Shmoozing it

So what happens if you get punted at work thanks to Mr. Virus and you fear your mortgage? If you have scant savings and can’t pay the monthlies?

Scary days for many. Layoffs are piling up. Over 500,000 of our neighbours applied for EI this week, up from 27,000 last week. Bank call centres are swamped. Phone systems are going down. People are on hold for hours, looking for loan relief.

That’s some of the bad news. Way more to come. American jobless claims are two million, that’s three times the 2008 experience. There are estimates the US economy could shrink by 15% and unemployment top 20%. Compare that with a 13% contraction in 1932 and a Depression jobless rate of 24.9% in 1933. Yikes.

Warns celebrity mortgage broker (only in Canada would this be possible) Rob McLister:

To say lenders are concerned by these numbers is the understatement of the year. The percentage of mortgage applicants declined because of income concerns will spike. If your property and qualifications are not solid, expect a much greater likelihood lenders will ask you for a co-borrower, bigger down payment or decline you outright.

Of course in the Thirties there was no unemployment insurance, welfare, state-run health care or governments willing to spend wildly to support laid-off workers. The result was social misery, until politicians were forced to react. In fact, at first governments contracted, making things far worse.

Today, in contrast, pols and central bankers have been on steroids to flood society with cash, direct assistance, cheap financing and subsidies. As a result this year the Trudeau government’s budget deficit could soar past $100 billion – or twice the hole Harper dug to get out of the 2008 disaster. Never, ever, ever have governments coughed up this kind of dough. Dog help us when it comes to future tax rates.

The biggest positive: this is not structural, as in the 1930s or even in 2008. Banks are not failing. The system not collapsing. The economy is not broken. Instead it’s suicide. We’re deliberately murdering GDP, stifling demand and idling millions of people to thwart a bug. When it passes (and it will) or a therapy is found (coming) demand will swell, jobs return, markets rise. It’s hell. But it ends.

Okay, back to the question.

Whaddya do if the boss closes the shop door, your company goes paws-up, your small business fails for lack of revenue and customers or the gig economy eats you? Now that 70% of Canadians have real estate with $1.2 trillion in mortgages, virtually no savings and epic monthly overhead, are we headed for a smoky hole?

Nope. But you might run out of money before we run out of misery. So here are things to know:

Mortgage deferral
The Big Six have agreed to let folks set aside home loan payments for up to six months, as banks in Italy, France and the UK have done. In order to arrange this, one must ask – and that’s why banker call centres have been melting down under demand over the last three days. If you got your mortgage through a sub-prime lender or some guy who also sells insurance and dog beds, well, good luck.

By the way, a mortgage deferral stops payments. It does not stop interest from accumulating. This money will be added onto the amount you owe, increasing the principal which will have to be dealt with later. But later is later.

Mortgage adjustment
If a home loan has a 25-year amortization (or shorter) you can always apply to lengthen that to, say, 30 years. This will result in monthly payment amounts dropping, but the loan will last longer and ultimately cost more interest.

HELOC borrowing
Home equity lines of credit are relatively cheap (especially since the prime went down) and easy to access, if you already have one arranged. There are no stipulations on what the funds are used for, and payments can be interest-only.

LOC life lines
Ditto for personal lines of credit. If you have one set up (and you should, for emergencies like this) this is the time to access the sucker. Save your cash. Don’t liquidate good investments. Instead use the bank’s money until we have a better glimpse of the future. As with a HELOC, you need only make interest payments on the amount withdrawn. In fact you can probably make no payments whatsoever, with the principal amount increasing up to the credit limit.

Banks don’t want clients to go bust. They don’t want their houses. Or cars. But they need people to talk to them.

Meanwhile, every hour is bringing more government intervention. On Friday the feds allowed CMHC to buy up billions of uninsured mortgages plus those with 30-year amortizations. This is in addition to the $50 billion in bank loans being taken over. In the US the Fed is on a wartime footing and Friday bought $107 billion in government bonds and $35 billion in mortgages. So far this week, it’s spend over $300 billion. And Washington is about to dispense $1 trillion. Breathtaking.

We live in historic times. Remember them well. They will pass.

 

227 comments ↓

#1 Sold Out on 03.20.20 at 3:54 pm

Anybody have a ‘paws on the ground’ experience with accessing a new HELOC post-meltdown? I’ve got an unsecured personal LOC, but would rather use my mortgage-free RE, if necessary.

#2 Emile on 03.20.20 at 3:55 pm

> Dog help us when it comes to future tax rates.

Reminds me of a “kids in the hall” sketch.

They ended up with their heads on pikes.

#3 Lost...but not leased on 03.20.20 at 3:57 pm

Ahhhh choooo

(Oops sorry..)

#4 The Wet One on 03.20.20 at 4:03 pm

I wonder if its time to buy?

Good securities with 10% yields.

Nah.

Wait until the big Six are paying 10% dividend yields. Then it is time to move.

#5 Lost...but not leased on 03.20.20 at 4:05 pm

Hmm:

Canada Top Doctor, Theresa Tam… wrote a report 2006 predicting what is unfolding as we speak.

https://twitter.com/RebelNewsOnline/status/1240638333149216768

#6 YouKnowWho on 03.20.20 at 4:06 pm

176.3% household debt in Canada, a new low from 176.6% 6 months back.

In what version of Canada does this not need to get down to 100% or less?

Deleveraging like it’s 1999!

#7 BlorgDorg on 03.20.20 at 4:06 pm

Disagree on the smoky hole — what else would you call 20% unemployment and widespread personal financial disaster? Not structural (mostly), but many households are ruined. Expect a pile of bankruptcies by the end of 2020 if not sooner.

Oh, by the way, on the pandemic, I told ya so back on Remembrance Day:

https://www.greaterfool.ca/2019/11/10/lest-we-ignore/#comment-674895

Who knew it would come so soon.

#8 The Wet One on 03.20.20 at 4:10 pm

I wonder if its time to buy?

Good securities with 10% yields.

Nah.

Wait until the big Six are paying 10% dividend yields.

Then it is time to make a move.

#9 Realist on 03.20.20 at 4:14 pm

You’re overreacting my friend. The world population is expected to reach 8 billion by next year. Demand for oil, food, land and shelter is only set to increase after the Coronavirus.

Oil prices have already increased by 20%+ as of yesterday because China has returned back to normal.

This summer oil demand will rise to 120 million barrels a day. Ignore the doomsayers and the YouTube gurus who insist that you buy their gold and silver from their beachfront mansion in Puerto Rico or Southern France.

Oil will return to $70 levels and jobs will return. The world population is growing. We aren’t in a war.

#10 Friedman's Ghost on 03.20.20 at 4:14 pm

Let it be known that the Great Depression was elongated and worsened simply due to the incompetence of the Fed at that time (MS contraction). They have long learned from this error.

There is no such thing as a free lunch. The public will pay for this increase in money supply indirectly through inflation and taxes. Equity prices (and their dividends) will reflect such.

And thus, liberty will continue to yield!

#11 The Wet One on 03.20.20 at 4:15 pm

Garth,

Pimping The Rebel?

Shameful.

Do we really need to have Fox News North pushed by you?

C’mon man. We know what kind of outfit those guys are.

Just link to the report and skip this Rebel nonsense.

Don’t disgust your audience with such feculence.

#12 YouKnowWho on 03.20.20 at 4:16 pm

I’m concerned about people.

If that “50% of Canadians are $200 away from broke” stat is true, more lending and debt isn’t the help needed Garth.

At 176.3% household debt, how much capacity is there for more debt?

Is the only solution more debt?

#13 The Wet One on 03.20.20 at 4:17 pm

Oops.

Jeez.

That’s not you Garth, but your readers.

My bad.

This is why the comment section is poison. And I drank deeply of it.

GAAAAH!!!!!

Apologies to you, most wise, most washboardy ab-ed Garth.

That last post was all on me.

Mea culpa.

#14 Lost...but not leased on 03.20.20 at 4:18 pm

Re: “Immunity”

Social distancing..???

Back in the day…one of our children had Chicken Pox…
Spouses co-worker brought their un-affected child come over to GET INFECTED AND BUILD UP THEIR IMMUNITY.(duly note NO VACCINE)

Here endeth the lesson..

#15 Franco on 03.20.20 at 4:20 pm

These times we are living in will be talked about for many years to come.

#16 YouKnowWho on 03.20.20 at 4:20 pm

Mother Nature.

Doesn’t she deserve to land at least a jab on humanity?

Honestly. She does.

It the truth.

#17 FreeBird on 03.20.20 at 4:24 pm

Life is a series of lessons as challenges. They can build confidence, resilience and make future ones easi(er). I know blah, blah. Right now other half is installing closet organizers to pass time and break from taking care of one who makes a really bad patient. PS thx to Garth and team for looking after us and going above and beyond. We’re not rich but better then before. Use the free advice on this blog. We’ve been there. Take care all. Stay clean.

#18 Not So New guy on 03.20.20 at 4:27 pm

Were there that many people who were down to their last role?

===================================

My theory is that they were all stealing TP from the office washroom and knew their supply was about to run out as they were forced to stay home.

Another theory is similar in that they were using the office as their dumping ground

#19 dgb on 03.20.20 at 4:28 pm

t.v. has no service since last night !!! will spend the day submersed in blogs posts from dr Garth…thank you so much for the education you provide Garth ..you are a true Canadian Treasure to all who come here …God bless you and your Dorothy and of course Bandit!!!!!!

#20 FreeBird on 03.20.20 at 4:31 pm

#14 Lost…but not leased on 03.20.20 at 4:18 pm
Re: “Immunity”

Social distancing..???

Back in the day…one of our children had Chicken Pox…
Spouses co-worker brought their un-affected child come over to GET INFECTED AND BUILD UP THEIR IMMUNITY.(duly note NO VACCINE)
————————
I just read about this done in rural England early 1950s. We just had oven mitts taped to our hands to stop scratching. Not fun. Mom didn’t play.

#21 Wrk.dover on 03.20.20 at 4:32 pm

To be followed by how many digit inflation?

#22 crowdedelevatorfartz on 03.20.20 at 4:33 pm

A financial shite storm about to unfold and most people have their debt pants down around their ankles with no where to run.

I have zero debt and a lot of cash sitting on the sidelines.
Interesting times indeed.

Please tell us your pants are on. – Garth

#23 JacqueShellacque on 03.20.20 at 4:36 pm

People remember the Depression almost a century later, but no one remembers the Asian flu or Hong Kong flu. Blowing a crater in GDP and employment is worse for society long term than a virus. At least when the Depression ended no one had to cover the tab for anything. We’ll all end up paying in taxes and inflation for decades. To me this whole thing is a repudiation of the last 3 decades of elite rule in the West: send jobs and money to China, which in turn sends us goods that haven’t priced in massive environmental and health externalities, keep borders wide open (at first for workers, then as a display of moral vanity) to make the hygiene standards of less developed countries only a plane ride away. If you add up all the money lost and spent due to this virus, it would be interesting to compare that to what was supposedly ‘gained’ by trade with China since 1990.

#24 crowdedelevatorfartz on 03.20.20 at 4:39 pm

And the CBC has decided in it’s infinite programming wisdumb to nuke all local stations and report the politically correct, socially just “news|” from the center on the universe….aka Toronto.
In the middle of the corona virus debacle they pull this?

Who needs the Conservatives to nuke them when they obviously want to nuke themselves?
:)

Less than 2% of the viewing public watch ANY CBC 6pm news channels.
The National isnt much better.
Now they want to report “local” news from Toronto….bwahahahaha good luck with that you idiots.
Would the last employee to work in Toronto please turn out the lights……

Rex Murphy has a great opinion piece in todays National Post.

#25 Alberta Ed on 03.20.20 at 4:39 pm

Looks like the”cure” will be worse than the disease. Countries where the coronavirus has already spread do not indicate anywhere near the predicted apocalypse politicians are reacting to.

#26 Piano_Man87 on 03.20.20 at 4:43 pm

Hi Garth,

Every year around this time I invest and rebalance my portfolio, so I have a good shwack of cash sitting in my savings account. Should I invest that like normal, or wait until some of the smoke clears? My gut tells me to wait until a solution of some kind is known and we are marching towards it.

Thanks.

#27 AK on 03.20.20 at 4:44 pm

#22 crowdedelevatorfartz on 03.20.20 at 4:33 pm

“A financial shite storm about to unfold and most people have their debt pants down around their ankles with no where to run.”
====================================

After reading this, It’s like watching CNN and MSNBC. Good Lord..

#28 Blog Bunny on 03.20.20 at 4:45 pm

I just remembered that in a past lifetime as a poor student I made a jumbo pack of TP from Costco last close to 3 years (without recycling obviously). That run on TP is hilarious.

