Juggling Dynamite

This segment was recorded in February 2022 and remains highly relevant.

GMO co-founder and Chief Investment Strategist Jeremy Grantham says there’s a huge commercial imperative for big firms to play right up to the end of this market ‘superbubble.’ Here is a direct video link.

Today, amid all the media hyperbole, stocks remain historically expensive, and portfolio positioning remains skewed to risk assets. Household equity flows are shown below in blue with the S&P 2-year total return in yellow (since 1990, courtesy of Lance Roberts). The bear market bottom lies somewhere ahead when retail will be liquidating. No capitulation selling yet!

This video offers an excellent overview of the compounding cost of short-termism and entitlement thinking in a world of corporations and households who expect endless government support and lower taxes.

The U.S. Government is facing some serious fiscal and monetary issues that don’t seem to have a positive outcome. In this video we will see the problems the U.S. is facing with debt, entitlements, and savings as well as the potential (negative) solutions they can attempt. Here is a direct video link.

The rapid cooldown in real estate threatens to worsen a global economic downturn and is emerging as a key variable for central bankers who want to tamp down inflation. Here is a direct video link.

Also, see The World’s Hottest Housing Markets Face a Painful Reset

In Australia and Canada — two of the world’s bubbliest markets — economists anticipate a notable crunch…

Variable-rate mortgages accounted for nearly 60% of all new [Canadian] home loans at the height of the country’s real estate frenzy earlier this year.

Of the roughly half a trillion Canadian dollars’ worth of variable mortgage debt outstanding, about a third have seen their monthly payments go up in line with the central bank’s benchmark rate, according to research from the National Bank of Canada. Combined with things like lines of credit and fixed-rate mortgages coming up for renewal, these rising interest payments could collectively shave 0.65% off Canadians’ collective disposable income over the next three years, the research shows.