March 28 Episode

Welcome to Money Talks. My name is Mike Campbell. Hey, if you're joining us for the first

time, please know how welcome you are. And if you're a regular listener, please know how

much I appreciate that support. But we have a great show plan for you. Make it worth your

while here. I've got Jeff Olin with me. Jeff is really one of the most thorough, sophisticated

and successful real estate investors, but he has a wrinkle. He only does it through the

stock market. So all those liquidity concerns you're hearing about, no, he doesn't have that

problem with vision capital. They have never lost money, never had a losing year and all

the years they've been in business. But he's going to talk to us about some of the opportunities.

The one that really caught my ear is he's talking about real estate investment trusts.

The ones that are existing, the ones that are successful can provide a terrific opportunity.

But there's others you want to say while well clear of. I also have Doug Bartoli with me

in play oil. Obviously, there's tons to talk about when it comes to the oil industry.

But is it straight forward to saying, hey, he's a Canadian producer? Is it all good news?

No, there's still some other challenges. And what about I want to get his take on the

federal government's promise that we're going to ship 23.6 million barrels for that international

energy agency sort of stockpiled to help the supply side. It's just talk about not so

straight forward. He will do that. Also got a great goofy award. I've got Victor with me.

I've got Ozzy with me and I've got Rob Levy locks to talk about in the gold front. But first,

I apologize for starting with some numbers. I mean, I understand. Come on, most Canadians

don't seem to like numbers. But it's unavoidable, though, when we're talking taxes, government

spending, deficits, actually, any financial issue. So I appreciate that no matter how

egregious the numbers are related by the way to government and government spending, I

know that a million or millions of Canadians don't care. So I apologize if you're one of

those people for starting with Auditor General Karen Horgan's numbers regarding the international

student visa program. But it's part of a much bigger issue. The Auditor General, for

example, identified 153,000 or 324 over the two year period of students violating the

conditions of their study permit. And here's a key part. They don't have adequate funding

to actually investigate further. Auditor General's office only did about 4,000 investigations.

Again, not enough funding. And of the 4,600 were left unresolved because they simply didn't

reply to letters sent by the government. So nothing happened. No follow-up. And by the

way, I don't feel like I'm expressing this by the way, particularly well here. This is

a system where the government allowed excessive abuse with no follow-up enforcement and no

interest in following up according to the Auditor General. Consider this, for example,

of the 232,764 applications approved in 2023. Got that? 223,000 plus approved in 2023.

96% were from Indian nationals approved under the student direct stream. You think that

would have begged a few questions, but it didn't. You know, one of the reasons that contributed

to the Auditor General's conclusion that the program was characterized by, in quotes,

a critical weakness in integrity controls. I mean, that's not close to the whole story,

by the way, as Stephen Staley writes in the hub, in just three focused sample investigations

by the AG, they uncovered 800 study permits issued to people who would use fraudulent documentation

or misrepresented information on their application. Here's the thing of those 800 rather, a staggering

92% subsequently than just applied for another immigration permit once inside Canada. Study permit

extensions or work permits, permanent residents, etc. They were behaving exactly as you would

expect immigration fraudsters to behave and, quote, mean, it's just one program. And the government,

and this is the bigger point, the government has shown no interest in cleaning it up. But no one

should be surprised. The Auditor General's reports have a consistent theme on the road to wasting

billions of our tax dollars. The reports consistently repeatedly find poor documentation,

week oversight, rules not followed, conflicts of interest, cost overruns, project management,

or really poor project management, failure to verify eligibility, failure to measure results,

no proof of value for money. I mean, it goes on and on. It's not just a theme, it's the theme

and how governments spend our money. That's my key point. It's our money, and they're regularly

mishandling it in a grigious fashion. So I'm going to give you a few direct quotes from the Auditor General,

because this is what we've been ignoring. On a rive can, in quotes, we found a glaring disregard

for basic, managed, and contracting practices. In quotes, the documentation was so poor we couldn't

determine the total costs of the rive can application. In quotes, public servants did not follow

proper contracting practices. In quotes, and this is a killer, there was little evidence of value

for money. How about on sustainable development technology Canada? Public funds were not all

these managed with due regard for value for money. In quotes, we found significant lapses in

governance and stewardship of public funds. Quotes, directors participated in decisions where they

were in conflict of interest. And there were some 90 cases of conflict of interest, by the way,

of insiders lining their own pockets. On, well, this is just for all the government IT projects,

you keep finding the same themes. In quotes, large IT projects are consistently poorly managed.

In quotes, departments did not follow basic project management practices. In quotes, oversight

and government governance were inadequate. You know, the tragedy is I can find dozens of other

examples wasting tens of billions of our tax dollars. Come on, just last week we learned the

Federal Clean Energy Innovation Research Center spent $38 million last year to lower greenhouse

gas emissions, but did not keep track of whether it kind of missions or not. In other words,

money for nothing. If this feels non-stop to you, it's because it is. It's absolutely hopeless.

As successives, auditor generals found the goal seems to be avoiding accountability in the public

sector. Meanwhile, federal taxation that's funding these programs and being wasted is the biggest

cost of living for millions of Canadians. But waste, grossment management, doesn't seem to be on

the mind of any politicians or any members of the mainstream media for that matter. Which,

along with the general public's complacency, it guarantees we're going to get a lot more of this

to come. Despite so many outrageous examples, it wasn't an election issue. Didn't even rate a

question in the leaders debate. As I say, that guarantees more of our tax dollars will be wasted

and mismanaged. This is wholly unacceptable to me, as you can tell. I've worked too hard for my

money to see it not just wasted, but guaranteed to be wasted. But sadly, I'm clearly in the minority

in Canada. But you personally have to decide where you stand on the issue. Hey, looking forward to

this. Martin Armstrong will be with us Tuesday, March 31st. It's in person. It's an intimate

evening with him. But obviously it's sold out, but that's a mean you can't see it. So you can

get a hold of the video by just going to Mike's Money Talks.ca and you could get a subscription there

for that. We'll put the details. Mike's Money Talks.ca. So be sure to take advantage of it. I'm

really looking forward to it. Stay with us. I got Jeff Olin on deck. Plus I've got Doug Bartoli

talking about the energy situation much more coming your way on Money Talks.

It's always a pleasure to welcome back to the show Jeff Olin. He's the founder. He's

portfolio manager, vision, opportunity funds. Jeff, first of all, appreciate you finding time.

What a great time to get a chance to chat with you. Nice to see you. You're looking well.

Well, okay. So your clamor needs a little cleaning up, but that's the case. Hey, let me just

in case people aren't familiar. I want to come back to something you guys do at Vision.

And that is you go into the stock market. You buy and sell and you can play short, which I love

that part of your fund. And you've done very well for Money Talks listeners for Vision Opportunity

funds, you know, investors, because you can plan to go up and down. But the really that the issue

is one liquidity. Thank goodness in this environment, by the way. And the other is that you can get some

real value situations where you can say, well, this is what the stock is. And it's dramatically

undervalued or in your view, dramatically overvalued. That creates opportunity. So maybe elaborate a

little bit on that for people to know the context we're talking. Sure. As you correctly described,

we're focused on real estate, but unlike pension funds or reads or entrepreneurs that focus on

direct property investments, we focus on buying real estate in the stock market. And our mantra is

we seek to buy real estate cheaper in the stock market than one can in the property market by looking

at the underlying net asset value of the real estate. What is that real estate worth?

