No Relief for You

As millions of Americans struggling through the second wave of COVID-19, President Trump announced that he was halting COVID-19 stimulus talks with the House Democrats until after he wins the upcoming election.

What's the background:

  • Since the last COVID-19 stimulus package in June, Congress and the White House have been negotiating a new response plan to support households and businesses through the ongoing pandemic.
  • Last week, Democrats passed a new $2.4 trillion stimulus plan which was down from it's original $3.5 trillion. Secretary of the Treasury Steven Mnuchin proposed a $1.6 trillion package in response. Among other issues, the two parties were at odds over how much state and local aid to include.
Why did Trump cancel talks? The President is frustrated with the pace of negotiations and many of his conservative allies are hesitant to pay for a fifth relief package after approving $3 trillion in aid over the Spring.

What does this mean?

  • The election: Trump's announcement makes it harder to blame the Democrats and makes clear that the Republicans are blocking further aid. At first glance, this doesn't seem like the brightest political move especially coming from someone down 10+ points in the polls.
  • Needless harm: COVID cases are spiking again in many US states, prompting a second wave of business closures. Without government support, many small businesses will go under and hundreds of thousands of jobs could be lost. Making matter worse, victims of this economic crisis won't have access to any government support.
  • Economic turmoil: Earlier in the day, Federal Reserve Chairman Jerome Powell warned of 'dire economic consequences' if Congress and the White House couldn't agree on additional support. In response to President Trump's announcement, stocks immediately turned and the S&P 500 closed down 1.4%
What's next: It's all a bit unknown. One option is that the Senate Republicans pass their own version of a stimulus and force the House Democrats to counter it. But the closer we get to the November 3rd election, the more it's looking like no deal until the results are in.

What about Canada: Thankfully Prime Minister Trudeau and his Liberal Government are moving forward with a number of additional stimulus measures to assist Canadian households and businesses through this second wave.
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Why can't you Venmo in Canada?

Yesterday, Venmo launched their credit card in the US and it got The Peak's Slack thinking... why isn't Venmo in Canada? So we did some investigating and here's what we found.

What's Venmo? For those less familiar with our neighbours to the South, Venmo is a digital wallet that makes it easy to transfer money to friends.

Going to a dinner with buddies in LA and the restaurant won't split the bill? You can just open the Venmo app and instantly transfer money to the person who paid.

And it's super popular. In 2013, the company was acquired by PayPal and last year the app processed over $12 billion of transactions. The app is fast, easy to use and offers low fees... so why can't we use it in Canada?

Bank Supremacy: Over 15 years ago, Canadian banks were smart enough to see the potential of peer-to-peer online transactions.

So they all got together and agreed upon a standard technology that would let Scotiabank, TD, RBC and CIBC customers transfer funds between each other. That's where Interac E-Transfers came from.

This was a huge win for the banks. By teaming up to control the Canadian peer-to-peer payment infrastructure, the banks could block competitors and charge customers a per transaction fee.

Blocking Venmo: With US banks so fragmented, Venmo became an intermediary that enabled money transfer between institutions. And the banks – eager to get on the peer-to-peer bandwagon – were happy to let Venmo do the work of connecting all the systems.

But Canadian banks are perfectly happy with Interac. Venmo needs to be able to hook-up to your bank to work and with Canadian banks raking in the e-transfer fees, don't expect to be Venmo-ing anyone anytime soon.
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Market Highlights

  • COVID: The White House has agreed to FDA guidelines that makes it unlikely for any COVID-19 vaccine to be approved before election day.
  • Stocks: Markets closed lower after President Trump announced an end to stimulus talks.
  • Economy: Consumer spending has picked up in recent weeks as Canadians upgrade their homes and revamp their wardrobes.
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Peak Picks

K-pop megastars BTS (or at least the company behind them) are going public at around $115 USD a piece, hitting the upper range of valuation projections. 

Venice's new system of 78 flood gates — in the works since 1984 — were just successfully deployed at high tide for the first time to prevent flooding of the historic city.

Conspiracy theories are everywhere these days and vary wildly, but those who believe in then do tend to share things in common. Here's how to know if you're among the susceptible.

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Science: A University of Alberta virologist was awarded this year's Nobel Prize in Medicine for his work on hepatitis C.

Telcos: Canada's wireless carriers want the government to treat attacks on cell towers fueled by 5G conspiracy theories as "national security threats."

Energy: A TD subsidiary is installing arrays of Tesla batteries for energy storage use in Alberta.
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The Rent Is Too Damn High

Relief is coming for businesses struggling to pay their rent, according to Federal officials.

