Thursday, January 30, 2020

Debt Problem? What Debt Problem? All is Giod in Canada, Right?

A lot of numbers in this article, but basically with our own credit card, mortgage, provincial and federal debt (yes actual real Canadians are responsible for that too! Government debt does not make it the government's reponsibility) would mean tens of thousands over each and every Canadian's head - man, woman and child. 


http://business.financialpost.com/executive/posthaste-canadas-world-leading-debt-could-be-its-downfall-in-global-downturn-report-warns

Monday, January 20, 2020

Ontario and its Teachers' Union: Have Canadians Forgot What Unions Were Meant to Be and Will Ontario Parents Always Be Beholden to this Unnecesarily Powerful Union

At one time, young impressionable students would choose to become a teacher as a noble and valid career path when it came to career choices after high school.  One of the many reasons may have been for the greater good of helping even younger, more impressionable minds.  Also, these teachers of yore had good intentions and priorities of actual "education" as well as teaching life lessons (sharing, behaviour, interacting with other kids), skills (physical activities/sports, reading, writing, painting), manners, religion (if in a Catholic system for example) and more importantly motivating children, teenagers and post-secondary students in their 20s how to learn throughout the various levels of our education system, that could result, as examples, in a well paying trade, a less structured but contributing world of art and/or music, a specialized brain surgeon, a professional finance or accounting designation to name a few.

At this point, we have to ask ourselves when did attending Teachers' College morph into: i) a hate for any provincial government (despite the 10 years of Liberal friendliness and cozy relationships), ii) a God-given right to strike what seems like every three years, iii) the gall to ask for salaries, as well as much longer term costs as pensions, that are indexed the highest versus inflation and are the most attractive of any industry such that the Ontario Teachers' Pension Plan has resulted in a pool of funds ($194 Billion) that competes with Canada's federal pension plan the CPP ($409 billion, that is supposed to cover ALL Canadians)?!?!  And iv) not to mention all the extra demands on the list when these deadlines approach (more benefits while retired, greater amounts of sick days/PA days/mental health days, smaller class sizes even though when I was growing up in an exploding Scarborough population, students approaching 40 to a classroom was the norm).

When will teachers set an example to the public and their students that when faced with a three year contract expiring in - oh say, three years - a month or weeks before the deadline is not the best way to settle a contact renewal.  Yet most contract renewal situations appear to turn out the same, with one or two irate union officials on the news or calling into the radio talk shows spewing the vitriol of "oppressive" working conditions and more and more forces that are piling up against them to topple their abilities of...coping.

At some point Canadians have forgotten why unions originally existed - to fight squalid conditions for meagre pay, less than say minimum wage today, while lacking any safety standards, rights or benefits.  Now, most Canadians, including teachers and auto workers in particular, view unions as  bona fide groups that are OBLIGATED to put forth above average, greedy demands despite maintaining an "average quality" of its workers (unions prevent anyone form shining above the rest and to be compensated appropriately) and to hold students, customers, even their own suppliers and fellow unions hostage by striking, shutting down a plant, protesting or blocking access to major traffic routes for a day or days on end. 

AS A REMINDER, unions were formed at a time when the western world was undergoing the Industrial Revolution in the 1800s, which created the "working class" while society moved from rural to industrial with many people living in towns and cities around factories, plants, ports, etc.  Working conditions were poor, destitute and deprived  fuelling not only the development of trade unions for the basics of safety, a humane length of a work week, or the odd work break but large groups of workers (union), for example, the shipping industry would provide assistance in times of unemployment, illness, or death - not for "oppressive" class room conditions that demand extra sick days or one or two less students.  Imagine that!? A union taking care of its unemployed, taking the burden off the government!

Teachers are an educated work force and, like all professions, there is a market rate for their skills (ask any private school teacher).  Why we need unions in this day and age (it is 2020!) for this large, influential, monetarily draining on the provincial coffers, and at times, whining bullying group of demading/negotiating thugs is a mystery that no parent, voting public or member of Provincial Legislature can explain.  Yet, if it is not done, it results in vote impacts for the then governing party, while the media ALWAYS sides with the union in these cases.  THE REAL VICTIMS ARE of course the students, the parents that are impacted PROVINCE WIDE as well as productivity and growth in GDP of this "small little province" of Ontario (that would be the GDP of a few first world countries!)

