The Canadian Investor - Bond Yields Are Rising Fast — What It Means for Canada, the US and Homeowners

Episode Date: September 12, 2026

Bond yields are surging in Canada and the United States, and the implications are starting to ripple across the economy. In this episode of the Canadian Macro Show, Simon and Dan break down why the bond market appears to be pushing back against attempts to contain long-term yields, what rising government spending and persistent inflation could mean for interest rates, and why higher borrowing costs could become a major problem for housing, AI investment and economic growth. They also dig into the escalating Canada-US trade war and why Trump may be increasingly motivated to secure a deal with Canada ahead of the midterms. Plus, they discuss Canada's weakening labour market, the growing popularity of variable and shorter-term mortgages, the pressures facing Canadian consumers, and whether government-funded investment is masking underlying weakness in the private-sector economy. Finally, they look at how geopolitics, elevated oil prices, tariffs and fiscal policy are becoming increasingly interconnected with inflation, bond yields and investment markets—and why ignoring macroeconomic developments may be getting much harder for investors.     Watch the full video on Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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okay, that's what we'll do. Trump, I believe he's just getting desperate. He needs a win. And I think right now what you're seeing too is Carney is way stronger politically than Trump is. You have a bunch of baby boomers who have equity in their health. They're not for sellers, right? And so they can just leave the market or they can just not not take the price the buyers are well to pay. Governments can spend enough to make whatever a central bank does almost irrelevant.

Has Canada become too dependent on government spending to keep GDP growing? Welcome back to the Canadian Macro show live every Thursday at noon, although next Thursday we'll be a live every Thursday at noon, although next Thursday will not be live at noon because I have doctor's appointment and we're going to be going early. I hit the replacement rate, so I got to go some procedures done. I mean, there's so much to talk about. I'm not even going to waste time babbling on right now. Tell me what we're going through today. Yeah, I mean, there's just quite a bit and let me know if I forgot something here, but obviously bond guilds, it's been just, I don't know, it's like a train wreck. It's been interesting to watch. Basically, the bond market just taking

on Besson's challenge, Bessent coming out and saying, you know, I'm the house now. I have a lot more information that you do, asymmetrical information that he mentioned, you know, bet against me if you want. And the bond market seems to be giving him the middle finger and saying, okay, that's what we'll do. And obviously all the ripple effects of that, the trade war, just accelerating Trump, I believe, and we'll talk about that. And we've been texting quite a bit. I think he's just getting desperate. He needs a win.

And I think he thinks that the Canadian trade deal is probably the easiest win you can get compared to lower gas prices, the Iran conflict ending with no end inside. So we'll talk about that too. Probably touch on the Canada jobs report that we just. last week. Yeah. Canada losing 42,000 jobs. Touch a little bit on Canadian bond yields.

The Japanese yen strengthening mostly on some hawkish talk from the Bank of Japan. And now the market pricing and almost a 100% rate increase in Japan. And some of the ripple effects in that. So shorts covering, but also the yen carry trade, some unwind there. And yeah, I think those are the big lines. Anything else you want to mention anything on the housing front in Canada? Well, I think bond yields, like you and I were talking a little bit about this. I was sending you kind of some notes from industry insiders about what's happening with,

you know, I mean, the rental supply right now is very dependent on Canada's bond yield curve. And, you know, right now we're running the market hot on construction or we were. I mean, construction starts are gradually decreasing. And I think the more upward pressure that we see on bond yield, I mean, the Canada 10 years ripping now. Like, it's funny, we talked about how the last couple times, you know, what was it in the cycle that ended up breaking, like actually bringing the bull run to an end. And it was always, it's always liquidity, right? Like, it could be whatever factors ends up getting you there.

You know, in 08, it was global financial crisis.com bubble, et cetera. But eventually rates need to catch up to account for the economy running as hot as it is. plus some exogenous factors in many of those instances. There was also oil price shocks that were causing cost push inflation. And then you also now have trade war that should cause cost push inflation onto consumers, which was my primary complaint about Carney's strategy to hit with counterteriffs. I think it was appropriate to leave the negotiating table. But I felt that counter tariffs, unless he's very confident that it's kind of just a head fake

and that he wouldn't actually have to do it, those costs are going to end up getting absorbed by the consumer and we can't really afford more inflation in this country and and I think in the US as well. So bond yield curve is pricing in the fact that we're going to be in an inflationary environment. Rates are going to keep going up. AI CAPEX is funded by these rates through swaps and their bonds. All the rental, the, you know, rental boom in Canada is funded by these rates through CMHCMLI select financing, which is priced off of the Canada bond yields and Canada mortgage bonds. Is it the venue for the MLI select or the five? They have two products.

There's a five or a ten. Yeah. I mean, obviously just priced accordingly, right? You know, your GOC plus 50 bibs basically on either one. But the reality is like it's just the, I just wanted to explain that sort of in the context of mechanics because as

from the like mechanically you can see, oh, those rates are going up. It's going to pull the momentum and energy out of those trades, right? out of the rental housing trade right now and out of the AI Cappex boom, both of which are contributing significantly to Canada's economy and the U.S. economy, respectively. Yeah, and I do wonder, like, do you think it'll have a bit of a slowdown on the, just the housing market, the resale market, for example,

because I would assume I'm just checking the five year here as we're talking, the five years also ripping. So it's funny because. Or people just go to variable, keep going like, go wrong. So CMHC put out a report the other day. I think it might have been yesterday, actually. And your five-year mortgage is the smallest share of total mortgages that it's ever been. So I think that maybe answers your question is that, well, one is when we had Ron on the show, he was telling us, you know, most of people going to shorter term rates, either variable or a three-year fixed is a pricing decision.

They're actually cheaper, which they usually aren't, right? Or it's very rare that they are. And so like bond markets could and should in a typical environment take steam out of the housing housing market by increasing your capital costs and decreasing borrowing power of borrowers. But borrowers, we saw this during COVID and it was the worst timing ever for people to make that trade. borrowers are adapting by pushing into your variable rate or your shorter term fixed, which increases our credit sensitivity as an economy if we have more people. people. So there's that sort of systemic risk to be aware of. But I think. And it's also another

thing to factor in for the Bank of Canada, right? They would be keenly aware of that too. Yeah, for sure. 100%. So I'll pull up that chart while you're chatting. But yeah, I would say like it, in theory, it should and will take some steam out of the housing market, but less and less so as the consumer implements this workaround that I mentioned, which you can see on the chart here, your gray bar, the kind of like what feels like white space at the top of the chart there, that's your five-year fixed mortgage. And you can see it's like meaningfully the smallest share that it's ever been on their dataset, 35.72%, sorry, with your three-year fixed being the most popular fixed mortgage product, a small amount less than three years, so two-year fixed,

not a lot of people are taking. And then a huge amount of variable as well, with variable being 33.63% of total mortgages. The only time we've seen a higher share variable was that those couple of quarters when everybody was piling into variable. I'll put it up on a line chart as well. It doesn't have the most recent data points, but I'll put it up on a line chart that shows you all of the people riding these curves of the different mortgage products in and out. Because like from a timing perspective, man, like everybody piled into variable like literally moments before the rate hiking cycle started. So it begs the question like is inverse Canadian consumers the right trade? because of the inverse kramer yeah yeah exactly and and there is there is data to show that like

inverse Canadians is actually a decent trade you know i mean our our mutual fund flows as an example like canadians perfectly time the top to the to the downside and time the bottom to the upside or whatever yeah so canadians are piling into mutual funds at the top of a market before the values drop and pulling out at the bottom when there's actually that they they've capitulated but they're is actually upside now. So, you know, they ride the wave down. And they, so, so I think, you know, there is a, there's a decent case to be made for inverse Canadians.

