm

Normally, when StatCan makes a pronouncement on the Cdn economy it gets headlines.

CTV, Global, Unmentionable Cdn Business website name headlines:

Hockey Sex problems, Loretta Lynn (God Bless her soul, RIP), Quebec Premier wins, Bear Attack, Russians, HSBC, RE (imagine that?) …

Meanwhile Cdns got a whole lot POORER in just ONE Quarter.

Distributions of household economic accounts for wealth of Canadian households, second quarter 2022
https://www150.statcan.gc.ca/n1/daily-quotidien/221003/dq221003a-eng.htm?HPA=1

StatCan so aghast they started using indices since some of the % drops were depressing beyond words.

I ran some of the % drops StatCan tried not to and posted to Twitter – yes, I do depressing as in Bring it On.

The Sack of Cdn Wealth

Age Group Net Worth
https://twitter.com/bsant54/status/1577235357745045504

Age Group Debt to Asset Ratio
https://twitter.com/bsant54/status/1577236810006089728

and my fave, the YOLO 55-64 yr olds, Age Group Debt to Income
https://twitter.com/bsant54/status/1577241470100463618

——————–

THIS is not good, not good at all.

Maybe that PAUSE at the US Fed and BoC may come earlier than some, including myself, would have predicted.

Too much blood on the street I say.

#14 OK, Doomer? on 10.04.22 at 4:14 pm

The psychology hasn’t changed yet. People are just starting to feel uncomfortable, but not yet fearful. Until foreclosures hit, nothing will be perceived as real.

One neighbor getting foreclosed scares the crap out of the whole neighborhood as everyone will hear about it. That will be when the psychology will change, but we are a long way from that point.

The masses either never learned or lost their fear of high interest rates and need to regain it to stop inflation. If the CB’s ease off before fear and capitulation, the next round of inflation will be far worse.

#15 crowdedelevatorfartz on 10.04.22 at 4:15 pm

Gas in the Lower Brain land is the highest in Canada.
And now used car taxes are going to be estimated on “what it’s wholesale price is” not what you sell it for.

Sell your car to your kid for a dollar?
Too bad.
BC Govt says its worth $10,000
Pay up.

https://vancouver.citynews.ca/2022/10/04/bc-used-car-tax-change/

#16 TurnerNation on 10.04.22 at 4:18 pm

When Good Condos turn Bad. They all do eventually. Only ~7 years old, in my prefecture, massive internal flooding also causing a business/lounge’s (on the rooftop) closure 2 months.
—-
—- This was not designed to ‘be over’. Fact: Corvid is life in the Former First World Countries. Year 3 beginning soon.

Quebec re-elected the guy who gave them house arrests and curfews…in 2022! After they complied and rolled up their sleeves in 2021. The science was settled.
Congrats you’ve earned your next prison-style lockdown.
Ontario will re-elect the current ruling junta, this too is a given.

.Mixed reaction from Ottawa travellers as Canada drops COVID-19 border rules, travel mask mandates (ottawa.ctvnews.ca)

.Fanshawe College faculty fight to restore mask mandate (lfpress.com)

——– Life in a Second World Country?

.Fiona: P.E.I. residents without power alarmed at response (atlantic.ctvnews.ca)
.Nine days after Fiona, P.E.I. residents without … – Times Colonist

#17 Futurist on 10.04.22 at 4:19 pm

It’s $1800 a month to rent a one-bedroom apartment in Jane & Finch, the infamous San Romano Way.
Will there be a homeless crisis in Toronto?

#18 Palpha on 10.04.22 at 4:20 pm

While T2 selfie boy is bungy jumping ( a really bad idea that can cause total blindness) our healthcare system is collapsing. Healthcare administrators are even more incompetent than our liberal government. Our administrators came up with the idea of supplying crayons and colouring in pictures to help our overworked nurses cope with stress. I am very pessimistic about the future of this country.
https://www.castanet.net/news/Kelowna/381990/-We-need-respect-Overworked-Kelowna-hospital-staff-bristle-after-being-given-art-supplies

#19 yorkville renter on 10.04.22 at 4:21 pm

now, we just need the TSX to jump and house prices to continue their collapse and this “Yorkville Renter” will be a “Yorkville Owner” in no time!

#20 Moose on 10.04.22 at 4:21 pm

…. sentiment is lower than a Dachshund’s private parts.

You are too funny Garth.

#21 Søren Angst on 10.04.22 at 4:21 pm

Day 2 of Mr. Market trend. Hopefully Day 3 the same or better (hey, I’m an Optimist).

My stuff all went up from +2.56% to +22.24% today.

That last one, my Albatross TWTR. WHAT a day.

Yes Little Johnny, there is a God after all.

[or Big Electron for the non-believers]

PS:

BNS finally got the memo.
https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

Good news for a lot of Cdn ETFs incl. one of mine and as usual

yeah oil

Celebrating now while I can. Hopefully Bears into hibernation.

#22 The real Kip (Ret) on 10.04.22 at 4:28 pm

….and through all the intervention, housing is more unaffordable than ever. Nice work.

#23 cramar on 10.04.22 at 4:29 pm

“…wussified widdle bears.” Nice ring to it! But a trifle too generous.

#24 Franco on 10.04.22 at 4:30 pm

A weeks worth of Stock Market gains like we have had the past several days will completely reverse all losses on paper, unless someone sold and made the losses real ones. Now to take care of Putin and be on guard for the next megalomaniac.

#25 enthalpy on 10.04.22 at 4:30 pm

Prices ran up so hard during the big C …we haven’t even corrected back to 2017 levels….correct?

We still need much more of a haircut. Bring it down to the wood.

Well, one can only hope.

#26 Dave on 10.04.22 at 4:31 pm

What happens when Russia brings out the heavy guns?

War escalates, inflation rises…..stocks market stumbles again.

That made no sense. – Garth

#27 jess on 10.04.22 at 4:31 pm

Disruptions in the commercial real estate market could in turn potentially threaten financial stability through the connectedness of the sector with the financial system and the broader macroeconomy. Continued vigilance is warranted on the part of financial supervisors to mitigate such risks.

To ensure banking-sector resilience, stress-testing large declines in commercial real estate prices should be conducted to inform decisions regarding the adequacy of capital buffers for commercial real estate exposures. Banks’ commercial real estate valuation assumptions should also be reviewed to ensure that provisions are adequate. In regions where nonbank financial institutions are important players in commercial real estate funding markets, efforts should focus on broadening the reach of macroprudential policy to cover these institutions to mitigate systemic risks. ”

As our Chart of the Week shows, property prices in the industrial and residential segments have, on average, experienced a deceleration across regions in recent months. At the same time, the depreciation in retail and office property prices has increased.

https://www.imf.org/en/Blogs/Articles/2022/09/21/commercial-real-estate-sector-faces-risks-as-financial-conditions-tighten

#28 Dave on 10.04.22 at 4:40 pm

Central Banks should keep hiking rates….Real Estate is still unaffordable in Vancouver

#29 Doing my Part on 10.04.22 at 4:48 pm

Real estate pumper “Dave” is trying to convince his wife that their house in Victoria has only dropped 5%.
By the frequency of the statement he must really have something on the line.
Hope is not a strategy.

#30 Ole Doberman on 10.04.22 at 4:49 pm

Does anyone know if capital flows out from bonds into equities during rising rate cycles?

#31 yorkville renter on 10.04.22 at 4:59 pm

#5 “Annualized” means about 2% a month… not in a single month.

