Hny

Almost half a decade has melted away since we first heard about Covid. It’s still with us, of course. Maybe not the germs, but the consequences. As we heard into 2025 this week, it’s a changed world.

Trump is back. Trudeau will be out. Millions of people don’t go to the workplace anymore, or want to. Bricks-and-mortar retail has been decimated. There’s a health care crisis. A housing crisis. A crisis of expectations. The dollar  sunk. Stocks markets have soared. Interest rates went up ten times and down five. Everybody, it seems, is pissed. Wars continue. Bitcoin at a hundred grand. And an anti-vaxer will be leading the US health department. Oh boy.

In conclusion, anything can happen. And while a year ago it seemed 2024 would be a predictable glidepath to more recovery, 2025 is already scary. Volatile. Unsettling. Perhaps explosive. And completely unpredictable.

So what better time than now for predictions?

The government will be changed.

After a decade Trudeau is cooked. His Atlantic caucus just voted to rebel. The Ontario one, too. He is wearing every public grievance and been made responsible for all social failures, real and imagined. Chrystia delivered the fatal blow. Poilievre’s lead in the polls is unchangeable. We’ll have an election in the new year. So we’d better start hearing how young Pierre is going to fix stuff.

Houses won’t get cheaper. The opposite.

The last two months of 2024 have brought increased sales in most markets with DOM and MOI on the decline. No wonder. Interest rates have been slashed, with the Bank of Canada delivering two jumbos. Variable rate and fixed mortgages are now solidly in the 4% range. Lending rules have been loosened. Amortizations are longer and downpayments lower. Big incentives – the FHSA and new tax-free retirement plan withdrawals – are in place. Pent-up demand is significant. Most people don’t care about macroeconomics or geopolitics – they just want a house and a lower monthly payment. The scene is set for FOMO.

Interest rates will tank. The dollar, too.

Even before Tariff Man bellowed, our CB was on the path to drop its key rate to 2.5% by mid-25. That would mean three more quarter-point reductions, with home loans dipping into the 3% range. But now it seems rates could tumble further, widening the spread with the States and driving the dollar into the mid-60 cent range.. This is all because…

A recession looks inevitable.

Blame Trump. Even a 10% tariff would send our no-growth economy into negative numbers. If the orange guy goes for 25% – even for a period of months, not years – economists forecast we could lose twice the slice of GDP that the pandemic erased. Unemployment at 8% or so and the CB would respond by trying to soften the blow with even-lower rates. Real estate would likely benefit even as some serious damage was done to manufacturing, exporting and consumer confidence amid rising inflation. If Canada retaliates, economists add, it gets worse. With Tariff Man in office there is no good outcome for Canada. And still, the uninformed here cheer him on.

No mortgage cliff. No stress test.

With mortgage rates coming back into the 3% range, there’ll be no renewal crisis. Almost 70% of all outstanding home loans come up for refinancing in 2025 and 2026, with an average legacy rate of 2.89%. Most people will be able to renew their debts at little or no increase in monthly payments. Meanwhile the Mortgage Charter tells banks to tread lightly for any households in distress. The bank regulator, OSFI, will be pushed by the new Con government to throttle back on the stress test which forces borrowers to quality at higher rates. Faced with a recession and rising house prices, politicians will panic.

A good year to have money.

The Trump Trade will return as the US president carries through with his agenda of corporate and personal tax cuts, America-first protectionist policies, dismantling of restrictive regulations plus a watering-down of environmental protection and DEI guidelines. His proxy for America is the S&P. Make sure you have some.

GreaterFool hits a million. Maybe.

So far this site has published 904,000 comments. Dog only know how many have been deleted, ghosted or dismissed with disgust. Bots have been banished, where possible. The MAGA stormtroopers repelled. The commies curtailed. Moderation has diffused the F-bombs, spanked the pandemic-deniers, shamed the racists and anti-immigration Karens and chased off the myopic traitors who would sell out their country for a bungalow. Along the way, lots of warnings that without respect, decency and cohesion, we shall be lost.

So behave. We have a tough mother to get through.

About the picture: “Hi Garth, we are having a nice wet time here on the South Coast of B.C.’” writes Kathryn. ” Since green, and gray are the colors of the day we decided to brighten things up a bit and purchased a red raincoat for the ‘Bell.’ Here she is in all her glory. She hasn’t quite figured out what we are doing to her this time, but she is getting used to her humans’ eccentricities. Happy new year!”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2024/12/30/hny-3/