This is an easy one, I’ll just link to the top 4 headline stories on MSNBC:
Record drop in house price index
U.S. home prices dropped 8.9 percent in the final quarter of 2007 compared with a year ago, Standard & Poor’s said Tuesday, the steepest decline in the 20-year history of its housing index.
Foreclosures up 57 percent in 2007
The worsening situation came despite ongoing efforts by lenders to help borrowers manage their payments by modifying loan terms, working out long-term repayment plans and other actions
Wholesale inflation rate jumps up in January
The January inflation surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years.
Consumer Confidence weakens significantly
The index measures how consumers feel about the economy. It has been weakening since July, suggesting that wary consumers may retrench financially, which could fatigue the economy further.
Does any of this matter to us in Canada? The IMF seems to think so.
More vital than Canada’s massive trade ties, financial markets have become the primary conduit for the faltering U.S. economy to infect its northern neighbour. And that’s why Canada can’t easily escape the economic headwinds now buffeting the United States, the report concluded.
Canada-U.S. trade represents 49 per cent of GDP, up from 37 per cent in 1988. But the value of cross-border financial holdings, meanwhile has shot up to 90 per cent of GDP from 53 per cent before the trade pact.
Meanwhile Bank of Canada Senior Deputy Governor Paul Jenkins has come out as skeptical about ‘decoupling’ – the theory that our economy can detach itself from the US economy, our largest trading partner.
“Decoupling doesn’t really do it for me,” Jenkins told the House of Commons’ Industry Committee today in Ottawa while taking questions about the strength of the Canadian dollar. The word “suggests that there’s only one force out there or two and we really need to look at all of those,” he said.
If all this gloom and doom has you feeling down just remember: its always darkest before the dawn, every cloud has a silver lining and you can re-arrange the letters in ‘Stagflation’ to spell ‘A Tango Lifts’!
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