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January 25, 2022 | Real Bottoms Deflate Valuations and Hubris

Late cycle-performers, financials and energy are now rolling over to confirm the bear market that small-cap stocks began last November (the Russell 2000 is -16% since). Word to the wise, as we move now into the slowing growth and inflation portion of the market cycle, commodities, equities, and corporate debt tend to be the worst-performing […]

January 21, 2022 | Grantham: Asset Super Bubbles Imploding, Prices Heading Down To Mean

We interrupt the mayhem in global asset markets for some rare and valuable context,  see Jeremy Grantham doubles down on crash call, says sell-off has started: In a note posted Thursday, Grantham, the co-founder of Boston asset manager GMO, describes U.S. stocks as being in a “super bubble,” only the fourth of the past century. And just as they […]

January 20, 2022 | Hoisington Q4 2021 Review and Outlook

Hoisington Investment Management’s fourth-quarter 2021 Review and Outlook is now available on their website here.   Always worth a mull. Bottom line:  Global growth is slowing in 2022 under record debt, poor demographics, negative real yields and wages that undermine spending and productivity-enhancing investment.  China is looking a lot like Japan did in the 1980s. With emerging […]

January 19, 2022 | Rate Expectations Higher Than Asset Markets Can Bear

Since December, a global jump in rate hiking expectations has caused bonds to sell-off. Both U.S and Canadian ten-year treasury yields are above 1.87 this morning, the highest since before the pandemic began in 2019. The 30-year U.S. Treasury yield on which widely referenced 30-year U.S. mortgage rates are based is above 2.26 and the […]

January 18, 2022 | Remember: Protecting Savings is Job Number One

The most critical function of savings is to cover future needs, wants and opportunities. For this reason, savings should be as protected and uncorrelated as possible with our other income sources. For example, it’s not diversified for tech workers to keep the bulk of their savings in tech shares, nor for property sector workers to […]

January 17, 2022 | Debt, Aging Demographics and Bursting Realty Bubbles, Not Contained in China

Amid slowing demand, the fewest births since 1950, a shrinking workforce, slumping home prices, and defaulting property developers, the Chinese central bank cut its policy rate overnight for the first time since April 2020.  See China’s GDP growth slows as COVID restrictions and property woes hit demand. The rate cut follows a series of easing efforts in recent […]

January 15, 2022 | Plant-Based Plastics

With fossil fuel demand for transportation and heating in a secular decline, the sector has been counting on destructive petro-plastics for its revenue growth; also an unsustainable plan.  Fortunately, there are smarter packaging solutions in the pipeline. Tom van Aken, CEO of Avantium, joins BNN Bloomberg to discuss the company’s plant-based packaging. He says the […]

January 14, 2022 | Melting Under The Surface

The widely followed Nasdaq index remains just 6% below its November all-time high, but 38% of its member stocks are down by at least half. This week, the negative divergence has continued with nearly two declining shares for every advancing one. As shown on the left courtesy of Sentiment Trader,  at no other time have […]

January 13, 2022 | Must Disgorge Profits with Zero Tolerance of Trust Abuse

As I discussed here in 2021: An excellent year for the unscrupulous, it is important to understand that there is no level of personal wealth at which those without scruples will stop capitalizing on positions of trust and gullible followers. This is why it’s imperative that we set zero-tolerance policies, prosecute abusers, and disgorge any profits […]

January 12, 2022 | Bubbles Everywhere, Math Still Matters

Good macro overview in this segment recorded on Jan 5… David Rosenberg believes we will transition away from the current burst of inflation to renewed disinflation. In an interview with Alfonso Peccatiello, author of the Macro Compass newsletter, Rosenberg, president at Rosenberg Research & Associates, lays out his thesis for inflation going even lower than […]

January 11, 2022 | Paying Up Precedes Spectacular Repricing Cycles

In November, at around $1700 per share, Canada’s e-commerce superstar Shopify (SHOP) was priced at a crazy 40 x the company’s revenue and was officially the most expensive component of the TSX Index.   Since then, a 36% decline has knocked SHOP out of the top spot and back to where it was in October […]

January 10, 2022 | Burning Less To Power More

A widely overlooked benefit of improving energy efficiency and powering the grid with electricity from the wind, water and sun (WWS) is that it will reduce our overall energy consumption by more than 50% globally.  You can see how in the Solutions Project Earth graphic here. In Canada, because we currently burn a lot of fossil […]

January 9, 2022 | Danielle on CBC Weekend Business Panel

Danielle was a guest with Jeanhy Shim and John Northcott discussing some of the week’s major business stories.  Here is a direct video link.

