Economic Outlook

Superforecasting A Bear Market

There’s an ongoing debate about whether or not the U.S. is approaching a recession. As an investor, this question is of utmost importance. It is precisely at these times when fortunes can be made and lost. There’s no shortage of pundits with strong opinions in both the affirmative and negative camps armed with plausible narratives and supporting data sets. How to decide which side to take? Applying some proven forecasting methods to historical data can help bring clarity to this question.

Forecasting is tricky business. It’s really hard to do well consistently, especially in investing.

Fortunately for us, Philip Tetlock has made a study of forecasting. In the book Superforecasting: The Art and Science of Prediction (aka Superforecasting) he and coauthor Dan Gardner share their findings of a multi-year study aimed to discover the best forecasters, uncover their methods, and to determine if forecasting skills could improve. There are many great lessons conveyed in the book. We can thus apply them to our problem at hand: the question of whether or not the U.S. will enter a recession….CLICK for complete article

Over 1 In 7 First-Time Homebuyers Are Tapping The Bank Of Mom And Dad

The bank of mom and dad may be undergoing an aggressive expansion. Teranet, Canada’s largest land registry operator, conducted an analysis on ownership in Ontario. First-time buyers scoring a place on their own is on the slide. Most aggressively taking its place, is buying with a second owner at least 20 years older. The firm believes this may confirm what you already know – more people need help from mom and dad.

Fewer Homes Have One Owner On The Title

Higher prices mean fewer first-time buyers are pursuing homeownership alone. The rate of condo apartments with only one person on title was 57.1% in 2012, and fell to 48.4% by 2018. For all home types (the general market), the rate fell from 40.2% to 33.9% over the same period. Double income households? Shocking… not. What is interesting is who they’re buying with….CLICK for complete article

In Case You Missed It

Ethics commissioner Mario Dion says Trudeau inappropriately tried to influence Jody Wilson-Raybould

“The prime minister, directly and through his senior officials, used various means to exert influence over Ms. Wilson‑Raybould.”

Dion said the prime minister and his staff viewed the SNC-Lavalin matter “chiefly through a political lens”.

The ethics commissioner said his review of the SNC-Lavalin affair turned up other “troubling tactics” and behaviour by some of the country’s most senior public office-holders.

CLICK here to see the full report

 

 

Recession Countdown Begins

The spread between 3m and 10Y yields has been inverted since mid-May and reached its most inverted since April 2007 this morning…and here is Bloomberg showing how the yield curve inverted in 1989, in 2000 and in 2006, with recessions prompting starting in 1990, 2001 and 2008. This time won’t be different.

Critically, as Jim Grant noted recently, the spread between the 10-year and three-month yields is an important indicator, James Bianco, president and eponym of Bianco Research LLC notes today. On six occasions over the past 50 years when the three-month yield exceeded that of the 10-year, economic recession invariably followed, commencing an average of 311 days after the initial signal….CLICK for complete article  

Technically Speaking: 5 Reasons To Be Bullish (or Not) On Stocks

Over the last few weeks, we had discussed the excessive deviation to the market above the 200-dma, which suggested that a reversal of that extension was probable. The question now is whether Tom’s view is correct?

Are the markets set up for “monster second-half rally,” or is this just the continuation of the topping process that began last year.

While these are certainly reasons to be “hopeful” that stocks will continue to rise into the future, “hope”has rarely been a fruitful investment strategy longer term. Therefore, let’s analyze each of the arguments from both perspectives to eliminate “confirmation bias.”

Economic Growth To Improve

No matter where you look as of late, economic growth has been pretty dismal. However, there is always hope for improvement that could support a recovery in asset prices….CLICK for complete article

Martin Armstrong Was Right Again

“Either Epstein will be found dead claiming suicide because he had remorse, or he will make a deal and then probably will be found dead of some heart attack afterward. I would be shocked if there would EVER be a public trial allowed.” ~ Martin Armstrong July 25th, 2019

When the news broke on Saturday that Jeffrey Epstein had committed suicide despite being on a suicide watch in the Manhattan Correctional Centre we couldn’t help but think about a blog post Marty put up last month. CLICK HERE for his complete answer to the question “Will Epstein every go to trial”. ~Ed