Pandering

Last Thursday, says Wendy in Coquitlam, she received “The Letter” from RBC.

The bank holds the first mortgage on the aging townhome she and Tom bought in late 2020 for just over a million. “All we could afford,” she says, “and that was stretching things to the max.” (Her mom, Bev, helped with the down payment.) The loan came in at three grand a month – a variable-rate borrowing, the cheapest rate they could find.

Since then there’s been a baby, a mat leave, more expenses and a reduction in household income. Then Tiff came along. The Bank of Canada rate increased 1,600%. Inflation hit the Superstore on Lougheed Highway and Tom’s paycheque ran thin. Mortgage rates went crazy, but they figured they were okay, maybe. Monthly payments were set. Until last week. The letter came.

Two hundred bucks is a disaster in some households. Wendy just has to cope – and to reflect on why she and her squeeze bought a home they could not afford on their own (without mom) then proceeded to have a family, cutting cash flow and goosing expenses. Now they have less disposable income, no savings, a ton of bank debt, an obligation to Bev and an asset that’s actually falling in value. House lust victims. Seduced by VRM borrowing that was the cheapest in Canadian history – which everyone said would never change. The house has put he family at financial peril.

The Bank of Canada this week tells us one-third of all the mortgaged households in the nation have VRMs. Ouch. Half of them have already – like this couple – hit the trigger point where a low monthly payment doesn’t even cover accumulating interest. Within six months, 65% of all the variable-rate borrowers will be in the same boat.

Meanwhile, as we told you, rates rise again on December 7th, adding another half-point to the variables, pushing thousands more closer to that trigger. Expect another hike or two, economists say, in early 2023. It all depends on inflation, employment and GDP data along with the actions of the US Fed, the Ukraine war and a brewing global energy crisis.

By the way, these are the dates in 2023 our CB will be announcing any rate changes:

* Wednesday, January 25*
* Wednesday, March 8
* Wednesday, April 12*
* Wednesday, June 7
* Wednesday, July 12*
* Wednesday, September 6
* Wednesday, October 25*
* Wednesday, December 6

The obvious question: will swelling VRMs, trigger points and household financial stress lead to real estate chaos as more are forced to sell and listings augment? Or (as house floggers like Re/Max are speculating) will property cravings kick in come the Spring with buyers leaving the sidelines to jump in again?

Logic tells us a historic increase in the central bank rate cannot happen after an unprecedented increase in house prices without consequence. Common sense screams that too many people – Wendy and Tom included – fell victim to FOMO, made bad choices, borrowed excessively, showing unbridled financial illiteracy and played a big role in driving up the very prices, valuations, inflation and interest rates that now eat at them like malevolent microbes.

There is no easy solution here. Certainly not what politicians have been suggesting – spending $4 billion in federal funds to build more houses, none of which will be affordable, or handing out $2.5 billion in cash as Alberta’s new premier suggested last night. That fiscal stimulus only insures the CB will have to tighten further – since the goal is more pain, less spending and a realignment of housing costs.

Sigh.

Now listen to this story, from the CEO of a BC-based company, which happens to be a global leader in its field. Leonard is a blog dog, and tells us why he’s losing his key guy:

My number 2 just handed in his notice after 10 years with me in the only job he’s ever had.  He loves the job.  He currently owns a town home with a 30-min commute each way, too small (third child).  Wife is currently a stay-at-home mom (quit her job to be with the kids; between child care, PD days, and travel, she apparently only brought home a few hundered dollars more than not working).  Of note, he just re-financed with a variable pushing his monthly $800/month more – and scared witless with the 75 or 100 BP increase coming up.

They are VERY house horny. He wants a 4 br single detached – I get he wants his forever home at 33 and that he can no longer see the forest for the trees.

A large US company has snared him (salary only slightly more than he makes now – which I offered to exceed) – but here is the kicker – he can live anywhere in North America (with access to an airport) and travel 2-3wks/month to client sites.  Short of buying him a house, I have offered every reasonable inducement that’s practical.

The only thing he (they) see is their inability to ever purchase a detached in YVR; their only answer is to leave for somewhere else.  It’s all about the house. I have talked to him about everything financial and practical, including what it’s like to live in airplanes and hotels for most of the year – and the toll that takes on families – he’s between a rock and a hard place.

Sadly, places like 416, and 604 are only going to be suitable for the rich and the homeless. I have to admit, I thought everyone was happy and content, they are well paid, with bonuses, and opportunity for ownership – I, naively, didn’t see it coming or happening to me.

Could it be any clearer what we’re doing to the country? Pandering to the real estate sector, subsidizing owners at the expense of renters, encouraging home ownership as the goal of life and using the tax code to persuade people to buy real estate rather than invest in a balanced, responsible, debt-free way has consequences.

Families get ground up when rates rise. Talented people move to cheaper nations. Massive amounts of income flows to pay interest rather than be invested in the economy.

Either the central bankers keep the hammer down, and people like Wendy are blown up, or they relent to political pressure and we craft a bigger bomb for later. Choose.

About the picture: “I’ve been following your daily posts from far way for a couple of years now,” writes Pete. “Not all Canada-specific content is relevant for Europeans but always good to read sound advice and solid reasoning wherever you are. I am hoping you may one day publish the photo of our amazing Gaspy, a rescue dog that found a safe haven with us and the neighbours. Always ready for long random walks down the street and into the trails. Thank you for the free service.”

205 comments ↓

#1 Prince Polo on 11.23.22 at 11:46 am

Q: When is the shyster cartel going to be abolished and replacing with real estate fiduciary facilitators?

A: Never because Canadians love overpaying for things. Sadly!

#2 Doug t on 11.23.22 at 11:51 am

BINGO GARTH – Canada, a nation built on plywood and drywall – pile of hurt coming for the naive

#3 Faron on 11.23.22 at 11:59 am

“Massive amounts of income flows to pay interest rather than be invested in the economy.”

RE has been the biggest, dumbest sink of money, talent and labor for decades in Canada. The opportunity cost of the RE insanity, if calculated, would be utterly staggering. That the government (conservative and liberal) has stood by and let this mess develop for years and years is shameful.

The economic headwinds of all of these VRMs will be stiff as they trigger. That, the equity wealth effect and even the crypto/meme stock wealth effect will add fuel. Gonna be a rough go.

NB: in the us, one of the GFC triggers were the 5-1 ARM. Typical US real estate purchases are 30 year amort, 30 year fixed rate mortgages. The ARMs brought shorter term loans with an adjustable rate sting that shoe-horned buyers into homes as affordability tanked. That was part of the RE collapse there. Here, 5 year variables have been shoe horning for decades. No surprise there is a massive RE bubble.

#4 Dharma Bum on 11.23.22 at 12:00 pm

The allure of cities that are more favourable to live in than Toronto, Vancouver, or any of the other half-decent cities in Canada (Calgary, Ottawa) is difficult to resist if the opportunity ever presents itself.

Lower cost housing, superior infrastructures, better amenities, and of course, beautiful weather, are highly appealing and desirable.

If a young couple is given the chance to live in a great city south of the border for a third of the housing costs, they will be way ahead of the financial game decades before they stand a chance for financial freedom in Canada.

Just ask Mr. Money Mustache:

“After a few raises and new jobs, I moved to the USA, doubled the salary, but kept the used car and the living-with-roommates situation. Finally, a 20% downpayment had been saved for a house, so I made the jump to buy my first fixer-upper, sharing it and working on it with my future wife.

At this point, we had it made – double incomes and a low mortgage. We let the good times roll a little bit, enjoying the same luxuries as our peers and even doing plenty of international travel. But the difference was, we were spending only about 25% of our disposable income, while they were spending 90%.”

https://www.mrmoneymustache.com/2011/04/08/mr-money-mustaches-own-story/

Young people (most of them) need to leave Toronto and Vancouver if they want to stand a chance, financially.

https://canadatoday.news/bc/for-the-sake-of-their-financial-future-young-people-should-leave-toronto-and-vancouver-70356/

#5 Brett in Calgary on 11.23.22 at 12:03 pm

Every Canadian gets the Canada they deserve.

#6 Linda on 11.23.22 at 12:15 pm

Sad tales of woe today, starting with the $1 million townhouse. What with the rise in interest rates sounds like a lot of folks are going to be crying in 2023, if they aren’t already. Ditto the lure of cheaper housing south of the border. Thing is, even if RE prices dropped by half in the hot markets, the fact is the resultant lower RE values would still be priced well above what your average Canadian household income could easily handle.

As for government intervention, in the case of Alberta there is supposed to be an election come May 2023. So vote buying. Plus the price of RE on the prairies is actually reasonable compared to just about everywhere else. One can buy a brand new 2 bedroom, 2.5 bath with 1 car garage townhome in Calgary. 1,393 to 1,468 square feet starting at $465K. A 3 bedroom, 2.5 bath townhouse with a 2 car garage, 1,605 – 1,645 square feet starts at $560K. As per the brochure, these places have all the fancy doodads – stainless steel appliances, granite countertops & the like – that lusty would be homeowners crave.

#7 Bubbles on 11.23.22 at 12:16 pm

Inflation is less than 7%. Three decades ago it was 12%. This is not the ‘most inflative time in 100 b years.’ Sheesh. – Garth

Do you actually think the average dog knows the diff?
The fact that houses were not outa reach then…now nose bleed territory. Int rates were not near zero..
Add 7 points to $1.5 mill vs 75k.
Bring wages in then and today.
There is no comparison.
You could work at the big grocery for $18 in 1984 a loaf of bread was $1. You could but a new car, a house and maybe a float cabin on the lake on the wet coast.
Apples to nuts.
Jeesh….

#8 dave on 11.23.22 at 12:17 pm

Every time the interest rates go up – the stock market tanks. All we see majority of the time is RED.

So if there are a few more rate hikes – then many more months of stock market red and our portfolios taking a beating.

#9 Dolce Vita on 11.23.22 at 12:21 pm

Bomb.

Rates aren’t going down any time soon.

Creative Destruction. Bad economic actors purged from the economy for a decade, new actors come in and hopefully invest borrowed money into productive assets.

Only way they will learn.

Misery for years to come otherwise.

——————

Germany today, before the game with Japan decides to virtue signal forgetting they are a bunch of overpaid primadonna jocks, often 2 bricks short of a full load:

https://twitter.com/RaiSport/status/1595406046113058817
[they were muzzled ’cause they couldn’t wear their human rights armbands – IQ 51-70 team]

The LOST TO JAPAN. 2-1.

Well, the memes seconds after starting rolling in (my fave by Troll Football – others but Garth would shoot me if I provided the links):

https://twitter.com/TrollFootball/status/1595432246294458368

Japanese react at home to the win, note how law abiding they are, too funny:

https://twitter.com/2022_QatarWC/status/1595441906045300737

… and they cleaned up after themselves post game:

https://twitter.com/brfootball/status/1595449590810935297

———————-

Speaking of upsets, here’s me waiting for an UPSET in about an 1:45:

Team* Hortin’s vs. Belgium

And come up with something better than Go, Canada Go! at the game and NO, Allez, Canada Allez! does not count.

* Tim in Italian.

———

GARTH:

DISTRESSING …

“Canadian corporations reported a quarterly decrease of 8.1% in net income before taxes (NIBT) in the third quarter. The financial sector recorded a decline of 11.6% in NIBT.”

https://www150.statcan.gc.ca/n1/daily-quotidien/221123/dq221123a-eng.htm?HPA=1

#10 Bill zufelt on 11.23.22 at 12:27 pm

Generational mortgages anyone? Japan has had 100 year mortgages for years and the Libs are going to feel tremendous heat by next summer. Japan RE prices are still less than 1/2 what they were in 1990 by the way.

#11 Felix on 11.23.22 at 12:36 pm

Pandering…..

…to dogawful mutt lovers, with yet another redundant dog pic…how about some balance and diversification?

#12 IHCTD9 on 11.23.22 at 12:37 pm

As long as we have LDP in charge, you can bet it’ll be “craft a bigger bomb for later”

I doubt we’ll make it till 2025 without some stupid policy goosing RE materializing. Trudeau doesn’t have the brass to withstand what is coming. He’ll “work for Canadians”, and blow an even bigger hole below the waterline.

#13 Bob on 11.23.22 at 12:43 pm

Logic tells us a historic increase in the central bank rate cannot happen after an unprecedented increase in house prices without consequence.

But haven’t you already said that this consequence is maybe another 10% to 15% drop in house prices? Big deal. Some days I wonder why you talk so much about reason and logic. We all know that the housing market, and indeed all markets, are driven by greed and fear.

Interesting anecdote from the CEO. I confess that I’ve considered moving to the states too, even with the crazy politics and well-armed wingnuts. Down there, I could afford a nice place to live in a good neighbourhood and make more money for doing the same job I’m doing now. Of course, children complicate everything. It’s not an easy choice.

The consequence this post clearly referred to is financial distress among the overly-indebted. – Garth

#14 Shirl Clarts on 11.23.22 at 12:54 pm

#5 Brett in Calgary on 11.23.22 at 12:03 pm
Every Canadian gets the Canada they deserve.

You’re right, Brett. Better luck next time!

https://calgaryherald.com/news/local-news/calgary-lotto-max-winner-70-million

“This isn’t just a win for one individual. This is a win for all of Alberta,” said Dan Keene, Alberta Gaming, Liquor and Cannabis vice-president of gaming.

#15 Bubbles on 11.23.22 at 1:01 pm

My kids working in a factory for $25 hr. He’s a slave and I warned him…he could be running my empire but kids are diff today…he’s 29. Step kid or i would have pushed him harder. He’s a softy sadly
Tell him 7% on a $6 or 7 eggs or loaf a bread it different than 11% in the 70s.
It’s the compound effect that crushes you.

