Trials & tribulations

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DOUG  By Guest Blogger Doug Rowat
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Until this past week, US equity markets traded lower for seven weeks straight.

The tragic Ukraine war continues, costing not only thousands of innocent Ukrainian lives but pointlessly devastating surrounding European economies as well.

China, the world’s second largest economy, is in the midst of a massive Covid lockdown that’s crippling its output.

US inflation is running wild creating investor anxiety and consumer despair.

The US Federal Reserve’s aggressively hawkish interest policy has resulted in a massive bond sell-off.

Biden continues to make reckless comments about the US’s willingness to overthrow heads of state and engage militarily against other superpowers.

And either Amber Heard or her dog, who’s apparently been incontinent since snacking on Johnny Depp’s weed stash, likes to defecate in the bed.

Clearly, this is the worst period mankind has ever known.

But that’s only our self-important human nature talking. We all like to think that we’re special and living in the most consequential time in all of human history. But we’re not. And we don’t.

Let’s start with inflation. Aside from the Ukraine war (and maybe Amber and Johnny), no story has garnered more media attention this year. And the recent US headline CPI numbers are tough: an 8.3% annual increase in April. But how short our memories are. Inflation in the 1970s and 1980s frequently rose above 10% and neared 15% by the early 80s. We also forget that US unemployment was nearing double-digits at this time as well—a double whammy. And if you think we’re in the midst of wildly hawkish central bank interest-rate policy now, remember that in the 1970s the Fed was raising interest rates BETWEEN meetings to control inflation.

With respect to the downturn in equity markets; yeah, it’s uncomfortable seeing markets decline, but the S&P 500 has only dropped 17% from its highs (after a stunning 29% total return last year) and our market, the S&P/TSX Composite, is down only 7% from its highs (again, after a spectacular 25% total return last year). How quickly we forget the utter carnage of the financial crisis 14 or so years ago, or the Covid crisis of only two years ago. The S&P/TSX Composite fell more than 50% and more than 35% from its peak, respectively, in these instances. Meanwhile, the VIX volatility index sits at 28 now, an uncomfortable level to be sure, but nothing compared to the 70 and 80 handles that we were seeing during Covid. Markets are practically tranquil now by comparison.

And as horrific and unjustified as the Ukraine war is, it isn’t a world war. Investors shouldn’t even pretend that this war is creating market disruptions equal to those of other global conflicts or economic downturns. Below, for instance, are the market drawdowns that we saw during actual world wars and other more consequential global crises. Other generations of investors would laugh at our present anxiety:

We may feel like we’re living through the toughest equity markets in history, but we’re most definitely not.

Source: Dynamic

And Biden’s steady stream of off-the-cuff bravado? Definitely unhelpful, but it’s become an understood White House routine now: trot out the press secretary to back-track the President’s poorly considered remarks. The White House did so when he called for regime change in Russia and it’s done it again regarding his threats to China over Taiwan. The global community has quickly learned to take any of the President’s unprepared remarks with a very large grain of salt.

But times are definitely still uncertain, and they may get more so. But before an investor can even consider the path forward, they have to accurately describe the present. And it starts with refraining from hyperbole and hysteria. The US may be teetering on a bear market, but Canada definitely isn’t in one; neither country’s in a recession (the US unemployment rate is only 3.6% for crying out loud); we’re not in a world war—and the President isn’t actually threatening one, even if it seems like it sometimes. And finally, the event that many cite as proof that we’re living in singularly momentous times—the global pandemic—is hardly a factor anymore, at least not for markets.

Relative to past history, our present situation isn’t particularly dire. As much as we’d like to think so, the times we live in presently aren’t special and probably won’t mark a great inflection point in world history.

Except for the Amber and Johnny trial. That might indeed signal the end of civilization as we know it.

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

 

98 comments ↓

#1 Flop… on 05.28.22 at 10:39 am

I believe it was Amber Heard’s dog that crapped in the bed.

No human would do that in between the sheets.

Everyone knows when doing that sort of thing you poop into the pillowcase…

M47BC

#2 Andrewski on 05.28.22 at 10:39 am

Thanks Doug, so I’m understanding that you’re saying that from an investing standpoint to just stay the course and maintain a B&D portfolio.
Lots of angst in the real estate market right now. How low can prices go as CB’s raise their rates?

#3 RowatNation aka Prince Polo on 05.28.22 at 10:44 am

We flatter ourselves that the times we inhabit are epochal and our lives are therefore remarkable. We exaggerate, lose perspective, drift to the extreme and sink into an emotional quagmire. It leads to bad choices.

Source: https://www.greaterfool.ca/2020/05/22/lessons-14/

#4 THE DANDADA on 05.28.22 at 10:51 am

Who is Amber and Johnny? What is going on with them?

There dog sounds cool to hang with.

#5 KNOW IT ALL on 05.28.22 at 10:56 am

Bull markets make you money, Bear markets make you RICH!

#6 don't break the bank on 05.28.22 at 10:58 am

i always wonder why people post that chart and leave the inflation adjustment out. you get a far far different picture. sure, do it on a total return basis too.

CP-LIE is much higher. you compare CP-lie to the 70’s but we all know, it’s no longer calculated the same way. and isn’t a valid comparison.

comparisons are good if they are on the same playing field.

Good article by Stephen Roach on the CP-lie rates…

“The Ghost of Arthur Burns”

https://www.project-syndicate.org/commentary/fed-sanguine-inflation-view-recalls-arthur-burns-by-stephen-s-roach-2021-05

i wonder why the central banks get worried about wage inflation?

it’s like they want to screw workers.

they take out food and energy. smooth out other data. adjust for “quality improvements” …

and yet, when workers start asking for higher wages.. it’s a panic. it’s like they purposefully want to suppress the masses.

“inflation” isn’t going away. it’s going much higher.

food prices have skyrocketed and are only going higher.
energy prices, oil, Nat Gas, … going much higher

wait.. oh ya… we don’t count those things. or much else it seems. the CP-lies will continue.

#7 Shawn on 05.28.22 at 11:14 am

Times are very good

Unemployment across the country is at record lows. (Alberta is a not at record lows but at 5.9% unemployment in Alberta is fairly low and headed lower).

