Welcome to weird. Change is everywhere. Portfolios, houses, rates, yields, the economy – we’re in a maelstrom of mess at the moment, with March delivering more surprises than an Avril Lavigne speech.
We’ll start with rates, moves to houses, then banks and finally with whatever the heck the Fed’s going to do in seven days.
The bond market is gorging with funds as investors globally grab the safest assets they can find. So as the price of debt’s pushed higher, yields are slammed lower. The market also sees increased odds of a recession now (thank you, flaky SVB execs), with lower inflation and a CB pivot coming. So, down she goes.
The yield on a GoC 5-year bond just crumbled to 2.8%, which is the lowest in a year, down another 6% on the day, and an incredible 80 beeps below two weeks ago (when it was 3.7% and the Fed was all hawkish). We told you Monday this would mean a drop in Canadian mortgage rates. And here we are.
The Big Banks haven’t moved, but they will. Meanwhile the smaller guys now offer home loans with that 4-handle. Five-year fixed is 4.6% and insured, high-ratio money a bit less. This is a far cry from a few months back when we thought 7% was a possibility.
Now, houses. The biggest single influencer of real estate is the rate of interest. As it falls, property values go up. Always. Already we had rustling loans in major markets with more solds-over-asking, creeping volumes and scant listings. The latest CREA report shows prices seem to have stabilized nationally at about 16% off year-ago levels and a swelling sales-to-listings ratio.
“While the broader turmoil is a clear negative for the overall economic outlook, the Canadian housing market dances to the tune of interest rates first and foremost,” says BMO Economics. “The pullback in long-term yields, along with the BoC’s rate pause, may at least put a floor under housing.” And the bank adds this: “There are signs that sales activity and prices may be close to a nadir. The recent sudden plunge in global bond yields, alongside the Bank of Canada’s step to the sidelines, look to provide some support for housing, as does the ongoing job market strength.”
Now the bad news. There are a ton of people in the country with mortgages getting bigger, not smaller, just as the economy goes wonky. Millions with variable-rate borrowings have passed their trigger point, forcing lenders to lengthen amortizations. It means monthly payments are just meeting interest charges on home loans that will now take years longer to pay off, and at substantially higher cost.
At the moment four of the five major Canadian banks have a quarter or a third of their mortgage portfolios sitting at ams of 30 years or greater. BMO is 33%; CIBC’s at 30%, with TD at 29% and RBC coming in at 25%. A few months ago these numbers were negligible.
So speaking of banks, is there contagion?
On Friday Silicon Valley went down, followed by Signature and Silvergate. US regulators and the White House moved fast to paper it over, but meanwhile trading halts and bank runs hit a number of smaller American FIs. Now Credit Suisse is seriously in the soup.
That bank’s been in trouble for a while, today teetering on the brink. Shares fell by over 30% (most ever in a day); its top shareholder (Saudi National Bank) bailed out; the lender went crawling for help to the Swiss National Bank; bank-linked default swaps surged; and Mr. Market got indigestion.
“Today’s cockroach is Credit Suisse,” says analyst Ed Pennock, of the banking mess. “This is a huge failure by the regulators. In retrospect, it’s all too obvious as usual. Bad decisions by seemingly lots of people. Biden Bucks now looking more like helicopter money. Powell stayed too long, went too far, lacked the investment smarts to know what the impact might be. He was failed by the government bank inspectors…. The accident that was waiting to happen is now happening.”
Okay, what now?
Stocks had a bad session. Especially in Toronto, where the Big Banks make up a huge percentage of the market. Expect more to come. A lot of money is on the move and, as mentioned, the bond portion of your portfolio is plumping up just as the equity side comes under pressure. This is why we always yak about the benefits of being balanced, diversified, globally exposed and currency-hedged. You never know when a black swan will splat. And you’re not smarter than everyone else.
Finally, what will the Fed do Wednesday next?
The current betting: a quarter-point increase, 50%. A pause, 50%. A half-point jump (which was favoured a week ago), 0%.
The latest US consumer inflation data came in hot, but wholesale price changes are tamer. “The Fed is in an incredibly awkward position heading into the March 22nd meeting,” says money manager Picton Mahoney. “Our positioning in financials is focused on investment grade names including the big six Canadian banks as well as select legacy issues in the UK with regulatory catalysts. On the short side, we are focused on higher beta European contingent convertible bonds and subordinated debt. We have no exposure to regional banks.”
