Exploring the US-China Trade War, Capital One Hack, and Advisors that are not advising
Simple Money Podcast – Canada’s Own Personal Finance Podcast
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Another Brand New Episode!
Hello and welcome back to Simple Money Podcast, Canada’s own personal finance podcast that covers those personal finance questions that are important to you and your family. I’m your host, Matthew Siwiec, also known as the friendly financial coach.
Today, we’re doing another episode of some recent financial stories that are impacting Canadians and beyond. We’ll be covering the on-going escalation of the US-China Trade war, the Capital One hack, and a recent industry release on the quality of advising being provided to Canadians.
Tariffs and More Tariffs
so our top story this week are the recent escalations in the trade war between the US and China. At the tail end of last week we saw Donald Trump announce a proposed tariff increase on the remaining Chinese imports that missed the last round of tariffs. This proposed 10% tariff would be applied to $300 billion worth of imports and is stated to start by September 1st if the underlying issues are not resolved. These tariffs will target mainly consumer goods that include clothing, consumer electronics – like iPhones, toys and other items. These tariffs come after previous tariffs that targeted industrial materials and goods. As all tariffs the importer pays the duty costs and very often the majority of these costs are passed on to the consumer. Bringing the likely outcomes of higher prices for consumers and reducing consumption. The immediate response to this announcement was felt in the financial markets. US, foreign, and oil markets dropped heavily and specific large US retailer’s stocks were also affected. Unfortunately, the story doesn’t stop there. In response to this new tariff, China’s commerce ministry announced that they will halt the purchase of US Agricultural products. China is a massive importer of products like soy and pork, so this will prolong the negative impact affecting farmers. China also allowed their currency to devalue against the US dollar past a symbolic exchange rate ceiling. Having a devalued currency means that importers buying Chinese goods with USD will pay less – partially offsetting the new tariff.
This move by China is viewed as weaponizing their currency, and in response the US Treasury Department listing China as a currency manipulator. This opens up a new front in the trade war and one that will cause future tension.
The outcome of this tension can be resolved, but it seems that both parties are digging into their positions.
Capital One Hack
Our next story is about a major hack at Capital One that affected approximately 6 million Canadians – of these, one million Canadians that had their Social insurance Numbers stolen. Those affected Canadians include Capital One credit card holders and those that applied for a credit card from 2005 to 2019.
Stolen personal information includes names, addresses, postal codes, email addresses, birth dates and income figures. Some Canadians also had their credit scores, limits, balances, payment history, and some transactional history stolen.
The good news is that Capital One believes that it’s unlikely that the information was used for fraud or disseminated yet.
In response to the hack, affected Canadians will be contacted, offered free credit monitoring, and identity theft insurance.
Capital One also confirms that contact will not be made by phone. This means that those that may be affected should be very wary of phone calls and emails phishing for passwords. Further, if criminals have information from Capital one, the can pretend to be another organization and seem legitimate as they have access to personal and confidential info – like sin numbers and birth dates. Therefore, it’s recommended that extra care be made. On top of this, it’s also good practise to monitor account activity to look for any unusual activity. Anything that is out of the ordinary should be reported immediately.
Not Getting the Best
In other news, the Ontario Securities Commission’s advisory Panel recently conducted a large scale survey and found some startling information about quality of financial advise. They found that 1/3rd of all respondents were not able say that their advisors had ever discussed planning for education, retirement or even buying a home. This is startling because these are fundamental financial questions and it’s not possible to give proper advise if these questions are not asked.
Further, half of the respondents also said that they hardly had any communication or any at all with their advisor over the past year. 43% also felt that they were not receiving any educational advise about financial concepts.
These results absolutely reflect the outcomes from what I see in the financial industry. Unfortunately, there are many cases of individuals and families that received rushed and unresponsive advise.
That’s it for today, thank you so much for joining us. If you’re enjoying the show, you can support the show by rating or sharing the show with anyone that you may think that it will benefit. You can also contact me at email@example.com or find me on Twitter at F_FCOACH Take care and talk to you soon!