ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
October 1, 2021 | Twin Growth Challenges in China will Test the World
China is being hit by the double whammy of a real estate slowdown and electrical power shortages. The Chinese system will be put to a severe test. Will China’s twin challenges impact the world economy? Since China was initiated into the WTO in 2001 the Chinese economy has led the world in economic growth. In […]
September 24, 2021 | China Evergrande is not Lehman Brothers
The China Evergrande debacle continues to worsen. China Evergrande, the second largest property developer in China and the most indebted in the world, missed loan payments this week, triggering a technical default. Is the China Evergrande crisis like the Lehman Brothers bankruptcy? Lehman failed in 2008 with $630 billion in liabilities and $600 billion in […]
September 10, 2021 | Irrational Exuberance is Here Again
Irrational exuberance is a term introduced by Alan Greenspan in a speech in December 1996. In 2021, the degree of enthusiasm for financial assets is at an extreme seldom seen before throughout history. Will this episode of irrational exuberance lead to a crisis in markets? Some market analysts and economists are very concerned about the […]
September 3, 2021 | Corporate Debt Threatens the Recovery
Corporate indebtedness has been increasing at a steady rate for years. The rate of increase has even accelerated since 2008. This amount of debt in the corporate world makes the economy more vulnerable to new shocks. Will elevated corporate debt trigger the next financial crisis? From the FT.com (paywall) “Unhedged” Robert Armstrong writes: “Corporate debt has never […]
August 27, 2021 | Stock Market Speculation Soars
Speculation in stock markets has been growing for many months. But the latest review of several reliable indicators of speculation shows that a shocking amount of speculative fever has appeared in stock market activity. Does this degree of speculation always lead to a stock market crash? The highly respected GMO LLC quarterly letter compiled a […]
August 20, 2021 | Property Developer China Evergrande Could Trigger a Crisis
China Evergrande Group, one of the largest property developers in the world, appears to be unable to pay its debts. Investors reacted badly when founder and Chairman, Hui Ka Yan, stepped down from his role as chair of the most important unit of the company, Hengda Real Estate. Could China Evergrande trigger a financial crisis […]
August 13, 2021 | Code Red Alert on Climate Change
A report from the UN Intergovernmental Panel on Climate Change triggered a code red alert on the impact of human-induced global warming. The sixth assessment points out that the earth’s climate has warmed by 1.1 degrees Celsius (C) since the Industrial Revolution and immediate action is necessary to limit future temperature increases. Antonio Guterres, UN […]
August 6, 2021 | Central Bankers Risk Losing Control of Inflation
Inflation worries are getting to the Bank of Canada. In an unusual move for a central banker, the current Governor, Tiff Macklem, took to the print media to express a controversial point of view. Macklem wanted to reassure Canadians that inflation is under control, and if ever it is not, the Bank of Canada can […]
July 30, 2021 | China Stock Markets Getting Cheaper and Cheaper
Stock markets in China are getting even cheaper. The Hong Kong-based Hang Seng Index is down more than 20 percent from its January 2018 high. The Chinese government is cracking down on the largest technology companies. Investors are getting spooked by these anti-market moves. Is this sell-off a buying opportunity? Investing in China means dipping […]
July 23, 2021 | A Gray Rhino in China Could Rock the World
China has a property bubble second to none in the world. Evergrande is the second largest property developer in China and one of the largest in the world. Could Evergrande’s troubles burst the Chinese property bubble? Source: Macmillan Publishing, 2016 Michele Wucker wrote the book on gray rhinos, called “The Gray Rhino: How to Recognize […]
July 16, 2021 | OPEC Faces an Existential Threat
OPEC failed again to reach agreement among its members and others to increase the supply of crude oil, a failure that risks an even greater surge in the price of oil which could trigger a worldwide recession. Five of the last six recessions have been preceded by a spike in the price of crude oil. […]
July 9, 2021 | Canadians Need Wishful Thinking to Believe in the Housing Bubble
Canadian housing is expensive. Household debt in Canada is at record levels. And yet there is still enthusiasm about buying more real estate, and very little fear of a crash. Why are Canadians so complacent about houses? Canadians buying real estate have a very positive view about real estate prices. They have little or no […]
July 2, 2021 | Wilful Blindness and money laundering
