We're Facing The Bursting Of Twin Bubbles In Housing AND Stocks | Danielle Park

Summary

• Market Outlook: Danielle Park highlights the simultaneous bubbles in the tech and real estate markets, reminiscent of the 2000 and 2007 periods, exacerbated by years of zero interest rates.
• Economic Concerns: Federal Reserve Chair Jerome Powell's recent shift in tone at Jackson Hole indicates concerns about the labor market, potentially leading to monetary easing despite inflation risks.
• Real Estate Insights: The real estate market downturn in Canada and the U.S. is seen as a significant economic factor, with high leverage and unaffordable housing prices posing long-term risks.
• Interest Rates Impact: Rising interest rates have doubled mortgage costs since early 2021, affecting housing affordability and leading to increased financial strain on homeowners.
• Investment Strategy: Park advises a cautious approach, emphasizing risk management and the potential for a prolonged correction in both housing and stock markets.
• Precious Metals: Recent breakouts in gold and silver markets suggest potential for continued gains, with silver showing significant upward movement.
• Demographic Shifts: The aging population, particularly the over-60 cohort, holds significant equity in housing and stocks, which could impact market dynamics as they adjust their portfolios.
• Key Takeaways: Investors are encouraged to de-risk portfolios, focus on liquidity, and prepare for potential market corrections, while considering the impact of demographic changes and economic shifts.

Transcript

You know, it's almost like we've taken 2000 and 2007 and squished it together here in a in a in a hor what do you call it? Uh play of horribles because we've got a tech bubble from like we had in 2000, but at least the real estate market wasn't in a big bubble in 2000. It had been coming down and here we've got the re the real estate bubble and the tech bubble at the same time uh a after years of zero interest rates. So I just think that the financial risk has never been higher just as people have never been o older in terms of you know the bulk of the owners of the of the uh equity market and of uh anything on that uh in the financial product sector tends to be the over 60 crowd and you know I I see things and I've talked to people they send me their portfolios they're 70 years old they're 85 to 90% in equities and maybe they have 10% in some high yield debt or a high yield debt fund. And you know, you try and say to them, "This is insane." [Music] Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. After a year of projecting confidence in America's strong and resilient economy, at his recent Jackson Hole appearance, Federal Reserve Chair Jerome Pal suddenly changed his tune. He expressed concern about the deteriorating labor market, saying the situation may warrant a resumption of monetary easing notwithstanding the potential inflationary risks of tariffs. Now, this comes at a time when stocks are at nosebleleed valuation levels with the general public more exposed to them than at any time since the 2000 and 2007 bubble peaks. So, are investors sleepwalking into an oncoming painful market correction here? to find out. We've got the good fortune to welcome Danielle Park back to the program. Danielle is president and portfolio manager for venable Park Investment Council where she manages millions for some of Canada's wealthiest families. She's also proprietor of the daily financial website jugglingdynamite.com. Danielle, thanks so much for joining us today. >> Always nice to be back, Adam. >> It's great to have you back, Danielle. Um, you're definitely a crowd favorite here. It's been way too long since we've had you on, so hopefully everybody's very excited that we got you back. Um, look, a lot to dig into here. Um, and you've been very kind, uh, in preparing a whole bunch of slides for us, so I don't really want to get in the way of them. Um, and so I guess real quick, um, before we we just let you run on the slides, um, high level, um, what's your general take on the macro situation today? Well, it's extremely volatile. I think that's a a simple statement. Um, I would say that I think that the focus on tariffs is overdone uh in terms of concern around inflationary impacts. I think the greater theme is the real estate downturn which is unfolding in both Canada and America and other countries. Um, and I think that that is likely to have more of a sway on the economic picture, the employment picture, uh, going forward than the tariff file. However, it is continuing to, uh, undermine confidence, undermine business investment, um, many things that, you know, would be better if they weren't um, negatives right now. But I think that, you know, it's an irritant rather than the main theme. >> Okay. And uh not to steal your punchline from your slide presentation, but right before we turn the camera on, uh you sort of said exasperation, uh I'm so tired of the situation. I just can't wait to be bullish, but I I can't be there yet. So, um is that kind of a true sum up of where you are right now? >> Yeah, I'm I'm a very optimistic person by nature, and I like to be optimistic. I like to look on the bright side. Um but unfortunately my day job is a risk manager for life savings and so I have to be focused on what can go wrong and right now that is the dominant set of factors I see are more negative than positive and that requires me to you know focus on them more than I otherwise want to. >> Okay. All right. Well, look, why don't we why don't we get to your slides here? Um, I'm actually very excited to hear your your thoughts on the housing situation when we get to it because it's something I talk about a lot on this channel. And I believe that the negative wealth effect from a housing market correction um is more substantial in terms of what's going to happen in the economy than than say a a correction in the stock market. >> Absolutely. It's the most wildly held widely held asset worldwide and we know that the bulk of the wealth of the country of the private sector is certainly in the real estate market and it's also the most widely levered market in the world as you know because most people use debt to buy it and so that makes it uh extremely important when leverage is positive but also a negative when leverage turns the wrong way. >> All right. Okay. Well, look, let's uh let's not waste any more time. Let's get straight to your slides. >> All right. The interest rate cycle has been really pronounced in the last uh 15 years as you well know. Um and that is reflective of the fact that you know so much was done after the GFC to try and stimulate the economy that interest rates were slashed. And we see this chart of the 10-year Treasury. Um of course the Fed and the central banks don't control the uh Treasury rates. That's done by market forces. But they certainly have an impact on the short end of the curve. And um the US tenure now at 428 is the same as it was in August of 2007. So I thought that was an interesting jumping off point because again back in August of 2007, we had a massive housing bubble in the United States which people were still largely bullish on even though there was defaults and various factors um eroding under the surface. people were generally saying, you know, things are well and it was a good thing for income for those with savings who were able to generate more than 4% on treasuries and safe deposit CDs, that sort of thing. It was a positive for those spending interest income and it is today as well. It's good for um that cohort who is able to have capital in in safe deposits and get interest bearing. It's not good for borrowers though, right? So, this is the the major factor here. The 30-year fixed mortgage rate at 656 today is um more than double where it was in January of 2021. And that is a major factor that is starting to unravel throughout the housing market. Um when we see that in Canada indeed uh the same sort of thing has happened where mortgage rates have doubled from the bottom which was in the first quarter of 2021 when people here were able to take out fixed fiveyear mortgages which is the most common term in Canada fixed 5-year mortgages at less than 2%. And they were doing that with both hands and feet. It was a real boom in our real estate market. Um now we have seen of course with uh rates coming up in the last couple of years they're now around 4% which historically is not that high um but it is uh significantly more when you're having to renew at these current rates. Another thing I'd like to point out with respect to Canada and the United States is that even though your mortgage rates are considerably more six and a half range in there um versus 4% range in Canada, our housing market has not revived. It is not taking off and doing well now that rates are back in the 4% zone even though they were, you know, up above five at the peak of the rate cycle. So, I think that's instructive and something we should keep in mind. Um, >> so let let me just note one thing for our American viewers just to make sure they're aware of this. So the chart that she just showed was of five-year mortgages in Canada has a a a different lending setup than we do where mortgages tend to be a lot shorter there in Canada where in the US we're very common, you know, the 30-year fixed mortgage is very common. And what's important to note about that is you have I mean essentially what uh 20% of the roughly of the houses in Canada uh coming up for refinancing every year, right? So you're you're feeling the effects of these higher mortgages faster in Canada than we are here in the States because we still have a ton of people that are sitting on a you know 3% 30-year fixed mortgage and probably will for a long time. >> Yeah. And so the gift that keeps giving here is that the ultra low interest rate period uh ballooned home prices more in Canada than even in America but extraordinarily. So in two and a half years our median home prices went up 40%. >> Wow. >> Uh while the average pay for private workers went up 12%. So right in there is the is the crux of what's happening to us now. that was already quite expensive to live in Canada. Housing was already in a major upcycle since 2008. We didn't have the big crash that you had in America and our prices were already going up and then this was just like the cherry on top this ultra low rate frenzy that went on uh into the peak of 2022 and that's what really drove affordability to impossible levels. Uh the next thing that happened was of course that our economy became extremely concentrated in terms of uh the amount of money that was going into housing as opposed to other sectors of the economy. And I was pointing out at the time that this was a big misallocation of capital because it was highly inefficient. Right? The I've said this before, but an abode is not more efficient when it costs a million or $2 million than when it costs 500,000. It's still just your shelter. It's consumption spending. It's where you live. It's lovely to have, but it's not going to drive the economy in terms of efficiency or innovation or new technology. It's none of that. It's just places to live. And so, the fact that our uh GDP became more concentrated in pro in the property sector relative to yours at the peak of your 2006 bubble, you were at 6.7% of GDP was in residential investment. We got to 9.3 in the first quarter of 2021. And at the time, you know, that was basically driving all of the economic growth in Canada. There was really very little growth coming from anywhere else. It was the highest in at least 60 years and nearly double the long-term average or norm around 5% being the investment quotient going into residential real estate. So again, for those of us that were paying attention, we were trying to say this is not healthy. this is going to be a problem later on. And part of that was looking at your experience after the GFC in the blue line there when the um you know the mean reversion began in terms of investment in that sector when it was clear that there had been a huge overallocation to uh residential real estate and things went into a freef fall and of course then everyone pulls back on new permits and building and you get a contraction in employment and it tends to be a very cyclally negative impact for the economy. And so we were concerned that this would be in fact with spades in in the same way with the Canadian cycle. And indeed it's turned down just in the last uh year or so from that peak in 2022. We're now seeing that investment sector uh for housing come off. But the aftermath of that of course is that Canadian households now have the most debt they've ever had. uh more than 100% of GDP which again is you know you guys peaked around uh that level briefly in the peak of 2006 in your craziness and then you know it has been falling off since. So Canada has now surpassed that in terms of the household sector and 74% of that is in mortgages. So it is uh sticky debt. it's hard to retire and it's kind of sitting there like an anvil on households and on the economy overall. So when we look at housing affordability, this just gives some perspective, but basically the the effect of having, as I say, the affordability crisis today is not so much that interest rates are at 4% or around there for mortgages. That's pretty average and benign for any of us who came into the housing market in the 90s and remember much higher rates. But as a percentage of the median household income, we've