The Two Things That Keep Toronto Housing Market Messed Up

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The news is in – there are 15,000 to 28,000 homes in Toronto that are sitting empty. The real estate industry downplayed this as just 2 to 4 percent of all housing units, as if that cannot affect the housing prices and supply at all. They are wrong.

First, we have to understand that many of these houses are investment with no plan whatsoever to rent the units out. There are special investors unlike the classic ones who want to put their capital to work. These special investors are parking money on these properties just because they need a safer investment vehicle than keeping cash in the bank. By the way, keeping a lot of money in the bank is not safe.

So the suggestion of putting a vacant-home tax on these empty houses will not improve the supply of rental units that much. At least not as effective as what many people believe. The reason is exactly what I wrote earlier that there is a new class of housing investors who do not behave the same way like the ones that we are familiar with. This class of investors will simply choose to ditch their investments in housing and switch to something else. Hence, we may see a drop in average purchase price but not improvement in rental unit supply.

Case in point – the so-called foreigner tax on properties has already been neutralized by accounting tricks in Vancouver. I guess the same fate on foreigner tax will happen in Toronto quickly.

Lesson learned from foreigner tax? Negative incentive (i.e. punishment driven taxes) seldom works.

Further complicating the situation, many smart investors are now converting their investments into AirBnB instead of the traditional long term rental because of the significant increase in potential income. In additional, the rental units operated as AirBnB can be sold quickly with no troublesome issues of long term contracted tenants. Hence, local people seeking for long term rental units are facing a near static pool of supply even though there are new condos built everywhere.

The government has to think of more novel ways to resolve the housing supply problem.

To start, they need to factor in the two new dynamics I mentioned above that changed the housing market behaviour so that the correct solutions can be found. Otherwise, people can no longer choose to rent or buy their homes because there will be next to none new supply of rental units. When everyone is being forced to buy their living places, the housing prices will never stabilize. The long term economic impact will also be very bad when labour mobility is greatly reduced.

Personally, I can think of several ways to tackle this problem but it will not be welcome by majority of the people living in Greater Toronto Area as the balance of renters and home buyers is now completely messed up.

For example, introducing positive incentive policies to get people to consider offering their housing units for long term rental can be very effective. It can be as simple as first time landlords offering long term rental units can keep their gain tax free the first 5 years. This encourages more people to consider doing long term rental instead of the more entrepreneur AirBnb option. We cannot force investors to do something they do no want to do but incentives can get people to think twice before going for the AirBnb route.

Policy of this type, however, is almost always objected by the NDP party because “it helps the rich”. So whatever I suggested here is, yet again, babble for my own amusement.

 

Resource

http://www.metronews.ca/news/toronto/2017/06/12/in-housing-crunch-15000-to-28000-toronto-are-empty.html

Double Whammy: Two Credit Cards of Mine Hacked

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Don’t know what to say when I was called this morning from the bank that one of my credit cards is compromised. I was told that the card is disabled and a new card will be sent to me in a few days. I thought that was no big deal because it has happened to me several years ago. Credit card information being stolen is just part of life when everything are paid with credit cards these days.

I was kept on the phone to verify every transactions happened lately whether each of them were legitimate purchases I made. It took couple of hours over the phone to get things cleared up. I thought the trouble was over until I checked online to see which credit card of mine can be used in place of the one that was compromised.

Crazy as it may seems, I found another credit card of mine has quite a number of Uber charges that I do not recognize. Within moments I realized that this other credit card was hacked as well. After another round of marathon phone calls to handle the situation, most of my day was used up already.

This is so frustrating. I have no idea how my credit card information were stolen. I do not visit questionable websites. My computer is clean from malwares. I shop at normal places. It is something I like to dig deeper to see if I can prevent this from happening in the future.

For now, I am keeping my fingers crossed that the credit card thieves / hackers will spare me for a long long time.

Server Maintenance This Weekend

Due to server failure earlier this week, we have been running everything off a backup server. This weekend we will move things onto a new server we’ve received today. The weekly update could be delayed by several hours.

