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Who Is John Paulson, And Why Should The Globe And Mail Care?

Tyler Durden's picture





 

They say that the simplest analysis is always the most powerful one. That appears to certainly have been the case with our presentation of global banks' Tangible Common Equity ("TCE") ratio to total assets from last Thursday, and specifically our observation of the glaringly obvious, namely that of the 30 most undercapitalized banks in the world, Canadian ones represented a whopping 33% of all. Note: this was not an attack on Canada, this was not some hedge-fund inspired start of a bear-raid on the Canadian banking system, this was nothing but an attempt to warn our readers of, again, what is out there for anyone (who is not blinded by cognitive bias) to see for themselves. Alas, the reaction to that post, particularly in the Canadian media, has been swift and severe, provoking such respected publications as The Globe And Mail to pen not one but two responses, one being the by now so-oft discredited attempt to ignore the message and target the messenger (Who is Zero Hedge, and why should we care?), followed by a more coherent attempt to debunk the claim that a painfully low TCE ratio is never a good thing (Is Zero Hedge looking at the wrong numbers?). The argument of G&M's Boyd Erman boils down to the statement that TCE is not a fair indicator of balance sheet stress and instead one should focus on a "Tier 1" approach of risk estimation, one that includes Risk Weighted Assets. Here we could provide the reference to Lehman's Tier 1 ratio, which was well in the double digits on the day when it filed for bankruptcy, even as the bank's true leverage was about 40x, a number which eventually brought on the biggest bankruptcy in history. We could but we won't, instead we will ask, rhetorically, who is John Paulson, and why should the Globe and Mail care?

Because while those "oddballs" at Zero Hedge may be hyperventilating or whatever the verb du jour may be, the (one time legendary) hedge fund's opinion probably should count for something, even in the G&M's esteemed opinion. And specifically his take on the whole Tier 1 vs TCE debate...

Back in March 2009, John Paulson (when he still was actually making money for his LPs, perhaps because he was rightfully quite bearish on the financial system, and wasn't running the world's smallest mutual fund) and JPM's Chairman of China Equities, Jing Ulrich, sat down and discussed the then-imploding economy, in a Q&A which we are confident is about to get much more airplay over the next several weeks. What is most notable about this discussion, in addition to what a difference two years can make to a person's P&L and outlook on the world, is that it was Paulson himself who chimed in, well in advance of the current debate on TCE vs Tier 1, with his personal thoughts on the issue. We present them below as we preemptively answer the rhetorical question posed above with a resounding yes.

Jing Ulrich: Things seem to be getting worse in the financial services area – how much worse is it going to get? Do you think we now know the true extent of the underlying problems?

 

John Paulson: The problem with financials is that they are very leveraged and don’t have enough tangible common equity to absorb anticipated losses. Large American and European banks have on average 40:1 leverage, defined as Total Assets / Tangible Common Equity. The Tier 1 capital ratios commonly used by banks present a misleading picture as to the capital adequacy of banks. The Tier 1 ratio includes preferred stock, hybrids and subordinated debt as capital and then risk weights assets, leading to a risk weighted asset number that is much less than the total asset number. This can lead to a situation where banks have high Tier One Ratios but very low tangible common equity ratios (see graph below). As a common shareholder, we only care about tangible common equity.

Hence, while we are confident that McKinsey is more than capable of putting together any analysis goalseeked as per the paying customer's demands (because at the end of the day, consultants and rating agencies are the same: they both tell their clients what they want to hear, and somehow this is only now being discovered for S&P and Moody's), we will go with the facts, as per what the world's (once upon a time) most vaunted investor had to say.

So while we relegate this simplistic debate over whether TCE or Tier 1 is more appropriate (best to just ask Dick Fuld) to the compost heap of legacy media click-thru monetization attempts, we leave our readers with the following far more fascinating interview with John Paulson, which provides some much overdue flashbacks to why he was, at one time, one of the world's most respected asset managers. Something tells us the topics discussed in it will become yet again quite salient in the immediate future.

 

 


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Sat, 08/20/2011 - 11:27 | Link to Comment TomJoad
TomJoad's picture

Oh Snap! Nice one Tyler.

 

Jump! You Fuckers!

Sat, 08/20/2011 - 11:39 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

Tyler, your Canadian Bank post was a stroke of brilliance. As most know canucks are an insecure bunch that continually need to be stroked.  To suggest and simply pose a question about the soundness of Canadian banks was tantamount to asking an insecure woman if she's put on a few extra pounds even if she hasn't.

  I suspect that if you post something/anything about Canada once per week you will quickly become the most read author in Canadian history.

 

PS did you see the canuck CDS spreads widen?  What is Rosie's view of canuck banks? 

I'm sure his Alma mater Gluskin+Sheff were thrilled to see your post.

 

PSS I wonder if you will be making the canuck version of the no fly list?

Sat, 08/20/2011 - 11:45 | Link to Comment asdasmos
asdasmos's picture

Hey Globe & Mail...... what now?

Sat, 08/20/2011 - 11:47 | Link to Comment redpill
redpill's picture

They are probably just realizing that they are way out of their league.

Sat, 08/20/2011 - 11:59 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

I expect that Boyd Erman (cub reporter extraordinaire) will soon be replaced with some big dogs (or if they are smart they'll never tangle with nor mention ZH again).  But as a point of clarification in his article on the "numbers' he did not mention tier 1 but instead TCE to Risk Weighted Assets as an alternate to the TCE ratio you are using. 

Tyler, what are your thoughts on the use of that ratio?

 

from Mr Erman's (cub reporter) article

 

It doesn't appear that McKinsey looked at the debate over which TCE ratio to use. What the analysts did find is that as the TCE/RWA ratio rose above 7.5 per cent, the likelihood of banks getting into distress declined sharply. Below that level and banks started to get into trouble.

And in that case, Canadian banks, with average ratios over 10 per cent, look very strong.

Sat, 08/20/2011 - 12:09 | Link to Comment Tyler Durden
Tyler Durden's picture

Anything that is "weighted" invites accounting and GAAP gimmickry, and first degree abuse of Mark to Market, which obviously is suspended everywhere in the world.

It is suspended for a reason.

The reason why TCE is the only one that matters is because it gives the least opportunity to adjusted either the numerator or the denominator.

One can read much more about this topic in one of our earliest posts.

Sat, 08/20/2011 - 12:23 | Link to Comment Kayman
Kayman's picture

Hey Tyler

Ask Boyd about the Dome Petroleum re-write of Canadian Banking law.  ALL THE CANADIAN BANKS WERE BROKE.  But the Canadian government re-wrote the law to allow them to write off their bad debts over 5 years instead of 1 year. Quietly stuffed under the carpet.

It is all smoke and mirrors.  Most Canadians eat pablum every day just like americans.

Sat, 08/20/2011 - 13:29 | Link to Comment vamoose1
vamoose1's picture

Kayman

    They also rewrte hundreds of years of Canadian Securities Law in the  Dome Petroleum deal, The Supreme Court of Canada abrogated the rights of preferred shareholders, and nullified our votes,  which were 4 to  1 against the rape ..  Same bat time,  same bat channel.

