By Guest Blogger Ryan Lewenza
First the important stuff. I have to give a shout out to our Raptors, the 2019 NBA champions! Being a long-time fan and a proud Torontonian, I couldn’t be happier for our team who played their butts off and showed incredible grit, determination and team work. We can all learn something from that team and their season. Now let’s re-sign Kawhi and go back-to-back next year, when we’re all collectively chanting “let’s go Raptors!”
Ok, now on to nerdy market stuff.
Since the beginning of the year we’ve seen a peculiar and unsettling trend of both stock and bond prices moving up together. As seen below the S&P 500 has rallied roughly 15% while the US Government 10-year bond yield has declined from 2.9% to 2.1% (bond prices move inversely to yields) or over 25%.
Normally you see bond prices declining as stocks rise since the economy is generally strong causing the Fed and other central banks to hike interest rates. This time it’s different with both moving up together resulting in conflicting messages from the stock and bond markets. Stocks are suggesting more growth while bonds are signaling a slowdown/recession. Which one will prevail?
Stocks and Bonds Are Rallying. Who’s Right?
Source: Bloomberg, Turner Investments
Why are bond yields declining?
I believe it’s largely due to two factors – recent weaker US/global economic activity and Trump’s ongoing trade war with China.
Look at the chart below. I overlaid the ISM manufacturing index – a great leading indicator of manufacturing activity in the US – with the US 10-year yield. Note the strong correlation and recent declines in both. This chart illustrates that the decline in bond yields is being driven by softer economic data. The key question is what is driving this (Trump’s trade war or just a natural slowdown in the economy) and what will the Fed do in response to this economic soft patch?
Bond Yields Are Down On Slowing Economic Growth
Source: Bloomberg, Turner Investments
Will the Fed cut rates?
What a 180 degree turn from late last year when the Fed was signaling that they would continue to tighten monetary policy and hike rates further. Many economists were calling for 2-3 rates hikes this year (I was on record saying one and done for this year) and now the market is pricing in 2-3 rate cuts. Currently Fed Funds futures are implying an 84% probability of a cut at its July meeting.
Either the economy has slowed more than the Fed expected or Trump’s ongoing threats to Fed Chairman Powell are having the desired effect leading the Fed to backpedal faster than the NBA sportscasters who said the Raptors had no chance against the Bucks and Golden State!
I believe the pendulum has swung way too far to the bearish side. The fact remains that the US/global economy is still in decent shape. For example, the US unemployment rate stands at a 60 year low. If that doesn’t suggest a strong economy then I don’t know what does?
I see economic data stabilizing and bond yields starting to move back up as investors realize they overshot and the economy is not going to hell and a hand basket. Plus I continue to believe a US/China trade deal could be hashed out as it’s in everyone’s best interest and Trump will want a big win ahead of the 2020 election.
Given this I see the Fed cutting at most once this year and it’s more of an insurance policy rather than a signal of a more protracted downturn.
Fed is Expected to Cut Rates at July Meeting
Source: Bloomberg, Turner Investments
What does this mean for the stock market?
To me both scenarios are bullish for the stock market. Either I’m correct on the economy and it stabilizes, which would be bullish for corporate profits and the equity markets overall. Or I’m under-appreciating the slowdown in the economy and impact of Trump’s escalating trade wars, in which case, the Fed will cut rates more than I expect thus are adding more stimulus and support to the stock market.
We used to talk about a Greenspan or Bernanke Put on the markets (they would cut rates to support the stock market). Now it looks like we have the Powell put! And the one thing I’ve learned about the markets and investing, it generally does not pay to bet against the Fed. So just like we said earlier this year, block out the noise and position portfolios for more upside, but do so with more defensive investments like high-quality dividend payers and healthcare stocks just in case I’m wrong. It does happen from time to time.
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.
71 comments ↓
“position yourself with high quslity dividend payers and health care stocks”.
this signals a shift to stock picking. I guess I win…. ‘ nuff said.
Next we have to discuss the choice of which high quality dividend players and why ‘healthcare stocks?’
For me I view Healthcare as bluesky plays, eternally optimistic, dead money without appreciation, like water….a demographic play. There are far better issues to in, much more profitable .
I’ve always believed the guy that guesses right is the expert! Who knows what lies just around the corner.
Stay balanced and invest in the long term. More importantly, understand what your are investing in.
How much can bond yields rise in Canada? I think not much, maybe 25 to 30 basis points by December-2019. The 5, 10 and 30 year at 1.50% to 1.6%, 1.7% to 1.75%, 2.0% to 2.05%.
