Sunday, November 22, 2009

Canadian Bankruptcies Soar, Rising Debt

Canada's (Sub-Prime) Mortgage Market
For most of this year the markets have been discounting an economic recovery. That is, they have been in rally mode in anticipation that the worst of the economic crisis is over. While that is likely, all that is left for debate is how meaningful the recovery will be and if it is sustainable. The G20 countries have committed to not let their collective foot off the stimulus gas pedal until they are confident that the economy is on a sustainable trajectory... Recently, the president and CEO of ING Direct Canada stated that he is seeing Canadian habits resemble those of US and European nations during their housing booms. The level of equity in Canadian homes is surprisingly low as more than 50% of all mortgages issued this year are longer than the 25 year range that has been the usual option for borrowers.

Bankruptcies Soar 43%
The number of bankruptcies across the country was 43 per cent higher in September than at the same point a year ago, government data shows. The latest figures provided by the Office of the Superintendent of Bankruptcy Canada show the increase is disproportionately slanted towards consumer bankruptcies over business insolvencies. The September figure for the former was up by 45.5 per cent in the last year; the latter by only 1.6 per cent.

Easy credit, Soaring Prices Raise New Housing Fears
Canadians are buying homes at a blistering pace, binging on new debt. But all that cheap money can come at a high cost.

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