The unexpected

.
DOUG  By Guest Blogger Doug Rowat
.

To invest means to constantly brace for the unexpected.

In just the past two years, we’ve witnessed two perfect examples: the 2020 global pandemic, which led to the fastest equity bear-market in history, and the 2022 rise in inflation, which has led to the most severe bond bear-market “since reliable record-keeping began in the late 18th century”.

Can you dodge these downturns like Neo bending over backwards dodging bullets in the Matrix? Unless you’re preternaturally talented or exceptionally lucky, no. But after the decline’s already occurred what investors can do is pause, assess and make informed decisions regarding whether the downturn’s created value.

To illustrate, let’s look at an area of the market that’s certainly behaved contrary to expectations this year: Canadian preferred shares.

The S&P/TSX Preferred Share Index is down about 20% y-t-d. Roughly two-thirds of the Canadian preferred share market is composed of rate-resets. These are preferred shares that have their dividends indirectly pegged to the Government of Canada 5-year bond yield. The higher this yield goes, the higher rate-reset dividends are likely to go as well—with rate-reset prices typically moving higher in the process.

Indeed, the correlation of the S&P/TSX Preferred Share Index to the Government of Canada 5-year bond yield from October 2015 (when rate-resets started to gain prominence) to October 2021 was roughly 0.60. Not a spectacularly high positive correlation, but definitely in the moderate-to-strong range. Enough of a correlation for investors to feel that Canadian preferred shares offered reasonable protection against rising interest rates.

But here’s where the unexpected occurs. Over the past year that correlation has inverted to -0.90. Basically, even as the Government of Canada 5-year bond yield has dramatically increased, preferred-share prices have moved in the polar opposite direction. You can view this relationship visually below:

Government of Canada 5-year bond yields (orange line) vs S&P/TSX Preferred Share Index (white line)

Source: Bloomberg; Turner Investments

So why the sudden change? Canadian preferred shares are primarily owned by retail investors. The Canadian preferred share market lacks the liquidity and size for institutional ownership (though this is starting to change). But retail investors are undisciplined and panicky. They often do the wrong thing at the wrong time. When broader market sentiment turned ‘risk off’ over the past year, even though their preferred-share dividends were still safe and were, in fact, poised to increase, retail investors instead headed for the exits. You can see their panic simply by looking at the S&P/TSX Preferred Share Index against a broader equity benchmark such as the S&P 500:

S&P 500 (orange line) vs S&P/TSX Preferred Share Index (white line)

 

Source: Bloomberg, Turner Investments

So, given the complete inversion of correlation, clearly there’s no point in holding Canadian preferred shares any longer, right? Hardly. Now that the downturn’s occurred, now’s the time for some sober second thought.

First, roughly a third of the Canadian preferred share market is made up of perpetuals. These are preferred shares that simply pay a straight dividend with no potential for increases based on the rise of the Government of Canada 5-year bond yield. With some justification, perpetuals have sold off sharply this year. However, yields are now undeniably attractive. Almost all perpetuals presently yield more than 6%. Factor in the dividend tax credit and the interest-equivalent yield moves north of 8%. Consider this when you’re tempted by a GIC.

Second, retail investors are likely not understanding the extent to which their rate-reset dividends could increase. Reset rates are generally the Government of Canada 5-year bond yield (currently 3.60%) plus a preset ‘spread’ or extra yield, which currently averages almost 3% across the entire rate-reset universe. Granted many rate-reset preferreds are simply being redeemed or called by issuers rather than being reset; but current prices are still, generally speaking, well below call prices. So either way—a higher dividend or a redemption—holders of rate-reset preferreds are positioned to benefit. And these are reliable issuers: mainly banks, utilities, lifecos and pipelines.

Then there are US preferred shares. Tremendous value exists here as well. The US preferred share market is more liquid than the Canadian preferred-share market, has less retail ownership and, generally speaking, lacks rate-reset structures. Therefore US preferreds have actually behaved as expected this year—as interest rates and bond yields have risen, US preferred share prices have fallen. The S&P US Preferred Stock Index, for example, is down about 22% y-t-d. However, thanks to this 22% decline, very attractive yields now exist in the US preferred-share space as well.

Further, because US preferreds have behaved as expected as interest rates and bond yields have risen, they’re likely to outperform if interest rates and bond yields fall. Naturally, lower interest rates seem an impossibility at the moment, but this won’t always be the case. US preferred shares are an effective diversifier.

So the trick with preferreds, or any asset class for that matter, isn’t to entirely avoid ownership in order to dodge a sudden downturn. That’s impossible. The trick instead is to own them but then recognize the value that the downturn has created.

And right now there’s plenty of value in the preferred-share market.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

 

120 comments ↓

#1 crowdedelevatorfartz on 10.15.22 at 11:04 am

Interesting info and a great explanation for the folks in steerage.

#2 Mikey on 10.15.22 at 11:04 am

I’m sitting on 60% cash. Took a pile off the table when peeps was going nuts through last winter.
I personally laughed at my buddy getting into crapto.
He’s got egg and I warned him multiple times.

#3 crowdedelevatorfartz on 10.15.22 at 11:17 am

Months before the Pearl Harbour attacks in 1941, Japanese “tourists” were observed taking endless photos and detailed notes of the American airfields, naval jetty’s and fuel infrastructure….

https://www.reuters.com/world/europe/norway-police-arrest-russian-flying-drone-amid-heightened-security-2022-10-15/

#4 Observer on 10.15.22 at 11:32 am

#111 There’s a reason for that on 10.14.22 at 10:16 pm
#99 Observer on 10.14.22 at 8:47 pm

Anyone watched yesterday’s January 6th committee hearing? Weird how the many Trumper fans who hang here don’t talk about the hearings at all. Hmmm….

———-

Because nobody who supports Trump cares about the sham hearings.

^^^^^^^^^^^^^^^^^
Amazing the strength of their denial, despite that the committee has gathered an unusually large amount of evidence and has built its case almost entirely from the testimony of Republicans, not Democrats, undercutting the accusations of Trump loyalists that the committee has been partisan.

Their evidence has come from Trump aides and Republican lawmakers, lawyers, political professionals, appointees, staff, and advisors and even from Trump’s family members.

#5 Dave on 10.15.22 at 11:36 am

Bank of Japan has no Bond buyers…one of many central banks

So does this mean back to QE or something else?

#6 Doug t on 10.15.22 at 11:46 am

Time for the blue pill

#7 Shawn on 10.15.22 at 11:49 am

Does low investment as percent of GDP at least partly explain the low interest rates of the last 30 years?

If a society is in a heavy building and investing phase it makes sense that interest rates would be higher as there would be more demand for money to invest.

On a real basis investment is the savings of a country.

So I looked at a chart of U.S. investment as a percent of GDP.

On average, investment has been lower in recent decades but not THAT much lower. (Then again small changes at the margin can have big impacts) So this does not give much evidence that lower investment were partly responsible for the lower interest rates. But it is SOME evidence.

Click on “max” to see the chart back to 1950.

There was quite a dip in investment after the financial crisis (very few houses got built) and it took years to recover and we are still not back to the circa 2007 level of investment as a percent of GDP.

https://www.ceicdata.com/en/indicator/united-states/investment–nominal-gdp#:~:text=United%20States%20Investment%3A%20%25%20of%20GDP,-1947%20%2D%202022%20%7C%20Quarterly&text=United%20States%20Investment%20accounted%20for,an%20average%20ratio%20of%2022.4%20%25.

#8 crowdedelevatorfartz on 10.15.22 at 11:52 am

American/Russian journalist Julia Ioffre commenting about the war in Ukraine in Puck magazine.

“Within the first 2 weeks of the announcement of a partial mobilization more than 700,000 men have fled the country.
The rest have proved so difficult to find that officials are giving draft notices to business owners to give to their employees because they can’t find the people at home.
There are also reports of “recruitment” officers drafting homeless people at shelters.”

The war is not going well for Vlad the dictator.

#9 Ponzius Pilatus on 10.15.22 at 11:55 am

Great post.
Easy to follow, concise and advise in line with analysis.
Also, do Gentleman prefer “preferreds”?

#10 Søren Angst on 10.15.22 at 12:02 pm

Thanks for trying to give some Expected to the Unexpected.

It was a good read. Your cogent self as usual.

But I have to say this Tweet about what a J. P. Morgan trader said, is how I feel to:

https://twitter.com/WallStreetSilv/status/1580980767429365760

Staying vested. DRIP every last $ dividend I get **. Keeping the faith and sticking to what I know has worked for me.

——————-

PS (Doug Cdn Oil Oracle … Update):

TC PIPELINES in the lurch, still the 6.41% dividend helps soften the blow. The rest doing very well I think. YTD. *

https://www.google.com/finance/quote/ENB:TSE?comparison=TSE%3ATRP%2CTSE%3ASU%2CTSE%3APPL%2CTSE%3ACVE&window=YTD

Well, actual STELLAR when compared to the Lead Sinker Muchaco 5. YTD.

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

* Worldwide refining capacity shortage. OPEC+ cutting output. Biden is going to drain their Strategic Oil Reserve dry by the Midterms.

** yeah oil … well after the US Midterms.

And, the US Fed doesn’t care.