We should, we should maybe build an index on that. Yeah. And I mean, it's just, it's just pretty crazy, right? What's happening in the bond market in the U.S. right now? So I don't know if you saw this tweet from the Kobasee letter, probably butchering, which is a great follow. I would, anyone into a macro, I would recommend that they actually. follow this account. Like it's great if you want to stay on top of like the stock market, but also

like kind of general macro stuff. And it's a great tweet because essentially it's what I was saying earlier. You have Besson going on and basically saying I'm the house now talking a little bit like Trump. Like, oh, I dare you to, you know, to bet against me. And we saw more market intervention by Bessent earlier. I think it was earlier this week, a couple days ago where those buy So they increase the buybacks from $2 billion to $4 billion and now $6 billion. So a couple of weeks ago was the $2 to $4 and now $4 to $6. And essentially just what that means is buybacks in themselves are not something that are unusual. And what they do is they're typically just doing that for more liquidity.

So they'll be buying back off the run longer term treasuries, which means they're not the freshly issued one. They're usually not as liquid. and then issuing some more liquid ones, some more fresh ones. But typically these schedules are just published every quarter. So you don't, it's not usual to have at least two additional increases between the plan schedule of buybacks and the announcement and the schedule. So when obviously a couple weeks ago to Drunken Miller with Stan Drunken Miller, which was, I think, his mentor that Besson has said, and he criticized him for doing that.

And now Besson has been on and just basically saying what I was saying over there is just, if you want to bet against me, then go for it. But I have more information than you. And I'm the house now. So a lot of confidence. But it looks like the bond market is calling his bluff. And that's essentially what Drunken Miller was saying is he's putting himself in a spot. where he's going to have to increase more and more intervention.

And who knows, at this point, it's just a treasury. So the Fed obviously isn't involved. I wouldn't consider that QE. But the reason that they're doing it. And of course, it's just small potatoes when you think about the $40 trillion in debt from the U.S. government. But it's also the signal that it sends that they're trying to control long-term yields. And I think the bond market is saying, you know what, you won't be able to do it.

will just dump your treasuries if you start doing this. Keep in mind, that's what happens, right? Really, yields are inverted. So yields go up when the prices go down of those same treasuries. I've been thinking about doing a Quebec City trip where I bring my mountain bike and the family tags along. I could spend part of the day riding while my wife and my daughter explore the city,

walk around the old streets, stop for ice cream, and burn that energy in a beautiful park. Then at night, we'd all meet back, up, go out for dinner, and make it a family trip. And while we're doing that, our home in Ottawa would just be sitting empty. That's when it hit me. Listing our home on Airbnb just makes sense. Someone else could enjoy our place while we're away, whether they're here for a summer weekend, visiting family, or coming in for a big event in this city. They could explore the Rideo Canal, take the kids to the water park, catch a CFL game downtown, or just use our place as a home-based

to experience Ottawa like a local. The extra income could go right back toward our own trip, and we can choose to host only when it works for us. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. There is an old saying in investing. It's not about timing the market,

but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who see, spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move.

You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest, head over to Questrade.com, open and fund your account with code TCI and receive $50. Conditions apply. If you're a DIY investor ready to take control of your portfolio, BMO all-in-one ETFs simplify the process. Whether you're new to investing or looking to streamline your existing holdings,

these all-in-one solutions are designed to help you invest smarter. With management fees on popular portfolios now reduced to 0.15%, you get professional diversification at a lower cost. Check out the asset allocation ETFs at BMOETFs.com Does this feel like the market also kind of saying like I've had a big issue with politicians really disrespecting the autonomy of central banks, right?

And then I'm going to get to this question. There's a really good question in the chat here that I pulled up on screen. But, and I think, you know, it actually lends itself a while that what I'm going to mention here. But, you know, like we've seen in Canada politicians write open letters to the Bank of Canada

Trump obviously very much with his language around Powell and. Yeah. And then he's done to what it was too. Yeah. And you know, I feel like the markets are also kind of saying like, hey, let us show you that you actually don't have control here because you clearly aren't paying attention or aware of how the structure of this works. And I think Canada is an interesting example of this because you have a former central

banker running the Canadian government now. And we're in like a very clear position of fiscal dominance in Canada and in the US as well, obviously. I mean, governments can spend enough money or stop spending if they chose to, but they're never going to do that as we've, you know, has been made very clear. Governments can spend enough to make whatever a central bank does almost irrelevant, right, or less relevant because they can keep inflation popped up through through government spending. And I think, you know, Adam Steele's question here that I have up on the screen, it says, has Canada become too dependent on government spending to keep GDP growing? And are we making, are we masking a much weaker private sector economy? This is an interesting thought experiment in

Canada because, you know, we've got this government that's made it their, their position that we're going to start downsizing public sector employment. And for the first time in history, or sorry, first time in this millennium, I think since 2000, we've actually seen a year over year decrease in public sector jobs, right? So those are, let's call them, that's like, it's an accounting thing, right? Because he's making it OPEX versus CAPEX. Yeah. So you're reducing your OPEX spend. Creative, creative accounting. Yeah. And then you're increasing your CAPEX spend. So you're actually putting more government money out into the market, but that you're building subway stations or train stations or pipelines or whatever. And you RFP those projects. And those projects get the bid process,

rewards those projects to private companies who create private jobs to, you know, that creates job growth. That creates GDP growth. And it looks like organic private sector GDP growth, but it's not. And I think that this is, so this is a good question. We've sort of figured out a way to really stimulate the economy with government spending and with taxpayers. And I think the bond market is also reacting to this saying, look, you guys are growing your economies, you're heating them up. rates are going to have to be higher. And this is you and future generations now paying the price for all of the spending that you're doing today to get your economy through this, what should be probably a recessionary period, to get it through that with this sort of

these steroids that you're injecting in the market, right? I don't know what your thoughts are there, but. Yeah. Yeah. I mean, I think they're definitely stuck. They realize it. And one thing, I don't have the studies in front of me, but I know there's been studies about that where the more government, like your return on government spending on economic growth diminishes the more you do it and the longer you do it. So you get stuck in this loop where the more you spend, the more obviously your economy starts being dependent, but the more you keep going, you don't want to stop.