Adds Ed Pennock in a comment on the Fed boss: “Powell should have gone 50 bps last time. If he does it now, he will deep six the market. If he decides to do nothing that too will scare markets. He’s locked. He’s got a front row seat to watch the cockroaches show up.”
To be continued.
About the picture: “Thank you for your free daily blog,” writes Heather from South Surrey, BC. “You have such a way with words. It’s not often one can be inspired, educated and enlightened, all at the same time. Meet Pasha and Poupee, two rambunctious rescue pups we spent a lot of time with in the Dominican Republic. A big shout-out to Frederique, a kind-hearted French woman who has devoted her life to caring for abandoned dogs… and providing awesome hospitality to her guests who need a dog fix.”
145 comments ↓
IMHO….
….TPTB are herding the masses back to RE…
….more later
I think I cracked why western democracies won’t ban bitcoin.
All the bribes and payoff to the politicians are done with it.
Feds baked in 3/4 point hike this year by the looks of things.
Damned if they do…
Yes, indeed.
Beware the Ides of March.
It is upon us now.
Russia shooting down US drones.
Escalations in Ukraine will blow the world as we know it apart within weeks.
https://www.cnn.com/europe/live-news/russia-ukraine-war-news-03-15-23/index.html
Catastrophe looms closer than ever before.
You have been warned.
PREPARE
Monthly opex this week. Huge chunk of stabilizing dealer flows evaporate this week. Instability doesn’t say anything about direction. Just that equity moves will get even bigger soon. Considering how risk-free rates are varying intraday, it’s a wonder that equities haven’t done worse.
Also, Silicon Valley Bank was the second to fall, not the first. All of these entities are steeped in either Crypto, ARKK invest, archegos type garbage or both. If the crisis expands, the greed and avarice of others will cost everyone with an RRSP or pension or who simply pays taxes. Bullshit.
Finally, it’s truly a wonder watching people over weight banks get munched.
This week just getting started
Keller Williams just had their big conference in Vegas.
Key speaker said US is going to see a large reduction in RE agents.
Talk was also about money fleeing into Canadian RE once the 2 yr moratorium has expired.
Our currency is known as the CDN peso.
I do have a balanced portfolio, praise be to Garth.
But I do own ONE equity in a non-registered account. Negligible amount in the grand scheme of life, but man I really wanted it for some upgrades in the house.
Hopefully the stocks that have nothing to do with banks rally a bit in the coming couple weeks.
Why does it feel like 2008 all over again. It started small then grew into a big wart.
Your colleague, in her well thought out post yesterday, spoke peripherally about one of the biggest dangers in finance; ‘seeking Alpha’.
There’s nothing inherently wrong with it; so long as investors can accept its kissing cousin is actually its flip-side twin; ‘accepting risk’.
There were some poor decisions associated with SVB to be sure but thus far this isn’t Enron style fraud and there is no indication of Silicone Valley creative accounting or Crypto fantasy land.
The rush to blame Powell and insist on ‘not my fault’ bailouts is ultimately toxic. Cowboy calls to let it all burn are equally reckless.
A sensible policy going forward when there is an absence of buyers (funny how no one appreciates vultures until they’re needed) to take on the risk is a Fed based restructuring where the taxpayer becomes equity holders and depositors are forced to take a loss (10-15%) in exchange for equity.
Clawbacks of Executive bonuses and losses by equity holders should not be viewed nor structured as punitive; their primary role should serve as a forward going reminder of the need for key parties to have ‘skin in the game’.
Making depositors whole at 100% over-and-above depositor insurance is pure folly. It merely validates the complacency and poor decision making that caused the mess in the first place. A 100% wipeout of depositors is even more unreasonable.
Seeking Alpha AND socializing risk will only lead to more devastating financial consequences down the road; accepting risk means mitigating, managing, and monitoring risk not ignoring it based on an absolute belief in a Fed Put.
Powell et al did warn that corps and households would experience pain. Now that those warnings are surfacing people want bail outs?? What got us into this mess, oh yes COVID?? Rising rates caused the tide to go out on many ventures. Did no one take heed of Powell’s warnings?? Or thought nothing would happen….? Does the collective market have the right data at their finger tips to get the jist of where things are headed??
Turn in next week for part two of SOAP.
Socialism Overtaking American Patriots.
Apparently, KPMG certified the annual reports of both SVB and Signature Bank, just weeks before both blew up.
The source on this is that Falun Gong bog roll, so consider it carefully. But if true – and according to Newsguard, it doesn’t repeatedly publish false content, but also doesn’t present it responsibly – I’m starting to get whiffs of the 2007 crisis, where risk management was buck-passed to the ratings agencies, and MBS products were slapped with investment-grade ratings when they shouldn’t have been.
