Good article but not I’m sure that pension funds, insurance companies and even universities would be exposed very much to the US private debt market. These institutions, for the most part, would have robust risk management practices in place that would limit exposure to high risk debt such as this. Any actual exposure would be small. Private equity, alternative equity funds and even retail investors would be more at risk here. Now the financial contagion impacting the overall markets from defaults in the private debt sector could be a negative impact on these institutions for sure. But the craziness in the oil/energy markets right now is the bigger risk right now. The bigger point is that I agree that Canada is relatively well positioned for trade talks with the US given our resources that they definitely need.
Canada does hold plenty of cards right now. With the US, Israel and Gulf Countries burning through a lot of missiles right now critical minerals and aluminum will be in greater demand. Canada has critical minerals reserves but developing this will take years to get on track. Canada produces a lot of aluminum and I read recently that around 20% of production was being sent to Europe. Before the tariffs virtually all Canadian aluminum production went to the US. This will be a definite discussion point in the upcoming CUSMA discussions set for this summer.
Good article but not I’m sure that pension funds, insurance companies and even universities would be exposed very much to the US private debt market. These institutions, for the most part, would have robust risk management practices in place that would limit exposure to high risk debt such as this. Any actual exposure would be small. Private equity, alternative equity funds and even retail investors would be more at risk here. Now the financial contagion impacting the overall markets from defaults in the private debt sector could be a negative impact on these institutions for sure. But the craziness in the oil/energy markets right now is the bigger risk right now. The bigger point is that I agree that Canada is relatively well positioned for trade talks with the US given our resources that they definitely need.
Fair point Kevin... and I’m not saying the big institutions are reckless.
But when something hits this size, even “limited exposure” can still sting once it spreads.
The real pain probably lands on private equity and yield-chasers first… then works its way outward.
And yeah... energy might be the bigger fire right now.
Big picture though? Canada’s still holding the cards the U.S. actually needs.
Curious how you see that playing out from here.
Canada does hold plenty of cards right now. With the US, Israel and Gulf Countries burning through a lot of missiles right now critical minerals and aluminum will be in greater demand. Canada has critical minerals reserves but developing this will take years to get on track. Canada produces a lot of aluminum and I read recently that around 20% of production was being sent to Europe. Before the tariffs virtually all Canadian aluminum production went to the US. This will be a definite discussion point in the upcoming CUSMA discussions set for this summer.
Thanks Fred, you are so good at making things make sense! I appreciate the time you spend in making your posts the way you do. Keep on truckin!