got the worst affordability that we did since 1980 when mortgage rates were, you know, 17 18%. You know, and that's fully a function of the prices being just ridiculous. And so, you know, uh long-term affordability for um shelter costs is considered, you know, 30% of your disposable income. Uh and that's supposed to include your property taxes and utilities, Adam. And we're at 58% nationally just for mortgages today. And in the major centers where, you know, 80% of the population in Canada, just like in America, lives in the major urban centers. Well, in Toronto in particular, um 78% is going to just housing of the median household income to the mortgage and more almost 100% in Vancouver. Like it's just it defies any kind of reason. It's just crazy. >> That is bananas. >> It's truly bananas. And this is what you were alluding to partially is that twothirds of Canadian mortgages because they were all refying, you know, and and um buying properties when mortgage rates touched the lowest ever in history below 2% 5 years ago. It's no surprise that those 5-year fixed terms have been coming up for renewal in 2025. And uh a bit more than half of them are going to be renewed by the end of this year and then the remainder in 2026. So we see that big bulk and I remember looking at charts like this um in 200678 Adam you probably do too about all the refies coming up in the American market and how that was um like the pig in the python you know kind of thing going through where you know you had to get um refied at at current rates and that was going to be a problem um for a lot of people. >> There there was a famous one by CS First Boston I think and and remember we had a lot of these ARM mortgages too right? I know. >> Yeah. Um, so anyway, so okay. Yeah, we're we're seeing the reckoning, you know, the timing of the reckoning right there. >> Yes. And so we've got the highest inventory of completed unsold homes nationally. This is a US chart, but the Canadian stats are about the same. Um, and of course, um, the home sales in Canada are actually the lowest they've been since 1990 in major urban centers, which is wild when you consider like in places like Toronto, the the metropolitan uh the latest census says that the population increased 72% since 1990. And yet, we've recently had 32% lower sales than we've had for the same month in 1990. So, it's really just frozen up. Um, the movement that we are seeing is in the um first-time home buyers that have been waiting on the sidelines. You know, sort of anything under uh significantly under a million. Um the the tiny condo market in Toronto where, you know, uh a couple of years ago they were trying to sell them for 800,000 and now they're selling for around 5 to 600,000. There's some of those things being sold, but basically the bulk of the of the housing stock um is in the more than a million dollar range. Um indeed, more than $2 million has a huge amount of properties. And I'm talking about not just in in urban centers proper. I'm talking about in commuter communities, you know, an hour north where I live or in cottage country. It was very common for prices there to be more than $2 million during the ultra low rate frenzy. And those are the ones if they're for sale, they are literally just sitting there. There's several on in the on the street where I live, which is a waterfront street. Lovely, you know, top tier properties, but asking multi-million dollars, and they haven't had any hits in more than a couple of years here. So, it just shows that even the, you know, high-end markets are not immune from this kind of thing. And I think it's very interesting to look at this is a chart of real residential prices. So ad adjusted for inflation and what they've done in these past cycles. Now I happen to think that this particular one is most akin to what happened in the 1980s um certainly um uh in the early 80s when we had a major housing downturn. And um Bank of Montreal recently came out with a report that just pointed out that Canada is often a bellweather for the overall North American trends uh for housing. Now, we dodged the bullet in 2008 because we didn't get so over our skis. We were headed that way, but we didn't get there before the GFC burst. Uh so that really saved us, if you will, at that point. But in two in the early 80s and in the uh late early 90s we had similar downturns as you saw in in the United States. So and what I the point I like to make here is when you see that for 30 years the average or real rate of appreciation for real estate was less than 2%. From 1970 all the way to 2000. Then you get into this hyper period of 10.3% annualized gains from 2000 to 2006. uh which is of course as we know now was a bubble then you see that mean reversion through a 39% correction uh that happened over six years and I think that's an important theme here is it's a multi-year event that happens it's not something that you know it's not a nine month bare market typically it's something that happens and it takes many years to play out and that sort of surprises people that aren't aware of the historical record and so um you've seen some uh rebounding in prices of course um in the last little while, but still I think by you know having come up about 4.1% uh since the 2006 bottom, we're still quite a bit above the historical norm here, about twice the historical norm on a longer term basis. And I that's why I think that America, although not as bad as Canada, has certainly got over uh overpriced again in the last couple years for many of the same reasons. Just all the handouts, all the, you know, uh um stopping of of foreclosure procedures, letting people not pay their mortgages for many years, like all these political decisions that were quote unquote to help. I get a kick out of the help when we Oh, no. I'm I've triggered confetti there. I'm sorry. But uh the help that's that comes from governments around housing tends to be deadly in the end because it just is always focused on how do we get you know home prices higher? How do we stop them from going down? How do we build more so we can sell more? Um that's typically that the approach that that is taken. So if we look at the Canadian experience so far, so on a nominal basis, prices got the average uh sale price was 817 in the second quarter of 2017 and it's come down recently to about 680. So we've had about an 18% correction on a nominal basis. On a real basis, we've already come off about 23% from the peak. But again, if we look at the overall, we're still extremely priced relative to rents. uh the numbers still make no sense. You still can't buy a house at current price levels and interest rates and rent it for anything close to what it it takes to carry the property, not never mind maintenance and all that sort of thing. So, and in terms of the ratio of income, it's still the average uh median sale price in Canada is still, you know, six times the household income and in major centers still north of eight. So the I think that this this period of correction which is now three years in counting is more likely to resemble what happened in the as I say the 1980 and 1990 downturns that took eight and nine years to complete. So if we've already seen this level of mean reversion in the first three, I would submit to you that we could see um a a quite a terrible grind here for people that are unprepared for this particular cycle. >> Okay. So basically you'd love to be more bullish but kind of years of pain ahead. Uh if you're looking at the housing market, >> it's a slow correcting asset class, right? Because we've seen that as you know in America as well that builders have been, you know, doing all sorts of incentives and they've been buying down mortgage rates. In both Canada and America, builders have been offering mortgage rates in the 3% range and yet housing sales are still at 30-year lows. So it's not just a function of lower the rate. Uh and when the central banks start cutting, it's not going to be a quick fix. It never has been in these past cycles. And what we know is that for the reasons that I sort of touched on uh with respect to you know the high most highly levered asset class the largest cyclical driver of growth in the economy housing tends to lead the most um severe and longest economic downturns when it starts to mean revert. And I think that's definitely what we're into at this point. And then you know one of the other factors that helped drive the prices higher of course was a massive uh influx of immigration which has driven you know 80% of our population increase since 1990 has been through immigration in Canada. Um and you've had a similar influx of immigration um at least up until the last year and that has helped to provide because as you know our birth rates are not replacement replacement levels. So the only way we've been able to get population growth is to have this immigration. But we also sort of did that to a wild extreme during the pandemic and it kind of uh distorted everything to um in terms of making rents that more much more unaffordable and uh driving some consumption driven uh impacts through the economy which helped offset uh some of the other slowing that was happening in other sectors. But now we've got a full-on reversal of immigration. Um, and you know, again, the the greatest parts of the population of the country live in Ontario and British Columbia. That's where most of the immigration went to, particularly more than half went to Ontario where I live. And that was why we saw those property values and rents go up the most in those particular areas. And it's also why we're starting to see the weight, the mean reversion be that much heavier in those particular provinces. So, um, it's expected to be this negative, uh, reversal of immigration is expected to continue through next year. Um, similar kind of to what you're seeing in the United States as well. >> All right. C, can I ask a couple quick questions about this? I don't want to rattle hole on it, but I just I I I I don't have as good a picture of what's going on immigration wise in Canada as I do here obviously in the US. So much of your your immigration numbers you just showed there, that was predominantly legal immigration, right? You you guys haven't had the the surge that we had in illegal immigrants over the past five years, correct? >> Yes, it was predominantly legal, but it was uh a lot of it was a it was a concerted effort uh intentionally by the government to try and offset. I think they saw the weight of the boomers and the weight of the housing bubble deflating and they got concerned and they said, you know, we're going to have to get new blood in here to try and help pay the bills for the old folks. And they really uh doubled down on not just um uh uh legal immigrants, but a lot of students were attracted in droves and some of it was fraudulent. some of the schools that that uh you know were pounding the pavement all over the world bringing people especially from Southeast Asia um were doing so on false promises of you know access to the Canadian job market and how wonderful it was going to be and some of those people are reversing of choice in the last while because they found quite the opposite they found that it was very expensive and very difficult to get integrated and started here and then also policy-wise we've done a reversal Okay. And that's the second question which is Yeah. So I mean in the US very famously we've slammed the border shut. The illegal immigration flows have stopped. Um what have you guys done in Canada? basically that um there is some positive immigration still in 2025 but it's been sort of tourniqueted to a trickle and that's um partly there was just such a public uproar uh about the deteriorating job market which has been uh declining our unemployment rate has been going up and our workly wages have been going down now for many months. So there's that and also just the outcry about the affordability crisis with housing and the impossibility of people just being able to live anywhere near where they were hoping to work. So that that sort of uproar caused the government to retrace its steps. >> Okay. And uh I didn't hear you use the word deportation. So I'm guessing the folks that made it in there in the surge over the recent years are still there. So now the challenge is sort of an absorption challenge. How do we how do we absorb these people into the economy in a way where, you know, yeah, it's kind of flooding the job market right now and whatnot, but we'll we'll just have to work it off over the coming next years. >> Yes. We're not doing the sort of violent round people up and ship them out on on planes that you're seeing. >> Well, because they're legally there in your case. Yeah. >> Right. Right. Yeah. So, again, this is just uh about the, you know, why the public was in such an uproar. the ability to rent just became uh to buy became impossible. Um and now the good news is with the reversal in immigration um and the influx of properties that are being listed for sale now because people that were you know lots of properties were on negative carry back in 2022 even with mortgage rates below 2%. And I was looking at proposals and you know people wanting to buy or having bought or balance sheets. I was looking at all sorts of things and saying, "This doesn't make any sense. You're subsidizing your rental property, you know, so much, hundreds to thousands of dollars a month. It makes no sense." Well, that's got a lot worse, as you can imagine, since interest rates