Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
This is a terrific day for Canadians looking for an assessment of the domestic economy as three different sources more or less lay the whole thing bare.
FT Alphaville's Matthew Klein wrote what is probably the best explication I've seen of our country's attempt to economically restructure from commodity-based to export driven growth in "Digging into Canada's trade balance." Investors should read the whole piece, which includes numerous helpful charts, but here's the conclusion,
"[The commodity] boom is now over. The hope for Canada is the combination of a cheap currency and rising American demand for houses and cars can offset the collapse of the oil economy. There are some encouraging signs, but so far, Canadian rebalancing remains a work in progress."
"Digging into Canada's trade balance" – Klein, FT Alphaville
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Separately, National Bank Financial published an in-depth report on the Canadian housing market with a focus on regional affordability. Economist Matthieu Arseneau writes,
"The slightness of the Q1 change in Canada-wide affordability continued to mask large regional divergences. No fewer than six of the 10 markets surveyed show improvement. Montreal homes have become the most affordable in a decade … The story is radically different in Vancouver and Toronto, the country's two largest markets … In both markets, non-condo affordability is the worst on record."
For a table showing full rundown of affordability: "@SBarlow_ROB Good summary of Canadian housing affordability from NBF pic.twitter.com/7e4x74gI5k " – Twitter
The RoB also produced an exhaustive set of data on Canadian housing on the web site: "House price data centre" – Report on Business
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I'm on record as picking George Soros as the greatest investor alive although "greatest market speculator" might be more accurate. Mr. Soros was featured on Bloomberg Wednesday arguing that the current state of the Chinese economy is very similar to the United States just before the financial crisis. For what it's worth, I share this view to a great extent,
"[Soros] He said at the World Economic Forum in Davos that he's been betting against Asian currencies because a hard landing in China is "practically unavoidable.".. ""Most of money that banks are supplying is needed to keep bad debts and loss-making enterprises alive.""
"Soros Says China's Debt-Fueled Growth Echoes U.S. in 2007-08" – Bloomberg
"China's Economic Recovery Masking Financial Risks, Fitch Says" – Bloomberg
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Crude prices and silver continue to ramp higher.
The scuttlebutt among traders on Twitter is that both moves represent massive short covering by hedge funds or, in the words of oil market insider @energyrosen , "This is a big boy squeeze." (For those on Twitter and remotely interested in oil market, Energy Rosen is an absolute must follow .)
"Commodities' Five-Month High Weighs on Bonds; Europe Stocks Slip" – Bloomberg
"Silver `Spike' Seen Extending Best Start in Five Years: Chart" – Bloomberg
See also: "IEA chief says oil market, prices to return to balance by 2017" – Reuters
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The Wall Street Journal' s Marketwatch site detailed the almost-death of PC computing after Intel announced mass layoffs,
"While the product life cycle of the PC in 2009 was around three-and-a-half to four years, it has since expanded to between five and six years as people use their PCs less frequently and the hardware lasts longer, said Reith. In other words, the smartphones apps you're addicted to, such as Instagram, Facebook, Pinterest and Spotify, are stealing away quality PC time."
"The rise and fall of the PC in one chart" - Marketwatch
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Tweet of the Day: "@TheEconomist Today is Queen Elizabeth II's 90th birthday. Her record reign, in graphics econ.st/1qYLJWg #econarchive pic.twitter.com/P99EKRdzSp " – Twitter
Diversion: " What's probably killing your motivation right now, and how to stop it" – Quartz
Scott Barlow