ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
October 3, 2024 | Canadian Rough Patch Getting Rougher
Canadian businesses are closing at one of the fastest rates in history. See: Canada Just Saw One in Twenty Businesses Close in a Month, Biggest Wave Since the Pandemic. Since the vast majority of private sector job growth is driven by small—to medium-sized companies, it’s not surprising that job vacancies (blue line on the lower right […]
October 1, 2024 | China Launches Next Wave of Asset Propping Efforts
2024 has seen the most aggressive central bank easing globally since the 2020 pandemic and 2008-09. Whatever ‘stimulus’ impacts may flow from this will filter into the economy over the next few years. In the nearer term, the 22-fold tightening cycle of 2022-2023 will continue to weigh on borrowing and spending ability over the next […]
September 30, 2024 | Housing Downturn Intensifies with Motivated Sellers
Nationally, the supply of new one-family homes in America (shown below since the 1960s) has only been higher in the 2005 housing bubble peak. As more existing homes come on the market from stretched households and investors, home supply is rising in most areas. The median price of a new single-family home fell by 4.6% […]
September 27, 2024 | Employment Cycle Drives Reactionary Monetary Policy
Stock markets have soared further on soft landing hopes, just as they initially did when the U.S. Fed cut base rates by 50 basis points in January 2001 and September 2007. Other more prescient leading and coincident economic indicators warn of cause for pause. As shown below (courtesy of Jeff Weniger), the ratio of leading […]
September 25, 2024 | Rate Cuts Offer Less Ease Than Many Need
The Federal Reserve finally began an easing cycle last week, and hopes spring eternal that this will be enough to arrest an ongoing deleveraging cycle, shrinking employment, asset deflation, and economic contraction. Time will tell, but the odds aren’t good. Lest anyone forget, central banks aggressively eased monetary conditions throughout the 2007-09 and 2000-03 downcycles, […]
September 24, 2024 | About That: Supersized Rate Cuts?
The U.S. Federal Reserve slashed interest rates for the first time in four years, and in the same week, Canada’s inflation rate reached the Bank of Canada’s two percent target. Andrew Chang explains why this is prompting economists to predict more aggressive rate cuts are on the horizon. Here is a direct video link. Canadian […]
September 18, 2024 | Fed Cuts Unlikely to Prevent Spreading Strife
Rising unemployment has overtaken inflation as the dominant fear, and today is expected to bring the Fed’s first rate cut of a new easing cycle. Like Pavlovian dogs, stocks typically rally in anticipation of Fed easing. However, unemployment continued to surge in the eight recessions since 1969, and stock markets eventually fell an average of […]
September 17, 2024 | Gundlach’s September Macro Outlook
In his webcast titled “1984” in remembrance of George Orwell’s dystopian novel, DoubleLine Founder and CEO Jeffrey Gundlach on Sept. 10, 2024, dives “into the subject of the Fed and some of the variables that will likely underpin their logic and their thinking” at the Sept. 18 meeting of the rate-setting Federal Open Market Committee […]
September 16, 2024 | Koo: China’s Balance Sheet Recession
Once real estate bubbles bust, prices typically fall for years, and paying down debt becomes the priority. In the process, slashing interest rates does not entice the hoped-for revival of borrowing, and it takes years to rebuild balance sheets. This is now underway in the world’s second-largest economy. Et tu, Canada? Richard Koo, senior adviser […]
September 14, 2024 | IEA: Global Oil Demand “Slowing Sharply”
Global oil demand growth is “slowing sharply” as China’s economy cools, pushing prices to a three-year low, the International Energy Agency said. World consumption increased by 800,000 barrels a day in the first half of the year, barely a third of the expansion in the same period of 2023, the adviser to major economies said […]
September 13, 2024 | Chinese Bust Cycle is Contagious
From 2019 to 2022, rounds of “free” money courtesy of central banks and governments fuelled gullibility and blind risk-taking in many countries. The effects were particularly short-lived in China, the world’s second-largest economy, where consumer confidence has been moribund over the past three years (below since 2016). Hampered by relatively low household incomes and […]
September 12, 2024 | Lacy Hunt Economic Update
Ted Oakley interviews Dr. Lacy Hunt regarding the U.S. economy, world economy, Federal Reserve, and interest rates. Here is a direct video link. Meanwhile, the effective corporate tax rate for large S&P 500 companies is at a multi-decade low of less than 20 percent (shown below since 1985). Sustainable?