have now doubled since the lows. And as more of those properties come up for renewal, uh, I'm talking to people every day who are saying, "Well, we're just going to sell it. We're just going to sell it because it doesn't make any sense." And, you know, why would we subsidize it? because now they get a notion that property prices have been coming down since February of 2022 and so their appetite for subsidy is no longer there cuz you know why would you do that if you're just losing value. So, you're starting to see more people just planning to sell. And a lot of Canadians, as you know, um even, you know, snowbirds, as they're called, going to Florida and, you know, Arizona, um have also been listing their properties for sale. partly because of the stress from the Trump administration and the concern around the border stuff, but also I would argue just as a function of the fact that the Canadian dollar uh has been weak relatively and the costs have just skyrocketed. >> Yeah. So, let me let me dig into a couple things you said there. So, um, it sounds like Canada has has seen the same thing we've seen here in the States, which is, forget mortgages for a second. All the other costs of home ownership have skyrocketed. Property taxes, insurance, maintenance, you know, it's just gotten a lot more expensive to own a home, right? Um, so, uh, you're seeing, you know, some additional degree of distress there as somebody who might have even been fine in their home beforehand. It's just like it's hard for me to hold on to my home now just with all these this this rise and all these other costs that I have to pay around it. Um now you then add in the higher mortgage rates. So to your point earlier, you know, hey, my 5-year mortgage is ending and now my new mortgage is at twice the rate of what my one before was. Um but also, uh presumably you're now, you know, these these are higher mortgage rates on high home prices, right? So it's it's it's like a perfect storm on every dimension, right? So, okay, you're nodding as I'm saying all this. You you talked about how Canadians are um you know, we're we're we're sort of famously seeing in in the newspapers here, hey, there's a lot less Canadian tourism to the US and you know, they're they're selling their Snowbird properties here. And to a certain extent, you know, they're saying, well, that's because, you know, relations between Canada and and the US are kind of rocky right now. when, you know, Trump really uh insulted a lot of Canadians and they're unhappy with what he's doing and that's why they're they're not coming here. I'm sure there's a fair amount of truth behind that, but I I wonder how much of it is really due to the fact that they're just economically struggling and they can't, you know, they they can't hold on to a second property internationally or they can't take that, you know, nice trip that they're they used to be able to do because of the the macro issues you've been talking about. >> Absolutely. And I would layer on there the the reality of the boomers aging. I think we were always going to see an exodus from these southern clims where they have had properties for 20 and 30 years. um it's natural at a certain point the health insurance everything just compounds to make it no longer attractive uh to go south and that is happening I think naturally just by attrition uh of aging out but it's also been brought to a point now by concern around the economy uh the dollar as you say extreme weather hurricanes all these things have just made it much less palatable for people and they're thinking well I'll just bring my money back and you know they're they're excited about the fact that you know many of them bought when the Canadian dollar was near par uh you know 15 years ago and now if they bring it back they can translate that into even higher Canadian dollars if they sell in American dollars. So, I think all of those factors, um, it's funny because I I must each week I'll speak to someone who's talking about selling a US property and they start to explain to you, it's so cute, why they're doing it. And you think, listen, let me stop you and tell you the five main reasons that you're doing this. Like, everyone always thinks they're individuals and unique in their circumstance, and in fact, it's part of a whole generation of people that are doing the same thing at the same time. So, that's definitely a force. Um uh and it's and the good news is it's getting cheaper to rent. Uh and you know again Rick Gurley and Reventure does uh some of that showing people where it's cheaper to rent than own and and you do you would be doing well to take note of that because it's been cheaper to rent in um in many places here for some time. And yet the party line and apparently a a lot of parents uh a lot of older parents thought that it was really important that kids get into the property ladder and they did things like take out proper uh take out mortgages on their paid off house or a line of credit to try and help. Again, this help business, goodness, it it's going to kill us if we keep helping so much around real estate. but to get their kids into the property market. Uh they were in a frenzy during the the peak of 2022 in that area. And of course, all those things are now underwater. Prices have come down. Now mortgage rates are up. Now, you know, the elders wanting to get the mortgage off their house and the kid can't afford to take it over. And there's a lot of angst uh around the whole property situation right now. >> Yeah. So, two other sorry, two other quick questions on that. one um big topic, but we I just want to touch on it super briefly. Um I I've interviewed several housing analysts recently and and whenever I do, I like to ask them about where are we on the the demographic wave of of boomers aging out, meaning having to go to the nursing home or to the cemetery. um because at some point that's going to start in earnest and we're going to have 20 years of properties basically getting forced onto the market as that happens, right? And for years they've said, "Oh, it's it's going to be a real deal, but it's it's still years away." And um anyways, long story short, Melody Wright, when I interviewed her last week, said, "I'm already starting to see signs that it's becoming a material factor now." Like like we're we're in the first inning of it now. Curious if you have an opinion one way or the other. >> Absolutely. I see it now. how I talk to people every week on this topic and the exodus is real and um it's it's a it's for a lot of reasons but it's all mostly around finance and just wanting to simplify lower your overhead. A lot of people bought cottage properties, vacation properties, chalets, uh all these consumption uh spending things during the peak of the boom thinking that that was investing and it would all be good in the long run. You know, lots of people thought you could never lose money in real estate. Well, actually, you can and you often do when you buy it at these peak valuations. So, this is some um you know, warnings for people to try and keep this in mind to try and remember. Uh we're probably three years into this process that could go on for another few years. And um in the process, rents are coming down, which is a positive, which is also a disinflationary aspect, right? uh because that's a a good part of our CPI basket comes from these shelter costs. So, it's it's positive in that sense. Um it's not great for those that are looking to rent to try and oops try and cover the um >> the carrying costs, right? Again, because the carrying costs are up and they can't rent and now rents are coming down. But this is just again back to this this point about the demographics of the situation. So, you know, the over 55 cohort is about 30% of the population in in North America. They own more than half the housing market, though. And >> that's a great chart, >> right? And about 20% of them are one in 55, one in five over the age of 55 own multiple properties. And these are the most expensive properties, right? where they've really done them out to the nines with lots of, you know, per bells and whistles, uh, lots of square footage, you know, things like that, which are lovely, but expensive, uh, and and not something that the average person or even the person making an above average income can afford these days. Um, so again, I always tell people, uh, there's mortgage calculators on every, uh, property website, Zillow, Zolo, whatever you want to look, and if you look at the mortgage calculator, um, even if your home is paid for and you're thinking, you know, I'm going to sell it for X and and then you put that price in and look at what a person who doesn't have an allcash buyer, who just has to do it with a down payment and a mortgage, just have a look at what the monthly payments are being uh would be at the price points that you have in mind or that you're thinking you're going to list it for. And the the fact of the matter is that a tiny fraction of the population can afford that. And many of the ones that can afford it are looking to downsize themselves, right? So this is why it's a shrinking pool of of buyers at at least at these price points. >> Yeah. And so that's a key point that Sorry, you're getting to the other thing I wanted to ask you. um which is uh if I heard you correctly something I've been saying for a long time is you know the the the home owners were we're all trying to hold together in solidarity right housing's priced at the margin right so it's sort of like look if we just all hang in there and we don't sell um you know there was this mantra of survive to till 25 at least here in the states and by 2025 the Fed should have brought rates down and the mortgages will be back down we'll all be okay right and they're realizing now okay that didn't happen. >> Um, so at some point if you're if you're a potential seller, there's a first mover advantage, right? You you get out before everybody starts listing and then the price gets chased down. So, um, I I think I heard you say that that, you know, you know, folks were hanging in there carrying the properties, but now it's just getting more and more expensive and they're not seeing the cavalry start to arrive anytime soon. And so are you starting to see this market at the precipice of going from a frozen market to, you know, the first movers bolting first to try to lock in the best price they can. And then all of a sudden that's more inventory and the thing starts just, you know, dethawing, but but with price declines from there. >> So there's two cohorts that really uh have an impact there. One is we're seeing a lot of people cancel their listings. So, this would be the people that financially can afford to wait a little longer, uh, maybe older, maybe paid off, and they're just annoyed that they can't sell their house for what their buddy got, you know, two years down two years ago down the street, >> right? And so, they're just saying, "Well, to hell with this. We're not going to sell. We're going to hold off and we'll list again in the spring." But they've really they're on a a a vanishing runway in the sense of they're not getting younger. they're getting older and this house isn't going to suit them anymore in the spring that it suits them now. And they still this theme of wanting to downsize and consolidate their overhead is going to continue whether or not prices cooperate from their perspective. So you hear a lot of agents now, real estate agents complaining that people are unrealistic. A lot of people are digging in their heels and they don't want to uh list at these prices. So the the the cancellation rate is very huge um in Canada but also in the US. I've noticed that. So that's the one cohort. Then the other cohort is the people who are highly levered or can't afford to wait, you know, and relist later. So they're increasingly uh there's a good rise in uh foreclosures happening through the court system that's been going on for the past couple years, but it's gradually increasing month over month. So there's amount a good amount of foreclosures now happening. Um and people are just like basically losing the properties. And so when that happens and you get a sort of a surge in that, you tend to get more forced selling and a r and a ratcheting down of prices where market forces finally come in. So that's definitely um evident and I think that that will pick up as more and more people uh either you know we're just into the rising unemployment now Adam as you know and that is going to you know by the Bank of Canada's own measures the Canadian economy barely expanded in the first quart the first half of 25.4% 4% annualized rate of employment, rate of expansion in the economy. Um, and uh, we have a lot of red flags and concerns that the next year is not going to be a lot better. And that typically, even if the Bank of Canada goes back to cutting rates, which is expected now, um, you know, unemployment typically rises throughout the cutting cycle when they're chasing the economy down. And I think that's the scenario that we're we're facing right now. And the other point I like to make is that, you know, we've seen this movie before. We saw the Japanese housing bubble happen in, you know, into the early 80s. Uh we saw the Chinese bubble happen after the GFC, right? Because the government there decided that the thing to do was help housing. And so they really threw all the stimulus uh into um government financing and you know ultra- low interest rates to get the public to buy