ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
February 17, 2025 | What’s breaking Canadian consumers?
The latest Canadian Joe Debtor study finds that the average insolvent debtor owed $60,678 in unsecured debt in 2024, an increase of 12.2% from 2023—the largest annual rise since the study began in 2011. Driving the surge was a sharp rise in average credit card balances, which increased by 25.9% to $20,398 and accounted for 34% of […]
February 13, 2025 | China’s Real Estate Bust Leads Other Countries
Anyone who plays Monopoly can experience how quickly real estate holdings drag once cash in hand proves insufficient. Bubbles may seem fun on the way up, but they’re universally brutal in the inevitable deflation stage. China’s stimulus boom helped inflate global demand and real estate prices after the 2008 recession, but mean reversion has been […]
February 12, 2025 | Investors Dumping Real Estate
Blackstone is selling off their subsidiary Home Partners of America, and doing big price reductions on certain homes. This is an indication of the ongoing investor selloff occurring in the US Housing Market. Big Wall Street investors like Blackstone and Amerst Holdings have lowered their purchases of homes, and haves started to sell off properties. […]
February 11, 2025 | Canadian Insolvency Filings Leap Along with Property Listings
The Hoyes, Michalos 2024 Canadian Joe Debtor Survey is out and available here. The numbers portray Canadian households as increasingly cash-strapped and vulnerable to unexpected shocks or economic weakness. S0me standouts: The average insolvent debtor owed $60,678 in unsecured debt in 2024, an increase of 12.2% from 2023—the largest annual rise since the study began in 2011. […]
February 10, 2025 | Cooper: Canada is a Major Fentanyl Portal
Today we’re speaking with Canadian investigative journalist Sam Cooper, whose deeply researched book Wilful Blindness exposes Canada’s damning role in the opioid trade. This might explain why the Trump administration is going on the offensive with our northern neighbor. Sam’s research uncovers an intricate network where the inputs to make synthetic opioids like fentanyl move […]
February 7, 2025 | Big Leverage Magnifies Boom and Bust
Human life is full of unforeseen risks every day. Unexpected events are the norm, not the exception. There’s no such thing as certainty. Only daily choices and habits are within our control. But that gives the disciplined a big advantage over the masses, who tend to careen helplessly from one crisis to another. Contrary to […]
February 5, 2025 | Less Over-Valued Equities Do Not Equate to ‘Safe Haven’
Participating in a recent VRIC panel with my two favourite economists was fun, and I have included the video clip below. As the only money manager on the panel, I must add a caveat to David’s comments about the Canadian stock market being relatively cheaper than the U.S. That’s true, as I have noted many […]
February 4, 2025 | Canadian Insolvencies at 15-Year High and Rising
According to the latest Canadian Association of Insolvency and Restructuring Professionals, 2024 saw a 15-year high in Canadian business and consumer insolvencies—about 375 daily. The group expects pressure on companies and consumers to continue in 2025 amid threats from potential tariffs and mortgage renewals. See, Insolvencies in Canada rose 12.1% in 2024, led by business filings: […]
February 3, 2025 | Starting Points Matter Most of All
How long the Trump bump will continue in stock prices is everyone’s guess. Still, great expectations increase room for disappointment, and nothing matters more to long-term investment returns than the level of fundamental valuation at the starting point. Donald Trump comes back to office astride extreme confidence and the most highly valued stock market of […]
January 31, 2025 | Hunt: Global Capacity Under-Utilization Leading Unemployment Higher
Hoisington Management’s Fourth Quarter 2024 Review and Outlook is now available at this link. Always worth a mull. Here’s the main takeaway: “…fundamental determinants of inflation indicate the prospects for slower price increases are even more significant than in any year since the late 1990s. In addition to the growing factory capacity glut and rising UR […]
January 29, 2025 | Pent-up Listings Hope for Spring Demand
The Bank of Canada (BoC) cut interest rates by 25 bps this morning, bringing the overnight rate to 3%, 200 bps lower than when the central bank started easing in June 2024. Moreover, the BoC announced it would restart quantitative easing (Treasury buying) in March to reduce longer-term yields/interest rates and increase liquidity in the […]
January 28, 2025 | Insolvency Cycle Picking Up
‘Maximizing shareholder value’ has been about pumping up near-term valuations at the expense of long-term financial health and viability. Private equity is excellent at this. Kristina Partsinevelos joins CNBC’s ‘The Exchange’ to discuss the latest data on bankruptcies. Here is a direct video link. Households are increasingly struggling. The American consumer is showing some signs of […]
January 27, 2025 | American Tech Exceptionalism Under Review
