The Globe and Mail reports in its Thursday, Aug. 27, edition that the man who shorted Canada
is as pessimistic as ever about
the country's prospects.
The Globe's Sean Silcoff writes in the Streetwise column that Vijai Mohan, in fact, foresees a
downturn for Canada that
could rival the early 1990s recession
in its severity.
In April, 2013, his San Francisco-based hedge fund, Hyphen
Partners LP, had made a big bet
against the Canadian economy,
amassing short positions against
bank shares and the loonie, betting
their value would fall sharply.
At the time, he was an outlier,
although others joined the "Sell
Canada" bandwagon.
Now, with oil prices and bank
shares in a downdraft, the economy
potentially in recession and
global stock markets doing the
funky chicken led by China, Mr.
Mohan's view has not changed.
If anything, his outlook is darker.
"I'm more convinced this is
the beginning rather than the
end" of bad news for the Canadian
economy, he warned. "You
could be set up for a very nasty
downturn" akin
to the early nineties
recession.
Mr. Mohan argues the Canadian
economy is much more leveraged
to housing than the United States was
in 2006, prior to the subprime
mortgage meltdown.
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