ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
June 6, 2024 | Eyes Wide Open as Bank of Canada Blinks
Yesterday, the Bank of Canada (BOC) blinked on inflation fears and responded to weak growth and rising unemployment with the first rate cut in four years and the first since the epic tightening cycle began 27 months ago in March 2022. Markets are pricing in another 50 bps of BOC rate cuts by year-end. Canada […]
June 6, 2024 | Bank of Canada Cuts by 25 basis points, to 4.75% as Economy and Inflation Slowed. QT Continues
“With continued evidence that underlying inflation is easing,” the Bank of Canada said today that “monetary policy no longer needs to be as restrictive,” and it cut policy interest rates by 25 basis points, as widely expected. But QT will continue, the statement said. The BOC has already shed 64% of the securities it had […]
June 6, 2024 | What Would Josey Wales Do?
“Now remember, when things look bad and it looks like you’re not gonna make it, then you gotta get mean. I mean plumb, mad-dog mean. ‘Cause if you lose your head and you give up then you neither live nor win. That’s just the way it is.” – Josey Wales “To hell with them fellas. […]
June 5, 2024 | The Economic Decline of Europe With Rising Interest Rates?
I have returned from a two-week tour of Europe covering the UK, Germany, and Italy. Europe is in dire straights. I have stay on the Via Veneto since my parents took me there back in 1964/65. It was the 5thy Abenues of Rome. The street was lined with sidewalk cafes out of probably 30, […]
June 5, 2024 | WTI Crude Plunges Over US$4/B To US$73.10/B As OPEC Plans To Open The Spigots in Q4/24
OPEC’s announcement to gradually phase out the 2.2 Mb/d of quota cuts (starting October 1st) was not received well by the markets. In the details an agreement to give the UAE a 300 Kb/d addition to their quota, and continued cheating by Iraq and Nigeria resulted in a knockout blow to crude prices over the […]
June 5, 2024 | AI Mania Has Hyped Costs and Stock Prices
The costs of running generative AI are mind-blowing considering energy, training, and materials, while the revenue case is still largely missing. In just one example, Silicon Valley venture capital firm Sequoia estimates that in 2023, the tech industry spent $50 billion on chips from Nvidia to train AI but generated only $3 billion in revenue. […]
June 4, 2024 | Easing Begins as Unemployment Rises
We’ve long noted that their actions tend to be contagious once central banks start easing rates in response to disinflation and weakening global demand. This week, the Bank of Canada (BOC) and European Central Bank are expected to follow the Swiss and Swedish central banks in announcing the first 25 basis point (bps) cut since […]
June 4, 2024 | The Major Fractal Wave of the Economic Confidence Model & 2032.95
Here is the Economic Confidence Model at the very high end to all the questions about how high up the fractal structure can be defined. We are in the grand Public Wave overall that peaks in 2032.85. This is the equivalent of the wave that picked the Peak of Rome in 175 AD. So here, […]
June 3, 2024 | Art of the Collapse, June 2024
Looks like the Aristocracy has finally stopped pretending to be the good guys. George Washington is not impressed: ‘250 Years Wasn’t A Bad Run,’ Says George Washington Looking On From Heaven Babylon Bee — Watching as the last vestige of the nation he helped found crumbled, George Washington sighed and remarked that America still had […]
June 3, 2024 | No Panacea
Happy Monday morning! Housing affordability, or lack thereof, is all the rage these days. Politicians from every colour of the political rainbow are rallying around restoring some semblance of price stability, or so they say. They’ve been working hard lately, through mass rezoning, tax breaks on new rental construction, and even housing catalogues. In fact, […]
June 3, 2024 | EPB Macro: Recession Signal Still Flashing
Eric Basmajian of EPB Macro offers valuable business cycle insight, and his latest educational video is worth watching. Eric warns that ” a lapse in patience is often a fatal flaw in using a business cycle process.” No truer words… In this video, we look into sequential signals of Business Cycle Recessions. Here is a direct video link.
June 3, 2024 | Do You Know How to Trade a Panic?
