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June 15, 2018 | Heavily Indebted Chicago Looks to Increase Productivity with Transport Innovation

After a couple of decades wasting scarce resources on non-productive consumption and financial gimmicks, future progress depends on increasing productivity (doing more with less spending) by lowering day to day friction costs in the most critical areas like energy, transportation, housing, food production and environmental harm. Chicago has the right idea this week in embracing […]

June 14, 2018 | Daniel Kahneman On Expertise, Bias, And The Investment Industry

Always worth listening to Dr Kahneman on the foibles of human thinking and behavior, especially around money and markets and especially when he is speaking to a room of would-be-expert-investors at the recent CFA Institute Annual Conference.  Enjoy. Nobel laureate Daniel Kahneman…delivered a captivating mini seminar on some of the key ideas that have driven […]

June 13, 2018 | What’s in a name? Not Much When the Bias for Higher Fee Collection Remains

Further to my article here yesterday, a reader correctly points out that financial sector representatives calling themselves “advisors” with an ‘0r’ in North America do not fall within security regulations requiring them to put the best interests of their clients first. This one vowel distinction from ‘advisers’ is of course farcical in terms of any meaningful […]

June 12, 2018 | ‘Adviser’ Title Use at the Heart of Financial Ills Ailing Us

We don’t let pharmaceutical reps hold themselves out as doctors to the public for the same reason that we must stop letting product sales companies and employees market themselves as financial advisers.  Society and taxpayers cannot afford for this to continue. The need to put income and title separation between product sellers (paid by companies) […]

June 11, 2018 | Australia’s Looming Problem: ‘Interest Only’ Loans

ABC discusses the problem faced by many interest only loan holders as tighter lending standards bite, forcing some to higher payment P&I loans.  Here is a direct video link. Meanwhile Australia has the second most indebted households–as a percentage of national GDP– in the world (see chart below).  As in Canada, and most other developed countries […]

June 8, 2018 | Is it Helpful to Help People into Properties They Can’t Afford?

As shown in this chart, the median household income in Canada for ages 25 to 34 declined from 54K in 1976 to 49K in 2016 even as most families moved from one to two income earners.  Meanwhile interest rates moved through the widest range in 5000 years of data, with the prime rate falling from […]

June 7, 2018 | China’s Rampant Security Fraud has Spread through Global Markets

Carson Block, Chief Investment Officer, Muddy Waters Capital LLC, joins Bloomberg Markets AM with Pimm Fox and Lisa Abramowicz to discuss China’s impact on US capital markets. Running time 06:33. Here is a direct audio link. I recommended the Netflix documentary  The China Hustle here in April.

June 6, 2018 | Aggressive Loan Sales Wreaking Destruction Worldwide

Different country, same destructive lending models as in Canada and everywhere else.  Mortgage Choice Limited, commonly known as Mortgage Choice, is a publicly listed Australian mortgage broking firm. Mortgage Choice is in damage control as it faces an uprising from its franchisees on the back of a business model that is pushing many into financial […]

June 5, 2018 | Hold and Hope at Extreme Valuations Suggests Compound Losses

It is appreciated and rare when financial advisors acknowledge the math of loss and the truth about why compound return expectations routinely disappoint in real life.  This article from Lance Roberts is a gem:  The buy-and-hold investing approach is part of one of the most ‘hazardous’ stock myths: Avoiding losses weighs far more heavily in compounding […]

June 1, 2018 | Solar in Oil Country

Forward-thinking folks that embrace change and look for opportunity are the life blood of human progress.  On a ‘full cost’ accounting basis, clean, renewable energy is ‘cheaper’ and smarter than using polluting energy.  See Brazeau County- Solar in oil country: “Grandpa said there’s two ways to make money, the money you make and the money you […]

May 31, 2018 | Debt-Weary Canada Moving Toward a Reboot

The Bank of Canada (BOC) continued to talk tough while carrying a diminished policy stick yesterday.  With its overnight rate still at 1.25%–10 years since the last recession–there’s no doubt the BOC would like a lot more rate room to cut–they just don’t have it.  What they’re left with is hope and confident statements even […]

May 30, 2018 | Public Support for Breaking Up Big Banks is Building

The break up of above-the-law financial conglomerates that are bankrupting the world economy should have happened in 2008, but the Obama-led government missed their opportunity to lead on this critical reform.  This change is certain to come forward again in the next financial meltdown, because it must.  There can be no rule of law, stability […]

