June 10, 2024 | Enjoy The Moment

Happy Monday morning! As widely anticipated, the Bank of Canada slashed rates this past week, cutting by 25bps. The move was celebrated across the nation, not just by Realtors and mortagage brokers but provincial leaders in BC & Ontario. The economy is struggling so much so that it warrants a rate cut, and this is […]

June 10, 2024 | Leveraged Gambling Ends Badly, as Usual

The lure of easy money delivers time-worn outcomes, once again. See how Real estate investors are wiped out in bets fuelled by Wall Street loans: Lynn Nathe was growing tired of the meager gains from her family’s retirement account. In late 2021, she invested $200,000 with a company that was making 30% returns by buying the […]

June 10, 2024 | Taiwan’s Defense Strategy – US Protection

  Taiwan’s new administration under President Lai Ching-te has been extremely vocal in its distaste for the One China policy. The Democratic Progressive Party (DPP) campaigned on the promise of sovereignty and patriotism. No other president has been this outspoken about China’s control over the small nation that clearly cannot defeat China independently. Yet there […]

June 10, 2024 | Used Car Wholesale Prices Continue Plunge, Gave up 59% of Pandemic Spike. But still up 35% from Jan 2020: EVs +72%, ICE Vehicles +34%

Used vehicle prices are in a historic downward spiral, unwinding the hugest-ever price spike that had built up during the pandemic. Despite the plunge, wholesale prices of vehicles sold at auction in May were still 35% above where they’d been in January 2020, according to Manheim, the largest auto auction house in the US. With […]

June 9, 2024 | Soft Landing Fantasies

Those who think the wizards at the Fed have engineered a soft landing for the grotesquely pumped U.S. economy are in for a rude awakening. Strip out the “wealth effect” from mega-cap stocks driven mostly by hot air and short covering, and the economy is already in recessionary muck. Although yacht sales reportedly are still […]

June 9, 2024 | Why is Keynesian Economics Collapsing?

  John Maynard Keynes in his 1936 book, ‘The General Theory of Employment, Interest and Money,” argued aggregate demand was too volatile to be stable and would lead to inflation or recessions. His theory honed in on spending as a means of price control. Low aggregate demand, Keynes argues, would lead to high unemployment and […]

June 9, 2024 | Emission-Free Air Travel Now in Motion

Conventional polluting air travel is ripe for disruption. Fortunately, that’s in motion. German aerospace company Lilium wants to revolutionize air travel with its electric vertical take-off and landing (eVTOL) jet. “Revolutionize means make it absolutely zero emission,” Lilium CEO Klaus Roewe told CNBC Tech in an interview. Here is a direct video link.  

June 9, 2024 | Farage on Britain’s Future

June 9, 2024 | Geopolitical Breakdown

’m writing you from Cape Town, South Africa, where I’ve been warmly welcomed and reminded how much I enjoy international travel (well, except for jet lag!). Our world has so many wonders most people never get to experience. Of course, “there’s no place like home,” but seeing other places makes me happy, too. Yet this […]

June 8, 2024 | Trading Desk Notes For June 8, 2024

Check your old-school assumptions at the door Market sentiment has been oscillating between believing that “higher for longer” is 1) dead or 2) will be indefinitely sustained. The oscillation frequency has shrunk from months (during the October to February period) to days (since mid-April), and this week, sentiment swung from pillar to post between Monday and […]

June 8, 2024 | Gold Hit With One-Two Punch

On Friday, two announcements combined to hit gold and silver about as hard as they’ve ever been hit. First, the US jobs report, as usual, came in far hotter than expected, which led credulous headline readers to conclude that the economy is booming and interest rates will have to stay higher for longer. If true, […]

June 8, 2024 | Lacy Hunt: There is Reason To Worry

One of Lacy’s best ever… Famed economist Dr. Lacy Hunt joins us to talk about the recession in America and what he thinks will tip the scales. Here is a direct video link. 

