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December 31, 2017 | Year of the Pooch

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.

1. The cost of money goes up in 2018. A lot. The Bank of Canada will increase its benchmark rate three times, likely on March 7th, May 30th and September 5th. A fourth increase is possible, according to people who should know, like RBC. Lock it up.

2. The Fed goes three times, too. At least. That will bring to eight the number of quarter-point jumps in roughly 24 months, taking the rate from zero to 2% or more – with further increases expected in 2019 and 2020. Our central bank has followed the US one more than 90% of the time over the past few days. ‘Twill continue

3. Five-year, fixed-rate mortgages will hit 4% in 2018. The benchmark central bank mortgage rate will be more than 5.5%. Newbie real estate buyers will have to qualify at the higher of that, or the contract bank rate plus 2%. Ouch.

4. The stress test, B20, will crater sales and depress prices for at least first three months of 2018. There’s no point predicting anything past that. This is too fluid a situation as rising rates and tighter regs do battle with the house-horny loins of the Mills, who now compose the largest demographic. God help us.

5. There’ll be a serious federal budget in March. If you have money, you will not like it.

6. In politics, Kathleen Wynn is toast, Trump will be thumped in the mid-terms, T2 moves further left to out-jig Jag and Bill Morneau will refuse to do the ethical thing.

7. People who bought houses in Toronto in the Spring of 2017 will insist it was never meant to be an investment. They will lie.

8. BC’s leftie government mistakenly brings in a speculation tax while doubling the one on foreign buyers. The stealth collapse in Lower Mainland detached real estate values accelerates.

9. Growth, interest rates, inflation, corporate profits and the wealth gap all spurt. US unemployment sinks to 1946 levels while stock markets leave 2017 records in the dust. Bitcoin is a failed footnote.

10. A middling, boring, pedestrian balanced portfolio, after doing 8.5% in 2016 and 11% in 2017, does peachy in 2018.

11. Oil looks to be in for a bumpy year as US production bloats, OPEC dithers and Canadian prices sag. Poor Alberta. Taxes, deficit, unemployment, government spending up. Houses and jobs down. Big year for Jason.

12. Trending real estate markets: Montreal and Halifax. Mills are about to kill off the PQ, and people in NS actually have a life (and a house).

13. In the Year of the Dog this pathetic blog will celebrate its tenth birthday, counting more than 3,000 incredibly accurate, prescient and manly posts plus 700,000 weird comments. Of course, canines will continue to be celebrated here as a sacred species, held up as role models. Non-judgmental. Loyal. Forgiving. Happy to sleep anywhere that’s safe and smells vaguely like old socks. And, yes, that’s Bandit up there.


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December 31st, 2017

Posted In: The Greater Fool

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