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November 26, 2020 | This is Where We Are

With US equity markets closed for Thanksgiving, the US dollar index (DXY) continues to hover around the $92 long-term support level this morning–its lowest point since May 2018. A confluence of factors drives the benchmark currency one way and another, including trade and investment/speculative fund flows, hedging, fiscal and monetary interventions, relative global rates of […]

November 25, 2020 | All Eyes on the Greenback

After falling 7% since March 2020, the US dollar index has helped fuel a dramatic recovery in risk markets and push speculative sentiment back to record highs. As shown in my partner Cory Venable’s weekly chart below since 1996, $92 is now testing the dollar’s long term support. A bounce in this area is likely […]

November 23, 2020 | A Good War: Mobilizing Canada for the Climate Emergency

For some time, I’ve described the climate and pollution challenges at hand as our generation’s war effort.  Seth Klein comes to a similar conclusion in his new book, A Good War:  Mobilizing Canada for the Climate Emergency.  He joined CBC’s The Current last week to discuss.  Worth a listen; here’s a direct audio link. There is a […]

November 20, 2020 | Stock Holders Face Capital Loss and Negative Return Prospects…No Cake and Eat It Too

GMO co-founder Jeremy Grantham recently reaffirmed his assessment that the stock market is in a bubble.  One can own stocks in a bubble and lock in poor prospective returns, or buy them after prices burst and enjoy years of steady returns thereafter.  There is no cake and eat it too. “The more spectacular the rise […]

November 19, 2020 | Renewable Energy and EVs Have Cost/Benefit Advantage

The energy sector in southern Alberta has over $2 billion worth of renewable energy projects being built in the region.  The related new jobs and tax revenue are much needed.  See: Southern Alberta witnessing ‘unprecedented’ surge in renewable energy projects. The renewable energy sector in southern Alberta is riding high with projects surging like never before. […]

November 18, 2020 | Surviving a Recession is the Real Financial Superpower

Experience attests that life is full of risk, every day in every way. Ego and spending commonly rise with income, asset prices and debt.  But humility and personal discipiline are the attributes that most define our financial health over time. It’s not what we make–in terms of income and cyclical asset inflation–but what we retain […]

November 17, 2020 | There’s No Free Lunch, But There Are Healthy Choices

In our world of sub 1% interest rates on guaranteed deposits and government bonds, many people have moved their savings into principal-insecure assets in the hopes of picking up more yield nickels in front of oncoming steamrollers. In the process, corporate asset prices have been bid to record highs once more.  As in similar fateful […]

November 13, 2020 | Pandemic and Sudden Income Loss

Pandemic and sudden income loss have made people more aware of their vulnerability.  Even as interest rates have fallen again since March, loan demand is weak and cash savings in bank accounts have risen sharply.  These are financial-health-restoring-trends in the right direction for individuals; not so much for banks and other lenders.  See Deposit interest rates […]

November 10, 2020 | Personal Discipline Plays Leading Role in Financial Health

We cannot discern a person’s financial health based on their age or physical trappings.  Nor does a high income ensure financial security.  Many people figure this out with experience; some never do. As with our physical health, it is the avoidance of accidents, along with constructive personal discipline, that plays the largest role in defining […]

November 9, 2020 | Reassessing Safe Withdrawal Rates From Extremely Valued Assets

As I have noted many times, most people today have unrealistic expectations regarding what income their savings can ‘safely’ produce in retirement and, therefore, the amount of savings they need to sustain their spending once retired. A sustainable rate of withdrawal is one that can continue throughout our lifetime without consuming all of our principal […]

November 5, 2020 | Volvo Announces First Fully-Electric Heavy-Duty Truck

Meanwhile, regardless of who will be in the White House, Volvo Group, the world’s second-largest truckmaker, announced today that electric heavy-duty trucks with a range of up to 300km will go on sale next year and enter production in 2022.  Volvo is  aiming for half its truck sales in Europe to be battery powered by […]

November 4, 2020 | Shilling: The Nifty Fifty have a message for the tech obsessed

A. Gary Shilling’s November Insight (subscription only) compares the recent FAANG mania with the Nifty Fifty mania of the 1970s and the last tech mania of the late 1990s.  His recent BNN article shares some of the highlights, see The Nifty Fifty Have a Message for the Tech Obsessed.  Historical perspectives are sooooo important when it […]

November 3, 2020 | Generational Investment Theme: Clean, Renewable Energy and Storage

I’m working through Mark Z. Jacobson’s new text on the science and mechanics of migrating global power systems and transportation to 100% renewable water, wind, solar and storage.  Those interested in seeing where we are headed and what the opportunities look like should keep this book on their desk or coffee table as a daily […]

