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September 30, 2024 | Free Markets
Happy Monday Morning! This newsletter isn’t all bad news. We finally got some good policy out of Ottawa this past week. OSFI, the banking regulator, announced it will finally remove the stress test for homeowners who wish to switch lenders at mortgage renewal time. Under previous guidelines, when the mortgage term ended and a borrower […]
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 29, 2024 | Levitating Kamala
Expect stocks to continue their heedless waft into outer space until the election. They would not likely do so if investors even remotely imagined Kamala Harris might win. James Kunstler provided the most succinct reason we’ve heard for why this is not going to happen: “The people in this land are finally sick of a […]
September 29, 2024 | You Don’t Need a Weatherman To Know Which Way The Wind Blows
Twenty years of schoolin’ And they put you on the day shift Look out kid They keep it all hid Bob Dylan – Subterranean Homesick Blues As we accelerate towards whatever disastrous outcome awaits our debt-ridden, delusional, decadent, despairing society, I seem to be drawn to the anti-establishment lyrics of Bob Dylan, written during the […]
September 28, 2024 | The Trading Desk Notes for September 28, 2024
Traders are more interested in the market’s reaction to news than the news itself. This week’s news flow felt like a tsunami after the dog days of summer, but for the markets I trade, the big news was the monetary and fiscal stimulus in China, the acceleration of Israeli attacks on Hezbollah, and the shift in […]
September 28, 2024 | Tech Talk for Saturday September 28th 2024
The Bottom Line Greatest influence on equity markets last week was the recovery in China after the Peoples Bank of China added monetary stimulus to the economy. Chinese equity indices, ETFs and individual equities listed on North American equity markets soared. Sectors influenced by a recovery in China quickly caught the wave: North American gold, […]
September 27, 2024 | 10% Cap on Credit Card Fees?
APR fees on credit cards have never been higher, reaching an average of 24.92% as of September 2024 in the United States. In fact, credit card interest rates have not been beneath 10% since the early 90s. Consumer debt has never been higher and countless households have fallen into a snowball situation where they simply accumulate more […]
September 27, 2024 | College and the Shrinking Trust Horizon
Law professor Jonathan Turley just posted an article that contains a fascinating stat: “From 2010 to 2021, [university] enrollments fell from roughly 18.1 million students to about 15.4 million.” The decline is apparently continuing, and Turley blames diminishing trust in the quality of the education now offered by American schools. Here’s an excerpt from Turley’s post: What Happens […]
September 27, 2024 | China Moves into Panic Mode
China entered full panic mode, announcing stimulus measures to counteract the deflationary impact of weak property prices. But those policies may not be enough to lift the economy to the 5 percent growth target. This week China announced several measures to stimulate demand in a weak economy, a last-ditch effort to meet GDP growth goals […]
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 26, 2024 | WTI Crude Down Over US$1/b On Concerns About China Demand
Weak US and China economic data continue to be the focus of investors. Central Banks in each country have lowered interest rates and in China’s case lowered banks reserve requirements so they can lend more and support companies in need of credit to keep from failing. The urgency of both Central Banks to stimulate their […]
September 26, 2024 | Fake News is a Crime – Caught Red-Handed
The Media is Guilty of Mail and Wire Fraud 18 U.S.C. § 1341, 1343 This crime occurs when someone uses the postal service or makes a wire, radio, or television communication that crosses state lines to commit fraud upon another or to obtain money or property under false pretenses. Here, the fraud is misstating facts to […]
September 25, 2024 | FCC Fast-Tracks Soros’ Purchase of Second-Largest Radio Conglomerate
The Harris and Biden administration is having their FCC expedite the sale of 200 radio stations to George Soros. pic.twitter.com/RFHCHhjcSU — Insurrection Barbie (@DefiyantlyFree) September 19, 2024 I reported earlier in the year that George Soros acquired a 40% stake in Audacy, America’s second-largest radio network with over 220 stations nationwide. The Federal Communications Commission (FCC) […]
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 | Consumer Confidence – Biggest Crash Since 2021
COMMENT: Marty, it is amazing that the world is not focusing on your model. Consumer confidence in the US took a nose dive, which was the largest decline in more than three years. The ECM turns, and central backs began to cut rates within weeks, and you explained that recessions are born when people lose confidence […]
September 24, 2024 | Daniel Lacalle: Prepare for “Unprecedented Monetary Destruction”
Daniel Lacalle, economics professor, Mises Institute analyst, and publisher of the QTR’s Fringe Finance Substack, just posted a chilling summary of where we’re headed. Here’s an excerpt: An Unprecedented Monetary Destruction Is Coming “There is no escape from debt.” Global money supply has soared by $20.6 trillion since 2019, according to Bloomberg. Additionally, global debt surged by over $15 […]
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 23, 2024 | Fire in a Crowded Theatre
Happy Monday Morning! Last week I wrote a note titled ‘Connecting the Dots’ in which we highlighted the impending crisis brewing in the new construction market. New home sales are at 20 year lows in the GTA, and there’s nearly 10,000 unsold units in Greater Vancouver. People who bought pre-sale near the peak paid way […]
September 23, 2024 | Watch the Housing Bust Play Out in Real-Time
Most asset classes have their own unique, repeating cycles. For housing, it usually looks like this: Demand for homes rises faster than sales, causing prices to increase. Seeing this, would-be sellers hold off to see how much more they can get a year or two hence. Would-be buyers note the rising prices and shrinking supply […]
September 23, 2024 | IRS Agents for Harris
The National Treasury Employees Union has come out to offer their full support to the Harris-Walz campaign. Is anyone surprised that the Internal Revenue Service (IRS) is in favor of a Kamala presidency? Kamala Harris prides herself on passing the Inflation Reduction Act, the largest spending measure in US history, that initially aimed to employ […]
September 22, 2024 | Late Summer Sandpile
Last week, I said I would continue writing about Michael Gurri’s important book, The Revolt of the Public. It turns out giving a proper review of not just the book but all of the comments about the book will require more than a few days’ writing. I am going through almost 100 pages of new comments […]
September 22, 2024 | Sell the News
The stock market went bonkers following the Fed’s first rate-cut since March 2020, but it’s more than a little tempting to sell the news. A return to easing had been rumored for the last couple of years, but with a pitchfork mob threatening to descend on the Eccles Building, Fed Chairman Powell finally gave in […]
September 22, 2024 | Whites in America are Doomed by 2045, Abortion Rules, & Western Culture Declines
QUESTION #1: Is it true that Socrates has projected that the White population will be the minority by 2045? Eric COMMENT #1: Why do Democrats hate children and promote abortion, always claiming incest and rape when all the statistics show rape accounts for just 1% of abortions and incest is 0.5% of abortions? Then […]
September 21, 2024 | Trading Desk Notes for September 21, 2024
The Fed cut 50; here’s a quick take on how different markets reacted The Notes will be brief this week. I’m hosting the Moneytalks show and playing in the Oceanside Special Olympics golf tournament, and we’ve got a houseful of guests who will be golfing with me. The golf tournament is fully booked, which […]
September 21, 2024 | Why the Fed Cut Rates
The Fed cut the Fed Funds rate by 50 basis points on Sept 18th. Why the Cut? It was NOT because the markets (stocks and real estate) have started to roll over and head south. They are both at record highs. Nor was it because the economy is in recession. Atlanta Fed’s GDPNow […]