Warts

With the patience of a benevolent retriever, this blog has explained over several months why financial assets and real ones are like bicycles and carp. You just can’t compare.

Fin stuff (like equities) moves in markets determined by corporate profits, investor demand, macroeconomics, geopolitical situations, forex, trade treaties, monetary policy and tax rules. Real stuff (houses) is priced based on mortgage rates. And hormones. That’s all buyers are motivated by, since most people have but a vague interest in, or knowledge of, the other stuff.

Financial markets absorb current news and look beyond the warts. Property markets reflect the present. It usually takes up to twelve months before the full impact of rate changes hit housing. But stocks change value many times a second. In an efficient market investors know everything instantly, adjusting prices to reflect reality.

Bicycles and fish. There’s no comparison. This is why – even with rates rising, inflation roiling and recession likely – stock markets are zig-zagging their way back while houses are digging into a deeper and deeper hole. Equities reflect the coming world in which the CPI moderates, central banks plateau and economic growth restores. House prices tell us two things: rising rates make real estate unaffordable and buyers are weenies. FOMO is gone. Properties tumble.

On Thursday the Teranet index recorded its biggest drop since being created, with house prices down 3.1% in a month (yeah, that’s 37% annualized). The big plops came in the GTA and Hamilton. Soon it will be BC and the LM. Teranet’s methodology is different, as it gathers data when properties close, not when sold. So it’s always months out of date. Expect worse to come, therefore.

Mortgage rates are going up again this week, as we suggested a couple of days ago. Ten basis points. Not a lot. But another hit. The cost of a fixed-rate conventional mortgage on a place over $1 million will soon be 6%. That’s double in seven months.

Scotiabank says the BoC will add 1% to its rate, starting Wednesday. Canada five-year bond yields have hit a 15-year high. The chartered bank prime looks like it might peak at 6.7%, pushing HELOC rates well over 7%. Says realtor/broker Michelle Makos: “If you have a private mortgage on your property, you should listen up! Shit is going to get real for many of these homeowners! The signs are everywhere.”

For sure. Lots of private mortgages will not be renewed, or borrowers will be asked to pay double-digits. There’s growing concern about MICs – mortgage investment corporations – which have offered unsuspecting investors high interest payments on their investments, because the capital may now be at elevated risk.

And didja tune into Chrystia this week?

Our finance ministress warned people that swelling rates will hurt. “Our economy will slow. There will be people whose mortgage rates will rise. Businesses will no longer be booming. Our unemployment rate will no longer be at its record low. That’s going to be the case in Canada.”

Now that was a confidence-booster, right? With mortgages closing in on 6%, the stress test damn near 8%, winter and more Covid on the way, a listings drought and too many house sellers thinking their houses are made of gold, no wonder sales have crashed. Either prices crash more, too, or the market croaks until the crocuses.

Meanwhile financial assets are definitely volatile, but it appears – increasingly – like a bottom’s in the rear view. Mr. Market has absorbed higher rates, concluding inflation is a worse evil and needs to be stomped. The odds of a recession are baked in, too. Unemployment will rise from its current level, which is the lowest in decades. No disaster. The war in Ukraine is also priced in. Truss, too. Like pandemics, all wars end. Central banks eventually pivot. Meanwhile people still buy groceries, clothes and cars. In an economy which is two-thirds driven by retail spending, there are eternals to profit from. What bad/worse/awful news is there to come, more than we already know?

This is why stocks, funds, trusts and stuff that pays you dividends, interest, distributions or capital gains will recover or advance light years faster than housing. When the average family cannot afford to buy the average home, there’s no reason sales or prices will jump. Before this market rekindles, valuations must plunge – by enough to lure buyers back who can afford to carry 6-7% mortgages on much smaller debt loads.

In short, your investment portfolio is not going to lose 40% of its value. Unlike your house. But Chrystia wants you to know she feels your pain. No, really.

About the picture: “I just thought that you might need a photo of a BC Toad with a big smile on his face,” writes Ron. “Sometimes dogs and cats just don’t fit the bill. Southern BC is having a drought like we’ve never seen before. I was riding my motorcycle and stopped to move a log off the trail. This guy was underneath the log. I picked him up and poured some water on him and he gave me this big smile. That’s the story.”

135 comments ↓

#1 Sail Away on 10.20.22 at 2:06 pm

“I was riding my motorcycle and stopped to move a log off the trail. This guy was underneath the log. I picked him up and poured some water on him and he gave me this big smile. That’s the story.”

——–

That was nice of you, Ron. Good karma.

#2 Timmy on 10.20.22 at 2:08 pm

Speaking of Freeland, she has mislead the public about Trudeau’s worst decision as PM: to buy Transmountain. Despite continued warnings of it’s environmental challenges and questions about viability it has now tripled in cost and economists have shown that it will never be profitable. The Energy Regulator gave the oil companies a sweet deal where they would only have to pay 22% of the increased costs for shipping their product. They are talking about a 100 year payback period. Why is Freeland still in Finance?

See Nikiforuk’s article in the Tyee

#3 the Jaguar on 10.20.22 at 2:16 pm

“……..but it appears – increasingly – like a bottom’s in the rear view. ” – GT +++

Well, if that’s the case, I sure hope it’s Freeland’s bottom.

P.S.. That was sort of a steal from Stephen Harper. Check it out.

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

#4 IHCTD9 on 10.20.22 at 2:19 pm

Nice Husky – I like the Toad too.

#5 The Guillotine is God on 10.20.22 at 2:20 pm

What Mrs Freeland is trying to tell us is, bond maths are back. Being taught via the residential real estate market.

#6 protea on 10.20.22 at 2:31 pm

Great article today. Currently visiting Montreal from Vancouver many houses for sale at between $400 to $500 thousand. Montreal appears to me that real estate is still a sound investment, your thoughts as it relates to this market compared to Toronto and Vancouver.

#7 Yukon Elvis on 10.20.22 at 2:31 pm

DELETED

#8 ElGatoNeroYVR on 10.20.22 at 2:40 pm

The only number that matters in RE is price/sqft related to the age of the property.
While there is no doubt about an RE correction for the median house something massive need to happen for us to see a 40% drop. At some extremes ,yes but not a s a rule.
Current top line corrections are driven by older ,smaller so cheaper properties being sold vs. newer or bigger.
A top line of 40% decline in reality is more like 10%-20% at same age ,same size.

#9 Steven Rowlandson on 10.20.22 at 2:47 pm

“On Thursday the Teranet index recorded its biggest drop since being created, with house prices down 3.1% in a month (yeah, that’s 37% annualized).”

Two more years like the one suggested above making 3 years and sanity in the real estate market will be temporarily restored. I expect that old habits will die hard.

#10 Zed on 10.20.22 at 2:53 pm

Nova Scotia is capping EMERA’s rate increase at 1.8% to help with inflation for its people.

I hope that the NS government will also cap its budget increase at 1.8% to help its taxpayers.

Governments are always keen to impose restrictions on private companies but nothing on themselves.

#11 MediOgre on 10.20.22 at 2:57 pm

Hi Garth,
Will the banks do well in this rising interest environment – TD, RBC etc.?
Also, can you begin every blog with “let’s be very clear”. I believe this is what we say now before something intelligent is said. At least this is the memo that CF received from JT.

#12 Liz Truss on 10.20.22 at 3:03 pm

Hello Mr. Turner,

I hate rodents. I mean, the House of Commons is completely infested. I will stand on a chair if I see one of the things. So I’ve decided to leave here. Stephen Harper tells me your blog would be a very good, rodent-free place to be, so I am taking his recommendation and flying over soon. I will be joining your steerage deplorables shortly.

Please ensure that the reception lounge is stocked with crisps, |Hobnobs and Marmite.

See you soon!

#13 I love Pierre on 10.20.22 at 3:03 pm

DELETED

#14 Chris on 10.20.22 at 3:04 pm

Meh – actually the real estate market and the housing market are equally smart/dumb – the only real difference is that the equity markets react to everything much faster. So what takes a month in equities takes 2 years in houses. But the pendulum swings too far in both directions in both markets. Both markets eventually go higher, just that housing can stay go and stay low for many years, while stocks usually turn up from a bear in 1-2 years.

#15 A Girl Who Invests on 10.20.22 at 3:05 pm

Will house prices decline in the prairies (Regina/S’toon)? Hubby and I just got married and are renting for another year before looking at buying. Prices seem to be holding steady here. Will it be any different here from out east?

#16 Cash is King on 10.20.22 at 3:05 pm

Don’t believe anything you hear and only half of what you see.
After being subsidized for 20 years by savers home moaners will be squealing from the pain of higher interest rates for many years to come. How high will they go? 6% Nah 8% Nah 10%? Nah 12% Nah 15% maybe higher

#17 DLee on 10.20.22 at 3:06 pm

Where did all the “one and done” folks disappear to??

#18 In Dog We Trust on 10.20.22 at 3:09 pm

corporate profits r a big reason for much of the higher costs we’re seeing while the little guy gets hit with higher interest rates. monopolized positions today allow 4 zero competition so big guy can charge whatever they please. how are higher interest rates going to stop big guy from continuing to gouge… seems like interest rate increases aint da answer

#19 IHCTD9 on 10.20.22 at 3:10 pm

#6 protea on 10.20.22 at 2:31 pm
Great article today. Currently visiting Montreal from Vancouver many houses for sale at between $400 to $500 thousand. Montreal appears to me that real estate is still a sound investment, your thoughts as it relates to this market compared to Toronto and Vancouver.
____

It’s a good place to buy a house bang for the buck wise for living in. Not a good place if you expect the price to appreciate bigly. The mass exodus out of Ontario skipped right past PQ and landed in the Maritimes for a reason.

#20 Quintilian on 10.20.22 at 3:10 pm

“But stocks change value many times a second. In an efficient market investors know everything instantly, adjusting prices to reflect reality.”

True, but not entirely.

There are enough fools with laptops and a credit lines with no knowledge, and a penchant to gamble, that simply crowd out the considerations of:

corporate profits, investor demand, macroeconomics, geopolitical situations, forex, trade treaties, monetary policy and tax rules”

And thus, it is a casino on a short-term basis.

Yes, it is an efficient market, but on a delayed time basis, usually after the damage the irrational gamblers foisted on average people.

