Juggling Dynamite

A new 18 page report on the Canadian credit and housing boom comes to a sober assessment which we have been warning on for some time: “Canada borrowed its way out of the 2009 Recession by stoking our residential housing market to absurd levels. We cannot afford the houses we are living in.”

This presents serious downside risk to the Canadian economy, our financial system, government budgets and taxpayers. See: The Canadian Housing Market for a good overview and some useful charts. As with every asset market, the best time to sell is before the downcycle hits, when prices are high and people are still complacent. For over-indebted Canadian homeowners, and boomers hoping to downsize within the next 5 years, this report is worth consideration.

As the business media is all a flutter about what words big Ben might include in his answers to the Senate today, we have a few more big picture postcards from the real economy to ponder, courtesy of Zerohedge:

• tech bellweathers have now all officially missed their revenue targets for Q2 as they did in Q1 as well.  Intel clocked its 4th consecutive quarter of negative revenue growth.  See: With recoveries like this who needs micro-chips.  This happened in both the 2001 and 2008 recessions.
• and according to this week’s weak retail sales report, food-service sales (consumers eating out) fell 1.2% in June, the largest decline since February 2008.  See:  June restaurant spending plunges

But then, I know….who needs customers and revenue when the world has central bankers pumping US stocks to record highs??

It is 30 Celsius on the east coast today, 40 with the humidity. The kids are living in tents this week at camp–no doubt spending a lot of time in the lake. This clip made me giggle. Brings back a few memories from my own childhood. Here is a direct video link.