This week I was fortunate to be at the Credit Grantors Association 2012 kick off dinner.
Unfortunately Benjamin Tal could not speak (he is great to listen to), however we had a good replacement with Peter Buchanan.
Generally the graphs pointed towards increasing debt load within the Canadian economy. However there was less concern expressed on the economic effects of this over the next 12months due to the steady policy of the Bank of Canada.
However there were a couple of factoids that stood out as potential flags to watch.
- Canadian debt to income ratio (DTI) is now around 165%. This is now higher than the USA (it was always lower)
- Although the DTI ratio has declined in the USA this reduction did not happen by more prudent lending or consumers reigning in spending. 2/3 of this reduction was from defaults.
As always… monitoring changes in the situation closely.