Thanks Ryan, for an honest post.
No one really knows what’s going on.
Only hindsight will tell us, but then it’s too late.
A couple of things:
I watched the NBA finals and was struck by how childishly the fans acted (with “Drake the clown” [GT’s moniker] as head cheerleader. Also, when it comes to professional sports, e.g. hockey, it’s “their French-Canadians, Swedes and Eastern Europeans against our French-Canadians, Swedes and Eastern Europeans” (I know it’s a generalization) and so loyalty to any one team is largely artifice. Admittedly, it was still very entertaining.
When it comes to the bond/equity markets it’s a wonderful thing (and perhaps the only way it can truly operate with something approaching equanimity) that it’s not specifically predictable. What the rest of the year, the rest of the orange-haired wonder’s tenure brings, or the prospects for the next decade brings is happily largely unpredictable, thus making a B&D portfolio all the more prudent.
Also, it’s “hell in a hand basket” not “hell and a hand basket” – two rather different images.
If the economy is so strong why does it crater at the suggestion of a .25% rate hike?
The chart for International Global Freight is way down, and could have been added. For the 60 year low for unemployment in USA, are you using the Official figures or the Real figures?
#135 dharma bum on 06.22.19 at 10:06 am
#127 Boulder
When the labor is taxed for 100% of his share, why not the investor ?
Risk. – Garth
——————————————————————-
Also known as balls.
Risk (aka, investors with balls) provides the opportunity for those with none to sell their labor.
—
This is a bit more nuanced.
Investors take risk and in this they often need to purchase various materials, resources, including human labor, because they simply can not create the desired value and profit all by themselves.
For a while to fill human labour needs, the most cost effective way was to purchase slaves. It was hardly an “opportunity” for the people who contributed the human labour for the economic enterprize to exist, let alone work. No amount of “ball” would create anything without hands.
Buying selling human labour today is a mutually beneficial economic co-oparation.
Labelling it as “opportunity provider” exclusively by one side is more of a politically tool to claim various tax benefits, incentives than economic reality.
Terry Wilson “How much can bond yields rise in Canada? I think not much, maybe 25 to 30 basis points by December-2019”
Yeah I would agree with that. I think they could rise 25 to 50 bps over the next 12 months. Not a huge move but I think they rebound from here. – Ryan L
What will happen to the price of Canadian oil is there is war in Iran? Will Alberta start booming again?
I find that every Central Bank that has been painfully raising interest rates from nothing to a little over nothing and now talking about almost immediately cutting them back to nothing again, much akin to a bunch of children daring one another to put their hand over that flame for a quick second or to jump into that cold water and then jump back out. “You see I did it, now can I go back to my safe place?”
Sideliners and savers screwed once again
A Dollar is a Dollar?
#127 Boulder
When the labor is taxed for 100% of his share, why not the investor ?
Risk. – Garth
*********************************
And it has nothing to do with the fact that the people who make and influence the rules tend to make more of their money from investing versus their labour?
You obviously have never reviewed the CVs of MPs. Few investors in that chamber. – Garth
US stocks TO THE MOON!!
Dave “What will happen to the price of Canadian oil is there is war in Iran? Will Alberta start booming again?”
Price of oil will go up. But it would be a short term price spike so not enough to turnaround AB economy. For that we sustained higher prices and more supportive government policies. – Ryan L
Who Pays the Income Tax of big Corporations?
Dividend tax credit exists to eliminate double taxation whereby the investor has arguably already paid some share of the corporate tax before getting the dividend. The dividend could have been larger in the absence of corporate taxes.
But who really pays the corporate tax?
1. Customers, because all competitors raise their prices to offset corporate tax?
2. Investors because prices are what the market will bear and the tax comes out pf pre-tax profits?
I really don’t know. I would have through the answer was 1 in a competitive industry. But if firms are not competing on price the answer might be 2.
In today’s world most companies may be competing much more based on products and service and everything but price. Competing on price is death unless you are a low-cost producer.
Everything goes up as there is expectation of rate cuts.. so current bonds become more expensive.. and stocks rally on expectation of monetary easing.
If economy was strong, interest rates would have been 6 – 8 %, even more.
Hiding anyplace possible from the crappy currency, everything else, even bitcoin looks good when compared to it.
The long-term Fed average is 3%. Did you just pull “6-8%” out of your butt? – Garth
@#10 dave
“What will happen to the price of Canadian oil is there is war in Iran? Will Alberta start booming again?”
+++++
nah.
If there’s war in Iran.
Iran will start “booming”…..
