Bank Of Canada Cuts 25 BPS: The Totally Expected Rate Reduction

Market Certainty of this drop to 3% at the BoC was 99% so zero surprises from Governor Tiff Macklem

NOW IT GETS INTERESTING

Because quite possibly Saturday the Bank of Canada will face a crisis like Covid

2/ No one, except President Trump knows if Tariffs will start on Feb 1st & no one knows the severity of the disaster for Canada

The only certainty is there WILL be Tariffs soon

Bank of Canada will be a huge part of the Tariff response

Just like Covid

The Government in Ottawa

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Should I Buy A House Now? In The Mortgage Business You Get That Question Alot

The classic Real Estate answer: It's ALWAYS a good time to buy

Which is utter BS, how do the people feel today who won a 25 bid contest by paying $400K over asking in 2021?

They're screwed now

2/ What about the 55K buyers who bought 416 Pre-Con Dog Crate Condos in 2019 - 2022 at $1100 - $1500 a sqft that are worth $850 a sqft today?

The standard RE response is: 15 years from now that RE will go way up

2 Points:

- Alot of people will have to sell before 15 years

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Mortgage Rates & Trade Wars: What Should We Expect

Will there be 25% Tariffs on Feb 1 or maybe April 1 but maybe they won't be 25%, yeah confusing but there will be some Tariffs eventually

How does it effect mortgage rates?

Let's break it down

US Tariffs on Canadian goods

2/ That's bad for our Economy & fuel for the Recession fire therefore the Bank of Canada's reaction is to continue to lower rates: Take Variable Mortgages

BUT Canada puts Counter Tariffs on American goods coming to Canada which is inflationary & may drive BoC to raise rates

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Unemployment In The GTA: A Made In Ontario Recession?

What happens to House Prices?

Unemployment Rate in the City of Toronto hit 9%....

And the trend is clearly UP

Ontario Unemployment is 7.6% & will also certainly climb

What's up with Canada's economic engine?

2/ The cracks in Ontario's economy that have been building for years are finally opening up

The decline of Manufacturing is a very long sad trend decades long

It was offset by a boom in Construction, Finance & huge growth in the Public Service sector

That's all changed

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There Are Just 2 Candidates For The Liberal Leadership: Freeland & Carney

Everyone else is meaningless

It's an incredibly short campaign, it will all be over in weeks

Yesterday, Mark Carney had a Leadership announcement that was just plain awful

It was every bad thing

2/ It was amateurish & poorly organized

The speech was very poorly delivered & badly written

His energy level was very low

The people in charge of his Communications & Strategy should be replaced immediately

It doesn't matter what he said, if he doesn't improve it's over

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Rents Are FALLING: Will It Get Worse For Landlords? Oh Yeah BIG TIME

A smart person asked yesterday: We have been told for years there is a massive housing crisis in Canada how can Rents be FALLING?

It wasn't expected but it's real: how it happened & why it will continue

2/ We have a Housing Crisis in Canada but this ongoing drop in Rental rates is a result of over building of a specific housing product & the previous ridiculous run up in Rents

Firstly, rents fell more than 5% in the GTA, GHA, less in the Vancouver area

They will keep dropping

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Canada Deserves An Elected Leader: Enough Of This Election Avoidance BS

Whoever the next Liberal Leader is (who will immediately become Prime Minister) they will not be a person who never received one vote to lead Canada

I get that is how Westminister Parliament's works

2/ It's a flaw, and so be it, BUT what if someone who has NEVER been elected to Parliament becomes the Prime Minister? Because that's what Carney & Clarke would be NOT ELECTED

Again, under our system, this is actually possible

It's utterly WRONG

A new PM must call an election

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The New Government Is Coming: What Should They Do?

Let's forget about the coming Dog & Pony show that is the Liberal Leadership Race: It's meaningless

In 4 or 5 months a new Conservative Government is installed

What should they do?

2/ 1) Reduce Taxes - all kinds of taxes, should be reduced or eliminated Canada is one of the most taxed countries on Earth

2) To allow for reduced taxes without program cuts Public Service jobs must be radically reduced & efficiencies installed

Cancel every contract job

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The Prime Minister Decides To Go & Canada Says THANK GOD

At 10:45, we will know exactly how he's going & how he will actually depart the job, we will get the announcement with details to follow

It doesn't really matter how he finally goes: Bottom Line is he's finished

2/ And Canada needs that: the feeling of chaos in Government is palpable

People can deal with adversity, we can fight through difficult situations but the feeling of total uncertainty is likely the toughest thing the human mind encounters

75% of Canadians want a new Government

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Things Can Be Better In 2025: Here's How

Many things could really be improving

First: A new Federal Government means we won't have 1000 posts a day about the Prime Minister, some of which are just crazy & sickening

There will be bitching & moaning about Conservatives

2/ But not the tension of this last year of the current Prime Minister, there's always some months of "Honeymoon" with a new Government, most people just watch what happens without going crazy

That's something to look forward to we could all live without so much politics

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$10 BILLION In Losses Over The Next 2 Years: Will GTA Pre-Con Condos Break Some Investors?

Will the losses scar some RE Investors? Will the Developers take big hits?

