Hoodlum

Canadian Prime Minister mentioned today that it would be months before they consider relaxing protective measures. https://www.theglobeandmail.com/politics/article-return-to-work-will-be-graduated-and-likely-months-off-trudeau-says/ He cautioned that it would be a “few months, probably” before Canada is in a position to consider relaxing protective measures in place that have most Canadians staying at home and many businesses shuttered or working at partial capacity.

Yeah, I'm more bearish on the USA, because--regardless of what no_free_lunch seems to be saying--the Canadian response has been far superior to that of the USA. BC, Ontario, and Quebec have put in preventative measures that will cause the infection numbers to fall, peaking probably next week or sooner. Trudeau's economic response has been mediocre (he shouldn't have tried to shove payments to individuals through the EI system), but I think over the next few weeks, the virus numbers will be driving things, and Canada has done way better than the USA on the virus. The economy's going to suck for everyone. (Of course, all this is speculative--I'm betting on the SPY, but I'd also bet that the divergence between the S&P 500 and the TSX won't be huge....) I agree that it's a terrible time to be converting CAD to USD. It's also worth noting that I see light at the end of the tunnel. So I'm only very short-term bearish based on future infection numbers, but medium- and long-term bullish. I don't know what is happening in the US. In Canada we are testing over 20,000 per day yet it looks like the US is testing 40,000 per day?

That's all fine and dandy. But we don't exactly have an oversupply of tests....so wouldn't it be best to put them to the most efficient use? High risk individuals. It all starts from the top. Trump has decided he doesn't need to be tested or go into self-quarantine after being in contact with someone who now has the virus. I believe actions speak louder than words and Trump is not considering this as a serious threat. So you will see large segments of the US that won't take it seriously since the government is providing the leadership. This is not going to end well in the US.

The below is a better indication of where are based on closed cases. There is currently a 6% death rate for closed cases wordwide with 10% of open cases in serious/critical condition. It does not look good after extrapolating this out. https://www.worldometers.info/coronavirus/

Downwards if I had to bet. LOL! You are a fierce betting-man LC :) It does start to feel like a real deep shit swamp and maybe it's time to start to consider buying. Why? We are only at a 12 month low. I don't think we are close to the bottom.

But shouldn't their bond gains be offsetting this?

The scary thing is that a 20-30% drop just brings us back to Jan 2016 in Toronto. We would need a 50% drop just to get back to 2012 levels.

Non-paywalled version http://www.pressreader.com/canada/the-globe-and-mail-ottawaquebec-edition/20161223/281754153977995

Unbelievable. I have no idea when this will end. B.C. offers interest-free loans up to $37,500 to first-time homebuyers The B.C. Home Owner Mortgage and Equity Partnership program will provide a maximum of $37,500 — or up to 5 per cent of the purchase price — with a 25-year loan that is interest-free and payment-free for the first five years.

More likely getting they are getting grouped in with the rest of the insurance industry who are getting killed on their long bonds.

Here is the full quote. http://www.bloomberg.com/news/articles/2016-11-04/prem-watsa-s-fairfax-sells-90-of-long-bonds-ahead-of-election “We’ve sold 90 percent-plus of our Treasury bonds and we’ve made the point that the uncertainties in the U.S. election are the reason," Watsa, chief executive officer of the Toronto-based company, said on the third quarter conference call Friday. “We don’t know who’s going to win the elections, but you could have significant infrastructure spending, a drop in corporate tax rates, and while we think it might work in the short-term, in the long-term we have questions about that. We wanted to take that risk out."

I suspect we are only scratching the surface with these issues. According to an article from yesterday students would only need 35% down in order to apply for a mortgage with no income. http://www.theglobeandmail.com/news/british-columbia/incomeless-students-spent-57-million-on-vancouver-homes-in-past-two-years/article31892652/ "Nine students with no apparent source of income bought $57-million worth of single-family homes in Vancouver’s tony Point Grey neighbourhood over the past two years"

Well they sort of have that with the TFSA but only if you don't have larger gains. Otherwise the tax department will take you to court. ::)

It's no longer a question of if but when. A few years back I was saying the government needed to intervene before it gets to this stag but it is too late now.

My very basic calculation puts FFH share at $75M US. Unfortunately not enough to move the needle.

Underwriter shares are now selling at $687.50 with all remaining shares expected to be sold last night. But it looks like they still made some money on the deal. https://webcache.googleusercontent.com/search?q=cache:g3Iv93XNaJcJ:https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20160308/RBSWFAIRFAX+&cd=5&hl=en&ct=clnk&gl=ca After equity markets closed on Monday, bankers cut the offer price on the portion of a recent $735-million financing deal that did not entirely sell out to $687.50 a share. That is about 6.5 per cent below the original price of $735 a share, which was unveiled on Feb. 24. Fairfax shares closed at $700.40 on Monday, about 1.8 per cent above the revised offer price. Underwriters were expected to aim to clear out any remaining shares overnight Monday.

That makes sense and was likely planned for a few months. I doubt it has anything to do with the current price.

I can tell you that the CMHC is allowing purchasers to use overseas accounts as collateral for mortgages. There is no method for the CMHC to ensure that these account don't have any other leans against them or if the cash would be accessible when required. This is likely one of many holes in our existing system and when the market does turn we will start to see what was really happening. In my area, new homes are going for 20% more than existing resales and many of these new homes won't get built until 2017. Home owners are hoping that the market continues this upward trajectory between now and when the new house closes. When the market does turn and house prices drop we will see a lot of home owners in trouble as they won't be able to take on the additional mortgage. Foreign buyers may just get up and leave rather than deal with the huge losses.

Fremont? Please tell me you're visiting the Tesla plant. That would be cool. ;D No, but I can see it from my room in the Marriott.

I picked a good time to do business travel to Fremont this week and LA next week. Haven't really needed my jacket.

When I walked out of my local Tim Hortons last night, there were 2 men discussing taking out $100k on their home line of credit to invest in the stock market. I think we are getting close to the end now.

It will be interesting to see if the government sues the banks to get back losses if the market does tank. I don't think the banks will get off scott free, especially with the bundling of mortgages they sold at high profits.

No tapering for a while according to Bernanke. http://www.forbes.com/sites/afontevecchia/2013/05/22/taper-this-bernanke-makes-it-clear-tapering-qe-isnt-happening-any-time-soon/?partner=yahootix

The biggest problem with cutting cable is live sports in HD. I'd gladly pay $15/month for sports and switch for the other channels.

I think this is the wrong way to enforce higher rates. You just end up pushing it underground. http://business.financialpost.com/2013/03/19/manulife-pulls-low-rate-mortgage-offer-after-pressure-from-ottawa/