Hello,
Markets were once again, sluggish, with weak economic data coming out of China and interest rates staying elevated due to inflation data. To help with an understanding of where we are, we start the top ten with a commentary from Jim Thorne and a BNN interview with Brian Belski.
Inflation ticked higher and CTV explains the areas where it is most prevalent.
The real estate market and the immigration explosion in Canada is in the news everywhere, for obvious reasons. We added the weekly piece from Steve Saretsky who discusses those items, and Gary Mason of the Globe & Mail looks at the high costs and taxes of building in Vancouver.
The boys at Berkshire bought three positions in the homebuilding sector and you wonder what Warren and Charlie know. Buffett et al, must think housing won’t be deflationary and prices/profitability will be sticky or grow on a shortage of homes vs. households in the US.
The sad news about Maui this past week has affected many people and now the lawsuits are coming. The one thing that should come out of this is better warning systems in the future.
The David Brook’s op-ed from a couple weeks ago has gotten a lot of attention and Sean Speers follows up looking at the “over educated and underachievers” out there.
As one reader said “I chuckled at Speer’s last line. It does hark to the sense of entitlement that seems to accompany the ‘everyone gets a ribbon culture kid’ have been schooled in (driven to and picked up from). Resilience along with moral teachings seem to have been given a bad rap or just plain overlooked.
Speaking of Mr. Brooks, his piece this week in The Atlantic is getting even more attention. Yes, there is a lot of sadness and meanness out there and not just in the US.
As my summer student, Alex Muir, points out: “For a long time, America took a lot of how it operated and managed as a country from England and really modelled the moral values of traditional England. Nowadays, America and England could not be more different. So when, after the deviation in cultural norms from traditional England, did Americans turn so mean? Sometime after World War II, when America realized they were becoming the global superpower, the scrutiny and envy they would have to become accustomed to would require a thicker set of skin. In America’s founding days, that the boys and girls of America should be “Acceptable at a dance and invaluable at a shipwreck.”
The dog days of summer are upon us and a time when the pennant race heats up just like the weather. Is there a greater baseball player than Shohei Ohtani?…it is good question and he sures helps us love baseball as the Washington Post explains.
David and Amy
Number 1 - August Market Insights. Unveiling The Crystal ball – Jim
It is essential to note that historical cycles do not guarantee future performance. The financial market is influenced by various factors, including economic conditions, geopolitical events, and market sentiment, which can significantly impact its trajectory. Therefore, while historical data can provide insights into potential market trends, it is essential to consider other factors and continuously monitor market conditions to make informed investment decisions. That said, it’s always nice to look into the crystal ball occasionally and dream about the future.
August Market Insights by Dr. James Thorne – Unveiling The Crystal Ball-1
Number 2 - Time to come back to Steady Eddie consumer discretionary retailers: BMO’s Brian Belski
Brian Belski, chief investment strategist at BMO Capital Markets, joins BNN Bloomberg to discuss this week’s retail earnings, and the US tech sector. He notes that tech sector earnings are now eclipsing the overall market. His advice for investors in Canadian stocks is: Follow the cash, as he believes Canadian companies are better managers and users of cash.
Number 5 - Greedy developers or greedy government?
The Globe and Mail’s Gary Mason compiled an unbelievably dense layer of taxes and fees in building new homes:
In one example, the [Urban Development Institute] looked at the costs of an 800-square-foot condo in Vancouver in 2023 and what contributed to the unit’s staggering average price of $1.12-million.
Here we go: Per-square-foot charges include building permits, $1,376; a development permit, $3,992; Empty Homes Tax, $60,000 (to be paid only if a unit sits empty for an extended period of time); development cost levies, $28,368; a per-square-foot property transfer tax, $13,688; property tax including an additional school tax, $11,480; a community amenity contribution, $89,992; a public art fee, $1,584. Other charges upon sale include GST, $56,000; a Greater Vancouver Sewerage development cost, $1,988; a Translink development cost, $1,554; and a per-unit property transfer tax, $20,400. The subtotal for fees per unit is $290,422 just to build, and upon sale, the total climbs to $327,565.53 – or 29.25 per cent of the imagined condo’s cost.
Which, on the face of it, seems like madness. You can’t tell me that back in the great residential building booms of the sixties and seventies, builders and buyers were having to factor in fees, taxes and other charges of nearly 30 per cent into the sale price.
So, while politicians blame housing shortages, developer greed and speculation, they don’t tend to mention that government takes the biggest share of all.
Number 6 - Buffett’s Berkshire Buys Three Homebuilders
Berkshire Hathaway, the conglomerate run by billionaire Warren Buffett, on Monday disclosed new investments in the homebuilders DR Horton, Lennar and NVR.
Number 8 - Sean Speer: Welcome to the age of overeducated underachievers
If you don’t like working-class populists, you’re going to hate the white-collar populists.
https://thehub.ca/2023-08-12/sean-speer-welcome-to-the-age-of-overeducated-underachievers/
For these reasons, he warns that “disgruntled elite-wannabes are far more threatening to societal stability than disgruntled workers.” Their growing ranks therefore ought to be the subject of far greater political and policy attention.
Which brings us back to Brooks’s essay. Although he’s right to look inward at the role that educated elites have played in contributing to the rise of contemporary populism, his conclusions aren’t quite correct. The chief problem isn’t less-educated classes or meritocracy itself. It’s the flawed culture of credentialism and its diminishing returns on educational credentials for legions of overeducated underachievers that may ultimately prove to be his class’s gravest mistake.
If you don’t like working-class populists, you’re going to hate the white-collar populists. Unless, of course, you are one.
Number 9 - Why Americans Are So Awful to One Another - The Atlantic - David Brooks
https://www.theatlantic.com/magazine/archive/2023/09/us-culture-moral-education-formation/674765/
Moral formation is best when it’s humble. It means giving people the skills and habits that will help them be considerate to others in the complex situations of life. It means helping people behave in ways that make other people feel included, seen, and respected. That’s very different from how we treat people now—in ways that make them feel sad and lonely, and that make them grow unkind.
Number 10 - Opinion | Shohei Ohtani is why we love baseball - The Washington Post
https://www.washingtonpost.com/opinions/2023/08/15/shohei-ohtani-baseball-player-greatness/
In so many ways, Ohtani perfectly represents why we still love baseball after all these years. That is because Ohtani, like baseball itself, blends the surprising and unsurprising like nothing else. Yes, on the one hand, he is doing things that have never been done before. But, at the same time, he feels oddly and sweetly familiar. Anyone who has played youth baseball will surely remember a teammate who was both the best pitcher and best hitter on the team.
That’s baseball. The game is ancient by American standards, and it has had to win over generation after generation, had to win over fans during Reconstruction and the Industrial Revolution, the Roaring 20s along with the Great Depression, the Space Age and the Disco era, the tech boom and whatever time we’re living in now.
Baseball always prevails. You think you’ve seen all the sport has to offer — and then, like magic, a player such as Willie Mays or Roberto Clemente or Johnny Bench or Ken Griffey Jr. shows up. Or Shohei Ohtani. And it all feels new again.
We hope you found the Top Ten interesting this week, and are looking forward to another selection of articles, stories, and commentary next week. If you know of anyone else who would be interested in receiving our weekly note, please let me know.
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