Farmer Diaries

Summary Yesterday, Boeing launched a $25 billion bond issue -- it was snapped up by investors, not because the company is sound, but because its too big to fail, its part of the US military complex (Yeah) and investors are convinced that the government will bail them out (maybe).  Investors have made the cynical bet that the US government will bail them out...  The one certainty is that until a vaccine is found international travel will be curtailed and complicated. I strongly believe that business travel will reduce appreciatively after a few months of “Zooming” and that most business people will appreciate this new reality.  I suspect that this crisis is going to make things for Boeing very uncomfortable, and may even push the company into Chapter 11.  A fitting end to a company that has been grossly mismanaged over the past decade. Airbus has its own challenges, the write off of the A350 would make a massive hole in the company’s balance sheet (and t...

On the 15th of April total Canadian death from COVID-19 was just north of 1,000 (population 35 million) and US death was 30,000.  7 days later the total respectively is 2,000 and 45,000. The power of numbers expressed in human lives.  Here in Canada, a fast-growing proportion of those deaths are in their 70s and 80s -- and mostly in long term residential centers with a number (obviously) of health concerns.  In the last 24 hours, in Quebec, fully 90% were in these long term care facilities -- which speaks volumes on the scope of the tragedy and the fear fo those who live in these long term care facilities. Across Canada, the governments have taken notice and action...Canada's infection rate seems to have peaked -- news out of NYC is still inconclusive...that's why Canadians are so "happy" that the US/Canada border will remain closed but for essential traffic -- there is a strong concern that the pandemic is only beginning to explode in the rest of the US, the Mid ...

The estimates are in and demand seems to have collapsed by nearly 40 million bbl per day.  No wonder the OPEC agreement to cut 20 mm bbl per day went nowhere (aside from the cheating), the demand has collapsed.  At one point today, Canadian [Edmonton] prices dipped in the negative territory (it was a short thing). Overall the price curve is in contango (future oil prices are cheaper than spot) which is rare in the commodity world. 36 million bbl per day, and we are not talking natural gas...

Recently published in a number of Canadian local papers -- certainly looks coordinated!!! Sir, Not to appear xenophobic, but the US president’s desire to re-open the Canada/USA border fills me with anxiety. Canada has been a serious, united and largely acquiescent of most governments’ decisions vis-a-vis covid-19, we may disagree with the speed of re-opening the economy, but we all seem to agree that the governments took the right decisions and in general we have abided by the new and sometimes difficult rules that were put in place. The US response has been, something else, and now it appears that the Federal government’s leader, President Donald Trump, is keen to foment rebellion in certain states – it may all come down to nothing, but it seems too well-coordinated – its smells like big money pushing “idiots gun-fodder ahead”. It also appears that China, Korea and Singapore’s new cases of Covid19 were largely caused by people traveling back to their country or visiting family....

What grim numbers to evaluate.  What did Canada do right (yes a 1,000 is still a lot) so that its death toll is such a small fraction of that of the US.  Canada's population is about 1/10 that of the US (more or less) so either Canada should have reported 3,000 death or the US has 20,000 too many dead people. There is no doubt that Canadian have been inconvenienced by the social distancing and the shutting down of business.  That is simply the reality -- as far as I've seen no one has tried to have church stay open, also stupid rules have been few and far between. The time frame for Covid cases are about identical (early March for both countries -- in Canada, it was in BC and in the US it was California and NYC).  The response in Canada has been aggressive with most of the country completely shut down since mid March.  So why are so many more Americans dying?  Different in general population health? medical system (socialized in Canada) government res...

There was always something "special" about Americans and their religion.  For years, working with Mid-American fundraisers coming to Canada I had to actually tell them that "no, you cannot start your presentation about your religious beliefs"  -- seriously they were appalled that they could not discuss their belief in JC! Now in a number of states are having constitutional fights with churches (not catholic you will note that since Gallileo are slightly more pr-science) that want to be able to "get together to pray.  Some "moron" even said that "she did not believe that you could catch Covid-19 in a church.  There no comments to that level of stupidity As a not particularly aggressive guy with regards to religion, I take the view that if they have a death wish -- who am I to stop them.  It is well documented that a number of Koreans were infected in a religious service (supercarrier) -- at the time no one knew of the risk of covid019 still......

There has been a view expressed by the GOP that "companies have to be saved" people can die, but it turns out that some "people" are more equal than others.  Enter two "entities that really do not deserve the taxpayers' larges":  Boeing and the Cruise ship industry. Let's be clear, Boeing used nearly US$ 20 billion (some say $30 billion) to buy back share and not invest in its aircraft.  The lenders (about half the amount) knew very well what the money was going to be used for -- reduce the level of equity and raise the price of the equity.   If tomorrow Boeing declares bankruptcy what happens?  Really not that much, it goes into Chapter 11, who loses the equity owners and the unsecured bondholders -- the same guys who were happy to lend money to Boeing to reduce the amount of capital.  Workers -- not so much, they will have a job and a pension, why should they pay for management stupidity...even their pension is safe since its now illegal for pe...

Over the past few days, there have been a number of economists and market prognosticators looking at the future of America and the world in a "post" CV-19 world.  In the ultra short term, a deep recession is certain to hit.  After all, economic activity has basically stopped entirely, aside from basic food goods everything else has been shut down.  At the very least we are looking at a 20 to 30% GDP contraction.  Some of the more interesting commentaries were made when comparing the current economic problems with the second world war:  (1) a large percentage of the population became absent from daily economic life (joined the Army) (2) most economic activities stopped since much nonwar economic activity was transferred to war production, (3) a large percentage of economic life was dedicated to "unproductive:" activities (e.g. making bombs and guns and ammunition). Right now, in many economies (like up here in Canada) a large percentage of the workforce has bee...