The return on those additional dollars becomes lower and lower and lower. And I think that's what we're seeing right now with pretty much governments around the world is they can't really stop spending because, they know it's going to crush the economy and go into recession. But the more they spend, the lesser of a return they're seeing. I mean, it's not like the economy, even the U.S. If you X out data center spend and AI spend, I mean, it's not like the economy is booming in the U.S. You have the federal government in the U.S. is doing record deficits.

I think they're at 6% of GDP now. And it's not in a recession. It's not, I guess it's kind of wartime, if you'd like. with the Iran War, but it just goes to show that it's basically these massive deficits and what is there to show for it, like pretty weak growth when you ex out data center spend. Yeah. Totally, man. Like I think that you basically have two economies that have really in Canada, like I will say, I mean, one of our like clickbait kind of thumbnails in the last couple of weeks was like Canada Bull Run, right? Like we have this all this GDP growth. We had that

really good job sprint from FIFA, which obviously got rolled back in August. But you have these governments that are really betting everything on a certain trade or like some. And so in Canada, a lot of that is infrastructure and CAPEX build out, presumably so they can resume human QE or like quantitative peopling with population growth into infrastructure that actually can sustain the growth levels that they want to have. But in the U.S., it's all AI CAPEX, right? And the question becomes, what happens if those trades don't materialize? Like, you know, it's just simple diversification. Yeah.

Or if it don't mind. Yeah. Yeah. And because we are really making big bets on certain specific things. I think Canada less so. It does seem like, I mean, we had a diversification problem before when too much of our GDP was concentrated in residential investment. And now I think we're getting, you know, with that being, you know, in the gutter,

we're diversifying into natural resources and like in the in the article you have up AI data centers which Canada is you know cold climate cheap electricity good place for that to take place for sure yeah a lot of those AI data center there's predominantly would be Alberta base with a lot of that trapped energy but yeah what I'm showing here is an article I know you're aware of that so next week Carney is going to be in Toronto and just pitching some projects here for large and investments funds, also large investing companies, so Black Rock, some sovereign wealth funds to just promote Canadian projects. And as much as there's been talk about Canada being uninvestable for years, I think it's starting to shift with our new CEO as prime minister.

I mean, it's hard to not kind of see it that way. At the same time, I mean, I think a lot of people, that's what they wanted, right? Like I think it's and look, I think it's a completely different government than the Trudeau government. Yes, they're still liberal, but they're doing, they're essentially undoing a whole lot of stuff

that Trudeau did and just doing a whole lot of stuff that Piapoleev had in his platform and the conservatives. And I think right now, what you're seeing too is Carney is way stronger politically than Trump is. And I think in the trade war, that has a big part because on a political basis, Carney, it's not even close. Carney has like domestically, it has the upper end.

It's not, it's not even close. Trump is just, I think Trump is just getting desperate. I think that's what we're seeing right now. Just like a little boy that's not happy and just doing some tantrums. And he's just essentially trying to do the art of the deal, right? And that's just like, that's what he's doing like on steroids right now. But I don't think it's a bad idea here to get some investments. And look, the way the U.S. has been acting.

And obviously they're kind of switching over to more of a mercantilist view. And I think their ultimate view is to have a bit more of a, well, let's just show it here. There you go. I think that's their view of what they want. So they want essentially to control the Western Hemisphere. So the Americas and the rest of the world, it's not as important. I think that's the ultimate view. Obviously, that was posted by Trump earlier this week as he kind of ramped up his

attacks on Canada. But, you know, that kind of behavior. Yes, the U.S. is a massive market and that's not going to change. But I think you're starting to see that Canada may be a pretty attractive place to invest because we don't have a lunatic as our head of state. state and like I mean look I don't have you know what what is it trim derangement syndrome it's just some of the stuff he's been doing like you do wonder like yeah you think it's hard to argue I mean you can even see a lot of the people that really helped him get elected say you know

talking about yeah yeah exactly talking about like this like Canada's our enemy now like what and and I think um you know it's almost just like a deductive reasoning like if the U.S. is clearly not investable right now. And I think it's an foreign direct investment in the U.S. doesn't, if I'm a global pension fund, you know, the people that Carney is courting at the moment, even if Canada wasn't exceptionally investable, because I feel like, you know, there's still always that question mark of like, how hard is it for Canada to really go back to the insane policies that we saw from the previous liberal government, right? Like, it was, I think that it was, it was, a couple of things are clear.

One, that didn't resonate with Canadians. And Canadians were pretty quick to kind of give our head of shakes and get, arrive at either Carney or Pollyev being the right solution for the future of our country. Like we wanted to throw out that, that previous brand of politics that, that had kind of taken over our country. But the other thing that, that we kind of proved is that we also allowed that to happen. and we allowed it to perpetuate for a very long period of time. And so I think the big question mark for foreign investors is, well, what if, you know,

like I've heard of, you know, large Chinese funds that I've, I've been presenting deals to and development opportunities and stuff. And they're like, you know, they'll ask you questions. Like, what is like, you know, what is this like defund the police stuff? Or like, you know, what is like, like some of the social movements that are in, happening in Canada and the US. And like, it doesn't, that doesn't necessarily resonate well with, I think foreign capital that has different value systems than like a lot of the things that's happening in

Canada and the US. So it's not I don't I don't know if it's to say like I'm not I'm not super confident that Canada is exceptionally well positioned independent of everything else that's that's happening in the world. But if you could just go to deductive reasoning and you cross out the US which you know has the you know reserve currency stability you know stability etc. All of the selling points have disappeared. One of the places that you're really going to arrive at If you're looking to get exposure to a lot of the inputs of sort of the next wave of economic growth. So, you know, battery metals, electricity, space, physical space. Yeah, natural gas, natural resources. And you want to be in the Western world. You don't want to be in

Europe because, you know, they've sort of proven that they have maybe even more extreme political no growth model. Where are you going to put your money? Well, Canada is kind of the only the next spot for a lot of these to land. So timing is also on his side, I think, to try and be soliciting these investments. Yeah. And the end of the day, too, like he speaks this kind of language with these big wealth funds, right? Like he knows these people and he knows how to deal with them. So I don't know what's going to happen with this if they're going to secure some investments.