June 8, 2024 | Tech Talk for Saturday June 8th 2024

The Bottom Line Focus this week is on news following the FOMC meeting on Wednesday in response to the stronger than expected U.S. May employment report released last Friday: May Non-farm Payrolls and Average Hourly Earnings came in “hotter” than expected. Under these conditions a reduction in the Fed Fund Rate by the FOMC probably […]

June 7, 2024 | 2024 Hillary vs Trump – Not Biden?

      The press is starting to actually report that Biden is losing it. This is how they float a balloon to see if it will fly. The August Democratic Convention has been rumored for some time that they will DRAFT someone else to replace Biden. He swore he would never debate Trump. This […]

June 7, 2024 | Bank of Canada Cuts Rates and Sends The Market a Signal

The Bank of Canada cut interest rates by 25 bps on Wednesday and the ECB made a similar cut on Thursday. This marks a significant moment in the history of interest rate policy changes and could be a turning point. CPI Inflation has moderated enough (2.7 percent) to allow cuts without a loss of credibility. […]

June 7, 2024 | Canadian Banks Bracing For Mortgage Renewal Stress

About that Canadian debt renewal cliff… Canada’s Big Six banks are adding billions of dollars to their emergency funds as mortgage renewals approach for more than three quarters of homeowners. Andrew Chang explains why the banks are preparing for more delinquencies, and who’s most at risk. Here is a direct video link. 

June 6, 2024 | Supreme Court Bombshell Decisions Due June 13th

  The Supreme Court has 28 decisions still remaining, and there are a lot of really important cases that will shape history. The next opinion day will be June 13; this 2023-2024 term ends on June 28th. Buried within these 28 cases is the only one regarding deference to agencies known as the Chevron decision. […]

June 6, 2024 | Eyes Wide Open as Bank of Canada Blinks

Yesterday, the Bank of Canada (BOC) blinked on inflation fears and responded to weak growth and rising unemployment with the first rate cut in four years and the first since the epic tightening cycle began 27 months ago in March 2022. Markets are pricing in another 50 bps of BOC rate cuts by year-end. Canada […]

June 6, 2024 | Bank of Canada Cuts by 25 basis points, to 4.75% as Economy and Inflation Slowed. QT Continues

“With continued evidence that underlying inflation is easing,” the Bank of Canada said today that “monetary policy no longer needs to be as restrictive,” and it cut policy interest rates by 25 basis points, as widely expected. But QT will continue, the statement said. The BOC has already shed 64% of the securities it had […]

June 6, 2024 | What Would Josey Wales Do?

“Now remember, when things look bad and it looks like you’re not gonna make it, then you gotta get mean. I mean plumb, mad-dog mean. ‘Cause if you lose your head and you give up then you neither live nor win. That’s just the way it is.” – Josey Wales “To hell with them fellas. […]

June 5, 2024 | The Economic Decline of Europe With Rising Interest Rates?

  I have returned from a two-week tour of Europe covering the UK, Germany, and Italy. Europe is in dire straights. I have stay on the Via Veneto since my parents took me there back in 1964/65. It was the 5thy Abenues of Rome. The street was lined with sidewalk cafes out of probably 30, […]

June 5, 2024 | WTI Crude Plunges Over US$4/B To US$73.10/B As OPEC Plans To Open The Spigots in Q4/24

OPEC’s announcement to gradually phase out the 2.2 Mb/d of quota cuts (starting October 1st) was not received well by the markets. In the details an agreement to give the UAE a 300 Kb/d addition to their quota, and continued cheating by Iraq and Nigeria resulted in a knockout blow to crude prices over the […]

June 5, 2024 | AI Mania Has Hyped Costs and Stock Prices

The costs of running generative AI are mind-blowing considering energy, training, and materials, while the revenue case is still largely missing. In just one example, Silicon Valley venture capital firm Sequoia estimates that in 2023, the tech industry spent $50 billion on chips from Nvidia to train AI but generated only $3 billion in revenue. […]

June 4, 2024 | Easing Begins as Unemployment Rises

We’ve long noted that their actions tend to be contagious once central banks start easing rates in response to disinflation and weakening global demand. This week, the Bank of Canada (BOC) and European Central Bank are expected to follow the Swiss and Swedish central banks in announcing the first 25 basis point (bps) cut since […]