I do not expect any major problems from this hardware replacement routine.

Trading Related Videos Have a New Home

I have moved the trading related videos to Essence of Trading from DaytradingBias.

This completed another part of the streamlining of the content within the daytradingbias website.

Although the videos are moved to Essence of Trading, the function to browse by the specific topics related to trading is not ready yet.

We will take care of that as soon as possible.

Have a nice weekend all!

Short Term Schedule Change

Due to unforeseen issues, I have to handle several things out town until end of next week.

I will try to post if the internet connection is functional at where I am heading.

I am quite sure I cannot trade during this trip but I will still post my pre-open thoughts in real-time commentary as long as I have internet access.

Must get packing now.

Have a good one!

Email Issue Resolved

We replaced my email server with a new computer over the weekend.

Data transfer was easy. Looks like there is no data loss so far.

Setting up the email server, however, took many hours as many tedious settings have to be done manually.

Anyhow, it is all done. Everything back up and running.

And a nice little surprise for me – I was told the old email server has been working 7/24 for 12+ years.

When things are working, we tend not to think too much about their importance.

Server Upgrade and Changes to Art of Chart Reading Online

As reported several days ago, my mail server broke down. I am working with a backup of the server setup on an older computer temporarily. We will setup the mail server properly over the weekend. If you intended to send email to us over the weekend, please note that it may be bounced. Just resend the message to us should get it to us.

Art of Chart Reading online will be taken off the site soon as I prepare to release the book bearing the same name. In short, many changes to the site daytradingbias.com in coming weeks as content will be rearranged. If you find the site suddenly looks different, no need to be alarmed.

Have a nice weekend all!

My Mail Server Is Down

Email problem with my server today. It is taking much longer than expected for the repair of the database so far. My guess is that I have to wait til tomorrow before I can check for my email let alone answering emails in the queue.

If you have not seen my reply of your email from last week, it will happen tomorrow.

Site Revision Progress

This week we have completed the move of one set of articles from DaytradingBias.com into a separate website, Essence of Trading. Obviously, the site is for the publishing of the article series bearing the same name. I expected to write more articles for the site whenever I find the right topic.

The original Essence of Trading articles are now redirected to the new site to avoid duplication. So don’t be alerted that you are redirected there. In the meantime, I have the tedious task of reviewing and editing the articles on the new site to make sure they have the correct formatting, etc.

In the future, I will invite other successful professional traders to pen articles for Essence of Trading. Many of my trader friends are not the type who enjoy the spotlight hence don’t hold me responsible when I come up empty handed on this pursuit.

More changes are coming to DaytradingBias.com as we are streamlining the design to prepare for the launch of the new real-time trading signals and trading models.

I will keep you all posted.

Have a nice weekend all!

Long Lives Windows XP or Is That a Major Time Bomb Ticking

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One worrisome thing I noticed during my trip to Asia several months ago was that Windows XP is everywhere. I am not joking here. Even though Windows XP has been discontinued by Microsoft with no updates and totally open to all kinds of exploits, it is still heavily in use. This gets me thinking, maybe those end of day prophecies are not about bombing, wars or whatever humanity issues but just that Windows XP stops working one day in the near future.

Odd Encounters

Official support for Windows XP has ended in year 2014 yet almost all the government services I have to deal with are still using Windows XP. Remember I travelled to quite a number of countries in Asia. This means all these countries, assuming they are using legitimate copies of Windows XP, have not upgraded their computers nor the operating system for at least 10 years already.

Originally I intended to take photos of these computers but I was challenged multiple times with serious threats to my personal safety for trying. Seriously, I did not, like, pull out a big ass camera to take a picture. All I tried to do was to take a quick photo with my cell phone. And nope, it is not allowed everywhere. The hassle I have to went through for even attempting to take a photo or asking about the computers is unbelievable. It is as if I was trying to spy on them or catching them for doing something criminal.

Bureaucrats Do Not Really Care

I do not see this as an issue of the frontline government workers. They have to use whatever they are given. I wonder who gave them the instructions to forbid people from taking pictures of their computers showing the Windows XP desktop or logo. And more importantly, what is the reason for being such paranoia?