May 29, 2018 | On Recession, ‘Advisory’ Services and Equity Diversification

On the weekend the Financial Post ran with an article headed Macquarie thinks housing will drag Canada into a recession as bad as the financial crisis in two years–and that’s the best case scenario. In it Macquarie Capital Markets correctly notes that Canada’s grotesquely inflated–now deflating–housing market is a recession catalyst in motion, with the share of […]

May 25, 2018 | It’s Reduce!! Then Reuse and Recycle

Hate to be a downer on a Friday, but most of the plastic we use never gets recycled. Yes, even the items we carefully sort and send off in blue bins mostly ends up in landfills and our water systems.  Most containers are manufactured with mixed formulas that cannot be efficiently separated, so they are […]

May 24, 2018 | Must read: Getting Rich on Government-Backed Mortgages

Mortgage brokers driving Lamborghinis… We have learned zero from the 2008 financial crisis.  Coming ’round again for sure, stay liquid.  See:  Getting rich on government backed mortgages: Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down […]

May 23, 2018 | Netflix Series Dirty Money on Payday Loans

The second episode of the six-part Netflix docu-series ‘Dirty Money’ is on payday loans and should be seen. Payday loans have grown into a booming predatory business over the past decade.  The cost of borrowing exacted through transaction and ‘administrative’ fees effectively circumvent criminal interest rate prohibitions and are helping to keep poor people poor.  […]

May 22, 2018 | Rich Yields Coming to Those Who Buy Low

As shown here, corporate debt as a percentage of GDP has reached historic cycle extremes once more, similar to levels that preceded the last 3 recessions (olive bars).  As energy prices and interest rates have risen the past 2 years, free cash flow is naturally eroding. Meanwhile covenant-light bonds–those lacking in usual capital protections for […]

May 20, 2018 | Debt service costs are a function of rate and amount owed

Those saying that the recent rise in interest rates is still inconsequential because relative rates remain below historic averages, are ignoring that debt service costs are a function of rate and the amount of debt outstanding.  With record debt at every level in pretty much every country today–consumers, corporations and governments–every rise in rates equates to […]

May 19, 2018 | Australian Royal Commission into Customer Abuse in Finance: Familiar Findings

Captive and impotent regulators and financial firms committing fraud and abusing client trust are the dominant financial model worldwide. AMP is a financial services company in Australia and New Zealand providing superannuation and investment products, insurance, financial advice and banking products including home loans and savings accounts. AMP shares are included in the Australian Securities […]

May 18, 2018 | ‘Buffett Indicator’ Screaming ‘Fire’ to Risk-Blind Stock Holders

The financial press loves to flog viewers with bullish quotations at all times, but especially from Warren Buffett, and especially near cycle tops when valuations are the least attractive for investment. In recent years, I have written a few times about Why Buffett won’t warn that stocks are in a bubble. With more than $700 billion in […]

May 17, 2018 | Killing the ‘Little Guy’ with ‘Investment’ Sales Dung

Abuse of trust is a dominant business model in conventional ‘investment’ sales and wealth ‘manglement’. As I mentioned in April, this odious truth was on full display at the recent ‘Canadian Wealth Expo’ in Toronto, where gullible attendees were showered with high-powered propaganda like this line from one of the seminar selling, self-declared ‘experts’ on […]

May 16, 2018 | Home Sellers Dig in, Hoping Fantastical Pricing Will Return

Canadian average home prices doubled over the past decade (as shown in the chart below) as cheap credit and lax lending flowed.  But over the past year, the supply of buyers has been retreating amid unaffordable prices and rising finance costs, even if sellers refuse to lower prices, for now.  Listing agents are complaining about […]

May 15, 2018 | What Credit Abuse Gave, it Will Also Take Away

According to Bank of Canada numbers, some $700 billion of mortgage debt is up for renewal in the next 12 months at higher interest rates. According to the latest Stats Can numbers, about 1/3rd of Canadians rent their home, 1/3rd own a home with a mortgage, and 1/3rd own a home mortgage free. This means bubble real […]

May 12, 2018 | Better Markets: Where are the adults in Finance?

Important article from Better Markets this week, see:  With Red Lights Flashing Danger, Where Are the Adults in Finance? “It seems almost everyone in finance is cheering on the deregulation frenzy in Washington and the demise of consumer protection and enforcement in the financial markets.  Given that an historic crash happened just ten years ago and the […]

May 11, 2018 | AAA Survey: 50 Million Americans want Next Vehicles to be Electric

There is no denying that Elon Musk and Tesla have been key instigators in the long delayed push and now race for electric vehicles. Leaping battery technology and the spread of charging stations will naturally accelerate this transformation.  The emissions-fraud perpetrated by many of the world’s largest ICE manufacturers has also helped increase public awareness […]

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