The long-term Fed average is 3%. Did you just pull “6-8%” out of your butt? – Garth
Remove central banks and see what the market interest rates are.
Care for a tissue? – Garth
Who Makes and Who Influences the Tax Rules
You obviously have never reviewed the CVs of MPs. Few investors in that chamber. – Garth
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Obviously indeed. But some parties are known to accept some fairly big political contributions and might be influenced by investors? Not every (like virtually none?) MP has the independence you displayed.
Bring on a Royal Commission on taxation to take a look.
Naively cynical. – Garth
All I know inflation wise is that a fund I contribute to in Australia, that is supposed to match inflation via the Consumer Price Index, just went up 4.8% mid year to mid year.
I thought Melbourne was only 17 hours ahead, not six months.
The future is expensive…
M45BC
Sorry to keep flogging an empty 5 cent beer can, but perhaps one more note on the Boom Beer I featured yesterday.
As I dropped a few Hop Pops I noticed this written on the side of the can…
“Boomtown(noun): Explosion of population due to a rapidly rising economy.
Boomtown Beer:Explosion of taste that is economically desirable”
Also up top, ” The Boom Is In The Beer.”
So we have a Beer named Boom talking about the economy, with what I see as a bowler hat, which I would associate with a classy guy.
Couldn’t have drawn it up much better myself.
Thanks for the kind words yesterday regarding Boom.
Also, I tried to avoid it but the GAP code gives it away, I’m 45 now, thanks to the people who noticed and wished me a happy birthday the other day.
Gonna be the best 45 I can be.
Got some stiff competition with the 45 in The White House…
M45BC
M64WI
https://www.westcoastliquor.com/products/boomtown-lager/
Regarding the unemployment stats in both USA and Canada. This is a truly irksome topic. I have never known so many unemployed, disemployed, underemployed people OF ALL AGES in my decades of working on this planet. ALL of these people are not showing up in any metrics. They are the fallen off. They are way beyond any UI qualifications. Many of them never qualified in the first place. Numbers of them are in their 50s and 60s with zero prospect of work and a frightening financial future. (I know so many people who will be GISing it into their final years.) I know young folks in their 20s who are leaving the major metropolis regions behind. Some because they cannot find work to even pay the rent! (Some do have decent wages but see that they will never save for anything without ditching the YYZ and YVR.) I have friends who are well off and have no financial worries but are spending their ~50 to ~65 zone unwillingly unemployed. I will be watching the GIS curve, the hockey stick, over these next years.
I think Stan Brooks is saying that interest rates 6% to 8% should be the norm now if we truly had a strong economy.
Now, the last time the economy was supposedly strong was in the 1999-2000 era when before dotcom crash, tech wreck and big stock market crash happened the Fed Funds rate was 5.5% to 6.5%.
The 30 year Treasury rate reached 6.75% and 2,5, 7 and 10 years were in the 6.00% to 6.5%. U.S. unemployment rates was 3.7% to 3.9% which is not different than today. Also, inflation rates were not that much different 2.9% to 3.4% back in 1999 to 2000 and today 1.8% to 2.4%.
It seems central banks and governments are hell bent on making it a point to punish savers, savings, real capital formation, anything to do with interest bearing, interest compounding investments and reward speculation, borrowing and leverage at higher and riskier levels. It is really scary how they make it look normal now and throws out all the text book and economic principles that were taught about inflation, interest rates, capitalism and competition, comparative advantage and economies in general.
Long time reader, first time posting. A great thank to Garth and Ryan for all their hard work and advices that lead my immigrant family of 3 from 30k savings to over 200k of diversified portfolio. Renters in Van from very first day with mostly one good salary (and huge tax!)
I’m just rebalancing our portfolio and looking for some decent bond etf since that I postponed buying bonds last few month due to expectations of lower prices. We have 11% in ZAG but I am not sure whether we should continue the same way. Any suggestion?
Thank you again and keep doing a great job!
Sandra, I’ve seen Garth Turner since the 90’s on TV and other places which he never was a fan of savings accounts, GIC’s, term deposits, savings bonds etc.
Now that they pay 2% to 3% interest, I don’t think he has any empathy for those that put their money in these things all their lives. I hope this post gets shown because I don’t think he as any slight against these comments.
Shawn Allen on 06.22.19 at 2:30 pm
Who Makes and Who Influences the Tax Rules
You obviously have never reviewed the CVs of MPs. Few investors in that chamber. – Garth
*******************************
Obviously indeed. But some parties are known to accept some fairly big political contributions and might be influenced by investors? Not every (like virtually none?) MP has the independence you displayed.
