Category: Uncategorized

  • What drives equity bear markets?

    Word on the street Atlanta Fed President Raphael Bostic to the Atlanta Rotary Club today: On Fed policy: “We are just going to have to hold our resolve.” Asked by the moderator how long he saw rates above 5%, Bostic said: “Three words: a long time.”  Here’s the full speech: The link between earnings and […]

  • Toronto Housing Bubble Pushing Economy Over the Edge

    Toronto is #1! Usually that’s a good thing. In this case, it’s not. According to the UBS Global Real Estate Bubble Index, Toronto is the most overvalued real estate market in the world. Toronto is a nice city, but it’s totally disconnected from reality. Increasingly, the only way people can afford to buy a house […]

  • Another blow to the US housing market

    Quick take from me, as I’ve been thoroughly exhausted the past couple days… 1: Another blow to the US housing market, 30 year fixed mortgage rates are quickly approaching 7%. Affordability is getting wrecked and new buyers are likely to remain on the sidelines. Many renters will keep renting and young adults will remain living with […]

  • Fed driving full speed towards a cliff

    Jay Powell is pushing the economy to recession. He has made it clear that inflation is his number 1 priority and yesterday he stated that “inflation has not really come down”. Today, the market is still digesting the news and strategists are revising their forecasts. The fact that Powell publicly stated he believes the Fed hasn’t made […]

  • 5 Reasons I Could Never be a Landlord

    Many people have built wealth with real estate. Not me. I get it. The idea of buying a property, holding it for many years while it appreciates and spits out monthly cashflow is appealing. Over the long run, real estate has been a great investment. Particularly unique to real estate is the ability to get […]

  • Try Being a Bull

    “We’re seeing that volume decline in every segment around the world.” — FedEx CEO Raj Subramaniam I’m a glass half empty kind of person. I’ve seen so many blow-ups that I’m always on the lookout for the next one. I recognize my mindset, so I fight hard to find reasons for optimism. This mental tug […]

  • Demand Must Be Destroyed

    There is a narrative out there that when prices are high, we can happily resolve the issue by producing more. After all, inflation occurs when too much money is chasing too few goods. So increasing supply is an intuitive solution. But it’s largely incorrect. The premise ignores the cost of increasing supply. Unless unutilized capacity is already […]

  • Is the Fed fighting last year’s battle?

    Retail inventories are piling up. Many commodity prices are declining. There are signs the economy is slowing. These are all indications of potential future deflation. Yet, central banks are tightening aggressively. On July 13th the Bank of Canada increased rates by 100 basis points. Markets are now assigning a 31% probability the Fed hikes by […]

  • Beware of the Sucker’s Rally

    Stocks can experience face-ripping rallies during major bear markets. For example, in real terms the S&P 500 rallied 43% and 42% during the 1970s secular bear market. Similar rallies occurred during the Global Financial Crisis, Tech Collapse and Great Depression. These massive bear market rallies don’t always happen, but when they do they are like […]