Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
The Canadian Real Estate Wealth Boom Is Over, Expect $1.6 Trillion In Losses: RBC
Canadian real estate values soared over the past few years, helping to drive wealth. However, now that we’re past peak — RBC sees housing pulling wealth back. The bank notes households lost $900 billion in Q2 2022, the largest drop on record. By the end of this cycle, they expect households to lose $1.9 trillion from the peak.
Global Real Estate Downturn Can Kill Growth, Canada Most Vulnerable: Ox Econ
Canada is one of the most vulnerable economies in the upcoming recession. The dependence on housing investment as a share of its economy leaves it vulnerable to shock. Few countries would allow their advanced economies to become so dependent on housing that 1 in 10 dollars of GDP comes from housing. Not Canada though. Higher interest rates make it more vulnerable than any other advanced economy.
Bank of Canada Should Release The Inflation Index Data It’s Using: BMO
The Bank of Canada used an obscure data point to justify its decision this week. There was just one problem — this critical inflation point isn’t a typical one. BMO Capital Markets urges the central bank to release this data regularly. Despite being presented as normal, economists at BMO couldn’t re-create the never-before-seen data. If the market is going to move based on this index, it should be regularly released, argues the bank.
Bank of Canada Hikes Rates Just Half-Point, Economy Not Strong Enough
Canada’s central bank surprised markets with a smaller-than-expected hike to the overnight rate. The Bank of Canada (BoC) raised rates 50 basis points, a third less than expected by the market. Along with the smaller hike was a GDP forecast cut in half, and inflation recovering much sooner. In other words, an economic slowdown is now expected to curb excess demand.
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boc inflated the bubble now we have to pay the consequences, not them. the boc along with all the other central banks essentially gave out free money for over a decade which has never been done in financial history. they did this to make up for the financial disater of 07-09 where all credibility was lost. only the top tier of humanity benefitted from this. there must be a better way.
there isn’t a better way and they know it. We must bow our heads down and follow like a herd. Down boy
Incoming 500,000 migrants by 2025, with no place for working Canadians to live. But we get taxed at least 40% in taxes.
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