• James J. Hargan

Covid Update, Life Insurance, Gold and the Canadian Banks eh!

Another week is coming to an end and here is the latest. Have a great week-end. LIFE INSURANCE Typically when applying for life insurance blood and urine samples are required. However given the current isolation level those requirements are not possible so many companies are waiving those requirements for insurance applications received in this period of time. This is a great opportunity. It's subject to age and amount limits but if you are afraid of needles, now may be the time to apply for life insurance! The following qualify for all life insurance products: Ages 18 to 50, $2,000,000 or less Ages 51 to 60, $1,000,000 or less Non-smokers only

CANADIAN BANKS EH!

My rant on buying the 6 Canadian banks ETF continues...more ammunition from several bank insiders:


  • BMO has one of the longest unbroken dividend paying records in the world at 191 years

  • Canada’s five largest banks have said their dividend policies remain unchanged even as regulators in Europe and Asia Pacific countries have asked lenders to suspend dividends.

  • Canadian Imperial Bank of Commerce Chief Executive Officer Victor Dodig said Tuesday the firm is well capitalized with “healthy” returns on equity and that won’t change any time soon.

  • BMO and TD have announced no layoffs

  • Scotia is 3 times better capitalized than in 2008/2009

  • CIBC has come out saying there dividend will not be reduced

  • RBC has 50% of their call centre working from home. And it's working well. Think about the cost savings in rental space when this is all done and companies realize working from home is a legitimate option for many.

  • CIBC bank analysis attached

  • BMO Market Report: Bottom Line: The move this week by the U.K. banks to involuntarily suspend their common dividends, served as a reminder of the “stroke of the pen” risk implicit in any regulated business. It also caused many investors to question the sustainability of Canadian bank common dividends. For the “Big 6” we believe the dividends are sustainable and the likelihood of an ‘involuntary’ suspension is very low


GOLD STRESS

I must confess I've never before looked more forward to week-ends than the last few weeks. I've always enjoyed what I do but the market correction combined with all the unknowns and the lockdown has me looking forward to 4pm every Friday when the markets close. My hair gets thinner and greyer by the week (this statement supported by my children on a daily basis). This week however I've felt much better so perhaps that's a sign this may be coming to an end. Don't get me wrong, volatility will likely continue and we don't even know what will happen with 2nd and 3rd waves of this virus but I will continue to pay close attention to events as they happen and on measures to reduce stress!

Which leads me to point out that gold is at a high last seen in 2012 and maybe approaching $1800. Which you may recall was close to its peak around that time. So perhaps that's another sign this is coming to an end and gold lovers should sell now before it goes back down! Time will tell.

NETFLIX

Wednesday brought yet another landmark in corporate history. With Netflix rising to a new all-time high while the market had its worst day in three weeks, the streaming king is now valued at more than Cisco Systems Inc. and even Exxon Mobil Corp. Irrational exuberance perhaps?

RBC CONFERENCE CALL SUMMARY

  • Countries that have peaked are beginning to show us what may happen here, may take a little longer to start economies.

  • Slower bounce back in the opinion of RBC

  • 70000 new cases per day, had peaked at 90000

  • fewer global deaths

  • US stats:

  • retail and recreation down 47%

  • train use down 51%

  • air travel down 96%

  • dept stores down 15% (seems low but not all had closed by end of March)

  • US Steel down 20%

  • US mtge applications down 30%

  • Peterson poll 73% say family income has been reduced

  • 24% of the US population have seen a significant cut in income

ARE YOU A BULL OR A BEAR?

John Authers Bloomberg : "With hindsight, the post-Lehman bailout can be seen as a Faustian bargain that staved off meltdown and a second Great Depression, but saddled the world with an economy that underperformed for another decade amid mounting political anger and inequality. It looks like that deal is being made again. Bulls can point to what happened to asset prices — and pile into the stock market. Bears can raise the prospects of long-term stagnation and civil unrest, and stay away."

From the New York Times...given our isolation you may be getting to the back of the cupboard so does that expiry date really apply?

https://www.nytimes.com/article/expiration-dates-coronavirus.html

PLUNGED! COLLAPSED! CRATERED! STAGGERING! Anyone else sick of the media's use of extreme terms? And the worst of all: BREAKING NEWSU.S. retail sales suffered the biggest plunge on record in March, dropping 8.7 percent as the pandemic shut stores and wallets.Wednesday, April 15, 2020 8:35 AM ESTGrocery stores, pharmacies and other sellers of essential items experienced a surge in demand last month. But that was outweighed by a steep decline in other categories as businesses shuttered and shoppers restricted their spending. AS A MATTER OF LAWProvincial governments respond to the Coronavirus (COVID‑19) by permitting virtual witnessing of Wills and Powers of AttorneyIn response to the Coronavirus and demands for social isolating, Ontario and Quebec will now permit virtual witnessing of Wills and Powers of Attorney. There are some requirements that must be met around the technology used and who must be present for the witnessing.

And on a lighter note...





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