#7 Lots of preapprovals are expiring, so people are taking their “discounted” rate to buy “discounted” property… might be a smart move, but only time will tell.

#32 Søren Angst on 10.04.22 at 5:01 pm

#4 Sail Away

Selling when it hits USD $54. I’ll make all of 8% and very happy with that. Elated if it gets there. Should.

Last single stock pick I ever make in my life.

PS:

Well that 19% will help offset your “My Man” other shares you own:

https://www.google.com/finance/quote/TSLA:NASDAQ?window=YTD

#33 DanBC on 10.04.22 at 5:04 pm

Dave#5

Garth is correct, Victoria is not “off only 5%”

The Times Communist printed its monthly VREB stats today.
https://www.timescolonist.com/business/a-cool-fall-for-greater-victoria-real-estate-with-sliding-prices-and-fewer-sales-5904286

Garth’s comments come straight from this.

Sure, there are still listings that beg, “Why?” Neighbour behind me has a 1400 sq ft rancher, needing updating, late 90s build. Over $1 million list. Nuts.

Seeing similar type listings in the South Okanagan, those homeowners like seeing their big numbers in the listing, but when DOM is well over 100, they need to get a clue. The down market has only just begun there, as it rose 40% there last year.
What goes up, must go down.

#34 Predictions anyone? on 10.04.22 at 5:07 pm

Blog dogs, do you think this property can eventually be had for under a million?

https://www.realtor.ca/real-estate/24906027/3-edgewater-dr-alnwickhaldimand-rural-alnwickhaldimand

#35 Phylis on 10.04.22 at 5:11 pm

#2 Søren Angst on 10.04.22 at 3:55 pm
Xxxxx
Cool. He owns a bunch of bots that can vote for him in his poles. Seems kinda pricey thought. Wonder what’s next?

#36 Steven on 10.04.22 at 5:14 pm

The world is not ending…once QE starts again, hyperinflation is coming.

Then the world as we know it ends like in the past when a war is needed to clear the deck the Central Bankers created for the 1%.

…and we were doing so well today… – Garth

#37 MD on 10.04.22 at 5:22 pm

FED has barely touched the tip of QT and markets are cheering QE again :)
I guess if FED does a U turn than it will be QE forever n ever and we all can assume that asset prices will only go up.

#38 DC on 10.04.22 at 5:25 pm

Sounds as though the BoC is only going to go halfway in fulfilling its promise to serious dampen inflation. Sad that those who overextended because they want(ed) everything and they want(ed) it now are going to get let off the hook. Man, this country is going to be in a financial mess in the coming decades if the BoC doesn’t put on its ‘big boy pants’ and deal with inflation properly and not in some half-assed way.

#39 Søren Angst on 10.04.22 at 5:37 pm

The Sacking of Cdn Wealth

Besides the YOLO 55-64 yr olds taking on more debt relative to their income, this one surprised me as well (magnitude wise).

The wealthiest (top 20% or quintile) LOST this much wealth in the 1 quarter:

$199,118

https://www150.statcan.gc.ca/n1/daily-quotidien/221003/cg-a002-eng.htm

OUCH an understatement.

———————-

PS:

The Liberal Party had the nerve today to Tweet:

“… has a real plan for clean air and a strong economy, that puts money back into the pockets of Canadians …”

Well, the money went back into the pockets of somebody, ’cause it certainly wasn’t Cdns.

https://twitter.com/liberal_party/status/1577379938180669440

#40 Quintilian on 10.04.22 at 5:39 pm

Not sure what justifies the rally.

Everything is still the same.

People like Liz in power, oil is up because a cartel can collude and determine prices, core inflation still rising, earnings recession is forecast.

The whole pyramid foundation rests on psychology, or perhaps a bunch of rich guys manipulating the markert.

CB’s have given no indication of a pivot, only the talking heads are speculating.

Did you miss the part about markets being forward-looking? – Garth

#41 the Jaguar on 10.04.22 at 5:41 pm

All due respect, but am I the only one who thinks cute little ‘Joyce’ doesn’t resemble a ‘Husky dog’?
Super cute anyway……

As for real estate, let’s see what happens Oct.26th.
October is ‘earthquake month’. Let’s see if there are tremors that signal things to come…

#42 Søren Angst on 10.04.22 at 5:46 pm

#35 Phylis

Well, look it.

He was whining about 5% bots.

I have done Mergers & Acquisitions for then 1 of the largest companies on Planet Earth and I can assure you that if the target company can guarantee me after the buyout

95%

of Revenue streams I would have done a backwards somersault from the supine position at the mere thought.

THAT is how positively ridiculous, infantile Musk’s claims were about not buying TWTR.

He knew that too. Why today he caved. And I am sure the thought of pleading his lame case in a couple of weeks to the Delaware hanging judge seemed NOT to be a good idea. And the so called dismissed TWTR whistleblower seemed to me to be an opportune BS artist.

Then again, he Musk is a NUTTER if you ask me, and may change his mind tomorrow, tonight?

Who knows?

#43 Sail Away on 10.04.22 at 5:55 pm

#32 Søren Angst on 10.04.22 at 5:01 pm
#4 Sail Away

Last single stock pick I ever make in my life.

———

Let’s hope so. Good grief.

#44 Scott in Gibsons on 10.04.22 at 6:07 pm

Whew! Thank goodness that’s over. I was getting a bit worried with the escalating NATO/Russia nuclear war risk, the bankruptcy of corporations that can’t roll over at these rates, the coming economic contraction in Europe now that the gas lines have been cut (and missing earnings for NA stocks), the Chinese debt crisis, and the latest product out of Wuhan all seeming to threaten our rosy economic future. Surely all these issues are now in the past.

#45 Penny Henny on 10.04.22 at 6:13 pm

I used to think that the Dolce guy was annoying but this Soren Angst has got him beat by a mile.
Must be an Italian thing.

#46 Penny Henny on 10.04.22 at 6:18 pm

#32 Søren Angst on 10.04.22 at 5:01 pm

Selling when it hits USD $54. I’ll make all of 8% and very happy with that. Elated if it gets there. Should.
/////////////////

From whining to greed. Sounds like Dolce

#47 Søren Angst on 10.04.22 at 6:19 pm

#43 Sail Away

Elon Elated is what I am. Soon to be Done like Dinner with him.

I like Google Finance’s new “Key Events” markers/text box explanations for a stock chart.

I have to say TSLA one of my faves. Mouse over these Key Events (Google has a sense of pathos, humour)

Apr 26
Sep 29 (my personal fave)

—————

“My Man” … he’s all yours as of tomorrow bright and early.

With that tidy sum, ‘gonna load up on some more Cdn ETF and YEAH OIL ETN.

#48 Brian on 10.04.22 at 6:25 pm

Everyone is too focused only seeing interest rates and short tem economic data. Over the last three weeks since Sept 7 to last Wed, banks withdrew $288 billion in reserves at the Fed, that is more than a quarter trillion $, and reserve levels have fallen more than a $1 trillion this year. That hiked 3.15% IORB the Fed now pays banks IORB to rent that money to keep it out of circulation or from banks using it for other purpose like making loans is not enough. This is a problem that banks want to be compensated for, expected inflation and market rates might give it to them allowing the money supply to expand making inflation worse. The potential increase in the money supply of this bleeding of reserves or leakage is immense. What can they do? Go 100 instead of 75 next round? There is no pivot on the short term horizon this year. The Fed will push things till the unemployment rate goes above 5%. The housing market will be in trouble too, but will take time for it to get severe enough.

https://fred.stlouisfed.org/series/IORB

#49 crowdedelevatorfartz on 10.04.22 at 6:35 pm

@#40 Quibbling Quanty’s Questions
“The whole pyramid foundation rests on psychology, or perhaps a bunch of rich guys manipulating the markert.”
+++

So you come to a financial blog because you believe
“the whole pyramid is based on psychology….or gamed by a bunch of rich guys…”

Ok.
So what DO you invest in?
Or is your entire retirement strategy that 100+ years of Wall St will, eventually, maybe, sooner rather than later,….go bust and YOU will have Pogs to trade.