October 30, 2020 | Loonie, Oil and Canadian Financials, All in This Together

After bouncing 10% between March 20 and September 1, the Canadian dollar continues its allegiance with risk assets, dropping 1% against the US dollar today and rolling over at the 74.50 resistance range, highlighted in my partner Cory Venable’s chart below since 2007.  A restest of the March low in the .67 area (pink band […]

October 29, 2020 | Corporate Tax Receipts Must Rise From Here

Large corps have long-lobbied for preferential tax treatment and government subsidies because they are ‘job creators.’  In reality, automation and off-shoring have been reducing their employment rolls steadily.  As globalization has allowed multi-nationals to position head offices in the lowest tax zones, countries, states, and provinces have raced each other to the death for the […]

October 28, 2020 | Tough Times Are Full Of Opportunity

Cutting unnecessary operating costs is always smart, but being able to do so during a big hit to income can be the difference between survival and bankruptcy. Like most municipalities, the City of Kitchener spends millions on electricity each year.  In 2011, they invested in 2600 solar panels atop their operation facility at the site […]

October 27, 2020 | Second Wave of COVID Testing Canadians and Their Lenders

As the second wave of COVID is shutting down large parts of Europe and Canada’s cases hit a fresh record, studies suggest antibodies may be short-lived. Not surprisingly, a study released today from FP Canada finds that 30% of Canadians surveyed worry they’ll never recover from the pandemic’s economic impact, and 42% say they can’t financially […]

October 23, 2020 | ‘SPAC’ and Gambling in Today’s Greater Recession

Never before have so many companies with no revenue pursued a public market listing at such high valuations.  The froth is particularly evident in sectors like online gambling and nascent start-up companies.  See:  EV start-ups are Wall Street’s hot new thing.  No revenue? No problem: Companies at such a nascent stage are inherently risky and are […]

October 22, 2020 | Lending and Buying Frenzy has Bubble Hallmarks

Living one hour north of Toronto, the COVID-19 home-buying frenzy is readily apparent.  Prices have appreciated more than 20% year over year, and “Coming Soon” signs turn into “Sold” within days.  Many properties don’t even make it to an MLS listing. A realty lawyer friend told me yesterday that she is having the busiest transaction […]

October 21, 2020 | Solar, Wind and Water Dramatically Reduce Energy Use and Costs

The Solutions Project at Stanford University has been pointing out for years now that improving energy efficiency and powering the grid with electricity from wind, water, and the sun dramatically reduces overall energy use.   In their blueprint for Canada, the reduction in demand is an estimated 63% below current levels. Already, wind and solar power are the […]

October 20, 2020 | Summers: Deflationary Pressures are the New Paradigm

I have been commenting on building deflationary pressures for some time. The pandemic has accelerated these forces with negative implications for status quo thinking and social stability.  I don’t often agree with Larry Summers, but his comments in this segment are lucid.  The era of borrowing to inflate asset prices has misallocated trillions in resources.  […]

October 19, 2020 | Canadian Consumer Confidence Weak, Faith in Realty Prices Unshaken

Still missing some 25% of jobs lost in the first shutdown phase, Canadians are feeling less confident as the most populous areas in Ontario and Quebec re-enter Stage 2 restrictions, banning indoor dining, gyms and movie theaters for at least 28 days. The Bloomberg Nanos Canadian Confidence Index, a composite measure of financial health and […]

October 16, 2020 | OECD: Most Economies Will Remain Well Below 2019 Output Levels By End of 2021

According to third-quarter forecasts by the OECD, by the end of 2021, most economies, including Canada, will have a level of output that remains well below that of 2019, and considerably weaker than projected a year ago. As shown in the graphic below, all projected growth paths undershoot the 2019 forecast (shown in grey), including a best-case […]

October 15, 2020 | Perfect Storm For Realty Investors: Rising Vacancies and Ralling Rents

In Picketty and the decline of dirty mansions, Dylan Reid reminds of the debt-driven economic boom that built large single-family mansions in the early twentieth century.  Many were converted to more efficient and affordable multiple-unit dwellings in the bust years that followed.  In the process, working people who had been priced out of many areas could move […]

October 14, 2020 | Electric Vehicles Are The Future, Canada Will Evolve or Die

Canada is a global leader in auto and parts production yet one of the few auto-producing nations with no homegrown auto companies.  Twenty years ago, Canada was assembling about three million internal combustion engine (ICE) vehicles a year for foreign giants (Fiat-Chrysler, Ford, General Motors, Honda and Toyota), today this has dropped to about 2 […]

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