The trouble with overconfidence and securities priced to perfection is that something always happens to upend the narrative. Underdogs often accomplish more for less; it’s a question of when, not if. Necessity has always been the mother of invention because constraints drive ingenuity. Anna Edwards, Guy Johnson, Kriti Gupta and Mark Cudmore break down today’s […]
January 23, 2025 | Loonie Dives to 22-Year Low
Canada’s loonie (CAD) traded at .6939 U.S. this morning, the lowest since January 2003. Part of the weakness comes from the Canadian overnight rate at 3.25%, which is expected to be cut to 3% on January 29, 133 basis points (bps) below the current U.S. effective funds rate at 4.33%. Foreign capital flows where it’s […]
January 22, 2025 | Trump Astride Most Over-Valued Stock Market
President Trump comes back to office amid one of the most over-valued stock markets of all time, even more inflated than at President Hoover’s inauguration months before the Black Tuesday crash of 1929. See WSJ: Make America Cheap Again. The CAPE is just one of a long list of historically prescient indicators ringing alarm bells. Of […]
January 21, 2025 | DoubleLine Round Table 2025
More moving parts than usual in 2025…For a few new ones, see Everything to Know about Trump’s Use of Executive Orders. The discussion below further elucidates. During the macroeconomic segment of Round Table Prime’s 2025 edition, participants, among other issues, deliberate the future path of inflation, premature Trump administration assumptions at the Federal Reserve, the hidden but […]
January 20, 2025 | Balance Sheet Recessions Take Years To Repair
The winds of change are blowing around the globe. 74 countries representing half of the world’s population held national elections last year. Many of them — including the US — saw a replacement of the ruling incumbent by the opposition, often one promising a more nationalistic agenda. With so many new leaders and their accompanying […]
January 16, 2025 | When will People Stop Moving to the Riskiest Areas?
For the last 50 years, Americans have flocked to the warm, sunny South. But, as climate change makes extreme heat, hurricanes, wildfire and flooding worse, will that trend ever STOP? Well, some regions might just be showing signs of a reversal, and they hold lessons for what other areas might expect as the world continues […]
January 15, 2025 | Rethinking Risk-Exposure
The Great Fire of London in 1666 prompted the creation of the first fire insurance companies, which later evolved into broader property insurance. Home insurance became more widespread in the 19th century, particularly in the United States and Europe, as urbanization and industrialization increased. The Hartford Fire Insurance Company began offering policies in the U.S. […]
January 14, 2025 | Surprise: Financial Conditions Tightening into 2025
While the U.S. Federal Reserve cut overnight rates by 125 basis points since November 2023 (below on the lower right), the U.S. 10-year Treasury yield has risen more than a percentage point, touching 4.8% for the first time since October 2023 (on the lower left) and April 2007 before that. Higher rates are the opposite […]
January 13, 2025 | How Canadian Prime Ministers Stepped Down Over The Years
History offers valuable perspective on human systems and cycles. Political leadership is easy to criticize and hard to do. Pendulums swing, and so it goes. Revisit decades past in Canadian politics as prime ministers came and went and oversight of the country changed hands. Here is a direct video link.
January 9, 2025 | Risk-Blind Bets Are All The Rage
Risk complacency is evident in exuberantly priced assets. Stocks do not provide contractually prescribed interest payments or a return of principal date. Some pay dividends, but these are always at the discretion of corporate management and can and should be cut when a company’s financial circumstances warrant it. When a company becomes insolvent, creditors and […]
January 8, 2025 | The Biggest Global Risks for 2025
Many moving parts are pulling in opposite directions. This discussion highlights some big ones. 2025 ushers in one of the most dangerous periods in world history — on par with the 1930s and early Cold War, says Ian Bremmer, president and founder of Eurasia Group and GZERO Media. Highlighting the top geopolitical risks for the […]
January 7, 2025 | Different Countries Similar Challenges
Canada’s unemployment rate rose to 6.9% in December, now up 210 basis points (bps) from the 4.8% low in June 2022 (below in blue). The U.S. unemployment rate, at 4.2%, has risen 80 bps since it bottomed in April 2023. There has never been a time when unemployment has increased this much outside of recessions.Moreover, […]
January 6, 2025 | Unaffordable Home Prices Weigh
Asset bubbles create unproductive debt and uneconomic pricing, which magnifies financial trauma as prices reverse. Most Canadians now live in cities where the average home price is five to twelve times the average household income (shown below, courtesy of WOWA.ca). The long-term ‘affordable’ norm was three times, max. This reality increases financial vulnerability for households, […]