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April 12, 2024 | CPI Shocker Could Affect The U.S. Election

The U.S. Consumer Price Index exceeded expectations, growing by 4.8 percent (annualized) in the month of March, while Core CPI rose 3.8 percent from last year. The markets corrected sharply after the surprise as the market expected lower inflation leading to rate cuts. President Joe Biden said that he still expects the Federal Reserve to […]

April 5, 2024 | Famous Climate Scientist Heats Up Debate with a Bold Prediction

James Hansen is an 83-year-old climate research scientist that became known in the 1980s for making accurate predictions about global temperature increases. Now, he forecasts that warming is happening even faster than he expected. Will policymakers listen to Hansen this time? His latest paper, a 33-page peer-reviewed report that was published in November 2023, covers […]

March 29, 2024 | Canada Declares an Emergency as Economic Productivity Growth Lags Far Behind

  “Well, it’s time to break the glass,” said Carolyn Rogers from the Bank of Canada in a recent speech, referring to the emergency situation in the lack of improvement in productivity in Canada’s business sector.   The Bank of Canada cares about productivity because “productivity is a way to inoculate the economy against inflation.” […]

March 22, 2024 | The Federal Reserve Believes The Soft Landing Myth

The Federal Reserve announced that interest rates will remain unchanged. The chairman, Jerome Powell, seemed confident in his remarks that inflation will come down further, while economic growth gets stronger, and unemployment stays at the current low level of just under 4 percent. Powell hinted that rate cuts are coming, starting in June with a […]

March 15, 2024 | Banks are Fighting Proposals for Tougher Regulatory Rules

A battle is underway in the U.S. over new rules requiring higher equity capital for the banks. Enhanced equity capital protects the bank from insolvency in the event of a financial crisis. Bank lobbyists are fighting hard to keep capital requirements at the lowest possible level while regulators would like higher capital given the historical […]

March 8, 2024 | Apple Struggles with Slumping Sales in China

China and the iPhone are closely linked, as sales in that country are a key to Apple’s success. China is going through an economic slump which shows up in sales of Apple’s most successful product, the iPhone. Recently competitors in China have been growing sales faster than Apple. Is a China sales slump for the […]

March 1, 2024 | Warren Buffett is at a Crossroads

Berkshire Hathaway, the investment vehicle of Warren Buffett, reported results for 2023 and Buffett left investors with some pearls of wisdom in the accompanying letter to shareholders. As Warren Buffett explains, investing is not easy, but it is very rewarding, if good decisions are made more often than bad ones. But Buffett states that it […]

February 23, 2024 | China Could Be The World Leader in Nuclear Power by 2030

China is growing its nuclear power generation capacity. Already the world leader in solar and wind, China threatens to take the lead in one of the most talked-about clean energy formats, nuclear power. Will China pass the U.S. and France in generating electricity from nuclear fission? China has announced aggressive targets for nuclear power generation […]

February 16, 2024 | Commercial Real Estate Slump in U.S. Could Trigger a Crisis

Commercial real estate is a major asset class for businesses, institutional investors, and banks. For decades, most lenders were eager to accept commercial real estate as collateral for loans. Also pension plans and insurance companies regarded properties like office towers as safe, long-term investments. But doubts are appearing over the quality of those holdings with […]

February 9, 2024 | China Struggles with Weak Stock Markets

China starts 2024 with drastic measures to head off further losses in the stock market. These actions echo government rescue efforts in 2021-2023 for the property market which have been unsuccessful. Could China stock markets rebound this time? The meltdown in Chinese stock markets is historic. This chart shows the cycles over the period from […]

February 2, 2024 | Canada Might Abandon Its Inflation Target in a Recession

The Bank of Canada (BOC) held interest rates steady at 5 percent in January, highlighting growing weakness in the Canadian economy. But unfortunately, inflation is not declining as fast as the central bank would like. Will the central bank abandon its inflation target? While the weakness in the economy would normally allow the Bank of […]

January 26, 2024 | Tesla Debuts a New Inexpensive Sedan

Tesla announces a new low-cost sedan which will sell for about $25,000 in U.S. dollars. This vehicle will be available in mid-2025 and will be manufactured initially in Austin, Texas. Will this new model be enough to justify Tesla’s valuation? For the 2023 year Tesla announced revenue of $25 billion while the stock market value […]

