Danielle was a guest with Jim Goddard on Talk Digital Network talking about recent developments in the world economy and markets. You can listen to an audio link of the segment here.
You can see more here on The Great Disruption–Rethinking energy, transportation and food & agriculture.
This chart is further to the comments on Canadian real estate risks. Canadians have levered all-in and then some at the highest prices and lowest interest rates ever. Happy October!!
Household wealth is more concentrated in equities today than at any time in the last 50 years, including the 2000 tech bubble top. This is great for firms who make the richest fees issuing, trading and holding equities in client portfolios. As shown below since 2005, from Bank of America, 65.3% of client assets under management are in stock-based products today compared with a peak of 56% at the cycle top in 2007.
Unfortunately, for the holders/clients, this record exposure to stocks (S&P 500 below) comes at a time when the securities are priced to deliver negative returns over the next decade, as they were, and did, from the cycle peak in 2000.
This will be super hard on financial plans and prompt many to reduce spending and/or work longer than they presently imagine. Asset bubbles are no free lunch or dinner.
Ongoing revelations that politicians, central bank heads, and federal judges have joined corporate insiders in using advance notice of non-public information to execute self-enriching trades confirms what many of us have known for some time: markets are rigged in favour of those who cheat, break laws and abuse the public trust.
In the process, respect for public institutions and systems is dangerously and deservedly crumbling from the top. See more in Bloomberg Businessweek’s: Most Americans today believe stock markets are rigged, and they’re right. Here is a direct link to an audio reading of the article:
Time and time again, insiders appear to exploit private information for opportunistic gain. Cheating…they discovered, seemed to be everywhere.
While the evidence is plentiful, as shown above (red line), the prosecution has intentionally lacked, so white-collar offenders have become ubiquitous.
The only meaningful deterrents to this are public embarrassment, enforcement and punishments that include disgorging of ill-gotten gains, stripping of positions of trust and jail time, where deserving.
It’s really basic: those who abuse positions of trust, do not deserve to have positions of trust.
