Canadian Financial Markets Investments and Stock Trading Thread

[GreaterMontréal]

Originally Posted by misher

And we don't even need to spend more than we were planning on. Just take projects we were going to do a year from now and start them now and rush approvals of stuff in progress.

Plus get some things done we've been thinking of and hire the remainder to plant trees.

We can't start them now, the country is about to be locked down. We have at least 2 more months of reduced activity if not more.

[milomilo]

Originally Posted by WarrenC12

We're in unprecedented times. The Fed Reserve just lowered rates by a full point and the Dow Futures reacted by dropping 1000 pts.

I think consensus is the government needs to spend. The economy will grind to a halt and they need to make it up. By spend, I mean literally give people money. Millions will be out of work, at least temporarily. They can't all default on rent, mortgage, loan payments, etc.

We could come out of this into some serious inflation, I'm not sure.

I'm genuinely not sure if it would work that way to induce inflation. In good times, absolutely, giving away money and lowering interest would increase inflation because the central bank is injecting more money on top of all the other money. But in this moment? Spending is going to be way down, so even if the BoC throws gobs of money at it I don't think it will be a problem, unless they keep doing it after the economy picks up. As I say though I am not an expert and I might not be understanding this right.

Even if it does cause inflation though, it would probably be the right thing to do. Just deposit $1000 in everyone's bank account, and keep doing it until the problem goes away. The damage of inflation will be much less than people being kicked out of their homes, landlords losing money etc.

And we could probably do with a long period of above 2% inflation anyway.

[misher]

Originally Posted by milomilo

I'm genuinely not sure if it would work that way to induce inflation. In good times, absolutely, giving away money and lowering interest would increase inflation because the central bank is injecting more money on top of all the other money. But in this moment? Spending is going to be way down, so even if the BoC throws gobs of money at it I don't think it will be a problem, unless they keep doing it after the economy picks up. As I say though I am not an expert and I might not be understanding this right.

Even if it does cause inflation though, it would probably be the right thing to do. Just deposit $1000 in everyone's bank account, and keep doing it until the problem goes away. The damage of inflation will be much less than people being kicked out of their homes, landlords losing money etc.

And we could probably do with a long period of above 2% inflation anyway.

On one hand no ones spending. On the other hand there are massive lines at grocery stores and nearly empty shelves.

Honestly this urge for us all to stock up is good for keeping our economy going and giving us a boost.

[milomilo]

Originally Posted by misher

On one hand no ones spending. On the other hand there are massive lines at grocery stores and nearly empty shelves.

Honestly this urge for us all to stock up is good for keeping our economy going and giving us a boost.

The stockpiling will be a very minor, short term boost to those that need it least. The real long term damage will be focused on those who can afford it least.

Me? I'm on salary and have been told to work from home. If there's no work to be done, no big deal I'll just spend my day ranting on this forum and they'll still pay me. But for anyone hourly in the service industry or gig workers, they're screwed. They weren't even being paid much to begin with and now they potentially have no income at all. Multiply that by millions of people and the country of Canada has a big problem and the only solution is to just give them money. That obviously isn't sustainable, but it will probably be manageable for a few months.

[misher]

Originally Posted by milomilo

The stockpiling will be a very minor, short term boost to those that need it least. The real long term damage will be focused on those who can afford it least.

Me? I'm on salary and have been told to work from home. If there's no work to be done, no big deal I'll just spend my day ranting on this forum and they'll still pay me. But for anyone hourly in the service industry or gig workers, they're screwed. They weren't even being paid much to begin with and now they potentially have no income at all. Multiply that by millions of people and the country of Canada has a big problem and the only solution is to just give them money. That obviously isn't sustainable, but it will probably be manageable for a few months.

Massive pressure on the federal government to take significant action here. The problem with spending like your in a recession when the economy is good is that you got to do every more when it’s bad.

The good thing about this is that there’s going to be massive pressure on government to improve the economy and reduce regulation. Even BC has a chance of reducing/eliminating taxes like the foreign buyer and speculation taxes because jobs are a hell load more important right now.

[GreaterMontréal]

The Federal government will drop the ball.