Not identical, mind, since KPMG is an accountant, not a ratings shop like Moody’s, and these are bank runs, not mortgage backed securities. But enough of history is echoing to make me wonder if risk management isn’t being buck-passed to the accounting firms, like it was to the ratings firms. I wonder how many financial statements have been certified, when they should have had a qualified opinion (I think that’s the term), instead? And how many investors went, “If the big 4 certified it without qualifications, that’s good enough for me! Kind of a, “Well, if we’re wrong, it’s somebody else’s problem, and not our fault” sort of thing.
I guess we’ll wait and see, since there’s SFA the average person can do about it, except wait, watch and hope the big brains who run the banks and central banks know what they’re doing, or can jaw-bone markets back into quiescence.
You think there’s a chance of a cut, if things get worse between today and next week, or something goes sideways with CS?
These kinds of failures are expected and required in a free market. Biden’s holding the depositors harmless is affordable (SVB had plenty of assets, just no liquidity), effective, and exceeding morally hazardous – it’s a hard call. The fed might want to pause for a bit to let the market stop freaking out, but they should then continue to hike rates as needed to forestall a wage-price spiral. Note, that is to stop a spiral, not stop inflation: much of our current inflation is an inevitable effect of de-globalization. Get used to your dollar not going as far, in both senses of the word.
#8 Ole Doberman on 03.15.23 at 2:45 pm
Why does it feel like 2008 all over again. It started small then grew into a big wart.
********
With the digitalization of the news you can go back and relook at how things unfolded in 2008. Slowly at first, with pundits fighting small fires (all is well) and pushing back and then came the big fires.
Group Think in the markets?
“Today’s cockroach is Credit Suisse,”
…..
there is never just one….or 4.
who’s next?
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
Maybe we should put Avril Lavigne in charge of monetary policy. She seems to be able to handle surprises.
So I was wondering:
What is the downside to replacing some of my currently rising bonds with blue chip bank etf’s (the Big 6). Looking at long term investment, 20 years or more. Can a stock etf in the big 6 be considered as ‘safe’ as a floating preffered etf or corporate bonds?
Would appreciate your thoughts blog dogs.
Wednesday, March 15, 2023
Ho Wan Kwok, A/K/A “Miles Guo,” Arrested For Orchestrating Over $1 Billion Dollar Fraud Conspiracy
Over $630 Million of Alleged Fraud Proceeds Seized by U.S. Government
Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a twelve-count Indictment charging HO WAN KWOK, a/k/a “Miles Guo,” a/k/a “Miles Kwok,” a/k/a “Guo Wengui,” a/k/a “Brother Seven,” a/k/a “The Principal,” and KIN MING JE, a/k/a “William Je,” with various wire fraud, securities fraud, bank fraud, and money laundering charges. JE, who is KWOK’s financier, is also charged with obstruction of justice. The charges in the Indictment arise from an alleged sprawling and complex scheme by the defendants, and others, to solicit investments in various entities and programs through false statements and representations to hundreds of thousands of KWOK’s online followers. As alleged, KWOK and JE misappropriated hundreds of millions of dollars in fraudulently obtained funds during the course of their conspiracy. KWOK was arrested this morning in New York, New York, and will be presented this afternoon. JE is currently at large.
In addition, Mr. Williams announced that between September 2022 and March 2023, the U.S. Government seized approximately $634 million from 21 different bank accounts. The $634 million constitutes proceeds of KWOK’s alleged fraud, which the Government will seek to forfeit. Today, law enforcement also seized assets that were purchased with proceeds of KWOK’s alleged fraud, including a Lamborghini Aventador SVJ Roads.
U.S. Attorney Damian Williams said: “As alleged, Ho Wan Kwok, known to many as “Miles Guo,” led a complex conspiracy to defraud thousands of his online followers out of over $1 billion dollars. Kwok is charged with lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht.
As alleged, Kwok lied to his victims and promised them outsized returns if they invested…https://www.justice.gov/usao-sdny/pr/ho-wan-kwok-aka-miles-guo-arrested-orchestrating-over-1-billion-dollar-fraud-conspiracy
You can’t time the markets but you can surely wait for a sector crisis.
One is upon us.
The blood will soon flow down the streets.
Be ready to scoop it up for pennies on the dollar.
using high school energy to run mining !
