Today's Bank of Canada cut supports our view that Canada’s economic outlook is among the weakest within the G10.

We like long $AUDCAD to express this view.

1/ Canada’s credit stress remains clearly visible, with very high delinquencies among small business and mortgages in arrears trending higher.

2/

The VP TLDR Guide

We have written a series of whitepapers over the years covering our proprietary models and thematic research, which we frequently cite in our posts.

To better understand our approach, see the below summary of VP's 10 most important whitepapers + concepts🧵 1/ Capital Cycle 3.0

Capital cycles are powerful predictors of long-term equity returns: over-investment is a destroyer of capital and should be avoided, while capital-starved industries/regions consistently outperform.

Our capital cycle scores help quantify competition. Too much competition reduces future profits and vice versa. This helps us with idea generation for new investments.

We define capital scarcity by using three ratios: capex + R&D as % of assets, marginal operational return on invested capital (ROIC), and depreciation and amortization as % of assets.

The VP TLDR Guide

We have written a series of whitepapers over the years covering our proprietary models and thematic research, which we frequently site in our posts.

To better understand our approach, see the below summary of VP's 10 most important whitepapers + concepts. 🧵 1/ Capital Cycle 3.0

Capital cycles are powerful predictors of long-term equity returns: over-investment is a destroyer of capital and should be avoided, while capital-starved industries/regions consistently outperform

Our capital cycle scores help quantify competition. Too much competition reduces future profits and vice versa. This helps us with idea generation for new investments.

We define capital scarcity by using three ratios: capex + R&D as % of assets, marginal operational return on invested capital (ROIC), and depreciation and amortization as % of assets.

Real-time NFP data releases are noise.

Here's why 🧵 Data series, even from 20 years ago, are still being revised today as demographic factors are shifted.

These adjustments, while not malicious, can skew perceptions. NFP can be outright misleading at turning points.

What defines liquidity?

A question to ponder over, yet we rarely do.

Let's delve into an exploration that uncovers the layers of this often misinterpreted concept.

1/11 🧵 2/ In every big crisis, the Federal Reserve expands its mandate, interacting with various parts of the financial structure & altering the game along the way.

Sometimes prices drive narratives more than fundamentals.

Our latest thoughts on 'Godot's Recession' 👇

A unique, paradoxical blend of inflationary pressures, catalyzed by an excess of savings and fiscal stimulus.

A thread 🧵 In the aftermath of covid, a peculiar scenario unfolded.

The government, striving to sustain the economy, pumped stimulus checks.

As a result, people accrued savings like never before.

To mark our #twitterversary, here's 10 books that have influenced VP's framework. The Volatility Machine by @michaelxpettis

[blog] vrnt.co/3nbYQAR

Reflation narratives are becoming consensus. We are data-led, and nothing in our indicators contradicts the recovery view. Equity analysts are revising their forecasts upwards for cyclical companies. We still think there’s a lot more room until reflation trades become crowded. Money-market assets are very elevated and we see from 2009’s experience that it takes a while for money to be deployed into riskier assets.

[blog] vrnt.co/379Pm3z