=================================
Trudeau trust funds & Morneau trust funds, etc., could be pretty large influences.
You may recall that these were exempt when the Income Trusts got punished…
«That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.»
Aldous Huxley
Care for a tissue? – Garth
Millions of retirees will do/will need a tissue.
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#23 Sandra Jerawoski on 06.22.19 at 3:00 pm
Correct.
But the real impact from the play with the zero rates will be much bigger than anyone anticipates.
We are not Japan, they have huge savings first and strong economy second, plus their experience is from the time when the world-was-not-so-open. Plus their societal and work attitude and ethics is something very different.
Here we will experience devastating inflation, higher taxes and nobody, I literally mean nobody will help the poor schmucks who believe in authorities.
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#25 Jane Strauss on 06.22.19 at 3:32 pm
Everything that has to do with pensions is like that saving account, you might not recognize it but the CPP, OAS, even corporate and government pensioned are index with the CPI.. which is again a function of spending habits and generally gravitates around the GDP changes but has absolutely nothing to do with the real inflation.
#18 stan Brooks
good lord you must be fun at parties…but I think that doesn’t happen often
Who’s right? Me of course.
Off topic but I think Trump will win in 2020 and will leave office peacefully after his second term in 2024. There isn’t really a way he could stay beyond his term. Despite all the badness in the US, it is not a third world dictatorship. Trump would have to leave and all the talk of him refusing to leave is just silly. He could take it in 2020 to a recount or to court like Al Gore and George Bush did but there is no way he could overturn the election results. And 2024 is the end of the road.
But it wouldn’t matter because Tucker Carlson will win in 2024. The democrats are suffering from a huge problem. They have no candidates. Yes I said Tucker Carlson. If one reality TV star can win another can too.
Closer to home in Canada I will predict the results of the upcoming election. Conservatives will sweep all provinces except Quebec and YVR. Trudeau will keep his seat but now be the opposition leader. There are only 3 types of Canadians, those who are appalled by Trudeau, those who are embarrassed by him, and Quebec.
When Scheer wins in a landslide the first 2 things he will do is put an end to the carbon tax silliness and cut Quebec’s transfer payments. So he isn’t going to get many votes in Quebec, Trudeau will hold that province. And then we are right back to a constitutional crisis. But this time the rest of Canada will vote Quebec off the island. We simply can’t afford to carry them anymore and since they won’t allow Alberta to develop her resources and prefer to buy oil and gas from the US and Saudi Arabia we can’t consider the Great White North to be a union of any sort anymore. The next election in I guess it will be 2023 will be not about whether Quebec will leave confederation, but whether they will be allowed to stay. And of course the native issues that have mostly been glossed over since the last referendum will resurface. If Canada is divisible so is Quebec, and the natives don’t want to leave Canada now as they didn’t the first go round. Don’t get me wrong the natives have issues up one side and down the other, but the last thing they want is to find themselves in an independent Quebec with whom they have no treaties.
It’s kind of funny. The Canada that Trudeau the elder fought so hard to keep together will be the Canada that Trudeau the junior breaks apart. It is inevitable at this point though. We don’t have a union anymore. Not in any way, shape or form.
DELETED
30 Smoking Man on 06.22.19 at 8:33 pm
DELETED.
Even the word Fat. No nuts gartho.
It’s TRUE. Totaly understand your fear.
In afraid too.
When get to the point in life where you give no shit about being judged. It’s the heaven moment.
A delete here or there is trophy.
Isn’t it time to End the Fed ….and the IRS ? Unleash America.
#29 Nonplused on 06.22.19 at 8:25 pm
[…] But it wouldn’t matter because Tucker Carlson will win in 2024. The democrats are suffering from a huge problem. They have no candidates. Yes I said Tucker Carlson. If one reality TV star can win another can too.[…] I’ll see your Tucker Carlson, and raise you an Oprah Winfrey! :P
#32 Smoking Man on 06.22.19 at 9:31 pm
A delete here or there is trophy.
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Participaction Pin?
Ryan, if you think Bond Rates are going up .25- .50% from here, is it time to add more Preferred Shares to the Portfolio to catch this shift in direction?
Let’s not get too hung up on Kawhi – let’s have a little faith in Masai.
Is it wise to push balanced diversified portfolio on the blog on the basis that the future is unknowable and then to subsequently advise picking healthcare sector etc. to ‘ass cover’ on a prediction that is even or worse odds to come true? The interwebs are full of those guys…not a differentiator.
