FFFA! income, rates & debt people

It’s that time of the week again!

Let’s get to our regular Friday Free-for-all post, this is our traditional end of the week news roundup and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

BC income growth worst in Canada
Why rate cut may not drop mortgages
Bankers keep filling the punchbowl
The Okanagon oil link
The British Columbia oil link
Recession? Again?!
Owners ask for reduced valuations

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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Royce McCutcheon
Member
Royce McCutcheon

http://www.cbc.ca/news/canada/british-columbia/craigslist-luxury-rental-scam-victims-stage-citizen-s-arrest-in-vancouver-1.2928845

Interesting story, but then, in the middle of the story:
“Tenants usually don’t have as much money as home owners do, and for them to lose a month or two rent, they feel it.”

Seriously?

KG
Guest
KG

John Ivison: $26B shock — Canada’s largest ever defence procurement handed off in sole-source contract

http://news.nationalpost.com/2015/01/21/john-ivison-26b-shock-canadas-largest-ever-defence-procurement-handed-off-in-sole-source-contract/

Six Figs Ain't What It Used To Be
Guest
Six Figs Ain't What It Used To Be

Given that everyone who can fog a mirror can get a 2.5% down mortgage on a condo and that renters-by-choice are the lunatic fringe, why not?

patriotz
Member

Isabella Mori lives in ‘tiny home’ in North Vancouver
The – whatever – is located in a mobile home park and my guess it’s on an Indian Reserve not subject to zoning regulations.

bullwhip29
Guest
bullwhip29

massive earnings miss from UPS due to weakness in the US; lowers guidance

lots of big bellweather co’s reporting next week

bullwhip29
Guest
bullwhip29

Black Friday pushes Canada’s retail sales to record high as inflation drops to 9-month low

http://business.financialpost.com/2015/01/23/black-friday-pushes-canadas-retail-sales-to-record-high-as-inflation-drops-to-9-month-low

-imho this is in part or entirely due to rapid decrease in cross border shopping (in Cda’s 3 largest mkts) and drop shipping to US PO boxes (as evidenced by UPS poor earnings). so net-net i am not so sure this is as positive as they’re making it sound and that a meagre 0.4% increase in sales is anything to get excited about.

Brian Ripley
Guest
Brian Ripley

I have the annual Demographia table of 35 Canadian cities updated for 2015 (data to 3Q 2014 – near bottom of page):
http://www.chpc.biz/demographia.html

Vancouver ranks 2nd most unaffordable city in 378 world markets after Hong Kong (1) and before Sydney AU (3). Last year the number 3 spot was Honolulu.

bullwhip29
Guest
bullwhip29

as i was saying…

Drop in Canadian dollar linked to fewer cross-border shoppers

http://www.vancouversun.com/business/Drop+Canadian+dollar+linked+fewer+cross+border+shoppers/10752596/story.html

with the loonie at < 0.81 it almost makes no sense for day trippers anymore (ie. groceries, gas etc) as most items are effectively at par now, if not more expensive. add to this the fact that items like eggs and poultry (where price discrepancy is greatest) are banned for at least the next 90 days. this will all translate into both a hit to monthly cash flow for many cdns and a precipitious drop off in sales for US retailers, tourist destinations etc that are located anywhere near Vanc, Ottawa, Toronto and Montreal (which i believe all rank in the top 25 largest cities in N.A).

space889
Guest
space889
Softy
Guest
Softy

The 186 SF house shows the extreme appeal of the detached house. So does huge price appreciation in SFHs. It is the Canadian dream. I think it comes down to a basic philosophical truth:

“Hell is other people”
Jean Paul Sartre

http://ih2.redbubble.net/image.11584802.5967/flat,550×550,075,f.jpg

space889
Guest
space889

@bullwhip29 – Black Friday was back in Oct, way before the current rout in CAD $

bullwhip29
Guest
bullwhip29

@ #11

uhhh, which calendar are you looking at? lol…

space889
Guest
space889
Most people under-estimate the risk of stocks, and over estimate the benefits of it’s liquidity. Given in the prevalence of HFT, stocks can flash crash in minutes on no news now and it happens regularly, just don’t get reported on as much. As well, adverse after hour news release can kill your stock the next morning when trading starts. Frankly when exchange are closed, your stock have zero liquidity and you can’t sell it to anyone at any price. And if some news result in a trading ban, good luck. Finally, remember that running a rental is running a business, same as Amazon, BB, RBC. The only difference is that a single house rental is much smaller scale and you can’t trade partial claims on future cashflow and control as easy as stocks/bonds. Each has its own pros and cons.… Read more »
space889
Guest
space889