German investigators take down crypto money laundering site
German investigators say they have taken down a major online money laundering operation, seizing the Germany-based server infrastructure of a platform that dealt in ill-gotten cryptocurrency
ByThe Associated Press
March 15, 2023, 10:35 AM
https://abcnews.go.com/Business/wireStory/german-investigators-crypto-money-laundering-site-97880159
An economy driven by free money actually can’t handle normalized rates and goes squirrely when rates rise. Centrals back off at the first sign of trouble. No soft landing. Jeeze who could have ever predicted this.
Hard landing incoming.
Today’s post pertains to today’s calls on the market, in an environment where massive events are churning within 24 hour frames. Events that haven’t been noticed for decades.
To be certain of the rate pause (we will completely ignore the rate cut positions for those are wishful thinking) is but based on recency bias. In reality two facts. Lots of jobs. Still high inflation.
If we are looking at elephants in the room. $620 Billion in unrealized losses stemming from increased rates. For which the powers that be have already created backdoor QE facilities as of this Sunday past. So much for free market.
It’s time to book losses. Until those losses aren’t realized one way or another there is no point buying into the market, unless ofcourse ya enjoy volatility. And those selling now are looking at public markets to shoulder over private equity losses. Shouldn’t touch anything with any length of pole.
The thesis that rate increases take 9-18 months to reflect into the market pricing is coming true. We are in month 12 of rate hikes. Atleast another 90 days before we can have any vision in these circumstances. That is IF/WHEN US Congress can come to terms with Debt Ceiling shitstorm.
Mr. Market can make as much noise it wants to. Much like it had been doing so since late Oct early Nov 2022. First it’s gotta clear up that indigestion before it can signal anything remotely meaningful.
Fed 1 Market O ‘Dirty Diapers
More cheap official currency to placate the special interests who caused the problem with their excessive borrowing causing inflation. Can you say Weimar world order? The terminology fits the situation perfectly.
What a difference a couple weeks and a bank failure can make! A few weeks ago, I heard that majority consensus was the FED would do a half-pointer, a minority saying a three-quarter would be necessary. Now even a half-pointer is zip.
#15
Trump did it with the help of Barney Frank.
The same guy who drafted the Dodd-Frank act which was supposed curtail this nonsense. But then Barney gets a job on the board of Signature and changes his tune. Move along, nothing to see. Never trust a politician.
“There are a ton of people in the country with mortgages getting bigger, not smaller, just as the economy goes wonky. Millions with variable-rate borrowings have passed their trigger point, forcing lenders to lengthen amortizations”.
“Today’s cockroach is Credit Suisse,” says analyst Ed Pennock, of the banking mess. “This is a huge failure by the regulators. Bad decisions by seemingly lots of people. ……He was failed by the government bank inspectors….” *****
Some days I wonder if anyone at Chicken Hawk Central reads this blog. In my dreams I imagine it might even be Pete Routledge as he flies from an ESG gathering to a climate change symposium. “Please Pete, I’m begging you”, I think. “Just stick to the knitting and take a deeper dive at what’s going on in your own backyard”.
That little flock you tend used to be more vigilant. Then they became ‘sales organizations’. Let that sink in.
Well, well, welll… what do we have here.
Contagion? …. nAh it is just Credit Suisse.
Market crash? ….what crash? only 500 points.
Gonna get seriously ugly ,after Biden’s lies to the people. He said losses will be covered by bank fees to FDIC. Don’t withdraw money folks..Everything is OK> FDIC big guy said NO!
So how do you pay? PRINT MORE MONEY!! ..ther goes inflation.
FDIC says no buyers for SVB….WHat? HSBC just said yes!!
Marc Cuban said a “bail out is needed.They sure do..and this is just the begining.
$31 Trilion and lies.
Bibilical clay feet….. the fiat currency…and the cookie crumbles.
This is just the tip of the iceberg.
I will give 10 years.
Ottawa Real Estate Market Update February 2023:
As expected, home prices were negative on a year to year basis. On a month to month basis, prices seem to be stabilizing.
Detached home prices lost 15.6% from a year ago. They were up about $54,000 on a month-to-month basis.
Townhome prices lost 17.2% compared to a year ago and lost about $16,000 on a month-to-month basis.
Condo prices lost 12.0% compared to a year ago and lost about $2,000 on a month-to-month basis.
For those interested in recent sold prices, Ottawa real estate sold prices are available via my site https://ottawarealestatesoldprices.ca.
Please note, you will need to register and sign in to access sold data.
