Grinch hath Spoken - 2025 Recession/Depression is underwayhttps://www.newswire.ca/news-releases/repaying-debt-is-the-1-financial-priority-for-canadians-in-2025-cibc-poll-860281592.html We know it's more enjoyable to have endless flow of positive economic news; unfortunately, that's not the way of the world for Canadians these days.
Little insight from CIBC ..............................
Customers #1 priority is to reduce debt!! That means they are finished spending, that means many have overborrowed, that means few were prepared for this Embedded Inflation that is continuously underreported by Govt.
Economic growth has been magically manipulated by importation of 3mm immigrants and their associated spending. The trickery is over............. Recession likely started 18-24 months ago. We will be in depression territory in 2025. GDP per capita has fallen flat and trending down vs steady uptick for USA households. ..............Maybe it's Nukester at his Aspen chalet, decking the 4-car garage with luxury V8's and a few new snowmobiles. "Nothing but 94ocatine, sir!" The sleds need rocket fuel.
BoC spiked rates from 0.25% to 5.0% over 16mo period 2022 to 2023. People say it doesn't matter because Overnight rate is now back down to 3.25%, ahhhhhhhhhhhhhhh, but people are wrong. Velocity of rate hikes and their stay at 5.0% for the following 11mo sowed the seeds of Deflation.
Impact Lag suggests 12-24mo for rate changes to take hold.
Canadians in a very precarious place these days, be prepared for a difficult 2025-2026 before Canadian economy shows green shoots. We are in the ghost version of the 2008 GFC, great financial crisis; a deflationary cycle is underway today but has yet to show up in the stats.
RE to decline in value, access to credit will get tighter, unemployment rates climbing. The GFR 2025-2026, Great Financial Rinse taking place now. The TSX probably overvalued by 20%-30%, priced for earnings growth when there won't be any. Just think of all those happy ETF ivnestors ready to hit the sell button after a few months of negative returns. -500pt days on the TSX may likely take place.
Not sharing this "pragmatic opinion" to scare you guys out of your Long-term equity holdings, just providing a little bit of reality sprinkled with the bread crumbs of hope for early 2027.
Canada feasted and partied at 2% mortgage rates, now today's 5% rates are the hangover and time is the cure.
Take a good look at your heavily-weighted holdings, ensure they can brave the high seas for 24mo period of downturn.
During an extended market downturn, high-risk gets hit the hardest while lower-risk can offer safe harbour. GH would be in the lower-risk group. Doesn't mean we rally but it could mean we retain today's valuation +/- 20%.
Hoping that I'm wrong, usually not wrong but often early.
Keep your cards close, don't get sloppy.
Better days ahead, patience required!!
Sometimes Kasking and I chat about $12 GH.
It will happen, made possible by debt reduction, buybacks and dividend growth.
Takes some time for sleepy market participants to notice how GH's fundamentals continue to improve quarterly.
Even a dividend hike didn't get much notice this last time around but that will change..................................
Hang Around and Find Out
HAFO!
We are the mini-Fortis (FTS) of the Entertainment biz, in the right province at the right time.
Risk-adjusted-returns. Low-risk, mid-sized returns. That's a winner.
Keep rowing, gents.
Pay no attention to the sharks, they want your GH shares.
Ahoy!! Nassau is just over the horizon and it's said that they have good rum.
