US Stock Valuations Have Reached Extreme Levels: A 95-Year Perspective. In the ongoing debate about US stock market valuations, a striking chart from the Financial Times' Daily Shot presents a compelling visualization of how extraordinary current market conditions are. By examining the ratio of non-financial market capitalization to corporate gross value-added from 1929 to 2024,[...]

The sharp downturn shown in the chart illustrates a K-wave's peak and subsequent downturn, where excessive financialization has led to economic vulnerabilities. This phase could be marked by a correction or a deflationary period where asset prices adjust and economic realities come to the forefront. Understanding this cycle is crucial for forecasting future economic trends[...]

Toronto's housing affordability trends from 1976 to 2024 reflect a sharp and persistent decline in affordability, as seen in the dramatic rise in the price-to-income ratio. Here's a detailed analysis: Long-Term Trend in Housing Affordability The price-to-income ratio (inflation-adjusted) rose from 4.4 in 1976 to 16.0 in 2023, reflecting a 512% increase in real home[...]

  1/ Lower rates = bigger market. More folks can afford loans when monthly payments drop. Simple math: same house, lower payment = more potential borrowers. 2/ Quality boost: When rates fall, existing borrowers breathe easier. Their debt payments shrink relative to income. Default risk ⬇️ 3/ The fixed-income goldmine: Banks holding long-duration bonds saw[...]

  Key Observations Real Boom (Green Box): This period refers to historically robust population growth driven by organic economic factors. These could include: Natural Population Growth: High birth rates or family sizes. Economic Prosperity: Agricultural or industrial expansions providing stable economic opportunities. Immigration Waves: Large-scale immigration, particularly during Canada's nation-building era in the late 19th[...]

The financial markets are sending clear signals about Canada's economic trajectory. The significant gap between the Bank of Canada's policy rate (3.75%) and the 3-month T-Bill rate (3.43%) isn't just a technical detail - it's revealing a compelling narrative about our economic future. Markets are pricing in cuts between 0.25% to 0.50%, but this anticipated[...]