ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
August 16, 2024 | Pandemic Era Wealth Mirage Has Evaporated for Most
Stocks cheered yesterday on news that US households further eroded their savings in July, increasing retail sales by 1% while the average weekly earnings contracted by .1%. Year over year, retail sales volumes are running -.3% and full-time employment -.4%. Costco and Walmart are the best-performing retail companies. Everyday discounters are some of the few […]
August 15, 2024 | Recession to Slow Inflation and Spike Unemployment
Nancy Lazar, Piper Sandler global chief economist, joins ‘Money Movers’ to discuss whether Tuesday’s economic data changes any of the economists’ forecasts, whether the Federal Reserve has room to focus on its employment mandate, and more. Here is a direct video link. Also, see, Investors return to bonds as recession fears stalk markets: Investors are piling back […]
August 13, 2024 | Canadian Real Estate Company Insolvency Outpacing Great Financial Crisis
From January to May this year, there was an average of 20 real estate, rental or leasing insolvencies in Canada every month where companies either sought bankruptcy protection or filed creditor proposals. At this pace, Canada is on track to reach about 240 corporate real estate insolvencies in 2024, which would be 57% more than in 2023 […]
August 7, 2024 | Luxury Condo Sells for 21 Percent Loss
According to the Toronto Regional Real Estate Board (TRREB), the average sale price for all property types in the Greater Toronto Area (GTA) dropped to $1.106 million in July. On a month-over-month basis, the price fell by 4.7% from June. On the supply side, new listings rose 18.5%, and the sales-to-new listings ratio was […]
August 6, 2024 | Canada’s Financial Hell Paved with Good Intentions
As interest rates fell from 1980 to 2020, the average Canadian home price increased 746% from $67k to $566k, while the median household income rose about half that rate (400%) from $21,252 in 1980 to $84,000 by 2020 (table courtesy of Nerd Wallet). The average Canadian home price rose from about 3x the median household income […]
July 31, 2024 | Inflated Prices Increasingly Weigh
Policymakers and economies face a similar challenge globally. After the 2008 meltdown, short-term rates were intentionally suppressed to incentivize credit growth and consumption at the expense of savers and productivity-improving investments. Now, we are paying the longer-term costs of those short-term focused choices. As debt and unaffordability weigh on spending and employment, excess capacity and […]
July 30, 2024 | Central Banks Easing into a Recession
David Rosenberg, founder and president at Rosenberg Research, and Ed Devlin, founder of Devlin Capital, senior fellow at C.D. Howe Institute. and former head of Canadian portfolio management at PIMCO, join BNN Bloomberg to share their outlook on the economy and the markets. Here is a direct video link.
July 29, 2024 | Danielle on The Jay Martin Show
In this episode of The Jay Martin Show, host Jay Martin sits down with Danielle Park of Venable Park Investment Counsel to explore the current state of the Canadian real estate and bond markets. Danielle provides in-depth insights into how negative yields have driven the Canadian home price bubble, the lagging effects of recent rate […]
July 24, 2024 | Hoisington Q2 Review and Outlook
Hoisington’s Q2 Review and Outlook is now available; see Monetary and Fiscal Extremes. One of several standout charts shows the US Net National Savings Rate since 1929, negative in 2024 for only the second time ever, as the federal budget deficit (dissaving) exceeds the total of household, corporate and foreign savings. Hoisington notes that, as in […]
July 23, 2024 | Canada’s Economy Feels Like a Recession
Canada’s June unemployment rate of 6.4% was up 160 basis points from the cycle low of 4.8% in June 2022. Since the 1970s (as shown below courtesy of RBC), Canada has never had this trough-to-peak rise in the unemployment rate without the economy going through a recession (blue bars). The increase following the 2000-03 dotcom […]
July 22, 2024 | US Recession in Motion?
The US Conference Board of Leading Economic Indicators (LEI Index) declined for a 30th month in June (purple line below since 1959, courtesy of Advisor Perspectives) and is now -14.2% from the cycle peak in December 2021. As shown, since 1959, an LEI contraction of this magnitude has never happened outside of an officially declared recession […]
July 19, 2024 | Electricity Produced by Renewable Power Dramatically Lowers Energy Waste
Electricity generated by renewable power reduces energy waste significantly and, therefore, global power needs. This critical fact is key to understanding the energy evolution unfolding. Fossil fuels still supply 80% of our energy. And people point to this number to say it’s impossible to switch to renewables, especially if we want to do it quick […]
July 18, 2024 | Loan Defaults Confirm Faltering Consumers
In the second quarter of 2024, loan loss provisions at the six largest US banks increased the most since 2020 and car repossessions in June (drivers over 60 days late on payments) rose 23% year over year and were +14% compared to the pre-pandemic first half of 2019. See Car Repossessions Surge 23% as Americans Fall […]
July 16, 2024 | Beware the “Relative Value” Trap
Over the past 32 months, economically sensitive small and medium-cap stock indices have underperformed the largest-cap tech-heavy indices (price x shares outstanding) to a degree not seen since the last tech bubble in 1998 through March of 2000. Indeed, global fund flows (shown below since July 2023, courtesy of The Daily Shot) have concentrated in […]
July 15, 2024 | Struggling Consumers are a Tough Slog
Consumer spending drives just under 60% of Canadian GDP growth and consumer spending fell across all categories in June–discretionary and essential (shown below courtesy of RBC). Warm weather and declining interest rates did not entice spending as hoped. Overall, second-quarter retail sales were negative. Fewer Canadians have renovated their homes amid a sluggish housing sector, while […]
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.