Sat, 08/20/2011 - 17:23 | Link to Comment rocker
rocker's picture

If honest Mark to Market is reinstated and required one will be able to decicde if the banks are a buy.

Not until then. Without Mark to Market all banks and investment houses need a 50% discount to present price.

Sun, 08/21/2011 - 12:30 | Link to Comment billsykes
billsykes's picture

I would like to see this information, where did you find it?

thanks.

Sun, 08/21/2011 - 19:40 | Link to Comment Kayman
Kayman's picture

Sun, 08/21/2011 - 12:30 | billsykes

Dome Petroleum and Smiling Jack Gallagher- early 1980's when interest rates sky rocketed.  Olympia and York, Canary Wharf and the magical Reichman brothers PACR.

Sat, 08/20/2011 - 12:26 | Link to Comment spiral_eyes
spiral_eyes's picture

Globe & Mail just got owned by pure empirical fact.

Sat, 08/20/2011 - 12:59 | Link to Comment Bananamerican
Bananamerican's picture

Give 'em a post...here's mine

ZeroHedge is simply THE best source for economic/political news on the web today.
Why? Because the editorial voice of ZH is both deeply knowledgable and profoundly SKEPTICAL (correctly so...) and because the comments are unmoderated, something much closer to the Truth can emerge from the scrum.
The Main Stream Media?
I scan it for the Official line...and see it for what it is...Propaganda

Sat, 08/20/2011 - 16:57 | Link to Comment pgarner
pgarner's picture

+10!

Sat, 08/20/2011 - 17:23 | Link to Comment Fedophile
Fedophile's picture

+ ?

Edit: Tyler, there is a small bug in the UI. If you post with the HTML <p>+ &theta;</p> the pieview is as expected but once it's posted you get the much lamer + ?

 

Sat, 08/20/2011 - 12:35 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

Thanks that post was before my time. You may want to double check M2M ban as I don't believe canuck banks adopted the mark to make believe that their US counterparts (FASB) did.

 

I agree that basic TCE has the least opportunity for shenanigans but at the same time to lump exposure to for example greek feta versus canuck cheddar can also distort things.

Do you know which TCE Meredith uses? If I'm not mistaken I  think it's TCE to Risk Weighted Assets.

Sat, 08/20/2011 - 12:47 | Link to Comment Tyler Durden
Tyler Durden's picture

One quick question: who "weighs" the risk and on what basis? Canadian cheddar is less risky today because the herd hasn't realized it could be just as risky as Greek feta tomorrow? Read Corrigan's guest post from Sunday on how risk perception paradigms change not overnight but in an instant when denying reality becomes impossible. And 100 points if you spot the circularity in saying Canadian cheddar is less risky so assets that are collateralized by it are safer?

But back to the Corrigan piece. The following paragraphs on why instantaneous "risk" is the most misunderstood concept in the world, should be read by everyone who deals with any form of risk management (and certainly weighing):

From The Sun Chairman, What's Future Is Prologue, And Why The Second French Revolution Is Coming To America

A long time ago, we first wrote about what we had come to recognise as the bipolar tendency of financial orthodoxy to undergo opposing, Kuhnian revolutions of its Groupthink every six to twelve months, or so.

Typically, the players first persuade themselves of the validity of an often arbitrary, but usually bullish, scenario which, by dint of constant repetition and uncritical mimicry comes not only to serve as a dogma, but one which each believer professes to have discovered for himself. Along the way, all objective data and governmental statistics which can possibly be construed to support this scenario are talked up and re-transmitted in confirmation of the first idea: those which cannot be so re-interpreted are simply ignored as ‘outliers’ by all except the small cluster of much-derided contrarians and habitual Cassandras.

Eventually, as the trend matures and its espousal becomes near universal, it begins to lose its onward momentum. Now, for the first time, the dissonant evidence, which has long been accumulating, begins to excite a certain uneasiness in the Jungian mass consciousness.

Finally, the trend turns – sometimes to, but often absent, the accompaniment of some unanimously-recognised trigger event – and the first losses start to be taken by those latecomers caught in the reversal. As each successively lesser, Greater Fool sells out, cursing himself that he always buys the top, as he does, he encourages another of this time’s Smart(er) Money men to quit while he’s ahead, too. So, each initial trickle dislodges more and more of those clinging precariously to the edges of a now-vertiginous slope below, until the first, trivial setback snowballs its way into a screaming avalanche of head-in-the-hands liquidation.

Now, at this point of maximum dislocation and mental discomfort, all those inconvenient developments which should have long since called the move into question are suddenly rediscovered and - lo! – they crystallise instantly into the foundational themes of a counter-trend of equal and opposite conviction.

Sadly for them, the earlier naysayers will find no belated applause for being right, being despised for their pusillanimous refusal to play the game if they say, ‘I told you so’ and being anyway doomed to seeing their premature insights co-opted shamelessly – and without the slightest attribution - by the post hoc rationalisations of a consensus-hugging crowd soon avidly blowing themselves an anti-bubble to replace the inflated soapskin of ill-starred hope which has just imploded all around them.

So it has been here, too, with the Shock! Horror! Hoocoodanode? of the downwardly-revised US GDP numbers; the farce of the WWF grand slam which was the Federal budget dispute; and the ritual slaying of the sacred cow of that nation’s undeserved prime credit rating.

Up until that point even the yawning cracks opening up around the foundations of the Eurozone could largely be ignored in the eagerness to buy a small section of Blue Sky, but, once sufficient self-doubt was ignited in some corner of that Gordian tangle of correlated and cross-margined trade in which the near-free leverage of QE-II had enmeshed everyone, that ongoing turmoil also became one of the defining features of the new bearishness and its expression in market pricing became violently intensified as a result.

So the first sparks of panic were struck to find a ready kindling among the garish paraphernalia of illusion piled high behind the flats and tableaus which comprised the backstage clutter in the Theatre of the Absurd where the ‘Great Global Recovery’ play had been enjoying its unbroken, 15-month run.

In time-honoured fashion, a mad rush for the exits soon followed.

Sat, 08/20/2011 - 13:03 | Link to Comment Stax Edwards
Stax Edwards's picture

And that so succintly desribes why I for one cannot ignore the Hedge.  Cheers TD, don't forget about us little guys when the IPO comes.

Sat, 08/20/2011 - 16:53 | Link to Comment Spitzer
Spitzer's picture

I remember Bernanke saying in 2006 that household debt to equity was still low. But Peter Schiff pointed out, the debt was feeding the perceived equity value.

Just like now, the US govt debt to GDP is "not that high" but its the debt thats feeding the GDP.

Sat, 08/20/2011 - 17:02 | Link to Comment citta vritti
citta vritti's picture

and IIRC, in recent years, chasing shibboleth of ever growing GDP has required more and more debt per unit thereof, until now we find the GDP is insufficient to feed the debt. Jubilee anyone?

Sat, 08/20/2011 - 17:07 | Link to Comment Spitzer
Spitzer's picture

Tyler Durden on BNN Canada "we don't know who he is but....

http://watch.bnn.ca/#clip519606

Sat, 08/20/2011 - 17:22 | Link to Comment Earl of Chiswick
Sat, 08/20/2011 - 18:12 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Their guest wasn't too kind to TD or ZH.

