The hinge

US Fed boss Powell caused bond yields to jump by a factor of 6. Tempting?
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DOUG  By Guest Blogger Doug Rowat
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Anyone who’s played pee-wee hockey in this country, specifically as a defenseman, remembers their coach yelling at them to ‘play the hinge’.

This means ‘swinging back’ when your defense partner’s ‘swinging up’ offensively. Basically, the hinge provides a defensive safeguard.

Bonds in an investment portfolio are similar. They frequently ‘swing’ in a direction opposite (or at least neutral) to equities. However, as many investors are learning this year, the operative word here is “frequently”. Every once in a while, the low-to-negative correlation between bonds and equities evaporates and a more strongly positive correlation emerges.

This year, the reason for this rare, positive correlation is straightforward: red-hot inflation is forcing aggressive central bank tightening, which is lowering bond prices (and therefore boosting yields). At the same time, equity prices are falling because the market fears the tightening may become too aggressive and lead to an economic downturn. There are other complicating factors, of course, including the Covid lockdown in China and the volatility of the Ukraine war, but the above basically summarizes capital markets this year.

However, despite a tough few months, there are many reasons to be optimistic regarding bonds.

First, investors are constantly searching for value and extreme sell-offs often produce just that. The US 10-year Treasury yield, for example, recently spiked to an intra-day high of 3.2%. This is a staggering yield increase as just last summer the US 10-year Treasury yield was barely at half a percent. Half a percent isn’t going to excite anyone, but 3.2% for a very low-risk investment? That becomes more compelling. And if you’re an investor who believes inflation’s peaking and you’re presented with a 6x move in Treasury yields in less than a year, what might be the result? You guessed it: money being moved into bonds.

It’s this emergence of value that consistently causes bonds to rally after sharp sell-offs. RBC shows as much by looking at all the major US Treasury sell-offs since 1987. Sixteen instances in total, and in each instance, the bond market subsequently rallied:

You can’t keep a good bond down

Source: RBC; chart measures subsequent returns following rapid 10-year Treasury sell-offs dating to 1987.

Further, what if the steady stream of 50 basis-point rate-hikes expected by the US Federal Reserve this year doesn’t materialize? Presently, it’s accepted as gospel that the Fed will need continuous (and large) rate increases to tame inflation.

But this isn’t a certainty.

Already we’re seeing evidence of a potential peak in inflation. Indeed the CPI data from earlier this week showed a still-lofty 8.3% y-o-y inflation increase in April, but it marked the first monthly deceleration in annual CPI since last August. And major drivers of inflation—gasoline prices, natural gas prices, used car prices, and so on—are showing at least tentative signs of peaking. The Manheim Used Vehicle Value Index, for example, after skyrocketing for much of the past year, has now dropped for three consecutive months:

Menheim Used Vehicle Value Index – finally, a moderation.

Source: Moody’s Analytics

Naturally, it’s still far too early to conclude that the worst of inflation is behind us, but expectations of aggressive Fed hiking are so embedded in investor thinking that even the hint of a more moderate Fed interest-rate policy would likely be a significant positive catalyst for the bond market. In other words, bad outcomes are heavily priced into the bond market, but good outcomes aren’t.

Finally, sharply positive correlations between bonds and equities rarely last. For example, the long-term correlation between the S&P 500 and the Bloomberg US Aggregate Bond Index, a benchmark of investment grade bonds (mainly Treasuries) is only +0.07—not the +0.50 that we’ve seen since the start of the year. In fact, New York University examined S&P 500 and US Treasury performance going all the way back to 1926 and in only four instances did both asset classes end the year lower. So almost a hundred years of market data suggest that bonds will soon re-establish their more defensive relationship to equities.

Bonds have had a tough 2022, but it almost certainly won’t last. The unique ability of bonds to ‘play the hinge’ will return, and not only will they once again provide good defense, but this time around they likely do some scoring as well.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

 

81 comments ↓

#1 crowdedelevatorfartz on 05.14.22 at 9:26 am

@#74 Shawn
“I got $2.34, who’s gonna give me $2.50? I got a bid for $2,34 who’s gonna give me $2.50?”

+++

Over the past few months the gas prices have seemed to jump about 10 cents.
Then they slither back about 5 cents for a few weeks.
Then they jump another 10 cents…..
Uppa . uppa, uppa.

Lets see how long the Liberal ( federal) and the NDP ( provincial BC) carbon taxes last….with voters screaming for blood.

2 years before Jaggy Singh will stab Trudeau in the back and cause this Minority govt to fall?

An eternity in the polls.

#2 crowdedelevatorfartz on 05.14.22 at 9:37 am

” And major drivers of inflation—gasoline prices, natural gas prices, used car prices, and so on—are showing at least tentative signs of peaking. ”

+++
Hey Doug.
I guess the low unemployment numbers will have to factor in at some point.

You can’t find employees right now.
However.
I spoke with a friend who owns a large demo company the other day.
Orders have evaporated.
His guys are working reduced hours or laid off.
The endless stream of old houses to crush and load into dumpsters…..over.
No new houses being built.
Flop’s move from housing construction into govt employment was well timed.
A canary in the coal mine?

#3 Linda on 05.14.22 at 10:31 am

Doug, a helpful analysis. I do wonder though if the lower inflation rate of 8.3% for April was due to the increase in the central bank rate, plus possibly a slowing of purchases in general due to higher prices? In general the response to higher prices is trimming household expenditures, especially when household income has not increased sufficiently to permit the same level of expenditures. Call it financial self preservation in action:)

#4 The other Doug in London on 05.14.22 at 10:58 am

I’ve been taking advantage of the lower price of bond funds lately, averaging in bit by bit. It looks like a good time to buy even more of these bond funds.

#5 Ponzius Pilatus on 05.14.22 at 11:00 am

Unfortunately, in amateur hockey, the coach usually designates one defence man to be the “stay at home” guy and lets the other guy roam.
The opposing team can quickly hone in and focus on the “roamer”.
Having said that, hockey is probably the hardest game to play and coach.
Go Leafs, Oilers and Flames.

#6 Søren Angst on 05.14.22 at 11:07 am

You are correct, US CPI rate of increase slower, 2022 m/m, %:

Mar +1.2
Apr +0.3

———————-

…There’s the Rub.

Stats anomaly started.

Go here:

https://www.bls.gov/opub/ted/2022/consumer-prices-up-8-5-percent-for-year-ended-march-2022.htm

Scroll table to say Feb 2021 at the top and look at subsequent numbers.

Can anyone PREDICT a slowing or acceleration for the May 2022 US CPI & following months?

Think y/y using the numbers from May 2021 onwards.

———————-

Hopefully, Mr. Market is bad at stats (and it is) and will rejoice at inflation decelerating at a nice pace and the “HINGE RESTORED” – mythically speaking. *

* Whilst still remaining at 40 yr highs.

Doug shhh!

Tell no one. Not even your clients (or Garth).

Let the bullets fly My Liege.