#29 Viorelli on 03.20.20 at 4:46 pm

I too remember surviving the collapse of the USSR when I was a kid prior to leaving the former to Canada with my parents. The currency became worthless over a short period of time, factories closed, smart ones left the country, unemployment and crime had skyrocketed. My relatives had a farmland in Siberia, cattle, potato fields, cherry trees, hot houses, fruit and veggies, goats, etc. Ak47s to protect themselves, they survived just fine and recovered in the late 90s. This was a country with more or less homogeneous populations, lots of farming still happening in the country side, free state housing. People had only to worry about food and safety. Now we have a multicultural society, very little productive farmland, housing shortage and mortgages, rents, large homeless population and lack of good, stable domestic work as all the production had shifted to Asia long ago. Add to this upcoming automation, LGBTQ rights, increased immigration, outsourcing, taxation, and we have a receipt for disaster. As I had mentioned earlier, some smart individuals had already liquidated all their assets in Canada except the primary residence and shifted all their wealth out of the country. Who is still left to tax? Most of small business will fold due to the virus, cost of living and groceries will skyrocket as the feds will print paper non stop. The economic fundamentals are broken! The sooner we cut off the sweat shops in China and put our people back to work to produce our own goods, the better for everyone. The big corps who wanted these sweat shops to begin with can screw themselves. Keep the borders closed, globalization is a failure. Let’s put our people to work and start providing for ourselves here and now. This is our only chance

#30 Mel on 03.20.20 at 4:48 pm

Something to do in your spare time to stay healthy and fit.

https://www.youtube.com/channel/UCnMjjYuiaJZT7JilnXPo7jQ?utm_source=YMCA+E-Newsletter&utm_campaign=f1d6012a0f-EMAIL_CAMPAIGN_2020_01_29_01_25_COPY_02&utm_medium=email&utm_term=0_a1714976d9-f1d6012a0f-74122021

#31 Lost...but not leased on 03.20.20 at 4:49 pm

CUI BONO?

I am”sick” of this psychological warfare…

We are imbedding this “chicken little” paranoia into the various generations and allowing communism to grow roots.

In Vancouver….we have meter maids ratting out restaurants who have people not complying with social distancing.

We are literally encouraging people to become their own prisoners and wardens and stay in “lock up”.

Do they not recall how TYPHUS was spread ?

#32 spoon_man on 03.20.20 at 4:52 pm

Garth, you should start a poll to name the year 2020. Here is my proposal: ” The great reset”. Dunno about inflation but the wealth gap is going to soar beyond imagination after this virus madness ends. Same old same old…

#33 Glorious day ... on 03.20.20 at 4:52 pm

in the LM today. Just came home from a walk with my “better half” and spotted a notice taped onto a light post down the street. It started … Hello neighbor … and went on to offer anyone free help or assistance with picking up food or meds etc. Wow. Made my day. Always appreciate my neighbors. I will give her a call and let her know.

#34 Sail Away on 03.20.20 at 4:57 pm

And…. again:

#25 Alberta Ed on 03.20.20 at 4:39 pm

Looks like the”cure” will be worse than the disease. Countries where the coronavirus has already spread do not indicate anywhere near the predicted apocalypse politicians are reacting to.

#35 Dolce Vita on 03.20.20 at 4:58 pm

-24% GDP growth rate Q2 forecast Excited States of America.

Week ending Mar. 21, 2.25 million jobless claims there (Choi at Sachs). 9% unemployment rate by Q3.

There are no precedents for this. I take it back, there will be no recession, it will be a depression. Pray the vaccine people pull off a Hail Mary Miracle, like now.

FEAR NOT

StatCan “seasonally adjusted” will probably show that Canada’s GDP grew by just a bit in Q2 and that jobs were created surprising everyone (including themselves).

There will be no “seasonally adjusted” forecast GDP growth in the US that has NEVER, EVER, happened in history. Nor can there be for Canada either since that “season” has never happened in history.

“When the US catches a cold, Canada gets the flu.” is the old economic saying.

It will be one MOTHER of a flu.

————————–

Still, I think some of the outrageous? predictions are timely, POSTURING, when you consider US Congress still refining their $1 Trillion? economic aid package. It will determine how many people get laid off or kept on.

Q2 not far away, Q1 almost done (Sachs Q1 US GDP prediction: “only” -5% growth).

We’ll see soon enough.

————————–

And Garth, you’ve been alluding that Moisters have never seen it as bad as us Wrinklies did, lucky self-entitled kids.

-PAYBACK.

#36 Keith in Rio on 03.20.20 at 5:00 pm

Garth,

You forgot to say those jobs are not coming back.

#37 Joseph R. on 03.20.20 at 5:09 pm

#14 Lost…but not leased on 03.20.20 at 4:18 pm
Re: “Immunity”

Social distancing..???

Back in the day…one of our children had Chicken Pox…
Spouses co-worker brought their un-affected child come over to GET INFECTED AND BUILD UP THEIR IMMUNITY.(duly note NO VACCINE)

Here endeth the lesson..

————————————–

Pox or Flu Parties:

https://en.wikipedia.org/wiki/Pox_party

Some people pee on electric fences too.

Here endeth the lesson…

#38 A Borrower Bee on 03.20.20 at 5:09 pm

For a few years, my place has been paid off but I still had an untouched $100K HELOC. I have now used that to invest in light of the recent crash. Even if dividends are cut by 30%, this should still be cash-flow positive.

On Monday I signed an application to expand my HELOC with the Big Green Bank. “Approved subject to appraisal.” On Tuesday, the appraiser came. On Tuesday afternoon, an email from the bank- the branch is closing and my bank contact will no longer have access to phone or email. The application is “on hold until further notice”.

Phoning the bank’s main line has, for three days, yielded “we are currently having technical difficulties”, followed by an automatic disconnection. The bank seems to literally have closed up shop and is unreachable, having walked away from my application. And this is one of the big five, not some rinky-dink outfit.

Good luck with any attempt to originate a new loan right now.

#39 DON on 03.20.20 at 5:10 pm

#9 Realist on 03.20.20 at 4:14 pm

You’re overreacting my friend. The world population is expected to reach 8 billion by next year. Demand for oil, food, land and shelter is only set to increase after the Coronavirus.

Oil prices have already increased by 20%+ as of yesterday because China has returned back to normal.

This summer oil demand will rise to 120 million barrels a day. Ignore the doomsayers and the YouTube gurus who insist that you buy their gold and silver from their beachfront mansion in Puerto Rico or Southern France.

Oil will return to $70 levels and jobs will return. The world population is growing. We aren’t in a war.
***************

Oil went down again today. The roller coaster ain’t over yet!

#40 Mattl on 03.20.20 at 5:14 pm

Banks don’t want clients to go bust. They don’t want their houses. Or cars. But they need people to talk to them.

———————————

This is really good advice, and it’s the reason defaults are so low. Very few people will lose their homes, or have to panic sell, but all of their resources will be diverted to covering their household expenses and consumer spending, even when this bug is eradicated, will be brutal for a long time.

And I’m not sure this isn’t structural. These corps have been making money hand over fist, the economy goes dark for a few months and they are bankrupt? This too big to fail is a big problem…are we going to have to bail out the worlds largest companies every decade?

#41 Captain Uppa on 03.20.20 at 5:18 pm

This is worse than hell.

Everyone I know is getting laid off. No matter the industry.

Even talk of teachers being laid off as schools could be shutdown for a lot longer than we think.

#42 FrostedCranberry on 03.20.20 at 5:18 pm

@#14

“Social distancing..???

Back in the day…one of our children had Chicken Pox…
Spouses co-worker brought their un-affected child come over to GET INFECTED AND BUILD UP THEIR IMMUNITY.(duly note NO VACCINE)

Here endeth the lesson..”

What lesson might that be? That we were dumb back in the day?

#43 Penny Henny on 03.20.20 at 5:21 pm

Scary days for many. Layoffs are piling up. Over 500,000 of our neighbours applied for EI this week, up from 27,000 last week.
///////////////

I believe the stat was 27,000 applicants this week LAST year.

#44 David Pylyp on 03.20.20 at 5:23 pm

In the olden days, when a few payments were missed, the loan would run interest short, until 3 payments were made in a row. Then the contract could be extended.

Sometimes it took an extra years interest to make it right.

Interesting times.

While offering on property last night, we thought we had a chance by bidding late. Turned out to be 8 offers for a vintage bungalow in the 416.

Things do not appear to have slowed except Listings and open houses.

David Pylyp
TORONTO

#45 Howard on 03.20.20 at 5:24 pm

The Liberals have spent the past 12 years bashing Harper because he ran a deficit during the worst (at the time) financial crisis since the 1930s. Apparently Lehman’s collapse was Harper’s fault, see.

I hope Conservatives spend the next 12 years talking ad nauseum about Trudeau/Morneau ruining the country’s finances.

#46 conan on 03.20.20 at 5:24 pm

I think this virus is different. Nations can not let it go through society in one time frame. They have to delay it at all cost, so that they can ramp up health services to meet the challenge.
We are all going to get this virus…..just not at all at once.

I am guessing the plan is to go into WW2 mode as far as health and medical production is concerned . Once they get the hospital beds up, medical supplies up, etc, they will exit the quarantine strategy, and let this virus go rampant.

There is no stopping it and a vaccine is doubtful. They have still have not found a vaccine for the common cold and that is also corona virus.

#47 mark on 03.20.20 at 5:26 pm

60 year mortgage incoming?

#48 newinter on 03.20.20 at 5:33 pm

No bottom yet, this is just the start.

Prices need to be lower, there is no one out there to buy except the dealer banks.

Until the markets get a handle on whats really going on, there is no bottom.

#49 P.Ooched on 03.20.20 at 5:33 pm

> The economy is not broken. Instead it’s suicide. We’re deliberately murdering GDP, stifling demand and idling millions of people to thwart a bug.

What are our options besides committing this “economic suicide”?

#50 FrostedCranberry on 03.20.20 at 5:35 pm

@#14 My apologies for not noticing your “no vaccine” disclaimer, which of course is not the situation today. Back in the day, such parties may have made sense, given that contracting chickenpox as an adult can be much worse.

However, I hope people don’t assume the same for COVID19. Could be dangerous thinking. Everyone, please keep practicing “social distancing”. If not for yourself, then for others.

#51 Stylite on 03.20.20 at 5:35 pm

I don’t think the world will learn from this. Majority of people will wait until the last minute react. There is a fine line between being patient and knowing when to act. Mixing it with a little emotion and it gets worse. Keep your head up everybody!

#52 Brian Ripley on 03.20.20 at 5:39 pm

I have published my chart on the latest 4Q 2019 Canadian Household Debt, GDP, Foreign Direct Investment and Balance of Trade and FDI notes

http://www.chpc.biz/household-debt.html

Households STILL carry $1.76 in debt for every $1 of disposable income (StatCan 4Q 2019 Seasonally Adjusted)

AND Y/Y 4Q household debt is up 6.9% vs disposable income up only 4.9%

Now we know why thinking about amortization of debt is worth scrutiny especially when looking at the viability of employment income and its stream of cash flow.

If there is a big unknown about cash flow maintenance, then that is not the time for leveraging on hope.

#53 DrC on 03.20.20 at 5:42 pm

Should we expect any RE price drops? Bigger than when the stress test was introduced?

#54 david on 03.20.20 at 5:43 pm

and imagine how bad it would be if there were no stress tests imposed the past few years… lets just say that the stress test critics just lost the only leg they had to stand on…

#55 Sold Out on 03.20.20 at 5:45 pm

“Since the development of the vaccine, however, hospitalizations and deaths associated with chickenpox have fallen by more than 70% and 88%, respectively.”

https://www.outbreakobservatory.org/outbreakthursday-1/11/22/2018/the-resurgence-of-chickenpox

#56 S on 03.20.20 at 5:48 pm

#24 crowdedelevatorfartz on 03.20.20 at 4:39 pm

Yup… they even let Rosie back in the building.
Justin sure gets to look prime-ministerial these days… two weeks ago his government was hanging by a thread. What a gift this has become to so many incompetents.

#57 CRETINOVIRUS on 03.20.20 at 5:50 pm

CoronaVirus is the scam of the century… to purposefully induce a depression and stop the economic life on the planet..FOR 11,000 DEAD AFTER 4 MONTHS… and in basically 4 countries out of which the very old and sick are over 90%…

WHAT A JOKE..

BECAUSE OF OVERREACTING IDIOT POLITICIANS, LOOKING FOR AN EXCUSE TO PRETEND THEY KNOW WHAT THEY ARE DOING.

I HAVE NEVER SEEN SUCH GLOBAL CRETINISM AND IDIOCY IN MY WHOLE LIFE.

HOW MUCH DO THESE CRETINS THINK THEY CAN KEEP PEOPLE LOCKED UP IN LARGE CITIES UNTIL THINGS BLOW UP.

WHAT IF THERE’S A REAL CRISIS..

#58 Ed on 03.20.20 at 5:53 pm

Government. Corporate America. Bankers. Media. They all play on the same team. Keep that in mind when this meltdown is complete.
Notice how they are systematically shutting down the country and the world in stages? This city, that city.
So the Fed. to buy trillions in corporate debt… taking this debt off the balance sheet of these mega-corporations and putting it on the backs of We The People.. A CREDIT DEFAULT SWAP.. The New America SUCKS.

#59 newinter on 03.20.20 at 5:56 pm

The fed has compressed the previous 12 years of activity into the last 2 weeks.

And every central bank around the world is throwing everything at it.

It’s not working.

#60 Oracle of Ottawa on 03.20.20 at 6:00 pm

I predict we’ll have a rally in the Fall. In the meantime fasten your seatbelt. It’s going to be a long bumpy ride.

#61 Not Debtified No More on 03.20.20 at 6:09 pm

Looking good, Bandit!

