“Canadian banks are priced too richly given where Canada stands in the debt cycle. Canada now has a private debt to GDP ratio of 230%. For reference, before the American financial system melted down in 2008, the United States had a private debt to GDP ratio of just 170%.”
There’s going to be a election then.
A ratio of 179% for the US was actually worse than 230% for Canada. Why? The US is a global tyrant, a child sex trafficker, and a gun smuggler, masquerading as a country. It has a LOT less spending elasticity than Canada. The Canadian government can simply issue more currency. It doesn’t care about outcomes-based healthcare, nor military proficiency. Also, Canadian banks are no longer truly “for profit” entities. They are now public utilities. They will be completely bailed out by the government.
Tax payers.
They will be completely bailed out by the government.
Yes. It is called the Trudeau/Morneau “Bank Bail In” scheme which is contained in their first budget bill and allows them to seize our bank accounts to bail out the banks. For the collective good, of course.
Remember how smug we (collective Canadian we) were when our banks didn’t collapse in 08?
We should have been smug. Canada avoided the sub-prime mortgage fiasco rather nicely.
Although people want to draw comparisons to 14 years ago in the U.S., it’s not at all a given that the Canadian banks are about to implode.
I agree with Marmont on this. Canadian Banks are public utilities in all but name. They will not be allowed to fail. Period.
Remember when they brought in legislation that allows banks to convert your deposits into bank shares? I do. But ,I digress . A run will result in a one to one conversion to digital . They will likely even kick in a few thousand to smooth the transition. However there will be limit on how much you can access. If you have a 100 thousand or a million you won’t be able to access it until “later” -when and if that time comes. This is not my take , but the probable path conveyed by a currency expert I listened to. His scenario made perfect sense to me given what has been taking place. Destroy the fiat currency and replace it with digital is no accident.
Been hearing this stuff for years.
Nothing changes.
Behind closed doors, the yanks would consider even the major canadian banks to be systemically important; there’s significant inter-ownership of assets in North America and beyond.
And we already know what they would do in the event of a liquidity problem. They did it already in 2008. The Fed creates “money” on its balance sheet, it buys “toxic assets”, i.e. non-performing corporate debt and residential mortgages from the banks for the book value of the “asset” rather than the current market value, and the Fed then credits the banks’ reserve account at the Fed itself.
If the Fed has to provide $2T in nightly reverse repo, they will continue to do so.
If the Fed needs to provide USD liquidity, they will perform currency swaps with other central banks.
If the Fed forces a bank to buy shares in another “troubled” bank to extenuate the liability ratios, the bank will do so. If a bank need further injections of straight-up heroin, ahem, I mean liquidity, the Fed will force all the banks to take a couple hundred billion of electronic USD just for good measure.
As I say, this was all done behind the scenes during the financial crisis of 2008/9.
Moreover, if the banks want to go further and limit withdrawals as they cannibalize depositors’ “assets”, Mark Carney already drafted the bank bail-in law that is the model for the G7.
They will be no “collapse”, just a continued slow burn while the plutocratic corporatists continue to take everything over. The giant vampire squid will consume all.
The yootoob algo pushed this video to me first thing this morning. I’ve never seen the channel before. Weird.
Will the Minister Of Inflation, Bobblehead Bankruptcy Barbie wear her famous purple potato sack when announcing how strong our finances are?
Are you referring to the one I know as The Eggplant?
(U.S., here. The “purple potato sack” sounds like the same person. Just checking.)
Purple Perogy Pants
Grimace…
And his boss, the head clown, just like real life!!
https://nypost.com/2021/09/08/what-is-mcdonalds-grimace-manager-reveals-shocking-truth/
Here’s another hot take published a month ago, also in Seeking Alpha…
https://seekingalpha.com/article/4555319-canadian-banks-hot-canadian-imperial-among-them
To quote, “Canadian banks are a great investment”. Someone’s not on the same page over there.
Fundamental analysis for short term investing is horseshite. Over time frames of 1-2 years, it is behavioural finance all the way.
Fundamental analysis or value investing has been a superannuated skill ever since the Greenspan Put. And all the subsequent Fed puts. Stonks never go down. BTFD.
Banks will be holding a lot of deeds over the next year or two.
I wonder how this fits into the great reset “you will own nothing and like it”. Will the government bail out people in exchange for the deed? Will they let them go bankrupt and then rent them their own house back?
Even no mortgage isn’t a guarantee, the cost to heat your home, the taxes you pay on it, the groceries you need to survive they can still bankrupt you.
In the 2008 crisis, the US Treasury and Fed bailed the banks out, evicted the defaulting home “owners”, and torn down whole subdivisions of new houses. If they had bailed out the debtors, they would have burned far less money than they did with the banks. But everyone hates a deadbeat debtor, and banks can never be considered deadbeats. That’s right, isn’t it?
No, the banks don’t want to own negative assets. Instead, they will tell BlackFaceHitler, and his pawn Tiff, to:
-Print and Bail Out
-Allow ReFi of the overdrawn millenials to 40 or even 50 year amortizations.
Groper will be seen as a saviour to his millenials, despite making them debt slaves forever.
Zimbabwe Mon.
