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

Tyler Durden's picture

While two short months ago, "nobody" had any idea that Italy's banks were on the verge of insolvency, despite that the information was staring them in the face (or was being explicitly cautioned at by Zero Hedge days before Italian CDS blew out and Intesa became the whipping boy of the evil shorts), by now this is common knowledge and is the direct reason for why the FTSE MIB has two choices on a daily basis: break... or halt constituent stocks indefinitely. That this weakness is now spreading to France and other European countries is also all too clear. After all, if one were to be told that a bank has a Tangible Common Equity ratio of under 2%, the logical response would be that said bank is a goner. Yet both Credit Agricole and Deutsche Bank are precisely there (1.41% and 1.92% respectively), and both happen to have total "assets" which amount to roughly the size of their host country GDPs, ergo why Europe can not allow its insolvent banks to face reality or the world would end (at least in the immortal stuttered words of one Hank Paulson). So yes, we know that both French and soon German CDS will be far, far wider as the idiotic market finally grasps what we have been saying for two years: that you can't have your cake and eat it, or said otherwise, that when you onboard corporate risk to the sovereign, someone has to pay the piper. Yet there is one place where that has not happened so far; there is one place that has been very much insulated from the whipping of the market, and one place where banks are potentially in just as bad a shape as anywhere else in Europe. That place is.... Canada.

As the chart below shows, which is a ranking of global banks by tangible common equity, lowest first, of the banks with a TCE ratio of under ~4% a whopping 30% are those situated in Canada, the same place where nobody thinks anything can go wrong, and which has been completely spared from the retribution of the bond vigilantes. Something tells us Canadian sovereign CDS, not to mention Canadian bank CDS, are both about to go quite a bit wider...

h/t Geoffrey Batt

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Sancho Ponzi's picture

...who morphed into Texas Ginslinger

LMAO, simultaneous posts. Gunslinger turned into Ginslinger.

slewie the pi-rat's picture

i dunno, ponz, i usta offer the gunslinger dog food coupons for his sunday shopping trip, and i'm not even close that with his 'clone'

Sancho Ponzi's picture

That's a shame, Slew. Gunslinger's posts were all over the place - kinda like a whirling dervish on acid. 

dwdollar's picture

Take cover!  Black swans are landing in North America!!!

imsaul0968's picture

Our Risk On/OFF Model has been sniffing recession triggering a risk-off trade 6/30 so we've missed the entire move down in SPY and are now +8% YTD vs negative SPY. We are opening up our weekly commentary to those on ZH emailing me at Just send me your email and I'll add you to our weekly market update with risk-on/off signals.  Got gold?

slewie the pi-rat's picture

very self-effacing of you, saul, but we're starting to get a wee bit wise to people self-linking, here, and collecting e-mail addresses of the more moronic.  maybe they work for google, who knows?  "got gold?"  

nothing personal, maybe you're legit, but at this point, with your bullshit here and the "extra hook" to try for the link hit, who cares? 

slewie the pi-rat's picture

this isn't FacefukingBook, here, people

Vic Vinegar's picture

A strong case could be made that it actually is. 

Imagine if one day you woke up, fired up Zero Hedge and saw a "Farmville" link atop this site, between "donate" and "rss".  Worlds would be rocked!

Vic Vinegar's picture

For what it's worth slewie I would water the crops on your farm out of respect and water Max Keiser's crops for irony's sake.

Maybe Zero Hedge can partner with Zynga to come up with some kind of solution to the junks, reds/greenies thing? 

IQ 145's picture

--"a strong case could be made that it actually is." No this case cannot be made. Apparently my diagnosis was correct, you learned to read, but it didn't help.

Vic Vinegar's picture

Let's just agree to agree on this one dude :-)

slewie the pi-rat's picture

...if you like being will perhaps value that in other people here, too...both you shitheadz are very smart, btw...

fuu's picture

The only reason that thought should even be entertained is that it would include an ignore feature.

Larry Dallas's picture

Love it. No different than this guy today... High school hero, real life zero...

slewie the pi-rat's picture

hey, La_D.  member:  29 weeks , 21 hours

                 total posts:  4.  all in the last 9 weeks, with 3 in the last 3 weeks and 1 last week and 1 today

that's you, shithead!  

hi, larry!  you are very flattering, here!  But i didn't hit the link, if that doesn't hurt your feelings, k?

fuu's picture

So many phish, so little fry.

Larry Dallas's picture

You don't have to because everyone on this post did and now they get the idea.

I'm going to go out on a limb and guess that you weren't breastfed as a baby... Don't tell me, I know the odds are great just reading how everyone reacts to you.

And the number of posts you place on ZH and the time you've been on here won't get you laid either.

Sudden Debt's picture

hmmmm.... Fois Gras....


redpill's picture

I hear they serve Black Swan Foie Gras at every meal on Martha's Vineyard


Sudden Debt's picture

They serve it to the dogs over there.

Todays supper is Bald Eagles on a spit.


Mesquite's picture

...Bald Eagles on a spit...


Manthong's picture

Could be a hoser, eh?

Flak, had the same thought at about the same moment.. I just went shopping for something suitably affronting to add.