#7 DON on 05.14.22 at 11:09 am

Have we felt all the inflation associated with the Ukraine War yet?

On another front fast food restaurants are no longer cheap. When will prices return to normal that’s the question?

#8 Flop… on 05.14.22 at 11:19 am

Are we ready to do this again?

Probably not.

Things were different last time Vancouver real estate had a cool down period, I had an extended period off work, motivated by paying tribute to a guy trying to take me under his wing, Pink Snow fell down from the heavens.

I’m not going there again, I’ve got more limited time and frankly if you stop producing information that someone values, they will just start looking at the next best option pronto.

I’ll ease into it, like last time, I don’t know where it will take me, hopefully the journey will not be as dark, but I’ll try and document a few things, this blog has moved a way from being a major source for Vancouver real estate information, can we bring it back, dunno.

It feels a little like late 2016 to me, Westside Vancouver has never been the same, I noticed one of my old Pink Snow cases listed for a million less than purchased in 2016, still trying to wriggle out of the noose with limited rope burn to their neck, 6 years of struggle, still grinding away.

Things west of Cambie, all the way out to Hope have been dynamite the last few years, in my hood places that were going for 1.8 in 2016 have been getting easily over 2.2

The knockdowns that were going for 1.3/1.4 seemed to have no problem getting 1.7/1.8.

Bee seeing some stuff, I’ll show some examples try and highlight some changes in the market.

Garth, if you are not ready to partner up again and do this, just let me know and I’ll head back over to the Martha Stewart baking blog.

The new segment on here is going to be called, you guessed it, Flop Drops…

M47BC

#9 Sail Away on 05.14.22 at 11:20 am

#77 Longterm on 05.13.22 at 11:42 pm
#73 Nonplused on 05.13.22 at 10:27 pm

Things that cannot go on forever, usually don’t.

——–

Like endless economic growth on a finite planet.

——–

Ah. You have touched upon the crux of the biscuit: Finite, yes… but from the perspective of humans today, essentially infinite. Let’s explore:

Humans are expanding at a fairly breathtaking rate: 140M annual births, 60M annual deaths, so +80M annually and increasing with compound annual growth rate. With this growth comes, of course, increased need, so every year brings more demand.

We call it the economy, but it’s really just expanding population causing expanding demand. And people aren’t stopping their procreation. At this point, though, the human population is nowhere near the earth’s maximum carrying capacity, even with current technology.

Now the finite thing: we use many materials that are finite. But many other energy sources are not: solar, wind, electricity being a few. Capturing infinite energy- efficiently- is the holy grail.

Being alive right now, in the Western world, represents huge potential. So much is available and easily obtained. But it takes long-term planning:

1. Population increases, land does not- accumulate land
2. Services expand to accommodate population- choose a field, then gain the credentials, skills and connections to become essential. Build your moat.
3. Economy expands to accommodate population- accumulate things essential to the economy. Buy the means of production. Support those accomplishing great things.
4. Learn as much as possible, as continually as possible.

#10 Quintilian on 05.14.22 at 11:21 am

Crowdie:
You point out the undeniable presence of the mega ton gorilla inflation in the room, you concur that the artificially suppressed interest rate cycle is coming to an end, and you seem to agree that there is a negative correlation between high rates and housing prices, and I agree on that point.

But how do you not see the inevitable implosion of your equities portfolio?

Your common sense, seems to give way to your wish fulfilment desire, as you deviate from logical and deductive reasoning.

The bears on this board have been warning you bulls, but you wouldn’t listen.
We pointed out the exuberance and that the math didn’t make sense, but your rebuttals consisted of syllogisms.

More to come.

Yes, it will eventually bounce back.
But, by the time you will be so old you will have lost interest in the ladies!

#11 Ponzius Pilatus on 05.14.22 at 11:31 am

That’s why Swiss chocolate is the best.
https://www.spiegel.de/fotostrecke/bilder-des-tages-fotos-aus-deutschland-und-der-welt-fotostrecke-122824.html#bild-45b3e564-ede0-4dac-9823-73bfad03d759

#12 Ponzius Pilatus on 05.14.22 at 11:40 am

10 Quintilian on 05.14.22 at 11:21 am
Crowdie:
You point out the undeniable presence of the mega ton gorilla inflation in the room, you concur that the artificially suppressed interest rate cycle is coming to an end, and you seem to agree that there is a negative correlation between high rates and housing prices, and I agree on that point.

But how do you not see the inevitable implosion of your equities portfolio?

Your common sense, seems to give way to your wish fulfilment desire, as you deviate from logical and deductive reasoning.

The bears on this board have been warning you bulls, but you wouldn’t listen.
We pointed out the exuberance and that the math didn’t make sense, but your rebuttals consisted of syllogisms.

More to come.

Yes, it will eventually bounce back.
But, by the time you will be so old you will have lost interest in the ladies!
——————————-
I think the world would be a better place if CEF would stick to plumbing.
And let the experts here discuss financial matters.
As for the “demo truck operator”:
The good old days of just demolishing a whole house are over.
Much more stuff is being recycled these days.
Which I think is a good trend.

#13 Ponzius Pilatus on 05.14.22 at 11:45 am

#8 Flopinsky
Pink Snow!
Oh no!
I beg you, not again. Have mercy.
You’re doing just fine.

#14 Dave on 05.14.22 at 11:46 am

BoC deputy dog already in his speech said they might reverse course if the impact on housing is too great!!!

He did not. Read the speech. – Garth

#15 Flop… on 05.14.22 at 11:48 am

Flop Drops.

Ok, so the last time I tried to do some sort of detailed documentation, the detached market bottom in my area ballooned from just over a million, closer to 1.4, then as things yo-yo-ed up and down actually went back down below a million in pretty short amount of time- less than 18 months.

It was violent, shocking to the amateurs and weak hands, the dollar amounts dwarfed by the losses racked up on the Westside, but the percentages to net worth, where the supposed real people live were explosive.

Let’s start by trying to establish the new bottom for the detached market, in Vancouver proper, that always means the Eastside.

Let’s see a couple of Flop Drop examples.

The details…

2535 e Broadway, Vancouver.

Just took 12% off the asking price, was already down near the bottom of the market.

Looks like a bulldozer.

Was asking 1.7
Now asking 1.5

https://www.zealty.ca/mls-R2670743/2535-E-BROADWAY-Vancouver-BC/

$$$$$$$$$$$$$$$$$$$$$$$$$

Second one

1536 e 12th Ave, Vancouver.

The details…

Was asking 1.59
Now asking 1.49

Looks basic, but livable, only waited 20 days on market before price adjustment, 15 days is current average Vancouver selling time.

https://www.zealty.ca/mls-R2678225/1536-E-12TH-AVENUE-Vancouver-BC/

There are only a handful of viable options under 1.5 million in Vancouver proper at the moment, I think last time i did any type of documentation, when it was something of a buyers market this number was approaching 75/80.