But if a recession is merely two quarters of GDP shrinkage we are probably headed there.

Why? Prices are up several percentage points higher than wage growth. That is, real wages are lower.

The simply rules of supply and demand are that higher prices lead to lower demand. Lower demand means lower volumes of goods purchased and produced. That means a decline in GDP from current lofty levels.

Demographics are also a headwind. In the 70’s the boomers were coming of age. Now they are dying off. Boomers who are not yet dead are entering their go slow years and the average age of the population in North America is rising.

Inflation and an aging population will lead to a recession in The U.S. and Canada this year. (Probably, maybe.)

#8 Shawn on 05.28.22 at 11:22 am

Rampant Deflation

On the other hand the rampant deflation in Watermelon prices continues.

$17.99 about 5 weeks ago. Then $11.99, then $7.99. Yesterday, from the same grocery chain the the sale price was $4.00. That’s 78% deflation on this item. Hello Summertime, you seeing this? Even if you look at the $7.99 price we just got a 50% reduction!

Why? Probably because consumers acted rationally and refused to pay $11.99 much less $17.99 for a watermelon.

That is our job as consumers. Cut back or refuse to buy the more expensive items. The laws of supply and demand do work.

#9 Old Boot on 05.28.22 at 11:40 am

#52 Faron on 05.28.22 at 12:01 am

#48 Beth on 05.27.22 at 11:13 pm
#49 Satori on 05.27.22 at 11:15 pm

 It  was  a  rhetorical  question!

**********

Oh dear. Faron has the clap.

#10 Shawn on 05.28.22 at 11:41 am

GDP Shrinkage

As a reminder, the reported GDP growth percentage is ALWAYS measured against real GDP.

GDP will almost certainly continue to rise in nominal dollars. But a shrinkage in real dollars is very likely. How can it not if most consumers have a persistent decline in real wages? Do consumers as a group really have savings or borrowing capacity to keep buying the same volumes when their incomes are down in real dollars? Sure a big chunk of consumers do have savings but are they going to spend it? What about that 50% or so who said $200 a month puts them underwater? Is that a dull roar of gurgling I am hearing?

On top of real wage shrinkage we have a noticeably bigger chunk of the household budget going to gasoline and heating/cooling bills. How does that not lead to lower volumes of purchases in other categories? The dollar value of other categories will likely fall if prices are up say 5% or more, and some categories absolutely have to fall in volume terms.

Pass the popcorn.

#11 TurnerNation on 05.28.22 at 11:48 am

A L’il weekend look at the future.

I told you back in 2020 that it was a training period.
On the Permanent Social and Economic lockdowns. The world fell in global WW3 that cold winter week March 2020. Global prison is here.
In the Land of Fizer.

https://globalnews.ca/news/8872680/canada-monkeypox-update-vaccinations-may-26/

“Mass vaccinations are not yet needed to combat rising cases of monkeypox in Canada, a top health official said Thursday, but people should keep their distance from others to avoid catching the virus

Deputy chief public health officer Dr. Howard Njoo said because the virus “doesn’t discriminate” and can be spread through close contact with an infected person, people can avoid infection by “maintaining physical distance from people outside their homes.”

#12 Ponzius Pilatus on 05.28.22 at 11:52 am

In some countries, Johnny and Amber would get a public lashing for wasting the courts time.

#13 Tarot Card on 05.28.22 at 11:59 am

Thanks for the blog Garth
Thanks for the post Doug
And a big thanks Shawn for the hot stock tips
On Monday based on your astute observation I am buying cemetery stocks who would have thought!
And I am selling short all vegetable stocks because of your wisdom into telling everyone to stop buying watermelons.
What about oil?
Should I sell oil short because your going to tell all your fiends to stop driving their cars.

Well at least I don’t need to read the Saturday funnies I just come to the daily comments.
You’re a leader!

#14 Cdickenzz on 05.28.22 at 12:08 pm

Doug, I find your disingenuous attitude to be the epitome of Micawberishness

#15 Ponzius Pilatus on 05.28.22 at 12:12 pm

Anna Netrebko is back from senseless censure.
Without music, we’re just a bunch of monkeys with toilet paper.
Ars longa, Vita brevis.

#16 Doug Rowat on 05.28.22 at 12:21 pm

#6 don’t break the bank on 05.28.22 at 10:58 am

“inflation” isn’t going away. it’s going much higher.

food prices have skyrocketed and are only going higher.
energy prices, oil, Nat Gas, … going much higher

—-

Another post of unequivocal certainty. Like all of us, you know nothing of what the future holds.

—Doug

#17 earthboundmisfit on 05.28.22 at 12:30 pm

“in the 1970s the Fed was raising interest rates BETWEEN meetings to control inflation”

And in doing so, tipped the economy into a two and a half year recession. (if memory serves). So Doug, where’s the tipping point?

#18 crowdedelevatorfartz on 05.28.22 at 1:04 pm

“The US may be teetering on a bear market, but Canada definitely isn’t in one; neither country’s in a recession (the US unemployment rate is only 3.6% for crying out loud)”

+++
This has to be a very weird time for Economists making predictions with the inflation numbers shooting higher and unemployment so low.

How to explain the lack of workers everywhere affecting those low unemployment numbers.
A person that has quit their job ( Boomers by the hundreds of thousands/millions during covid?) must skew those unemployment numbers.
Also . If a person stops looking for work then they are not counted on the “unemployment rolls”
Where did all those workers go?
Aliens?
Cruise ships?
Alien run cruise ships?

If all the people that quit decided that their crappy pensions or investments arent cutting it and decide to come back to work for some extra dosh….

Where would our unemployment numbers be then?

#19 None on 05.28.22 at 1:05 pm

Yeah, biden calling out evil is the problem – eye-roll

You sound like a gun nut apologist.

#20 Elon Fanboy on 05.28.22 at 1:10 pm

I guess it depends on how you define a ‘world war’?

The west is effectively fighting a proxy war with Russia by supplying endless weapons to Ukraine.

I get the feeling the US would be quite happy to drag this war out for years trying to bankrupt Russia. Ukraine is just unfortunate collateral damage.

#21 crowdedelevatorfartz on 05.28.22 at 1:14 pm

@#67 Vlad Tor
“If you have nothing to say on the topic – better friends be silent!”

