Should you take money the government offers, even if you don’t need it?
That, of course, was the debate yesterday as this blog slipped from chatter about canines, balanced portfolios and manly haircuts into the churning waters of ethics, morality and angst. Applications for the emergency benefit continue to pour into Ottawa and it’s possible an astonishing third of the entire workforce will ultimately stick its collective paw out. The tax consequences of this could be Biblical. We shall reflect on those soon. Ready your special underwear.
In the last 24 hours the steerage section has been in open revolt. Cries of ‘we want our two grand, or you die’ have been ringing out from below. But is this reflective of the way most people feel? How about the survey that was posted here? Are people feeling responsible, or just greedy? Well, you may be surprised. Results in a minute – and thanks to the 5,881 readers who chimed in.
First, an update. Ms.Virus is meeting her match, but taking a toll.
The cases continue to pile up. NYC is a mess. Two million people have been infected globally. Most hotels in Canada are closing. The unemployment rate in Banff is 85%. Lobsters are down to $5 a pound. Used car prices are expected to plunge as inventories pile up. The real estate market is comatose. Air Canada and Westjet are living off government payroll pogey, but all those Airbnb hosts are twisting in the wind. Eight hundred thousand hospitality workers are out of a job, and will be the last ones rehired. Mortgage deferral applications are trailing away, but 600,000 families have asked for it. And the latest confidence index has crashed faster than Drake’s credibility after his latest video (I mean, dude, is this really the time to prance around your mansion? Even if you had talent?).
Pollster Nik Nanos found people are more bent out of shape than at any time since 2008 (when the surveys began), and real estate is a big reason. Over 40% now expect house prices to drop – a stunning change from one month ago when just 13% anticipated a decline. And, yikes, 80% say the economy will get worse over the next six months – 20 points higher than during the 2008 crash. Meanwhile another survey shows 9% of homeowners in Canada anticipate being unable to pay their mortgages – despite deferrals by the banks – if things don’t snap back in three months (which they won’t). Compare that with a 0.5% mortgage default rate in the 2008-9 crisis. And, wow, 45% of homeowners in Vancouver say they’ll be unable to make their payments in May. (By the way, the city reveals it’s probably going bankrupt if enough owners welch on property tax.)
Okay, so people are in a deep funk. But not your portfolio. After a best-in-45-years romp last week, financial markets continue to chug higher. Goldman Sachs and JP Morgan say the bottom is in the rearview. Yes, earnings will suck and the economy’s cratering with millions of people watching Netflix and eating Cheetos in their skivvies, but investors are positioning for the recovery. It will come. Pandemics are temporary. They pass. The sun will return.
And this brings us to the questions posed here yesterday. Will you take Ottawa’s virus pogey? Even if you need it not?
What can I say? I am so proud of you. Well, most of you…