Retail investors who think they’re smarter than the market always reap the results. – Garth

#21 In Dog We Trust on 10.20.22 at 3:11 pm

and then big guy uses profits for stock buy-backs. yup stocks will rise while the world around us crumbles

The world is not crumbling. – Garth

#22 Linda on 10.20.22 at 3:12 pm

“It usually takes up to twelve months before the full impact of rate changes hit housing.”

So based on the above, as long as BoC continues to increase the cost of borrowing the erosion of RE values will continue. This will undoubtedly result in much angst & possible jingle mail. I’m going to have to see whether the StatsCan inflation website breaks down how housing is calculated. I’m wondering whether higher borrowing costs are factored in. If it costs more to borrow presumably that would be considered inflationary & presumably there is some sort of formula to account for said higher costs.

#23 Matthew Perry on 10.20.22 at 3:18 pm

I learned something new today.

Did you know that Matthew Perry (yes, of Friends) once beat up Justin? Yeah, our Justin.

https://www.cbc.ca/news/entertainment/perry-kimmel-trudeau-1.4027636

#24 Bill zufelt on 10.20.22 at 3:19 pm

CPI will moderate? Who says so? I’m not convinced inflation won’t be higher next year or 5 years from now or 10 years from now. No one can make that assumption. Between 1967-2000 average inflation was higher than today so to assume it moderates from here is an assumption a smart person would not make.

#25 Søren Angst on 10.20.22 at 3:24 pm

Garth you’re pure.

I am not the driven snow.

When I see Average Wealth Impoverishment for ALL Cdns 1st Qtr vs 2nd Qtr of (ALL quintiles lost Wealth not just the poorest):

-6.5%, -65,400

and average Household Net Savings crash for 40% of Cdns, 1st Qtr 2020/2021/2022, $:

Lowest Income Quintile -6960, -5659, -7089
Second Income Quintile -2465, -875, -1709

I SHUDDER at what this will do to the economy and what the numbers will be for this Qtr.

100% of Cdns have lost wealth in but 1 quarter. 40% of Cdns have been bleeding money for 2 years.

Mr. Market says it has priced in almost everything, somehow and per the above I do not think it has.

Much, much more pain to come. Sad. So very sad.

———————–

To peruse Wealth destruction by quintile see this Tweet (me haranguing the Liberal Party):

https://twitter.com/bsant54/status/1583113920071364608

Net Savings destruction by quintile (ditto haranguing):

https://twitter.com/bsant54/status/1583113632480518144

#26 Grumpy Panda on 10.20.22 at 3:33 pm

It’s a myth that you can get warts by handling a toad. Similar to real estate is always a great investment.

#27 Faron on 10.20.22 at 3:34 pm

#20 Quintilian on 10.20.22 at 3:10 pm

Yes, it is an efficient market, but on a delayed time basis, usually after the damage the irrational gamblers foisted on average people.

Retail investors who think they’re smarter than the market always reap the results. – Garth

It’s an efficient market embedded in all kinds of algo, passive and options hedging monetary flows. Excepting big news, daily fluctuations are driven by reflexive dynamics. That’s why the EOD explanations for why the market does anything on a daily to sub-daily time scale are total bunk.

TSLA today, for example, was down because of earnings news and Elon’s obvious stock pump prior to Twitter financing sale. But the magnitude of the drop is increased by passive dynamics.

Unless you are a near genius quant able to rapidly incorporate tons of data, this makes day-to-day speculation a gamble.

#28 Sean on 10.20.22 at 3:44 pm

> Meanwhile financial assets are definitely volatile, but it appears – increasingly – like a bottom’s in the rear view.

The yen just dropped to over 150 for USD, Korea government re-activated it’s bond buying fund, American truckers warning of 2008-like crisis, etc. – bad news everywhere. Give it a few more days.

> Mr. Market has absorbed higher rates, concluding inflation is a worse evil and needs to be stomped.

Business hasn’t absorbed it from what I see at work. Mr. Market will catch up soon.

No way they can keep rising interest rates like this. One more and they’re done. Inflation won’t be stopped. And I expect another QE or some emergency measures in Q1 2023.

Now why would CBs actively work to reverse the work they did this year on monetary tightening? Not happening. – Garth

#29 Søren Angst on 10.20.22 at 3:46 pm

The Cheap Laughs Family of Bad Timing out for a day in the Real World.

The Economist decided to run this as their cover page, likening the UK to hapless Italia:

https://twitter.com/TheEconomist/status/1582838871712092160

Hours later …

https://uk.finance.yahoo.com/news/ftse-100-economic-political-sentiment-081835932.html

Liz Gone. The Economist ended causing a TWITTER STORM

The Italian UK Ambassador not amused:
https://twitter.com/ItalyinUK/status/1583083342320525313

The Italians took a light hearted approach, some of my faves:
https://twitter.com/ewilio/status/1583011826291609601
https://twitter.com/Danielewhite87/status/1583071929963249665
https://twitter.com/giumartoz/status/1583087620925452290

Brits, surprisingly, called them Racist & were disgusted. Whoah.
https://twitter.com/PatrickGKellyG/status/1582855058110435329
https://twitter.com/JohnGreenTweets/status/1582986429449220097
https://twitter.com/mpbontenbal/status/1583038979863351296

And Ryanair as usual could not resist:

https://twitter.com/Ryanair/status/1583074534202408960

Many retweets of The Economist Tweet with of course RIGHTEOUS TWITTER STORM indignation repeated over, and over, again.

—–

The only thing that saddened me today was the Carabinieri shut down Antica Pizzeria Brandi in Naples for hygiene reasons …

https://twitter.com/bsant54/status/1583117782933450752

They invented Pizza Margherita in 1889.

——————–

How the mighty have fallen today.

#30 PBrasseur on 10.20.22 at 4:11 pm

Equities reflect the coming world in which the CPI moderates, central banks plateau and economic growth restores. – Garth

I truly hope this isn’t true or you might be sorely disappointed.

There is a lot of deleveraging and correction to go through before we get even close to healthy growth based on real productivity. True that markets move on what’s ahead but I truly doubt they see that far and are that smart!

what is happening is more likely this: As Ben Graham once said stocks constitute a reasonable edge against inflation. I would also add that is this world of money printing, QE and stimulus it is hard to identify real value anywhere but in shares of good money making companies.

#31 Ole Doberman on 10.20.22 at 4:12 pm

Does anyone know if Putin is still thinking about dropping a nuke?

Wouldn’t that kill his army too?

#32 Søren Angst on 10.20.22 at 4:14 pm

Now why would CBs actively work to reverse the work they did this year on monetary tightening? Not happening. – Garth

Oh Garth.

You forget the IMMEDIATE GRATIFICATION, Gold Medal for breathing air in, and out, 15 sec TikTok video generations that are in our Paleo rear view mirror. Still …

THAT was good.

#33 I don’t know on 10.20.22 at 4:20 pm

Of course we are near the bottom. It’s been obvious for anyone who doesn’t spend their life on social media and is scared of their shadow for months. Most will just stay in cash quivering in fear then complain.

Real estate? It will be fine.

Anyone who already owns and locked in can go to sleep. Anyone else who owns and wanted to sell will just wait it out.
Anyone struggling will cut out every single expense they can and eat Kraft dinner before they touch mortgage payments. Then they will extend amortizations out if they have to. Everyone needs to place to live and rents aren’t a viable option for many, as they are off the charts (and getting worse).

The group harmed the most by all this are first time home buyers, who will continue to see affordability deteriorate with further rate hikes.

IDK

#34 Inflation on 10.20.22 at 4:21 pm

It’s a bad time to be apartment searching in Toronto right now. You can’t even cook food inside the rooms that you will be renting because there are bidding wars for Bachelor apartments across the city.

Inflation. Thank the Liberals for that.

Did the Liberals give Britain 10% inflation, or the Americans 8.2%? – Garth

#35 the jaguar on 10.20.22 at 4:22 pm

Still absorbing the 1% prediction. That would really be something. A shot across the bow of the ship named ‘Soft Landing’……

#36 Victor V on 10.20.22 at 4:26 pm

BREAKING

5 – Year Canada Yields Go Nuts

3.866 right now

Some points in 2003 had LOWER Yields than that number

If this holds tomorrow Fixed Rates start heading up bigly on Monday

We shall see some 5 – yr Fixed Rates starting in the low 6% range

https://twitter.com/ronmortgageguy/status/1583171785423343616

#37 Old Boot on 10.20.22 at 4:31 pm

‘Old Boot’ posted on this blog more than 400 times as ‘Sold Out’ then as ‘Masks really do make some people more attractive.’ Draw your own conclusions. – Garth

—————-

Perhaps a more fulsome disclosure is required for people to draw any reliable conclusions?

I have posted sequentially under those names solely due to Garth’s stealthy and invisible banhammer.

The views expressed under those names are entirely in agreement with my current position. I’m a consistent, if one-note, crank and I haven’t misrepresented any facts regarding who, or what, I am.

You’ll find no interaction between those names in the comments, as those names never existed concurrently.

I troll the authoritarian left for their ridiculous luxury belief systems because they’ve made a laughingstock of my former political parties, education, science, and civil discourse in the pursuit of imaginary victimhood.

And because it pleases this retired, high-school drop out, blue collar daughter of a residential school survivor no end.

#38 Søren Angst on 10.20.22 at 4:45 pm

Sorry but …

The poor Economist.

The Financial Times, you know, THE MUST READ pinkish newspaper every business person reads in the AM in the UK, piles on The Economist with a verbal bollocking avec mucho charts to drive the bayonet (stake?) into their heart and twist.

https://www.ft.com/content/e999efb8-a5e1-4c1c-94cf-ad6a8526e8fa

Mind you, in true Brit dry humour, they showed Chiellini pulling the jersey of an England player during Euro 2020 and mused (quoting others):

“… Britain has became as profligate as the southern pizza, pasta and mafia economy.”

Pretty sure The Economist cover art dept. sending out job applications to other firms as I type.

———————–

Tempest in a Teapot, literally.

