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Steve Saretsky -

I don’t have any strong political views, I genuinely believe politicians are just pawns in a bigger system that is deeply entrenched in society today. In other words, full of promises but not a whole lot changes regardless of who gets in power. I do, however, have a few observations about these elections that i’d like to share. First of all, the election this September shouldn’t even be happening. The Trudeau government clearly misread the sentiment emanating across society. Inflation is at a 10 year high, housing affordability is at a 30 year low. We’re just pulling ourselves out of a recession with a million Canadians still out of a job. People are tired and frustrated from a pandemic with seemingly no end in sight. Drug and alcohol usage is through the roof. It’s quite likely that the mental health crisis that’s been created will be an even bigger problem than Covid. Suffice to say people are pissed off and looking for change of any sorts. It’s quite possible that not only will Trudeau fail to gain a majority, but he could lose to the Conservatives. At least that’s what the polls are saying. Again, don’t shoot the messenger. Anyways, this has

Steve Saretsky -

Election campaigns are in full swing, and at the centre of the political debate is the cost of living. CPI inflation just ticked in at 3.7% in July, one of the highest readings over the past two decades. Furthermore, housing inflation is out control, with national home prices accelerating at their fastest pace on record, officially up 22% year-over-year in July. According to RBC, housing affordability, or the lack thereof, is the worst it’s been in 31 years. While central bankers are convinced this problem is merely “transitory”, there’s no question monetary policy is being rightfully scrutinized. It’s been over a decade with a near zero interest rate policy that has crushed savers and forced capital into alternative assets such as housing. The resulting house price inflation is no coincidence. In fact, just take a look at the growth in mortgage credit, which is now running at its fastest pace since 2007. It’s a cheap debt housing bonanza. I mention this because it is rather perplexing that the prime minister of Canada, who is ultimately responsible for setting the Bank of Canada’s mandate every 5 years, and which is also up for renewal this year, was quoted this past week

Steve Saretsky -

Here we go, the highly anticipated federal election this fall is now confirmed. The Trudeau government will seek to win a majority government in what is undoubtedly a power grab at a pivotal time in history. “Canadians need to choose how to finish the fight against COVID-19 and build back better. From getting the job done on vaccines to having people’s backs all the way to and through the end of this crisis”, noted Trudeau in a press conference Sunday. Regardless of your political leaning, there’s no question this will be a critical election as the economy recovers from the pandemic. One thing is clear, we are entering a new era, one marked by increasing government control. Economic growth is going to rely heavily on fiscal spending and central bank debt purchases moving forward. Debt levels are simply too high, and in order to squeeze more growth from an over indebted society, government will need to keep their foot on the fiscal accelerator, and the central bank will have to play along, mopping up debt issuance to keep borrowing costs in check. You might not like the sounds of that, but it is what it is. No government in this election

Steve Saretsky -

The great reopening trade is in full swing. People have exited their homes and real estate has become less of a priority. We can see this in the housing data which continues to recede each month since the FOMO induced top in March. Sales here in Greater Vancouver have now dropped for four consecutive months in a row, but are still running above normal levels. Meanwhile, new listings have evaporated, with sellers seemingly delaying their listings until the fall. I know what you’re thinking, “this always happens in the summer, real estate is seasonal.” While that is certainly true, this summer slowdown has certainly been more dramatic. For example, this July was the weakest July in 11 years for new listings. For detached homes it was a 20 year low in new listings. This is downright painful for home buyers who have been plagued with inventory shortages over the past year. In other words, the cupboards have been looted bare and they aren’t being restocked, at least not yet. To no surprise, the same phenomenon is playing out in Toronto. New listings in the Toronto area plunged 32% from last years levels, and overall active inventory for sale is now

Steve Saretsky -

he Canadian government announced it has extended its pandemic recovery benefits (also known as helicopter money) until October 23, 2021. It’s getting hard to track all these programs, not to mention how many times they have now been extended. The following money drops are ongoing: 1. The Canada Recovery Benefit (CRB) 2. The Canada Emergency Wage Subsidy (CEWS). 3. The Canada Emergency Rent Subsidy (CERS) 4. The Canada Recovery Caregiving Benefit (CRCB) 5. The Canada Recovery Sickness Benefit (CRSB) “Extending these supports — which have been lifelines for many — is needed,” Finance Minister Chrystia Freeland said in the release. “This is of particular importance for those workers and businesses that have been hit hardest by the pandemic and are still reopening and rebuilding.” Politics aside, these programs have certainly been useful in avoiding an economic calamity, however, when and how to exit these programs remains a big question mark. Many businesses are already reporting difficulties getting people back to work, and with the money supply growing close to 20% year-over-year there are increasing fears of inflation. Ironically, in the same week these measures were extended, the CPI inflation printed north of 3%, and the Bank of Canada’s Tiff Macklem decided to write an

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The Canadian Economy

Steve Saretsky -

I don’t have any strong political views, I genuinely believe politicians are just pawns in a bigger system that is deeply entrenched in society today. In other words, full of promises but not a whole lot changes regardless of who gets in power. I do, however, have a few observations...

Steve Saretsky -

Election campaigns are in full swing, and at the centre of the political debate is the cost of living. CPI inflation just ticked in at 3.7% in July, one of the highest readings over the past two decades. Furthermore, housing inflation is out control, with national home prices accelerating at...

Steve Saretsky -

Here we go, the highly anticipated federal election this fall is now confirmed. The Trudeau government will seek to win a majority government in what is undoubtedly a power grab at a pivotal time in history. “Canadians need to choose how to finish the fight against COVID-19 and build back better....

Steve Saretsky -

The great reopening trade is in full swing. People have exited their homes and real estate has become less of a priority. We can see this in the housing data which continues to recede each month since the FOMO induced top in March. Sales here in Greater Vancouver have now...

Steve Saretsky -

he Canadian government announced it has extended its pandemic recovery benefits (also known as helicopter money) until October 23, 2021. It’s getting hard to track all these programs, not to mention how many times they have now been extended. The following money drops are ongoing: 1. The Canada Recovery Benefit...

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The Saretsky Report. December 2022