#50 wallflower on 10.04.22 at 6:40 pm

The RE epic slide has yet to hit.
Too many specuvestors holding multiple condo units that
[a] they cannot rent at the prices they thought when originally buying
[b] that they cannot rent period … finding qualified tenants becoming a massive challenge
all as their equity evaporates and selling prices continue downward spiral…
There are going to be forced sales; that is when the fun begins.

#51 Mr Canada on 10.04.22 at 6:43 pm

The Central Banks are screwing up. After increasing the money supply by 1/3 over 18 months, and promising no rate hikes into 2024, then confirming inflation was just “transitionary”, they are now being way too aggressive in such a very short window its negatively impacting all areas of the economy (name a sector that is not up). They should pause and measure the lag effect this will have on the economy because at this rate, there will be no “soft” landing in 2023.

#52 The Original Jake on 10.04.22 at 6:43 pm

Easing in is ok but last 2 days could easily be reversed if either the jobless number is sticky or next week’s CPI number doesn’t fall. Wouldn’t be the first time markets have head faked investors.

This blog’s comment section is an excellent contrarian indicator. – Garth

#53 Re-Cowtown on 10.04.22 at 6:46 pm

#15 crowdedelevatorfartz on 10.04.22 at 4:15 pm
Gas in the Lower Brain land is the highest in Canada.
And now used car taxes are going to be estimated on “what it’s wholesale price is” not what you sell it for.

Sell your car to your kid for a dollar?
Too bad.
BC Govt says its worth $10,000
Pay up.

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

There’s always been an tax exemption on transfers of a vehicle from parents or grandparents to a child in BC. It looks like that is probably still intact. I used it several times myself when we lived in BC. Getting rid of that one would be political suicide. Same with the “Settler’s Effects” exemption when people move to BC and bring out of province cars with them. People would go nuts paying tax again on something that they bought years ago. I don’t think that would pass a court challenge.

But I agree with you; I think it’s ridiculous for the BC government to get into the business of estimating a “wholesale” price on every car transaction. The paperwork will be unbelievable.

Time for a new BC Ministry of Truthy Car Prices. The Truth is whatever a faceless, unaccountable, unelected bureaucrat says it is. What could go wrong?

#54 The Original Jake on 10.04.22 at 7:00 pm

This blog’s comment section is an excellent contrarian indicator. – Garth

Fair enough but so too are many analysts. I’ve been easing in since Ed Pennock said we were only a few hundred points away from a bottom which was a few months ago or a few thousand points higher.

#55 crowdedelevatorfartz on 10.04.22 at 7:01 pm

@#53 Re-Cowtown.
“Time for a new BC Ministry of Truthy Car Prices. The Truth is whatever a faceless, unaccountable, unelected bureaucrat says it is. What could go wrong?”

+++
Nah.
They’ll shovel it into the growing Kraken octopus aka
ICBC
The Govt Car insurance monopoly.
They had a major computer glitch today.

https://vancouver.citynews.ca/2022/10/04/icbc-outage/

Which begs the question.

If my car insurance expired today and ICBC computers were down….and I can’t renew my insurance…..
who pays in an accident?

#56 ogdoad on 10.04.22 at 7:01 pm

Jeesh. What else is chilling is just how much humans want to be with other humans…broad statement, I know, but, man. I am having mega success lately and ….sorry, paid subscriptions only(full. dis. I don’t mind).

Found other baby blues, btw…phew, looking at me like I’m a steak! It’s all that matters. Here’s my money, house, education, average-to-great looks, hair, height….
Have it! Just keep those eyes on me…always on me…

…Phew…

Og

#57 Faron on 10.04.22 at 7:05 pm

#32 Søren Angst on 10.04.22 at 5:01 pm

LOL. Funny how clowny doesn’t realize that the twitter boom has to come on the back of yesterday’s TSLA rout and today’s underperformance.

#58 baloney Sandwitch on 10.04.22 at 7:11 pm

“The world is not ending. Govern yourself accordingly”

lol. A 2-day rally turns the steerage section from a withering mass of earthworms to a posse of strutting peacocks.

#59 Ballingsford on 10.04.22 at 7:26 pm

There must be a lot of anxiety out there. I don’t think I’ve ever had it until now

#60 Kool Aid on 10.04.22 at 7:43 pm

Let’s see if the CB’s can get the fiat phoenix to land.

The multi rounds of QE & extended decades of low interest rates are history, so the record asset prices recede.

QT and rising interest cost has quickly changed investor behaviour, unfortunately, inflation persists.

Mortgages at 6.5%, GIC’s 5.5% in 2023?

#61 JM on 10.04.22 at 7:46 pm

This could be a bear market short squeeze. Lots of pessimism out there. Shorts got caught, had to buy.

95% of S&P 500 stocks moved higher. You are not even close. – Garth

#62 Shirl Clarts on 10.04.22 at 8:03 pm

I’m curious… does the gov’t consider home ownership part of an individual’s net worth? I was led to believe that it should not be counted.

#63 Faron on 10.04.22 at 8:06 pm

#55 crowdedelevatorfartz on 10.04.22 at 7:01 pm
@#53 Re-Cowtown.

If my car insurance expired today and ICBC computers were down

You would have had a month of notice, so it’s on mr. procrastinator. Also, I just renewed my insurance this afternoon. Glitch was, apparently, brief. But maybe our Vancouver Island unicorn fart powered internet kept the system alive around here.

#64 Faron on 10.04.22 at 8:10 pm

Local politics note:

Here in Victoria we are having a municipal election. There’s a coalition of conservatives and, among them, there have been no less than two involved in criminal activity, another who is sketch AF (lawyer practicing without having passed the bar) and a volunteer who is under fire for impersonating IslandHealth. Good job guys and gals. goooood job.

#65 TurnerNation on 10.04.22 at 8:11 pm

Duck ‘n Cover is back! This time it’s people who are transacting commerce under-the-table to keep their loot out of T2/UN hands.

In the mean time enjoy the Second World Infrastructure.

https://www.tvo.org/article/if-you-think-toronto-is-cash-strapped-now-just-wait
Toronto’s fiscal state is having a moment in the spotlight and is being found wanting. Whether it’s looming cuts to library services, a satirical public-art exhibit, a state of disrepair at the city’s newest aquatics centre, or an under-resourced planning department making the housing crisis worse, we’re seeing signs of a city that is simply not spending enough to maintain the current level of public services — much less do anything more ambitious than the status quo.

.Why is the Toronto Public Library facing service cuts? Ask John Tory (thestar.com)

.Toronto pledges to repair broken amenities at Regent Park pool after dad tweets out criticism (cbc.ca)

#66 JM on 10.04.22 at 8:16 pm

It starts as a short squeeze, then turned to FOMO and greed. Market ripped higher… Only time will tell if it holds… I am invested and was a buyer last week at the lows. But hey, it could go lower… it doesn’t hurt to keep a little dry powder..