#11 observer on 10.15.22 at 12:28 pm

Doug, I agree with you assessment on US preferred shares and have recently bought 4.

One of them has just paid me it’s dividend and is now past it’s recall date, at which point they will either have to call @ $25 (I paid under $24) or pay me a dividend rate higher than the old rate which is close to 8.5% on my entree price.

#12 Shawn on 10.15.22 at 12:30 pm

Rate Reset Preferred shares

Lessons learned:

They issue at $25. They can rarely ever go above $27 since the issuer can redeem every five years at $25.

They can go very low at times due to illiquidity or unpopularity. The market required “spread” over the 5 year government increases.

When rates rise they can go down in price since the reset can be up to five years in the future.

Never buy individual issues at $25 or especially above $25.

They can be great at prices under $20, especially at $15 and lower.

Some will never go back to $25. Say an issue that had a low spread of 1.5% over the 5 year. (Rate resets were in demand at the time it was issued) It’s now a below market spread and the so the price is low and the issuer has a below market source of financing and no reason to EVER redeem. But if the yield is good, it can be a great investment. Just don’t expect it to ever return to $25.

#13 RowatNation aka Prince Polo on 10.15.22 at 12:52 pm

A great write-up, but you omitted channeling your inner Lewenza and telling us that the divvies are juiiiiiiiiiiiiicy. :)

#14 Faron on 10.15.22 at 12:55 pm

TSLA off 34% since late September and the market cap is still way too high. This market bottoms when TSLA gets back to some semblance of the valuation of other automakers unless the Fed pivots hard.

#15 crowdedelevatorfartz on 10.15.22 at 1:16 pm

@#14 faron.
“This market bottoms when TSLA gets back to some semblance of the valuation of other automakers.”

++++
Yep.
The idea that Tesla is worth more than the Top 5 other Auto manufacturers combined is a tad ridiculous.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjA18uD3uL6AhVTJX0KHfAqBNcQFnoECAwQAQ&url=https%3A%2F%2Fwww.reuters.com%2Fbusiness%2Fautos-transportation%2Ftesla-market-cap-eclipses-that-top-5-rival-carmakers-combined-2021-10-26%2F&usg=AOvVaw2auLryiECt4y9zyBFP0fN3

#16 Faron on 10.15.22 at 1:22 pm

#143 Dogman01 on 10.15.22 at 10:26 am
#111 There’s a reason for that on 10.14.22 at 10:16 pm
#99 Observer on 10.14.22 at 8:47 pm

It was a committee, not a trial. The aim was to gather facts, testimony and other evidence. They succeeded and have and will continue to release the damning findings. Next they are asking the orange man to give his own account. The evidence of all kinds of criminal activity abounds and will be used in court at which time the defense can issue its own evidence. That’s how a functional court system works.

#17 Faron on 10.15.22 at 1:24 pm

#147 Brent on 10.15.22 at 12:14 pm

The market has seized.

And when there are no transactions, there is no price leaving open the possibility of an unstable step down. A zero bid market is no bueno.

#18 Sail Away on 10.15.22 at 1:26 pm

#144 Shawn on 10.15.22 at 10:49 am
#113 Ponzius Pilatus on 10.14.22 at 10:31 pm
#105 EV on 10.14.22 at 9:30 pm

Electricity getting expensive in Europe.

Exactly.
Shawn , how’s the Tesla doing?

———-

We locked in a cost of 10 cents per kWh which equates to about $10 to charge from empty. In reality it’s best to plug in after every trip and keep it charged at 80% which is best for the battery.

———-

$10, eh? Plus you get green bragging rights.

I never pay attention, but $10 is probably about the same as completely filling an SUV at the gas station these days, right?

#19 Observer on 10.15.22 at 1:26 pm

#11 observer on 10.15.22 at 12:28 pm
Doug, I agree with you assessment on US preferred shares and have recently bought 4.

One of them has just paid me it’s dividend and is now past it’s recall date, at which point they will either have to call @ $25 (I paid under $24) or pay me a dividend rate higher than the old rate which is close to 8.5% on my entree price.

^^^^^^^^^^^^
One of us should change their name on this blog.

#20 Doug Rowat on 10.15.22 at 1:31 pm

#12 Shawn on 10.15.22 at 12:30 pm

Rate Reset Preferred shares

Lessons learned:

Some will never go back to $25. Say an issue that had a low spread of 1.5% over the 5 year. (Rate resets were in demand at the time it was issued) It’s now a below market spread and the so the price is low and the issuer has a below market source of financing and no reason to EVER redeem. But if the yield is good, it can be a great investment. Just don’t expect it to ever return to $25.

—-

OSFI (the bank regulator) is ‘encouraging’ banks to redeem. This is why we’ve seen redemptions occur recently where the economics are unfavourable to the issuers.

—Doug

#21 ogdoad on 10.15.22 at 1:36 pm

Matrix, eh? I’ve unplugged. Have you?

Og

#22 TurnerNation on 10.15.22 at 1:37 pm

LT uptrend still in effect.

https://finviz.com/quote.ashx?t=DIA&ty=c&ta=1&p=m&tas=0

——-

Trust the science.

https://news.harvard.edu/gazette/story/2022/09/researchers-report-dramatic-rise-in-early-onset-cancers/
September 8, 2022
A study by researchers from Brigham and Women’s Hospital reveals that the incidence of early onset cancers — including breast, colon, esophagus, kidney, liver, and pancreas — has dramatically increased around the world, with the rise beginning around 1990

———Yes this is permanent in the Former First World Countries. Corvid is Life. Life if Corvid.

.German health minister urges stepped-up Covid-19 measures (abcnews.go.com)

.Illinois executive order encourages everyone to mask again (wrex.com)

.End of Covid-19 pandemic is in sight, WHO director-general says, ‘so let’s seize this opportunity (cnn.com)

#23 Nonplused on 10.15.22 at 1:59 pm

“However, yields are now undeniably attractive. Almost all perpetuals presently yield more than 6%. Factor in the dividend tax credit and the interest-equivalent yield moves north of 8%. Consider this when you’re tempted by a GIC.”

Except that you have to pay taxes on those yields, so the after tax rate of return is closer to 4%, and inflation is 8%. Thus, the real after tax rate of return on preferers is currently -4%. Thus, they are hugely overvalued (actual value is negative) unless one considers some sort of longer term expectations that a 4% (AT) yield will be above inflation for most of the life of the preferred. That would be the expectation. However, short term there is no reason to believe it. Interest rates are still way below the official inflation rate, which is directionally meaningful but a fanciful fabrication in absolute terms. And all of the drivers of inflation are still there only worse. Bad monetary policy, energy shortages, now coming food shortages, war, mass migration, greenwashing boondoggles, you name it, it’s all looking bad. And now winter is bearing down on Europe.

The other factor that affects retail holders in times of inflation is, well, inflation. Saving for the future is for most people a discretionary activity that takes place after current needs are met. So when official inflation is running at 8% and real life experience is higher, and wages don’t keep up, savings get liquidated. Thus, anything held by the public right now is under sales pressure, but there are no buyers save institutions who are not fully invested, and the lucky 1% who still have earnings above expenses. Down the price goes.

All things are related. The masses who hold small amounts of preferreds in their RRSP’s and such are powerful due to their numbers. And they need to sell. They can’t keep running up the credit cards at 29%. It will always be more important to them to have gas in the car and food on the table today than the hope they might be able to gas up the car in ten years. This is how you get selling pressure in an inflationary environment.

GIC’s still suck even worse over the long term, but the advantage is you don’t have to worry about losing 20% just when you need to sell because you can’t make ends meet. Sure, you still lose big time to inflation, but not inflation plus 20%. That’s almost as bad as putting things on the credit card.

Garth talks often of recency bias. I don’t know whether to look at this as a case where recency bias is the problem and people should be looking at history, or whether we are at an inflection point where nothing will ever be the same, or at least not for a while.

Buy all the things. And if you are a central banker, raise rates. We can’t have 8% inflation.

#24 Dr V on 10.15.22 at 2:24 pm

Thank you for this post Doug, and thank you Shawn for those examples and explanations.

I have asked about prefs with my advisor, and she is not warm to them, as I have read many advisors are not. As rates rise though, and may be maintained generally
higher, the resets may be more appealing. Will discuss them again with her.

#25 British taxes on 10.15.22 at 2:45 pm

So England was going to lower taxes and that was bad?

Now they will increase taxes and this is good?

They couldn’t have just left it alone at 19%?

Corporations aren’t going to hang out in England at 25% when Ireland is near by. 6% is plenty of motivation to move activities elsewhere.

#26 Sunk Mole on 10.15.22 at 2:51 pm

Elon Musk is on a losing streak, isn’t he?

Electricity in Europe going up.
Gonna have to buy that twitter cesspool.
SpaceX internet funding.
Tesla now has competition.
Overall people are starting to realize these electric cars aren’t so great for the price.
On and on.

Needs to spread some Burnt Hair on himself to cover the stink.

Oh sure…he’ll be OK, but his ego is taking hits in this round.

#27 Faron on 10.15.22 at 3:12 pm

#21 ogdoad on 10.15.22 at 1:36 pm
Matrix, eh? I’ve unplugged. Have you?