So we’ll call the bottom 1.5 and see if it holds steady or slowly drifts down…

M47BC

#16 Søren Angst on 05.14.22 at 12:01 pm

Hopefully Ukraine’s Spy Chief got it right today:

“Ukraine-Russia, chief 007 Kiev: Putin sick, coup in progress”

https://www.adnkronos.com/ucraina-russia-capo-007-kiev-putin-malato-golpe-in-corso_1fzpMyqds99kappDpaKBxU

and

https://news.italy-24.com/world/449577.html

Went to verify Italian MSM and in Major General Kyrylo Budanov’s own words…

https://youtu.be/kYg9XCohK-0?t=270

Regardless,

Slava Ukraini (double Slava if Budanov correct on Putin)

#17 Shawn on 05.14.22 at 12:01 pm

Sail Away at 9 suggests:

Being alive right now, in the Western world, represents huge potential. So much is available and easily obtained. But it takes long-term planning:

1. Population increases, land does not- accumulate land

2. Services expand to accommodate population- choose a field, then gain the credentials, skills and connections to become essential. Build your moat.

3. Economy expands to accommodate population- accumulate things essential to the economy. Buy the means of production. Support those accomplishing great things.

4. Learn as much as possible, as continually as possible.

*************************
Sounds like the road less traveled. Most people find it easier to foam at the mouth about Trudeau, central banks, the CBC, corporations and the evil “they”.

Number 2 is exactly what Warren Buffett gave in answer to a young woman at his annual meeting. Become really good at a marketable in demand skill.

Number 3. Buying the means of production (for what the masses consume) is exactly what we do as equity investors and has been suggested here before.

Number 1. Buy land sounds right. But it can be tough since vacant land has to go up a LOT to make a decent return when held for years. A company I own has loads of land mostly around Edmonton and Calgary that they slowly develop and it trades at 40 cents on the dollar. Because their ROE has averaged under 5% with little sign of improvement.

Number 4. Learn lots. Yes.

#18 Søren Angst on 05.14.22 at 12:25 pm

#14 Dave

BoC deputy dog already in his speech said they might reverse course if the impact on housing is too great!!!

He did not. Read the speech. – Garth

———–

Fanatics cannot be reasoned with Garth.

Still, I admire your stalwart ways. Unsinkable.

2 Cdn Generations about to learn that Inflation is not going away, even with suspect “inflation slowing” Statistics, ANY.TIME.SOON.

Rough ride coming.

Cdn RE Speculators will get slammed, AirBnB or not – years for inflation to be tamed meanwhile underwater “investment”. Cashflow thrown at a capital loss “investment” – makes no sense but welcome to 🍁 ’cause it’s different this time & Cdn RE always goes up.

GRAVITY.

Homes will become more affordable.

yeah Kids.

(and ya, yeah oil)

#19 Philco on 05.14.22 at 12:41 pm

#157 DON on 05.13.22 at 12:32 pm
——————————
Jumping back a few post.
Yes I watched people wipe themselves out with Ballard and the Dot Coms. Same thing just keeps repeating. Human nature to follow the heard.

Had a busy Fri. Moved 55 truck loads of dirt and cut some fir. 6x16in header 14ft long. Heavy stuff about 400lbs ea! Did a bunch of 6×6 and 2×6 all for a the 9,000 RV and shop building. Amazing cut $2500 of lumber in 6 hrs on that little band mill.
The kid I hired is one hard working boy. Nice to see and hard to find these days. We are the only regional district that has no code or inspectors. That a great thing as we don’t even need to grade the wood, plus saves a ton of BS and money. All buildings I do have engineered though.
Cheers

#20 crowdedelevatorfartz on 05.14.22 at 12:41 pm

@#10 Quinty’s Quantifiable Query’s
“Yes, it will eventually bounce back.

@ #12 Pugnacious Ponzies Pshaw
“And let the experts here discuss financial matters.”

+++
Quinty.
I have personally seen several market meltdowns.
First in the 1970’s when I was a teen, then in the 1980’s( I was actually doing maintenance work at the now defunct trading company C.M.Oliver at 750 West Pender on Friday, Oct 19 1987 when everything went south….quite an eyeopener. Screaming traders and fear in everyone’s face. Monday morning was like a morgue in that trading house.).
The early 1990’s drop. etc etc etc.
Been there. Seen it before. It happens.
Will this market continue to drop?
Probably.
Does it come back?
Inevitably.
Will it be like Japan’s 30 year market Stagnation slump?
Hopefully not.

As Ponzie endlessly points out.
I’m no financial genius.
Observations from the street aren’t financial predictions….just observations.

Demo companies are slow.

Next up to watch for will be announcements for cancelled construction projects in the private sector.

Large development projects that require millions of up front $$$$$ and years to plan, start, build and finish.
Rising Interest rates make those mega builds too risky for banks and builders.
Cancelled.
Watch for the announcements.
3- to 6 months from now.

After that comes the cancelled govt projects because….there aint no tax money left after free universal daycare, free rainbow sidewalks, free first nations cash, free abortions for Americans, free plane flights for war refugees, free, free free.
Free aint cheap.

So watch for cancelled govt projects in 12-24 months because the govt is always way behind the real world.

Hopefully Trudeau will be in the middle of an election by that time.
High bank rates, high unemployment, high food, gas, rent and voters wanting blood.

Reminds me of the early 1980’s

#21 Søren Angst on 05.14.22 at 12:41 pm

If you will permit me Doug…if NOT I understand.

The best of both Worlds.

yeah oil + yeah 🍁

NXF

YTD +26.09%
May 2022 Div Yield = 7.25% [paid qtrly]

Scroll down for Holdings, Stock Style = Value ETF. Peruse 1-Year Return for their Top 10 holdings.

https://www.morningstar.com/etfs/xtse/nxf/portfolio

May slow down this Summer though.

Oil Spot price
https://ycharts.com/indicators/wti_crude_oil_spot_price

Oil Futures
https://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic

——————-

Still in Contango, and that’s a good thing for my

yeah oil ETN

#22 Doug Rowat on 05.14.22 at 12:44 pm

#10 Quintilian on 05.14.22 at 11:21 am
Crowdie:

But how do you not see the inevitable implosion of your equities portfolio?

—-

The problem with inexperienced investors is that they speak always in terms of certain outcomes. Nothing’s inevitable. To make such conclusions is vanity, or fear.

—Doug

#23 Dharma Bum on 05.14.22 at 12:54 pm

In May of 2025, everybody’s gonna be crying:

“I shoulda bought in May of 2022!”

#24 Faron on 05.14.22 at 12:58 pm

#16 Søren Angst on 05.14.22 at 12:01 pm

Propaganda. Likely Putin is having a good laugh at that.

#25 Sail Away on 05.14.22 at 1:00 pm

#17 Shawn on 05.14.22 at 12:01 pm

Number 1. Buy land sounds right. But it can be tough since vacant land has to go up a LOT to make a decent return when held for years. A company I own has loads of land mostly around Edmonton and Calgary that they slowly develop and it trades at 40 cents on the dollar. Because their ROE has averaged under 5% with little sign of improvement.