#16 Tom on 11.23.22 at 1:06 pm

Most that have any kind of professional job will likely be able to handle the increase in mortgage payments, they’ll do anything to avoid selling. They’ll cut back in other areas. By the way TD Bank has stated that they think most of the drop in prices has already played out. So Vancouver seems immune. Prices spike over 20 percent in two years and they drop 6 percent. Big deal.

#17 Dave on 11.23.22 at 1:07 pm

Re Dharma Bum

Living in the states is fine as long as you don’t get sick or get shot…

#18 Katherine on 11.23.22 at 1:09 pm

Felix
…to dogawful mutt lovers, with yet another redundant dog pic…how about some balance and diversification?

I know Felix…. I sent Garth a photo of my beautiful cat and am still waiting to see him posted.

#19 Diharv on 11.23.22 at 1:09 pm

Not locking in a long term fixed rate when they are at rock bottom is mind boggling. You’ve been saying for a long time that the rates were going to go up eventually so the first couple in the blog can’t say they were’t warned.

#20 Dolce Vita on 11.23.22 at 1:10 pm

#11 Felix

GET.A.LIFE.

If you don’t like this Blog, find a Cat Blog.

Never once have I read anything remotely ON TOPIC from you.

Always about Cats.

What is wrong with you?

#21 Tom on 11.23.22 at 1:11 pm

“TD economists believe that most of the damage in the housing market has already been done” Globe and Mail.

So prices go up in Vancouver 30 percent in two years and now with high int rates they drop 6 percent and these economists think the damage has been done?

#22 Dolce Vita on 11.23.22 at 1:17 pm

#15 Bubbles

It’s the compound effect that crushes you.

—————-

Nailed it.

I mean, it’s only been since early this year prices going crazy. The pain is just beginning. And Cdns, per yesterday’s Retail Trade Sales report from StatCan, have not altered their spending habits overall.

Means rates not working.

More pain to come esp. at the slow pace BoC is raising rates and size of the rate increases.

1,600% says Garth.

You know, 1/2 of f all is still f all, sorry Garth but it is.

Early 80s rates raised quickly and to nosebleed heights. Inflation stomped down.

BoC is prolonging the misery. The suffrage has yet to begin with the Cdn Consumer.

The compounding is DEATH BY A THOUSAND CUTS. No such thing as you can only shoot me once, sorry, not with high inflation.

#23 Bubbles on 11.23.22 at 1:17 pm

I want for Xmas.
1. For T and C to go away.
2 Turn up LNG and start selling to other countries its safest and cheapest to keep peeps alive.
3. Natgas is needed for fertilizer daaaa pls make more not less
4.shrink gov and crippling beacracies
5.stop waisting money…it’s billions.
6. We need cheap fuel to dig batteries out of the ground.
So we can afford 3,000 lbs of batteries that will fail in our EVs. There many issues here.
I’ve got 5 more but I know I’m getting coal anyway.
No more sugar Garth.
Sad pisspoor management.
God pls wake Canadians up…most importantly..
Thanks Garth your input is truly invaluable.

#24 Fiendish Thingy on 11.23.22 at 1:22 pm

And after all this, I’ve still yet to see a single politician, from any party, suggest that the CMHC should be dissolved, and that lenders should assume ALL the risk of their mortgages.

Even if CMHC continued to insure existing mortgages, requiring lenders to assume all the risk moving forward would make housing affordable very quickly.

#25 Sail Away on 11.23.22 at 1:27 pm

Leonard’s employee may be making a wise financial decision by moving to the US. Choose location carefully and he could get a fine 4BR for $200-$400k, so basically a rounding error on their townhouse. And no ban on foreign ownership.

Also, there are free school breakfast and lunch programs in many states, based on household size and income. If they keep playing the procreation game, they’ll be able to fill the 4BR to overflowing and feed the spawn for free. And, and… kids born there will be dual citizens.

Smart man. I’m Sail Away and I approve of this choice.

#26 Summertime on 11.23.22 at 1:30 pm

If we measure inflation the same way as in the 80-es it would be 15-18 %, not 7 %. CPI is not ‘the inflation’.

Rents alone increased by 26 % in a year.

Lies and ignorance will not help in retaining the top talent.

It can’t be a top talent if stupid to fall for this.

#27 Zero immigration in Japan on 11.23.22 at 1:30 pm

Generational mortgages anyone? Japan has had 100 year mortgages for years and the Libs are going to feel tremendous heat by next summer. Japan RE prices are still less than 1/2 what they were in 1990 by the way.

They don’t bring half a million slaves a year to pick-up the slack for the indebted government and earlier slaves.

#28 Captain Uppa on 11.23.22 at 1:34 pm

I have said before that I used to cheer on the RE boom as all I saw was my home’s value skyrocketing and thus my own wealth.

But I have completely changed my tune. When I drop my kid off at school and all I see is RE ads everywhere, it makes me wanna puke.

I feel doubly as sick when I see fancy Audis and BMWs pull up in my neighbourhood to scoop up homes for them to rent out to anyone with a heartbeat and can pay monthly. They are from further off affluent hoods, who only became so because their homes shot up in value due to low rates. So now these brilliant investors lever themselves up and invade other areas to make more money.

I hate it. All of it.

I don’t wish harm on anyone, but to those who levered up for greed … I have no sympathy for what is coming your way.

#29 Bankrupting Landlords is good for the Economy on 11.23.22 at 1:42 pm

Leonard’s story is far from a fluke. I know many who left the Lower Mainland for greener pastures. My best example are a couple of software engineers ( they met at work) who left for Austin. Yes, home prices are high there too but their take-home salaries doubled.

Real estate bulls always say that “40,000 people are moving to the Lower Mainland every year”. Was that ever true? Are they only counting the homeless?

#30 Bankrupting Landlords is good for the Economy on 11.23.22 at 1:45 pm

#1 Prince Polo

Sadly you’re right. Canadians don’t mind getting gouged. Just look at eggs and dairy.

#31 Ponzius Pilatus on 11.23.22 at 1:48 pm

Re: Alberta Premier dispenses 2.5 billion in cash.
Wow.
I thought only leftwing commies spend like “drunken sailors”.
Vote buying at its best.

#32 Faron on 11.23.22 at 1:53 pm

I was told that, after the elections, oil and gasoline prices would pop back up ’cause SPR… Yet… WTI down 13% since election day. Muh politix! Turns out oil is a global geopolitical beast that DGAF about a drop in the bucket SPR dump.

More hilariously, the US gov’t could opt to refill now and make a nice 13% profit. Which was stated in their strategy briefs issued when the SPR was accessed.

Of course the conservatives will never own up to being so wrong on yet another issue.

#33 Ponzius Pilatus on 11.23.22 at 1:55 pm

17 Bankrupting Landlords is good for the Economy on 11.23.22 at 1:45 pm
#1 Prince Polo

Sadly you’re right. Canadians don’t mind getting gouged. Just look at eggs and dairy.
——————-
What about eggs and dairy?
Very little price change where I shop.
And all organic.
If you want to make a case for inflation, talk about the cost of a head of lettuce.

#34 go Canada go on 11.23.22 at 1:58 pm

@#9 Dolce Vita on 11.23.22 at 12:21 pm

how’s the Italian team fairing?

#35 Ponzius Pilatus on 11.23.22 at 1:59 pm

20 Dolce Vita on 11.23.22 at 1:10 pm
#11 Felix

GET.A.LIFE.

If you don’t like this Blog, find a Cat Blog.

Never once have I read anything remotely ON TOPIC from you.

Always about Cats.

What is wrong with you?
——————-
Dolce, you always talking about Italia.
What’s wrong with you?

#36 Bubbles on 11.23.22 at 2:00 pm

#13 Bob on 11.23.22 at 12:43 pm

Bob…housng is stabilizing. A market that looks more normalized. ( Garth no? )
People can now make more sound decisions on actual more realistic numbers.
Peeps need a home and unless forced to sell will not do so. Flippers are toast thank God. So sick of bubble boob tube telly.
Don’t count on another 15% drop.
Go to the lumber yard. A 6inc × 10ft pvc plastic pipe is $110 to $130 if you can get it. Shuttering the energy complex bolsters commodity prices. Houses are built from those.
Yes the US is cheaper depending on geo…10x the market.
My buddy built a house in Birch B last year. $400usd Sq…
It’s dangerous as hell in some areas down there now.
I’m reluctant to jump in the rv and head south now.
Even though we have PPManagement here Kanada still better than most…although I’m shopping.
It’s just a number….just think bigger.

#37 TalentScout on 11.23.22 at 2:05 pm

A capital gains tax of 5% on one’s principal residence. We need to put some sand in the gears similar to a Tobin Tax to disincentive speculation and take some of the shine off of ownership. Makes no sense to allow these gains to go untaxed…

#38 Ponzius Pilatus on 11.23.22 at 2:09 pm

Sure, Computer People move to the States.
Lots of layoffs happening in the field, and more to come.

#39 Ponzius Pilatus on 11.23.22 at 2:12 pm

#25 Sail Away on 11.23.22 at 1:27 pm
Leonard’s employee may be making a wise financial decision by moving to the US. Choose location carefully and he could get a fine 4BR for $200-$400k, so basically a rounding error on their townhouse. And no ban on foreign ownership.

Also, there are free school breakfast and lunch programs in many states, based on household size and income. If they keep playing the procreation game, they’ll be able to fill the 4BR to overflowing and feed the spawn for free. And, and… kids born there will be dual citizens.

Smart man. I’m Sail Away and I approve of this choice.
———————
So, why are you still here.?
Follow your own advice.

#40 Steven Rowlandson on 11.23.22 at 2:14 pm

Bitcoin and real estate need to do the right thing and that is crash and burn and never ever recover! We need high double digit interest rates that are high enough to deter government from running deficits in order to correct the financial sins of the nation and the world in general.
Work, production, saving and inventing should be the only way to prosperity, and it really is that simple.

#41 Beavis on 11.23.22 at 2:17 pm

Wow. A 33 year old working with a CEO (maybe with a ‘chance’ to eventually be the big boss) goes to work for an American company where he’ll likely be another number……Just to get a house.

Real estate obsession has made this country so uncompetitive. So much tied up capital in a dead asset which could be used to build businesses. Sad.

#42 Sail Away on 11.23.22 at 2:20 pm

This house, for a one-minute search example. 16 minutes to airport:

https://www.zillow.com/homedetails/114-Windslow-Dr-Rapid-City-SD-57701/117819321_zpid/

#43 Kit Marlowe on 11.23.22 at 2:20 pm

But Chrystia said we’d be fine if we just cut Disney Plus and check our Visa bill, right?

#44 ElGatoNeroYVR on 11.23.22 at 2:24 pm

So my understanding is that Leonard’s key guy is NOT moving to the US. He received a job for a US based company which requires him to work on the road for 2-3 weeks out of 4 .That is not the same thing. While he gets a work visa I am not convinced that he can live in the US full time as a legal resident.I am also not an expert on various types of US work visas.
Either way the point is moot. If you are on the road for this long there will be no family to talk about in a few years.
Sad that people make these choices just to own a house.
Either way ,my advice :
never buy with less that 50% down
never get job that requires 75% travel out of town when you have a family ,or ever for that matter.

#45 XEQT and chill on 11.23.22 at 2:24 pm

My personal terrifying theory is that the modern world has become so crazy (climate change, trump, political polarization, war with Russia, etc), that what is fundamentally happening is people’s nesting instinct is overruling their rationality. When everything is falling apart, people just want a safe comfy home to pass the days. Nothing else matters. Why invest for retirement 40 years down the road, when the scientists say 3 years ago, we needed a WWII scale effort to transform our global economy to avoid catastrophic climate change? Why not just stick your head in the sand, buy a house, and at least have some sense of physical security in your life for the future? It’s more of a zeitgeist than a concern people articulate, but it feels present in everyone’s choices these days. The attitude is one of “the world has gone to crap, might as well just enjoy the ride, and grab whatever you can get.”

#46 Shawn on 11.23.22 at 2:33 pm

The Mortgage Broker: Friend or Foe?

As a boomer who last bought a house in 1995, I have never used a mortgage broker which were probably just starting to become relatively common back then.

I was suspicious that I would pay more at a mortgage broker since they need to make a profit as well as the bank.

Later I learned that they get paid by the bank and (I think) get about the same amount of Commission no matter what the interest rate.

The crazy banks were giving these brokers better deals than they offered their own customers. And they had access to smaller lenders willing to give a better deal
So, all good right? Your mortgage broker could save you a lot of money. And you did not have to “dicker” with the bank which most Canadians find distasteful.

What I have never thought about until now is their HUGE incentive to have you go variable rather than fixed. How’sat, you ask? Well, their Commission rises with the size of the mortgage.

With a bigger mortgage your broker gets a higher Commission. And a variable rate means you can get a bigger mortgage for the same payment.

Humans, being human, respond well to cash incentives.

So, your mortgage broker had a big incentive to put you in a variable mortgage so you’d get a bigger mortgage on a more expensive house.

And then she told you that all the other couples and people were doing the same. You felt comforted by that…

Nothing nefarious here, just brokers reacting to the incentives in front of them and borrowers going along with what everyone else was doing.

People got talked into doing dumb things. They have to accept responsibility for that. No point blaming the mortgage brokers who were just doing what the incentives told them to do.

#47 ElGatoNeroYVR on 11.23.22 at 2:41 pm

#61 Quintilian on 11.23.22 at 9:40 am
“B.C. Premier David Eby has announced a new law to crack down on money laundering. Instead of a presumption of innocence, under an unexplained wealth order, the onus falls on the alleged perpetrator to explain where money came from to purchase their assets”
==========
Sadly this will end up hurting regular people. Same as why the CRA pretty much neven chases the high rollers,and instead goes after the small fish.
This will never be used for the stated purpose as those that need it for illegal proceeds likely already have backups in place , so in desperation to show they are doing something the bureaucrats will just harrass anyone unlucky enough to upset them.
We don’t need new legislation ,we need to actually enforce the existing one.

