Dodging a bullet or bleeding to death?
Canadians believed the worst was behind them, in 2008 the global financial crisis hit Canada but the impact was no where near as damaging as it had been here in the US. The reasons offered for Canada's reprieve included a more fiscally conservative population, less radical spending by government and no desire to chase after cheap and easy wealth through manias such as the sub prime mortgage debacle.
So were Canadians just a lot smarter than their neighbors to the south? Were they simply more responsible and able to refrain from rash exuberance? If you're a Canadian, living in Canada you'd probably like to think so, sadly the truth is becoming painfully obvious.
A Canadian's house is his castle... But the barbarians are at the gate!
Canada's housing market has exploded in the last 10 years, as the following chart indicates Homes values in cities such as Vancouver have increased 142% since 2002, this trend has been repeated in cities throughout British Columbia and Ontario.
As with any bubble that is about to burst the smart thing to do is liquidate your assets tied to that bubble and reinvest those assets in a newly forming bubble. In the case of the Canadian housing market the most obvious way to get out is to sell any residential property one might hold in Canada. Rents are low right now so selling a home renting is a good idea.
Now if you don't own a home in Canada or even live in Canada can you profit from the Canadian housing collapse? Of course! One way to do this is to short companies who are intrinsically linked to the Canadian housing market, here are a couple of examples:
is considered to be Canada's largest bank, both by assets and market cap. Residential mortgages form the largest part of the bank's retail loans portfolio, with a 66% weight.
is the sixth largest bank in North America on the basis of branches. Residential mortgage form a significant 59% of the bank's retail loans portfolio.
There's a lot of money to be made by studying, extracting and then acting upon the trends. Remember we're in the midst of of a complete change in the Global Economic Paradigm - THE PARADIMESHIFT!