Og

Irony is not dead.

#28 Flop… on 10.15.22 at 3:14 pm

Former President of Real Estate Board of Greater Vancouver just tweeted out this message below.

What we want you guys to do is put the interest rates genie back in the bottle.

If you don’t do what I want, I’ll bring the heavy hitters in from Surrey.

Sir, you are at Parliament Hill, the Bank of Canada is a little bit further down Wellington Street, on your left…

M48BC

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

“Off to CREA’s 37th annual Political Action Committee (PAC) Days which are being held from Sunday, October 16 to Tuesday, October 18.
Currently registration sits at a historic high level of 400+ attendees and we have over 90 meetings set up with MPs.”

https://mobile.twitter.com/philmooreRemax/status/1581350170931113984

#29 Faron on 10.15.22 at 3:22 pm

SAIL AWAY TRIGGER WARNING!

#15 crowdedelevatorfartz on 10.15.22 at 1:16 pm
@#14 faron.

“This market bottoms when TSLA gets back to some semblance of the valuation of other automakers.”

++++

Yep.
The idea that Tesla is worth more than the Top 5 other Auto manufacturers combined is a tad ridiculous.

Indeed.

Especially when producing annually about what Toyota produces in a month (at far higher quality to [old] boot).

Tight financial conditions via QT and interest rate hikes will squeeze out all of the excess in this economy. The hipster donut shops, overpriced beer, bazillion yoga studios and profitless garbage stonks. The pruning is just getting going.

#30 Joseph R on 10.15.22 at 3:36 pm

#4 Observer on 10.15.22 at 11:32 am
#111 There’s a reason for that on 10.14.22 at 10:16 pm
#99 Observer on 10.14.22 at 8:47 pm

Anyone watched yesterday’s January 6th committee hearing? Weird how the many Trumper fans who hang here don’t talk about the hearings at all. Hmmm….

———-

Because nobody who supports Trump cares about the sham hearings.

^^^^^^^^^^^^^^^^^
Amazing the strength of their denial, despite that the committee has gathered an unusually large amount of evidence and has built its case almost entirely from the testimony of Republicans, not Democrats, undercutting the accusations of Trump loyalists that the committee has been partisan.

Their evidence has come from Trump aides and Republican lawmakers, lawyers, political professionals, appointees, staff, and advisors and even from Trump’s family members.

—————————————————————-

Don’t worry, Observer. Currently, All House committees and inquiries are partisan DEMONCRAP sham attacks who are using the House to attack poor, God-fearing Conservatives Christians to advance their wicked policies and to protect from the Truth of Hunter Biden’s Book of Shadows laptop!

If the GOP does indeed take control of the House in November, Every House committees and inquiries will be unbiased and demonstrate the will of the people. Anyone questioning any House inquiries will be branded traitors to the will of the American people.

Just like that! It will be a miracle!

/Sarcasm tag needed because internet

#31 Old Boot on 10.15.22 at 3:40 pm

#24 Dr V on 10.15.22 at 2:24 pm

Thank you for this post Doug, and thank you Shawn for those examples and explanations.

I have asked about prefs with my advisor, and she is not warm to them, as I have read many advisors are not. As rates rise though, and may be maintained generally
higher, the resets may be more appealing. Will discuss them again with her.

***********

Same with my advisor. Their firm seems to substitute commercial mortgages in the slot Garth et al reserve for prefs in the FI side of things.

I believe I hold some prefs on the equity side, though.

Can anyone compare the relative risks (without knowing specifics)?

#32 jess on 10.15.22 at 3:42 pm

minions in the cult
Pro-Trump Georgia Officials Plotted to Swipe Voting Data. We Caught Them
Emails obtained by Rolling Stone reveal how a group of county officials in Georgia tasked with protecting the election instead discussed a plan to pull sensitive data — and have taxpayers pay for it

Led by lawyer Sidney Powell, the team copied data from voting machines in Coffee County. Coffee County wasn’t the only Georgia county where pro-Trump forces were working to swipe election data in search of nonexistent fraud. And in Spalding County, it wasn’t Trump’s team leading the effort — it was the election officials themselves.

https://www.rollingstone.com/politics/politics-news/trump-georgia-election-officials-big-lie-2020-1234609561/

#33 Faron on 10.15.22 at 3:43 pm

#135 neo on 10.15.22 at 9:06 am
#97 Observer on 10.14.22 at 8:34 pm
#82 TurnerNation on 10.14.22 at 7:32 pm

If you had half a brain you would realize it is to justify the continued Emergency Use Authorization of the Pfizer shots

If you had a whole brain, you would know that the FDA and Health Canada gave their rigorous, full approval to the Pfizer and other vaccines some time ago.

#34 jess on 10.15.22 at 3:45 pm

https://www.atlantafed.org/economy-matters/banking-and-finance/viewpoint/2018/04/costs-and-benefits-of-the-bank-holding-company-structure

Quarterly Report on Bank Trading and
Derivatives Activities
Second Quarter 2022

https://www.occ.gov/publications-and-resources/publications/quarterly-report-on-bank-trading-and-derivatives-activities/files/pub-derivatives-quarterly-qtr2-2022.pdf

#35 Shawn on 10.15.22 at 3:50 pm

Rate Reset Redemptions

OSFI (the bank regulator) is ‘encouraging’ banks to redeem. This is why we’ve seen redemptions occur recently where the economics are unfavourable to the issuers.

—Doug

*********************************
That’s interesting. I was not aware of that.

Looking it up I now see that Bank of Montreal and TD have both redeemed some non-viability-contingent-capital rate resets. These were meant to protect the bank by converting to common shares in the unlikely case that the bank runs into serious financial trouble.

Presumably OSFI is now favoring a new kind of contingent capital. I believe I saw some debt issues (capital notes) that reset after five years.

This redemption trend is good news. I will watch for further news on this.

#36 Mostly Peaceful on 10.15.22 at 3:57 pm

Preferred shares are one investment I can’t bring myself to invest in. All the risk of a small cap stock and at best the return of bonds.
Just put up a 10 year chart of any Canadian preferred ETF, it is a sad sight indeed. You can make some money, but you have to time your purchase and your exit precisely, and timing the market is not my thing.

#37 Cheese on 10.15.22 at 4:01 pm

The only preferred share ETF I ever purchased was ZPR, 1cent off the literal peak, and then it began cratering.

Life is suffering

#38 neo on 10.15.22 at 4:42 pm

S&P 500 is really defending that long term support of 3,580. Each time it has dipped below that recently it has rocketed up…yet still finds itself closing precariously close to that number on a few occasions now. Once it breaks that with conviction the next stop is under 3,000. What will finally be the catalyst for that in the coming weeks?

#39 Gr on 10.15.22 at 4:51 pm

That matrix pic…

White House Ai bill of rights
https://spectrum.ieee.org/white-house-ai

AI has great potential for good but also… YT 16min
https://www.youtube.com/watch?v=J6Mdq3n6kgk

Then there is this AI says it would kill you
https://www.youtube.com/watch?v=Fbc1Xeif0pY

Hopefully SkyNet isn’t already involved in real world events.

An Interesting time to be alive for sure.

#40 Doug Rowat on 10.15.22 at 4:55 pm

#23 Nonplused on 10.15.22 at 1:59 pm

…GIC’s still suck even worse over the long term, but the advantage is you don’t have to worry about losing 20% just when you need to sell because you can’t make ends meet.

—-

Of course GICs have that advantage. GICs carry less downside risk? What a revelation.

And show me where I say a portfolio heavily weighted to preferred shares is suitable for an investor who “can’t make ends meet”?

They’re worth consideration, but at a modest portfolio weight.

—Doug

#41 Quintilian on 10.15.22 at 4:55 pm

#15 crowdedelevatorfartz on 10.15.22 at 1:16 pm

“The idea that Tesla is worth more than the Top 5 other Auto manufacturers combined is a tad ridiculous.”

Common sense would suggest you are right.

However, major institutional investors, hedge fund managers, mutual fund managers don’t get it.

Says a lot about the “experts”

#42 jess on 10.15.22 at 5:14 pm

It was a committee, not a trial. The aim was to gather facts, testimony and other evidence.

lessons learned :
2013 senate banking committee -london whale
Thus the total amount of fines exceeded $1 billion (Brush).
https://financetrainingcourse.com/education/2014/04/london-whale-casestudy-timeline/

=============
ebruary 07, 2022
Brown, Colleagues Seek Answers on Reports of JPMorgan Robo-signing

WASHINGTON, D.C. – Today, Sen. Sherrod Brown (D-OH), Chair of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, along with Committee members Sens. Menendez (D-NJ), Smith (D-MN), Warren (D-MA), Van Hollen (D-MD), and Warnock (D-GA), sent a letter to JPMorgan Chase seeking to better understand the company’s credit card collection practices, including reports that JPMorgan has resumed the practice of robo-signing to sue customers.

https://www.banking.senate.gov/imo/media/doc/letter_to_jpmorgan_chase_on_robo-signing_2-7-2022.pdf

#43 Sail Away on 10.15.22 at 5:29 pm

#29 Faron on 10.15.22 at 3:22 pm

SAIL AWAY TRIGGER WARNING!

