ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
July 7, 2020 | Dead Weight: More Government Subsidies for ‘The Haves’
Debt-funded government subsidies that further enrich ‘the haves’ are not economic stimulus but rather dead weight with a negative multiplier effect that reduces productivity and critical investment for years to come. Billionaires, country clubs, private jet companies and Kanye West all received millions in government funding under the Paycheck Protection Program, according to the Small […]
July 3, 2020 | Connecting Dots Between Nortel’s Collapse and the Ascent of Huawei
Nortel was Canada’s star company into the 2000 cycle peak before a spectacular collapse crushed retirement savings across the land. The usual irrational exuberance, extreme overvaluation and complacent management undoubtedly played a leading role; but a new investigation also connects Nortel’s collapse with Huawei’s ascent to 5G leader today. You can read the story here […]
July 2, 2020 | Rethinking Canada During the Greatest Recession
The federal government and taxpayers are the ultimate backstop for all help and bailouts extended. Canadians will be paying the last decade’s debt-fueled spending bill for years to come. What we direct ‘stimulus’ to now will make all the difference in terms of whether repayment is manageable or cash flow-crushing going forward. Spending to fuel […]
June 29, 2020 | Lenders Hit By Contracting Credit and Rising Bad Debts
From March 1 through the end of May, Americans deferred debt payments on 106 million different loans, according to credit-reporting firm TransUnion, triple the number at the end of April. In addition to missing payments on student and auto loans, 8.8% (4.68 million) of American homeowners were in forbearance plans delaying their mortgage payments for at least three months. […]
June 25, 2020 | Big Picture View: Avoiding Snakes is Job Number One
After the 2018 fourth-quarter meltdown, large-cap stocks rebounded on share buybacks to a higher high before hitting the skids this February and taking out the 2018 low. This was a significant breach. The sequentially lower low circled in my partner Cory Venable’s S&P 500 chart since 2004 below, has now set the neckline for a […]
June 24, 2020 | IMF: Global Contraction Deeper and Longer than Previously Thought
As COVID-19 cases surge across 27 US states this week, the IMF revised its 2020 global economic contraction forecast today to -4.9% (from -3% in April) thanks to a larger-than-anticipated supply shock and an ongoing hit to demand from social distancing and other safety measures. Dubbing it a “crisis like no other” the report notes that if safety measures […]
June 23, 2020 | Retirees Pay Heavily When Sales People are Allowed to ‘Advise’
In the late 1990s, thousands of Canadian teachers were offered early retirement packages that included the option to take a lump-sum withdrawal and forfeit their vested right to a defined pension for life. My mom was a teacher and she–and others–approached me to review the options. Cash-out values of several hundred thousand sound huge to […]
June 22, 2020 | Grantham: “This is the Real McCoy of Bubbles…Crazy Stuff”
Billionaire investor and GMO co-founder Jeremy Grantham is growing more and more sure that the U.S. stock market’s rebound amid the coronavirus pandemic is a bubble that will end up hurting many people. “My confidence is rising quite rapidly that this is the fourth ‘Real McCoy’ bubble of my investment career…“We’ve now reached a level […]
June 21, 2020 | Danielle on CBC Business Panel
Danielle appeared on CBC Business Panel with John Northcott discussing key business news this week. Here is a direct video link.
