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​"The retail industry will be transformed by technology, just like newspapers were."
@benedictevans March 20, 2019

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Thanks to Benedict Evans for retweeting Andreessen Horowitz's 76 page slide show "Mobile is Eating the World"  The charts to the left from the slideshow are related to autonomous transportation, but the bigger picture of this presentation is about machine learning and the eventual end of your employment if your job is a repetitive task. ​

"Machine Learning...the idea that systems can learn from data, identify patterns and make decisions with minimal human intervention." sas.com 
​

The Bank of Canada acknowledged that our current economic slowdown is now “more pronounced and widespread” than it had previously forecast.

Global economic momentum is slowing.

Our economic slowdown has been sharper than expected.

Housing and consumption have slowed, and business investment and exports haven’t picked up the slack as the BoC had hoped.

Inflation expectations have been lowered.

Uncertainty is increasing.

Our output gap is widening because debt is choking off growth, and that is a powerful, long-term headwind, which will continue to exert itself long after global trade networks have been re-established.

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While we wait for the February real estate data to come in, here is the latest UBS update to their real estate bubble index. Not many surprises; we have been seeing these cities appear on the most expensive lists for sometime now.  My Demographia file has been tracking these cities since 2005. CLICK CHART TO ENLARGE

Vancouver, whose house prices accelerated to a double-digit rate relative to last year, has a ballooning index score. Higher stamp duties for foreign investors proved futile in braking its boom. By contrast, Toronto’s price dynamics have slowed considerably and its index score declined somewhat from last year’s. In both cities, valuations have trended upward since the late 1990s. Neither the financial crisis nor weakening commodity prices has dragged them down. But rising rates, stricter market regulations or an economic downturn could turn the lights out on the party given the high valuations and strained affordability.
2018 UBS Global Real Estate Bubble Index PDF

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Remember when Vancouver real estate prices were defended by making comparisons to New York City housing prices? It looks like we can make those comparisons again. For price drops see MyRealtyCheck.ca ​The chart to the left is from Wolf Richter February 11, 2018, and he notes that: ​

The higher the price, the harder it gets:
Homes listed at less than $1 million: 45% failed to sell.
Homes listed at $1 million or more: 61% failed to sell.
Homes listed at $5 million or more (656 units): 79% failed to sell.

Resale transactions on Vancouver homes over $1 million fell by 26 per cent in 2018, with the slowdown more heavily weighted toward the second half of the year, said the brokerage. This was the third consecutive year of a decline in “top-tier” home sales over $1 million.

In the single-family home sector alone, the annual sales declines were even deeper, down 35 per cent among $1 million-plus homes and 51 per cent among $4 million-plus homes.

High-end condos in the City of Vancouver fared somewhat better but still “gave in to market stressors” in the latter half of the year, said Sotheby’s. Sales on condos over $1 million fell by 14 per cent year over year.

Peak Consumption in Canada
appears to be at hand.

Feeble savings may also signal that
consumption-led growth has nearly reached it’s end, as
Canadians are spending by drawing down savings.​
​From Bloomberg via TheStar.com ​December 1, 2018​
Hat Tip to TradingEconomics.com for the Charts

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The low rate leaves Canadians more vulnerable to an economic shock, according to Brian DePratto at Toronto-Dominion Bank. “It’s concerning that households aren’t building up buffers and prepping for retirement like they used to,” the Toronto-based senior economist said by email. “The extent to which Canadians turn around their priorities when it comes to their financial situation could also mean less money for consumer spending.” “It doesn’t bode well for consumption spending moving forward,” National Bank Financial’s Krishen Rangasamy

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As we wait for the December real estate data, let's look at some year end charts.  First up is Henrik Zeberg @HenrikZeberg who is suggesting that the price of oil is headed down to less than USD$23. ​Notice where oil was trading in 2001-2002 and 2016.

"...concerns about the pace of global economic growth in coming months have led to related concerns about the pace of oil demand growth."

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The economic slowdown in China is on, being driven by "risky lending and a rapid rise in debt levels". That sounds familiar to me and I have plotted it out on my Canadian Household Debt, GDP, Balance of Trade and FDI chart.