But the other thing, too, you're seeing, just to get more on that, like Trump getting desperate here, is so was it last night where he said like he if the Republicans hold the old Congress he's going to give a $5,000 dividend check to all adult Americans which would be about 1.3, 1.4 trillion in additional spending. So you're seeing like record deficits and then you have this president. Imagine the bump in the economy though. Like we're doing stimmy checks again. Like remember Remember Stimmy? Like this, Oh yeah,

but imagine the bump in yields. Like I think what's really happening is first that bond market is telling Besson, like we will dictate what the yields are. Try your best here. But also the bond market is just like concern about this fiscal situation in the U.S. I think that's that's just, it's as simple as that. You have not only the debt,

I think a lot of people tend to forget their unfunded liabilities with social securities with veterans, benefits going down the line. You can just look it up. The U.S. government actually publishes updated numbers on that. And the last time I checked, I think it was around 80 trillion on top of the 40 trillion that they have. So I think the bond market is just saying that they're very concerned with that. And I think Stan Drunken Miller said the same thing. Look, they have to get finances in order. If not, that's the only way that the bond market will react. If they end up to taking the US Fed ends up with more aggressive measures like QE or even like yield curve control,

that can have other consequences. So it's not like this is ultimately the solution. And that can definitely have, we'll have second order effects. So it's not an easy situation. But now you're seeing the 10 year yield. So for Trump, it's creating more issues. You have mail-in ballots that are starting pretty soon. If not like the earliest state, maybe next week.

I can't remember. There's about 30% of the votes that come from early voting in the U.S., whether it's early voting in person or mail-in ballots. So that's not insignificant. I think the U.S. is pretty desperate. Trump is desperate to get like a good news, like show that he's doing something, a good news deal. And I think Canada is the lowest paying fruit for that because the Iran war is not ending anytime soon. Oil prices are reaching record high. I think I saw Roy Johnston posting that now diesel prices are over $200 a barrel.

And you have diesel prices between $5.50 and $8 a gallon in the U.S. depending on the state. The U.S. national average for gas is now at $4.2.4.20 per gallon. And of course, California is at the top of all these lists because their taxes are quite high on gasoline. but you also have the 10-year skyrocketing like we've been talking about, which is affecting mortgage rates. So mortgage rates are about to hit 7% on 30-year fix, which I think you probably know a little bit more than me, but the U.S. housing market is not doing all that well. And that was despite yield being a bit lower than they are right now. And now with rising yields, I think it's just going to remain pretty frozen.

I've been thinking about doing a Quebec City trip where I bring my... mountain bike and the family tags along. I could spend part of the day riding while my wife and my daughter explore the city, walk around the old streets, stop for ice cream, and burn that energy in a beautiful park. Then at night we'd all meet back up, go out for dinner, and make it a family trip. And while we're doing that, our home in Ottawa would just be sitting empty. That's when it hit me. Listing our home on Airbnb just makes sense. Someone else could enjoy our place while we're away, whether they're here for a summer weekend, visiting family, or coming in for a big event in this city. They could explore the Rideau Canal, take the kids to the water park, catch a CFL game downtown,

or just use our place as a home base to experience Ottawa like a local. The extra income could go right back toward our own trip, and we can choose to host only when it works for us. Your home might be worth more than you think. Find out how much at Airbnb.ca slash host. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom.

They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade makes the whole process seamless, allow you.

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etfs at bemoetifs.com. It's funny, there's two ways that you need to think about the, like when you say it's not doing well, there's sort of two ways you would interpret that. So I'll give you a couple of data points here. And Canada is very similar, so you can just kind of use this. But if you look at like U.S. pending home sales, we're basically at the lowest level that we've seen in history. And I'll pull up the chart here. I don't know. I was pulling something else, but go for it. Yeah. Yeah. So we have this, like, you, you know, you're U.S. pending home. So, so transaction activity, you know, the real estate profession, let's call it, realtors, and all of the sort of set things that are secondary to the real, like, people,

moving houses, so like moving companies, contractors, you know, residential investment is going to suffer as a result of the number of pending home sales falling to this level, which is basically the low. Like it's as low as what it when the, you know, you see a huge steep drop during COVID. It's as low as when the pandemic, when nobody could do like literally physically could not do anything. So on transactions, absolutely, right? But then if you look at, you know, you US house prices. They're like, I think they're just coming off all time highs. And, you know, so the, yeah, like, let me pull the last reading I have here from Redfin.

So July, in July, they hit all time highs. And now if you go to, or say June, they hit all time highs. You know, so it hasn't really impacted price. And this is the weird part because if you also look at the U.S. home sellers to buyers, I'm just going to try and get this one last chart up. and then I'll take back over. But if you look at the number of U.S. home sellers relative to home buyers, sellers outnumber buyers at the highest level that they ever have.

So you would think that... Well, in the last 10 years, right? Yeah, yeah, since Redfin started publishing that data. But you would think that this would result in, you know, the market, like prices falling, right? You're in an excess supply scenario. Prices shouldn't be hitting all-time highs, especially with buying power being suppressed by rates rising, but somehow prices are still being propped up.

And a lot of it is because you have this generational changing of the guard between your existing sellers. And I've researched this more than anybody in the world perhaps because I've written an entire book about it called the Great House Transfer. It's out, but I haven't really done anything with it because I just have other things to focus on right now. but I spent like since the beginning of the pandemic working on this. And it functionally, you have a bunch of baby boomers who have equity in their houses. They're not for sellers, right? And so they can just leave the market or they can just not not take the price. The buyers are well.

I think that's why house prices haven't fallen the way that they should given the market dynamics. But the older they get, the more likely they are. I think that's. So. Yeah. Yeah. I was going to just say an anecdote that I saw here. not far from my place.

So there's this house that I didn't look at maybe in the last month. I feel now there's been like three, two or three price cuts. And I've seen them. It's an older couple. And the house has been for sale, I think, since April at this point.

And it's a pretty desirable neighborhood in Ottawa. It's like fairly central. You know, decent size lots. You're like maybe a 10, 15 minutes drive from downtown when there's not too much traffic. And, you know, one of the owners, I saw him, he looks in pretty rough shape. Like he's a baby boomer.

He's probably in his 70s, late 70s. He has a walker. It's a bungalow, but clearly just the maintenance and everything I think is just too much at this point. This is just the perception, right? Like I'm not sure if it's like all true. But the perception, like clearly they want to sell. It's been there for like over six months or around six months at this point. They've done several price cuts.

They've had an open house every single Sunday, it feels like. And it's still not selling. And you can tell they're in rough shape. So they're clearly motivated, but the house is not moving. And they're reducing their price. And I think the older the baby boomer courts gets, the more you're going to get some people like this where they just have to sell. They just cannot own their motivation level increases. Exactly.