+++
A quote by Abraham Lincoln

“Better to remain silent and be thought a fool than to speak out and remove all doubt.”

I believe videos and interviews from multiple independent media sources before I will believe Putin’s propaganda machine.

Putin is a thug. A murderer. A war mongering swine.
He will say and do anything to remain in power.
Sadly, his people are stuck with him and forced to follow along.

#22 Brian on 05.28.22 at 1:17 pm

The situation north of the border gets little attention but Canada is fast approaching a “Minsky Moment”. It’s a nation where the prevailing wisdom is “House prices only go ⬆️⬆️” & Canadian consumption has been fueled by a generational leveraging of the Big 6 Balance Sheets

https://twitter.com/BrydenTeich/status/1530584689454600193

#23 Quintilian on 05.28.22 at 1:19 pm

#13 Tarot Card on 05.28.22 at 11:59 am
“Well at least I don’t need to read the Saturday funnies I just come to the daily comments.”

Comical for sure, the funniest are the ones that emphatically claim that nobody can tell the future, and then go on to elaborate on their stock market/picks and predictions.

#24 Ed on 05.28.22 at 1:26 pm

Like most I have been worried about my portfolio and took Garth’s advice to stop checking.

Finally got the courage to check for the 1st time in 3 months…looks like I’m up 2% YTD.

Cowabunga! and other financial expletives.

#25 crowdedelevatorfartz on 05.28.22 at 2:17 pm

Careful Vlad Tor

You might be declared a “foreign agent” next time you visit Russia….

https://www.reuters.com/world/europe/russian-ex-president-medvedev-calls-tougher-foreign-agent-law-2022-05-28/

Putin’s paranoia reaches new levels in police state tactics.
He’s becoming more like Hitler every day.

#26 Jib on 05.28.22 at 2:18 pm

Looking forward to the 90’s style 2 year house price drop and 14 year recovery

#27 ogdoad on 05.28.22 at 2:20 pm

Jeesh, you guys are turning out some entertaining reads lately. Is that part of ‘The Great Reset’?

Og

#28 Maurice on 05.28.22 at 2:21 pm

Amber Heard can press criminal charges for damaging her reputation online. I’m telling you this as someone whose brother works in the Toronto Police D14.

#29 Michael in-north-york on 05.28.22 at 2:22 pm

Keep helping Ukraine. Do not try to pressure Ukraine into signing an armistice on bad terms.

“Any cease-fire that allows Putin to experience any kind of victory will be inherently unstable, because it will encourage him to try again. Victory in Crimea did not satisfy the Kremlin. Victory in Kherson will not satisfy the Kremlin either.”

https://www.theatlantic.com/ideas/archive/2022/05/why-ukraine-must-defeat-putin-russia/629940/

Do not believe #VladTor, who is busy spreading kremlin’s propaganda here.

#30 PeterfromCalgary on 05.28.22 at 2:25 pm

The news is what is getting us all down. Turn the channel. Watch a re-run of “Sanford and Son” or something.

#31 Phylis on 05.28.22 at 2:30 pm

Phew, that shovel must be pretty big.

#32 Bipolar on 05.28.22 at 2:43 pm

Yes inflation is really up. Every time I head out in the car for a purchase or two always seems to be a couple hundred bucks plus the price of gas! So, I don’t go out much unless I can combine five errands or more in the car. I’m eating less and starting to drop a those pounds I don’t need and, my B&D really jumped back up this week! Overall I am grateful for everything I have. However, I do feel for young families during these times.

#33 Philco on 05.28.22 at 2:57 pm

Thanks for the post Doug….

#30 PeterfromCalgary on 05.28.22 at 2:25 pm
———————-
Better to ditch the news and social media.
Waist of time and bad for your brain. There’s NOTHING you can do about anything.
Set your self up where you don’t give a dam. Its a happier place :-)
My income and Biz is recession proof.
Jim Thorne a great interview.
https://mikesmoneytalks.ca/may-28th-episode/

#34 Shawn on 05.28.22 at 3:02 pm

Responding to a fan…

#13 Tarot Card on 05.28.22 at 11:59 am

Thanks for the blog Garth
Thanks for the post Doug

And a big thanks Shawn for the hot stock tips
On Monday based on your astute observation I am buying cemetery stocks who would have thought!

Response: Buy good quality companies on dips. Don’t buy dying companies.

And I am selling short all vegetable stocks because of your wisdom into telling everyone to stop buying watermelons.

Response: Get it right. Short watermelons at $17.99. Refuse to buy at $11.99. Nibble at $7.99. Back up the truck at $4.00.

What about oil?
Should I sell oil short because your going to tell all your fiends to stop driving their cars.

Response: The gas prices have already told them to cut back on driving and look into an electric vehicle.

Well at least I don’t need to read the Saturday funnies I just come to the daily comments.
You’re a leader!

Response: Thank you. It’s a great to be appreciated.

#35 Doug Rowat on 05.28.22 at 3:04 pm

#19 None on 05.28.22 at 1:05 pm
Yeah, biden calling out evil is the problem – eye-roll

You sound like a gun nut apologist.

—-

It’s his own administration that’s back-tracking his statements.

You tell me then, who’s in charge?

—Doug

#36 Philco on 05.28.22 at 3:04 pm

If you listen to Jims interview.
He’s correct the Fed is trapped. They can’t raise rates much or poof peeps take a big hit.
——–
M.Media is garbage.
I don’t believe anything until its truly verified.

https://tnc.news/2022/05/27/legacy-media-pushes-fake-news-claiming-trudeau-was-a-victim-of-racist-slurs/

Trudeau is awful.
T2 must go as he is a specialist in dividing the population.

#37 Faron on 05.28.22 at 3:18 pm

@Elon Fanboy

It’s not a proxy war. It would be if the US was backing a nation imvadimg Russia.

#38 Grunt on 05.28.22 at 3:19 pm

70s/80s inflation cost of the Vietnam and wider cold war theater. I’m really proud of Canada taking Ukraine refugees. Sending equipment, weapon and health support.

No sympathy from me for retired Russian airforce general who flew one more sortie and got shot down over Ukraine. Do you see that about him and his huge hat? Very decorated probably thought he was invincible and wanted to add more metal to his bust.

