Some U.S. Recession Hints
A few months ago we touched on some recession signals (“Start spreading the views“, Nov. 28, ’06; “Is the end near?“, Dec. 21, ’06), and Craig recently posted on the happenings in the sub-prime consumer lending market.
Here is a confirmatory perspective from a U.S. observer with some meaningful facts. The key theme:
According to MortgageDaily.com, “The sub-prime sector still has another year of tough times ahead.” That’s supported by Countrywide Financial, which says, “We’ve got another eight, nine, 10, 12 months of headwinds. You’re seeing 40 or 50 (sub-prime companies) a day throughout the country going down in one form or another. I expect that to continue throughout the year.” Worse yet, the most recent Center for Responsible Housing report projects that “2.2 million borrowers will lose their homes and up to $164 billion of wealth in the process.”
The take-away? Every Canadian borrower (sub-prime or not) that has an annual review coming up with their senior lender in the next quarter or so should be cognizant that their own access to credit may well be impacted by any tightening of the credit markets south of the border.