While we wait for the March housing data to be released, here is an updated Confirmed Cases and Deaths by Country, Territory, or Conveyance of the "top" 19 countries from WorldoMeters.info. Canada at this time of writing (MAR 31, 2020, 11.45am PST) reports the following: 8467 total cases​ 1019 new cases 95 total deaths 6 new deaths 1162 total recovered 7210 active cases 120 serious critical cases 224 total case per 1 million population 3 deaths per 1 million population First reported case: January 24, 2020 ​We should of course be "physical distancing". We can still socialize electronically and in person in our virus free local environments. In these two photos I am shopping for a digital thermometer and isopropanol which I did manage to find and buy.

Understanding the Virus that Causes COVID-19, Animation

Bill Gates makes a prediction about when coronavirus cases will peak

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Covid-19 MAR 27, 2020 The incubation period (time from exposure to the development of symptoms) of the virus is estimated to be between 2 and 14 days. A very long incubation period could reflect a double exposure. 24 days represented an outlier observation that must be taken into consideration in the context of the main finding of the World Health Organization study. CLICK CHART TO ENLARGE

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The February housing data for Calgary shows that the average price of a condo is trading at prices from nearly 15 years ago and two and a half years before the July 2008 WTI Crude Oil peak. ​The Canadian Federation of Independent Business released their March 2020 "Business Barometer" suit of charts: ​"The index now stands at a record low 30.8, well under the previous lows near 39 recorded in both the 2008 and 1990 recessions. The scale of the negative perspectives appear pretty consistent across industry groupings..." Earlier this year, Jason Kirby via Macleans.ca released their 6th annual "Most important Canadian economic charts to watch in 2020." Note the Calgary trend changes unfolding since February 8, 2016 when WTI Crude Oil prices hit USD$28.49. CLICK CHART TO ENLARGE

Alberta’s Double-Dip Recession?
"Oil producing provinces have faced a difficult five years. Low oil prices cut into revenue, investment, employment, wages, and overall economic activity. Government budgets are increasingly strained, unemployment is stubbornly high, social assistance enrollment is at record highs, and the end is not yet in sight. In fact, a second recession might (just might) be in Alberta’s future. As this graph illustrates, my index of monthly economic activity in Alberta has been negative for most of 2019 – signalling a possibly contracting Alberta economy. A worsening economy in Alberta affects employment and growth throughout Canada, but the ripples go far beyond the dollars and cents. Rising frustration and disappointment are increasingly directed at perceived failures of the federal government and Alberta politicians are happy to oblige. A second recession may exacerbate these tensions and further strain Canada’s confederation. For these reasons, and more, this indicator will be one to watch in 2020." Chart above thanks to Trevor Tombe, associate professor of economics, University of Calgary and research fellow at The School of Public Policy.

CANADIAN EMPLOYMENT RATES
in Vancouver, Calgary, Toronto, Montreal and their Provinces
See also my previous posts with charts related to DEFLATION and what to expect:
Asset Prices Drop
Investment Spending Drops
The Savings Rate Rises
Debt Delinquencies Rise
The Credit Boom Turns to Bust 

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ITEM: "People are hitting the wall’:
Delinquency rate highest since 2012  GlobalNews.ca MAR 5, 2020

"Canada’s so-called 90+ day delinquency rate on non-mortgage payments climbed to 1.2 per cent in the final three months of 2019, an 11 per cent jump compared with the same period in 2018, Equifax data shows... Delinquency rates had been “marching higher” for much of 2019 and will likely keep going up in 2020... The trend is strongest in British Columbia, Ontario and Alberta, where delinquencies are now back above their 2016 level."

Canada sees rising numbers of consumers defaulting on their debts even amid a healthy economy and solid job market. Consumer insolvencies were up more than 10 per cent in January 2020 compared to the same month in 2019, according to the latest figures from the Office of the Superintendent of Bankruptcy.

Scott Terrio, manager of consumer insolvency for Hoyes, Michalos Licensed Insolvency Trustees said "much of the debt he sees from clients filing for insolvency is much older than two years... "We’ve run up debt for most of a decade... Some borrowers are simply getting to the end of the runway... That may be especially true among renters, who, according to Terrio, made up more than 90 per cent of debtors who filed for insolvency with Hoyes Michalos over the last couple of years... While sky-high home prices allow many homeowners in expensive cities to keep borrowing against their home equity, renters have fewer options to keep borrowing and consolidate debt."

