Pattie Lovett-Reid

Chief Financial Commentator, CTV

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I feel like the little kid in the backseat of the car asking: are we there yet? I keep wondering what it will take to get us to the point of stabilization in the pandemic, the markets and the global economies.

I reached out to my social media followers and asked what their most burning questions were right now. Almost universally the question was: Have the markets bottomed out and do you think the economy will turn the corner?

I don't really think anyone has the answer to that, but what I do know is this health crisis rapidly morphed into an economic crisis and has quickly turned into a job/financial crisis. 

People are afraid of the unknown, and while jobs have been lost rapidly, the rehiring process will never move at the same speed. This is why I get the feeling people believe the sooner we get through this, the odds getting back to normal increase. And that means getting to back to work sooner.

So, if I had to quantify it, I would say we are two-thirds through the crisis. Here’s why.

1. Central bankers around the world have stepped in and provided liquidity to the banking system. They have done so by cutting interest rates, buying up assets and stepping in frequently to ensure the well doesn't run dry –  far more aggressively than in 2008. The G7 nations have vowed to coordinate their efforts providing funding for health initiatives and more, while governments have established financial aid in the form of unprecedented stimulus packages.

2. Aid is quickly becoming available. The difference between this crisis and the one in 2008 is the level of debt Canadians are carrying. Debt levels at the individual and business level are staggering. However, aid is now available to assist cash-strapped Canadians, through measures like the Canada Emergency Response Benefit (CERB) and the new wage subsidy program. Business owners will now be helped more so that when we come out the other side of this crisis, Canadians can hope to find jobs to sustain themselves, their businesses, and their families.

Add to this, the big banks are throwing a life line to those who need it by way of mortgage deferrals. The Canadian Bankers Association (CBA) said Friday mortgage deferrals have reached a half a million in the country. Finally, all of the big banks cut their prime lending rate 50 basis points to 2.45 per cent from 2.95 per cent in a move matching the Bank of Canada's latest interest rate cut. 

3. The virus hasn’t reached its peak in Canada. The missing element and the key element that makes me believe we are only two-thirds of the way there, is that the virus has only reached its peak in some countries. It is the wildcard that is creating fear, panic and complete uncertainty. Financial support can't change that. It can only provide temporary relief. 

Once all three on these components come together in perfect symmetry, only then can we hope to see lives saved, economies stabilize and the markets respond accordingly. 

​I do believe we will get there, but it is going to take time and sadly we have no choice but to be patient. Being at war with a virus is a complete unknown, but a few weeks ago we had no ammunition and today we have a fighting chance.