Great buying opportunities. Will only get better when the US testing ramps up and the American goes into a full blown panic once they find out how many are actually already infected roaming their streets. And the bestest opportunity of all is when this financial contagion begins as the chicken comes home to roost on all the debt binging.

It’s an awesome time to be alive.

Thank you Garth!

#62 Femdom Fist on 03.20.20 at 6:13 pm

#29 Viorelli on 03.20.20 at 4:46 pm

…Add to this upcoming automation, LGBTQ rights, increased immigration, outsourcing, taxation, and we have a receipt for disaster.

…wut

#63 Abc123 on 03.20.20 at 6:13 pm

22 crowdedelevatorfartz on 03.20.20 at 4:33 pm
A financial shite storm about to unfold and most people have their debt pants down around their ankles with no where to run.

I have zero debt and a lot of cash sitting on the sidelines.
Interesting times indeed.

Please tell us your pants are on. – Garth
————

The people with debt up to their eyeballs have nothing to lose since they have no real equity.

It’s you with savings invested in financial markets that have something to lose , as you continue to do as markets crash AGAIN.

Better to spend your savings on real tangible items you can consume, now and later and better your life now and in the future then keep your savings in the casino, I mean market.

#64 DON on 03.20.20 at 6:14 pm

I assume the assumption is that all jobs that are lost will return after this is all said and done? What happens after six months? Does everyone get their job back automatically or will some companies be shuttered completely. I guess we will find out. Remember consumer spending was already on the way down, but the DEBT remains.

It was already discussed in the news that HELOCs and LOCs could be capped at their current balances. Why would banks want to take on more in difficult times?

Th virus and oil war pricked underlying issues.

I didn’t expect the EI numbers to be so explosive a mere week later. That will panic the herd. I don’t think Monday Markets will be good.

Now the WHO is warning youth not to be so cocky. And bloomberg has an article discussing how the elite and famous are queue jumping for care and aide.

Queue Trump.

Today he ramped up his attack on China not responding fast enough and allowing it to spread to other countries.

When will he officially call out Wall street?

#65 Sail away on 03.20.20 at 6:15 pm

#40 Mattl on 03.20.20 at 5:14 pm

These corps have been making money hand over fist, the economy goes dark for a few months and they are bankrupt? This too big to fail is a big problem…are we going to have to bail out the worlds largest companies every decade?

—————————

Here’s food for thought, Mattl:

Let’s use Air Canada. 30,000 employees.

They are in big trouble.

Option 1:
Government says, sorry fatcats: deal with it. AC goes bankrupt. Tax base gone. 30,000 Canadians on the dole.

Option 2:
Government helps with tax breaks or other stimulus. AC stays in business but cuts 10,000 jobs. Recovery over time.

What’s better?

#66 YouKnowWho on 03.20.20 at 6:20 pm

Let’s talk about good that will come out of this.

I’ll get us started…

– Filthy Cruise ship industry will die off.
– Hopefully we will consume less useless junk.

#67 oh bouy on 03.20.20 at 6:24 pm

@#24 crowdedelevatorfartz on 03.20.20 at 4:39 pm
And the CBC has decided in it’s infinite programming wisdumb to nuke all local stations and report the politically correct, socially just “news|” from the center on the universe….aka Toronto.
In the middle of the corona virus debacle they pull this?

________________________________

you’ve got some serious OCD about the CBC.

Pro tip for you – quit watching it.

#68 Sold Out on 03.20.20 at 6:24 pm

For those who unfortunately may have to lay off employees. The information was surprising; I didn’t realize that employees had such considerable rights and entitlements.

https://business.financialpost.com/legal-post/looking-to-temporarily-lay-off-staff-during-the-coronavirus-crisis-wait-thats-illegal#comments-area

#69 alf on 03.20.20 at 6:24 pm

Hi Garth,

You’re doing a great job.

I’m kind of puzzled by the overreaction of governments and individuals to this virus.
Are we all going to hide in our caves indefinitely every time a new bug emerges for which there is no vaccine?

Much like the risk inherent in investing, there is inherent risk in walking out the door every day.

Shouldn’t the citizens of a country be standing together and debating the validity of the measures that are being taken by their governments when the impact on their lives is so damaging?

I’m all for taking appropriate precautions to hedge your bets. But shutting down the world?

Unfortunately, this entire crisis has only reinforced many of the negative opinions I have held about humanity and institutions of all kinds.

Originally, I only regarded these individuals and institutions as greedy and uncaring. Now I can add irrational and cowardly.

#70 Nonplused on 03.20.20 at 6:29 pm

I’m still trying to get my head around these unprecedented times. I think, for me as well as for many others, the true nature of this shock hasn’t quite sunk in yet. My wife and I both work from home so not much has changed for us yet. But all 3 of my kinds are in some level of school. So far it’s been like an early spring break only with nothing to do and nowhere to go, but I don’t know how long that can last. Thank Dog for Minecraft. But 2 of the kids live on grants and student loans, which are accumulating as they pay the rent but get no schooling done.

Trying to got one’s head around what it really looks like when all the hair dressers, waitresses, cooks, dental assistants, movie theater workers, airline hosts, ski lift operators, lifeguards, rink rats, and many office workers get sent home all at once is difficult. Can we really put them all on EI all at once? And once the “social distancing” is over, how fast will these jobs return? Will everyone rush back to the movie theaters? Will the pubs fill up right away like nothing happened? Will the all-inclusive resorts in Mexico and the associated flights resume operations immediately? How long will it be before there is enough interest to resume operations? Will the cruise lines even have enough money to restart operations? What about all the people who have no money left after having been off work for a month or 2? How long will it be before they are able to buy anything but groceries?

So I think the recovery might take a long time. People who have been social distancing for 2 months and have money left might not rush back into public places and this could really slow the return of many jobs. Also folks like me who have seen a 20% haircut to their life savings might not be rushing out to the dealership for a new car. The old one might have to do for another year.

This is how a recession turns into a depression. Once the usual flow of economic activity gets disrupted, it isn’t always easy to just restart it. The problem is the movie theaters can’t reopen until they have the money to pay staff and buy popcorn, but that will be difficult for them if they’ve gone 2 months without revenue and without relief for their debts.

The economy is an energy dispersal system. An analogy might be that of a camp fire. You can throw all the wood on it you like, nothing will happen if the fire has already gone out. So you have to start it up again and that takes time. The corona virus in this analogy is like a long soaking rain that has put the camp fire out and soaked all the wood. It is going to take more than a match to get it going again. The rain will pass, I think 2-4 months is a good estimate as to when, but the fire will take a while to get going.

#71 not 1st on 03.20.20 at 6:30 pm

#49 P.Ooched on 03.20.20 at 5:33 pm

What are our options besides committing this “economic suicide”?
—–

There are other options than full shut down. You could have staggered work days in office with work from home, off peak, on peak, institute shift work, staggered school classes, social distancing in class. You could have had companies rent temp office space and separate people by 50 ft but still keep working. Same with restaurants and schools. Transit should have been closed immediately. With the staggered schedules more people could have driven to work in larger centers. Give people with the means chance banked vacation or sick days to stay home.

There were so many ways to do this in a managed way but our so called leaders always have their pants around their ankles as is the theme today.

We have now taken a ballistic nuke to a mosquito. Our economy has a lot of inertia when its in motion, going to take a lot of that same inertia to start it again.

Anyone with a shop or restaurant or franchise business or salon or service business is not going to survive this. Our world will be run so much different in the coming years. We will always be looking over our shoulders for the next bug now.

#72 Lost... but not leased on 03.20.20 at 6:34 pm

Just got back from shopping…

Got our rationed amount of TP(4 roll pack)

Went to the local Public Market…got take out….my God did they load up….we are set for a few days !!!

#73 Dolce Vita on 03.20.20 at 6:39 pm

If Sachs US GDP forecast even 1/2 correct about Q1 -5% then Q2 -24% GDP growth rate in the US, that means the Cdn. economy will be near obliterated.

First time since the early ’80s even I’m getting worried.

-24% means their GDP will be rolled back in $ terms to what it was 20 years ago.

STAGGERING to think that 20 years of GDP in $ terms wiped out in a single quarter.

THIS IS THE ECONOMIC EVENT that will transcend ALL generations save those of the Great Depression in the 1920’s.

History about to be made, all the wrong kind.

——————————

Some good news:

Canada new cases infection rate about 17-18% or near half those in the EU (Italia at 14% today) and THAT IS good news.

Slowing the virus down in Canada. ‘Atta go Canada!

That’s one precedent that needs breaking.

Yes, yes it’s still to early to tell about 2 weeks from peak but touch wood, some good news is better than all the bad news out today.

#74 Steven Rowlandson on 03.20.20 at 6:39 pm

Are you trying to tell us the banks and government don’t have an Achilles Heel?

#75 oh bouy on 03.20.20 at 6:41 pm

@#46 conan on 03.20.20 at 5:24 pm
I think this virus is different. Nations can not let it go through society in one time frame. They have to delay it at all cost, so that they can ramp up health services to meet the challenge.
We are all going to get this virus…..just not at all at once.

I am guessing the plan is to go into WW2 mode as far as health and medical production is concerned . Once they get the hospital beds up, medical supplies up, etc, they will exit the quarantine strategy, and let this virus go rampant.

There is no stopping it and a vaccine is doubtful. They have still have not found a vaccine for the common cold and that is also corona virus.
__________________________________

I’m curious as to what they’re not telling us about this virus

#76 Jager on 03.20.20 at 6:41 pm

The 10yr Treasury yield (0.854) dropping again. If this keeps up Monday will be a disaster…

#77 world traveller on 03.20.20 at 6:42 pm

I’d support this, you cannot kill more than 10,000 people and crash the world economies and go about business as usual.

https://www.washingtonexaminer.com/news/republican-congressman-calls-on-trump-to-make-china-forgive-us-debt-over-coronavirus-crisis?fbclid=IwAR3hVJB9vI_-Xtrxr2ADzUQIMDf8RhiiiZaEOhjVrqCpsIjM2f1Io3FVhnk

#78 Faron on 03.20.20 at 6:42 pm

Thanks for the posts of late Garth. These are truly odd times with economic disruption akin to wartime and lots of uncertainty and your insight is very helpful.

I’m just old enough to not be a moister, and one who has never felt like buying into the Victoria RE bubble (not without FOMO as prices have nearly tripled in the time I’ve lived here). Now I’m starting to wonder if the bubble will finally burst. The questions are:

1) Is it a bubble (in the obvious markets of SW BC and Southern Ontario)?

2) How much of a bubble is it? i.e. given the need-based demand for housing, income levels and the housing stock, what would fair prices look like if second homes/speculation and AirBnB and other skewing factors were taken out? I know that’s not something we can expect, and I know it’s not this simple, but what if?

3) Will this economic shock be large enough to knock enough people out of their mortgages to flood the market with listings, drive prices down, induce fear based selling and thus trigger the feedbacks that lead to a crash?

4) Would the Gov’t of Canada allow this to happen? And if not, under what justification should props be put into place? To protect the debt consumers (an extremely strong no in my opinion)? Or, with more nuance, how can the crash happen (assuming it needs to) without threatening the stability of Canadian banks. I think there needs to be demonstrable and demonstrated pain among the over indebted and now jobless to help keep these mistakes from being repeated. If people walk away from this bailed out by the government and retaining their overpriced house(s) car(s) doodle(s) and spouse(s) while gov’t debt goes up, this would be a huge WTF for me.

#79 Faron on 03.20.20 at 6:46 pm

Garth, it also says a lot that you live in rural Nova Scotia. Those towns are beautiful and waaaay undervalued/underrated in my opinion. Talk about value.

I have chosen carefully and deliberately. Some day I will share why. – Garth

#80 Flop... on 03.20.20 at 6:50 pm

#22 crowdedelevatorfartz on 03.20.20 at 4:33 pm

A financial shite storm about to unfold and most people have their debt pants down around their ankles with no where to run.

I have zero debt and a lot of cash sitting on the sidelines.
Interesting times indeed.

Please tell us your pants are on. – Garth

////////////////////////

What are you two dudes doing on the East Coast?

People in Vancouver are flooding parks, getting a jumpstart on their suntans.

You guys sound like you’re having a pants-off, dance-off…

M45BC

#81 Bytor the Snow Dog on 03.20.20 at 6:53 pm

#54 oh bouy the CBC employee sez:

“you’ve got some serious OCD about the CBC.

Pro tip for you – quit watching it.

——————————————-

Most of us have quit watching it. Now we wanna quit paying for it.

#82 MF on 03.20.20 at 6:54 pm

#41 Captain Uppa on 03.20.20 at 5:18 pm

Agreed. What you say is true.

However, I remember you cheering it on here a few weeks ago. You were thinking only of dollars and interest rates, and forgot the human element.

To be fair, I don’t blame you. Like a lot of others, you thought this time would be similar to what you had become used to. You thought bad economic news would mean the Bank of Canada would lower interest rates again and bail you out, and the health element would simply be forgotten.

That has changed now. That was the financial strategy of the last decade but isn’t the strategy any more. A pivot has just occurred. No one knows what will work moving forward. Stay tuned on that front.. and stay healthy!

MF

#83 Alberta is toast on 03.20.20 at 6:55 pm

I never did think I would see $20 WTI (oil) in my lifetime again. And with transportation costs the netback to Alberta (well Canadian since 4 provinces produce significant amounts) is coming in around $10. I remember the oil shock of the 80’s because my dad lost everything but his tool van in that recession. But inflation adjusted oil prices have not been this low since the 70’s, excepting a brief period in 1999. Even 2008 couldn’t break below $51 in today’s dollars.

