March 30, 2020 12:40 pm eastern time

Markets are higher today despite indications over the weekend that the shutdown will be longer than recently hoped. 

The Canadian government is offering to pay 75% of wages if businesses keep workers on (up to $58,700) The businesses do not even have to pay the remaining 25% although they are encouraged to. This looks like it would be an open invitation to abuse and so the government has warned businesses not to abuse it. It is far more generous than EI. I did not see any indication of whether the government would also cover CPP and EI premiums. Many businesses may find it hard to apply for and administer the program. With all this money going out (at least once it starts to flow) and far fewer places to spend the money, there should be not be much excuse for many people to stop paying their rent and mortgages. Unemployment and job loss figures are also going to greatly distorted by this move.

Oil prices are at a 17 year low with West Texas under U.S. $20 and Canadian Western Select (which I understand is a heavy unrefined oil from oil sands) dipped under U.S. $4 and so is practically worthless. This is very bad for Alberta if it continues.

I notice that Melcor Developments as well as the Melcor REIT announced approval of normal course issuer bids (share buy back) programs. This may NOT mean they plan to buy any despite the low price. That’s not clear. They were already scheduled to renew those programs at this time. And both are restricted to low amounts of purchase per day in any case. They may choose to hang onto cash rather than bother buying the few shares they are allowed to since any buy backs might also draw criticism.

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