Thanks Saturday girl nice post.

#39 TurnerNation on 05.28.22 at 3:21 pm

On: the Permanent rolling Social and Economic lockdowns for
The Former First World Countries.

It was never designed to be over. Not “Two weeks”. Nor Two Years.
You will be wearing Your Mask till 2025. Smile???

.Toronto’s biggest waterpark opens for the season next month, requiring a reservation, masks mandatory during entry to the park and when indoors at the park (blogto.com)

.Chicago COVID update: With cases rising, officials urge face mask use over Memorial Day weekend (abc7chicago.com)

.UCLA reinstates indoor mask mandate due to rising COVID cases (ktvu.com)

.Kent State makes masks mandatory at one of its campuses (fox8.com)

Google translated. Germany:
https://www.tagesschau.de/inland/rki-corona-neuinfektionen-inzidenz-107.html
“Federal Health Minister Lauterbach wants to prepare the country for a possible corona wave in the autumn. For this, he is also preparing a new mask requirement. The seven-day incidence fell further to 262.6, according to RKI.
“That expires on 23.9. And then the question will have to be discussed again, for example, whether mask wearing indoors will become mandatory again.” That could come again, “I think it is also absolutely necessary that we open up this possibility for the autumn”

#40 Doug Rowat on 05.28.22 at 3:22 pm

#17 earthboundmisfit on 05.28.22 at 12:30 pm
“in the 1970s the Fed was raising interest rates BETWEEN meetings to control inflation”

And in doing so, tipped the economy into a two and a half year recession. (if memory serves). So Doug, where’s the tipping point?

—-

As we’ve mentioned in recent Saturday posts, we believe a soft landing’s more probable this time, but regardless, recessions are normal and unavoidable, occurring once or twice every decade.

The best strategy is to have a balanced and diversified portfolio that minimizes the downside. And to add to that portfolio on weakness.

—Doug

#41 Ustabe on 05.28.22 at 3:25 pm

@#67 Vlad Tor
“If you have nothing to say on the topic – better friends be silent!”

That sounds suspiciously like gatekeeping, eh?

So what happens if I disobey this Vlad Rule? Do you call for my removal from the group?

That would be cancel culture, something no sturdy conservative person would engage in, no?

Always amazes me how some can call for the silencing of others all the while they enjoy the same freedom of expression they would remove from them.

#42 Omicron Kenobi on 05.28.22 at 3:26 pm

Why no mention of me, Doug?

My offspring and my cousin Monkeypox are coming for all of you.

The seas may be rough, but I am the Captain!

#43 Dave on 05.28.22 at 3:35 pm

What about the debt the average Canadian has. Its only been taken on because the real estate prices kept getting higher and higher for the last 15 years. Buy now or never own a home.

Then there the huge investment community….taking helco, private loans and multi person loan signatures.

The debt is like NO other time in history….and now if interest rate rise….real estate falls. Real Estate drives the job market.

There has to be huge vasts blood in the streets….otherwise the kids of today will need to pay $3M for a townhouse in Vancouver tomorrow

#44 Sail Away on 05.28.22 at 3:36 pm

#13 Tarot Card on 05.28.22 at 11:59 am

And a big thanks Shawn for the hot stock tips

Should I sell oil short because your [sic] going to tell all your fiends to stop driving their cars. [this should end with a question mark]

———-

Response: Thank you. It’s a great to be appreciated.

———-

Shawn, you have fiends?!? Cool.

I want some, but would also settle for minions.

#45 any woman on 05.28.22 at 3:55 pm

If you had to live with Johnny Depp, you would sh#t the bed also. Any woman would!

#46 Faron on 05.28.22 at 3:58 pm

#67 VladTor on 05.28.22 at 11:15 am

This is a lie. The Russian army did not bomb a single hospital or playground.

It has bombed 3 health facilities per day!

https://reliefweb.int/report/ukraine/russian-bombings-hospitals-and-healthcare

10 March, 2022:

…we have recorded 12 incidents in which Russia has bombed hospitals. These attacks have resulted in 124 civilian casualties…
Hospital attacks have been a consistent and devastating feature of Russia’s air campaign in Syria, and this inhumane tactic is now being seen in Ukraine.

https://www.aljazeera.com/news/2022/3/24/who-says-64-hospitals-attacked-since-russia-invasion-of-ukraine

24 March, 2022:

The World Health Organisation (WHO) says it has verified some 64 attacks on health care facilities in Ukraine since Russia began its invasion a month ago.

https://foreignpolicy.com/2022/04/11/putin-targeting-ukrainian-hospitals-war-crime/

11 April, 2022:

War is synonymous with suffering, but for civilians, the severity of the consequences depends on how a war is waged.

One war crime stands out for its singular capacity to amplify the suffering of civilians, multiply the effect of mass atrocities, and drive forced displacement: Russia’s deliberate assault on health care.

https://www.reuters.com/world/europe/who-raises-alarm-about-healthcare-knife-edge-ukraine-2022-05-17/

17 May, 2022:

“As of today, WHO has verified 226 attacks on healthcare in Ukraine. That is almost three attacks per day since the 24th of February…These attacks are not justifiable, they are never OK, and they must be investigated.”

It’s actually a Russian tactic. Here’s how they teamed up with the brutal Assad regime in Syria to do the same thing:

https://en.wikipedia.org/wiki/Russian%E2%80%93Syrian_hospital_bombing_campaign

Look, I also agree that all human life is sacred and that war is a godawful mess. But open your eyes, man. If you are reading Russian sources, it’s no surprise you are seeing disclaims of these kinds of atrocities. These kinds of actions are extremely unpopular and would send Russians into the streets in protest. Putin has total control of Russia’s media and is hell-bent on obscuring the facts of his invasion from his people lest he become even less popular.

#47 Faron on 05.28.22 at 4:01 pm

#19 None on 05.28.22 at 1:05 pm

Yeah, biden calling out evil is the problem – eye-roll

You sound like a gun nut apologist.

It’s pretty well known that, throughout his career, Biden has been hot under the collar. Not a bad trait in Congress, and, in my opinion, makes him pretty relatable as a human. But, not a great trait as a commander in chief.