"Gutter journalism"?

Sat, 08/20/2011 - 20:02 | Link to Comment Reese Bobby
Reese Bobby's picture

Consider the source.  Worthless WASP...

Sat, 08/20/2011 - 19:03 | Link to Comment speconomist
speconomist's picture

Looks like promising material for a "Tyler Durden was right" video in the future.

Sat, 08/20/2011 - 20:01 | Link to Comment Reese Bobby
Reese Bobby's picture

Duke scum.  What kind of a dip-stick uses current LTV's on mortgages to refute the possibility Canada might have a housing bubble.

I am confident Vancouver, e.g. define housing bubble.  Hoser.

Sat, 08/20/2011 - 20:55 | Link to Comment o2sd
o2sd's picture

Thanks, that was a good laugh.

ZOMG, 7% of Canadian Mortgages are under water!!???? Canada is soooo forked.

 

Sat, 08/20/2011 - 13:08 | Link to Comment Kayman
Kayman's picture

Tyler:

Here's hoping you like power more than money.  I imagine a check for $1 billion could be drawn on Berkshire's account. 

Sat, 08/20/2011 - 13:38 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

 

slewie thinks tyler likeZ publishing and has a tiger by the tail, here, too

which is why slewie writes: for tyler to publish my work & ideas, right along w. his, and yours, also

free speech here and only here

BiCheZ!

Sat, 08/20/2011 - 14:58 | Link to Comment Kayman
Kayman's picture

slewie the pi-rat

Love your sentiment, but Benny bucks can be created in a keystroke.  Benny's masters would love to buy Tyler's soul.

Sat, 08/20/2011 - 19:40 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

what, exactly, do you see as my "sentiment" ? in this (paste):

slewie thinks tyler likeZ publishing and has a tiger by the tail, here, too

which is why slewie writes: for tyler to publish my work & ideas, right along w. his, and yours, also

free speech here and only here (end paste)

could you please tell me exactly what you are talking about?  i am actually confused by what you present as "slewie" here

you go ahead and fantasize about whose souls "Benny's masters would love to buy..." with their "keystroke bux"

how's that going, huh? 

if you are convinced that tyler is either looking for the bux to sell out, or unable to protect himself, please indicate why.  other than that, my friend, please stop projecting the drama of your 'soul' v. 'whatever' onto tyler, ok?  it doesn't seem to me to be working v. well, here, today, if you catch my drift...

Sat, 08/20/2011 - 20:42 | Link to Comment Kayman
Kayman's picture

slewie the pi-rat

what, exactly, do you see as my "sentiment" ?

You're going a little bit rat-shit crazy on me slewie.  If you are trying to tell me that the TD's are incapable of being bought, then that is sentiment my friend.

Other than that, following your train of logic is a bit like reading entrails.

Sun, 08/21/2011 - 01:20 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

you seem confused abt what i am saying about tyler, puddin-head, so "slewie" must be out there, eh?  actually, you are confused, but it rilly isn't slewie's fault!

at least what i said could be followed logically as a train of thought, son, even if you couldn't understand its meanings, for some reason...

you didn't make that cut, didya?  and maybe my thoughts wouldn't be so shitty, if you had, mr jelly-mind boo-boo "soul" man, been a tad more "logical" here, yourself, especially when gratuitously attacking tyler with what is, at best, a hunch, and almost certainly, at this point, a hallucination-projection about your own "worth" as a semi-conscious faustian plant, here

hey!  life's a BiCh, and then, you turn into one!  eh? 

 

 

Sun, 08/21/2011 - 12:38 | Link to Comment Kayman
Kayman's picture

slewie the pi-rat

"when gratuitously attacking tyler with what is, at best, a hunch, "

A rat ought to know a bigger, more rotten piece of cheese is infinitely more attractive. You know damn well the PTB would love to crush dissent. So my question is legit and I am certain TD can sustain the "injury" of the question without his self-appointed long-tailed side-kick squirming around trying to defend him.

When trying to follow your disjointed train of logic, I am not certain whether you smoke crack or just sniff crack.

Kayman

ps. I doubt that you are old enough that I could be your son.  Now go back to  babbling in the corner.

Sat, 08/20/2011 - 13:34 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

Most excellent that you have taken the time with a detailed response, thank-you.

 

So to summarize: any leveraged vehicle is insolvent if it gets a cash call.

Sat, 08/20/2011 - 13:54 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

nope & no cigar for you, earl!

consider the micro-econom example of a corp using bal sheet leverage successfully with some kinda callable debt, if you would, or renewable paper which doesn't get "re-newed" which wld make the corp a "leveraged vehicle" would it not?

this does not make the corporation insolvent

likewize with a person as a vehicle who has debt, for "leverage" 

assuming you know what "insolvency" means, try thinking, here, ok? 

and tyler:  nice "Who is John _____"!  i liked that!

Sat, 08/20/2011 - 14:35 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

au contraire petit(e) slewie

today's subject matter is banks maybe even sovereigns and the quality of the capital backing their leveraged asses as in:

"Hello Dick, this is Lloyd and it's Tuesday, I hope you know a good orthopedist"

Sat, 08/20/2011 - 15:02 | Link to Comment Kayman
Kayman's picture

Earl of Chiswick

Receptionist, " Mr. Blankfein, you still have Hank holding on line 2. "

Sat, 08/20/2011 - 19:27 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

is it?  Who Is John Paulson, And Why Should The Globe And Mail Care?

now, if you are gonna claim to have been speaking about "banks and sovereigns" before, why didn't you simply say so, instead of writing:  any leveraged vehicle as you were "innocently paraphrasing" someone.  incorrectly

...while playing "gotcha" (you can look that up, too, shitforbrains) w/ tyler and slewie...and making an ass of yourself here.  again.

we know who lloyd and dick are, too.  the fact that you seem to, doesn't excuse what you are doing on this page and how you are so pitifully attempting to do it. 

 

Sat, 08/20/2011 - 20:24 | Link to Comment WonderDawg
WonderDawg's picture

Dayummmm, Slewie. If that wasn't a proper verbal bitch slap, I've never seen one.

Sat, 08/20/2011 - 18:51 | Link to Comment knukles
knukles's picture

What is the Daily Mail asked John Paulson and who the fuck cares, anyhow?
The more panties on a bunch, the better to play with.
Or something or other like that somtimes.

Sat, 08/20/2011 - 16:00 | Link to Comment anonnn
anonnn's picture

 

Who defines for YOU what "risk" is?

That cuts to the marrow of the confusion.

Sat, 08/20/2011 - 17:46 | Link to Comment Yen Cross
Yen Cross's picture

Do Not get me started.>  Clint Eastwood<  POOF>>>

Sat, 08/20/2011 - 18:09 | Link to Comment Bob Sacamano
Bob Sacamano's picture

As for me, being praised or getting attribution for ideas or not being despised for being contrary does not do much for me.  Making money off movements in the markets is more rewarding.  So being right in word is much less fulfilling then being right in deed -- for me any way.  Thanks for the forum.

