There’s trouble brewing in the Great White North.
Jared Dillian, former Lehman Brothers trader and noted financial writer, says that low oil prices have hurt the Canadian economy and the real estate market is near the peak of a massive bubble.
In a video interview with Mauldin Economics, Dillian notes he shorted the Canadian dollar almost three years ago, and has profited a great deal since then. He also says the structure of the Canadian mortgage market means that when the bubble bursts, it will look quite different than the sharp and sudden 2008 crisis in the US.
BY JACOB SHAPIRO : Two important reports were recently published on the current state of the Chinese economy. The first was the IMF’s annual review. It said the outlook for China’s near-term growth had improved. But, it pointed out that corporate debt is rising. Also, capital outflows for 2016 will equal 2015’s at $1 trillion.
The second report was China’s monthly release of investment data. This showed that fixed asset investment growth in China slowed to 8.1% in July. According to Caixin, that’s the slowest year-to-date fixed asset investment growth in 16 years.
FRA Co-founder Gordon T. Long discusses with John Rubino
“Governments are acting like they don’t think they can handle a garden variety equities bear market anymore.”
You’re seeing central banks all of a sudden become among the biggest buyers of equities in the world. It’s one thing to buy bonds and intervene in the interest rate markets, but another to buy equity. This is governments buying the industrial capacity of the world and from an Austrian Economics point of view, this is catastrophically dangerous.
The Pakistani housing market is booming and to a lesser degree is India’s, in fact many areas of Pakistan are in the grip of a mania driven by the same forces that are driving the likes of the UK housing market into stratosphere, drivers such as the population explosion, government rampant money printing, all of which have driven what were deemed as being valueless properties as compared to those in the west a decade ago to levels that rival properties across most UK cities even when valued in sterling, dollars or euro’s!
Yellen seems to me to be mastering the art of saying things so that everyone can come away hearing what they wanted to hear.
For those concerned about the Fed leaving interest rates too low for too long, she adopted a hawkish view on the economy, particularly when it comes to the payrolls. For those thinking that any Fed rate hike would send the Dollar soaring, pressuring Emerging Markets as well as equity markets both here domestically and elsewhere, she sounded the theme of interest rates remaining low for a long time. Thus, if the Fed were to hike sooner rather than later, no need to worry because it would not signal the beginning of a rapid series of rate hikes.
The most critical element of the BREXIT is that it is THE closing bell being rung on the period of Centralization from 2009 to today.
What do I meant by Centralization? I am referring to the era of Central Planning of the global economy by Central Banks.
In the US, we’ve seen the Federal Government/ Federal Reserve become involved in virtually every major industry in the economy including insurance, healthcare, housing/mortgages, banking, financial services, and even energy.
The equity markets are bouncing along support on the lower bound as they wait to hear what Chairman Yellen has to say about the Fed’s perspective tomorrow and what else is said over the next few days at Jackson Hole.
As for gold and silver, they went down in honor of the option expiration on the Comex for the most part this week, and today is just the anti-climax.
Traders claim to be ‘confused’ about what the Fed is up to. So for their benefit and yours, here is a brief cheatsheet.
Donald Trump, who is commanding all of 1 percent of Black voters, according to an impartial Quinnipiac poll, says he could get as much as 95 percent of the Black vote in a second term. In June 2011, he had said, “I’ve always had a great relationship with the blacks.” It’s nothing less than political hyperbole in a campaign for a first term, and meant to get a few thousand more votes in key states. However, Trump’s past actions don’t mitigate whatever future plans he has.
The whole spectrum of the public sector from the Police, to the NHS, to education is not governed by the pursuit of excellence for all recipients so as to maximise competitive advantage and increase market share but instead operates under the fundamental principles of delivering that which is free at the point of delivery. In which respect whether someone gets good or bad service is dependant upon the public servants own prejudices, usually dictated by stereotyping, the mass media and what’s said in the gossip columns or on social media.
Investors worldwide have been on pins and needles in eager anticipation of a speech from our economic overlords. Friday morning FED chair Yellen finally opened her mouth and said a whole lot of nothing.
Markets didn’t know exactly how to react to her nothingness. Stocks were up and then down. Gold was down and then up. The USD index plunged and then rallied nearly 1%. Will the FED raise rates in 2016 or not? The drama continues as Yellen of Oz pulls the levers behind the curtain.