#67 kommykim on 10.04.22 at 8:38 pm

#42 Søren Angst on 10.04.22 at 5:46 pm
THAT is how positively ridiculous, infantile Musk’s claims were about not buying TWTR.

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

Maybe Musk has dementia and has confused TWTR with rocketship TWR…

#68 Quintilian on 10.04.22 at 8:40 pm

#49 crowdedelevatorfartz on 10.04.22 at 6:35 pm

“So what DO you invest in?”

Boring , very boring stuff, but it makes money.

It mirrors the real economy, not the whims of some cocaine sniffing suspender clad sociopath in Manhattan.

Private equity, with portfolio of companies ranging from, auto service, electrical box mfg, lumber products, food packaging equipment, and testing laboratory.

BTW you guessed the Pogs thing, I still have some, but they are just mementoes in the same drawer as my Transformers.

#69 Shawn on 10.04.22 at 8:42 pm

Capital flows from bonds to stocks?

#30 Ole Doberman on 10.04.22 at 4:49 pm asked
Does anyone know if capital flows out from bonds into equities during rising rate cycles?

********************************
Well SOME individuals and companies will sell bonds and buy stocks.

But in the net zero capital can flow out of bonds that way. Each bond sold must be purchased by someone for the same amount as the sale price.

Each stock bought with cash must be sold by someone who then gets cash.

No net flows.

It’s a common misrepresentation. What CAN happen is that stock prices can be bid up. That creates wealth out of thin air and does not require any capital to flow. Bond prices can be bid down destroying wealth but not a penny flows out in the process.

A company with a book value of $100 million does not have anymore capital if the stock price is bid up from book value to ten times book value.

Think of houses. If prices drop by 25% on average, where did the wealth go? It did not flow out. It merely disappeared. ’tis how it works.

#70 Norman Bigbird on 10.04.22 at 8:49 pm

Getting inflation down to 4-5% is the easy part. There are two more rate hikes this year. I expect the US Fed will go for 0.75 % rate hikes both times. If the Fed goes soft the markets will fall. Geting inflation back down to 2% may take 2 years or more so rates will not decrease as many fools believe. The credibility of the Fed is going to be tested. Canada’s real estate pendulum has a long way to go. People do not understand what the world will be like as more and more liquidity is withdrawn. Cash will be King. All the majic bullets have been fired over the last twenty years. Smarty pants politicians have their hands tied and fiscal stimulus and handouts will just prolong the agony and bring on the bond vigilantes as we saw with the duffers in the UK last week.

#71 Shawn on 10.04.22 at 8:50 pm

Banks withdrwaing reserves from central banks?

#48 Brian on 10.04.22 at 6:25 pm
Everyone is too focused only seeing interest rates and short tem economic data. Over the last three weeks since Sept 7 to last Wed, banks withdrew $288 billion in reserves at the Fed, that is more than a quarter trillion $, and reserve levels have fallen more than a $1 trillion this year.

**********************************
This raises great questions about why banks are drawing down reserves and what they are doing with them. These things are far from obvious to me. Requires some thought and trace trough debits and credits on bank balance sheets. Don’t be too quick to rush to assumptions.

Is it in part because the FEDs are selling bonds to banks who then pay for the bonds by having their reserve balance reduced? That is, are they trading fed reserves for bonds formerly held by the Fed?

Let’s remember that banks as a group generally don’t need a lot of cash (if any) to make loans since the loaned out cash in almost all cases will be deposited in some bank or other. What’s created in banks (money) stays in banks. Think about it, for example think where the proceeds of a mortgage loan go. (The sellers bank account)

#72 Rachel on 10.04.22 at 8:59 pm

Sorry @The Jaguar

Joyce is 65% husky and other is German Shepard. Should have specified she was mixed breed.

Rachel

#73 Dr V on 10.04.22 at 9:05 pm

40 Q – agreed on most points. Proceeding with
caution.

#74 Steven Rowlandson on 10.04.22 at 9:10 pm

Real estate is dead when the price is zero and people are burning their monopoly games. Probably not before.

#75 meslippery on 10.04.22 at 9:12 pm

#15crowdedelevatorfartz on 10.04.22 at 4:15 pm

Gas in the Lower Brain land is the highest in Canada.
And now used car taxes are going to be estimated on “what it’s wholesale price is” not what you sell it for.

Sell your car to your kid for a dollar?
Too bad.
BC Govt says its worth $10,000
Pay up.
—————
That just makes the case for saving your car sales receipt.
Then you could show the BC Govt that you already paid the tax on $35,000 when you bought it new so your kid wouldn’t have to.

#76 PBrasseur on 10.04.22 at 9:36 pm

Inflation is nowhere near “controlled” and the Fed is not done, more .75 hikes on the way. The Fed’s job is not to please the UN because the strong dollar is hurting poor nations, the Fed’s job is to control inflation in the USA. Period, expect the markets to get clobbered, again.

#77 crowdedelevatorfartz on 10.04.22 at 9:46 pm

@#68 Quinty’s Quantifiables.
“not the whims of some cocaine sniffing suspender clad sociopath in Manhattan.”

+++
Good one.
Apparently looming layoffs on Wall St are rumoured.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj8vo3U-sf6AhWVBDQIHRHCBqcQFnoECAQQAQ&url=https%3A%2F%2Fwww.reuters.com%2Fbreakingviews%2Fwall-street-job-cuts-will-be-shallow-painful-2022-09-29%2F&usg=AOvVaw1wsmaQvwE5wVQHV4iEH8bO

50 years from now you can give your wise, sage, “boomer-ish” advice…to the wide eyed, envious youth surrounding your electric Rolls Royce
“Pogs my boy. Pogs!”
“It all started with Pogs!”

#78 crowdedelevatorfartz on 10.04.22 at 9:51 pm

@#63 Faron
“You would have had a month of notice, so it’s on mr. procrastinator.”

+++
Some customers refuse to govt the govt their money until the very last day.
Many years ago in another life.
I watched a Lawyer pay his legal fees at the BC Legal Society at 4:59pm on Dec 31st.
Apparently this lawyer was famous at the Society for arriving at the last minute on the last day….to pay his exorbitant fee.

#79 crowdedelevatorfartz on 10.04.22 at 9:54 pm

@#75 meslippery
“Then you could show the BC Govt that you already paid the tax on $35,000 when you bought it new so your kid wouldn’t have to.”
+++
Good luck with that.
Sales tax is the tax that just keeps on giving.
ICBC doesnt renew you car registration, insurance and now YOUR drivers license….if you owe them money….any money.
tax, fines, tickets…..
No money…no drivee

#80 Faron on 10.04.22 at 10:15 pm

#78 crowdedelevatorfartz on 10.04.22 at 9:51 pm
@#63 Faron

“You would have had a month of notice, so it’s on mr. procrastinator.”

+++

Some customers refuse to govt the govt their money until the very last day.

Yes. Well, in a market with reliable returns, waiting makes sense. Similarly, not having tax withheld is the best choice. But, like anything, you accept risk in doing so — force majeure doesn’t necessarily give the payer an out.

Also, my time is worth doing things when convenient rather than when a point may be proved to a clerk who doesn’t give a rat’s arse why you are in their office on new year’s day at closing time.

Anyhow, I’m almost a grand lighter in the wallet today. Yay.

#81 Linda on 10.04.22 at 10:16 pm

#41 ‘Jaguar’ – not all Huskies have those amazing blue eyes. Their eyes can be blue, brown, one of each color or a mix of the two colors & in some cases may look green, though that last is apparently quite rare. Or so says the mighty Google. I’d imagine today’s blog dog is a true Canadian Heinz 57 dog, with Husky being predominant but not necessarily the only factor in the mix.

