It’s Probably Nothing

18 Replies to “It’s Probably Nothing”

1. I wonder how many people ended their relationship with TD Bank based on the fact the TD supported the government in the persecution of the truckers?

   I know I did.

   1. I did also

   2. All Big 5 banks did.

2. TD has the least exposure to the housing market of all the big Canadian banks. CMHC covers a lot of that risk for the others, for better or worse. TD has the most exposure to commercial real estate, no CMHC there, and anyone dumb enough to think we aren’t headed to the deepest economic mess of our lifetimes should buy TD today. I bought puts on TD at $90, 6 weeks ago, they run until July 23. It is at $81.41 today, I won’t sell until $75, and maybe lower. Cha-ching.

   1. Don’t forget TD also has a significant banking presence in the USA

   2. I bet those puts had a decent premium that far from maturity.

      1. They did, but that has been covered nicely about $5 ago. When you have the combination of Biden/Yellen paired with Trudeau/Freeland, betting on economic stupidity is not really rocket science.

3. There’s no financial ill that can’t be overcome with the following strategies:

   1: if your mortgage book is starting to load up with delinquent borrowers, just stretch out their amortization for another 5, 10 or 15 years. The regulators will insist on it, in fact.

   2: If you find your balance sheet filling up with a pile of underwater bonds that are worth less than what you paid, just hand them over as collateral for a loan from the central bank. They will obligingly value them at part even when it’s obvious that this is fraudulent. It’s a sweet deal for the bank, but who cares about the currency anyway? Kick that can down the road!

4. $3.7 billion on a market cap of $140 billion doesn’t seem like a lot

   1. It may not, but don’t forget, short money is smart money. Most of the time.

5. I need your help SDA.

   With my parents aging I have started to get involved in their finances somewhat, mainly to keep an eye on things and help them out down the road should their facilities get worse. (it’s already started 🙁 of course)

   They have a joint chequing account at TD. The balance is enough that by my math, combining inflation losses with not making any interest in their chequing account, that they are losing around $3000 per month.

   So, my suggestion to invest in a few GIC’s (tax free to limit), to get this balance under the $100 000 that is CDIC “guaranteed”, and to quit losing $, should be met with “NO SH!T”.

   It’s not. What to do?

   1. They need to see a Financial Planner for the best strategies to preserve capital while minimizing taxes.
      They missed the peak of rates to take advantage of by two months.
      We bought some corporate bonds (BMO, WCT) giving a 5.4% payout, and some 5.1% GICs with some of our funds, getting out of a bad bond fund.
      None of us are going to beat inflation unless you go high risk, and that’s not a good strategy for your parents.
      Like it or not, 60/40 will probably be recommended. Oh, and it’s their money, unless you have POA there’s not much you can do about it.

      1. Dan, as an old man retired on his own dime I have tried many strategies to keep up with inflation. In my opinion it cannot be done. Every year when I complete my taxes the tax bite increases, yet the monies being taxed have not increased in step. I now try and get the best interest rates I can and watch as prices continue to eat away what we have saved. Unless Trudeau manages to completely collapse the country and the currency I just may be able to continue eating until I die.

      2. The bond funds will swing the other way if rates start to drop.

   2. I am in the same situation with my parents, it is hard. My sisters and I are getting power of attorney set up, which they must agree to. You can get a “cashable” GIC which carries a decent (3-3.5%) interest rate, might be a suggestion to get their feet wet with the idea?

      DanBC, you probably had an Ok bond fund, but holding it while interest rates climb 450 b.p. is going to take a drubbing, longer the duration the worse, no matter who is running it. When the recession gets rolling and easing begins, the bond funds will post spectacular returns.

      1. EQ bank & Tangerine GIC’s are in the 4.4-5% range 1 non-redeemable if you don’t need the cash for a year. With elderly parents you never know.

         Both banks are solid, well as solid as any bank now days.

      2. EQ bank & Tangerine GIC’s are in the 4.4-5% range 1 non-redeemable if you don’t need the cash for a year. With elderly parents you never know.

         Both banks are solid, well as solid as any bank now days. M

6. Wish the short sellers Godspeed. Take down TD. David vs Goliath. My wife and I have moved much of our business out of the Royal because of their reprehensible conduct during the Freedom Convoy.