September 11, 2024 | Small Businesses Warn of Weak Outlook
The outlook for small business earnings has been contracting since 2019, retreating below the pandemic bottom in August, with no turnaround yet. The glaring outperformance of S&P 500 operating earnings (in light blue below) above small business earnings since 2023 (dark blue below since 1986) looks unsustainable even as a bullish consensus forecast continued divergence […]
September 9, 2024 | What’s Your Plan?
Last week, the two-year US Treasury bond yield (3.654%) closed below the ten-year yield (3.716%), making for a +.062% spread and the first upward-sloping curve for these yields since July 2022. The re-steepening of Treasury yield spreads after months of inversion has historically proven to be a reliable warning of economic contraction, accelerating unemployment, and […]
September 4, 2024 | Recession Warning in Wine, Watches, Art and Yields
Fine wine prices have tumbled back to the pandemic lows of 2020 due to falling consumption, globally. Fine wine prices are decreasing sharply amid rising inventories and low demand for some of the most expensive wine #MacroEdge pic.twitter.com/qzuVSh3ixd — MacroEdge (@MacroEdgeRes) September 3, 2024 Are consumers struggling financially or realizing that alcohol is toxic for […]
September 3, 2024 | Why Are So Many Canadian Real Estate Developments Going Bust?
Over the last year, more than 200 real estate developments in Canada became insolvent. Andrew Chang explains why, at a time of high demand for housing, a growing number of projects are falling through. Here is a direct video link.
August 30, 2024 | Disappointing Demand is Dominant Theme
One after another, consumer-driven sectors are warning of tumbling demand amid still inflated prices and the highest real interest rates in 17 years. Although mortgage rates have fallen year-to-date, auto and home sales have continued to slump, with buying conditions the worst in decades (U of Michigan Home buying conditions below since 2000, courtesy of […]
August 29, 2024 | Hunt: Economic Review and Outlook August 2024
In this episode, Dr. Hunt explains that non-farm payrolls overshot by five standard errors, making it the worst miss since a 9 standard one for 2009, during the GFC recession, and marking another bureaucratic failure. According to Dr. Hunt, the reported overshoot of 818,000 was based on an internal seasonally adjusted series, but based on […]
August 28, 2024 | China Ramps up Exports to Offset Weakness at Home
As China’s real estate bubble continues to implode, the government has directed Chinese banks to shift lending from real estate to Chinese industry, including manufacturing firms. At the same time, 99% of publicly listed Chinese companies now disclose some form of government subsidy, according to the Kiel Institute, a German think tank. China is spending […]
August 27, 2024 | Fed Cuts in Response to Weakening Employment
Rosenberg Research President David Rosenberg joins ‘Squawk on the Street’ to discuss his economic models, what’s happening in today’s economy, and much more. Here is a direct video link. The 21.3% increase in US unemployment since 2022 is a degree of change only seen during the past 12 recessions since 1948. But, sure, maybe this time […]
August 24, 2024 | ‘Easy Money’ Boom to Bust
The same ‘easy money’ policies that enabled excessive spending and mal-investment in real estate fuelled a boom and bust now unfolding in the venture capital and start-up space, as well. This has broader implications for asset prices, lenders, investment, jobs and the economy at large. See, Start-up failures rise 60% as founders face hangover from the […]
August 23, 2024 | About That: Record Developer Insolvencies in Canada
Over the last year, more than 200 real estate developments in Canada became insolvent. Andrew Chang explains why, at a time of high demand for housing, a growing number of projects are falling through. Here is a direct video link.
August 22, 2024 | Toronto Condos Aren’t Selling
Mortgage rates are historically average today, but too high prices and insufficient household income levels remain a problem. Welcome to a buyer’s market without buyers. Condo sales in the GTA are down, according to the latest data from the Toronto Regional Real Estate Board, but the number of condos on the market is up. With […]
August 21, 2024 | Extreme Over-Valuations Suggest Years of Negative Returns
At 35x the average of the past decade’s earnings, adjusted for inflation, the S&P 500 basket of stocks is the third most expensive since 1871 (CAPE, in blue below, versus long-term interest rates in red, courtesy of Shillerdata.com). It is pricier than at the 1929 secular peak and more than twice the long-term median of 16x […]
August 20, 2024 | Lucid Motors CTO Rawlinson on the Evolution of Electric Vehicles
Bloomberg Radio host Barry Ritholtz speaks to Peter Rawlinson, chief executive officer, chief technology officer and member of the board of directors at Lucid Motors Inc., where he is responsible for the company’s strategy and execution, as well as the creation and delivery of all Lucid products. Before Lucid, Peter was vice president of vehicle […]