@#29 Nonplused
Ford is busy frying the federal Conservative vote in Ontario. Trudeau takes Quebec, Ontario splits and a Liberal minority happens. These days, politicians are among the most dangerous people in society. I am hoping for minority governments that stumble along in the middle of the road. Eliminate extremism from the right and the left.
Excellent post Ryan.
I would prefer financial commentators stick to talking about bond prices rising and falling rather than bond yields rising and falling. I understand the relationship between prices and yield but it is clearer to me when we just talk about price. One less bit of mental gymnastics I have to do to make the comparison to stocks.
Anyway, I will posit a theory that the labour numbers are a frankenumber and that the bond market is the correct one to watch for a recession. The stock market is rising due to share buybacks because companies can borrow cheap and buy back stocks, not because of a flourishing economy. Simplistic yes and there are no doubt many exceptions to my belief. But really, does anyone who is well informed believe that the USA economy is on solid ground?
#29 Nonplused
“There are only 3 types of Canadians, those who are appalled by Trudeau, those who are embarrassed by him, and Quebec.”
THAT was good.
Trudeau won’t keep his Papineau seat (where you can usually run a 3 headed dog, call it a Liberal and it will win).
You underestimate the Québécois. They are as pragmatic as any other Canadian, favorite sons included (par exemple, Stéphane Dion 2006).
It will be a squeaker, probably a recount needed but Papineau will dump Justin as their MP. After that will come a huge sigh of relief and thanks from the rest of Canada.
The best strategy for young Canadians is to work 2 years get made redundant and collect EI for a year. Rinse repeat.
Your government is corrupt and you are taking a test best know as the Kobayashi Maru. The only winning move is not to play.
One day soon Canada will once again have a government that actually represents the people who live here. Until then travel and see the world.
Americans paid 600 million in bribes to Liberals in Canada to purposely stall the Canadian economy tax records show. It’s pretty shocking to see how many outright traitors you can buy with 600 million. It was enough to fund ann18 month Hate Harper campaign on purpose national broadcaster. Enough to fund “powe panels” every day on every network to twist propaganda into our homes until we believed that Duffy was enough to bring down an government and foist an inane drama queen on us.
https://calgaryherald.com/news/local-news/corbella-vivian-krause-shows-canada-useful-idiot-to-u-s-interests-with-bill-c-48
Is that what you expected when you voted Trudeau? Is it a coincidence that Trudeau bribed Canadian media and activist social media with the same number? 600 million and they’re pretty sure Canada stays bought’.
If that doesn’t suggest a strong economy then I don’t know what does?
This is a statement and does not take a question mark.
Or did you meant to write “If that doesn’t suggest a strong economy then what does?
@#22 Wallflower.
Yup.
The “uncounted” unemployed.
The “under” employed working 2-3 jobs for crap.
Of all ages, not just Millennials.
The population is sleep walking into underfunded “retirement”.
Very angry voters tossing whoever is in charge and electing “anyone else” in election after election.
The loudest bumbling fool wins.
And if that bumbling fool promises to tax “the rich” and give to the poor…..woooo hoooo.
They get my vote.
I talked to a friend the other day who works in govt and the number of assaults on govt staff is at an all time high.
He is at a loss to explain it.
I suggested perhaps the exorbitant rise in govt “user/licensing” fees, dreadful customer service, endless waits via telephone or text for basic requests, etc etc etc. might, just might, have something to do with the people’s anger and frustration.
He naturally disagreed.
No one respects authority any more.
No one trusts authority any more.
No one wants to be ordered around by authority any more.
They get it enough at work and at home with endless tripe on how to think, how to act, how to “improve”.
Ugh.
Enough.
The majority believe they have been swindled, lied to and used by “someone else”.
And now we have most first world govts sitting at near zero interest rates and absolutely no wiggle room to drop rates if the economy needs “stimulating”.
Public faith in “Leaders” at all time lows.
A possible recession creeping around the edges of the Canadian economy, the EU, China, etc…..
And The Donald gearing up for re-election in 2020.
One can hardly wait for the new vitriol he spews forth to explain why “The Wall” still isnt built and Hillary still isnt “Locked Up”.
Not a great combination moving forward over the next 12-36 months.
Save your nickels folks.
Yer gonna need every one for that last can of beans on the shelf.
@#42 Bob Dog.
“a test best know as the Kobayashi Maru. The only winning move is not to play….”
+++++
Actually the lesson learned in the Kobiyashi Maru training scenario was ….
The only way to win was to cheat.
@#29 Nonplused = minus
I was going to tell Smoking Man he should lay off the booze but after reading your political predictions…….