Venezuela calling.
Too big to fail.
We will all be rich in Trudeau’s Can Ahh Duh.
Every citizen will have billions of Justine Bucks.
Equality for all.
The NDP will be over the moon.
Damn shame a bus load of those “Canadian Dollars” will not buy a loaf of bread.
When a country goes insane,is it still sedition to carve your own life raft out of it?
What kind of retards would starve amidst plenty,cause some idiots rule and regulate that they must?
Is it still “Bad Luck” when you can so easily predict it?
One wonders how many Digital Loonies can one fit in a bus load?
Hard currency was a great way for the common man to see how worthless their currency is.
Hard currency was a great way for the common man to see how worthless their currency is.
Hard currency isn’t the crap governments make their coins with. Hard currency is made with precious metals, and they keep their spending power relatively well in comparison with nickel.
After LBJ put the US gov’s warfare/welfare program into hyperdrive, one of the first things he had to do was remove real silver from the currency, just like FDR had removed gold from the currency during his New Deal welfare program, followed by his war expenditure.
When precious metal disappears from your currency, the common man ought to realize his earnings and savings are being stolen by the banks and the banks’ politicians.
Dictionary definition of Hard Currency is “Money in the form of bills or coins” oh pissy one.
A physical media you can hold in your hand.
The economy grows from the Laurentian Elite’s heart out. Canadian bank collapse is day 1 of the New World Economic Forum Order.
There will be no “bank collapse”.
Day 1 of the New Economic Order is the day they enact the law, (under “Emergencies Act” powers), that peremptorily wipes out all bank liabilities while retaining the book value of all their assets. Guess what a bank’s liabilities are. Your “assets”. Your debts are a bank’s assets.
Aaaaaaannnnnd it’s gone.
The plebes are the bag holders. Always has been the way of things. Always will be.
Thanks for rephrasing what I said.
Cmhc has all the risk, the banks don’t have any.
CMHC hasn’t got a fraction of what’s needed to back up the liabilities they’d be on the hook for. It’s total window dressing for the rubes, and a complete fraud.
The central banks are the ultimate back stop for insolvency of banking institutions.
The Maestro Himself was once asked in front of Congress if he as Chairman of the Fed would guarantee all deposits held in US banks in the event of systemic financial failure. Greenspan didn’t hesitate: “I absolutely guarantee US depositors will get their dollars out of the banks. Of course, I wouldn’t be able to guarantee what those dollars would be worth.”
CMHC only holds risk on those that can’t get a 20% down payment.
If your chunk of real estate that you bought at the peak suddenly takes a 30% dip in value, and you can’t afford the now $4000/month payment, it puts you underwater, and the bank won’t be able to get it’s value out of the property that it’s appraiser said was worth loaning against.
Cmhc has 300 bn in assets.
Hey, I’ve got a bridge to sell you…
Inflation in Canada is a nickel for your thoughts
Seeking Alpha, the website quoted in this video, publishes opinion articles of varying quality about the stock market. The guy who wrote the article, who isn’t necessarily an expert on anything, isn’t saying that Canadian banks will collapse. He just thinks that RBC and TD bank stocks won’t do well in the near future because he sees them as too expensive today.
That may or may not prove to be true. Canadian banks stocks are down recently because the market believes that the recession risk, decline in borrowing activity and higher incidence of bad loans associated with rising interest rates will more than offset the wider spreads banks will make on their loans.
Meanwhile, the guy narrating the video pretends that this means that some banks will collapse, which isn’t the same as their stocks possibly not doing great. He then throws around a bunch of giant debt numbers that sound scary, but doesn’t get into any important details.
While it’s true that many Canadians have too much debt and that our governments also have too much debt, this video unhelpfully conflates several unrelated issues and ignores others. It is not persuasive.
Move one’s money out of banks before it’s too late.
O K , I doubt the bank would give me everything that I have sitting in cash. Hell you have to advise them in advance to get ten grand.
They are in cahoots with each other.
Search ‘Bank Bail In’.
Your bank account and investments held in the banks will be converted to shares in the bank that is going bankrupt.
The laws are already in place in Canada.
Canada’s banks may have serious problems, but nothing like America’s. America’s banks are busted by awful laws that keep them fragmented and small. Small banks suck. They are failure-prone and have even worse customer service than the big ones. Get your healthcare in America, do your banking in Canada. Ooh also no Community Reinvestment Act in Canada.
The canuckistani banking sector is far to large given the small and shrinking underlying economy and has been for some time. I expect consolidation and am surprised that more of it hasn’t happened yet. Much has been made of bail in legislation but that is not new. Deposits have always been liabilities to the bank. So you have to diversify in order to not go over the CDIC limit as that is all the guarantee there is, after that you are an unsecured creditor. Bank stocks have sucked for quite a while already as they are zombie companies so I own zwb which at least turns a higher yield off the banks using a covered call strategy. Bottom line is that nothing here is news. A CBDC is not really news either as the canbuck is already a CBDC in that it is printed into existence by a keystroke. Our economy is already soviet in that we pretend to work and they pretend to pay us. A canbuck is only useful to pay debt and taxes as it is and we wonder why there is no workers available.