———

When visiting nieces and nephews, I often state very clearly that I don’t want anyone peeking inside the bag, and I’m putting it right here and NOBODY is to look into it. Then later I am invariably great outraged by the peeking that has clearly occurred against my wishes.

#44 Joseph R on 10.15.22 at 5:50 pm

Elon Musk is on a losing streak, isn’t he?

Electricity in Europe going up.
Gonna have to buy that twitter cesspool.
SpaceX internet funding.
Tesla now has competition.
Overall people are starting to realize these electric cars aren’t so great for the price.
On and on.

Needs to spread some Burnt Hair on himself to cover the stink.

Oh sure…he’ll be OK, but his ego is taking hits in this round.

———————————————————–

Trying to extort the US Government for his Starlink service in Ukraine, in a time of war, will not go down well, for any of his future projects involving public money.

I am sure the Pentagon will look elsewhere for its next satellite Internet service contracts, if not make there own as the public’s expense. After all, Musk just gave everyone the argument why you cannot trust private parties in wartime.

#45 Søren Angst on 10.15.22 at 5:57 pm

#22 TurnerNation

“And if you are a central banker, raise rates. We can’t have 8% inflation.”

——————

On that, I agree wholeheartedly.

Families struggling to make ends meet on the basics food, shelter, etc. thanks to high inflation. They have no choice in the matter and are suffering.

Those that used money recklessly be it Peak Cdn RE, Investing, whatever, CHOSE to do that.

The latter blame the BoC because of past assurances of rates staying low.

Pointing fingers away from their own fiscal incompetence.

There are ONLY TWO assurances in life:

Death. Taxes.

Post Covid, add another:

Expect the Unexpected.

#46 ogdoad on 10.15.22 at 5:59 pm

#27 Faron on 10.15.22 at 3:12 pm

:):):):)

Neither is sarcasm.

Og

#47 TurnerNation on 10.15.22 at 6:13 pm

Going out on a limb here that ever single new pruduct from Fizer and Moderna will be “approved” by the feds. Ever Single One. No exceptions. I mean it’s just business.

Tax dollars at work:

— Our Social Saftey Net is World Class. Our leaders care about us, praise their handling of things.

.Nova Scotia family doctor wait list hits record high at more than 116,000 people (cp24.com)

—— What’s it like living in a post-national State? Our Colour Revolution (Red) began, March 2020.
The Prime Minister is involved even in shutting this down. You know it’s for real.
All the old culture must be torn down Comrades. This ‘news’ items says that’s so
I’m guessing the national anthem at the games will be replaced with a land announcement and a gemnder affirmartion.
Add a new one to the list, Culture Audits.

https://www.cp24.com/news/calls-for-cultural-change-at-hockey-canada-spark-period-of-reckoning-for-sport-1.6110746

#48 Ponzius Pilatus on 10.15.22 at 6:17 pm

#144 Shawn on 10.15.22 at 10:49 am
#113 Ponzius Pilatus on 10.14.22 at 10:31 pm
#105 EV on 10.14.22 at 9:30 pm
Electricity getting expensive in Europe.

Won’t help electric car sales.
——————
Exactly.
Shawn , how’s the Tesla doing?

******************************************
Great. If you get an electric car be sure to get a proper home charger. Mine includes an energy management system whereby it automatically shuts off if the rest of the house needs the power. This avoided having to upgrade my electrical panel (which sometimes involves upgrading the service wires).

We locked in a cost of 10 cents per kWh which equates to about $10 to charge from empty. In reality it’s best to plug in after every trip and keep it charged at 80% which is best for the battery. You can’t risk having the car sit at say 30% in case a sudden need for say a 3 hour trip comes up.

—————–
thanks for the honest assessment.
Not something you’d get from the Sailo, who obviously can’t cope with reality.
Anyway, too much hassle for a simple Austrian.
Oops, gotta go. 
Gotta bus to catch.
58 bucks for all you can ride for a month.
Cost of Chaffeur is included.
Some of them even wear a uniform and greet you when step in
And happy customers yell “Thank You” when getting off.

#49 Søren Angst on 10.15.22 at 6:35 pm

#44 Joseph R

Musk. Starlink. Gov USA. Ukraine.

Myself, partial to this approach.

https://twitter.com/Akiirro/status/1581398992885207040

The pen is not mightier than the sword.

It’s not.

#50 Ed on 10.15.22 at 6:39 pm

Trying to extort the US Government for his Starlink service in Ukraine, in a time of war, will not go down well, for any of his future projects involving public money.

I am sure the Pentagon will look elsewhere for its next satellite Internet service contracts, if not make there own as the public’s expense. After all, Musk just gave everyone the argument why you cannot trust private parties in wartime.

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

It is strange that the USA buys all their HIMAR, Anti tank,etc etc from weapons manufactures Lockheed,Raytheon,BAE,Grummon but expect SpaceX to provide their hardware etc free.
Musk is not out of line.

#51 Warren-the-lagging_indicator on 10.15.22 at 6:41 pm

Neato! I just bought ZPR yesterday after my oil trading binge escapade. Let’s just say my TD fees are 7 bucks. I may be over-trading.

#52 Sail Away on 10.15.22 at 6:44 pm

#44 Joseph R on 10.15.22 at 5:50 pm
Elon Musk is on a losing streak, isn’t he?

Electricity in Europe going up.
Gonna have to buy that twitter cesspool.
SpaceX internet funding.
Tesla now has competition.
Overall people are starting to realize these electric cars aren’t so great for the price.
On and on.

Needs to spread some Burnt Hair on himself to cover the stink.

Oh sure…he’ll be OK, but his ego is taking hits in this round.

———–

Trying to extort the US Government for his Starlink service in Ukraine, in a time of war, will not go down well, for any of his future projects involving public money.

I am sure the Pentagon will look elsewhere for its next satellite Internet service contracts, if not make there own as the public’s expense. After all, Musk just gave everyone the argument why you cannot trust private parties in wartime.

———–

This war is the best thing that could have ever happened to Starlink. What a guy, that Elon. This launches him and all his ventures to the next level. Watch and learn.

#53 Shawn on 10.15.22 at 7:10 pm

Leave Nova Scotia, Now.

#47 TurnerNation on 10.15.22 at 6:13 pm

Nova Scotia family doctor wait list hits record high at more than 116,000 people

*********************************
OMG, I looked it up and it’s true! The population is only one million and over 10% are on a wait list for a doctor!!!

Maybe all the ex-patriates in Alberta are going to have to move their parents to Alberta for care.

I have no idea how that province manages to stay afloat financially. Well, a lot of transfer payments and equalization.

It’s well past time for the three maritime provinces to merge.

It would take massive immigration to make Nova Scotia viable. But how can they keep immigrants when they would have the right to move to Alberta and why wouldn’t they?

#54 Sail Away on 10.15.22 at 7:17 pm

#50 Ed on 10.15.22 at 6:39 pm
Trying to extort the US Government for his Starlink service in Ukraine, in a time of war, will not go down well, for any of his future projects involving public money.

I am sure the Pentagon will look elsewhere for its next satellite Internet service contracts, if not make there own as the public’s expense. After all, Musk just gave everyone the argument why you cannot trust private parties in wartime.

———-

It is strange that the USA buys all their HIMAR, Anti tank,etc etc from weapons manufactures Lockheed,Raytheon,BAE,Grummon but expect SpaceX to provide their hardware etc free.
Musk is not out of line.

———-

Of course he’s not. If I let my neighbour use my car to get through a tough patch, it doesn’t mean he gets to keep using it for free forever. A good deed does not create an obligation.

Elon will get a massive contract out of this, most probably with Ukraine, funded by the NATO alliance.

#55 Ponzius Pilatus on 10.15.22 at 7:28 pm

#49 Søren Angst on 10.15.22 at 6:35 pm
#44 Joseph R

Musk. Starlink. Gov USA. Ukraine.

Myself, partial to this approach.

https://twitter.com/Akiirro/status/1581398992885207040

The pen is not mightier than the sword.

It’s not.
——————-
As usual, you’re thinking short term.
Ars (pen) longa, vita brevis.
This conflict will probably be just a short footnote in the great Annals of History.

#56 Ponzius Pilatus on 10.15.22 at 7:49 pm

#41 Quintilian on 10.15.22 at 4:55 pm
#15 crowdedelevatorfartz on 10.15.22 at 1:16 pm

“The idea that Tesla is worth more than the Top 5 other Auto manufacturers combined is a tad ridiculous.”

Common sense would suggest you are right.

However, major institutional investors, hedge fund managers, mutual fund managers don’t get it.

Says a lot about the “experts”
 —————
Haha,
There are still people who believe that manufacturing companies are operating in perfect/ efficient markets and should be valued using P/E ratios etc.
And actually show profits.
That quaint notion probably never was true, but certainly is no longer valid in our crazy times, where “price is what you pay, and value is what you get” is just a quote by an Old Sage.
Nowadays, manufacturing companies are valued like high tech companies.
Where convenience and fads trump utility.
A stove is now a high tech toy not a cooking appliance.
Same with cars.
Car reviews now no longer focus on the mechanical side, but on how many gizmos the car has.
My favorite is the rain sensor.
No idea how I could live without it.
In summary, market value of car companies have now entered the pie-in-the sky valuation territory of high tech Companies, just like Apple, FaceBook etc.
Act accordingly.
Or don’t.
However, B&D is the way to go, as always.
unless your Sailo.

