Do low oil prices and a real estate bubble spell trouble for the future of the Canadian economy? Jared Dillian, former Lehman Brothers trader and financial writer is predicting a continuously dropping dollar with a long drawn out housing market crisis:
Unlike the US market, the mortgage market in Canada is not securitized. This means the housing crisis in Canada won’t be quick the way it was in the US (6/2007 to 3/2009).
Dillian says a long, drawn-out “death by a thousand cuts” scenario is in the cards for the Canadian housing market. And, this economic pain will probably last years.
He also notes that nearly all mortgages in Canada are “recourse mortgages” (except in Alberta). This means in-the-hole homeowners are not as likely to walk away as they were in the US housing crisis.
Is this the time that the wolf actually shows up, or just another failed prediction of doom? Read the full article and view the video interview over at Business Insider.