into the property market. Well, that bubble burst there and property sales have now been falling for 5 years. So they're about two or three years ahead of Canada in this cycle. And there was crosscontamination there because there was a lot of Chinese money just like there was Japanese money in the early 80s that was you know looking for homes around the world and had bought up real estate. So there was a buying pressure there that was very prevalent in Canadian markets um from the Chinese inflows uh into the 2021 cycle. Um and then the government brought in foreign buyers taxes and things again because the public was complaining and rightly so. They're saying there's all these properties being bought up by foreigners. They're sitting empty in many cases and we can't afford to buy because they've bit up the price. So, it was a legitimate uh problem and policy response always comes after the fact and then they sort of excluded, you know, or tried to to limit the amount of foreign buyers and that is good but painful, right? Because it's now even evaporated more of a demand p more of the demand picture. But the the again back to the the length of these things taking many years, not a couple. So again, China's done everything it can to keep stimulating and trying to reignite uh appetite in the public for buying and speculating in real estate to no avail. Um and major developers that were, you know, the star turns uh of the uh property cycle have now been going bankrupt, getting delisted. So there's this contagion as well in terms of the stock market that happens from uh some of these trends. Um so China's property investment again it's been dropping. So this portion of you know your real estate investment as a percentage of GDP which I highlighted as a problem in Canada being driven too much of it's been falling in China uh consistently and that's again something that's a headwind for the economy just as it was a boost to the economy during the bubble phase. Mhm. >> So that is one of the major deflationary aspects that real estate deflation. It's such a huge impact that it's very hard to offset. And you you put on top of that just like we have here aging demographics and now low immigration which they've had in China throughout. But basically that creates this deflationary impact and it's affecting all major sectors uh which is being exported globally. So again, back to the fears about tariffs being inflationary, and I understand that certainly in some uh some ways they're a price shift, and we aren't sure, you know, to what degree that's going to be stairstepped and continue as more items, you know, inventories get drawn down and, you know, the the picture keeps changing monthtomonth. So yes, there's some inflationary concerns around the tariffs, but this major deflationary impact I think is still the bigger story. Um, and that's certainly what we're seeing in the Chinese market. And there again, Treasury yields have fallen. You know, 10-year China treasuries at 1.77 as their GDP has, sorry, their debt to GDP has doubled. They're about 300% or something debt to GDP right now. a double from '08 and yet their yields continue to fall which is you know again in congruent. Many people think well if the government debt goes up yields are going to definitely rise. It's not what we saw in the Japanese experience and it's not what we've seen in the Chinese experience so far. So it just gives us some food for thought. >> Is China is China buying their own debt handover fist the way that Japan has? >> Yes. So the Chinese um banks and uh financial institutions are the primary holder of Chinese government debt. >> Okay. >> Uh so um in in Japan, I think it originally it was more to the actual um individuals were the biggest cohort of holding government debt. Um in China, they never got to that level of household wealth on a you know median basis. So they haven't had as much savings or ability to step in and buy the government treasuries as a as an investment or as a a store of value. >> Okay. >> Um so the other thing is you know this business about this is also disinflationary or potentially deflationary. Um oil you know again peaked on the whole China reflation story in 2011. Um and then again in 2022 when you know the negative rates were driving all this mindless consumption around the world and it's been rolling over since. So our long-term target has been $40 a barrel and uh we got there in the 2008 downturn. Of course we got there way below there in the 2020 pandemic in the original shock. But I think that that the I the IEA also sees output uh growing faster than demand over the next couple of years at least. Um and I think that that could help in terms of a disinflationary or potentially deflationary force as well. So that's another factor uh to keep in mind. And when we look at the CRB index, even though precious metals, which make up 7% of this basket, are as you know, at all-time highs, have really exploded in the last little while, the CRB basket has not made new highs. It's just kind of flat. Um, and hasn't had any inflationary revival, so to speak, since 2022. So again that makes me wonder if you know under the financialization that's gone on uh in the economy the real economy you know is still stagnant is stuck and I think that that is something that has to be remedied by lower prices across the board. Um the other thing is I I think I touched on this that you know um Eric Bad Bagmian does some great work at um in terms of the construction being a cyclical factor leading employment in the economy. Um and this is just uh reminding that the worst unemployment cycles happened in the 1980 and 1990 housing recession. So Canadian unemployment has come up significantly from the June 2022 low. Um but I think that again this suggests that that tends to continue for a period of several years during these type of correction environments. Um and of course you know we've seen the same kind of stuff happening with really weak uh as these crazy revisions come in from the BLS etc. You've got this really uh negative trend in payroll growth in America as well. And that's something we've only seen during past recessions. So just again a question mark, you know, if the labor market is continuing to deteriorate, is that not going to force more people to try and, you know, consolidate households, sell property, you know, raise cash, >> tighten their belts. Yeah. Reduce >> spending their belts. >> Tighten their belts. And we're certainly seeing that from major retailers. Macy's notwithstanding, which apparently blew the doors out, but good for them. Uh, everyone else is sort of saying the consumer is is getting very frugal. Um, >> so hey, real quick. Um, just as you were talking here, a headline came across Yahoo Finance titled jobless Americans outnumber openings for the first time in years, which is a really interesting I haven't had a chance to actually read the report yet, but um, you know, for years and years now, we've had the chair of the Federal Reserve talk about how, hey, we've got way too many job openings um, versus the people that, you know, we need to fill them. And that was a big part of not, you know, not only bringing the CPI down from 9% but but hey, I need to cool this labor market, right? So that's a very different story than we've been being told for the past bunch of years or it's a big milestone. Um, secondly, your your your chart you had back there of the Canadian unemployment rate. Um I I I I I wish it it had the um recessions shaded in it because I know what the US one looks like and and essentially almost without fail in this data series, what happens is is once the unemployment rate bottoms and it starts coming up again, it then tends to spike hard into the next recession. And we're seeing here, you know, okay, Canadian unemployment has bottomed and is starting to rise pretty dramatically. What would keep this from spiking into another recession here? Like something would have to be quite different this time than in all the previous cycles. >> Well, actually the truth is that it spikes through recessions and into the recovery. So even after central banks have finished cutting rates and the economy has bottomed, unemployment traditionally continues to rise for a period of time. So it's not businesses are not quick to bring people back. They always try and be more efficient at the outset. Another major factor that's happening right now is that our governments are there was the the major hiring that went on during the pandemic was from all levels of government. That was the major source of of employment. A lot of that happened in America too, right? And what you're seeing now is that there's a a move of foot to cut government spending. Um, and also one of the sort of low-key ways to do that is to tell people that have been working from home for, which was again part of the factor that drove all of the exodus out of the urban centers into cottage country and ski country and all these places buying up these properties was this notion that they could work from home and that they wouldn't have to be at the office. And now what it was the you know the federal government the provincial governments are now increasing the major banks just increased a mandate that people have to work fully now in the office uh starting this fall and so you know the unions are all up in arms. Everyone's angry but this really speaks to a loosening labor market where employers are now back in charge and saying like if you don't want to come then quit like we don't really care. we've got enough workers and we're looking to downsize anyway >> and they would much rather you quit than fire you because they don't have to pay you severance. >> Exactly. Right. So that that factor is also weighing on but as you rightly point out I think that the even if they you know even if uh the downturn ended today um the fact is the unemployment rate is likely to continue rising and that typically is what happens. So this I could have put as you know 20 charts on credit but this is just one that happened to come pre recently but the credit card delinquencies, student loan delinquencies, mortgage delinquencies, the insolvenies and trustee are booming up here and I follow several of them and and they are just like you know they can hardly see people fast enough and they're reporting that for a long time it was just people that didn't own houses that were in there because the people that owned houses were able to refy refi, refi. And now it's across the board. It's people with household incomes more than 150,000 a year. It's, you know, people with uh properties um and and this is where the the really crazy stuff starts to come out in the open because they're reporting things like, you know, people had uh three um you know, pre-construction condos they'd bought by a line of credit on something else and you know, they only put minimum down and now those things are coming up and they can't get the repraisals to justify getting financing and they're getting sued and like the lawyers are getting busy, right? This is this is uh again a boom time for the for the undertakers so to speak. Um and it's just a natural part of the credit cycle. >> A boom time for the undertaker. What a great turn of phrase. >> It's not it's grim but it's true. I I had insolveny and uh trustee told me in 2007 that he said, "Well, you see Danielle, we are the undertakers." And I thought, "Oh, that's so true." >> So anyway, the uh Canadians are spending less. This is just, you know, sadly the average person doesn't understand these cycles and is sort of sucked in from one mania to the next. They couldn't buy housing fast enough when prices were at all-time highs and mortgage rates were less than two. And then they have recently, you know, uh, turned trail and now they can't get enough US stocks. Even though US stocks and Canadian dollar terms have not done well, haven't done great year to date, but they're just like in a frenzy about the AI and they're following the the social media news and you know they can't get in fast enough. So it just shows that they're now trying to buy up US stocks and as you know record valuations whether it's you know the S&P book value at five times uh or or um price to book at five times or price to sales at three times or you know cap a at 40 I mean any measure you take market cap to GDP is more than 212%. We just it's just ludicrous fringe, you know. 29 65 the year I was born. There we were. That was a peak. 99 the year my son was born. I always tell him you were born at the peak of a mania son. And now we have it again today. So uh that's that's >> Danielle. This feels very much like the person who is having money troubles saying, "All right, well, you know, let me go into the casino and and see if I can't make it all back at the crafts table." This is so true. This has been the gamification of our uh financial system since 2008 when the crooks weren't carried off in cuffs. We let everyone away with everything. There's been this huge magnification of all the traits that were crazy then have got even worse. Uh you know, you have a president that is making billions on crypto. Uh you know, like it's as if you know, conflicts of interest. We used to at least put a sort of a hat tip to the fact that they weren't good in policymakers and we should try and have a bit of division. But nowadays conflicts of interest are just rampant and people seem to think well if everyone else is getting away with this or everyone else is doing crazy I might