See my piece in the Globe & Maili’s Economy Lab here

Lots of people moved in to U.S. cities over the past decade – but what happens next? See my post on Seeking Alpha for more.

Yes it costs a ton to go to university,and no, there are not guarantees…but looks like it is still your best best.  Read my Globe and Mail piece on it here

September really is like a New Year.  Not only does school get into full swing, but everyone is back and work – and the real trading begins.  Maybe that’s the reason that financial crises are more likely to start in the Autumn than in any other season.

Let’s be clear: I am not looking for a wholesale world economic crisis to unfold anytime soon. I do, however, think that the world economy is a little shaky right now, and there are a lot of things that are going to come together to cause some volatility over the next few months, and that investors need to understand them.

Here are my top five ‘Things That Could be a Problem for the Global Economy’ :

1. Europe

Well, what else could I start with? Yes, the policy-makers have pledged to make things work, and yes the most recent plan by the ECB to buy bonds will help.  Still, Europe is in recession and the Eurozone is unlikely to look the way it does now a few years from now.  That means the risks coming from Europe are not over, not by a long shot.

2.China

With Europe as weak as it is, the rest of the world desperately needs China to a source of strength.  Sadly, the last batch of numbers shows this economic powerhouse struggling and growth at the lowest in three years.  Policymakers have made some effort to boost growth – in July they cut the key lending rate for the second time in a month – but they are moving slowly lest they re-ignite an already crazy property market.

It is so far so good for commodity prices (and stocks) but a little more slowing from China could hit hard.

3. The U.S. Fiscal Cliff

Tick-tock: unless some major compromises are reached in Washington, the U.S. falls off the ‘fiscal cliff’ in a matter of months.  The term refers to the menu of tax hikes and spending cuts that will go into effect at the beginning of 2013 as a deficit measure, and the corresponding havoc they would cause. Unless something changes, the U.S. is headed into at least a short recession- or maybe a longer one – in 2013.

Chances are there will be some kind of band-aid measures to stop the worst of the damage – but look for some slowing just the same.

4. Oil Prices

Since the end of the Second World War, there have been 11 U.S. recessions  – and eleven of them have been preceded by sharply higher oil prices.  Which makes sense: the U.S. consumer sector accounts for about 70 perent of total U.S. GDP, and the generally speaking, there is not a whole lot of room in U.S. budgets to pay more to fill up the car (let alone the SUV).

If the U.S. sees a surge in growth and incomes, rising oil prices may not matter too much.  Barring that scenario, even if Europe and China keep chugging along and there is a compromise reached on the fiscal cliff, high oil prices could pull the U.S. economy into a downturn anyway.

5. Lender Caution

Not that you can really blame them, but since the end of the last recession   lender have been notoriously careful about issuing credit.  That’s why interest rates at generational lows – and even at zero in some cases – are not sparking global growth the way they should be. Canada, by the way is a bit of an exception ot the rule – the Bank of Canada’s second quarter Senior Loan Officer Survey showed lending standards loosening up a bit – but that’s probably because our lenders were cautious to start with.

If things get shakier over the next few months, credit could get squeezed even more –in North America, and around the world too.  That is not good news for the economy or the markets.

Now, none of this is to scare anyone out of the market or to have them pulling their money out of financial institutions.  Still, better to understand and monitor the risks than to blindsided if Autumn gives us more than falling leaves.

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Just took a look at today’s release on employment data from Statistics Canada and was underwhelmed by the data.  Looks like Canadian employment is rising, but not really rising all that fast. Read more →

Here’s a quick quiz – which would you rather do: 1) Live in poverty or 2) Live with your spouse?  A lot of baby boomers seem to be choosing (1), although they may not actually know it.  Trouble is, boomers are ending their marriages in droves, and splitting up what are really very inadequate retirement assets.  So just when it seemed that the baby boomers could not make the dream of retirement even more elusive, they have apparently found a way to do so. Read more →

Last time, I talked about who the middle-young ratio (ratio of 40somethings to 20somethings in the population) correlated with financial market activity in the U.S. and Canada. A population with a lot of 40somethings poured money into the stock markets through the 1990s, then a slightly older one held back a little on equities. The demographics certainly are not the whole story behind why the markets dipped over the past few years, but they were most certainly a contributing factor. Read more →

Aging population – market time bomb?

Okay, that’s a sensationalistic way to put it, but that’s certainly one of the fears people have about an the shifting demographics in North America. Last time around I looked at how portfolio size tends to trend lower as people go past 65. All things being equal, the older the population gets, the more money that is going to be pulled out of the market. Question is, at what point does the ‘market time bomb’ thing go from sensationalism to reality – or does it? Read more →

This is the first in a series of blogs about the way that demographics are going to affect your investments.

Yes, I know there has been a lot written on the topic, and most of us know the basic theory.

The boomers poured a lot of money into the markets over the past couple of decades, and they made the markets go up. Now they are getting old (sorry if that term offends anyone, but the first wave of boomers is cashing in their pension checks as we speak) and they are going to be pulling the money out of their retirement accounts. This will make the markets go down.

Really? Is it as simple as that? Read more →

I like offbeat economic indicators – the number of boats or RVs sold, what colors are in the crayon box, etc. etc. A lot of time they tell you what is going on just as well as some of the stuffier stuff  (y’know, GDP and all that)  that we all track every day.  So I was glad to see the U.S. Census Bureau release their survey of ‘movers’ – people shifting households.

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