#48 Faron on 05.28.22 at 4:03 pm

#9 Old Boot on 05.28.22 at 11:40 am

Ha! Well done.

#49 crowdedelevatorfartz on 05.28.22 at 4:11 pm

@#45 any woman
“If you had to live with Johnny Depp, you would sh#t the bed also. Any woman would!”

+++
Alas.
The simpler bygone days of kicking anyone out of bed for eating crackers….are gone.
:(

+++++++++++++++++++++++++

@#46 Faron re Vlad Tor
“But open your eyes, man. If you are reading Russian sources, it’s no surprise you are seeing disclaims of these kinds of atrocities.”
+++

Or “Tor” is the Russian word for “Troll”….?

#50 crowdedelevatorfartz on 05.28.22 at 4:19 pm

Albertan entrepreneur attempts to pay for expensive BC gas for his speedboat….

https://www.msn.com/en-ca/news/canada/alberta-boat-pilot-arrested-in-u-s-seizure-of-1-500-lb-of-meth-in-san-juan-islands/ar-AAXOL6Z?ocid=winp1taskbar&cvid=fe1b4f6f637f40c1a8aa2f9160be15a1

Unfortunately he allowed himself to be nabbed on the US side of the “border” with a gun, 1250lbs of Meth and a poor excuse.
US arrest/conviction = 25 years in the slammer.
Canuck arrest/conviction = time served & wrist slapped

#51 Faron on 05.28.22 at 4:23 pm

On topic regarding wither recession/equity sell-off:

Last week there was a somewhat rare occurrence in which Implied Volatility (VIX and VIX-like indexes) was lower than the realized volatility. We could see this when indexes kept dropping and VIX didn’t move a whole lot. There were days where S&P lost more than 1% and VIX hardly budged. This implies serious complacency in equities.

Interestingly, one of the last times this happened was in the spring of 2008. We all know what happened that fall.

So, the tail end of a long bull market and everyone is feeling that a serious market draw down is impossible so they BTFD and fail to hedge with puts leaving VIX lower than it “should” be. Do we have the same systemic trigger as then? Probably not. Maybe Crypto? But, maybe useful to keep in mind. Here’s the Twitter thread where I saw this:

https://twitter.com/vixologist/status/1527702288537636864

#52 Faron on 05.28.22 at 4:32 pm

#37 Faron on 05.28.22 at 3:18 pm

@Elon Fanboy

It’s not a proxy war. It would be if the US was backing a nation imvadimg Russia.

Or invading, either-or really.

#53 Michel HFX on 05.28.22 at 4:51 pm

Thanks as always Doug, for the the thoughtful and sober analysis. I wish I had been reading this blog 20 years ago.

#54 espressobob on 05.28.22 at 5:02 pm

Investors don’t give a rat’s ass about market volatility. Anything can happen for unforseen reasons. That’s the game.

This calender year ain’t over just yet and predicting outcomes never proves to have the upper hand.

Maintaining core positions is always prudent while harvesting profit on the upside and loading up on the slim side has historically been quite profitable.

Mr. Market is a tough foe.

#55 swan on 05.28.22 at 5:07 pm

This blogger clearly has run out of ideas. He repeats what his boss has written more than once (and adds half a pinch of context), e.g., nothing is unprecedented as self-important exaggerations suggest, whereas his two other colleagues actually provide substance in their posts.

#56 wallflower on 05.28.22 at 5:28 pm

#55 swan on 05.28.22 at 5:07 pm

Thanks to you, we all now know what Rowat is doing here.
Question that lurks amongst many:
What are YOU doing here?

#57 You've been Markled! on 05.28.22 at 5:31 pm

Clearly, this is the worst period mankind has ever known.

These all pale in comparison to Markle’s trip to Uvalde!

#58 Ambi and Vasu on 05.28.22 at 5:32 pm

We came to Canada back in 1997.

Back then, as we remember, inflation rate was 1.62% and the mortgage we were offered by a bank was 7%

And today the inflation rate is 6.8% and mortgage rate is 4.59%.

Back then, as we remember, the mortgage rate was always higher than the inflation rate……

But today, inflation rate is much higher than the mortgage rate……

Somewhere the real economics will have to play out!!!!!! And someone has to pay today or tomorrow or the day after…..

And now, we can get a glimpse of it!!!!!!

PS: May be we are wrong as we do not much understand this

#59 Faron on 05.28.22 at 5:33 pm

#55 swan on 05.28.22 at 5:07 pm

Do you attack the people handing out free samples at Costco too?

#60 Charles in charge on 05.28.22 at 5:44 pm

#35 Doug Rowat on 05.28.22 at 3:04 pm

—-

It’s his own administration that’s back-tracking his statements.

You tell me then, who’s in charge?

—Doug

——–

Jen Psaki.

#61 AK on 05.28.22 at 5:47 pm

“And Biden’s steady stream of off-the-cuff bravado? Definitely unhelpful”
====================================

And they were calling Trump a Whack Job.

#62 Faron on 05.28.22 at 5:52 pm

#65 Tony on 05.28.22 at 10:23 am

Re: #17 Faron on 05.27.22 at 6:27 pm

On Wolfstreet I guessed the bottom for the year would be DOW 31,700. It fell lower than that. That was about a month ago.

I’m not saying that wasn’t the bottom. I don’t know. Nobody knows. I think I called a temporary SPX bottom at 4560. Ha! But the doomy nature of that prediction could easily have kept people from buying and then capturing a nice rally.

#63 Yukon Elvis on 05.28.22 at 6:18 pm

Anyone interested in a deep background look into the cause/reason for the “special military operation” might be interested in this interview with this guy. Stephen Mark Kotkin (born February 17, 1959)[1] is an American historian, academic, and author. He is currently the John P. Birkelund ’52 Professor in History and International Affairs at Princeton University, where he is also co-director of the program in history and the practice of diplomacy and the director of the Princeton Institute for International and Regional Studies.[2] He is also a senior fellow at the Hoover Institution at Stanford University.

https://youtu.be/2a7CDKqWcZ0

#64 crowdedelevatorfartz on 05.28.22 at 6:25 pm

@#55 Swan song
“This blogger clearly has run out of ideas. ”
+++
It’s a financial blog.
Not too many ways to make finances sexy.
Thats probably while so many people can’t be bothered learning to save for the future and end up broke.
Perhaps you would like it if we talked about Bruce Willis’s cumulative concussion injuries?

