ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
January 10, 2023 | Real Estate Prices Typically Contract for Years After Bubbles Burst
In the first quarter of 2021, residential ‘investment’ in Canada (real estate commissions, construction of homes, significant renovations, and ownership transfer costs) comprised some 9% of Canada’s GDP, while business investment plunged. US residential investment peaked at 6.7% in 2006 before that epic bubble burst. We have noted repeatedly that Canada’s exuberance in real estate was an unsustainable […]
January 4, 2023 | 2023 Comes in Like Ongoing Bear for Stocks and Commodities
Two thousand twenty-two vaporized $25 trillion of notional equity value from global balance sheets, and the global bond market lost nearly $10 trillion more. Together, the decline in these two asset classes amounted to about a third of the world’s 2022 103.86 trillion GDP, not counting ongoing losses in real estate, commodities, or the crypto […]
December 30, 2022 | Cheers To Healthful Longevity
Seventy-two percent of Americans (Canadians, about the same) are now overweight and obese, reducing the quality and quantity of their life. Not to mention crushing the sustainability of our sick-care system. Study after study shows that it’s the type and quantity of things we are consuming. Here’s to delicious things that don’t promote cancer, heart […]
December 28, 2022 | Home Prices Are Falling For Good Reasons
I recently reviewed Canadian real estate metrics in Canadian home prices need to fall. The segment below reviews similar affordability deficits in US home prices. The median US household income is $54,000, while the household income needed to qualify to buy the median US single-family home is $87,000 (up nearly 50% year over year). Real estate presently […]
December 20, 2022 | Fun with Stocks and Curves
The S&P 500 is down just over 20% since January 4th and a seasonally unusual -6.4% month to date. Under the hood, the most widely held stocks are leading the descent. The top five most expensive S&P 500 companies are now: Apple (6.23% of index) -27% Microsoft (5.65% of index) -28% Amazon ( 2.42% of the index) […]
December 19, 2022 | Canadian Home Prices Need To Fall
According to Statscan, 89% of Canadian individuals earn less than $100,000 annually. The median household income is $75,000 nationally (see more here) and just over $80,000 per year in the Greater Toronto (GTA) and Vancouver (GVA) areas. According to CMHC (calculator here), a household with $100,000 in annual income ($8,333 a month before tax) and no other debt can qualify […]
December 16, 2022 | Bill White on Cascading Risks in a Highly Levered System
Bill White is a rare former central banker with decades of experience and a truth chip. Always refreshing to hear. Canada comes up in this discussion specifically. Here is a direct video link. Former central bank insider William White one-on-one with Quill Intelligence CEO & Chief Strategist Danielle DiMartino Booth. There’s no more consequential time to […]
December 14, 2022 | Cooler CPI and The Crowd Goes Wild
Fourteen years of ever-easier money has reared a generation of mindless financial allocators and gambling preoccupations. Whatever this is, it’s not investing, and the costs of waste and mal-investment will be with us for years to come. Patience and self-discipline remain the best antidotes to destructive madness and mania. Danielle raises an interesting point in […]
December 13, 2022 | Lower Inflation is Good, but Not Bullish For Risk Markets
November US CPI at 7.1% year over year was .2% lower than the 7.3% consensus forecast. Excluding food and energy, the consumer price index rose 0.2% in November (compared with .3% expected and was the smallest advance in 15 months), up 6% from a year earlier. Every sector showed a smaller increase in November than […]
December 12, 2022 | Inflationary Pressures Moving Lower with Demand and Prices
Demand destruction is weighing on prices globally as financial conditions tighten. It’s not just interest rate increases three times faster than historical norms, an estimated $750 billion is running off of global central bank balance sheets monthly as the massive 2020-22 QE injections now reverse. Notwithstanding new sanctions on Russian oil and continued production cuts […]
December 8, 2022 | Rosenberg: 2023 outlook
David Rosenberg, founder and president of Rosenberg Research, joins BNN Bloomberg to discuss his outlook for the Canadian economy amid rising rates. Rosenberg says the Canadian economy will receive the payback from the BoC’s tightening cycle, and he expects a recession to occur next year. Furthermore,Rosenberg adds the BoC could be forced to cut rates […]
December 7, 2022 | Bank of Canada Will Pause as Financial Conditions Tighten in 2023
The Bank of Canada raised policy rates another 50bps today, taking base rates in the banking system to 4.25% from .25% at the start of the year. As we look into 2023, it bears remembering that monetary changes move through the economy with lags of up to two years. The Bank of Canada explains on their […]