June 19, 2020 | Plastic Rain is Coming Down on All of Us
Today, more than 99% of plastic is made from chemicals sourced from fossil fuels. Our throw-away habits have made plastics profitable for producers while devastating environmental and health costs are left to mount on the public tab. The COVID-19 pandemic has been doubly harmful in both increasing plastic use and reducing our attention on its […]
June 18, 2020 | Investing is Not a Game and ‘Free Trades’ Aren’t Free
The ‘gamifying’ of stock trading has become all the rage once more thanks to the financial sales marketing machine, a go-for-broke mentality in participants hoping to ‘win’, and misplaced confidence that central banks are able to prevent asset prices from going down. This is what a shit show looks like and it always ends in […]
June 16, 2020 | Ramp Some More…
Meanwhile, in the financial casino…stocks are leaping again on recycled headlines of debt-financed spending by governments and more loans to small businesses, even though the first business loan programs have not been taken up as hoped. Weak demand is the global problem that policymakers cannot fix it. It has always been customers that drive sales […]
June 13, 2020 | Reducing energy consumption and cost is ‘stimulus’ needed
As taxpayers are pledged to pay for trillions in ‘stimulus’ spending, it is important to note that the transition to 100% renewable energy is not only possible and necessary for health on earth but also offers the added bonus of a 57% reduction in overall energy consumption and a 60% reduction in average energy costs […]
June 12, 2020 | Capitalizing on Financial Mistakes
I learned what not to do with money when I was 35–the hard way. I wrote about this in my book Juggling Dynamite. Graduate degrees in business and finance didn’t teach it to me, loss did. The experience was gut-wrenching and anxiety-producing and absolutely the best thing that ever happened to me. In the 20 […]
June 11, 2020 | The Probability of the Next Market Crash Has Risen Sharply
As house-bound gamblers have turned their free time to financial markets over the last couple of months, stock and junk debt markets have rebounded sharply and attracted new believers daily. See WSJ: Stuck at home with few entertainment options, more newbies turn to shares; ‘it’s like a gambling game’. In this environment, things like investing experience, […]
June 10, 2020 | OECD: Second Virus Wave or Not, Huge Economic Cost Will Persist
By now everyone knows that the COVID-19 pandemic is a global health crisis that has triggered the most severe economic recession in nearly a century. The uncertainty is about what comes next and how wide and lasting the impacts will be. In its June 2020 report here, the international OECD (Organization for Economic Corporation and Development) took […]
June 9, 2020 | Déjà vu: Extremely Valued Tech Companies Propping Up Stock Markets
In the spring of 2000, as now, there was a widespread belief (we remember well, we were there) that the leading tech companies would be impervious to recessionary strife in their customers, the wider economy and financial markets. See The NASDAQ’s summer 2000 bounce, might contain a cautionary lesson: “Along similar lines, the current environment carries […]
June 8, 2020 | 60 Minutes Australia: Rethinking the Housing Dream
Massive consumer debt bubbles and policies that have encouraged real estate speculation have brought Canada and Australia to a similar tipping point as two of the most over-valued property markets in the world relative to rents and income. When households can’t or don’t wish to crush themselves with unsustainable debt, more cost-effective living ideas–like multi-generational […]
June 5, 2020 | Tempering May’s ‘Less Bad’ Jobs Report
There was a massive surprise in the latest Canadian employment report with the economy adding about 290,000 jobs last month. While welcoming the dramatic surprise, Frances Donald, chief economist at Manulife Investment Management, says we shouldn’t feel too comfortable because it remains a very painful labour market. She wonders how many jobs are possibly being […]
June 2, 2020 | Scheer Intelligence: Big Banks Get Sweetest Deal From COVID-19 Bailouts
It’s been over a decade since the 2008 banking meltdown, and yet many Americans are still living with the consequences of the financial crisis and the Obama administration’s decision to bailout banks over people with their own tax money. As Covid-19 spread around the world, and the economic impacts of the public health crisis began […]
May 29, 2020 | WSJ: What Happens When Millions Stop Paying Their Debts?
Allowing millions of borrowers to defer debt payments allows them to focus on other necessities and lenders to slow a near-term spike in reported delinquencies and charge-offs. But it doesn’t solve the solvency crisis now spreading nor the debt write-offs coming. See Millions skip credit card and car payments: Lenders hope that being flexible with borrowers […]
May 28, 2020 | Falling Rents: Good for Tenants Bad for Levered Landlords
In December 2017, the Bank of International Settlements (BIS) reported that Canada’s highest population areas were home to the most over-valued realty prices, relative to rents and income, of anywhere in the world. According to a recent CIBC and Urbanation study, 48% of all newly completed condominiums in the greater Toronto area since 2017 were purchased […]
May 27, 2020 | Canadian Credit Cycle Starting to Bite
As Canadian banks begin reporting their second-quarter earnings this week (for Feb thru April), Bank of Nova Scotia was first on deck with a 39% drop in profits and a 111% increase in loan loss provisions. Since business lockdowns and layoffs only surged in the latter half of March, half of this quarter was still pre-COVID-19. […]
May 26, 2020 | Reopening is Not Business as Usual
As many North American businesses move to reopen with social distancing this month, China offers a glimpse of why business-as-usual is unlikely to follow. After a strict lockdown bent the spread of COVID-19 in April, China has reopened schools and businesses and was operating at 87% of typical output on May 12, according to the […]
May 25, 2020 | Fitch: Customers Leaving Equity Funds Means Lower Revenue for Financial Sector
With the Canadian TSX today virtually unchanged from its April 2008 peak, even the most steadfast buy and hold investors have reaped zero capital gains over more than 12 years of risk and just 1.7% annually since the prior cycle peak in July 2000. Those who bought GICs and government bonds over these same […]