But now we are at $10 (netback) in today’s dollars and costs have not gone down or stopped inflating. This is a total disaster. The budgets of Alberta, Saskatchewan, British Columbia, and Newfoundland, not to mention Canada itself, are going to be devastated. (BC doesn’t produce a lot of oil but they produce a lot of natural gas which will be affected.)

Folks, this situation is much worse than it seems. Alberta had already been kicked in the groin by the pipeline problem, but not like this.

#84 Marlene Morris on 03.20.20 at 6:56 pm

Garth, what breaks are renters getting???

#85 oh bouy on 03.20.20 at 6:59 pm

@#80 Bytor the Snow Dog on 03.20.20 at 6:53 pm
#54 oh bouy the CBC employee sez:

“you’ve got some serious OCD about the CBC.

Pro tip for you – quit watching it.

——————————————-

Most of us have quit watching it. Now we wanna quit paying for it.
_______________________________

apparently thats not the case.
so many folks bleating about what they watched on CBC these days.

#86 Sail Away on 03.20.20 at 7:01 pm

#60 Sold Out on 03.20.20 at 6:24 pm

For those who unfortunately may have to lay off employees. The information was surprising; I didn’t realize that employees had such considerable rights and entitlements.

——————-

Oh, they can be laid off. Employment standards need to be followed to the letter, but no problems when done correctly.

That article discusses employers not following the rules.

#87 Trojan House on 03.20.20 at 7:02 pm

I’m not sure how Great Depression 2 will not be bad considering Great Depression 1 lasted from 1929 until WWII. If it wasn’t for the war, perhaps it could have lasted much longer. It could be years before we recover from what the governments are doing right now.

20+% unemployment and over $100 billion to the deficit cannot be good for any economy. In Europe, banks are not solvent and are hanging on by a thread, aka Deutsche Bank. Negative interest rates have not worked there either and the billions being injected into the economy are either being hoarded by the banks and not being lended out or are being used by companies to buy back their own shares.

This may not end well for people who have the coronavirus nor for people in general.

#88 John in Mtl on 03.20.20 at 7:05 pm

“May tou live in interesting times”

That is also the understatement of the year!

#89 Smartalox on 03.20.20 at 7:06 pm

City of Toronto, BC Hydro, the Big 6 Banks are all offering ‘deferrals’ for those hit hard by the Covid-19 virus and resulting pandemic panic.

A deferral is not what people need – you get to miss a few payments, but then just as you get back on your feet, you get a bill for all the missed payments lumped together! Thanks for nothing – literally – plus interest.

Crown corporations like the Insurance Bureau of BC (ICBC) the auto insurance company of the Quebec government (SAAQ), utilities like BC Hydro, HydroOne Hydro Quebec, should be giving their customers months of FREE service, to take the sting out of losing jobs, shutting businesses, etc.

Consumers don’t have a lot of choice when it comes to these corporations. And much of these corporations’ successes (i.e.: infrastructure) has been paid for by generations of public finance.

On top of that, for the electrical utilities in particular, it’s not like these corporations have to pay much in the way of input costs for their products. It’s not like the virus prevents water from flowing through those turbines, or that the virus will keep Hydro One’s atoms from doing their neutron dance.

Yes, they all have their operating costs. And yes, not charging for their services may cause them to operate in deficit. Still, three to six months of lost revenue will mean little to these companies, especially when many are routinely bailed out by multi – Billion-dollar cash infusions from the public purse (ummm ICBC?)

private corporations could get in on this too. Worried these ‘giveaways’ will tank your stock price? I’ve got news for you – your share prices are already in the tank, why not write off the cost as a ‘free trial’? After 120 days, when everyone’s back at work, start charging again. You want customer loyalty?

And what about rents? The government should make it possible for landlords to claim rents that cannot be paid (because businesses are temporarily shuttered, tenants laid off, etc.) as losses against income from investments.

These are unprecedented times. Instead of everyone ponying up to the government for a handout, the businesses that we patronize when times are good, should be prepared to help us out when times are tough.

#90 Doug t on 03.20.20 at 7:15 pm

And take some food to the food banks people

STAY STRONG

#91 Kick out the jams on 03.20.20 at 7:16 pm

Tried to post this earlier but I guess didn’t go through…

Anyway, I was going to access my RBC line of credit of $25k this afternoon to start looking for some bargains – I won’t buy just yet – and realize they cut it down to $10k without any notice. Is this allowed? Definitely a sign of the times.

#92 MF on 03.20.20 at 7:17 pm

#67 oh bouy on 03.20.20 at 6:41 pm

Whose “they”?

We are acually learning a lot about this virus. More information every day:

-It’s extremely easy to catch
-It stays virulent on surfaces for days
-It causes severe pneumonia in a subsection of cases
-It causes mild to no symptoms in a larger portion of cases
-People can be infectious with or without symptoms
-It appears to have two or more strains. Some worse than others
-Anyone with pre-existing conditions is at much greater risk of severe complications
-It’s spreading exponentially worldwide
-It’s mortality is low, but high enough that if it spreads wide enough, deaths will mount.
-A vaccine will come at some point, and yes, it could possibly cure the common cold (stay tuned on that one).

MF

#93 jess on 03.20.20 at 7:18 pm

Oct 28, 2019 – Sen. Ron Johnson (R-WI) met with Andrii Telizhenko, an ex-Ukrainian diplomat who’s been fueling a false claim about the DNC and Ukrainian …
https://talkingpointsmemo.com/news/ron-johnson-met-ukrainian-diplomat-dnc-conspiracy-theory
conspiracy theories+ bad math

1 day ago – Wisconsin Sen. Ron Johnson thinks people are panicking way too much about the coronavirus.

Republican leaders on Capitol Hill made Johnson the chairman of the Senate Homeland Security Committee?

Not a math guy!
For Sen. Ron Johnson (R-Wis.), one of only eight senators to vote against the bill
The GOP senator believes the coronavirus is a death sentence for “maybe no more than 3.4 percent of our population.”

” According to the U.S. Census Bureau, there are currently over 329 million Americans. If, to use the senator’s phrasing, the coronavirus were to kill “maybe no more than 3.4 percent of our population,” that would mean the death of over 9 million Americans. If the 3.4 percent figure is high, and it turns out that the virus is fatal to 1 percent of the population, that’s still over 3 million American deaths.”

https://www.msnbc.com/rachel-maddow-show/ron-johnson-s-coronavirus-perspective-takes-unsettling-turn-n1163691

#94 conan on 03.20.20 at 7:20 pm

I’m curious as to what they’re not telling us about this virus-oh bouy

4 weeks ago there were people who knew that the markets would tank 20% plus, and that unemployment would go nuts until the war time production of health goods started delivering.

Today, (and I am guessing,) there might be people who know that this virus is not weakened by warmer weather, and/or it has a coin flip chance of mutating into something deadlier. Which is the kicker for me, meaning ,I am off to the bunker if that happens.

#95 espressobob on 03.20.20 at 7:22 pm

My math is a bit rusty, please indulge.

774 billion people on the planet. 274,724 confirmed cases. Works out to be 0.103% infected. 11,368 deaths from said plague equals 0.00527% of population.

When we get to the other side of this, the collateral damage should prove fun.

#96 ImGonnaBeSick on 03.20.20 at 7:22 pm

#46 conan on 03.20.20 at 5:24 pm
I think this virus is different. Nations can not let it go through society in one time frame. They have to delay it at all cost, so that they can ramp up health services to meet the challenge.
We are all going to get this virus…..just not at all at once.

I am guessing the plan is to go into WW2 mode as far as health and medical production is concerned . Once they get the hospital beds up, medical supplies up, etc, they will exit the quarantine strategy, and let this virus go rampant.

There is no stopping it and a vaccine is doubtful. They have still have not found a vaccine for the common cold and that is also corona virus.

———–

If we need medical space, we now have all the unused community centres in every town.

“Common cold” has many variants not just corona. Rhinovirus being the most common viral infection. Stop pretending you know what you’re talking about…

#97 Treasure Island CEO - Margin Call - .88 cents offshore on 03.20.20 at 7:26 pm

If we model the 2008 drop, home prices will drop 30-35%; however, this is worse than 2008. And recovery in 2008 took about 7 years to kick in and reach break evens by about 9 years.

The drop in prices is going to be larger, compounded by all the issues talked about here (like debt levels), etc. and probably will be showing up by Summer if not sooner, when the stock market and world will already be in recovery. The problem with housing is the damage is always U-Shaped, slow and painful. And once the dominoes start falling can’t stop the avalanche in housing. And you can already hear it coming down the mounting.

People who have purchased since 2018 probably won’t see any appreciation above break even from purchase this decade and anyone will less that 50% equity in the home will be loosing it due to LTV margin call on your loan when it needs to roll over, but will get rejected. And this is if you manage to survive job cuts and continue paying your bills.

In the words of Rob McLister of Rate Spy: “I would not be running out and buying a home right now”

In fact, he said he is contemplating selling his home right now to free up liquidity to pour into the stock market, which is my opinion would be brilliant if you could pull it off, because stock are going to rebound niiiiiceeee once this shutdown is behind us.

#98 Man of the cloth on 03.20.20 at 7:27 pm

What is the proper amount of vermouth to put in a martini?

#99 Pierre on 03.20.20 at 7:28 pm

#88: “And what about rents? The government should make it possible for landlords to claim rents that cannot be paid…”

Why should the government bail out landlords, and do nothing for tenants? How about helping tenants who have already suffered from huge rent increases??

#100 Last Gasp on 03.20.20 at 7:34 pm

This too shall pass…like an oversized kidney stone. All social pain and no financial gain. When the economy bounces back it will not look like the economy we know, but one we will not recognize , nor know how to properly navigate for at least a half generation or more.

#101 Flop... on 03.20.20 at 7:35 pm

Drove home taking 33rd Avenue, past B.C Children’s Hospital.

Haven’t noticed too many changes this week, besides traffic resembling more of a summer time volume.

This afternoon the back side of the hospital had a heavy police presence.

Witches hats everywhere, and seemed to be screening who was allowed into the car park.

What it means, I do not know, I was doing 60 kilometres an hour.

Actually officers, now I remember.

I was doing 50, that’s right, I was doing 50…

M45BC

#102 Gregor Samsa on 03.20.20 at 7:35 pm

I disagree that this all “self inflicted.” It is at least partially central banker inflicted. Our economy was not well leading up to this, over gorged on helicopter money and cheap debt. And what are we told is the solution? Even more helicopter money and cheap debt.

Note that interest rates were going down before Covid 19. An economy based on debt and government handouts is not an economy, it’s a house of cards that will eventually collapse, even when covid 19 is gone.

#103 Don Guillermo on 03.20.20 at 7:36 pm

#66 oh bouy on 03.20.20 at 6:24 pm
@#24 crowdedelevatorfartz on 03.20.20 at 4:39 pm
And the CBC has decided in it’s infinite programming wisdumb to nuke all local stations and report the politically correct, socially just “news|” from the center on the universe….aka Toronto.
In the middle of the corona virus debacle they pull this?
________________________________
you’ve got some serious OCD about the CBC.
Pro tip for you – quit watching it

***************************************

Quitting watching it is the easy bit. Quitting paying for it – not so much!

#104 BS on 03.20.20 at 7:46 pm

23 JacqueShellacque on 03.20.20 at 4:36 pm

People remember the Depression almost a century later, but no one remembers the Asian flu or Hong Kong flu. Blowing a crater in GDP and employment is worse for society long term than a virus. At least when the Depression ended no one had to cover the tab for anything. We’ll all end up paying in taxes and inflation for decades. To me this whole thing is a repudiation of the last 3 decades of elite rule in the West: send jobs and money to China, which in turn sends us goods that haven’t priced in massive environmental and health externalities, keep borders wide open (at first for workers, then as a display of moral vanity) to make the hygiene standards of less developed countries only a plane ride away. If you add up all the money lost and spent due to this virus, it would be interesting to compare that to what was supposedly ‘gained’ by trade with China since 1990.

China is done as the next economic super power. This virus has finished what Trump started. Supply chains will completely move out of China. It’s economy will be devastated after the rest of the world starts to recover. It just does not make economic sense to be manufacturing things in Communist China for the western world. China knows this and is in a massive PR campaign being pumped by the fake news media. It won’t work. There is too much money to be lost by not moving out of China. The virus exposed everything.

#105 Yukon Elvis on 03.20.20 at 7:46 pm

I can remember when there were no credit cards in Canada. I had to save money for a rainy day, save to buy a car, stereo, tv, etc. Of course I’m as old as dirt but there ya go. Being in debt and living close to the financial edge is an iffy proposition. I miss the twentieth century.

#106 Captain Uppa on 03.20.20 at 7:48 pm

#81 MF on 03.20.20 at 6:54 pm
#41 Captain Uppa on 03.20.20 at 5:18 pm

Agreed. What you say is true.

However, I remember you cheering it on here a few weeks ago. You were thinking only of dollars and interest rates, and forgot the human element.

To be fair, I don’t blame you. Like a lot of others, you thought this time would be similar to what you had become used to. You thought bad economic news would mean the Bank of Canada would lower interest rates again and bail you out, and the health element would simply be forgotten.

