Saturday, April 25, 2020

Try and understand the future with the following few examples

Try and understand the future with the following few examples

Clothing and footwear retailers are inventorying winter and spring merchandise that no one will want to purchase because summer has arrived. Will consumerism prevail when prices are slashed, or will aged inventory be liquidated for pennies on the dollar? Has China and the East created the apparel inventory for summer sale, and have retailers paid for it?

Should this fantasy virus lockdown carry to the end of May or June commercial rent subsidies may help retailers sustain their basic rent, but not their entire rent factor. That factor includes insurance, utilities, depreciation and some other semi-fixed costs (ex. communications, security, data processing, accounting fees etc). Bankruptcy may prove to be more viable than resurrection. If commercial bankruptcies become abundant, commercial rents will fall because of an over-supply of commercial space.

Automotive retailers are likely inventorying 2019 models, and now carrying a 120 day supply of 2020 year model vehicles. It is unlikely that automotive manufacturers will fill the remaining 2020 inventory and sold order requirements. One should conclude that they are retooling to build 2021 model year vehicles. One and two year old new vehicles values will have a dramatic impact for manufacturers, retailers, trade-in values and bank lending. Will the manufacturers have the capital to move the over-supply of 2019 and 2020 vehicles, and save their entire franchise system. Likely not.

With new vehicle values dramatically impacted, used vehicle inventories owned by franchise dealers and independent used car lots will suffer major blows. The excess supply of old new vehicles and unsold used vehicle inventories will make trade-in values and maturing lease values worth dramatically less. Banks will not finance over-stated retail values and the mounting amount of people whose credit has been damaged by Covid-19 and growing debt.

What will happen to home values when the economy starts to crawl back to normality. With mortgage payment, realty tax and credit card arrears mounting for so many people the answer is unpredictable. The only factor that may save home sales are the prevailing low mortgage interest rates, but will banks approve individuals who work in an uncertain employment future (i.e a future with less employers). How many mom and pop storefronts will brave the storm in order to save their livelihoods and indirectly save the commercial real estate landlord. What happens when the handouts end? I have heard many tenants say I want out of condominiums. Covid-19 has transformed condos into asylums. Freedom to enter and exit one’s apartment has become a nightmare. Will foreign investors continue to indulge in the faltering value of the Canadian dollar? Are we talking about a global real estate crash? It certainly leans that way. The big investors will certainly be buying up all the pieces at a discount.

Now that so many cash businesses have been exposed, will they return to operate in the underground economy. Covid-19 proved to so many people that reporting your income will have much more security going forward, but those individuals will have much less disposable income - remember those source deductions.

Will travel and tourism ever fully recover. Vacation destinations all have varying degrees of Covd-19 travel restrictions. Will tourists venture out to countries whose healthcare systems are considered inadequate. After all, the media has already placed a second waive pandemic fear for this autumn. People are already scared. We have transformed social interaction into a disease. Even social distancing is inadequate.

Will restaurants and theatres of all kinds attract their regular audiences. These are high human-density venues and the fear of social interaction may prevail past the removal of the Covid-19 restrictions. Everyone will be worried if someone sneezes, looks frail or blows their nose. The Chinese say farting is a sign of good health. That may become the cue that all is well with the people sitting across from your table. At present the cold, flu or sniffles are all diagnosed as Covid-19. Even an instance of diarrhea is counted as Covid-19.

Food, food food. Farmers and ranchers are likely feeling the pinch with their growing live-stock inventories and wasted produce. Pork and poultry slaughter-houses are shutting down due to Covid-19 infections. Will food producers be more inclined to fill recovering commercial demand and undermine consumer demand? To a large extent this question will be answered if the travel, tourism and restaurant industries resume normal sales levels. Food inflation and shortages are on the horizon if farmers are not immediately bailed out. In the end, food and water are all that matter.

Travel and tourism to a great extent involve trains, planes and automobiles. Gasoline is cheap and with billions of dollars in travel vouchers awaiting to be claimed, what exactly will happen? Will stay-vacations and the great white north prevail over long distance travel? With so many people locked inside their homes something strange has come to pass. People are shopping for groceries and cooking and baking a lot more than they ever used to. Being frugal may prove to be wise going forward. The fear of uncertainty has cast a terrible shadow over human existence. Nonetheless, this Black Swan simulation in Chaos Theory must not be allowed to prevail. Your freedom lies in the balance.

Covid-19 proved the healthcare system is broken and corrupt. Political and medical dictators are determining who lives and dies, and what drugs the public can access. There has never been a better time for governments to fund Naturopathic Practitioners. Alternative medicine means alternate choices. When public officials prevent known cures from helping vulnerable populations then criminal conduct is infringing on our Bill of Rights. I have learned to trust no one in government, policing and the medical profession. They do not have our best interests at heart. If anything, we must make public servants accountable to the law. Canadians can longer afford handouts when an encroaching technocratic totalitarian future is looking down upon us. These uncertain times were intentionally created by madmen like Bill Gates and the many idiots who think human beings are obsolete. Well we are not. 

While most people have turned away from religion, this simulation in chaos theory did attempt to remove your faith in God (regardless of the God you pray to). Houses of Worship became taboo and the liturgy was suspended so we could instead listen to the prevailing version of George Orwell’s “newspeak” via public and political announcements. My message to you is to not abandon your God. For the truth lies in God.

Thank you,
Joseph Pede

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