Foreboding

The Globe and Mail reports on the possible global effects of the all-too-likely coming crash in the U.S. housing market. And you can be sure the problem is a severe one when the best anybody can say about the future of the economy is that the changes resulting from that crash (a) are probably necessary harms, and (b) may not be quite as damaging in Canada as elsewhere:

(T)here may be a glimmer of hope in this sobering scenario, according to Morgan Stanley's Mr. Roach. He said the global economy, like the U.S. housing market, is badly out of kilter, and needs to be rebalanced to ensure its long-term health. The housing correction could go a long way to erasing these global imbalances.

And if there's a silver lining for Canada it is that we may not be as vulnerable to a U.S.-led recession as much of the rest of the world.

Economist Clement Gignac of National Bank Financial Inc. in Montreal argued that the price boom in oil and other commodities may keep Canada from following the United States into a recession. He said Canada escaped U.S.-driven downturns three times in the 1970s, and this time could be the same. He puts the odds of a U.S. recession at 40 per cent, but just 15 per cent north of the border.

Not that Canadians should be celebrating a relatively high likelihood of recession here either. And of course the precarious state of both the U.S. and economies who rely on American consumer spending may make it difficult for Canada to grow significantly in the near future even if it can avoid a recession.

Of course, there's a chance the U.S. will manage to avoid a recession of its own despite what already looks to be the start of a downturn. But it's hard to be optimistic that the same system which produced the problem will manage to avoid the worst possible effects - and nobody should be looking forward to the potential downside if the readily foreseeable ends up happening.