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December 12, 2019 | Fossil Fuel Co Write Downs: The Next New Normal

The second-largest U.S. oil company announced this week that it is writing down the value of reserve assets by $10 billion ($11 billion Cdn), as well as restructuring operations, and looking to sell some properties including the planned Kitimat LNG facility to export liquefied natural gas from Canada. Chevron CEO Mike Wirth said management was […]

December 11, 2019 | First All-Electric Seaplane Takes Flight in B.C

There are about 170 different electrically-propelled aircraft programs in development worldwide, up 50% since April 2018, according to consulting firm Roland Berger.  BC’s Harbour Air achieved flight with one this week.  In the process, it slashed fuel costs from $300-$400 per 100-miles to $4 to $10.  The initial model can fly 60 minutes on one […]

December 10, 2019 | Why Consumer Insolvency Rates are Leaping in Canada

The latest Canadian consumer insolvency report is available here from Hoyes, Michalos, and includes a list of their top 10 debt statistics for 2019 as follows: Ontario bankruptcies and consumer proposals increased by 15.9% in the first ten months of 2019, while Canadian insolvencies increased 9.7%. The pace of growth is accelerating. Average weekly earnings have only […]

December 9, 2019 | Condo Insurance Crisis: Leaping Premiums and Harder to Get Coverage

Property insurance premiums are leaping, with deductibles doubling and worse.  In some cases no insurance is available. Insurance industry consolidation over the past decade has left fewer options for consumers and less competition among insurers, in addition, sky-high property replacement costs, antiquated infrastructure and extreme weather are making insurance more expensive and, in some cases, […]

December 6, 2019 | Funding Crunch in Short-Term Lending Raises Alarm

A repurchase agreement (repo) is a crucial form of short-term borrowing for dealers in government securities where they sell or swap government tbills on an overnight basis in exchange for cash and buy or swap them back the following day. The New York Federal Reserve has funnelled hundreds of billions of dollars into repo markets […]

December 5, 2019 | Bank of Canada Stuck in Low-Rate Catch 22

Yesterday, as expected, the Bank of Canada left its policy rate unchanged at 1.75% for the ninth consecutive meeting, even though other central banks have implemented dozens of rate cuts and liquidity injections over the last year in many countries. See Bank of Canada holds rate.   As a result, Canada’s overnight rate is now the highest among […]

December 4, 2019 | Gilded Age Redux: Bank Vault Exclusively for Billionaires

A new bank vault in a grade-II listed gothic mansion built in 1899 for soap magnate Robert William Hudson, will have more of the feel of an “exclusive private members club than a bank” next to the Dorchester Hotel on London’s Park Lane will open for business next week. “We won’t deal with millionaires,” says Sean […]

December 3, 2019 | Hoisington Third Quarter Review worth reading

Hoisington Investment Management’s always insightful Q3 2019 review, can be read here. As shown below, year-over-year world trade volume fell in the third quarter by the most since the recessions of 2000 and 2008.   Confirming slowing growth, thirty-year Treasury bonds rose and their US yield fell to a record low at 1.90% (the previous record […]

December 2, 2019 | After the Oil and Gas Rush: Apportioning Clean Up Costs

This is a complex question, but as we consider benefits that flowed to the public and how to apportion cost responsibility between producers and taxpayers, it’s worth noting that oil and gas production doubled in Alberta since 1980 but royalty revenues to the province fell 90% and corporate taxes from producers are down 51% since […]

November 30, 2019 | Cincinnati Building Nation’s Largest City-Led Solar Array for Economic Reasons

Another day another new record renewable energy project underway for economic reasons: to reduce utility and extreme climate costs while creating sustainable jobs.  See:  Cincinnati to build the nation’s largest city-led solar array. Cincinnati is releasing details about a plan to build what’s being touted as the largest municipal solar array in the United States: a 100 megawatt […]

November 29, 2019 | Present Equity Valuations Suggest Negative Returns for Next Decade

Lest we kid ourselves, stocks today are everything but attractive investments. In terms of Buffett’s self-proclaimed favourite value indicator, as shown below, the S&P 500 is now priced at 144% of US GDP, far above the 2007 top, and near the short-lived highest-ever valuations in history at the tech wreck peak in 2000. While the […]

November 27, 2019 | Slowing Economy Undermining Misplaced Over-Confidence

Data released today from The Conference Board shows that US consumer confidence dipped for a fourth straight month in November as economic conditions weaken into the end of 2019.  While sentiment about the present is still a relatively high 125.5, as shown below, expectations of the future versus the current situation remain at a level that has […]

November 26, 2019 | Souring Loans Spook Bank Investors

Record household debt is on the minds of bank investors as earnings season kicks off for the Big Six. Doug Hoyes, licensed insolvency trustee at Hoyes, Michalos & Associates, provides frontline context.  Here is a direct video link.