#39 Mattl on 10.20.22 at 4:51 pm

In short, your investment portfolio is not going to lose 40% of its value

——————————————————-

Sure, probably although adjusted for inflation might come pretty close. SP at 31% today adjusted for 8% inflation. Balanced in the 20s adjusted. See lots of housing charts but serious lack of balanced port returns YTD, 3 year, 5 year. Would be nice to see you post returns in bad times, not just good. I mean we get it, housing is getting cranked.

And what is still to come is brutal corporate profits, layoffs, declining consumer spending (just starting) and a long recession. SP isn’t even close to pre-covid levels, we are at Dec 2020 levels, hard to believe whats to come is already priced in. This thing has barely started and excuse me for not having as much faith in Mr. Market, he seems to wet the bed every decade.

#40 Sail Away on 10.20.22 at 4:51 pm

#37 Old Boot on 10.20.22 at 4:31 pm

‘Old Boot’ posted on this blog more than 400 times as ‘Sold Out’ then as ‘Masks really do make some people more attractive.’ Draw your own conclusions. – Garth

——–

I don’t see where adjusting avatars makes any differences. Get a new haircut, post under another name. Why would it matter?

#41 Kurt on 10.20.22 at 4:53 pm

#33 Old Boot on 10.20.22 at 4:31 pm

1. Fulsome: adjective. offensive to good taste, especially as being excessive; overdone or gross: fulsome praise that embarrassed her deeply; fulsome décor. disgusting; sickening; repulsive: a table heaped with fulsome mounds of greasy foods. excessively or insincerely lavish: fulsome admiration.

2. Based on my 14 years of reading this blog and some of the comments, I say that if you’ve been banned by Garth, you deserved it. You should remain silent until you’ve learned to perhaps not play well with others, but at least not be so mean as to merit discipline.

#42 DON on 10.20.22 at 4:53 pm

#12 Liz Truss on 10.20.22 at 3:03 pm
Hello Mr. Turner,

I hate rodents. I mean, the House of Commons is completely infested. I will stand on a chair if I see one of the things. So I’ve decided to leave here. Stephen Harper tells me your blog would be a very good, rodent-free place to be, so I am taking his recommendation and flying over soon. I will be joining your steerage deplorables shortly.

Please ensure that the reception lounge is stocked with crisps, |Hobnobs and Marmite.

See you soon!

************
Whoop Whoop!

Battlestations on the double.

CLOSE the Gates. And release the hounds.

#43 Penny Henny on 10.20.22 at 4:56 pm

139 Faron

Last one from me for a little bit.

………………..

I would like to believe it but you always go back on your word.

#44 Scott in Gibsons on 10.20.22 at 4:59 pm

Yet to be priced in……the “October Surprise” The Democrats need a big one. All bets are off until after November 8th. They’re capable of anything.

#45 Elon Fanboy on 10.20.22 at 5:00 pm

So did you hear the one about Liz Truss vs the Lettuce?

The lettuce won….

https://amp.theguardian.com/politics/2022/oct/20/iceberg-lettuce-in-blonde-wig-outlasts-liz-truss

#46 Triplenet on 10.20.22 at 5:01 pm

In real estate, a ‘sale’ is when a contract of purchase and sale becomes unconditional. That means all conditions precedent are satisfied or waived.
If you are receiving market information that includes accepted offers as bonafide sales – you may want to reconsider your source.

#27 Faron
……you mean like climate change.
You are a bot – aren’t you.

#47 Faron on 10.20.22 at 5:14 pm

#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if. If Garth is banning your posts, it’s his will, on his blog, that you leave. And you have now even thrown down the victim card. *Facepalm*. This is incredible.

#48 Shawn on 10.20.22 at 5:14 pm

TransMountain Pipeline?

#2 Timmy on 10.20.22 at 2:08 pm
Speaking of Freeland, she has mislead the public about Trudeau’s worst decision as PM: to buy Transmountain. Despite continued warnings of it’s environmental challenges and questions about viability it has now tripled in cost and economists have shown that it will never be profitable. The Energy Regulator gave the oil companies a sweet deal where they would only have to pay 22% of the increased costs for shipping their product. They are talking about a 100 year payback period. Why is Freeland still in Finance?

See Nikiforuk’s article in the Tyee

**********************************
Well, from what you say that line will be VERY profitable to the shippers.

Feds bought it after they failed to do their job and assert jurisdiction to push aside illegal protestors including the probably the B.C. Government. Where was the army?

Feds have to look at the more than the profit on the line. How about the benefit of not causing Alberta to go completely ballistic if this line does not get done? How about the benefit of the corporate income taxes collected from the oil companies that ship through the line. And the huge provincial income taxes and royalties.

Freedland is still Finance Minister because Trudeau, leader of the duly elected government, wants her there. Simple as that.

It’s an embarrassment that this pipe line has been so long delayed. It needs to get built ASAP.

#49 Old Boot on 10.20.22 at 5:21 pm

Why would I trouble myself to make stuff up, when reality provides more than enough examples of authoritarian left cognitive dissonance?

Remember when Trudeau spent the very first “Indigenous Day of Reconciliation” surfing in Tofino?

I wonder if he performed a land acknowledgement before hitting those tasty waves.

If he did, it might have gone something like this:

I acknowledge that I hang ten in the ancestral territory of the Esowista, who peacefully roamed these sacred lands before the arrival of my genocidal, oil-dripping, settler-colonizer progenitors.

I also acknowledge the validity of the ancient, indigenous ways of knowing that guided the peaceful arrival of the Esowista, who gave thanks to the Creator and begged zie/zer’s blessing as they – (checks notes) – “captured by clubbing the people who lived there to death”.

https://en.m.wikipedia.org/wiki/Esowista_Indian_Reserve_No._3

Those ancient surfboards must’ve been made from Douglas fir. Foam core boards wouldn’t have even raised a decent welt.

You are skating towards a new set of Deletes and Banishment. This is not an indigenous reconciliation blog. – Garth

#50 Ponzius Pilatus on 10.20.22 at 5:27 pm

#40 Sail Away on 10.20.22 at 4:51 pm
#37 Old Boot on 10.20.22 at 4:31 pm

‘Old Boot’ posted on this blog more than 400 times as ‘Sold Out’ then as ‘Masks really do make some people more attractive.’ Draw your own conclusions. – Garth

——–

I don’t see where adjusting avatars makes any differences. Get a new haircut, post under another name. Why would it matter?
———————
as the saying goes:
“on the Internet, no one knows that you’re a dog”
And, Donny G. It could be a Yogi Bera quote.

#51 jess on 10.20.22 at 5:29 pm

DELETED

#52 Penny Henny on 10.20.22 at 5:38 pm

#139 Faron on 10.20.22 at 12:48 pm
Last one from me for a little bit.
????????????

#27 Faron on 10.20.22 at 3:34 pm

??????????????

#47 Faron on 10.20.22 at 5:14 pm
#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if.
/////////////////

Faron trigger warning!

Wow Faron your addiction is getting much better :)

You were able to refrain from posting for almost 3 hours, congrats bud.
And almost 4 1/2 hrs before you started arguing.

Hey just wondering, did the wife leave you yet?

The over/under for number of comments from you on this thread is 9.5.

Go get em Tiger!

P.S,- I took the over

#53 IHCTD9 on 10.20.22 at 5:41 pm

#47 Faron on 10.20.22 at 5:14 pm
#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if. If Garth is banning your posts, it’s his will, on his blog, that you leave. And you have now even thrown down the victim card. *Facepalm*. This is incredible
———

C’mon Mang. No one is obligated to advise us dogs of a handle change, Soren didn’t, Shawn didn’t, Ustabe didn’t, Flop didn’t, Boom didn’t. No one cares. You should try to not be so blown away by everything.

#54 Shawn on 10.20.22 at 5:51 pm

Handle Changes?

#53 IHCTD9 on 10.20.22 at 5:41 pm
#47 Faron on 10.20.22 at 5:14 pm
#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if. If Garth is banning your posts, it’s his will, on his blog, that you leave. And you have now even thrown down the victim card. *Facepalm*. This is incredible
———

C’mon Mang. No one is obligated to advise us dogs of a handle change, Soren didn’t, Shawn didn’t, Ustabe didn’t, Flop didn’t, Boom didn’t. No one cares. You should try to not be so blown away by everything.

****************************
The only handle change I ever made was:

1. to stop using my corporate name Investorsfriend after some nitwit convinced Garth I was here to drum up business when it’s obvious I just like sharing my views of the truth and educating people. And I like a bit of back and forth.

2. I finally dropped using my last name. If it were up to me, actual full names would be mandatory. I stand 100% behind whatever I say.

So, unfair to suggest I really made any handle change. Just the one forced on me really.

#55 Dr V on 10.20.22 at 5:52 pm

Just some info regarding the lender makeup of the
canadian mortgage market as of last year. Note the high percentage banks hold, and the low percentage of alt lenders. Do note however, the higher arrears rate for the alt lenders.

https://www.cmhc-schl.gc.ca/en/blog/2021/new-report-residential-mortgages-shows-30-year-low-arrears

Latest arrears stats (June2022)

https://cba.ca/mortgages-in-arrears

#56 GDuncs on 10.20.22 at 5:53 pm

Are you able to set up this blog so that the comments you reply to go to the top? An absolute highlight of this blog.

#57 Yorkville Renter on 10.20.22 at 5:58 pm

Did the Liberals give Britain 10% inflation, or the Americans 8.2%? – Garth

Of course not… but the uninformed rubes eat this up!

#58 the Jaguar on 10.20.22 at 6:01 pm

#53 IHCTD9 on 10.20.22 at 5:41 pm
#47 Faron on 10.20.22 at 5:14 pm
#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if. If Garth is banning your posts, it’s his will, on his blog, that you leave. And you have now even thrown down the victim card. *Facepalm*. This is incredible
———

C’mon Mang. No one is obligated to advise us dogs of a handle change, Soren didn’t, Shawn didn’t, Ustabe didn’t, Flop didn’t, Boom didn’t. No one cares. You should try to not be so blown away by everything.

+++

Wasn’t there also an occasion where a letter to Garth from “Sean” was the subject of a blog post, and subsequently “Sean” posted to provide context to follow up Garth’s comments?

