Oz Buzz 101: Revenge Of The Little Man (ROTLM) – US Election

November 24, 2024

Remember: You are reading Ozzie’s opinion, not advice! And, yes, I have lots of them! But use only your personal professional lawyer/realtor/accountant/ to make your personal investment and life decisions.

Latest videos and podcasts at YOUTUBE.COM/JUROCKVIDEO

Ozzie discusses WHY WAS DONALD TRUMP ELECTED:

THE REVENGE OF THE LITTLE MAN

WELCOME TO HAWAII – MAUI DEALS

(Each video is also available AS A PODCAST on
Spotify, Apple, Amazon, Pocketcast and many others!)
See ozbuzz.ca/category/podcasts/

AGENDA

• REVENGE OF THE LITTLE MAN (ROTLM) – US ELECTION (READ IT)
• ECONOMY ASSESSMENT – SLIDE SHOW
• INFLATION – HARD ASSET INFLATION – COMMODITY PRICE INFLATION
• STRIKES CONTINUED
• THE DOLLARS – US HIGHER, CANADA MUCH LOWER
• VANCOUVER: 4 YEAR RUNNING TOTALS SHOW A 50% COLLAPSE IN SALES
• INVESTORS SUMMARY OF OPPORTUNITIES
• ELECTION IMPACT … WOKE DEAD. DEI DEAD. ESG IN TROUBLE.
• QUESTIONS, QUESTIONS (POSTPONED TO VIDEO)
• NAVIGATING AN UNCERTAIN FUTURE
• ECONOMIC POLICIES: UNITED STATES VS. CANADA
• WORLDWIDE SHIFT TO THE RIGHT
• ECONOMY CANADA VS US
• OIL WILL SURPRISE
• 3 SCARY BLACK SWANS…

Dear Ozbuzzers

Over the years (long years) I have taken a lot of flak about my English. Words like “massacring”, misuse…etc. etc. Why not use a secretary?

Well, here is my revenge. I have used ChatGPT to rewrite my slide show – in ‘proper’ English and you can vote:

The quirky Ozzie – often French English German muddled or my new secretary “Chat-baby”.

Major Point: Everything has been re-written – except the usual numbers section. For all who complained my “action recommendation TALK” was too fast… Chatbaby summarized.

Final Major Point: On the economic video on Nov. 20. We had 911 people ask for the link (and was painstakingly sent to all), 487 actually signed in and only about 400 (at the peak) attended. Huh?

The craziest thing is that I received over 100 requests for links to the Wednesday zoom meet up to and including today (Sunday!)?

I will send a Survey and please ask your help: Morning not good, evening better? What time 6 – 7 PM?

Youtube.com/jurockvideo make it a live show Tuesdays at 7 PM?

FULL DISCLOSURE

Global Political Shifts and Leadership Trends

Worldwide Shift to the Right

• Germany:
  • Implemented the Debt Brake law after the 2009 financial crisis, limiting borrowing to 0.35% of GDP. This became legally binding in 2016.
  • Current challenges, including the Russia-Ukraine war, DEPENDING ON ENERGY ON OUTSIDE COUNTRY (TRUMP WARNED THEM IN 2018) and declining manufacturing, have strained this rule, leading to an upcoming election in February 2025. Woke is dead.
• United States:
  • Trump’s massive electoral victory has been likened to Reagan’s transformative era.
  • His administration plans to reduce government size and inefficiency by:
    • Hiring Elon Musk, a proven efficiency expert.
    • Empowering Vivek Ramaswamy, who proposes eliminating agencies (even IRS and FBI. Huh?) and cutting 75% of federal employees. Woke is dead.
• Canada:
  • An election is expected in October 2025, with debt and left-wing policies dominating the discourse. Why?
  • Opposition parties face internal challenges, with the NDP unlikely to gain seats and MPs waiting for lifetime pensions before triggering an election.
  • Woke is dying

The U.S. Dollar and Global Reserve Currency Dynamics

• Recent Trends:
  • The U.S. dollar has risen 7% in six weeks, driven by higher bond yields and inflation expectations.
  • Long-Term Bond Yields: Watch the 10-year Treasury rate—a critical indicator of inflationary pressures. Rising long-term rates further strengthen the dollar. Now at 4.7% can affect 30-year rates in US.
• Trump’s Approach:
  • BUT: Advocates for a weaker dollar to improve U.S. export competitiveness.
  • Believes Asia and Europe are artificially devaluing their currencies, a tactic he strongly opposes.
  • Despite his intentions, bond market movements and inflation concerns could keep the dollar high.
• The U.S. Dollar as a Reserve Currency:
  • For over two decades, experts like Ozbuzz and JREI have argued that there is no alternative to the U.S. dollar as the world’s reserve currency. 

