Summertime Charts

August 5, 2023

Let’s review some charts.  First, a long term view of the Canadian Labour Force Participation Rate: As you can see, since peaking in 2003, the trend is down.  Let’s zoom in: As you can see, the trend is accelerating.  The Labour Force participation rate is now 65.6%, which is higher than the 60% level reached […]

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The End Draws Closer

July 29, 2023

Good title, eh?  The End Draws Closer.  The End of What?  What does “Closer” mean?  Are we a day away from whatever the end is?  Or five years? I don’t know. I get up early on Saturday mornings and write down my random thoughts. But let’s start with a chart, shall we?  This is the […]

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Proof that Inflation is Collapsing

July 22, 2023

Last week we discussed the inverted yield curve, which always precedes a recession.  When recessions happen, consumers have less income, so they spend less, which tends to drive down prices. I’m not saying that recessions cause prices to go down.  Correlation and causation are two different words. However, it makes intuitive sense that inflation will […]

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The Craziest Yield Curve Ever

July 15, 2023

As I said last week: What is a leading indicator?  What can predict the future? The Yield Curve Here’s what a normal yield curve looks like (from March 1, 2022). The curve is upward sloping to the right because as the time period increases, investors want a higher return. In a normal yield curve, like […]

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Massive Deflation Ahead?

July 8, 2023

The Fed and the Bank of Canada hint that they will continue to raise interest rates because inflation continues to trend higher than their 2% target. (Our current bout of inflation was caused by massive money printing in 2020 and 2021, so treating the disease of excessive fiscal policy with tightened monetary policy is stupid, […]

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Where are we at?

June 24, 2023

The S&P 500 closed on Friday at 4348, the same level it was at in July 2021.  Back then, real interest rates were negative 1.7%.  Today they are positive 1.85%.  How is that possible? How can interest rates be massively higher, and yet the stock market is trading at exactly the same level? The answer, of course, […]

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Oil

June 3, 2023

Let’s discuss a commodity we never discuss on this little blog: oil. Oil is down 13% since April 12, 2023, and down 43% since the peak in March of last year. Does the WTI chart look inflationary to you? After the spike, the price of oil is unchanged since the beginning of 2022.  That doesn’t […]

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Time Lag

May 27, 2023

I will keep this short, and only say two words: Time Lag. I believe we are in a recession. Unemployment will increase. Interest rates will fall. The markets will fall. But inevitable and imminent are two different words. It may not happen tomorrow, but it will happen. I’m increasing my cash allocation, and I’m waiting. […]

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The Summer Lull

May 20, 2023

And so it begins. Nothing. Sell in May and go away. We are in that weird time where we are obviously in a recession, but the Bank of Canada, and the Fed, continue to chirp about raising interest rates.  The betting odds for a 25 basis point increase in June is now a lot more […]

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The Bitcoin Collapse

May 13, 2023

Okay, that headline is a clickbait title.  Bitcoin has not collapsed.  However, as I write this early Saturday morning, May 13, 2023, Bitcoin is down 17% over the last 28 days, so if that’s not a collapse, it is certainly entering bear market territory.  But that’s what Bitcoin does every few weeks (or months). As […]

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