Feeling ill

Wow, whadda week.

The Confidence Man

In Ottawa the big confidence vote may be called. It’s now a nothingburger, since the Dippers won everything they demanded of the Libs. The CERB is back and being extended for as far as the eye can see – although it’s called different names (enhanced EI and CRB). Does this sound like a guaranteed income to you? It should. Plus Jag got the feds to agree to two full weeks of sick pay. That’s extra sick pay over your deal with your employer. It was an NDP prerequisite for backing Trudeau when he disbanded Parliament earlier this year, and it’s now a done deal.

So, no election. Yet. The spending will continue. We are on our way to a $500 billion one-year deficit. Harper’s credit crisis x 10.

By the way, speaking of ten additional paid sick days, it’s useful to remember how many public-sector workers are already paid for time away from their jobs due to sniffles. For example, this is the deal for elementary teachers in Ontario (who work 194 days per year, or 53% of the calendar):

If you are employed in a permanent full-time position, your sick leave entitlement each school year is as follows:
* 11 sick days at 100% of salary;
* 120 short-term leave and disability plan (STLDP) days at 90% of salary; and
* “top-up” of the STLDP days from 90% to 100% of salary from any of the unused 11 sick days of the previous school year. (Source: Ontario Elementary Teachers Federation)

Yes, this is where we’re headed. No wonder there’s a tax storm on the horizon. Plus this storm…

Blood & Guts in Cleveland

It probably won’t be pretty, but it will be seminal. The first presidential debate between Trump and Biden happens tomorrow night (Tuesday) in that city on Lake Erie’s shores. The first of three. So who has the most to lose?

Trump, of course. And not just his embarrassing tax records. He’s spent months painting Joe Biden as old, incoherent, doddering, senile and suffering from dementia. This happened after trying to portray him as a player in Ukrainian corruption and, when they failed, as a pedophile. In any case, expectations of Biden are now so low that if he shows up and stops drooling, it’ll be a win for the Dems.

I have no idea who will win this election, unlike everyone else who reads this pathetic blog. But we can expect mayhem. Trump has worked hard at discrediting the electoral process. He claims (without evidence, according to the FBI) that mail-in ballots are a sham. (There will be million so them, thanks to Covid.) He’s suggested that Congress, or maybe the Supreme Court (hence the haste to appoint the new gal) – and not voters – will decide the outcome. And he’s refused to say he will gracefully exit in case he loses.

Sound like a mess in the making? You betcha. This will not be decided on November 3rd, and Mr. Market could be in a crappy mood until Christmas. Meanwhile the social media onslaught is overwhelming. We have Proud Boys battling BLM. Guns are coming out. America is battling not only a virus but an infection of intolerance, polarization and hate.

Suddenly Canada doesn’t look so bad. And we get free money….

We’ve hit 1%. Seriously.

So a one-year, fixed-rate, high-ratio, insured mortgage is now available for 1.29% in most of the country. When did this happen last? Never, silly. It’s an all-time low number reflecting the fact our central bank has artificially depressed yields by buying up $5 billion a week in government and mortgage securities.

The times are unprecedented. While a 1% mortgage for sounds progressive, borrowers should realize it comes because of the risks facing the economy. There are four million people this week lurching from CERB to new government pogey. Unemployment in Canada is the highest in the western world. Our per-capita government sending is off that chart. The central bank is printing cash as never before and feeding it to a government that spends without precedent. Notably, almost 70% of all the people who stopped making mortgage payments because of Covid had yet to resume as of the beginning of September.

Should you take a one-year term? For most people, no. Go five. Not worth the risk. Of course, if you really want to be shellacked, go get a five-year bank GIC. The Royal’s paying 0.95%. Remember these days. Your grandchildren will want to hear about them.