Economic Policies: United States vs. Canada

United States: Pro-Business and Growth-Oriented (excellent productivity)

• RE Tax Policy. Goal: Tax cuts
  • Capital gains taxes can be deferred indefinitely.
  • Interest payments are deductible against income, encouraging investment.
• Infrastructure Spending: Trump’s policies are likely to prioritize highways, bridges, and other infrastructure projects, boosting the industrial and service sectors.

Canada: Limited Incentives and Rising Government Spending (falling productivity)

• RE Tax Policy. Goa: Massive new taxes. Capital gain increase…but capital gains can be deferred for up to five years, often by carrying a mortgage.
• Spending Challenges:
  • Trudeau’s government expanded the size of government by 40%, creating significant fiscal pressures.
  • Critics point to inefficient spending, such as $9 million for a cricket factory (huh), as emblematic of mismanagement.
• Debt Concerns:
  • Canada’s debt service costs are approaching levels that could consume all GST revenue, raising sustainability concerns.

Oil Prices: A Downward Trend, but a Surprise Reversal Possible

• Oil prices have been largely declining, but (NOTE) this could change:
  • U.S. Production Lag: It takes time for the U.S. to ramp up oil production to meet demand.
  • Geopolitical Risks:
    • If Trump enforces major sanctions on Iran, oil prices are likely to spike.
    • Trump’s strong opposition to Iran and the Houthis increases the probability of these sanctions.
  • Pipeline Politics:
    • If Trump supports projects like Keystone XL, this will benefit Canada’s oil sector. Keystone XL was projected to carry 830,000 barrels per day of Alberta oil sands crude to Nebraska. However, it was halted in 2021 after President Biden revoked a critical permit.
    • Over the past 12 years, the project had faced continuous delays due to opposition from U.S. landowners, Native American tribes, and environmentalists.

Canada’s Heavy Reliance on U.S. Exports

• 97% of Canadian Oil Exports go to the United States, primarily to the Midwest and Gulf Coast.
• Pipeline Infrastructure: A robust pipeline network links Canada’s oil regions to U.S. refineries, enabling record-high exports.
  • In July 2024, U.S. crude oil imports from Canada reached 4.3 million barrels per day.
  • 80% of exports go to US.

Canadian Dollar Impact: A stronger U.S. dollar and increased Canadian oil exports may push the Canadian dollar below 70 cents.

Real Estate Market Trends: Diverging Paths

Condominiums: A Market in Decline

• Sales Trends:
  • Condominium sales are down 11.4%, with pre-construction sales 50–75% below long-term averages.
  • Inventory has reached 12+ months, creating a glut in the market.
  • Several projects facing bankruptcy (read STOREYS MAG)
• Investor Challenges:
  • High interest rates and declining rents make it difficult for investors to maintain positive cash flow.
  • Many are offloading assets, while few buyers remain.

Detached Homes: Resilience Amid Uncertainty

• October Sales: Improved in Vancouver, Toronto, and Montreal as sellers held properties off the market, hoping for better spring conditions. Also, buyers hold back waiting for lower rates.
• Rising Housing Starts: October saw an 8% increase in housing starts, reflecting cautious optimism.

Winners and Losers in the Evolving Economic Landscape

Winners

• Oil Sector:
  • Trump’s “drill, baby, drill” approach supports increased production and infrastructure spending.
  • The industrial and service sectors stand to benefit from broader economic growth.
• Small Businesses:
  • Reduced compliance costs and kill regulations attitude under Trump’s policies could offer significant relief.

Losers

• Renewable Energy:
  • Trump’s disdain for wind and solar projects could undermine growth in this sector.
  • Canada’s renewable energy initiatives may struggle if not aligned with U.S. policy.
• Pharmaceuticals: Heightened scrutiny could create challenges for big pharma companies.

The Big Picture: Navigating an Uncertain Future

• As oil prices fluctuate, real estate markets shift, and political landscapes evolve, both opportunities and risks abound. Leaders like Trump are pushing transformative policies, while Canada and Germany grapple with fiscal constraints. For investors and policymakers, the key lies in staying informed, adapting to rapid changes, and seizing opportunities amidst the chaos. The crossroads we face today will define the economic realities of tomorrow.

REVENGE OF THE LITTLE MAN (ROTLM)

The “Revenge of the Little Man” (ROTLM) is a growing sentiment among everyday individuals who feel marginalized and unheard in a world of corporate, political, and social powerhouses. They may not wield much influence on their own, but together, they’re finding ways to push back—claiming even small victories when they can.