“Wilful Blindness”, by Sam Cooper, describes how Canada has become a prime destination for money laundering. The book, released in 2021, ranks as a best seller for its entertaining and shocking descriptions. However, the reader is forced to ask uncomfortable questions about Canada. Why have Canadians allowed their country to become a hiding place for […]
June 25, 2021 | Housing Bubble in Canada One of the Biggest
Canada has one of the largest housing bubbles in the world, according to Bloomberg Economics. The top 3 countries at risk are New Zealand, Canada and Sweden. The warnings signs are as intense as they were in the run-up to the global financial crisis in 2008, according to Bloomberg. Could Canada’s housing bubble trigger another […]
June 18, 2021 | The Federal Reserve Hints at Higher Rates
A turning point for interest rates may have arrived. Federal Reserve members hinted at raising their official interest rate above zero sooner than expected. Until now the Fed had maintained that rates will stay “lower for longer” without any hint imminent increases. How significant is this subtle shift in the Fed forecast for future interest […]
June 11, 2021 | Higher Inflation Puts a Popular Investment at Risk
U.S. Consumer Price Index (CPI) inflation increased by 5 percent year-over-year, and 0.6 percent in the month of May – an annual rate of 7.2 percent. The core CPI, which excludes the volatile components of food and energy, rose even faster at 0.7 percent. What popular investment would lose 43 percent if this level of inflation […]
June 4, 2021 | Activist David Threatens Exxon Mobil Goliath
Exxon Mobil suffered a setback at its annual shareholder meeting in voting for members of the board of directors. Exxon lost the vote on three members, giving an activist investment fund a quarter of the seats on the twelve-member board. This new firm, called Engine No. 1, says that it is “pursuing long-term value by […]
May 28, 2021 | The IEA Claims That Net Zero by 2050 is Possible but Difficult
The International Energy Agency (IEA) released a special report on May 18, 2021, called “Net Zero by 2050: A Roadmap for the Global Energy Sector”. The IEA is sponsored by the largest countries in the world, including Canada, Australia and the U.S. and publishes the World Energy Outlook annually. This special report pushes for radical […]
May 21, 2021 | Unaffordable Canadian Homes Get Snapped Up by Eager Buyers
Canadian house prices continue to soar higher in April, making this epic housing bubble a story for the record books. While affordability has been stretched for several years now, with annual price gains of 20 percent fewer and fewer Canadians can buy houses based on income. How can people afford to chase prices ever higher? […]
May 14, 2021 | CPI Surge Pushes Interest Rates Higher
This week the CPI index in the U.S. hit a new high for this cycle with a 4.2 percent gain from a year ago. Most central bankers claim that they are happy to see inflation move higher, as they want to stimulate the economy. But economists for decades have been trained to focus on inflation […]
May 7, 2021 | Germany Pressured To Make New Emission Reduction Targets
Targets for emission reductions keep getting increased, by China, the U.S., Canada and now Germany. In a bold new move, Germany pulled forward its target for zero emissions to 2045. Germany, under pressure from court rulings and a looming September election, also upped the size of the emissions reduction by 2030 to 65 percent below […]
April 30, 2021 | The Fed Pushes for More Inflation
The US Federal Reserve stayed the course on Wednesday April 28, 2021 by continuing its policy of fighting deflationary forces, even at the risk of inflating asset bubbles in housing and stocks. Its stated goals are maximum employment and inflation averaging 2 percent. Will Fed policies unleash out-of-control inflationary expectations? Source: Bloomberg Chair Jerome […]
April 23, 2021 | The Bank of Canada risks a taper tantrum
The Bank of Canada announced this week that it will reduce buying of government bonds during this pandemic recession. The Bank had been buying most of the bonds issued by the government during the pandemic spending spree which created a $350 billion deficit. The Bank of Canada now owns 40 percent of all government bonds […]
April 16, 2021 | Central Banks are Nervous as CPI Soars
Rapid inflation reared its ugly head this month, as the Consumer Price Index hit 2.6 percent gain for the last year. The price increase for energy was closer to 15 percent, while food was almost 4 percent. If the CPI keeps rising at this pace, as some predict, interest rates will rise. What will central […]
April 9, 2021 | Banks Tell Government To Do Something About The Housing Bubble
Canadian banks want the government to take measures to halt the latest surge in home prices. Several bank CEOs and economists are urging the government of Canada to slow the runaway housing bubble where prices are advancing at a 15 percent annual rate after inflation. Will the government make bold moves to halt housing mania? […]