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October 1, 2023 | Capitalizing on Recessions and Financial Cycles

Worthwhile big-picture discussion… Experience financial expert Gary Shilling’s insights like never before in this engrossing video titled “Gary Shilling On A Violent Stock Collapse Dead Ahead.” Shilling, known for his astute market predictions, discusses the impending dangers of a violent stock market collapse, offering invaluable advice for both seasoned and aspiring investors. Here is a direct […]

September 30, 2023 | China’s Great Slowdown and Real Estate Crisis

Secular mean reversion in the world’s second-largest economy and largest consumer of global commodities has far-reaching implications for all of us. Kyle Bass, Hayman Capital Management founder and CIO, joins ‘Squawk Box’ to discuss the state of U.S.-China relations amid rising tensions, China’s economic woes and real estate crisis, and more. Here is a direct video […]

September 29, 2023 | Canadian Recession “Earlier and Harder”

Unfortunately, a decade of loose money and misallocated capital has set Canada up for a period of hard return. David Rosenberg, President and Chief Economist & Strategist of Rosenberg Research & Associates Inc., talks with Financial Post’s Larysa Harapyn about how Canada will get a recession ‘earlier and harder’. Here is a direct video link.     […]

September 28, 2023 | China’s Housing Bust Spreads

Shares in the Chinese property firm Evergrande have fallen as problems in the country’s struggling housing market deepen – affecting the wider economy. Its mainland unit Hengda Real Estate has defaulted on 4bn yuan (£449m; $547m) of debt, it revealed on Monday. The BBC’s Analysis Editor Ros Atkins examines the background to the current crisis. […]

September 27, 2023 | Financial Headwinds Intensify as Cash Dwindles and Debt Costs Leap

Trillions in emergency government handouts have been spent. Eighty percent of Americans now have less cash than when the Pandemic began. Only the wealthiest 20% of Americans still have some excess Pandemic savings, and that is expected to be fully consumed by the end of this month. All income groups have seen their balances decline in […]

September 26, 2023 | Jeremy Grantham “Bubble Historian”

The below podcast with Grantham is nearly two hours long and broad in scope. Worth the time, IMHO. For those with less patience, you can read some key takeaways in 10 quotes from the interview. Also, this 2-minute TikTok reel offers a taste. @downtownjbrown Is This a Real Estate Bubble? @The Compound THe Compound and Friends […]

September 25, 2023 | McGill Housing Study: “Staggering Impact of Short Term Rentals”

Greater restrictions around short-term rental properties seems inevitable. A McGill University professor has found some eyebrow-raising numbers regarding short-term rentals in B.C. …“The report underscores the need for the Province of B.C. to implement a province-wide short-term rental registry and platform accountability measures to save tenants billions in rent and address housing supply, attainability, and […]

September 23, 2023 | Unaffordable Homes and Cars

A new report from RATESDOTCA found that Canadians who took a five-year insured $500,000 variable-rate mortgage in the low-interest days of 2021 would be paying $23,579 more in cumulative interests by September 2023 compared to a fixed-rate mortgage option. See Variable rate mortgage holders on the hook for thousands in interest: The figure represents 63 per cent in […]

September 22, 2023 | Stocks Tank on Fed’s ‘Hawkish’ Pause

Excellent overview of key data in this segment. Danielle DiMartino Booth, CEO & Chief Strategist of QI Research, returns to Forward Guidance to share her views on the September meeting of the Federal Reserve’s Open Market Committee (FOMC). Filmed on September 20, shortly after Fed Chair Jay Powell’s press conference. Here is a direct video link.

September 21, 2023 | Falling Incomes and Forced Home Sales

Lucid insights on macro conditions and the housing cycle in this segment. Homeowners in America have run out of money in 2023, which could spark a wave of panic selling that will cause inventory to surge. Here is a direct video link.

September 20, 2023 | What This $100 Billion Ghost City Says About China’s Realty Crisis

Country Garden, once seen as one of China’s most stable property developers, is now struggling financially, leaving the future of unfinished megadevelopments like Malaysia’s Forest City in doubt. Here’s how overbuilding, and a streak of bad luck, have left China’s real-estate developers in the red. Here is a direct video link. This entry was posted

September 19, 2023 | BOC: Elevated Investor Ownership Magnifies Real Estate Downside

In a September 8th update entitled, Indicators of Financial Vulnerabilities, the Bank of Canada (BOC) notes that in Q1 2023, so-called investors owned 30 percent of mortgaged homes in Canada, up from 20 percent before the pandemic. See, Investors took a bigger chunk of the housing market during the pandemic, data shows.   In the first quarter […]

September 18, 2023 | Mind The Credit Cycle

Bank lending is contracting across world economies. The percentage of US banks tightening their credit to large and medium firms (below since 1990 via Tier 1 Alpha) now above 40%–was only seen during the 2020 pandemic, the 2008 financial crisis, the 2001 Dotcom bust, and the 1990-91 recession. As higher interest rates freeze existing home […]

September 14, 2023 | Wall Street’s Soft-Landing Delusion and What Really Comes Next!

