#famouslastwords

Almost half of Canadians on verge of bankruptcy-Ipsos

An Ipsos poll for bankruptcy specialist MNP Ltd has shown that 48% of Canadians have $200 or less of going bankrupt each month after meeting all obligations. The poll also revealed,

“35% of Canadians say an interest rate increase would move them towards bankruptcy, while 54% said they worry about their ability to repay debts.”

This is consistent with a ME Bank survey in Australia which found only 46% of households were able to save each month. Just 32% could raise $3000 in an emergency and 50% aren’t confident of meeting their obligations if unemployed for three months.

According to Digital Finance Analytics, “there are around 650,000 households in Australia experiencing some form of mortgage stress. If rates were to rise 150 basis points the number of Australians in mortgage stress would rise to approximately 930,000 and if rates rose 300 basis points the number would rise to 1.1 million – or more than a third of all mortgages. A 300 basis point rise would take the cash rate to 4.5 per cent, still lower than the 4.75 per cent for most of 2011.”

Do you know how many homes NAB has under repossession on its books at the latest filing? Around 277. Yes, Two hundred and seventy seven. Out of 100,000s of loans.

But we needn’t worry because we have to trust our central banks will keep rates low to avoid any economic shock. Remember the current and previous US Fed Chairmen have all but guaranteed there will be no more financial crises in their life time. Either they don’t hold much prospect for their longevity or they are clutching at straws.

To infinity and beyond?

Several days before Enron went belly up, Goldman Sachs released a research report on the company titled, “As good as it gets“. Grandiose statements are often precursors to calamity.

When Barrons publishes articles with “The bull market has no expiration date” start running for the hills. Sounds like Barrons has channeled Buzz Lightyear from Toy Story who said, “to infinity and beyond.”

What happened to Greenspan’s “irrational exuberance“?

Remember his godlike status was such that markets would hang on his every word forcing him to eventually utter,

I know you think you understand what you thought I said but I’m not sure you realize that what you heard is not what I meant!”

Maybe Barrons forgot that Buzz also said, “this isn’t flying! It’s falling with style.” Unfortunately there will be no grace when this bubble pops.

Thanks to SM007 for the flag.