“Outside of mortgages, we have seen a significant pullback in demand for credit,” Johnston noted. Consumers, Terrio said, are “entering a period here of self-policing.”

ie: DEBT REVULSION

​"Deflationary Spiral" - The Khan Academy
"EMPLOYMENT DRIVES DEMAND"

​TEXT FROM VIDEO ABOVE Created by Sal Khan: So in a normal economy we know that employment will drive overall demand. If we have high employment or low unemployment, then people are going to have more jobs, and they're going to have higher wages, and that will have higher demand. Or if the other way goes around, if they lose their jobs, demand is going to go down, wages will start to go down, and people aren't going to have money in their pockets. So employment drives demand. And we can view the demand-- and I'm making a huge simplification here-- demand will drive production. Or maybe we could think of it as supply. It'll drive supply, and it can also be a driver of price. And of course, there is a little bit of a negative feedback loop for both of these things. If the demand is high and the price goes high, that might produce a little bit of negative feedback on the demand. Instead of an arrow, this line here means negative feedback. I'll put a little negative sign here. And let's say the demand is high and then the supply goes high. Well actually, the supply going high would drive the price going down. So maybe I should draw a negative feedback like here. High supply would mean lower price. But that's not what I want to focus on in that video. And we could keep adding more lines here. But this is roughly simple take on it. But the general idea is supply and price will then drive corporate profits, or just profits in general, even for an individual business owner. And then profits are going to drive employment.

Now, let's imagine a scenario. We are in a bad economy, maybe a depression-like economy. So in that situation, you could start really at any point in this circle. I'll just start at employment. So let's say employment is really low. That's going to make demand really low. And if demand is really low, then supply is going to go down, and price is going to go down. And then that's going to make profits go down. And that's going to make employment even lower. And so what we find ourselves in this kind of recessionary or depression area environment, this would be called a deflationary spiral. And it's a spiral because a bad economy is driving lower prices, which is in turn driving a bad economy. And to make matters worse, if this continues long enough, or if these price declines are severe enough, you could imagine people saying, look, I have this dollar in my pocket. I'm not going to spend this dollar because, one, I might lose my job at any moment, and I know that that dollar is becoming more powerful, that I can buy more every minute that I wait. So as the price goes down, so as all of this scary stuff happens-- so the employment is going down, profits are going down, prices going down-- this makes people not hoard goods the way that they would do in an inflationary spiral. But it makes them hoard money.

​And why it's ultra scary for central bankers or for governments is they start to not have as much control over the economy. They can't just run the printing press and try to stimulate the economy in this situation, because if they did people are so conservative right now-- You could imagine maybe a depression is going on for years and years and years. And let's say that they take some type of a helicopter-- And this isn't how you actually distribute money to the money supply, but it's just to show an extreme example. So they take a helicopter, and they start dumping cash on people. They print cash, and they start dumping it on people. So every man, woman, and child in the country gets a $10 bill. Well, if people are really scared and really afraid, they're just going to take that $10 bill and stuff it into their mattress, and it's not going to change anything. That dollar isn't going to actually enter into the money supply. The velocity on it will be 0." 

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​On February 25th, The Economist published an article "Single Women are Losing Out in the Property Market" on Gender Gap Wealth with the lead that ​in 2015 women held just 30% of all global private wealth according to the Boston Consulting Group.  The chart presented here, one of many, is based on data from nine million housing transactions in the U.S. between 1991 and 2017 presented in January 2020 by Paul Goldsmith-Pinkham and Kelly Shue of the Yale School of Management in a PDF titled The Gender Gap In Housing Returns.

"Data on repeat sales reveal that women buy the same property for approximately 2% more and sell for 2% less."

THE GENDER GAP IN HOUSING RETURNS
PAUL GOLDSMITH-PINKHAM & KELLY SHUE
January 2020 Abstract

Housing wealth represents the dominant form of savings for American households.
​
Using detailed data on housing transactions across the United States since 1991, we find that single men earn 1.5 percentage points higher unlevered returns per year on housing relative to single women, with couples occupying the intermediate range. The gender gap grows significantly larger after adjusting for mortgage borrowing: men earn 7.9 percentage points higher levered returns per year relative to women. 