That has changed now. That was the financial strategy of the last decade but isn’t the strategy any more. A pivot has just occurred. No one knows what will work moving forward. Stay tuned on that front.. and stay healthy!

MF

—————————–

I never cheered on this virus. In fact I chided Garth for what I felt was a lack of human element in his assessment.

What I was “cheering on” was the fact that I own a home that was rocketing in value … just like any shareholder would of their holdings.

This virus is devastating health, first and foremost. The second uppercut is how much it’s crushing the global economy.

My post today is to say that no, this is not just another bump in the road. I believe this is far more serious than people realize.

I can weather the storm with savings and large equity in my home, but lots of people are getting hammered.

I personally believe even Garth is underestimating it.

Just what I feel.

#107 Retro Marxist on 03.20.20 at 7:54 pm

This is unfair for the working poor and homeless!
https://www.cbc.ca/news/business/banks-rbc-bmo-td-mortgage-credit-coronavirus-covid19-1.5503478

Government giving free handouts to the landowners, but nothing for those who rent!

#108 Lost...but not leased on 03.20.20 at 7:55 pm

OMG
…..What part of you don’t get it don’t you get?

People that are genuflecting to Big Brother to “save them” have not understood the Hegelian dialectic or Yuri Bezmenov warning

Izz der a cure fer STOOPID??.
….maybe 14 day isolation from CBC aka taxpayer funded fear porn ???????????????

#109 Yuus bin Haad on 03.20.20 at 7:57 pm

Looks like single-use plastic bags were banned just in time to bring them back

#110 ts on 03.20.20 at 8:03 pm

That’s super – mortgage deferrals, rents deferred, car loans deferred etc. etc. It appears the government is throwing money around left and right.

What about seniors?
What is the government offering seniors? Will Trudeau offer increase in CPP or OAS when the price of necessities start to skyrocket? Some seniors live on very limited income and can barely make ends meet as it is. What about all the money seniors lost in their retirement investments? Is the government going to be helping them out? What kind of assistance will the government be offering seniors? I haven’t heard a word about helping seniors who worked hard all their lives. Why are they being ignored?

#111 Attrition on 03.20.20 at 8:03 pm

Bad news….for Doomers!

Japan just announced all schools to reopen after normal Spring break.

Sorry Chickens-little, but we’ll power and plow through this virus like we have EVERY OTHER ONE.

Gov’t bailouts will save a slim majority of businesses, many on the verge should be gone anyway.

Asset bubble popped, valuations now reasonable…

I’m no expert, on anything, but the Dow seems to have found a sticky bottom (is that even a thing?) at the 19k mark.

Doesn’t this usually signal it’s about as low as the AIs think it should go?

#112 yvr_lurker on 03.20.20 at 8:04 pm

#23 send jobs and money to China, which in turn sends us goods that haven’t priced in massive environmental and health externalities, keep borders wide open (at first for workers, then as a display of moral vanity) to make the hygiene standards of less developed countries only a plane ride away. If you add up all the money lost and spent due to this virus, it would be interesting to compare that to what was supposedly ‘gained’ by trade with China since 1990.

——————————

This is very close to my sentiment on this. If we have very close ties with countries that heed no warning on very unsafe practices and we have 100 flights a day to these places, we will see this again. Researchers at John Hopkins university predicted last fall that the world could see a disaster like 1918 triggered by the live animal markets originating in Asia and in particular bats. This is summarized as:

https://www.politico.com/news/magazine/2020/03/07/coronavirus-epidemic-prediction-policy-advice-121172

I hope that at the end of this, there is a collective rethink about the good and perils of massive globalization like we have known it for the past 20 years; and in particular our close relationship with China.

#113 BS on 03.20.20 at 8:04 pm

#64 Sail away on 03.20.20 at 6:15 pm

Let’s use Air Canada. 30,000 employees.

They are in big trouble.

Option 1:
Government says, sorry fatcats: deal with it. AC goes bankrupt. Tax base gone. 30,000 Canadians on the dole.

Option 2:
Government helps with tax breaks or other stimulus. AC stays in business but cuts 10,000 jobs. Recovery over time.

What’s better?

If you pick Option 1 the planes would be sent the the scrap heap and air travel in Canada would end? Nope, shareholders and creditors would lose all their money and someone would buy all the planes and infrastructure (maybe even the AC name) through the bankruptcy process, hire all the staff (sorry no union contract) and start a new airline. You would still have 30000 jobs with no government money. The only difference is shareholders and creditors would get nothing and the union would be toast. Sounds fine to me. That is capitalism.

How did the GM bailout workout? Had they let GM go bankrupt we may have an auto manufacture that makes decent cars. Instead we have the revival of the Camaro and a company destined to die with the electric vehicle. Oh we did get the now discontinued Chevy Volt which is fun to laugh at.

#114 pbrasseur on 03.20.20 at 8:05 pm

This is a major (and unexpected) buying opportunity!

just get on with it.

#115 Damifino on 03.20.20 at 8:05 pm

#46 conan

There is no stopping it and a vaccine is doubtful. They have still have not found a vaccine for the common cold and that is also corona virus.
——————————–

That’s because there is no ‘common’ cold. There are about 200 different viruses that cause various ‘colds’. Most of them mean a week or two of discomfort for nearly everyone who might acquire a version. Are you prepared to get 200 vaccinations, just in case?

But there’s only one COVID-19. And I think we can all agree it’s a very nasty one. A vaccine is quite possible but will take time. The impetus for developing such a thing is exceedingly strong.

I wonder if the anti-vaxxers will refuse it when it comes along.

#116 A regular on 03.20.20 at 8:06 pm

Hi,

As a pragmatist, a realist, someone who trusts in science and evolution…

…I really appreciate you saying “thank dog”, as a tongue-in-cheek cheek way of saying a million things, and commemorating the companionship of dogs of course.

Also, I’m more of a cat guy. I’m open to “thank cat that we practice social distancing”…

:)

#117 Mr Canada on 03.20.20 at 8:09 pm

20% of the US Economy gone this week: 2 MILLION jobs. poof ! Its only been a few weeks! Social Media shaming in high gear – what about next week and so on ? .. What’s it going to take for someone will guts to stand up and say this remedy is WORSE than the disease??

#118 Ralph Nader on 03.20.20 at 8:10 pm

Herr Trump dismantled the US of A’s infectious disease departments after coming into office to boost that military budget. Need more nukes you know…

https://mailchi.mp/nader/in-the-public-interest-for-americas-urgent-health-and-safety-trump-needs-to-resign-gqulsuocr2?e=2908937ea7

#119 How to make money? on 03.20.20 at 8:14 pm

It appears we will be in some kind of self induced recession slash depression, how long it last is anyone’s guess. Yes billions to help people which was not available in the 30s so people will spend on on necessities and yes survive.
But what will the paradigm shift be when we exit these turbulent times?
We need to focus on how to make money. What business models will die, what will survive but most important what new business models will emerge? We all talk about making a killing in the stock market, guess what not happening this will be slow and painful recovery.
So what ideas are floating around for investing in new business ventures as we enter new and exciting times after the depression? And I don’t mean Toilet paper and hand sanitizer both failed.
First thing that comes to mind is drone delivery!
Anyone else like to participate in this discussion?

#120 King of Kensington on 03.20.20 at 8:15 pm

Daughter’s friend is a nurse at Sick Kids Hospital and they are seeing less patients in the past week than previous weeks. I jog by Trillium Hospital in Mississauga and notice nothing out of the ordinary…

#121 Smartalox on 03.20.20 at 8:15 pm

Pierre @98:

The renters who were laid off temporarily, or who were forced to shut their businesses, could make deals with their landlords not to pay rent for a predetermined period – using that cash for other expenses. The landlords, on the other hand wouldn’t be hit as hard, by the loss.

EI pays $530 / 2 weeks. Not a lot to live on if your rent on your apartment is $1200/mo.

For commercial properties in Vancouver, so-called Triple-Net leases mean the commercial tenant pays rent, taxes and utilities. On top of any business licenses. The city government can suspend all of those expenses with a council vote.

A lot of businesses have made substantial improvements to the spaces that they occupy. Forcing eviction for non-payment of rent (in temporary cases) is more hassle than it is worth.

Some commercial mall operators are already doing this.

#122 Franco on 03.20.20 at 8:15 pm

I hope after this is all over that governments all over the world make changes for the betterment of this planet and all living things in it or the next one we may not have a fix, oh wait we don’t have a fix on this one, it ain’t over yet.

#123 El Monte Slim on 03.20.20 at 8:17 pm

Wow… what a beautiful dog.

#124 Kurt Godel on 03.20.20 at 8:20 pm

#94 espressobob on 03.20.20 at 7:22 pm

“My math is a bit rusty, please indulge.

774 billion people on the planet. ”

Your math is really rusty Bobo. You are off on the global population by a magnitude of 10 times…

#125 Phylis on 03.20.20 at 8:22 pm

The only good thing i can think of for the government situation is all the sellers have triggered a massive capital gain tax wise for 2020. Hmmm, inclusions…

#126 IPL paid a 2 percent monthly dividend on 03.20.20 at 8:22 pm

So I was very happy to see IPL pay out a 2 percent or annual 24 percent dividend today! Look forward to my next check. I see IPL is flowing at 94 percent capacity.
Remember the world still runs on oil. Even if IPL cuts the dividend by half still over 12 percent,
I can wait out the depression.
Cheers

#127 Stone on 03.20.20 at 8:26 pm

#74 oh bouy on 03.20.20 at 6:41 pm

I’m curious as to what they’re not telling us about this virus

———

Zombie Apocalypse is not fiction.

#128 yorkville renter on 03.20.20 at 8:27 pm

#123 – you’re also off… it’s a factor of 100.

#129 not 1st on 03.20.20 at 8:32 pm

#114 Damifino on 03.20.20 at 8:05 pm
—–

That’s why vaccines wont solve the problem of endless mutating viruses. There will always be another strain coming. Bird flu has mutated 5 times. I believe in vaccine therapy but we cant be getting vaccinated for something new every year.

But the other drugs like recently announced Hydroxychloroquine target the virus replication mechanisms and they all have the same mechanisms. The secret to curing these classes of diseases are in antivirals not vaccines and lowering the virus load until the bodies own immunity can take over.

#130 -=withwings=- on 03.20.20 at 8:33 pm

Households STILL carry $1.76 in debt for every $1 of disposable income (StatCan 4Q 2019 Seasonally Adjusted)

So someone earning 100k owes 176k on their mortgage? That seems reasonable. It’s not like they need to pay it off in one year. Spread over 10, 15 years that’s nothing. What would a low number be?

I can remember when there were no credit cards in Canada. I had to save money for a rainy day, save to buy a car, stereo, tv, etc.

There have been layway plans since the 1800’s. Don’t think you are that old :)

It’s all a democrat hoax to make Trump look bad.

#131 aerozone on 03.20.20 at 8:33 pm

#97 Man of the cloth…
Just pass the vermouth bottle overtop of the
glass. Better still, pass on the martini, and
have a wee dram o’ the Spey or Islay.

#132 Felon Musk on 03.20.20 at 8:34 pm

#40 Mattl on 03.20.20 at 5:14 pm

“And I’m not sure this isn’t structural. These corps have been making money hand over fist, the economy goes dark for a few months and they are bankrupt? ”

Many of these corporations are zombie companies kept alive by their access to capital markets. These companies can’t even service their massive debts and have been able to keep going through new debt and equity issues. Tesla is the champion in this field…

https://fortune.com/2019/09/02/why-zombie-companies-are-on-the-rise-and-could-pose-a-threat-to-the-u-s-economy/

#133 oh bouy on 03.20.20 at 8:36 pm

@#103 Don Guillermo on 03.20.20 at 7:36 pm
#66 oh bouy on 03.20.20 at 6:24 pm
@#24 crowdedelevatorfartz on 03.20.20 at 4:39 pm
And the CBC has decided in it’s infinite programming wisdumb to nuke all local stations and report the politically correct, socially just “news|” from the center on the universe….aka Toronto.
In the middle of the corona virus debacle they pull this?
________________________________
you’ve got some serious OCD about the CBC.
Pro tip for you – quit watching it

***************************************

Quitting watching it is the easy bit. Quitting paying for it – not so much!
__________________________________

well, if the majority quit watching, it will probably go quietly into the night. lets work together people.

#134 oh bouy on 03.20.20 at 8:40 pm

@#122 Franco on 03.20.20 at 8:15 pm
I hope after this is all over that governments all over the world make changes for the betterment of this planet and all living things in it or the next one we may not have a fix, oh wait we don’t have a fix on this one, it ain’t over yet.
________________________________

Franco, there’s only going to be one government when this is over!

lol i’m kidding, just trying to fit in with the like of
‘not 1st’ and stan brooks.

#135 Reality is stark on 03.20.20 at 8:47 pm

Ah yes. The taxes.
Today’s deficits are tomorrow’s taxes.
Housing prices to be slashed in half and subsequent property taxes to be doubled in 5-10 years guaranteed.
You had a concept of a middle class life and a decent retirement. Now you get divorce papers when they find out the party is over.
If you are young enough and you bought and paid for the matrimonial home and made a few hundred grand on it you can kiss it goodbye.
Read up on exclusive possession and how easily you can be evicted for “psychological abuse”.
At least the summer should be warm enough for sleeping in your car.
Good luck. Reality is stark.

