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February 7, 2019 | Kaput

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.

Being a full-service blog, we don’t just titillate and split like a flirty beagle in heat. Nope, you also get follow-ups. Here are some things you should know…

Gerry Cotten did, in fact, croak. The sole guy in charge of storing the Bitcoin for 115,000 clients of his ill-fated Canadian-based Quadriga exchange was admitted to a hospital in Jaipur, India on December the 8th and passed the next evening. A sufferer of Crohn’s, he was in septic shock upon admission, had two heart attacks in the hospital and could not be revived after the second.

The evidence comes from a hospital disclosure, a funeral home statement of death and a death certificate from the Government of Rajasthan’s Directorate of Economics and Statistics. So much for all the comments posted here a few days ago about Mr. Cotton faking his demise and stealing $250 million worth of crypto and fiat (as a lot of people in the steerage section would apparently do).

As you know, all those coins were stored in a cold wallet (offline) on a laptop back in his home village outside Halifax. Only Gerry knew the password to get into the encrypted device. And without that PW, the coins are pffft. Gone.

His spouse, Jennifer Robertson, has sworn she doesn’t know the key, and this week the courts granted the exchange 30 days to try and recover the missing millions, which has resulted in a national accounting firm taking the laptop. They plan to torture it by typing in the Income Tax Act until it coughs up the crypto.

There’s more. Jilted clients will get no relief from regulators. The BC Securities Commission, for example, has refused to act. The Canadian Securities Administrators (they oversee all provincial bodies) says tough. The RCMP holds out no hope. And now that the NS Supreme Court has granted the 30-day creditor protection no BTC owners can sue.

So, kids… You wanted a cool asset totally devoid of government control, oversight, regulation and protection? Here you go. Enjoy.


It almost seems coordinated. This week both the Toronto and Vancouver real estate boards came out swinging against the T2 government and the OSFI mortgage stress test. In YVR head realtor Phil Moore piled on, saying: “It disqualifies people who can afford the payments, yet can’t buy a home that their family needs because of the harshness of the stress test requirements.” And he adds it makes the local housing situation worse by increasing competition at the low end of the market (condos).

In fact, this is the first time the industry has repeated exactly what a certain pathetic blog has been telling you for a year: government policies designed to ‘fix’ expensive markets ain’t working. In concert with BC’s insane anti-house taxes, it’s caused the price of cheap houses to go up and crashed the value of properties 99% of the population still can’t afford. Meanwhile sales in Van are dropping 40% a month and 93 of every 100 detached houses currently for sale, can’t sell.

Phil Moore should talk to Jason Kenney, who says the test is unfair to Alberta and it’s all Vancouver’s fault (plus Ottawa, of course). Meanwhile household debt continues to increase to a new record level, the national savings rate has cratered from a long-term average of 7% to just 0.8%, the BC savings rate is negative and Albertans have the most debt in Canada. How does that end well?

We’ve also lamented here for a few months that 30-year amortizations would be back on the table soon. Rumour has it the announcement will be in the spring (pre-election) budget. Big mistake.

Longer ams increase the amount of interest buyers have to fork out, but by spreading payments over three decades, monthly charges are lower – by about 10%. That’s equivalent to getting a lower mortgage rate, which allows buyers to spend more money. And that increases house prices by fostering greater demand.

So to bring back CMHC-insured, 30-year loans for 5%-down buyers would be a crass, regressive, paleo, dumbass, political move. It’s been seven long years since they were banned by the courageous elfin deity, F, who will be rolling in his grave if Chateau Bill makes the move.

But, as stated, 2019 is a year to vote. Winning trumps principles. Real estate is probably the biggest issue in the nation. How could we possibly expected common sense?

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February 7th, 2019

Posted In: The Greater Fool

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