Approximately 45% of the gap in housing returns can be explained by gender differences in the location and timing of transactions. The remaining gap arises primarily from gender differences in execution prices: data on repeat sales reveal that women buy the same property for approximately 2% more and sell for 2% less. Women experience worse execution prices because of differences in the choice of initial list price and negotiated discount relative to the list price.

Gender differences in upgrade and maintenance rates, and preferences for housing characteristics and listing agents appear to be less important factors. Overall, the gender gap in housing returns is economically large and can explain 30% of the gender gap in wealth accumulation at retirement.

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​In 2018, female employees aged 25 to 54 earned $4.13 (or 13.3%) less per hour, on average, than their male counterparts. In other words, these women earned $0.87 for every dollar earned by men.

The gender gap in hourly wages has narrowed by $1.04 (or 5.5 percentage points) since 1998, when it was $5.17 (or 18.8%).

The reduction in the gender wage gap between 1998 and 2018 was largely explained by changes in the distribution of men and women across occupations; women’s increased educational attainment; and the decline in the share of men in unionized employment.

The two largest factors explaining the remaining gender wage gap in 2018 were the distribution of women and men across industries, and women’s overrepresentation in part-time work. These were also the largest explanatory factors behind the gap in 1998.

Similar to other studies, nearly two-thirds of the gap in 2018 was unexplained. Possible explanations for this portion include gender differences in characteristics that were beyond the scope of this study, such as work experience, as well as unobservable factors, such as any gender-related biases.

New Study Provides Clearer Look at Canada's Gender Pay Gap
Global News, January 14, 2020

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"Last year (2019), nine Narwhal companies raised rounds exceeding $131 million CAD ($100 million USD). Over the last three years, the financial velocity required to make the list and the average financial velocity of companies on the list has increased, meaning companies are moving faster in securing capital. The number of Narwhals on track to become ‘Unicorns’ has also grown from seven to 42." Charles Plant, the founder of the Narwhal Project, FEB 4, 2020.

Three years ago, we at the Impact Centre initiated the Narwhal Project to conduct research to discover the root causes of Canada’s challenges in creating a world-leading innovation economy. We thought it would be useful at this juncture to summarize our findings. This Report  highlights some of the issues we have identified.

For fifty years, the federal and provincial governments have been spending billions to improve our innovation economy, but without performance improvements. The usual discussion is centered on Canadian businesses and their lacklustre performance on research and development (R&D) and intellectual property (IP) protection. In addition, our productivity has lagged relative to the US because of insufficient investments into productivity-enhancing technologies, along with the lack of available capital and talented people to grow technology firms.

But we believe that a critical challenge is our inability to scale companies to a world-class size. Larger companies boast several advantages. They have greater revenue per employee, pay better salaries, undertake more R&D, and take out more patents.

We lack large companies, particularly in the technology sector. We have only one Unicorn (with perhaps another one qualifying but not listed as such at the date of this publication) compared with over 150 in the US. Few tech companies in Canada grow large enough to go public. This means less R&D, fewer patents, and, ultimately, lower income per capita and productivity.

Perhaps the solution to our innovation challenge is not more R&D and more patents, but rather scaling and building of companies. But why are we challenged do this in the tech field? What we have found is that:

• Few Canadian companies are founded in large consumer markets capable of generating the desired scale.
• We invest less per company relative to the US.
• Canadian firms spend less on marketing and sales (M&S), activities that are critical to building the customer base.
• We have fewer qualified people in marketing functions.

The underinvestment and underspending result in lower growth rates for Canadian tech firms compared to their US counterparts. Fundamentally then, Canadian firms do not look as attractive as potential investments due to slower growth. Because of this, they do not attract large amounts of late-stage capital and are often sold before they can scale to worldclass size.

All of these factors converge to create serious barriers to growth of Canadian companies, thus necessitating smarter and more strategic thinking about how we will overcome these challenges.