as well do crazy too. And I really do think that that's been the sort of contagion in the public consciousness. Certainly in young people they've thought you know okay boomer I'll never get a house. And I keep telling them, you will get a house, but you have to wait for prices to come down significantly. And the trend suggests that that could very well happen. So, it's not like an impossible thing. But people have sort of decided it's impossible and so there's no hope and so I'll just gamble and see if I win. That's basically what I've noticed a lot of people have been uh speaking like and they're levered up. They this is just margin balances again and this is you know b both from short selling uh but also from levered long very little cash or treasuries in any of the professional funds or any of the actual portfolios um you know as stocks have leapt in the last year or since April um there's been no rebalancing in fact you know again the finance sector loves to bring products out right at the peak of everything and so now they're doing these levered ETF products Right. Um, and the public is is pounding it. They're thinking, "Well, if the S&P went up 25% and I buy this, it'll go up 50%." You know, so they're just uh they're making off like bandits as as usual. The product sales people make make the fortunes. So, that's more evidence of that. And you've just got again this whole the long, you know, the most highly equity high equity exposure um since the peak of the 2007 bubble. Um, and it just I I you know I always try and tell people you're 24 years older now than you were then and uh or than you were in 2000 when the tech bubble burst the last time. You know, it's almost like we've taken 2000 and 2007 and squished it together here in a in a in a hor what do you call it? Uh play of horribles because we've got a tech bubble from like we had in 2000. At least the real estate market wasn't in a big bubble in 2000. It had been coming down. And here we've got the re the real estate bubble and the tech bubble at the same time uh a after years of zero interest rates. So I just think that the financial risk has never been higher just as people have never been o older in terms of you know the bulk of the owners of the of the uh equity market and of uh anything on that uh in the financial product sector tends to be the over 60 crowd and you know I I see things and I've talked to people they send me their portfolios they're 70 years old they're 85 to 90% in equities and maybe they have 10% in some high yield debt or a high yield debt fund and you know you try and say to them this is insane and they go well my advisor thinks it's fine and we've done great. It's like yeah you've done great in recent times but you know what if we're into this uh correction phase that could take prices down significantly from here um and they kind of look at you with glazed eyes. So >> So two things real quick. One it's parade of horribles which I think is a great way to describe this. Thank you. >> Um, and the analogy to that person you just talked about, it's like the guy that jumps off the 20s story building and as he falls, you know, past the 10story, someone says, "How you doing?" He says, "Fine so far." Right. >> I know. I know. And it doesn't seem as fun to be worried about what can go wrong. But it's just I've been doing this like more than three decades now, and I've seen this before. And it it's not a small thing. It's a big impact. And unless you can go back to work and put the hammer down and keep saving for another 10 or 15 years, you know, a conservative uh equity allocation for someone over 70 would be like 20%. >> Right? >> You know, if you want to be in the market, you know, that's the kind of thing. But routinely people are 60 70 80% in equities today. And a lot of that is they didn't want to rebalance because prices went up and the the the the meme becomes, well, I don't want to sell anything because then I'll have to pay tax. >> Yeah. >> And that's where you get really locked into things. And I always say the downturn takes away your tax problem. Don't worry about it. You know, >> that's a good way to say it. You know, that chart you had showing that we're at very high levels of of equity exposure. I've seen a version of that chart broken out by age cohort and the the cohort that has the highest degree of equity exposure is the older cohort, right? The ones that that should have the lowest, right? Yeah. >> Yes. I saw a stat that the uh over 60 owns 79% of the housing equity and I think it was 72% of the uh stock market equity. So, you know, Danielle D. Martino Booth has made this point in the past that when they start cutting interest rates on GIC's CDI to the extent that every anyone has money in interestbearing instruments as we know there's a higher propensity to spend that and so if that starts to go down her concern is that may be a catalyst for more selling on the risk side. It certainly should be there should be some catalyst coming here. Um, unfortunately, most people just wait till it's tanking and then they call their advisor and start freaking out and saying, you know, get me out, get me out, get me out. And then it's very t tough for the adviser because, you know, they're trying to keep them in the seat and uh that's usually not very successful when people start to panic. >> So, Treasury prices, you know, again, I I'm mindful of that chart of China and how these disinflationary forces have continued to push Treasury yields down. Now, we knew we had a big selloff in um treasury prices um into the 222, you know, we had a huge bare market in government bond prices, well, bond prices and dividend proxies. Um and that seems to have stabilized. So, we're seeing uh you know, certainly um Canadian Treasury prices are up 11% now since the March 2022 bottom, and that's on the bot on top of the coupon. Um so you know we'll see if that continues then yields will continue to fall if treasury prices continue to rise. And by the way all this talk about the foreigners abandoning uh treasuries. I don't see that in the data. I see the tix data. You still have foreign appetite coming in. You still got um a significant flow there. Um and you know this is John Husman's chart but I always like to check in every once in a while and see where we're at. and he's just saying, you know, of all these uh uh price point uh periods in time, that little um dot on the left is where we were in um in July in the sense of we've never seen equities having perspectively more negative returns relative to treasuries over the next 12 years as we do today. And even the the sellside shops like Vanguard, Goldman Sachs, Morgan Stanley have recently come out saying, "Yeah, actually treasuries are likely to outperform equities from current levels." Which is a no-brainer. I mean, because once we know that, you know, 75% of future returns come from what you're buying at like the valuation level. And if I have some I would say um encouragement to my concern from here with respect to equities. It it is of the experience of the property market. How in 2022 and 2021 I was trying I was writing and speaking about it every week. Guys, this is crazy. This makes no sense. Look at the math. It doesn't math. You know, all that. And people thought I was just ridiculous. And of course now they're starting to say, "Oh, what's going on?" Like, "Well, why why are prices not going up?" So, I think that that kind of thinking is is still yet to come with respect to the equity market. Um, and so, um, we we have an opportunity here, as I'm trying to say to people, to pay some tax notwithstanding, if you got some capital gains, move some money over, you know, take advantage of locking in uh, interestbearing north of four in in America is still around three in Canada. You know, there's a reason to hold these things. Um, and this just goes on to show that, you know, the TSX, some people speak about Canada as being a value uh index and that we will fare better because we are relatively less undervalued than the US S&P 500. We've had much we have one tech company uh Shopify essentially and we've not had the same mania, but the problem is we're trading about the same valuations today as we were at the peak of the last cycles. and all of the gains. This goes back to if you buy or hold when things are high, it took 12 years for the TSX to break even. Like it from the 2008 peak, uh it didn't durably surpass that until 2021. So that means that all of the gains from in terms of capital gain from the TSX have happened just since January of uh just since 2021. and um that it wouldn't take a lot to get back to, you know, what the price was many years ago. I mean, a 25% correction would be extremely weak and little in this kind of environment from these kind of levels. And that would take you all the way back to where you were almost 6 years ago. And you know, it would just take 46% to get back to where we were at the peak of the '08 cycle. And people think that's impossible, but actually that's kind of typical. Um, and this is just, you know, Ned Davis research reminding people that complies with historic record, which is it takes about 76% of the time to make back your losses in the stock market. If you hold at these peak levels, the things correct and then it spends, you know, many years trying to recover those losses and you only get the gains in a very short period of time. So, I know people have fear of missing out. They don't want to be out in case they miss those gains. And fair enough, but the problem is that you don't have any discipline around when you're pulling or reducing or pulling back your risk, then you're just sort of riding it up, crashing, taking years to ride back up again and all that sort of thing. And you're really getting nowhere. And as I've said, you're not getting younger. None of us are. Um, and of course now there's this stuff about, oh, the Fed, you know, the Fed's running to the rescue. They're going to start the cut rate the the rate cutting cycle. It's going to solve everything. Well, we had, you know, the 50 beep cut in September of '07. And then we had them, you know, uh, on pause. They paused for five months, kind of similar. We've had a big pause uh, since December here. And then they chased the economy all the way down into 2008, right? slashing and that slashing to zero and leaving it there for seven years. It still didn't revive the stock market. So, um it's important to keep that in mind. It's not as simple as they just need to cut rates and that fixes everything. Although that's what many people say. You read that on social media. You read it on X every day. uh they have these charts showing from the first Fed cut how the stock market always rallies and they conveniently leave out the periods where there was a economic downturn as well, never mind a real estate driven economic downturn and in those scenarios you typically saw the stock market have as they were easing. So again, >> kind of kind of back to my my pattern on the unemployment rate. The pattern on on rate cuts is is you know, usually it's when the Fed starts cutting rate is is when the wheels come off. That's when the economy slumps. That's when the Fed starts panic cutting trying to catch up. Uh and uh yeah, so you know, I don't know why people have this narrative that cutting is always equals higher prices because we we always see at these cycle turns. It's usually the Fed showing that it's arriving at the party too late and you know, we have that big correction. In light of my earlier comments, I'd just like to point out the far right half of this chart here, which shows that 8990, 81,82, 2002, 0709, those were real estate downturns, three of them, and techled downturn for 0102. And those were the longest uh bare markets um where things did not revive just because the Fed was cutting. And those are the factors that are confronting us today. And again, you know, it's it's a fallacy to believe that you can hide out in dividend paying stocks. They may decline less than tech stocks. Hopefully they will because tech stocks, you know, often decline by 80% in this environment. So hopefully dividend paying stuff will be more cushioned, but it's certainly not cashlike, right? And this is again something that people sort of mistake. They think, well, I'm in I've shifted into into safer dividend paying. And it's like, well, not if we get into a real bare market because everything basically gets sold in that environment. So, that's something to keep in mind. And I just wanted to point out um I I've said before I'm very agnostic on bullion and if people like bullion, I'm all for it. if you want to hold some of that as a a store of value, you know, whatever hedge you you feel most comfortable with. I would point out that we've seen this massive financialization not just of crypto, but in the precious metal space as well. So, you know, you've got this endless stream of products. Back in '08, there was one Bitcoin and now there's hundreds of thousands of crypto things that people are buying and putting, you know, speculating with, etc. And there's all kinds of ETFs and funds that have come out in the precious metal space. That makes me nervous because they've all sort of been trading together in in other words, you know, they sold off together early in the the March 20 downturn. They rallied together. They sold off again in the 2022 bare market and they've rallied again in the last little while. So all I'm saying is I'm a little worried that financialization has sort of um m