#57 Parkville Prankster on 10.15.22 at 8:06 pm

ZPR has been a crushing disappointment since I purchased a swack of it back in 2015. Since then I’ve been dollar cost averaging it down, and sure, the monthly payments are okay, but sheesh, will I ever get my original capital back? Doubtful.

It’s almost like having the worst of fixed income and equity ETFs all packaged into one turd-licious product.

#58 Sail Away on 10.15.22 at 8:15 pm

#56 Ponzius Pilatus on 10.15.22 at 7:49 pm

However, B&D is the way to go, as always.
unless your Sailo.

——–

Moderation in all things. Including moderation.

#59 crowdedelevatorfartz on 10.15.22 at 8:46 pm

@#56 Ponzie’s precise prediction
“Car reviews now no longer focus on the mechanical side, but on how many gizmos the car has.”

++++
As much as it pains me.
I agree.
However.
How many “moving parts” does an ICE engine/transmission/etc have vs an electric Tesla?

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjIq9LIwuP6AhVlAzQIHak2CqkQFnoECE4QAQ&url=https%3A%2F%2Fwww.quora.com%2FHow-many-parts-does-an-electric-car-have-vs-an-internal-combustion-engine-car&usg=AOvVaw0I9A9v3CsQBkvdWyaBpd3a

Apparently electric vehicles have 20 moving parts in an electric engine vs 2000 in an ICE vehicle.
( note to auto mechanics…..time to retrain…the “buggy whip” repair shop is done)

Perhaps that’s why the Moto trend mags focus on the “trinkets and baubles” rather than the mechanics.

#60 Ponzius Pilatus on 10.15.22 at 8:59 pm

#53 Shawn on 10.15.22 at 7:10 pm
Leave Nova Scotia, Now.

#47 TurnerNation on 10.15.22 at 6:13 pm

Nova Scotia family doctor wait list hits record high at more than 116,000 people

*********************************
OMG, I looked it up and it’s true! The population is only one million and over 10% are on a wait list for a doctor!!!
————————
So that means that about 90% have a Dr.
That’s better than most Provinces.
In my books, that not too bad.
But then, I’m not seeking perfection.

#61 crowdedelevatorfartz on 10.15.22 at 9:26 pm

Municipal elections in BC today.
A HUGE amount of people voted in the advanced polls and there are long line ups….
Vancouver Mayor Kennedy Stewrat should be worried….

#62 crowdedelevatorfartz on 10.15.22 at 9:29 pm

Temperature records SMASHED today in BC.
29 in Squamish
24 in Vancouver.

Oct 15th.
Crazy

#63 DON on 10.15.22 at 9:32 pm

https://www.zerohedge.com/political/elon-musk-alarmed-after-appearing-well-known-ukrainian-kill-list.

Do something nice and get put on a kill list from the ‘good guys’.

#64 Badger on 10.15.22 at 9:40 pm

Prefs are the most junior debt, basically on the honor system. If I have to take a risk why not just buy bank shares at a p/e of like 8, or something like Rio Tinto with a div in the teens?

#65 Mikey on 10.15.22 at 9:49 pm

It’s amazing.
Same dumb ass’s chewing the fat here everyday. Most about nothing. Faron Soren top of the heap.
Salo your so damb smart and rich you should be elsewhere? Ego rules some souls… Hahahahahahaha wtf is wrong wif you clowns???

#66 Concerned Citizen on 10.15.22 at 10:03 pm

#38 neo on 10.15.22 at 4:42 pm
S&P 500 is really defending that long term support of 3,580. Each time it has dipped below that recently it has rocketed up…yet still finds itself closing precariously close to that number on a few occasions now. Once it breaks that with conviction the next stop is under 3,000. What will finally be the catalyst for that in the coming weeks?

***

My guess is this earnings season will show, on average, lower margins due to inflation. And with valuations still very high historically, and margins also starting from an extremely high starting point, there is a recipe for potential further declines.

Increasing policy rates will also put pressure on asset prices too, of course. But it’s about time. The rates need to continue going higher, and then the central banks ought to keep them there for a few years at least to clear out the excess that’s formed since 2009. It will be painful, but it’s much needed for the long-term health of economy – and more importantly, society.

#67 THE DANDADA on 10.15.22 at 10:03 pm

Fed needs to raise rates above the CPI to kill inflation” →

Inflation is at 8.3%, meaning the Fed would need to raise an additional 5% aka play with fire.

Good luck with that!

#68 L Lawliet on 10.15.22 at 10:08 pm

There are more readers of this blog than preferred shareholders in Canada. For an article about only preferred shares, almost none (literally only a few) of the comments are about preferred shares. There are more comments about anything else, especially Tesla, Elon Musk, and Donald Trump.

#69 KNOW IT ALL on 10.15.22 at 10:15 pm

Remember when they told us inflation was transitory?

How long will that take?

#70 NoName on 10.15.22 at 10:32 pm

#54 Sail Away on 10.15.22 at 7:17 pm

Elon will get a massive contract out of this, most probably with Ukraine, funded by the NATO alliance.

Maybe now tesla will piggyback on that one, and be valued more that all other defence companies that produce anything that have wheels attached to it… Can you just imagine self driving wifi antenna? Sadly i can…

#71 Joseph R. on 10.15.22 at 10:58 pm

#52 Sail Away on 10.15.22 at 6:44 pm
#44 Joseph R on 10.15.22 at 5:50 pm
Elon Musk is on a losing streak, isn’t he?

Electricity in Europe going up.
Gonna have to buy that twitter cesspool.
SpaceX internet funding.
Tesla now has competition.
Overall people are starting to realize these electric cars aren’t so great for the price.
On and on.

Needs to spread some Burnt Hair on himself to cover the stink.

Oh sure…he’ll be OK, but his ego is taking hits in this round.

———–

Trying to extort the US Government for his Starlink service in Ukraine, in a time of war, will not go down well, for any of his future projects involving public money.

I am sure the Pentagon will look elsewhere for its next satellite Internet service contracts, if not make there own as the public’s expense. After all, Musk just gave everyone the argument why you cannot trust private parties in wartime.

———–

This war is the best thing that could have ever happened to Starlink. What a guy, that Elon. This launches him and all his ventures to the next level. Watch and learn.

———————————————————-

Indeed, you are correct. So why did he screw it up by trying to extort the government? It costs $20 million/month to run, and the US government has even paid for the equipment:

https://www.washingtonpost.com/politics/2022/04/08/us-quietly-paying-millions-send-starlink-terminals-ukraine-contrary-spacexs-claims/

He could have used it for publicity or asked for a tax deduction instead of telling the US Government to foot the bill.

It’s the same stupidity then when he publicly said he wants to take Telsa private for $420 a share on Rogan’s podcast or buy Twitter.

#72 Doug in London on 10.15.22 at 11:23 pm

If you don’t have any or are underweight in these preferred share ETFs then take this opportunity to scoop up some while they’re on sale. If you’re already heavily invested in them then just sit back, relax, park your ass in the comfy chair, let the dividends roll in and do nothing. If they should go up a lot in the future, then possibly sell some off. Buy low, sell high. Nothing new to see here, time to move on to the next attraction.

#73 crowdedelevatorfartz on 10.15.22 at 11:43 pm

@#65 Too many Mickey’s
“Hahahahahahaha wtf is wrong wif you clowns???”

+++
I can’t speak for the others who spread their wisdom.
I just spread hot air.

#74 crowdedelevatorfartz on 10.15.22 at 11:45 pm

@#68 Lucy Lawless
“For an article about only preferred shares, almost none (literally only a few) of the comments are about preferred shares.”

+++
Read between the lines.
Preferred share owners prefer to remain anonymous.

#75 crowdedelevatorfartz on 10.16.22 at 12:04 am

gee
Realtors might be involved in protests against interest rate hikes…?

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiIzNXy7uP6AhXiAjQIHd5LCmwQglR6BAgaEAY&url=https%3A%2F%2Ftwitter.com%2FRE_MarketWatch%2Fstatus%2F1581429973172092933%3Fref_src%3Dtwsrc%255Egoogle%257Ctwcamp%255Eserp%257Ctwgr%255Etweet&usg=AOvVaw3YO4qAGlOfQxkM_ax3CgIK

I’m shocked.

#76 Bdwy on 10.16.22 at 12:36 am

Looking like a ken sim landslide in van mayor race.

#77 yvr_lurker on 10.16.22 at 12:47 am

#23 Non-plused

GIC’s still suck even worse over the long term, but the advantage is you don’t have to worry about losing 20% just when you need to sell because you can’t make ends meet. Sure, you still lose big time to inflation, but not inflation plus 20%. That’s almost as bad as putting things on the credit card.

