Juggling Dynamite

We recently completed rooftop solar, which allows us to run operations and vehicles on sunshine. Technology is here to improve efficiency and lower waste for all sectors of the economy—a much-needed bright spot ☀️.

Smart food production powered by renewable energy is what productivity enhancement looks like.

For the first time, a King City, Ont, greenhouse has harvested thousands of pounds of lettuce grown entirely by automation with AI monitoring temperature, light and humidity. The grower hopes the model can help Canada be less reliant on the American market. Here is a direct video link.

The spreading downturn in real estate is the typical and foreseeable mean reversion of the speculative mania that prevailed through the years of near-zero interest rates.

The condo market in two of Canada’s big cities has taken a major downturn. CBC’s Nisha Patel breaks down three reasons why condos aren’t selling in the middle of a housing crisis. Here is a direct video link.

Not just in Canada, and not just condos; home prices are falling in many US markets, too.

Housing supply is skyrocketing across Southwest states like Arizona, Nevada, Utah, and Colorado, suggesting that the 2025 housing market is amid a correction in these states. Here is a direct video link.

Builders now have more completed but unsold homes on lots than at any time since 2009. See, First-Time Home Buyers Are Struggling. That’s Bad News For Builders:

People buying their first homes in the existing market are about a decade older than historical norms, at 38 years of age, according to Jessica Lautz, deputy chief economist at the National Association of Realtors.

Their median household income has shot up to $97,000, and last year they had a 9% down payment on average. These buyers had to wait until they were older and had higher incomes for homeownership to be affordable. The share of first-time buyers in the existing-homes market is at a record low (shown below).

As bubbles burst, real estate “corrections” tend to last 4 to 6 years, with prices not recovering prior highs for years after that. Traditionally, housing has led the harshest economic contractions.

Then, we have a tariff shock hitting the highly leveraged economy on a scale not seen since the 1930s (the present US weighted average tariff rate is estimated at 14% vs. 2.5% at the start of 2025, shown below via Barclays and The Daily Shot).

These increased costs are expected to be evident in the price of goods this summer–some food for thought and personal risk assessment.

The United States and China to drastically roll back tariffs on each other’s goods for an initial 90-day period, in a surprise breakthrough that has de-escalated a punishing trade war and buoyed global markets. The announcement, which was made in a joint statement, comes after a weekend of marathon trade negotiations in Geneva, Switzerland by officials from the world’s two largest economies, during which both sides touted “substantial progress.” Here is a direct video link.

A 90-day pause on embargo-style US-China trade tariffs has revived bullish spirits. The large-cap S&P 500 (black below), with its one-third weight in tech companies (“Magnificent Seven” companies in orange), has rebounded 18% since April 8—now flat year to date and -3.8% below the February high.

The retail crowd is back at it, bidding the most popular meme stocks (pink below) up 25% since April 11, while the Goldman Sachs retail favourites basket (in blue) has rebounded 16.96%.

It’s worth remembering that such dramatic rebounds are typical during ongoing bear markets, as the most-shorted stocks, which have fallen the most, get repurchased on profit-taking from short-sellers.

In the real economy, small business hiring plans and job openings have not rebounded (below, from 2017, courtesy of The Daily Shot).

Nor have capital expenditure plans (below since 2017) that touched the COVID-lows in April. Making long-term capital allocation commitments is tough when government policy is wipsawing daily.

It’s hard to get a word edge-wise with David R. 🥸, but his economic content is always worth a mull. The discussion below covers many relevant observations.

David Rosenberg, Founder and President of Rosenberg Research & Associates, discusses the impending recession he forecasts for the second half of 2025 despite the recent US-China tariff reprieve. He recommends defensive investment strategies, including treasuries, gold, and low-beta equities. Here is a direct video link.

An important caveat emptor when discussing the ‘defensive’ quality of dividend-paying stocks and sectors: they may fall less during recessions, but they still tend to lose a lot (performance by sector versus the broad S&P 500 below since 1990, courtesy of A. Gary Shilling).