Sat, 08/20/2011 - 20:08 | Link to Comment treemagnet
treemagnet's picture

+100

You smart, me dumb. 

Tyler, you must wax the market when you trade - or when you did trade.  At least tell me you had to use a thesaurus to write this.  Who are you by the way?

Sat, 08/20/2011 - 12:40 | Link to Comment vast-dom
vast-dom's picture

Thank you TD. I read both G&M articles more at responses and sniggered all the way through; to term their contrarian snide tone tenuous is too kind. They had NOTHING on you and your article save for that which plagues most sheeple: fear of the obvious!

 

May I give the G&M a nice acid-bath vagina now?

 

 

Sat, 08/20/2011 - 14:17 | Link to Comment Canaduh
Canaduh's picture

I believe I have the last word in this matter, and that word is rainbowkittensprinkles.

 

 Carry on.

Sat, 08/20/2011 - 16:34 | Link to Comment Going Loco
Going Loco's picture

Ah, 'our'. Thought so. No matter. Keep it coming. Strength in numbers, don' y' know.

Sat, 08/20/2011 - 17:34 | Link to Comment narnia
narnia's picture

i'm not sure either of these ratios tell you very much.  anyone can carry infinite assets, no matter how levereaged, with ZERO interest rates.

Sun, 08/21/2011 - 02:12 | Link to Comment Growyourownfood
Growyourownfood's picture

Tyler, please talk about loan origination. The TCE ratios have no value without looking at loan origination criteria of what is held by the banks. The loans issued in the US real estate market which subsequently caused its destruction were never made in Canada and arent being made today. The two markets are not even remotely comparable.

Sat, 08/20/2011 - 11:56 | Link to Comment rocker
rocker's picture

Zerho Hedge seeks the truth. As I tell my wife who now reads it too, if ZH printed it, you can bet on it.

The banks of the world have been hiding and fudging numbers for a long time.  U.S. banks refuse to count all their negative assets in their statements.

For the banks, it is a race to see who can stay off the bottom.  Unlke the currencies they hold, which is a race to the bottom.  Hmmmm.

Sat, 08/20/2011 - 12:17 | Link to Comment topcallingtroll
topcallingtroll's picture

As to the banks here is why they stall.

Whoever blows up last doesnt blow up.

Sat, 08/20/2011 - 17:49 | Link to Comment Yen Cross
Yen Cross's picture

Long  / 10 puts!

Sat, 08/20/2011 - 12:29 | Link to Comment French Frog
French Frog's picture

Spot On.

One only has to read the comments at the end of the G&M article to realise that there is a growing number of people around the world who are fed up with the MSM and are actively looking elsewhere for their source of financial knowledge and news.

I'm sure I speak for the majority in here in saying that education is one of ZH's best character: so much can be learnt about the way things really work in the world we live in.

Uber-bear ... yes, depressing ... sometimes, but if that is the state of today's affairs then i'm glad it's been put in front of me by ZH without any dressing up and I can make up my own mind about it.

I hope you're around for a long time to come.

Long live all those that make ZH a daily necessary dose of truth.

Sat, 08/20/2011 - 20:28 | Link to Comment treemagnet
treemagnet's picture

I can't wait for the day when I can read ZH and go long real equities - no trading, straddles, etc.  Like 1981, get diversified and go to the beach for 18 years.

Sat, 08/20/2011 - 11:50 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

|_|

Sat, 08/20/2011 - 13:58 | Link to Comment Terra-Firma
Terra-Firma's picture

The globe and mail is a left wing rag controlled by the establishment. Don't look for news in the G&M, just lefty propaganda

Sun, 08/21/2011 - 10:04 | Link to Comment RSloane
RSloane's picture

Yes, yes, and yes.

Sat, 08/20/2011 - 12:11 | Link to Comment Dan The Man
Dan The Man's picture

 

..I am Canadian...and we are insecure.  

 

It drives me nuts.

Sat, 08/20/2011 - 14:29 | Link to Comment WonderDawg
WonderDawg's picture

Not only that but your ass looks fat in those jeans.

Sat, 08/20/2011 - 19:54 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

coffee out nose on that one, dawg, altho i recall being asked not to be so graphic once on a prior "nose-breather fuk-up"

sealskin jeans are like that, dude

Sat, 08/20/2011 - 21:02 | Link to Comment LongBallsShortBrains
LongBallsShortBrains's picture

And his pussy is showing

Sat, 08/20/2011 - 12:49 | Link to Comment Loose Caboose
Loose Caboose's picture

Does this CDS make my ass look big?

From an insecure Canuck.

Disobey

Sat, 08/20/2011 - 19:58 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

not to slewie!

are you, like robot_trader: a riddle, wrapped in an enigma, dressed in a bra?

if not, are you married?

Sun, 08/21/2011 - 10:56 | Link to Comment mogul rider
mogul rider's picture

 

 

Hey Earl of dickhead

 

Insecure?

 

I think not, I am certainnly willing to kick your sorry fucking ass up through your brain,

when and where

 

Fucking American fag nancy boy

Sat, 08/20/2011 - 11:52 | Link to Comment In Fed We Trust
In Fed We Trust's picture

Ah yes the missing link/puzzle

Canada impodes.

Mexico implodes with the help of the CIA funding the drug gangs with guns.

Of course the us is in a linear sloped debt implosion.

With these 3 intersect ,

Tim Geithner will introduce the Amero.

Good bye Greenback. hello AMero.

Sat, 08/20/2011 - 12:37 | Link to Comment Mactheknife
Mactheknife's picture

>Tim Geithner will introduce the Amero.

Nope...you need to be thinking bigger.  Think global IMF SDRs. Coming soon to a country near you. The beauty of this plan (for the global banking cartel) is that it can be fazed in without much fanfare (as in the Federal Reserve Act) wherby a country's currency can be backed by these without having to actually change the curreny. Of course that would eventually happen. And there you have it, a one-world currency which of course leads to a one-world government. Owned and operated by the Rothchild banking cartel.

Tin-foil off.

Sat, 08/20/2011 - 12:44 | Link to Comment In Fed We Trust
In Fed We Trust's picture

Of course, SDR's.  George Soros pet project.  I think George was asking 1/2 % to get the deal off the ground.

And if you allow for the currencies to exist, more opportunity for the bankers to gun down/up the markets.

Sat, 08/20/2011 - 12:50 | Link to Comment In Fed We Trust
In Fed We Trust's picture

Just introduce the Amero at a 2 for 1 rate and people will go ballastic.

 

Maybe even offer 5,000 Ameros to the first patrons to step up and get a skin chip on their arm.

 

Forget the $100 FREE for opening a checking account.  Get 5000 Ameros for putting a chip on your arm.

Sat, 08/20/2011 - 14:05 | Link to Comment Mactheknife
Mactheknife's picture

Oh yeah! And then there is good ol George. It's not enough for him to have proven himself a shrewed and skillful hedge fund manager thereby amassing a great fortune. This just relegates him to the Bilderburg middle man position where net worth is measured in the billions. He just can't stand it that he is not a part of the ultiment cartel above him who give marching orders to the Bilderburgs, CFL, et al and whose net worths are measured in the trillions. A group where money has lost meaning and being all powerful is the only remaining goal.