About the BC government plan to assign a value to vehicles for tax purposes. Not really a surprise that government is looking for more sources of tax revenue. And if government can assign a taxable value to someone’s house then why not to someones car or any other asset that might be worth taxing? I wonder if they’ll decide that ‘foreign’ cars should have a surtax applied? Since they’ve already justified applying a surtax on RE owned by anyone who isn’t a BC resident. Or how about an ’empty vehicle’ tax? After all, lots of folks own more than one vehicle & can only drive one at a time, so shouldn’t those underutilized vehicles which take up valuable parking space plus add to air pollution be taxed extra? Like a luxury tax, if you can afford to own more than 1 vehicle then obviously you have $ that can be siphoned off for the greater good, no?

#82 Summertime on 10.04.22 at 10:27 pm

So central banks then obviously have no intention to fight inflation, we should then expect the inflation to stay elevated with strongly negative real rates continuing as I predicted for a very long time with all the consequences for consumption.

There was an article recently that stated that 50 % of Canadians are close to being bankrupt:

https://ca.finance.yahoo.com/news/nearly-half-of-canadians-on-the-brink-of-insolvency-mnp-survey-182844647.html

Expect that number to increase.

How a consumption based economy can improve when real consumption shrinks due to people being bankrupt is an interesting questions.

It won’t in real terms, which indicates that economy will shrink in real terms, which means that stock market will shrink in real terms as well as it is driven by corporate profits.

So expect ‘good’ nominal numbers that will be offset by much higher inflation for a very long time, higher debt that will kill future consumption, the textbook definition for prolonged inflationary depression.

Which considering the current financial system is pretty much the expected outcome from decades of exploding debt due to central bank policies.

Relating, this is entirely due to intentional central banks and government policies.

At least UK is reversing their idiotic plans for tax breaks and further deficit spending which considering their horrific CPI of 11 % and real inflation of 20 % is the right think to do.

The middle class on track to be obliterated.

#83 Nonplused on 10.04.22 at 10:33 pm

#15 crowdedelevatorfartz on 10.04.22 at 4:15 pm
Gas in the Lower Brain land is the highest in Canada.
And now used car taxes are going to be estimated on “what it’s wholesale price is” not what you sell it for.

Sell your car to your kid for a dollar?
Too bad.
BC Govt says its worth $10,000
Pay up.

https://vancouver.citynews.ca/2022/10/04/bc-used-car-tax-change/

———————————–

What’s amazing about this story is not that they are dickering over what the value of used cars should be for tax purposes, but that there is a tax on used cars at all! What’s next? Garage sales?

The tax on a car is already paid when it is purchased new. Isn’t the PST 7% in BC? Plus 5% for GST, so a total of 12%? And they are going to attempt to collect this 3, 4, 5 sometimes 10 times as the car changes hands?

The “black book” value is disingenuous as well, as cars in BC are now worth 12% less than they are anywhere else in Canada, due to the tax, because that’s how things work. Someone who has $10,000 to spend on a car isn’t going to pay $10,000 and then $1,200 in tax because they only have $10,000. They have to pay $8,800 for the car.

And what if you paid more than “black book”. Does it only go one direction? By definition, half the people paid more than average, if it is normally distributed.

What if you trade your car in? Or sell it to a dealer? Are they exempt because they already pay tax? Sounds to me like used car dealers had a hand in creating this monster.

Next thing you know they are going to be taxing youth soccer coaches for the implied value of their time.

#84 DON on 10.04.22 at 10:57 pm

#79 crowdedelevatorfartz on 10.04.22 at 9:54 pm
@#75 meslippery
“Then you could show the BC Govt that you already paid the tax on $35,000 when you bought it new so your kid wouldn’t have to.”
+++
Good luck with that.
Sales tax is the tax that just keeps on giving.
ICBC doesnt renew you car registration, insurance and now YOUR drivers license….if you owe them money….any money.
tax, fines, tickets…..
No money…no drivee

******
Fines with Shark teeth. Never ever ever owe an utility, insurance company or government money if you can’t live without that service.

#85 DON on 10.04.22 at 11:13 pm

#77 crowdedelevatorfartz on 10.04.22 at 9:46 pm
@#68 Quinty’s Quantifiables.
“not the whims of some cocaine sniffing suspender clad sociopath in Manhattan.”

+++
Good one.
Apparently looming layoffs on Wall St are rumoured.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj8vo3U-sf6AhWVBDQIHRHCBqcQFnoECAQQAQ&url=https%3A%2F%2Fwww.reuters.com%2Fbreakingviews%2Fwall-street-job-cuts-will-be-shallow-painful-2022-09-29%2F&usg=AOvVaw1wsmaQvwE5wVQHV4iEH8bO

50 years from now you can give your wise, sage, “boomer-ish” advice…to the wide eyed, envious youth surrounding your electric Rolls Royce
“Pogs my boy. Pogs!”
“It all started with Pogs!”

********************
From the link

“This time the cuts are likely to be shallower, but still traumatic.”

The word shallower gives hope but trauma indicates diving into a shallower pool. Meta just closed a New York office, citing savings.

#86 Faron on 10.04.22 at 11:16 pm

This market will rally exactly as long as it takes to get sentiment back to positive looking. Or until SAGIs are issued. 4200 SPX according to some.

May whipsaw a bit just to get everyone offsides as much as possible.

The overall bear will be over when TSLA has the market cap of Ford. Or ARKK has been decimated from its highs. Could take years.

Today all the meme garbage rallied which tells me the gig isn’t up.

IMO.

#87 Sail Away on 10.04.22 at 11:26 pm

#68 Quintilian on 10.04.22 at 8:40 pm
#49 crowdedelevatorfartz on 10.04.22 at 6:35 pm

“So what DO you invest in?”

Boring , very boring stuff, but it makes money.

It mirrors the real economy, not the whims of some cocaine sniffing suspender clad sociopath in Manhattan.

Private equity, with portfolio of companies ranging from, auto service, electrical box mfg, lumber products, food packaging equipment, and testing laboratory.

———

Really? You’re accredited? Reading your stuff, I have to admit I would not have guessed that.

#88 Dr V on 10.05.22 at 1:32 am

82 Summertime

“There was an article recently that stated that 50 % of
Canadians are close to being bankrupt”
—————————————————

This article caught my attention too when it first appeared.

While I have not read the cited study by MNP, the article presents no data to back up that specific claim in the headline. There are references to food, shelter and clothing being less affordable.

From the article:

“The MNP Consumer Debt Index also found that 46 per cent of Canadians find themselves closer to insolvency – defined as being $200 or less away from being unable to meet their financial obligations – a six percentage point improvement from the previous quarter.”

Big difference between being “on the brink” and just
“closer”. And ironic it was actually an improvement.

#89 Elon Fanboy on 10.05.22 at 1:41 am

One for you FLOP

Pretty good update on Nanaimo real estate.

https://www.nanaimore.com/blog/september-2022-real-estate-market-report/

Headlines….

62% drop in homes sold in Sept over Sept ‘21

16% drop in ave home price since Jan.