#136 ImGonnaBeSick on 03.20.20 at 8:51 pm

#95 espressobob on 03.20.20 at 7:22 pm
My math is a bit rusty, please indulge.

774 billion people on the planet. 274,724 confirmed cases. Works out to be 0.103% infected. 11,368 deaths from said plague equals 0.00527% of population.

When we get to the other side of this, the collateral damage should prove fun.

—–

I don’t even know where to start.. your math is incredibly rusty…

First there’s not 778B people… there’s around 8B.. so we’ll chalk that up to a missed decimal… Second 274,000/8B is 0.00035 or 0.0035%… it’s essentially zero.

They should do this same social experiment on the seasonal flu each year… Including deaths. What an absolute mess they’ve made… This virus, so far, has not been nearly as contagious as the seasonal flu, nor as deadly… It’s absolutely absurd what is happening right now.

#137 mike from mtl on 03.20.20 at 8:52 pm

#109 Yuus bin Haad on 03.20.20 at 7:57 pm
Looks like single-use plastic bags were banned just in time to bring them back
//////////////////////////////////////////////////////////////////////

What, I thought it was rather retro chic seeing full size paper bags again. Like ya know before the 2000s.

#138 ImGonnaBeSick on 03.20.20 at 8:56 pm

Shoot.. I forgot a zero even it’s such a small number..

0.000035

#139 Harvey Lipshitz on 03.20.20 at 8:57 pm

Just my luck, no LOC and no mortgage…I miss all the fun.

#140 espressobob on 03.20.20 at 8:57 pm

Kurt Godel.

Good point. 774 billion, well thank God my math is lousy. Was just trying to put this pandemic into perspective.

That many people would be a real bitch. I believe it was more like 7.4 billion. My mistake but I wonder what this world would look like with 774 billion?

#141 Drinking on 03.20.20 at 8:57 pm

#119 How to make money?

For the way I see it; this virus, although horrible, makes me sick because it did not have to be this way; we had plenty of warning! I think (I hope) we all realize is not to outsource everything to the cheapest producers.

This one is just the wake up call the next one (maybe next winter) will be the harbinger! We need to wise up!

#142 Ovidet on 03.20.20 at 9:00 pm

#29 Viorelli on 03.20.20 at 4:46 pm
Add to this upcoming automation, LGBTQ rights, increased immigration, outsourcing, taxation, and we have a receipt for disaster.

How are LGBTQ rights a “receipt” for disaster?

#143 What if Garth is wromg on 03.20.20 at 9:01 pm

I am not looking for a fight just thinking outside the box.
Yes this will be over maybe in a few months. What happens next?
This will be a major shift in how people spend money, save, and credit. Everyone will be hurting especially those laid off and small business. So what do you do when you loose your paycheque? Yes you prioritize. What happens when you have lots of free time. You should be doing fun things that you always wanted to do.
So the point of this we will all be changed how we think and behave, we are not going back to 2019.
So will there be a super recovery, no I disagree, people will take along time before they go out for dinner, take major holidays as they will have no money.
Majority of people as Garth has said live paycheque to paycheque, now they will be more in debt.
Priorities will change in the future.
How I don’t know but people will never be the same.

#144 Lost...but not leased on 03.20.20 at 9:06 pm

An intriguing development is “On Line” company’s like AMAZON are into mega hiring mode…..

“Accelerated//Taxpayer funded” Knife in back of Bricks and Mortar companies?

Stay Tooned !!!

#145 Captain Downa on 03.20.20 at 9:08 pm

“ Yet in the real economy, everything has halted, frozen in place. This is not a recession. It is an ice age.”

The Atlantic

#146 Yukon Elvis on 03.20.20 at 9:09 pm

#119 How to make money? on 03.20.20 at 8:14 pm
It appears we will be in some kind of self induced recession slash depression, how long it last is anyone’s guess. Yes billions to help people which was not available in the 30s so people will spend on on necessities and yes survive.
But what will the paradigm shift be when we exit these turbulent times?
We need to focus on how to make money. What business models will die, what will survive but most important what new business models will emerge? We all talk about making a killing in the stock market, guess what not happening this will be slow and painful recovery.
So what ideas are floating around for investing in new business ventures as we enter new and exciting times after the depression? And I don’t mean Toilet paper and hand sanitizer both failed.
First thing that comes to mind is drone delivery!
Anyone else like to participate in this discussion?
………………………

You could also invent an electrical plug that makes your electric meter run backwards. Plug your Peloton bike into it, start pedalling, and get free electricity. Get the wife to pedal off a few pounds. Put the kids on it in shifts, make a few bucks. I’ve thought it thru. I’d do it myself but I’m too busy eating bon bons and drinking Coronas by the pool. You could patent it and make a fortune. I want ten percent. E

#147 AK on 03.20.20 at 9:10 pm

#76 Jager on 03.20.20 at 6:41 pm
“The 10yr Treasury yield (0.854) dropping again. If this keeps up Monday will be a disaster…”
=====================================
This is not a disaster.

When both Stocks and Bonds go down at the same time, that’s when a crash occurs.

In today’s case, Bonds went up, and Stocks went down.

The reason stocks were hit today, was due to the triple witching Friday.

“Triple Witching Friday happens on the third Friday of March, June, September, and December, and is the simultaneous expiration (or rollover) of various futures and options contracts. Many U.S. stock index futures, stock index options, and stock options expire on these days.”

#148 Out Of Work CEO, Will Travel on 03.20.20 at 9:22 pm

Our hotel outside of Knoxville, Tn just off the I-75 has a majority Ontario plates in the parking lot (many dogs in the family car). Starbucks is open but only for drive-through or carry out. We gas up at the Circle K on the I-75 in Tennessee for $1.71 per gallon and the coffee is truly epic. Circle K is Canadian owned by “Alimentation Couche-Tard Inc. Circle K offers three or four brewed coffee types where the machine grinds your fresh beans; then brews your Jo in your size cup. It cuts your Starbucks price by a third and it is fresh. Circle K is without a doubt powerful with its innovation. They will be frowned upon by the Timmy set no doubt.

#149 DON on 03.20.20 at 9:26 pm

#111 Attrition on 03.20.20 at 8:03 pm

Bad news….for Doomers!

Japan just announced all schools to reopen after normal Spring break.

Sorry Chickens-little, but we’ll power and plow through this virus like we have EVERY OTHER ONE.

Gov’t bailouts will save a slim majority of businesses, many on the verge should be gone anyway.

Asset bubble popped, valuations now reasonable…

I’m no expert, on anything, but the Dow seems to have found a sticky bottom (is that even a thing?) at the 19k mark.

Doesn’t this usually signal it’s about as low as the AIs think it should go?
******************
How you managed to change some details. “Some” schools, not “all”. Details and context matter, links are helpful.

https://www.ft.com/content/e388851e-6aa8-11ea-800d-da70cff6e4d3

“Japan has begun discussions that would make it one of the first Asian countries affected by the coronavirus outbreak to reopen some schools from April, despite a warning from experts of a potential “explosive” increase in infections if control measures were lifted.”

Parents need to get back to work to pay the bills after 5-6 weeks of staying at home.

https://www.ft.com/content/e388851e-6aa8-11ea-800d-da70cff6e4d3

#150 Smoking Man on 03.20.20 at 9:27 pm

When you’re not in the game anymore. You are on borrowed time.

You just take in the scenery, hope you can finally take the wife to Hawaii. She never said she wanted to see it.

Love you dogs….

#151 Jager on 03.20.20 at 9:28 pm

#119 How to make money? on 03.20.20

An excellent read on the future that is here now:

“The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives (Exponential Technology Series)”
https://www.amazon.com/Future-Faster-Than-You-Think/dp/1982109661

Yes. The market can do many things yet science edges forward. A breathtaking future awaits. This is certainly not the time to give up our freedoms!

#152 Barb on 03.20.20 at 9:33 pm

#32 spoon_man on 03.20.20 at 4:52 pm

Garth, you should start a poll to name the year 2020. Here is my proposal: ” The great reset”.
————————–

The Year of the Bat

#153 Sail Away on 03.20.20 at 9:42 pm

Update on the company situation: last week management went half salary, today 25% of staff laid off and all others signed to hourly contracts.

Next few weeks will be uncomfortable.

#154 jerry on 03.20.20 at 9:52 pm

@#98

Dean Martin said that the correct amount of vermouth was added by waving the tumbler of vodka/gin for several seconds in the general direction of Italy.

#155 Sail Away on 03.20.20 at 9:54 pm

#146 Yukon Elvis on 03.20.20 at 9:09 pm

You could also invent an electrical plug that makes your electric meter run backwards.

—————–

Simple generator or dynamo. It’s been around for a loooong time. A person can run a 100W lightbulb at full power. No invention needed.

Way more energy is expended than harnessed. Energy balance minus significant friction and mechanical losses.

#156 Sail Away on 03.20.20 at 9:57 pm

#141 Drinking on 03.20.20 at 8:57 pm
#119 How to make money?

For the way I see it; this virus, although horrible, makes me sick because it did not have to be this way; we had plenty of warning! I think (I hope) we all realize is not to outsource everything to the cheapest producers.

This one is just the wake up call the next one (maybe next winter) will be the harbinger! We need to wise up!

————

Nope. You always have lots of warning, and you’ll always be caught. Who knows if it’ll happen today or 10 years from now?

That’s life.

#157 schnuflzz on 03.20.20 at 9:58 pm

“Dog help us when it comes to future tax rates.”

In Dog we trust!

#158 Barb on 03.20.20 at 9:58 pm

Gorgeous pic of Bandit as a teenager?
Look at those expressive, all-knowing eyes!

#159 ImGonnaBeSick on 03.20.20 at 10:02 pm

Frankly, I don’t care what you think of him personally, so don’t bother telling me, but lots of good points here by Conrad Black, and some great suggestions.

https://nationalpost.com/opinion/conrad-black-getting-a-handle-on-covid-19s-economic-fallout/amp

#160 Monsieur B OReilly on 03.20.20 at 10:10 pm

#11 The Wet One on 03.20.20 at 4:15 pm
Do we really need to have Fox News North ”

Stop the jabberwocky and stop being a nitpicking ninnyhammer with this pecksniffian and cantankerous codswallop

#161 Steve French on 03.20.20 at 10:23 pm

Sorry Garth, but with all due respect to you and your fancy pants Ferrari-driving hired help … (and i do respect your free services)

… even you have to now admit that you have underestimated the situation over the past 2 months, and that you are still far behind the curve right now.

Not everything can be compared to past history. There are some new things that appear under the sun.

I’m not panicking and not liquidationg my portfolio… but I am starting to realise the seriousness of the situation.

Hyper-globalisation is collapsing in on itself like a red dwarf after a shining star gone supernova.

This is going to be a very very painful process of deleveraging and a full re-organisation of globalisation.

We are going to be lucky to avoid geopolitical armed conflict.

It won’t match the impact of the Great Depression, but it could indeed be the second most serious economic collapse since that time- worse than the 2008 GFC.

Hold on tight for tough times ahead.

Buy some Gold.

#162 Bart Barilko on 03.20.20 at 10:36 pm

#29 Viorelli on 03.20.20 at 4:46 pm

I too remember surviving the collapse of the USSR when I was a kid prior to leaving the former to Canada with my parents.”

Do you break into a cold sweat whenever you hear the name “Paul Henderson” or the phrase “he shoots he scores”

#163 Gil on 03.20.20 at 10:42 pm

#32 spoon_man on 03.20.20 at 4:52 pm

Garth, you should start a poll to name the year 2020. Here is my proposal: ” The great reset”.
————————–

Coronation year

#164 Gil on 03.20.20 at 10:51 pm

Its hard to say at a time like this that there is anything good can be coming of this situation but maybe people will finally understand how over leveraged everybody is.
Vast majority lives beyond their means. I do not want to start a holly war between have and have nots but that can be said about practically every group. Whole generation brought up with a strong belief that recessions/tough times can be avoided by government “providing liquidity”. People keep borrowing because that behavior is insentified and rewarded .

#165 Kurt Godel on 03.20.20 at 10:58 pm

#128 yorkville renter on 03.20.20 at 8:27 pm

#123 – you’re also off… it’s a factor of 100.

You are correct! It’s all the scotch I’m having in quarantine…

#166 HappyKind MM on 03.20.20 at 11:08 pm

#129 not 1st on 03.20.20 at 8:32 pm
The secret to curing these classes of diseases are in antivirals not vaccines and lowering the virus load until the bodies own immunity can take over.”

You sound like you work for big pharma and want to hook the population on lifetime medication, kind of like HIV meds. Dont forget the happy pills….

#167 the Jaguar on 03.20.20 at 11:10 pm

“I have chosen carefully and deliberately. Some day I will share why. – Garth’

Can’t you just give us a little preview? This blog isn’t all about financial advice and markets. A charming seaside World Unesco site far from the madness of crowds. Totally understandable. Or maybe a family connection. It’s a kind of torture to put out a little tidbit like that to those who like to solve puzzles. Have a heart.

#168 Da Juice Be Loose on 03.20.20 at 11:28 pm

One of the scariest features of this whole crisis is the lack of accessibility to testing for the average Joe. Seems you have to already be critically ill or a B list celebrity trying to revive a failed acting career before u get tested. How long before the Kardashians and OJ hijack the narrative and claim to be infected, then come up with some kind of zany reality show such as “The Infected”. You heard it here first folks.