muted or hurt dampened any diversification benefit. And so I just caution people that we're going to have to test this by seeing the next durable downturn. You know how these things perform. And I'm quite sure I feel pretty confident that crypto is going to trade down with all the other risk stuff. And it's going to be interesting to see to what extent the precious metal cohort is able to hold up. And it's always kind of the same reason. The longer it goes up, the more it's attracted in people that are not so convicted of its long-term uh hold and they're more trying to speculate and the less patient they tend to be if there's any kind of price decline. So I just >> chicken loose. Yeah. >> Yeah. And I think that that's uh we'll see that tested in the next two little bit. And I just like this qu quote from Warren Buffett because I think it speaks to everything. You know, so many people that uh have got an amassed a good deal the bulk of their life savings could live very comfortably if they just didn't spend crazy, didn't speculate crazy, you know, basically collected decent interest income and, you know, had a nice life. but instead they're taking what they have and and need for that purpose and plunking it into very risky plays. And I think that that is the very problem with all the asset markets today. The people owning them are overexposed with shorter time horizons because of their age. And I think that that is likely to magnify things uh as we get into a downturn. >> All right, Danielle. Um it's been a fantastic presentation. And I'm just going to read this for the people that might be listening on a podcast and and don't have the visuals in front of them. Uh it's a quote from Warren Buffett. It says, "Don't risk what you have and need for what you don't have and don't need." Right? Just very simple common sense, but as Danielle has, you know, just walked us through, vast majority seem to be doing the inverse of that right now. Um all right, Danielle. So, uh fantastic. Let me just ask you this to to um kind of get to the the so what which I always like to try to conclude these conversations on. So within an with an environment like this um it's clear that you are you know big on de-risking right now and and a way to do that is to reduce your equity exposure. at a minimum maybe make it age appropriate but you know probably have it be more conservative than that for all the reasons you mentioned here sounds if I heard you right it sounds like you're saying hey in the near term tea billing chilling is not a bad thing to do um and if we get some sort of you know corrective event in the markets you're going to be real happy just sitting there in safety you know earning your 4% or whatever it is even if the Fed starts cutting 2%'s way better than down 80% in a tech stock Okay. Um, beyond that, are there any strategies or asset classes that you favor right now given the where we are in the current story? Well, for my concern with respect to positive correlations that have developed across the fold, um the only ones that I see any potential for um holding up if the selling accelerates here are potentially as I say treasury bonds, which it's not just T bills. You can lock in three or four or five years here and have yields over 4% which are in they are also very liquid. It's not like, you know, a a guaranteed deposit where you're fixed. You don't have to hold it for four or five years. >> You can sell it right now. Yeah. >> Right. So, I like that kind of a a prospect. And, you know, a few years ago, um, the risk averse options were paying next to nothing. These are paying more than inflation. I'm quite quite happy with that. Um, the US dollar has been oversold here for Canadians. I think maybe that could be a potential safe haven and potential capital gains. it typically is during big bare market sell-offs. >> Um, but only if you're in cash or cash equivalents, not if you're in equities, US equities, right? So, it's it's very tricky. I think that the big themes are look at your look at your um income statement, look at your what you're spending, look at how much of it is in risk assets, consider how that would impact you if they were to have a multi-year decline. Um, if you have a lot of real estate that you're looking to to offload, maybe be pragmatic uh in terms of the big picture, looking at price trends and how they're not likely to improve in the near term. Um, and maybe um, you know, get your house in order, uh, rather than hang on what you think something should have sold for uh, a couple of years ago. >> All right. Um, Danielle, uh, just a fantastic discussion. Uh, you totally delivered today. Um, I know folks are a going to love this and b say, "Hey, Adam, get her on again much sooner next time." So, hope we get a chance to do that. Um, just in wrapping up here, uh, I don't want to put words in your mouth, so correct me if this is is incorrect, but I kind of get the sense from you that you feel like, um, this may be a bad analogy, but like, you know, a mountain with a high avalanche risk that like, um, you don't know which snowstorm is going to cause the avalanche, but just over time with enough snowflakes hit, one of them is going to be that critical instigator and then the whole thing happens. So, it sounds to me like, hey, timing wise, we don't really know when this this multi-year correction is going to happen. And we don't even know what the trigger is going to be. Just the weight of all the things that you talked about are going to continue to weigh on this thing until some trigger proves to be the one that's that last snowflake that just starts it all. And so, better to, you know, get to safety sooner rather than after. And so, you know, that's why you you would recommend people derisk in the way that you just mentioned here. Correct. >> Yeah. because human life is full of risk every day in every way and it it gets worse as you get older in the sense of the finite nature of your lifespan. So I just think um you should be eyes wide open about that. It's not a it doesn't have to be a sad thing but it it should be something that you account for in your plans and and decisions. >> Yeah. All right. I think the only other thing I would add to that to use an American analogy here but like if you've had a really good run, right? So, you know, if if your portfolio is doing well and you own a couple of different houses and all that type of stuff, right? Like, don't put yourself in a position to fumble the ball on the five yard line. Like, you're you're almost in the end zone of life. Like, don't don't be don't take dumb risks and ruin it all, you know, right when you're so close to to the finish line. >> Agreed. >> Exactly. Yeah. Absolutely. >> All right, Danielle. And now the most important question. For folks that would like to follow you and your work in between now and the next time you appear on this channel, where should they go? >> Uh, my firm is veniblepark.com and my daily blog is jugglingdynamite.com. >> All right, fantastic. And Danielle, when I edit this, I will put up the URLs to those there on the screen. And folks, I'll have the links down in the description below the video if you want to get there with just one click. Uh, Danielle, as always, uh, just such a great job today. really look forward to having you back on the channel soon. >> My pleasure, Adam. Thank you. >> All right. Well, now's the time in the channel where we bring in the lead partners from New Harbor Financial, one of the endorsed financial advisory firms by Thoughtful Money, uh to both share their key top takeaways from the interview we just did with Danielle, uh but also uh give us an update on what the market's been up to over the past week. I'm joined as usual by uh lead partners John Lodra and Mike Preston. Hey guys, great to see you here. Uh great conversation with Danielle. Lots going on in the markets, especially with the precious metals. Um, so lots to talk about, but John, why don't we start with you? Um, what's your key reaction to Danielle's uh, I think quite excellent presentation there. >> Hi, Adam. Great to be with you. Yes, excellent presentation. I would totally agree with that. And I we got to credit your program, Adam, for introducing us to Danielle. I we weren't familiar with her work until a few years ago, I think, when you first had her on. Maybe it was further back than that. But um we really really appreciate her perspectives and and the data that she brings to it. I mean she uh went through a chart pack there that's uh undeniably paints a picture that uh is pretty pretty stark and it doesn't matter till it's ma till it matters. we had the good opportunity to to chat with her briefly off camera after you recorded with her and we um you know we're we're I guess um kindred souls in the sense that um you know we have often said and she she said to us that uh you know sometimes it it would be just so much easier being a bull but when you look at this data you can't just put your blinders on and it doesn't matter till it matters and and every bubble which we are not at all bashful to use that term as I think she has used in uh very stark terms and if not cloaked terms. Uh we're in a bubble. Uh and it's a bubble that pervades many asset classes. Certainly real estate, certainly the stock market, the bond market was in a in a massive bubble. Um arguably much less so now um that the the Fed has, you know, come off the zero interest rate bound and the huge quantitative easing. But we are in rare times. You can look at all of history and you you can never find you can you can find no instance in history where we have had all these markets as richly valued together as they are now. And that's just black and white data. It's not subject to anybody's opinion. And the one thing we know from our careers which is uh I think Daniel said she's been doing this 30 years. We've been doing it nearly that long uh as professional adviserss and and just as long uh you know if you think about our our interest um and we've seen this before and every bubble ends the same way. It ends with uh the stages of disbelief and grief and and people getting sucked in at the late stages because of the seduction of this time is different because x y or z. You know what is it going to be this time? Is it going to be the the mantra of liquidity and marks markets can't go down with liquidity, central bank liquidity or fiscal liquidity, whatever the case might be? Uh we have a little doubt that gravity will end up playing. So the broad takeaway is what what we do is is in our roles as advisers to real people, we boil it down to takeaway actions. And we couldn't agree more with with Danielle that uh one key takeaway is um this could this syndrome can can last longer than than even it has, but it still is not a good reason not to derisk and and scale back risk. And I I've got some things later I want to talk about in terms of the real consequence of sequence of returns risk on a real person's hypothetical retirement. Um but uh we totally agree with the broad takeaway there and and I I love the last quote she uh she shared there that Warren Buffett uh was attributed to Warren Buffett. I don't remember exactly but you know basically it was to the to the effect the effect of uh uh don't risk what you can't afford to lose in pursuit of those things you don't have nor need right many of our clients have built very sound financial um footings and and even folks that still have work to do. The biggest risk in these kinds of markets is not missing out on the last gasp of a a very richly overvalued market. It's in unwittingly suffering major declines that can wipe out years if not decades of of progress. >> Yeah. And this, you know, we we've talked about prospect theory in the past. Um but this is where you know where as humans we experience the pain of a loss twice as much as we um enjoy the joy of a gain. The problem is is most of us don't really realize that and that just all goes out the window when FOMO is running hard, right? And uh in markets like this one, you know, bubble to use your words, John, um you know, FOMO is running really hard and everybody is trying to figure out how do I not get left behind here, right? And um the the sad sad you know sad probability here is that if this does indeed turn and correct the way that highly richly overvalued markets like we might be in now do um you know it's not just going to be oh I I you know I I got the inconvenience inconvenience of some losses for a lot of people especially the older people who have the majority of the wealth you know they may find themselves set back, John, not years but potentially decades, right? In some of the worst situations. >> Yeah, absolutely. And I'll just share a couple charts here, Adam. And one thing I want to make clear is when we say drisk, it doesn't mean go under a rock. Doesn't mean put cash under your mattress. Maybe a little bit, but not all of it. You know, we still have at this moment about 45% equity exposure. And and we're picking our our points very carefully within the equity market. We have exposure to sectors that our systematic relative strength tools have guided us into that have been by and large the outperformance uh this year for example and have avoided areas that have been lagards. So it's important to to right size and d-risk your equity exposure but also with what exposure you do have be in the right areas and I use right in kind of air quotes. It's not a perfect science. It's a matter of using systematic tools and rules to