Market Outlook:
The Ottawa real estate market has shown some price stability over the past two months. I will need to see an uptick in transactions and a few more months of steady prices to be more confident that prices have bottomed.
Mortgage rates should fall a bit (bullish) while the banking sector problems are negative with respect to the health of the overall ecenomy. I am taking a wait and see approach.
With a 40 year investing horizon, no debt and no real plan to ever stop working, all market slumps are welcome in the Sail Away household.
Action 1 during slumps is hold and evaluate
Action 2 is buy
Action never is sell
All is well
“ ECONOMICS
RBC expects ‘mild’ recession in middle of 2023”
BNN Bloomberg
#17 CEW9 on 03.15.23 at 3:18 pm
So I was wondering:
What is the downside to replacing some of my currently rising bonds with blue chip bank etf’s (the Big 6). Looking at long term investment, 20 years or more. Can a stock etf in the big 6 be considered as ‘safe’ as a floating preffered etf or corporate bonds?
Would appreciate your thoughts blog dogs.
/////////////
DO IT!
There’s a bunch of us up here at work trying to follow this mess at break times….but the best part of it all has to be Ed’s description of Credit Suisse.
Thanks Ed and Garth for making our day. We call it the way we see it up here too.
Recent turmoil has made for interesting markets. SPY up 1-2% yesterday down 1-2% today. and always seems to buy up into close. Must be a day trader’s dream.
Crapadian TSX had a bad day today though.
Dows trending down.
Likely a bailout looming or merger..
Hopefully no inside trading involved with the banksters.
#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
——————————————————-
Nonsense!
Plenty of regulations still on the books. They were ignored by the regulators because of the politically connected big Dem donors who ran the bank and made up its deposit base.
Lots of insider selling, they knew what was happening. Nothing will happen to the insiders, that’s what big left wing political donations get you.
There were buyers waiting but the Bidenistas wanted to Nationalize the deposits…. and start a trend. Goodbye free markets, the US will be like Canada soon.
RE :#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
Actually it was Bill Clinton when he got rid of Glass-Steagall in 1999!
The Glass-Steagall Act was repealed in 1999 amid long-standing concern that the limitations it imposed on the banking sector were unhealthy and that allowing banks to diversify would actually reduce risk.
Your right, you can’t fix stupid!
Very misleading or misinformed post today.
Credit Suisse – “its top shareholder (Saudi National Bank) bailed out”
Not true. They only said they will not increase their stake above 10% due to regulatory hurdles. At least it wasn’t true 45 minutes ago. ;)
Kilt
#30 Sail Away on 03.15.23 at 3:52 pm
Action never is sell
—
Sounds good. You seem to know the words to use that support what you are supposed to do.
That makes me curious as to how your policy of don’t-announce-sales-unless-they-make-you-look-good-in-steerage fits in. Millmech feel free to respond as well.
#18 jess on 03.15.23 at 3:20 pm
Here’s a great The New Yorker article on the guy. No surprise he’s in the Trump orbit/clown car.
https://www.newyorker.com/magazine/2022/10/24/how-a-tycoon-linked-to-chinese-intelligence-became-a-darling-of-trump-republicans
I greatly enjoy watching Tesla sidestep cumbersome regulations and bottlenecks.
1. Several states have laws against non-dealership auto sales. Tesla’s solution? Strike deals with the Natives and sell from reservation lands.
2. California offers $6M to Tesla Supercharging with condition to install payment interface. Tesla says keep your $6M and we’ll keep doing it our way.
3. Tesla battery production outstrips car production. To avoid overstock, they create Megapacks, which sell as fast as they’re produced.
Can’t wait for Q1 earnings
The Fed and cronies will have to do a quick Olympic Dive into the Regional banks per Bond situation before making informed rate decision on March 22 . To make the right decision alot of grunt work needs to be done…
#2 Bitcoin on 03.15.23 at 2:25 pm
I think I cracked why western democracies won’t ban bitcoin.
All the bribes and payoff to the politicians are done with it.
—
Both Silvergate and Signature bank were crushed because of regulatory attention having to do with their association with Crypto. That’s a pretty strong action from US regulators toward shunning cryptocurrencies.
The US political system has a very abundant suite of payola schemes that enable money to flow extremely freely into politics.
This set of schemes ensures that politicians are roughly 20 to 30% responsive to poorer constituents while being close to 70% responsive to wealthy constituents. (Yes, these numbers are supported by data).
