IMF Rings The Alarm On Canada’s Economy

 

Shortly after yesterday’s rate hike by the Bank of Canada, its first since 2010, we warned that as rates in Canada begin to rise, the local economy which has seen a striking decline in hourly earnings in the past year, which remains greatly reliant on a vibrant construction sector, and where households are the most levered on record, if there is anything that can burst the local housing bubble, it is tighter monetary conditions. And a bubble it is, as the chart below clearly demonstrates… one just waiting for the pin, which as we suggested yesterday in “”Canada Is In Serious Trouble” Again, And This Time It’s For Real“, may have finally been provided thanks to the Bank of Canada itself. Continue reading

Canada’s household debt is now bigger than its GDP, for the first time

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OTTAWA — The insatiable appetite of Canadians for cheap credit has been well-documented since the Great Recession, as consumers piled on debt by ever-increasing numbers.

Now, household borrowing has reached a new milestone, of sorts.

For the first time, the level of debt held by Canadians has exceeded the country’s gross domestic product as the red ink spilled over in the second quarter to 100.5 per cent of GDP, up from 98.7 per cent during the previous three-month period. Continue reading

“We Haven’t Seen This Is In Our Lifetimes” – CEO Says “Alberta Is In A Depression”

Toronto’s “Condo King” Brad Lamb tried to put things into context when he said the situation is “worse than 2008.” However, on Friday we received an even more gloomy (albeit realistic) description of the economic situation in Canada’s energy hub, Alberta. In a very blunt interview with BNN, Murray Mullen the CEO of trucking company Mullen Group, said that the situation has moved well past recession, and should be described as a depression. Continue reading

Are the dollar’s carry trade days numbered?

The video unfortunately cannot be posted here due to compatibility issues, but can be found in the link to the source, if interested.

Traders borrowing U.S. dollars to fund investments in other currencies should beware, with analysts expecting the greenback to strengthen and advising a shift to borrowing the euro instead.

“U.S. rates and the U.S. dollar may get a pop from an expected jump in April inflation,” Barclays said Monday in a note titled “Carry on, but don’t fund with USDs.”

Over the medium term, Barclays expects the U.S. inflation risks are to the upside, making it likely the greenback will continue to strengthen. Barclays expects the U.S. dollar index (DXY) to rise 5 percent by year end, with a 7.3 percent rise over 12 months. Continue reading

Why Worst Not Over for Europe: Canada Bank Official

Bank of Canada Governor Mark Carney warned on Saturday against an emerging consensus among delegates at the World Economic Forum in Davos that the worst of the euro zone debt crisis was over.

Carney said that tail risks — an unlikely event which could prompt a market sell off — are “still out there.” Continue reading