Full Report Here

Top 3 Technology Trends for 2020 | YBF Ventures

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While we wait for the January real estate data to come in next week, here is an update on the visualization of global temperature change over the last 2019 years.   ​"This reconstruction includes data from a wide variety of proxy records such as tree rings, cave deposits, corals, etc. The warming over the past 50 years is stark compared to the variations that have occurred naturally over the last 2000 years. It is not normal. The invention of the efficient steam engine in 1790 by James Watt kick-started the industrial revolution and our reliance on burning fossil fuels for energy." JAN 30, 2020 by Ed Hawkins (Climate Lab Book​)        Climate scientist in the National Centre for Atmospheric Science (NCAS) at the University of Reading. IPCC AR5 Contributing Author.

Abstract from Nature Geoscience, July 2019
Multidecadal surface temperature changes may be forced by natural as well as anthropogenic factors, or arise unforced from the climate system. Distinguishing these factors is essential for estimating sensitivity to multiple climatic forcings and the amplitude of the unforced variability. Here we present 2,000-year-long global mean temperature reconstructions using seven different statistical methods that draw from a global collection of temperature-sensitive palaeoclimate records. Our reconstructions display synchronous multidecadal temperature fluctuations that are coherent with one another and with fully forced millennial model simulations from the Coupled Model Intercomparison Project Phase 5 across the Common Era. A substantial portion of pre-industrial (1300–1800 CE) variability at multidecadal timescales is attributed to volcanic aerosol forcing.

​Reconstructions and simulations qualitatively agree on the amplitude of the unforced global mean multidecadal temperature variability, thereby increasing confidence in future projections of climate change on these timescales. The largest warming trends at timescales of 20 years and longer occur during the second half of the twentieth century, highlighting the unusual character of the warming in recent decades.

Our Changing Climate: learning from the past to inform future choices
The Royal Society Kavli Lecture given by Professor Ed Hawkins. May 2019

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Today we see fear in the headlines. Fear in the Party of Trump (Bolton's book is leaked), fear in the contagion pipeline ("At this time, it’s unclear how easily or sustainably this virus [Coronavirus] is spreading between people...” the CDC says. [2700 confirmed case and 60 million Chinese residents in lockdown provinces] via CNN JAN 27th) and fear in the stock market indexes (1st chart left). The second chart to the left shows the "un-growth" of Canadian Labour Productivity since the peak in the 1980's punctuated by two major global stock market selloffs (fear). In OCT 1987 "Black Monday", every major world market experienced a decline. Measured in USD, 8 declined by 20-29%, 3 by 30-39%, 3 by more than 40%. In OCT 2007 through MAR 2009 (17 months) during the Global Financial SubPrime collapse, the Dow Jones Industrial Average dropped 53%. ​

​Chuck Schumer speaks following leak of Bolton book excerpt

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...IN AUSTRALIA While we wait for the release of the December real estate data, let's acknowledge the Canadian firefighters serving in Australia. Dozens of Canadians have been there during the holidays helping out and more are on their way by month's end. ​"...this is the first time since 2009 that Canadian firefighters have been sent to Australia. Australian crews helped in B.C. during record-setting wildfire seasons in 2017 and 2018." CBC News Dec 27, 2019

Tracking Climate Extremes Around The World In 2019
NBC News NOW - Dec 24, 2019

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​The CBRE Group, Inc. trading on the New York Stock Exchange under the symbol “CBRE.” is the world’s largest commercial real estate services (2018). Their recently released study "Scoring Canadian Tech Talent" provide insights into how the growth in demand for tech talent is impacting cities and real estate markets across Canada. ​ CBRE Report Snippets Record commercial and residential real estate demand and an office construction boom in several markets. High-Tech sector GDP growth = 3x the pace of the overall economy over last 5 years. Tech industry accounts for 17.1% of major office leasing activity since start of 2018. Immigration policies have produced an abundant, accessible source of tech talent.  Top Canadian universities produce highly educated tech workers in specialized fields eg: AI research and multimedia production.  U.S. companies can tap into high quality talent at a less prohibitive cost when accounting for the discounted CAD$.

The foundations of the APT tax proposal—a small, uniform tax on all economic transactions—involve simplification, base broadening, reductions in marginal tax rates, the elimination of tax and information returns and the automatic collection of tax revenues at the payment source. The APT approach would extend the tax base from income, consumption and wealth to all transactions.