It does appear that folks are terrified that another bank failure domino effect may occur, shades of 2008. Can hardly blame them. The only bit of silver lining I can see at the moment is that if mortgage rates do drop then those with VRM’s might get a bit of a break. I say might, since banks are quick to increase rates but not exactly pedal to the metal when it comes to decreasing them.
If we don’t follow the Fed will our dollar get stronger?
Garth, the US Fed really needs to get it’s dung together on enforcing post GFC liquidity in its banking sector.
I am floored at the Credit Suisse news. Compared to US banks they are the gold standard of liquidity.
Mr. Market has lost its mind. Illinformed. Irrational. They are not some hick US Regional bank.
If they falter, then all are vulnerable incl. CDN banks. Sorry, but that is what the LCR & NSFR numbers say.
———–
Negroni TRAVEL TIP
€15 outrageous until you watch the Spanish pour triple shots into 1 drink. Stirred not shaken lost on them and I couldn’t care less.
God Bless Madrid. 24C forecast tomorrow then back to more seasonable weather of 17-21. Tourists from EU cold countries sun tanning. Us Spanish & Italians with heavy jackets. A crazy world.
“Time to tap the Strategic Toblerone Reserve.”
@keubiko on twitter dot com.
I’ve said it before how this ends, big banks absorb the other banks and then the mantra of this wouldn’t happen with digital currency resounds.
Then digital currency replaces cash.
Every move you make they’ll be watching you.
#15
Thanks. I knew it had to be Trump’s fault.
What a great time for any younger investors.
I have not lost it on CS.
Credit Suisse meets the capital and liquidity requirements of systemically important banks. If necessary, the SNB will make liquidity available to CS.
https://www.20min.ch/story/nationalbank-wird-im-bedarfsfall-der-credit-suisse-beistehen-902412295540
They went on to say …
Due to the current turmoil in the US banking market, there are no indications of a direct risk of contagion for Swiss institutions.
————
If instead that does happen Garth, fasten the seat belts in Canada.
Can’t be that bad. They (top managers) all managed to sell their sell their stock options and collect bonuses before tanking. They should all be in handcuffs.
As historical precedent has shown, delaying the inevitable or reversing too soon only made the pain worse later.
Powell has referenced this history.
He may slow or stop Fed fund rate hikes, but watch if he continues money contraction (QT). Volcker did this in the early 80s when he couldn’t convince the FOMC to raise the Fed fund rate. It was a sleight of hand that amounted to the same thing.
Note that while Macklem paused on the overnight rate, the BoC is still continuing QT.
These recent events are just a side show with the exception of the impact on liquidity. The 6 stocks that I want to own are marching downwards to my price zone. The fools are still over-leveraged and liquidity is vanishing. Inflated real estate will still unwind, especially condos and their insolvent builders. You cannot unwind 10+ years of excess in 18 months and the broad consumer price index shows no signs of moderating other than oil.
From my perch….
Great view of Fraser River….and the local economy..
About 90% of the Tugboats are not engaged in moving anything….simply single tugs cruising up and down river…perhaps for maintenance reasons.
Yesterday….a tug pulled THE longest log boom I have ever seen…HUGE…..DOWN river. I was wondering why…given the mills are UP river…perhaps the boom was confiscated via some bailiff forfeiture.
Anyway….river traffic is quite dead.
10-4 ……over and out…
The various Grand Poobahs are submitting we ain’t seen anything yet…
……the SVB etc . crash is like a drowning victim that will take a lot of other banks etc. etc. down.
Apparently….the US’s F.D.I.C. total current reserves would barely cover SVB losses…implying many will be SOL if another banks tanks.
Enough chatter about interest rates. The real question in Canada is who has the guts to go all in when the aount of debts in the country have never been higher, banks are blowing up, the job losses are just starting and Putin & Uncle Sam are at each other’s throats. No one in their right mind buys at such a ludicrous time to risk money.
#41 Sail Away
Good S-T news.
Still say their master stroke will be 100% solar powered charging stations.
When EVs ubiquitous current electrical grids will not handle the load and with no one building any significant power stations to meet that future need.
Their stations then will be one of the few shows in town or the ONLY show in town.
I’m I the only one buying in this storm? I bought credit Swiss today at 1.95. It’s not going to go broke it’s designated to important to fail. If CS goes watch out… 2008 will look like a regular market correction. What I see, and again I’m stupid, is that the only thing missing right now is confidence and balls. I may be stupid but I have both confidence and balls.
Those thinking blood will be on the street next week are going to show up after it’s been cleaned up.
#55 Alois on 03.15.23 at 5:16 pm
From my perch….