On a forward looking basis using sublime demand is our, we call it our blood. What is it worth

in the property market and then compare it to what is trading on an applied basis in the stock market?

And as you touched on, if the fundamentals are negative,

our valuations are too high. Well, you can't do anything about that in the property market. We can,

we can go short and that was really relevant in the last four months because two of our longest

high conviction, sharp positions coincidentally, we're validated at the same time in the fourth

quarter in year to date. One was in U.S. Life Science office and the other was in Canadian office.

Let me come also, you know, you mentioned it just very briefly. The thing also that's becoming so

much more pertinent right now is the issue of liquidity. And that is if I'm, and again, I want to

be careful. I'm not casting aspersions on anything, but I'm just saying it's tough to get out in the

private equity market sometimes. We've had those periods. I think we're in a period right now where

you have to check what the level of redemptions are, et cetera, et cetera. Not so in the stock market.

I mean, there's a price every day. You could go in right now with every one of your holdings and

say, let's see what the price is and decide whether to buy or sell or hold. That's, I think, a very

important advantage for people looking at various aspects of the real estate market in this environment.

It's really a really critical factor and it's relevant pretty much to any asset class that

has to be opposed to child and real estate today. But any time you have a mismatch between the

underlying liquidity of what you're investing in and the liquidity, you promise your investors,

those are accents waiting to happen. And we got a lot of accents happening globally and it's not new.

March 2020, Brexit, Brexit, it was standard life assurance, a Viva assurance, and they promised

their investors liquidity monthly. Brexit came along and they put up gates and they basically

wouldn't mean gates. I just read the offering brand and it said right there, I could redeem

my 30 days notice. And they said, don't you know, we own office buildings and shopping malls in

London, England. So it's prevalent. You know, it's not, you read it in the Wall Street Journal

last year about the Oxtones B Re, Starwood Re, KKR, Schroeder's in Canada. It's a long list. I

don't need to pick on anybody. It's really, it's just, you know, it's Nicola Welfth, it's Ross

Benes-Terez, it's Centurion, it's Avenue Living, it's Kinks, it's a long list where you have this

mismatch between the liquidity they have in what they're investing in and the liquidity that they

avail to investors. Some cases, it's a function of quality, some cases of not, some cases of timing,

but that's certainly an advantage that we have having liquidity in what we do.

Does it also offer opportunity? I mean, I'm thinking that, you know, if you get some private equity

that's being forced to sell, you know, that they need, they have to find some liquidity. So they have

to discount maybe to major buyers. And again, I guess that's not quite what you guys do in terms

of because they're not listed on the stock exchange. So I appreciate that. I'm just taking some good

buys might come up. I did a shocking stat last week, Jeff, on the office, office commercial

office market in Denver. And I only did it because it was shocking what some of the valuations

is sort of like, if it could have got three friends together, we could have bought a couple of

buildings. You know, so I really brought up and actually, because another key difference,

and this is, you know, recently and now is, you know, we have seen, we see, in our view,

we will continue to see distress in certain pockets of commercial listed. I'm not going to name

them, but a major global asset manager. There was two articles last summer. My colleague Andy

Roth sent around the morning, he sent around an article about this institution raising their

biggest fund ever for distress, property investments. And the afternoon, he sent around an article

talking about them handing back the keys to lenders on a four-tower office complex in Houston.

We're going, what? It was too distressed or not distressed enough to go in the biggest fund

you ever created. There will be no distress in REITs because of balance sheets. If you're a family

office or private equity fund, you're typically using 60 to 70 percent leveraged. The average

according to cost are 66 percent. US REIT sector today is 33.5 percent loan to value, 90 percent

fixed rate debt, 4.3 times interest coverage ratios, and over six year yield to maturity

REIT balances of the best they've ever been. These management teams remember the global financial

crisis. The point is, and they, by the way, unlike any other own a real estate pension fund family

office, you want to put debt in your real estate, you're getting a mortgage. Well, 85 percent of

the US REIT sector is investment-grade rated. They use unsecured bonds and the cost of unsecured

bonds has recently been 160 base points cheaper. Today about 100 base points cheaper than secured

market debt. So REITs have the quality balance sheet, the strength of balance sheet, and access

to cost-effective capital to allow them to play offense in the matter in which you've outlined

doing a creative acquisitions and buying back a lot of stock. I'm wondering now it has the market

a fully appreciated what you've said. I've actually said it, obviously you do this for a living 24-7,

but I have been reading about exactly what you said. The soundness of the balance sheets

many, many, many the mass majority of REITs, the collective is in very, very good shape,

but as the market fully appreciated that, or sometimes it takes a while, and the baby gets thrown

out with a bath water at least to some degree. Well, it's a really, it's the billion dollar question

because if you believe in reversion to the main, I believe it's a blind amount, but most investors

believe to some degree in reversion to the main, and the REIT sector has just gone through the

worst five-year period in history, and today it is trading at the cheapest one percent, like

10, one tenth of one percent, in history, relative to the S&P 500. The only time REITs were as

cheap, relative to the S&P 500, was in the .com boom, and then in the .com bust, the REIT

index outperformed the S&P 500 every year for seven years. That's not a forecast, but it sure

is interesting data. Yeah, very much so. I mean, that must have you and your team at vision,

you know, sort of rubbing your hands when you're searching around the marketplace, and of course,

I'll remind people, you'll do it geographically, and as you say, supply demand, it's not a blanket

statement. You are very choosy about which areas which type, all that kind of stuff, but it must be

at least a lot easier than when things are not, you know, that are overvalued, if you know what I

mean, and you're looking for buys. This must be a much easier environment, at least to get excited

about. Yeah, I mean, to your opening comment, we're not here to be bulls for real estate, right?

We have a lot of art strategy, I'm as an individual, I'm the largest single investor in a fund,

our fund, the returns have been amazing, but we don't seek to be the best performing fund,

we do seek to be the best risk adjust for me fund. But yeah, we see some interesting opportunities

because, as I said, we believe in supply and demand, and supply, new supply has fallen off a cliff.

You can't make new development yield returns work economically in any asset class in North America,

except for data centers. And the combination of inflation over the prior three years,

pushing up construction and replacement cost values exacerbated by tariffs,

exacerbated by the crack gun and immigration in the United States, it's making labor more

scarce and more expensive. The numbers just don't work. So that points pretty well for the property

sector generally over the next two, three years, maybe longer if you don't see new supply picking up.

So those sectors where demand is resilient and supply is diminished, look pretty interesting

to us today. And I know it's not such an apples apples comparison, but I do look at housing

starts, for example, and more taking to your point that it's just not making sense economically,

despite what the government says we're going to build record amounts. Sorry, I had to say that

because I love a good joke at any time. But you know, but those are the factors that are coming in,

it just financially doesn't make work. But as you say, that means existing successful supply and

for the, you know, in the reate market, for example, becomes even more attractive because there's

not going to be competition jumping up, you know, over the next couple, three years.

