ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
July 10, 2024 | Time Lags Have Magnified Risk Exposure and Complacency
In the second quarter of 2024, big tech companies drove the S&P 500 up 4.3%, while the Russell 2000 index of economically representative small and midsize stocks fell 3.6%. The five most expensive S&P 500 companies now make up a record 29% of the US market capitalization–the narrowest concentration since 1965 and more extreme than […]
July 8, 2024 | Ford CEO on the Rapid Evolution of Electric Vehicles
For those of us who’ve benefited from driving an EV for years already, it is a relief to hear mainstream leaders finally drop the opposition and misinformation to embrace the obvious. Ford CEO Farley does an excellent job of articulating facts in this segment. Ford CEO Jim Farley joins CNBC’s Julia Boorstin for a discussion […]
July 5, 2024 | Treasuries See Recession-Style Employment Trends, Stocks Should Too
The US unemployment rate in June ticked up to 4.1% (from 4% in May, red line below since 2021, and 70 basis points above the 3.4% cycle low in 2022). Full-time job creation fell to a 39-month low and part-time job creation reached a 33-month high while April and May job estimates were revised lower. […]
July 4, 2024 | Real Estate Bust Has Compound Impacts
The Greater Toronto Area (GTA) is home to approximately 8 million Canadians (about 20% of the country’s population) which account for some 20% of Canada’s Gross Domestic Product (GDP). For context, the GTA is as important to Canada’s economy as the eight largest US cities are to the American economy. In terms of provincial per […]
July 1, 2024 | Hussman on Thoughtful Money
Happy Canada Day! Today’s guest is one of those who smartly navigated the past 2 great market corrections. He now thinks we stand at the precipice of a 3rd — and he’s ringing a bell for anyone who will listen. To hear why and what he advises we do about it, we have the great […]
June 26, 2024 | Easy Money Has Yielded a Vicious Payback Period
Interest rates and high debt levels are biting hard in Canada; the economy is weak, and layoffs are rising. Toronto’s new home sales were down 71% compared to May 2023, with new condo sales down 75% and new single-family home sales down 65%. The same period saw an increase of 20,427 new home listings in […]
June 25, 2024 | Lags Demand Respect
The US 10-2yr Treasury yield curve has been inverted (two-year yields higher than ten-year) for 23 months since July 2022. An inversion in this spread has preceded the onset of every recession in the last 50 years by an average of 10 months. Generally, longer-than-average inversion periods (11 months Sept 12, 1980 to Oct 23, […]
June 24, 2024 | Mindless Capital Allocation Leads to Bad Investment Outcomes
Mindless capital allocation leads to wasted resources and bad investment outcomes. We’ve just come through a decade of some of the dumbest financial choices in history–that’s been very expensive. In the midst of a housing supply crisis, thousands of condos in Canada’s largest cities are sitting empty. Most, experts say, are less than 500 square […]
June 22, 2024 | Recession Impacts on Employment and Financial Markets
Ted Oakley interviews Danielle DiMartino Booth on recession, interest rates, and markets.Here is a direct video link.
June 21, 2024 | Cost-Cutting in Focus
Some facts on the ground… Cutting Costs – Corporate Mentions of “Operational Efficiency” Spike — DiMartino Booth via Fox Business News. Here is a direct video link.
June 20, 2024 | A.I. Hype Has Magnified Market Downside
A worthwhile discussion in this segment… So far this year, the top 10 stocks in the S&P 500 have accounted for more than 76% of the index’s gain. This is the 2nd most concentrated reading for the S&P in the past 20 years. The highest percentage was 79%, achieved in 2007, right before the Global […]
June 19, 2024 | Canadian Financial Weakness Stands Out
The unemployment rate and bankruptcies are surging. Here is a direct video link. Canadian corporate bankruptcies are +93% year over year (shown below since 2014). While the Canadian stock market has gone nowhere since November 2021…
June 17, 2024 | Understanding the Risks of Artificial Intelligence
Geoffrey Hinton, a computer scientist and cognitive psychologist, has long been a leading thinker about artificial intelligence. In this segment with Jon Erlichman, he articulates complex issues clearly enough for a general audience. Worth the listen. Here is a direct video link to part one. And here is a direct video link to part two.