Great view of Fraser River….and the local economy..
About 90% of the Tugboats are not engaged in moving anything….simply single tugs cruising up and down river…perhaps for maintenance reasons.
///////////////
Say hi to Bruno Gerussi and Relic.
Faron on 03.15.23 at 4:28 pm
As Mother Jones has reported, Guo also bombarded his fans with solicitations to invest in a slew of ventures. He promised that investors would profit, and he also claimed their investments would help “take down the CCP” by boosting an entity called the New Federal State of China that he and Bannon founded in 2020. That organization claims to be prepared to replace China’s government….”
https://www.motherjones.com/politics/2023/03/guo-wengui-indicted/
A prediction: No banker will harmed in the making of this catastrophe, just more bonuses and caviar.
Lenin is starting to look like a good role model.
#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
+++++++++++++++++++++++++
Really?
I’m betting you still believe that Trump told everyone to drink/snort/inject bleach too.
I’ve come to the conclusion that to Leftists, Trump has a lot in common with Climate Change.
There’s nothing that can’t be blamed on either, including cats sleeping with dogs.
#60 Penny Henny on 03.15.23 at 5:32 pm
Say hi to Bruno Gerussi and Relic.
==================
Sadly…both are deceased…
……I’ll try channelling them with my Ouija board
I think Bruno was one of THE last alpha males CBC allowed…nonwithstanding perhaps Don Cherry.
Take note: it was the Trump “leadership” that dropped the bank regulations that allowed this to happen.
Diamond Sports Group, the largest owner of regional sports networks, filed for Chapter 11 bankruptcy protection on Tuesday. …
the restructure industry should do well!
https://www.pbs.org/wgbh/frontline/documentary/age-of-easy-money/
Powell & CBs
Hoisted by his own petard.
“transitory inflation” Lower Rates will be here for a long time”
Soft landing is really going to be relative to what?
#17 CEW9 I have buy orders in on ZEB.TO at 33, 32 & 31
didnt get filled today…low was 33.01
, Guo’s luxury penthouse apartment on Manhattan’s Upper East Side caught fire, burning for two hours before firefighters were able to put out the blaze. The Federal Bureau of Investigation (FBI) is reportedly investigating the fire. The 15-room apartment is currently on the market for $32.5 million.
Charged With Fraud, Including $500M Crypto Scam
Guo, who is wanted by the Chinese government, filed an application for political asylum in the U.S. in 2017. That application remains pending.
https://www.coindesk.com/policy/2023/03/15/chinese-businessman-with-ties-to-steve-bannon-arrested-charged-with-fraud-including-500m-crypto-scam/
It’s different in Canada, our banks are strong and insulated from all that systemic dark losing debt international banking stuff.
Stay in stox, your house and bonds because interest rates are goin down. And then these will all go up.
The economy is fine, just a minor hiccup recently. In fact right now is a buy opportunity in all 3 asset classes above.
Don’t worry, the Fed has a printing press and can always drop interest rates like they have the last 40 years with absolutely no negative side effects.
Everything always keeps going up.
They have your back, nothing to see here.
Stay strong and stay invested.
DELETED
https://www.reuters.com/world/china/chinas-move-again-economic-outlook-brightens-2023-01-12/
This is the next shoe to drop for the CBs. I predicted in January 2023 that by the end of March, China will regain its legs. What will this do to inflation in the middle of 2023. You guess. Will prices of goods be going down or remaining stable? Suppliers will want to regain lost ground and they will. Inflation will reignite in small pockets at first by August, if rates remain or there is a pivot…. within the next year, we will need another Volcker. Guys like Ryan and Doug are too young to understand the dynamics of inflation.
Even the analysts and economists are too young to feel the energy of inflation. I felt it in mid 2021. It was not transitory. Guys like Powell were likely not really exposed to it in their youth so they had no real understanding only looking at their “models” created by quants too young to understand what feeds it. As a result it is not properly modeled. Buckle up folks.
#37 Brian on 03.15.23 at 4:14 pm
RE :#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
Actually it was Bill Clinton when he got rid of Glass-Steagall in 1999!
—–Bla bla bla—–
Your right, you can’t fix stupid!
=======================================
And Trump dumbed down the Dodd-Frank reforms enacted to prevent another 2008…
He’s your latest stupid of the stupid who still wants to run again. Clinton is long done…
Stupid indeed.
#37 Brian on 03.15.23 at 4:14 pm
RE :#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
Actually it was Bill Clinton when he got rid of Glass-Steagall in 1999!