#48 PeterfromCalgary on 11.23.22 at 2:41 pm

These stories are pretty sad. But I would like to remind people their are still a lot of places in Canada with affordable housing.

Here are the stats for Calgary according to CREA for medium house prices.

Single detached: $572,000
Townhouse $335,000
Apartment units $243,500
https://creastats.crea.ca/mls/calg-median-price

I don’t know where prices will by next year as higher interest rates could lower them. But than again higher rates may induce more people to move here since they can afford higher rates on less expensive houses.

Calgary is a big city! Metro Calgary which includes nearby cities like Airdrie has 1.6 million people. So most of the amenities available in the GTA are available here. However most amenities are on a smaller scale.

Sadly, Calgary’s only amusement park Calaway Park only has one big roller-coaster. So if you are a big roller coaster fan you should probably stay close to Canada’s Wonderland which I admit is pretty awesome. On the plus side Calaway Park is less expensive and the lines are not as long and it does have other rides.

Although if you like financial roller-coasters you can buy Bitcoin in Calgary with the money you save on your house and it will be just as terrifying as if you owned Bitcoin in Toronto.

#49 Shawn on 11.23.22 at 2:42 pm

Are Dairy and Eggs expensive?

#30 Bankrupting Landlords is good for the Economy on 11.23.22 at 1:45 pm
#1 Prince Polo

Sadly you’re right. Canadians don’t mind getting gouged. Just look at eggs and dairy.

************************************
I look at eggs in particular as one of the cheapest things you can eat. And they are not a processed food. Why should I get my shorts in a knot that the farmers make good money on them?

Milk is also cheap. I just now bought 4 liters for $5.49. And it’s not much more in the grocery stores – who often use it as a loss-leader – so my grocery magnate friend tells me.

Same Costco trip paid $33 for 300 Glucosamine capsules. I made a mistake on that and will return unopened and buy the Kirkland brand.

Same Costco trip Kirkland multivitamins $22. Kirkland large bag of dogfood $57.

Vitamins and dog food have no marketing boards but I am pretty sure they are making high profits on this.

I’d focus on the higher cost grocery items to complain about. Chicken is usually cheap but last week I refused to buy skinless chicken breast in a small package for $24 a kilo. Found the next day at a different store for $14 a kilo. Shop around. And maybe leave the farmers alone.

#50 Yukon Elvis on 11.23.22 at 2:44 pm

#23 Bubbles on 11.23.22 at 1:17 pm
I want for Xmas.
1. For T and C to go away.
2 Turn up LNG and start selling to other countries its safest and cheapest to keep peeps alive.
3. Natgas is needed for fertilizer daaaa pls make more not less
4.shrink gov and crippling beacracies
5.stop waisting money…it’s billions.
6. We need cheap fuel to dig batteries out of the ground.
So we can afford 3,000 lbs of batteries that will fail in our EVs. There many issues here.
I’ve got 5 more but I know I’m getting coal anyway.
No more sugar Garth.
Sad pisspoor management.
God pls wake Canadians up…most importantly..
Thanks Garth your input is truly invaluable.
+++++++++++
And I want to take a bubble bath with Halle Berry but she never returns my calls.

#51 Observer on 11.23.22 at 2:45 pm

#25 Sail Away on 11.23.22 at 1:27 pm

” kids born there will be dual citizens.”

^^^^^^^^^^^^^

Yes, beware the US citizenship tax trap. US is the ONLY COUNTRY IN THE WORLD that equates birth on its soil with lifelong taxpayer status on world-wide income, regardless residency.

#52 CL on 11.23.22 at 2:50 pm

It’s like you always say though, the BoC will have to follow the Fed so I don’t see political pressure on the BoC (if it exists) will affect anything.

#53 Bankrupting Facts on 11.23.22 at 2:52 pm

#29 “Real estate bulls always say that “40,000 people are moving to the Lower Mainland every year”. Was that ever true?”
******************************

Population stats are widely available easily accessible and very accurate.

But I wouldn’t want you to have to figure out how to access basic facts, that would ruin your fantasy world.

Like the one where landlords don’t exist. (rolling eyes emoji)

#54 A J on 11.23.22 at 2:53 pm

Although there is some level of personal responsibility that people need to take in this circumstance, there’s also a lot of responsibility on the shoulders of the banks. They’ve been handing out mortgages that people can’t afford for so many years. I bought a house a few years ago and the bank tried to give me a (close to) million dollar mortgage. They said I could afford it because I had $150k to put down. They told me to increase my mortgage in order to afford a “better house.” I said NO. And still, they pushed. The mortgage broker was friendly. He insisted that with house prices as high as they were, we might not find a house in our price range. He said he “cared” about getting us into the nicest house we could afford. I’m glad I stuck to my guns. But how many people would have pushed for the highest mortgage the bank would give them? Even if that meant being house poor? A LOT I’m sure. Part of me was happy people were getting a dose of reality, as people’s personal spending and debt loading have been out of control. Boats. RVs. Etc. on HELCOs during a pandemic. Insanity in hindsight. That reality is now just sad. And I’m hoping that while people learn a lesson through this, I’m also hoping they can make it through without losing everything. Especially at this time of year. Rough times ahead.

#55 Vote Buying on 11.23.22 at 2:54 pm

#31 Ponzi

About time the right caught onto how the game is played.

If you can’t beat ’em, join ’em.

#56 Stealth on 11.23.22 at 2:55 pm

Good afternoon, thanks for the post.

A different question, what are the positives?
Blog talks about 2 negative choices at the end, and look at the comments, however there must be something good here?

E.g markets rise, housing becomes more affordable, cdn currency follows USD and beats the rest, etc.

Garth could you or your respectable colleagues write a post on positive aspects going forward?

Thanks

#57 Mean Gene on 11.23.22 at 2:55 pm

The Wendy and Tom show need to work more than 40 hours a week, here’s looking at you girl.

#58 Entitled brats on 11.23.22 at 3:04 pm

Yes CEF, those awful entitled Trump brats, drug addled, hooker addicted, influence peddling….oh wait…

https://abcnews.go.com/blogs/politics/2014/05/bidens-son-gets-ukrainian-oil-company-gig

#59 Squire on 11.23.22 at 3:04 pm

#5 Brett in Calgary on 11.23.22 at 12:03 pm
Every Canadian gets the Canada they deserve.
——————————————————-
Well, sadly those that vote for people with nice hair have the same voting rights as any other Joe.

#60 Dolce Vita on 11.23.22 at 3:05 pm

Sorry Garth BUT … I am

FURIOUS.

Canada should have had at least ONE MORE penalty shot against Belgium. 1-0 for them so far.

Italian game commentators as furious as I am, they’re saying at least 2 more penalty shots should have gone to Canada. That referee is not very good if you ask me (and the Italians).

The 4 Mounties Cdn fans a big hit with the camera crew.

UPSET THEM CANADA!!

– Tifoso Canadese living in Italia.

#61 Dolce Vita on 11.23.22 at 3:07 pm

#37 Observer

Canada has Worldwide income as well.

What CRA reports to me yearly as a Non-Resident.

#62 Foggy on 11.23.22 at 3:10 pm

Just to get this straight, Wendy’s VRM (which could have had a 25 year term?) is for all intents and purposes now an interest only mortgage? How long will they be allowed to only pay interest only on their mortgage?

I think we are closing in on peak interest. As long as Wendy can get by paying an additional $200 to $300 a month for however long it take for interest rates to subside a bit, then that’s what will happen.

No other choice, unless they can get $1,000,000 for their old townhouse, which seems impossible now.

I just recall when the US had their housing bubble back in 2006, we all scoffed at their interest only mortgages. How time have changed!

#63 Me on 11.23.22 at 3:11 pm

I want to believe that these high rates will trigger forced sales across the country, but something tells me it won’t be so.

There are just too many sitting on the sidelines, waiting for an opportune moment to enter the market.
And the ones who bought will be forced to come up with more money (maybe a second job) and eat the $1.5 Costco hot-dogs for a few years until the mortgages come back down.
Nobody wants to be forced to sell. Selling for them means total capitulation, realized losses, being a joke to their families and friends.
They will work like crazy, borrow more money (from bank of mom), and pray the rates come down soon enough.

#64 Joe on 11.23.22 at 3:14 pm

Leonard, is it possible he just does not want to work for you anymore?, sounds like it.

#65 chalkie on 11.23.22 at 3:18 pm

Analysis expects house prices to drop by 10 percent next year in 2023 without a recession, as a direct consequence of the combination of skyrocketing house prices and high mortgage rates which has pushed many aspiring first-time homebuyers out of the market for the time being, while at the same time it squeezes the last bit of lemon juice out of the ones who bought on variable.

There are so many sad stories that I listen to on conference calls daily, it’s hard to focus on the positive, it feels like the mortgage world is so busted, it’s like a turtle on its back asking for help.

If we enter a recession and all indications say we will, home prices in Canada could drop as much as another 15 to 25 % in 2023 according to analysis.

As a result, housing demand “has been crushed and analysts are now starting to see house prices even go beyond lower than their previous predictions.

Canadian Bank Lenders are going to be more cautious in extending credit in this environment of falling prices and projected higher unemployment, so we will get less credit.

With the banks being scrutinized and criticized from the fraudulent paperwork accepted for prior loan applications submitted by clients with a helping hand from fraudulent applicants, real estate agents and loan officers.

The now exposed and well-remembered fraud mortgage applications uncovered by marketplace hidden cameras recently, I can unequivocally tell you, there is much more emphasis put into the mortgage applications now. Auditors are focused to sniff them out and they have a lot of work ahead of them yet, from the past two years.
There were a lot of financial eyebrows raised over the past criminal deception activity that helped fuel the FOMO run up in home prices. Fraud from applicants with lots of help, was more rampant than we would like to believe, it was just not the one Real Estate Company involved, it ran deep with even owners of some firms.

All those variables will conspire to weigh on house prices going forward.

The sudden increase in variable loans so quickly in 2022 was catastrophic to many families, to say it was not expected, it is something that is built into a variable, the word variable says it all, it varies.

My neighbor who sold his home and bought two rentals, curses the day that he went and got a LOC on his paid off home, it was so easy he says, His words: I never used my line of credit for two years and now look at the mess I am in, I am mad enough at myself to bite nails in half, how could I be so stupid.
The neighbor also went on to say, his inexperienced purchase of two rentals has caused a lot of friction in his household. He is working long hours to pick up the shortfall of funds and finds himself spending lots of time and expenses to keep up the homes that someone else is living into.

When we can show interest rates have peaked, then and only then will the markets adjust to how much risk it can afford with current prices and interest rates.

I read the real estate news daily from across the country and outside, there are many agents still trying to encourage sells with write ups like or similar, Part Sample of real advertisement:
Opportunity
: First-time buyers, investors and upsizers should seriously consider buying provided they have secure employment. In the long term, you are better to go variable since in 2023/2024 we should see the rates decline.
In my opinion, this is not good PR for the real estate industry, it’s an encouragement to set someone up for more family failures in this type of market.
It baffles me on where the agent’s information comes from to motivate such advertisement, they certainly do not read or follow the same economic predictions that our financial world follows.

It is your money, spend it cautiously and wisely, there are many real estate agents that would just love to take their commissions and walkway leaving you with the scars of a decade or life time to try and recover from your mistake, after all, you made the final decision.

Quote of the day: If it does not feel right, it most likely is not.

#66 observer on 11.23.22 at 3:19 pm

They are typical Canadians from what I can see.

Live in million dollar houses with no equity or savings.

The biggest crime in this country for the last 10 years, was 0% predatory interest rates.

#67 Nonplused on 11.23.22 at 3:24 pm

“Massive amounts of income flows to pay interest rather than be invested in the economy.”

Well, the money doesn’t disappear, unless the central bank disappears it.

Instead, the long suffering fixed income holders in this country are finally seeing a return on their investment. It’s still negative in real terms, which means borrowers are still borrowing for free, in real terms.

I mean, how long, really, did we think this could go on? The only reason lenders are lending at all (I mean the people who have money, not the banks, who just sleeve the transaction) is because losing 1% per year to inflation (2% inflation, 1% interest on your bonds) is twice as good or half as bad, however you want to look at it, as losing 2% per year to inflation sitting in cash.

Now, with inflation at 7% and maybe you can get 3 or 4% in bonds, lenders are actually worse off than they were before! Now they are losing 2-3% to inflation! And don’t forget in both scenarios they have to pay tax on their notional gains while actually being behind in real terms. Not only are they losing money in real terms, they have to pay tax for the privilege.

The only thing that makes the system work is that people have to put some spending off to tomorrow. Pensions and all that. Saving for a rainy day. But negative real yields imply the most economic thing to do is spend it all now, before it declines in purchasing power. It is only because people can’t do that that it works. But if yields go negative enough, they will.

It’s crazy. Nothing will make sense until rates are higher than inflation. This means all the people complaining about their mortgage rates now haven’t seen anything yet.

Maybe one day we’ll get to a point where inflation is 1-2%, and bonds return 3%. That world would be stable. This one isn’t. Negative real rates cannot be sustained. They imply the time value of money is negative. I don’t even know how to conceptualize that, unless there is widespread deflation. Instead what will happen is that the more negative real interest rates get, the more spending will be moved from the future to the present, driving inflation even higher and depriving the economy of capital. It’s equivalent to eating your seed stock. And it is self reinforcing.

Buy all the things. But don’t use credit. Inflation is still high, but rates are going to go even higher.

#68 Observer on 11.23.22 at 3:28 pm

#66 observer on 11.23.22 at 3:19 pm

One of us needs to change our name at this blog.

