A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Famed short-selling hedge fund manager Jim Chanos is not a big fan of cryptocurrencies, calling them “simply a security speculation game masquerading as a technological breakthrough in monetary policy” in a recent interview.
More interestingly (for me at least), Mr. Chanos talked about market cycles becoming more fraud-ridden the longer they last, an observation that very well could have applications to murkier segments of Canada’s housing market,
“The ‘fraud cycle’ — instances of large-scale financial fraud over multiple platforms and companies in the financial markets in the modern era (the last 500 years) — follows the financial cycle with a lag. That means that as business and particularly financial markets improve, peoples’ sense of disbelief and caution… begins to erode.”
“Jim Chanos: “Cryptocurrency is a security speculation game masquerading as a technological breakthrough”” – Institute for New Economic Thinking
“Real estate developer Fortress faces foreclosure battles as mortgage lenders circle” – Report on Business
“Cryptocurrency isn’t controlled and is vulnerable to hacks. It could also revolutionize the way we spend money.” – Vox
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A few reports in recent days point to a slowdown in the global economy, with Goldman Sachs predicting this is as good as it gets for the U.S.,
“Jan Hatzius, Goldman’s chief economist, said in a research note published Monday that the tailwind effect of fiscal stimulus and benign monetary conditions had likely pushed the growth rate as fast as possible for now. “The current pace is probably as good as it gets because we expect the impulse from financial conditions to gradually turn more negative,” Hatzius said.”
“@LizAnnSonders: Slowing global trade: #CapitalEconomics @SoberLook @MikaelSarwe pic.twitter.com/MsR8DgytcV “ – (charts) Twitter
“Global growth is set to ebb as expansion shows its age, the World Bank says “ – Bloomberg
Domestically, UBS strategists believe the Bank of Canada is overly optimistic about growth and will have to back off on planned interest rate hikes,
“We still don’t think the Canadian economy warrants the degree of tightening that the market is pricing, but the BoC’s more optimistic outlook implies that two further hikes by year end are now more likely to be delivered, putting our trade at risk. Wage and inflation dynamics in Canada are optically strong, but both are benefitting directly and indirectly from the Ontario minimum wage increase .. to the extent that the pick-up in real wages is muted as inflation erodes some of the increase in nominal wages, this should have a limited impact on growth. Indeed, household consumption slowed down for a third consecutive quarter in 1Q18 and was the biggest downside surprise in the GDP report.”
“@SBarlow_ROB UBS: Bank of Canada overconfident on growth” – (research excerpt) Twitter
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Tweet of the Day:
Diversion: “An amateur sleuth has spent years tracing the identity of a mysterious body found on a beach 70 years ago. Finally, he is finding answers close to home” – New Scientist
Scott Barlow