Sat, 08/20/2011 - 16:02 | Link to Comment Cleanclog
Cleanclog's picture

Soros may be invited into the Tri-Lateral Commission yet!

Sat, 08/20/2011 - 18:57 | Link to Comment knukles
knukles's picture

A little more Gravitas, please.
If Timmah introduces the Amero either it's half-life will be about 1/1000th of the Euro or t'will be mistaken for an SNL skit.

Sat, 08/20/2011 - 19:20 | Link to Comment robertocarlos
robertocarlos's picture

We will get the Amero over my f=dead body.

Sat, 08/20/2011 - 13:20 | Link to Comment doggings
doggings's picture

Heh, "The Globe & Owned"  - classy TD, for an oddball anyway ;) 

 

Sat, 08/20/2011 - 14:33 | Link to Comment Silver Bug
Silver Bug's picture

Awesome, was right in the middle of this yesterday, defending Zero Hedges side. Good work Tyler. This clown won't come up with any sound argument.

 

http://silverliberationarmy.blogspot.com/

Sat, 08/20/2011 - 11:35 | Link to Comment dwdollar
dwdollar's picture

What's wrong?  Canada afraid to join the shit-a-cane?  The shit-hawk is swooping down boys.  You're looking into a shit-abyss.

http://www.youtube.com/watch?v=JuedGDhkQKg

Sat, 08/20/2011 - 15:00 | Link to Comment B-rock
B-rock's picture

Shit-winds are a-comin...

Sat, 08/20/2011 - 11:32 | Link to Comment unununium
unununium's picture

Dear SEC, any particular reason why you did not look at the list of those who stood to benefit from the Abacus racket?  Namely, John Paulson's investors?

Sat, 08/20/2011 - 11:33 | Link to Comment Confused
Confused's picture

Keep up the good work. Its clear that most of the talking heads are reading your work. Keep exposing them. 

Sat, 08/20/2011 - 11:33 | Link to Comment jplotinus
jplotinus's picture

Oh Canada, eh, bitchez!

Sat, 08/20/2011 - 11:34 | Link to Comment richie0496
richie0496's picture

I've been reading zero hedge for 4 years now u are a genius my friend!

Sat, 08/20/2011 - 11:38 | Link to Comment Earl of Chiswick
Earl of Chiswick's picture

you sir must be a time traveler

Sat, 08/20/2011 - 12:27 | Link to Comment gmrpeabody
gmrpeabody's picture

+1

How's he do that?

Sat, 08/20/2011 - 12:33 | Link to Comment DeadFred
DeadFred's picture

He files the patent in 2013. Invest in his company early, it surpasses Apple in market cap in 2017.

Sat, 08/20/2011 - 14:04 | Link to Comment buzzsaw99
buzzsaw99's picture

impressive

Sat, 08/20/2011 - 11:36 | Link to Comment treemagnet
treemagnet's picture

I love it when these bureaucracies take on Tyler - it makes me long for the day the Illinois teacher retirement fund just couldn't help themselves and their addiction to getting thrashed.  But, now I guess like all trouble makers its the sovereign players  - OH Canada!

Sat, 08/20/2011 - 14:38 | Link to Comment doomandbloom
doomandbloom's picture

word

Sat, 08/20/2011 - 11:37 | Link to Comment i-dog
i-dog's picture

Nicely done, TD. I hope you sent them a 'thank you' note for the free publicity.

Sat, 08/20/2011 - 20:35 | Link to Comment Jena
Jena's picture

True.  They were huffy but they did spell the pseudonym right.

Sat, 08/20/2011 - 11:37 | Link to Comment AladdinSaneGirl
AladdinSaneGirl's picture

Tyler, please could you do something on whether/when physical gold will become the new monetary standard & what the effect on gold equities will be. I'm sitting on gold shares that just don't reflect the gold price. Paulson is a big holder of gold and maybe he too is waiting for a rerating. 

Sat, 08/20/2011 - 12:30 | Link to Comment papaswamp
papaswamp's picture

It won't happen until after the collapse of the present system.

Sat, 08/20/2011 - 15:43 | Link to Comment GFKjunior
GFKjunior's picture

So like the end of 2012?

Sat, 08/20/2011 - 19:26 | Link to Comment knukles
knukles's picture

Yeah, Dec 21, 2012
(eyes closed, shaking head, saying "Oh Jesus", exhale....)

Sat, 08/20/2011 - 11:38 | Link to Comment alexwest
alexwest's picture

## Perhaps because they are short the shares, or because they want to get in cheap.

 

@Tyler,, if its not worst offense then i dont know what?

 YOU WANT CANADIAN BANKS ON CHEAP .......

 

in my country exists saying ' dont touch the shit and it wont  stink'

 

alx

Sat, 08/20/2011 - 13:05 | Link to Comment Stax Edwards
Stax Edwards's picture

Did we last cross paths at a highly successful night at a craps table in a certain C.A. country when the rodeo first began?  I feel like I know you brother.

Sat, 08/20/2011 - 13:11 | Link to Comment Bananamerican
Bananamerican's picture

"Last year (2007), Mr. Paulson made as much as $3 billion to $4 billion for himself — thought to be a record one-year payday on Wall Street. This year the former Bear Stearns Cos. investment banker bet against the financial sector and profited from weakening among banks, including Bear.

douchebag

Sat, 08/20/2011 - 11:40 | Link to Comment Toxicosis
Toxicosis's picture

Our beloved Real Estate doomer in Canada is Garth Turner who pretends to write about other economic problems we face up here in the Great White North, but nonetheless on most topics and future trends fails miserably.  Here is his take on his blog known as....drumroll please...."The Greater Fool".  And yes he will prove time and time again to be that which he names his blog.  So here we go:

Over my lifetime I have found the strongest emotion to be fear. This is why countries have armies, newspapers sensationalize and people avoid risk. Fear motivates whereas greed encourages and lust coaxes. It is the greatest compeller to action. As such, it gets the most attention. So  people who like attention use it.

Days ago one of those guys, who anonymously writes scary blog entries, had this headline: “Is the Next Domino to Fall…. Canada?” But the Zero Hedge piece was not about Canada, instead the Canadian banks. The thesis was simple: our banks are not the fortresses the feds have been telling us and popular mythology supports, but rather wispy Euro-style institutions which are but a few bond vigilantes away from keeling over, and taking your GICs with them.

The Zero Hedge anon dude came up with this by looking at the ‘tangible common equity ratios’ of the banks. The smaller the ratio, then the more easily a bank can be reduced to zero net worth if the value of their assets plops. That means a bank with, say, a ratio of 5 would be road kill if the value of its total equity was reduced by 5%.

Here’s the fear part: a third of all the global banks with the lowest TCE ratio (below 4) are Canadian. In fact all of our big six are on the list – which means if their assets (the money they have loaned out in all its various forms) lose just 4% of their value, then let’s hope you have a big can of money buried in the garage floor. And in the event one or more of our big banks keeled then (as I have proved here previously) it’s unlikely Canada Deposit Insurance would be able to refund everyone’s savings and chequing accounts or guaranteed investment certificates.

