A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Citi's U.K.-based credit strategist Matt King is an interesting thinker, but, for the purposes of context, readers should be aware that he has been consistently bearish in most markets – fixed income and global equities – in recent years. Mr. King's overriding view is that monetary stimulus, notably in China and by the Federal Reserve, has been the primary driver of asset values in the post-crisis era.
In a report published last week, he details the seven reasons that market values are about to fall – investor cash into markets is about to slow, rising real yields will crimp returns for riskier assets, central banks are now tightening money supply, China's credit expansion will either slow or cause financial stress, economic growth prospects aren't very good, valuations are too high and investors will soon recognize political risk in Europe.
"Citi's Matt King says 'sell'" – Keohane, FT Alphaville (free access with registration)
An explosive CBC report cites a TD Bank employee who alleges "incredible pressure" to squeeze profits from customers by signing them up for products and services they don't need … Documents … show the teller's sales revenue goals have more than tripled in the past three years."
"'I will do anything I can to make my goal': TD teller says customers pay price for 'unrealistic' sales targets" – CBC
The ROB's Michael Babad cites research from the Bank for International Settlements – the "central bank of central banks" – highlighting the rising potential for a Canadian financial crisis,
"Unlike measures that look solely at household debt, which has been the focus of alarm in Canada for many years, the BIS indicator includes all credit to the non-financial sector, taking in loans and other instruments such as debt securities, for example … The stress warning comes from the gap between the ratio and the long-term trend, a gap that has been widening in Canada. Indeed, by the third quarter of last year, it rose to 17.4 percentage points above the long-term average, second only to China's off-the-chart reading among a select group of countries, according to this table, which 'summarizes the early warning indicators for domestic banking risks.'"
"Central bank body warns of rising threat of Canadian financial crisis" – Babad, Report on Business
Related: "Federal Budgetary Comparisons: Canada and the United States" – Woolley, Worthwhile Canadian Initiative
The crude prices' failure to break out of its $50 to $55 trading range has some analysts concerned about a significant decline,
"Earlier bullish sentiment was based on optimism that OPEC production cuts would ease supply gluts. Now record U.S. crude stockpiles are raising doubts about that outlook.
"They've gone so far on hopes and dreams," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. "I'm worried they've overdone it, since we haven't seen much happen with measures that would support the market -- i.e. inventories.""
Tweet of the Day: "@tracyalloway A chart to keep you up at night. From Goldman: " – Twitter
Diversion: I am a fan of the band so possibly biased, but I thought the HBO documentary on the terrorist attacks during an Eagles of Death Metal concert in Paris, one that killed 89 people, was riveting on many levels. The trailer is here