As Canadian crude fathoms a record low this week (chart below), we have news today that Canadian home sales fell further in October.
Heavily indebted and unprepared, the global downturn is coming at a particularly vulnerable time for Canada. Even worse, what savings and pensions households do own have been funnelled into overvalued corporate securities and funds that are also falling in value. This is a very destructive way to manage a business cycle.
The segment below covers many of the factors working against Canada today, but also makes the classic error of blaming Trump (rather than self-destructive behaviours and policies adopted in Canada), as well as suggesting Canadian banks may somehow be protected from downside as global markets drop.
Canadian financial shares lost 50% in the last two bear markets, and they are more risk-exposed today than either of those cycles. Beware the usual false narratives from mainstream commentators, defensive they are not.
Disclosure: No positions.
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