See what I mean? Your breathing just got faster.

Just for fun, here are the ratios: CIBC 2.8, National Bank 3.3, Scotia 3.3, Royal 3.4, TD 3.6, BMO 4.1.

How serious is this? Well, very, if you agree with the ZH guy’s hypothesis that every asset our banks own contains risk. Obviously the banks do not, and use a different formula which calculates equity as a ratio to assets which they consider more likely to fluctuate in value. That pushes their number up to a comfortable 10 or so and, the bankers claim, is a far more accurate way of assessing their exposure.

Meanwhile our banks (like all banks) are heavily leveraged, which means they lend out far more money than they actually have sitting in a vault beneath King & Bay. If on Tuesday everybody wanted the money back that they’d deposited in RBC, for example, then 97% of us would be SOL. That’s the way the system works. The banks are allowed to lend out what you give them – far more, actually.

More heavy breathing.

But here’s the difference between those dorky European banks and ours: They hold billions in sovereign bonds issued by deadbeat places like Greece and Italy (what, I ask you, have they ever done for world culture?). Chances are these banks are going to the cleaners. They may not fail, but it won’t be pretty.

In Canada, guess where our guys have the greatest exposure? You bet, real estate. And that has led some people (lots, actually) on this blog to speculate that a housing correction here will cause the banks to stumble and bleed.

But that is a bad bet. The ZH dude should know better.

This is because virtually every high-ratio, high-risk mortgage in Canada is federally-insured. These are the loans most likely to non-perform if house values take a dump, people skip and cease payments and action is taken to reclaim the properties. Through CMHC, the banks are protected against major losses because everyone with less than a 20% down payment (which is just about all buyers these days) is forced to purchase mortgage insurance. This does not insure the homeowner, of course, just the lender. In almost all provinces, anyone buying a house which plunges in value and who walks, is still responsible for the debt – unless bankruptcy is chosen. This dangling sword just about guarantees jingle mail (sending the lender your keys) will never come to Canada.

What are the odds of our banks having all their equity wiped out by a housing correction?

The blogger got part right: zero.

Sat, 08/20/2011 - 11:47 | Link to Comment TomJoad
TomJoad's picture

Wow, Who knew Canucks were so delusional?

Sat, 08/20/2011 - 11:52 | Link to Comment Toxicosis
Toxicosis's picture

Just the koolaid drinkers my friend.  Just the koolaid drinkers.  Garth doesn't let me post so much on his website anymore. 'sniff' 'sniff'.  He can't handle well thought out analyses, straight and accurate predictions based on history and reality, nor contrary assessments.  He just takes his bat and ball and says "I'm going home"!! 'Sniff' Sniff'

Sat, 08/20/2011 - 12:01 | Link to Comment Terminus C
Terminus C's picture

I do believe ZH had an article about the CMHC. How do you think the insurer would do if there was a real estate crash. Oh, and I think they are capitalized with less than 5 percent.

You are free on this site to be as wrong as you'd like.

Sat, 08/20/2011 - 12:15 | Link to Comment Toxicosis
Toxicosis's picture

I believe you're referring to Garth here. I think? Yes indeed all insurers would take a bath here related to housing and it's inevitable downfall. Garth must dream of unicorns and bonds, such that he mesmerizes his viewing audience with such constant "there will not be a sovereign debt crisis, nor financial repeat or calamity similar or worse to 2008". Dope smoking must be fun!!!

Sat, 08/20/2011 - 12:38 | Link to Comment gmrpeabody
gmrpeabody's picture

We have our own versions of Garth down here, and many are members of Congress. A bunch even reside in the White House. There is plenty of Garth to go around.

Sat, 08/20/2011 - 17:49 | Link to Comment Spawn of Cagliostro
Spawn of Cagliostro's picture

Party on Wayne!

Sun, 08/21/2011 - 10:17 | Link to Comment RSloane
RSloane's picture

Indeed, Sir. Plenty.

Sat, 08/20/2011 - 11:50 | Link to Comment treemagnet
treemagnet's picture

Ah yes, the "all my eggs in one sovereign basket" comeback.....Bank of Canada, same shit different country - backstopped with faith, hope, and love.  Good luck Canucks, this is gonna be global.

Sat, 08/20/2011 - 11:58 | Link to Comment CPL
CPL's picture

There have been discussions about CMHC and their ability to cover the insurance without breaking their bank as well.  This isn't old news, just ignored.

 

If you think CMHC is any better than Freddy Mac, which is operated in a similar fashion, look where that is today.

Sat, 08/20/2011 - 13:13 | Link to Comment Marco
Marco's picture

CMHC is backed up by the full faith and credit of the Canadian government isn't it?

Sat, 08/20/2011 - 14:39 | Link to Comment WonderDawg
WonderDawg's picture

Which, of course, means the taxpayers.

I think I just had deja vu.

Sat, 08/20/2011 - 18:52 | Link to Comment CPL
CPL's picture

So is Freddie and Fannie.  Both are just awful, however the same model adopted by CMHC.  If you want to buy CDS investments, the CMHC website offers bonds and anyone of the Canadian banks can offer a wide variety of "risk free" mutual funds so any slob can own them.

 

CMHC has been bailed out before btw, late 80's and early 90's, real estate fell through the floor, interest rates were well and over 17%.  You would be able to find a vacancy in every second shop and a guy in a slide door van willing to sell anything from pants to tv's.

 

And as the lad in thread mentioned, the backing is by the Canadian taxpayer.  If none of this sounds familiar, then it's time to step out of de nile, large lizards are coming and it won't be pretty.

Sun, 08/21/2011 - 04:05 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

actually, and possibly not important, here, CPL, i was schooled like a troll here the other day for writing something to the effect that Fred & Fan were now guaranteed by the "full faith and credit" of the american sheeple, like Treasuries

turns out the goobermint presently owns F&F and has stood their pay-outs, so far, most likely to protect high crimes and misdemeanors, should the frauds become actionable on the basis of failure, of course

beyond that, which can change, either by "ownership" or "backing" or even "getting the shit hauled away" (once it becomes manageable in another decade or so) there is no "guarantee" [if that is what you meant by "backing" at least as far as what i heard (and later looked up)]

which leads a pirate to wonder:  why do they trade so low (rate-wise), relative to Ts?  this is from doug noland's weekly wrap at the prudent.bear PrudentBear (paste): 

Ten-year yields dropped 19 bps to 2.07%.  Long bond yields sank 33 bps to 3.40%.  Benchmark Fannie MBS yields fell 11 bps to 3.19%. (end paste, my emphasis) and the spread v. the 10-yr increased over the week, but check it out v the 30...

but, if you can now get a 30-yr jumbo for under 5%, who cares who guaranteeZit to the "source"?  huh?  /s/ there for otherz trying to follow along, CPL,...

Sat, 08/20/2011 - 11:58 | Link to Comment Spitzer
Spitzer's picture

As if a bank that ends up living off of the CMHC is not going to have their market cap wiped out similar to Bank of America. Will the bank go bankrupt ? Maybe not but they will get zombie status.