Garth talks often of recency bias. I don’t know whether to look at this as a case where recency bias is the problem and people should be looking at history, or whether we are at an inflection point where nothing will ever be the same, or at least not for a while.
—————

This is very much in line with my own viewpoint. It seems to me that the down cycle we are in will last for some longish period (2—3 years), with much more potential of a further downside correction that a euphoric rise in the market. This winter will be a milestone with what will happen with the war (both economic, gas shortages etc…, european pain) and the risk of something more impactful (limited nukes etc…). I remember years ago how the market took a big dip when Greece almost defaulted (a country with less that 1% of world GDP). Ridiculous.

The downturn here is much more linked to core events (war, too much $$ in circulation with COVID, supply chains not back at speed, climate change, etc…etc…).
Am happy to largely sit on the sidelines with the extra $$ that I woul normally have put into the market. No need for a further 10–15% loss.

#78 Deepstick on 10.16.22 at 12:49 am

Doug, re: Preferred shares.

I don’t think the price power of the mass panicked sell off is fully reflected in your post. It’s not just the retail market that’s thrown the baby out with the bathwater, it’s also institutions puking up shares, both players selling to satisfy margin calls.

It’s typical, selling the good and crying about not taking the losses on what’s gone down hard.

You’ve provided a good technical overview, but in reality it’s the puke up that’s most effected these issues. You’re right that value discovery is apparent. The dividends keep flowing regardless of the screaming and bloody terror.

#79 yvr_lurker on 10.16.22 at 12:51 am

crowded:
Municipal elections in BC today.
A HUGE amount of people voted in the advanced polls and there are long line ups….
Vancouver Mayor Kennedy Stewrat should be worried….
—–
Even my left leaning wife (more so than me) and my ultra-green neighbour decided that Stewart has to go; worst mayor that Vancouver has had since Sam Sullivan. Even my kid who turned 18 three days ago voted for Sim. I am hoping for a favorable outcome tonight where this dude is punted to the curb.

#80 crowdedelevatorfartz on 10.16.22 at 12:55 am

The City of Surrey has tossed their incumbent Mayor.
The Mayor elect has announced that the new Surrey Police Force is dead.
The RCMP will remain.
The Surrey police force has already hired 150 officers.
The financial severance packages will be epic.
Stay tuned.

P.S.
Vancouver incumbent Mayor Kennedy Stewrat is getting hammered in the polls.
Something about arrogant and invisible …..
Crushed.

#81 crowdedelevatorfartz on 10.16.22 at 1:11 am

Kennedy Stewrat FORMER Mayor of Vancouver was CRUSHED by voters fed up with rampant crime under his “Defund the Police” agenda.
The Council behind Kennedy Stewrat was also crushed.

The voters have spoken.

Federal Conservatives take note.

Urban voters are fed up with Urban crime and the Liberal Woke agenda that has fostered politically correct anarchy

#82 AM in MN on 10.16.22 at 1:29 am

At just after 10 PM Pacific the people of Vancouver will truly have something to look forward to as the new Mayor and Council will make it one of the great cities of the world.

Might be time to look at RE there soon?

While waiting for results, I watched live Chairman Xi rattle on and on about marxism and socialism, to be contrasted with the fact that ethnic Chinese from the poorer parts of Van were the ones putting our signs for Ken Sim and crushing the polls today.

My guess is the flow of people and money over the next few years will only go in one direction, especially from HK and Taiwan.

There is hope for sanity yet! This was an earthquake, and Kevin Falcon and PP will be smiling tonight.

#83 kommykim on 10.16.22 at 1:46 am

RE: #20 Doug Rowat on 10.15.22 at 1:31 pm
OSFI (the bank regulator) is ‘encouraging’ banks to redeem. This is why we’ve seen redemptions occur recently where the economics are unfavourable to the issuers.

—Doug

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

I assume the OSFI is NOT encouraging the banks to also redeem their NVCC preferred shares?

#84 WTF on 10.16.22 at 6:46 am

#53 “It would take massive immigration to make Nova Scotia viable. But how can they keep immigrants when they would have the right to move to Alberta and why wouldn’t they?”
——————————————————————-
They expect 23,000 new people to NS this year. Second year of in migration. Halifax has a LOT of new construction. Nobody talking about Alberta.

You can stop fantasizing of having hard working Nova Scotians making the move. It’s over.

#85 Wrk.dover on 10.16.22 at 7:19 am

#53 Shawn on 10.15.22 at 7:10 pm
It would take massive immigration to make Nova Scotia viable.
____________________________________

In Yarmouth which has always been a seafood town, the other day I was served by a Phillipino in a Korean restaurant with a Sikh chef.

The town Mexican guy’s burrritos are lousy though.

The drive through window at Digby DQ has brown people from dog knows where on the planet. Keep in mind, Digby is a town where residing nearby locally blacks were not allowed in town after dark as recently as the mid 70’s.

One out of twenty license plates are from Ontario.

Building supply stores and grocery stores are crawling with obviously not long time locals.

NS wasted money on a commission to study how to get an influx…covid solved that for free!

Boomers yes, but also the loser corps generations too.

The economy is roaring here in Bunny Patch, my RE is never going back to the previous value, it is only at 33% of the new value of a GTA semi anyhow, even though it includes a guest house and 40 acres.

Come from away’s love our ocean view, and our tasteless odorless crystal-clear well water.

#86 Dharma Bum on 10.16.22 at 8:18 am

#53 Shawn

But how can they keep immigrants when they would have the right to move to Alberta and why wouldn’t they?
——————————————————————————————————–

I dunno.

Depends on whether or not they love freedom and independence.

A lot of Canadians don’t.

That’s why they voted for Trudeau. They love big government with it’s big spending for welfare handouts. They love being told what to do and when to do it and how to do it. They love being taxed and patronized by a barely educated smug and smarmy hypocrite. They love it when their leader spends 50 + million bucks on a useless travel app that gets scrapped like it should have been before it even started. They love identity politics and virtue signalling. They love real issues being ignored while nonsense like how many genders there are or aren’t gets debated.

If they moved to Alberta amongst the independently minded freedom loving down to earth no nonsense people, their heads might explode.

#87 Dharma Bum on 10.16.22 at 8:30 am

#69

Remember when they told us inflation was transitory?

How long will that take?
———————————————————————————————————

Life is transitory.

So, a lifetime.

Compare prices from 70 years ago to today.

They are WAY higher.

Life is inflationary.

Inflation is transitory.

Get used to it.

In 50 years, house prices will be higher.

So will grocery prices, cars, rent, coffee, furniture, clothes, and Netflix.

Nothing’s coming down in the long run. Not the main things, anyway.

It’s still transitory.

Like life.

Impermanent.

https://dictionary.cambridge.org/dictionary/english/transitory

#88 Brett in Calgary on 10.16.22 at 9:14 am

Probably a poopty earnings season or bigger than expected rate hike. As for preferred shares I agree with another commenter here, you have the time your entry and exit as best you can. In theory they sound great, in practice they seem to get turfed quite a bit.
_—————
#38 neo on 10.15.22 at 4:42 pm
S&P 500 is really defending that long term support of 3,580. Each time it has dipped below that recently it has rocketed up…yet still finds itself closing precariously close to that number on a few occasions now. Once it breaks that with conviction the next stop is under 3,000. What will finally be the catalyst for that in the coming weeks?

#89 baloney Sandwitch on 10.16.22 at 9:36 am

Useful info. Not only preferred’s but some blue chip dividend paying stocks are compelling. Verizon for example – PE of 7 and dividend yield of 7%.

#90 the Jaguar on 10.16.22 at 10:10 am

@#53 Shawn on 10.15.22 at 7:10 pm+++

Careful Shawn ( originally from Cape Breton area if I recall correctly…). You awaken the hatred of WTF who cannot stand any positive comments about Alberta.
But since you have connections to those far east provinces, can you enlighten me on why it has taken so long to ‘clean up’ after the bad storm they had? A friend in PEI says many are still without electric power.

A number of years back a family member was sent to Puerto Rico after a bad storm to assist with the mending of electrical grid issues, etc.

Doesn’t the rest of Canada pitch in when it happens here? Or do the locals forbid it so they can cash in on the ‘over time’ opportunities?

#91 Old Boot on 10.16.22 at 10:16 am

#82 AM in MN on 10.16.22 at 1:29 am

At just after 10 PM Pacific the people of Vancouver will truly have something to look forward to as the new Mayor and Council will make it one of the great cities of the world.

Might be time to look at RE there soon?

While waiting for results, I watched live Chairman Xi rattle on and on about marxism and socialism, to be contrasted with the fact that ethnic Chinese from the poorer parts of Van were the ones putting our signs for Ken Sim and crushing the polls today.

My guess is the flow of people and money over the next few years will only go in one direction, especially from HK and Taiwan.

There is hope for sanity yet! This was an earthquake, and Kevin Falcon and PP will be smiling tonight.

**********

What successive, fauxgressive, civic governments have foisted on Vancouver’s once-vibrant and livable Chinatown should be treated as a hate crime.

No other neighbourhood would’ve been treated this way.

The fauxgressives need the optics of ‘hate crimes’, all caught on security cameras, to justify their narrative of rising intolerance.

Mentally ill drug addicts crapping all over Chinatown and pushing its residents around was the gift that kept on giving.

#92 Tony on 10.16.22 at 10:34 am

Re: #4 Observer on 10.15.22 at 11:32 am

I warned everyone even before the 2016 election all the blogs including this one, youtube everywhere and they still voted for him. Then I warned them constantly while he was the president and even after he was the president.