#69 Bezengy on 11.23.22 at 3:29 pm

#61 Quintilian on 11.23.22 at 9:40 am
“B.C. Premier David Eby has announced a new law to crack down on money laundering. Instead of a presumption of innocence, under an unexplained wealth order, the onus falls on the alleged perpetrator to explain where money came from to purchase their assets”

—————–

This undoubtedly confirms that David Eby also reads this blog.

#38 Bezengy on 06.29.22 at 4:27 pm

I say let the criminals pay up. Put all CRA agents, border guards, and police department personal on commission. Perhaps a minimum fine of $100k for knowingly not declaring income for starters. Maybe a mandatory audit of every citizen when they turn 60 in which they can explain in detail where they obtained their accumulated wealth.

#70 When the Whip Comes Down on 11.23.22 at 3:34 pm

That story is nothing new from where it sounds like it is.
Boardroom discussions have been the same since 2010 by my own experience.

#71 Observer on 11.23.22 at 3:36 pm

#61 Dolce Vita on 11.23.22 at 3:07 pm
#37 Observer

Canada has Worldwide income as well.

What CRA reports to me yearly as a Non-Resident.

^^^^^^^^^^^^
Canada has tax on world wide income for those with Canadian residency, but does not confer taxpayer status based solely on place of birth as the US does. Big difference!

It is easy to officially drop your Canadian residency when you move out of Canada and avoid taxation on your non-Canadian sourced income without having to renounce your Canadian citizenship.

USA taxes world-wide income of people who were born in USA regardless if they do not have US residency. For example, a pregnant Canadian who gives birth unexpectantly in USA has just created a US taxpayer for life unless said offspring officially renounces US citizenship.

#72 Sail Away on 11.23.22 at 3:38 pm

#51 Observer on 11.23.22 at 2:45 pm

…beware the US citizenship tax trap. US is the ONLY COUNTRY IN THE WORLD that equates birth on its soil with lifelong taxpayer status on world-wide income, regardless residency.

——-

Incorrect. And stop yelling.

#73 observer on 11.23.22 at 3:49 pm

#68 Ok, done.

I will no longer use that handle.

#74 Observer on 11.23.22 at 3:53 pm

#72 Sail Away on 11.23.22 at 3:38 pm
#51 Observer on 11.23.22 at 2:45 pm

…beware the US citizenship tax trap. US is the ONLY COUNTRY IN THE WORLD that equates birth on its soil with lifelong taxpayer status on world-wide income, regardless residency.

——-

Incorrect. And stop yelling.

^^^^^^^^^^^^^
OF COURSE IT IS CORRECT. And I will yell if I want to.

There is only one other country that has citizenship based taxation – Eritrea – and even Eritrea requires more than just birth on its soil to be considered a citizen, thus USA is the only country that equates birth on its soil with taxpayer status.

“The US is one of only two countries in the world that has citizen-based taxation, the other one being the east African nation of Eritrea. ”
https://brighttax.com/blog/citizenship-based-taxation/

#75 Neo on 11.23.22 at 3:54 pm

An enlightening video produced by a recent immigrant software engineer trying to live in Vancouver.

https://www.youtube.com/watch?v=DnNBEAk4Vn0&t=167s

His summer is as follows.

Canada is only for immigrants who are already wealthy.
Living in Canada as a software engineer is hopeless. The Canadian dream is a nightmare.
BC is a pretty cool place.
Wait till you get your Canadian passport and get out.

What a fraking disaster. When software engineers are giving up you have a very serious problem.

No government is this incompetent. It is massive corruption at the highest levels in Ottawa.

Everything that has transpired has done so according to the design of traitors pulling the strings on one of the most corrupt governments the world has ever know.

There are no elected ‘traitors’ in the federal government. Stop the inane hyperbole or go find another blog to pollute. – Garth

#76 Sail Away on 11.23.22 at 3:55 pm

#39 Ponzius Pilatus on 11.23.22 at 2:12 pm

So, why are you still here.?
Follow your own advice.

——–

I stay to provide sight to the unseeing, hope to the hopeless; benevolence, kindness and mercy to the downtrodden.

‘If ever in despair, Sail Away is there’, they say in my town.

It’s sorta my thing, that selflessness.

#77 Observer on 11.23.22 at 4:04 pm

#73 observer on 11.23.22 at 3:49 pm
#68 Ok, done.

I will no longer use that handle.

^^^^^^^^^^^^^^^
:)

#78 Dolce Vita on 11.23.22 at 4:07 pm

Belgiumree* 1 – Canada 0

Italian Commentator at the end of the game said it best:

“Belgium won but they did not deserve to.”

For example, Attempts on Goal:

Belgium 7 – Canada 26 (80′ mark)

I’m telling you this team will do well. If they can play as they did against Belgium, they can beat Croatia (ageing team, still some great players) and Tunisia. Watched their game today and both unremarkable.

3 TIMES CANADA got hauled down in the Belgian penalty box and ONLY 1 penalty shot. My neck veins are still pumping. The Italians could not believe it! They kept showing the obvious infractions. That Ref should be expelled from the World Cup.

* New EU football power, 12 players, 1 was the Referee.

——————-

Camera crew loved Cdn fan dressed like a Sheik. Probably from Alberta.

Cdn fans cheered “Let’s go Canada”. Do BETTER.

#79 Sail Away on 11.23.22 at 4:11 pm

#74 Observer on 11.23.22 at 3:53 pm
#72 Sail Away on 11.23.22 at 3:38 pm
#51 Observer on 11.23.22 at 2:45 pm

…beware the US citizenship tax trap. US is the ONLY COUNTRY IN THE WORLD that equates birth on its soil with lifelong taxpayer status on world-wide income, regardless residency.

——–

Incorrect. And stop yelling.

——–

OF COURSE IT IS CORRECT. And I will yell if I want to.

——–

So sure of themselves, today’s youth.

Any US citizen can renounce their citizenship and have no more taxpayer status in the US, on money earned separate from US interests, for the rest of their lifelong life.

#80 Dolce Vita on 11.23.22 at 4:15 pm

#71 Observer

I am going to be kind to you Sparky as it is clear to me you have never yet dealt with CRA as a Non-Resident that has assets.

“easy to officially drop your Canadian residency when you move out of Canada”

– CRA drops it for you. I cannot contribute to TFSA because I am non-resident.

“without having to renounce your Canadian citizenship.”

– The don’t care. If you have Cdn sourced income, you pay tax. Like I do.

“USA taxes world-wide income of people who were born in USA regardless if they do not have US residency.”

– same for Canada. For example, property owned outside of Canada has to be declared and if you own in and out of Canada, guess what on disposition?

Before I left I got informed. Try it some time. Where did you read all this BS of yours? Some expat website which is nothing but click-bait and wrong, every last one of them?

———————-

Do me a favor. Leave Canada. Move to the EU. Then let CRA, Global Affairs Canada, etc. know. Keep Cdn property, buy in EU. Dispose of one. Try topping up your TFSA, etc.

Won’t you be surprised at your first Non Resident Tax Filing.

#81 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 11.23.22 at 4:19 pm

Too bad Canada’s soccer team had so many players on it from the GTA today.

Hard to shake off that culture of losing…..

But they can all still sign up to be REALTORS to the Greater Fools there!

#82 Dolce Vita on 11.23.22 at 4:33 pm

#50 Yukon Elvis

“And I want to take a bubble bath with Halle Berry but she never returns my calls.”

———————

Well.

Aren’t we the ambitious Bill C-16 buxom 73-yr old.

Down, but not out. Good for you.

You have a kindred spirit here in Italia:

Silvio Berlusconi …

https://www.repubblica.it/2006/05/gallerie/politica/festa-noemi/1.html

Translation unnecessary.

———–

Bubbles is correct about Canada shooting itself in the foot with Energy. Go here:

https://www150.statcan.gc.ca/n1/daily-quotidien/221123/dq221123a-eng.htm?HPA=1

And read the section under this title:

“Growing concerns over contractions in the economy led to a decline in the price of commodities across many sectors”

So far, Cdn Oil Oracle Doug’s oil/pipeline picks doing very well …

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

but what about Cdn GDP, Balance of Trade for the rest in that Sector?

Does not read good to me. Then there is this section:

“Net income before taxes for the finance sector declines as economic uncertainty increased during the quarter”

which explains why my Cdn ETF heavy on financials is struggling.

DISTRESSING to say the least as an Investor.

#83 Foreclosure King on 11.23.22 at 4:34 pm

No sympathy. Really stupid generation paying a million dollars for a townhouse that is only worth about 120k in normal interest rate conditions of 7-8% for a 5 year mortgage. Let them all go broke as rates continue rising. We only buy at rock bottom prices so we will wait for them all to go into foreclosure and insolvency and buy them dirt cheap later

#84 Bubbles on 11.23.22 at 4:40 pm

#22 Dolce Vita on 11.23.22 at 1:17 pm
Yes….
I’m glad I stared early…we OK here.

#50 Yukon Elvis on 11.23.22 at 2:44 pm
Haha
That’s what keeps us moving fwd.
Sadly my wife’s only sis husband died on the 3rd. Her sis died testerdayay 66. Fortunately we have resourses we my wife can be off work sick for a week cause at 56 and retired. She can jump on a plane at any costs as she did a hr ago to go to Asia for her funeral.
It’s not important that my week was terrible but more important that I can provide what we need at any cost.
That she can see her only sis off. Life’s short.
And that’s why you need a good plan.
So you are not held hostage by debt and money.
But for most it’s to late.
Rising costs…and int rates will stunt your growth.
That my friends is a fact.

#85 NOSTRADAMUS on 11.23.22 at 4:41 pm

UNBIASED ADVICE!
RE/MAX giving unsolicited opinions/advice to potential homebuyers, Mmm, that’s like getting financial advice from a homeless person sleeping under a bridge.
New point. If you have a sick animal the first question the Vet will ask, what has Barky the dog being eating? The majority of Vet related issues are diet related. Humans are really not that much different. Your Doctor quizzes you on your diet and lifestyle, so many choices, shape up or it’s the bone yard for you. Your Banker quizzes you on your spending/saving habits and ticks the boxes “Dead Beat, No Mas, Tilt,” and he puts you on a bread and water diet.
New point. Speculation was not kind to Mark Twain, “There are two times in a man’s life when he shouldn’t speculate, when he can afford to, and when he can’t.”
One more. “A banker is a fellow who will lend you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”

#86 Bubbles on 11.23.22 at 4:46 pm

#83 Foreclosure King on 11.23.22 at 4:34 pm

Dirt cheap ain’t coming.
Nothing will be Dirt cheap unless we get a depression.
And then you would never have the guts to buy..
An ignorant statement.
Take it from someone that has 8 digits in RE and no debt.
I did my homework.

#87 Observer on 11.23.22 at 4:48 pm

#79 Sail Away on 11.23.22 at 4:11 pm

Any US citizen can renounce their citizenship and have no more taxpayer status in the US, on money earned separate from US interests, for the rest of their lifelong life.

^^^^^^^^^^^
DUH! Point being, you need to legally renounce US citizenship otherwise you are a US taxpayer for life if born in the USA, regardless other citizenships and regardless country of residence.

Note: USA has been steadily increasing the fee to renounce (currently $2500 USD) since more and more US citizens world wide have become aware of US citizenship based taxation.

#88 Observer on 11.23.22 at 4:50 pm

#80 Dolce Vita on 11.23.22 at 4:15 pm
#71 Observer

I am going to be kind to you Sparky as it is clear to me you have never yet dealt with CRA as a Non-Resident that has assets.

“easy to officially drop your Canadian residency when you move out of Canada”

– CRA drops it for you. I cannot contribute to TFSA because I am non-resident.

“without having to renounce your Canadian citizenship.”

– The don’t care. If you have Cdn sourced income, you pay tax. Like I do.

“USA taxes world-wide income of people who were born in USA regardless if they do not have US residency.”

– same for Canada. For example, property owned outside of Canada has to be declared and if you own in and out of Canada, guess what on disposition?

Before I left I got informed. Try it some time. Where did you read all this BS of yours? Some expat website which is nothing but click-bait and wrong, every last one of them?

———————-

Do me a favor. Leave Canada. Move to the EU. Then let CRA, Global Affairs Canada, etc. know. Keep Cdn property, buy in EU. Dispose of one. Try topping up your TFSA, etc.

Won’t you be surprised at your first Non Resident Tax Filing.

^^^^^^^^^^^
Not the brightest bulb are you?

#89 Dolce Vita on 11.23.22 at 4:53 pm

#83 Foreclosure King

I mean, you know, you want to say that as a good purge of BAD ECONOMIC ACTORS in Canada will usher in better times, hopefully.

But the flip side is this:

“The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006 …”

High % of VRM mortgages out there where people will have to walk away from their homes and debt obligations, somehow.

And we all know the FLIP SIDE ended. Google to the rescue …

People also ask

How many Americans lost their homes in 2007?

10 million

Nearly 9 million people lost their jobs and at least 10 million lost their homes. Within four years, 46.5 million Americans were living in poverty.

If what we read today about Wendy/Tom is endemic to VRM, Canada isin big trouble economically. When? I don’t know?

But the end is nye.

—————

Why today Garth torn, as am I:

“Either the central bankers keep the hammer down, and people like Wendy are blown up, or they relent to political pressure and we craft a bigger bomb for later. Choose.”

Why I chose BOMB.

Better than kicking the can down the road and repeating the above American experience.

#90 PeterfromCalgary on 11.23.22 at 4:57 pm

I love reading the Wall Street Journal but it seldom has articles about folks like me. So I was happy to see this one!