My theory is that those who made the decision to use Windows XP computers could have been long retired in all these countries. If not, they probably moved higher up in their ranking or positions already. Hence those who inherited the existing equipment have no idea that computers are not furniture. Maybe those who originally made the purchase decision also have no idea that computers are waste asset that have to be replaced while they are still working.

Since we all know how bureaucracy functions in the real world, it is not hard to figure out the rest. Replace a broken computer is allowed. Repairing a broken computer is part of the maintenance program. But upgrading to new computers with operating system that may not work well with the rest of the deployed frontend computers, is definitely not a good idea for any smart bureaucrats who care about the safety of their jobs.

As long as these computers are still kicking, the bureaucrats in power would leave the headache of computer upgrades to the next bureaucrats.

Windows XP Is Common in Many Critical Government Services

I will not name names here. In the countries I have visited, Windows XP is used in customs, police stations, fire stations, centralized control centres for major bridges and tunnels. We are talking about critical government services here. We are also talking about the most vulnerable version of Windows being used for such purpose.

If these governments want to reduce the upgrade overhead, they have to bite the bullet and switch to something cheaper like Linux. Of course there will be huge up front cost to switch over and likely firing many of the IT staff too because they may not be tech savvy enough to maintain Linux based computers. In other words, either way these government departments are facing large expenses that the politicians will not approve. This is the other reason why many countries are stuck with their trusted Windows XP computers.

Time Bomb is Ticking

I am not saying Windows XP does not work well. In fact, the matured version of Windows XP was much better than the initial releases of Windows 7. Windows XP is also much less demanding in terms of CPU power. In short it is more efficient.

The problem though, is that Windows XP was released so long ago, that the components in those old computers with Windows XP can stop working anytime. When that happens, it is still possible to get new computer hardware to work with Windows XP now. In a few more years, however, it may no longer be the case.

A good example is the newer generation of USB ports. Currently, we are having the 3rd generation of USB being adopted everywhere. Windows XP can barely working with the components supporting this generation of USB. Soon, when the 4th generation becoming the standard, it is likely it may not even work with Windows XP at all.

I can foresee already that massive computer failures on these Windows XP machines happening in the near future. When that happens, I wonder if the government officials and the politicians understand what it takes to resolve the problem.

Defusing the Time Bomb

Hopefully, some government workers and high up bureaucrats, get the chance to read my post here. The important thing now is not to panic since they cannot suddenly upgrade all the computers anyway. By having a disaster management plan in place, it will take care of the crisis faster and minimize the impact of normal government operations. I think that is the number one priority for these government departments.

Many IT departments already adopted the practice of taking complete image of their deployed computers. Such backup image is great for dumping onto another computer should the original machine break down. It minimizes the down time but it only works if the target computer is having almost exactly the same configuration with very similar components. This is where the real bottleneck is as I discussed earlier in the article. Basic image of the computer hard drive is not good enough any more.

To improve the situation, the IT departments can create virtual machines of these frontline Windows XP computers. There are many solutions out there that do not cost much and can handle this task perfectly. What it means is that when new computers are needed, any hardware available can be used and having the cheapest stable operating system installed on such computer will be enough. The actual solution is just deploying the virtual machines onto these new computers.

Of course there are technical details that has to be attended to but it is well worth the effort. If anyone cares about the continuity of their computer systems operate smoothly with minimal down time, using virtual machine technology is probably the best solution right now.

Personal Agenda

I have my personal agenda here when I am writing this article. I actually talked to some high up government officials who understand the problem but they do not know what to do about it. Obviously, their people who manage the computers have not keep up their knowledge with the current technology we have nowadays.

I do not wish that one day I am stuck at a airport just because the computers suddenly not working and they have no way in restoring the service quickly.

I do not want to spend days waiting for something from a government just because their Windows XP computers are out of commission.

Hopefully, more people are aware of this crisis in the making so that it will be defused before major impact is felt when these Windows XP computers failing massively in the future.