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May 11, 2021 | Equities Priced For Negative Returns For a Decade from Present Levels

As I observed last Thursday in Coming off the boil?, some leading speculative measurements have waned over the past couple of months, and the trend continues this week with the tech-heavy NASDAQ leading broader markets lower. The ARK Innovation ETF (shown on the lower left in pink from The DailyShot), all the rage since March 2020, […]

May 8, 2021 | Danielle on Debt Free in 30

Doug Hoyes is co-founder of Hoyes, Michalos & Associates Inc., one of Canada’s largest personal insolvency firms. In his 30-year career as a chartered accountant and Licensed Insolvency Trustee, Doug has personally helped over 10,000 individuals solve their debt problems and rebuild their financial future. His 2017 book Straight Talk on Your Money explains that Doug has […]

May 7, 2021 | Lessons To Learn From Michael Lee-Chin and Mean Reversion

Michael Lee-Chin started his money management career as a financial advisor with Investors Group in Hamilton Ontario in 1979. In 1987, he bought Kitchener-based Advantage Investment Council which he renamed AIC and developed it into a mutual fund company that focused on buying the shares of other investment management companies and banks. The timing was […]

May 6, 2021 | Coming Off The Boil?

A handful of the world’s most expensive tech companies helped pushed US stock indices to record high valuations this spring.  However, as shown here since 1986 (courtesy of my partner Cory Venable), the tech-heavy NASDAQ index has lost lift relative to the older-economy Dow Jones Industrial Average since April 21, and a similar leadership reversal […]

May 5, 2021 | Secular Inflation or Inflated Expectations?

The year-over-year rise in commodity prices into May has been the highest in 40-years (shown below since 1976 courtesy of Bloomberg–click for a close-up).   When we look at this chart, it’s worth noting that previous commodity price spikes were followed by sharp declines.  But why let past precedent inform herd inclinations to inflationary bias. […]

May 4, 2021 | Chip Shortage Highlights Destructive Financial Incentives

Destructive financial incentives have wasted years of free cash on gimmicks like buybacks to boost share prices rather than productive long-term focused investment.  Then when high leverage implodes, as it always does eventually, the companies look to governments for bailouts.  We need to change course.  This segment offers some insight. Car companies across the globe […]

May 3, 2021 | Stocks vs. Treasuries: Which One is Most Accurately Pricing Future Growth

Stock markets and Treasury bonds are pricing two diametrically opposed investment outlooks from here. They can’t both be right.  For a lucid discussion on where probabilities lie see The Battle Royale: Stocks vs. Bonds (which is right?). Productivity growth depends on capital expenditures, education, employee training, and new technologies. There are few signs spending in these […]

April 30, 2021 | Hunt on Deflation and The Current State of the Economy

Worthwhile discussion and charts in this segment.  Although, sounds like someone is doing dishes in the background…thankfully it doesn’t continue throughout. Dr. Lacey Hunt: Deflation and the current state of the economy. In this long-awaited interview, Lacey Hunt lays out the basis of his deflationary thesis, explains how a debt unwind could be managed and […]

April 29, 2021 | Shilling Warns on the Destructive Thinking of Financial Mania

In a RealVision interview released this week (subscriber access only) economist and money manager, A. Gary Shilling, accused the Federal Reserve and Treasury of pumping up asset prices, dismissed fears of higher inflation and urged investors to resist joining the buying frenzy: “We had a wake-up call with the pandemic. It’s time to save money, […]

April 28, 2021 | Low Interest Rates Help Only If We Use Them To Get Debt-Free Faster

Low-interest rates can be a huge help in getting out of debt faster.  Unfortunately, many people make the opposite choice and use low rates as an opportunity to increase debt and delay its repayment.  Case in point, after forty years of falling interest rates, the world is more indebted today than at any other time […]

April 26, 2021 | It’s a Ponzi world

Bitcoin and other digital coins plunged last week, wiping over $200 billion off the value of the cryptocurrency market. Some cite the need to pay income taxes in April as a prompt to raise needed cash.  A similar factor was noted in April of 2000 after the previous year’s 100% leap in NASDAQ shares into […]

April 23, 2021 | Shilling: Bond and Greenback Bears Mistaken

The US dollar and Treasury bonds outperform risky assets during “D” periods–disinflation and outright deflation.  While inflation trades have won year-to-date, a return to “D” conditions remains probable in the second half.  As usual, very few will be positioned proactively for it. Gary Shilling, president of A. Gary Shilling & Co., offers his top investment […]