#65 NoName on 05.28.22 at 6:41 pm

@ deflating watermelon

Maybe prices of watermelons are going down because usually domestic supply starts coming online around may and generally tends to displace import watermelons until October.

Article suggests to drink watermelon tequila while reading this, but what is odd that cocktail recipe is at the end…

https://parade.com/590014/solanahawkenson/national-watermelon-day-fun-facts/

An old man is selling watermelons…
His pricelist reads: 1 for $3, 3 for $10

A young man stops by and asks to buy one watermelon.
“That’d be 3 dollars”, says the old man.

The young man then buys another one, and another one, paying $3 for each.

As the young man is walking away, he turns around, grins, and says, “Hey old man, do you realize I just bought three watermelons for only $9? Maybe business is not your thing.”

The old man smiles and mumbles to himself, “People are funny. Every time they buy three watermelons instead of one, yet they keep trying to teach me how to do business…”

#66 PeterfromCalgary on 05.28.22 at 6:50 pm

Anyone else wonder what is the point of the federal government subsidizing the purchase of electric cars when manufactures can not keep up with demand?

Seems like a waste of taxpayer funds that will not result in any more electric cars on the road due to limited supply. Just as if the feds subsidized the purchase of Vincent van Gogh original paintings it wouldn’t increase the supply of them.

“Burrows said that the recent delays to buy a new EV are having people wait a few months or even a year in some instances.” https://globalnews.ca/news/8807151/wait-times-electric-vehicles-canada/

#67 Elon Fanboy on 05.28.22 at 7:20 pm

#37 Faron

Lots of MSN outlets referring to this as a proxy war.

E.g. https://www.bloomberg.com/opinion/articles/2022-05-10/russia-ukraine-war-putin-s-right-that-u-s-is-waging-a-proxy-war

But whatever. With every man and his dog (at least in the west) throwing money and weapons at Ukraine I suspect this war will continue until Ukraine runs out of the one thing it can’t replace….bodies to fight with.

The final death toll is going to be horrific.

#68 The Regulator on 05.28.22 at 7:47 pm

Special thanks to VladTor for telling it like it is. Apparently, the Russiaphobic peoplekind don’t agree with unbiased alternate views here. Almost hysterical are they. Eating and breathing C.N.N./C.B.C. fear porn and googling will do that to a person. But when N.A.T.O. destroys a country like Libya or Yugoslavia, not a peep is heard from the armchair generals. By the way, the metal shiny part of a gun points out, and the woodlike part in.

#69 Faron on 05.28.22 at 7:54 pm

#66 PeterfromCalgary on 05.28.22 at 6:50 pm

Anyone else wonder what is the point of the federal government subsidizing the purchase of electric cars when manufactures can not keep up with demand?

Nope. Your premise is flawed.

#70 Shawn on 05.28.22 at 8:01 pm

Subsidies for Electric Vehicles?

#66 PeterfromCalgary on 05.28.22 at 6:50 pm

Anyone else wonder what is the point of the federal government subsidizing the purchase of electric cars when manufactures can not keep up with demand?

********************************
In Alberta, only the federal subsidy applies.

Vehicles with a base price over about $50k don’t qualify.

I had mixed feelings about choosing the larger Tesla when only the lowest price one qualified. This was last Fall when I ordered the car. Just as well though. Why sully my purchase with a stupid subsidy for $5000 that I don’t need?

After some delays I am supposed to get my Tesla next week. Model Y.

#71 CJohnC on 05.28.22 at 8:11 pm

#49 CEF. TOR is Russian for Top. So yes a troll

#50 CEF. Thankfully, not unfortunately.

#72 Barb on 05.28.22 at 8:43 pm

#55 swan on 05.28.22 at 5:07 pm

This blogger clearly has run out of ideas.
—————————-

How unkind.
Perhaps your Diplomacy certificate is still in the mail.

#73 Ponzius Pilatus on 05.28.22 at 9:23 pm

#63 Yukon Beatle
He is also a senior fellow at the Hoover Institution at Stanford University.
—————–
Thank you.
That’s all I need to know.
And for those who care:
He is NOT a vacuum salesman.

#74 espressobob on 05.28.22 at 9:42 pm

#55 swan

Better not to post and be potentially foolish, instead doing so removes all doubt.

#75 Swan on 05.28.22 at 9:56 pm

#59 Faron on 05.28.22 at 5:33 pm
#55 swan on 05.28.22 at 5:07 pm

Do you attack the people handing out free samples at Costco too?

Faron,
I don’t read the comments section here much but from what I’ve read you’re one of the smartest voices so I respond only to you: of course not; but this is not free if you think of it. Name more than a handful reputable investment firm these days which do not have some sort of media presence, from podcast to more traditional blogs etc. All I wrote was that this particular blogger often recycles ideas compared to his boss and other colleagues.

#76 Ponzius Pilatus on 05.28.22 at 9:56 pm

#65 Watermelon Salesman
That’s why all large PR firms, have magicians on staff.
Most shoppers are easily fooled by mental tricks.
And many shoppers are not good at basic math.
For instance:
Buy two, get the second for 50% off.
Sorry buddy, that’s not 50% off both items.
You just helped the store get rid of unwanted inventory.
And MacDonalds likes this one:
Buy one Mac for 1.99 or two for 3.98.
What a deal!

#77 Tom from Mississauga on 05.28.22 at 10:08 pm

Countries, like Canada, entering mass retirement as a result of Breton Woods, that’s new, also the main driver of global inflation.

The President contradicting his staff, not new.

#78 Slim on 05.28.22 at 10:19 pm

Well, this is nuts. Couldn’t believe it when I read this.

https://www.castanet.net/news/Kamloops/370252/Line-for-apartment-pre-sale

#79 Millennial Realist on 05.28.22 at 10:57 pm

Biden continues to make reckless comments about the US’s willingness to overthrow heads of state and engage militarily against other superpowers.

___________________

Yikes. Trump much, Doug?

I get it, the background to this blog is usually deep Boomer Conservative ideology in many facets.

But to position yourself against a president standing up for what is right?