December 6, 2022 | The Bulk of Losses Come After The Fed Stops Hiking
December 14 is expected to mark the US Fed’s 7th consecutive rate hike this cycle with a 50bp increase that will take the fed funds rate to 4.25-4.50%, the highest since December 2007. Chair Powell says they intend to hike more in 2022. We shall see! As of last Friday’s close, the 10-year minus 3-month […]
December 5, 2022 | Jeremy Grantham on Green Tech, Bubbles and Opportunity
The host in this segment is awkward, but Grantham’s responses are worth a listen. When it comes to fighting climate change Jeremy Grantham is optimistic about technology – but worried about timing. Known widely for his acuity in identifying bubbles, the British investor contends that the one created by our dependence on fossil fuels is […]
December 1, 2022 | Reality: Tightening Done Just Starting To Bite
Financial markets rocketed higher yesterday after Federal Reserve Chair Jerome Powell said the central bank might scale back the pace of its interest rate hikes as early as December. Bullish hopes fixated on the prospect of a 50 bsp hike on December 14 rather than a fifth consecutive 75 bsp. This is the surreality of the most […]
November 30, 2022 | Instability Breeds Opportunity in 2023
A lucid macro overview in this discussion. Worth a mull. Michael Green, portfolio manager & chief strategist at Simplify Asset Management. Here is a direct video link. Portfolio manager Michael Green returns for Part 2 of our interview with him to explain why he does not expect a “soft landing” for the economy and predicts stocks […]
November 29, 2022 | Cyclical Foresight and Patience Pay
After 12 years of ultra-low interest rates, generous government support, and unprecedented liquidity injections from central banks, the global real estate market is in the midst of a much-deserved contraction cycle. As the Financial Times put it this month, The Global Housing Market is Heading for a brutal downturn, and bubble prices and household debt make […]
November 26, 2022 | Danielle on CBC Weekend Business Panel
Danielle was a guest with Elmer Kim and Hillary Johnstone on the CBC Weekend Business Panel. You can watch an audio clip of the segment here.
November 25, 2022 | Pension Deficits Growing and Widely Understated
I have been writing for years about the train wreck unfolding in pension funds and individual retirement accounts that have migrated towards riskier holdings, leverage, “alternative,” and private equity allocations over the last 12 years of ultra-loose financial conditions. Needless to say, the cost of all this is not yet “marked to market.” The segment […]
November 24, 2022 | Further Downside For Risk Markets
On today’s edition of “Boiler Room,” Alfonso Peccatiello is joined by Eric Basmajian for a discussion on the rising risks of recession into 2023. With a focus on the cyclical & secular forces driving the global economy, Eric shares his framework for assessing the risks of recession in Q1 of 2023. Using both real-time and […]
November 23, 2022 | Paid Promoters Hired To Lure The Unsuspecting
I, and others, have written for years about the charlatan that is Kevin O’Leary. You can see some of my past articles here and here. The latest FTX scam is just another installment. The story of Sam Bankman Fried & FTX is far from over and it has become wilder and wilder the more I dig. But I […]
November 22, 2022 | Capital Goes Poof
Last November, the global market value of crypto assets amounted to $3.2 trillion (FT Wilshire Digital Asset Index). Today, it is something less than $ 861 billion. In other words, the 73% loss in the crypto and NFT (non-fungible token) space in one-year is, so far, nearing $3 trillion and about 38% of the $8 […]
November 21, 2022 | EPB Macro: The Economic Data Just Got Worse
Last week, the entire US yield curve inverted (a diffusion index of all spreads is shown below via ISABELNET.com since 1981), with the one-month Treasury yield rising above the 30-year Treasury yield. The spread on two and 10-year Treasury bonds widened to -71bp–the most negative since before the double dip recession of the early 1980s (shown below […]
November 17, 2022 | Empty Office Space Weighs on Rents, Investors and Lenders
Private equity firms and funds have doubled down on the realty space during the low-rate boondoggle of the last decade. As usual, this led to a massive surge in supply and leverage as most forgot (or never realized?) that real estate is a cycle. Now pounds of flesh are due. In 2021, the tech sector […]
November 16, 2022 | KTX is Part of Financial Scam Ethos
After 26 years with a front-row seat in the revolving door, wild-west finance sector, I am not surprised at the unfolding crypto-doom; neither am I confident that better public protection policies will follow, nor the disgorging of ill-gotten gains from those who promoted and perpetrated the carnage. I have also long noted that people can […]