And I also recall several posters saying someone else had posted under their blog name, which really shows a lack of character. I believe Billy Bob was one such victim and I can think of two others…

#59 TheDood on 10.20.22 at 6:03 pm

#8 ElGatoNeroYVR on 10.20.22 at 2:40 pm
The only number that matters in RE is price/sqft related to the age of the property.
While there is no doubt about an RE correction for the median house something massive need to happen for us to see a 40% drop. At some extremes ,yes but not a s a rule.
Current top line corrections are driven by older ,smaller so cheaper properties being sold vs. newer or bigger.
A top line of 40% decline in reality is more like 10%-20% at same age ,same size.
______________________________

I respectfully disagree. The only number that matters is the amount a buyer is willing to, or can spend.

#60 Old Boot on 10.20.22 at 6:06 pm

#41 Kurt on 10.20.22 at 4:53 pm

#33 Old Boot on 10.20.22 at 4:31 pm

1. Fulsome: adjective. offensive to good taste, especially as being excessive; overdone or gross: fulsome praise that embarrassed her deeply; fulsome décor. disgusting; sickening; repulsive: a table heaped with fulsome mounds of greasy foods. excessively or insincerely lavish: fulsome admiration.

2. Based on my 14 years of reading this blog and some of the comments, I say that if you’ve been banned by Garth, you deserved it. You should remain silent until you’ve learned to perhaps not play well with others, but at least not be so mean as to merit discipline.

—————

Are we really going to play the grammar/syntax/spelling game?

Fulsome:

https://www.merriam-webster.com/dictionary/fulsome

“generous in amount, extent, or spirit
the passengers were fulsome in praise of the plane’s crew
Don Oliver
a fulsome victory for the far left
Bruce Rothwell
the greetings have been fulsome, the farewells tender
Simon Gray”

Opinion duly noted, and summarily dismissed.

—————-

“You are skating towards a new set of Deletes and Banishment. This is not an indigenous reconciliation blog. – Garth”

Message received.

Lampooning Trudeau is just irresistible, as his whole shtick neatly encompasses everything currently wrong with the left.

I don’t think he’s necessarily a bad person but he’s chosen to amplify the worst of ahistoric narratives and is setting Indigenous people up for a nasty backlash when the spell is broken. (Please delete this bit if you see fit)

#61 zxcvbnm on 10.20.22 at 6:06 pm

“*Facepalm*. This is incredible”

You should get out more. Touch grass, as the kids say.

#62 Reality is stark on 10.20.22 at 6:08 pm

Chrystia let you know a couple things.
First thing is that her government spent money like drunken sailors and now they are in trouble which means you are in trouble. Big trouble as the bond vigilantes are now in charge not her and the other buffoons.
What she didn’t tell you is that her and her friends have monstrous pensions so she doesn’t really care about the pain you will suffer from her pals profligacy.
They built a false economy based on people selling houses to one another and silently bolstered their pensions on the ponzi deal.
It’s really no more than legal criminal behaviour.
And you voted for them.
Now they get to watch you squirm.
Watching them drive the dollar to 50 cents is enough to make you sick.

#63 Hurtin' Albertan on 10.20.22 at 6:11 pm

re: TMX

Trudeau or whoever is in charge when it is completed will sell it to an indigenous consortium such as Project Reconciliation (likely at a loss to taxpayers – it will be an act of reconciliation):

https://www.aptnnews.ca/national-news/project-reconciliation-one-of-the-indigenous-groups-aiming-to-buy-trans-mountain-pipeline-even-as-costs-soar/

https://www.hilltimes.com/2022/10/10/enbridge-deal-with-indigenous-groups-in-alberta-a-model-for-trans-mountain-sale-say-industry-insiders/386685

#64 Lower the Boom...er not on 10.20.22 at 6:12 pm

Yogism 1: “Never worry until the time to worry. That way you won’t miss it if you know what I mean”.

#65 Ed on 10.20.22 at 6:20 pm

The TransMountain is more than triple over its budget is solely because the job became a government public funded project management job.

Anyone driving from Kamloops to the coast will see a parking lot of expensive machinery sitting but still on the ticker to us tax payers.

It seems there’s no one in charge.

It will be a miracle if that pipe does end up over 40 billion.

#66 Dr V on 10.20.22 at 6:21 pm

Oops, markets all red today……crazy times….

#67 chalkie on 10.20.22 at 6:40 pm

Homeowners who want to sell soon, do not have good news in front of them, for quite some time down the road.

There will be tough family choices ahead, as adjustments are made in lifestyles, separating the need from the want.
Cottages that were bought on LOC variables in 2021 with the sudden spike in home ownership values, many of them will be on the chopping block soon. Cottages are an unnecessary luxury that can be spun off to support the family household in rough times. Cottage values did well for the first half of 2022, but there are many cracks and discounts starting to surface now in their values.

Back in the 80’s recession, there were items on lawns for sale right across every province in all municipalities like Skidoo’s, boats, motorcycles, campers, trailers and other large items, anything that would generate an income to survive the economic downturn, great deals everywhere you looked, desperation surfaced like a cork in water.
We will most likely enter an official recession in the first quarter of 2023. What will be different this time around is, many Industries will not lay off their employees for fear of them going to the competition when things pick back up again. Big industry learned their lesson during the pandemic, they were too quick to pull the trigger on layoffs, it came back to bite them in the rear end.

The recession, will be short lived but very painful mostly to how quickly the cost of living in almost every product know to mankind shot upward.
The lesson we have learned here is, Cost and Value has no comparisons, they make no sense.

Next week will see at least ¾ percentage increase on the BOC, & I would not discount 1%, the signs are in the making for this to happen.

Keep you money, if its buring a hole in your pocket, put in a double liner and wait it out.

Some people spending their money is strong as a bull, but dumb as a streetcar, they were born to be taken.

Quote of the day: You can be young without money, but you cannot be old without it.

#68 Inflation on 10.20.22 at 6:42 pm

Why compare an insular economy like Great Britain?

Trudeau has done more harm to Canadians than the fallout guy Vladimir Putin.

Trudeau is entirely responsible for the cost-of-living crisis and the homeless crisis.

#69 Dr V on 10.20.22 at 6:53 pm

97 Jane24

“If anyone wants to fly now to Bari, Italy, it is 25 degrees here…”
———————————————————-

Jane it was 25C here on VI for most of October. Only drawbacks were closed forest gates and some wildfire
smoke. It is supposed to end on Friday. I am convinced it is not “Climate change” but rather “Calender change” as summer was several weeks late arriving, but stayed much longer.

And a shout out to blogger “Cuke and tomato” as I was out Sydney way enjoying a leisurely (for me) ride on the bike path yesterday. Wife wants to go back for further exploration.

#70 ogdoad on 10.20.22 at 7:01 pm

You are skating towards a new set of Deletes and Banishment. This is not an indigenous reconciliation blog. – Garth

:|:|:|:|

Clear and concise, G. When’s that gonna catch on?

Og

#71 Shawn on 10.20.22 at 7:17 pm

Banks face high interest rates to borrow!!!

RBC just issued “$2.5 billion of bail-in bonds”. The 5 year portion is costing them 160 basis points above treasuries or about 5.4%.

Some of you might want to panic about the bail-in feature but it’s just a precaution to protect the bank and ultimately depositors in a disaster scenario. These bonds are part of the reason that actual deposits will never be bailed in.

And how can a bank be profitable if it is paying 5.4% for money? The reason is, this is not the money that banks lend out. This is capital. The existence of this capital entitles the bank to attract deposits on which it mostly pays FAR less interest.

But it is a bit shocking to see the high rate on these bonds. Can you even buy these as a retail investor? Probably not. I don’t see them on RBC’s IPO page.

Anyhow you can probably find 5.4% of a five-year GIC -though it’s not liquid if that is a concern.

https://ca.finance.yahoo.com/news/rbc-add-2-5-billion-194420862.html

#72 Wrk.dover on 10.20.22 at 7:27 pm

#10 Zed on 10.20.22 at 2:53 pm
Nova Scotia is capping EMERA’s rate increase at 1.8% to help with inflation for its people.
______________________________

I almost BLEW a few grand on EMA yesterday!

WHEW!

By this Monday, I will be able to get three times as many shares on the dollar, I suppose.

#73 IHCTD9 on 10.20.22 at 7:39 pm

#54 Shawn on 10.20.22 at 5:51 pm
Handle Changes?

#53 IHCTD9 on 10.20.22 at 5:41 pm
#47 Faron on 10.20.22 at 5:14 pm
#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if. If Garth is banning your posts, it’s his will, on his blog, that you leave. And you have now even thrown down the victim card. *Facepalm*. This is incredible
———

C’mon Mang. No one is obligated to advise us dogs of a handle change, Soren didn’t, Shawn didn’t, Ustabe didn’t, Flop didn’t, Boom didn’t. No one cares. You should try to not be so blown away by everything.

****************************
The only handle change I ever made was:

1. to stop using my corporate name Investorsfriend after some nitwit convinced Garth I was here to drum up business when it’s obvious I just like sharing my views of the truth and educating people. And I like a bit of back and forth.

2. I finally dropped using my last name. If it were up to me, actual full names would be mandatory. I stand 100% behind whatever I say.

So, unfair to suggest I really made any handle change. Just the one forced on me really
——

Dude, you’ve had three different handles here. The reasons don’t matter. The point was no one cares. I have mused about changing my handle after unloading the TD9, I fully expect no rips to be given when I do.

#74 Trevor on 10.20.22 at 7:39 pm

So i guess locking in a 5% 10 year BMO GIC is still premature as rates must rise more.

#75 IHCTD9 on 10.20.22 at 7:51 pm

#58 the Jaguar on 10.20.22 at 6:01 pm
#53 IHCTD9 on 10.20.22 at 5:41 pm
#47 Faron on 10.20.22 at 5:14 pm
#37 Old Boot on 10.20.22 at 4:31 pm

You have zero credibility and zero integrity and aren’t even being truthful about your pseudonyms and you know if. If Garth is banning your posts, it’s his will, on his blog, that you leave. And you have now even thrown down the victim card. *Facepalm*. This is incredible
———

C’mon Mang. No one is obligated to advise us dogs of a handle change, Soren didn’t, Shawn didn’t, Ustabe didn’t, Flop didn’t, Boom didn’t. No one cares. You should try to not be so blown away by everything.

