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October 11, 2019 | Fantasy Planning Yields Financial Disappointment

Each week I encounter nice people with deeply flawed retirement plans.  Many have been aided into misguided thinking by financial-sector marketing and salespeople, planners, even their accountants.  This is a problem because faulty assumptions in money management tend to end in a nightmare.  Working with sober return and withdrawal expectations is the best antidote, and […]

October 10, 2019 | Fantasy Planning Yields Financial Disappointment

Each week I encounter nice people with deeply flawed retirement plans.  Many have been aided into misguided thinking by financial-sector marketing and salespeople, planners, even their accountants.  This is a problem because faulty assumptions in money management tend to end in a nightmare.  Working with sober return and withdrawal expectations is the best antidote, and […]

October 9, 2019 | Debt Free in 30: Real Estate, Personal Debt, and Recession Indicators

Good discussion on investment and economic risks in Canada today. Real Estate, Personal Debt, and Recession Indicators with Ben Rabidoux – Debt Free In 30 – A Personal Finance Podcast – Ep 266. Is a recession coming? Are private lenders replacing bank mortgages? And is that causing more risky investments? On today’s podcast, our guest […]

October 8, 2019 | GE Offers a Blueprint in Corporate Governance Changes Needed

As I have been pointing out for a couple of decades now, aggressive risk-taking and unsustainable return assumptions in retirement plans and pension funds are a reliable recipe for disappointment and financial hardship. The trouble is it can take years before the inevitable becomes obvious, and by then it is often too late to make […]

October 7, 2019 | Inventor of the Yield Curve Indicator Explains Code Red Now Flashing

The discussion below with Campbell Harvey is insightful. The ‘could this time be different’ questions are common, but in reality, GDP growth is routinely revised lower months and years after initial estimates, so the fact that recent quarters have reported still positive GDP growth to date, does not mean that a recession may not be already here […]

October 4, 2019 | Energy Status Quo is Being Upended. How will Canada Respond?

Excellent article in the Globe today on the opportunities urging Canada to evolve with the modern world.  There’s good growth here, if we can see it.  The price for resisting this turn–as many others have learned before us– is economic hardship and lost income.  If we embrace the evolution and position ourselves to benefit, the […]

October 3, 2019 | Late Cycle Credit Risks Loom Large for Canada’s Stock Market

Canada’s TSX stock index (which most Canadian funds and managers are designed to track up and down) peaked in September of the 1990 to 2000 expansion cycle. Then it crashed 50% over the next two years, recovered into June 2008, and crashed 50% a second time in the 2008-09 cycle.  Though it rebounded into 2014, […]

October 2, 2019 | High-End Realty Supply Weighing on Prices

The third quarter saw a 14% drop in Manhattan property sales.  Some of the weakness is attributed to a fall in foreign buyers and a new “mansion tax” on apartments over $2m which came into effect July 1st and pulled some transactions forward into the second quarter.   As prices soften though, the supply of […]

October 1, 2019 | Global Downturn and Price Deflation Demand Adoption of Bold New Ideas

This morning we have further confirmation of the global downturn spreading with the US ISM manufacturing index contracting to 47.8 in September (50.1 was the consensus expectation); the second month in a row that the reading was under 50 (49.1 in August).  This was the steepest contraction in this reading since the last recession in […]

September 26, 2019 | Evolving Food and Agriculture: Dairy Without Cows

Dairy farming is one of Canada’s largest agricultural sectors and in the top two agricultural commodities in seven out of ten provinces, Quebec and Ontario being the largest producers.    In 2017, the sector contributed approximately $18.9B to Canada’s GDP and approximately 215,000 full-time equivalent jobs. On average, two-thirds of Canadian dairy produced is sold as […]

September 25, 2019 | Important Book: Lords of Finance

I recently finished reading Lords of Finance by Liaquat Ahamed. Published in 2009, the book details the rise and fall of central banks in the western world from the early 1900s through the end of the Second World War.  More than 500 pages, it offers a detailed account of the personal relationships and policies which have shaped […]

September 23, 2019 | Canadian Economy Running on Empty

Canada has a low-household-savings, stagnant income, high debt, aging boomers, slowing economy problem.  The Bank of Canada will no doubt cut its policy rate soon but in present conditions, more consumer debt-stimulus will not help.  Pushing lines of credit and housing prices a little higher is not going to aid what’s binding here.  Doubling down […]

September 20, 2019 | Negative Rates Erode the Base on Which the Financial System Depends