You will see a lot of its product type too. You know, a lot of boomers want to downsize maybe from like a four bedroom McMansion into a bungalow. But switching costs make it not economically compelling for them to do that. You know, like you might as well just stay where you are because you're going to spend a lot on a bungalow plus like 10% commission in total, you know, 5% on the way in 5% on the way out. Like why not just stop using the upstairs and move your bedroom to the main floor? And so I think you're going to start seeing more of that. take place and, you know, boomers try and age in place and then just the assets will get handed off to the next generation through inheritance. But you can't really like build an economy

based on on the idea that like all this wealth is just going to be inherited. Like imagine, I mean, when my parents, you know, are of the age at which I would assume that they're probably going to live until I'll be like in my 60s or 70s when I like if I have it, if I don't have a house at that point or my financial life figured out, you know, like then I'm probably a pretty big candidate to just liquidate that anyways. And then I'm going to liquidate it probably, you know, the primary residence because I don't need it. And so you have all of this wealth concentrate. Majority of bottom 80% net worth is concentrated in primary residence. Somehow we're supposed to see that get inherited. And the most likely outcome is a liquidation from from an estate. I think that this is probably

the biggest economic event in the housing market of our lifetimes. Anyway, I know you put up a couple of charts. So I don't want to stay on this topic too long. No, no. I was just kind of talking because I was like always when we do these live, I try to get the tabs ready. Yeah, it's always hard to share. I had too many tags. It's because we're like Googling stuff while trying to speak to. Exactly. And I was like, I had too many charts, but it just goes to show the diesel prices in the US while there's diesel and gas. The average is at 4.27 per gallon. And I know I've said this before on it, but Walmart did say they see a shift in consumer spending behavior as soon as it hits $4 a gallon. So when you have this kind of stuff going into the midterm, so it's not good. That's why I think,

with Trump lashing out, I think this is an attempt for him based on like the way he does deals and the art of the deal is just you try to leverage as much as you can in slick pain to try and get a deal that acceptable to you. The deal that they want is probably not as big as what they might be asking for. They may be ready to compromise a little bit, but he always wants to start at a higher level. And I just think that we're seeing right now is just him lashing out because he realizes that prices of gasoline and diesel are probably not coming down. This is, he's probably being told that this will likely feed into inflation. This is not good.

You're probably going to start seeing it with the August and then the September print for CPI in the US, especially with diesel. You'll probably start seeing that kind of trickle through the economy. People see at the pump. They have less money to spend. They know their government is spending money on a war that has just only caused them problem. at the pump at this point they're spending hundreds of billions of dollars on that a lot of states actually quite a few swing states are massive exporters to canada and now canada is slapping counter tariffs on them this is not great he needs a win like he and this is likely the easiest

path for a win for trump is to get a trade deal and i know the u.s has a whole lot of leverage and i'm sure a lot of people will push back on that you're not wrong but The reality is I think the Kearney government is probably saying, you know what? We'll bite the bullet for a couple months and see where it goes after the midterms. And if the Trump administration comes to us and they're actually willing to restart negotiations on a deal and have something a bit more like favorable for us. We're open to it. But if not, you know, we can pipe the bullet for a few months. We know it's going to hurt the Canadian economy.

but the U.S. will hurt as well. Like Trump specifically will hurt. You're not saying stupid stuff like $5,000 dividend check if you're not desperate. Yeah, I would agree. I think the reality is like nobody really asked for this. Like I don't think he started really going in on the 51st state and like trade war with Canada stuff until it was like the final days of the election,

if not after. I think he had won. Yeah, it was. it was between November and the in January. I think it was in the fall. Remember Trudeau? Yeah. Went to Marlau go with his group of people.

That was in the 51st stuff started, I think. Yeah. Yeah, because I think he was talking about tariffs still at this point. So he was like basically saying, I'm going to put tariffs. And then he went. And then I think that's when the governor Trudeau started and all that stuff started. Yeah. Yeah, I think based on like support numbers.

Like Trump doesn't have a high approval rating. I think it's the lowest for any any president. It doesn't feel like this like really resonates with like the mandate to govern that he was given. I mean, the war is an obvious like a very glaring one that he literally ran on no wars. He did run on tariffs and trade war. But, you know, I think that the escalation, like I think people thought it would be like Trump 1.0 where you ended up with a lot of exemptions and, you know, not really like picking fights with people or like deals actually happening, not like trying to. grind the economy to a halt to scare people into submission. And I think this is a very different

version of what I think, I think you have kind of like the people who who seem to like still be in support of this really just don't have a good grasp for how economically damaging it is. And I think and I would say the same thing. Like I don't think it's appropriate for Canada's leadership to join in in the in the political theatrics and in an imposing countertary. and stuff like that because it is economically damaging. Like, I don't think it's a good idea for anybody. You know, when, when Ben was on with, with Ron, he was kind of saying, like, well, you have to, you have to fight back.

I'm like, you don't really. Like, actually, like, if you go, like, look at like stoic philosophy, right? It says there's no way to win an argument. Like, if you win, you still lose because you, you got baited into this argument and you look like an idiot and you put all this time and energy. Like, the better time and energy is focused on doing maybe more productive things. Like, you could have just left the table. That would have been, in my opinion, the far more powerful move to do that didn't sort of impose collateral damage on on Canadian consumers, which we just simply cannot afford right now.

Like why do we need to be used as a pawn to, for these political theatrical theatrics? So that part's kind of, but I do, I do think I agree with you like Trump is going to have to get something done here. I think that there's more and more or there's a lower and lower support for what he's trying to do. You know, we're heading into winter where you start to see, you know, like last year, you saw all these numbers of Canadians no longer traveling to the U.S. I've heard of, you know, and I think it's silly to try and punish an entire U.S. economy. Like, it's not like they can do anything now. They elected the guy.

They're stuck with him for four years. They can't get, get him out to, you know, sufficiently to fix this problem. So we're stuck with this kind of policy game for four years. But I think that there are visible economic consequences that are happening in, in the U.S. as a result of it. And I think that he would be wise to pay attention to them. And I think he will start. I agree with you.

Yeah, I mean, and I was just sharing here, like just some polling for his approval ratings. I show the financial time, but I just want to show that. You know, it's bad when Fox News actually says

his approval rating is low. Yeah. So I wanted to show that, you know, even for a network that's been traditionally very supportive of Trump, even they're saying, yeah, the approval rating is quite low.

So it's just, I mean, I don't know. It just feels like it's a kid lashing out. And I agree with you. Is it a counter tariff that good of an idea? I'm not sure because at the end of the day, it's going to hurt Canadians. Everyday Canadian things will get more expensive. And I think a lot of people just get into the, okay, let's not back down, elbows up. That's fine.