I guess you would really to prefer to have an enabling idiot like Trump back in power to help Putin along…..

#80 Nonplused on 05.28.22 at 11:21 pm

Here is some food for thought for all you WEF conspiracy followers:

To be in the top 1% of income earners worldwide you need an income of $35,000 per year. At $15 dollars and hour minimum wage you earn about $30,000 per year. So Canada isn’t that far off from everyone who has a job being in the top 1%.

Now add a one world government and economic system and central bank and all that.

Now add the popular meme that we need to soak the 1%.

Can you see how that will work out for Canadians if “they” try a world wide socialist system? Not good.

And stop complaining. You’re richer than you think.

—————————————-

So, down in the US they are complaining a blue streak over $4.50 a gallon gasoline like it’s the end of the world. That’s about $1.12 a liter. Why are we paying $2.00 a liter when we have the oil? Oh ya, taxes.

And if you check out Trudeau’s carbon tax profile, by 2030 the actual cost of the oil will be close to irrelevant and we’ll be paying something like $5.00 per liter for gasoline.

No matter who the conservatives put forth as their new leader, we have no choice but to vote conservative. The country will not survive $5/liter. And no, pinwheels and solar calculators aren’t going to save us.

#81 K on 05.28.22 at 11:39 pm

#30 PeterfromCalgary:

Watchit sucka!

#54 espressobob:

I’ll take an Americano at 20% off, please.

#82 Ponzius Pilatus on 05.28.22 at 11:53 pm

79 Millennial Realist on 05.28.22 at 10:57 pm
Biden continues to make reckless comments about the US’s willingness to overthrow heads of state and engage militarily against other superpowers.

___________________

Yikes. Trump much, Doug?

I get it, the background to this blog is usually deep Boomer Conservative ideology in many facets.

But to position yourself against a president standing up for what is right?

I guess you would really to prefer to have an enabling idiot like Trump back in power to help Putin along…..
——————-
This is not Biden vs. Trump.
Biden is now the President and he should be judged by his actions.
And I think he’s not up to the task.
No clear plan on the Russia – Ukraine conflict.
Calling Putin evil and sending weapons and cash to Selensky just does not cut it.
The American Public needs accountability.
Sanctioning everyone who’s ever had contact with Putin is just silly.
Freezing or confiscating private citizens’s assets don’t seem to be working and just set bad precedents.
Just recently, he was on a trip to Japan and South Korea and what did he accomplish?
He tells Taiwan that the States will step in should China invade.
But does he have the guts?
I think the biggest insult was when some news outlet called Selensky “Leader of the Free World”.
Of course Selensky isn’t, and Churchill he’s is not either.
Time for Biden to focus and stop micro managing.
Or we could have another 4 years of Trump.
And that would be a real disaster.

#83 crowdedelevatorfartz on 05.29.22 at 12:19 am

@#75 Black Swan
“All I wrote was that this particular blogger often recycles ideas compared to his boss and other colleagues.”

+++
Well.
You could always cancel your Greaterfool blog subscription and ask for your money back….

#84 crowdedelevatorfartz on 05.29.22 at 12:25 am

@#79 Millenial Surrealist

“I guess you would really to prefer to have an enabling idiot like Trump back in power to help Putin along…..”

+++
The last 18 months of Trump not posting DAILY on twitter has been a godsend.
I cringe at the thought of him becoming President again.
While Biden seems like a very nice person….
I can’t believe someone of his age can handle the endless 24/7 pressure of the Oval Office…. he probably keeps his physicians and PR handlers, busy.
Kamala Harris is one missed heartbeat away from being in power.

#85 Doug Rowat on 05.29.22 at 1:18 am

#75 Swan on 05.28.22 at 9:56 pm
#59 Faron on 05.28.22 at 5:33 pm
#55 swan on 05.28.22 at 5:07 pm

Faron,
I don’t read the comments section here much but from what I’ve read you’re one of the smartest voices so I respond only to you… All I wrote was that this particular blogger often recycles ideas compared to his boss and other colleagues.

—-

Oh, I bet you read this comment section a lot. And I don’t mean to mess with your it-rubs-the-lotion-on-its-skin disassociated serial-killer vibe, but “this particular blogger” is Doug.

And my last 10 blogs have been on the unrelated topics of US Treasuries, confirmation bias, Russia risk, Trump/Trudeau, Canadian banks, AAII investor sentiment, preferred shares, valuations, and growth versus value stocks.

You don’t like my posts (of course, why read them?), but be accurate.

—Doug

#86 Swan on 05.29.22 at 9:45 am

“-rubs-the-lotion-on-its-skin disassociated serial-killer vibe”

You must be seriously sick with an inflated ego to write the above. Though this will not pass the filter, enough will be communicated for you or your boss (who’s multiple times smarter and more interesting than you) to see this. All the above-listed ‘topics’ are what your boss has written about more clearly . So the comment stands. You’d benefit to take critiques more seriously and put out better material instead of seeing them as an attack on your existence as you have evidently done.

#87 Senator Bluto on 05.29.22 at 11:32 am

#66 PeterfromCalgary on 05.28.22 at 6:50 pm
Anyone else wonder what is the point of the federal government subsidizing the purchase of electric cars when manufactures can not keep up with demand?
++++++++++++++++++++++++++++++

Electric cars only exist because of government intervention and government decree.

There is no rational, logical reason to build or own one, not economic, net energy efficiency, not environmental, and certainly not “Global Warming.”

To paraphrase JFK: “Electric cars are the means by which poor people in rich nations send money to rich people in rich nations”

The vast majority of people are paying for the subsidies on electric vehicles they could never, ever, afford to own. Nothing virtuous here.

Energy poverty is becoming a real and destructive force around the world and every step in the elites tone-deaf circus only makes things worse.

#88 OK, Doomer on 05.29.22 at 11:40 am

#79 Millenial Surrealist

“I guess you would really to prefer to have an enabling idiot like Trump back in power to help Putin along…..”

——

I guess you’re missing the ongoing trial in US about Hillary inventing the whole “Russia Collusion” thingy.

Trump called Putin “a Killer” and everyone dismissed his warning. You included apparently.

