ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
July 18, 2023 | Real Estate Speculators Start to Blink
Nick Gerli, Reventure Consulting Founder and CEO, joins ‘Last Call’ to explain his recent viral tweet claiming AirBnB is seeing declining revenue in several major markets. Here is a direct video link. Also, see Nick’s update on developments in the commercial property sector. Commercial real estate values have already dropped 11% in the last year, with […]
July 15, 2023 | Danielle on CBC Weekend Business Panel
Danielle was a guest on the CBC Weekend Business Panel. Here is a direct video link.
July 14, 2023 | Hard Landing, New Stock Market Lows Ahead
As we enter the second half of 2023, the economy continues chugging along. GDP growth for Q2 is currently estimated at 2.3%, and inflation continues dropping, with the latest June headline CPI just in at 3.0%. Have those warning of recession been wrong? Or will the lag effect result in a bumpier ride for the […]
July 13, 2023 | Housing Inventory to Explode Higher
Home prices in the US peaked a year ago in June. Since then, transactions have noticeably cooled as mortgage rates have skyrocketed. And while prices have declined in a number of markets nationwide, the correction so far has been quite mild. Are the housing bears wrong? Or are things going to get notably worse from […]
July 13, 2023 | Central Banks Holding The Hand Brake
The June US Consumer Price Index (CPI) came in at a 3% annualized rate, down from the pandemic-inflamed peak of 9.1% a year ago. FOMC chair Powell has said that ‘super-core’ services ex-shelter (which excludes food, energy, rent and used car prices) is his preferred inflation gauge, and (as shown below) it came in at […]
July 12, 2023 | Corporate Bankruptcy Wave Just Started
Unlike government bonds that typically rise while stock prices fathom bear market lows, higher-risk corporate bonds tend to fall with risk appetite and equity prices. That trend has held over the past 15 months as most corporate securities have lost value. As US junk bond prices have tumbled, their yields have risen to around 8.75% […]
July 11, 2023 | Yields Testing Resistance (and Nerves)
The Visual Capitalist chart below shows the pace (in months) and percentage points of Fed hiking cycles since 1988 and confirms that the 2022-23 cycle (in yellow) has, by far, been the sharpest in at least 35 years. In the process, interest-sensitive assets–commodities, bonds, equities and real estate–have all sold off. In the last week, […]
July 7, 2023 | Higher Debt Costs Are Economic Death By A Thousand Cuts
Fed minutes on Wednesday telegraphed that voting members plan another 25 bps rate hike this month and 25 more by November. Market implied rates are shown below in blue versus expectations last week (pre-minutes) in orange. While rate cuts are expected to follow from December 2023 through September 2024, the magnitude of easing anticipated is […]
July 6, 2023 | Insolvency Bull Market
Insolvency trustees are the financial undertakers. They endured a bear market when easy credit enabled extend and pretend habits for the masses. Now the undertakers are entering a boom time as their phones “ring off the hook.” Hoyes, Michalos published Canadian stats through the end of May and included this chart. Other trustee firms are also feeling […]
July 5, 2023 | Protracted Hangover For Real Estate Investors and Lenders
The seemingly endless party of growth in real estate supported by ever-cheaper finance has reached an end, with a protracted hangover now ahead. This has broad implications for the many sectors that feed off real estate and is why realty-led recessions have historically been the harshest. See, Industries that rely on thriving downtowns suffer, and Office turmoil […]
July 2, 2023 | Worst is Yet To Come For Stocks
Some lucid assessments in this segment. When the road ahead is uncertain, there’s no wiser choice than to listen to those with experience – who have seen enough market cycles to judge what’s most likely to happen next. Today we’re fortunate to welcome financial advisor Ted Oakley, managing partner & founder of Oxbow Advisors. Ted […]
June 30, 2023 | Sober Time
After debauchery comes the hangover; this one is far-reaching. Demand for pricey timepieces from the top Swiss brands has cooled amid slowing economies, higher interest rates and the crash in cryptocurrencies, according to data compiled by London-based Subdial, a dealer in pre-owned watches. Prices peaked in February of last year following an unprecedented surge during […]
June 29, 2023 | Repurposing and Repricing Real Estate
Between 2010 and 2022, increasingly slack monetary conditions added trillions to the global money supply, and it was all looking for something to do. Some flowed into ideas and efforts to improve life on Earth. A lot more was thrown at unproductive, counter-productive and mathematically challenged pursuits. Private and public investment funds ballooned on the […]
June 28, 2023 | Leaping Short-Term Rental Supply
A survey from rental site Vacasa showed that 90% of summer travelers this year changed their plans for travel to be more budget-friendly, including choosing driving over flying or choosing a cheaper day to travel. At the same time, active US short-term rental listings reached 1.4 million in April 2023, an 18% jump compared to the […]
June 27, 2023 | Credit Contagion Drives Distressed Selling in Real Estate
Thirteen years of record-low interest rates drove record public and private capital into all forms of real estate and related credit/securities from 2010-2022. Now, sharply higher interest rates and contracting credit on offer are bursting the bubble as forced sales rise. One broker estimates that 90 percent of office buildings in New York were distressed […]
June 26, 2023 | Taleb on Looming Crisis: The Risk is in Front of Us
Nassim Taleb, Universa Investments scientific advisor and author of ‘The Black Swan’, joins ‘Squawk Box’ to discuss the markets and economy, why a bubble is looming, the state of cryptocurrency, and more. Here is a direct video link.
