Overstretched homeowners may be part of the migration in the polls from Conservatives to Liberals and New Democrats.
In a September 24 report, little noticed outside the business press, analysts working for Merrill Lynch Canada warned that we're just about where the Americans were in 2006:
"What worries us is that Canadian households have been running a larger financial deficit than households in either the US or the UK, as Chart 4 also shows. After forty years of net saving, Canadian households moved into sustained deficit in 2002. In 2007, household net borrowing amounted to 6.3% of disposable income, a wider deficit than in the UK, and not far off the peak US shortfall seen in 2005.
"These data imply that the Canadian household sector is now overextending itself as much as the US or UK ever did, challenging the consensus view that Canadian lenders and borrowers have been far more conservative through the cycle."
If Canadians haven't been conservative borrowers, they may not be Conservative voters either.
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