Economic Outlook

Why Silicon Valley Is Moving To Toronto

Silicon Valley has a second address, and it’s becoming much more than a summer cottage these days. Welcome to Toronto, the hottest new venue for the North American tech industry.  For starters, this Silicon Valley cottage residence has lured in Intel Corp, Uber, Microsoft and Silicon Valley Bank, among others.

As reported by the Wall Street Journal, Intel Corp. is planning to build a graphics-chip design lab in Toronto. Uber is opening up an engineering hub. Alphabet, the parent company of Google, is establishing a campus in Toronto for its Lake Ontario “smart city”. Microsoft is working to significantly expand its Toronto labor force, too.

That means that there is also a lineup of startups preparing to go public in Canada, following on the coattails of the successful IPOs of Shopify Inc. and Lightspeed POS Inc earlier this year….CLICK for complete article 

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

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  

The S&P 500 roared back to life on Tuesday led by Apple, Inc. after the U.S. Trade Representative released a long list of exemptions from the new 10% tariffs on an additional $300 billion in Chinese imports set to go into effect on Sept. 1. Tariffs on the exempted items do not go into effect until Dec. 15.

Exempted Items

The USTR said cell phones and other electronic devices, including laptops, video game consoles and computer monitors, are also exempt until December. Certain articles of clothing and most footwear is also clear for another four months. Tariffs will be delayed for certain chemicals, household glassware and silverware, microwaves, jewelry, and sporting equipment as well….CLICK for complete article

The World’s Most Innovative Economies

In the 21st century, innovation has become the heart and soul of economic policy. Developed and developing nations alike are in the race to leave industrialization behind, adapting instead to technology-focused, entrepreneurial societies.

Customized cancer treatment, faux meat products, and the smart home technologies are frequently positioned as ‘the next big thing’. But which countries are consistently innovating the most?

Today’s graphic comes from the seventh annual Bloomberg Innovation Index and highlights the 10 most innovative economies, and the seven metrics used to rank 2019’s top contenders….CLICK for complete article

What Is Africa’s Role In The New Silk Road?

A lot of resource investors stop listening to corporate presentations when they learn the company’s project is in Africa.

More often than not the country risk of exploring for minerals is just too big a gamble for retail investors’ hard-earned capital.

Development projects are hi-jacked by rebels, or over-run by artisanal miners. Operating mines get expropriated by governments that can’t resist the temptation to raid a foreign company’s coffers. And African miners frequently see their profits reduced by corrupt officials intent on re-negotiating royalty contracts….CLICK for complete article