#89 Quintilian on 05.29.22 at 12:24 pm

#10 Shawn on 05.28.22 at 11:41 am
“GDP Shrinkage

As a reminder, the reported GDP growth percentage is ALWAYS measured against real GDP”

GDP is a very rough measurement almost meaningless, GDP per capita captures somewhat better the financial standing of the consumer.

Canada’s GDP and GDP per Capita compared to other developed countries is no superstar.

#90 Franz and Hanz on 05.29.22 at 12:35 pm

Bond and stock markets are just coming down slightly from their biggest bubble in history.

There is a lot more downward trend to go when 70% of the economy is consumer driven and consumers are driving less and less with such high price inflation.

The world did NOT have the debt in the 1970s that it has today.

Rising interest rates will have significantly more impact today than in the 1970s.

#91 Stealth on 05.29.22 at 1:59 pm

Thanks Doug for the post and answer to one of the comments to stay invested, diversified and add to it on weakness. All good, makes sense.

One topic perhaps worth elaborating on are taxes. I suppose that goes with tax efficiency of the portfolio etc however it’s dependency on other earned income and room availability in tfsa/rrsp makes a big difference.
People usually forget it until tax time.
Anyways just an idea for you to consider around t3,t5,t5008, dividend gross up, div credit.

Your team must spend significant energy managing non registered accounts vs registered because every sell click is now a taxable event.

If you already addressed it in a previous blog let us know.
If you don’t like the idea, don’t worry about it.

Thanks again.

#92 Old Boot on 05.29.22 at 3:25 pm

#85 Doug Rowat on 05.29.22 at 1:18 am

#75 Swan on 05.28.22 at 9:56 pm
#59 Faron on 05.28.22 at 5:33 pm
#55 swan on 05.28.22 at 5:07 pm

Faron,
I don’t read the comments section here much but from what I’ve read you’re one of the smartest voices so I respond only to you… All I wrote was that this particular blogger often recycles ideas compared to his boss and other colleagues.

—-

Oh, I bet you read this comment section a lot. And I don’t mean to mess with your it-rubs-the-lotion-on-its-skin disassociated serial-killer vibe, but “this particular blogger” is Doug.

And my last 10 blogs have been on the unrelated topics of US Treasuries, confirmation bias, Russia risk, Trump/Trudeau, Canadian banks, AAII investor sentiment, preferred shares, valuations, and growth versus value stocks.

You don’t like my posts (of course, why read them?), but be accurate.

—Doug

*********

If Faron’s so smart, why aren’t you over at his free financial advice blog giving your uninformed opinions?

Oh, right…

#93 Jay (not that one) on 05.29.22 at 3:35 pm

Serious problem with what you’re talking about: The numbers may have been worse in the past, but they aren’t the same numbers.

Steaks got too expensive so people bought chicken, then chicken got too expensive so they bought bologna, then bologna got too expensive so they bought organ meats, and steaks are 100 times more expensive but they just go “Everything costs the same because people are paying the same for meat!” even though people are buying something considerably worse.

Then there’s the insanity that is “owners’ equivalent rent” — That’s not something that has any reason to exist in an objective mesurement.

This is just showing the massive differences in inflation, and it’s not alone. It’s just two examples. Those didn’t apply in the 1970s and 1980s, they’re changes in the calculation made later to hide inflation.

The unemployment rate is another great example, because we don’t measure unemployment rate the same as we used to. Instead of being a measurement of the number of unemployed people, it’s a measurement of the number of people who aren’t being supported perpetually by the state who are unemployed. We have the “lowest unemployment rate ever”, but the lowest workforce participation rate ever. It isn’t the same. You can’t compare the two time periods, they’re just not the same.

That’s what I’m concerned about — We couldn’t get a Volker if we wanted one, because the world has been on a spending spree for 20 years that has run up public and private debt so high that addressing inflation is a suicide pact. That’s different. It’s happened in the past to other countries, and we know that it doesn’t end well.

#94 jess on 05.29.22 at 3:43 pm

why that clown show when …..this is even more bizarre

https://pressprogress.ca/doug-fords-office-wanted-names-from-surveillance-allegedly-targeting-ontario-pc-ministers-family-home/

#95 crowdedelevatorfartz on 05.29.22 at 3:47 pm

@#86 Swan song

My my.
I didn’t believe that swans, while nice to look at, were reputed to be of a nasty temperament and lashed out at the slightest provocation…. until now.
Nothing is stopping you from getting your free advice at another blog.
Or is nitpecking the goal?

#96 jess on 05.29.22 at 3:58 pm

Rising interest rates will have significantly more impact today than in the 1970s.
…”the triple impact of the 1979 oil price shock, the loss of market share to overseas manufacturers and the worst recession since the Second World War.”

The Canadian Auto Industry, 1978-1986

https://www150.statcan.gc.ca/n1/en/pub/75-001-x/1989003/article/2278-eng.pdf?st=XtrOETpp

=======

The savings and loan crisis of the 1980s and 1990s was the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995. An S&L or “thrift” is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members.

What Was the Savings and Loan (S&L) Crisis?

The Savings and Loan (S&L) Crisis was a slow-moving financial disaster. The crisis came to a head and resulted in the failure of nearly a third of the 3,234 savings and loan associations in the United States between 1986 and 1995.

The problem began during the era’s volatile interest rate climate, stagflation, and slow growth of the 1970s and ended with a total cost of $160 billion; $132 billion of which was borne by taxpayers.1

Key to the S&L crisis was a mismatch of regulations to market conditions, speculation, moral hazard brought about by the combination of taxpayer guarantees along with deregulation, as well as outright corruption and fraud, and the implementation of greatly slackened and broadened lending standards that led desperate banks to take far too much risk balanced by far too little capital on hand.

https://www.investopedia.com/terms/s/sl-crisis.asp

#97 Doug Rowat on 05.29.22 at 4:36 pm

#86 Swan on 05.29.22 at 9:45 am

… Though this will not pass the filter, enough will be communicated for you or your boss (who’s multiple times smarter and more interesting than you) to see this. All the above-listed ‘topics’ are what your boss has written about more clearly .

—-

Thought you rarely checked the comment section?

Agreed on all points. But it means you’ve read all my posts. You’re a glutton for punishment.

—Doug

#98 James on 05.30.22 at 11:29 am

Johnny needs a new PR agent.