ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
May 1, 2023 | Hoisington Review and Outlook First Quarter 2023
Hoisington Investment Management’s First Quarter 2023 Review and Outlook is now available; see Financial Cycles lead Business Cycles. The bottom line is that (lagging) inflation is receding with economic activity. Rising unemployment and higher government bond prices (falling yields) are par for this course as riskier assets keep losing lift. “…with low or declining economic activity, […]
April 22, 2023 | Back to ZIRP?
Good big picture discussion in this segment. When today’s guest was last on this program in early February, he warned that markets were “in La La Land” — meaning they were too optimistic at a time the macro data was warning of an approaching recession. Well, here we are, a quarter later and — after […]
April 21, 2023 | Canadian Stock Buyers Paying up for Negative Earnings
About 200 companies in the TSX Composite index are expected to report Q1 earnings over the next month. Although it’s typical for companies to “beat” lowered earning estimates, the earnings trend is recessionary, with a second sequential quarter of negative growth in 10 of 11 sectors. See Factset, Canada Earnings Season Preview Q1 2023: Analysts lowered […]
April 20, 2023 | Jacobson: Renewable Energy Here and Now
Mark Z. Jacobson’s latest book No Miracles Needed. How today’s technology can save our planet and clean our air lays out the facts on why and how we transition to more efficient, cheaper, cleaner energy. He offers an excellent overview in the presentation below and answers common questions and concerns at the end. Well worth listening! Understand the […]
April 19, 2023 | DiMartinio-Booth: The Credit Crunch is Ahead
Believe it or not, the violent monetary tightening of the last 13 months has only started to be felt throughout the economy. Job losses are just beginning to drive the lagging unemployment rate up from cycle lows. As risk markets rebounded of late (again) in the prospect of coming rate cuts, the credit crunch lies […]
April 18, 2023 | New Financial Mantra: “Stay Alive ’til ’25”
The sharpest monetary contraction in decades (US M2 below since 1960) has hit highly leveraged people and sectors like a meteorite from outer space. After twelve years of TINA reaching for yield and levered gambling, a new financial mantra is sweeping the land: survival. Real estate investors are increasingly responding to the math of higher […]
April 14, 2023 | Rosenberg: Recession is Part of The Business Cycle
David Rosenberg, founder and president of Rosenberg Research, joins BNN Bloomberg for his reaction to Canada’s latest rate hike decision. Rosenberg adds investors should be focusing on what the BoC will say 6 months from now as the jobs market will be completely different. Here is a direct video link. Recessions are a regularly recurring […]
April 13, 2023 | Grantham: This Crisis is Bigger Than Banks
We welcome back a very special guest, and that is billionaire and legendary investor Mr. Jeremy Grantham. I have been continuously amazed at how accurately Jeremy has been predicting future events over the last couple of years that we’ve been chatting. Still, it should be no surprise because he’s one of the few who have […]
April 12, 2023 | Multi-Family Rentals Feeling The Heat
As mortgage rates have more than doubled year-over-year, defaults are spreading through the commercial property space, from offices to shopping centers and rental apartments. A record $151.8 billion backed by US rental apartment buildings is up for renewal this year, and $940.1 billion over the next five years (Trepp data). The good news for tenants […]
April 11, 2023 | Worst of Stock Market Losses Come During Recessions and Rate Cuts
A negative US 10-year minus 3-month yield spread has signalled every incoming recession of the last 60 years (grey bars below courtesy of Charlie Bilello). The current reading, at -1.67%, is the most negative ever recorded. Still, bullish hopes spring eternal. While most economically-sensitive sectors have floundered for two years: small cap stocks (-27% from […]
April 10, 2023 | Taleb on Bitcoiners, Venture Capital Ponzi’s and Plumbers
Taleb is a character, to be sure, and he offers many cogent insights in this segment. I especially resonate with the idea that, unlike sales skills, expertise comes from first-hand risk work: seeing what goes wrong and cleaning up mistakes and messes; then designing systems and approaches to minimize the impact of bad outcomes. The […]
April 7, 2023 | CBC Marketplace: Mortgage Scam in Ontario
Some seniors across Ontario are at risk of losing their homes in an elaborate scam that involves door-to-door equipment rental contracts, low-quality renovations and unaffordable high-interest mortgages. Marketplace speaks to people who feel they’ve been scammed, some on the brink of losing their homes and someone who already has. Here is a direct video link.
