Juggling Dynamite

Walmart just reported its weakest US sales growth in six years, and it could be an early warning that the American consumer is finally starting to crack. Walmart same-store sales grew only 2.6% year-over-year, while Albertsons reported declining comparable sales. Home Depot and Lowe’s are also showing weakness, with falling transactions and inflation-adjusted sales declines. At the same time, US retail sales dropped 0.6% in July, the biggest monthly decline since May 2025. That matters because consumer spending accounts for nearly 70% of the US economy. If Americans continue pulling back, the next step could be weaker corporate earnings, layoffs, rising unemployment, and eventually a broader recession.

And there’s another major warning sign: the US personal savings rate has fallen to just 3%, one of the lowest levels on record. Similar periods of extremely low savings occurred before the 2008 financial crisis and the dot-com crash. In this video, I break down the latest Walmart earnings, Albertsons, Target, Home Depot and Lowe’s sales data, the decline in US retail spending, and what it could mean for the stock market, economy and housing market heading into 2027.

Housing is already weakening in many parts of America. Home prices are falling across markets including Denver, Houston, Washington DC, Charlotte, Los Angeles and South Florida. If unemployment starts rising during a recession, those housing corrections could accelerate. Here is a direct video link.

Most people spend their lives trying to get money. Few understand how complex it can be to protect and manage money once you have it.  Money often corrupts the peace of mind of individuals and those around them. Emotions run deep and often run intergenerationally.

Henry Winkler opens up about his complicated and emotional relationship with money, admitting it has long been a source of anxiety despite his success. He explains that even small financial decisions can trigger fear about running out or not being able to provide, and reflects on how that mindset traces back to childhood experiences, including a painful moment when his father asked him for his bar mitzvah money. Here is a direct video link.

In my neighbourhood, 1 hour north of Toronto, several homes in the 1m+ price range have been for sale for over a year with no takers, even though asking prices have been reduced by more than 30% to date.

Affordability remains untenable for most because prices are still above the historical standard of less than 4x household income. The table below shows the price-to-income picture across Canada’s provinces, combining CREA average home price data (2026) with Statistics Canada’s official median after-tax household income figures (Canadian Income Survey, most recent official data).

Canadian mortgage rates are historically moderate today, with 5-year fixed rates around 4% and variable rates around 3.4%. The trouble is that more than two-thirds of Canadian homeowners with mortgages bought or refinanced in 2020-2022, when interest rates were at all-time lows and home prices reached bubble highs.

In 2020–2021, the 5-year fixed rate dropped as low as 1.34%–1.44% (special discounted offers), with some sources citing sub-1.5% deals for highly qualified borrowers between September and October 2021. The 5-year variable rate fell even lower, to around 0.85%–0.99%, with some special offers dipping toward 0.88% in late 2021.

Unnaturally low interest rates enabled all kinds of extreme spending and gambling that is now retreating, while debt weight continues to compound and renew at normalized interest rates.

The same can be said of corporate security prices, which also reached bubble valuations on unnaturally low interest rates and speculation. The tide has not yet retreated fully there to reveal a world of naked swimmers, but as with mean reversion in housing markets, it’s a question of when, not if.

The discussion below examines the psychology that inflated home prices and leverage to destructive levels.

Special Guest John Pasalis: President and Broker of Record at Realosophy Realty Inc. Brokerage. What’s really going on in Ontario Real Estate: let’s get some honest answers from a true expert.  Why John saw the 416 Condo Crash coming years before prices started dropping. The long list of mistakes made by all levels of Government. The myths & reality that fueled the wild price run-ups from 2009 to 2022. Here is a direct video link.