+++

Wasn’t there also an occasion where a letter to Garth from “Sean” was the subject of a blog post, and subsequently “Sean” posted to provide context to follow up Garth’s comments?

And I also recall several posters saying someone else had posted under their blog name, which really shows a lack of character. I believe Billy Bob was one such victim and I can think of two others…

——-

There’s been a lot of imposters. Probably just regular dogs stirring the pot. G knows who they are. C’est la steerage.

#76 Quintilian on 10.20.22 at 7:55 pm

#68 Inflation on 10.20.22 at 6:42 pm

Trudeau is entirely responsible for the cost-of-living crisis and the homeless crisis

That is crazy talk.

the liberals did not cause this even if Crowdie and IH think so

#77 Grunt on 10.20.22 at 7:55 pm

A new king another bloody prime minister.

#78 Steven Rowlandson on 10.20.22 at 8:02 pm

Here is a report at BNN.
https://www.bnnbloomberg.ca/canadian-home-prices-post-record-monthly-decline-in-september-housing-index-1.1835420

#79 Dragonfly58 on 10.20.22 at 8:20 pm

Hi IHC, too bad you are in Ontario and I am out here on the coast. I am going to need a crawler in the New Year. A TD9 is just about the right size.

#80 Sail Away on 10.20.22 at 8:26 pm

#73 IHCTD9 on 10.20.22 at 7:39 pm

The reasons don’t matter. The point was no one cares. I have mused about changing my handle after unloading the TD9, I fully expect no rips to be given when I do.

———

Incorrect. There IS someone who cares. Truly, madly, deeply. Emphasis madly.

A sparrrow does not fall to the ground without this blogdog insulting it.

#81 Vancouver Keith on 10.20.22 at 8:35 pm

Re inflation: At this point Canada is in the lowest quartile

https://www.rateinflation.com/inflation-rate/canada-historical-inflation-rate/

#82 TurnerNation on 10.20.22 at 8:36 pm

Nonna Nicola may be correct, uppa up.
If you own a SFH in GVA, GTA never sell it?

Could you afford a slanty semi at 1.5 million @ 1.5% variable? No?
Ok how about same slanty semi at 900,000 @ 5.5%
No? So why sell. You are Priced Out Forever.

———————

Folks for almost 15 years the data has indicated that this weblog is safe and effective across all demographics (ages 10 and upward) when consumed at the recommended dose of Once Daily.

—-
—-
Just another day in the Former First World Countries. UK’s PM has resigned.
Cue another perhaps more compliance gobalist stooge to do the #reset-like biding??

Ah yes the Permanent fictional State of Emergency. *Everything* will be approved. Bet on it.

.WHO says COVID-19 is still a global health emergency (reuters.com)

.Novavax (NVAX) Covid Booster Wins US Emergency Authorization (bloomberg.com)

.Biden’s Plan for Next Pandemic Eyes Vaccine Supply Within 130 Days (bloomberg.com)

#83 TurnerNation on 10.20.22 at 9:23 pm

Why do I comment here on this pathetic weblog?
In one sentence: The First and Second World Countries get bomb’d econonically while Third World Countries get just bom’d.

That went into hyper drive with the globally coordinated Economic and Social Lockdowns. Then to Interest Rates.
Russian War. Look at British pound and their rotating door of banana republic leaders over there. A bad joke.
Add Karbon Taxes and we’re doomed.

#84 IHCTD9 on 10.20.22 at 9:33 pm

#76 Quintilian on 10.20.22 at 7:55 pm
#68 Inflation on 10.20.22 at 6:42 pm

Trudeau is entirely responsible for the cost-of-living crisis and the homeless crisis

That is crazy talk.

the liberals did not cause this even if Crowdie and IH think so

————

The Libs did cause some serious inflation to my bank account though. Also 100% inflation on my house from just 2015. But I won’t crap on him for those because I like free money.

YAMAHA likes my free cash too, I got three now. Nice Ferris commercial zero turn too. Overkill I know, but hey – it was basically free. All funded in part by Trudeau’s boneheaded policies. I hope you are well benefiting from all these as well.

I hear YAMAHA is considering putting their sweet 850 twin into the Grizzly – and if they do; I’ll be there with Trudeau cash in hand for toy #4 when the first truckload arrives. What a sweet machine that would be.

A bro and I counted up to a 1/4 Million combined in tax returns and CCB alone since Trudeau took power. Who cares about inflation with that kind of bank? That’s quite a few YAMAHA’s and GM’s bro.

I can’t really comment on fthb’s or homeless folks, since I’m neither. All I can do is get down on my knees and thank the good Lord above that I built a life under a series of competent governments, and was off and running well before Trudeau ever got elected.

#85 Flop… on 10.20.22 at 9:43 pm

Flop Drops.

I said to myself, you know Flop, when people are arguing about kill lists on here, that it’s time to ride the pine for a while.

Had a break, let’s see what’s happening in Surrey, with this detached house.

I don’t focus on the Pink Snow anymore, this listing has a bit of everything, for every appetite.

The details…

12729 114A AVENUE

Surrey

Previously bought for 1.03 in February this year

Original ask 894k

Assessment 817k

Just sold for 712k

https://www.zealty.ca/mls-R2719462/12729-114A-AVENUE-Surrey-BC/

So they lost about 300k in a short amount of time apparently.

I’ve seen a few liveable houses out that way go in the 900s, this sounds like it’s gonna have a date with a demolition team , but still this has got to have the protesting realtors out that way concerned.

What are they going to order for dinner?

Chop Suey…

M48BC

#86 epic bear on 10.20.22 at 9:49 pm

#74 Trevor on 10.20.22 at 7:39 pm

So i guess locking in a 5% 10 year BMO GIC is still premature as rates must rise more.
____________________________________________

floating rate prefs yielding >9% now
fixed rest prefs now resetting at >8% for 5 years

otherwise, stick to 30 day tbills or money market funds

#87 Chameleon on 10.20.22 at 10:04 pm

WOW. A toad.

This blog is getting better with each passing day.

#88 crowdedelevatorfartz on 10.20.22 at 10:09 pm

@#31 Ole Dobie
“Wouldn’t that kill his army too?
+++

You mistakenly assume Russian dictators actually care about their armies.
Ever heard of Stalin?

#89 crowdedelevatorfartz on 10.20.22 at 10:13 pm

@#quinty’s quandry

We just hate Trudeau and blaming everything on him is so much more satisfying….until Freeland replaces him as PM for a few months before the next election….a la Kim Campbell and Mulroney’s “night of the long knives”..

#90 crowdedelevatorfartz on 10.20.22 at 10:16 pm

@#77 Groot
“A new king another bloody prime minister.”

+++
You have to admit.
Liz did hit the history books.

She’s the shortest serving PM in Brit political history
AND she was sworn in by the Queen and announced her resignation to the King.

No one will ever have those exceptional circumstances happen again.

#91 Diamond Dog on 10.20.22 at 10:18 pm

Insightful, Garth.

Although a bottom is in sight, it’s not tomorrow. We do have a Fed induced recession coming, there’s no way around it. A rapid expansion of the money supply in 2020 and to some degree 2021 has forced their hand by way demand destruction to fight inflation. But for readers of steerage, this is nothing new here to Greater fool as these points have been discussed many times before by myself and others.

To also repeat, what moves the needle most in equities is corporate earnings. We have a deepening U.S. recession coming, potentially through most if not all of 2023, likely longer than we care to admit and predictable losses WILL drive the markets down. Welcome to the world of Fed induced demand destruction.

The markets have yet to price in corporate losses as sure to come as the recession itself. (Canada is still a coin toss, depends on the strength of commodities)

Earnings are never really priced in until they get printed. Don’t think so, look at corporate forward earnings projections from a year ago and compare share values to today. See the disconnect? They were future price earnings not fit for TP (as projected here on Greater Fool steerage at least, by myself). CEO’s in masse pump projections in good times and pump doom in bad times. Just do the counter intuitive opposite with investing and we’ll be fine.

That said, to say Mr. market has priced in a U.S. recession in the stock market when earnings most moves the needle and is yet to hit is really is a bit “premature” right? Just a little?

I don’t think this bottom will be even for investors either but choppy, meaning the bottom is not a V. Not all sectors will bottom at the same time but spread out over 6 months or so.

For me, next spring through fall looks good for U.S. equities with hope of a Fed pivot coming nearer in the fall of 2023 keeping the markets from dipping lower. This means holding and re-entry until the next bull run top presumably beginning from early to late 2023 bottom and beyond. Next summer to winter looks great for European large caps (strong currency tailwinds setting up there as the war in Europe nears it’s end and the Fed comes into late 2023, early 2024 reducing the Fed rate) so overseas diversification looks good at this timeline.

As for Maple, investors really need to watch U.S. markets for market timing indicators with a twist as I still think commodities will do well for Canadians even through global recession and beyond due to chronic under investment and sanctions on Russia.

As the war in Europe reaches it’s conclusion as past predicted here on steerage sometime next summer to next winter assuming war hawks don’t start pushing red buttons (hasn’t happened since WWII, some solace in that), and the Fed gets a handle on high inflation (sometime during the spring/summer/fall of 2023), we will see a weaker U.S. dollar offsetting what should be an end to the Ukraine war in the latter half of 2023, potentially into 2024 giving commodities some tailwinds supporting the possibility that Canada avoids a recession!

Talking state side here, but we have S/P 500 with corp earnings at 27x, coming down but still historically high with what could be a full year of recession coming in the U.S. . Once again, what could go wrong:

https://www.multpl.com/shiller-pe

When buying into a basket of U.S. equities, considering the losses that will be reported down the road, we should not be surprised to see S/P 500 P/E ratios below 20x at some point between spring and fall of 2023.

It’s important to follow P/E’s when investing in S/P 500 ETF’s since 20x as we know for easy math is the 5 year multiplier for the aggregate of market caps doubling effect. Assuming earnings stays consistent and large caps produce through a bull run, earnings will double in 5 years factoring in corps that bow out in the basket, but offset by bull runs that pop share prices higher.

This doubling effect over timelines is why managers council investors to stay invested. Just know that the entry point, regardless of what some managers will say (such as “any time is a good time to invest”, that’s not true), is a large factor ignored only at an investors peril.