Yeah, I mean, you know, the sectors that we're focused on, they reflect those characteristics are

grocery anchor shopping centers. We like in a bolt size of the border, new supply diminished,

no fashion, you know, the anchor is the law, laws of public's a safe way. And the,

and still a return is a necessity based, right? You may recall, I mean, saying you can't get

your haircut online. Yeah, you get your nails done online. We're seeing 15 to 25% increases

or ransom renewal. So that very defensive yet growth, not you still got to eat if even if

they're tariffs. We like seniors housing, obvious demographic factors there. We like it in

Canada and the United States, the valuations, the US are kind of stupid. You got well tower, mega

captivating 100% premium to net asset value. That's against the religion. You can still buy quality

seniors housing in Canada, um, in names like Chartwell, CNN, Extended Care at discounts in

that asset value. Thirdly, data centers, um, this has been a uniquely interesting sector. There's

so much hype and froth about AI. Um, you can have zero AI. We believe in AI. We use it. But you're

going to see 50% growth in demand for data centers just from the cloud and collation,

and a collocation activity. And you can buy large cap names and we have a, a cool investment,

something called digital court, which is listed on the Singapore stock exchange. Yes.

It's got a 7% dividend yield. No withholding tax coming into Canada or United States.

Uh, because they're not the US, they have similar to Canada IFRS counting, which means they

report the market value. And the IFRS value is 78 cents. And this stock is 48 cents with 7.5

percent dividend data centers at a 40% discount traded on the Singapore stock exchange. And their

assets are in Osaka, Japan, Toronto, all the way to an LA, California, Frankfurt, and Northern Virginia.

Let's, um, let's repeat the name again, because I'll tell you, I had never heard of it till you

told us through vision capital about that company. Singapore listed. But as you just described,

their properties aren't in Singapore, you know, their properties are in North America, for example.

And so I had never heard of it before, you know, guess the last year when through vision.

And that's the point. That's the opportunity. Um, the hottest asset has globally. You know,

why Singapore? Because there's no tax on dividends at Singapore. Why is it trading at 48 cents

when the net asset by 78? Because last June, they lost a tenant representing 22% of revenue

with Microsoft. Um, Microsoft wanted to expand and they couldn't accommodate them. But you're

in the biggest, most important data center market in the world, where the vacancy rate is 0.5 percent.

You get a vacancy. That's a good thing. Not a bad thing. Uh, we profiled this at a major investment

conference in October. And we said, we think they'll have this released by the end of June this year

at a 25% premium to what Microsoft was paying. They announced early in January,

a hundred percent lease for this space. I won't name the tenant, but it's a top five tech tenant

at a 35% premium to what Microsoft was paying. So the Singapore investors were so focused on the

dividend. They couldn't see the forest through the trees. And we think that trends that least

coming online, the cash flow go up and or we're hopeful, though, considered pursuing a listing

in New York, because I can tell you about digital core and then you go, wait a minute, I got to be up

at two in the morning to buy it. And then my broker tells me, I'm sorry, I can't buy stocks on

the Singapore stock exchange. So we're hoping they're going to pursue a listing in North America.

Well, it's the other reason, by the way, you just did a nice presentation for why you need professional

managers. There's a lot of reasons about we hope the professional managers, as you've proven,

you've never had a down year with vision, you know, despite, you know, ups, downs, all the recessions

and that kind of stuff. But beyond that, it's because you find opportunity that you're searching the

market, you're evaluating, you have a list of criteria. And I'm just saying, that's a great example

because I'd never heard about that from anyone else other than you at vision. And as you say,

the story is a great story. It's interesting. Yeah, let's talk about let's let's break down about

stuff that right now, if you looked at the funds or look at the opportunity, can you give a sort of

general percentages on how much you've got sort of in data center or grocery related malls,

as you've said, you know, or properties that have a grocery as an anchor tenant, you know,

that kind of stuff, maybe break down a little bit. Sure, our net exposure. So this for your audience,

we're a long short fund, and we don't use leverage on the long side. So two definitions,

gross exposure, net exposure, gross exposure is some of our long positions and our short

positions. So we got a hundred bucks to invest, invest 90 long, 50 short, our gross exposure is 90

plus 50, 140. Our net exposure is our long's minus our short. Same example, 90 minus 50

before 40. So if you're looking at our net exposure, about equally balanced between gross

re-anchored shopping centers, seniors housing, data centers, and the fourth one we haven't mentioned,

which we've talked about in the past is manufactured housing communities, which is maybe the best

property class for the last 50 years. BC pension fund actually owns a major Canadian

player that was our biggest holding of vision for the first three years, called Parkbridge.

But in the United States, and it's an amazing business, this never had 12 months of declining NOI,

investors don't understand it, simply put, you know, you go and you spend 200 grand to buy

a prefabricated manufactured home, you put it on their land, they charge you land rent,

200 to 400 dollars a month, but you pay the property taxes, you pay the operating expenses. So

it's all this pure form of cash from the real estate space, we own a name today called

Sun Communities in between 2011 and 2021, a decade, it traded in the average 24% premium to

net asset value. We've been accumulating that over the last year to 10 to 50% discount to net asset

value. There was activism on the name, the CEO of 30 years announced his retirement earlier last

year in April, they sold the six billion dollar portfolio of marinas to Blackstone,

at a premium to book value, allowing them to revert to pure play manufactured housing and RV

community reach. This sector's never had 12 months declining in operating, ever,

including the Great Recession, it's affordable housing. There's no credit, who's not going to pay

default, who's not going to pay their 200 dollars a month land rent at risk of losing their

biggest single asset their home. So we sleep well at night on behalf of our investors with exposure

to this sector at a discount to net asset value. So none of the four core pillars, we like

industrial, but we're a little bit more balanced on that today. Maybe give us a couple of names,

you've given us some, you know, and maybe re reiterate, you know, just to give people something

to look out, put on their radar, and sorry, I'm backtracking for a sec, what kind of return would

you expect on a sort of a yield basis? What I'm just saying, people sometimes get unrealistic

about what's out there. So what is out there, at least the quality stuff that you look at?

Well, the yields can range in what we do for our investors to give you some context,

is we pay a distribution four to four and a half percent of the nav at the beginning of the year,

it gets reset, and what's critical to understand if you're a taxable investor, which I suspect 95

percent of your audience is 70 percent of returns on average over the last 17 years in

the capital gains. So if you get a four and a half percent distribution from a fund that's a flow

through that has its return 70 percent capital gains, that's like getting six and a quarter percent

interest income on a pre tax interest income equivalent to some of you in a 50 percent tax bracket

and you live in this country or in the United States where even in the United States where capital gains

are taxed more cost effectively, the interest or employment income. So what we offer the yields,

I mean some of the names we have don't have any yield, we generally prefer those.

Some have as high as a digital core today, seven and a half percent dividend yield.

Know with all the tax, come eat the counter. Yeah, wow. And I don't want to let you go without

making sure that people understand how they can invest to envision capital vision capital,

you've got two major funds, but maybe just sorry to throw that at you, but give me a couple

of the quick outline on the two, because you know going back a few years now, all of a sudden it

became eligible, one of your funds became eligible for RSP, so that's something that people could

look at if they want the diversification, especially in this broad sector here. This is a great

way of doing it. So maybe just outline the two broad funds that you look at. Sure. I mean,

briefly we have one strategy and we do it in different classes of units and the major difference

between them is we believe selectively in concentrated positions and our best ideas.

And so the major difference is we have funds that are redeemable on 30 days noticed,

and the top five weights will be 25, 27 percent in total. We have funds that have initially

figure committed capital and we are one in between. The top five weights will be 45, 50 percent.

It still has the ability to get redemption through transferability on a best effort basis,

but that's the difference is we're longer term investors, the core themes we focus on are we hold

our feet years, you'll remember dream office read. We talked about it many times. We were short for

four years and we were just short Alexander Reed life science office in the US for over three years.

