ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
November 22, 2024 | Bird’s Eye View of Price and Risk
This week, we learned that the US index of leading economic indicators (Conference Board LEI) contracted to 99.5 in October—the 32nd consecutive month of contraction and the longest since at least 1957 (all shown below courtesy of The Daily Shot). The only LEI items that expanded in October were stock (green) and credit (pink) prices. […]
November 20, 2024 | Even Higher Hopes
The S&P 500 is on track for its biggest election-year gain in 88 years. Still, according to the latest Conference Board Consumer Confidence Survey, the share of US consumers expecting stocks to rise further over the next 12 months has doubled over the last year to the highest percentage since this question was first asked […]
November 19, 2024 | Euphoria Bounces Back
Since stock markets hit a two-year low last October, prices reflated on bets that artificial intelligence and central bank easing could solve spreading insolvency. Then came this month’s Republican sweep in the US election, and the crowd ordered another round. Risky assets went parabolic before selling off last week—the S&P 500 and Canada’s TSX remain […]
November 18, 2024 | Danielle on CBC Weekend Business Panel
Here is a direct video link.
November 13, 2024 | Higher Rates Tend to be Self-Correcting
With a price of more than 5x book value (lower right), U.S. stocks are the most overvalued since the tech-mania top in March 2020. At 3x price-to-sales (lower left), the recent euphoria has returned to the fall 2021 level and significantly overshot the 2000 top. As the S&P 500 has rebounded sharply over the past […]
November 12, 2024 | Hoisington Q3 2024 Quarterly Review and Outlook
Hoisington Management’s Quarterly Review and Outlook is now available here and always worth a mull. Central banks have been cutting overnight rates, but the money supply has continued to contract, with the latest reading lower than during the 2008 financial crisis. After years of zero-rate interest policies ballooned debt levels, the 2022-2023 monetary tightening cycle was the […]
November 11, 2024 | Danielle on Thoughtful Money
November 8, 2024 | Great Expectations are Priced for Disappointment
The fourth year of a presidential cycle is all about promising. The first year of a presidential cycle is about trying to deliver on all the promises. At the start of President Trump’s last term in 2017, the U.S. government deficit to GDP was 3% versus 6% today. The federal debt as a percentage of […]
November 6, 2024 | Rates Back Up More
It looks like the U.S. election is yielding a decisive verdict, and that’s good news. Risky assets like stocks and cryptocurrencies are up sharply on the promise of less regulation and further tax cuts from a Republican-led government. In less bullish news, the Treasury market continues to sell off, with a rate backup that began […]
November 5, 2024 | Home Listings Rise as Pandemic-Era Mortgages Approach Renewal
A new CMHC report notes that 1.2 million mortgages are up for renewal in 2025 and 980,000 in 2026. About 85% have fixed rates contracted when mortgage rates were below 2% compared with over 4% today. Although the Bank of Canada has lowered its base rate from 5 to 3.75% since June, Canadian fixed-term loan […]
October 30, 2024 | What’s The Right Amount To Bet at a Casino?
During the financial mania of 1634 to 1637, people bid up the price of tulip bulbs. At peak craziness, a “Semper Augustus” bulb sold for the equivalent value of a $14,000,000 mansion on the Amsterdam Grand Canal today. Then the fever broke, dragging bulbs and participants’ net worth back into the dirt. Today’s financial mania […]
October 28, 2024 | Rosenberg: Household Wealth at Extreme Risk
David Rosenberg, founder and president of Rosenberg Research & Associates Inc., joins Jack Farley on Monetary Matters to argue why a recession is likely to occur as soon as 2025. Rosenberg points to the low savings rate and argues that fiscal deficits and a stock market price bubble are boosting consumer spending and that this […]
October 25, 2024 | Creating Your Best Future
Happy Friday! Keep Looking up! In this episode, my guest is Ari Wallach, most recently an adjunct associate professor at Columbia University’s School of International and Public Affairs and host of a new TV series titled A Brief History of the Future. We discuss the importance of learning to project our understanding of ourselves and […]
October 24, 2024 | Oversized Rate Cuts: Red Alert
Four easing cycles have seen the Bank of Canada deliver larger than 25 basis point rate cuts at a time: 2001, after the US dot-com bubble and Sept. 11 attacks; during the global financial crisis; in the COVID economic shock of 2020 (see chart on the left); and now, in 2024. See Bank of Canada’s Deeper Cut […]
October 23, 2024 | The Trouble with Central Bank Rate Cuts
On September 18, the US Fed cut its overnight target rate by 50 basis points (bps), and risk markets went wild. Stock and corporate debt prices have risen to more all-time highs, and real estate bulls rejoice that lower interest rates will reignite loan demand and save highly leveraged property markets. The trouble is that […]
October 22, 2024 | About That: Should Baby Boomers Get More Government Money?
