Juggling Dynamite

The fear trade has come to life the last few weeks and the above chart from Technician Cory suggests fear may well be here to stay for the next several weeks.  Here he shows the US long bond index “TLT” as a ratio over the Canadian dollar Index “FXC”.   When the TLT moves up more than the FXC we see the deflation fear trade has the upper hand over growth or inflation prospects.  The TLT ratio came up to resistance in August last summer and then rolled over on the euphoric hopes that QE2 would revive growth.  Lately as this hope has been dashed, the TLT/FXC ratio has broken out just as it did in the fall of 2008.  Harbinger of things to come?

I did a segment last year with CBC’s Anna Maria Tremonti on the Canadian housing market. It turns out a lot of people listened to that show. I have received more feedback, questions and comments on that segment than probably any other interview I have ever done. Many people have asked if I had a copy of it. For anyone that is interested it has recently come to my attention that CBC has archived the show here on their website under
Pt 2: Housing Bubble.   As I listen today, I would say that the thoughts and concerns expressed apply equally and possibly even more so now than in 2010 as Canadians have had another year of higher home prices and even more debt.

I had the opportunity to sit down with geologist and junior mining analyst Brent Cook recently. I have had a few frank discussions with Brent over the years when we have crossed paths on the speaking circuit. In a business too often full of bravado, hype and salesmanship, I find Brent to be refreshingly honest about the risks and limitations of fundamental analysis in controlling downside risk to capital.