After decades of sharp expansion, the Chinese economy is slowing down. Growth in 2018 is set to be the weakest since 1990. And 2019 looks even worse. The world's second largest economy is feeling the effects of a darkening trade outlook and government attempts to rein in risky lending after a rapid rise in debt levels. "The drivers of China's slowdown have yet to have their full impact on the economy, and the combination of both is unprecedented," analysts at Moody's wrote in a research note this month. "This creates a high degree of uncertainty and risk. CNN Business December 30. 2018
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The USD which is the "senior currency" continues to go up in value when measured against other currencies. That is having a profound effect on global foreign debt holders that have to raise US dollars to repay their loans with their "depreciating" local currencies. CLICK CHART TO ENLARGE

A further, significant strengthening in the dollar will tell us when the Deflationary endgame for the global economy is gathering force. It will crush debtors, bankrupt creditors and lop at least four or five zeroes worth of funny money from the banking system’s quadrillion-dollar shell-game. I have written extensively on why hyperinflation is extremely unlikely to settle debts that have become vastly too large to repay. If you cannot understand why, let me pose this question: Do you actually believe the banksters will let you pay off your mortgage with a few hundred-thousand-dollar bills that you’ve peeled from your wallet? If you answered in the negative, you are implicitly a deflationist. 

The C.D. Howe Institute study estimates of money laundering in Canada range from $5 billion to $100 billion. C.D. Howe Report, September 2018

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Strength in Gold of late has it (the Gold/USD ratio) breaking above the top of this trading range at (2). What the ratio does at this resistance test will send an important message to the metals sector for the next few months.​

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​While we wait for the November Real estate data to come in, the World Trade Organization has released their November 26, 2018 World Trade Outlook Indicator. Their Trade Indicator has dropped to the lowest level since October 2016. NOTE that the Canadian National MLS Real Estate sales peaked three months later in January of 2017.

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World Trade Component Indices Key Findings Full Text

This report covers new trade and trade-related measures implemented by G20 economies between 16 May and 15 October 2018. It shows a number of important trends in global trade policy-making. While G20 economies continued to implement trade-facilitating measures, the figures show a significant increase in the number and coverage of trade-restrictive measures. This provides a first factual insight into the trade‑restrictive measures imposed in the context of current trade tensions.

G20 economies applied 40 new trade-restrictive measures during the review period, including tariff increases, import bans and export duties. This equates to an average of eight restrictive measures per month.
During the review period, the estimated trade coverage of the import-restrictive measures (US$ 481 billion) was more than six times larger than that recorded in the previous period and is the largest since it was first calculated in 2012.

G20 economies also implemented 33 measures aimed at facilitating trade during the review period, including eliminating or reducing import tariffs and export duties. At close to seven trade‑facilitating measures per month, this is in line with the 2012-17 trend.

The trade coverage of import-facilitating measures (US$ 216 billion) has also risen significantly during this period but is just half that of trade-restrictive measures.

On trade remedy measures, the review period saw a decrease in initiations of investigations by G20 economies and a stagnation of terminations compared to the previous period. Initiations of anti-dumping investigations remain the most frequent trade remedy action, accounting for almost three-quarters of all initiations. The trade coverage of trade remedy initiations (US$ 25 billion) has fallen significantly compared to the previous period. The trade coverage of trade remedy terminations remained equivalent to the previous review period at US$ 6 billion.

The proliferation of trade‑restrictive actions and the uncertainty created by such actions could place economic recovery in jeopardy. Further escalation would carry potentially large risks for global trade, with knock-on effects for economic growth, jobs and consumer prices around the world.
​
G20 economies must use all means at their disposal to de-escalate the situation. The WTO will do all it can to support its members to this end and leadership from the G20 will be essential. PDF Chart Source

​3 of My Charts Echo the WTO Warning

MLS SALES CLICK CHART TO ENLARGE Canadian National MLS sales peaked in January 2017. Two of the six WTO metrics were already in recession.

YIELD CURVE CLICK CHART TO ENLARGE The 10yr less 2yr yield metric was at its last major wide in January 2017 and now is only 16 bps from inversion.

NET TRADE CLICK CHART TO ENLARGE Since January 2017, there have been 21 unbroken consecutive negative Net Trade prints.

CLICK IMAGE TO ENLARGE CIA MAP OF ILLICIT DRUG TRADE VIA WIKIPEDIA CLICK IMAGE TO ENLARGE MAP OF FENTANYL TRADE INTO CANADA VIA GLOBAL NEWS

​Consider how Canadians have been whipped up into a FOMO real estate frenzy by a combination of our government sponsored ZIRP and NIRP, ​high ratio loan to value insurance schemes and outright cash helicopter drops all at the expense of you dear taxpayer. ​We've all been punked and taken to the cleaners in Canada and weak handed mortgagors are at the highest risk as fear of missing out turns to fear of getting in.

THE VANCOUVER MODEL
FOR MONEY LAUNDERING
​SPREADS ACROSS CANADA

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