#90 Neo on 10.05.22 at 2:04 am

Off to the coke ovens.

https://bc.ctvnews.ca/flipping-tax-proposal-really-scary-says-b-c-mla-who-bought-and-sold-3-homes-in-4-years-1.6094486

#91 Bethe rosly on 10.05.22 at 2:47 am

And so the escalation begins ….

https://www.cnn.com/2022/10/04/politics/uss-gerald-ford-deploys/index.html

#92 Used Cars on 10.05.22 at 4:38 am

The BC government never used to charge PST on used car private sales but then the used car dealers cried about that so the BC Liberals of the day (some of whom were used car dealers themselves) decided to add PST to all used car sales to make it “fair” for everyone.

#93 under the radar on 10.05.22 at 5:33 am

Twitter purchase – Complete disaster for the worlds richest man. His financing costs have rocketed much higher, who will buy the junk debt?. I never understood his one offer strategy. The Delaware Court would have imparted a simple lesson, A promise made must be kept. Careful what you wish for.

#94 maxx on 10.05.22 at 7:19 am

@ #11

Completely agree, however your sensible advice will largely fall upon deaf ears.

COVID-19 has underscored how gullible and manipulable the general population is. TPTB can do very nearly anything it wants with people – I´m absolutely gobsmacked at how easy it is to suck in society, who then behave much like a school of mackerel.

Lack of critical thinking and sheer stupidity are a major portal for creating wealth – I would argue nearly all of it – amongst other things.

The fools who paid over the odds for housing, cars, renos or anything else now must pay the painful nut.

Out of necessity, many lazy a$$ Canuckleheads will now have to get their butts back to the office and work sites.

Notice any sour, resentful attitudes lately at retail cash points and service outlets? Wait until job shrinkage picks up steam.

#95 Wrk.dover on 10.05.22 at 7:27 am

So, Furz, different rules for every locale.

I bought a car in Georgia in ’88 and learned that their system is has no sales tax. Then I found out to get title, it had to also be registered which costs 10% of the current value of any car in the state…each year.

My purchased car registration had lapsed a year, so I got to pay twice, plus pay to get the title bonded, because of that.

So move to Georgia?

Meanwhile, AZ gave me title and 90 transit sticker for $19, no tax applicable, unless it lapses before it is transferred, on all of my later purchases there.

#96 Wrk.dover on 10.05.22 at 7:29 am

90 day transit sticker

#97 Meh on 10.05.22 at 8:02 am

#44 Scott in Gibsons on 10.04.22 at 6:07 pm
Whew! Thank goodness that’s over. I was getting a bit worried with the escalating NATO/Russia nuclear war risk, the bankruptcy of corporations that can’t roll over at these rates, the coming economic contraction in Europe now that the gas lines have been cut (and missing earnings for NA stocks), the Chinese debt crisis, and the latest product out of Wuhan all seeming to threaten our rosy economic future. Surely all these issues are now in the past.

________________________

Yes and the collapse of the British Pound, the Japanese Yen, the Euro, economic mayhem in Asia, Germany and the UK along with real inflation near 20 percent, were all resolved this past weekend also. Imminent failure of several gigantic banks all just a distant memory now.

You just have to constantly be forward thinking. Ya that’s the ticket. No bond yield, currency and commodity manipulation here or ever for that matter.

#98 Brian on 10.05.22 at 8:11 am

Twitter purchase-Problem for US banks.

https://www.bnnbloomberg.ca/twitter-lbo-revives-12-5-billion-headache-for-wall-street-banks-1.1828030

#99 Phylis on 10.05.22 at 8:37 am

#93 under the radar on 10.05.22 at 5:33 am
Twitter purchase – Complete disaster for the worlds richest man. His financing costs have rocketed much higher, who will buy the junk debt?. I never understood his one offer strategy. The Delaware Court would have imparted a simple lesson, A promise made must be kept. Careful what you wish for.
Xxxxxx
But now he can create a blockchain powered rocket to mars! Thats the dream. Carbon credits, check, rocktship, check, cash flow, check. Bonds? Try collecting from mars. Glwt. (Just havin’ a little fun with the saga)

#100 Dharma Bum on 10.05.22 at 8:37 am

#93 Under the Radar

His financing costs have “rocketed” much higher…
———————————————————————————————————–

Get it?

Uhuh-huhuh-huh-huhuhu-hu

Yeah yeah

Hee-hee-hee-hehheh-heh-heh

He said “rocketed” – Elon Musk – hehhehheh

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

#101 crowdedelevatorfartz on 10.05.22 at 8:40 am

@#83 nonplused
“but that there is a tax on used cars at all! ”
++++
Govt taxes on used houses, used appliances, used clothes, labour..( think about that…. your labour is taxed) dining out, drinking, cigarettes, govt fees, entertainment…on and on and on.

Taxes on top of taxes….
Endless ways to grab money from millions of people.
And they still can’t balance a budget.
Absolutely criminal.

Speaking of criminals.
Did you hear the latest on Vancouver’s homeless encampments on Hastings St?

Blocks and blocks of tents, tarps, plywood and pallets, feces and used needles….

The BC Courts are now looking at tossing out a “Removal” injunction imposed by the City Fire Chief due to the blocking of doorways and fire hose connections in the event of a fire.
( There may be a fire bug in downtown van burning buildings. A lot of fires lately….)
The Courts must decide if the Fire Chief ” didn’t take into account the unhoused (homeless) situation of the plaintiffs”.

I guess taxes and business licenses only buy so much “protection ” from the govt when the rights of criminals , drug addicts, and scofflaws retain lawyers

So if the “sidewalk asylum” becomes legal.
I’m sure the business owners down in that area are thrilled.
Municipal election in 2 weeks.
Mayor Stewrat has proposed a “Park” on Hastings St….another park……

https://vancouver.citynews.ca/2022/10/04/vancouver-police-union-endorse-candidates/

Mayor “Defund the Police” and “Vancouver Police are systemically racist” Kennedy Stewrat shouldnt be counting on VPD Union endorsement.

#102 IHCTD9 on 10.05.22 at 8:42 am

#83 Nonplused on 10.04.22 at 10:33 pm
_____

All this stuff already exists in Ontario. You pay tax on book or what you paid for the car – whatever is higher. Dealers here don’t pay taxes on their incoming stock. A buyer used to only have to pay 1 tax when buying privately, but now we have to pay both, same as if buying new.

Hence we have a rash of car flippers who don’t register the car, and resell it under the name of the previous owner (“curb-siding”). You can save tax on a used car by getting an appraisal, so there are now a lot of very “flexible” appraisers out there (for a fee).

Truth be told though, the book value thing likely happened because so many private sellers would write up a receipt for 1500.00 on a 5000.00 car for the buyer to take in when they went to register the car…

#103 the Jaguar on 10.05.22 at 9:19 am

@#72 Rachel on 10.04.22 at 8:59 pm
Sorry @The Jaguar

Joyce is 65% husky and other is German Shepard. Should have specified she was mixed breed.

Rachel++++

A beautiful creature whatever the mixture………..

#104 crowdedelevatorfartz on 10.05.22 at 9:32 am

Ho hum.
Another day another random attack in Vancouver.
6pm Sunday evening.
A woman walking into her high rise lobby is attacked by a stranger.
Bystanders intervened and the police attended, arrested the man, took him in for photographs and fingerprints….and then released him with a notice to appear.
Apparently this man is well known to police.

https://vancouver.citynews.ca/2022/10/03/woman-stranger-attack-bystanders-vancouver/

When the BC Attorney General was questioned again about the “Catch and release” policy of the NDP govt.
The AG promised to “review the matter and respond back” to the groans and catcalls of the Legislature.

https://globalnews.ca/video/9177431/random-violent-crime-in-communities-throughout-bc/

Prolific offenders being released again and again and again and the govt “

#105 the Jaguar on 10.05.22 at 9:46 am

Morning Snippets……..