For those who like detail, Francois Trahan of Trahan Research offers a cogent macro assessment in his latest video update (1-hour run time): “Wall Street’s Soft-landing Delusion and What Really Comes Next!” You can watch it at this direct video link.

September 13, 2023 | More and More Hard Data

Debt payments consume an impossible amount of household income, and the problem is global. Across ten large Canadian cities, mortgage payments alone are eating up about 59% of household earnings, based on mortgages amortized over 25 years. This is with 70% of Canadian mortgages still paying fixed payments based on rates less than 3%. With […]

September 12, 2023 | Central Banks Offer No Free Lunch

The San Fransisco Federal Reserve published its latest economic letter last week, entitled Does Monetary Policy Have Long-Run Effects? The conclusions are clear: loose monetary policy does not raise long-run economic potential while the eventual tightening of policy reduces economic output for a decade and beyond. We have entered the payback decade: Analyzing cross-country data for […]

September 11, 2023 | Rents and Home Prices Heading Down

Good news: Big Wall Street Investors like Blackrock, Blackstone, Invitation Homes, and Progress Residential are no longer buying up the housing market. As the rental supply balloons, rents are starting to fall. The next leg of housing downturns typically see for-sale listings surge and prices fall. Nick Gerli explains well in his latest video segment. […]

September 8, 2023 | Pause Before The Storm

As Greg Ip notes in the Wall Street Journal today: “Every recession starts out looking like a soft landing. August’s moderate increase in unemployment was welcome. The risk is that plenty more are in store, which won’t be cause for celebration.“ In reality, recessions are the norm following monetary tightening cycles, and unemployment rises through contractions […]

September 7, 2023 | Jeremy Grantham on Risk and Opportunity

I discovered Jeremy Grantham in 2002, and he’s served as a touchstone since. His experience and insight are rare and valuable. The slow-moving influence of rising interest rates will end up torpedoing the economy, dashing Federal Reserve expectations that a recession can be avoided, according to renowned Wall Street curmudgeon Jeremy Grantham. This interview for “Bloomberg Wealth […]

September 6, 2023 | Real Estate Has Earned Us a Drubbing

US mortgage rates (30-year fixed) jumped an extra 50 basis points this week to 7.7%, while Canadian mortgage rates are 6% plus. Higher carrying costs are causing many owners to need to maximize rental income from their properties. Short-term rentals are attractive because they have yielded more per night than long-term leases. However, many cities […]

September 5, 2023 | Extend and Pretend Has Magnified Economic Shock

As interest rates soared above six percent over the last seventeen months, four of the big five Canadian banks have allowed floating-rate customers to extend and pretend by making the same mortgage payments as when floating rates were sub-2%. This has compounded solvency problems as unpaid interest adds to the debt and extends amortization periods […]

September 1, 2023 | Higher Rates Freezing Mobility and Consumption

About seventy percent of Canadian mortgages were taken out over the last few years with a 5-year fixed term and an ultra-low interest rate that averaged 2.79%. In 2020-2021, some 40% were taken at floating rates that averaged 1.65%. Floating and new fixed-term rates are now above 6%. Eighty-five percent of US home mortgages have […]

August 30, 2023 | Unaffordable Prices Cure Unaffordable Prices

Canada’s housing bubble is crystal clear unless you are paid not to see it (wilfully blind) or painfully naive. The average national home price of 754K in July is ten times the average household income of $75k. The historically recognized affordability ratio has been home prices that are 3 to 4 times household income; this […]

August 29, 2023 | Economic Weakness Leads Unemployment, Not The Other Way Around

Many cite US and Canadian unemployment levels today near 5o-year lows as grounds for economic optimism. Unemployment is a lagging indicator that commonly inspires misplaced confidence heading into recessions and then pessimism as it rises into subsequent economic expansions. For leading employment indicators, we look to readings on the average manufacturing workweek, average overtime manufacturing […]

August 28, 2023 | Productivity Challenges

Weak productivity pressures profits and, ultimately, increases unemployment. Eventually, after recessions, productivity increases, thanks to reviving demand and lower labour costs (after layoffs). So far, we are early in the layoff phase, with jobless claims rising in 48 US states. Similar trends are evident in Canada and many developed economies, not just in America. The […]

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