Diversification with equities (and bonds) minimizing risk coupled with earnings is why, over time, it still makes sense to stay invested even though you know short term, there’s pain ahead. Time itself will bail you out of an unfortunate entry level. Just know that with new money to invest, it’s wise to fish for bottoms and know the wait is measured in months, not years.

With bonds, its as soon as the first few days past Jan31/Feb 1st and beyond. With equities, the sweet spot is from spring through fall in U.S. markets (and by proxy, maple) with a caution that there are factors that could delay. With Europe, fall resonates with me most for overseas investing (think currencies and timing to the end of the war in Europe).

In other words, diversified investment into a pool of large caps from the S/P 500 with P/E’s near or below 20x is a safe, large volume no brainer! Even if the investor gets into ETF’s/equities a bit too soon, it comes back to how long it takes for the diversified pool of investments to double. 27x earnings with a looming recession (7 years approx) is too soon (at 40x, it’s a worst case scenario as we’ve been reminded throughout 2022, I did say sell everything). 20x times or less? What’s not to like! To repeat, I’m suggesting we’ll see 20x earnings or lower next year in the S/P 500, so… patience.

Couple say, 20x earnings with bonds invested “for price” with the Fed rate at 4.5%+ and 60/40’s rock for the novice, intermediate investor AND the seasoned investor with large volumes and an appetite for low risk. Do readers get that? What I’m telling readers is this. With a bond market driven by Fed reaction to high inflation, we can time it and it’s near. With equities, it pays to wait a bit more, but the time is also near.

Bond prices as we know have been under pressure this year with the Fed continuing to hike rates spiking yields and crashing prices. The end is near though, for this brutal onslaught on bonds. The Fed rate is at 3% – 3.25% and poised to be 4% in early November. The Fed meets again mid December and Feb 1st meaning the Fed rate should be around 4.5%. At this point, 60/40 investors have my blessing to fill their boots on bonds but with a caution on equities.

It will most likely pay to wait with equities at least until next spring. There is bad news coming from equities as the Fed rate pushes past neutral, thought to be between 4 and 4.5%. Spring through fall and beyond (til the spring of 2024 I should think) will see some rough earnings periods. What we’ll see as a likely consequence is market selloffs during earnings periods followed by rallies in between when looking for the nuances if one wants to tease out the timing of new money to invest.

Remember this to new investors (and old), when meeting managers, you do call the shots. They will ultimately follow your lead. If you decide to break up investing 60/40 and invest in bonds a little early and wait a bit on equities, they should be flexible upon the condition that you wish to enter into equities at a later date. It’s not a golden rule, a lot can happen between now and next spring, just know you are in control and wait for earnings to fully reflect rates at 4.5% or higher. We are talking demand destruction here needing to filter through the markets, so it’s best to exercise patience from both investors and managers alike.

Disclosure: Things can still go wrong in the markets. The war in Ukraine could drag on into 2024 and beyond. There could always be another black swan. Another year of La Nina perhaps (I think it ends next summer), another pandemic, maybe a bird flu variety this time or a U.S. war with China over Taiwan. Just as importantly, we could see a black swan emerge with credit conditions as rates tighten with CB the world over, in emerging bond markets, with credit freezes, there’s stuff out there that can take markets down below what I project or delay bottoms.

We don’t know everything but some things are clear. The path for bonds is crystal clear when one understands U.S. monetary policy decisions driving the Fed to as high as 4.6% in their latest guidance. As such, the timeline for U.S. equity lows is becoming more clear. I think chronically underfunded commodities coupled with Russia’s war in Ukraine is bullish for commodities even through the face of global recession for the foreseeable future. The timeline for Russia’s war is also becoming clearer if one follows the money and Russian military resources. There are lots of moving parts but through it all if we remain diversified, be patient and keep the group think, time really is on our side.

As always, good luck and good fortune.

#92 crowdedelevatorfartz on 10.20.22 at 10:24 pm

Yo Sailio!
I was over on the Island north of Nanaimo for a few days of work.
Just got back.
Several things I noticed.
I drove from Victoria to Campbell River
Dry, Dry, Dry
The rivers are gravel pits with small pools.
The coniferous trees are wilting and brownish tinged.
Lots of deer on the side of the highway in the evening.
The upgraded Island highway is impressive.
I havent been north of Nanaimo on the ‘new” highway since it was built.
Very nice. 110kms speed limit. Sweet.
The Malahat section needs to get a diversion inland to get the truck traffic and the tourists separated.
Other than that.
A very impressive divided highway for a small population north of Nanaimo

#93 crowdedelevatorfartz on 10.20.22 at 10:28 pm

Anyone using pseudonyms for their pseudonyms….
You need to pick a truly epic name that no one wants.
Like Ponzie’s
And … wear it with pride.

#94 Tom from Mississauga on 10.20.22 at 10:39 pm

Unemployment won’t rise as the inflation problem is there aren’t enough workers to fill orders, lots of hiring signs in Sauga, retirements, that we’ll definitely see.
Ukraine War will end, as you say, but with American security overwatch and globalization gone countries will branch out regionally to secure what they need to keep their population going.

#95 Hang On on 10.20.22 at 10:42 pm

Unless you’re flipping houses, or lending second mortgages real estate is not an “investment”. It’s a non fungible place to live that is more comfortable than a car. If you ever thought otherwise you’ve missed the whole concept.

If you got sucked in to a monster mortgage, that was just stupid greed and in every kind of market, pigs get slaughtered. There has to be blood in the street in order for markets to backfill and advance, pigs are the stepping stones of progress.

Speaking of lending second mortgages, these are sweet time a’coming, snack. Having extra cash in the coming scenario is worth gold, in the arena of 15% on one year terms. Look for couples who temporarily separated with good jobs and built up extra debt while apart.

They’ll get back together because they can’t afford to live separately and rekindle the romance out of desperation. Ex: I had a CRA auditor who took an early morning paper route to pay my loan. As a lender you’ll pick through dozens of applications to find the perfect profile.

Dividends, sweet victory on that front. We’re back to waltzing with TINA and they’re holding up far better than the index. I might be down 10%, but that’s genius compared to the indexers loss of 25% ++. And the dividends are perpetual, monthly, quarterly, semi and annual.

Cash flow is king in this market and that security is the pole position for investors. Our line was infected by margin calls but no where near the 70-90% wipeouts of tech.

#96 45north on 10.20.22 at 10:47 pm

On Thursday the Teranet index recorded its biggest drop since being created, with house prices down 3.1% in a month (yeah, that’s 37% annualized). The big plops came in the GTA and Hamilton. Soon it will be BC and the LM. Teranet’s methodology is different, as it gathers data when properties close, not when sold. So it’s always months out of date. Expect worse to come, therefore.

a lot worse. Wolf Richter writing about the US, notes that the NAHB/Wells Fargo Housing Market Index has just dropped more and faster than Housing Bust 1.

https://www.howestreet.com/2022/10/housing-bubble-woes-plunge-in-buyer-traffic-homebuilder-confidence-a-lot-faster-than-during-housing-bust-1/

Canada didn’t have a Housing Bust. House prices just sailed higher which makes me think that house prices in Canada are going to drop more than the latest Teranet index.

Here’s Steve Saretsky talking about the BC housing market:

Ironically, incentivizing new supply could prove challenging in an environment where the cost of financing is surging and pre-sale conditions are weakening. Oh, and we just welcomed nearly 700,000 new people into the country, the largest increase in 55 years.

Saretsky understates the problem. Private developers are just not going to start new developments. I’m guessing they have more than a vague interest in equities. I mean if you are a developer and you actually have money in the bank, you’d be better off with equities. Pretty sure that’s a question the banks are asking.

#97 Don Guillermo on 10.20.22 at 10:50 pm

#50 Ponzius Pilatus on 10.20.22 at 5:27 pm
———————
as the saying goes:
“on the Internet, no one knows that you’re a dog”
And, Donny G. It could be a Yogi Bera quote.

#########
Hahaha, good one Ponz

My favorite is
“Nobody goes to Surrey anymore. It’s too crowded.”

Yogi Berra (slightly modified for context)

#98 Faron on 10.20.22 at 11:33 pm

#80 Sail Away on 10.20.22 at 8:26 pm
#73 IHCTD9 on 10.20.22 at 7:39 pm

madly

Ad hominem and baseless.

And still bickering away despite a respected commenter telling you and I and Old Fraud to STFU. Still wasting Garth’s time.

#99 PeterfromCalgary on 10.20.22 at 11:41 pm

When is comes to taming inflation the body building slogan no pain no gain sort of works.

#100 DON on 10.20.22 at 11:57 pm

@Crowded
The Qualicum to Campbell River is a pleasurable drive. Traffic spread very very far apart, the road is built for speed without even noticing it. Good views etc. Peaceful. The Hat is another story as stupid travels that part of the highway.

#101 yvr_lurker on 10.21.22 at 1:17 am

Meanwhile people still buy groceries, clothes and cars. In an economy which is two-thirds driven by retail spending, there are eternals to profit from. What bad/worse/awful news is there to come, more than we already know?
——–
Garth seems to have a special phone line to Mr. Market to get his/her/they views of the world. Has Mr. Market priced in a major recession? Will all those suffering from inflation and mortgage renewals be happily out there at the malls this Xmas buying tons of consumer items? I doubt it. People will hold onto their wallet, which will bring on a large down-cycle. Mr. Market is going nowhere for quite a long time period. Perhaps Garth should have a chat with him/her/they in a few months over a beer to get the real scoop.

#102 DOWn on 10.21.22 at 1:21 am

That frog should be put I n a pot of warming water.
This volatility we’re seeing rivals the markets of 1929 & 1989.
That’s a warning.

#103 Pain_Trade on 10.21.22 at 2:22 am

“… market participants stopped being investors when they accepted the notion that stocks are always attractive regardless of the price paid for them…”

#104 Jane24 on 10.21.22 at 2:36 am

Just received an email from UK Conservative Central office telling me that I will have a vote next week on the new British Prime Minister. I cannot believe the events of this last month. The choice seems likely to be Boris the proven liar or Rushi the back-stabbing snake. I’m going for the liar as I like his hair!