“These Travelers Would Rather Eat Glass Than Pay an Airline Fee ”

https://www.wsj.com/amp/articles/cheap-airfares-fees-baggage-carry-on-11669138040?mod=popular_AMP

#91 Bill Ferguson on 11.23.22 at 4:59 pm

“…their inability to ever buy a detached in YVR”. Such nonsense; it’s a massive bubble and bubble always pop.

YVR detached properties are not only seeing lower asking prices, median prices are weakening…on ever thinner sales volumes. November is shaping up to be another sales slam-o-rama.

Some people can never see past their own noses.

#92 The real Kip (Ret) on 11.23.22 at 5:00 pm

Not sure why someone would move to the states and think it’s cheaper. We just got back from visiting family in Florida so we didn’t pay for hotel rooms (except the drivedown) and I’ll tell you, prices are crazy high in Florida. A bit higher than here and then you realize you’re paying in US dollars with a 2.5% kicker on the credit card. Gas was slightly cheaper but that’s it, everything else is to the moon baby!

#93 enthalpy on 11.23.22 at 5:01 pm

sounds like the CEO was underpaying his employee.

#94 Dolce Vita on 11.23.22 at 5:04 pm

#86 Observer

You have Sail Away the ACTUAL US CITIZEN living in CANADA telling you that you are wrong.

You have me, the ACTUAL NON RESIDENT living in ITALIA that has filed SEVEN YEARS WORTH OF Cdn NON RESIDENT taxes with CRA telling you that you are wrong.

I have to ask, what is wrong with you?

Is it like pulling teeth for you to learn from people that are ACTUALLY doing what you are nattering on about and all of it wrong?

Grow up.

#95 Ponzius Pilatus on 11.23.22 at 5:11 pm

#74 Observer on 11.23.22 at 3:53 pm
#72 Sail Away on 11.23.22 at 3:38 pm
#51 Observer on 11.23.22 at 2:45 pm

…beware the US citizenship tax trap. US is the ONLY COUNTRY IN THE WORLD that equates birth on its soil with lifelong taxpayer status on world-wide income, regardless residency.

——-

Incorrect. And stop yelling.

^^^^^^^^^^^^^
OF COURSE IT IS CORRECT. And I will yell if I want to.

There is only one other country that has citizenship based taxation – Eritrea – and even Eritrea requires more than just birth on its soil to be considered a citizen, thus USA is the only country that equates birth on its soil with taxpayer status.

“The US is one of only two countries in the world that has citizen-based taxation, the other one being the east African nation of Eritrea. ”
https://brighttax.com/blog/citizenship-based-taxation/
—————–
Thanks Observer for the post.
Confirms again that there is no free lunch.
Unless you’re a free loader called Sailo.

#96 Dolce Vita on 11.23.22 at 5:17 pm

#86 Observer

And FYI on the

“Not the brightest bulb are you?”

Mensa IQ tested numerous times +162 off scale. EQ 95 percentile, still looking to smite that other 1/20 to go EQ 100 percentile. Not successful so far on the latter, they are a wyle bunch.

Go here, type in “162”, click Calculate and find out where you fit into the Cosmic Scheme of Affairs …

https://www.gigacalculator.com/calculators/iq-percentile-calculator.php

And don’t flatter yourself, from what I read of your prose.

#97 Ponzius Pilatus on 11.23.22 at 5:19 pm

Sailo,
So sure of themselves, today’s youth.

Any US citizen can renounce their citizenship and have no more taxpayer status in the US, on money earned separate from US interests, for the rest of their lifelong life
———————-
But then they would not be Dual Citizens.
Are all American Engineers as dense as you?
Eritrea sounds like a good place for you to move.

#98 active on 11.23.22 at 5:20 pm

let them all go broke

i bought $WULF at 0.66 cents yesterday and up 40% already…now that’s how you make $$$

#99 Dolce Vita on 11.23.22 at 5:30 pm

#95 Ponzius Pilatus

Bright Tax, not so bright.

Tell them to give me a call and I will share my Gov Canada NR tax returns with them and those of Gov Italia.

————-

Will Rogers, 1920s Cowboy Philosopher Humourist …

“All I know is just what I read in the papers, and that’s an alibi for my ignorance.”

Not much has changed since then.

—————

10 sec Internet search and now I am a Tax Maven although I have no actual experience in the matter.

But I can type.

#100 Sail Away on 11.23.22 at 5:31 pm

#85 Observer on 11.23.22 at 4:48 pm
#79 Sail Away on 11.23.22 at 4:11 pm

Any US citizen can renounce their citizenship and have no more taxpayer status in the US, on money earned separate from US interests, for the rest of their lifelong life.

———-

DUH! Point being, you need to legally renounce US citizenship otherwise you are a US taxpayer for life if born in the USA, regardless other citizenships and regardless country of residence.

———-

Let’s go with ‘tax filer’, since there are many exclusions that apply. Also eligibility for stimulus, social security, VA hospital, Medicare, hunting licenses (important to me) and tax-advantaged IRAs. Plus more, like, you know, cheaper and more diverse real estate.

Our whole adult family also got $1,200 completely unrequested and unnecessary stimmie checks from Pres. Biden last year. Just wasted it on booze and junk.

I personally couldn’t fathom giving up US citizenship and enjoy doing the taxes, shuffling funds between countries, and digging into all the cross-border tax advantages. We consider the US and Canada pretty much the same – just slightly different money rules and weird elections.

#101 John Shearer on 11.23.22 at 5:31 pm

$200.00 increase in mortgage payment “The house has put he family at financial peril.”
Ha ha..$200.00 is less than lunch at a decent restaurant in Toronto!

Well, that was insensitive. – Garth

#102 Ponzius Pilatus on 11.23.22 at 5:40 pm

#96 Dolce Vita on 11.23.22 at 5:17 pm
#86 Observer

And FYI on the

“Not the brightest bulb are you?”

Mensa IQ tested numerous times +162 off scale. EQ 95 percentile, still looking to smite that other 1/20 to go EQ 100 percentile. Not successful so far on the latter, they are a wyle bunch.

Go here, type in “162”, click Calculate and find out where you fit into the Cosmic Scheme of Affairs …

https://www.gigacalculator.com/calculators/iq-percentile-calculator.php

And don’t flatter yourself, from what I read of your prose.
——————
unfortunately for you, EQ is the new IQ.
Musk is slowly getting it.
Great IQ, but ackward with people .

#103 TurnerNation on 11.23.22 at 5:46 pm

Who here was sentient in the early 1980s?
Was it like this? Was there the feeling that rates would not go ‘that high’?
Easily I see 8% prime imo, 10-12% if we are to “own nothing and be happy” :-(

————————

Just wow. I penned this below post two years ago. More relevant now than ever.
We are nearing the garnishing [of] the wages time.

#201 TurnerNation on 05.07.20 at 8:55 am
The new life in Kanada 2020:
– Wake up in your 350 square foot “Smart Condo”
– Eat your delivered breakfast ration and watch the State AM news update.
– You work at home for one the banks, one of the few employers remaining.
– Your job there involves garnishing the wages of debtors. Initially you were apprehensive, one garnishee lives in your building even. But as time went on you become quite good at your job; achieving the most files handled per day. Your boss rewards you greatly.
– The corner of your PC screen has the live Covid numbers score. Win-Lost-Tied. You are pleased your Prefecture is keeping its numbers down.
– Evening is your delivered dinner; watching the State news PM update.
– Entertainment tonight is a virtual tour of a really cool place overseas your friend told you. So impressed were you that you made this place your new social media backdrop. It garnered many likes.
– You tend to your virtual anime dog – with its cheeky demeanor ; it has become so needy lately; you consider selling or trading it on the online market place for a more relaxing virtual pet.
– Next week you will vote online, for the Red party of course. They are the best choice as their actions resulted in very few new Covid cases this week.

#104 Shawn on 11.23.22 at 5:49 pm

The FED’s balance sheet has barely started to decline. They have barely started to sell long term bonds into the market.

I’m just now looking at an article in the Financial Analysts Journal that strongly suggests that stocks will decline if and when the FED really starts to reduce its balance sheet. Quantitative tightening. Fun times ahead?

Long term interest rates would rise. That would be a HEAVY gravitational pull on stock prices.

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

#105 Quintilian on 11.23.22 at 5:55 pm

According to an egghead at the University of Oregon:

“ Between the ninth and the fourteenth centuries,[ a primarily ]agrarian economy based on the values of land.”

According to some indebted, intellectually compromised posters, we are headed back to Feudalism.

I’m having trouble believing the latter.

#106 Tom from Mississauga on 11.23.22 at 6:04 pm

1/3 of mortgages are variable while rates are at zero? That’s mind boggling stupid!

#2 can file joint return and split income in the US, but he’ll find that out later as it’s not likely part of the decision.

#107 Reality is stark on 11.23.22 at 6:04 pm

This housing market will revert towards the mean. It will be 50% off the peak price in February.
As with all markets you learn the hard way.
A 50% hit hurts with most investments but it is exacerbated when it comes to real estate due to the leverage.
You would be naive to think that Canadians will not declare bankruptcy as a result of this slaughtering.
They will en masse.
The losses are going to be too great to manage, do not let anyone tell you otherwise, they don’t know what they are talking about.

#108 Craig on 11.23.22 at 6:05 pm

Over the past several months numerous economists have stated that overnight bank rates of 0-1% are both unhealthy (agree) and a thing of the past. Hopefully in a year or two inflation will stabilize begging the question, what will the normal overnight lending rate look like? Will 3-4% be the new norm or will governments revert to their previous ways? Also, with higher rates will central bankers have to raise their inflation target from the longtime annual preferred rate of 2% ? Opinions would be appreciated.

#109 Brian on 11.23.22 at 6:12 pm

I have been following this market for a long time and its toast. In 2023 Bank of Canada will follow the American FED and we will have more rate hikes. Most prices will hold till the spring market is a dud and summer will suck for sellers and their agents. Don’t be in such a rush to buy and you will save large. This market will take one more year to really come apart and it’s just the start of people learning that a 750.000 mortgage with an Audi payment can get complicated with rates moving up.

#110 under the radar on 11.23.22 at 6:18 pm

Warnings about a coming debt storm were sounded but not heard. The storm is here, the water rough and many will drown.

#111 AM in MN on 11.23.22 at 6:21 pm

#17 Dave on 11.23.22 at 1:07 pm
Re Dharma Bum

Living in the states is fine as long as you don’t get sick or get shot…

—————————————————

For the vast majority of US residents, they have health insurance, and thus you want to be in the US if you get sick, compared to say Canada or the UK.

About 98% live in areas with a zero murder rate. You don’t need to live in an inner city.

Wendy could buy the same townhouse in the suburbs of many US cities for about US$200k. Coquitlam isn’t exactly downtown, and try getting to the airport just about any time of the day.

The big holiday for the US tomorrow, bigger than Christmas in many parts. This year it’s off to the BIL’s house in the country, with a gun range in the back yard. Always fun for the kids, keeps their skills sharp. Ammo shortages are still a problem though.

#112 Paul on 11.23.22 at 6:31 pm

#101 John Shearer on 11.23.22 at 5:31 pm
$200.00 increase in mortgage payment “The house has put he family at financial peril.”
Ha ha..$200.00 is less than lunch at a decent restaurant in Toronto!

Well, that was insensitive. – Garth
/////////////////////////////////////////////

I guess John forgot, now it’s interest only nothing off the principle.

#113 kommykim on 11.23.22 at 6:39 pm

#49 Shawn on 11.23.22 at 2:42 pm
Vitamins and dog food have no marketing boards but I am pretty sure they are making high profits on this.

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

Vitamin, mineral and supplements sales dollars are 3-4x that of pharmaceuticals.
With a proper diet, the majority of people need none of these products.

#114 PBrasseur on 11.23.22 at 6:49 pm

1/6 of mortgages paying only interest, at best, and the number is growing. Likely also a large number of fixed mortgages near renewal will be in deep trouble also, very soon. To make things worse many will also be under water just as their payments explode. What a mess!

How this country can avoid a nasty financial crisis is beyond me!

#115 Wrk.dover on 11.23.22 at 6:51 pm

A million borrowed bucks, for a place to keep a change of clothes, take a shower, watch TV, and catch some ZZZ’s!

Nah. Even $3000 for the 1st month is ridiculous.

That’s $100/night, plus expenses. She didn’t factor them.

#116 Observer on 11.23.22 at 6:53 pm

#94 Dolce Vita on 11.23.22 at 5:04 pm
#86 Observer

You have Sail Away the ACTUAL US CITIZEN living in CANADA telling you that you are wrong.

^^^^^^^^^^^^^

Sigh, SA said I was incorrect, because he was being an arse (as usual) and because I did not mention in the particular cherry picked statement he referred to (though I did mention it in a subsequent comment) that a non-resident US citizen must renounce US citizenship to end their lifelong US tax status on their non-US sourced income.

And how do you know I am not also an “ACTUAL US CITIZEN living in Canada”? Regardless, many such Canadians are clueless as to their US taxpayer status which is why I bring it up – to help and inform. Or perhaps I am a tax specialist in Canada/US cross-border taxation.

Like I said, you are not the brightest bulb as you are not even clever enough to figure out why SA wrote what he did, nevermind take the time to investigate (did you check out the link I posted?)
whether or not US is indeed one of only two countries in the world that has citizenship based taxation.

Stupid people who think they are smart can be so annoying.

#117 crowdedelevatorfartz on 11.23.22 at 6:53 pm

@#58 Trumps Entitled Brats
“Yes CEF, those awful entitled Trump brats, drug addled, hooker addicted, influence peddling….oh wait…”
+++
The major difference between Trump and Biden entitled brats?

Biden’s kids wont have to testify against him under oath.
:)

#118 That Guy on 11.23.22 at 6:54 pm

Gentle Garth,
There are far too many folks gloating over the suffering over the 99 %er sob stories.