Aged populations are ballooning government deficits in most countries. The Bloc Québécois has threatened to force a snap election if Canada’s federal government doesn’t increase Old Age Security payments for people between the ages of 65 and 74 by 10 per cent. Andrew Chang breaks down the dilemma before the Liberals and why economists say […]
October 21, 2024 | Grantham: The Bigger The New Idea, The More The Market Overshoots
For those able to hear truth and facts… Today on the podcast, we’re delighted to welcome back Jeremy Grantham. Jeremy is the long-term investment strategist at his namesake firm, Grantham, Mayo, Van Otterloo & Co., or GMO, which he cofounded in 1977. Here is a direct audio link. “Bubbles and enthusiasm, ecstasy, they’re all kind of […]
October 17, 2024 | Financial Risk at Historic Highs–What’s Your Plan?
US Auto loans that were more than 90 days delinquent in the second quarter were the highest since the second quarter of 2010 (blue line below since 2004, via Arbor Research and The Kobeissi Letter). Auto loan debt held by Americans rose to a record $1.63 trillion (red line), 92% above 2008 levels, while auto […]
October 16, 2024 | Retailers Feeling The Pressure of Cash-Strapped Consumers
Major retailers have noted a pullback in consumer spending, and same-store traffic is down across restaurants this year, particularly at sit-down chains. Most are ramping up discounts and promotions to lure customers. See, After years of Increases, Companies are Rolling Back Prices: Retailers, restaurants and other companies spent years lifting prices. Now that consumers are closing […]
October 15, 2024 | Results are in: ‘Easy’ Money Policies Build Debt, Hurt Productivity and Affordability
The results of the easy money experiments from 2009 to 2022 are widely evident: they yielded record indebtedness and unaffordable housing. This was especially true in Canada, where the median household debt to income was 175% in the second quarter of 2024 from 156% in the fourth quarter of 2008. At the same time, the […]
October 10, 2024 | Mainstream Financial Plan: Double or Nothin’
This morning, US data showed a larger-than-expected increase in people applying for jobless benefits—258k for the week of October 5, versus 230k expected—a 14-month high. There was also a .2% month-over-month increase in headline CPI, double the .1% expected by the consensus. Fewer jobs and a higher cost of living remain an increasing challenge for […]
October 9, 2024 | Realty Bubble Bursting as Power of Sales Spread
In September, across the Greater Toronto Area, there were 204 power-of-sale listings, more than double the 96 reported in September 2023, an increase of 112% year over year and more than triple pre-pandemic levels (chart below since 2020). See, Power-of-sale listings more than double as mortgage lenders repossess homes from over-leveraged buyers. Finally, reality is dawning […]
October 8, 2024 | About That Jobs Report…
Nonfarm Jobs Increased by 245K Last Month, Far Surpassing Estimates. Here is a direct video link.
October 7, 2024 | Understanding China’s Economic ‘Bust’
The Chinese government has just unveiled a massive stimulus for its troubled economy, but can it fix the slowdown long-term? What’s at stake for the country, and the world? Here is a direct video link. Leland Miller, China Beige Book CEO, joins ‘Squawk Box’ to discuss the state of China’s economy, impact of Beijing’s stimulus package, […]
October 5, 2024 | Danielle on CBC Weekend Business Panel
CBC News Network’s Weekend Business Panel takes on the top news of the week. Here is a direct video link.