#169 Future Expatriate on 03.20.20 at 11:42 pm

“They will pass”

Along with millions.

#170 Unhinged Trader on 03.20.20 at 11:44 pm

What are you guys buying now?

I took $15K US and went shopping today, picked up Chemours Company (industrial, leading TiO supplier) and Haemonetics (healthcare, blood plasma products, all-star management growing earnings 100% every 2 years).

#171 WUL on 03.20.20 at 11:48 pm

#83 Alberta is toast on 03.20.20 at 6:55 pm

nailed it…nailed it…nailed it…

Yup. Burnt toast.

WUL

M64Ft. Mac Resident = Shuttered = Everything Has Changed

#172 Drinking on 03.20.20 at 11:52 pm

#150 Smoking Man

This one is for you; all the best!

https://www.youtube.com/watch?v=gMTZu6_TjU8

#173 The Big-Reset on 03.20.20 at 11:53 pm

its just started. Recency bias had folks thinking V-shape recoveries r then norm, it always goes up. That central bankers can just print money , that deficits/debt are irrelevant

they are throwing trillions at this, cant stop the bleeding.

50% correction at minimum and millions of lives/retirement plans turned upside down

#174 islander on 03.20.20 at 11:55 pm

https://www.youtube.com/watch?v=p8oxndup1QM

Hi Garth
This is for you.
I almost died laughing – oops!

My apologies to those who’ve already seen the above – ‘Pluto addresses the internets (sic)’

#175 James Gileo on 03.20.20 at 11:59 pm

5G. Framile yourself about it. Could be behind this whole charade.

#176 fishman on 03.21.20 at 12:04 am

Last shift tonite for a couple of the highest tech, most modern always profitable, 750,000 b.f./day sawmills in the interior. No sawmills ; less chips. Less chips ;less pulp. Less pulp ;less paper.
e-mail yesterday from Cloverdale Cold Storage. Thats the biggest & main cold storage plant for the LM down by the border. I carry product there. Letter mostly boilerplate but one sentence stood out. They are monitoring inventory & subsequent use by “end users”. That means the Feds are sniffing around. Tallying up food stocks under the guise of stopping hoarding. Preparing for a worst case. Actions deemed in the national interest like halting exports & instituting rationing of critical food products. Hard times a coming in the land of plenty.

#177 Attrition on 03.21.20 at 12:09 am

#149 DON on 03.20.20 at 9:26 pm

#111 Attrition on 03.20.20 at 8:03 pm

Bad news….for Doomers!

Japan just announced all schools to reopen after normal Spring break.

Sorry Chickens-little, but we’ll power and plow through this virus like we have EVERY OTHER ONE.

Gov’t bailouts will save a slim majority of businesses, many on the verge should be gone anyway.

Asset bubble popped, valuations now reasonable…

I’m no expert, on anything, but the Dow seems to have found a sticky bottom (is that even a thing?) at the 19k mark.

Doesn’t this usually signal it’s about as low as the AIs think it should go?
******************
How you managed to change some details. “Some” schools, not “all”. Details and context matter, links are helpful.

Did I change something?

TOKYO

Prime Minister Shinzo Abe’s government will not extend its current request for school closures across Japan to prevent the spread of the new coronavirus and will allow classes to begin as scheduled in Japan’s new academic year from April, the education minister said Friday.

Speaking at a meeting of a government task force on fighting the coronavirus, Abe instructed the education ministry to draw up plans for the reopening of schools after a spring break through early April…

https://japantoday.com/category/national/Abe-says-schools-to-reopen-after-spring-break-remains-cautious-about-big-events

Sheesh. I gotta do your homework for you too?

#178 Long-Time Lurker on 03.21.20 at 12:21 am

I’m glad you let that last comment of mine get on here, Garth. It’ll save more lives.

#179 Mike in Van on 03.21.20 at 12:28 am

Thank you, Garth, for your daily solid advice and calm assessment of the world’s current situation. You might be wrong about some of it in the end, but your optimism everything is going to be all right is rare in the media right now.

#180 Adolph Lungren on 03.21.20 at 12:50 am

#148 Out of Work CEO

Same here in China at the 7-Eleven. Choice of Americano or Latte. Machine brewed. Fresh, full-bodied taste and aroma. One-sixth the price of Starbux for a 12-ouncer.

#181 WUL on 03.21.20 at 12:59 am

#119 How to make money? on 03.20.20 at 8:14 pm

“We need to focus on how to make money.”

50 years…50 years…50 years…

Good idea!!

Since I was 14 years old, this was my singular focus.

I’ll stick with it. One foot in front of the other. Onward.

WUL

M64Flat Busted in The Mac – Hi FLOP!

#182 Dr V on 03.21.20 at 1:21 am

152 Barb – agreed! And it’s a long ways from over….

#183 Daveyboy on 03.21.20 at 1:30 am

Always made me laugh Smoking Man

Smoking Man on 10.02.16 at 7:02 pm
Close Encounters.

Well, it finally happened, I jumped into the truck and headed up Hwy 10, went left on King street and right on Mississauga rd. GPS said 10 more kilometers, this is the furthest upriver I’ve ever gone on my previous failed attempts to meet the god dogs. This was my Martin Sheen moment. The road was like a scary river in Vietnam going to meet Kurt’s. I imagined all kinds of weird shit, negative outcomes raced through my mind at lightning speed.

I get to the four corners of Belfountain and there is a road block up ahead, these old geezers with big X symbols on their shirts, I was about to do a U-turn, and an epic burnout, but the traffic killed that idea I was trapped. To my relief, they were just collecting money for some kids or something, I was in full panic mode so I don’t remember much of the encounter except for forking over a 5 and hoping this will get me passed the checkpoint.

I see a hummer in the parking lot of the general store, I pull right beside it on the other side, out of view from whatever was lurking in that store. I had a cigarette, took it down in one drag. I forced myself out of the truck and slowly walked toward the door. I get in and to my relief no Garth. Just a pleasant young lady who got me a really good coffee for a 1.70 and in my moment of terror, I forgot to tip her. I asked her.” Is Garth here,” hoping she would say no. She said “Yes”

I asked her to tell him an off planet observer from a galaxy far away would like to see him.

A minute worth of time went by which was like a few weeks to me. I hear what sounds like brown suede cowboy boots hitting the dirt hard outside the store. I spot Garth coming toward the door in cool RayBands. We shake hands go outside and shoot the shit for about half an hour. I meet Dorothy and Bandit.

Being a supreme Alien observational technologist I was floored. Got to say truthfully that Garth and Dorothy are truly remarkable. I felt extream warmth radiate from these strangers who know I’m totally certifiably insane but it didn’t seem to matter to them much.

My first impression is they truly care about humanity and enjoy helping people regardless of how different we all are. Definitely going back, bringing the wife and dogs the next time.

I sort of wish I never went, how can I be Smoking Man on here going forward after this pleasantly warm encounter of the third kind. But then again I still have lots of JD hidden in the back yard and I’m not quitting drinking anytime soon.

#184 Not So New guy on 03.21.20 at 1:39 am

Instead of buying up debt, central banks need to be buying up debt…and canceling it.

They can’t do it all, that would be moral hazard. They should maybe start with 20% or so (maybe via lottery or something). If that fails to stabilize things, then another 20%. The debt needs to be turned into interest-free cash which only the CBs are able to do.

Interest rates need to be restored to sanity levels so as to reward savings again.

Hopefully, this whole bad money era is begetting a new economic philosophy that steers away from leverage and back into debt-free economics

#185 Mikeshouse on 03.21.20 at 1:39 am

Welcome back Dolce Vita ;0)
As a long time lurker I really have missed your commentary

#186 Calgary on 03.21.20 at 1:48 am

I believe Saudi Arabia, Russia and the United States will sign a tripartite agreement to curtail oil production.

#187 Tom from Mississauga on 03.21.20 at 1:49 am

With all the essential goods and services Canada will have to onshore inflation will not get below 3% till 2030.

#188 Nonplused on 03.21.20 at 1:51 am

#116 A regular on 03.20.20 at 8:06 pm
Hi,

As a pragmatist, a realist, someone who trusts in science and evolution…

…I really appreciate you saying “thank dog”, as a tongue-in-cheek cheek way of saying a million things, and commemorating the companionship of dogs of course.

Also, I’m more of a cat guy. I’m open to “thank cat that we practice social distancing”…

:)

——————-

Thank “cat” doesn’t make a very good anagram. And anyway cats are evil.

#189 Nonplused on 03.21.20 at 2:29 am

PS #116 A regular

My dog is named Remus. We did not name him that, that was the name he carried from the rescue shelter and the fine lady that fostered him when he was but a pup. It is a lofty name, Egyptian for “God of dogs”. Well I just couldn’t think of anything better, so we left it as was. But he is a good dog, and not nearly as evil as his 2 cat friends. He’ll eat his toys, but he doesn’t try and push our computer stuff and coffee cups off the desk. All he wants is a cookie (milkbone) and a walk.

#190 Rock your Recession on 03.21.20 at 3:13 am

“Use the banks money”? How does that work again? You borrow on ‘credit’, and you still have to pay it back compounding, likely at higher rates. No, it’s not the banks money, it’s your money. Borrowing vs cash ? Sorry to disagree. Use the bank loan last. In the meantime start your new austerity diet. Cash is good for that. You take only what you can spend and leave the credit card HELOC money frozen into an ice block. Take $5 cash bucks , when it’s gone go home.

#191 Richmond will be underwater by 2014 on 03.21.20 at 3:21 am

Trump and Biden will ask Congress to postpone the election

Trump and Biden will jointly call the troops home.

#192 Dolce Vita on 03.21.20 at 4:22 am

Holy Moses Garth, it starting to happen.

To choked this morning to finish drinking my espresso lungo…

BNN Bloomberg:

“Canada received over 500,000 EI applications this week”

-The largest number of jobless claims for a whole month was 499,200 in 1957, according to Statistics Canada data.
-“This is going to be the depression of 2020,” said David Rosenberg, founder of Rosenberg Research and Associates Inc.

Even the darned Wedding Industry reporting “unprecedented cancellations”…usually a nice Spring GDP boost to the GDP Service Sector.

Some GOOD news:

-Walmart & grocery chains hiring to meet demand.
-And Justin vows he’s on top of the EI claims.

—————————

…staggered, hard to wrap my mind around it all – the speed of it.

And here I was hoping that the Sachs forecast was mostly about posturing for their Congress.

WE NEED a miracle, a vaccine right about now would be really nice.

#193 under the radar on 03.21.20 at 5:34 am

Of 180 + residential units , I am expecting 50% to be unable to pay their April rent. Yearly operating costs run about 50% of revenue and that’s with no debt.

#194 MaryEn on 03.21.20 at 5:36 am

I recently transferred some investment (preferred ETF) from Margin acc. to TFSA. Obviously, I wanted to use low prices and save some taxes for the next year. It was surprising to learn that CRA assumes this kind of transfer as taxable “sale” when you make a gain. But if you make a loss, the same transfer is not a “sale” anymore and you cannot deduct the loss. Interesting. Does someone have the same experience?

#195 SHANE GALLANT on 03.21.20 at 5:48 am

Garth, what about the Government allowing us to use our locked in funds for retirement from our company pensions.

#196 Long-Time Lurker on 03.21.20 at 6:43 am

DELETED

#197 Toronto_CA on 03.21.20 at 7:09 am

With a strong USD, is this a time to use hedged-ETFs for investments rather than non-hedged? I have read that currency hedged funds are never a good idea, would be interested to hear some blogdog views.

I could just see a lot of sp500 gains as this reverses course lowered by a weakening USD (at all time highs).

#198 TurnerNation on 03.21.20 at 7:56 am

Is this normal?
On every single door for every store , office or business there is sign.
On outdoor light boards.
On every business website.
On every email you are getting from business and government.
On every single news story they push at us.

Like didn’t you know already?
That word. You know it. It will be the justification for total mayhem and strikes fear in the heart.
A few of us on here always have said that control over our minds is the game always.

#199 Bezengy on 03.21.20 at 7:58 am

#172 re: #150 Smoking Man

I’ll raise you a dollar.

https://m.youtube.com/watch?v=7hx4gdlfamo

#200 Wrk.dover on 03.21.20 at 8:06 am

Trying to predict post Bat Year, note that the Dow hovered along basically unchanging from 1965-1983 while consumer goods quadrupled in price, as I recall the era of blundering and paying for the Viet Nam war, from my experience of someone born in ’53.

Perhaps this is to be relived, post bat year. How were earnings in that era of stagnant stock values? I have no knowledge to draw from. But I sure recall the inflation, which was a constant insurmountable burden for a have not.

The good times never started until Reagan invented un-necessary debt for fun times the well connected.

#201 Felix on 03.21.20 at 8:19 am

Nonplused, why don’t you go down to your local EB Games store and mingle with your friends.

#202 TurnerNation on 03.21.20 at 8:21 am

Our elite’s plan right now works on so many levels.
All those protests against high residential rents and calls for rent strikes? Now legalized by the government. The poor can stick it to the man.
No one may be evicted. They’ll stop paying rent.
Buildings will turn to shambles. HOA/condo fees will go unpaid. Kommunist Blok housing is back.

