Qs & As

Q: If the Trump tariffs are whacking Canada, why did the loonie rise in value last week?

A: It’s all about the greenback, not our dollarette. The US currency has been shedding value since the tariff insanity began. The White House planned on the American currency strengthening, further bolstering its protectionist strategy. But, oops, FX traders saw it differently. Down she went. Up bobbed the loonie.

Q: Don’t understand. If the US is creaming everyone and skimming off trillions in tariffs, why a weaker dollar?

A: Because Mr. Market thinks Trump is a wiener. The tariff thing is wrong. A “self-imposed economic nuclear winter” as one of the president’s oligarch backers put it on the weekend. The outcome will be a recession in the States, economic contraction, more debt, lower tax revenues and worsening credit. So the dollar is being discounted.

Q: A recession in the biggest economy – is that why oil prices have tanked in the last few days? Less demand?

A: You learn fast.

Q: Sunday night stock market futures were far worse than at the opening this morning – down, like, 5% for the S&P. What happened to trim those losses by this morning?

A: Still ugly. But traders and investors are gambling all this grief and all these losses – $9.5 trillion by sunrise today – will force the Fed to take action. Before Obliteration Day the US central bank was expected to make just one or two rate cuts this year. Now people are betting it will slash five times – maybe with a big initial emergency chop – to stauch the market’s flow of blood. But the Fed most recently said it’s also worried about Trumpian inflation. So, yeah, this is a gamble.

Q: Some people say Canada got off lightly. Fact?

A: No, a lie. We are wounded. Steel and aluminum exports tariffed 25%. (Canada’s major metals producers ship up to 90% of their stuff south.) Our cars are being hit by a tax at half that level, but enough to shutter production. Softwood lumber duties have just doubled. Lots of exports not covered by our now-meaningless trade deal with the States are hit with a 10% levy. Unless this stuff disappears, expect recession.

Q: Okay, so what is a recession? What’s so bad about things slowing down and house prices dropping? Maybe Trump did a good deed.

A: When an economy shrinks for at least two consecutive quarters (six months) we’re technically in a recession. The hallmarks of this are struggling businesses that shed workers. Layoffs are the most visible sign, and as unemployment rises consumer sentiment sours, families pull back and spending falls. That makes the hole deeper. As for real estate, yes, a price decline is absolutely to be expected – along with lower mortgage rates. But history shows us when prices fall, sales do as well. Go figure.

Q: You’ve shoved homilies like ‘never sell in a storm’ down our throat. Are you a financial marketing shill? Or some kind of sadist? The storm’s getting worse.

A: So sell. Sheesh. Turn a paper loss into a real one and see how that feels. All we’re saying is that never, ever (and never) did financial markets stay down for long after a crisis or a sell-off. The worst episodes in memory (Black Monday of 1988, the Financial Crisis of 2008, the Pandemic in 2020) were all followed by a wave of buying and eventually record market highs. If you don’t need the money now, do nothing. That includes coming here to be an emotional wuss.

Q: Is Trump trying to influence our election?

A: He got tired of trolling Canada. Besides, he’s afraid of Melanie Joly. Who isn’t?

Q: So are you saying this is a good time to back up the F-150 and buy a mess of cheap stocks and stuff?

A: No. For most people, absolutely not. The Vix has spiked wildly, market sentiment is swirling the drain, corporate valuations are being gutted and as yet Trump shows no sign of the capitulation which will have to come. He just posted this drivel: “Don’t be weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!)”. When the most powerful person in the world is saying such things, stay under your rock. Lots of stocks may be cheap, but unless you have the stomach for wild swings and more slides, wait. He’s nuts.

Q: Why is this blog loading so slowly lately? Did you run out of money to pay for a stable connection because your B&D portfolio is shredded, you geriatric old dog-licker?

A: The site has been repelling up to 70,000 attempted log-ins per day. It’s a “new and worrisome threat and attack” my webmaster says, as he welds another piece of scrap metal (looks like a scorched Cybertruck hood) onto the gates. Bots roaming the digital world looking for vulnerabilities have seriously tested site defences and slowed response times. But we’re winning. We just ransomed the IPs of the morons in the comments section on the dark web. All good. Check your email.

About the picture: “This is Daisy,” writes Kim. “She is two, she loves to play stick and tug-a-war.  Sweetest little bug but, Daisy has a cat brother names Peter.   If we want her to come quickly, and she won’t respond to her name, all we do is call Peter.  She’ll comes tearing towards you looking for that dang attention-stealing-thief cat!!  She’ll chase Peter away but Peter tolerates it, with a few whaps and then he is gone.”

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

Source: https://www.greaterfool.ca/2025/04/07/qs-as-2/