The highlights: 

  • The new program will allow businesses to apply directly for rent assistance without needing to go through their landlord.
  • It will target support for small- and medium-sized businesses. 
  • The program will replace the Canada Emergency Commercial Rent Assistance which expired last month. 
Why a new program: The old rent assistance program was not popular with businesses who argued it was overly complicated and required landlords to apply for the assistance. Many landlords refused, as they were required to take a 25% reduction in rent payable.

Zoom out: Coupled with the Wage Subsidy program, the Federal government hopes to keep as many businesses alive as possible during the pandemic. But with cases rising and economic restrictions back on the table, that will be no easy task.

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The Other Health Crisis

While less discussed than its effects on the body, COVID is also creating a serious mental health crisis. 

What's causing it: Obviously, the isolation of lockdowns, loss of the ability to socialize and enjoy hobbies with other people, and the anxiety of the pandemic are major factors. But economic anxieties are also damaging people's mental health — and that could result in a vicious cycle. 

From the Globe & Mail:

"People with mental health problems are typically the last to benefit when the economy booms and the first to suffer in a downturn, found a 2009 summary report by the Mental Health Commission of Canada.

"Employment problems and financial stress are key risks for suicide around the globe, with every one-per-cent increase in unemployment correlating with a 0.79-per-cent increase in the suicide rate."

Who is suffering: Well, everyone — but some groups appear to be having a disproportionately hard time. 21% of women report higher levels of anxiety than men (15%) during the pandemic. Part of this may be because women have lost their jobs at a higher rate than men.

The economic impact: A report from the Conference Board of Canada found depression and anxiety problems cost the Canadian economy a total of almost $50 billion each year.

Big picture: Mental health stresses have been excacerbated by the pandemic — some experts say nearly half of Canadians may now suffer with mental health problems — and addressing this issue will have to be a part of any serious national recovery.

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A Lack of Confidence

After rebounding over the summer, Canadian consumer confidence has stagnated

What happened: The Bloomberg Nanos Canadian Confidence Index measures people's financial and economic expectations. After dropping to a record low of 37 in April, the Index has risen to 53.1 — barely up from 52.7 in August and well below typical levels.

By the numbers: 
  • 51% of Canadians believe the economy will weaken over the next 6 months. Only 18% believe it will improve.
  • 14% of Canadians are concerned about their job security.
  • 28% of Canadians say their personal finances have taken a hit this year, higher than historical averages but lower than at the height of COVID. 
Why it matters: Low consumer confidence translates into more saving and less spending, which sucks demand out of the economy. Without demand, businesses will shut down, jobs will disappear, and economic recovery will take even longer.
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Make a will week— is that a real thing?

It’s as real as Shark Week is real. Albeit, much less exciting.

The BC Government, like many provincial governments and legal associations, pick specific weeks or months to bring attention to the importance of estate planning. The hope is it will encourage millions of Canadian adults (57% as you may have heard) to create their legal will and power of attorney documents. And wouldn’t you know: they picked this week to encourage you to make your will.

Why should I care?

Great question.

You should care because dying without a will (known as dying intestate) means your assets (money, property, valuables) will be distributed by the government formula in your province and it may not be how you’d wish.

It also means the courts would appoint a guardian to look after minor children if there were no surviving parents (yes, that could mean the sister-in-law you hate).

But I would be dead, so does it really matter?

Interesting point.

Creating a will and making your wishes known is not just for your benefit, it’s for the people you love. Knowing your wishes will provide clarity when they’ll need it the most.

Oh wow, I never thought about it that way

Brain twister, right?

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Testing Tribulations

COVID-19 is sweeping through the White House and Donald Trump's inner circle which is making us wonder: if COVID can penetrate the highest levels of American government, what chance do other workplaces have for operating safely in-person?

Some have said testing is key to bringing people back into offices, but the White House's outbreak shows the limitations of this strategy: 

  • Rapid tests like those used in the White House can deliver false negatives.
  • Someone can be infected and contagious for days before they have enough viral load to be detected on rapid tests in use today.
  • Imperfect testing can create a false sense of security that leads people to abandon other measures like social distancing and mask wearing.
Returning to the workplace also raises other thorny questions: 

  • Privacy concerns: Should employers know the identity of an employee has tested positive? Should their co-workers?
  • Scale questions: If someone tests positive, who gets sent home because of possible exposure? Co-workers who were nearby or the entire building?
  • Employee choice: Is it right for businesses to force employees back to the office despite the risks? What about workers in vulnerable populations?
  • Negligent bosses: And as one person asks in the Careers section of the Globe & Mail, how should you handle a manager refusing to comply with their own safety protocols?
Big picture: These are complex questions faced by most businesses now that will have a major impact on the lives of their employees and the trajectory of the economy. 

Dig deeper: This interview with Carbon Health co-founder Dr. Caesar Djavaherian helps clarify a lot of the issues around workplace re-openings.
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