Hard assets like gold and silver bullion have always been negative-yielding once owners pay for insurance and storage. Real estate is often negative-yielding when it does not generate income sufficient to pay for its carrying costs. Stocks and corporate bonds are always at risk of negative yields when their value can fall more than any […]

September 18, 2019 | Cash Crunch Intensifying for Canadian Boomers

Years of poor money habits and destructive financial advice have taken a toll on the majority of Canadian households.  This is particularly evident for the over-50 crowd, where high living costs, coupled with insufficient savings, low-income yields, risky-investment products, lax-lending and longer life expectancy, have proven a toxic mix. As stock and corporate bond-based retirement […]

September 17, 2019 | Money Market Strains Warn of Elevated Capital Risks

As the US Fed debates its next rate announcement tomorrow, a liquidity crunch in overnight lending rates in the repo market prompted the NY Fed to inject $53m into the US banking system today.  See: Unhinged Money Markets trigger Fed action to alleviate stress. Rate spikes threaten to spread and push up borrowing costs for companies […]

September 16, 2019 | Bear Markets are Necessary and Inevitable, Use Them Wisely

Financial markets experience loss cycles of more than 20% routinely, but it’s not inevitable that individuals do the same.  Effective financial management has rule sets to help anticipate down cycles and positions to benefit from them.  Most participants have no plan or strategy to do so, however, because mainstream theories, products and approaches are long-only.  […]

September 13, 2019 | New Report: Gas Plants and Pipelines to be Undercut by Renewables and Storage

A new report by The Rocky Mountain Institute finds that natural gas-fired power plants, which have crushed the economics of coal, will soon be undercut by renewable power and big batteries. As wind, solar, and energy storage technologies have improved and dropped precipitously in price,RMI research shows that “clean energy portfolios” (CEPs) comprised of these technologies […]

September 12, 2019 | Draghi Out of Options, Leads EU Deeper into Negative Consequences

Today European Central Bank head (ECB) President Mario Draghi made his last rate announcement before incoming head Christine Lagarde replaces him on November 1. Having held its policy rate at negative .40% since March 2016, the ECB today cut by a further ten basis points to negative 0.5% and announced a restart on November 1 […]

September 11, 2019 | Debt Repayment Before Investment Products is the Right Order

The 2019 Household Balance Sheet Report by Investor Economics found that in 2018 the financial holdings of Canadians–deposits, investment funds and direct holdings of securities–declined for the first time since the 2008 financial crisis. This was the first year in a decade that Canadians on average started directing free cash flow to pay down debt […]

September 10, 2019 | Massive Pay and Opportunity Gap Between Men and Women is Bad Business

While the whole world is scrambling for ways to stimulate spending and economic growth, one way remains vividly evident and yet widely ignored: equitable income and opportunity sharing between men and women. Men are not inherently smarter, better or more deserving workers than women.  Disproportionally enriching one sex at the expense of the other is […]

September 9, 2019 | Climate Change Threatens the Economy, Financial System and Life as We Know It

Last week, for the first time ever, the Bank of Canada released a report examining the threat climate change poses to the country’s financial system and economy and concluded that physical risks from disruptive weather events and transition risks from adapting to a lower-carbon global economy make economic activity and the environment inherently intertwined.  See Climate […]

September 6, 2019 | Financial Fragility Hurts Productivity

The latest survey from licensed insolvency trustees Hoyes, Michalos here reports that consumer insolvencies in Ontario–Canada’s most populous province–accelerated in July, growing at a 3-month moving average pace of 17.4%, a level last seen in the 2008-2009 recession.  Nationally, the year over year rate of change was 13.4%. This marked 15 consecutive months of insolvency growth […]

September 5, 2019 | Sign of Our Times: Pensions Blacklisting Oil Companies

The movement of investors to divest of their holdings in fossil fuel companies has gathered pace in the last five years.  Notable converts to date include: Norway’s national oil fund which is refocusing on renewable energy, two-thirds of the UK’s university pension funds, as well as other public pension funds, including the Irish infrastructure fund, […]

September 4, 2019 | Porsche: “The Turning Point has Arrived for Electric Vehicles”

Contrary to what the Porsche CEO says below, sustainability does require some compromise: 8 billion people on earth need to manage and share finite resources more efficiently and with less waste than when there were just 3 or 5 billion people. The move toward electric power is a key part of this transition.  As usual, […]

September 3, 2019 | Vancouver Condos Following Detached Homes Lower

This is not great for owners, especially highly levered ones, but it’s essential progress toward restoring affordability and investment value in residential real estate. Mean reversion is a process.   Further price declines are likely in the months ahead. Another sign Metro Vancouver’s once-hot housing market is cooling off can be seen in new data from […]

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