But a lot of people get hurt by that. those counter terrorists, like they will ripple through and they're going to impact Canadian consumers. And I think that's just, it's too bad. That's forgotten. And the other way around is right as well, right? Trump is doing that kind of stuff, but it's impacting. I mean, you can look up online the amount of U.S. businesses that are impacted by those

tariffs because they were using a lot of goods, materials from Canada. and now they have to find alternate sources or they have to put off projects. It is impacting Americans. And a lot of those states that are closed geographically to Canada are definitely also big exporters to Canada. So they will be felt. And like Michigan is a key one obviously with the automotive sector. But there are other states that are key swing states that are being impacted by this. And I think it's you're getting some, a lot of.

of nervous Republicans right now because I think they realize that the odds are against them. Well, like, I think it's pretty evident that they don't feel confident they can win the midterms on their own on their own merit if they're trying to tell people that they'll pay them $5,000 to if they win, right? Oh, my God. Yeah. But I feel like, I feel like that's the writings on the wall on that one. I mean, like the biggest thing that the Republicans have going for them right now is a Democrat.

can't get us together long enough to win this thing. The midterms or the next election. I mean, I think polling was still suggesting that Kamala would be who they run. I mean, I think Newsom could win, right? But like,

depending who are the Republicans. And, you know, the Republicans have a lot of walking back to do from, from this era of, I think that they've really breached a lot of trust with the people, you know, like not Trump's base or like the people who are still sort of

in support of these policies that he's telling them, you know, oh, we don't like Canada. you know, we're into war now. Epstein files go away, whatever, like all of the things. We don't really hear about the Epstein's files anymore. I mean, man, it's like, I don't know. Like, I think it's like bought farms like turned it into a meme rather than like a real issue. Like, you know, there's so much. It's crazy. Like it's funny because you, you know, you look back

like history, right? Like the things that we read in in our history books and how easy it is for them to rewrite history today with like all of this information available. And you can imagine like what, what percentage of the true story were actually being told of like human human history is kind of an interesting thing to consider but i think like you know the people who aren't the and kind of in that group of individuals that would maybe be the ones that are still in support of trump there's a lot i think there's a lot of people in the republican party that are saying like this isn't this isn't what we yeah this wasn't the plan guys and and we i think that they're you know they really need to have something i mean even even vance is really kind of distance himself from a

a lot of the public, like political theatrics and stuff. And he's in a tough spot, vans. Like, whatever you think about him, because he was always anti-war, right? I think he was, wasn't he in Iraq or Afghanistan? Yeah, he was. Yeah. And he was a never-Trump or before, too. Yeah.

Right. And he's been kind of backed into a corner where he has to stay loyal to the president. But let's be honest, I think he, there was already, like, rumblings when the war started that he was, like, trying to. talk sense into Trump and not go ahead with it. And then since then, obviously, he had to kind of get on board. But now we're seeing essentially what's been happening every time a military conflict happens in the Middle East.

So it just lasts longer than expected. It's always, I mean, it feels like it's always like that. And yeah, I think in the U.S., I know a lot of people that in the U.S. that voted for Trump, not because they were really. big Trump supporters just because it was the least bad option in their view. Yeah. Yeah. No, it's true.

I mean, well, like, yeah. Like the Democrats, it was the exact same thing with Hillary, in my opinion. Like the Democrats literally gave two elections to Trump. Like, I think there wasn't, you know, like I don't, I think that they. And if you kind of zoom out even further, it was like it was almost like a disrespect to democracy, right? Because they didn't really run a proper primary for either of those instances. Like, you know, with Hillary, like, had they ran Bernie, I mean, we would have had two anti-establishment

candidates, which the U.S. just didn't want to trend in that direction. But, like, Bernie probably would have beat Trump. And then in the, in the Kamala election, like Tulsi Gabbard would have beat Trump. RFK would have beat Trump, right? Like, there's a lot of people who would have beat Donald Trump. And yet they ran Kamala, right? Yeah. Once Biden had to step down.

And yeah, you could say, oh, you know, it was the last minute kind of thing. It's like it's not that hard to really to nominate. I do wonder if like, you know, like the there was the infamous debate where it was clear that Biden was not fully there. Yeah. Cognitively. I do wonder if, you know, like not that he's like I think a lot of people say, well, he's always been like this. But it just seems like it's ramping up even more. Like I feel like, I don't know.

I feel like, you know, is Trump just becoming a bit senile? Like are we just seeing that? Like he's not a young guy either. like I could very well and he doesn't look like he's ever been really the healthiest eater and sleeper like that takes a toll on the body he just like crushes like coke and like McDonald's all day exactly no but I mean it's I'm always reluctant to speculate on things like yeah this is definitely speculation of mine yeah like let's give it the benefit of the doubt and say that this is like him of sound mind and these are the decisions I mean that's maybe even

more concerning right like hey, like, this guy actually thinks a lot of these things are good ideas. Yeah, I think it's an, it's an interesting one. But I think that the economic ripples are starting to appear. The bond market is calling it. And the party's coming to an end. Like, you know, it's, I can't see an outcome where this doesn't really, really cause big issues for the economy. And, you know, I mean, you go back to that, that quote, right?

It's the economy stupid. I mean, if, if Americans are feeling like that, you know, their, their financial lives have just been destroyed. and more people are struggling than ever, I can't see it being easy for the Republicans to win the midterms or the next election. Yeah, and the stock market is not the economy. Let's be clear about one thing. And I think Jim had to create a great comment. So he's saying, like, I think a lot of people think that Democrats, if they're elected,

things will get better. Like, I think he's right. Like, Democrats, first of all, we saw Biden, the Biden administration. They didn't revert a whole, like a whole lot of stuff. Trump did in his first term, for example, on the trade front, especially they had imposed some tariffs on China. Like that was not reverted. So sure, Democrats will have different priorities, but it doesn't mean that they'll all of a sudden be like super favorable to Canada. What you might just start seeing is that sure, the rhetoric might not be as intense, but they might still ask for some massive concessions from Canada.

Like, it's not a, it's definitely not given that the Democrats will, the Democrats will take power. And, you know, Kearney and whoever wins on the Democrats side in two years from now will just make a fire sing Kubaya and just everything goes back to normal, basically, or how it was five, six years ago. Yeah. No, I think it's, it's funny because, you know, he mentions like how historically the Democrats have been not known to be more. free trade. And I think, um, I think that both of these parties are just populous now, to be honest with you. Like the lines are so blurred. And so Trump can't really like, or anybody following him can't really come up and say, hey, we're for the free trade guys now. Right. Like, they can't just be like, oh, yeah, we're throwing that playbook out. Like they have, they're kind of

forced to stick to this. Otherwise, it's too politically confusing to try and rally like a votes around. So the Democrats now can play on these as wedge issues. I think the two issues that Trump really fumbled would be free trade and the war. And these are important. It feels like this is becoming a very political episode, but it's not intentionally. Like war is oil prices right now, which is leading into bond yields and inflation. And free trade is obviously impacting GDP, but also cost push inflation. I, the Democrats are going to use those as as their wedge issues and be like, we're going back.

I mean, you can't talk macro without acknowledging what's happening on the geopolitical and on the political front. Like, it's impossible. You can't do that. And it's also impacts investments, right? Like, it will impact. You know, you're seeing a lot of the, you know, the rise in bond yields is as a result of what's happening politically.

And that's higher yields. That's higher mortgages for Canadian homebuyers, unless they want to play Russian roulette with short term with variable rates. But, you know, it does have a big impact. It's also a big impact if you're invested in oil companies in Canada. I mean, you're doing pretty well right now. Like, they're definitely benefiting from that. So yes, it's you can't really like, it's all interconnected.