Knowing how to trade amid a panic is one of the most important skills a trader can master, and those who have done it correctly have profited in recent years. This is where the greatest amount of money is both won and lost. Few traders over the decades have really mastered this fine art. It […]
June 2, 2024 | Inflationary Perceptions
A quandary of writing a weekly letter is I notice myself saying the same things repeatedly. Something comes to mind as I write, I start to include it, and then I vaguely remember, “Wait, didn’t I say that last month/quarter/year?” I check and sure enough, it’s right there. Should I say it again? There’s no […]
June 2, 2024 | Market’s Insanity Is Tightly Scripted
Speaking of my fellow gurus, our switchboards have lit up to warn that something big is looming. Even the oddballs who think stocks are headed much higher seem to agree that a punitive correction is long overdue. And although each of us would like to believe that the arrival time of whatever dreadnought is coming […]
June 2, 2024 | World War III by 1st Week of September 2024?
Macron faces a serious collapse in confidence among the French and he too desperately needs to create war. He is pushing NATO to send in troops. They already have “advisers” there and Russia knows that the Brits are in Ukraine firing the missiles for Ukrainians are not competent. Likewise, Ukraine is incapable of sinking Russian […]
June 1, 2024 | Trading Desk Notes For June 1, 2024
Let the cuts begin The Bank of Canada may announce a 25bps cut (from 5.25%) on Wednesday (markets are pricing a 75% chance), and the ECB is expected to announce a 25bps cut (from 4.50%) on Thursday. The Fed is not likely to cut rates at its June 12 meeting. The net speculative short positioning in Canadian dollar futures is […]
June 1, 2024 | The Impact of the Trump Verdict on our AI Computer – The Fall of the US in 8.6 years.
Juan Manuel Merchan is a Colombian-born American judge and former prosecutor. Most curious, he is NOT a formal judge, he is ONLY an acting justice of the New York State Supreme Court in New York County. How did a former prosecutor who is NOT a formal judge get assigned this case? This is not just […]
June 1, 2024 | Tech Talk for Saturday June 1st 2024
The Bottom Line North American equity markets responded favourably to the April core PCE Price Index report released on Friday. Consensus was an increase of 0.3% versus a gain of 0.3% in March. Actual was an increase of 0.2%. On a year-over-year basis, the Index gained 2.8%, in line with consensus. This Index is the […]
May 31, 2024 | Deflation v Inflation v Stagflation – Misconceptions Clarified
Some people have a very hard time understanding that we are in a massive deflationary spiral; they think that rising prices simply means it is inflation and not deflation. Then they mistake stagflation for deflation and wonder why people are spending more on less. They only see prices, not disposable income, and certainly not economic […]
May 31, 2024 | German Property Price Crash Will Not Become a Crisis
Germany property prices are plummeting. Prices for commercial properties and multi-family buildings are dropping with insolvencies and foreclosures soaring. Even house prices are falling. The housing market in Germany is very different from the U.S., Canada and Australia, particularly in the terms and amount of financing available to buy a house for a first-time buyer. […]
May 31, 2024 | Japan Death Spiral Update: Now Inflation Is Spiking
Pretend you’re running a central bank and your primary job is to maintain a stable currency. Then assume that your long-term interest rates are around 1% and an important inflation measure is spiking to near 3%. What do you do? Normally, you’d raise interest rates to one or two percentage points above the rate of […]
May 30, 2024 | Total US Inventories Grew By 13.2 MB Last Week. Crude Prices Under Pressure
Bearish commentary from the Fed meeting notes and repetitive comments by Fed officials that they see no reason to lower interest rates in the near term has spooked markets. There have even been some officials saying that higher rates may be needed if inflation persists or goes higher. This is a big change from prior […]
May 30, 2024 | The Silver Secret
Two of the oldest commodities known to man, gold and silver, share a history dating back thousands of years. The role of gold has changed little through the passage of time. The same cannot be said for silver. In fact, it is the remarkable transformation in the usage of silver that has set the stage […]
May 30, 2024 | Running Bulls Need No Thinking
For a year now, overnight interest rates have been above 5% in Canada and America, while the Consumer Price Index (CPI) has been falling. This has resulted in the highest real interest rates (overnight rate – CPI) in at least 23 years. While very hard on debtors, it’s favourable for savers and it’s long overdue. […]
May 30, 2024 | “Peer Reviews” And The Shrinking Trust Horizon
It’s now widely understood that science faces a “replication crisis” where attempts to re-do experiments frequently fail to yield the same results. In other words, a lot of cheating and/or incompetence is showing up in peer-reviewed journals these days, making it impossible for, say, doctors to know how to treat their patients or the rest […]