November 11, 2024 | Danielle on Thoughtful Money

November 8, 2024 | Great Expectations are Priced for Disappointment

The fourth year of a presidential cycle is all about promising. The first year of a presidential cycle is about trying to deliver on all the promises. At the start of President Trump’s last term in 2017, the U.S. government deficit to GDP was 3% versus 6% today. The federal debt as a percentage of […]

November 6, 2024 | Rates Back Up More

It looks like the U.S. election is yielding a decisive verdict, and that’s good news. Risky assets like stocks and cryptocurrencies are up sharply on the promise of less regulation and further tax cuts from a Republican-led government. In less bullish news, the Treasury market continues to sell off, with a rate backup that began […]

November 5, 2024 | Home Listings Rise as Pandemic-Era Mortgages Approach Renewal

A new CMHC report notes that 1.2 million mortgages are up for renewal in 2025 and 980,000 in 2026. About 85% have fixed rates contracted when mortgage rates were below 2% compared with over 4% today. Although the Bank of Canada has lowered its base rate from 5 to 3.75% since June, Canadian fixed-term loan […]

October 30, 2024 | What’s The Right Amount To Bet at a Casino?

During the financial mania of 1634 to 1637, people bid up the price of tulip bulbs. At peak craziness, a “Semper Augustus” bulb sold for the equivalent value of a $14,000,000 mansion on the Amsterdam Grand Canal today. Then the fever broke, dragging bulbs and participants’ net worth back into the dirt. Today’s financial mania […]

October 28, 2024 | Rosenberg: Household Wealth at Extreme Risk

David Rosenberg, founder and president of Rosenberg Research & Associates Inc., joins Jack Farley on Monetary Matters to argue why a recession is likely to occur as soon as 2025. Rosenberg points to the low savings rate and argues that fiscal deficits and a stock market price bubble are boosting consumer spending and that this […]

October 25, 2024 | Creating Your Best Future

Happy Friday! Keep Looking up! In this episode, my guest is Ari Wallach, most recently an adjunct associate professor at Columbia University’s School of International and Public Affairs and host of a new TV series titled A Brief History of the Future. We discuss the importance of learning to project our understanding of ourselves and […]

October 24, 2024 | Oversized Rate Cuts: Red Alert

Four easing cycles have seen the Bank of Canada deliver larger than 25 basis point rate cuts at a time: 2001, after the US dot-com bubble and Sept. 11 attacks; during the global financial crisis; in the COVID economic shock of 2020 (see chart on the left); and now, in 2024. See Bank of Canada’s Deeper Cut […]

October 23, 2024 | The Trouble with Central Bank Rate Cuts

On September 18, the US Fed cut its overnight target rate by 50 basis points (bps), and risk markets went wild. Stock and corporate debt prices have risen to more all-time highs, and real estate bulls rejoice that lower interest rates will reignite loan demand and save highly leveraged property markets. The trouble is that […]

October 22, 2024 | About That: Should Baby Boomers Get More Government Money?

Aged populations are ballooning government deficits in most countries. The Bloc Québécois has threatened to force a snap election if Canada’s federal government doesn’t increase Old Age Security payments for people between the ages of 65 and 74 by 10 per cent. Andrew Chang breaks down the dilemma before the Liberals and why economists say […]

October 21, 2024 | Grantham: The Bigger The New Idea, The More The Market Overshoots

For those able to hear truth and facts… Today on the podcast, we’re delighted to welcome back Jeremy Grantham. Jeremy is the long-term investment strategist at his namesake firm, Grantham, Mayo, Van Otterloo & Co., or GMO, which he cofounded in 1977.  Here is a direct audio link. “Bubbles and enthusiasm, ecstasy, they’re all kind of […]

October 17, 2024 | Financial Risk at Historic Highs–What’s Your Plan?

US Auto loans that were more than 90 days delinquent in the second quarter were the highest since the second quarter of 2010 (blue line below since 2004, via Arbor Research and The Kobeissi Letter). Auto loan debt held by Americans rose to a record $1.63 trillion (red line), 92% above 2008 levels, while auto […]

October 16, 2024 | Retailers Feeling The Pressure of Cash-Strapped Consumers

Major retailers have noted a pullback in consumer spending, and same-store traffic is down across restaurants this year, particularly at sit-down chains. Most are ramping up discounts and promotions to lure customers. See, After years of Increases, Companies are Rolling Back Prices: Retailers, restaurants and other companies spent years lifting prices. Now that consumers are closing […]

October 15, 2024 | Results are in: ‘Easy’ Money Policies Build Debt, Hurt Productivity and Affordability

The results of the easy money experiments from 2009 to 2022 are widely evident: they yielded record indebtedness and unaffordable housing. This was especially true in Canada, where the median household debt to income was 175% in the second quarter of 2024 from 156% in the fourth quarter of 2008. At the same time, the […]

October 10, 2024 | Mainstream Financial Plan: Double or Nothin’

This morning, US data showed a larger-than-expected increase in people applying for jobless benefits—258k for the week of October 5, versus 230k expected—a 14-month high. There was also a .2% month-over-month increase in headline CPI, double the .1% expected by the consensus. Fewer jobs and a higher cost of living remain an increasing challenge for […]

October 9, 2024 | Realty Bubble Bursting as Power of Sales Spread

In September, across the Greater Toronto Area, there were 204 power-of-sale listings, more than double the 96 reported in September 2023, an increase of 112% year over year and more than triple pre-pandemic levels (chart below since 2020).   See, Power-of-sale listings more than double as mortgage lenders repossess homes from over-leveraged buyers. Finally, reality is dawning […]

October 8, 2024 | About That Jobs Report…

Nonfarm Jobs Increased by 245K Last Month, Far Surpassing Estimates. Here is a direct video link. 

October 7, 2024 | Understanding China’s Economic ‘Bust’

The Chinese government has just unveiled a massive stimulus for its troubled economy, but can it fix the slowdown long-term? What’s at stake for the country, and the world? Here is a direct video link. Leland Miller, China Beige Book CEO, joins ‘Squawk Box’ to discuss the state of China’s economy, impact of Beijing’s stimulus package, […]

October 5, 2024 | Danielle on CBC Weekend Business Panel

CBC News Network’s Weekend Business Panel takes on the top news of the week. Here is a direct video link.

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, […]