———

Agreed. Making land pay is a gamble. Our strategy is finding undeveloped parcels with historical access bordering rivers, lakes, ocean or protected parkland/wildlife management areas, then buying with no intention of any sort of development or return but as long long term, hopefully forever, family holdings in a closely- held corp.

Sometimes this involves managing and covering all subdivision costs/procedures for an existing landholder- in this case, historical access isn’t necessary since an access right of way can be registered at subdivision.

#26 Joseph R. on 05.14.22 at 1:03 pm

“Already we’re seeing evidence of a potential peak in inflation. Indeed the CPI data from earlier this week showed a still-lofty 8.3% y-o-y inflation increase in April, but it marked the first monthly deceleration in annual CPI since last August. And major drivers of inflation—gasoline prices, natural gas prices, used car prices, and so on—are showing at least tentative signs of peaking.”

It seems you are only considering goods in your analysis, remember we live in a service-based economy: 70.5% of our GDP in 2017 (As a financial advisor, you are part of the service sector !). A little less than 30% was goods production.

The thing is, the CPI template used by Statistics Canada did not change to accommodate the rapid change in customer behaviour than occured since February 2020.

As the country reopens and we go back to normality, like using services as restaurants, hair dressers, gyms, back to work,… and less relying on ourselves to buy goods.

This year, or better yet, next year’s CPI results will reflect back to its it had pre-pendamic model and we will have a “truer” picture of inflation.

#27 DON on 05.14.22 at 1:04 pm

#14 Dave on 05.14.22 at 11:46 am
BoC deputy dog already in his speech said they might reverse course if the impact on housing is too great!!!

He did not. Read the speech. – Garth

**********
Hey Dave.
You should also check out what Mr. Powell said yesterday. It is amazing how many people were twisting his words an hour later. Powell was speaking in plain simple words.

Sales people no doubt interpret what they need to.

#28 Pbrasseur on 05.14.22 at 1:09 pm

Governments and central bank thought they could indefinitely manipulate the credit markets and that was true until inflation started biting them in the *ss!

It was always going to end that way and inflation is not a problem you can kick down the road.

You can say what you want Doug but there’s not putting back that gini in the bottle.

As one of the most leveraged nation on earth Canada is in for a treat.

#29 Sail Away on 05.14.22 at 1:09 pm

#23 Dharma Bum on 05.14.22 at 12:54 pm

In May of 2025, everybody’s gonna be crying:

“I shoulda bought in May of 2022!”

———–

That’s not the way it works on the interwebz. In May of 2025, all the people that are not buying now will be saying:

“Shoulda bought in May of 2022 like I did!”

Same ones who ‘bought’ in March 2020, but were also conspicuously quiet in March of 2020.

Doug in London was clearly and happily posting buys in March of 2020. Don’t remember many others, but they sure appeared later!

#30 Søren Angst on 05.14.22 at 1:15 pm

Realtor Pasalis (guy that hates Garth) “sottovóce” summarizes the state of Cdn RE Speculation.

https://twitter.com/JohnPasalis/status/1525467250500714497

🔻

yeah Kids.

#31 Søren Angst on 05.14.22 at 1:18 pm

#24 Faron

Flippant as usual. Shoot from the hip.

Engage keyboard before brain.

And your “controindicazioni” are?

#32 willworkforpickles on 05.14.22 at 1:21 pm

“And if you’re an investor who believes inflation’s peaking and you’re presented with a 6x move in Treasury yields in less than a year, what might be the result? You guessed it: money being moved into bonds.”
………………………………………………………………………………………………….

Those who believe inflation is peaking or soon will are listening to current Fed-speak story line bullshit.
What investors who believe this don’t know is the Fed’s tiny rate increases are adding stimulative fuel to the inflation fire.
That which creates expansion (too low interest rates) adding to inflation, can’t possibly have the contractionary effect on inflation the Fed pretends to target. And so inflation will continue to stay high, then soar to new heights with new rounds of stimulus and the next round of QE to come as shaky markets start to shake more so with each tiny rate increase until it starts to break apart.

Runaway inflation – not peak inflation is the very antithesis to the bond market and good luck to you all with your new found strategy.

So will bonds rally? Probably with all these sheep believing the current Fed lie they can get inflation under control.

Just as i said months back, don’t invest in gold as an inflation hedge yet as there will be a big pullback.

Just as i said there would be … here it is now and right on time when i said gold would pull back as starry eyed investors will believe all the Fed-speak of getting inflation under control notwithstanding the fact they can not and will not nonetheless.

#33 Blair on 05.14.22 at 1:25 pm

#14 Dave Do you ever take a day off, Garth? Otherwise, have a good weekend.

#34 wallflower on 05.14.22 at 1:48 pm

Meanwhile, crickets at the open houses around here.

#35 Barry on 05.14.22 at 1:53 pm

Why would I want to buy a BOND when I can get 4.8% purchasing Scotiabank stock with a possible divvy increase at the end of May with more to come over the years? When was the last time they cut their dividend? The Second World War. I’m nearly 70 and I’ve never believed in “a balanced portfolio”. Dividend growth equities from good companies like JNJ or Royal Bank or Fortis or CN Rail. And the taxes HA! Hardly any.

#36 Ponzius Pilatos on 05.14.22 at 2:06 pm

https://www.reddit.com/r/onguardforthee/comments/uoxyrs/finally_some_honesty_about_canadas_housing_crisis/

#37 Bond, James Bond on 05.14.22 at 2:16 pm

Looks like the Fed has license to kill Bonds this year

#38 Søren Angst on 05.14.22 at 2:25 pm

#24 Faron

Putin health questions ongoing for a while now.

Guardian in March.
https://www.theguardian.com/world/2015/mar/13/vladimir-putin-work-russian-tv-illness-rumours

DW in April.
https://www.dw.com/en/putin-and-parkinsons-what-experts-say-about-his-health/a-61597476

Oz. Cancer operation. May 3.
https://www.youtube.com/watch?v=yeykMBQdVJw

Oligarch conversation recording that Putin has cancer, 2 days ago.
https://twitter.com/newlinesmag/status/1525266722575552513

Daily Mail going out of its way to prove the hypothesis, 1 day ago.
https://www.dailymail.co.uk/news/article-10813667/Top-oligarch-secretly-recorded-saying-Putin-blood-cancer.html

And of course today, Ukraine Spy Chief say Putin has cancer.

There are earlier accounts than March. Did not bookmark them.

——————–

Enough information out there that says Putin is sick.

Latest seems to be cancer. If he dies soon, I do not think there will be an orderly handover of power if Russian history repeats.

Hope not. Mr. Market will not be happy.

There you go Doug.

#39 Faron on 05.14.22 at 2:48 pm

#31 Søren Angst on 05.14.22 at 1:18 pm

#24 Faron

Flippant as usual. Shoot from the hip.

Engage keyboard before brain.

And your “controindicazioni” are?

First of all, the burden of proof is on you to show that it is true. The null hypothesis is that any allegation is unfounded.

