Manipulation, Watch Video
Think for Yourself
It’s okay to be confused.
Bloomberg Business news: https://www.bnnbloomberg.ca/own-canada-says-bofa-analyst-pointing-to-record-dividend-gap OWN Canada, not its land, but its stocks.
What Bank of America’s Ohsung Kwon says about Canada:
1/ Own dividends, own inflation, own Canada,” the strategist wrote in a Monday research note. “2024 could be a banner year for dividends as cash yields drop and a global recovery cycle lifts beaten-down high-dividend stocks.
and
2/ The outlook for inflation and geopolitics are the two biggest risks that investors see for equities this year, and Canada could offer a hedge against both, especially given current global tensions, according to the research.
Kwon pointed out that the TSX’s three historical upward cycles relative to the S&P 500 came during inflationary periods, and two were in wartime, including in the 1940s.
Why would a Bank of America be looking at the CANADIAN stock market?
Canada’s stock market INCREASES its profitability during war time.
However, right now, Bloomberg also sees a drop in the sales price of Canadian homes, but a market expansion: https://www.bloomberg.com/news/articles/2024-02-06/toronto-sees-winter-surge-in-home-sales-as-prices-drop-again?srnd=premium-canada.
Makes me think ‘State of Confusion’ by Genesis.
Basically, Bloomberg is arguing Inflation is up, but houses prices are down.
Begging the question about stocks?
Why are stocks so highly priced? Because of Inflation?
Inflation in Canada is directly linked to the price of houses and rents because of mortgages (like variable rate mortgages). Everyone’s mortgage is in trouble, right now, because of the housing bubble caused by lower interest rates enabling house purchases by those who normally couldn’t afford to buy, and which is being burst by interest rates being raised, so, people carrying those mortgages can no longer afford them, but also means they can’t sell those houses because they can’t afford to buy or rent anywhere else.
And, lose their equity.
Make sense? I hope, so. I don’t believe the Bloomberg piece about an expanding housing market.
Pamela Heaven in FP: https://financialpost.com/news/housing-inflation-is-sticking-around. A Canadian reporter, so, someone here, is saying house prices are actually staying high.
Justifying Inflation? I don’t think so, more, a consequence of the Interest rates raised to fight Inflation.
That same FP reporter also had a piece on Canadian Bankruptcies: https://ca.finance.yahoo.com/news/posthaste-bankruptcies-soaring-especially-canada
They’re soaring here, also, likely, because of interest rates; to quote: Business insolvencies in Canada jumped the most in 36 years of records in 2023, as debt costs rose and the economy weakened.
The number of businesses that filed for insolvency was the highest in 13 years, according to figures out last week from the federal Office of the Superintendent of Bankruptcy. Filings rose 35 per cent in the fourth quarter from the third and more than doubled compared to the same quarter a year ago.
Year over year, Bankruptcies have reached 75% levels; again, to cite:
During COVID-19 businesses were artificially supported by direct government aid, bank forbearance and low interest rates. “A rebound was always going to happen when these supports started to fall away,” he said.
Even so, bankruptcy levels are higher than Oxford modelling predicted, especially in Canada and the United Kingdom.
These two economies and others where bankruptcies are high tend towards floating-rate corporate borrowing, so companies must deal with the costs of higher interest rates sooner. In markets where fixed-rate borrowing is more common such as the United States bankruptcies are below or close to 2019 levels, said Slater.
Oxford predicts a further double-digit increase in bankruptcies this year, and in some markets into 2025. But it only expects these to reach really worrying levels if the downturn in advanced economies is much worse than it forecasts.
Bankruptcies of little guys?
Justifying the prices of products in larger companies meaning greater profits for the deep pocketed people?
So, Canada actually doesn’t have Inflation caused by a shortage of goods, so much as an Inflation supported by Interest Rates. I think.
I do have a bias, and I think Interest Rates are being raised to keep the rhetoric about Inflation going, so, the deep pocketed people can make money through stocks.
The war timing is just coincidence, or distraction? It’s BS (sorry) about the Canadian economy; your man is raising rates for the dividends.