ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
February 21, 2019 | High-End Property Inventories Leaping
It is typical of dramatic price appreciation cycles, for people to believe that those with the means to buy expensive assets are somehow impervious to credit cycles, and will continue to buy and not sell, regardless of stresses that may impact the masses. Until recently, for example, it was common for people to say that […]
February 20, 2019 | Two Decades of Monetary Largesse Are The Harm Not The Cure
The US Fed has led the world in 20 years of progressively more extreme monetary interventions to inflate debt and asset prices at all costs. Each time that US stock markets have dropped more than 10%, central banks have moved to ‘ease’ volatility with more and longer monetary ‘accommodation’. Nevertheless, in both 2001 and 2007, […]
February 19, 2019 | Clawbacks of ‘Hot Flows’ Coming After International Land Banks
Now that China is struggling with slowing growth, massive debt and an aging population, a hunt to recover funds siphoned out of the country over the last decade has begun in earnest. Clawbacks can drive forced selling of property in previously ‘hot flow’ countries like Australia and Canada, just as domestic demand in these markets […]
February 14, 2019 | Debt Crisis Demands New Thinking, Policies and Behavior
The true source of widespread financial instability today is rarely acknowledged by mainstream commentators and their sponsors. Former Senator Heitkamp’s comments on CNBC this week were an exception, see: A tax alone won’t fix the wealth-income gap. The fact is that we are in the midst of a debt crisis globally. This has been compounded by […]
February 13, 2019 | Rate Hikes Off The table?
It is critical to keep in mind that monetary policy changes impact the real economy at a lag of several quarters. So the tightening cycle that ran from December 2015 to December 2018 will continue to dampen global demand over the next several quarters, even if central banks tighten no further and move to more stimulative […]
February 12, 2019 | W5 Investigates ‘Massive’ Money Laundering in Canada
Illegal money flows in Canada have inflated property prices and profits for insiders in gambling, luxury retail, the realty sector and lenders, while costing Canadians greatly in terms of unaffordable home prices, related household debt, increased crime and lost tax revenues. Court cases have collapsed, news conferences cancelled, and political leaders stonewalled in multiple attempts […]
February 11, 2019 | Downside for Economy, Equities and Corporate Debt Likely in 2019
In a report last week, Societe Generale annalysts warned that a historically reliable indicator suggests a US recession is probably close at hand with commensurate declines in corporate security prices. News articles on US economic strength as a percentage of all news articles (in red below) has led the US ISM manufacturing index (in grey) over […]
February 8, 2019 | Fun with Legs and Shoulders
The global stock market drop in the third quarter of 2018 was sharp and quick. In North America, the S&P 500 and TSX 60 fell 18 and 15 percent respectively in just 60 trading days between October 1 and December 24th. Both then rebounded some 14% in the 25 and 28 trading days that followed […]
February 7, 2019 | Realty Mean Reversion Started in Vancouver
Some takeaways from the latest data from the Real Estate Board of Greater Vancouver (REBGV), see Suddenly, there are tonnes of homes for sale in Vancouver and prices are coming down.: the number of homes for sale jumped by 27.7% in January, compared to January 2018. From December to January, homes for sale jumped 244% compared […]
February 6, 2019 | Financial strain driving independence impulses worldwide
Debt was a cohesive force in the early years of the European common currency union, as have-less countries saw their standards of living rise. In truth, this was being purchased with unsustainable levels of borrowed money, however, so that same debt is now a divisive force driving financial strain throughout Europe and much of the […]
February 5, 2019 | Canadian Mortgage Growth Slowing: Good for Households, Bad for Banks
Good news, Canadian mortgage growth is finally coming off the frenzied boil of recent years. As shown below, according to the Bank of Canada, Canadian residential mortgage growth rose 3.1% year over year in December to $1.55 trillion, the slowest pace since May 2001, and half the growth rate of two years ago. Canadian households […]
February 4, 2019 | Real Estate Engine Running Out of Steam–For Good Reason
Sales trends lead price trends, and according to a new report by Altus Group on behalf of the Canadian Real Estate Association, Canadian home sales fell 11% nationally in 2018 on poor affordability, higher rates and tougher loan qualification rules. The report also estimates that each home sale not made is a loss of some […]
January 31, 2019 | Pause before the storm?
