Who knew?

The first business day after a cabinet shuffle, T2 has another cabinet crisis. With the resignation of Jane Philpott, Trudeau loses a trusted, experienced politician. But it’s way more than just a defection. This is a Lib disaster. Think Titanic. Dino-incinerating asteroids. The black hole.

Two senior women ministers out the door in quick succession. Serious allegations of legal and moral cock-ups by the PM and his cronies. The exit of the prime minister’s principal secretary and long-time fixer/fluffer. And now this. Just months before an election.

“I must abide by my core values, my ethical responsibilities and constitutional obligations,” said Philpott as she left, twisting the knife handed her by JWR. “There can be a cost to acting on one’s principles, but there is a bigger cost to abandoning them.”

They’ve suddenly discovered ethics in Ottawa. Who knew?

  Philpott says it’s all about SNC Lavalin. Wham. She has “serious concerns” regarding the pressure the Trudeau gang put on the former attorney-general to intervene in the criminal prosecution of that company and she can no longer support the government. This from the President of the Treasury Board who was formerly the Minister of Health. So with this news the Trudeau government – almost assured of re-election three weeks ago – is entering a state of poochedness.

Brison. Butts. JWR. Philpott. And the top bureaucrat saying he fears someone will get shot. Remember this day. Soon you may just have the lingering stench of weed to remind you of Pierre’s kid.

$     $     $

Meanwhile in BC, Comrade Premier Horgan must be rejoicing at the latest real estate stats. The Dipper campaign to tax and Hoover the poop out of the market is a resounding success. Equity’s being erased and prices are falling. But, of course, buyers are few and far between.

Sales last month were down 32% year/year while listings mushroomed more than 40%. Incredibly 91.5% of all detached homes on the market failed to sell, and market value is now dropping by about 1% a month. In fact the average detached price at $1.4 million has plunged 20% from its peak. If this were stocks, it would be a bear market. The detached carnage is everywhere. West Van (-28%), East Van (-21%), North Van (-16%).

So, more to come. Negative sentiment is building, which means even fewer buyers. Driving prices down with political actions is just as dumb as governments pumping housing up. The odds of an overshoot are real. If that 20% drop turns into 40% there’ll be tens of thousands of families in negative equity, owing more on their homes than they’re worth. As the US experience showed us, in a market rout it’s not house-hungry families swarming the streets looking for bargains, but investors buying the dip.

Trudeau. Horgan. Notley. Barry McGuire. One-hit wonders.

$     $     $

And here’s an interesting tidbit. Canada’s largest homebuilder, Mattamy, looks like it’s starting to wriggle out of the real estate business. On Monday the company announced a major reorg, creating an asset management corporation, “to capitalize on a range of investment opportunities and strategic partnerships outside of the homebuilding industry. The significant excess cash flow generated by Mattamy Homes Canada and U.S. will allow both the de-leveraging of the homebuilding businesses and the funding of these new investments.”

Well, when the biggest builder in the land says it will be ‘de-leveraging’ from homebuilding you know something is hitting the fan. Stay tuned for life after particleboard.

$     $     $

“I think that’s why they let comment moderators work from home,” Adam Sokol wrote in the NY Times a few days ago in a piece about moderating posts on a conservative website. “Nobody wants to work next to the guy who’s quietly weeping at his desk. It just brings everyone else down and is a real bummer in terms of productivity.”

Weeping’s not my thing. But some days this blog is a place I’d rather avoid. Since a certain person was elected US president, it’s apparently okay to be openly anti-Chinese, xenophobic, tepidly racist and unapologetically intolerant of those worried about silly distractions like the climate or the wealth gap. On a quasi-financial site like this, this stick-it-in-your-eye arrogance extends to trashing anyone without the current alt-right world view – that Libs have destroyed our economy, anyone other than Trump will destroy that one, central bankers are idiots, gold is good, real alpha men flip stocks and the Internet’s where you go to rip off free information, then dump on the source.

Yesterday was a prize. After referencing a big rebound on Bay Street in 2019 and a reversal of last year’s market plop in New York, I detailed weightings for a 60/40 portfolio rebalance. A few tweaks from previous iterations, appropriate for a volatile year of politics, trade tensions and tapering interest rates. Naively, it seemed like a service. But it didn’t jive with the narrative of those who live in a black-&-white world. The DELETE finger was busy.

So, good luck You’re now on your own.