March 25, 2025 | TD: Canadian Recession in 2025

TD Economics’ latest Canadian Quarterly Economic Forecast largely comports with our assessment of an incoming Canadian recession. The wildcard is how much government support can soften the depth of the downturn and contain job losses. TD has a hopeful view. Here are the main takeaways: Canada has borne the brunt of President Trump’s tariff action despite having […]

March 24, 2025 | Wilful Blindness Tends To Be Financially Destructive, In The End

For decades, my mission has been to help individuals with finite lifespans make unvarnished, clear-eyed financial assessments and plans that will serve them well through complete market cycles. Fortunately, we have attracted a strong base of clients who value the approach. But we’re far from mainstream. I am regularly asked to review the portfolios/asset allocations […]

March 21, 2025 | How Bad is Canada’s Fentanyl Problem?

This is unsettling stuff with broad implications for Canada, but the first steps to recovery are to admit, repent and reform. Most of the 2022 Cullen Commission 101 Recommendations have yet to be implemented. Port Coquitlam, Vancouver Mayor Brad West Describes U.S. Government Concerns with Canada, Says He Would Serve as Fentanyl Czar if a New Government […]

March 20, 2025 | Falling Shelter Prices are Good, but Also Painful

According to data from the Canadian Real Estate Association (CREA), February Canadian home sales fell 9.8% from January and were 10.4% lower than in February 2024. The drop in sales was most pronounced in the Greater Toronto Area but relatively broad-based, with declines in three-quarters of local and almost all large markets, said CREA. See Canadian […]

March 19, 2025 | Macro Update: Powell’s Dangerous Trap

Inflation is dropping quickly, and other concerning trends, including mass layoffs, are developing. But you wouldn’t know it from reading the headlines. QI Research founder Danielle DiMartino Booth has been calling attention to underreported recession signals since our last interview in May, when she highlighted rising store closures and job losses. As she said then, […]

March 18, 2025 | U.S. Recession Odds Spike with Households Pessimistic and Risk-Exposed

Last week’s University of Michigan consumer sentiment survey saw economic expectations plunge for Democrats, Independents and Republicans. Those expecting an improved financial situation one year from now reached the lowest since 1980 (shown below, courtesy of The Daily Shot). Those seeing improving employment conditions were the least since the 2008 recession (red line below since […]

March 16, 2025 | Danielle on CBC Weekend Business Panel

March 14, 2025 | Lessons From China (and Japan)

China’s economy is slowing. Amid weak borrowing, slack investment, deflationary pressures and uneven growth, the evidence points to China slipping into a “balance sheet recession”—a phenomenon our guest, Richard Koo, first diagnosed during Japan’s lost decades of the 90s, and then identified in the financial crises of both Europe and the U.S. The former New […]

March 13, 2025 | Canada Between Rock and Hard Place

As expected, the Bank of Canada (BoC) cut overnight interest rates by 25 basis points yesterday, lowering the banking system’s base rate to 2.75%, the lowest since September 2022. In his prepared statement, BoC Governor Tiff Macklem struck a grave tone, saying, “We’re now facing a new crisis. Depending on the extent and duration of new […]

March 11, 2025 | Extremes Go Both Ways- It’s Called Mean Reversion

And, it’s gone…the widely owned Magnificient 7 stocks (Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet A, and Alphabet C), down a collective 20% from recent highs, have given back their Trumphoria election gains (see pink bank below, courtesy of my partner Cory Venable).   The downdraft to date is Apple -15%, Microsoft -19%, Nvidia -27%, Amazon […]

March 10, 2025 | Housing Downturns Lead the Worst Recessions

Real estate, the most widely owned and highly leveraged asset class globally, has historically led the deepest economic downturns. Has a housing bubble ever burst without devastating pain across the economy and society? Unfortunately, not. It is far better not to pump real estate bubbles with government incentives and excessive monetary stimulants in the first […]

March 7, 2025 | About That: Canadian Debt and Defaults

Despite cooling inflation, a falling interest rate and steady employment numbers, more and more Canadians are missing payments on their loans and mortgages. Andrew Chang explains what’s going on. Here is a direct video link.  Also worthwhile, see Can the US Auto Industry Survive without Canada? President Donald Trump says he wants every car sold in the […]

