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October 30, 2016 | Trick or treat?

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

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Hallowe’en is a mystery. Pagan, meaningless, pointless and expensive. But every year it gets bigger, apparently because people like dressing up and pretending they’re super heroes. Or fruits. In the US, for example, more citizens will celebrate this silly ritual than will vote. They’ll be spending $8.4 billion on a single night, turning their lawns into graves, gluing fake bats to their front doors, carving pumpkins to look like relatives and (at the extreme) renting costumes so adults can masquerade as a creepy clown, Beyoncé, Prince, a T2 voter or a deplorable.

This blog won’t be dressing up, since it’s plenty scary enough. But in the spirit of the moment, here are some relatively terrifying things to contemplate.

First, November the 8th. As you know, on Friday the meanies and poopers at the FBI informed lawmakers thy;re re-activating that probe into the Clintonian email disaster. The timing – nine days before the Presidential vote – could hardly have been worse, and the impact was immediate. Stocks dropped, currency markets reacted, ten million F150 owners went for a joyride and the election outcome odds abruptly changed.

The latest: Clinton has a 78% chance of winning vs Trump’s 21.4%. That’s still a decisive trouncing, of course, but it also means the goofy billionaire’s doubled his numbers in the last few months. Worse, Clinton shed ten points on Friday and now has negative momentum. This doesn’t man she won’t win (rational analysis says she will) but the election could end up being tighter than pundits expected, meaning the Trumpster may not consider it “a clear outcome” and decide to lead an armed rebellion (or at least Tweet a lot).

By the way, the Electoral College – not the popular vote totals – determines who gets to be supreme leader. Right now Clinton has 318 votes and Trump has 218, according to FiveThirtyEight.com. To win requires 270. As stated, this is getting ghoulish.

Now, here’s another blood-curdling thing, if you happen to own real estate in Vancouver. There’s hard proof now the Chinese Dudes tax has all but stopped the flow of foreign money into that market. The impact was sudden, dramatic, draconian, shocking and far-reaching. By announcing it without consultation or advance warning, and making the 15% levy almost immediate, the BC government scored political points with a confused electorate but sent out a harsh message to the world when it comes to investing in Canada, and especially delusional YVR.

From about 13% of sales, foreigners now account for  just 1%, and dropping. Of more than 12,000 trades in August and September, merely 150 were to non-Canadians. Realtor phones have gone silent. Audi dealerships are being swamped with early-lease returns. Open houses are funereal. Bidding wars have ended. In the past year the province not only took over the entire real estate industry regulatory function, but outlawed practices perfectly legal elsewhere in Canada, then dropped the hammer on one specific set of buyers. Meanwhile Ottawa raised down payment minimums, then imposed its MST, seriously restricted mortgage insurance and brought in a capital-gains-tax-exemption test.

This was layered over a market which we told you in May, June and July was already starting to roll over. Sales of detached homes were in freefall even before either of these governments decided to appease their electorates by overreaching on real estate reform. Now comes months of a market which will more resemble The Walking Dead than Love it or List It.

The inevitable result? Simple. Economic growth in Canada will be whacked, since housing-related stuff accounts for at least 15% of GDP. That could prompt the Bank of Canada to drop its rate a quarter point in the Spring (or sooner), cratering the dollar and increasing consumer prices. If we do slip into recession, our central bank will be almost out of bullets – and your ‘high interest’ savings account will be negative factoring in inflation.

More consequential, all those moisters hoping for lower house prices will get them. No, not enough to make real estate affordable in a country with a moribund economy, but enough to punish the homeowner class. Most at risk (as you have been warned in the past) are those with the least and the greatest equity. Young couples who bought in the last few years will see their paper gains evaporate, while their epic mortgages remain intact. The house-rich, cash-needy Boomers who resisted selling during the boom (‘But honey, where would we move?’) will see the greatest retirement windfall of their lives fade, never to return. Shudder.

Of course, no market is immune. From Ottawa to Victoria, the latest wild mortgage measures will have an impact, knocking out young buyers, killing sales and eventually dropping values. Markets will move from balanced to weak, to favouring buyers. Ironically this will happen when many buyers qualify to borrow less, face a weakening job market and cannot take the plunge.

Now, add in a NAFTA-shredding, Muslim-fearing, protectionist alt-POTUS after the 8th, and you’ll wish you’d read this pathetic blog more closely.

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October 30th, 2016

Posted In: The Greater Fool

2 Comments

  • Avatar Holly Hallston says:

    Where on earth do you get your bull crap polling info? The Clinton News Network (CNN)? Some libtard collegiate website? Trump is going to trounce this criminal hag. It must be a Canadian thing to suck up to self styled royalty but down here we generally are repulsed by people who portend to such pretensions and those who would genuflect to career criminals. The crowds at Trump rallies are astonishing: she has to pay people to show up to hers. People have realized there’s a dead sure way to know when she is lying.How? Answer; when her lips move. That Turner is so passionate about endorsing what the former FBI assistant director has publicly labeled as a crime family shows that he’s an intellectual midget. Ask yourselves if you would vote for the pedophile nest door. Garth would, as long as it’s good for his portfolio. Would you vote for someone who commits treason by selling national policy for millions in “donations”? Garth would; business is business. All that sitting around in skivvies and alligator boots while pounding scotch has to make you wonder if Garth may be related to Weiner. I forgot that Garth was once one of those libtard reporters himself; once a dolt always a dolt.

  • Avatar walt s says:

    Yes those Ford 150 drivers should not celebrate a win for the great unwashed peoples team just yet. The mafia donness just needs to ramp up the lying meters yet again and get the dead and unregistered voters to make their mark. The Queen of war will still be able to augment her sixth sense, ” I see dead people” after the Trump movement gets finished with the full MSM treatment. Can’t wait to see what she can do with the rest of the world using her middle east success program. Her next regime change candidates aren’t goat herders wearing sandals but experts with atomic equations. Should work out just fine, just give us a list of US defense contractor stocks and your latest Blue kool aid recipe.

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