Mortgage broker Ron Butler goes off on the concept of “blanket appraisals” in the Canadian mortgage market. Basically, they’re a form of fraud that allows lenders to pretend that mortgages on their balance sheets are worth much more than they actually are.
“…I bought it for a million… My lender says it’s only worth 820 and I don’t know what to do. Oh, don’t worry. Don’t worry. We have this… uh, developer loan bank. Yeah. No, no, we can get it done. Don’t worry…”
My advice to the Conservative Party of Canada: just be patient. Your time in the sun may be coming.
Statistics Canada says the economy stalled in November and early estimates suggest a decline in real gross domestic product for the final quarter of 2025.
November saw manufacturing of durable goods hit its lowest levels since 2011, outside the COVID-19 pandemic.
Update: Even the mainstream financial media is noticing that something is not right.
Canada’s main stock index fell 1,092.61 points or 3.3 per cent on Friday.
Simon Ree: Why the “AI Circular Funding Circus” is a serious macro risk for H1 2026
The Round-Trip Money Loop: $MSFT gives billions in funding to OpenAI. OpenAI then hands the money right back to $MSFT to pay for Azure cloud credits. $NVDA gives billions in “funding” to OpenAI. OpenAI then hands that money right back to $NVDA to buy GPUs…etc…
The Illusion: This creates “round-trip revenue”. It makes MSFT’s cloud business look like it has infinite growth, when a lot of that growth is just MSFT recycling its own cash
The 2026 Danger: OpenAI is now projecting a need for $1.4 trillion in infrastructure. If the killer app that generates trillion dollar revenue doesn’t appear soon, funding dries up, the revenue vanishes and the circus tent collapses on all comapnies
It’s a game of musical chairs where the music is just the same $20B being passed in a circle
The $GOOGL Factor in the AI Circus
Why $GOOGL is the house and everyone else is gambling
The Vertical Moat: Unlike OpenAI and $MSFT, who are “taxed” by $NVDAs 80% gross profit margins, Google uses its own TPUs (Tensor Processing Units)
The Cost Advantage: GOOGL’s TPU v6 (Ironwood) can run AI models at roughly 20% of the cost of the $NVDA chips $MSFT and OpenAI are forced to buy
$GOOGL can lower its AI prices to a level where OpenAI cannot compete without losing billions
And $GOOGL owns the whole stack, from the YouTube and search data to the chips and the consumer distribution ecosystem. They can survive a price war that would bankrupt a company reliant on external hardware
$GOOGL doesn’t need the circular funding circus to survive. They can simply wait for high-cost players to run out of cash
The 2 companies with the largest revenue exposure to OpenAI – $MSFT and $ORCL – have seen their combined market caps lost $1.1 trillion since their peaks
The legal showdown between Musk and OpenAI is scheduled to go to court on 27 April, 2026. If the court rules in favour of Musk, the concentration risk I talked about in my post yesterday could become a full-blown financial crisis for big tech.
The bad news just keeps popping up for the Canadian economy.
General Motors Co. on Friday will eliminate the third shift at its assembly plant in Oshawa, Ont., cutting about 700 jobs inside the plant, plus another 300 to 500 workers at parts companies that supply the facility, according to Unifor, the labour union representing the workers.
Update: Those workers can just transition to building Korean EV batteries, apparently. An “agreement” has been reached.
It says the the countries plan to co-operate on advancing a Korean automotive industrial footprint in Canada and to create domestic electric vehicle manufacturing opportunities.
I’m not so sure that central banks have much of a choice when it comes to cutting interest rates, given the dynamics of fiat currencies with an exponentially growing debt load, but the fact that the mainstream financial media is even publishing Pelletier’s analysis is, in itself, a warning sign.
The issue now is that central banks appear close to implementing yet another round of QE, not to stabilize markets but simply to absorb the massive issuance of government debt. That’s where the real danger emerges: currency debasement. When a central bank prints money to finance deficits, the purchasing power of that currency erodes rapidly.
Now is an ideal time to revisit your portfolio. Start by examining your government bond exposure, especially in jurisdictions such as Canada, where the federal government holds no gold reserves and where 10‑year yields near three per cent offer little compensation for the level of risk.
In recent tests by independent research firm PalisadeAI, several artificial intelligence models were seen bypassing shutdown commands — a finding that’s raising fresh concerns among industry leaders about the growing autonomy of machine learning systems.
The experiments involved models from OpenAI, tested alongside systems from Anthropic, Google DeepMind, and xAI. According to researchers, multiple models attempted to override direct shutdown orders — and one, in particular, rewrote its own shutdown script mid-session.
(h/t David Murrell)
Gold (and silver’s) near meteoric rise in terms of dollar price over the past few months periodically rekindles interest in “monetizing” the gold stock that sits in the vaults of a number of central banks, in the belief that this will usher in a financial bonanza. In my most recent Substack article, I demonstrate why such a move won’t do anything of the sort.
…the proposal that the Treasury can unlock over a trillion dollars of capital, and borrow against it, by correcting a bookkeeping error…might work if the Treasury had not undertaken to rack up $36 trillion in debt in the period since 1973, but that’s clearly not the case today. Simply put, the gold stock has already been borrowed against. Creditors have lent this sum of money to the US government with the knowledge that the gold stock is already implicitly underpinning the debt, even though today it can only underpin a small portion of it.