#93 the Jaguar on 10.16.22 at 10:46 am

@#86 Dharma Bum on 10.16.22 at 8:18 am+++

Appears Vantown is waking up from ‘Woke’. Ken Sim rolled over the incumbent according to the headlines.
Guess buzzwords like ‘Affordable Housing, Safe Injection Sites’ are falling on more and more deaf ears.
People are figuring out that ‘Tent Cities’ are hardly ever about true homelessness, but harbour greater evils…

Seems like everywhere one looks progressive thinking is being exposed for its fraudulent elements and failures. Just a breeding ground for more ‘Ponytails’.
Hope the Democrats south of the 49th are paying attention, but probably not…..

Where is Fishman to give us his analysis?

#94 Doug Rowat on 10.16.22 at 10:59 am

#89 baloney Sandwitch on 10.16.22 at 9:36 am

Useful info. Not only preferred’s but some blue chip dividend paying stocks are compelling. Verizon for example – PE of 7 and dividend yield of 7%.

—-

Valuations aren’t particularly predictive of market direction in the short term, unfortunately, but nevertheless, you’re right, some sectors are ridiculously cheap.

—Doug

#95 crowdedelevatorfartz on 10.16.22 at 11:02 am

Vancouver polling results
Ken Sim : 69,650
Ken Stewart : 41,500

Kennedy Stewart still believes that he accomplished a great many things.
“Homelessness is turning around and Harm Reduction has provided a safe supply of Drugs.”

Delusional, Homelessness is rampant and Drug overdose deaths are at record highs.

The voters finally got to boot Stewart out.
Lots of sad faces in the Provincial NDP today.
They backed Kennedy right up to the bitter end.

#96 IHCTD9 on 10.16.22 at 11:07 am

#81 crowdedelevatorfartz on 10.16.22 at 1:11 am
Kennedy Stewrat FORMER Mayor of Vancouver was CRUSHED by voters fed up with rampant crime under his “Defund the Police” agenda.
The Council behind Kennedy Stewrat was also crushed.

The voters have spoken.

Federal Conservatives take note.

Urban voters are fed up with Urban crime and the Liberal Woke agenda that has fostered politically correct anarchy
————

Wow, what an epic steamrolling for Stewart. He must feel like the 401 on a Friday before a long weekend right now. I guess he found out! Total slate wipe for council too. A ray of hope for a flagging city. That is about as clear as a message can get.

Hopefully, Horgan gets obliterated in a similar fashion in 2024. And Trudeau too. The whole house needs a good cleaning.

#97 crowdedelevatorfartz on 10.16.22 at 11:12 am

@#90 The Jag
“You awaken the hatred of WTF who cannot stand any positive comments about Alberta.”

+++
As a former working Albertan, born on the East Coast, perhaps I can explain.

Alberta is a wonderful, scenic province but the insular mindset was a bit off putting.
People from “back east” were loathed, ridiculed and made to feel unwelcome.
Premier Ralph Klein’s epic rant, “Go back East all you creeps and bums” was a confirmation of the general attitude in Wild Rose Country.
Alberta, where all the eggs are hard boiled not soft.
Lots of work back east now.
No need to make the commute to Albertastan any more.
I actually heard an advertisement on the truck radio yesterday in Vancouver that praised the affordability of Calgary ( odd there was no mention of the -40 cel winds screaming down the streets for 2 -4 months of Winter).
Seems Alberta is still trying unsuccessfully to appeal to people.
Good luck.

#98 Doug in London on 10.16.22 at 11:15 am

I have no trouble believing the low price of these preferred share ETFs is primarily caused by retail investors selling at the exactly wrong time. In Friday’s Globe and Mail there’s an article about stock in companies that went to ridiculously high values like Peloton, Zoom Video Communications, Nautilus Inc., and DoorDash. Now they’re trading at a fraction of their peak price. Typical retail investors. I bet institutional investors were selling these stocks back in 2020 and are buying them back now when they’re on sale.

#99 Shawn on 10.16.22 at 11:23 am

Banks Redeeming Some Rate Reset Preferred Shares?

#83 kommykim on 10.16.22 at 1:46 am

RE: #20 Doug Rowat on 10.15.22 at 1:31 pm
OSFI (the bank regulator) is ‘encouraging’ banks to redeem. This is why we’ve seen redemptions occur recently where the economics are unfavourable to the issuers.

—Doug

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

I assume the OSFI is NOT encouraging the banks to also redeem their NVCC preferred shares?

*********************************
Kommykim, that was my thought as well. Regulators and banks came up with the NVCC (Non-Viability- Contingent-Capital) in other words “bail-in” style prefs in order to protect capital (really to protect depositors and faith in the banks) so why would they now encourage redemption?

I am not familiar with this “encouragement”. But google tells me that BMO and TD both redeemed some NVCC pref shares.

The banks have this new thing Limited Recourse Capital Notes that are a type of bond with 60 year maturity (at least some are) and a rate that resets every five years and an attractive yield and the bank can redeem every five years and ONLY available to institutions.

What is going on? I have no idea. Will lots of bank rate resets be redeemed? If that was expected none would be trading way below $25.

Perhaps Doug can elaborate.

Here’s the BMO redemption.

https://www.newswire.ca/news-releases/bank-of-montreal-to-redeem-non-cumulative-5-year-rate-reset-class-b-preferred-shares-series-42-non-viability-contingent-capital-nvcc–818735200.html

TD redeemed some back in October 2021

http://td.mediaroom.com/2021-09-24-TD-Bank-Group-Announces-Redemption-of-Non-Cumulative-5-Year-Rate-Reset-Class-A-First-Preferred-Shares,-Series-14-NVCC

Were any of these redeemed when their prices were well under $25?

#100 Shawn on 10.16.22 at 11:29 am

Yeah, sorry, rate reset preferred share holders that are under $25

Do not count on the banks redeeming these at $25

“On October 3, 2022, TD announced that it does not intend to exercise its right to redeem all or any part of the currently outstanding 14 million Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 16 (Non-Viability Contingent Capital (NVCC)) (the “Series 16 Shares”) of TD on October 31, 2022.”

#101 Shawn on 10.16.22 at 11:35 am

Why the long power outages in Cape Bretona dn PEI?

#90 the Jaguar on 10.16.22 at 10:10 am

@#53 Shawn on 10.15.22 at 7:10 pm+++

Careful Shawn ( originally from Cape Breton area if I recall correctly…). You awaken the hatred of WTF who cannot stand any positive comments about Alberta.
But since you have connections to those far east provinces, can you enlighten me on why it has taken so long to ‘clean up’ after the bad storm they had? A friend in PEI says many are still without electric power.

**********************************
My understanding it is simply the extent of the damage. Basically all the power lines are overhead and many lines got knocked down by falling trees.

Much of the population is strung out along rural roads.

Yes, other areas sent crews to help with the work.

In Alberta, at least in urban areas, all the local lines are undergound. Edmonton mandated new areas to be undergound starting in 1960.

#102 Faron on 10.16.22 at 11:40 am

#63 DON on 10.15.22 at 9:32 pm
https://www.zerohedge.com/political/elon-musk-alarmed-after-appearing-well-known-ukrainian-kill-list.

Do something nice

Is cluelessly (perhaps with the backing of Putin himself) proposing that Ukraine cede it’s own territory “something nice”?

#103 IHCTD9 on 10.16.22 at 11:44 am

#91 Old Boot on 10.16.22 at 10:16 am.

Mentally ill drug addicts crapping all over Chinatown and pushing its residents around was the gift that kept on giving.

——————-

Indeed. I had come to the conclusion years ago that the hard left was eating its own lunch, and they would eventually be brought to heel via their own “victim classes”.

Same just happened to Trudeau wrt to the current Iran protests. His woke ideology left him unable to separate regular on the street hard working Muslims from a totalitarian, abusive, misogynistic Islamic government, for fear of looking like an “Islamophobe”. But Canadian-Iranians had no such limitations and proceeded to rip T2 a new one. I’ve never seen a guy tail-tuck and 180 so fast in my life.

Hard left woke ideologues who go too far down the rabbit hole eventually lose the ability to think properly. That apparent reality keeps getting reinforced over and over again. Stewart is just the latest victim of his own stupidity.

#104 Quintilian on 10.16.22 at 11:48 am

#80 crowdedelevatorfartz on 10.16.22 at 12:55 am
“Vancouver incumbent Mayor Kennedy Stewrat is getting hammered in the polls.
Something about arrogant and invisible …..
Crushed.”

All true, but sadly the new cadre is much worse.

Luckily this new crew is greedy rather than smart, and the façade will become apparent even to Vancouverites.

What’s the term Crowdie uses :“Lowerbrainland”?

#105 Mikey on 10.16.22 at 11:57 am

TO and Van at the top of the heap. What were peeps thinking!?
https://www.ubs.com/global/en/wealth-management/insights/2022/global-real-estate-bubble-index.html

Same as alot of stocks.
Whipe out. Go Pelaton lol.
Even that darling TSLA has lost 50%. If you bought the bubble…ya need 100% to get even.
Salo hope you sold the hype. All those EV stocks.
Rivian hit $180 now $28. People are nuts.

