Juggling Dynamite

It is rare for a chief market strategist for a major bank to discuss downside risks in Canada so plainly. This segment was recorded during yesterday’s market bounce.  Most stocks, especially in Canada, remain well below their February highs, however, the rebound since March made back some losses and has afforded another opportunity to reduce capital risk and raise liquidity for the next phase of the recession and bear market.  Cash remains king.

Stéfane Marion, chief economist and strategist at National Bank Financial joins BNN Bloomberg for his reaction to the BoC’s rate decision and his current outlook on the market.  Here is a direct video link.

All the cheap Made in China goods we’ve been buying on credit have come with many costs.

This is China’s most spectacular extravaganza. A hundred years in the making, costing $25 billion, one of the biggest engineering feats the world has ever seen. And, according to its critics, an environmental disaster on a monumental scale. The Three Gorges Dam is certainly a sight to behold, a massive wall of concrete spanning the mighty Yangtze River. The Chinese say it’s all about flood control and clean hydroelectric power. The environmentalists say true, it is about power. Power and national pride and the arrogance of man trying to tame forces of nature.  Here is a direct video link.

In August, I pointed out that the US dollar index (DXY) was looking oversold and that a bounce in the 92 range could signal the next retest for risk assets on the other end of the dollar teeter-totter.  Here was my partner Cory Venable’s big picture chart of the dollar index from 1995 to August 7.

Bouncing around in the $92 range to the end of August, the dollar held and traded through 93.50 this morning as other risk assets, commodities and currencies have sold off. We are watching to see whether dollar support has legs through a weekly close.  When it does, liquidation selling in other risk assets is likely to continue.