Tuesday, August 19, 2008
Canadians slow to realise their party is over too
"Canadians haven't stopped borrowing, however - and that's a divergence that just can't last. The mortgage market has expanded 13.4 per cent over the past year, and consumer credit has grown more than 10 per cent. Both growth rates are far above recent averages, even though Canadian economic growth has ground to a halt. If consumer behaviour were to continue on that kind of track, Canada would no doubt be in store for a dangerous credit bubble, Mr. Tal said. Ottawa has decided to essentially ban 40-year mortgages as of mid-October - a decision that some financial institutions have already implemented on their own, said Craig Alexander, deputy chief economist at Toronto-Dominion Bank."