kind of guide you in the in the right direction, but also uh bringing tools to the table like hedging tools. We often times talk about hedging on your program, Adam, and this is a way of, you know, having an asset, having exposure, but but taking the the sting out of uh an unfortunate outcome out of the equation by using hedging tools. We use options to hedge risk, covered call options, protective puts, and combinations like that. that those are very aptly um applied tools in the kind of environment we're in right now. I just wanted to kind of bring it back home before we pause on and Mike has got plenty to say I'm sure here u but let me share and I've shared this with you be before but I hope this isn't redundant. I think it is hopefully illustrative as to what's at stake here. This is a um a little hypothetical example I put together just showing the consequence of retiring at a bad time, an unlucky time and what we call sequence of returns risk. And this shows a hypothetical example of a of a nest egg starting nest egg of a million dollars. And this particular couple person needs to uh generate um basically 5% withdrawal rate per year and give themsel a raise 2 and a.5% each year for inflation over their retirement period. This is a you can see you know a typical retirement period for example and and what I want to show here is the actual sequence of returns from 1973 through 1977 which comp uh 197 1997 which culminated in ultimately the tech bubble peak but started with the nasty 7374 bare market and you can see the average simple average return was 10.1% over that time frame but in this scenario if you do the simple math starting value gain loss and and ending value. This couple, this person ran out of money before their retirement period was done. Now, if you take the same sequence of returns and reverse them, so the 31% happens in the first year versus the last year and the bad, you know, backtoback negative years happened late in late in life. Dramatically different outcome. Still the average is the same, but look what happens to the the leftover ending value. So, the cost, the difference between here and here, we're talking about millions of dollars simply. amazing >> when you retired or more correctly it's not a matter of like should you retire or not should this is all about making sure you're positioned properly that's one thing you can control none of us what the markets are primed to do or don't do but we can absolutely control how we invest in response to that and that's something that main street mainstream Wall Street will never tell you they'll say always stay invested because if you mix miss the 10 best days you're going to forever harmed. Um that is a self-serving cliche that uh is tired and overused. Even Vanguard as as um as um Danielle talked about has preached caution. Uh right now they're predicting 10-year returns for Treasury bonds to out outpace uh US stocks with far less volatility. Now, that's not a slam the table, buy buy, you know, load up on 100 100% treasury bonds, but if you're going to buy and hold something for the next 10 years, which is what Wall Street mostly tells you to do, be very, very careful about where the stock market is. >> All right. Um, all right, heading over to you here, Mike, just two quick things. So, John, you the key thing to underscore here is, you know, at the end of the day, um, folks, we watch, uh, channels like this one. We talk to experts like Danielle because we want to make more informed decisions with our wealth. And while these conversations can be really intellectually engaging um at the end of the day, you got to remind yourself what's it for, right? It's so that I can make sure that I am able to fund my life goals by the time I want to be able to fund them. And a really important part of that is not just picking, you know, the most promising investments. It's just making sure that you don't do anything reckless uh with what you have with the wealth that you have built up. This is sort of my analogy of foaming the ball on the five yard line. So, you know, key thing to keep in mind in here is, yeah, there's lots of really interesting things going on, but at the end of the day, you really want to make sure that you've got a really good defense in addition to whatever offense you're building because you don't want to put yourself in a position where you may not have enough time to make up uh to try to get your goal, try to hit your goals if uh some adverse event happens. All right, Mike, coming over to you real quick, John, just to give full credit. Um, so, uh, thank you for recognizing this channel, introducing you to Danielle. Um, I want to credit the source that put me in touch with Danielle, which was Jay Martin. Um, he produces the Vancouver Resource Investment Conference. Um, and, uh, I shared a stage with Danielle two years ago, I think, and that was the first time I ever met her. And she, uh, left such a big impression on me that I had to call her right afterwards and say, "I need to get you on my channel." So, I want to I want to give props to Jay there. Um, all right, Mike. Look, I'll let you react any way you like above and beyond what John has done. But if you can uh also speak to the price action that's going on in gold and silver because things are getting really interesting there. We've had some major breakouts and this is something that you've been predicting for a long time. So would love to get your latest thinking on it. >> Sure. Thank you, Adam. You know, you can I could really sense the frustration a little bit in in in how Danielle is is seeing and talking about these things. She's got a lot of data and she shared a lot of data with us today. I love the charts. The truth is the data hasn't mattered. It hasn't mattered for so long now. Really hasn't mattered much since the last great financial crisis. But that doesn't mean it's not going to matter. And we're here to say that the data does matter. This time it hasn't mattered longer than ever before. And nobody knows when the turn actually comes. But there are some early indications that Danielle talked about in terms of unemployment rate rising and credit card delinquencies at 12-year highs. I think she said that type of thing. These are early indications. If we had to guess, and sometimes I think we do have to guess, we think that the markets are likely to top here sometime in the next 6 months or so. We're starting to see some real speculative fever and would not be surprised at all to see a little bit more of a vertical blowoff top. that would be a signal that the end is at least getting closer. But these things are very difficult to time, very difficult to recognize um when a market's topping. It's only after the fact and then after the fact, nobody wants to sell and so they're trapped. So we're here to, you know, help people react ahead of time to prop properly position and to put hedges in place so that we don't have to actually know when the top or bottom of a market is. we can use options to take um you know some of the the the need to be precise off the table. Couple things that I circled in my notes that I'd like to mention here um in addition to what John mentioned and then we'll get into gold and silver briefly. Interesting interestingly I did not know that the Canadian housing market was down 10% already. Uh there's some places that we've been uh reading about and hearing about from clients that are actually down quite a bit and maybe even more than that. Like for instance, Austin, Texas, things like that. There's certainly been a top in the market, but not the type of in the housing market, not the type of top or decline you'd expect to see after mortgage rates have basically doubled from 2021, both in Canada and in the United States. It's been really frustrating for people that want to get into the housing market. They've been told for more than 10 years, well, housing prices are up because mortgage rates are down at 2 or 3%. You know, and interest rates on deposits are zero. Well, when those rates doubled, we hardly even budged and we're just barely off a bubble peak. We think that housing prices could go down easily 30% across the board. Some of the charts that Danielle shared showed that we could see that type of correction. And just looking at my notes, she basically um a few years into the correction here. And she says um and I'm just based on her chart, there was a 39% correction between 2006 and 2012. And if history is to be any guide, we likely have at least five more years left in this correction. So I would say continue to be patient. We're continuing to say that to our clients. We don't think that you should necessarily gain your primarily primary home. You need a place to live, but uh if you are looking to increase your exposure or looking to buy your first home and you can afford to wait a little bit, it's probably a good time to wait a little bit. Um especially when it's two times as expensive to own versus rent based on the charts that Danielle showed. And you the last thing I'd like to to say about the charts which I thought was really interesting. Danielle showed a chart showing the major market peaks and they were 1929, 1965, 1999 and 2025. Those are the four big peaks on that valuation chart. And she talked about how this is the highest ever. And that's confirmed by Husman's data and a lot of other places as well. Those four major peaks are almost exactly 30 years apart. I thought it was roughly uncanny. >> 29 kind of fourth turning, you know, turnings. >> Yes. And and that coincides with what we think about the fourth turning here. Probably in the last three to five years of a fourth turning here. So we are probably at some at or near some type of peak. And when this peak is actually set, it could be the peak for the next several decades. So be careful because the average person out there in retirement has 70 80 90% exposure to stocks. We see it all the time. Um not with our clients but people that we review statements for. So when that turn happens, it's going to be hard to change later. So think about changing now. So those are just the things I wanted to mention there as part of her speech, her talk that I thought was fantastic. And in terms of gold and silver, if you're ready for that, I' I'd like to talk about that a little bit, too. >> Yeah. So, if you can maybe just pull up the chart, show folks where we are right now. Um, we're recording midday on Wednesday, uh, September 3rd. Um, so say whatever you want to say, Mike. One of my questions for you is, um, at what point in terms of the price action will you guys start, um, you know, altering how you hold your precious metal position? meaning when will you start taking gains off the table? When might you put on some downside hedges um to you know try to lock in some of these gains? Um so if you can include that however you can in your answer that'd be great. >> Sure. We've seen a big big move in precious metals and in the miners and for many months the mining stocks have been outperforming the metal and therefore we're we're more tilted toward the mining stocks and within the bullion metal itself silver has been outperforming gold and and therefore we're we're in silver right now. I want to just share a quick chart, a number of quick charts actually. Sure. And >> as you pull them up, not not to beat pat ourselves in the back too hard, but this is what we've been talking a lot about. And Mike, you've definitely been beating the drum about, you know, the upside potential. you were seeing in the in the charts of where this could go and that this is indeed where things have been going and it is largely following the script that we you know told folks we thought it would which was gold would move first then the miners would probably move after and then silver would move last but each successive asset would move further and faster than the one before. Yes, that's what's been happening. That's what's been happening so far and we'll describe a little bit of that here. This chart shows a 5-year chart of the gold silver ratio and it's presently at 86 or so. Longer term over five years that I think that average would would uh if I were to draw our line here it would be somewhere around maybe low70s. So the ratio is still a little bit elevated and favors a a more of a reversion down to the 70 level or so which would favor silver. Look what happened just a little while ago. A few months ago we hit 106 on that gold silver ratio. We talked about that on this program and it since has pulled back to that midline mid80s and so that's been a good move in favor of silver. Let me show you the actual chart of silver on a daily chart here. So there's a triangle back here that I drew back in July. We were talking about that here Adam uh weekly. We were looking for a breakout. We had a breakout back here a week or two ago. It came back. It looked like maybe a false breakout, but then boom, the last four days it's just really broken out. And so if you take from a technical analysis standpoint, if you take the height of this triangle from top to bottom and then add it to this breakout level, it brings you up to around this line here, 38 on SLV. That would be a first target. And that's around 42 or so on spot. Spot silver right now is 41 41 a 12. And we've been thinking that the next level of resistance for silver is in that 40 to 42 level. And that's where we're at now. For people that feel like they're perhaps overexposed, uh, that might have been heavily in silver and gold all along, we