The sky is falling... NAH... its all good

Ok, we have been hearing for months now a Recession is immanent, so... where the hell is it? The Fed and BOC are doing their best to make it happen,

"Hey, lets raise interest rates by 800% and see what happens, ya that should be fun"

And nothing happened... yet. Yes stocks are limping along, oil isn't doing so well but chips are blasting, with NVIDIA making a big score... (flash in the pan optimism) jobs? lots of friggin jobs you kiddin me? Positions still unfilled in a lot of companies... but if you start to dig a little deeper, you start to see trouble.

Mr market is tired of waiting for this so called recession, that was baked into the Nasdaq, and partially into the Dow an S&P, so the traders are starting to jump back in, pickin up those deals to be had, and that is not a bad thing. Why? because they don't believe any kind of downturn is going to happen, and hey, they may be right. But headwinds are forming.

https://www.cbc.ca/news/business/economy-warnings-column-don-pittis-1.6852987

I am starting to see more and more stories like these... kinda sneakin in under the radar, while the banks are getting ready for default, which are already happening, they are also doing some cheezy stuff to pad the profits. Amortizations are going to back up to 35 years, at the same time, Royal Bank just raised their dividend.

https://www.cbc.ca/news/business/economy-warnings-column-don-pittis-1.6852987

and they are looking at more way to prevent all the variable rate mortgages to not default, as with the current drop in house values:

"The price of the average home in Vancouver has fallen by more than $100,000 over the last year, but thanks to soaring interest rates, the amount of money needed to afford such a home has risen, according to Ratehub.ca."

I've long said the BOC needs to stop aggressively raising rates and let it take effect. I takes 3 months for a rate hike to actually hit home, but they will not wait... what is happening now is a sign of the times, craziness in the interest rate market, and Banks wearing the brunt of it.

The biggest problem is, not only is he consumer getting hit with the interest rate hikes, so are the banks. as the rates heap on, the current holdings in bonds are worth less, and this is where Banks get their money. Also as new mortgages dry up, they banks are not cutting as many deals at the higher rates, and when they do, people are opting for a 2 year fixed... Why? Speculation rates will drop as everybody agrees, the BOC and FED are overdone. then it is essentially a variable Mortgage, as it will reset in the near future. Long and short, Banks are in trouble. More will fail in the US, this is being speculated in several articles I see, not so much in Canada, but profits will drop.

And what about the economy ? Well, we sit on the fence, not knowing if the other shoe will drop, or are we coming out of this with optimism and milk and honey for all? Only time will tell, so what to do financially?

As with any time in an investment cycle, stay balanced, stocks have dipped, housing is down, jobs are still up. My equity portfolio is not suffering, but may dip in the future, and I have an appropriate balance of bonds, T-Bills, and cash to fund projects. Long term investors, now is not a bad time to start a dollar cost averaging rebalance, if like me, you have cash and T-bills collecting interest, you might want to think about some small purchases of you favorite ETF, Dividend Stock, or Tech Giant, lots are down to bargain basement prices. Just not NVIDIA.

These companies are showing signs of stress, so I believe we have not seen the full downturn yet, so don't go overboard, you are investing for long term... 20-40 years. Meta, Tesla, Twitter Telus Corp, are all looking to downsize, by laying off workers, and offering buy out packages, so do you think this is a sign of a bull market ? No its not. Read between the lines... a storm is coming... it may be small, it may be a Hurricane, but its coming...