June 25, 2023 | Recessions Come with Bear Markets
David Rosenberg, founder and president of Rosenberg Research, joins BNN Bloomberg to discuss U.S. Fed chair Jerome Powell’s latest comments. He says a recession certainly will happen, and we’re at or near the end of the tightening cycle. Here is a direct video link. Caveats noted on the Japan comment: global decoupling is not a thing, […]
June 24, 2023 | Housing Inflation Keeping Central Banks Hawkish
Falling average hours worked is leading consumer demand lower while housing inflation is keeping central banks hawkish for longer than in past cycles. Nasty combo. Chris Harvey, Wells Fargo Securities head of equity strategy, and Frances Donald, Manulife Investment Management chief economist and strategist, join ‘The Exchange’ to discuss the case for a recession in […]
June 23, 2023 | Near Half of New Canadian Mortgages Have Amortizations >30 Years
Near half of all new Canadian mortgages taken out in the first quarter of 2023 had amortization lengths longer than 30 years. In addition, as interest rates have leapt since 2022, a significant number of existing variable-rate mortgage holders have paid less than the interest owing, causing principal balances, repayment years and financial risk to […]
June 22, 2023 | Equifax: Canadian Business Revolving Debt is “Worrying Trend”
New data from Equifax shows that in the first quarter of 2023, Canadian businesses increased their credit card balances by 15 percent and lines of credit by 11 percent while the total balance outstanding on bank-issued installment loans fell 2.4 percent. See Businesses’ changing credit usage a “worrying trend”: Equifax. Jeff Brown, head of commercial solutions […]
June 21, 2023 | Home Buyer Math is Bonkers for Most
Many homes for sale in our area north of Toronto are priced in the $2 million range–many have been on the market for months now. If we do some math, we can appreciate why. Online calculators allow us to model numbers. To buy a $2,000,000 home with 20% down (400k) at a mortgage rate of 4.99% […]
June 20, 2023 | Monetary Policy Magnifying Economic Downturn Most in Decades
The latest rebound in equity prices has pulled the S&P 500 and Canada’s TSX back to levels seen two years ago in June/July 2021. In the process, bullish sentiment among professional and retail participants is back to the highest readings since November 2021, and the spike in Google searches for “bull market” (below, since 2018, […]
June 19, 2023 | Scarce and Expensive Funding Brings Financial Sobriety
There’s a timeless adage that when money is cheap and easy, many people do dumb things with it. When money was free and easy (2010 through 2022), dumb things were all the rage. In 2021, $346 billion was handed out to startups by US venture capital firms alone, averaging more than $86 billion a […]
June 15, 2023 | “Skip”, QT and High For Longer–Not Bullish
A world of bullish commentators asserts that Fed pauses are positive, even though the worst economic and stock market downturns have always come after the Federal Reserve stops tightening. After ten consecutive rate increases and the sharpest rate of change since 1980–yesterday, Fed Chair Powell announced a “skip” with ongoing quantitative tightening (QT) and possibly […]
June 14, 2023 | Lagging Shelter Costs Mask Magnitude of Disinflation Unfolding
Shelter costs account for a whopping one-third of the US consumer price index (CPI). Ex-shelter, the other two-thirds of CPI components deflated 0.1% month over month in May and were a tame +2.1% year-over-year (close to the official 2% CPI target). Higher home and rent prices were significant factors in spiking inflation between 2020 and […]