Juggling Dynamite

Trading-driven investment bank profits are thriving even as consumer sentiment and labour markets remain weak. See Capital markets, wealth drive earnings for Canada’s big banks:

Canada’s big banks exceeded expectations for the 2025 fiscal year as capital markets and wealth management carried results.

But economic uncertainty loomed over results. Adverse trade policy and a cooling labor market were hot topics, and there are risks of consumer credit stress: The Bank of Canada estimates that about 60% of outstanding mortgages will renew in 2025 or 2026.

Also, see Goldman Sachs and Morgan Stanley see double-digit profit jumps amid surging stock market. Goldman Sachs reported a 12% increase in fourth-quarter profit to $4.6 billion, fueled by a surge in investment-banking fees and equities trading. Morgan Stanley followed with an 18% profit jump to $4.4 billion, as their investment-banking fees climbed 47%. Trading and capital-markets engines are generating record cash flows amid the largest wave of employee headcount reductions in the banking sector in more than a decade.

Investment sales firms reinforce a powerful feedback loop in which their elevated profits inspire high valuations and animal spirits, thereby promoting the very trading and dealmaking that generate their profits.

In short, financial firms enrich themselves on activity, regardless of how buyers fare.

The house rakes it in until it implodes, and then they look to the government for bailouts.  Unfortunately, individual players (aka investors) have no such assurances and must manage their capital risk carefully.

The Greater Toronto Area’s (GTA’s) 62,400 residential real estate transactions during 2025 were the lowest since 2000 and 51% less than in 2021. In the Greater Vancouver Area (GVA), the 23,800 residential transactions were the fewest since at least 2005. See, Home Sales in Canada drop to historic lows in 2025.

Sales fathomed multi-decade lows, even as fixed mortgage rates fell from above 6% in 2024 to around 4% in 2025 and the average sale price dropped roughly 18% nationally and -25% from the early-2022 peak in the Greater Toronto Area.

About 60% of outstanding mortgages (1.15 million mortgages according to CMHC) are set to renew by the end of 2026, and many of those taken out in 2021-22 are facing a significant interest rate increase. Some borrowers in variable-rate mortgages experienced negative amortization during the rate spike—meaning they now owe more than when they took out the initial loan.

February 2026 marks the fourth year since the top of Canada’s real estate bubble, and those expecting an imminent rebound have been continually disappointed. The volume of homes listed for sale this spring looks poised to balloon as disgruntled would-be-sellers look to relist.

Similar trends are unfolding in America, where Redfin housing-market analysis shows that in November 2025, there were about 37.2 % more home sellers than buyers in the U.S. housing market — roughly 529,770 more sellers than buyers. That gap represented one of the largest imbalances in records going back to 2013.

At the same time, those who poured savings into real estate investment funds over the last few years are increasingly finding their capital frozen. Some 40% of Canadian real estate investment funds are now denying withdrawals. See, Canadians Are Furious After Real Estate Funds Lock Up Their Money:

Across Canada, investors who poured billions into private real estate funds suddenly can’t touch their money. Stung by a deep downturn in the country’s housing market, many of the funds have restricted cash distributions, client withdrawals or both, in a process the industry calls “gating.” Often, the companies don’t say when access will resume. About C$30 billion ($21.7 billion) — almost 40% of the C$80 billion invested in such funds — is now locked up.

For markets to clear, properties need to find able and willing buyers. That’s going to take time and lower prices. This type of cash crunch tends to be contagious.

Grid-scale batteries have, until recently, been predominantly used only to stabilize the frequency of electricity supply. But as prices have dropped dramatically in recent years and new chemistries like sodium-ion have come into the mainstream, batteries have started to replace coal power stations and even gas peaker plants. So, is the final death knell now being sounded for the combustion of fossil fuels? Here is a direct video link.

What if your phone battery charged in seconds instead of hours? What if buildings could cut their carbon emissions in half? What if medical sensors could detect diseases years earlier than they do today? Graphene was supposed to deliver all of this and more. Since 2004, researchers called it a wonder material. It would revolutionize everything. 20 years later? Most of those promises fell flat. But now graphene supercapacitors are powering AI data centers. Graphene-enhanced concrete is being poured at industrial sites. Medical sensors using graphene are hitting the market. The trickle is turning into a flood. Here is a direct video link.