I know a lot of people will invest, especially in the stock market. And they say, oh, they don't pay attention to macro. And I know Buffett is famous for doing that, saying that where you essentially, if you're spending five minutes on macro, you've wasted five minutes of your time. And I respect Warren Buffett. I have shares in Berkshire Hathaway and my personal investments. I think he's one of the greatest, if not the greatest investor, at least equity investor of all time. But the reality is he made a whole lot of his money in a dropping, in a rate environment that was like for a big part of his investing career that was just trending down. And now what we're seeing is a lot more

volatility there, a lot more just kind of different variables coming into play. Where you had for a better part of what of like 40 years, it was like towards globalization and it was just coming more and more global. You kind of knew what to expect. There was a rule of law. There was a U.S. hegemon that was kind of governing. And there was no other power that could really challenge the U.S. So you kind of knew you you knew what to expect. And now, it's just flipped on his head, it's head and not paying attention to macro, I think,

and just saying it's a waste of time, I think it's a good way to get wrecked unless you're just, you know what, you just use a kind of passive approach. It's well diversify. You're not too concentrated with some of the largest companies and you have some assets in real estate. You have some money and hard assets like gold,

you know, even some exposure to oil and gas. Sure, but if not, you definitely, even then, you still need to be aware, in my opinion. I think that, you know, he's also been, Buffett's also been quoted saying like he doesn't listen to economists. I mean, the reality is he does that because he is an economist. Like, and this is what people don't really think about.

Like, you know, why is he taking the biggest cash position in their history? Like, he does have market timing elements. You know, you could just say, oh, it's fundamental, but it's not really. Like you're just using fundamentals as your primary economic guidance. It's still an economist thing to do. You're saying, oh, valuations don't align with where I would want to buy in. Well, you're still playing the cycle. You're just playing it from a different variable.

He argues that it's because he can't find good deals. Dad would move the needle. I think that's probably what they would argue. And we say Buffett, but it's Greg Abel, who is, by the way, Canadian, looking for his dual citizenship. So, yes, just a little nod to Canada there. Yeah. Did you want to cover jobs quickly and anything else? Yeah, let's cover jobs and then, yeah, we'll wrap this up.

I just looked at the headline. So do you want to, I have the tab here. I can share. So do you want to have you had a chance to look at it a bit more than that? Yeah. So basically, you know, we lot like, and we had mentioned this when we were, we were talking about jobs from July before. It felt like that was the big jump wasn't.

I mean, you saw a couple of things. That was where the Canada Bull Run headline came from. from, right? It was like, we saw the positive job sprint for July numbers, which was really probably that FIFA bump. You saw a positive, you saw a positive GDP revision for Q1 pulling us out of that technical recession. You saw GDP for monthly GDP for one of the months in Q2, alluding to Q2 growth being three point something percent annualized. And everyone's like, oh, it's propaganda that, you know, that it's not growing. And like, you have to annualize GDP growth guys. Like, that's just how you use it.

like I used an annualized figure when I said negative 5% and and now it's plus three. You can't say like your average consumer can't understand GDP on a month, a monthly basis. So that's why they use an annualized figure. But so you had like a couple of these data points that came out and it was like, well, damn, this is strong. And I think bond yields were kind of saying, hey, maybe there's not as much downside in Canada as we anticipated.

And like these guys, you know, I think Canada had been sort of fortunate. the bond market has been sort of fortunate or nice to Canada and such that it let us trail a bit, but started to price a lot more of that back in pretty quickly with all of these positive prints. The reality is, I mean, you know, so employment fell. Employment rate was unchanged. So you're still seeing a lot of the labor force contraction as a result of temporary foreign workers leaving the country. Canada's population shrinking.

So unemployment rate didn't necessarily change. public-private composition mix, a lot of public sector jobs being lost, a couple of private sector jobs being lost. Actually, if you go back to the stat can tab there, and you search, if you go to the bottom, there's a headline that talks about wage growth. Next one down, I think.

Yeah, so, no, keep going. There, this is a long one, eh? There it is. This is the most interesting thing from the L. FAS survey from my perspective, your wage growth is decelerating, right? And so for consumers to be more, to become more wealthy or for your economy to grow, like in the most organic way humanly possible, I think, you need your consumers to have more real wealth or more real income. And if now our wage growth is, our annualized wage growth is actually approaching, you know, so inflation's

going up, let's say, and wage growth is coming down, if your real wage growth is, is below the inflation rate, people's spending power is getting inflated away on a year-over-year basis. And this is sort of a scary thing to see, even with jobs numbers, you know, the, like, a lot of the things that I kind of try and zoom in on, because I think headline jobs numbers are tough to interpret is hours worked, right? How much, how much, like, it doesn't matter if we created a bunch of jobs if nobody's actually working or if our hours worked went down and wages, right? Because those are your real to actual inputs. Aggregate number of hours worked by the economy and that amount of money that those people are getting paid for those hours worked.

And if both of those are slowing, which they are, it doesn't really matter if jobs are going up or down. People are becoming, or they're making less income relative to what they were making in the past based on how many hours of their job they're doing and how much they're getting paid to do those hours. Neither of those things point to board positive economic indicators in my perspective. And if anything, it tells me that the economy is making a compromise on, oh, we're going to hire people, but we're going to give them bad wages by comparison to what we did before. Yeah. What I find the most concerning is that increase, right, the 2% in August, increase in wages compared to,

so the reason I was sharing July CPI is I think I always look at the increase in wages and I compare at the increased food cost. Yeah. Is that to me, it is essential and food is increased 3%. It's been higher than the headline number now for a. I don't know how long. While you have that up, go down to gasoline. Yeah, gasoline.

You know, it's at 25.7%. And we have this return to work movement happening as well, right? So now all these people, you know, they don't like work from home was was inflationary. I mean, or sorry, I'm sorry deflationary because people had had no costs. Right? Like you're just sitting at home. You're consuming your internet. You don't have to drive to work, you know, you don't have to go eat out, eat lunch, pack a lunch.

you're not burning two hours of your day, two plus hours of your day, getting to and from work. Now you have all of these consumers paying for gas again because they have to get to their workplace. And the fuel cost is significantly higher. So imagine going from like, let's take a consumer's picture from two years ago, three years ago. Three years ago, I'm working from home every day of the week or three or four days a week. And my wages are decent and inflation is not that bad. Today, I have to drive to work every day. So my fuel costs technically went up like 100%.

Just the cost of doing business, right? The cost of me, my job. And my wage growth is what? My wages have grown 6% in that period of time when fuel is grown 40%. And again, my actual real expenditure on fuel, because they haven't adjusted the basket for the fact that people are buying fuel again. No, they don't. Yeah.