we're telling them to sell into this rally a little bit at a time. Even though we think we're likely going higher, I would not be surprised to see silver settle in the mid40s or so uh, and consolidate there. the the old high was 50 or so back in 2011, but if I remember right, silver was only there for a couple days. So, that hardly even counts. So, it's almost like silver is is really close to an all-time high here, even though not yet on a spot basis. But up at these levels, there's been these have been some big moves, just pure technical um analysis moves here. And and interestingly, if you take a look at where silver's gone since April, silver's been trending up since April and it just accelerated here. If we take a look at gold, we were talking, I think, in the last few weeks about gold that gold too had this triangle going back to April, but then just flatlined and fell asleep, you know, just went to bed. And we were saying, well, when gold breaks out, silver should accelerate and that should push the miners even higher. Well, that happened in the last week. gold is sitting at a new high. So, uh there's no telling how far this can go. But now the miners, if you take a look at the miners, they've just been going crazy and hit what we thought were were were aggressive targets a few months ago were already there. Take a look at the junior miners on GDXJ. Went from 65 to 85 just a couple weeks. >> Wow. >> And lastly, GDX, which is in our portfolio. Whoops, I just typed in the wrong symbol. GDX went from 52 to 65 in just a few weeks. And so we have we just adjusted some hedges on GDX actually today. We have half of it uh written with short covered calls to bring in income because we know at some point we're going to have a pullback. We don't know if that pullback comes from higher or from here. Learned a long time ago to try to not call tops because things can go a lot further than you think. But we are getting extended from the 21day moving average here in light green and from the 50-day moving average in red. So hard to give targets for these things, but I would I would wager that we go higher. But just remind people to sell a little bit into the move, particularly if you're starting to feel a little extended. But if I were to go to a monthly chart again on GDX, all these years, the gold bulls and mining bulls, all these triangles that we wrote about and talked about, we were early on many different occasions, but look at all this return. All this return came all at once. GDX has almost doubled this year and um could could easily double again in the next year or two if gold continues upwards into what we think is likely to be the 4,000s or so. But don't get ahead of yourself. Don't forget to hedge and or take some profits here because now we're getting a little bit stretched. All right, very well said. Um I'm just looking at the time. We're going to have to um start wrapping it up here, but um Mike, we will be, I'm sure, revisiting uh those charts in the next couple of weeks in particular um because either gold continues to run from here and that's going to be, you know, extremely interesting. Um and if there's a correction, obviously the big question is going to be, well, was this just a blowoff spike that we were just in? or you know a lot of times when you have a breakout like this you then ret you know it it falls to retest key support and then if it bounces off support that can often times be a very bullish signal for what what lies ahead. agree. And one thing I've learned in my career of 25 over 25 years now is that when you have a market that's been basing out for a long long time and it finally turns into a bull market, you'll often see a double off the lows and then another double after that. And so I was looking at some of the silver stocks this morning. A lot of them have doubled in the last couple months. But if you look at the longer term charts, particularly if silver and or gold go higher, all of these things could double again. Now, those will probably take longer to double again, but that's what I've seen across the board, not just with mining stocks, but with other sectors and stocks in general. In a real bull market, it will double. And just when you think it's extended, it will likely double again with patience. >> All right? So, >> but obviously, folks, no guarantees. So, >> obviously not. >> Take it slowly. keep your position size in check. Talk to your adviser or us. >> All right. And John, I'm going to hand the baton back to you right on that last point Mike just made of talk to your adviser. Um, you know, there's a lot going on here right now, right? Um, there's a lot of money currently being made in the markets. Um, certainly on the speculative side and on the, you know, mag seven and all that type of stuff. Um but also on you know the the safe haven side you know it's traditionally been the precious metals role um so there's a there's a lot to be excited about but um there's a lot to be concerned about as Danielle you know walked us through. So um you know I think a lot of people are saying whoa wait a minute like I've not really been in an environment like this before. Um, and I want to a, you know, uh, first and foremost don't want to put myself at risk at potentially losing a whole truckload if there is indeed a big big correction like Danielle thinks might happen. Um, but also I don't want to just, you know, sit out this upside opportunity if there's upside potential there. So, it's a really good time, I think, right now for most people to talk with a professional, uh, to both re-evaluate their current portfolio allocation, uh, revisit their financial goals, but then also have these sort of deep discussions around, hey, what makes the most sense for me right now given the whole macro situation. So, if you can talk to that that need uh, as we wrap up here, I think that'd be helpful for folks. >> Yeah, absolutely. Um, you know, one thing I want to Daniel talked a little bit about the job market and some some noise we're starting to see there. not so not so positive noise and I was just at my my actually my son got married this past weekend. It was such a joyous event. Um >> congratulations. >> Thank you. But I was talking to a lot of folks at the wedding and then there were more than a few data points about uh people having lost their jobs or know people that have and um that is that could be a very very traumatic experience for for anybody, right? especially ones that are later on in their career and you know um aren't quite sure if they're they've reached the finish line yet and it's not their choice but uh it's been thrust upon them. One of the very first places I want to tell people to kind of think about is their 401k plans that that are at their their employer because oftentimes those get forgotten about even if even if you're already working with a a financial adviser oftentimes those are the forgotten assets because they're just set and forget. But but absolutely take a fresh look at those. You know, we do that all the time for our clients, even if these are accounts we can't manage because it's important to to make sure those sometimes large assets are are positioned properly. Um, I I will say we're we're actually growing our team. We've got a couple job openings and uh I hope we see a vibrant job market because we we are certainly in the in the hunt for some good quality people to help deepen our bench. you know, we're we're in growth mode and uh we always want to make sure we can give our clients full and comprehensive service and the the best way to do that in our line of work is making sure we have great people to to be on our team. So, if anybody's out there listening and you think you know somebody that's in our industry or perhaps yourself, you know, and you feel like you're a good fit, we'd love to hear from you. Um, shamelessly plug in our our openings. Um, but um, you know, it really is really important to kind of bring this back to your own situation. um forget about this the keeping up with the neighbors or the headline news or whatever. um you you got to call your own top so to speak uh based upon where you are in your life and and the best way to do that is take a objective step back and sometimes with the help of an adviser you can do that more more truthfully perhaps than it than within your own your own bubble so to speak but um you know >> all right well well said John and again this I'm going to murder this analogy here beat it to a beat this horse to a bloody pulp but like um you know there's been a you know markets have been very favorable to people um for the past couple years. Um Danielle has made an argument that that party's going to end. And to your point about calling your own tops here again, doesn't mean you have to all of a sudden go to it 100% cash tomorrow. But you've got to determine when it is time to start leaving the party, especially if you think, you know, if I overstay here, I might be leaving in handcuffs after the cops arrive, right? So, like just to my football analogy, just don't don't put yourself in a position or minimize your your potential for fumbling on on the 5yard line, you know, especially if you've had a good run and you're sitting on a lot of good assets right now. All right. Well, John, um I'm glad you actually gave that that plug for a couple reasons, but um first, I mean, it reflects very well on you and the New Harbor team that that your company is doing so well, that you're in growth mode right now. Uh and secondly, I do know that there are a lot of financial professionals that watch this show because they email me and interact with me on social media all the time. U so folks, you know, if you're if any of you are watching who, you know, if you know somebody, yeah, sure, recommend them. But if you're a financial professional right now that might be looking to join a quality shop, um highly recommend you consider the guys at New Harbor. If you want to hear my specific thoughts about them, if you're thinking about this from a job switch standpoint, feel free to reach out to me directly and I'll be happy to give you my my direct thoughts on these guys, but the punch line is is very positive, obviously. Um, all right. Well, look, in wrapping up here, gents, um, uh, thank you. Let me just remind folks um first off, if you enjoyed having Danielle on and would like to have her come back on again uh sooner rather than later, please let us know that by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. Um you know, Danielle is is based in Canada. I just interviewed uh Jonathan Wellm earlier today uh who's thoughtful money's uh endorsed Canadian financial adviser. Um, so if you're watching this video and you're thinking, "Yeah, maybe I might want to talk to one of Thoughtful Money's endorsed advisors." Uh, they're not just in the US like the guys here at New Harbor. We also have good presence in Canada through Jonathan's firm. Um, so if you, you know, want to talk to an adviser and walk through a lot of the issues that we've we've been talking about here, um, you know, work with a good professional financial adviser. time agnostic whom you work with, just as long as they take into account all the stuff that Danielle and John and Mike and I have been talking about and they're good. If you've got a good one who's doing that for you, great. Don't mess with success. But if you don't, or you'd like a second opinion from one who does meet that criteria, then consider scheduling a free consultation with one of the firms that Thoughtful Money endorses, maybe even John and Mike themselves and their team there at New Harbor. To schedule one of those consultations, just fill out the very short form at thoughtfulmoney.com. only takes you a couple seconds to fill out the form. As a reminder, these consultations are totally free. There's no commitments involved to work with these firms. It's just a free service they offer to be as helpful to as many people as possible. Lastly, don't forget that we've got the thoughtful money fall online conference coming up pretty quickly now. It's a little over a month away. It's going to be Saturday, October 18th. If you can't watch live, don't worry. Everybody who registers for the event will get a uh replay video of the entire event, all the presentations, all the Q&As's afterwards. Um, and if you um haven't bought your ticket yet, you're still in luck because the lowest early bird uh price discount is still in effect. I want to make sure as many people get that lowest price as possible. So, to lock it in, run to thoughtfulmoney.com/conference and buy that ticket. And as a reminder, if you are a premium subscriber to our Substack, look for the code I've emailed you. Uh that discount code will give you an additional $50 off of the ticket price beyond that lowest uh early bird price discount I mentioned. Um lastly, too, if you didn't hear the news, Lynn Alden just signed on for the uh faculty. So, the faculty of this event just keeps getting better and better and better. All right, John and Mike. Um can't thank you enough, buddies. Another great week. Very exciting to see what's happening here in the precious metals, especially after you guys have been predicting that for so long. Regardless of what happens over the next week, I look forward to having you guys back on in a few days to make sense of it for us. >> Thank you, Adam. Good to be here. See you next week. >> Thank you, Adam. We'll see you next week. >> All right. And everybody else, thanks so much for watching.