Any 1%er wins lately? How are your clients faring in the greener pastures?

#119 The Joy of Steerage on 11.23.22 at 6:56 pm

#96 Dolce Vita on 11.23.22 at 5:17 pm
#86 Observer

And FYI on the

“Not the brightest bulb are you?”

Mensa IQ tested numerous times +162 off scale. EQ 95 percentile, still looking to smite that other 1/20 to go EQ 100 percentile. Not successful so far on the latter, they are a wyle bunch..

..
Good work dude!.. Steerage needs all the help it can get to raise its IQ!

#120 crowdedelevatorfartz on 11.23.22 at 6:58 pm

@#76 Sail Away
“I stay to provide sight to the unseeing, hope to the hopeless; benevolence, kindness and mercy to the downtrodden.”
++++
What?
No Pickleballs to the boring?

#121 Observer on 11.23.22 at 6:59 pm

Another point for Canadians(or anyone) with US citizenship to keep in mind is that although renunciation of US citizenship ends your US tax obligations with regard to non-US sourced income going FORWARD, it does not relieve you of past non-compliance.

#122 Graeme on 11.23.22 at 7:01 pm

Much presented here strikes a deep chord. I have the kind of variable that just goes up so at least I won’t get this letter. As a long time reader I knew the risk, I even assumed it would happen–just not for very long. Now I admit it’s gone on a little longer than anticipated. 2023 isn’t looking much better at present either. I took the risk though knowing I could weather a significant increase though, and I didn’t buy recently at insane prices. Still, this is an epic crisis albeit a slow moving one. A fixed isn’t a solution either, it’s just a stay of execution. For awhile. Once this foments and gets rolling there’s going to be real trouble. A few more 50+ hikes and 6-12 more months and something’s gotta give. Homeowners, Earnings, Government debt, something and the Fed will be back. I don’t know how most people are getting by right now other than to say they’re on borrowed time (with a fixed). It’s not with borrowed money at these rates that’s for sure!! I can see stories like this all around me down here on the ground in the real world.

#123 The Original Jake on 11.23.22 at 7:01 pm

#13 Bob

You better be making a killing if you make that move. Sure, it’s cheaper to live and work in the US than here while you are working, just be prepared for the sticker shock when your time comes to tap into the health care system.

I have a friend who’s the POA for her uncle in the States. He is a Canadian citizen but left in his 30’s to work in top management for a Fortune 500 company. Boasted all the time about how cheap it was to live there compared to here.

Now in his late 80’s, no dependents, wife passed and he needs daily at home care 8 hours per day. Total home care cost 8K US/month + the cost of maintaining the home. Nursing home is not much cheaper. My friend is looking to bring him back over here before he runs out of money.

#124 jack on 11.23.22 at 7:01 pm

The bank should at least be able to get their commas in order while they gut their customers.

#125 Tony on 11.23.22 at 7:02 pm

Re: #32 Faron on 11.23.22 at 1:53 pm

You forgot the Christmas buying season. Black Friday sales and Christmas buying in my opinion are the reason. This doesn’t make the news but I know what goes on behind the scenes. Oil and gasoline prices will surge as the New Year comes in. Oil and gasoline price suppression equals more things bought at this time of year. I know how the American system works. In the future the exact same thing will happen.

#126 crowdedelevatorfartz on 11.23.22 at 7:03 pm

@#84 Bubbles
“It’s not important that my week was terrible but more important that I can provide what we need at any cost.”
+++
Yep.
Having the money to deal with stressful family crisis’s is huge.
Parents are on the inevitable slide and they had enough money to take care of their own homecare needs.

Huge financial costs for the elderly in homecare looming for everyone.

#127 Big Red on 11.23.22 at 7:03 pm

How can one own a million-dollar home, yet can’t find $200? Especially when they were stress tested?

Cry me the Delta River.

#128 crowdedelevatorfartz on 11.23.22 at 7:11 pm

@#97 Ponzie’s Plural People
“But then they would not be Dual Citizens.’
++++

Uhhh, yeah.
Thats the whole point.
Renounce your US citizenship to avoid US taxes.

I seem to recall several British Citizens in the news a few years back , who were born in the US and their parents moved back to Blighty when the kids were infants.
Never voted or worked in the US but the parental units had gotten them US passports.
Jump forward 30 years and they were working as high rolling financial types in London and received audits from the US taxman for failing to file their world wide earnings…..
Huge fines.

#129 Tony on 11.23.22 at 7:12 pm

Re: #103 TurnerNation on 11.23.22 at 5:46 pm

For me it was like the pot of gold at the end of the rainbow. I was raking in so much money from interest on my money I didn’t know what to do with it.

#130 Penny Henny on 11.23.22 at 7:12 pm

I saw this funny cartoon on a website today and it so reminded me of Faron. It goes like this.

Faron’s wife (from the bedroom)- Honey are you coming to bed.

Faron (hunched over the computer)- I can’t it’s something really important

Faron’s wife- What?

Faron- There is someone on the internet who is wrong!

#131 Fritz on 11.23.22 at 7:29 pm

I knew they would pull Canadians in the debt trap. This is why our family bought within our budget plus a $1,000 a month financial cushion. We locked in a 3.19% 10 year fixed rate mortgage until 2031. We also went short term with our GICs, GIC RRSPs, TFSA GICs and came due just last week invested them all in long term 5% GIC rates laughing all the way to the bank.

#132 Robert James on 11.23.22 at 7:37 pm

Money laundering ring tied to Vancouver real estate alleged by police group …. https://www.castanet.net/news/BC/397914/Money-laundering-ring-tied-to-Vancouver-real-estate-alleged-by-police-group

#133 hwy_str on 11.23.22 at 7:42 pm

After 6 years in YVR I fled earlier this year for same reasons as the ‘number 2’. Even with good 6-figure salary all I would ever be able to afford is a 1-bedder in good location or 2-bed apartment somewhere far. Renting forever is not an option (I know about all the financial benefits – but humans are not machines, I want to be able own my land and walls, at least eventually).

Now enjoying SoCal sun, much better salary and smaller gap to my own walls and land (SoCal is far from being cheap, but SO much more affordable in terms of salary/prices ratio than YVR)

#134 ElGatoNeroYVR on 11.23.22 at 7:42 pm

#92 The real Kip (Ret) on 11.23.22 at 5:00 pm
Not sure why someone would move to the states and think it’s cheaper.
==========
Because people posting all of that “US is cheaper” advice are not talking about California ,Florida ,Washington state ,Oregon .
They are talking about Montana ,Idaho , Wisconsin and so on or “small town USA”.
Not that they are wrong ,technically they are not; but it is not an apples to apples comparison.
Texas migh be the only valid comparison.
Else one can move from GVA to Calgary or Edmonton and achieve almost the same.

#135 Reality is stark on 11.23.22 at 7:43 pm

EQ is the new IQ, what a crock.
It’s not enough that the public sector worker is overpaid by a factor of 25%, but now they want a premium of 50% for their ability to empathize.
They want to suck you in to convince you to reward the risk averse to an absurd extent and destroy what little competitive advantage remains in this country.
I certainly hope the intelligence standards remain high for our surgeons. I am not particularly interested in their bedside manner while I am under anaesthetic.
The social engineering idiocy alive and well in this country will be the death of opportunity here.
The proof is in the pudding. You gravitate towards innovators when you want a job, because they are the people offering opportunity. They are looking to you to solve complicated problems. The more difficult the problems you can solve the more you get paid.
Don’t let the socialists tell you otherwise, they are lying, you’ll find out the hard way.
Know thyself and be cognizant of your capabilities.

#136 Outrage on 11.23.22 at 7:46 pm

So ,I guess there will be rate cuts with 40 year mortgages next year ! I’m in Mexico and they should implement a noise pollution tax, like carbon tax. Loud barking dogs, music ,parties and so on. Also have a noise pollution credits like carbon credits. Hopefully coming to Mexico because it works in Canada. Punish the noise polluters.

#137 Victor Llearna on 11.23.22 at 7:49 pm

Tom, Tom, the sheepers son,
bought a house before the interest rates ran.
Now he’s screwed and might as well move to Siam

#138 Shawn on 11.23.22 at 7:51 pm

The Market and Toast

#109 Brian on 11.23.22 at 6:12 pm

I have been following this market for a long time and its toast.

************************
I knew the market had jam, but I didn’t know that it has toast. Where do you follow this toast?

#139 Dr V on 11.23.22 at 7:52 pm

108 Craig

“…what will the normal overnight lending rate look like? Will 3-4% be the new norm or will governments revert to their previous ways? Also, with higher rates will central bankers have to raise their inflation target from the longtime annual preferred rate of 2% ?”
——————————————————–

Great question!

In her recent talk, Dep BOC gov Rogers stated that they dont know what the terminal rate will be, but that more hikes are coming. They watch many factors, and are very much aware of the variable rate mortgage issue.

Bloggers like “Summertime” insist on a double digit bank rate, as it must exceed the inflation rate of 8% or higher. Yes, that would cure inflation, and devastate the economy.

The inflation we have now had multiple contributors, with possibly the most important being the increase in the money supply from government support payments
and other largesse. Add in the low rates, supply chain
issues, and geo-political strife and it was the perfect recipe.

My thought is that any decrease (or decrease in the increase?) of the money supply could lower inflation, and, given no outsized effects from other factors, that continuing to increase the bank rate would continue to reduce the rate of inflation. If we graph the two
rates, they would eventually cross. Further increases could then put the interest rate into the range of
“Taylor’s rule”, though I think the rule is over simplified.

So no real answer for you, and I have just professed as if I actually know this stuff like many others on this blog like to do!

#140 Pena on 11.23.22 at 7:54 pm

Helped my grandmother today at BMO branch renew her RRIF. It was at an actual decent rate for 10 years 5.00%, starting her first minimum RRIF monthly payment at $16,200 all fully CDIC insured with 4 BMO financial institutions they have.

The percentage now 4% will increase the RRIF minimum payment that is will keep go up from there and as my grandfather passed away last year so now OAS from him and only 55% of his CPP. Her and my grandfather’s combined pension is only $25,000 a year so this really helps her live with dignity and not in poverty. He was not the smartest guy working 37 years as a janitor for many industrial employers but they both knew how to save alot for many years and live well within their means. My grandmother was left with no debt, a decent house and a maxed out TFSA worth $89,000 and that big RRIF will help my grandmother alot. She is in a much better position than most Canadians because they saved, prepared for heir future.

#141 Dr V on 11.23.22 at 7:54 pm

130 Penny – HAHAHA!

#142 San on 11.23.22 at 7:58 pm

>in North America (with access to an airport) and travel 2-3wks/month to client sites.

This is not a plausible long term arrangement for anyone.

#143 fisherman on 11.23.22 at 8:06 pm

Every Canadian commercial fisherman I have known over the last 4 decades that had any possibility of becoming a U.S. citizen has done so. Changed to U.S. registration for their boats & commercial fished in American waters for the rest of their careers. Never to fish in Canadian waters again. With some living in Canada in the off season for family reasons. This goes for the west coast B.C. I would venture a guess that over 90% of us commercial guys would gratefully hand over jurisdiction of our fisheries to America in a New York second. It takes a pretty damn good corrupt third world country to match DFO’s record of fish stock decimation.

#144 Mad Money on 11.23.22 at 8:15 pm

So, the BoC is ready to offload the most vulnerable in the housing market? This is the biggest signal of any housing correction/crash happening.

This guy in the YVR made the right choice – the same conclusion that most younger people in the Canadian metros have made.

It just isn’t worth it. Ownership and rental expenses in Canada steal all of the disposable income. It all goes to real estate.

Painful reset.

#145 Don on 11.23.22 at 8:27 pm

#21 tom…… subprime is contained. Have you heard that before.

#146 John Shearer on 11.23.22 at 8:34 pm

#101 John Shearer on 11.23.22 at 5:31 pm
$200.00 increase in mortgage payment “The house has put he family at financial peril.”
Ha ha..$200.00 is less than lunch at a decent restaurant in Toronto!

Well, that was insensitive. – Garth
/////////////////////////////////////////////

#112 Paul
I guess John forgot, now it’s interest only nothing off the principle.
Paul I did realize principle was no longer being reduced but $200.00 more a month to keep a roof over thier heads seems a reasonable temporary solution.

#147 Ponzius Pilatus on 11.23.22 at 8:34 pm

128 crowdedelevatorfartz on 11.23.22 at 7:11 pm
@#97 Ponzie’s Plural People
“But then they would not be Dual Citizens.’
++++

Uhhh, yeah.
Thats the whole point.
Renounce your US citizenship to avoid US taxes
————————
But then you would be still Canadian, paying taxes on Worlwide income.
My issue was with Dual Citizenship.

#148 Observer on 11.23.22 at 8:40 pm

#94 Dolce Vita on 11.23.22 at 5:04 pm

I have to ask, what is wrong with you?

Is it like pulling teeth for you to learn from people that are ACTUALLY doing what you are nattering on about and all of it wrong?

Grow up.

^^^^^^^^^

Tell me specifically what you think I got wrong regarding my posts on US taxation. I love to learn new things.

And please don’t reply with “because Sail Away said so” as that is not something a highly intelligent person – as you claim to be – would do.

#149 Observer on 11.23.22 at 8:45 pm

I must admit, as annoying as the Dunning-Kruger types can be, it’s also kind of fun to mess with them. Looking at you Mr Mensa, Dolce Vita.

#150 Doug t on 11.23.22 at 8:45 pm

#45 XEQT and chill

I believe there is a lot to this line of thinking

#151 Roofer on 11.23.22 at 8:47 pm

If Wendy sells, she won’t be better off with the price of rents north of $4000 per month

#152 Leonard's #3 on 11.23.22 at 8:50 pm

I spoke to Leonard’s #2 at the water cooler the other day..told him how bad I feel for him and he should have followed my advice to rent..
‘Daddy Trudeau gave me $500 to help pay my rent..no strings!!’

