{"id":5142,"date":"2015-02-01T10:34:04","date_gmt":"2015-02-01T15:34:04","guid":{"rendered":"http:\/\/olduvai.ca\/?p=5142"},"modified":"2015-02-01T10:34:04","modified_gmt":"2015-02-01T15:34:04","slug":"canada-mauled-by-oil-bust-job-losses-pile-up-housing-bubble-banks-at-risk","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=5142","title":{"rendered":"Canada Mauled by Oil Bust, Job Losses Pile Up \u2013 Housing Bubble, Banks at Risk"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/02\/01\/oil-bust-socks-it-to-canada-job-losses-pile-up-housing-bubble-banks-at-risk\/\" target=\"_blank\">Canada Mauled by Oil Bust, Job Losses Pile Up \u2013 Housing Bubble, Banks at Risk<\/a><\/h3>\n<p>Ratings agency Fitch had already warned about Canada\u2019s magnificent\u00a0housing bubble that is even more magnificent\u00a0than the housing bubble in the US that blew up so spectacularly. \u201cHigh household debt relative to disposable income\u201d \u2013 at the time hovering near a record 164% \u2013 \u201chas made the market more susceptible to market stresses like unemployment or interest rate increases,\u201d it wrote back in July.<\/p>\n<p>On September 30, the Bank of Canada warned about the housing bubble and what an implosion would do to the banks: It\u2019s so enormous and encumbered with so much debt that a \u201csharp correction in house prices\u201d would pose a risk to the \u201cstability of the financial system\u201d [<a href=\"http:\/\/wolfstreet.com\/2014\/10\/01\/is-canadas-truly-magnificent-housing-bubble-next\/\" target=\"_blank\">Is Canada Next? Housing Bubble Threatens \u201cFinancial Stability\u201d<\/a>].<\/p>\n<p>Then in early January, oil-and-gas data provider CanOils\u00a0<a href=\"http:\/\/blog.evaluateenergy.com\/how-sustainable-is-canadian-oil-gas-at-50-oil\" target=\"_blank\">found<\/a>\u00a0that \u201cless than 20%\u201d of the leading 50 Canadian oil and gas companies would be able to sustain their operations long-term with oil at US$50 per barrel (WTI last traded at $47.85). \u201cA significant number of companies with high-debt ratios were particularly vulnerable right now,\u201d it said. \u201cThe inevitable write-downs of assets that will accompany the falling oil price could harm companies\u2019 ability to borrow,\u201d and \u201clow share prices\u201d may prevent them from raising more money by issuing equity.<\/p>\n<p>In other words, these companies, if the price of oil stays low for a while, are going to lose a lot of\u00a0money, and the capital markets are going to turn off the spigot just when these companies need that new money the most.\u00a0Fewer than 20% of them would make it through the bust.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canada Mauled by Oil Bust, Job Losses Pile Up \u2013 Housing Bubble, Banks at Risk Ratings agency Fitch had already warned about Canada\u2019s magnificent\u00a0housing bubble that is even more magnificent\u00a0than the housing bubble in the US that blew up so spectacularly. \u201cHigh household debt relative to disposable income\u201d \u2013 at the time hovering near a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,103,195,3108,3109,1935,406,1775,2902],"class_list":["post-5142","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-canada","tag-debt","tag-fitch","tag-household-bubble","tag-household-debt","tag-housing-bubble","tag-oil-price-collapse","tag-real-estate-bubble"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5142"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5142\/revisions"}],"predecessor-version":[{"id":5143,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/5142\/revisions\/5143"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}