January 6, 2022 | Elevated Risk Exposure Magnifies Drawdown Impact

Those without the ability or willingness to lose capital and wait years hoping to recover have no business owning stocks and risky debts (including funds and ETFs of them), never mind cryptocurrencies, SPACs, and the myriad of other Ponzi-like instruments. And yet, individuals, asset managers and speculators have never been more fully risk-exposed. Last month, […]

January 5, 2022 | EVs Here To Stay Because They are Better and Cheaper to Run

Finally, thanks to Tesla’s leadership, all of the world’s major vehicle companies are racing to evolve to cleaner technology that is much more energy-efficient and cheaper to run for owners.  See Ford plans to nearly double production of its new all-electric F-150 Lightning pickup by mid-2023: The increase is a positive sign of demand for the F-150 Lightning as […]

January 3, 2022 | Strong Hands to Weak–and So It Goes

More than $1 trillion of trend-following capital flowed into global equity exchange-traded funds (ETFs) over the past year–exceeding the combined total of the past 19 years (data: Bank of America Corp. and EPFR Global.)  The chart below offers a visual courtesy of ISABELNET.com.  Passive funds tracking U.S. equity indexes accounted for most of that inflow.   […]

December 30, 2021 | 2021: An Excellent Year for the Unscrupulous

Fuelled by crypto, SPACs and commission-motivated promoters, there were 1,110 initial public offerings globally in 2021 (3x the average of the past decade).  As shown below, two-thirds of them are ending the year with losses.   It is important to understand that there is no level of personal wealth at which those without scruples will […]

December 29, 2021 | Fed Induced Asset Bubbles Have a History of Bad Endings

Valuable historical context for the Fed’s bubble-blowing antics in this Politico article around former FOMC member and QE dissenter Thomas Hoenig.  See The Fed’s Doomsday Prophet has a Dire Warning about Where We are headed.  Here’s a taste: As a bank examiner, Hoenig realized another very important thing. Easy money policies don’t just drive up the price […]

December 22, 2021 | Cryptomania: King Ponzi in a Land of Naked Emperors

I have likened truth-telling in finance to being sober in a house of addicts; when noting irrational, destructive behaviours, you are often dismissed as the problem–too dumb, critical or boring to join the party. Adoring naked emperors is a common theme.  Most now know the story of Bernie Madoff’s Ponzi, and yet, compared with many […]

December 21, 2021 | A World Long on Risk is Short on Cash

After a rough couple of weeks, the risk trade is bouncing.  While those in the business of selling us risk (in exchange for our cash ‘trash’) advise that investing requires bravery, the truth is that risk management, discipline, and math-based assessments are the best predictors of longer-term financial outcomes.  Unfortunately, discipline and realism tend to […]

December 16, 2021 | Central Bank Worship Moving Toward Predictable End

This week central banks are responding to political pressure around price inflation (lagging economic indicator) with accelerated monetary tightening plans. The central bank of Norway (Norges) doubled its policy rate to .50%, the Bank of England ended its bond-buying program and hiked its base rate to .25 from .10%, while the U.S. Fed doubled the […]

December 15, 2021 | Financial Conditions Tightening into Consumer-Led Slowdown

Today, Fed chair Powell will try to appease political pressure to “do something!” about inflation caused by supply-side shocks (which are already resolving themselves) and asset markets loco on the irrational belief that central banks won’t let asset bubbles burst.  Sure thing!  Of course, the policy mistakes were already made in not tightening financial conditions […]

December 14, 2021 | Misplaced Confidence Melts with Misallocated Capital

The last 18 months have been the zenith of two decades of monetary madness and speculative mayhem.  For the few possessed of fundamental and historical context, conditions have been both amazing and disturbing to behold. Fear of missing out (FOMO) is a form of mental illness when it diverts focus and capital from time-tested first […]

December 13, 2021 | Rosenberg: The Case for Lower Rates and Risk Off in 2022

This segment is a sober, worthwhile overview of inflation, growth, interest rate and risk market trends heading into 2022.   Here is a direct video link.

December 9, 2021 | Transparent Numbers are Key to Budgeting and Consumption Choices

Whether calories, investment or spending, we can’t make intelligent planning and management choices unless we have accurate numbers; this means that transparent content labelling is essential, and we must overcome all those who oppose it. To stay within needed limits on greenhouse gas and other pollution emissions, we need to define our maximum budget per […]

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