Manitoba’s distinctive blend of primary, manufacturing, and service businesses represents a true cross-section of the Canadian economy. A focus on business is also appropriate at this stage of the economic cycle. A key determinant of the pace and sustainability of Canada’s recovery will be how investment and hiring intentions of businesses in all sectors evolve as policy stimulus begins to fade.
Given the magnitude of those losses and the recognition that rigorous credit analyses are extremely information-intensive (and very sensitive to assumptions about loss correlations), I would expect investors to remain skeptical of two-layer securitized financial products for the foreseeable future.