April 22, 2021 | Financial Stress Rising for Households

I have to preface this clip by saying that the Questrade ad that leads it is one of the most sexist, predatory, revolting things I have seen. Typical of suck-in-the-retail-trader-platforms, but still…a particularly heinous example of why the financial sales machine is so damaging.  Encouraging people to try and win a downpayment for a home […]

April 21, 2021 | Bankruptcy Wave Delayed, But Building

I’ve often mentioned that bankruptcy filings usually peak some 18 months after a recession ends.  Government support and payment deferrals have delayed bankruptcies flowing from the COVID-19 triggered depression, but the deadwood is building all the same. The go-to maneuver has been to keep raising capital at rock bottom yields from risk-indiscriminate lenders and investors.  […]

April 20, 2021 | Lumber in La La Land Too

Parabolic lumber prices are not due to a lack of trees. Consolidation in mills over the past couple of decades is part of the story.  But most of all, the familiar forces of cheap credit, rampant financial speculation and stockpiling are all at work here.  Once again, we will find that financial bubbles are neither […]

April 17, 2021 | Danielle on CBC Weekend Business Panel

Here is a direct video link.

April 16, 2021 | Extraordinary Markets Promise Extraordinary Opportunity for the Prepared

In a product-creating financial world paid to sell us growth and inflation narratives, sober risk-reward assessments are not well tolerated.  In the past 24 years, I’ve had to be bearish more often than bullish, but it’s not my fault, in fairness.  I’m a naturally optimistic person.  It’s just that my entire career as a financial […]

April 15, 2021 | Central Banks Trying Every Trick To Boost Inflation

I have explained many times that central banks worry that falling inflation (disinflation) and outright deflation reduce the incentive for spending and capital flow into financial markets. The theory goes that if consumers and businesses believe that prices will be flat or lower in the future, they have less incentive to spend today. Moreover, if […]

April 14, 2021 | High Market Capitalization Bodes Poorly for Investment Returns

A December 2020 paper entitled The Big Bang:  Stock Market Capitalization in the Long Run, confirms that we have been living through a highly unusual period in financial markets. While advanced-economy stock market capitalization to GDP ratios were pretty constant between 1870 and 1990s, they tripled in what the authors call a “big bang” in the […]

April 13, 2021 | Sharp Reflation is Not the Same as Inflation

Persistently high inflation can reduce buying power for households when comparable increases in wages do not offset it, and wage growth has been flat for years. However, the greater fear for central banks is that persistently low inflation, disinflation, and outright price deflation leave much less room for monetary policy (at near-zero interest rates) to […]

April 12, 2021 | Bullish Consensus Helps Off-Load Junk To Undiscriminating Buyers

A few recent charts, courtesy of DailyShot.com, offer clarity on where we are in the present financial cycle. According to data from BofA, central bank and government injections (backed by taxpayers) encouraged more than half a trillion dollars to flood into global equity funds over the past 5 months–exceeding the total inflows recorded over the […]

April 11, 2021 | Peak Inflation Expectations, Are We There Yet?

After a 4% decline for Treasury Bonds in the first quarter–the biggest quarterly loss in 41 years (as shown below in blue)–the consensus sees only more of the same.  Very few expect higher treasuries/lower bond yields over the next 6 to 12 months. But actually, that’s typical.  I’ve explained the inflation-bias inherent in an equity-fee-centric finance […]

April 9, 2021 | Pressure on OSFI to Cool Canadian Property Market

The Office of the Superintendent of Financial Institutions (OSFI) will launch a new consultation on the stress test Thursday with the goal of determining whether changes are needed to the framework that dictates whether or not borrowers can qualify for a loan. …The fresh round of consultations come more than a year after OSFI abandoned […]

April 8, 2021 | Millions Tumble Out of the Global Middle Class

Even as many global stock and commodity markets have rebounded above pre-pandemic levels in recent months, economic recovery is far from globally synchronous.  Costs of the pandemic and worst economic downturn since the 1930s are continuing to compound. The emergence of a global middle class has been one of the most significant trends in the […]

April 7, 2021 | Rosenberg: Inflation Expectations Overdone

At the end of March 2020, stock, commodity and corporate debt markets rebounded sharply in anticipation of reopening data that improved later last summer.  Today, the question is when will these same markets start repricing slower growth and revenue heading into the second half of 2021, some three months hence?  If they are still leading […]

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