ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
April 15, 2024 | 30-year Mortgage Amortizations are Not The Solution Needed
The latest government initiative to try and keep home prices at unaffordable levels is to extend the term of debt amortization to 30 years from 25 for government-insured mortgages (available where property prices are $1 million or less). Making people debt slaves for even longer does little to help the housing unaffordability and debt weighing […]
April 14, 2024 | Danielle on CBC Weekend Business Panel
Danielle was a guest with Jacqueline Hansen and Elmer Kim on CBC’s Weekend Business Panel. You can view a video clip of the segment here.
April 12, 2024 | Rate Cutting Comes with Deteriorating Job Market
Frances Donald, chief economist at Manulife Investment Management, and BMO Capital Markets head of US rates strategy Ian Lyngen explain the biggest economic challenges facing the Federal Reserve as the central bank’s 2% inflation target remains elusive. Frances and Ian speak with Tom Keene and Paul Sweeney on Bloomberg Radio. Here is a direct video link.
April 11, 2024 | Easy For Some, Harder for Most
Four months ago, Fed Fund Futures had priced in the expectation of 6 to 8 US rate cuts (150 to 200 basis points) by the end of 2024. Today, that expectation has retreated to just 40 bps, with a 17% chance of a 25 bp cut in June, down from 50% on Monday. A significant […]
April 10, 2024 | Debt Stress Pandemic
US credit card debt topped $1.34 trillion in February, significantly above the cycle tops of around $900 billion in 2008 and 2020 (as shown below since 2003, courtesy of MFHOZ). The interest rate on this debt is above 20%. New car loans (5-year term) at 8.22% are above the 2007 rate peak (shown below courtesy of Liz […]
April 8, 2024 | Canada and Australia: Two Economies with Similar Challenges
Canadian GDP per capita declined for the 6th consecutive quarter in the final quarter of 2023; this means there are less resources per person–the standard of living is in decline.A new RBC study finds that more than half – one million – of 1.9 million new Canadian households by 2030 will not be able to buy a […]
April 4, 2024 | Impossible Home Prices Are The Problem
The median Canadian household income of $85k (Dec 2023) now qualifies for a maximum home price of $496k (assuming 20% down, 25-year amortization, and current mortgage rates (5-year fixed). That’s a problem since the avAdd New Posterage home price is $796k, an impossible 9.4x the median household income. The long-standing affordability rule is a home […]
April 3, 2024 | Rank Lawbreaking is a Popular Business Model
It’s not just crypto that’s lawless; it’s finance and many large corporations. Without equal prosecution and punishment prospects for all, we undermine the rule of law on which democracies depend. Mainstream finance companies that sell themselves as prudent and trustworthy while packaging gambling products to sell to the masses compound the harm. Better Markets CEO […]
April 2, 2024 | All In and Then Some
In every market cycle, once everyone who can or will buy has bought, only sellers remain. Today, households have a record 48% of their financial assets allocated to equities, the same level as the tech top in March 2000 and above the cycle peaks in early 2008 and 2022 (shown below, courtesy of The Daily […]
March 28, 2024 | PBS on the Plastic Recycling Scam Promoted by Oil Cos
The world produces an average of 430 million metric tons of plastic each year. The United States alone produces tens of millions of tons of plastic waste annually. Yet on average, only about 5 to 6 percent of plastic in the U.S. is recycled. NPR correspondent Michael Copley joins Ali Rogin to discuss a new […]
March 27, 2024 | Rosenberg: Business Cycle Update 2024
Economist, David Rosenberg reveals the potential for significant economic downturn and wealth erosion in 2024. With an uncanny blend of humor and insight, he exposes the misleading job reports, the phantom strength of the housing market, and the precarious position of the consumer credit bubble. This discussion stretches beyond the US, offering a grim look […]
March 26, 2024 | Spring Market Demanding More Realism
Nationally, the average Canadian home sale price in February 2024 was $719,400, -11.9% from the cycle peak of $816,720 in February 2022. Year-to-date, sixty percent of homes in the Greater Toronto Area sold below their asking price, 71% in Vancouver, and 48% in Calgary (the trend over the past three years is shown below). The […]
March 25, 2024 | Bottom Not In
US commercial real estate prices have declined an average of 33% since early 2020, with a 60% decline in the office sector. Similar trends are unfolding in Canada. US office loan delinquencies of 30 to 60 days (dark blue below, courtesy of Bespoke) and over 90 days (light blue) have spiked in the past year […]
March 22, 2024 | Danielle on Soar Financially
Danielle Park joins Kai Hoffmann for the first time on Soar Financially and examines the disconnect between current market optimism and the underlying economic indicators suggesting a forthcoming hard landing. Drawing on her extensive experience, Park offers a pragmatic outlook on the risks of speculative mania and the importance of cautious investment strategies in today’s […]
March 21, 2024 | Poorer Than Most Think
Yesterday, the US Fed paused for the fifth consecutive meeting since July 2023. Holding its overnight rate at 5.25 to 5.5%, the Fed expects that rising unemployment will prompt it to ease policy rates later this year. At the same time, Chair Powell intends to continue reducing the Fed’s balance sheet (QT), withdrawing liquidity from […]
March 20, 2024 | Robert Prechter: Levitating Optimism in the Stock Market
People don’t care about cycles when prices are going up. But up followed by down cycles have been constant for centuries, and once everyone who can buy has bought, only sellers remain. Bob Prechter offers a detailed temperature check in his latest market overview. Here is a direct video link.