#203 Ace on 03.21.20 at 8:32 am

What the heck is going on with RE.. there are thousands of places for sale in Toronto and market yet whatever does happen to sell, which isn’t much at all anymore, is going for over asking price. Is it rigged? Just look at the zolo stats !

#204 unbalanced on 03.21.20 at 8:51 am

Remember when the FN’s blocked the railway lines. Did this prevent any medical supplies getting to the proper places? Just wondering.

#205 Stone on 03.21.20 at 9:11 am

Concrete coffins in the sky.

Takes on a whole new meaning now.

#206 not 1st on 03.21.20 at 9:20 am

Its too bad that we don’t have honest media to tell people the real story in a calm measure manner. People have to go digging to get the truth.

This virus is targeting a slim subset of the population but on a world wide basis looks like bigger numbers.

– immuno-compromised
– very elderly
– smokers, vapors, etc
– hypertensive (drugs causing more susceptibility to the virus)

In the rest of the general population, this appears no worse than seasonal flu.

We panicked and shut down our economy instead of getting the right information first. A small subset of the population could have been quarantined and monitored and the rest of us could have gone out and burned through this thing and passed on herd immunity.

The scientists on the news are saying its better to be fast than right. Uh huh, lets see how that goes as we try to pick up the tatters of this economy. I suspect a boom in divorce lawyers and phycologists will be the next boom industry.

#207 I’m Still Around on 03.21.20 at 9:29 am

Thank you Garth for all that you do!! Yes these difficult times will pass and we will come out stronger as a nation

#208 Dharma Bum on 03.21.20 at 9:37 am

THIS is mother nature in action.

Whatever happened to good, old fashioned climate change?

Now, instead of social justice warriors, we have social DISTANCE warriors.

#209 MF on 03.21.20 at 9:40 am

203 Ace on 03.21.20 at

That’s easy.

It hasn’t occurred to some people yet that the whole system as it was has changed. Ten years of fake price increases, real estate propaganda, and bank of canada bailouts have created a world of illusion that is currently dying as we speak.

Buyers today are like buyers of pets.com in 1999, they just don’t know it.

Of note, there could be a section of people that just don’t care. Ie the system is so screwed up, cost of money zero, no value of any dollar, bailouts galore, debt like crazy, and it’s all basically collapsing in on itself so who cares might as well buy and enjoy.

MF

#210 Is the advice to still hold? on 03.21.20 at 9:52 am

It sounds like the D word is appearing in financial circles.
Everyone talks about a rebound to the moon.
I have been hanging on but in getting worst
We saw what happened as people panic
Stocks are down, Preferred’s are down, bonds are down gold stocks are down, oil in the toilet,
Yep I have lost allot all in good solid blue chip common stocks
Explain to me why waist Management company is dropping? We will still have garbage? Why is Algonquin power down We still need electricity.
I am stressed now!

#211 Dharma Bum on 03.21.20 at 10:17 am

#117 Mr Canada

20% of the US Economy gone this week: 2 MILLION jobs. poof !
——————————————————————–

Where’s your Moses NOW, see?

https://www.youtube.com/watch?v=D0Qcv3YV4aA

#212 Renter's Revenge! on 03.21.20 at 10:26 am

#194 MaryEn on 03.21.20 at 5:36 am
I recently transferred some investment (preferred ETF) from Margin acc. to TFSA. Obviously, I wanted to use low prices and save some taxes for the next year. It was surprising to learn that CRA assumes this kind of transfer as taxable “sale” when you make a gain. But if you make a loss, the same transfer is not a “sale” anymore and you cannot deduct the loss. Interesting. Does someone have the same experience?

=======

That’s how it works. It’s similar to superficial loss rules where if you sell something to realize a capital loss and then then buy it back within a month you can’t claim the loss. On the other hand, any time you realize a gain, the government wants its share. In-kind transfers apply. I believe the solution is to sell the security, transfer the cash to your TFSA, then buy a different security in the TFSA (it can be similar but not exactly the same one). Then you can claim the loss.

#213 Vanessa Blinko on 03.21.20 at 10:42 am

#84 Marlene. If you’re in BC there’s good news for renters. Under Emergency Powers Act the courts and Sheriff will not process any evictions. Landlords can nail them to the door, but tenants no longer have to pay rent if that’s what their circumstances dictate.

Suggestion: First contact your landlord and inform them that you can no longer pay rent due to government order leading to unemployed status. You might be nice and attempt to mitigate, and offer a lesser amount, effectively to lower your rent until emergency has passed. It could be 18 months, it could be less.

Teachers , in BC they are being laid off , TTOC first. Likely unionized later. EI will not sustain anyone if emergency lasts beyond EI. This category is supposed to cover all workers not in line for EI, $450 BI weekly.

TTOC can collect Emergency Funds from fed, 14 weeks so far, but no exact details from Liberals just a lot of farts and promise about money by May.

#214 Sail Away on 03.21.20 at 10:46 am

This. Read it again.

#206 not 1st on 03.21.20 at 9:20 am

Its too bad that we don’t have honest media to tell people the real story in a calm measure manner. People have to go digging to get the truth.

This virus is targeting a slim subset of the population but on a world wide basis looks like bigger numbers.

– immuno-compromised
– very elderly
– smokers, vapors, etc
– hypertensive (drugs causing more susceptibility to the virus)

In the rest of the general population, this appears no worse than seasonal flu.

We panicked and shut down our economy instead of getting the right information first. A small subset of the population could have been quarantined and monitored and the rest of us could have gone out and burned through this thing and passed on herd immunity.

#215 Sail Away on 03.21.20 at 10:48 am

Shawn Allen, you still owe me an apology.

#216 Flop... on 03.21.20 at 10:55 am

#181 WUL on 03.21.20 at 12:59 am

M64Flat Busted in The Mac – Hi FLOP!

/////////////////////////

Hey WULLY!

I’ve got some good news for you, sort of.

It’s the time of year that Australian Rules Football normally kicks off.

Right down to the wire, they deliberated about whether the season should start with the carnage currently happening.

They decided to play the games in empty stadiums in the hope that things eventually clear up and spectators can attend later games.

Professional games played in stadiums that can hold up to 100,000 people, with no one in attendance, look just like intense training sessions.

Lots of changes.

Except my beloved Carlton Blues got beat again, not much change in that department.

Your beloved Geelong Cats also lost, but this season more than ever could be a battle of attrition, where one club could be wiped out by a few sick players.

Strange times indeed.

Despite the uncertainty I wish you good health and a little bit of wealth…

M45BC

#217 Nottawa Housing Bust on 03.21.20 at 10:55 am

Seeing a lot of comments regarding RE prics going up. I am wondering at what time would you consider conditions ” not a good time to buy”.
From here I will proceed with some fear mongering.

500k EI claims in one week. How long will EI last at this rate. Stock markets dropped 30 % so far and maybe more ( Most likely 10 -20% more but again buying opportunity of a lifetime to acquire some business).

Those of you who think GOV jobs will be spared. We cut 25000 positions in 2010 on a 58 billion deficit. I can only imagine what will happen this go around. Do you really expect the rest of the economy to work MIN WAGE to pay your salaries???

Anyone with multiple investment properties or air bnb properties is incredibly exposed. Rental income will come in based on EI sustained employment if lucky. Air bnb. It’s dead. Travel will take years to recover.

We need to be positive but realistic in these situations. Tough times are ahead and after this is done, we need to re evaluate “risk and leverage” in real estate. The fact the government has purchased 50 billion in mortgages 10 days in tells me banks are terrified.

#218 Sail Away on 03.21.20 at 10:56 am

#209 MF on 03.21.20

It hasn’t occurred to some people yet that the whole system as it was has changed. Ten years of fake price increases, real estate propaganda, and bank of canada bailouts have created a world of illusion that is currently dying as we speak.

Buyers today are like buyers of pets.com in 1999, they just don’t know it.

Of note, there could be a section of people that just don’t care. Ie the system is so screwed up, cost of money zero, no value of any dollar, bailouts galore, debt like crazy, and it’s all basically collapsing in on itself so who cares might as well buy and enjoy.

—————————-

Turn that frown upside down, fella! It’s not as bad as all that.

Consider that your pessimism may be colouring objectivity.

#219 MF on 03.21.20 at 11:03 am

#206 not 1st on 03.21.20 at 9:20 am

I guess it never occurred to you that the certain subsection of the population you cited at risk represents billions of people.

News flash: almost everyone has a pre existing health condition above a certain age. Even below that age, massive amounts of people treat their health like garbage and have all kinds of pre existing conditions they may not even know about as well.

Psst: look at the ages of the patients in Italy for some insight.

In the US, with a massive amount of people overweight, this is a huge problem. The economy will be in tatters with these people all self isolating, or worse.

Maybe stick to complaining about oil, millennials, Toronto, and politicians. Leave the epidemiology to the experts.

MF

#220 Sold Out on 03.21.20 at 11:20 am

#214 Sail Away on 03.21.20 at 10:46 am
This. Read it again.

#206 not 1st on 03.21.20 at 9:20 am

Its too bad that we don’t have honest media to tell people the real story in a calm measure manner. People have to go digging to get the truth.

This virus is targeting a slim subset of the population but on a world wide basis looks like bigger numbers.

– immuno-compromised
– very elderly
– smokers, vapors, etc
– hypertensive (drugs causing more susceptibility to the virus)

In the rest of the general population, this appears no worse than seasonal flu.

We panicked and shut down our economy instead of getting the right information first. A small subset of the population could have been quarantined and monitored and the rest of us could have gone out and burned through this thing and passed on herd immunity.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Facts from CDC, no digging required.

https://www.cdc.gov/mmwr/volumes/69/wr/mm6912e2.htm

#221 MF on 03.21.20 at 11:24 am

#218 Sail Away on 03.21.20 at 10:56 am

Meh you’re right. I’m lucky enough to be working full time still. One of the few people going to work in the morning these days.

There were warning signs about our economy and our economic system for years. The rubicon was crossed somewhere in 2014/2015 when we committed to having real estate and debt as a larger and larger portion of our economy. Garth has been writing about this for decades.

None of it was sustainable. We knew all along that if any shocks came to the system, we would be very exposed.

So here we are. Might as well accept that big changes are coming. Some will be good (maybe less offshoring of manufacturing), some will be bad (real estate collapse and deep recession).

MF

#222 Flywest29 on 03.21.20 at 11:25 am

https://medium.com/six-four-six-nine/evidence-over-hysteria-covid-19-1b767def5894

Bit of a read but very good analysis of the current situation and where we are going by this gross overreaction.

#223 Darren on 03.21.20 at 12:20 pm

# 53 Should we expect any RE price drops? Bigger than when the stress test was introduced?
—————————————————-
Can you say Timber!!!!

#224 Lambchop on 03.21.20 at 2:01 pm

Ok, so we can probably all agree that the medical community should not be permitted to run our country’s finances, same as an accountant should never be allowed to run a restaurant based on food cost alone.

So why are we allowing this to happen? We are being forced onto EI and whatever social programs are available to us because “flatten the curve”.

There simply has to be another way. I am luckily still working but we are all waiting for the hammer to drop.

Everyone I know (except the CBC fanatics) is extremely unhappy and stressed about not being able to work. I don’t know what we can do about it, there’s nothing I can think of, but lots of you on here have good ideas.
Nobody is interested in a deep and prolonged recession, or worse.
I know this will garner some social shaming about how I don’t care about the afflicted, but why should the country, the world, be dragged down economically by this? I thought we were going to follow South Korea’s successful example? They didn’t have a nationwide lockdown of everything, and they survived!

What can we do to turn this crazy government around?

#225 Drinking on 03.21.20 at 6:06 pm

#156 Sail Away

Nope; it’s called preparedness!

#226 HH on 03.21.20 at 7:33 pm

Wanted to say a few words to all the lovely human beings on this blog who think this is all an overreaction and saving the economy should take precedence over saving lives.

You know, those folks who think the proper policy response to a disease that doesn’t touch 80-90% of population and mops the floor with 10-20%, is to continue business as usual and throw the 10-20% under the bus.

Or better yet, pack those pesky 10-20% off to quarantine concentration camps, so the rest of us can continue going to work and never lose a single day of work or a single dollar of profit.

Dog forbid we let anything interfere with the making of a buck for even a few weeks or months…

Bye-bye grandma and grandpa. Off to camp you go… Nothing personal – just business. You are starting to get in the way of my making money…

How old are you people? If you are anything over 60 and you hold that opinion, you are too dumb for words. You are the at-risk group. You are basically volunteering yourself to be thrown under the bus or into quarantine concentration camp.

If you are younger, don’t you have parents, grandparents or other elders in your family? Are you willing to sacrifice them so easily?

I know, I know. Economy matters too. They are drastic measures. The shutdowns cannot last forever. Eventually tough choices and trade-offs will have to be made.

But what does it say about the moral fibre of our society that just a mere lousy, stinking, miserable 1-2 weeks into this thing, so many are already willing to throw every hypertensive, immuno-compromised, old grandma to the wolves?

Are we really that perfectly willing to let that slim minority of 10% or 5% or 2% or whatever take it on the chin, while we all just stand back and watch?

If so, what does that say about us?

#227 Prince Polo on 03.22.20 at 11:06 am

Bandit’s looking quite dapper!!!