Sat, 08/20/2011 - 12:04 | Link to Comment DonnieD
DonnieD's picture

Most states in the US are recourse states and people still handed over the keys (or squatted). Why is Canada different?

Federally insured? Ever heard of Fannie, Freddie? That didn't stop all the banks in the US from going bust if it wasn't for The Bazooka. 

And what are the assets the banks hold back from their analysis that "won't fluctuate in value"? Treasuries? LOL

With the leverage that is in the banking system, everyone is fair game.

 

Sat, 08/20/2011 - 12:22 | Link to Comment billwilson
billwilson's picture

Turner is right. The structure of the real estate loans does make Candian banks safer than they appear using TCE only. TCE is a starting point, but then you have to dig a bit deeper. When you do you see the real risk is less than the headline.

One number analysis is always dangerous. You have to look behind the numbers. .... which typically is what I would expect of zero-hedge. Of course a story that said Candian banks not as dangerous as the ratios show would not have many readers.

 

Sat, 08/20/2011 - 12:37 | Link to Comment DonnieD
DonnieD's picture

So dig deeper for us, please explain what you see.

Sat, 08/20/2011 - 12:29 | Link to Comment Dasa Slooofoot
Dasa Slooofoot's picture

This is because virtually every high-ratio, high-risk mortgage in Canada is federally-insured.

 

So high risk, low performing (when SHTF) assets are "too big to fail" in Canada.  Where have i heard that before?

Sun, 08/21/2011 - 02:08 | Link to Comment Growyourownfood
Growyourownfood's picture

No you dumbass, the difference is in HOW DEBT IS ORIGINATED. In the US you had subprime loan issuance with variable rate mortgages carrying zero payment terms for the first two years, issued on fake documents, at 110% or higher of the home's value. THIS DOES NOT, HAS NOT, AND WILL NOT HAPPEN IN CANADA. EVER. This is just one example of the type of stuff that was originated during A MORE THAN 5 YEAR PERIOD in the early to mid 2000s in the US. Overall, subprime mortgages that NEVER GET WRITTEN IN CANADA TO ANYONE UNDER ANY CIRCUMSTANCE made up a huge part of US mortgage origination and collateralization into CDOs. Subprime and Alt-A was something like 70% of the US market or some such stagerring number. The excesses WERE RIDDUCILOUS, UNIMAGINABLY RIDDICULOUS. 

IT IS NOT REMOTELY COMPARABLE TO THE CANADIAN REAL ESTATE DEBT MARKET.

Sat, 08/20/2011 - 19:29 | Link to Comment knukles
knukles's picture

LOL
Fucktard.

Sat, 08/20/2011 - 11:43 | Link to Comment Peak Everything
Peak Everything's picture

Appears that a low IQ is required to be employed at the Globe and Mail. Idiots.

Sat, 08/20/2011 - 11:55 | Link to Comment CPL
CPL's picture

It and most of the printed press is used to wrap fish.

Sat, 08/20/2011 - 11:45 | Link to Comment alexwest
alexwest's picture

@tyler

look at comments on

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwis...

 

majority is praising your research..

alx

Sat, 08/20/2011 - 11:49 | Link to Comment Manthong
Manthong's picture

Equity is transitory.

Sat, 08/20/2011 - 11:49 | Link to Comment alexwest
alexwest's picture

##if you agree with the ZH guy’s hypothesis that every asset our banks own contains risk.

 

best part .. SO NOT EVERY ASSET IS RISK ??   funny.. last time i heard no risk no

money.. isnt  WHOLE CHIGACO-PORTFOILIO-GIBBERISH  ALL ABOUT ??

 

alx

Sat, 08/20/2011 - 11:51 | Link to Comment cowpieflapjack
cowpieflapjack's picture

The only fault I can find with this article is the assumption that The Globe and Mail is a respected publication. We're just whistling past the graveyard here thinking our banks are infallible. Really, they're banks. And our Governor of the BOC is a former GS minion. Ask the Russians how they feel about GS and Carney.

Sat, 08/20/2011 - 11:51 | Link to Comment Spitzer
Spitzer's picture

 Short Cad financials  HFD X 2, HIF X 1 on the TSX

Pile in, seriously. The good part is there is so much here to short. These banks are way above pre Lehman levels. Canadians are so fucked up on debt that  that once a nominal US recession hits, they will put a nasty squeeze on these banks.

 

Sun, 08/21/2011 - 08:45 | Link to Comment snowball777
snowball777's picture

Yep, might even get some nice contrarian action on the supposed relative safety of the CAD too, if "federally-insured" means what I think it does for their currency if/when their bubble does what bubbles do.

Sat, 08/20/2011 - 11:51 | Link to Comment alexwest
alexwest's picture

##What are the odds of our banks having all their equity wiped out by a housing correction?

 

ANOTHER... basically B bernanke version 2011... houses prices never fall in whole country...

 

alx

Sat, 08/20/2011 - 11:52 | Link to Comment alangreenspan
alangreenspan's picture

"Legendary" John Paulson has only had one good idea in his entire career. Give him credit for calling the sub prime debacle correctly. Otherwise, he has a very mediocre track record, and really should not be held in higher esteem than any other former schmuck Bearn Stearns trader. He is the Jesse Livermore of our time and will go down the drain in tragedy.

Sat, 08/20/2011 - 12:09 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

I think you just insulted Jesse Livermore.

Sat, 08/20/2011 - 20:34 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

not to mention, by implication, betamillion gates, altho i also see his point

Sun, 08/21/2011 - 08:46 | Link to Comment snowball777
snowball777's picture

No. Predicting a 3-alarm fire with a match in your hand gets no golf-clap.

Sat, 08/20/2011 - 14:36 | Link to Comment thunderchief
thunderchief's picture

You better be careful, or you may get bought out by the Huffington Post, and you know who owns them now.  

When you get over a million hits a day you're going to get attacked first, and then they will panic and start chucking cash trash at you. 

Just tell them you will stop this nonsense if they throw in a forclosed Vancouver BC property for free.  And that's not the one south, with lots of pickup trucks and a former Olympian Ice skating champion.

Vancouver BC realestate rollercoaster video...

http://www.youtube.com/watch?v=hqOn5XEm86A

Sat, 08/20/2011 - 11:53 | Link to Comment Terminus C
Terminus C's picture

I was disappointed by the Globe and Mail response to ZH, but not surprised. Worse still, was the poor quality of their "rebuttal".

Canadians (I am one and study this shit) have a strange relationship with America; we always seek American approval but get very defensive when faced with American criticism. This is particularly true when it comes to institutions where we feel that we are superior (eg. Health care, hockey, beer, weed and banks... Not necessarily in that order).

This response was not a reasoned one because of the above neurosis and not because the analysis provided by ZH was unsound. We (wrongfully) have been telling ourselves how great we are because our banks are not in bad shape and did not need bailouts. This is bullshit of course but we, the sheeple and media of Canada, believe that Canada is mostly immune to the financial storm raging in the world. We tell ourselves that any damage we do receive was not our fault because we have a sound financial system... Tyler popped that myth with one simple stat and the cognitive dissonance generated blowback.

