Juggling Dynamite

The Bank of Canada press conference yesterday finally admitted facts about Canada’s housing market: “The housing market is looking weaker, and weaker than we had incorporated into our January outlook. So, that’s something we will be looking at when we prepare the April outlook.” Canadian home prices “need to come down” and “housing feeds into our forecast and deliberations on monetary policy.” 

In other words, interventionist central banks can help balloon debt and asset bubbles, but they can’t stop them from bursting. Here’s the unvarnished video clip.

Most so-called financial advisors are there to get people into risky assets, not to protect against capital losses.

As the materials’ bubble continues to implode, silver (-44%) since the end of January and gold (-18%), the TSX has fallen just over 6% since March 2, 2026 and is now flat year to date with all sectors, but oil cos, in a downdraft (shown below courtesy of my partner Cory Venable). Gold miners are off more than 28%. Parabolic oil prices are bad for everything.

As noted by the Bank of International Settlements in the chart below (courtesy of the Kobeissi Letter). Wall Street has been selling gold and silver to retail investors.

Since Q2 2025, retail investors have bought +$70 billion in gold ETFs. These purchases have more than TRIPLED over the last 6 months. Over the same period, institutional investors have sold -$1 billion with outflows accelerating in late January after gold prices crashed -20% in just 3 days. Meanwhile, silver ETFs have recorded +$10 billion in retail purchases over the last year. Over the same time period, institutions have sold -$200 million. Retail investors are all-in on precious metals.

The masses are learning once again that all the marketing hype about “defensive” sectors is the same high risk in different shiny wrappers. Here’s David Rosenberg this morning:

There are few places to hide. Not in stocks — every sector closed in the red. Not in Energy stocks, even with the spike in crude prices. Not in the most defensive sectors, like Heath Care and Consumer Staples, which actually underperformed the market. Not in gold, silver, Bitcoin, or industrial metals, and that includes once-mighty copper. Even the S&P 500 Defense subsector fell by -0.3% yesterday and has been clocked for losses in seven of the past eight sessions. What does the Iran war have to do with U.S. Health Care Service stocks? Yet this group sagged by more than -1.0% for the second day in a row and is off by nearly -10% in less than two weeks.

For those who love to talk about the resilience of the overall equity market, dig a little deeper and you will see that the regional banks — big lenders for private debt and equity funds — are back in a bear market (down -20% from the early February highs). Consumer Finance stocks are off by -26% (back to where they were last June) and yet nobody from the media asked Jay Powell at yesterday’s press conference how that fits into the “economy is solid” narrative. All the more with General Mills and Macy’s having just issued some soggy guidance over the consumer outlook.

On a similar note, see Private Credit’s Investor Exodus Spreads to Consumer Loans:

A fund holding consumer and small-business loans made by companies including Affirm and Block is the latest corner of the private-credit market to come under stress.

Stone Ridge Asset Management told clients in the fund last week that recent redemption requests were so high that it would honor only 11% of the amount investors wanted back, according to an investor update viewed by The Wall Street Journal.

That suggests that investors’ concerns about private credit are broadening. Unlike other private-credit funds that experienced a flight of investors in recent weeks, Stone Ridge’s fund didn’t hold loans to software makers or other corporate sectors that investors fear will be displaced by advances in artificial intelligence.

Cash and short- and medium-term treasuries remain the most attractive options until other asset prices return to investment-grade levels down from the latest speculative mania.

An oil shock amid rising credit stress and negative job revisions, unexpectedly pushing up unemployment.  Every cycle is a little different, but similar developments have marked the onset of past recessions and bear markets. Oil price spikes reduce economic demand, partly because they tend to keep interest rates higher for longer. The segments below do a good job of examining the implications of recent trends.

Private credit has exploded in recent years, drawing in major institutions and alternative asset giants, and even featuring more heavily in retail portfolios. But as cracks emerge in parts of the private credit space, we take a look at how the benefits of non-bank lending could be turning into vulnerabilities. Apollo’s Marc Rowan points to the broad appeal of private lending to institutions, while former Goldman Sachs CEO Lloyd Blankfein and former Federal Reserve Board Governor Daniel Tarullo worry about the harm it could cause for retail investors. Here is a direct video link.

A simply brutal reminder from Canada about the real state of the global economy. The Canadians backed up the US payroll number for February, except in Canada it was the largest loss of jobs since 2022. As one big bank economist put it, this is a “simply brutal” result. While everyone has been talking, really hoping for reflation maybe recovery, the opposite keeps showing up instead. Especially where it comes to employment. Here is a direct video link.