We were short at 15 billion dollar market gap, 125 bucks a share. Today it's 40 bucks.

These things are secular or supply and demand they take time to work out. So we believe a

longer term approach is appropriate even though we can offer short term liquidity.

Yeah. Well, and people can find out more of with vision capitol.ca, visioncapitol.ca.

Jeff, you know, it's always absolutely fascinating. I don't know anyone who knows this market better

than you do. And of course, you've been added for, you know, I'm not going to tell you how long

by the way you've been added. That'll depress you. But, you know, and you look all over North

America, all different categories there. You've been on top of that. And the other one, I'm just

going to throw very quickly the 30 seconder at you. You've had 22 of your properties bought out

like companies that you own and then they got taken over, which to me was a pretty nice,

you know, that validation of the approach you were taking. Yeah, the difference between real estate

in any other asset class is the size of the private property market is much bigger than the two

trillion dollar rate universe. Yet there is an arbitrage between not two. We say we'd rather not

compete with Blackstone. We've sold the Blackstone, which we've done, frankly, and I think about

four occasions last six years. I mean, Blackstones figured it out. They bought 55 reeds since they

launched the real estate group. I mean, you listened to the year in conference call a year ago,

the incoming CEO John Gray cited, and I quote, all of our time is being spent at public markets.

I quote, quote, that is where the value is. You know, last few months, they bought a few more.

One of our advisors is at a major U.S. wealth management firm called up our head of sales last

quarter. He said, you guys are kind of like the farm team for Blackstone. I think it's a compliment.

I'm not quite sure. Yeah, that's great stuff. Great stuff as usual. Jeff, thank you so much for

finding time. And again, go to visioncap.ca vision cap.ca lots of other information there.

Always illuminating to find out really what's going on. Jeff, thanks very much for finding time for

us. Thanks for having me. I enjoyed the discussion. Time now for the quote of the week. Melanie

Phillips is a commentator, call in this for a wide variety of publications. She's written for the

Guardian, the Times, the Jerusalem Post. She's the winner of the Orwell Prize for literature when

she was writing for the observer. While recently in an interview, she talked about the moment,

the West decided evidence no longer matters, something that I have noted on this show several times.

But especially when it gets in the way of utopia, in quotes, objective evidence was cast aside

because it was too inconvenient. The very idea of reason and rationality was dismissed.

All these ideologies, multiculturalism, lifestyle choice, deep green environmentalism,

moral relativism, were utopia. They promised perfection. Anyone who brought facts against them

wasn't just wrong, they were evil. Result, evidence became right wing. The centers were bullied,

ostracized, fired, threatened. End quote. While it continues to be the driving force, by the way,

for increased censorship demands as official narratives, whether we're talking back at COVID or

climate change, are considered beyond reproach and oppositions labeled misinformation or worse.

And the cost, though, of ignoring facts keeps mounting. I think most obviously, when we look at

the energy issue right now, and the energy squeeze, you got the European Union forced to import

94.9% of the oil it consumes, and 90% of the natural gas, which has pushed the cost of energy

to individuals and businesses absolutely through the roof. But I love her comment, because that's

something we have certainly alluded to here on Money Talks. When facts not only don't matter,

it doesn't seem to matter that facts don't matter. Of course, on this show, we've been talking

an awful lot about oil, as everybody else has, but I really like to get to the people who are

producing it. I mean, there's the broad scope, of course, that we've talked the geopolitical

pressure, the straightforward moves, etc. But what about if you're actually operating an oil

company and one successful oil company in this country is in play oil? Please to welcome the

President, CEO, Doug Bartoli. Doug, I appreciate you taking the time. This must be an incredibly

busy time in terms of... I check the oil price 27 times a day, it seems like these days.

Well, yeah, it is a busy time. Maybe we just get your end out in early March and

started some marketing after, and then, of course, at the same time, yeah, the start of the

era of the war, which is phenomenal and like the oil, the oil price changes significantly on

tweets, right? Yes, right, yeah. Well, I'll tell you this. I'm always thrilled to talk about

in play because it was one of our recommendations going back about... I don't even got the top

of my head three, four years, and it's performed beautifully, but let's talk about this experiment for

you. You know, there's sort of the simplistic analysis is you're still producing oil is now at a

higher price. It's 100% good news for you, but I know it's not that straightforward.

Yeah, I mean, it is good news for us, you know, in the short term, I mean, it's... Well,

or for whatever length mistakes, but that length mistakes is going to have quite a long

lasting effect after something gets settled, which, you know, everyone's guess will not be.

But, yeah, I mean, it just, you know, significantly adds to our revenue and our cash flow

in their term, you know, paying down debt quickly, significantly, is the key from it all.

You know, we've budgeted, we put our budget over at 63 WTI, which was basically the

price for the year in February, right? So, you know, we're sitting there. What is that?

$30, $35 lower than it is today in the U.S. So, yeah, it's, you know, it just did some rough

math, and there's probably another, which is revenue, 12, 13 million of revenue in March with the

change in price. So, that's just one month. So, yeah, it's quite, well, interesting, it's very

dynamic, right? Well, I think that's a key back in stuff. Yeah, I mean, it's fluid. And so, you

know, you can't make your decisions for the entire year when you see this kind of disruption.

And of course, the big question is, how long does it last? Everybody's, you know, guessing at it,

and everybody appreciates, I think, that we don't know how long it lasts. But that's interesting, too,

because it's kind of this extra cash that shows up for an oil company. Then you have to decide what

to do with it. And if I read you correctly, you thought, okay, at the very least, it's an opportunity

to retire debt. You can get a stronger balance sheet, which you've been doing. But I mean, it's sort

of supercharges that. Yeah, correct. And, you know, again, it's put it in perspective. Today's

spot price is $98. I think the April price right now was $98. It's flat. But like next year,

calendar 27 is like $74. So it's, there's a lot in the front end of the curve with a lot

of backwardation in the strip, in the forward strip, right? In the futures curve. So, you know,

you got to manage that, right? Like, you know, you can't, you can't run your, you can't run your

business going forward on today's pricing. You have to, you know, use the forward futures curve.

You have to understand it. And, you know, it's a little bit of what you believe it's going to do

going forward. So, but, you know, there are things you can do, like, you can start, you know,

again, hedging, right? I mean, we started the year at $59 with $57.50 was sort of the

strip in early January. You know, we put our budget out, it was more like $63. But, you know,

and the fundamentals were going in the right direction, prior to the, to the war, or to the start

of the war in Iran. But, yeah, that's, that's the big thing is, is, is just managing it. I mean,

you know, fundamentally, like, in Canada too, like, you know, we had our pretty active Q1,

Q2 generally slows down quite a bit, just due to spring break up. And we, we had a warm,

but actually a lot of snow, you know, so if it doesn't stay, you don't get a warm spring,

and it's a wet and cool spring, like, it's going to extend break. I was like, I could just go

and throw equipment to work and drill a whole bunch more wells in Q2 right away anyway, like,

so it's been lots of these little pieces that are just sitting there. And it, across the board,

like, I mean, the Dallas Fed survey just came out with, they're, I think there's some, like,

40 companies they checked on. And in the US, so most of these guys are show plays, and they ask

for break evens and stuff like that. And if they're going to change their program, and the discipline

is amazing. And they're all, they're all saying, like, well, no, and they're, you know, that number,

like, they're basically their number, the break even, or, or a cost to make in the different plays,

that it's all set up in that federal board, which I'm pretty sure I don't Joseph likes to use.