Regardless, I see this as unlikely to be true based on:

1: Sources are tabloid media and Twitter. After Berlusconi, I have a hard time taking Italian sources as credible at all.

2: Your source’s source is a Ukrainian official who has a strong motive to spread that rumor. Another is a Putin opposition oligarch.

3: That kind of intel would be a very closely held secret in Putin’s circle. Sure, anything can leak, but illness of a strong-man leader is the least likely.

Like any assessment when we don’t have the facts and will not have the facts ~ever, it’s a game of likelihood. I give this a low to very low likelihood of being true. Nothing personal.

#40 Flop… on 05.14.22 at 2:53 pm

Can we put the old gang back together?

Is there a need?

Questions, questions, I’m not sure what pulled me out the coma, I think subconsciously it was seeing a guy that used to be a contributor on this blog, and followed me over to my blog, got a mention on the Vancouver real estate Twitter feed.

With municipal elections upcoming they raised a valid point, one of the candidates decided to highlight it, I thought about showing it then realized CBC had done a piece on it, so I decided to lay down my guns.

I can’t compete with boondoggles.

I knew the name, didn’t know what they did for a living, decided to look into it, and then realized if I can put the old gang together again and get the information flowing from those in the know then maybe there could be some value in it for the casual observer.

Sure the critics will complain, Yogi Berra would probably say they wouldn’t be critics if they didn’t criticize.

During that time I vividly remember the number one complaint people would vent towards this blog was “ So sick of the Trump stuff.”

Well kids, he’s still around, could be coming back, if only Vancouver real estate was considerate enough not to cool price-wise when Donald Trump was making noise.

Last time at this stage in the cycle the realtor ran blogs simply just stopped updating their pages when things became too dire to report.

This is the void that we can fill, buyers are swamped with information on the way up the mountain, and their trusty Sherpas abandon them on the way down…

M47BC

#41 Faron on 05.14.22 at 2:58 pm

#38 Søren Angst on 05.14.22 at 2:25 pm

So, is it blood cancer, abdominal cancer (which is not really a thing) or parkinsons? The videos leading up to the war show him pretty robust looking. Parkinsons has clear outward signs and, when severe, people can hardly move. It also is a very slow killer, if at all. People about to die of cancer look like crap. You certainly aren’t pounding any table in loud “defense” of your country.

Now ask yourself: “What motives do Ukrainian or western bodies have for spreading such a romour?” I think you will find numerous answers. Enough to cast plenty of doubt.

#42 Faron on 05.14.22 at 3:07 pm

Who was the dude here pumping the high interest rates that can be “realized” from staking crypto? Currently, USDT (AKA Tether) is yielding 33% and slipping off its peg. Pundits give it a month before it pulls a LUNA. Any takers?

Jeesh. The co-working space I was in for a while was packed to the gills with people into various crypto tokens. Solana for one. You could hear chatter about “investing” in it around the lunch counter. I kinda feel bad for them. But, perhaps they are learning good lessons at a young age.

#43 Doug Rowat on 05.14.22 at 3:09 pm

#35 Barry on 05.14.22 at 1:53 pm
Why would I want to buy a BOND when I can get 4.8% purchasing Scotiabank stock with a possible divvy increase at the end of May with more to come over the years? When was the last time they cut their dividend? The Second World War. I’m nearly 70 and I’ve never believed in “a balanced portfolio”. Dividend growth equities from good companies like JNJ or Royal Bank or Fortis or CN Rail. And the taxes HA! Hardly any.

—-

There’s nothing wrong with owning high-quality dividend equities. But what you’re really saying here is that you’re an excellent stock picker, which, of course, is impossible to verify.

If you only pick winners then, naturally, any concentrated dividend-stock portfolio looks great. But no one picks only winners. And “good companies” are only good until they’re not. Even blue-chips cut their dividends.

Just ask General Electric investors.

—Doug

#44 DON on 05.14.22 at 3:10 pm

#20 crowdedelevatorfartz on 05.14.22 at 12:41 pm
@#10 Quinty’s Quantifiable Query’s
“Yes, it will eventually bounce back.

@ #12 Pugnacious Ponzies Pshaw
“And let the experts here discuss financial matters.”

+++
Quinty.
I have personally seen several market meltdowns…

*************

Nicely put! Experience provides context as human nature always repeats.

#45 Yukon Elvis on 05.14.22 at 3:20 pm

#35 Barry on 05.14.22 at 1:53 pm
Why would I want to buy a BOND when I can get 4.8% purchasing Scotiabank stock with a possible divvy increase at the end of May with more to come over the years? When was the last time they cut their dividend? The Second World War. I’m nearly 70 and I’ve never believed in “a balanced portfolio”. Dividend growth equities from good companies like JNJ or Royal Bank or Fortis or CN Rail. And the taxes HA! Hardly any.
+++++++++++++++++
Same. I buy the Big 6 every time their dividends hit 5+%. I hold and drip the divs. Done ok over a few decades now.

#46 Look out below on 05.14.22 at 3:29 pm

It feels like it is a bit early to say we have seen the potential peak in inflation. The number has come off, but that doesn’t in mean that it can’t go back up. It is very likely that it will. Even if it doesn’t, it is extremely probable that it will settle at a much higher rate of 6 or 7 percent for the foreseeable future and CB’s will need to continue raising rates. Trying to call the bottom in the equity slide because inflation peaked seems like a bad move. Don’t fight the Fed I always hear, and the Fed is raising rates for the next year.

As well, the Fed talks about average inflation of 2% now. If inflation is 8%, to average it to 2% you need a year of 6% deflation. That will take a few more rate hikes.

The economy hasn’t even felt the small hikes we have had so far. Wait for a few more before the party really starts and then look at how the buy and hold is working. You can see what is coming here if you open your eyes. I’m fading the move on Friday.

#47 Doug Rowat on 05.14.22 at 3:57 pm

#32 willworkforpickles on 05.14.22 at 1:21 pm

So will bonds rally? Probably

—-

A person of so few words. But look at that? We’re in agreement.

—Doug

#48 Diamond Dog on 05.14.22 at 4:15 pm

#32 willworkforpickles on 05.14.22 at 1:21 pm

You speak it true. It’s difficult to see how the Fed will not continue to raise rates at this point. It’s inflationary not to. We can call for peaks all we like, but if anyone looks at m2 and the 18 to 24 month delay in inflation in relation to m2’s money supply (7% yoy is the 20 year norm):

https://www.longtermtrends.net/m2-money-supply-vs-inflation/

We’ll see that high inflation will be around for a while and that it has been reckless to not raise rates already and quite damaging for the Fed’s credibility insofar as telling the truth is concerned by the Fed to say that inflation is transitory or look for every excuse to slow roll raising rates “because inflation is that damaging”. It’s a wrecking ball.

Knowing the consequences to printing all that money and shutting down large sectors of the economy during a pandemic, the choice to avoid recession during this time over the inflation we are seeing now is my own axe to grind. This is failed policy during an election year 2020 with self gain written all over it and accountability from what I can see (Trump still controls the Republican party) has yet to come.

