Is The Next Domino To Fall.... Canada?

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Thu, 08/18/2011 - 15:27 | 1574147 Stoploss
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LOLOL!!!! Sorry, i can't help it.

Thu, 08/18/2011 - 15:31 | 1574163 redpill
redpill's picture

What's this all aboot, eh

Thu, 08/18/2011 - 15:35 | 1574192 wang (not verified)
wang's picture


30% of Canada`s banks

that would be one bank


Thu, 08/18/2011 - 15:37 | 1574208 Pladizow
Pladizow's picture

Whats all this blasphamy aboot, Eh!

Thu, 08/18/2011 - 15:51 | 1574271 TruthInSunshine
TruthInSunshine's picture

Well, it would seem dat der is some talk abooot money troubles in Canada, dontchya know.


Drop ze puck.

Thu, 08/18/2011 - 17:10 | 1574621 wang (not verified)
wang's picture

here is the TCE ratio  (TCE/RWA)  for each of  Canada`s Banks for Q1 2011 (all in the 9% to 10% range) similar for full year and prior year


I believe that US Treasury has as their target a TCE/RWA of 4% (and if I am not mistaken that ratio is the standard currently in use when discussing TCE in the context of evaluating a banks capital adequacy) - some further explanation of the chart in Tyler`s post would be of value  (I`m guessing it`s TCE/TA)

full report on Canada`s banks (large file)


and more on the Treasury and the  TCE ratio

Thu, 08/18/2011 - 17:16 | 1574765 Sancho Ponzi
Sancho Ponzi's picture

Last year Deutsche Bank stess tested 42 Euro banks, and they averaged 3.2%. Can you say KABOOM?


Thu, 08/18/2011 - 17:55 | 1574924 sleepingbeauty
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I'd really like to understand this information, as I have money in a ScotiaBank drip and this is the first I've heard of Canadian banks being risky. I know that CIBC is the cowboys of Canada, but even CIBC is pretty well conservative when compared with other countries.

Thu, 08/18/2011 - 18:49 | 1575076 wang (not verified)
wang's picture

read the above PDF and make up your own mind - Tyler tossed out a metric, which is great but there are manifold metrics that measure the health of a financial institution so it would be of value if Tyler could perhaps provide some context and background on the TCE metric he chose to use vs the widely used TCE/RWA, which the Canadian banks score very well on.

Fri, 08/19/2011 - 03:40 | 1576112 ZeroPower
ZeroPower's picture

Wtf? This is a joke article. Definitely not by 'Tyler' TD but by a newbie intern probably.

And im not even biased towards Canadian banks.

How about you look at their (core) T1 ratios, their NPLs/Loans, RoRWA, Loan loss reserves, etc etc i could go on.
Bar none, the Cad banks are the safest in the world. Add in some Scandinavia though i havent personally done my DD there just have been told they are decent as well

How about exposured to peripheral sovs on their banking book? Even RBC CM which is the largest CAD bank in the CM space, they have virtually zero exposure to Greece and the other shit sovs. The large US bulge banks and of course every single large EU bank is taking haircuts in the area of 15-30% on their banking book. Disastrous for their equity..

Finally, there is no CAD sov CDS. Definitely proofread the stuff posted by your other members, Tyler.

Sat, 08/20/2011 - 08:20 | 1580684 jic
jic's picture

How about Canada Housing trust balance sheet is ballooning, eventually the mortgage bond holders will want to be compensated for this risk with higher rates.

Sure our banks will enjoy this higher rate enviormemnt with higher deposit rates and with a CDN government PUT on CMHC mortgage buy back, our banks will

be made whole good but our government will have egg on their face in allowing this low interest policy to run so long and allow our housing bubble to linger !

Thu, 12/01/2011 - 19:23 | 1936696 ucsbcanuck
ucsbcanuck's picture

Thanks jic - many in Canada think we are somehow "special" and "different". No we aren't. Today I had a discussion with friends about this issue. As usual, it ended with a "We are not US! We are not Europe!" diatribe. 

You can't compare Canada to anything in US or Europe now - and that includes cell phone plans LOL! It always ends with "We have a stronger financial system than the US or Europe." Or some other nonsense.

Just the other day, there was an interesting article in the Ottawa Citizen about high tech in the Ottawa area. For those familiar with Ottawa - it used to be known as Silicon Valley North and was the high tech centre of Canada. Not any more:

"The fact that Shopify set up here is very much an accident. Lütke followed his girlfriend, now wife, here. Chief technology officer Cody Fauser moved to Ottawa from B.C. because his wife got a job with the government. Not only that, the city would have lost this startup to California had Shopify not been so successful early on that moving became problematic.

"I always thought of Shopify as this San Francisco company that took a wrong turn and ended up in Ottawa," says Lütke. Even now, for two weeks every quarter, Lütke travels to California's Silicon Valley to "recharge my battery of thinking big."

