Soured loans from slumping oil prices and a weakened economy are likely to push Canada's banks next year to set aside the most money since 2009.

Toronto-Dominion Bank, Royal Bank of Canada and four other large lenders are forecast to allocate 27 percent more money for bad debt next year, according to estimates of analysts surveyed by Bloomberg, adding further pressure to earnings as lending slows.

"This is what may create some significant headwinds in 2016," John Aiken, a Barclays Plc analyst, said in an interview. "The biggest villain is low oil prices and what that's doing to the Alberta economy. However, broadly speaking, the Canadian economy is not doing well."



NARY a week has gone by this year without news of China's extraordinary injections of cash into its own economy. The central bank has pumped hundreds of billions of yuan into the financial system through an admixture of short-term, open-market operations; medium-term credit instruments; and direct loans to state-owned banks. Many have described it as Chinese-style quantitative easing (QE). When a central bank buys up a large amount of assets to expand its balance-sheet, it is indeed a modern-day form of money printing, and deserves to be labelled as QE. There is just one rather inconvenient fact when Chinese finances are examined more closely: in purely quantitative terms, the central bank has been tightening, not easing. And it has been doing so for several years already.

The chart below shows the balance-sheets of the world's four major central banks. The QE paths of the Federal Reserve, the European Central Bank and the Bank of Japan are well documented by the size of their assets, depicted by the blue lines in the chart. The Fed's balance-sheet swelled in three large steps: QE1, primarily in 2009; QE2, from late 2010 to mid-2011; and QE3, the final surge that started in late 2012 and ended last year. For the ECB, the squiggle shows a brief lift from the cheap loans it provided to banks in 2011 and 2012, followed by a retrenchment as concerns about potential inflationary consequences prevailed, and then a big rise since the start of this year, when it officially launched QE. Japan's trajectory has been pretty much straight up since April of 2013 when Haruhiko Kuroda, the BoJ's governor, first fired his monetary bazooka.



* Economy a political weapon in run-up to Sept. 20 poll

* August marks 30th straight month of deflation

* Industrial output falls in July

* Wages at lowest since 2001 in second quarter

* Data dump points to new recession after H1 growth

By George Georgiopoulos and John Stonestreet

ATHENS, Sept 9 (Reuters) - With deflation entrenched, its industrial base shrinking and a tough new bailout to service, Greeces economy is heading for another fall with even those of its citizens lucky enough to be in work poorer than at any time since 2001.

Given that gloomy backdrop the main party leaders, campaigning for what looks certain to be close-run national elections on Sept. 20, have used the economy - which enjoyed a rare growth spurt in the first half of 2015 - solely as a political weapon.

Alexis Tsipras, former prime minister and leader of leftist Syriza, has promised to fight to improve the terms of the third Greek bailout that he reluctantly agreed to in July and admitted will damage growth.

His main opponent, conservative New Democracys Vangelis Meimarakis, has blamed Tsipras for mismanaging the economy towards another recession, a tactic that has boosted his approval ratings at his rivals expense.

But the two have been running neck-and-neck in polls - which suggests voters hold out little hope of an upturn in fortunes regardless of who wins.

I dont see any relief in the short term, whatever the outcome, said Costas Mallatos, 42, who works in the claims department of an insurance company in Athens.

I will still be burdened with the taxes Ive been paying but I am afraid unemployment will go up. Employers are trying to cut costs, thats life under the bailouts.

The economy grew 0.9 percent between April and June - the only full quarter in office for Tsiprass government - as consumer spending rose and exports edged up.

But economists say GDP will soon go back into reverse.

We expect the economy to shrink (this year) by a bit less than 2.0 percent, Angelos Tsakanikas, economist at IOBE think tank said on Wednesday, after data on Wednesday showed industrial output fell for the second month running in July and August marked the 30th straight month of year-on-year deflation.

NO GROWTH, NO JOBS

Among factors impacting growth, capital controls were imposed in July, when the banks also stayed shut for a week, and the 86 billion euro ($99 billion) bailout will come with fresh taxes and pension cuts.

Private consumption was a driver behind the growth in the second quarter, helped by tourism ... There was also sporadic spending due to fears of haircuts on deposits related to a possible Grexit, IOBEs Tsakanikas said.

With the danger of an exit from the euro zone and of a possible overnight devaluation averted for now, Greeks will be less inclined to splash out on consumer goods, especially given salaries are at a 14-year low.

Having risen year-on-year in the previous three quarters, the Greek wage index fell in the second quarter to 85.2, its lowest level since the same quarter of 2001, statistics office data showed on Tuesday.

After minimal growth in the third quarter, Tsakanikas expects the economy to contract again in the fourth, and further declines are widely predicted for 2016.

That signals a return to a recession that ran from 2008 and 2014 and augurs badly for an unemployment rate that, at 25 percent in May, is already the highest in Europe.

There is no job creation ... The jobless rate will rise after the seasonal boost from tourism fades, Tsakanikas said, predicting a rise to 28 percent - a tenth of a percentage point above the record high reached in September 2013.

(Editing by Jeremy Gaunt)



Berkshire Hathaways Warren Buffett said Tuesday the US economy is growing at about 2 percent, a rate he characterized as not bad.

Were still on that path weve been on for six years, the chairman and CEO of Berkshire Hathaway said on CNBCs Squawk Alley. Thats not a bad rate, but its not a booming rate, either.

Buffett made his remarks as investors around the world ponder whether or not the Federal Reserve will move forward on raising interest rates, given the recent volatility in financial markets.

Read More Check out the stocks that are on Buffetts radar

If our rates got substantially higher than Europes, I dont think that would be good for exports in this country, Buffett said. In economics, you can never do one thing. There is always a then what and I think the then what of raising rates while Europes trying to keep them low could have some consequences down the line.



As Chinese President Xi Jinping prepares to visit the US later this month, a new survey shows a majority of Americans are gravely concerned about hacking and China's impact on the US economy - with alarm regarding the former rising markedly over the past three years.

The poll, released Wednesday by the Washington-based Pew Research Center, shows that 67% of US adults view the large amount of American debt held by China as a "very serious" problem. 60% say the same about the loss of US jobs to China, while 54% describe Chinese cyberattacks as a very serious issue.

In 2012, 79% of those polled said cyberattacks were at least a somewhat serious problem. By 2015, that number had risen to 86%.