The good news is that m2 is coming down. The bad news is that the economic delay in taking money out of people’s pockets still exists not because of fundamentals, but because of human behavior. Inflation will not go down willingly. Time alone will not break the back of inflation. It’s human behavior that needs to change, unfortunately. The price fixing, the income entitlements and expectations, recession at least historically, has been the only cure to high inflation.

That being said, a Fed rate at less than 1% won’t induce recession and is still inflationary! To argue that Govy bonds are worth a look knowing that rates will continue to rise crushing coupon values is a bit premature (and I’m being kind). We need to be realistic and ask ourselves what the Fed rate of “neutrality” truly is and how far the Fed is willing to go or can go, beyond it. If we haven’t asked this much, we aren’t asking the right questions.

Don’t want to pick on anyone, but money managers/investors can’t have it both ways. We had an “everything bubble” ok? 27% gains last year in the DOW alone. Real estate numbers off the charts. Bond markets in a bubble with nowhere else to go. Commodities arriving in 2022 at a full clip. Do we somehow expect this to be a new normal, that money will always be free, that indexes will rise to the moon forever? That the next great secular bull market has just begun? What are we, market pumper memes now?

It’s not rational to think that the markets won’t self correct, or that 30x earnings is the next bottom in equities for this decade or that bond yields won’t continue to go up and I’ll remind, bond investors don’t invest for yields, they invest for coupon values. Asking a 5th grader question but to drill it home, what’s happens to those when rates further rise?

In short, welcome to the fallout of the everything bubble collapsing. It’s not coming back ok, the trend is no longer our friend. There are periods of time when the markets will hurt you if you are buying indexes and ETFs and debt no matter what you do. This is one of those times.

It’s not an easy message to digest or sell. There’s still lots of money on the sidelines looking to get in, fresh clients who want to invest, want to grow and prosper but for the most part, leading an investor into risk is not one of those times. We can fool ourselves with stories of “no one knows the future” or “better us than someone else” but it’s all an excuse to do what? Go with what we know which is great during a bull run but not so much during a bear.

Don’t want to be the bitch here, but the arguments we heard over the last 6 months for clients taking on more risk haven’t worked out so well, have they? There was some play in commodities in the last 6 months but now?

It’s not like there aren’t places where you can put your money safely, but managers AND clients have to be realistic with their returns. It’s a dangerous market. The froth is coming off an everything bubble and the markets are correcting. It could be a while yet before one can wisely council all in equities AND bonds. I’d wait out the risk myself (as I have been) and advise clients to do the same knowing it will cut my own margins but that’s just me. There’s an old adage, not a golden rule but it works. “Never put a person in a position where you set them up to fail”.

This isn’t just a game of logic, experience and the mental disciplines of removing bias to see straight, it’s a game of trust. Always, always, give the best advice one can (even knowing to err is human) and it will come back to serve us well.

#49 willworkforpickles on 05.14.22 at 4:24 pm

#47 Doug Rowat

#32 willworkforpickles on 05.14.22 at 1:21 pm

So will bonds rally? Probably

—-

A person of so few words. But look at that? We’re in agreement.

—Doug
………………………………………………………………………………………….

Not that it’s the smart move to be making looking ahead ahead to next year but many will jump in.

#50 Yukon Elvis on 05.14.22 at 4:27 pm

There’s nothing wrong with owning high-quality dividend equities. But what you’re really saying here is that you’re an excellent stock picker, which, of course, is impossible to verify.

If you only pick winners then, naturally, any concentrated dividend-stock portfolio looks great. But no one picks only winners. And “good companies” are only good until they’re not. Even blue-chips cut their dividends.
++++++++++++
Not so hard when you invest in Canadian oligopolies like banks, railroads, pipelines, and telecoms. They are heavily regulated and protected from outside competition and the country could not function without them therefore they will not fail.

#51 Going... Going... Gong show! on 05.14.22 at 5:15 pm

#5 Ponzius Pilatus on 05.14.22 at 11:00 am

Go Leafs, Oilers and Flames.

——

Be careful what you ask for. I suspect they will all be go.. ing to the golf courses within 32 hours or so!

#52 crowdedelevatorfartz on 05.14.22 at 5:24 pm

@#41 Faron.
“So, is it blood cancer, abdominal cancer (which is not really a thing) or parkinsons? The videos leading up to the war show him pretty robust looking”
+++

All the internet conspiracy theories aside.
If dictator Putin croaks in the next few months I’d put it down to poison.
Russians seem to have a perverse fascination with poisoning their foes.
Several of Putins’ Russian enemies have died over the past few decades as the result of poisoning.

Toxic radiation in tea.

https://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvinenko
( I had a friend who was traveling back from Ukraine on business and stayed in the same hotel as Litvinenko. Actually saw him in the Hotel bar with some friends the night he was poisoned. It was late when my friend arrived at the hotel and wanted something to eat. He ate, drank and watched these guys partying. He was questioned by the RCMP at the request of the Brits when he arrived back here.)

Toxic nerve agents sprayed on door handles.

https://en.wikipedia.org/wiki/Poisoning_of_Sergei_and_Yulia_Skripal#:~:text=On%204%20March%202018%2C%20Sergei,the%20city%20of%20Salisbury%2C%20England.

Our Russian Comrades always enjoy the dramatic flair to a routine killing.
Too many James Bond movies I suppose.

My personal interest in KGB ( Putin’s former employer) assassination techniques was piqued way back in the early 80’s when a Bulgarian assassin jabbed a former Bulgarian whistleblower standing at a bus stop in London with an umbrella gun.
The poor bastard died a few days later in absolute agony.

https://en.wikipedia.org/wiki/Bulgarian_umbrella

Yes Russians don’t seem like to kill their enemies quickly, quietly and with as little fuss as possible when a dramatic poisoning will do.
I guess it sends a message to other potential dissidents.

If Putin IS sick then he is weak.
If he is weak he is vulnerable.
A vulnerable Russian dictator usually doesnt last very long.

#53 Brian on 05.14.22 at 5:33 pm

Great post, Doug, love the analogy.

#54 Flop… on 05.14.22 at 5:46 pm

Flop Drops.

So this studio, junior one bed, call it what you will, sold in my hood recently, it was a bit of a weird one, sale price to assessment was great, that got hammered last year, but gave me pause as to just how solid the bottom of the market is.

The details…

106-1988 e 37th Ave, Vancouver.

Original ask 399k
Final ask 450k

Sold for 427k

Purchased by previous owner for 418k in 2018.

So they tried to cover their costs, couldn’t really, splitsies maybe, trying to avoid the calculator on the weekend, did the guy in 2018 get ahead of the market maybe, but if you look at the lowly numbers that’s the real headline with this one.

Things don’t get much lower than this in Vancouver, 427k gets you looking at the tail end of the bottom page of the absolute cheapest options in Vancouver, and they still couldn’t escape the scrape of a changing market.

Any cheaper than this gets you into special assessment, leaky condo territory, this place although tiny is solid and updated tastefully with no mould in sight.