Black Friday – The day after Thanksgiving holiday in US. At least a few months ago, Nov at the latest since it changes every year. Either way it was before the current big loonie plunge. Definitely doesn’t support your story.

bullwhip29
Guest
bullwhip29

@#13

most people underestimate the risk of owning RE on margin (effectively) while overestimating its status as a so called safe haven. as we saw in 08/09 RE, ABS mkts etc completely froze up too.

space889
Guest
space889
@Royce McCutcheon – I guess these tenants didn’t do a background check on the landlord like asking to see proof of ownership. Though, what can I say? Canada is a heaven for criminals. The victims could have been arrested for unlawful confinement, like that shopkeeper in Toronto. The fraudsters likely will not be charge due to either lack of resource, lack of interest, or simply not big enough losses/victims. The bank in this case will also not put a hold on the account, nor help with reverse any wire transfers, etc. I seriously doubt that $200K was withdraw in cash. So by the time police actually do some arrest, that money is likely all gone and unrecoverable. The punishment for these fraudsters are most likely suspend jail sentence or max 2 years in prison with really mean at most 1… Read more »
space889
Guest
space889

Though given this girl is Vietnamese and you know the stereotypes about Viets…this guy might want to watch his six…

Oh woops…that’s racist and bad…

unless off course you are trashing Chinese, then all is ok cuz whatever bad one says about Chinese it is all true and good and not racist.

bullwhip29
Guest
bullwhip29

@ #14
get a clue. black fri was at the END of nov (ie. the month that was referred to in the article regarding retail sales). you are correct in that the decline from early dec to present isnt factored in. going forward this means even less business for cross border retailers and less disposable income for cdns who have no choice but to buy their more expensive essentials here. add it all up and this translates into fewer nights out, trips to the mall, vacations and “things” in general (not to mention more earnings warnings from US co’s like UPS, Best Buy etc).

space889
Guest
space889

@bullwhip29 – Right…the importers who has to spend more CAD $$$ to pay for those imports priced in USD will simply keep the CAD price here the same. No sir, they wouldn’t raise the price here in CAD despite the drop in CAD$.

Geez…with that kind of analytical skill, how do you expect people to take your RE bearish arguments seriously.

space889
Guest
space889

ABS are a type of debt security traded in the markets, not a physical asset. Your argument basically validate my point that financial assets aren’t as liquid as some thinks and their liquidity can work against you when you need that liquidity the most.

bullwhip29
Guest
bullwhip29

@ #19

“the importers who has to spend more CAD $$$ to pay for those imports priced in USD will simply keep the CAD price here the same. No sir, they wouldn’t raise the price here in CAD despite the drop in CAD$”

i must have skipped this class. explain how this is bullish for the Cdn consumer

bullwhip29
Guest
bullwhip29

@ #20
during 08/09 financial crisis credit mkts seized up. if you believe this didnt have any effect whatsoever on lenders (and more importantly those that require financing to buy your house) then so be it.

KG
Guest
KG
Newcomer
Member
Newcomer

@space889

>>I would personally be more gracious to those who are subsidizing my lifestyle rather than mock them. Don’t bite the hand that feeds you as the saying goes.<<

I agree with the general sentiment, as appreciation always feels nicer than scorn. But the hand that feeds the renter is the market, not the individual landlord. There will always be accommodation for those willing to pay as much as the next guy. In Vancouver, it currently makes sense to have someone else hold the actual title for you, but if those landlords all decided to sell their properties, there would still be accomodation available for those willing to pay as much as the next guy. The only thing that might change is the most sensible way to access that accommodation.

C.Junta
Guest
C.Junta
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