Summer storms

Learn to BBQ. Take up snorkeling. Get a dog. Or a Harley. Just fuhgeddaboud the economy until at least Labour Day because, well, it’ll likely suck.

The big impact? On jobs and real estate.

Here’s what to expect (according to most economists plus a new report from DBRS, the bond rating dudes). Then we’ll tell you how much to worry.

• Probably a recession, which means negative growth. Consumers will turtle, the savings rate will rise, retailers will have a cow and the economy will contract along with confidence. You can feel it now. That federal election was all about fear and it’s still here. Two-thirds of the economy is based on sentiment and spending. Have you cut back? See?
• So the first impact of tariffs was disinflation. Demand fell, energy prices went down and the cost of living waned. But now core inflation has stiffened and tariffs mean higher prices across North America. Cars, cribs, refrigerators and the stuff needed to build houses is all about to swell. Trump has found his spine again.
• People running businesses can’t make plans when the rules change daily. So investment is tanking at the same time the GDP is contracting. The unemployment rate seems destined to hike over the summer. Expect double-digits in major markets like the GTA.
• No interest rate cuts yet. Not with Tariff Man hiking costs for everyone and making the global economy less efficient. The Fed has stayed high, while our guys cut a few times more. There’s little appetite in Ottawa to move further – unless Carney flames out and a serious downturn results. (Odds of that below.)
• Making it more challenging is the dollar. Ours – because theirs is troubled. The loonie’s back over 73 cents today, on its way to 75. Perhaps beyond. This makes those tariffs on Canadian exports extra painful. As America’s currency is sold off it means commodities (gold), crypto and our money grow in relative value. (The budget bill now before the US Senate will add about $2.5 trillion to the deficit, pushing the debt closer to $40 trillion. Mr. Market is not amused.)

* The spring real estate market was dead on arrival. It will stay that way. Sales down. Listings up. Prices slowly dropping. Buyers on the sidelines. Construction halted. An industry in chaos and disbelief. Just look at the mighty GTA, where supply and demand have never been this out of whack. There are almost 31,000 properties for sale right now, with sales plunging.

See what I mean? The coming months promise to be more worrisome than ants in your picnic and ticks in your shorts. It you lose your job or utterly fail in selling a property you need to dump, it’ll take time to recover. Sorry.

Otherwise, chill. Drink more coolers than usual. Go offline in the garden.

Longer-term, there are positives.

For example, the Trump agenda involves big corporate tax cuts, a slashing of regulation, personal taxation reductions (tips, overtime, car loans) and a reindustrialization of America. Human rights, democracy, equality, the environment and social justice may take a gut punch, but 47 will ignite asset values if the agenda passes. Stay invested.

Also have some faith in our new leader. Carney is a cagey, non-emotional and experienced exec who understands we need a deal, not a fight. The goal is a new trade agreement, at the same time we build more national infrastructure, crash internal barriers and reach out to the rest of the world. He’s no fool. Deliver or die.

Finally, reason tells us Trump will hit a wall. Check out recent videos of street mobs pushing back ICE cops raiding restaurants and rooming houses. Look at the instability and irrationality of Elon Musk. The insane war against Harvard. Travel bans. Kennedy. Kristi. Cash. The deaths caused by America’s retreat from global health. Gutting of scientific research. Removal of female officers’ pictures at the Pentagon. Renaming a ship because a gay guy’s monitor was on it. Investigating and persecuting the last president – now dying of cancer. Attacking global and historic allies. Like us. Misogyny, homophobia and racism.

How long until Republicans understand this is the death of their party? It’s not America. Not American values. Not liberty, equality or justice. It won’t be pretty getting rid of MAGA, but it’s nonetheless inevitable. Never bet against the USA.

Be an optimist. We got through wars, Nine Eleven, the credit crisis, a global pandemic and Adele.

Now, off to the beach. Whatever happens, do not read this blog.

About the picture: “Difficult news ….my little guy Onyx,” writes Peter. “He’s now 16.5 years old.  In the last year he has been less active and loving his naps.  Unfortunately, he’s been very ill the last week. My daughter is flying in  from Law School, as I write this.  We are saying goodbye….tonight. Onyx has had a brilliant life.  Toronto, Florida, Manhattan and lastly Muskoka. Thank you for everything you’ve given back to this amazing community and country.”

To be in touch or share a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/06/05/summer-storms/