I really have to call out BMO for irresponsible commentary in this report on Canadian debt.  Basically the report says that despite even faster increases in debt of Canadians, that increases in the stock market cover the increase so overall its ok. Does anyone at BMO really believe that]? Family debt rising but financial health improving | BMO “Balance sheet repair is quietly underway among Canadian households thanks to a slight rise in savings and firmer equity markets, while debt growth is poised to slow amid the clear cooling in the housing market,” the report said. “A singular focus on … Continue reading BMO relies on rising stock prices to cover over the risk inherent in increasing debt

The video and the pdf record the discussion moderated by McKinsey.  This quote summarises for me and the longstanding position of this blog that Government is wrong to speak about recovery.  While the debate is US centric, the characteristics broadly apply to US, Canada, UK, and Euro countries such as Spain.  Brian is the General Counsel of the SEC.  The Future of Capitalism, Credit and Leverage | McKinsey Brian Cartwright: When you look at the leveraged nature of, let’s say, the consumer, it’s about 70 percent of the economy. So, if we’re going to have an economic recovery—and I would … Continue reading US households have borrowed an entire year’s worth of the production of the entire economy

There is a fascinating debate raging amongst some of the best known economists.  The debate is specific to the UK economy but when you note the number of Americans involved you can rest assured this is equally applicable to US. The debate began with the case for belt tightening from 20 economists: UK economy cries out for credible rescue plan | The Times IT IS now clear that the UK economy entered the recession with a large structural budget deficit. As a result the UK’s budget deficit is now the largest in our peacetime history and among the largest in … Continue reading To exit or not to exit; that is the question