Flakmeister's picture

Call it a photo-finish...

Flakmeister's picture

Bunch of hosers, eh?

Dr. Richard Head's picture

They could always launch some CMSOs (Collateralized Maple Syrup Obligations) to buffer the loss.

Flakmeister's picture

Arrggh, Billy have you ever been to sea, boy?

Oh, no, Captain Hindgrinder!

Betty Swallsack's picture

Did you ever screw that one up.  The punch line is, "No, but I've been blown ashore".

Not to be confused with, "Get off Dad, you're crushin' my smokes".

Flakmeister's picture

No, not at all...

Stems from an old TV ad for Highliner fishsticks...if you were Canadian you would recognize it.

Ellesmere's picture

Yes indeed...

We Canadians have been getting mileage out of those old ads for close to 30 years....true classics.

Flakmeister's picture

Ever see Mr. Dressup and Alan Greenspan in the same room?

Flakmeister's picture

Come to think of it... Timmah could pass himself off as Casey...

Betty Swallsack's picture

'Hoser'? Ah c'mon. Still stuck in the 80's?

andybev01's picture

"Koo loo koo koo, koo loo koo koo!!"

Franken_Stein's picture


And what about the elephant in the room that nobody talks about, which is the U.S. ?

What about the Rockefeller-owned J.P. Morgan Chase ?


redpill's picture

They are better are screwing the citizenry and thus will survive longer.

knukles's picture

Federal recipients of campaign contributions ensure we the people taxpayers absorb their losses.

First loss layer = innocent civilian peasantry.

Caviar Emptor's picture

Sacrosanct. If that goes, it's the Bastille all over again. 

Long-John-Silver's picture

Hugo Chavez will soon own JP Morgan

Sudden Debt's picture



I like it! I wonder how the logo will look like!

Threeggg's picture

Banzai7 "enter stage left"

EvlTheCat's picture

Sounds like a new kind of Rum.

Makes you feel punch drunk after a single shot.  Blabber on for hours about the devil and earthquakes.  Then right before you blackout, you get the uncontrollable urge to have anal intercourse with sheep in a pile of FRN's.

Larry Dallas's picture

Im sitting here crying reading this, too funny. +1000.

slewie the pi-rat's picture

fuking jamie is opening branches all over cali and all over the country, too, from a bit 0'sign i have read here, doctor.  they owe slewie $125 after sending me a coupon.  when i went in, i opened an account.  when i wondered why the $125 wasn't in it, the person to whom i spoke (b/c my "personal banker" w/whom i had signed up) was busy opening coupon accounts) told me "next week"... which point the third person told me that the $125 would not come to me for...six months and would i like a copy of the printout?  i responded no thank you, i had my file.  i spoke with my dad later and told him that over @ the morgue people probably thought i couldn't understand the terms of my checking acct but that it was so funny, that i just couldn't get mad about it! 

i had done this a year or two ago for $100.  then they changed the terms of the account from "free" to "expensive" without this here certain amt of minimal activity, right here in this letter we sent you in a plain vanilla #10 envelope like they send debit card in, ya know?, which many people might not even open, much less read, with 2.5 diopter glasses and a magnifying glass (v. small print boilerplate) where the relevant info was down in abt para #5

so, i took my $1 outa the morgue and got a genuine FRN, instead!

now, i have this great new situ, where my 00-riginal $100 to-open bet now = $1  aka "the slewie dollar in the fuking morgue" again.

this timer when i talked to the nice lady who offered me the print-out, i also asked her if they had any record of the letter i had received in a plain vanilla #10 envelope like they send the debit cards in right after i had opened the account.  what did the letter say?  please!  just look in the computer to see if there is any record of the letter.  no.  thank you for you help & good-bye.

when i fanally got ahold my "personal banker" [b/c he was so busy w/all the fuking coupons? and i do not leave personal info w/ banks where i blocked caller ID before i dialed; so he didn't know...?] he reckoned i had understood him correctly, but they change the damned coupons so often...

i like the kid, so i told him it didn't matter.  wtf, who cares?  he's a kid.  and that's my bottom line;  it ain't changin.  i asked him if he been taught the law of agency yet, in his MBA work or undergrad.  it seemed not.  when i started to explain it to him, he made a serious mistake:  he interrupted me & tried to cut me off.   maybe he had a coupon to redeem, i don't know.  at which point he heard "slewie & thelaw of agency" @ hi-decibels and everone w/in 4 blocks of my screened window also knows the law of agency, too, now! 

but, he understood what i wanted him to and what i considered the rules to be, when he represented me to the people who have my $125, which i'm not sure he's gotten to, yet.  you know how kids are!

so then i asked him if there were any computer record of the letter &tc.  what did the letter say, slewie?   just answer my question, PLEASE.  nope. 

the letter, i said, informed me that if i made a deposit, that the bank might limit me to $200 withdrawal, the next day.  oh, well, that's if such and such and of course with cash, never, and blahblahblah.

that's not what the letter says.  rinse, repeat X3.  me:  look, man, the way the shit is hitting the fans, anything could be "the way it is" in a week. 

no, shit, slewie!  i hear that!!!

so much for jamie; you have a nice evening, bro-brat