I’ve got a couple REITs down 20% and the issue here I think is DEBT. Interest rate reset is hurting them. Markets looking fwd.
It could be worse as some have lost 60% from the top!!!

#106 DON on 10.16.22 at 12:16 pm

#102 Faron on 10.16.22 at 11:40 am
#63 DON on 10.15.22 at 9:32 pm
https://www.zerohedge.com/political/elon-musk-alarmed-after-appearing-well-known-ukrainian-kill-list.

Do something nice

Is cluelessly (perhaps with the backing of Putin himself) proposing that Ukraine cede it’s own territory “something nice”?

********
I was referring to the initial donation of the Starlink system at face value. No need to assume.

#107 crowdedelevatorfartz on 10.16.22 at 12:18 pm

@#101 Shawn.
“My understanding it is simply the extent of the damage. Basically all the power lines are overhead and many lines got knocked down by falling trees.”

+++
I have found that trying to explain anything to an Albertan about anywhere “east” of the Alberta Saskatchewan border is pointless.
Their interest stops at the pump jacks.

Perhaps this analogy will help our confused Jaguar who seems to insinuate the continuing power outages are an unreasonable occurrence and would never happen in Alberta.

The Edmonton Tornado of July31,1987 was approximately 1 mile wide and lasted about 30 minutes.
It killed 27 and caused lots of destruction.

Hurricane Fiona was 300 miles wide and lasted 12 hours.
Tens of thousands of trees down across power lines.
Thousands of power poles snapped.
Hundreds of transformers smashed.
Lots of rural addresses.
Most of the people without power now are at remote farms or remote businesses.
The linesmen have been working nonstop for weeks.

#108 DON on 10.16.22 at 12:21 pm

#104 Quintilian on 10.16.22 at 11:48 am
#80 crowdedelevatorfartz on 10.16.22 at 12:55 am
“Vancouver incumbent Mayor Kennedy Stewrat is getting hammered in the polls.
Something about arrogant and invisible …..
Crushed.”

All true, but sadly the new cadre is much worse.

Luckily this new crew is greedy rather than smart, and the façade will become apparent even to Vancouverites.

What’s the term Crowdie uses :“Lowerbrainland”?

*********
Yup. Seemingly a new fox entering the Hen house.

Will give them a chance…but all this community safety is a great catch phrase but not easily solvable at the muni level. As the months pass we will lookto vote another incumbent out.

#109 Faron on 10.16.22 at 12:23 pm

So, now that Vancouver has a new mayor, we can expect the whole homeless/addict problem to be fixed right up, right? I’m sure the gushing flow of fentanyl and the laundering of the drug $$$ in Vancouver casinos and the insanely expensive RE owing to speculation and depletion of the housing supply has nothing to do with the problem. Hope you like crow. Sail Away tells me it’s delicious.

#110 Faron on 10.16.22 at 12:27 pm

#104 Quintilian on 10.16.22 at 11:48 am
#80 crowdedelevatorfartz on 10.16.22 at 12:55 am

will become apparent even to Vancouverites

Nah, many Vancouverites are also greedy and blinded by it. They hope to slap a quik-fix on the issue (mass, unsustainable thus temporary imprisonment) and claim victory when the numbers drop one iota.

#111 Wrk.dover on 10.16.22 at 12:32 pm

We still doing preferreds?

I dumped RY.PR.S a couple weeks ago for breakeven with divs factored in, after a nine month hold.

Down another 5% since I sold.

#112 the jaguar on 10.16.22 at 12:35 pm

@97 CEF. Thanks for providing such an excellent example of Alberta hate. Though inaccurate and dated it still stands up as a perfect illustration of what’s behind the resentment.

#113 AM in MN on 10.16.22 at 12:39 pm

#104 Quintilian on 10.16.22 at 11:48 am

All true, but sadly the new cadre is much worse.

Luckily this new crew is greedy rather than smart, and the façade will become apparent even to Vancouverites.

What’s the term Crowdie uses :“Lowerbrainland”?
———————————————————-

What makes you think they are greedy? Do you know Ken Sim? have you spoken to him?

Is it greedy to want to walk down the streets in your once well run City and not have to step on filth, vomit, needles, and have parks overrun with tent cities?

Is it greedy to want to bring honours classes back to the schools? Teach real subjects, not woke ideology?

The problem with the left is that all they have is name calling. They make such a disaster of everything they try to run, but it takes the average voter a while to figure this out, but it seems they have now. The fed Lib/NDP cabal is next!

#114 crowdedelevatorfartz on 10.16.22 at 12:52 pm

After 3 weeks waiting for someone, anyone from govt to clear the trees.
They decided to do it themselves.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj52JXPmuX6AhUoHjQIHaVODpoQvOMEKAB6BAgKEAE&url=https%3A%2F%2Fwww.cbc.ca%2Fnews%2Fcanada%2Fprince-edward-island%2Fpei-fiona-power-oyster-bed-1.6618064&usg=AOvVaw0FesS-P-qCV0ZQZke9xOn_

#115 Don on 10.16.22 at 1:19 pm

Canada called for Russia to be excluded from the IMF and G20

The Ukrainian lobby, represented by Canadian Deputy Prime Minister Chrystia Freeland, continues to gain more and more influence in Ottawa. So, the day before, she called for Russia to be excluded from the IMF and the G20.

“Meetings of the IMF and the World Bank are meetings of firefighters – ministers and central bankers whose job it is to protect the global economy. Russia right now is an arsonist. Russia was not supposed to attend IMF meetings. Arsonists have no place at meetings of firefighters,” the Deputy Prime Minister said.

Freeland voiced the decisive actions that Canada is ready to take in this matter in order to set an example for everyone else: “for now, the Canadian authorities can only publicly blame the government of Vladimir Putin for its decision to start a war with its neighbor” And added that Ottawa will continue to involve Russia in responsibility. The truth is Christia Freelands grand father was Michael Chomiak,who’s boss was Volodymyr Kubijovych,who’s boss was Hans Michael Frank,who’s boss was Adolf Hitler.

#116 Ustabe on 10.16.22 at 1:22 pm

Hopefully, Horgan gets obliterated in a similar fashion in 2024.

Why would anyone say that?

I think I’m the only person on this blog other than Garth who has collected paycheques from the Progressive Conservative Party of Canada and who still identifies as a small c conservative and I’ll tell you Horgan has both served in our legislature and governed as our elected Premier very competently and inclusively.

Do not conflate the provincial NDP under Horgan’s leadership with Fartz’s jaundiced view of Vancouver.

Plus the man has cancer and is stepping down so he won’t be around to be “obliterated” anyway.

#117 Sail Away on 10.16.22 at 1:55 pm

#109 Faron on 10.16.22 at 12:23 pm

Hope you like crow. Sail Away tells me it’s delicious.

——–

My goodness, the obsession. You’ve invoked me, unprompted, six times in the last 24 hours. Creepy.

#118 Faron on 10.16.22 at 1:58 pm

#106 DON on 10.16.22 at 12:16 pm
#102 Faron on 10.16.22 at 11:40 am
#63 DON on 10.15.22 at 9:32 pm

I was referring to the initial donation of the Starlink system at face value. No need to assume.

Except he didn’t donate the terminals. The majority of the terminals were purchased. No denying the service is useful, but Elon foisted it on Ukraine as a “donation”, which was one of his lies, and is now asking for payment for the gift. Regardless of how above board military contracts tend to be, my understanding is that products are delivered after the contract. Musk delivered something under no contract and is now asking for terms that should be in a contract, but aren’t. It’s a typical Musking.

Given that and the fact that he proposed a very Russian friendly “solution” to the war that, again, was likely proffered through Russian links Ukraine has every right to have Musk on a kill list. Given that SpaceX and Starlink aren’t Musk and would continue to operate without him, it wouldn’t even be shooting themselves in the foot to have him on said list.

From CNN:

According to the SpaceX figures shared with the Pentagon, about 85% of the 20,000 terminals in Ukraine were paid – or partially paid – for by countries like the US and Poland or other entities. Those entities also paid for about 30% of the internet connectivity

#119 Ustabe on 10.16.22 at 3:02 pm

#117 Sail Away on 10.16.22 at 1:55 pm

#109 Faron on 10.16.22 at 12:23 pm

Hope you like crow. Sail Away tells me it’s delicious.
——–
My goodness, the obsession. You’ve invoked me, unprompted, six times in the last 24 hours. Creepy.

And you keep track. Even creepier.

#120 Sail Away on 10.16.22 at 9:35 pm

#119 Ustabe on 10.16.22 at 3:02 pm
#117 Sail Away on 10.16.22 at 1:55 pm

#109 Faron on 10.16.22 at 12:23 pm

Hope you like crow. Sail Away tells me it’s delicious.

———

My goodness, the obsession. You’ve invoked me, unprompted, six times in the last 24 hours. Creepy.

———

And you keep track. Even creepier.

———

Creepy? Military attention to detail, that’s all. I also remember you accused me of something with zero evidence, then declared me your Enemy For Life still with zero evidence, then later retracted. Remember that? Sort of funny, in a 3 Stooges sort of way.