At Ozbuzz, I’ve been something of a “Don Quixote,” taking up personal battles against societal frustrations. For years, I’ve railed against the invasion of self-service machines in our stores and the forced upsizing of products. Take my local grocery store, for example: they charge $2.50 for bags, with no paper option. It’s a small issue in the grand scheme of things, but to me, it’s another example of how little say we have in the decisions that affect our daily lives.

Many Ozbuzz readers have also voiced their discontent. Some took a stand against Nike when they hired Colin Kaepernick, and others are disillusioned with corporate social agendas like DEI (Diversity, Equity, and Inclusion) and ESG (Environmental, Social, and Governance). These “little men and women” felt that their priorities were being pushed aside in favor of corporate image or scared of not fitting in the new woke cancel culture.

Though these actions often felt small and symbolic, ROTLM gained momentum. High-profile companies like Bud Light and Target faced backlash over decisions that seemed out of touch with their core customers, losing billions in the process. Eventually, even giants like Amazon and Microsoft made sharp cuts to their DEI departments, signaling a shift toward focusing on business performance over social programs.

And then came the U.S. election. The ROTLM movement found its voice in the American voters, who handed Donald Trump an unprecedented victory. He won the popular vote (the first Republican to do so since 2004), secured the Senate, and likely took the House. Why? Because he promised something different: a return to economic strength, safer communities, controlled immigration, and a focus on American interests.

For many, this vote was about reclaiming their voice. They were tired of being labeled, dismissed, and ridiculed for questioning certain cultural shifts. They wanted safe schools, affordable groceries, and fair wages. They wanted to feel respected in a society that seemed more inclined to mock their values than understand them.

When people raised concerns, they were told to be quiet. When they opposed certain ideas, they were called uneducated or regressive. Religious people, family-oriented citizens, and working-class folks were being sidelined as Nazis, right wing nuts or garbage. They felt. they didn’t belong in this “new” society. So ROTLM rose up! Enough is enough.

Major Point: This election became a statement against the woke mentality. The establishment expressed surprise—and maybe even scorn—at the “stupid voters” who supposedly “didn’t understand” what they were doing. But the ROTLM crowd understood all too well. For them, this was a declaration of democracy: a reminder that in a true democracy, the people still have power, and they’ve used it. The Little Man has spoken. And today, America—and the world—are listening.

OH: One other thing it proved again. Polls are horseshit!

From November Slide show. 

Investors: This is YOUR Market – A Comprehensive Must-Do List
Immediate Action Steps

1. Get on foreclosure lists:
   • Access all national foreclosure databases for potential deals.
2. Explore assignment opportunities:
   • Monitor platforms like Craigslist and Kijiji for real estate assignments.
3. Make lots of offers:
   • Embrace “stinkbids” (low-ball offers).
4. Sign up for pre-sale invitation lists:
   • Pre-sale deals are lucrative; be proactive.

Pre-Sale Market Insights

• Current Opportunities:
  • Many developments offer attractive incentives:
    • 12% interest on deposits.
    • Ability to back out 3 months before closing while earning 6% interest.
    • 4% commissions and promotional items like free Porsches!
  • NOTE: Out of 33 buildings planned for September launch, only 3 launched, highlighting limited supply.
• Advice:
  • Look for final units in existing buildings; these often come with smoking deals.
  • New supply is limited—no significant new inventory for 3–4 years. The value of what you own now is likely to rise.

Stinkbids and Negotiation Tips

• Make aggressive offers to quality builders and developers.
• Request additional perks:
  • Cars, full furniture packages, discounts, strata fee coverage, or even mortgage/property tax payments for 1–2 years.
  • Avoid very small units (e.g., 540 sq. ft. 2-bedroom units). For rental purposes, prioritize one-bedroom units.
• URGENT NOTE: MASSIVE DECLINE IN PROJECT STABILITY

Financial Planning: How Much Cash Should You Keep?

• Cash Preservation by Age:
  • Over 70: 50% cash.
  • Over 60: 40% cash.
  • Over 50: 35% cash.
  • Over 40: 25% cash.
  • Under 40: Go for growth opportunities (“the brass ring”).
• Special Note:
  • If over 65, with $2 million in home equity but no other assets, SELL NOW.
  • Watch Ozzie’s “Live Your Money” video for insights on optimizing your wealth.

