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April 28, 2017 | USD/CAD Correction Time?

USD/CAD 4-hour View [last 1.3619]:  We may have seen a five wave impulse rally completion at 1.3647, labeled wave [5].  If so, there is at least a short-term setup for move down to 1.3400-level in minor wave [c].  And if oil rebounds here (as we have been expecting a move back to 51-level in WTI […]

April 28, 2017 | Looking for Epic Signs? Enter Silver

In yesterday’s alert we wrote that the reversal in the precious metals market should once again not be taken at its face value and that one should not overreact based on it as the size of the potential rally was limited. Well, it turned out that “limited rally” was an euphemism for a decline. Gold, […]

April 28, 2017 | Trump’s Tax Plan Would Bankrupt the Empire

GUALFIN, ARGENTINA – Trump! Great guy! Big, dumb, hopeless. Menacing. Reckless. And completely loveable. Here’s The New York Times’ list of “winners” from his tax proposal: Businesses with high tax rates. The plan would cut the 35% corporate income tax to 15%. While few businesses pay the full 35% rate, those that pay something close […]

April 28, 2017 | Vancouver’s First Shipment of Alberta Crude Oil

A maritime archivist reveals the story of how Vancouver became an export port for a commodity it has been shipping safely since 1956 By Lea Edgar Librarian & Archivist, Vancouver Maritime Museum This article appeared in the May 2017 print issue of the BC Shipping News and is reproduced with permission.  In the early 1950s, […]

April 28, 2017 | Elected Representatives VS Unelected (the Deep State)!

My view of our leaders/administrators reveals that we all have (on the surface) a group of elected representatives (those we voted for) who we presume will do the will of the people and then we have a group of unelected operatives (which I will call the Deep State) who actually rule this planet (from a […]

April 28, 2017 | The Confidence Game – The Next Crisis

QUESTION: Martin, I started following your models shortly after college in 2000 when I entered the financial advisor world. I soon realized how clueless this industry was and formed a hedge fund in Tampa in March 2007 to short retail and housing, largely based on your models & my understanding of cycles. I reached the top […]

April 28, 2017 | Lessons

  A year ago a single share in Home Capital traded on Bay Street at $39. Today it was $8 – and this was actually a good day for the failing subprime lender. There are several lessons in this story which this week gripped the mortgage industry, the financial sector, regulators and depositors. First, if […]

April 28, 2017 | West Australia: A Cautionary Tale for Canada and Beyond

After the debt-fueled commodity boom: cash flows recede, asset values drop, only the debts remain. Property prices in WA have fallen while unemployment and cost of living expenses are high. It’s a perfect storm for those who invested at the height of the mining boom. Here is a direct video link.

April 28, 2017 | UK, France GDP Weaker Than Expected: Global Slowdown? IMF Early Warning Signal!

The UK and France also reported GDP today. Both were lower than expected. Is a global slowdown underway? UK GDP Weaker Than Expected The Guardian reports UK GDP Growth Slower Than Expected as Inflation Bites. The UK economy suffered a sharp slowdown in the opening months of this year, as the post-referendum rise in living costs […]

April 27, 2017 | Trump’s Tax Reduction Plan Could Be Improved Substantially! How?

Our President and his policy advisers could create a real boon for everyone if they understood money. For example: we could eliminate all taxes today and replace this revenue with direct payments from our centralized source…called the Fed. Let’s think about our situation and the realities of money for this missive. Currently, Americans pay the […]

April 27, 2017 | The Golden Tidal Wave is Rising in Asia

Gold investors, forget Europe. Yeah, yeah, gold prices went down on the idea that France might vote for someone boring. Panic leaked out of the market like an old balloon. So, gold prices went down. That’s nice. I told you why this is actually good. Meanwhile, there is a tidal wave of demand building in […]

April 27, 2017 | Conflicted

  By now I’m sure all dogs know our primo Alt mortgage lender, purveyor of liar loans and featuring executives being fitted for leg irons – Home Capital – was saved from destruction by a fat loan from a pension fund. Not just any fund. HOOP – the Heathcare of Ontario Pension Plan, representing all […]

April 27, 2017 | We ♥ Donald Trump

GUALFIN, ARGENTINA – Team Trump came forward yesterday and laid what it claimed was the “biggest tax cut in history” on the table. Before we go on, we should say “We love this guy.” If you’ve been reading the Diary for a while, you know that, thanks to the feds, rich people have gotten much […]

