ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
November 25, 2022 | Canada’s Central Bank Downplays The Risks of a Financial Crisis
Canada’s private sector debt problem keeps growing larger. With private sector debt at about 230 percent of GDP, Canada has no room for error. And rising interest rates could force large numbers of mortgage borrowers into default, which could create a financial crisis. But the Bank of Canada is not worried. Bank of Canada staff […]
November 19, 2022 | The Bernanke Nobel Prize Should Have Gone To a Different Economist
Ben Bernanke, then-chair of the Federal Reserve, made his wrong prediction about real estate in a 2005 interview, just a year before the collapse in house prices in the US. The collapse in housing and subprime mortgages triggered the Global Financial Crisis (GFC) from 2006 to 2009. In October Bernanke was awarded a Nobel Prize […]
November 11, 2022 | Canada Faces a Huge Challenge with Emission Reductions
Canada is about to hit the wall over CO2 emissions. Canada’s commitment to reduce by 290 million tonnes annually looks increasingly difficult to achieve. Canada is second only to Saudi Arabia in emissions of metric tons of CO2 per person, due to Canada’s status as a major producer of oil and gas. Other countries, […]
November 4, 2022 | Tesla Reports Record Production But There are Hints of Bumps in the Road
Tesla reports another record quarter of production but there are hints of some bumps in the road ahead. The company is generating huge amounts of free cash flow, even while building out two new factories. But a weak stock market and looming recession could affect Tesla. In full disclosure I have owned and driven a […]
October 28, 2022 | Bank of Canada Wavers
The Bank of Canada blinked first as recession looms and the economy continues to adjust to much higher interest rates. The BOC hiked interest rates only 50 basis points on October 26 when the market expected 75 basis points. Is the Bank of Canada signaling that rates are high enough now? Source: MacBeth MacLeod Partners […]
October 21, 2022 | China is Going Through a Rough Patch with Weak Growth
China probably slipped into a recession recently. On October 18, 2022, data that were expected for third quarter GDP failed to appear. Websites stated that the information was delayed. China matters to everyone on earth as the second largest economy in the world. But there are signs of trouble. Should we worry about China? As […]
October 14, 2022 | Canadian Real Estate Speculators Feel The Heat From Higher Rates
Homeowners and real estate speculators in Canada are already feeling the heat from interest rate increases that have had the effect of tripling mortgage interest for some people. A petition was started in protest against higher rates, and by Thursday October 13, 2022, had gathered over 15,800 signers. This makes the petition one of the […]
October 7, 2022 | OPEC Cuts Crude Oil Supply Again
OPEC cuts oil production by another 2 million barrels per day, adding to upward pressure on the crude oil price. Will OPEC keep control of the market for crude? On October 5, 2022, OPEC+ announced another 2-million-barrel reduction in crude oil production. OPEC+ refers to the OPEC members plus other large producers who are not […]
September 30, 2022 | Panic in London Over Interest Rates and Bond Prices
The panic in UK government bond markets that gripped London Monday was a trigger for emergency action by the Bank of England, which reversed its monetary policy in an attempt to calm markets. The UK budget released late last week was not well received. Chancellor of the Exchequer Kwasi Kwarteng, who delivered the government budget, […]
September 23, 2022 | The Fed Talks Tough as the Inflation Fighter
The Federal Reserve jumped its policy interest rate to 3 percent this week, from 2.25 percent. The Fed reiterated its commitment to getting inflation back to the target level of 2 percent, from its current pace of around 8 percent. The Fed is talking tough. Can the Fed walk the walk or is it just […]
September 16, 2022 | CPI Shocks The Financial Markets
The U.S. CPI for August shocked the markets this week, leading to an almost 4 percent decline in stock markets. The CPI showed a small decline, but the “core” CPI increased. Will inflation persist at these high levels? The market was expecting a moderation in the inflation number but got a shocking increase in some […]
September 9, 2022 | The Bank of Canada Says Full Speed Ahead
The Bank of Canada increased its policy rate by 75 basis points on Wednesday. It also stated that the fight to contain inflation is likely to last for some time. You could imagine them saying, “damn the torpedoes, full speed, go ahead.” How much pain will higher rates cause? The Governing Council of the Bank […]
September 2, 2022 | Junk Bond Prices Have Collapsed
Junk bond prices have collapsed, losing more than 15 percent of their value this year. But the push to higher rates by central banks and the possibility of a deep recession point to a much deeper adjustment during 2023. This will create some great opportunities for stock and bond investors. This chart shows how […]