The market started the week at SPX 2184. After a decline to SPX 2176 on Monday the market rallied to 2193. A pullback followed to SPX 2170 on Thursday, then a gap up opening on Friday, rally to 2188, selloff to 2160, then ended the week at 2169. For the week the SPX/DOW lost 0.75%, and the NDX/NAZ lost 0.40%. Economic reports for the week were mixed. On the downtick: existing home sales, Q2 GDP, consumer sentiment, and the Q3 GDP estimate. On the uptick: new home sales, the FHFA, durable goods orders, plus weekly jobless claims improved. Next week’s reports will be highlighted by monthly payrolls, ISM and the PCE. Best to your week!
The market had spent weeks ahead of the Jackson Hole, Wyoming speech by fed Yellen before making any type of move that included some volatility and a try higher with some force. The thinking was different depending on who you asked. Some thought she’d simply say nothing other than the usual, which was she’ll raise when it’s appropriate meaning she’s looking at the data that comes in from report to report. Others thought she’d definitely talk about raising rates in September. That she’d give a definitive date and then we’d see how the market responds. She played the middle ground. She’s very good at being vague. She said that employment is full, and that things are better and that rate hike is coming. We already know one is coming Ms. Yellen. But when? She didn’t say. Same old. She’ll see. When she feels like it she will.
Secular stagnation is said to be present when economic growth is negligible or nonexistent over a considerable span of time. Today, secular stagnation has become a popular mantra of the chattering classes, particularly in the United States. The idea is not new, however.
Alvin Hansen, an early and prominent Keynesian economist at Harvard University, popularized the notion of secular stagnation in the 1930s. In his presidential address to the American Economic Association in 1938, he asserted that the U.S. was a mature economy that was stuck in a rut. Hansen reasoned that technological innovations had come to an end; that the great American frontier (read: natural resources) was closed; and that population growth was stagnating. So, according to Hansen, investment opportunities would be scarce, and there would be nothing ahead except secular economic stagnation. The only way out was more government spending. It would be used to boost investment via public works projects. For Hansen and the Keynesians of that era, stagnation was a symptom of market failure, and the antidote was government largesse.
Technical analyst Clive Maund reflects on how Federal Reserve statements may affect markets, and explains why he thinks the precious metals markets are due for a correction.
Last week we projected 5% to 10% downside in the gold stocks. Well, not to butter my own bread but GDX and GDXJ both lost 9% on the week. That being said, I believed that the weakness would be limited and miners could rebound to new highs in September. While that possibility remains, there is a chance this correction could go a bit deeper and perhaps last longer.
Over the last few years, so-called "crypto-currencies" – digital equivalents of a monetary exchange unit, have been all the rage. The most well-known in the category, Bitcoin, has had quite a run.
Starting out as a "virtual penny stock" it rose in 2014 to the elevated height of $1,150, before crashing back to earth. This "electronic currency" is created and stored in a computerized "wallet." Purchases and sales are made via a "blockchain" which keeps a memory of every transaction conducted. Private keys (supposedly) provide assurance that a Bitcoin holder’s account is safe.
With every passing year since 2008, support for the idea of free markets and open competition without constant intervention by central banks has been declining. The idea of trust your central banker to always “assist” the markets has lead the public at large into the false illusion that stocks can always be engineered to return to all time highs in the US, even if just reaching these levels recently.
In an election cycle that has scored the lowest in human decency, civilized behavior and speech; a cycle characterized by hate, viciousness, competing scandals, voluminous unproven allegations, scapegoats, fear-mongering, incitements to violence, death threats, and general moral decline bordering on decadence, I advise no child be exposed to any of it – none!
The junior gold miners and explorers have soared dramatically in an amazing year, before falling hard this week. This sharp correction is doing its job in rebalancing bull-market sentiment, crushing greed and leaving traders wary of this sector. But gold juniors’ recently-released second-quarter financial and operational results prove their fundamentals are strengthening dramatically, a very bullish omen for stock prices.
The junior gold stocks are rightfully considered the Wild West of the gold sector. Most of the hundreds and hundreds of these small companies won’t prove successful. They won’t be able to secure funding to explore sufficiently, won’t be fortunate enough to find an economic deposit of gold to mine, or won’t be able to make the herculean leap from explorer to miner. The odds are stacked heavily against the gold juniors.
The trading week was starting to look as though it was going to end without any excitement. Wow, did that ever change on Friday!
On Wednesday Aug 24th, the stock market sold off to a level which I consider to be an extreme oversold condition for the week. While I do have several criteria as to why and how I come to the conclusion, the chart and indicator below show me when the market is oversold and ready for a bounce.