However, whenever I tell people here in Ottawa I'm thinking about moving back to CA, there's always the inevitable "OMG why would you want to move to California. It's sooo awesome here." Well, if it's so awesome here - where's our Google? Facebook? Apple? Intel? RIM is cratering right now. Nortel already bit the dust. 

One of my friends from South Africa said once at dinner - why wouldn't someone in high tech want to work in Silicon Valley? Immediately the whole dinner table started complaining about California. Inevitably the discussion became about the California economy! Nobody wanted to even contemplate the fact that CA might be better for high tech than Canada.



Thu, 08/18/2011 - 17:13 | 1574750 IrritableBowels
IrritableBowels's picture

o yaw? noe clue.

Thu, 08/18/2011 - 16:00 | 1574344 itchy166
itchy166's picture

Reread.  30% of the banks on this list are Canadian...not 30% of Canadian banks are represented.

And it looks like 100% of the big Canadian banks are on the list.



Thu, 08/18/2011 - 16:32 | 1574541 Howard_Beale
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For all intents and purposes, Canada's Big 5 are the banking system in Canada. When TARP occurred, they were bailed out at the same time in a budget line item that the Canadian public was not aware of for several months. The Toronto Star did an investigation and found the $500 billion in funds that were budgeted to the banks.

Thu, 08/18/2011 - 17:04 | 1574690 wang (not verified)
wang's picture

howie $500 billion is half of  Canada`s  GDP if I am not mistaken I think the number was $25b later bumbed to $75

Thu, 08/18/2011 - 18:55 | 1575089 macholatte
macholatte's picture

OK. Let me see if I get this right..... the American tax payer via its Pimp, the Fed, bailed out Canada as well as Europe while the MSM told everybody (and maybe the dim witted President & VP too) that all the money was going to shovel ready BS. Did I get that right or did I miss something?



noun      an artifice or expedient used to evade a rule, escape a consequence, hide something, etc.

Synonyms:   deception, scheme, trick, dodge, ruse.




Thu, 08/18/2011 - 15:38 | 1574217 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Good.  All the somolian taxi cab drivers are abooot to lose those $300K homes at 2% variable. 

Thu, 08/18/2011 - 15:57 | 1574335 Burr's 2nd Shot
Thu, 08/18/2011 - 16:21 | 1574438 Betty Swallsack
Betty Swallsack's picture

It IS laughable and hardly news.  Anyone paying attention merely has to check out the derivatives exposure of our Canadian banks (Canadian Imperial Bank Of Commerce, TD Canada Trust, Bank of Montreal, Royal Bank of Canada, et al).  Just Google 'derivatives exposure canadian banks'.

Here's a sampling:

Thu, 08/18/2011 - 16:36 | 1574561 Howard_Beale
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Interesting data but the guy was short the big 5 on 9-15-2009. Ouch.

Fri, 08/19/2011 - 03:46 | 1576122 ZeroPower
ZeroPower's picture

Um, its from 2009. Taking the first metric posted there which is ever important T1 leverage, its as at July31 09. All banks in the world were heavily under their targets at that point! Currently if i were to average the CAD banks itd be around 9% Tier 1 lev... take SocGen this week and theyre at about 6%, BAC might be trying to boost it a bit with their asset sales.

Anyway, metrics from 2 years ago dont matter.

Thu, 08/18/2011 - 17:26 | 1574814 IQ 145
IQ 145's picture

I like these nice easy questions; the answer is NO. This sounds like something written to have a crazy contest with George Washington.

Fri, 08/19/2011 - 02:01 | 1575974 He_Who Carried ...
He_Who Carried The Sun's picture

No, Mr Durden, this time you got it wrong and your data is too narrow and biased.

It may well be that Canadian banks will be drawn down by the general global problems

but not on their own like SocGen or its Italian, Irish, Greek counterparts.

Stop fearmongering, it easily becomes immoral when overplayed.

Thu, 08/18/2011 - 15:27 | 1574148 Gene Parmesan
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Where has Leo been lately?

Thu, 08/18/2011 - 15:30 | 1574160 Almost Solvent
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No longer @ ZH for some reason or another

Thu, 08/18/2011 - 15:31 | 1574169 gulf breeze
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Leo and Robo are trolls

Thu, 08/18/2011 - 15:42 | 1574250 Vic Vinegar
Vic Vinegar's picture

Agreed.  They are most definitely trolls to those who like to live in an echo chamber. 

I hope you enjoyed writing your comment.

Thu, 08/18/2011 - 15:47 | 1574278 tmosley
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Trolls are one thing, but those guys were so consistantly WRONG in every last one of their calls that their presense here had degenerated into nothing more than a farce.