#153 Ed on 11.23.22 at 8:52 pm

Remember when we were convinced interest rates were going negative,hyperinflation would take hold and we would all die from monkeypox…

The turn tables.

#154 Bonnie Rea Gomes on 11.23.22 at 8:52 pm

DELETED

#155 Doing my Part on 11.23.22 at 9:13 pm

Hey Jake,
Those U.S. home care prices are on par with Vancouver Island.
MIL had to move from private assisted living, $8k per month, to the next level of private care at over $14k per month.
Public subsidized care isn’t pretty and costs about $4K.
Solution, don’t get old.

#156 Observer on 11.23.22 at 9:15 pm

#130 Penny Henny on 11.23.22 at 7:12 pm
I saw this funny cartoon on a website today and it so reminded me of Faron. It goes like this.

Faron’s wife (from the bedroom)- Honey are you coming to bed.

Faron (hunched over the computer)- I can’t it’s something really important

Faron’s wife- What?

Faron- There is someone on the internet who is wrong!

^^^^^^^^^^^^
Ha! I see myself and a lot of other regulars at this blog(and elsewhere on the internet) in that cartoon as well!

And it is funny because who really cares if some self-proclaimed genius “Dolce Vita” is dim, or some narcisstic troll “Sail Away” constantly stirs the pot for self-pleasure.

#157 Doing my Part on 11.23.22 at 9:15 pm

Work hard, invest in your retirement plan, and,
don’t get sucked into the pyramid crypto scheme.

#158 crowdedelevatorfartz on 11.23.22 at 9:23 pm

@#147 Painful Ponzies Patter
“My issue was with Dual Citizenship.’
+++

Yes.
Dual citizens with US citizenship are required to file tax returns annually for ALL worldwide earnings.
Thus a dual citizen that has barely lived and never worked in the US must file a US tax return …or face the consequences.
US dual citizenship…..Hardly an advantage for people who never use their US citizenship.
Another perk for the rich?

#159 I don’t know on 11.23.22 at 9:41 pm

“The obvious question: will swelling VRMs, trigger points and household financial stress lead to real estate chaos as more are forced to sell and listings augment? Or (as house floggers like Re/Max are speculating) will property cravings kick in come the Spring with buyers leaving the sidelines to jump in again?”

-Obviously there will be some stress, but not enough to move the needle on the whole market. Canadians rarely default, and this time is no different. Some speculative areas will see bigger declines, but highly sought after areas won’t budge. Actually the rate hikes will make sought after real estate even less affordable than it was before.

I will keep my views on our central bank’s policy to myself, but suffice to say once the market gets a whiff that rates are stabilizing (likely next year) then up she goes. Ditto stocks (already happening).

Are there buyers on the sidelines? Of course. Remember 95% of people complaining about “affordability” only want people like Wendy to default so they can steal the house from her and buy in. Those same people will snub their nose at actual subsidized rental units, and cry for a detached in an urban area right off the bat..because they deserve it. They aren’t really real estate bears, just frustrated and priced out bulls. Human nature is always the same and they are no different.

Logic? Logic dictates that the Canadian market is unique based on our culture, geography, banking system, demographics and so on. Houses are expensive here for a number of reasons beyond just rates. Logic dictates that life goes on. People get married, have kids, and need space. Timing the market, as with stocks, is a fool’s game and always will be. No one wants to borrow big bucks, but that’s the price to pay to own your own home in this country. Shelter is a right. Real estate isn’t.

IDK

#160 Ponzius Pilatus on 11.23.22 at 9:46 pm

As for Immigration and paying taxes.
Anyone mulling about moving to the States or Eritrea should consult with an immigration lawyer and tax expert.
Especially to the States with their America First policy.
They don’t take kindly to foreigners taking “Good American Jobs”.

#161 T-Rev on 11.23.22 at 9:48 pm

Quite frankly, Calgary and Montreal stand to benefit in the years ahead from folks like Leonard’s right-hand-man. The third and fourth most connected airports in Canada, and relatively cheap real estate. Not suprisingly, the folks at Teranet House Price Index have Calgary hitting an all-time high for resale values in October, up 2% in the last month and 16% from a year ago. Montreal is catching the same flu as Southern Ontario, but will get over it faster, and other than Calgary and Edmonton, is the Canadian city with the lowest peak-to-current decline.

Teranet isn’t perfect, but they have adjusted their math to try and compensate for the rapidity with which the market is changing. Word on the ground is that even here in Alberta sales have slowed, pricing is under pressure, and valuations are down (contrary to the Teranet view), but it’s as reasonable and unbiased datapoint as any other out there.

The world continues to change- places like Calgary will benefit from remote work if they maintain good public services, reasonable house prices, and international connectedness.

#162 T-Rev on 11.23.22 at 9:52 pm

Point of clarity in previous comment ^^
Montreal is the *major* Canadian city with the lowest peak-to-current decline. No disrespect intended to the folks in Moncton, Quebec City, or Lethbridge.

#163 jim on 11.23.22 at 10:14 pm

Only two of them when they bought.

Why buy a townhouse in Coquitlam and stretch yourself to the max?

How about starting with a one or two BR apartment in Pitt Meadows and pay that off first?

#164 Faron on 11.23.22 at 10:15 pm

#130 Penny Henny on 11.23.22 at 7:12 pm

reminded me of Faron

Rent free albeit creepy AF.

I’m sure I ain’t the only one who never gives you a second thought.

#165 Grunt on 11.23.22 at 10:19 pm

Add e-commerce and no longer paying in cash. I see people spending hundreds/month e-c instead of investing. Garth put it quite beautifully: Better to have investments than things.

Tap makes it too easy to part with money to my mind. Pre-pandemic. I’d pay for sundries with ATM drawn $20 bills. Which made me more aware. I do, I think this something that’s slipping by many people without the old impact.

#166 Waystar Royco Shareholder on 11.23.22 at 10:36 pm

Don’t worry, Garth’s old pal AJ Hazzi is holding a seminar next to learn how make money in a changing (read: plummeting) market.

Still lots of seats available!

https://www.eventbrite.ca/e/investing-in-a-changing-real-estate-market-with-aj-hazzi-tickets-463910056467?aff=email

#167 Work and Tumble on 11.23.22 at 10:36 pm

Brian post #109

Next time don’t copy and use my post from youtube, word for word without giving me a Quote or some credit.
Ron.L

#168 westcoaster on 11.23.22 at 11:25 pm

having only a $200 payment increase with a 1600% rate increase is pretty damn good actually.

#169 E. McMahon on 11.23.22 at 11:25 pm

Congratulations #101 – John Shearer!
You are our ‘douche-of-the-day’ winner!

#170 Summertime on 11.24.22 at 12:14 am

#139 Dr V on 11.23.22 at 7:52 pm

Bloggers like “Summertime” insist on a double digit bank rate, as it must exceed the inflation rate of 8% or higher. Yes, that would cure inflation, and devastate the economy.>

This ‘economy’ is consumption based to the extremes, built on the foundations of cheap debt and low rates.

It is sick to the fundamentals and needs to be rebuild, this is what I am asking for.

Here it is in writing in Financial Post:
<i?
https://ca.finance.yahoo.com/news/peter-hall-why-inflation-not-173610573.html

That reaction (to the rate increases) won’t be the same in all countries — but Canada’s weak fundamentals suggest a more acute response here.

Why? Because the shepple is so drown in debt that it can’t handle it

Other than that, the article goes on to defend the view/same as yours/ that inflation is not important, but the ‘economy’ is.

Is that the right path to continue on? Clearly no IMHO.

I am sorry but you can’t have a society drunk on cheap debt and insist on sobering it by more of the same.

There are no more stupid left to pay the bills and to continue to support the army of low productivity and service workers in an environment of severe capital misallocation and severe inflation/high taxes with close to nothing in return.

All thanks to clueless and incompetent central bankers and politicians.

Current rates environment is artificial, just let the markets rule it out and remove all the idiots who try to control it. They can’t.

Guess what will be rates once you remove the central ‘bankers’ from the equation.

The real inflation is just picking up steam and it is not going to go away any time soon.

If people are fine with a place where rents and food increase in double digits every year, while incomes and savings strongly decline with very high negative real rates, then you are in the wrong place.

#171 Summertime on 11.24.22 at 12:36 am

#67 Nonplused on 11.23.22 at 3:24 pm

Exactly. A great post, covering most of the important angles:

– Real interest rates are becoming even more negative.
– Velocity of money is increasing.
– Future capital is depleted.
– It is self reinforcing feedback loop that is just starting.

The attempts to talk it down/the problem of inflation/ with a hope that it will go away all by itself are pathetic.

There is no way in hell for inflation to go below 2 % any time soon. The central ‘bankers’ will change their target, that is for sure.
If they had any integrity they would insist on having real deflation of 3-4 % for quite some time in order to compensate for the oversized inflation that we experience now and that they do nothing about.

Keep in mind that degree to which the real inflation is understated is dangerous.

For example rates in GTA increased by 26.8 % in a year!
—————————–
As for dairy products/answer to another post/ – they are subsidized, i.e. the price is paid by the budget. On world scale dairy products have increased by around 20-30 % in a year.

#172 TurnerNation on 11.24.22 at 1:04 am

This is just the first quarter of the War on Middle Classes (launched in all the Former First World Countries, March 2020)

Tax dollars at work. Anyone here from Alberta? This is what the top health officers get paid. So ah, how’s that ‘hospital capacity’ looking? I’d urge all young people to finish school then join The Party. A lifetime at the trough. Just join The Party Comrades.

https://pbs.twimg.com/media/FiAahjaX0AI90w6?format=jpg&name=medium

—–

Get ready to be locked down in your UN Smart Cities. Travel will be for the rich. 2020-21 was just a test, get it? #essentialtravel only — you may afford.
Huddle around candles in enforced, global Energy Poverty.
This is why not a finger is being lifted in help of the Ukraine. Another Oil War. GEE. What a surprise.

.Federal carbon pricing to take effect in Nova Scotia, P.E.I. and Newfoundland and Labrador

.Ottawa rejected P.E.I.’s carbon tax plan, triggering 17.4-cent spike in heating oil next July

“EPA has proposed a new estimate for the social cost of carbon emissions, nearly quadrupling the $51 a ton to $191 a ton. It has already drawn legal challenges from a host of Republican-led states.
It will correspond to a $ 2-a-gallon gas tax.”

#173 ulsterman on 11.24.22 at 1:08 am

House lust victims. Seduced by VRM borrowing that was the cheapest in Canadian history – which everyone said would never change. The house has put he family at financial peril.

It’s easy to forget the vast majority of people don’t follow financial news and know little about economics. I don’t blame this woman for believing in 2020 that she better get in now or never. For 20 years prices marched relentlessly higher. Nothing derailed the magic of the Lower Mainland Housing Money Printing Machine. Until…it did.

#174 Bonnie Rea Gomes on 11.24.22 at 1:12 am

BTW border jumpers going for the double salaries ,lower taxes and cheap mansions in Dallas, the Avis car rental agent at DFW is Verne, great guy. Say hello for me.

What most companies do is a big benefits package inc health and all resettlement costs. In my case they gave me a free car rental for 24 months and a two bed suite at the Hyatt thrown in. I drove 23 different colour Camaros gas and insurance free. They want to make sure you stick around. Oh did I mention the huge per diem for groceries? I ate steak with the cowboys until my teeth hurt. Look, if you’re still in Canada, get smart.

#175 Dr V on 11.24.22 at 1:13 am

Apologies if this has already been posted

https://ca.finance.yahoo.com/news/peter-hall-why-inflation-not-173610573.html

#176 Balmuto on 11.24.22 at 1:13 am

Ron Butler put it most succinctly in a recent tweet:

“Nothing can fight the RE math: current prices don’t work with today’s mortgage rates

End
Of
Story”

So how far are we in to this the correction? Well this can’t be the beginning of the end when prices are unsustainable at current rates and rates are going higher still.

It feels more like we’re at the beginning of a slow motion train wreck.

#177 DON on 11.24.22 at 1:25 am

https://www.cnn.com/2022/11/23/business/global-house-price-slump/index.html

#178 The West on 11.24.22 at 2:33 am

Everything is fine.

I cancelled Disney Plus and Chairman Smith is sending me money.

What a joke…..

#179 dosouth on 11.24.22 at 3:15 am

#166 Waystar Royco Shareholder on 11.23.22 at 10:36 pm
Don’t worry, Garth’s old pal AJ Hazzi is holding a seminar –
——————————————————————

Wow I thought he was barred or in jail still or maybe both. He was sanctioned by the BC Real Estate board I don’t know how many times over the years. Guess you got to give him props for thinking people forgot about him.

tinyurl.com/e3s79j7a

#180 dosouth on 11.24.22 at 3:16 am

AJ Hazzi working link of Disciplinary hearings in BC starting in 2008

tinyurl.com/e3s79j7a

#181 jane24 on 11.24.22 at 3:50 am

I have a friend who now lives in Belgium who was born in the USA and left there when she was 4 years old. This makes her a US tax paying citizen for life, regardless of where she lives now. She is currently trying to give up her US citizenship and has been quoted $2500 to the US govt, an equal amount to the lawyer there to handle it and a 3 year waiting list from the US govt to get it done. She is currently on that waiting list.

Being a Canadian resident for tax purposes is not the same as being a Canadian citizen and holding a passport. None of my immediate family live in Canada but we all have Canada passports along with one or two others from previous lives. Any non-resident who has Canadian citizenship but lives elsewhere in the world must enter and leave Canada with a Canadian passport.