Think about the desirability and feasibility of replacing the present system of personal and corporate income, sales, excise, capital gains, import and export duties, gift and estate taxes with a single comprehensive revenue neutral Automated Payment Transaction (APT) tax.

In its simplest form, the APT tax consists of a flat tax levied on all transactions. The tax is automatically assessed and collected when transactions are settled through the electronic technology of the banking/ payments system.

The APT tax introduces progressivity through the tax base since the volume of final payments includes exchanges of titles to property and is therefore more highly skewed than the conventional income or consumption tax base.

The wealthy carry out a disproportionate share of total transactions and therefore bear a disproportionate burden of the tax despite its flat rate structure.

The automated recording of all APT tax payments by firms and individuals creates a degree of transparency and perceived fairness that induces greater tax compliance. Also, the tax has lower administrative and compliance cost.

If we want to take on the challenges of the 21st century, ie: the urgent generational "moonshots" facing us, then tech sector - take on the challenge of tax reform. 

"The global financial crime wave is no accident Financial crime is a feature of our global financial system not a bug." said pioneering economist Susan Strange. ​November 28, 2018 by Naomi Fowler

Financial Secrecy Index - 2018 Results

Canada ranks 21 out of 112 jurisdictions after Switzerland (1), the USA (2) and the Cayman Islands (3).

​“Canada and the U.S. are the two most lax jurisdictions in the world when it comes to the rules for preventing the incorporation of anonymous shell companies. What’s more, corporate service providers operating in those two countries are less compliant than those operating in Ghana, Lithuania, or Barbados, and follow laxer rules than those in Malaysia or the Cayman Islands.”

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​"Chinese Yuan makes up a lower portion of global reserves than the British Pound and even the Swiss Franc, and is just ahead of Canada." Hat Tip to ​@anilvohra69 for the note and graphic in my Twitter feed. US dollar credit to non-bank borrowers outside the United States grew by 4% year on year  to reach $11.9 trillion at end-June 2019. This represents a slight acceleration relative to the 3% annual growth rate observed at end-2018. Bank of International Settlements  October 2019 ​Foreign borrowers of USD denominated debt is accelerating. What gets borrowed in USD has to be repaid in USD and as the USD rises in value, so does the demand for USD. I update my USD vs CAD Canadian Housing Price chart as well as my Canadian Household Debt  chart every month. Our chronic negative Canadian Balance of Trade means that OUR debt obligations continue to provide more stimulus to offshore than onshore producers.​ A rising USD is not good for most Canadians.

INVESTOPEDIA KEY TAKEAWAYS, July 2019
​
> A dollar shortage occurs when a country spends more U.S. dollars on imports than it receives on exports.

> Since the USD is used to price many goods globally, and is used in many international trade transactions, a dollar shortage can limit a country's ability to grow or trade effectively.

> Most countries try to maintain a reserve of currencies, like U.S. dollars or other major currencies, which can be used to buy imported goods, manage the country's exchange rate, pay international debts, or make international transactions or investments.​

​Pierre Trudeau’s Washington Press Club speech
“Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.” Pierre Elliot Trudeau, the March 1969 speech to the Washington Press Club.

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While we wait for the October real estate data to start coming out later this week, BNN yesterday reported on Warren Buffett's plan to invest in a new Alberta Wind Farm. "The Rattlesnake Ridge Wind Project" will be located southwest of Medicine Hat and produce enough energy to supply the equivalent of 79,000 homes. Apparently demand is bankable because an "unnamed large Canadian corporate customer has signed a long-term power purchase agreement for the majority of the Rattlesnake Ridge energy output..." The Government of Canada chart mashup shows Alberta to be the 3rd largest renewable energy supplier via wind energy in Canada, and BNN goes on to report that Buffet's Berkshire Hathaway Energy "...also owns AltaLink, the regulated transmission company which supplies electricity to more than 85 per cent of the Alberta population."

​Warren Buffett's firm invests $200M in Alberta wind project
Bill Christensen, V.P. corporate development at BHE Canada, discusses an Alberta wind farm that the company has invested in. BNN Bloomberg OCT 29, 2019

​Neil Young - Four Strong Winds (Live at Farm Aid 1993)
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