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April 8, 2020 | The un-normal

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Did you ever think Easter/Passover would end up this way? Me neither. It’s one for the record books.

Thursday we get jobs numbers for March. Ouch. Expect at least 500,000 fewer people working, mostly those who can least afford to lose employment – hourly folks in the service sector. There’s no working at home (or pretending to) for cooks, cleaners, hotel staff or hairdressers.

They form part of the four million souls who have thus far applied for emergency cash from the feds. There will be a few million more by the time this thing is finished. We will never have experienced this level of joblessness. The pain and distress is real. Feel lucky if you’re a teacher on full pay with no students, retired with a pension or still drawing a paycheque for remote work. T2 said Wednesday this will carry on for months, while announcing yet more spending and subsidies.

Many are mystified why stock markets can go up at a time like this. Mrs. Virus is still munching her way through the population. A new poll shows terrorist media and government have now convinced almost two-thirds of the population they’ll be infected. The Alberta premier yesterday forecast 800,000 cases (or 20% of the population), oil worth less than zero and a deficit the NDP would be proud of. There are cops stationed on the bridge between Ottawa and Gatineau, stopping cars. The real estate market, everywhere, has gone to zero. People are being arrested for walking through parks. And nobody will be in a church or synagogue this year.

And yet the Dow has gained 27% in three weeks. Bay Street is ahead 24%. This seems entirely at odds with 1930s-style unemployment, a drop in economic activity of 30%, millions of people subsisting on government handouts, closed borders and untold numbers of businesses than will never re-open. The boss over at RBC warned this week that normal will not be normal again. And he’s right. High-rise office towers, cruise liners, collaborative work spaces, packed airplanes or subway cars, bidding wars for condos or double-digit interest rates – all poof.

Next?

This could herald an exodus from cities. Maybe a renaissance of the suburbs, with built-in social distancing, backyards for veggies (plus kids and canines), a shift from transit to personal EVs, no sticky elevator buttons and professional-grade home offices for remote employment. More take-out, Netflix and online shopping. Perhaps families won’t trip to Disneyland or Cuba. Maybe cocooning and small-town life will be embraced or more folks prepare for the next pandemic by paying down debt and beefing up assets. How much will we take away from the current mess, and use it to change our lives?

A lot, I’m guessing. If governments maintain current intentions and political postures, emergency orders could be in place for months. The prime minister started spreading that meme on Wednesday. Social distancing and work-from-your-couch will last “many more weeks,” he said. Actually getting back into the office or the store will be allowed “only in a measured, graduated way.” That could be staggered over many additional months. Meanwhile, school is pooched for the entire year. Child care will be a nightmare. Lots of small business, especially those relying on the tourist trade, travelers, diners or business and social events, will be toast by July, let alone September or October.

As this sad episode in our lives started to unfold a month ago, this blog commented it would end up making the wealth gap even wider. People with liquidity, investments, plans, diversified assets, balanced portfolios and tax advice would be better. Others (the majority) with debt, no reserves, poor savings, lousy pensions, job-dependency or all their net worth in a house would not.

It’s the new un-normal. For a while, anyway. You can be sure that an engorged government coming out of the pandemic will lead to seriously more tax, a universal basic income, forced retirement savings (more CPP changes coming), travel restrictions, big real estate changes and fewer civil liberties.

All thanks to a bat.

Well, time now to change from your sweat pants into your jammies and cue up the freaks on  Tiger King.

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April 8th, 2020

Posted In: The Greater Fool

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