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Scott Barlow

Globe and Mail Update

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web.

A report from Moody's sent a chill through the spine of Canada's rapidly aging population by warning of increasing leverage and risk in domestic pension fund portfolios:

"The nation's six biggest pension funds have increased their average leverage to 24 per cent, from 19 per cent in 2009, in an effort to offset the impact of declining pension member contributions and low interest rates on their cash flow and investment returns, Moody's said in an Oct. 3 report … 'They are definitely taking on more risk, and the question I ask them is, 'Why take on more risk if you don't need to?'' [Moody's analyst Jason] Mercer said by phone from Toronto. 'Why not just invest in very low-risk securities and not worry about volatility?'"

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"Canada's Pension Funds Are Piling on Leverage, Moody's Warns" – Bloomberg

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Report on Business and Bloomberg headlines on Toronto housing prices take drastically different approaches:

"Toronto home prices rebound sharply after short slump, sales drop" – Report on Business

"Toronto Housing Prices Fall for a 4th Straight Month" – Bloomberg

"Canada watchdog says mortgage changes to be finalized this month" – Reuters

The disparity arises from month over month and year over year results. For me, the more important distinction is between detached home and condominium prices.

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Crude prices are weak Wednesday ahead of the Department of Energy's weekly report on U.S. inventories. There's also a lot of electric vehicle and renewable power stories. I confess that I'm not that interested in potential investments in EVs and solar power at this point – I'll be more comfortable when the hype dies down and there's actual financial evidence of the trends taking hold (or not).

"Oil prices slip as markets eye rising U.S. crude output" – Reuters

"Utilities Should Charge Into Electric Vehicles" – Bloomberg

"Solar PV grew faster than any other fuel in 2016, opening a new era for solar power" – International Energy Agency (new report)

"U.S. oil may fall more to $49.22" – Reuters

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I have a pet theory that current economic conditions – stagnant wages, deflation pressures and low interest rates, aging population – is the reciprocal, 180 degree opposite of the 1970s. Leftist economist Chris Dillow asks whether the 70s economy that bad, which makes good points but conveniently misses how horrible that decade was for consumers:

"THE LESSON OF THE 70S" – Dillow, Stumbling and Mumbling

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Tweet of the Day: "@techreview Would you pay to have AI continuously monitor your health?" – MIT Technology Review

Diversion: "The Nobel prize in medicine goes to your body's circadian clock" – Wired

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