‘Legault now controls the closest thing Canada has to a one-party state.
As to how Legault accomplished this, he successfully won Quebecers over to the principle on which CAQ was founded in 2011: Unapologetic Quebec nationalism, but without the messiness of seeking outright independence.’ ( Is Danielle Smith listening, lol!) +++

‘Desantis is a smarter, more competent, better educated and less self-obsessed figure than the man stewing in his bitterness at losing the White House. He has degrees from Yale and Harvard, an impressive military career, a background in the law and six years in Congress.’ ( sounds like President Desantis to me…) +++

‘Ukraine is set to join Spain and Portugal in a combined bid to host the 2030 World Cup. ‘ (there are no words..) +++

#106 Love_The_Cottage on 10.05.22 at 10:02 am

It’s interesting to hear that rate increases are taking a huge bite out of the economy and can only rise so far. Some of us said this in the steerage section 2 years ago and were mocked for it.

The bank rate has increased 1,200%, but the economy is still growing. As predicted, it’s real estate being whacked. – Garth

#107 Flop… on 10.05.22 at 10:06 am

#89 Elon Fanboy on 10.05.22 at 1:41 am
One for you FLOP
Pretty good update on Nanaimo real estate.
https://www.nanaimore.com/blog/september-2022-real-estate-market-report/
Headlines….
62% drop in homes sold in Sept over Sept ‘21
16% drop in ave home price since Jan.

////::///:://///////////////////

Hey Boy, read it, thanks.

I guess the most striking difference between the island and Greater Vancouver is the softer, almost caring, tone the current message is being delivered.

Way less bullish, almost as if they acknowledge people are about to get their financial finger blown off if they don’t watch what they are doing.

Well, we didn’t get a volunteer to give us information in real time, hardly surprising, it took weeks if not months before someone coughed up some valid information in my Vancouver quest.

Luckily being Tasmanian, I am blessed with the characteristics of the unique blend of tenacity and stupidity….

M48BC

#108 another tinpot economist on 10.05.22 at 10:13 am

Stephen Harper made many trips to Washington to sell North American Energy independence…

America is going to reap what it sowed.

OPEC is no friend.

Do they get it yet?

#109 Doing my Part on 10.05.22 at 10:27 am

We hadn’t heard much from the guys saying “interest rates can’t go up” since the increases started, I guess they are having a tough time with the new reality. Hope they planned just in case.

#110 wash on 10.05.22 at 10:29 am

And today stocks down again

– we are a long way from any pat on the back or self celebration

Nobody has been celebrating anything, but rather stating the obvious: the impact of the tightening cycle will diminish. Inflation will fade. Growth will continue. Stay invested. – Garth

#111 Don Guillermo on 10.05.22 at 10:41 am

#83 Nonplused on 10.04.22 at 10:33 pm
#15 crowdedelevatorfartz on 10.04.22 at 4:15 pm
Gas in the Lower Brain land is the highest in Canada.
And now used car taxes are going to be estimated on “what it’s wholesale price is” not what you sell it for.

Sell your car to your kid for a dollar?
Too bad.
BC Govt says its worth $10,000
Pay up.

https://vancouver.citynews.ca/2022/10/04/bc-used-car-tax-change/
$$$$$$$$$$

BC is by far the best place in Canada to be from.

#112 Sail Away on 10.05.22 at 10:47 am

#105 the Jaguar on 10.05.22 at 9:46 am

‘Desantis is a smarter, more competent, better educated and less self-obsessed figure than the man stewing in his bitterness at losing the White House. He has degrees from Yale and Harvard, an impressive military career, a background in the law and six years in Congress.’ ( sounds like President Desantis to me…)

———-

Yes, I’d expect so. The man is young and vibrant, has bona fides for days, deals well with crisis, and is 100% redblooded American beefcake. It’s almost a foregone conclusion.

#113 Quintilian on 10.05.22 at 10:58 am

“[the] impact of the tightening cycle will diminish. Inflation will fade. Growth will continue. Stay invested. – Garth”

The tightening hasn’t had any effect yet- not on the real economy.

Just fodder for the talking heads in the media, and a great opportunity for the market manipulators.

The DOW could end up in positive territory by the end of the session or it could, as I stated a couple days ago, lose 1000, but it has nothing to do with Economics.

Of course tightening has been impactful. Real estate is massively influenced. The US ISM reading this week was tepid. Consumer sentiment has soured – and consumer spending accounts for over 60% of economic activity. Markets know were we’re headed. The path there will be bumpy but the destination is known. – Garth

#114 Ponzius Pilatus on 10.05.22 at 11:08 am

#112 Sail Away on 10.05.22 at 10:47 am
#105 the Jaguar on 10.05.22 at 9:46 am

‘Desantis is a smarter, more competent, better educated and less self-obsessed figure than the man stewing in his bitterness at losing the White House. He has degrees from Yale and Harvard, an impressive military career, a background in the law and six years in Congress.’ ( sounds like President Desantis to me…)

———-

Yes, I’d expect so. The man is young and vibrant, has bona fides for days, deals well with crisis, and is 100% redblooded American beefcake. It’s almost a foregone conclusion.
———————
Not so fast.
Ian may just be his undoing.
But he could still make it if he puts Herschel Walker on his ticket.

#115 Ponzius Pilatus on 10.05.22 at 11:14 am

FURZ.
No comment on our bungee jumping PM.

#116 OK, Doomer? on 10.05.22 at 11:39 am

What’s amazing about this story is not that they are dickering over what the value of used cars should be for tax purposes, but that there is a tax on used cars at all! What’s next? Garage sales?
)))))))

Technically, yes. There was a capital gain the tax man would want his share.

Luckily, not much of a market for used lava lamps and velvet Elvis paintings so capital gains on most garage sale items are a non-issue.

But if Gramps left his ’59 Gibson guitar or 1963 Ferrari in the garage expect a CRA visit.

#117 Kenneth West on 10.05.22 at 11:45 am

Glad to see markets starting to turn around.
Thanks to your advise, I have stayed the coarse throughout this scary decline in my net worth.

Beautiful dog pic today.

#118 Brian on 10.05.22 at 11:50 am

Saudi Energy energy minister refuses to answer questions from Reuters at OPEC+ press conference.

https://twitter.com/i/status/1577685721401462788

#119 Penny Henny on 10.05.22 at 11:53 am

#55 crowdedelevatorfartz on 10.04.22 at 7:01 pm

Which begs the question.

If my car insurance expired today and ICBC computers were down….and I can’t renew my insurance…..

////////////////////

Hey Fartzy,
just another insurance story to drive you nuts.
As you may recall full coverage on my 2017 Mustang Conv is $458 for the year. I just bought a 2002 Miata to tool around in and guess how much full insurance is for the year…

$305.

#120 Don Guillermo on 10.05.22 at 12:04 pm

Interesting read on hurricanes.

https://www.forbes.com/sites/bjornlomborg/2022/10/04/facts-on-hurricanes-and-climate-are-blowing-in-the-wind/

“Much of the best data comes from the United States. And despite what you may hear over and again, Atlantic hurricanes are not becoming more frequent. In fact, the frequency of hurricanes making landfall in the continental United States has declined slightly since 1900.”

#121 Brian on 10.05.22 at 12:08 pm

On a cheerful note it’s Canadian Beer Day!

https://canadianbeerday.ca/

#122 Sail Away on 10.05.22 at 12:22 pm

Wow, what excellent timing for the Twitter + divvie windfalls. I feel like a kid in a candy shop with everything on sale.