But their break evens are between $68, $74. Break evens with a return that they could live with,

$68, $74 in most of those plays. So, you know, it's sure it's great in the front end of the curve,

but it drops off pretty hard. But I think that's the, that's one of the more fascinating parts for

individuals saying, okay, so what is the oil market saying about the longevity of this and the

disruption? And as you're saying, the oil market saying, hey, things are going to get at least

closer to norm, you know, as we go through the longer you go out, the less pricing they're doing

for the price of barrel of oil. And I'm just saying that sort of message on that side of the things

is fascinating. And I don't want to ask you to sort of wait into the politics of it too much.

But when you heard that, you know, Canada was going to contribute 23.6 million barrels to the

strategic, you know, IEA, the International Energy Association, sort of pool of available oil.

And you heard then that that was going, we don't have a strategic petroleum reserve because,

of course, we are oil producers. But when you heard that, that's because oil companies were

going to all of a sudden ramp up production. And then we heard it was a request for, you know,

companies to stop that turnaround from summer to winter and all of this kind of stuff.

Well, yeah, I didn't hear anybody saying yes to that, you know, I didn't see any of the big

place saying we'll do it. So the follow up on that, first of all, is like we don't have a lot of

storage, right? And then even worse than that is how much, how much oil can we get to tight water?

So we, what we do using Canada, now it goes to TMX, right? And it'll probably 750,000 barrels,

they're going to increase that to 900 with certain things. Like, you know, sooner they do that,

the better. But bottom line is that's the, everything else we don't use goes to the US. So how

is our oil going to help the world? Like it makes no sense, right? Like again, policies behind us,

putting pipe to tight water is significantly hampered work. So what we're able to do, what we can

help, yeah. And as far as like I get it, the oil, so what they're asking is because a lot,

typically the oil sounds guys and they're big fat, big refineries and plants, they require a yearly

turnaround. Sometimes they're major, sometimes they're not as major. But again, I think, and when that

happens, of course, you get a reduction in price, which usually helps the WCS differential when they

turn around for a fairly long period of time. So what they're asking them to do is to not do

turn around this year, or currently and push it out or whatever they're going to do. I mean,

the problem with that, sometimes there's stuff that needs to be done. And you're right, I haven't

heard any of the oil sounds companies jump out and say, we're going to stop turn around this spring.

Because usually the turnarons are in early spring and late fall. So that, you know, you're producing

enough gasoline and diesel through the summer months and get through that before you do another

turn around. But I think they'd also sort of pretended there was no cost to this in terms of,

I mean, as you said, these are planned ages in advance. Sometimes years in advance, you get the

people, the equipment, you want to change stuff, you want to maintenance or whatever it is. You

know, and just to say you're not going to do it and pretend that doesn't have any repercussions,

I think, was more than politically naive. And that's why I think you've got people not jumping

at the opportunity there. Well, yeah, I mean, it isn't a typical virtue signaling from our

yeah, federal government, right? Like, no, fair enough. Well, yeah, it sounded good. But as I say,

it didn't take much scratching below the surface to see that this, you know, we really can't. And

that comes back though. And you're, I think, very important point is that, you know, let's say we

had storage, we don't, let's say we had, you know, whatever, you know, 500,000 barrels a day, we

could, we don't, but we don't have the infrastructure to get it out to anybody anyways. You know, and I

think I really do think they're skating hard to pretend there wasn't implications to the obstruction

to industry infrastructure. I mean, I'm always on about, you know, parts of eastern Canada are 100

percent dependent on imported oil. So they're playing that world price with no benefit whatsoever.

You know, at least in the rest, we've got at least oil producers benefiting tax revenue, jobs

probably, you know, that kind of stuff. But parts of eastern Canada for their refineries, you know,

part of Quebec, all of Ontario, sorry, all of New Brunswick, you know, PEI, no, we're totally

dependent. And we pretend that's no implications to canceling or not having energies by play.

Well, and even even then they're, they're actually paying closer to what a world price culture

brand. So brands, all right, 12, 12, 14 dollars higher than WTI today. So they're really paying for

if I asked you to put your sort of your crystal ball and shine it up for a second. And let's say,

let me just say that let's say this goes three more months. And again, nobody knows I'm not

pretending to know we get so many different announcements. You know, we got a peace plan. We don't,

we don't agree with it. Rainians come out and say and might be for a lot of reasons like they don't

want to be seen to be saying we're going to cooperate with the US in their own internal supporters.

That kind of stuff. I appreciate that. But if we went about another three months, the other thing

that I think needs to be cleared up is you get this disruption. You can't just turn the switch on

and presto you're up producing again. I'm talking about mid east oil, you know, and mid east refinery,

etc. It's just or it could be even refineries in Asia that don't have the feedstock. But it

doesn't just change and come back to sort of, in quote, normal overnight. Yeah. I mean,

Kuwait and Iraq who basically came out and said it's going to take them four or five months

today to get back to full production. So again, your tanks are over full, right? Your

production shut in. There's ships that are full of oil. There's ships on one one side that

are full of oil can't get out. There's ships on the other side that out in the oil that can't get

in. And like before you can even start bringing some production on you need to have a bunch of

the ships to get in and get out and start removing the storage tanks before you can actually add

to these tanks. So it's it's going to take months like we're at 11 million barrels a day right

now. There's 330 million barrels of depletion every month, right? Yeah. So I mean that the the

you know what you've done like there was this plot. There was this oil and water. I mean that's

disappearing massively the oil and water. And then the storage not as much in North America yet,

but in most of the world is dropping significantly and very quickly. Like it's it's the biggest

drop in production in a month or a storage inventory is in a month that we've ever seen. And it's

just started, right? Like they say it could work. Work its way to we're like 50 million barrels of

shut it. This keeps lasting. Yeah. And let me just finish with this. I want you to know I don't

want to throw the curveball at you, but it's not all roses in terms of you know, gee that price is

higher. Ergo we get a higher price because of what are called differential. So I'll put the test to

you see if you can explain what that is, but it has changed. Yeah. I mean, so especially for

we call them into the light. It's it's the sweeter product. It's closer to WTI. Everybody knows

WCS because there's more heavies leaving even Alberta than anything. It's predominantly the main

product that goes to the U.S. the Midwest, Chicago area to the Gulf Coast. You know and Leo

really hasn't grown much in Canada. So we're closer to WTI, but we normally pay a differential,

a transport differential. And you know, it's been two to minus two to four dollars off of the WTI

price, you know, the last four years. We budgeted I think three 30 or something like that this year.

Spot today is then that's minus 330. So I put it in perspective if if oils 83 30 we would get

80 U.S. Plus than our bump from the FX. Now spot the price to March is minus one. So that's after

it's settled. Anything extra gets sold for minus one. Right now the differential for

May is plus one dollar. So that's that's four dollars U.S. higher than what we budgeted on top of

right. Yeah. 63 dollars when we put it out which was close to strip in February and we're 98

today 20 so 25 higher. You know you look at another four dollars again 30 dollars U.S. higher

than what I want to make sure as you look you know the next few months. So then you put on our

and our dollars weaken which is something as well. So you're back down the 70 to cents gives us

next to 38% bump Canadian on that. So like we're up on the 125 130 Canadian sales price right now.

