July 26, 2024 | A Worried Bank of Canada is Cutting Interest Rates

Central bankers in Canada went out on a limb by cutting a key interest rate this week. The Bank of Canada cut its benchmark rate for the second time, by 0.25 percent to make a full ½ point reduction this year. The most powerful central bank, the U.S. Federal Reserve, has yet to make its […]

July 26, 2024 | Large Upward Revisions of “Core Services” PCE Inflation Pushed Six-Month “Core” PCE Inflation to 3.4%, Worst in a Year

The revisions, the upward revisions, oh-la-la! The Bureau of Economic Analysis released today the PCE price index for June; and as part of it, the “core” PCE price index – the Fed’s primary yardstick for inflation – was revised substantially higher for May, driven by a large upward revision of the “core services” PCE price […]

July 25, 2024 | WTI Falls >US$4/b Over The Last Week To US$77.30/b On Weakening China Demand

The ending of President Biden’s candidacy for a second four year term has emboldened the Democrats that they could win the Presidency and end the worry of a clean sweep (Presidency, House and Senate) by the Trumpers. By endorsing Kamala Harris, Biden passes the torch to his VP and ensures that the campaign funds raised […]

July 25, 2024 | It’s a Recession Not a Depression

  The government insists that the economy is fine, thriving perhaps, and has asked the public to pay no mind to their current financial situation. No one, aside from those living off government assistance, are better off now than they were four years ago. Americans cannot be gas lit into believing the economy is sound […]

July 24, 2024 | Who Really Controls Your Access to Politicians? The SWAMP!

QUESTION: Marty, I watched Rep. Anna Paulina Luna interrogating the questionable Secret Service Director Cheatle. Paulina accused her of perjury. She says that Garland probably told her to stonewall. Paulina is your representative. Why has she not asked the Inspector General to investigate your case with all the evidence you presented in the Plot to […]

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 24, 2024 | Housing Is Seriously Rolling Over

Let’s start with the fact that the average American can’t afford the average house. Not even close: Houses have been unaffordable for a while, but for a while, “investors” — i.e., private equity companies with access to cheap credit — took up the slack, sometimes buying entire neighborhoods and converting the houses to rentals. Now […]

July 23, 2024 | US Banks Experiencing Rising Unrecoverable Debt

  I’ve long been sounding the alarm on the private debt crisis sweeping the Build Back Better nations. US government debt equaled 122.3% of the nation’s GDP in 2023, a cost that will be passed on to the taxpayers. As of Q1 2024, US household debt stood at $1.77 trillion; $12.44 trillion held in mortgage […]

July 23, 2024 | Early Sign of a Downturn in CA Home Prices

    Everybody knows where we’ve been.  Let’s see where we are going. History shows that extremely low housing affordability in CA tends to precede market downturns, as occurred in 1980, 1989, and as shown below, 2006.                I see no reason why this time will be any different. But Fear Not, Fellow Investors 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 | Zelensky Prepared for a Trump Presidency

Donald Trump has guaranteed to end the war in Ukraine if elected president, vowing to do so before his first day in office. The recent outpouring of support for Donald Trump has led world leaders to consider the possibility of a second Trump presidency. Perhaps no one would dread a second Trump term more than […]

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 22, 2024 | Cutting Time

Happy Monday Morning! Headline CPI inflation decelerated in June to 2.7% year-on-year, slightly cooler than expected. The average of the Bank of Canada’s preferred core inflation measures also held steady at 2.8%. Some people would argue the job is not done, inflation must be returned to 2% and not a basis point higher, the same […]

July 21, 2024 | Tax Code Change for Emergency Retirement Withdrawals

Low-income Americans are in such dire straits due to the elevated cost of living that lawmakers are making changes to the tax code. No, naturally, the politicians are not voting to decrease taxes for those who can barely get by. Instead, they’re permitting Americans to pull a mere $1,000 out of their retirement accounts without […]

July 21, 2024 | Going, Not Gone

The ability to choose our goods and services is fundamental to economics. The freer we are to make choices, the more the economy should prosper. That’s because our choices tell producers what works. Modern science muddies this pleasantly clear water. Behavioral economists talk about a phenomenon called “decision fatigue.” It turns out we humans would […]

July 21, 2024 | Big Selloff Was Tightly Scripted

Bears shouldn’t get their hopes too high just because the S&P 500 plummeted for three straight days last week. The selloff seemed tightly scripted, given that the Dow Industrials were rising just as sharply at least part of that time. This is shown in the chart above, which captures price action on Thursday. The implication […]

July 20, 2024 | Trading Desk Notes For July 20, 2024

Risk assets had a key turn date When several markets reverse course on or around the same date, I define that as a Key Turn Date (KTD). It signals a (profound) change in market sentiment/psychology/positioning.   My favourite barometer of risk sentiment is the S&P 500 Index. S&P futures (and the cash market) closed at a record […]

July 20, 2024 | One of Reagan’s Best Jokes

July 20, 2024 | Tech Talk for Saturday July 20th 2024

The Bottom Line North American equity markets experienced substantial rotation last week: Out of the technology sector and into other economic sensitive sectors such as Transportation, Banks and Biotech. Second quarter results released to date have been significantly higher than consensus.  According to www.FactSet.com 80% of reporting S&P 500 companies have released a positive earnings […]

July 19, 2024 | CNN’s Report 3 Guns Fired

We have these reports that the sound implied that there were three separate guns fired, and thus, there had to be a second shooter. I think if there were a second shooter, Trump would be dead. I tend to think they stood down, let it happen, and hoped for the best. The same routine in 911 […]

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 19, 2024 | Charles Hugh Smith: A Repeat of the 1970s Will Change a Lot of Things

Many people recognize the similarities between today’s world and that of the 1970s. But few understand the potential chaos that implies for a system this overleveraged. Charles Hugh Smith just posted an article that explains the impact on investors. Here’s an excerpt: Twisters on the Horizon: Is This Decade a Re-Make of ‘That 70s Show’? If […]

July 19, 2024 | The Fed will Cut Rates Too Late in This Cycle

Anticipation ahead of the U.S. Federal Reserve’s first rate cut is growing. Traders are betting on a first quarter-point cut at the meeting on September 17-18 as the most likely date, with more cuts to come later this year in November and December. But traders are wrong in thinking that rate cuts are good for […]

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 […]