March 6, 2025 | Hoisington Q4 2024 Review and Outlook

Well before the rising layoffs and economic disruptions in the first quarter of 2025, the global economy was registering a recessionary rise in unemployment and excess capacity, along with an accelerating decline in world dollar liquidity (WDL).  Hoisington’s Q4 2024 Review and Outlook explains the historical significance of these key indicators. Here’s a taste: Factories across the […]

March 5, 2025 | Tit for Tariff Policies Weigh Heavy by Design

Economic conditions today are more fragile than in March 2018 when Trump 1.0 signed a memorandum instructing the United States Trade Representative (USTR) to apply relatively modest tariffs of $50 billion on Chinese goods. As RBC chief economist Frances Donald points out: “In 2018-19, tariff policies raised the average import duty from 1.5% to approximately 3%. As […]

March 4, 2025 | Can China (and other Countries) Avoid Japan’s Lost Decades?

China followed Japan’s bubble-boosting playbook from the 1980s, and Canada followed China along for the ride through levered capital flows into commodities and our real estate market. The bust part is less fun. Low bond yields, weak inflation and a struggling property market have raised fears China may see its own version of Japan’s 1990s […]

February 28, 2025 | GMO’s Jeremy Grantham: Stock Bubble To Be Crushed

Merryn Somerset Webb interviews GMO co-founder and notorious caller of market bubbles Jeremy Grantham. Grantham, who also serves as the firm’s long-term investment strategist, leans into his more than five decades of investing experience to explain the current “super bubble” in the markets. He comments on when we’ll see a correction, the fate of the […]

February 27, 2025 | Government Spending Cuts Further Headwind for Real Estate and Economy

The good news is that shelter prices are finally retreating; the bad news is that this has significant knock-on effects for existing owners, debtors, lenders, and many other feeder sectors. Thousands of Canadians are missing mortgage payments — especially in Ontario and B.C. — as the affordability crisis stretches household budgets to the limit despite […]

February 26, 2025 | Trumphoria Under Review

After the U.S. election, Trumphoria swept financial markets with parabolic moves in many risk assets into the new year. However, the realization may have dawned in the past month that government spending cuts, fewer immigrants, and tariffs mean more job losses, lower economic growth, and fewer passive capital flows into the stock market. From its […]

February 25, 2025 | Housing Bubbles are Very Costly in the Long-Run

The Bank of Canada has slashed overnight interest rates by 200 basis points over the past seven months to 3% from 5%, while variable and fixed mortgage rates have fallen to around 4% from more than 5% a year ago. Mortgage rates of around 4% are not high; they are about average historically. The trouble […]

February 21, 2025 | Policy Mayhem and Markets

Danielle DiMartino Booth, CEO of QI Research, discusses the release of the latest Fed minutes, and what’s next for monetary policy in light of an ongoing trade war. Here is a direct video link.  .

February 19, 2025 | New Listings Spring Early

Despite snow banks and cold temps in much of Canada, property owners are getting a jump on what they hope will be strong spring demand. New property listings leapt 11% nationwide from December to January, the largest monthly increase in almost two years. The supply influx boosted the inventory of homes for sale in Canada […]

February 18, 2025 | Bid-Ask Spreads Wide Under Canadian Shelter Prices

Despite a 200 basis point drop in the Bank of Canada’s overnight rate, Canadian mortgage rates have more than doubled from the pandemic’s easy credit days when buyers were engulfed in bidding wars (5-year fixed rates offered by banks, below since April 2020, courtesy of WOW.ca).So far, sellers’ high hopes have kept asking prices elevated, even […]

February 17, 2025 | What’s breaking Canadian consumers?

The latest Canadian Joe Debtor study finds that the average insolvent debtor owed $60,678 in unsecured debt in 2024, an increase of 12.2% from 2023—the largest annual rise since the study began in 2011. Driving the surge was a sharp rise in average credit card balances, which increased by 25.9% to $20,398 and accounted for 34% of […]

February 13, 2025 | China’s Real Estate Bust Leads Other Countries

Anyone who plays Monopoly can experience how quickly real estate holdings drag once cash in hand proves insufficient. Bubbles may seem fun on the way up, but they’re universally brutal in the inevitable deflation stage. China’s stimulus boom helped inflate global demand and real estate prices after the 2008 recession, but mean reversion has been […]