Once you are non-resident in Canada you pay no more Canadian taxes other than on Canadian income. You have to declare this income in your new country but due to double taxation treaties between most western countries in the world your new country credits you with what you have paid in Canada. You don’t get taxed twice. When I left Canada in the 1990s I left rentals behind in Canada but got fed-up of paying tax in Canada and getting the credit in England so I sold them to make life easier. Too much money going to accountants.

#182 Citizens vs Residents on 11.24.22 at 5:08 am

#94 Dolce Vita on 11.23.22 at 5:04 pm
#86 Observer

You have Sail Away the ACTUAL US CITIZEN living in CANADA telling you that you are wrong.

You have me, the ACTUAL NON RESIDENT living in ITALIA that has filed SEVEN YEARS WORTH OF Cdn NON RESIDENT taxes with CRA telling you that you are wrong.

I have to ask, what is wrong with you?

Is it like pulling teeth for you to learn from people that are ACTUALLY doing what you are nattering on about and all of it wrong?

Grow up.

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

No need to be insulting. As usual, reality is a little more complicated than we think.

Canada, like every country in the world other than the US and Eritrea, as correctly stated, taxes on the basis of residency. US taxes on the basis of citizenship. Big difference. Observer is right.

That fact you are resident in Italy and paying taxes in Canada doesn’t make you right. It means you are subject to one of the exceptions of the resident-based taxation: you have income derived from Canadian sources.

If you had chosen to cut all ties with Canada, you would not have to pay tax in Canada. An American without a single tie in America other than their passport does not have this option. They must file with the IRS as a citizen even if they’ve never set foot in the country. Totally different.

I am a Canadian citizen by birth. I left and cut all ties, and pay no tax in Canada nor am required to file a tax return. As such I declare no worldwide income, as none is earned in Canada. I AM liable for tax where I reside. Fortunately, the personal tax rate here happens to be 0 (Middle East). And I am glad I am not American. (Although, US non-residents do get generous exemptions.)

Hope this helps.

#183 Wrk.dover on 11.24.22 at 6:08 am

#131 Fritz on 11.23.22 at 7:29 pm
our GICs, GIC RRSPs, TFSA GICs and came due just last week invested them all in long term 5% GIC rates laughing all the way to the bank.-
_____________________________________

Or, you could have waited two weeks and got 5.5%.

As they say on this blog, bwah ha ha ha !

#184 Sail Away on 11.24.22 at 6:17 am

Elon Musk donated Starlink to Ukraine. One of the most significant humanitarian moves in history and a major factor in the war. Haters always change the subject.

Yes, he also fired a bunch of folks when restructuring his private company while giving 30% more severance than required. Cry me a river.

#185 Wrk.dover on 11.24.22 at 6:22 am

#143 fisherman on 11.23.22 at 8:06 pm
It takes a pretty damn good corrupt third world country to match DFO’s record of fish stock decimation.
__________________________________

I don’t get out much, but in the stockroom at the shipyard, I was recently told that the lobstermen of St. Mary’s Bay, Digby Co, what was richest lobster fishery on Earth a few years ago, are resorting to setting their traps far offshore in the mouth of Fundy, and beyond.

That was fast!

#186 SilentWatchtower on 11.24.22 at 6:42 am

The Senior Deputy Governor of the Bank of Canada said on November 22, 2022:

“We need lower house prices to restore balance to Canada’s housing market and make home ownership more affordable for more Canadians.”

https://archive.ph/wnBX6#selection-2431.105-2431.237

https://www.bankofcanada.ca/2022/11/financial-stability-in-times-of-uncertainty/

And the next sentence was this: “But lower house prices may add stress for those people who purchased recently. They will have reduced equity, and this may limit their options to refinance.” – Garth

#187 crowdedelevatorfartz on 11.24.22 at 7:17 am

@#172 Turner nation
Tax dollars at work. Anyone here from Alberta? This is what the top health officers get paid. So ah, how’s that ‘hospital capacity’ looking? I’d urge all young people to finish school then join The Party. A lifetime at the trough. Just join The Party Comrades.

https://pbs.twimg.com/media/FiAahjaX0AI90w6?format=jpg&name=medium

+++++

Thats quite the list.
$600,000+ per year for the CEO of Alberta Health
the rest average $400k
Fire all the politically correct “Talking Heads” and use the money for …more nurses? Doctors? MRI machines?

Would anyone notice them gone?
Except the media…that would actually have to go out and research a story instead of shoving a microphone in front of another of the endless, pabulum spewing, talking heads?

#188 crowdedelevatorfartz on 11.24.22 at 7:21 am

@#181 jane24
“Too much money going to accountants.”

+++
No argument there.
You left out lawyers.
Another fee grabbing profession.
And they love politicians that pass more and more laws every year to create more work for ….accountants and lawyers.

#189 crowdedelevatorfartz on 11.24.22 at 7:29 am

More bad news for The Donald.

https://www.reuters.com/article/usa-election-senate-alaska/alaskas-murkowski-peltola-win-reelection-in-latest-trump-rebuke-idUSKBN2SE02F

#190 Penny Henny on 11.24.22 at 9:21 am

#156 Observer on 11.23.22 at 9:15 pm
And it is funny because who really cares if some self-proclaimed genius “Dolce Vita” is dim, or some narcisstic troll “Sail Away” constantly stirs the pot for self-pleasure.

+1

#191 crowdedelevatorfartz on 11.24.22 at 9:35 am

@#185 Wrk.dvr
“the lobstermen of St. Mary’s Bay, Digby Co, what was richest lobster fishery on Earth a few years ago, are resorting to setting their traps far offshore in the mouth of Fundy, and beyond.”

+++
The ocean is warming.
Lobsters are moving north or further offshore.
Maine Lobstermen noticed the change a decade or so ago.

#192 Penny Henny on 11.24.22 at 9:36 am

#156 Observer on 11.23.22 at 9:15 pm
And it is funny because who really cares if some self-proclaimed genius “Dolce Vita” is dim, or some narcisstic troll “Sail Away” constantly stirs the pot for self-pleasure

///////

two words. Dolce Math

#193 cramar on 11.24.22 at 9:50 am

It is too bad Leonard’s No. 2 cannot put the long-term viability of his family first. Then he would consider renting as a viable option. That way he stays put and prioritizes being a father and husband. This is what counts! Family first! He is heading for a broken family, where all suffer. But hey, you will OWN a house…which will be lost during the divorce settlement anyway.

#194 Quintilian on 11.24.22 at 10:24 am

Nothing is normal

“Tiff Macklem acknowledges the Bank of Canada is losing money for first time”

The experts shot themselves in the foot.

But who will now pay the tab?

“Fast-forward to 2022. The Bank of Canada has raised the policy rate six times since March, taking the benchmark rate to 3.75 per cent from 0.25 per cent. Higher rates increase the interest payments the Bank of Canada pays on settlements it created to purchase financial assets during its QE campaign.”

https://www.msn.com/en-ca/money/topstories/tiff-macklem-acknowledges-the-bank-of-canada-is-losing-money-for-first-time/ar-AA14vc1A?cvid=5fe8de0ea117468d9bc000dc483c0381

Would Tiff and company bought the bonds if it were with their own money?

Quantitative easing was done to provide liquidity and a needed financial lifeline during the pandemic. This is exactly what CBs are supposed to do. Grow up. – Garth

#195 Sail Away on 11.24.22 at 10:41 am

Tesla full self driving is now active for North America and the company can recognize their billion dollar$ profit of deferred revenue.

Great company.

#196 Quintilian on 11.24.22 at 11:18 am

“Quantitative easing was done to provide liquidity and a needed financial lifeline during the pandemic. This is exactly what CBs are supposed to do. Grow up. – Garth”

Fair enough, all things being equal.

But can you find a quote from any reasonably respected organization/analyst/economist/academic paper, that emphatically state that interest rates were not held artificially too low for too long?

RE economists, and stock traders do not qualify for the stated purpose.

#197 Shawn on 11.24.22 at 11:29 am

High Government salaries

Thats quite the list.
$600,000+ per year for the CEO of Alberta Health
the rest average $400k

***************************
I was going to say I take some comfort that these government executives / managers with high salaries face high income tax rates on much of their salary. But whoops it’s not THAT high.

In Alberta the combined federal / provincial income tax rate is 41.38% starting at $165,430.

It rises in a couple of steps t0 43.38% above $227,668

Then 47% above $235,675 and finally the top rate, 48% above $341,502. (Now we talkin’ high income tax rates!)

The real saving grace or thing to take comfort in is that this tax WILL be paid. With no stock options and getting paid in salary and bonus, there is no escaping this income tax.

Unlike the many business people who can still engage in some amount of income spitting (My wife does the billing and some administration, I’m tellin’ ya).

Unlike the business owners who can leave the income in the business and defer taxes for years.

Unlike private executives who can be paid in ways that defer income or generate capital gains.

Thy tax will be paid.

#198 Diamond Dog on 11.24.22 at 11:55 am

#194 Quintilian on 11.24.22 at 10:24 am

Tiff Macklem didn’t arrive at his job until July of 2020 and likely didn’t have much short term influence over policy until September. Keep in mind a good chunk of money was printed before Tiff had a chance to influence things.

The government of Canada is facing a pandemic, is any central banker going to say no? Is it realistic to blame him for coming up with the money a government says it needs during a pandemic? Pierre Polievre might blame Tiff, but it just goes to show how much he doesn’t know. You know, an MP finance critic who also wanted to make Canada the Crypto capital of the world (his words). Choices like his haven’t aged well for good reason.

“Either the central bankers keep the hammer down, and people like Wendy are blown up, or they relent to political pressure and we craft a bigger bomb for later. Choose.” – Garth

Yeah… they got no choice Garth. It’s demand destruction or inflation destruction. The best and really, the only choice is the first but it’s still painful. A soft landing was a pipe dream, like transitory. I noticed some grumblings as of late related to this chart (scroll down below to see it):

https://www.rbcwealthmanagement.com/en-eu/insights/yield-curve-inversion-a-wake-up-call-for-investors

The Fed rate is now trading 60 basis points above the 10 year with spreads poised to widen. Every other time it’s happened, a recession comes. As stated a few days ago, if we see negative GDP in the first half of 2023, we won’t be able to call it a recession technically until late July of 2023 but the U.S. and by proxy Canada is headed for one.

It looks like China is headed for recession due to real estate falling apart there along with Covid and Europe is in recession and if the U.S. joins, the world is slipping into recession. We aren’t an island.

Earnings reports are laggard here but we should see the numbers hit the books in the first quarter of next year and beyond to wit, if traders wish to bet on rallies and correction trends, they can have at ‘er, its what they do but investors going long on equities shouldn’t bet the farm and give it time.

#199 Faron on 11.24.22 at 12:04 pm

#184 Sail Away on 11.24.22 at 6:17 am

You can tell there’s some bad Elon Musk behaviour in the news when Sail Away, apropos of nothing, feels like he has to blurt out an Elon defense. #SimpLyfe

#200 Mattl on 11.24.22 at 1:01 pm

I still can’t see a scenario wherby 2 trillion in RE equity vanishes (we are almost there NOW), houshold expenses go up dramtically, and we end up with a soft landing. Very few Canadians have even hit their trigger, core inflation is not reigned in, copr profits haven’t even taken a hit yet…. this has barely started.

Maybe that makes me a doomer, but where exactly is the turnaround going to come from? Without stimulus, consumer discretionary is going to evaporate.

#201 Mattl on 11.24.22 at 1:20 pm

Regarding the CEO, there was a path to retain that employee….let him work remote. He really had to see him in person every day?

Good luck recruiting top talent in any field that has moved to remote work.

Conversely, companies that have evolved are positioned incredibly well. The talent I’ve been able to recruit for remote work the past few years is top shelf and the tools available to collaberate remotely + targeted in office sessions make managing remote employees pretty simple.

#202 Dr V on 11.24.22 at 1:48 pm

170-171 Summertime

Thank you for your response. Funny how we both posted the same link.

The article was a good review of the current conditions,
difficulties in assessing data, a brief historical refresher and a reminder of potential risks of a possible (probable?) bank rate overshoot.

Your frustration with it all is quite evident. I share some of that frustration, but it comes down to how much financial hardship we are willing to risk and endure personally or heap on others. (Disclosure – I no longer work and have no debt).

And still difficult to say when the economy hits that
“tipping point”. 1%…2%…3…???% higher?

Trust me, you do not want a “deflationary spiral”

From [email protected]

“I still can’t see a scenario wherby 2 trillion in RE equity vanishes (we are almost there NOW), houshold expenses go up dramtically, and we end up with a soft landing.”

#203 Sail Away on 11.24.22 at 2:27 pm

#199 Faron on 11.24.22 at 12:04 pm
#184 Sail Away on 11.24.22 at 6:17 am

You can tell there’s some bad Elon Musk behaviour in the news when Sail Away, apropos of nothing, feels like he has to blurt out an Elon defense. #SimpLyfe

———

Sometimes my enthusiasm carries me away.

You know, probably the same as that excited tingle you get when thinking of me.

#unrequitedlove

#204 Pulp Faction on 11.24.22 at 5:06 pm

This is a premier example of why dating these days is so toxic.
I recently met a prospective date and she explained to me how her 23-year-old daughter wants to quit her entry level job but is “hanging in there” until her and her squeeze can get a mortgage. Then she wants to dump her job and let her same age hubby figure it all out on his entry level job salary.
Needless to say, I ran like a scared rabbit.
People have lost their minds, if they had one to begin with.

#205 Mr Happy on 11.25.22 at 7:54 am

“but here is the kicker – he can live anywhere in North America (with access to an airport) and travel 2-3wks/month to client sites.”

Reality? In couples therapy in 6 months…divorced in 1-2 years. I wouldn’t touch that gig for all the tea in China.