So far the New Year has a theme to it. Headlines suggest that we’re at a precipice, and good lord, don’t look down.  And yet millions of people every day leave their homes to experience the joys of riding on overcrowded buses and subways and other forms of less than adequate public transportation.  The roads are jammed during rush hour, which now seems to be extended into Saturday and Sunday.  I’m assuming all these people taking public transit in the morning, and those navigating city streets in the hopes of getting somewhere, all left their house for a reason. Like maybe, a job?

God bless the millions, and millions of people who say to themselves, every day, “the four horsemen of the apocalypse may be on the way, but I have bigger things to worry about”.  GDP growth forecasts being lowered, what do you think about that? Interesting, but I got to get Precious to daycare on time.  Price of oil crashes?  My fuel consumption costs just went down because I have to take the kids to hockey, indoor soccer, jazz lessons, piano lessons, Chucky Cheese, to see grandma and grandpa, acting lessons (strictly for my child because he/she is special) and all this by Wednesday of every week.  Stock market takes a beating in 2016? Yeah, that’s bad but I don’t have time to think about it because (more…)

I came across an article that truly made me burst out laughing. It was an article from the Telegraph. The headline read as follows: “Islamic State forced to halve its jihadist’s monthly salaries in tough times”.  ISIL’s SLT, Senior Leadership Team, (honestly, I’m actually laughing while writing this) in Syria and Iraq released the following statement, “because of the exceptional circumstances that the Islamic State is passing through, a decision was made to cut the salaries of the mujahideen in half.  No one will be exempt from this decision, no matter of his position”. There was no clear explanation as to why terrorists would be forced to take a pay cut. Did the price of suicide vests go up? Was there a run on virgins in paradise, thus increasing the virgin acquisition costs? There was also no mention how those most impacted would respond.  No word if front line terrorists planned on withholding their services.  I guess they could all vote to strike or take some kind of work to rule action. So many unanswered questions.

There’s nothing funny about terrorism, and the ridicule, contempt and derision these mass murderers receive is justly deserved. Now they’ve earned the right to be mocked as well. The absurdity of the article should help all of us put things into perspective. (more…)

It looks like our neighbours south of the border will get something “special” this holiday season; like an interest rate hike. After almost nine years the U.S Federal Reserve rate is about to be increased.  Chairwoman, Janet Yellen, has been itching to raise rates for a while now, and the latest economic data from the U.S. gives her an opportunity scratch that itch. A rate hike is a signal to Americans, and the global economy, that worst is behind them, and the need for government to stimulate the economy is in the rear view mirror.

Or is it? The U.S. November job report indicated that over 200k jobs were added to the work force, their dollar is soaring, the unemployment rate has been cut almost in half to where it stood in 2008, so what’s not to be giddy about? Well, there is data to support that consumer spending, housing starts, and job creation have flattened. So the question is what happens if their economy has flattened, while at the same time the overnight lending rate is going up? Some pundits are actually suggesting that raising the rates now gives the Fed some wiggle room if they have to lower rate, yet again, to stimulate the economy. It’s not as if this hasn’t happened before.  Like back in 1930′s, a rate hike, followed by a quick rate drop, all the while knee deep in the Great Depression. Yeah – that little historical nuisance.

So what does the Fed’s move to increase rates mean for us here in Canada? For the time being, not much. We normally walk in lockstep with the U.S. Fed, but we’re about to decouple from that standard practice, and continue on the path we are on today. The reality is that our economy is still too fragile to mimic the Fed’s move. The oil sector in this country has been hammered, and the fallout has been far reaching. Some are suggesting (more…)

One of the unfortunate by-products of the “information” age is that content is required, every minute of the day.  Be it 24 hour news stations, sports stations or online publications etc.  There’s no time to think things through.  In-depth research and analysis takes times, and nobody seems to have it today.  We live in a 24 hour news cycle, and the competition is fierce.  The more salacious or provocative a story is, the greater the chance that eyeballs will be directed to it.  Case and point, Alberta.  Our friends and colleagues in that province must feel like they’re under siege.  It’s a constant bombardment of the “sky is falling” narrative. This is not an “it’s not fair” sentiment an eight year old says that when you make them go to bed by 9:30 pm.  The shame is that there does not appear to be much balance in the news with respect to the price of oil, and the impact it will have in Alberta.  There are contrary opinions in this regard, but you have to look for it.

I came across an article which suggests that the price for a barrel of oil has hit bottom.  This is not a lone opinion, and one individual who is suggesting this has a wee bit of knowledge and credibility in this regard.  (more…)

When isn’t it?  It may not be wise to hide your money under your mattress, but keeping some of your powder dry to seize opportunity is wise.  One never knows when the “next good deal” may present itself so it is always prudent to be ready when it does.  The challenge of course is identifying a “good deal”, and that takes some know-how, and luck.  Some of the best deals I ever made?  The one’s I didn’t make.  I think we all have those.  You look back on opportunities that you passed on and say to yourself, “whew, thankfully I didn’t pull the trigger on that one”.  Of course we all have stories about the opportunity we passed on that ended up being a winner.  Personally, I don’t let those decisions haunt me.  I never lament losing money that I never had in the first place.  But I will say there was a real estate transaction that I passed on that stills annoys me today.  Here’s the Readers Digest version.  A fabulous property was available about three years ago.  The footprint of the house was unique, and the dirt was in a rather exclusive neighborhood, and it was an eye-popping piece of property.  There was no issue of multiple offers because the property had been listed for over sixty days.   That led me to believe the vendor would be somewhat flexible.  I was wrong!  We were about five per cent away on the price, and we walked away from the deal.  That same home would cost me to thirty-five to forty per cent percent more to buy it today.  What bothers me about that deal is not increased value that I missed out on.  It’s that I knew it was a good real estate deal, and I let my ego cloud my judgment.  I should have given the vendor the victory at the negotiating table.  The vendor eventually got what he wanted, and we had to move on to find that next deal.  We did, but it cost us more.  Lesson learned, and we won’t be making that same mistake again.

I thought of that lost opportunity after reading an article in the Globe & Mail this morning.  The Globe reported that sales of high-end home are on an upswing, rather significantly.  Some 754 homes for $1.5M plus have sold in the Toronto market in first four months of the year.  That’s a year-over-year increase of thirty per cent.  So what’s driving high-end home sales?   Intuitively, it’s the reality of the market, and it’s a reflection that buyers that have the resources and the ability to carry the debt if a mortgage is required, they are saying it’s still a good deal.  I don’t mean to sound crass but a $1.5M home today is not what it was five years ago.  I look at property values every day, and when I see a tiny two bedroom bungalow, in an okay neighborhood, on a postage size lot going for over $700k, the $1.5M price tag is not all that shocking.  In desirable neighborhoods in Toronto, you would have to pay well over $1M for a tear-down.  The numbers are relative, and it’s simple as supply and demand.   As for the actual number of transactions in that snack bracket, keep in mind the population base in Toronto.  The largest populated city in Canada will lead in certain categories because of scale.  Also, there’s a lot of money in Toronto, and some of these people do not want to miss out on an opportunity.  I think the number one reason why people with means buy higher end properties, because they can.

Scarcity determines the price of all goods and services.   When it comes to real estate in Toronto, there’s no time for naval gazing.  In April, homes that sold in Toronto, were on the market for an average of twenty days.  In Calgary, the hottest market in Canada, it was thirty four days, tied with Regina.  It doesn’t matter where you want to buy a house in Canada today, irrespective of price point,  time is not on your side.

Until next time,

Cheers.