January 19, 2024 | Armed Conflicts Have Yet To Hit Markets

Investors are coping with a high degree of uncertainty in the world, with at least three armed conflicts active now. The Israel/Hamas war was the top concern. But now the Houthi situation in the Red Sea, related to the Gaza conflict, has become top-of-mind. And what about Russia and Ukraine? Will these conflicts spread? How […]

January 12, 2024 | The Speculative Commodity Boom That Might Have Been

The commodity boom that was expected by many in this period of elevated inflation has not happened. While inflation soared, reaching 10 percent annually in some countries, the prices of commodities that are often used by speculators to make quick profits have not kept pace. For example, gold and silver reached all-time highs during high […]

December 22, 2023 | Get Ready for Excitement and Surprises in 2024

The year 2024 will be full of surprises and uncertainty. A possible recession, the direction for the stock market, the housing bubble in Canada and changes in interest rates and inflation are all on the agenda for investors as we enter a new year. What are some of the most likely surprises? A surprise cannot […]

December 15, 2023 | The Federal Reserve Makes a Full Pivot To Rate Cuts

The Federal Reserve announced a pivot to rate cuts, hinting at an end to the period since March 2022 of rate increases and tightening of financial conditions. When the Fed cuts rates, will it help? The Fed meeting ended on Wednesday with chair Jerome Powell confirming the consensus view — the next Fed move will […]

December 8, 2023 | Canadian Lenders are Sleepwalking into The Next Recession

Canadian lenders are ill-prepared for the impact of higher interest rates on Canadian borrowers. The banks have sophisticated models that help them make predictions about the future. But those predictions are only as good as the assumptions fed into the model. Are those assumptions realistic? With the help of Nigel D’Souza, research analyst with Veritas […]

December 1, 2023 | Canada Heads into an Economic Contraction

Canada’s economy is shrinking, based on per capita GDP numbers. GDP results showed a contraction for the quarter ending September 30, 2023. Is Canada in a recession? Will there be a household debt crisis? Canadian GDP numbers, adjusted for inflation and population growth, showed a negative result for the third quarter. This means that there’s […]

November 24, 2023 | Gold Is Due For A Rally

The price of gold jumped above $2,000 per ounce this week, as the market started to expect an interest rate cut in 2024. Gold and gold shares have performed well during recessions and during periods when the stock market sold off. The price of gold has performed well in the last seven recessions, when US […]

November 17, 2023 | Wind Power Growth Hits a Major Bump in the Road

Wind power was predicted to boom in the U.S., partly due to incentives under the Inflation Reduction Act. Plans to build offshore and onshore wind turbine farms were expected to create a surge in capital investment and provide substantial new sources of renewable energy. The offshore wind power capacity was forecast to reach 30 gigawatts […]

November 12, 2023 | Canadians are Drowning in Debt

  Canadians are drowning in debt — of all three types. The total amount owed in government, household and corporate debt has soared since 2010. Of particular concern today is the rapid increase in federal government debt since 2020. Can Canada escape this debt trap? We know that Canada has had a growing household debt […]

November 3, 2023 | The Federal Reserve Issues a Margin Call

The Federal Reserve kept rates unchanged this week, at the highest level since 2001. The chair, Jerome Powell, insisted that the Fed might have to hike more, if inflation does not behave in the next few months. The last rate hike in the U.S. occurred in July 2023, after a streak of 11 hikes that […]

October 27, 2023 | The Bank of Canada Needs To Worry About a Recession

The Bank of Canada kept its official interest rate at 5 percent on Wednesday, October 25, 2023. The Governor, Tiff Macklem, emphasized that the BOC is willing to hike rates higher if needed, as he is not happy with the rate of decline in the inflation measures. But the BOC also issued a lower forecast […]

October 20, 2023 | Banks Need To Revise Their House Price Forecasts Down a Lot

Forecasts of increasing house prices in Canada by the economics departments of the large Canadian banks are wildly optimistic. This matters because it directly affects the risk assessment for their most important lending division — mortgage and consumer loans. Will they revise these forecasts lower in their reports for the year ending October 31 2023? […]

October 13, 2023 | The Attack By Hamas Increases The Chance of a Wider Conflict

Last week Israel was attacked by Hamas, shocking the world. But stock markets and the price of crude oil have demonstrated remarkable complacency after this momentous event. Is this just another skirmish in an area that has been in conflict for decades or will there be serious repercussions? The classic event that the world did […]

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