Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Tuesday, October 21, 2014

'Inflated' Housing Market Has Moody's Concerned About 'Risks' To Canada

OTTAWA - Canada is maintaining its triple-A credit rating thanks to a steady economic outlook, but the country also faces potential risks amid mounting household debt and climbing house prices, Moody's Investor Service said.

The U.S. credit rating agency said in a report Monday that Canada's top grade was supported by a "relatively solid economic performance," a strong banking system, relatively low government debt and a projected balanced budget following a series of deficits.

"After a recession at the time of the global financial crisis, the economy recovered and continues to show positive momentum, supporting improvement in government finance," said the Moody's assessment.

However, the research identified possible risks linked to Canada's high household debt and a "particularly inflated" housing market in some big-city areas — both of which, the paper noted, continue to rise.

"This combination presents a potential risk to the banks and to the federal government directly, as it guarantees a considerable portion of mortgages," said the report, co-authored by Steve Hess and Dmytro Kulakovskyi.

For years, both the Bank of Canada and the Finance Department have warned Canadians about amassing too much debt.

But both Bank of Canada governor Stephen Poloz and Finance Minister Joe Oliver have downplayed the susceptibility of the Canadian housing market, even though Poloz still views it as the top domestic threat to the economy. Oliver has predicted a soft landing for the real-estate market.

In the summer, U.S. financial agencies Fitch Ratings and Morningstar issued separate warnings about the Canadian housing market, saying it was overpriced and at risk of a correction.

The Moody's report Monday noted Canada's expected interest-rate increases over the coming years will boost the costs of borrowing and apply pressure to housing prices.

Meanwhile, the report found the provinces carried large amounts of debt, but noted their credit profiles remained strong.

Over the long term, Moody's warned that to keep its credit rating, Canada must maintain "fiscal discipline" when spending on social programs.

Canada's economic future will largely remain closely integrated to that of the U.S., it added.

Original Article
Source: huffingtonpost.ca/
Author: CP | By Andy Blatchford

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