If you are going to be bullish, be bullish for the right reasons.  And admit when you are wrong.

Thu, 08/18/2011 - 15:54 | 1574318 Vic Vinegar
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their presense here had degenerated into nothing more than a farce.

I agree.  They didn't think the world was going to end tomorrow and tried to share their takes on the market. 

Thu, 08/18/2011 - 16:13 | 1574404 RockyRacoon
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RobotTrader used to post nice pics of scantily clad wimmin but not lately.  Must have had privileges revoked.  Without that he was out of ammo.   Leo used to post videos of stupid Europeans vacationing on Greek islands getting drunk -- went on hour after boring hour.   They're gone?   So what.   Waste of bandwidth.

Thu, 08/18/2011 - 16:50 | 1574631 slewie the pi-rat
slewie the pi-rat's picture

i agree that pictures take up bandwidth, especially for the poorer zeroHeads worldwide, who may get quite slowed by them.

leo went away mad, apparently.  he may have been claiming he wasn't allowed to defend himself, here.  not sure;  pretty hard to speak for another.

RT will be baaaaack, i'll betcha.  one of our strapped avatars was concerned, last hiatus, and RT re-emerged.  still, this time,...who knows? 

personally, rocky, i think RT misses the junks

Fri, 08/19/2011 - 00:52 | 1575825 fuu
fuu's picture

I miss the Junk button more than RT at times.

Thu, 12/08/2011 - 03:00 | 1957568 BorisTheBlade
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Junk button was as blind as justice, beautiful.

Thu, 08/18/2011 - 15:50 | 1574298 gulf breeze
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Robo is a troll that hides when market is not going his way.  I am long FAS @ 12.61.  It does not matter to me which way it goes. I will not critique others on their forecasts.  Robo constantly bashed on the contributors while posting 15 min charts after huge moves.  Fock him and his bank rally that I am betting with stops.

Thu, 08/18/2011 - 15:52 | 1574306 fuu
fuu's picture

No they are trolls for BRINGING the echo into this chamber. This is the refuge from the echo chamber that surrounds you at those other "news" sources.

Thu, 08/18/2011 - 16:15 | 1574410 Vic Vinegar
Vic Vinegar's picture

Aw shucks…I thought this was the place for smiles, cupcakes and greenies.  Am I on the wrong website?

I read a lot of their work and it seemed each knew quite well what’s going down.  But your point is understood, if not agreed with.

Thu, 08/18/2011 - 17:31 | 1574849 IQ 145
IQ 145's picture

---"it seemed each knew quite well what was going down." Wow. that's amazing. I guess you're one of those people who learned how to read, but it didn't do any good. It would be very, very, difficult to be wronger than Leo, and for all the wrong reasons. Robo Trader was a bullshit artist.

Thu, 08/18/2011 - 17:49 | 1574903 Vic Vinegar
Vic Vinegar's picture

Let's just agree to disagree.  On a personal note, thanks for not tossing around an excessive amount of semicolons in that comment.

Thu, 08/18/2011 - 15:39 | 1574223 tmosley
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He lost his contributor status and got all weepy and pissed off at Tyler, and is currently sucking his thumb while wearing a diaper in his mother's closet, which is his new bedroom.

Thu, 08/18/2011 - 15:40 | 1574232 Gene Parmesan
Gene Parmesan's picture

Ah - sorry to speak of the dead in that case. On to the business at hand then.

Thu, 08/18/2011 - 15:45 | 1574266 EvlTheCat
EvlTheCat's picture

ROTFL....  Wow, coming up in the world is he!?

Thu, 08/18/2011 - 16:14 | 1574415 RockyRacoon
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He is communing with MasterBates?

Thu, 08/18/2011 - 16:21 | 1574463 Flakmeister
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WTF ever happened to Johnny Bravo?

Thu, 08/18/2011 - 16:29 | 1574517 Sancho Ponzi
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I think he morphed into Math Man who morphed into Harry Wanger who morphed into Hamy Wanger who morphed into Harry Wanqer. 

Thu, 08/18/2011 - 16:32 | 1574539 Flakmeister
Flakmeister's picture

You missed William the Bastard....

My fav was Texas Gunslinger.... I think he suffered from multiple personality disorder

Thu, 08/18/2011 - 17:22 | 1574796 Raphio
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I hear gunslinger got a job as a CEO (Chief Executive Officer) at some fabulous new internet startup

Thu, 08/18/2011 - 17:34 | 1574834 Raphio
Raphio's picture

But seriously, CIBC, for instance, always seems to be the hoser bank most involved in dubious affairs.... the had the greatest Canadian exposure to Enron and plenty dodgy MortgageBS...

Thu, 08/18/2011 - 17:46 | 1574897 Flakmeister
Flakmeister's picture

"Best non sequitur of the thread" winner

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