April 6, 2023 | Treasury Market Sees Recession, Disinflation and Rate Cuts in 2023
Komal Sri Kumar, Sri-Kumar Global Strategies president, on Loretta Mester’s recent comments on the federal funds rate, what the yield curve tells investors, and more. Here is a direct video link. The chart below (courtesy of True Insights) shows the gap between the US Fed’s stated expectations for a 5.13% policy rate through the end of […]
April 5, 2023 | Credit Earthquake Reveals Fault Lines
The past year has seen the most aggressive Fed tightening cycle in at least 30 years (see the chart below as of March 30, 2023, courtesy of Isabelnet.com). Base effects matter a lot; coming off a decade of constant QE and near-zero interest rates, the “normalizing” of monetary conditions this cycle is particularly acute at […]
April 3, 2023 | Eyes On The Prize
Bear markets can be psychologically trying as interim rallies may obfuscate ongoing downtrends. Markets are liquidity junkies and repeatedly anticipate that central banks will pause and return to easing credit conditions (typically a few months after a pause). As with tightening, however, the bulk of easing effects are not felt until many months after they’re […]
March 28, 2023 | Buybacks Wobble as the Cost of Capital Leaps
Companies pushing up share prices with buybacks (while their executives sell personal holdings into the flow) have greatly supported stock prices (and executive compensation) over the past decade. The party was planned to continue in 2023 with a record $360 billion in buybacks authorized year-to-date. But, as usual, something unexpected happened on easy money street: […]
March 27, 2023 | Shock and Awful in Commercial Real Estate
Over the past year, bonds and mortgage-backed securities dropped in value as central banks hiked base rates in the banking system—that’s interest rate risk. The sound ones also rebound in value as central banks pause and then start cutting rates again. But that doesn’t mean these instruments all have the same risk profile. Government bonds […]
March 26, 2023 | Danielle on CBC Weekend Business Panel
Danielle was a guest with Dennis Mitchell and Hillary Johnstone on the CBC Weekend Business Panel. Here is a direct video link.
March 24, 2023 | Financial Stress Spreading
Deutsche Bank shares are off more than 10% this morning as credit default swaps on its senior euro debt blow out. Contagion fears are spreading after Credit Suisse’s shot-gun sale last weekend. Other banks are tumbling in sympathy. As shown below courtesy of Blomberg, financial shares have plunged sharply in the last month; see Deutsche Bank […]
March 23, 2023 | Fed Wrecking Ball
With consumer credit conditions already as tight as the 2008 financial crisis (shown below courtesy of The Daily Shot), yesterday, the US Fed hiked its overnight rate 25 bps to the highest level since September 2007 (4.75 to 5%). After insisting in 2021 that the Fed would not even consider raising rates in 2022, yesterday, […]
March 22, 2023 | Fed Today and Done?
At the last FOMC announcement on February 1st, the Fed hiked base rates by 25 bps and said it expected to tighten through 2023, with no easing before 2024, at the earliest. That was before retreating bank deposits sparked a liquidity crunch at highly levered financial institutions. Expectations are now that the Fed will hike […]
March 20, 2023 | Rates, Banking, Recession and Markets
Ted Oakley interviewed David Rosenberg of Rosenberg Research with his thoughts on banking situations, interest rates, recessions, and the stock and bond markets. Here is a direct video link.
March 16, 2023 | What Happened to Swiss Banks?
Good big picture in this segment. A global clampdown on tax evasion, led by U.S. law authorities, has transformed the banking industry in Switzerland. Without its famed reputation for secrecy, wealthy foreigners no longer see it as a haven to hide their money. So how have Swiss banks adapted? Here is a direct video link.
March 14, 2023 | Moody’s Downgrades US Banking System Outlook to Negative
Moody’s just announced a downgrade of its outlook on the entire US banking system to negative from stable to reflect “the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY.” Danielle explains the nuances of recent developments in the […]
March 13, 2023 | Backstops for Depositors, Not Risk Markets
The Silicon Valley Bank (SVB, founded in 1984) and Signature Bank (publicly traded since 2004) closures over the weekend are the second and third largest US bank failures in history (the largest eight failed banks in assets and deposits, are shown below). Banking failures tend to be contagious. To quell depositor fears, the […]