The true costs (to governments, and of course, us taxpayers) is not just another annual increase - the true cost is actually vastly outweighed by the CUMULATIVE and ONGOING costs of that group of teachers for the rest of their working career (10 years? 20 years? 30 years?) IN ADDITION TO THE ONGOING FUNDING REQUIREMENTS TO PAY FOR THAT TEACHER'S OVER-INDEXED PENSION PLAN after they stopped working - for another 10 years? 20 years? 30 years? 40 years?

All of this for 10 months of the annual working calendar.

As a reminder, at least eight of the major teachers, assistants and education workers strikes since 1997 and the tens of thousands of students that were impacted or simply held hostage as the strikes were held during exam time as an example are listed in the following link....

https://guides.library.utoronto.ca/c.php?g=250906&p=1680318

Also, to peruse....

https://www.theglobeandmail.com/news/national/education/ontario-teachers-a-history-lesson-on-the-labourdispute/article26030657/

https://www.theglobeandmail.com/investing/personal-finance/retirement/article-how-does-the-ontario-teachers-pension-plan-stack-up-against-the/
"...When combined with CPP, the PSPP [Public Service Pension Plan] provides a pension of 70 per cent of the final five years’ average earnings if the member contributed for 35 years. After 65, the pension (including CPP) is actually a little more than 70 per cent because integration with the CPP is not perfect. In addition, members receive OAS pension.

The pension for OTPP members is virtually the same except that the pension payable after 65 is even higher than it is under the PSPP.

Members with 35 years of service under either plan will be very comfortable in retirement. For workers who were raising families or paying off mortgages, which means almost everyone, a 70-per-cent pension (plus OAS) translates into a standard of living in retirement that is significantly higher than what they enjoyed while they were working. With the CPP being enhanced, this can only go up..."

https://www.theglobeandmail.com/news/national/education/anatomy-of-an-ontario-teachers-paycheque/article6015968/
From 2012, "...Annual starting salary for a new teacher at lowest and highest pay rates: $45,709, $55,404.  Salary for a teacher with more than 10 years of service at the lowest and highest pay rates: $76,021, $94,707.  (Teachers can reach the top pay scale 10 years after starting their careers. Within each pay scale there are four groups, which are based on teachers' education and extra training, as well as years of experience. The pay raises based on years of teaching have taken effect automatically on Sept. 1. In Bill 115, the government has imposed a delay to Feb. 1 and asked teachers to also take three unpaid days.)

Teachers are credited for 20 sick days per year. If they don't use them all, the remainder can be banked indefinitely until retirement and cashed out up to a maximum of half a year's pay. Bill 115 reduces allowed sick days to 10 per year and eliminates the ability to bank unused days until retirement

Teachers have an extended health-care plan that is 100-per-cent funded by the employer and dental plan funded 94 per cent by the employer. They also have group life insurance coverage, with the first $35,000 of coverage paid by the board and any additional coverage paid by the teacher.

Monday, January 6, 2020

2020: Investment Thesis Update...

In four days since the US killing of Iran's top general, gold is up ~$60/oz.

Unfortunately, the options on GLD (SPDR Gold Trust ETF) have not moved as expected.  Typically, the GLD has traded at a ~$80/oz discount to the spot price.  However, the GLD has not reflected the $60/oz increase in the spot market. 

However, oil is up and the equity markets are down as traders come back for a normalized week after the Christmas break.

Trudeau Vacation: Heading Into Week 3

When does the leader of any country use three consecutive weeks of vacation?

Although it has taken four years, Trudeau has managed to stay out of the news this time on his vacation...for now. 

House of Commons not due back until end of January, so the questioning will not begin until then.

Sunday, January 5, 2020

2020: Investment Thesis?

As a new year rolls over, that means another $6,000 is available for our TFSAs, one of the only "tax free" vehicles other than your principal residence. 

Looking at the options available, the broader equity markets have been on fire in 2019, so where to from there? Continue buying the S&P500 (SPY)? Is the bottom in oil? What about gold (GLD) for any sudden downturns? 

Well, we just had our answer....

http://business.financialpost.com/investing/gold-nears-six-year-high-as-traders-rush-to-havens

Wednesday, January 1, 2020

Political Gaffes of the Decade: Guess Who is on Top?

http://nationalpost.com/opinion/chris-selley-the-top-5-worst-political-ideas-of-the-2010s-and-5-honourable-mentions