The fire ball in Philly has moved the climate clock forward. Scientist people, please re-calculate the point of no return and get back to us. My bucket list depends on you! Please and thankyou.
It is my opinion that rising interest rates are good for markets not this scenario.
Central Banks have created a disaster as zero bound has given governments around the world at all levels the green light to borrow like pigs.
Look at SOCKS he’s added 100 billion in long term debt in 3.5 years!!!!
Thus CB’s have no choice but to cut.
Smart money is selling markets… The bonds price show that…
Gold’s breakout is telegraphing something. I suspect debt is the issue. But time will tell…
And no Im not a gold bug. I own but not for investment. For wehn SOCKS decides fiscal conservatives are the enemmy of the people…
Not soon far off
It’s gonna be all the rage…. inspiration for our own commie Jagmeet
https://www.dailymail.co.uk/news/article-7171049/Report-lays-Corbyns-proposal-grab-inheritances-tax-profits-family-house-sales.html
#47 crowdedelevatorfartz on 06.23.19 at 7:06 am
@#29 Nonplused = minus
I was going to tell Smoking Man he should lay off the booze but after reading your political predictions…….
***********
I had the same thought…
#38 Consistency on 06.22.19 at 11:48 pm
Is it wise to push balanced diversified portfolio on the blog on the basis that the future is unknowable and then to subsequently advise picking healthcare sector etc. to ‘ass cover’ on a prediction that is even or worse odds to come true? The interwebs are full of those guys…not a differentiator.
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So true. Stay with your strategy and don’t try to catch the next big thing. Dead boring and consistent is best in investing.
The next time it will not be a financial crisis but a financial disaster. This is what the powers at be want. Dow Jones will be 5,000 to 7,000 in the next 18 to 24 months, Nasdaq will be 2,000 to 2,400 in 18 to 24 months, S&P 500 will be 800 to 1,000 in the next 18 to 24 months and the TSX will be 6,000 to 7,000 in the next 18 to 24 months.
Green Bacon Marble “Ryan, if you think Bond Rates are going up .25- .50% from here, is it time to add more Preferred Shares to the Portfolio to catch this shift in direction?”
Absolutely. I see them recovering in the second half. – Ryan L
We can’t predict too much in the markets, but with politics, we can make some good short term guesses. Going forward in Canada (and most of the rest of the West), we can bank on a few things:
1. More debt, public and government
2. More taxes
3. Deteriorating demographics
…and some IMHO’s:
1. Population stagnation / decline beginning in the next 2 decades or so
2. Near zero success actually increasing revenues through increased taxes
3. Big eventual exodus of wealth, and the wealthy themselves from Canada
We can not do much about these problems due to the fragile Canadian voter. We’re going to have MASSIVE revenue problems. There’s just no way around it. We’re killing off revenue streams from households, current business activity, and especially future business activity. Meanwhile we’re blowing billions every year through borrowing just to keep shop.
Jagmeet just said he wants to ban the entire fossil fuels industry from Canada. This is were we are at (stupidity gets votes).
For me, the plan for the future is to save and invest via a Pro, and to keep my tax remittances as low as possible on all fronts. Some day, desperation may drive Politicians to commit some unforgivable sins in the tax dept. That day will be the beginning of the Venezuelanization of Canada. If it happens on my watch, I’ll have to take my lumps – but I’d be encouraging my kids and grandkids to join the migration out the door post haste…
“For example, the US unemployment rate stands at a 60 year low. If that doesn’t suggest a strong economy then I don’t know what does?”
Hi Ryan, could this also mean that we are at the peak in terms of employment and the next step is a decline…hence the need to lower rates to stimulate a already strong economy. Something doesn’t make sense here and why do we always seems to discover things in hindsight. Not many believed the 2009 recession until it happened.
Something doesn’t add up here?
#55 IHCTD9 on 06.23.19 at 11:19 am
This is were we are at (stupidity gets votes).
******************
Exactly how we got to our current predicament – vote liberals out…vote conservatives out…vote liberals out…vote conservatives out…to infinity.
I’ll just place this here…
https://www.ctvnews.ca/politics/scheer-acknowledges-feds-would-put-price-on-carbon-under-his-plan-to-cap-big-emitters-1.4477531
Wrong or Right voters are believing in Climate Change due our own activities. The other Politicals and now even Scheer has to chase the votes.
“greenspan and bernanke put??”
because they stopped the bear markets of 2000-2 and 2008/9??