So they do adjust the basket. basket annually, but like they didn't adjust it according to, hey, I used to buy no fuel, and now I'm buying enough fuel to commute 60 kilometers to and from work every day. No, that's a, that's a great point. And you're talking about gasoline, food, I guess shelter is the only saving grace with rent prices that are falling across Canada. So that's probably at least for renters, but it's funny though, because when you, yeah, but rent CPI always reads up. It always reads positive. And so you have to think about this. Rents are falling, but people are only able to capitalize on that if they switch.

Yeah, exactly. So new unit rents are falling, right? But if I've been in a unit for 10 years and I'm paying $2,000 a month and market rent is $3,000 a month, and maybe it came down to $2,800. I'm not going to go switch to a $2,800 a month unit just because it came down to $200. I'm going to stay in my $2,000 a month a unit and my landlord is going to increase my rent by whatever legal amount they can possibly do that, which is 2 to 3% per year. So maybe 10% of the rental market exists in those new leases that you're talking about,

which, yeah, they're benefiting. But rent CPI is the other 90% of renters that are still experiencing annual payment increases. The other side of shelter is mortgage payments. We're still getting through the renewal wall. Bond yields aren't helpful in this. At current yields, rates are people are, people are, are still resetting and that's going to get pushed into next year the run wall still going to exist people are still going to be resetting every single day at higher rates

extra $200 $300 a month on your mortgage payment these are real costs right so now all of a sudden i've got food like you mentioned fuel which i actually have to drive to work so i actually have to consume way more fuel and it's cost me way more and my shelter costs went up the three essentials that human beings have to have to like literally just need for surviving and you didn't even mention insurance or maintenance costs for homeowners, right? That has not gone down. I can tell you that in property taxes that has not gone down as well. These are all additional costs.

So, no, I think that's a good point. And that was one of the case I was making when I took a position, but then ended up selling it not too long after in Capritzal Canadian apartment reed. And one of the things where I think they are still well positioned for that is what you were saying. So they have a lot of their rents are actually well below marks. market rents. So they still were able, I think the last time I checked to do some pretty substantial rent increases, I think they were able to increase three or four percent around

that range because, again, they are not, they are well below market. And what you end up getting is your tenant's just they don't want to lose that cheap rent. They might start looking. They might end up leaving. I think you had a great podcast episode with Alliance Street. So, and he was talking that they're seeing a lot more turnaround, but they're located in Toronto. They're able to fill it in, but it does require more resources from them. But you have people that, a lot of people that will say, you know what, this new apartment building, they're offering me two months free. And I'm willing to go there and get that two months free.

But not everyone's willing to do that. And that's when you have comparable prices, I would assume, right? Prices that are not too far apart. So you go and get that two months free, but it's still the pain of moving. So a lot of people may decide to just not do that because, you know, saving a couple thousand dollars is not worth. Yeah. Just the pain of moving from one unit to another.

Yeah. Like, well, switching costs are huge like on, on both rental and ownership. Yeah. This is going to continue to introduce. Yeah. Yeah. And so, yeah. So people are not like, why would you do this unless your economic incentive has to be really

high, like to the tune of like 10 plus percent to to make that that move. Yeah, no, exactly. So anything else we want to talk about? My, my stomach's starting to tell me that we should end this soon. Yeah, yeah, let's wrap it up. Although there was one piece of news, actually, that literally just dropped because Joe in the six was talking about like he's surprised that Trump didn't go after the H-1B visas. And he tried.

I don't know if anybody recalls that, but like the H-1B visas, Because they, and it seemed like the Silicon Valley, you know, the supporters who really played a big role. And I think through Vance, because he's connected there, played a big role in him getting elected. They push back pretty hard on that because Canada's, it's one of the things that we export the best. Like, bang for your buck, like Canadian tech labor is like, you know, I mean, insanely valuable to those businesses. And we're big in the AI space and stuff. But Reuters, is it Reuters? Yeah, Reuters article just came out.

It says Trump administration proposes waiving the grace period for H1B holders after the job loss. So if you if your H1B expires, you usually had a 60 day grace period. You have to leave almost immediately. I think they're going to shorten it's taking it together. He's proposing it. I mean, just throwing all kinds of crap out there. It's just absolutely wild. But yeah.

Yeah. Hey, I mean, it's fun having this live show because, yeah, it seems like there's not a week that we don't have. They make it easy for us, for sure, man. They definitely make it easy for us to have stuff to talk about. Anyway, no, I think we got a big way. Should we talk about the 24th quickly before we wrap up? 24th we got, uh, oh yeah, that's right. Yeah.

Mm-hmm. Coming on. It's going to get wild, man. It is going to get wild. We will do our bet. I think he's one of the biggest short sellers in, in like, ever, right? Like, and especially when we're talking about Canada. Yeah.

He was the one who led to charge on, uh, Oh, do you want to see what it is? I said Marco, Mark a Hote. I think I was talking over you. That's why. All good, yeah. Yeah, so 24th. Make sure you tune into that one because it's going to be, it's going to be crazy.

Yeah, there's other ones. There's, oh, man, the names are not coming to mind. But I think, yeah, there's definitely Andrew. What is it? Like, he, I think he got convicted from something. Andrew left was a big one. Yeah, Andrew left. You know, there's some large short-seller.

he's definitely not acman too right yeah well bill acman does short but he's also like quite long on a bunch of different names so i think he's shorts when he sees an opportunity but he's not yeah that's not really i think his bread and brother if i'm being uh you know i don't i know a little bit about bill hackman i haven't studied him but that's my impression of him and uh yeah marcoldis will join i think uh will have to um who else will be on there so ben rabbit who's going to come on as a as a referee i think to, well, we'll see. I don't know. I'm curious. I mean, I mean, Mark's, Mark's perspective on Canada's banking regulations is interesting, but he definitely has a, you know, some, some fun language around Canada. So we'll, we'll, we'll just. Yeah, exactly. I think, yeah,

for people listening when you, uh, you listen to it, um, just, I think you, you, uh, you just have to to listen to what he says. You don't have to agree with it. And, you know, what I try to do generally is I try to stay open-minded. And even if I disagree with someone on 95% of what they say, well, maybe that 5% I'm like, you know what, that 5% of things that they were talking about, I didn't agree with the rest of the 95%, but the 5% he does make a point. So that's just a well, I think he mean, he's obviously very embedded in the US finance world. So I think he'll shed some really interesting insight on the way that the world of US finance is thinking about what's happening with the trade war but also with whether or not you know there is a target on the

banks which we kind of discussed before and if he thinks that's actually a real outcome that they could push for and succeed with so anyway stay tuned for that one it's going to be a really really spicy episode i imagine now on september 24th two weeks for today probably have to put in that explicit disclaimer for the podcast fee yeah there'll be there'll be well yeah we'll drop that we'll make you know we this was similar to ron butler stuff there'll be yeah it's going to get anyway I got to entertain, right? Yeah. Amazing.

Thanks, everyone. The Canadian investor podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.