March 19, 2024 | Liquidity Crunch Spreads as Investors Try to Exit
Saturday’s Report on Business included an insightful investigative report on private debt funds that became all-the-rage during the 2009-2022 low-rate era. See The risks of Bay Street’s hottest funds: Investors often fly blind, and billions of dollars are now trapped: The 2008-09 global financial crisis was a major catalyst for the sector’s growth. Before the crash, […]
March 18, 2024 | Marketplace Reveals Financial Disservice at Canadian Banks
Canadians trust they’re getting good financial advice from their banks — especially in these tough financial times. But a hidden camera investigation by Marketplace uncovers immense pressure on bank employees to push products and services to meet sales targets, or risk losing their jobs. Seven years after CBC first investigated the pressure to sell, bank […]
March 16, 2024 | Unprecedented Speculative Option Trading
Hmmmm… next-level bats*#t. Gunjan Banerji, Wall Street Journal live markets coverage lead writer, joins ‘Squawk Box’ to discuss the options market around semiconductor and tech stocks, the impact of AI mania on the options market, the impact of Fed rate cuts, and more. Here is a direct video link.
March 15, 2024 | Reaping What We’ve Sown
Eleven years of near-zero interest rates (2009-2022) drove record debt and consumption, with a manic over-allocation to expensive real estate. Then, online shopping and work-from-home collapsed demand for commercial and office space, and central banks embarked on the most aggressive rate-tightening cycle in more than 40 years. As central banks hold tight, the highly […]
March 14, 2024 | Beware Animal Spirits and The Lag Effect
Since the October lows, stocks have roared back to record highs, and bonds have risen solidly as US 10yr Treasury yields have dropped from 5% to near 4% Will the bull run continue through the rest of 2024? It is an election year in America after all. Or, have the animal spirits carried assets to […]
March 13, 2024 | This Kind of Housing Market
A house on my walking circuit sold on February 18 for $1,060,000 after 11 months on the market. It was initially listed in March 2023 for $1,798,000 and has been reduced nine times since. The property was relatively modest but updated with a water view and a legal rental suite. Property taxes are $8430 a […]
March 12, 2024 | Grantham: US Stocks Top 1 Percent Most Expensive in History
Jeremy Grantham’s latest update is available and worth reading on the GMO website. He points out that the current Shiller PE over 34 for the S&P 500 represents the most expensive 1% of all historical incidents. It has happened at a time when profit margins have also been at all-time highs and unemployment near all-time lows. […]
March 10, 2024 | Apartment Defaults Highest in a Decade
Nick connects the dots very well in this segment. Similar trends are happening in Canada, too. Apartment landlords around America are going into default on their mortgages at decade-high rates, suggesting that the Commercial Real Estate Crash is going to get even worse in 2024. Here is a direct video link.
March 7, 2024 | Central Banks Sit Tight as Pain Spreads
Yesterday, the Bank of Canada announced it would hold its key interest rate at 5%, the highest since 2007. At the press conference, Governor Macklem confirmed that policy discussions considered how long rates should stay at present levels but added, “It’s still too early to consider lowering the policy interest rate.” The main cause for concern remains unaffordable housing […]