- If you've ever wanted a cake that looks exactly like a pickle, or maybe a Croc, I have good news for you: it's apparently a thing, and it's called "still-life cakes".
- White Castle is testing out a burger flipping robot called Flippy. The bot costs $30,000 up front plus monthly payments of $1,500.
- We may be nearing Peak Hot Dog. A researcher analyzed years of historical hot dog-eating data and found the theoretical limit of hot dog consumption by a human is 84 in 10 minutes. The world record currently stands at 75.
July 15, 2020
Digging Out Of The Hole
Good morning, and happy birthday to Will Ferrell, which makes us wonder: will the Anchorman remake 20 years from now feature newsletter writers? Time will tell.
Markets
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TSX | 16125.37 | 0.66% |
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S&P 500 | 3224.41 | 0.27% |
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DOW | 26677.45 | -0.21% |
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NASDAQ | 10500.87 | 0.28% |
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Gold | 1813.10 | -0.02% |
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Oil | 40.99 | 1.74% |
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Dollar | 0.74 | 0.72% |
The Bank of Canada's new forecast for the economy is out, and it ain't pretty. The Bank reported that GDP fell 15% so far this year, and predicted the economy will shrink by 7.8% in 2020. Some other key notes from the report:
- Inflation: Despite record spending and the Bank pumping money into the economy, inflation fell to -0.1% and is expected to only reach 0.6% by the end of the year.
- Interest Rates: The Bank is keeping them at 0.25%, the lowest they've ever been.
- Rebound: The report assumes no major second wave of COVID and an end to the virus by mid-2022.
What is the Bank doing?
- Keeping interest rates low. The Bank has pledged to keep interest rates at record lows until at least 2023. Tiff Macklem, the Bank's Governor, also said rates wouldn't be going lower than that. Sad news for everyone hoping to see the rates go negative.
- Buying more government bonds... $5 billion each week, to be precise. Macklem said this will continue until the recovery picks up pace.
- And buying them more often. It's doing weekly purchases, rather than bi-weekly, to keep liquidity flowing into financial markets.
Will it be enough?
Even with unprecedented intervention by the Bank and Federal government to boost the economy, there's still significant risks ahead:
- A second wave. If there's another round of lockdowns, all bets are off.
- Global market instability and bad corporate debts, a risk which the Fed's top regulator warned of today.
- America. We're tightly connected to the U.S. economy, and things there aren't going so great (have you noticed?). 3 of the top 6 U.S. banks are stockpiling cash to handle future losses... $47 billion at this point, in fact.
So, when are we getting that COVID vaccine? Is anyone on that? Turns out some people are — many people, in fact. And thanks to a range of factors, we may have something useful in record time (like, this year).
The lead scientist developing the Oxford vaccine says they could be through large-scale (10,000 people) human trials by September, and believes there's an 80% chance it'll work. That's some good news for a change.
There are dozens of other vaccine candidates in development:
- Moderna's vaccine is in Phase 2 (small scale human testing) and early results look somewhat promising.
- A number of vaccines in development in China are in Phase 3.
- A clinical trial of a Canadian-made vaccine is under way in Quebec City with 6 participants.
Why it matters: Getting a vaccine or effective treatment is crucial to saving lives and fully restarting the economy. But vaccines usually take many years to develop, so compressing that into the course of months would be a remarkable feat of science.
A new study published in The Lancet predicts that global population will peak at 9.7B by 2064 before falling to 8.8B by 2100. It says that by 2100 India will be the largest population (1.09B) followed by Nigeria (791M), China (732M), the US (336M), and Pakistan (248M).
- Populations of 23 countries (including Japan, Thailand, and Italy) will fall by 50%.
- The U.S. economy will become smaller than China's by 2035, but could once again become the largest by 2098.
- If immigration levels are maintained, Canada's population will grow to 44 million by century's end.
Takeaways: If you believe this study, the only place that's going to grow in the next 80 years is Africa. It projects countries like Nigeria, Madagascar, and Burkina Faso to see enormous population booms.
Here's a question I've asked myself lately: if everyone's working from homes and all the restaurants/bars are closed and there's no live music or events... what's the point of living in a city, again?
Apparently others are asking the same question, as this story about a migration of people to Ontario's Prince Edward County shows.
Average home prices in the County, which has beaches, wineries, and good restaurants, are up 14% from last year as people from Toronto — a few hours by car — snap up properties. `
Anecdotes don't equal trends... yet. But the data to suggest that a mass exodus of city dwellers is underway just doesn't exist. People seem to be staying put for now.
- You can now trade cryptocurrency on WealthSimple. I have some DogeCoin from 2017 I need to unload — any takers?
- Elon Musk's satellite internet company, StarLink, is now asking for Canadians to give their address to participate in a private beta this summer.
- Ten thousand day traders every hour are buying Tesla shares, which are up 56% over the past 10 days. Are these aspiring Buffets accurately valuing an innovative disruptor or chasing a hot trend and praying they don't get stuck holding the bag? I leave that to your judgement, reader.