The number is just back of the napkin: 55K Pre-Con Units closing over 24 months with $175K loss per unit

2/ Some people may say "Just paper losses, in 5 years the prices will recover"

Actually NO

These losses will sure as hell be real to the Investors

If they don't close their deposits are seized & they're sued for losses

If they do close, they have to raise money

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Did The Federal Government Enhance CMHC Mortgage Rules To Bail-Out The Ontario & BC Construction Industry?

The answer is a strong MAYBE

A massive increase in the Cap for CMHC mortgages from $1M purchase price to $1.5M (USA is $806,500) & amortization from 25 years to 30

2/ Smart people like @daniel_foch and @SteveSaretsky suggested that these changes could bailout some GTA Pre-Con Condo Buyers & help some of last of the recent Single Family projects priced under $1.5M (mainly Semi's & Towns)

I was a bit doubtful for a few reasons

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The Prime Minister Must Go But So Far He Won't: He Puts Himself Above His Country

I am old & I have NEVER seen a Canadian Prime Minister cling to the job in the face of an overwhelming need to step down in my life

Never before have I seen all these reasons to leave

2/ - All 3 Opposition Parties agreeing to Vote Non-Confidence & bring down the Government
- So Many Ministers have quit
- So incredibly low in the Polls
- His own Party hiring lawyers to figure out how to remove him
- So many members of his own caucus voting for him to leave

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A Government In Chaos: The Wheels Fall Off In Ottawa

Freedland RESIGNS
Fraser RESIGNS

WTF is happening?

It's obvious that when the Prime Minister started calling his Ministers late last week about a proposed Cabinet Shuffle a couple of them told him to fck himself

2/ And why wouldn't they? The Prime Minister is running some of the highest negative impressions in the history of the polling industry

The polls also indicate his party would lose at least 115 seats if an election were called today & would likely be third behind the BQ & NDP

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What's A "Low Knowledge Voter"? It's Everyone That Doesn't Vote For Leftest Candidates

I just read a post that everyone who voted for the Ford Brothers in all their different elections was a Low Knowledge Voter

Same for all Trump Voters, all Poilievre Voters

Low Knowledge

2/ High Knowledge, well educated voters would NEVER vote for those candidates

Almost all leftist politicians & their political operatives deeply believe this

It's not a mean spirited, arrogant attitude, it's sincere

Leftists believe voting for other than Leftist Candidates

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Just How Bad Could Residential Construction Starts Get In Ontario Next Year? REALLY BAD

The simple facts are that Hi-Rise Construction which has been 80% of all new Construction in Ontario since 2018 has effectively halted

There are still cranes in the air in the GTA

2/ But those cranes are FINISHING projects that started years ago

The GTA has led the North American Construction Crane list & often had more cranes than the next 5 cities COMBINED

In a few more years that will be over

There's just no business case to build Condo Towers today

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50 BPS RATE CUT!!

The Bank Of Canada says it loud & clear: The Canadian economy is in trouble

There is no clearer message a Central Banker like Tiff Macklem can send that the Bank's view of Canada's Economy is entirely negative as a 50 BPS cut

The new rate is 3.25%

2/ Which is awfully close to most Economist's original suggestion of a 3% rate when the cuts started over 6 months ago

What happens next?

Because all the parsing of every boring word at today's BoC news conference is pointless

No matter how much analysts love to study it

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Rate Cut Tomorrow: May Be 50 BPS May Be 25 BPS But Does It Really Matter?

Because if it's only 25 BPS tomorrow it will be 50 BPS on January 29th

The path for Tiff Macklem & the Bank of Canada is clear: Get to a 2.5% Rate by late Spring

The cuts must happen & they will

2/ But...... THE CURRENCY!!!

Yeah, I've been hearing about the Canadian Dollar's slump against USD for over a year now

And the Canadian Dollar IS down against the American

So is almost every other currency in the world

Will the fall of the Dollar reignite inflation?

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Lousy Employment News = Good Mortgage Rate News But The Future Of Canada's Private Sector Economy Looks Awful

The Unemployment Rate in Canada rose to 6.8% sending 5 - Yr Canada Bonds down (over 40 BPS drop in 10 days)

Will the Bank of Canada cut 50 BPS next Wednesday?

2/ It's more likely a 25 BPS cut but this reality of crappy Private Sector Canadian economy is really getting locked in

The combination of record breaking Immigration & massive Public Sector job growth that has distorted the Canadian economy for 3 years has run its course

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The Great Toronto Condo Crash Gathers Momentum

The stories of losses on Pre-construction sub 500 sqft Dog Crate Condos & even on slightly larger 600+ sqft units just keep on coming

The same themes but different problems & really bad outcomes

More details are emerging

2/ A new twist is the difficulty in securing normal mortgages to close on these wildly overpriced units

In a great G&M piece this morning #rachelleyounglai describes an 8.3% mortgage rate on a $410K mortgage producing a $4200 payment including mortgage, condo fees & taxes

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WTF Is A Vibecession? The Finance Minister Tells Canadians Every Is Actually Great We Just Have The Wrong Vibe

Minister Freedland says the economy is actually doing really well. We are all fooled by right-wing commentors it's a Vibecession: not real

I am actually serious

2/ The newest push from our Federal Government & their supporters is that Canadians have simply made a mistake

Polls prove most Canadians (and the majority of Americans in the recent election) are pissed off at a crappy economy & an affordability crisis

Or is that a wrong Vibe

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