[vid]

Originally Posted by misher

Massive pressure on the federal government to take significant action here. The problem with spending like your in a recession when the economy is good is that you got to do every more when it’s bad.

The good thing about this is that there’s going to be massive pressure on government to improve the economy and reduce regulation. Even BC has a chance of reducing/eliminating taxes like the foreign buyer and speculation taxes because jobs are a hell load more important right now.

The foreign buyer and speculation taxes reduce jobs?

[Truenorth00]

Originally Posted by WarrenC12

We're in unprecedented times. The Fed Reserve just lowered rates by a full point and the Dow Futures reacted by dropping 1000 pts.

I think consensus is the government needs to spend. The economy will grind to a halt and they need to make it up. By spend, I mean literally give people money. Millions will be out of work, at least temporarily. They can't all default on rent, mortgage, loan payments, etc.

We could come out of this into some serious inflation, I'm not sure.

Stocks usually drop after rate cuts. So don't worry too much about that. It's their statements about liquidity and the relaunch of QE that has people panicking.

There's a lot of corporate debt out there. As revenue falls, companies will default. That will result in a tsunami of downgrades. But bank reserve ratios are based on grading of assets. Hold lower graded bonds and you are required to hold more cash. So as ratings fall, banks start hoarding cash and dumping suspect bonds. There's rumors going around that the big US banks have been dumping bonds for months. Anyway, the reserve requirements then result in liquidity drying up. This is why they are relaunching Quantitative Easing and lifting reserve requirements temporarily.

[misher]

Originally Posted by vid

The foreign buyer and speculation taxes reduce jobs?

Yep! Not a “huge” amount but a decent amount.

[WarrenC12]

Originally Posted by milomilo

Even if it does cause inflation though, it would probably be the right thing to do. Just deposit $1000 in everyone's bank account, and keep doing it until the problem goes away. The damage of inflation will be much less than people being kicked out of their homes, landlords losing money etc.

And we could probably do with a long period of above 2% inflation anyway.

Yes I agree it's the right thing to do, regardless. Undoing it when the time comes will be the hardest thing, IMO.

[goodgrowth]

Dow down 3000 points..

[misher]

Originally Posted by goodgrowth

Dow down 3000 points..

Speaking for Canada the provinces and feds need to take action NOW. The worse it gets the harder it will be to get it back.

[kwoldtimer]

Originally Posted by misher

Speaking for Canada the provinces and feds need to take action NOW. The worse it gets the harder it will be to get it back.

What actions do you think they can take that would be effective in the short term?

[Xelebes]

The stock market should be of lesser concern. Of more importance is getting business loans to bridge the turbulence. Businesses are not getting their cash from the stock market.

People trading on the stock market, it might be best to hold tight. In times of great dying, there is asset destruction occurring in the physical realm. Best to focus on that first.

[WarrenC12]

Originally Posted by Xelebes

The stock market should be of lesser concern. Of more importance is getting business loans to bridge the turbulence. Businesses are not getting their cash from the stock market.

People trading on the stock market, it might be best to hold tight. In times of great dying, there is asset destruction occurring in the physical realm. Best to focus on that first.

Yes. There's no run on the banks or anything like that. TSX is down less, which is our concern.

[lio45]

Originally Posted by vid

The foreign buyer and speculation taxes reduce jobs?

Not by that much, but yep, that's guaranteed.

[urbandreamer]

I think the end result will be another global war: over who controls the $, basic materials, the economy. This war will also get people jobs again.

[GreaterMontréal]

Originally Posted by urbandreamer

I think the end result will be another global war: over who controls the $, basic materials, the economy. This war will also get people jobs again.

against whom ?

[misher]

Originally Posted by lio45

Not by that much, but yep, that's guaranteed.

Any tax by default slows the economy and business.

Taxes that gain us less "total" tax than we were gaining before should definitely be removed when our economy needs a boost.

We can only put more taxes back on when the economy is better.

Unfortunately right now illogical taxes are being kept in place not because we need the money, but because they are politically popular.

[urbandreamer]

Oil is plunging: some folks are going to make out like robber barons when this is over.