July 22, 2024 | US Recession in Motion?

The US Conference Board of Leading Economic Indicators (LEI Index) declined for a 30th month in June (purple line below since 1959, courtesy of Advisor Perspectives) and is now -14.2% from the cycle peak in December 2021. As shown, since 1959, an LEI contraction of this magnitude has never happened outside of an officially declared recession […]

July 22, 2024 | Cutting Time

Happy Monday Morning! Headline CPI inflation decelerated in June to 2.7% year-on-year, slightly cooler than expected. The average of the Bank of Canada’s preferred core inflation measures also held steady at 2.8%. Some people would argue the job is not done, inflation must be returned to 2% and not a basis point higher, the same […]

July 21, 2024 | Tax Code Change for Emergency Retirement Withdrawals

Low-income Americans are in such dire straits due to the elevated cost of living that lawmakers are making changes to the tax code. No, naturally, the politicians are not voting to decrease taxes for those who can barely get by. Instead, they’re permitting Americans to pull a mere $1,000 out of their retirement accounts without […]

July 21, 2024 | Going, Not Gone

The ability to choose our goods and services is fundamental to economics. The freer we are to make choices, the more the economy should prosper. That’s because our choices tell producers what works. Modern science muddies this pleasantly clear water. Behavioral economists talk about a phenomenon called “decision fatigue.” It turns out we humans would […]

July 21, 2024 | Big Selloff Was Tightly Scripted

Bears shouldn’t get their hopes too high just because the S&P 500 plummeted for three straight days last week. The selloff seemed tightly scripted, given that the Dow Industrials were rising just as sharply at least part of that time. This is shown in the chart above, which captures price action on Thursday. The implication […]

July 20, 2024 | Trading Desk Notes For July 20, 2024

Risk assets had a key turn date When several markets reverse course on or around the same date, I define that as a Key Turn Date (KTD). It signals a (profound) change in market sentiment/psychology/positioning.   My favourite barometer of risk sentiment is the S&P 500 Index. S&P futures (and the cash market) closed at a record […]

July 20, 2024 | One of Reagan’s Best Jokes

July 20, 2024 | Tech Talk for Saturday July 20th 2024

The Bottom Line North American equity markets experienced substantial rotation last week: Out of the technology sector and into other economic sensitive sectors such as Transportation, Banks and Biotech. Second quarter results released to date have been significantly higher than consensus.  According to www.FactSet.com 80% of reporting S&P 500 companies have released a positive earnings […]

July 19, 2024 | CNN’s Report 3 Guns Fired

We have these reports that the sound implied that there were three separate guns fired, and thus, there had to be a second shooter. I think if there were a second shooter, Trump would be dead. I tend to think they stood down, let it happen, and hoped for the best. The same routine in 911 […]

July 19, 2024 | Electricity Produced by Renewable Power Dramatically Lowers Energy Waste

Electricity generated by renewable power reduces energy waste significantly and, therefore, global power needs. This critical fact is key to understanding the energy evolution unfolding. Fossil fuels still supply 80% of our energy. And people point to this number to say it’s impossible to switch to renewables, especially if we want to do it quick […]

July 19, 2024 | Charles Hugh Smith: A Repeat of the 1970s Will Change a Lot of Things

Many people recognize the similarities between today’s world and that of the 1970s. But few understand the potential chaos that implies for a system this overleveraged. Charles Hugh Smith just posted an article that explains the impact on investors. Here’s an excerpt: Twisters on the Horizon: Is This Decade a Re-Make of ‘That 70s Show’? If […]

July 19, 2024 | The Fed will Cut Rates Too Late in This Cycle

Anticipation ahead of the U.S. Federal Reserve’s first rate cut is growing. Traders are betting on a first quarter-point cut at the meeting on September 17-18 as the most likely date, with more cuts to come later this year in November and December. But traders are wrong in thinking that rate cuts are good for […]