Right. Sure. Well as I say it's not here. There's so many moving parts. This is like the education for

people about energy. I would have thought we would have learned a little bit more in 2022.

You know I'm talking about our own policies. Maybe this is going to be the final push

to take full of what we do have in terms of resources. We'll see. I keep saying on this show I'm from

Missouri. I'm not buying into the announcements etc. Just show me. Just show me something. But Doug

you have an in-play oil. You guys have shown incredible progress. Obviously more to come and we

appreciate you finding time to chat with us about it. Yeah. It's always a pleasure talking to you.

Anytime great stuff. Of course the story is beyond just what's happening with oil with

fertilizer products like urea and ammonia beyond what's just been going on in natural gas. I mean

that's a huge story. Of course these stories energy. But I've been fascinated by what's going on

in the gold market also. And I think back on many times in the past when you say a shouldn't

gold go up. It's geopolitical tensions or shouldn't gold go up because of the economic distress

that's being experienced domestically and globally. And then it doesn't. That's why I want to

bring on Rob Levy. He's looking at this momentarily on a daily basis with bordergold.com.

Rob as I say the traditional sort of theory would be gold would go up these times of obvious both

financial and geopolitical stress. Exactly right, Mike. But the issue is where the buyers and it's not

happening in this scenario. In fact it's even people selling for that source of liquidity in these

type of markets. So what's being quite vicious selling in the precious metal markets with some

pretty significant and severe corrections. But many watching sort of thinking how can this play out

to your initial point is gold not the de facto safe haven shouldn't it be rallying when you have

this sort of geopolitical turmoil as we see it. Well and again I'm going back this little date

me I mean I was still with gray hair by 2008 and looking at the financial crisis remember and by

the way I will recommend the movie the big short again I rewatched it recently my goodness that

was a good movie. But at any rate here you have the financial crisis of 2008 and again same thing.

We have Lehman brothers going down but the real installed was what else is going down what systems

are coming to an end. Presto gold went down instead of up and I remember it was something like

30% decline and very similar to the rationale that you're giving here Rob that people sold what they

could what was liquid. Yeah and I think those are the sort of the questions that are being dissected

and debated right now and there's a lot of you know sort of storied evidence so to speak because

with the gold market it's not as always transparent as you might like it to be. But that's the question

is what kind of pattern are we looking at how long can gold go down for here and I think the broader

question is who is selling in this market and why so you're right that it's the source of liquidity

you know when people need money quickly and especially as it relates to the oil story and cash flows

have been interrupted so you need a source of liquidity desperately we've seen gold sold for

that specific reason whether it's you know margin calls or corrections that's forcing people out

of a position but then the question I think a little deeper into the context is who are the sellers

in this market and what's their outlook and what's the potential because especially everyone's

trying to predict what happens to the price of oil here and how long this crisis plays out for

and then could that mean could that imply some further pressure for the gold market.

Well and again it's a reminder and my goodness why do we need this reminder that you know energy

is life energy is your economy without it you know massive problems and so yeah I like that expression

again though you sell what you can so gold was still a liquid market it's an international market

uh fascinating point you're also bringing up though both buyers because we don't I mean with this

level of uncertainty you've lost the central bank buyers that were obviously in the market before

that's not a surprise they might say let's put this on hold for a while you know let's keep the

powder dry so you you're also missing on the buy side yeah and that I think is certainly one of

the suspicions is that the central bankers have been this bid behind the market especially when you

think of a central bank buying policy and they are thinking long term so you go back the past decade

and it's being significant central bank buying and they've been moving in sort of one direction

continuous buying and we've had some sort of record years terms the positions that they put on but

you know one one specific example came up you know in the press and they're talking about

Turkey as an example who has been one of the largest central bank buyers of gold over the

past several years and an economy that's dependent on foreign oil so do they have a scenario where

there's potential threat of inflation because we don't know how long oil prices are going to stay

elevated impacts the cost of living and then they have to go out and defend their currency in the

market as well because their central bank's been trying to raise interest rates to limited

effect to control inflation so you have the scenario where gold could be sold in that scenario and

affects the actions of what central banks have been doing these past couple years so I don't think

it's a tide change necessarily yet but it's one that sort of comes up on everybody's radar and

worth monitoring well and again those countries that need to import have got to get the money from

somewhere so if they're sitting on U.S.T. bills I think that's the upward pressure on rates to

some degree they'll sell their U.S.T. bills so they can buy oil sell their gold if they have those

holding so they can buy oil so that's the other side of the equation for those countries that

are forced to or must import oil and I mean there's western countries like New Zealand come

to mind immediately to me because looking at the work how much they have to import but Europe

come on they import 95% of their oil and natural gas so again that's pressure so that may be some

of the sell side and as you say the buy side they got money they got to spend elsewhere they got

to spend it in the energy market exactly right so it's this dynamic scenario and it's just

it's watching it unfold because it's very hard for anyone to put a finger on this right now

well we're gonna have a chance to talk about as we go further you know does this change the game

for oil all right sorry for gold pardon me I meant for for gold does it change the game for gold

in terms of some of the factors you know like in my case it's the debatement trade well that

doesn't change for me you know the buying where I might get in and buy some more you know might

looking at moving averages etc some technical indicators but no I think overall it doesn't change

the overall thesis about the popularity of gold going forward other than this kind of short-term

problem you completely agree with you there and to that point it's that the fundamentals of the

market haven't changed but it can't ignore the outer or the other market dynamics that have

severely impacted the price action right now so it's it's sort of the two sort of conflicting

with one another as we watch them play out well you can't ignore it you're at border gold man you

can find Robert border gold dot com you've got to inflow the outflow people coming in asking you

questions etc the real live on the ground stuff there that's why I find it so valuable to check in

with you but yeah go to border gold dot com check out Rob he'll be writing a lot more in the next

couple of weeks thanks Rob thanks Mike

time out for the shocking stat of the week so here's the question who did better protecting you

financial your financial well-being money talks or government on money talks the main personal

finance theme has been to protect yourself from the consequences of government and central bank

actions that guaranteed the decline in purchasing power of the currency and the rising cost

of living which is absolutely crushing millions of Canadians it was never a guest by the way it was

as I said a guarantee that persistent deficits monetary expansion with actions like quantitative

easing and record low interest rates would mean our money would buy less and inflate asset prices

now if you own hard assets like housing or precious metals you could offset the impact of declining

purchasing power of the dollar and the rising cost of living but if you didn't then your standard

of living was going to drop dramatically meanwhile partisan apologists would attack anyone who

criticized the big government approach so my question is let's see who did better protecting you

money talks or government because on money talks our recommendation was to buy gold and that

is with a specifically or significantly higher percentage of your portfolio that was normally

recommended but along with silver and uranium while governments were raising taxes I appreciate

the politicos don't like the facts or research that challenges their narrative but the fact remains

you'd be way better off in gold than cash or government bonds since 2000 listen to this

the Canadian dollars lost 45% of its overall purchasing power but has done far worse when you

compare it to gold measured against gold the Canadian dollars lost 90% plus of its purchasing

power since 2000 when it comes to gold a dollar buys only 7% of the gold it did in year 2000

translating that to housing for example while the loony's purchasing power declined 77%

put another way in 2000 it took 356 ounces of gold to buy the average Canadian home which is about

