Juggling Dynamite

Confirmation this morning that Canada lost more jobs in June. In fact without the unsustainable oil-sand madness jobs added in Alberta this year, the other provinces have experienced no job growth at all now for the past 12 months. The loonie is taking a deserved blow on the news. As shown in the chart below, the elephant in the room (the one that nearly all Canadian-centric investment firms try hard to ignore) is: if a US led recession and credit crunch clobbered the Canadian dollar and stock market in both 2000 and 2007, how low might the loonie (and Cdn stocks, led by the Canadian banks) fall this time with the true north strong and free today enslaved by record domestic debt levels? Maybe Mark Carney is a genius after all…he certainly timed his exit to England last summer beautifully.

When happy go lucky CNBC personalities start bantering about the risk, you know the suicidal leverage and anemic trading volumes must be outright freakish…

Big moves in a handful of stocks provided traders with a worrying signal—an “ultra-high” level of leverage in the stock market. “People must be three or four times normal leverage,” Cashin said. “We’ve seen margin accounts go up. We knew the hedge funds were playing. But to see extreme moves like that on nonspecific news tells me there’s a lot of leverage out there. … If we start to get a protracted move, it could get very volatile.” Here is a direct video link.

For some historical reference on just how ‘bat-shit-crazy’ current leverage levels are today, here’s the updated chart again since 1995. But gee…300%+ leverage worked out so well the past couple of peaks, what’s to fear this time, right?

In the Federal Open Market Committee’s June meeting, the Fed decided that it would likely look to end its asset purchasing program (known as quantitative easing, or QE) with a $15 billion reduction in monthly purchases in October, according to the meeting minutes released on Wednesday. The markets took the news in stride, and stocks actually closed higher on the day.

But Peter Boockvar, chief market analyst at The Lindsey Group, told CNBC’s “Futures Now” that equity investors are making a huge mistake. Here is a direct video link.