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Canadian Households And Businesses Are Going Broke Faster Than Last Year

Canadians have been on a debt binge, and some cracks are starting to appear. The Office of the Superintendent of Bankruptcy Canada (OSB) saw an increased number of filings in October. Insolvency filings have been moving higher for the past year, especially in the consumer segment.

Canadians Filed Over 139,000 Insolvencies

Canadian insolvencies are rising very quickly from last year’s numbers. There were 13,512 insolvency filings in October, up 11% from a month before. The monthly number is up 13% when compared to the same month last year. In the past 12-months there were 139,194 filings ending in October, which is up 8.8% when compared to the same timeframe a year before. This implies growth could be accelerating even faster….CLICK for complete article

Mike’s Editorial – Governments Can’t Help Themselves

The EcoFiscal Commission is the latest to recommend a carbon tax BUT with a big caveat – in order to offset the impact – the money must be returned to the individuals and businesses who paid it. In other words, revenue neutral – sadly governments disagree.

 

The Fragility Of Monetary Policy

Physics students study mechanical systems in which pulleys are massless and frictionless. Economics students study monetary systems in which rising prices are everywhere and always caused by rising quantity of currency. There is a similarity between this pair of assumptions. Both are facile. They oversimplify reality, and if one is not careful they can lead to spectacularly wrong conclusions.

And there are two key differences. One, in physics, students know that pulleys have mass and friction, and graduate to a more sophisticated understanding. Two, the Quantity Theory of Money (QTM) is not a simplified view of reality. It is oversimplified, to be sure, but it is a false theory.

QTM leads one to think that the groceries you can buy with a dollar are intrinsic to the dollar itself. And this leads to the idea that, the lower the dollar goes, the easier it would be to pay dollar debts. Returning to our physics analogy, pulleys are not massless and frictionless. And the value of the dollar is not 1/P (purchasing power).

Useless Ingredients

We have written a lot about when government forces businesses to pay for things that their customers do not value, and do not usually even know about. We deem these things useless ingredients. Consider an example. Suppose the federal government got more serious about the Americans with Disabilities Act, and they no longer allow noncompliant restaurants and bars to remain grandfathered under the old code. All of these businesses now must spend a lot of money getting compliant, and reducing their revenue-generating floor space for the sake of much larger bathrooms. This does not cause prices to rise, directly. If restaurants could charge more, then they would already be charging more…CLICK for complete article

Bitcoin Blasts Through Key 7.4k Resistance

Since dropping below the descending channel on Nov. 25, Bitcoin (BTC) has reclaimed $7,000, cleared some hefty resistance at $7,400 and now made its way up to above $7,500 by press time.

Investor sentiment remains muted as traders are unsure whether Bitcoin price has found a bottom yet but the technical setup is clearly improving on the shorter timeframe.

Despite this, the Crypto Fear and Greed Index shows sentiment still in the extreme fear zone. One would expect this figure to improve if the daily candle closes above the resistance at $7,350.

Bullish scenario

If Bitcoin can hold the $7,075 support and avoid dropping below the descending channel trendline at $6,712, investors may feel that the digital asset has bottomed and begin to open long positions in the current range.

From a momentum traders’ point of view, the price has completed the cycle of touching the upper trendline of the descending channel and also the bottom trendline so once further confirmation of a price bottom is provided, swing traders will probably consider entries within the current range.

Traders entering long positions without leverage are likely anticipating an 18% to 25% gain, assuming Bitcoin slowly works its way back up to the main trendline of the descending channel.

Some traders have also noted that if Bitcoin can gain above $7,300, this would complete the inverse head and shoulders pattern and possibly send the price to the middle support of the descending channel which aligns with the $7,800 resistance — a high volume node on the VPVR…CLICK for complete article

Retail Is Alive And Well, But Only For The Rich

A decade ago, with the majority of stores exiting, Euclid Square Mall in Ohio was temporarily used by religious congregations who held services in abandoned retail stores. Two years ago, Amazon announced plans to build a fulfillment center in its place.

The fate of many malls around the country has largely come to mirror that of the Ohio story in varying degrees of non-retail activity, including simply a place where the elderly gather to walk a few safe laps.

Shopping malls may be hot this holiday season, but more so in classic Christmas movies or the season finale of “The Walking Dead”. Not in reality.

In the retail apocalypse, American malls are having a hard time keeping their doors open, and they’re trying pretty much every gimmick in the book.

Several big cities are testing out malls that cater to the upper-middle-class, millionaires and wealthy tourists.

Opened in March this year, Hudson Yards in New York City features high-end brands such as Tiffany & Co, Cartier, Dior, and the like. According to management, 12 million people have visited the mall since its doors opened.

High-end malls in other parts of the country are thriving as well. One of them, the Bal Harbour Shops, located in Miami Beach, just announced a $550-million expansion. Bal Harbour Shops, with its mandatory $30 vehicle valet, is considered one of the most luxurious shopping malls in the country, complete with five-star restaurants.   As an additional benefit, luxury malls have been relatively immune to the US and China trade war. CLICK for complete article

The Difference Between Investing & Speculation (10-Investing Rules)

Are you an “investor” or a “speculator?” 

In today’s market the majority of investors are simply chasing performance. However, why would you NOT expect this to be the case when financial advisers, the mainstream media, and WallStreet continually press the idea that investors “must beat” some random benchmark index from one year to the next.

But, is this “speculation” or “investing?” 

Think about it this way.

If you were playing a hand of poker, and were dealt a “pair of deuces,” would you push all your chips to the center of the table?

Of course, not.

The reason is you intuitively understand the other factors “at play.” Even a cursory understanding of the game of poker suggests other players at the table are probably holding better hands which will lead to a rapid reduction of your wealth.

Investing, ultimately, is about managing the risks which will substantially reduce your ability to “stay in the game long enough” to “win.” 

Robert Hagstrom, CFA penned a piece discussing the differences between investing and speculation:

“Philip Carret, who wrote The Art of Speculation (1930), believed “motive” was the test for determining the difference between investment and speculation. Carret connected the investor to the economics of the business and the speculator to price. ‘Speculation,’ wrote Carret, ‘may be defined as the purchase or sale of securities or commodities in expectation of profiting by fluctuations in their prices.’”

Chasing markets is the purest form of speculation. It is simply a bet on prices going higher rather than determining if the price being paid for those assets are selling at a discount to fair value….CLICK for complete article