160,000 today with that average home at 700,000 it takes only 111 ounces of gold in other words

paper dollar only buys 20% of the housing it did in year 2000 it how about food the one item we

all have to buy in 2000 the average family of four purchased about six thousand dollars worth

of food in a year and that took 13.3 ounces of gold well now the average family of four about

17,500 in groceries a year but it only takes 2.8 ounces of gold about gasoline priced in dollars

the cost has gone up 270% since 2000 the price in gold oh it's 80% cheaper so for all you people

wanting more government who did better protecting you financially financial well-being money talks

your government you know what it's not even close and you know what also nothing is about to change

always please be able to welcome back Aussie Jericho it's just so much happening in real estate

really enjoyed my conversation with Jeff Olin a vision capital getting his take on things Aussie

I you know I've been excited about beginning to give me give some good news on a change and that's

I saw that an Ontario is going to remove GST on all housing purchases well all new right

so they want to stimulate the new housing market but as you know our federal government waves

the GST or you can get a rebate for the first time buyer and it's limited to a million dollars

an up to fifty thousand dollars well the in Ontario it's the HST which is a combination of GST

and the provincial tax and so that can be up to 13% and they're up to a hundred and thirty thousand

dollars whether your first time buyer or a new buyer or an investor everybody gets it as long

as you buy something new so that's a whopping big change okay I want to go to something that's maybe

not as positive because one of the things I hope we've learned over the last two years is uncertainty

is what hurts capital investment people want to wait and see to think see how things are just a

matter for talking about tariffs and the uncertainty there or we're talking about the land claims

but there's something that I know you have been talking about it's been on the books for a number

of years but one aspect caught my eye and that is something called the Heritage Conservation Act

it's in British Columbia maybe just give me a quick spell out on that well to most of us it's it's

sort of just come to the fourth one because it's not related to you it's since 1990 but what they've

are looking for was heritage if we found some heritageable things or items on your property

you had some duty to report but last year the government added you know the whole native

question into it a much more to the forefront than before and it became dramatically so I mean

I think there was a in one particular case as somebody found a skull and then you had to pay

a hundred thousand dollars from archaeologists couldn't do anything with the land and the

diversity is that no he does not get any recompense key compensation and like I used to say to my

students don't buy anything that has to work archaeology or heritage in it you know I don't care

whether it is whether it's been even been fixed right just don't buy anything and I said if you

really hate your neighbor take an old bone throw it on his land and call the heritage people and tell

you think there is some bones there and they will tie him up for years and digging up the land

that was a joke it's no longer a joke my yeah I think that's the point it is no longer a joke I mean

what jumped out at me more recently I didn't realize that we had expanded that to something like

seriously if songs were sung or stories told you know on that track of land I mean that just

opens the door to everything and I think that's again back to my uncertainty comment like how

and back to your good advice you can't afford to do this and I've been at least only in one I guess

it's two commission hearings based on this and yeah it's all everything nothing's going to happen

as you say if they found a bone but now if they hummed well they did yeah well the the proposed

updated last year wanted to modernize it and reconciliation together with dripper and

and so now there's a lot of backlash and the government now in BC has put it on hold but we

we know from past unhappiness and happy happenings is that their postponement means they haven't

dropped it by any means but you've got to understand you know it's supposed to be reconciliation

but there is no wiggle room to challenge any findings or anybody that will help you pay it

you got to fix it and if they find something you have to stop a development if you're halfway

up you cannot do it until it's all been awkward and then an archaeologist may charge you

you know hundreds of thousands of dollars and you can't even do anything about it so it's really

serious and serious because I mean there's so many other alternatives if you want to make an

investment we talked to Jeff Olen earlier about you want to make a real estate investment he's

looking all over North America and including a you know listed property in Singapore that kind of

stuff well and if this is what it stands on the other side we have to understand it's not going to

get made and it doesn't matter all the happy talk from any politician about it you'd be nuts too

and it's not a difficult thing to understand if you heard potential that your money wasn't safe in

a bank you wouldn't put your money in that bank so if you're here about these potential delays and

the cost of those etc as you said that list about of what you can't do while this is getting

resolved is a key component yeah and everybody should the Google Heritage Conservation Act it's

a long URL about Heritage Conservation Act Google it and cry okay let's finish on something else

as you know I've been saying this for ages Aussie yes it is a quiet real estate market is down in

some areas but that may present some opportunities present some buys with it so you know me how he's

like to stick that with you at the end give me a couple of hot properties that again we're not

recommending them what we're saying are very interesting people don't go and check them out yeah

we have some units that where people walk away from the deposit so there's a two-bedroom two-bathroom

condo maple rich can buy for six hundred and five thousand the buyers are walking from a ninety

thousand dollar deposit there's one in Langley a one-bedroom flex the price is four twenty four

and the buyer will walk away from forty three thousand dollars and then finally in Coquitlam

there's a one-bedroom and the prices five twenty that you have to buy it at but the buyer is

walking from a hundred thousand dollars and there's deals in Shilovac that are not necessarily new

but the six-nose grafford condo you can buy now for two hundred thousand it's sold for two sixty

in twenty twenty two so there's deals everywhere so you've got to go out get a good professional

realtor and take a look you know it's you know for a new couple or a new buyer today is sort

of a great time to pick and choose and especially you can still get a four percent five-year mortgage

depending on your credit et cetera et cetera but something in that ballpark which is very attractive

interesting but the competition Aussie I jumped over this earlier sorry the competition is

rents are also going down you know so the mortgage rates very attractive at a five-year fixed

but also rents are going down in certain areas and Vancouver's one of them which you know

featured the highest rents in the country so we have seen some budging that way too

yeah in fact here we see said vacancy costs a country are up some three point seven percent

and then rentals.ca they have data they're showing when Cuba rents down a pretty substantial

nine percent so clearly a lot of the developers said had we're going to have a strata unit

then with the costs going nuts they changed into rental units and that extra supply means

that it's better for tenants now the government is going to take credit for it but before you

bring out the champagne dear government in two or three years when we needed these buildings

to be there they won't be there well as I say there's so much to talk about right now in real estate

which is a good reason to sign up for Osbus.ca Osbus.ca there's just so much coming at you no one

better than Aussie Jurek to share his insights with you Aussie you go out and have a terrific week

thanks Mike and just remember something money is not the most important thing in the world love

is the most important thing but fortunately I love money

Xue

I'm looking forward to getting back to the trading desk with Victoridiara I mean we're so much

happening right now Victor here let's just do a little recap of what all the markets have been

doing just really quickly you know we don't need much analysis but yeah I'm thinking things like

you know we had that Toronto Stock Exchange, we hit an old time high the day the bombs started to drop

I think February 28th, you know, what if half the gas prices, the Indian dollar, look at the

gyrations in gold. So maybe just a quick recap of all of that stuff. Okay. I'm going into the weekend

here. We've had all of the different contracts of crude oil are closing at the highest

end of week price that we've had since Russia invaded Ukraine. So crude oil prices are up.

But let's say gasoline in the states up about 30% since before the war started.

Diesel's up about 45%. And you know, we could talk for half an hour about why that's important.

But certainly you think midterms that that prices of gasoline and diesel are important.

You've got a bifurcated market here between the countries that are call itself sufficient

in oil and those that need to import whether they're importing oil or importing refined products.

I tell you, this would not be a comfortable time to be a country where you are really,

really dependent upon importing refined products, say like Australia and New Zealand. Yeah,

exactly. And India would be another one that you mentioned a week ago. Sure. Yeah. India,

while their currency made another new low this week, the stock market is down since the war started,

as an actually depending on which indices you were looking at. I mean, you just mentioned Toronto.