July 18, 2024 | Loan Defaults Confirm Faltering Consumers

In the second quarter of 2024, loan loss provisions at the six largest US banks increased the most since 2020 and car repossessions in June (drivers over 60 days late on payments) rose 23% year over year and were +14% compared to the pre-pandemic first half of 2019. See Car Repossessions Surge 23% as Americans Fall […]

July 18, 2024 | Home Buyers Still on Strike even as Mortgage Rates Drop to Lowest since March. But Refis Jump to Highest since Aug 2022

The average conforming 30-year fixed mortgage rate during the latest reporting week dropped to 6.87%, the lowest since mid-March, according to the Mortgage Bankers Association today. Not so ironically, two things happened, as the MBA also reported today: Applications for mortgages to purchase a home fell to the lowest point since early June, as potential […]

July 17, 2024 | Neocons Usurping American Foreign Policy & Assassinations for Regime Change

  I can tell you that when Regan was elected, the Republicans were beside themselves. When I asked: What’s the problem? They said: “You don’t understand!” They explained that they would have to “train” him because he was a “governor” and not one of them from the swamp. The Neocons tried their best to prevent […]

July 17, 2024 | US Total Stocks Rose 11.1 MB Last Week -This Should Put Pressure on Crude Prices

The Republican National Convention is on this week and all of Trump’s former Presidential opponents are singing kumbaya and circling the wagons to get a fully united party to win the Presidency, the Senate and a large majority in the House. His surviving an assassination attempt last week has added to his messianic support. A […]

July 17, 2024 | Nomi Prins: Why Nuclear Power Is Back In Vogue

Best-selling financial writer and former investment banker Nomi Prins just posted a primer on nuclear power (and, by implication, the uranium mining stocks). Here’s an excerpt: The New Gold Rush: Unlock Uranium’s Soaring Demand Nuclear energy is the “Switzerland” of energy sources. It is increasingly popular with both sides of the political spectrum for several reasons. First, nuclear energy is […]

July 16, 2024 | “They” Will Do Anything To Win

“We’ll know our disinformation program is complete when everything the American public believes is false.”  – William J. Casey, CIA Director (1981) The always mysterious question when trying to figure out what is happening in this insane world and why it is happening is who are “they”? In the current chaotic atmosphere, “they” are in […]

July 16, 2024 | Beware the “Relative Value” Trap

Over the past 32 months, economically sensitive small and medium-cap stock indices have underperformed the largest-cap tech-heavy indices (price x shares outstanding) to a degree not seen since the last tech bubble in 1998 through March of 2000. Indeed, global fund flows (shown below since July 2023, courtesy of The Daily Shot) have concentrated in […]

July 16, 2024 | KIM Questions the Assassination Attempt – It Does Not Add Up

    

July 15, 2024 | Struggling Consumers are a Tough Slog

Consumer spending drives just under 60% of Canadian GDP growth and consumer spending fell across all categories in June–discretionary and essential (shown below courtesy of RBC). Warm weather and declining interest rates did not entice spending as hoped. Overall, second-quarter retail sales were negative. Fewer Canadians have renovated their homes amid a sluggish housing sector, while […]

July 15, 2024 | The Speculator as Hero

Happy Monday Morning! We’re now in the dog days of Summer, a historically slow time for housing markets that is being compounded by weaker economic activity. The unemployment rate in Canada is up 1.6 percentage points from the lows, which is already a larger increase off the lows than in several recessions over the past […]

July 15, 2024 | Assassinations & Markets – Divided We Stand

  The attempted assassination of former President Donald Trump is reverberating around the world, to say the least. Domestically, it depends if you are a Democrat or a Republican. Each camp naturally views the event through their personal view of the world, which is basically unchangeable. If aliens landed from another planet and started wiping […]

July 15, 2024 | How a Country Goes Bankrupt, In 10 Steps

Japan appears to have entered the inevitable fiat currency death spiral, where interest rates (and interest costs) rise while the currency falls. Fix one problem and the other gets worse, until the system breaks. Here, from March 2023, is a longer explanation:   How a Country Goes Bankrupt, In 10 Steps   The past few […]