You think with rental prices in the city, this one would have been fought over and bided up,but that’s not the case, clearly.

Sold 7 times in the past 18 years, it’s certainly seems like stepping stone for most, if rent continues to run wild the new owners could be glad that the competition sat on their hands…

M47BC

https://www.zealty.ca/mls-R2678090/106-1988-E-37TH-AVENUE-Vancouver-BC/

#55 PeterfromCalgary on 05.14.22 at 6:33 pm

Putin’s war is causing some of this inflation.
Here’s a malediction that comes from the Abbey of Fefchamp, in France. It is circa the late 10th Century. And was caste against some strong men stole the Abbey’s land much like Putin is trying to do in Ukraine. I am going to borrow it to curse Putin! It probably won’t work but reading it out loud will make you feel better.

“We curse them, and we separate them from the company of the Holy Mother Church and of all faithful Christians, unless they change their ways and give back what they unjustly took away. May they be cursed in the head and the brain. May they be cursed in their eyes and their foreheads. May they be cursed in their ears and their noses. May they be cursed in fields and in pastures. May they be cursed when sleeping and when awake, when going out and returning, when eating and drinking, when speaking and being silent. May they be cursed in all times and all places.”

#56 Søren Angst on 05.14.22 at 7:05 pm

EUROVISION song contest just finished 1 minute ago.

Country Jury votes put UK on top.

BUT the people of Europa + Oz voted with their hearts.

The Winner is

SLAVA UKRAINI.

The people of Europa + Oz voted overwhelmingly for them. I clapped out loud when that vote came in.

Brava Ucraina, brava!

#57 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 05.14.22 at 9:29 pm

What a laughably deplorable non-performance so far tonight by the worst team in history and the worst fake city in Canada.

A place, a team, that cannot accomplish anything when it matters.

#58 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 05.14.22 at 9:35 pm

5 minutes to go and all the deluded fans know what is coming.

The Scotiabank Morgue continues……

#59 Dozer on 05.14.22 at 9:41 pm

You mention China and Ukraine, let’s examine. China could well be locking down for reasons other than Covid. Trillions lost in real estate and equities may mean China is starving for income and has locked down using Covid as an excuse. Many countries have tens of thousands of news daily cases, China reporting only dozens. Makes no sense to lock down cities of 25 million. There’s something else going on.

Covid might just be a gasbag to control the reality of an increasingly impoverished population. Inflation in China is rampant. Locking down has killed the need for basic materials generally. Is copper down in China by state decree? Are factories shuttered because they can’t pay for raw materials?

Ukraine is a political diversion for the failing left. There is no Putin Put in the oil business. The only reason gas is short and prices high are the coordinated energy killing policies of the leftist pols in EU and North America. The small Russian sanctions have zero effect on global oil. Read Oil Price.com for a reality check. The effects of this regional war is an obfuscation not a factor in the global energy sphere.

#60 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 05.14.22 at 9:52 pm

And so the truth is told, yet again, about the reality of the Make Believes and the Torontoilet.

Let all of us in Real Canada leave this dumpster fire of failure behind, forever.

FREEDOM 55!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

#61 Greg on 05.14.22 at 9:54 pm

I guess LUNA and the cryptos and related stocks that tanked this week are going to bounce back too…buy the dip applies once again.

#62 Sail Away on 05.14.22 at 10:53 pm

#56 Søren Angst on 05.14.22 at 7:05 pm
EUROVISION song contest just finished 1 minute ago.

Country Jury votes put UK on top.

BUT the people of Europa + Oz voted with their hearts.

The Winner is

SLAVA UKRAINI.

———–

Was ‘coming from a country currently under attack by Russia’ the main criteria in this singing contest?

#63 Outrage on 05.14.22 at 10:58 pm

Looks like the boc will be neutral for raising rates . I knew it and most Canadians did to. Inflation will be high for years to come so not to prick the bubble.

#64 Creamydill on 05.14.22 at 11:07 pm

The debt market days are coming to an end needs a real house cleaning blow off, central banks can’t get away with buying up all the unwanted debt forever when was the last time a bond sale failed hmmmm ever wonder why……

#65 Ponzius Pilatus on 05.15.22 at 12:09 am

#62 Sail Away on 05.14.22 at 10:53 pm
#56 Søren Angst on 05.14.22 at 7:05 pm
EUROVISION song contest just finished 1 minute ago.

Country Jury votes put UK on top.

BUT the people of Europa + Oz voted with their hearts.

The Winner is

SLAVA UKRAINI.

———–

Was ‘coming from a country currently under attack by Russia’ the main criteria in this singing contest?
—————
For simple minded Dolce Vita it obviously was.

#66 Nick on 05.15.22 at 2:14 am

Came here to enjoy a 50 YEARS OF MAPLE LEAF INCOMPETENCE comment and he did not disappoint!!

#67 Tom from Mississauga on 05.15.22 at 6:54 am

Much like here lockdowns and restrictions are politically popular as a security measure. Chinese people don’t have Canadian truckers to tell them they don’t have to put up with it. The lockdowns will never end, ever. It won’t matter what the virus is doing.

#68 TurnerNation on 05.15.22 at 7:42 am

Checking our Foum Host’s Insta-Gram he is a budding urban photologger. Emphasis in the East end.

#73 Nonplused on 05.13.22 at 10:27 pm

^^ Karbon Taxes? You will also love the engineered famine. It’s not like there is a global plan being rolled out especially in the Former First World Countries wink wink. We ae soo close to 2019 Normal I can feel it!

“Northern Ireland faces loss of 1 million sheep and cattle to meet climate targets”
https://www.theguardian.com/environment/2022/apr/22/northern-ireland-faces-loss-of-1-million-sheep-and-cattle-to-meet-climate-targets

.zerohedge @zerohedge Food Riots In Sri Lanka Turn Deadly As Protesters Beat Up Police, Burn Down Politicians’ Houses


— Control over our Travel/Movement. Another reminder that all free movement ended that cold week March 2020 per plan This is a PERMANENT global thang.
(Cough — Certificate Of V.I.D)

https://niagaraindependent.ca/cbsa-to-continue-mandatory-use-of-arrivecan-app-into-future-agency-official-confirms/
CBSA to continue mandatory use of ArriveCAN app into future, agency official confirms – Bridge authorities say they have been informed by the federal agency that required use of the app is to be “made permanent.

#69 Doug Rowat on 05.15.22 at 8:18 am

#61 Greg on 05.14.22 at 9:54 pm
I guess LUNA and the cryptos and related stocks that tanked this week are going to bounce back too…buy the dip applies once again

—-

The odds of a US Treasury recovery and a crypto recovery are, needless to say, not comparable.

—Doug

#70 Doug Rowat on 05.15.22 at 9:02 am

#48 Diamond Dog on 05.14.22 at 4:15 pm

In short, welcome to the fallout of the everything bubble collapsing. It’s not coming back ok, the trend is no longer our friend.