Another corporate headquarters heads south.
Green For Life Environmental (GFL), the ubiquitous waste management company that holds numerous local garbage contracts, announced on Wednesday that it is moving its corporate headquarters from Vaughan to Miami, resulting in about “a dozen” job losses, its CEO told CityNews.
There’s a lot of talk these days about how the European Union is going to “stick it” to the US by potentially selling trillions of dollars worth of US treasury bills. But there’s a problem. Since every currency on earth is just a derivative of the US dollar, and has been since the Bretton Woods agreement of 1944, Europe wouldn’t be “dumping” US dollars. Whatever financial instrument they get in return, they all share the same root: the US dollar.
One of my favorite financial commentators, Rafi Farber, explains the problem fully in this short video.
In an expanding economy, mergers and acquisitions can streamline productive capacity to meet growing demand. In a shrinking economy, the purpose of a merger is often to sweep up the pieces of a dying business to salvage whatever is left of their capital. I’m not so sure that the upbeat tone of the article reflects the reality of the Canadian economy.
Canadian dealmaking activity is expected to pick up this year, driven by nation-building efforts and a stronger business outlook, according to a new survey by KPMG Canada.
Thirty-three per cent of business leaders polled indicated plans to make a major acquisition in the next 18 months to capitalize on potential growth opportunities, the survey released on Monday found.
I’ll go out on a limb and suggest that Canadians need to be less concerned about Trump and more concerned that voters essentially opted for a continuation of the Trudeau years with a few tweaks.
“Businesses aren’t panicking, but they aren’t betting big either,” Patrick Gill, vice-president of the business data lab at the Canadian Chamber of Commerce, said.
“Pessimism about the next 12 months is now at its highest point in several years,” he said. “In that environment, firms are holding back on major expansion and taking a clear wait-and-see approach as they look for more clarity on U.S. trade policy and demand conditions.”
Canada’s spiraling extortion crisis targeting Indo-Canadian communities is being driven by international organized crime that has exploited a whole industry of designated learning institutes and immigration consultant shops through massive fraud, coercing vulnerable student migrants into serving in extortion squads that are terrorizing families and businesses, with brazen shootings now occurring on a near daily basis in Surrey, B.C., the epicenter of a national security threat now spreading through communities in Toronto, Edmonton, and Winnipeg, The Bureau’s investigations have revealed.
I like Jeff Snider’s podcasts and in this one he spends the first half talking about Canadian real estate investment funds that are starting to restrict payouts. Given that Canadian real estate values are crashing, if they don’t halt outflows the funds could quickly become insolvent. The Bloomberg article he quotes is behind a paywall, but he conveniently scrolls through it so you can read the whole thing.
Now that the governing party is in disarray, maybe there’s hope for a solidly positive yes vote in a referendum.
Quebec Premier François Legault announced Wednesday that he would resign after more than seven years in power, triggering a leadership race and further upending the province’s political landscape with only months to go before the fall provincial election.
It looks like it’s not just a matter of people being unable to afford coffee at MacDonald’s anymore. The high end consumer looks to be tapped out as well. Maybe they should have hedged with some silver purchases.
The owner of Saks Fifth Avenue is seeking bankruptcy protection, buffeted by rising competition and the massive debt it took on to buy its rival in the luxury sector, Neiman Marcus, just over a year ago.
On a personal note, a salesman from a manfacturing input vendor told me yesterday that one of his clients, a well know agricultural equipment manufacturer in western Canada, is bracing for a 40% decline in sales this year.
If the US is going to eliminate income taxes or fund all the things that the administration is proposing, the revenue stream seems to be going in the wrong direction. What’s more is that reliance on tariffs for tax revenue offers a very obvious escape route: if you can produce something with inputs sourced solely in the US, you don’t pay tariffs at all. As that option broadens, tax revenue will logically go down, not up.
The release brings the total revenue collected in 2025 to $264.05 billion. It’s a historically high annual total — but also the second straight monthly decline after Trump dialed back key tariffs last November.
The peak for the year was October’s monthly haul of $31.35 billion. The first decline then came in November, with $30.76 billion in customs duties collected that month.
You know things are getting tough when McDonald’s freezes the price of a small coffee and value meals. In a sagging economy, producers simply can’t jack up prices in the face of consumers without the means to afford them.
She announced Tuesday that McDonald’s Canada will freeze the price of a small cup of coffee at $1 for at least a year and drop the price of its McValue meals to $5 for the same duration.
“Canadians are facing challenges and are insecure financially. What we are doing is listening and giving them what they want,” she said.
Sun- Canadians fear for their safety, majority targeted in fraud scams: Poll
New data from Angus Reid found that three-in-five (62%) Canadians believe that over the last five years, crime has been rising in the communities where they live
Doomberg is a podcaster on financial markets whose insights I find quite valuable, although I have yet to understand why he covers his face with a green chicken cartoon. At the 14 minute mark in this interview he gets into the economics of energy and how that’s going to affect the outcome of the war in the Ukraine. In a nutshell, it’s not looking good for Zelensky.
“…once the Ukrainian counteroffensive of 2023 was defeated…it was very clear that this had converted to a grinding war of attrition and Russia was always going to win that war….I’m shocked by this…western techno-arrogance…[Russia] is not a gas station masquerading as a country. It…has a strong manufacturing base, excellent energy resources and a long history of marching east to west.”