June 15, 2024 | Danielle on CBC Weekend Business Panel
Here is a direct video link.
June 13, 2024 | Tougher For Longer
Yesterday morning, a milder-than-expected US CPI number boosted hopes that the US Fed may soon start lowering its policy rate. Financial markets pooped on the headline, further loosening financial conditions for some publicly traded companies. Then, a more hawkish Fed announcement in the afternoon lowered 2024 cut expectations from 75 basis points (bps) in the […]
June 12, 2024 | Rosenberg Updates on Economic Cycle
This interview offers a lucid top-down review of economic trends and asset markets. Here is a direct video link. As I explained here, I do not share the faith that immigration should prevent Canadian home prices from declining by more than ten percent.
June 11, 2024 | Canadian Home Prices Moving Lower For Math Reasons
It is wildly unpopular to say this, but Canadian home prices need to move much lower. And yes, I, too, stand to lose net worth as they do. Immigration is unlikely to prevent mean reversion here. Immigrants need places to live, to be sure, but historically, it took an average of 7 years before immigrants […]
June 10, 2024 | Leveraged Gambling Ends Badly, as Usual
The lure of easy money delivers time-worn outcomes, once again. See how Real estate investors are wiped out in bets fuelled by Wall Street loans: Lynn Nathe was growing tired of the meager gains from her family’s retirement account. In late 2021, she invested $200,000 with a company that was making 30% returns by buying the […]
June 9, 2024 | Emission-Free Air Travel Now in Motion
Conventional polluting air travel is ripe for disruption. Fortunately, that’s in motion. German aerospace company Lilium wants to revolutionize air travel with its electric vertical take-off and landing (eVTOL) jet. “Revolutionize means make it absolutely zero emission,” Lilium CEO Klaus Roewe told CNBC Tech in an interview. Here is a direct video link.
June 8, 2024 | Lacy Hunt: There is Reason To Worry
One of Lacy’s best ever… Famed economist Dr. Lacy Hunt joins us to talk about the recession in America and what he thinks will tip the scales. Here is a direct video link.
June 7, 2024 | Canadian Banks Bracing For Mortgage Renewal Stress
About that Canadian debt renewal cliff… Canada’s Big Six banks are adding billions of dollars to their emergency funds as mortgage renewals approach for more than three quarters of homeowners. Andrew Chang explains why the banks are preparing for more delinquencies, and who’s most at risk. Here is a direct video link.
June 6, 2024 | Eyes Wide Open as Bank of Canada Blinks
Yesterday, the Bank of Canada (BOC) blinked on inflation fears and responded to weak growth and rising unemployment with the first rate cut in four years and the first since the epic tightening cycle began 27 months ago in March 2022. Markets are pricing in another 50 bps of BOC rate cuts by year-end. Canada […]
June 5, 2024 | AI Mania Has Hyped Costs and Stock Prices
The costs of running generative AI are mind-blowing considering energy, training, and materials, while the revenue case is still largely missing. In just one example, Silicon Valley venture capital firm Sequoia estimates that in 2023, the tech industry spent $50 billion on chips from Nvidia to train AI but generated only $3 billion in revenue. […]
June 4, 2024 | Easing Begins as Unemployment Rises
We’ve long noted that their actions tend to be contagious once central banks start easing rates in response to disinflation and weakening global demand. This week, the Bank of Canada (BOC) and European Central Bank are expected to follow the Swiss and Swedish central banks in announcing the first 25 basis point (bps) cut since […]
June 3, 2024 | EPB Macro: Recession Signal Still Flashing
Eric Basmajian of EPB Macro offers valuable business cycle insight, and his latest educational video is worth watching. Eric warns that ” a lapse in patience is often a fatal flaw in using a business cycle process.” No truer words… In this video, we look into sequential signals of Business Cycle Recessions. Here is a direct video link.