The fact that the US Fed has determined that real rates above 0.5% are a threat to both economic growth and 2% inflation, suggests the economy is not ‘in a good place’ but extremely fragile. Here is a direct video link. Fed Chairman Jerome Powell said in prepared remarks that the central bank would use its […]
January 29, 2019 | Semiconductors Illuminate Market Cycle and Investor Psychology
As risk markets have recovered some of their dramatic third quarter sell-off this month, shares of semiconductor makers have bounced along for the ride, even as semiconductor exports out of South Korea have fallen 28.8% on a year over year basis. Because semiconductors are used in a wide range of manufactured goods globally, demand for them […]
January 25, 2019 | Reverse Mortgages Offer Odious Math for Homeowners
North American households are some of the relatively wealthiest in the world, with 10% of the population having a net worth of $1 million US or more, mostly held in personal residences. On the other hand, 90% have a lot less than $1 million. Seventy-five percent have less than $400,000, 50% less than $100,000 and […]
January 22, 2019 | ‘Winners Take All’ Author on Monopolies and Rigged Systems
This is an important discussion that is taking place all over the world today. In the decade of central bank supported financial engineering since the 2008 crisis, the number of billionaires has nearly doubled while wages have stagnated and deficits compounded for the rest. Thinking people are understanding that corporatocracy has become the dominant economic […]
January 21, 2019 | Gundlach: It’s a Bear Market…Next Leg Down Likely to be Worse than Q4
In case you missed this interview in December, it offers a good overview of the current market and economic cycle as well as the impact of rate hikes and quantitative tapering already implemented. Here is a direct video link. My partner Cory Venable’s chart showing the head and shoulders pattern forming in the S&P 500 also […]
January 20, 2019 | Ford Developing Electric F100 at Last
They are slow on the uptake to be sure, but at the Detroit auto show this week, Ford finally announced that is developing an all-electric version (EV) of its best selling F100 truck: “…the engineering advantages of electric pickups are appealing: the large, full-size platform is ideal for carrying a large battery, needed to supply adequate range, […]
January 19, 2019 | Detroit Auto Show Buzz “How Do We Catch up with Tesla?”
One more from the Detroit Auto Show…development goals have changed this year. Major car heads are no longer scoffing at EVs or Tesla. Kudos to Mr. Musk and team. Here is a direct video link.
January 18, 2019 | Negative Cash-Flow Companies and Households Bad for Banks
At their peak last October, the six largest Canadian banks traded at an average price of 1.9x book value. This was similar to the cycle high in U.S. bank shares in 2007 just before an 83%+ price plunge (XLF) returned them to an average of 0.7 x book value. Canadian banks went into the 2007-09 […]
January 17, 2019 | Electric Mercedes SUV coming soon to North America
The all-electric Mercedes SUV is expected to be available in North American by 2020 and will help legitimize EV technology in mainstream thinking. Thanks to Tesla for leading and sharing its patents for free in 2014 in order to help other manufacturers evolve into the 21st century. The Mercedes EQC brings a new level of competition to […]
January 16, 2019 | Canadian Real Estate in Well-Earned Downturn
Apparently, the new rules requiring that people have a reasonable chance of repaying a mortgage before advancing the loan are now depressing home sales and prices in Canada. Who would have thought… See Sharp drop in home sales portends stagnant year ahead: Year-end statistics published Tuesday by the Canadian Real Estate Association (CREA) show 458,442 homes […]
January 15, 2019 | Current Downturn Ours Courtesy of Extreme Monetary Intervention
While many commentators are calling on central banks to stop tightening and start increasing monetary slack once more as the global slowdown deepens, the fact is that current financial strife has been purchased by years of central bank slack that drove overcapacity and mal-investment through the global economy. Economist Daniel Lacelle explains truth well […]
January 14, 2019 | Global Growth Heading Down on Record Debt and Less Cash Flow
Further to my article last week Highly coupled global growth engines slowing all together, weaker economic data out of China and Europe this morning are roiling world markets. Chinese trade slumped in December, sending regional stocks and the Australian dollar lower, as an unexpected fall in both exports and imports underlined the impact of the trade war and […]
January 11, 2019 | What Went Up The Most is Coming Down the Most–Bank on it
As I have explained frequently, asset prices that went up on the same low rates, lax lending, speculation and foreign capital flows the past decade are now coming down together all around the world. In the process, the assets, markets, cities and holders that rose the most, now have the most to lose–it’s pretty straight […]