November 25, 2019 | New Energy Storage Cancelling Natural Gas Peaker Plants

A new report from the Rocky Mountain Institute confirms that the global energy transition is happening faster than models have predicted, thanks to massive investments in the advanced-battery technology ecosystem from the private and public sectors that, so far, total $150 billion through 2023. In the first half of 2019 alone, venture-capital firms contributed $1.4 […]

November 21, 2019 | Ontario Handing Off Pot Distribution to Private Sector

The Ontario Cannabis Store (OCS), following New Brunswick’s announcement last week, says that the government-owned agency is planning to let the private sector operate its distribution network.  OCS will also work with cannabis producers interested in taking on direct delivery for their products. As Canada’s most populous province, home to 39% of Canadians, Ontario is […]

November 20, 2019 | Canadian Insolvencies Accelerating at Recession-Like Pace

Insolvencies are accelerating at a pace that’s been associated with periods of distress: the start of the 2008-09 financial crisis, immediately before the 1990-92 recession, and during the period of pronounced economic weakness in 1995-96 that was tied to the Mexican peso crisis. Here is a direct video link. The below chart shows the recent rise […]

November 19, 2019 | Di Martino Booth on Stealth QE, Slowing Growth and Strain in the Indebted Oil Patch

Over the last two months, through liquidity interventions they insist are not ‘QE’, the US Fed has effectively reversed 40% of the quantitative tightening they had attempted over the preceding 21 months.  Relentlessly easier monetary conditions have enabled spending and record debt to continue longer than it otherwise would have this cycle, but the hangover […]

November 15, 2019 | Canadian Insolvency Leaping

Credit bubbles take an elevator up an escalator down. The escalator is now accelerating in Canada even as interest rates and unemployment remain near all-time lows. This suggests that our financial crunch is only getting started, and not just in Alberta. Canada is on track this year to record the largest increase in consumer insolvency […]

November 13, 2019 | Planning Dream Homes So They Won’t Become Nightmares

Canada is internationally acclaimed as having some of the most expensive housing on earth.  Nationally, our median home price is $512,000 in 2019 (CREA) and some 7.2 times the national median household income of about $72,000.  The Greater Toronto and Vancouver areas are even worse, of course, with average home prices (detached and condos) well over $600,000 […]

November 12, 2019 | Schork: EVs on the Road Represent ‘Oil Demand that is Never Coming Back’

Of the 96 million barrels of oil consumed globally each day in 2018, 62% was used for transportation, and that majority percentage is under assault. Stephen Schork, president at Schork Group, discusses his skepticism about the upcoming initial public offering for Saudi Aramco as the world has shifted away from an oil economy. Here is […]

November 11, 2019 | Auto Debt Helping to Drive Tipping Point in Transportation Sector

A third of Americans who traded in cars to buy new ones in the first nine months of 2019 had negative equity, compared with 19% a decade ago, according to car-shopping site Edmunds (chart on right).  Similar trends are evident in Canada.  See A $45,000 loan, for a $27,000 ride:  More borrowers are going underwater on […]

November 8, 2019 | ECB Holzmann: Monetary Policy at Limit, Time for Productive Investment

As the EU cuts its growth forecast this morning for 2019 and 2020 to barely over 1%, it is good to hear an ECB official admitting that the old add-debt-for-present-consumption model is at a close and the new paradigm has to be about investing in future productivity. European Central Bank official Robert Holzmann signalled that monetary policy […]

November 7, 2019 | Stock Prices Overshoot Profits by Most Since 2000–Mind the Gap

As explained well by Lance Roberts in Corporate Profits Are Worse Than You Think,  the S&P 500 stock index price (in blue) has now overshot corporate profits (orange) by the most since the late 1920s and the 2000 bubble top. In typical late-cycle fashion, consumer confidence is high while corporate leaders are worried about falling revenues […]

November 6, 2019 | Indiscriminate Fund Flows Fuel Financially-Destructive Times

We are living through the final scenes of one of the most financially-destructive chapters in human history. I was an investment analyst in the 2000 dot.com bubble and the 2007 China/commodities/subprime bubble and, yes, they were mad times too.  But unprecedented ‘free’ money over the last seven years has managed to magnify the destructive behaviours […]

November 4, 2019 | Seba Update on the Disruption of Energy and Transportation

This presentation was recorded in NYC October 29, 2019. Worth the 30 minutes. The #CleanDisruption will be the fastest, deepest, most consequential disruption of energy and transportation in history. By analyzing and anticipating these disruptions, we can learn that the benefits to humanity will be immense, but to seize the upside, we will need to […]

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