Abuse of the Canada Emergency Wage Subsidy (CEWS).

[JBen]

Fishfood. We saw it coming in 2005, 2006.
I don't recall exactly, but somewhere in there, I was told to reduce the companies exposure to Asset Backed Commercial Paper. "Paper" or pools of debt, backed by assets. In the subprime housing world, pools of mortages "secured" by asssets. Regardless, I went from being long over a billion dollars worth, down to 100-200 million.

When it really blew up in Sept of 2008, credit ( liquidity) dried up. Oddly enough, like what might happen when all kinds of widgets and gadgets dry up. Or have to bought from China/Thailand.

There are soooo many moving, related parts to all this. "Who knows"

The companies that are abusing CEWS? All kinds.
What about the loans? How many have borrowed $40,000, put $30,000 under a mattress for the free $10,000
We've discussed people abusing CERB.
Me? How hard would it have been for the government to say..
here you go...But if your houshold income for 2019 was > $x.00......no. Why should a house where between two people they bring in say $150,000......Others need it.
and on and on and on and on....

Basically, I can foresee a perfect storm, where a whole bunch of things....And I strongly suspect getting through the next month or two....lol, please

[Gilroy]

" Why should a house where between two people they bring in say $150,000......Others need it.
and on and on and on and on...."

You got my vote.

[fishfood]

So will some of these businesses have to pay back ?

Surely not all of them took losses or the 30 % to be eligible for the benefit.

We see with the cerb they gave it to them and certainly aren't going to claw it back. Justin said.

Also didn't the government get on board with this program ? At the beginning ?



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[fishfood]

Basically, I can foresee a perfect storm, where a whole bunch of things....And I strongly suspect getting through the next month or two....lol, please

Oh it's a big one brewing but noone is paying any attention to it.

I asked someone last week how they were .

The reply good, can't complain because nobody is listening lol.

People think things will bounce right back to normal but it's far from the truth ..so many people are going to be in world of hurt. Some understand it many do not .

Why is it that many people who made a fortune off the real estate market are backing off to invest in other things?

What do they know that we don't ?

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[MarkB]

" Why should a house where between two people they bring in say $150,000......Others need it.
and on and on and on and on...."

You got my vote.

$150k is a lot of annual salary ... but I'm willing to bet it is exactly that demographic that has the most debt in Canada ... and if you pull the plug on income, you will have a ROYAL disaster in the economy.

[JBen]

I think I've mentioned I am now in financing. Almost, sort of the other side of the equation. My old life, we were trained how to remove emotion from decision. To us, numbers are just that. Numbers.
Working with people now, especially when trying to explain why places won't extend credit to them, or why their rates are so high. Banks dont care about your life, your story, the how or why. All they see are the numbers.

Our "market" is subprime. These days (prior to2020), more than 50% of the population. We get people that are prime as well, but they are in the minority.
I've had "clients" with little income and decent credit resumes, and brutal. I've had clients that make more than $100,000 with brutal credit resumes.
Will say, while a number of things cause inflation, as a general, broad, umbrella type statement. The biggest factor is spending.
Who has the most to spend and the most credit ( that leads to even more spending??)
?????????

Couldn't begin to guess on Real Estate Fishfood. Lots of people are trying to figure that beast out.

one other thing maybe worth mentioning.
In the last couple months the number of people we are seeing with little income, having hard times getting credit is increasing. One of my hardest days was about a month ago. Had a young mother, same age as one of my daughters.

Going through a nasty divorce, 3 young kids. I could hear kids in the background crying, the desperation in her voice. "How am I suppose to prove income, when I lost my job, and cant get a loan, so I can get to a job"....

Not a good day that.

[Gilroy]

$150k is a lot of annual salary ... but I'm willing to bet it is exactly that demographic that has the most debt in Canada ... and if you pull the plug on income, you will have a ROYAL disaster in the economy.

Mark I only replied to that because most pensioners are well under half of that amount.

I don't think most pensioners would even get a car loan these days never mind a mortgage as JBEN says its all figures.

[JBen]

Another demographic that is and will get whacked...
We get some approved Gilroy. Depends on specifics, even ODSP as a single source of income can be enough, but, depends on credit resumes, TDS ( debt income ratio)........When you do the math

You would not believe how many people we ( theres 8 of us here) are are currently seeing, that are dead in the water before we pull their credit.
"CERB" doesnt count as income?

And if anyone is curious.
760-900... prime
700-759.....Good
660-712.... Fair
575-659....Average

Point there, is that about 5 years ago. Only about 35% were subprime. By 2019 is was over 50%
2020???????

[Gilroy]

Another demographic that is and will get whacked...
We get some approved Gilroy. Depends on specifics, even ODSP as a single source of income can be enough, but, depends on credit resumes, TDS ( debt income ratio)........When you do the math

You would not believe how many people we ( theres 8 of us here) are currently seeing, that are dead in the water before we pull their credit.
"CERB" doesnt count as income?

I got to say I am pretty in the dark when it comes credit as I have not used it much. I reduced my credit limit down to 5grand
simply to stop any liability in case my card got compromised. Don't think I have ever asked for a credit score in my life.

[JBen]

Call me some day, I'll walk you through a couple things. One of which is that you could be hurting yourself by reducing limits.

Everyone can request their bureau once a year free. Given this year I suggest it.
They also currently have a couple free things. You wont see all you want to but. Not sure if they still are offering it, but there's also a 30 day trial. Sign up, see a "score" and some other things ( again, not all) ...cancel.
https://www.consumer.equifax.ca/cana...ent=Core_Brand