Toronto made the high of the year, the day after the war started as our energy sector pulled the

market up. But so Toronto market and the S&P are down in the range of seven to eight percent here

going into the end of the week. Now, I keep saying end of the week, pardon me. And I think that's

very, very important to the markets right now. Given that we trade 24 hours a day virtually,

if you got a position on and you know, things starts to go against it, whether it's three in the

morning or whatever, it can get out, except on the weekend. So I think people are kind of

trimming up their positioning, going into the weekend because they know there's a day and a half.

Anyway, where you can't get out, no matter what you want to do, if something goes against you.

The US dollar has been stronger here as the war has gone along. I mean, it trade the US dollar

index was at a four year low in February and has come back up about four percent or so.

The Canadian dollar was, I call it a petrol currency here a couple of weeks ago because it did rally

right after the war, while the other major currencies were going down. But Canada has weakened as

well here for the last couple of weeks. And interest rates might get interest rates across the

different big central bank markets that we have. Interest rates are a forward interest rates look

like they're going higher, not lower, a reflection of the inflationary impact of higher energy

prices. Well, and again, that's one of those things that we may all not own gold, for example,

or for ticket or stocks, but you know, we're impacted by interest rates because our governments

have record amounts of debt that they have to re-service our provinces do and individuals do.

They've got their mortgage coming do. So that is a bit a flip from what the consensus was just

a month ago, let's say, you know, when they thought rates were going to drop a little bit this year,

well, now the market's telling us they're going to rise this year. Yeah, and I'd say the different

central banks say all there was, I think about a dozen of the met last week. We did talk about that

last week's show, but they were all worried about the inflationary impact of higher energy prices.

This is a major mandate for most of the central banks is to keep their foot, you know, on the neck of

inflation. It seems so kind of counterintuitive that they would want to raise interest rates while

fuel prices are going up, and they understand that and they're probably going to, if I could use

that word transitory, they're probably going to hope, you know, that the higher energy prices are

transitory so that they don't have to do that. But that's important. You just mentioned gold,

and I forgot to say anything about that. It is kind of counterintuitive that the gold price would

fall $1,000 an ounce or about 25%. When there's a war just started, well, it seems, and it's hard

to know all this stuff for sure, but it's certainly there has been some selling and maybe a lot of

selling. Some folks are saying it's likely some of the treasuries, say, of the countries in the

Gulf who now suddenly have no cash flow, and they've got expenses, they've got to cover. So,

you know, they're selling treasuries, they're selling gold. We certainly know Turkey's central bank

sold gold. And as I alluded to with Rob Levy earlier, you know, I mean, we have precedent for that.

You and I talked about it, 2008 financial crisis. Gold went down, not up. You know, we could have

gone to COVID when that first really hit and the lockdowns were getting excessive there, or, you

know, spreading across the world. Again, gold should have gone up in terms of theory, but didn't. And

I think it's back to, hey, you sell what you can. But, you know, exactly. Yeah, that's where we're at.

Well, let me just finish with this thing very quickly. We talked about the level of uncertainty.

And we are one tweet away from another move in oil prices. You know, I think we appreciate that.

Are you doing anything in this environment? Because that certainly rings a big caution sign for me.

I don't pretend to be able to predict that kind of stuff. You know, I still have my long-term views.

Haven't been disrupted. But still, yeah, what about you as a professional, you know, who do a more

short-term time frame? I tell you what, it was in my trading desk notes either the last weekend or

two weeks ago, I had a very shorthand expression. And that was ball up size down. Okay. And that's

exactly what I'm doing. I'm trading smaller size volatility in some of the markets. Well, it's up

in all of the markets and in crude. It was just unbelievable while. And Micah, I'm also, you know,

I'm driven by protect my capital. I'm hardly doing anything here. I am, uh,

I don't know, I guess I'm turning out to be more risk averse than I thought I was. But, you know,

really, you can just get whacked on a headline here and there you have no chance to react fast

because the machines are so far ahead of you. So I'm just saying, well, you know, I'll just kind of

go on cruise control here and wait a thing, settle down. Yeah, there's some opportunities I'm

going to miss, but I'm also not going to get clobbered on anything. So I'm really taking it easy

through here. And I know as you always say, and don't worry, the markets are open tomorrow. So

there you go, Vic, go out and have a great weekend and people can go see your trading desk notes

at victoradair.ca victoradair.ca. Have a good week. Thanks, Mike.

Time now for this week's Goofy Award. I started the show talking about how our money is being

spent, being wasted. And I'm going to finish it the same way. And you can file it under only under

a government would spend money like this. I'm talking about Canada Post, which in case you're not

aware, under operates under the Canadian Postal Service Charter. But here's the thing, that charter

states clearly that Canada Post must operate in a secure and financially self-sustaining manner.

Well, obviously that hasn't been happening. It's been ignored for years actually since 2018,

when it lost 153 million dollars before tax. And every year those losses keep going up up to

$841 million in 2024, and estimated 1.5 billion in 2025. That's despite the facts, by the way,

that mailing a letter is risen 25% in the last two years alone, 35% since 220.

Canada Post is an unworkable financial mess, and everyone knows it. The industrial inquiry

commission report may have last year concluded the Post Office was in their words effectively

insolvent or bankrupt. Now, I'm not sure which part of that is so difficult to understand

for the federal government or the union. As CEO Edinger points out and says, in quotes,

Canada Post needs urgent changes to its cooperating model, collective agreements,

and regulatory and policy framework to improve its financial situation. And the quote,

but you know what? Those changes haven't taken place. The loss is keep mounting. And in case you're

not clear, as taxpayers, we are ultimately on the hook for those losses. But that's not all.

Here's the goofy part. Taxpayers lent Canada Post just over a billion dollars in repayable loans

in January 2025. Oh, then we added up another billion plus in February 226. With the ongoing losses,

come on, what do you think the chances are that taxpayers will get the money back? Uh, none?

The second part was 60% of the Canadian Union of Postal Workers Executive. Now, they think they

should vote in favor of the current contract offer that includes a wage increase of 13% over four

years. Also expands weekend delivery, part-time positions, which are controversial,

along with automation. The cup W present recommends rejecting the offer.

Come on, this would not be happening in the private sector. After years of growing massive

consecutive annual losses, the business case has completely been decimated by competition,

especially in parcel delivery. Dramatic changes would be made, but not when it comes to government.

And taxpayers backstopping the inefficiencies. The question is, how much more can taxpayers afford

with so many other areas in government needing more funding and a deficit this year? You know,

our own federal deficit projected to be 78 billion dollars plus and growing with the latest

billion dollar promises by the Prime Minister in an economy that the Bank of Canada forecast to grow

one and a quarter percent only this year. Only in government, you say, well, that's more than a pity.

That's all the time we have this week, just a reminder to go to Mike's MoneyTalks.ca. Hey,

click on, you can get five minutes with Mike. Absolutely free. Click on, join us for that. There's

tens of thousands of people doing it. Money talks, Mike's MoneyTalks.ca and five minutes with Mike,

but also then you can find out all the details for getting a hold of the video of the Martin Armstrong

exclusive evening that's happening on Tuesday night. I think you'd enjoy it immensely, by the way,

so much to talk about. In the meantime, I hope you go out and have a terrific weekend.