#105 under the radar on 10.21.22 at 5:36 am

95- “Speaking of lending second mortgages, these are sweet time a’coming, snack. Having extra cash in the coming scenario is worth gold, in the arena of 15% on one year terms. ”

I’ve been at this for 30 years. The sweet times have always been here. I try not to make the noose too tight on the rate. Reasonable interest rate, reasonable placement fee, one year term, and legals all add up . The renewal fee is 1%. Everyone is happy. Besides, judges are not fond of excessive rates especially if the borrower is unsophisticated.

#106 Diamond Dog on 10.21.22 at 6:01 am

Afterthoughts:

Personally speaking, I’m headed for an off grid existence likely until Christmas so this blog won’t be hearing much from this cat. That said, there’s lots on my mind that is, I believe, relevant to this blog so if there’s a time to share it, it’s now.

As an example, where future indexes are headed and just how long the U.S. economy will stay in a funk until the Fed resolves inflation, i.e. deflate a bloated money supply. As a seasoned investor, I’m looking at the TSX around 14k for a re-entry, the DOW in the low 20’s (in line with Jamie Diamond’s latest musings btw) and have re-adjusted the NASDAQ up to the 9200’s.

The DOW Jones industrial is what it sounds, there’s a large component of industry there. It will be effected by a high dollar next year cutting into exports along with a Fed pushing slightly past neutral inducing recession coupled with a global recession so it’s different than the dot.com bubble bust days.

I’ve bumped up the NASDAQ to the 9200’s for re-entry because I don’t see the largest caps of the NASDAQ losing much money through this. Once we get to these levels, we are looking at a sideways market that rallies until earnings season and sells off, wash, rinse, repeat until 2024.

I don’t see an exciting market with wild runs and sell offs once the markets hit these levels. I just don’t see the market experiencing a V bottom. It’ll be more like 1 step forward, 2 steps back and then sideways with not a whole lot of flux and lazy index charts. Earnings season will come with earnings losses followed by rallies in between likely through to all of next year. It’ll be a “meh” year, a grind and challenge that offers the usual danger and opportunities with less intensity.

So why do I suggest spring to fall as the time to get in if the markets won’t meaningfully recover until 2024 thanks to the Fed? Well, a game plan helps. For one, as a seasoned investor it’s better to be a little early than late. Being early means a seasoned investor is chasing the largest caps first because they are the first out of the gate. Once they rise, roll a percentage over and chase the smaller large caps and the mid cap earners (as a rule, always stay with the earners) and then the small caps which we shouldn’t even talk about until 2024. Chuckles, large volume investors never really talk about small caps truth be told, but they shouldn’t be ignored in 2024.

Turner investments is also 60/40 and bonds are looking good from early Feb on, so it’s worth making the point. I think it’s worth getting in early with bonds because we just really don’t know how the system will take 4.5% (or higher). The market will also anticipate a legitimate Fed pivot as we get closer to the fall. Plus, the war in Ukraine will tilt towards Ukraine.

That said, we may likely see a Fed rate in the 4’s for all of 2023. In fact, it’s necessary to get the money supply under control and tame inflation. There’s talk of a Fed rate needing to go to 5%, but I think 4.5 ish is enough for a few quarters and just that half point bump elevates more systemic risk, so…

If the Fed pivots before late 23′, I’m in full agreement with El Elrian, it’s a bad thing, be careful what we wish for. It would mean high inflation into 2024 and more headwinds for the markets (lower bottoms). Larry Summers is worth a mention here as well with a 6% unemployment rate prediction. There will definitely be personal casualties next year so if investors do score, don’t gloat.

I think Crypto is dead until the spring of 2024. (and by proxy, tech except for the earners) Are there more shoes to drop over the next year and half in Crypto? You bet there is. It’s a scam filled casino market that tracks the speculative rate sensitive NASDAQ and is unnecessary for world function riding into a deep recession. (Etherium holders, watch out) Call me prejudice, I don’t see much use for it and wouldn’t miss it if Crypto was gone from human existence as it personifies some of the worst of human behavior and produces little if any real value (greed, gambling, something for nothing behavior that is no good for this world).

Sorry gold bugs, we won’t see a rise in gold until the Fed lowers rates again, unlikely until 2024. I see a glorious bull run beginning again in 2024 (unless the four horsemen have something to say about it) which would be good for gold, but good for everything else meaning it’s peers as usual, will out compete. This doesn’t mean to say gold miners won’t do well, they should, but gold will lag behind it’s commodity peers at least until late 2023.

Any other musings, sure, all the time with contexts not related to this blog. I’d love to take some deep dives into the contexts of sociology here at some point relating to humanities systems of government, economics and the environment and should, early next year as time allows specifically in the area of mental disciplines as mental health and what we value is the common denominator of lion’s share of humanity’s problems.

Little things like this should be noticed, if not talked about because it’s connected:

https://www.theweathernetwork.com/en/news/climate/impacts/wildlife-population-analysis-shows-terrifying-decline-in-numbers-says

“Global populations of monitored mammals, birds, amphibians, reptiles, and fish plummeted by an average of 69 per cent from 1970 to 2018, according to findings published by the WWF with data from the Zoological Society of London.”

69% drop, if that’s ballpark and humanity’s foot prints are all over this thing. Declining environment’s, we can talk all day about how to make money but if we can’t manage our natural surroundings, what’s the point of riches? Better is a little with righteousness than great revenues without right.

“What part of valuing life’s sustainability as #1 do we not get or understand?”

I have lots of thoughts on the war as I’m sure most have and once again, what humans value (or don’t) is the common thread through it all. That said, Putin’s regime clearly doesn’t get it. Putin, blinded by ego bloat and 20+ years as an autocrat dictator, is about to learn a hard lesson on hegemony. It’s not a question of how much more power you have over your neighbor and what you can force or compell, it’s a question of alliance and support.

Ego bloat, hubris, dictator syndrome, mental (albeit functional) instability, whatever the reason or combination, Putin has utterly underestimated Ukraine’s allies (now adversaries) of support and because of it, he entered into a war that he can’t win. Putin has already lost the hearts and minds of 42 million Ukrainians for the next 50 years (if the 4 horsemen don’t get them first). He will also lose this war for it is written, “Pride goes before destruction, a haughty spirit before the fall” (Proverbs 16:18):

https://www.youtube.com/watch?v=_X_nE22CssU

#107 Wrk.dover on 10.21.22 at 7:28 am

#92 crowdedelevatorfartz on 10.20.22 at 10:24 pm
The coniferous trees are wilting and brownish tinged.
___________________________________

Here in SWNS, for a couple of years now, the bark of red spruce (named for the color of the bark) is scaley and black. With or without the bark bee beetle infestation.

When you fell the tree, the log ends turn tobacco color within an hour, formerly that took weeks.

When you mill the logs, they are pre-dried.

Contractors are experiencing truck load of logs being rejected at the mill gate.

And that ain’t a cheap fun experience!

#108 crowdedelevatorfartz on 10.21.22 at 8:03 am

@#104 Jane24
” I cannot believe the events of this last month.”
+++
Well .
Look on the bright side.
Your commute from the summer home and the winter palace is shorter.
You now live in Britaly
:)

#109 crowdedelevatorfartz on 10.21.22 at 8:05 am

@#106 Diamond Dog
“I’m headed for an off grid existence likely until Christmas so this blog won’t be hearing much from this cat.”

+++

That was as far as I got…..
Then I burst into tears…of joy.

#110 IHCTD9 on 10.21.22 at 8:24 am

#79 Dragonfly58 on 10.20.22 at 8:20 pm
Hi IHC, too bad you are in Ontario and I am out here on the coast. I am going to need a crawler in the New Year. A TD9 is just about the right size.
____

There are a lot of old Crawlers out in BC thanks to all the logging over the decades. You should have no issues finding a sweet old track layer – get a good one though! Read up on what makes a good undercarriage, and which machines have wet steering clutches vs dry (wet is much better if you can get it).

#111 Dharma Bumd on 10.21.22 at 9:05 am

#125 Zero Sum (Yesterday’s comments)

Who did Steve Jobs take his wealth from?
———————————————————————————————————–

The broke, deluded, indebted idiots that line up around the block every time a ‘new” iPhone is launched.

The rich get richer, the poor get poorer.

The economy grows, for sure, but the share of it is increasingly out of balance.

I’m not saying it’s a bad thing. It is what it is. The point of view might change depending on what side of it you’re on.

Most are on the wrong side. (As in: not rich.)

#112 Dharma Bum on 10.21.22 at 9:11 am

#6 Protea

Montreal appears to me that real estate is still a sound investment, your thoughts as it relates to this market compared to Toronto and Vancouver.
——————————————————————————————————

Unless you’re French, it ain’t no place to be.

Limited market.

That’s why it’s super cheap.

A good place to leave.

#113 Dharma Bum on 10.21.22 at 9:31 am

#79 Dragonfly58

Hi IHC, too bad you are in Ontario and I am out here on the coast. I am going to need a crawler in the New Year. A TD9 is just about the right size.
———————————————————————————————————-

I’ll drive it out there for you.

50 cents a kilometre, and you pay for my flight back.

Deal?

#114 Former cubicle dweller on 10.21.22 at 10:03 am

Hi Garth, I faithfully follow your weekly podcast and I was surprised to hear that your Euro exposure in portfolios is down to only 4ish percent. I had to “rewind” and listen again just to make sure I didn’t mishear. It would be great to hear your bits of wisdom concerning the rationale for this. I think your standard emerging markets exposure might hover around this percentage, but Europe?

#115 KNOW IT ALL on 10.21.22 at 10:10 am

Word hitting the street that the FederalReserve will do another 75 bps in Nov then pivot.

Dollar starts to fall off highs.

Fed maybe just got the message of how close the world was to financial collapse.

The world financial system is not collapsing. The Fed will not pivot after one more increase. – Garth

#116 Shawn on 10.21.22 at 10:24 am

Little sign of recession!

Saw news this morning that retail sales were DOWN 0.5% in September. Not much of a decrease given continued inflation. Still, early signs of possible recession. But that would be about flat in volume terms. Anyhow this is a preliminary number.

ACTUAL numbers were out for August and at that time Consumers were still spending apace. VOLUME was up despite higher prices. Up 1.1% in a single month! What recession?

Where were we gettin’ the money? What are we cutting back on? Or just added debt and drawing down savings as of August?

