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Hilliard MacBeth

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Author of "When the Bubble Bursts: Surviving the Canadian Real Estate Crash"

Hilliard's Weekend Notebook - The U.S. Federal Reserve hiked rates again and signaled that there will be more increases to come as the U.S. economy continues to gain strength. The second hike of this year came this week. Now most observers expect two more increases before 2018 draws to a close. Will the Fed continue hiking rates for too […]

Hilliard's Weekend Notebook - Canadian housing myths are plentiful. But a new myth popped up recently in the form of a suggestion that “mother nature” is pushing house prices higher in Vancouver and Toronto. Is “mother nature” driving house prices in those two large cities? Does that mean it’s not a bubble? Many people, including former Ministers of Finance, […]

Hilliard's Weekend Notebook - The government of Canada purchased the Trans Mountain Expansion Project (TMEP) for C$4.5 billion from Kinder Morgan Canada Limited. Prime Minister Justin Trudeau made this controversial move despite substantial political and financial risks. This government purchase ensures that planning and construction work for the project will continue and that the “great national economic benefits” of […]

Hilliard's Weekend Notebook - Changes to the rules for qualifying for mortgages in Canada have been introduced in several stages recently. And these rules, on a cumulative basis, are starting to have a noticeable impact on lending to households and the housing market. Since availability of credit to finance a home purchase is arguably the single biggest factor in […] Radio - Nearly 40 % of Canadian unemployed have given up looking for work

Hilliard's Weekend Notebook - The deadline to resolve the impasse in negotiations to amend the North American Free Trade Agreement (NAFTA) passed without a resolution of the issues. The negotiators were not talking as of Wednesday. If the NAFTA agreement is canceled by the President of the U.S. and ratified by Congress, there will be serious consequences for the […]

Hilliard's Weekend Notebook - The price of crude oil pushed above $70 in the last week, bringing back memories of previous oil shocks that shook the world. In decades past, oil price surges have been highly correlated with the onset of economic downturns. Is this latest move to higher oil prices going to interrupt the economic recovery this time? […] Radio - Real Estate Market in a weird stage

Hilliard's Weekend Notebook - Bank of Canada Governor Poloz spoke in Yellowknife, N.W.T., on May 1, 2018. He explained that household debts are large and increasing and represent a threat to the stability of the Canadian financial system. He concluded the speech with, “There is good reason to think that we can continue to manage these risks successfully. “ […]

Hilliard's Weekend Notebook - The U.S. government recently enacted deep tax cuts that were designed to boost the economy. But tax cuts could mean smaller government revenue, and projections for deficits in government spending indicate huge increases in total government debt over the next decade and beyond. Will tax cuts be a plus or a minus for the US […]

Hilliard's Weekend Notebook - The Toronto S&P/TSX index was down about 5 percent in the first quarter of 2018, while the important energy sector index (S&P/TSX Capped Energy) was down even more, by 8 percent. This was during a time of higher oil prices worldwide. In the US, energy companies listed on the stock market show a similar pattern […]

Hilliard's Weekend Notebook - Loss Aversion is the human preference to avoid taking losses. This powerful force can cost people a great deal of money when it comes to trading stocks and buying and selling real estate. Can humans overcome their desire to avoid taking losses? I wrote about “loss aversion” as it comes into play when trading stocks in […]

Hilliard's Weekend Notebook - A flattening yield curve, based on the difference between the 2-year and 10-year (or 30-year) US Treasury bonds, contains valuable information about the future. The recent rapid increase in short-term interest rates means that the short-term rate is catching up to the 10-year rate. The spread between the two is 50 basis points, narrow by […]

Hilliard's Weekend Notebook -   There is significant and growing interest in electricity storage, sometimes for a very short period measured in minutes. Battery storage systems are gaining followers. Storage allows electricity that is produced by renewable energy such as solar and wind to be used later, at a time of peak demand. Will advances in storage disrupt companies […] Radio - Hard to get real numbers in a slowing market Radio - BC speculation tax freaking out recreational property owners

Hilliard's Weekend Notebook - The Bank of Canada release says: “The Bank continues to monitor the economy’s sensitivity to higher interest rates. Notably household credit growth has decelerated for three consecutive months.” Note that the Bank is saying that the growth in credit has slowed, not that Canadians, en masse, are paying back their loans. Canadians have just slowed […] Radio - BC’s new irritant for Albertans

Hilliard's Weekend Notebook - Here’s a recap of some history: Stephen Harper was elected with minority government status in 2006 and by the end of that year Finance Minister Jim Flaherty pushed through changes to Canada Mortgage and Housing Corporation (CMHC) rules that allowed 40-year amortization of mortgage loans and zero down payments, in spite of warnings from some […]

Hilliard's Weekend Notebook - The U.S. equity market is very expensive, according to most measures of stock market pricing. According to James Montier of GMO, the U.S. market is “obscenely” overvalued. Why are money managers still buying? James Montier wrote a 7 page piece called “The Advent of a Cynical Bubble” on the valuation of the U.S. market. It […] Radio - BC foreign buyer tax hiked from 15 to 20%

February 17th, 2018 | Higher Inflation Here To Stay

Hilliard's Weekend Notebook - Inflation reported in the core CPI and the headline CPI on Wednesday February 14 was not a message of love for Valentine’s Day. It was a wake-up call. The so-called goldilocks scenario called for rates to rise slowly, at 25 basis points per meeting, with a target of 2 to 2.50% for the Fed Funds […]

Hilliard's Weekend Notebook - As the Canadian prime minister visits the United States for four days and presumably is pushing really hard to save the NAFTA talks, the mood is somber. The probability of saving the agreement is estimated at less than 50 percent. One of the problems with expecting the U.S. to change course and agree to a […] Radio - Will Stock Correction Hit Other Markets?

Hilliard's Weekend Notebook - Source BofA Merrill Lynch, retrieved from FRED, St. Louis Fed I’m using the more provocative term “junk” because it gives a sense of the risk but you are more likely to see the euphemism “high-yield”. They mean the same thing. A junk bond is a corporate bond that has a Moody’s, DBRS or S&P rating […]
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