April 27, 2017 | Look for the Week to End with an AMZN/GOOG Hangover

AMZN and GOOG have taken psychotic leaps following the release of Q1 earnings news after Thursday’s close. This is likely to have little or no effect on the Dow and S&Ps on Friday, since the broad averages would find it difficult to emulate behavior for which there is no satisfying explanation. Call it a mood […]

April 27, 2017 | Canada: Under-Saved, Undiversified and Unprepared for Mean Reversion

Canada enjoyed elevated cash flow during the late, great, global commodity boom 2002-2011.  That was then.  Cash flow is cyclical, and that cycle is over.  Unfortunately, Canada is unprepared for the secular mean reversion that follows secular booms.  Thanks to over-confidence and malinvestment in highly inefficient assets like the Alberta tar-sands, egregiously priced real estate […]

April 27, 2017 | London Property Sales Crashed 40% Thanks to Tax Increase

Where I use to live back in 1985   The London housing market sales has crashed to its lowest level now since 2013. We reported in November 2015 with the turn in the ECM on 2015.75 that the London property market peaked. Valued crashed by 11.5% in the first month after the turn of the […]

April 27, 2017 | Misunderstanding GDXJ: Why It’s Actually Great News For Junior Miners

Something extraordinarily good for junior precious metals miners just happened. But for some reason it’s being misinterpreted as a bad thing. Here’s the general story: A Small-Cap Gold Mining ETF Streaks Lower As Big Index Change Looms (Investors.com) – Mining stocks blazed a bright trail of returns since the start of 2016 as gold saw […]

April 27, 2017 | Don’t Worry: “It’s Only 1997” Besides “It’s Different This Time”

Two articles in the last two days, one on Bloomberg, the other on the Wall Street Journal, provided key reasons we should not worry about stock market bubbles. It’s only 1997 (P/E valuations have not exceeded the dot-com bubble in 2000 yet) It’s different this time (always a classic argument) It’s Only 1997 Bloomberg explains […]

April 26, 2017 | The ‘Global Financial Brain’ Is Here! Let’s Think!

Today, most emotion has been taken out of trading and investing as computers, robots, smart phones, artificial intelligence, automated trading, and algorithms rule over trading and price changes. Essentially, the historical business cycle (where real human emotion used to rule) has been changed dramatically now that market ‘prices’ are mostly determined by trading algorithms, robots, […]

April 26, 2017 | Where There’s Smoke…

  It doesn’t take a lot to topple a house of cards. Or in this case, a nation of toppy houses floating on a foundation of debt. Maybe it’s just another week of excess borrowing and undisciplined spending as real bloats higher. Or, perhaps, this is it. The moment of capitulation. Over the cliff. In […]

April 26, 2017 | Too Fatigued to Pretend

Five hours’ worth of nervous distribution on Wednesday left the broad averages too depleted to rally into the closing bell. Instead, they took the path of least resistance and headed lower, tipping their hand for tomorrow. Barring unforeseen news that could stir the market’s bullish juices, we should look for the weakness to persist into […]

April 26, 2017 | A New Wave of Violence in the Valley

GUALFIN, ARGENTINA – “Watch out, Bill. The originarios almost killed someone up the valley,” our lawyer warned us. “He’s still in a coma.” The latest news isn’t very encouraging. The originario problem was supposed to have calmed down. Ranch Invasion Last year, they invaded our ranch and blocked the roads. We called the police, who […]

April 26, 2017 | Subprime Credit Card Losses Bite Capital One: Income Down 20%, Charge-Offs Up 30%

Capital One missed earnings estimates by a mile as Credit Card Charge-Offs Jump 30% What’s in your wallet? Capital One Financial Corp. reported a 20% drop in first-quarter net income from a year earlier as losses jumped for U.S. credit cards and the bank took a bigger provision charge for credit losses. The firm, known […]

April 26, 2017 | World Strife. What’s Next? Are You Ready? We Are!

KINGSTON, NY, 26 April 2017—Across the nation and around the world, explosive geopolitical and economic trends are erupting. Within days, the United States launched a massive missile strike against Syria, dropped the “mother of all bombs” on Afghanistan, incited global concern of nuclear war with North Korea and announced new military operations in Somalia. And now […]

April 26, 2017 | Bulls Come and Go, Valuations Remain Prescient

The simple, ego-free, mathematical valuation measurements that have had a near perfect 97% correlation in predicting actual investment returns over subsequent 7 to 12 year periods (such as forward operating price to earnings multiples, Shiller CAPE, price to cash flow, price to dividend, Tobin’s Q, the Fed Model, and market capitalization to GDP) are all […]

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