“Retail sales increased 0.7% to $61.8 billion in August. Sales increased in 6 of 11 subsectors, with these 6 subsectors representing 65.0% of retail trade. The increase was led by sales in food and beverage stores (+2.4%) and motor vehicle and parts dealers (+0.6%).”

“Core retail sales—which exclude gasoline stations and motor vehicle and parts dealers—increased 0.9%.”

“In volume terms, retail sales were up 1.1% in August.”

“Given the continually evolving economic situation, Statistics Canada is providing an advance estimate of retail sales, which suggests that sales decreased 0.5% in September.”

https://www150.statcan.gc.ca/n1/daily-quotidien/221021/dq221021a-eng.htm?CMP=mstatcan

#117 Dragonfly58 on 10.21.22 at 10:44 am

IHC, there are machines out here , but lots { most } are too big. Also , like everything else out here , prices are well up there. In my early days as a young mechanic I worked for one of the larger roadbuilding outfits in B.C. I was mainly involved with excavators, but also scrapers and dozers. Virtually all larger machines due to the nature of work the Co. was involved with. But other than the size of the parts the smaller ones are built the same way. I could get by with a larger ” mini ” excavator. But way too expensive for my wallet.

#118 Ponzius Pilatus on 10.21.22 at 11:07 am

97 Don Guillermo on 10.20.22 at 10:50 pm
#50 Ponzius Pilatus on 10.20.22 at 5:27 pm
———————
as the saying goes:
“on the Internet, no one knows that you’re a dog”
And, Donny G. It could be a Yogi Bera quote.
#########
Hahaha, good one Ponz
My favorite is
“Nobody goes to Surrey anymore. It’s too crowded.”
Yogi Berra (slightly modified for context)
——————-
Yeah,
Yogi got that one right, too.
Too many people and too many cars (F-150s).
Yearning to return to my roots in Austria.
To a small village by a pristine Alpine lake.
I know Europe very well, but still many places on the bucket list.
Gotta tie up some family business, and then it’s a go.
I love Canada, but deep down I’m still more European.
About two years from now. hopefully.
I’ll send postcards

#119 VanLoserRenter on 10.21.22 at 11:09 am

#37 Old Boot on 10.20.22 at 4:31 pm

TL;DR

“I troll..”

#120 Mattl on 10.21.22 at 11:26 am

Shawn – are the retail numbers adjusted for inflation?

#121 Quintilian on 10.21.22 at 11:39 am

#96 45north on 10.20.22 at 10:47 pm
“Here’s Steve Saretsky talking about the BC housing market:
Ironically, incentivizing new supply could prove challenging in an environment where the cost of financing is surging and pre-sale conditions are weakening. Oh, and we just welcomed nearly 700,000 new people into the country, the largest increase in 55 years.”

Steve is a salesman, a good one.
Great subliminal messaging.

But he is wrong.

Builders will build; that is how they make money, and not by leaving their production assets idle.

If existing builders stop building, the vacuum will soon be filled by others.

#122 The General on 10.21.22 at 11:42 am

It’s nice to know Freeland feels our pain. Canada and Germany have agreed to develop a hydrogen industry to solve the energy crisis. Why not develop L.N.G. facilities Instead? Because the man-child running OUR country demands net zero energy exports. Yes, let’s drop billions on unproven shady enterprises instead of proven technology which could make Canada billions. Oh, by the way, you need lots of ammonia to produce hydrogen. Well, how does one create ammonia? Natural gas of course. Chimpanzees on typewriters in action for all Canadians.

#123 Damifino on 10.21.22 at 11:50 am

A brilliant piece from Rex Murphy in the NP today.

Here’s a pearl:

“Under the current net-zero fascinated government, energy was deemed an enemy, due for shut down as soon as possible, and what we now offer a tormented world is a windmill-driven, not yet started, dubious in the extreme, futuristic hydrogen plant in Stephenville, Newfoundland. If you have tears, weep them now.”

Ah Rex, I do indeed weep…

#124 The General on 10.21.22 at 11:51 am

#98- faron: I thought you were taking a break. This melodrama you helped create is past its due date. And kind of sad. Say goodnight, Charley.

#125 Brett in Calgary on 10.21.22 at 11:57 am

I think there will be more central banks in hot water. Look at the move in TLT today.
———————-
#115 KNOW IT ALL on 10.21.22 at 10:10 am
Word hitting the street that the FederalReserve will do another 75 bps in Nov then pivot.

Dollar starts to fall off highs.

Fed maybe just got the message of how close the world was to financial collapse.

The world financial system is not collapsing. The Fed will not pivot after one more increase. – Garth

#126 Just As We Thought on 10.21.22 at 12:32 pm

#118 Ponzius Pilatus on 10.21.22 at 11:07 am

Too many people and too many cars (F-150s).
Yearning to return to my roots in Austria.
To a small village by a pristine Alpine lake.
I know Europe very well, but still many places on the bucket list.
Gotta tie up some family business, and then it’s a go.
I love Canada, but deep down I’m still more European.
About two years from now. hopefully.
I’ll send postcards

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

So all that cheerleading for Canada being the greatest was just simple trolling.

Got it.

Better check on that lake though and make sure it’s still…pristine. A lot has changed in the 60 years you’ve been away. Probably polluted like everything else.

“You Can Never Go Home Again.”

#127 Wrk.dover on 10.21.22 at 12:38 pm

#123 Damifino on 10.21.22 at 11:50 am
dubious in the extreme, futuristic hydrogen plant in Stephenville, Newfoundland.
____________________________

The provincial industrial park is a day’s drive to the other side of the rock.

I wonder what Stephenville does have, besides an abandoned/now gone US air base?

#128 Old Boot on 10.21.22 at 1:00 pm

#111 Dharma Bumd on 10.21.22 at 9:05 am

#125 Zero Sum (Yesterday’s comments)

Who did Steve Jobs take his wealth from?
———————————————————————————————————–

The broke, deluded, indebted idiots that line up around the block every time a ‘new” iPhone is launched.

The rich get richer, the poor get poorer.

The economy grows, for sure, but the share of it is increasingly out of balance.

I’m not saying it’s a bad thing. It is what it is. The point of view might change depending on what side of it you’re on.

Most are on the wrong side. (As in: not rich.)

—————–

Ah, but viewed through the distortion of a post modern lens, access to smart phones = access to credit = GDP growth.

https://www.weforum.org/agenda/2021/01/this-new-approach-to-credit-scoring-is-accelerating-financial-inclusion/

NewSpeak: Financial inclusion of the unbanked, empowered by access to smart phones

Reality: life-long debt servitude of – and thought control over – the social class that can’t afford to pay for their own indoctrination in post modern theory (any university education), and is inclined towards guillotines and revolutions as means to solve wealth inequality.

Post modernists get to pretend societal power differentials can be altered by means of obfuscatory neologisms because they can control access to our financial – and therefore corporeal – well-being.

Being financially independent renders the wealthy immune to life-long debt servitude, but uniquely vulnerable to control over access to their assets.

Wrongthink is the only real crime. Digital control over access to our own money, based on ESG scores, will be called ‘crime prevention’.

Big Tech and the financial sector, empowered by both governments and unelected bodies, are the new arbiters of acceptable thought, and they run the kangaroo courts (social media platforms) that banish offenders from acceptable society, jobs, funds and public discourse.

**And for extra paranoid points: your phone is, of course, a GPS locator device

#129 Shawn on 10.21.22 at 1:01 pm

Retail Spending and Inflation

#120 Mattl on 10.21.22 at 11:26 am

Shawn – are the retail numbers adjusted for inflation?

***************************
They give them both ways. The headline number is usually month over month (August versus July for example) in nominal dollars. When they give the change in volume that’s adjusted for inflation.

They also show it in chained 2012 dollars. This is also adjusted for inflation. It’s more a volume measure. But the chained dollars thing is complex so those really interested could look into that. The chained dollars is only given at the total retail spending level and not by component.

Here’s a nice table from the report showing month over month and year over year by component in both nominal unadjusted dollars and for the total (not components) in chained 2012 dollars.

https://www150.statcan.gc.ca/n1/daily-quotidien/221021/t002a-eng.htm

See the full report with more tables and text.

https://www150.statcan.gc.ca/n1/daily-quotidien/221021/dq221021a-eng.htm?CMP=mstatcan

#130 The General on 10.21.22 at 1:12 pm

It seems The Economist compared Liz Truss to a head of lettuce. Which will last longer on the shelf? Comic gold! Also, they have coined a new name for jolly old England: Britaly! While France is paralyzed by strikes, Sweden and Italy elect “far right governments.” Protests building across Euroland. Their “elites” are seen as betraying the little people for their own selfish reasons. Sounds about right. Yes. I use the Economist as a source, faron. More to come.

#131 The General on 10.21.22 at 1:21 pm

By the way, troll hunters: Running to father and demanding cancel culture should dwell here and suggesting the printing of I.p. addresses is a desperate move. Usually when you know you’re losing. Cheers!

#132 Old Boot on 10.21.22 at 1:27 pm

#119 VanLoserRenter on 10.21.22 at 11:09 am

#37 Old Boot on 10.20.22 at 4:31 pm

TL;DR

“I troll..”

———–
Your point, if you actually have one?

Keep thinking that your performative devotion to whatever 1st world luxury belief systems that help you sleep at night will result in houses getting cheaper.

I wish you luck with that.

#133 Faron on 10.21.22 at 1:39 pm

#124 The General on 10.21.22 at 11:51 am

Say goodnight

Good morning! And it’s a very nice one. Had the morning off with my lady and we took the basset out for a walk and sat for a coffee and a shared donut. Checked my stonks and they are a very nice shade of green. Much needed rain is on the way and I have extra side-gig work. Life is good, thanks.

How is our dear Yandex using Russian troll?

#134 Tony on 10.21.22 at 2:17 pm

Tangerine raised their GIC rates today.

#135 Richard L on 10.21.22 at 4:17 pm

It is true that inflation has taken hold throughout the western democracies , however Macklem could have done more to curb it in Canada. As was pointed out by Ryan Lewenza (I think) a while back, Macklem had an opportunity to raise rates by 0.25% in January 2022 as was expected by the market. However, he failed to do so. If a tightening signal had been sent at that time Canada would be in a better position now.