It could be a while yet before one can wisely council all in equities AND bonds. I’d wait out the risk myself (as I have been) and advise clients to do the same knowing it will cut my own margins but that’s just me.

—-

It’s not coming back…but wait…it could be coming back. In “a while”.

Brave forecast.

—Doug

#71 crowdedelevatorfartz on 05.15.22 at 10:10 am

@#57 55 years of Maple Leafs
“What a laughably deplorable non-performance so far tonight by the worst team in history and the worst fake city in Canada.”

+++
Apparently you’ve never been to a hockey riot in Vancouver…..

#72 crowdedelevatorfartz on 05.15.22 at 10:22 am

@#68 Turnernation
“.zerohedge @zerohedge Food Riots In Sri Lanka Turn Deadly As Protesters Beat Up Police, Burn Down Politicians’ Houses
+++
A similar Irish potato famine with wheat?
Some estimates of the Irish potato famine casualties were as high as 25% of the population starved or emigrated to America in the 1800’s.

Well, as the war with Russia escalates
I expect that “food riot” headline to be fairly common all over the world this year as food prices continue to climb and 2 billion? 3 billion ? realize …….
They can’t afford to buy food and there’s nothing to eat.
Boatloads of illegal migrants swarming southern Greece, Italy, Spain etc.

#73 Putin’s Mafia on 05.15.22 at 10:36 am

#52 crowdedelevatorfartz on 05.14.22 at 5:24 pm

All the internet conspiracy theories aside.
If dictator Putin croaks in the next few months I’d put it down to poison.
Russians seem to have a perverse fascination with poisoning their foes.
Several of Putins’ Russian enemies have died over the past few decades as the result of poisoning.

—————————————

Don’t forget the attempt on Alexei Navalny. The recent documentary about it is riveting, at one point he trolls his own assassins on the phone.

https://www.youtube.com/watch?v=81AAlzoKNPU

The inept crudeness of the Russian FSB is incredible.

Also highly recommend “The Salisbury Poisonings”, 3-ep British miniseries which recreates the events during that assassination attempt on the Skripals and highlights just how crazy-dangerous it was to the general public.

https://www.imdb.com/title/tt10394886/

Incidentally the two agents in Salisbury who carried out the poisonings were identified as the same two who carried out the bombing at a munitions depot in Czech Republic in 2014.

https://en.wikipedia.org/wiki/2014_Vrbětice_ammunition_warehouses_explosions

Busy little terrorist thugs, those Putin boys.

#74 crowdedelevatorfartz on 05.15.22 at 10:48 am

Doug.
Any comment on the US Fed reducing the amount of Bonds it will sell starting in June?
The Fed wants to shrink their Bond portfolio by $95 Billion per month….until they reduce bond holdings by $1 trillion dollars.

Will a reduction in Fed bonds drive the price of all other available bonds up?
Does Turner Investments even look at US Bonds or are they a “rate setter” for the rest of the bond industry?

#75 Philco on 05.15.22 at 11:37 am

Thanks for the right up Doug!
Just going through some charts. Heavy carnage Especially in those high flyers. Looks good on them as I couldn’t understand valuations. I was sitting on major cash late last fall and my gut I do have to thank for keeping me away. Everyone was talking down housing and I did mention last fall its not going to be bye bye housing without other markets taking a hit.
Thankfully I’m unaffected what so ever.

Here’s a good interview with beautiful Candice Malcolm.
I agree, Trudeau is an arrogated failure!! 17 min in.
Also a piece on Apple prior. I would not support that company as I did NOT support Huawei (Sadly I installed a ton of their crap now being ripped out by Telus and Samsung and Ericson will now replace their network :-)

https://mikesmoneytalks.ca/may-14th-episode/

#76 Ponzius Pilatus on 05.15.22 at 11:43 am

72 crowdedelevatorfartz on 05.15.22 at 10:22 am
@#68 Turnernation
“.zerohedge @zerohedge Food Riots In Sri Lanka Turn Deadly As Protesters Beat Up Police, Burn Down Politicians’ Houses
+++
A similar Irish potato famine with wheat?
Some estimates of the Irish potato famine casualties were as high as 25% of the population starved or emigrated to America in the 1800’s.

Well, as the war with Russia escalates
I expect that “food riot” headline to be fairly common all over the world this year as food prices continue to climb and 2 billion? 3 billion ? realize …….
They can’t afford to buy food and there’s nothing to eat.
Boatloads of illegal migrants swarming southern Greece, Italy, Spain etc.
—————————
Lots of substitutes for wheat.
Rice, Oates, quinoa,farro,corn.
Or just cut out the carbs altogether for a while.
Most Westerners are too fat, anyway.

#77 Satori on 05.15.22 at 12:23 pm

#48 Diamond Dog on 05.14.22 at 4:15 pm
#32 willworkforpickles on 05.14.22 at 1:21 pm
————————————
Diamond Dog, your post was a good read. How long do you project this down spiral. It doesn’t look good. Housing going down, markets going down and M2… are we suppose to brace for all assets crashing?

Months ago, people here talking about taking their money out of investments at the ‘high’… your thoughts?

#78 Faron on 05.15.22 at 12:28 pm

#65 Ponzius Pilatus on 05.15.22 at 12:09 am
#62 Sail Away on 05.14.22 at 10:53 pm
#56 Søren Angst on 05.14.22 at 7:05 pm

Why not Ukraine? The music of eurovision is so bad that it doesn’t really matter which country is selected. Ukraine is popular. Pick Ukraine. KISS

#79 willworkforpickles on 05.15.22 at 6:58 pm

#77 Satori
I could go over the details to your questions to DD myself and have over the past few months only to have many of those posts flagged or deleted.

…obviously for not sharing this blogs authors view of the economy with mine as it exists today related to the debt induced bubble economy….

…but i can and will say this, the masses hinge their investment decisions on every word of the Fed no matter how far out the Fed is with current Fed-speak…

Timing the market based on what appears commonsensical geared to solid fundamentals will guarantee eventual loss for the investor.

…but there is a way nonetheless…

Knowing what the Fed is going to do ahead of time before the Fed acts, puts you ahead of the curve of what the masses will do later following the Fed when getting in and out before the masses do to actually make some real money in the markets .

To be specific with any further details will likely get this post removed as this blogs author has a different view of where the Fed is leading the economy than mine and where i believe the economy really actually currently sits and where its headed.

Since there is no inbox access to relate those kind of messages and opposing economic views of this sites masters won’t be published here….what can you do.

#80 Shawn on 05.15.22 at 7:30 pm

Facism?

I’m sure most people don’t ahve a good idea of what it means. Here’s the main definition from Google:

1. or Fascism : a way of organizing a society in which a government ruled by a dictator controls the lives of the people and in which people are not allowed to disagree with the government.

Dictionary.com says:

Facism: a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.

On that basis, Russia under Putin is surely a facist country?

#81 Shawn on 05.15.22 at 7:46 pm

Any true environmentalist must cheer gasoline being over $2.00 This is better for the environment than a giant carbon tax increase.