A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
There has been no shortage of "the end is nigh" calls on Toronto real estate, but the fact that land costs are so high that developers can't make a profit by buying it and building homes anyone can afford is a new wrinkle,
"Toronto-area land prices have gotten so high that developers are struggling to build new homes that people can afford. Buyers are no longer lining up, despite discounts and incentives. The cost of land has nearly tripled in some areas the past five years, according to Altus Group Ltd. It now accounts for roughly half the price of a new home. In 2011, it was a little more than a third."
"Even Real Estate Developers Can't Afford Toronto's Housing Market" – Bloomberg
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The outrageously expensive Tesla stock is really hard to discuss. A lot of people, including me, are rooting for the electric vehicle project, but there's an element of smoke and mirrors in the business model that's hard to ignore,
"Musk has described electric trucks as Tesla's next effort to move the economy away from fossil fuels through projects including electric cars, solar roofs and power storage… Some analysts fear the truck will be an expensive distraction for Tesla, which is burning cash, has never posted an annual profit, and is in self-described "manufacturing hell" starting up production of the $35,000 Model 3 sedan."
The official release of the company's all-electric semi-truck included the surprise display of a new Tesla supercar. The car won't be available until 2020, prospective buyers can reserve one with a $50,000 (U.S.) deposit now. Cynics are calling this deposit plan a 'stealth cash raise' to replace new debt or equity issuance.
"New $200,000 Tesla Roadster speeds in front of electric big-rig truck" – Reuters
"Tesla Unveils 'World's Fastest Production Car' and Electric Big Rig" – Bloomberg
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I've noted previously that video game stocks like Nintendo Co. Ltd. , Electronic Arts Inc., Take-Two Interactive Software, NVIDIA Corp., and Ubisoft Entertainment SA have formed one the best-performing investment themes in recent years. Bloomberg notes, however, that the popularity of new, free games threatens the trend,
"When Shigenori Suzuki played video games in high school, he spent a few hundred dollars a year on titles like Final Fantasy. Now the 42-year-old Tokyoite plays free games including Sony Corp.'s Fate/Grand Order -- but spends more overall: He forks over thousands of dollars a year for in-game extras like rare characters and special outfits. Players like Suzuki have transformed the video game industry in recent years. "
"Darth Vader Choke Hold Fuels Fear Over $370 Billion Rally" – Bloomberg
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Maclean's asks the important question: Can the Canadian economy ever be really prepared for the end of NAFTA?,
"After quarter of a century under NAFTA, our three economies are deeply intertwined, with spiderwebs of supply chains criss-crossing borders. In 2016, Canadian exports to the U.S. stood at $454 billion, according to Export Development Canada, about three-quarters of all outward trade from Canada. That's equal to roughly 20 per cent of this country's economy … ""To put it bluntly," says Ian Lee, an associate professor at Carleton University's Sprott School of Business, "all hell would break loose [if NAFTA ends]."
"If NAFTA dies 'all hell will break loose'" – Maclean's
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Tweet of the Day: "@jennablan U.S. junk bond funds post fourth-biggest week of outflows ever: Lipper via @trhunnicutt reuters.com/article/us-inv… " – Twitter
Diversion: "The 15 best tech gifts you can get at Best Buy this holiday season" – Business Insider
Scott Barlow