#53 Jerry Roberts on 06.23.19 at 11:18 am
“The next time it will not be a financial crisis but a financial disaster. […] Dow Jones will be 5,000 to 7,000 […], Nasdaq will be 2,000 to 2,400 […], S&P 500 will be 800 to 1,000 […] and the TSX will be 6,000 to 7,000 in the next 18 to 24 months.” And if you’re wrong, will you eat a bug? :P
#55 IHCTD9 on 06.23.19 at 11:19 am
I disagree. That sounds a little cynical, and might be cloaked in political bias.
The demographic situation will improve for the remaining Canadians once the boomer generation is gone. Now this is not something I am looking forward to or I welcome, since I want my boomer parents to live to be 120. But it is fact that the majority of public spending goes towards benefits and healthcare for older folks.
Moreover, you mistakenly believe that wealth would have a place to flow to. Not exactly. Canada has debt problems yes, but so does everyone else.
When the debt bomb/tax inflection point does go off, the wealthy will have nowhere to run to since the entire ship would go down together. Third world countries usually depend heavily on tourism or trade to survive. During economic hardship these things dry up, and the land becomes fertile for political and social upheaval. Watch for coups and revolutions. It’s happened before and it will happen again.
Lastly, IF you believe in climate change, expect a huge influx of individuals (wealthy and not) to come to Canada as our tundra melts, land becomes more livable, and resources are easier to extract.
MF
@#50 Corbyn the Commie
https://www.dailymail.co.uk/news/article-7171049/Report-lays-Corbyns-proposal-grab-inheritances-tax-profits-family-house-sales.html
Yep, after Boris “Bolschevik” Johnson becomes the unelected Prime Minister of England in a month or two.
He will have less than 3 months to hammer out a Brexit deal with the rest of the EU.
Boris who, when he was England’s Foreign Secretary, annoyed most of the EU leadership with his buffoonery.
Boris , who talks before he thinks.
He’s not well liked….anywhere.
I cant imagine him signing anything for a Brexit deal if Theresa May couldnt do it in 2 years.
Especially if Britain has already agreed to pay the EU $50 Billion dollars to walk away…..
That wont go down too well with the Limey voters.
So, England will crash out of the Union.
Now the fun starts.
Scotland will want to have another Separation referendum ( which will be successful) so they can beg the EU to let them join. ( Good luck with that Scotty).
Ireland will already be gone because their borderless border will HAVE to become a Border again ( confused yet?).
The lineups in English and French ports will be historic.
Jane24 will be stuck in her palazzo( its NOT an apartment!) in Italy with a slowly dwindling supply of caviar and Italian wine….the horror.
Rip the British flag up and replace it with England’s Flag.
All this will happen as the Boris Conservative Party tanks to single digits in the polls….
Time for an election in Jolly old Blighty.
Next up as Prime Minister?
Corbyn?
Who once proclaimed Marx and Stalin as hero’s.
He’s even stupider than Boris but the irony of a PM named Boris losing to an avowed Commie sympathizer is causing glasses to clink from Cuba to Moscow.
Awesome.
Yo , Jane 24.
Better sell the flat( its NOT an apartment!) in London and move all your money to a boring, cold, clean, safe financial haven like Canada.
The English socialists are knocking at the door and Italy is almost insolvent……..
@#55 IHCTD9 on 06.23.19 at 11:19 am
We can’t predict too much in the markets, but with politics, we can make some good short term guesses. Going forward in Canada (and most of the rest of the West), we can bank on a few things:
1. More debt, public and government
2. More taxes
3. Deteriorating demographics
…and some IMHO’s:
1. Population stagnation / decline beginning in the next 2 decades or so
2. Near zero success actually increasing revenues through increased taxes
3. Big eventual exodus of wealth, and the wealthy themselves from Canada
We can not do much about these problems due to the fragile Canadian voter. We’re going to have MASSIVE revenue problems. There’s just no way around it. We’re killing off revenue streams from households, current business activity, and especially future business activity. Meanwhile we’re blowing billions every year through borrowing just to keep shop.
Jagmeet just said he wants to ban the entire fossil fuels industry from Canada. This is were we are at (stupidity gets votes).
For me, the plan for the future is to save and invest via a Pro, and to keep my tax remittances as low as possible on all fronts. Some day, desperation may drive Politicians to commit some unforgivable sins in the tax dept. That day will be the beginning of the Venezuelanization of Canada. If it happens on my watch, I’ll have to take my lumps – but I’d be encouraging my kids and grandkids to join the migration out the door post haste…
_________________________________
So dour man.
everythings coming up millhouse for most folks I know.
lifes good and only getting better for most.
