Juggling Dynamite

Good growth is ours in the renewable energy and transportation revolution. Not only are the well-paying, productive, domestic jobs desperately needed, but after the debt bubble, lower friction costs (full-cost accounting) for energy and transportation are a critical part of the necessity to do more with less. Let’s hope all the self-proclaimed business geniuses in the White House, catch on soon!

Bill Nye talks about what the U.S. withdrawal from the Paris climate accord could mean. Here is a direct video link.

Nightmare on crazy street, take 2: supply up 50% year over year. Nothing like irrational prices to entice listings.

Toronto’s hot real estate market just got a lot colder. Matt Galloway spoke with John Pasalis, a veteran real estate agent and president of Realosophy Realty Inc.  Here is a direct audio link.

Another month, another dubious debt distinction for Canada.  See Canadians push past $2 trillion in debt to set a new record, again:

Canadians pushed household credit to new highs. There was a total of $2.025 trillion in outstanding debt, a 5.5% increase from last year. That’s a $104.7 billion increase in twelve months, and a $20 billion dollar increase during the first four months of 2017. The annualized one-month rate of change was 6.8%. To put it bluntly, Canadian debt accumulation accelerated in April.

Canadian households have been particularly self-destructive, but they are not alone. See Global debt woes building up to a tidal wave:

Virtually every class of US debt — sovereign, corporate, unsecured household/personal, auto loans and student debt — is at record highs. Americans now owe $1tn in credit card debt, and a roughly equivalent amount of student loans and auto-loans which, like the subprime mortgage quality that set off the 2008 financial crisis, are of largely low credit quality (and therefore high risk)…

But this is not just a US phenomenon. Globally, the picture is similarly precarious, with debt stubbornly high in Europe, rising in Asia and surging across broader emerging markets. A decade on from the beginning of the financial crisis, the world has the makings of a fresh debt crisis.

We have mortgaged future economic growth and stability for instant gratification and short-term profits for risk-sellers.  The pay-back will be deep and long.  It also reminds of J. Paul Getty’s timeless quote:

“If you owe the bank $100 that’s your problem.  If you owe the bank $100 million, that’s the bank’s problem.”

After any net equity they may have, debtors stand to lose debt in bankruptcy.  Lenders and investors, on the other hand, stand to lose assets.  The financial system is in clear and present danger of another solvency crisis; that should concern everyone.