Monday, July 13, 2009

The Next Financial Fiasco

"If you think Canada escaped the downward trend in U.S. banking, think again,” Dan Amoss begins. “While the country may not have plunged headfirst into subprime mortgages, it did dip heavily into risky derivatives. The leverage it took on generated impressive returns on equity in good times, but that same leverage is set to wipe out equity today.

“Canada has just entered what will ultimately be an enormous credit loss cycle, and by the time it’s over, the Canadian banks could easily lose their pristine reputations. Until the middle of 2008, Canada’s economy was booming. Its mining, energy and manufacturing sectors are world-class, and every other sector was pulled along for the ride. (more)

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Job concerns expected to weigh down retail sales

On Tuesday the Commerce Department will report retail sales for June, and economists polled by MarketWatch are looking for a gain of 0.5%, matching the prior month's result. But gasoline prices are pumping up the sales figures, economists said.

"Steep ongoing job losses, tight credit availability and ongoing consumer deleveraging should keep weighing on personal consumption through the third quarter of 2009," analysts at CIBC World Markets wrote in a research note.

Stressed consumers are saving, economists said. (more)

Trend Trader For Monday July 13, 2009