#62 crowdedelevatorfartz on 06.23.19 at 12:53 pm
@#50 Corbyn the Commie
https://www.dailymail.co.uk/news/article-7171049/Report-lays-Corbyns-proposal-grab-inheritances-tax-profits-family-house-sales.html
Yep, after Boris “Bolschevik” Johnson becomes the unelected Prime Minister of England in a month or two.
He will have less than 3 months to hammer out a Brexit deal with the rest of the EU.
Boris who, when he was England’s Foreign Secretary, annoyed most of the EU leadership with his buffoonery.
Boris , who talks before he thinks.
He’s not well liked….anywhere.
I cant imagine him signing anything for a Brexit deal if Theresa May couldnt do it in 2 years.
Especially if Britain has already agreed to pay the EU $50 Billion dollars to walk away…..
That wont go down too well with the Limey voters.
So, England will crash out of the Union.
Now the fun starts.
Scotland will want to have another Separation referendum ( which will be successful) so they can beg the EU to let them join. ( Good luck with that Scotty).
Ireland will already be gone because their borderless border will HAVE to become a Border again ( confused yet?).
The lineups in English and French ports will be historic.
Jane24 will be stuck in her palazzo( its NOT an apartment!) in Italy with a slowly dwindling supply of caviar and Italian wine….the horror.
Rip the British flag up and replace it with England’s Flag.
All this will happen as the Boris Conservative Party tanks to single digits in the polls….
Time for an election in Jolly old Blighty.
Next up as Prime Minister?
Corbyn?
Who once proclaimed Marx and Stalin as hero’s.
He’s even stupider than Boris but the irony of a PM named Boris losing to an avowed Commie sympathizer is causing glasses to clink from Cuba to Moscow.
Awesome.
Yo , Jane 24.
Better sell the flat( its NOT an apartment!) in London and move all your money to a boring, cold, clean, safe financial haven like Canada.
The English socialists are knocking at the door and Italy is almost insolvent……..
…
Boris is gonna make Trump look like a stable genius……
#55 IHCTD9 – Just think, because the clock is already a minute from midnight. Time to wakeup and become watchful. Your greatest fear has been rolling step by step, and your missing it all. Have a good day!
Prefs just keep chucking out monthly distributions and the DRIP I use in one account is buying more units at varying prices.
Just keep in mind the TSX composite has been a real stinker for about a decade. Just starting to show signs of life.
Asset classes do that, but the yield adds up while your waiting for favour. Patience is one thing many retail investors lack. Pity.
#63 oh bouy on 06.23.19 at 1:52 pm
So dour man.
everythings coming up millhouse for most folks I know.
lifes good and only getting better for most.
———-
Yep, life is great here too. Don’t pay hardly any income taxes, house is paid for, nice nest egg on the go, DB pension, get thousands from the Feds every year just for having kids, lots of toys in the garage…
So, turn brain off then?
#39 Keith on 06.23.19 at 12:58 am
@#29 Nonplused
Ford is busy frying the federal Conservative vote in Ontario. Trudeau takes Quebec, Ontario splits and a Liberal minority happens. These days, politicians are among the most dangerous people in society. I am hoping for minority governments that stumble along in the middle of the road. Eliminate extremism from the right and the left
+++++++++++++++++++++++++++++
I don’t think you will find a Liberal minority, supported by the NDP, to be heading down the middle of the road…
#61 MF on 06.23.19 at 12:21 pm
——-
The boomers will still be fairly plentiful by the time you are 10 years from retirement. By the time you’re done working, the boomer Men will be mostly gone, but a lot of the Women will still be above ground. Short story, you will not live to see any improvement. The boomers just don’t disappear a few years from now, and the costs and revenue issues won’t magically disappear with them. Especially if we then have piles of broke, homeless Millennials moving in to take their place. The debt pile as a result will increase, the taxes will increase, and you can take that to the bank. Nothing researched says otherwise. It’s going to be Gen Z’s to fix, and I wish them lots of luck…
Wealth, and wealthy Canadians will leave when it is obvious to them that they are in the crosshairs and are officially being oppressed, just like they did in France. Folks with something to lose don’t sit around waiting for SHTF to make a decision. They’ll move out, and likely live out their lives elsewhere before your global meltdown ever occurs…
I’ve read nothing that says an aging demographic is good for anything. Things move slow with demographics, so there will be no easy quick fixes either.
O.k I’ll do a good deed and do one more comment.
Just make sure you get to 70 comments as I appreciate your time…
M45BC