Key Market Observations

1. Real Estate Insights:
   • Doubling of values: Real estate prices have doubled in the last decade—prepare for potential downturns.
   • Be patient; the market isn’t going anywhere fast.
   • Build a cash buffer: Readjust your strategy for current conditions.
2. Long-Term Advice:
   • Own “dirt” (land) for lasting value.
   • Follow Warren Buffet’s “risk-off” approach: Cash is okay in uncertain times.

Market Psychology

• Last year was dominated by FOMO (fear of missing out).
• This year is marked by fear and worry, leading to selling.
• Psychology will shift as markets move through this valley….NEXT YEARS SIDEWAYS TO DOWN
  Reminder: No one knows for sure—these are unprecedented times.

New Ideas for Tough Markets

1. Think Outside the Box:
   • Urban trends are shifting Millennials prefer renting in the inner city rather than moving to suburbs.
   • Lifelong tenants will increase—rental buildings are poised to perform well.
2. Focus on Downtown Properties:
   • Buy condos, commercial (all) properties that have an urban use! People are expected to return to city living.
3. Leverage Amazon Trends:
   • Amazon’s Canadian operations are driving demand for:
     • Large and small warehouses.
     • Return shipment locations.(Huge Opp)
   • Ideas:
     • Convert existing retail spaces into Amazon pickup/return locations.
     • Rearrange older properties for electronic rent collection, app-based entry, and modern features.
4. Cater to Netflix and Movie Production:
   • Netflix produces a movie a week and needs:
     • Sound stages.
     • Warehouses for equipment.
     • Unique houses or lots with a distinct vista for filming.
   • Opportunity: Turn condos into high-end rentals for directors or stars.

Ongoing Opportunities

1. Industrial Real Estate:
   • Top Picks:
     • Warehouses with 20% office components (MUST).
     • Trailer parks.
     • Mini-storage facilities.
     • Office condos.
     • Properties with truck access and loading ramps.
2. Private Lending:
   • Earn 7% returns on private money investments.
3. Rent Luxury Properties:
   • Luxury homes and condos often sit empty at great cost 3% spec and 3% empty tax – foreigners – plus UST. Renting them out—even for $5,000/month—offsets carrying expenses like taxes and common area costs.

Auctions and Assignments

1. Alberta Online Auctions:
   • Unreserved auctions present excellent opportunities.
2. U.S. Auctions:
   • Physical auctions are making a comeback—track upcoming listings.
3. Monitor Assignments:
   • Use platforms like Kijiji and Craigslist to find sellers ready to negotiate.
   • Examples:
     • Some owners (right now) are willing to accept $30,000 – $100,000 reductions for quick sales.

Black Swan Risks and Opportunities

Real Estate Insolvencies

• In 2024, real estate-related insolvencies in Canada are projected to rise 57% over 2023 – 20 insolvencies a month.
• Developers are defaulting on loans, with high-profile projects like The One condo tower in Toronto defaulting on $1.6 billion in loans.
• Big crash this week: THIND defaulting (1,800 units), Duck Island others (read STOREYS)

Buffett and Burry: Risk-Off Strategies

• Warren Buffett has reduced his stock holdings, selling Bank of America and Apple stocks among others. He sits on 330 billion cash! WHY?
• Michael Burry (of “Big Short” fame) has sold 56% of his portfolio. (not sure where it went). He and a lot of ‘big boys’ are into cash! WHY?

Equity Bubble Warning

• David Rosenberg predicts that Trump may face a massive equity bubble, potentially leading to a burst.

OUTLIER: Biggest Risk: If President Trump (God forbid) was killed…Civil war!

Conclusion

The market presents unique opportunities for investors who are prepared to think creatively and act decisively. From real estate deals to industrial investments and urban trends, the current environment offers a wealth of potential—if navigated strategically. While risks exist, embracing these tactics can turn challenges into gains.

NUMBERS, NUMBERS

SNAPSHOT OCTOBER  2024 VANCOUVER + FRASER VALLEY–ONGOING SALES CRASH

Let’s take a longer view by analyzing sales over a longer period and a “rolling total.”

We use the 12 months OCT 30 – OCT 30 the following year. Eyepopper!

Let’s keep looking at OCTOBER 2024 comparison to the ALL-TIME HIGHS ACHIEVED:

VANCOUVER OCTOBER 2024
HIGHEST PAST MONTHLY PRICE AND SALES COMPARED TO OCTOBER 2024. 

VANCOUVER SF and condos

Sales REVERSED UP! Prices lower. At least over this October over last October. Down sharply from June 2024.  Well below the 10-year average.

VANCOUVER: Here is a 4-year OCT 2024 over OCT 2023/2022/2021/ comparison.

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