I was going to write the above in the Globe and Mail's comment section but it would just receive the welcome of the blind trolls that haunt MSM sites.

I am not sure why you care what some hack in the Globe and Mail writes about this site because he is either paid to attack you, in which case you should be flattered, or he is too stupid to actually critically read the information and opinion on this site. Either way, fuck him.

Sat, 08/20/2011 - 12:24 | Link to Comment pain_and_soros
pain_and_soros's picture

Sadly, a lot of Canadians, have become uglier than the old sterotypical ugly American, in their smugness, arrogance and ignorance, and that long held inferiority complex likely has a lot to do with it. 

When the outcome of a hockey game creates mass rioting in one of its most beautiful cities, it sadly suggests there ain't a whole lot of meaning to their lives...just sayin.

Sat, 08/20/2011 - 12:33 | Link to Comment vamoose1
vamoose1's picture

To Terminus C

 

    Also canadian and boyd erman is just a punk. I agree,  fuck him.

    Canada doea about 70 percent of its exports with the US, if god forbid ,  we ever lose this absolutely critical customer as we well could, you could shoot a howitzer from prescott to niagara falls without hitting anything  and this country is flat on its pompous self satisfied ass.

    For those who care,  The Royal bank has 3.4 Trillion,  thats t   in  derivatives contracts on its books, and i am sure Tyler could look up and find similar numbers in the other big 4. Thats clever .

    If the United States ever goes down we are irretrievably fucked,  the more so  for our blind arrogance. It will be the fur trade and canoes. Like the old days.

Sat, 08/20/2011 - 12:47 | Link to Comment Terminus C
Terminus C's picture

Exactly, regardless of our financial system health, our economic health is directly tied to the US. So much so that we are basically the 51st state. We live in interesting times...

Sat, 08/20/2011 - 16:59 | Link to Comment Spitzer
Spitzer's picture

RBC is a Fed primary dealer. Marc Carney, the Cad CB governor, worked for Goldman Sachs in Russia in the late 90's. Russia went bankrupt under his expertise.

Sat, 08/20/2011 - 20:40 | Link to Comment sherryw
sherryw's picture

hmm, sure you're not talkin' about Oz ?

Sat, 08/20/2011 - 11:54 | Link to Comment RobotTrader
RobotTrader's picture

How can Paulson afford a new house when he just lost huge on Sinoforest and B of A?

No bonus money this year.

Sat, 08/20/2011 - 12:02 | Link to Comment falak pema
falak pema's picture

He didn't lose his fund lost. The institutionals lost : money, mutual, pension funds. He got his commissions up front. Bonus already taken.

Sat, 08/20/2011 - 20:43 | Link to Comment WonderDawg
WonderDawg's picture

When has a financial institution's shitty performance stopped the executives from paying themselves huge bonuses? It's a fucking crime what these guys pay themselves in bonuses, with the taxpayer's money, while their banks are realistically insolvent and their stocks are tanking. Crooks, all of them.

Sat, 08/20/2011 - 21:24 | Link to Comment Blano
Blano's picture

I'm guessing that's where the "2" in "2 and 20" comes in handy.

Sat, 08/20/2011 - 12:00 | Link to Comment falak pema
falak pema's picture

One thing I know about Canadian banks is that they are very stodgy and risk aversive. Which means they get hide bound and pile up in the same ball park, all of them. Instead of diversifying out. Maybe the real estate is their collective Achilles Heal. 
Just surmising...Not suggesting I know anything. I think that putting the question to them publicly like Z has done, challenging them to respond, is in itself an honorable exercise. It merits consideration. I hope ZH stirs up the Canadian bank brotherhood to steamy red indignation, then to susequent self assessment. Maybe the local media will stir the pot further. It could have unknown benefits and fall out for the Canadian citizen, bank investors etc; if the sector gets shaken out by some slick sleuthing, like a James Bond cocktail; shaken but NOT stirred! 

Sat, 08/20/2011 - 12:19 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

nice to see that you have extracted you head from your ass and re-gained the ability to post a rational para.  been a while!

Sat, 08/20/2011 - 12:22 | Link to Comment falak pema
falak pema's picture

Hey Commissar of the politically correct at ZH : learn to type or spell. And don't be so smug about your role as the Torquemada of this blog site. I see your style is as it should be; for a man who loves to be inquisitorial in his approach.

Sat, 08/20/2011 - 18:39 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i'm too old, f_p!  and, i guess, too styooopid to see what i mis-spelled, subsequently

i was just trying to applaud your infrequent rationality re a topic and did i also see a little tendency to applaud the dialogical, there, toy-boy?

people are most free to weigh your contibutions to the site against mine, even to "vote" again it seems for "people who like to vote rather than reply"

as w/ tyler & canuck banksters, not to mention the ny doomster, i invite folks to refer to what actually went down, here, not some bullshit from someone w/ impacted cranialism

Putting The Cart On Top Of The Horse, Or Why Heaping Fiscal "Stimulus" Upon "Stimulus" Is Suicide For America | ZeroHedge   [8.16.11/22:57-0400]

took me a whole day to figure it out, too!  The Scariest Chart Ever: Philly Fed Versus Non-Farm Payrolls | ZeroHedge   [8.18.11/10:29] Thu, 08/18/2011 - 10:51 #1572966

now the links will NOT work, b/c i'm signed in and they open to "welcome slewie" but if folks want to take some time to look back to those time/date stamps i highlighted [like this] and punch up the strings, they can see what was going on between ori & me at least before you choose to get involved with your vomit in the first reference and your "kiss of death" to ori, in the second

one person already has, and, you lost, f_p, on that one, dincha?

i hope i am torquemadesque to trolls especially when they self-link and try to get zeroHeads e-mails.  people who are not anon-y-mouse on zH, well, i won't bore you with inplications, especially if they include getting e-mail address of zHs who are anon-y-mouse, except to tyler, who requires the e-mail flip-flop to get a password, here

that said, i consider neither you nor ori to be trolls at this point.  i was trying to communicate w/ ori abt a thing or 3, and i have seen indications that he heard me

wtf you're doing coming after me remains to be seen;  it is not something i initiated, here, between us, as you well know, which is why i invite otherZ to go to these 2 strings and actually see what you are up to

toy-boy

 

Sat, 08/20/2011 - 12:50 | Link to Comment Kayman
Kayman's picture

One thing I know about Canadian banks is that they are very stodgy and risk aversive. 

Look up Asset Backed Commercial Paper and Smiling Jack of Dome Petrolem.

Canadian banks were offering ZERO DOWN mortgages, lending more than their capital to single companies, and as usual come to the party late.

Your concept of canadian banks is the propaganda they keenly hone.

Sat, 08/20/2011 - 13:38 | Link to Comment vamoose1
vamoose1's picture

So true.  There were fortunes to be made in subprime if you were early,  The CiBC,  constantly the dumbest bank in canada,  was just entering the mortgage securitization market ready to rock when it blew up like an atomic bomb.

    Ironic,  but they were saved by their own abject  stupidity that time. And let us not forget Olympia and York.

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