Beam me up

Time for some end-of-another-twisted-week updates.

Trump v The Other Old Guy

As we all know, the American president was behind a legal assault on the man in charge of the US central bank, Jerome Powell. Trump has belittled him relentlessly, questioned his competence, common sense and intelligence, apparently forgetting he was the guy who nominated Powell to be Fed chair. In a speech in Detroit this week (where he told a worker to F-off) Trump said of the CB chair, “that jerk will be gone soon.”

Well, the Justice Department stepped in it by issuing a subpoena to Powell for a Grand Jury. The allegation is he’s a criminal for misleading Congress over renos to the Fed’s two Washington buildings, where budget overruns have happened. It’s a shame. A charade. An excuse for Trump to seize control of American monetary policy and further upend the entire global financial system. He wants cheap mortgage rates so Republicans won’t be squished in the November midterm elections.

Alas, ain’t happening. Wall Street backs Powell. Congress won’t support his dismissal. Mr. Market shrugged it off as too stupid to contemplate. And the current odds are 8% on Trump winning and 92% for the other old guy. Case closed.

The real reason the kiddos are balking

The latest CREA stats confirmed local real estate board numbers – at least for major urban centres – that it’s a mess. Sales continue to drop to 20-year lows, prices are down 20%+ from the 2022 peak, inventory levels are elevated with CDOM and MOI going up while SNLR is falling (translation: the market sucks).

Is this because newbie buyers are totally priced out despite lower prices and reduce borrowing costs? Or are they just freaked out because real estate has turned into a turkey?

Bob Kavcic claims he knows. In a note to BMO Economics clients Friday morning he says the kiddos are looking at almost a decade of real estate torpor, and it’s just too much for their faint little hearts.

“From five years ago (starting point during the run-up), prices are now up a modest 2.2% annualized. While positive, keep in mind that inflation over that period has run at 3.7% annualized, leaving real home prices contracting,” he says. “In fact, in real terms, home prices are now roughly unchanged from where they were 9 years ago. There is a generation right now realizing that real estate can be a massive wealth creator; but it can also lock in capital and suck up cash flow for prolonged periods. Hence the lack of urgency of new buyers to get into the market right now, and the lack of investor interest.”

We’ll say it again. When prices soar, so does the desire to buy. When prices tumble, fear paralyzes. We buy high. We sell low. Then we blame the government.

Nine years later – Canadian houses cost the same

Source: BMO Economics

Stand with PP. Or fall for anything.

Not too many sleeps now until Canada’s Cons gather in Calgary (of course) for a convention to hear the latest loonie resolutions from delegates and review the leadership suitability of the leader. While the media trumpets Pierre Poilievre’s failures (blowing a huge lead in the polls against the oh-so-hated Trudeau, blowing the federal election, blowing his own seat in Parliament) and his sloganeering, pit-bull demeanor, he’s still their guy. There is no other credible candidate. The base still loves him, it seems.

Polling shows the Cons just a couple of points behind the Carney progressive conservative Libs, but the current prime minister has a 22-point advantage over PP. So what happens in Calgary may stay there, too.

Meanwhile the party has been sending a detailed questionnaire to its base. People like Blog Dog Ted in Alberta were asked to choose between “the fight for Canadians” or  a “devastating decline.”

Says Ted: “This desperately foolish thing appeared in my inbox. Q: Would you rather stand with Pierre or amputate a limb?”

Tough one.

About the picture: “Meet Walter White,” says Drew. “Walter is a 5 year old Samoyed who lives a spoiled life in Whistler BC. Favourite season: Winter. Favourite activity other than eating: XC skiing. I am a weekly blog reader and your insights help keep me level-headed amongst a constantly changing landscape.  One thing I am curious about is your thoughts on the US talks of banning institutional investors in the housing market. Is there a greater than 0% chance this happens? If so, would Canada follow suit?”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/01/16/beam-me-up/