#world=oyster

#123 Bdwy on 10.05.22 at 12:42 pm

A small tip for andriod using compulsive blog dog comment readers .

Moving the address bar and refresh button to the bottom of the screen is a real thumb saver.

SP 3200 still my target.

#124 Ponzius Pilatus on 10.05.22 at 12:55 pm

120 Don Guillermo on 10.05.22 at 12:04 pm
Interesting read on hurricanes.

https://www.forbes.com/sites/bjornlomborg/2022/10/04/facts-on-hurricanes-and-climate-are-blowing-in-the-wind/

“Much of the best data comes from the United States. And despite what you may hear over and again, Atlantic hurricanes are not becoming more frequent. In fact, the frequency of hurricanes making landfall in the continental United States has declined slightly since 1900
———————————
Tell that to the Floridians.

#125 Ponzius Pilatus on 10.05.22 at 1:10 pm

Another beautiful “First Nations” Summer Day in the Lower Mainland.
Another reason why houses cost more here.

It’s 22 and sunny in Toronto. – Garth

#126 Wrk.dover on 10.05.22 at 1:17 pm

#102 IHCTD9 on 10.05.22 at 8:42 am
Truth be told though, the book value thing likely happened because so many private sellers would write up a receipt for 1500.00 on a 5000.00 car for the buyer to take in when they went to register the car…
__________________________________

NS sent me a letter saying that a $500 car I had been gifted was worth $800, so send us $45 more tax, or appeal for a $40 fee, plus get an independent appraisal!

They can play that game better than me.

#127 Bdwy on 10.05.22 at 1:27 pm

Tell that to the Floridians
….

1700 out of 21.2m floridians currently in emergency shelters.

That’s 1 in 12,470.

They will manage somehow.

#128 Don Guillermo on 10.05.22 at 1:31 pm

#125 Tell that to the Floridians

Most Floridians understand hurricanes. Much the same as most Vancouverites understand umbrellas.

Wiki
The List of Florida hurricanes encompasses approximately 500 tropical or subtropical cyclones that affected the state of Florida. More storms hit Florida than any other U.S. state,[1] and since 1851 only eighteen hurricane seasons passed without a known storm impacting the state. Collectively, cyclones that hit the region have resulted in over 10,000 deaths, most of which occurred prior to the start of hurricane hunter flights in 1943. Additionally, the cumulative impact from the storms has totaled over US$216.1 billion in damage (2018 dollars), primarily from Hurricane Andrew, Hurricane Irma and Hurricane Michael in the 1992, 2017, and 2018 seasons respectively. The most recent huricane to make landfall in Florida was Hurricane Ian in 2022.

#129 Bdwy on 10.05.22 at 1:41 pm

It’s 22 and sunny in Toronto. – Garth

……
Nice but an outlier? 10c tomorrow also an outlier I’d guess. Either way it’s still toronto .

Also an outlier is bc late summer drought and daily 20s for at least the rest of the week. Yet to break out the dog towels, loving it.

#130 Faron on 10.05.22 at 1:45 pm

#120 Don Guillermo on 10.05.22 at 12:04 pm

Interesting read on hurricanes.

Nice try.

Slightly fewer but far more intense. Two major landfalling ‘canes this year and both were hyper destructive partky because warmer icean waters support stronger and wetter storms. Who cares if in a century we lose one or two named storms per year if the ones that do hit are far wetter, windier and broader?

Read the science here:

https://www.gfdl.noaa.gov/global-warming-and-hurricanes/

#131 Faron on 10.05.22 at 1:50 pm

#126 Faron on 10.05.22 at 1:45 pm

“partly” and “ocean”. etc.

Too busy pulling my 1.2% out of the market today.

#132 Quintilian on 10.05.22 at 1:55 pm

Garth, you have causation and correlation mixed up.
The indicators of a slowing economy, which is still a galaxy away, are driven by inflation, not higher rates.

Consumers, are finally tapped out of credit available, and inflation has been accumulating, and destroying purchasing power over a long period, reducing demand.

The tightening, if you can called it that and remain honest, is still offering negative rates.

#133 The Guillotine is God on 10.05.22 at 1:58 pm

One can expect a crosscurrent of conflicting economic and market data, as analysts try to parse the numbers and put into an oversimplified explanation…largely meant to keep investors buying and everyone borrowing.
It won’t work. Nearly US$30TN has been wiped from the bond market since January and almost no-one has noticed. Whatever the CBs do, long-term rates have reversed course and the new long term trend there is up. The difference is the USD will enter a long term bear trend as the bond vigilantes (remember them?) continue to take control of long rates and FX suffers as the commodity bull run enters its next stage.
Real estate goes up forever, stocks go up forever, inflation is dead, 60/40, ever-easier credit…all done.
Rising rates, rising inflation, rising commodity prices, tightening credit…and credit contraction are the New Normal.

Bond maths wins again.

#134 Sail Away on 10.05.22 at 2:10 pm

#130 Faron on 10.05.22 at 1:45 pm
#120 Don Guillermo on 10.05.22 at 12:04 pm

Interesting read on hurricanes.

———

Nice try.

Slightly fewer but far more intense. Two major landfalling ‘canes this year and both were hyper destructive partky because warmer icean waters support stronger and wetter storms. Who cares if in a century we lose one or two named storms per year if the ones that do hit are far wetter, windier and broader?

Read the science here:

https://www.gfdl.noaa.gov/global-warming-and-hurricanes/

———

Incorrect. Nowhere does NOAA say that. Verbatim from the link:

“In summary, it is premature to conclude with high confidence that human-caused increases in greenhouse gases have caused a change in past Atlantic basin hurricane activity that is outside the range of natural variability”

Heck, some whackjobs say the southeast US will become inhabitable for mammals due to climate change in a couple of decades.

#135 Don Guillermo on 10.05.22 at 2:56 pm

130 Faron on 10.05.22 at 1:45 pm
#120 Don Guillermo on 10.05.22 at 12:04 pm

Interesting read on hurricanes.

Read the science here:

https://www.gfdl.noaa.gov/global-warming-and-hurricanes/
#####
Lots of heavy reading for us laymen.

I jumped to section F. Summary

Statements like

neither our model projections…. support …

Therefore it is premature to conclude….

Studies suggest….

Blah, blah blah

Their executive summary should just say “we will need to continue studying this until our pensions have matured “

#136 Don on 10.05.22 at 4:50 pm

In Mississauga , ahouse priced originally at 2.1 mill. finally sold for 1595 after 6 price cuts!
https://www.theglobeandmail.com/real-estate/toronto/article-mississauga-house-sells-for-54000-under-asking-after-fourth-price-drop/

#137 Wrk.dover on 10.05.22 at 8:32 pm

I just talked with a marine insurance adjuster.

Quote “If I can’t do a repair in a timely fashion, I will write off any boat and pay out it at full value.”

“There is no hope in hell of repairing any volume of the tens of thousands of boats in Florida.”

“Anyone taking an empty trailer to Florida will come home with a blemished bargain of their lifetime”

Are there any would be boaters on this blog stubbornly parsimonious enough to miss this opportunity?

Start by contacting an adjustment company.

#138 Wrk.dover on 10.05.22 at 8:40 pm

Yarmouth NS, 20+ degree days thirty yr average, 57.

This year, 84.

Gulf of Maine heating uppa boys!

What’s next?