The Glass-Steagall Act was repealed in 1999 amid long-standing concern that the limitations it imposed on the banking sector were unhealthy and that allowing banks to diversify would actually reduce risk.
Your right, you can’t fix stupid!
**********
RIP Preventative Maintenance and Risk Management.
“Today’s cockroach is Credit Suisse,” says analyst Ed Pennock, of the banking mess. “This is a huge failure by the regulators. In retrospect, it’s all too obvious as usual. Bad decisions by seemingly lots of people.”
I think I’ll add Ed to my “clueless” list. You can’t blame regulators for bad behavior by the bankers, any more so than you can blame cops for speeding. The moral failure was with the people, not the regulators. And this all can be traced back to the moral failure of the leaders.
Our leaders have been using artificially low interest rates and financial shenanigans for years even before 2008 to paper over their moral bankruptcy. The people merely followed their leaders.
Probably the day of inflection was that fateful day in 1971 when Nixon closed the gold window. No, not because gold is some magically currency, but because that was the day that it became acceptable or at least inevitable for the US government to effectively default on financial commitments to finance war. It’s been deficits and inflation ever since. (And war.)
Remember folks, if we tolerate immorality among our leaders, immorality among the people soon follows. Who are our leaders?
Buy all the things. Except maybe hold off on buying the banks for now.
And definitely go short morality, you can sell that all day long. Our leaders are entirely corrupt, and the people have followed. Where you can’t count on the coverup, you can count on the bailout. And you can take that to the bank (when it reopens).
#62
No money in jailing bankers.
Banks privatize profits and socialize losses.
Profit sharing of sorts amongst the insiders, fines are sometimes the cost of doing business.
Another banking coincidence! I’m a lot like Garth, he’s been right about housing but really wrong on the timing. I’m the same with banks.
Medical schools are lowering standards in the name of “equity” to boost minority acceptance (while abandoning quality of care)
Lance D. Johnson — Natural News March 14, 2023
America’s top medical schools — including Columbia, Harvard, the University of Chicago, Stanford, Mount Sinai, and the University of Pennsylvania — are all lowering their academic standards for admission in order to boost minority acceptance and graduation rates. The loosening of standards is being conducted in the name of “equity” “diversity” and “inclusion.”
Lowering medical school standards will have profound consequences in the years to come, especially in a medical environment that is already overrun by corruption and malpractice.
etc. etc.
========================
COMMENT:
My “diagnosis” is TPTB will ” inject” doses of political correctness to assist in the “controlled demolition” of society.
Lowering Medical School standards?
…. is a warning of future shock….create a crisis and provide a solution.
..old Commie trick of
PROBLEM>…REACTION ….>SOLUTION.
Thus:
Our future HELLth care providers will be AI .
Human health care providers will eventually become extinct.
frustration over Credit Suisse’s strategy ?
Apparently this bank was involved in multiple scandals over the past decade involving corporate espionage, alleged misconduct, sanctions busting, money laundering and tax evasion.In the past two years alone,
Credit Suisse has admitted to defrauding investors as part of the Mozambique “tuna bonds” loan scandal, resulting in a fine worth more than £350m; and been embroiled in the collapse of the lender Greensill Capital and the US hedge fund Archegos Capital in 2021. It also came under fire after the Guardian and other media outlets revealed the bank had been serving clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes over decades.
https://www.occrp.org/en/daily/16054-credit-suisse-responds-to-report-of-destroyed-client-documents
https://www.occrp.org/en/daily/16038-credit-suisse-asked-investors-to-destroy-oligarch-loan-documents
“Do you see one week without a scandal, a tax scandal, or a money laundering scandal where Switzerland is not mentioned?” asked Sebastian Geux, a Swiss historian who has studied his country’s banking sector for nearly four decades.The basic problem, specialists said, is insufficient regulatory enforcement.
James Henry, an economist and adviser to the Tax Justice Network, explained that the “basic penalty of choice” for banks operating in Switzerland is paying a fine. But “this is just a rounding error” that they pass off to their customers, or something they treat as “a cost of doing business.”When Credit Suisse was fined 2.6 billion by the U.S. Department of Justice over what it described as “a conspiracy to aid U.S. tax evaders” in 2014, the fine itself was tax deductible, Henry pointed out. Nobody went to jail, and nobody lost any licenses. “Some CEOs have to go to jail,” he said. “They have to do actual jail time for this to hit home.”Swiss law also makes journalistic reporting on financial crime difficult.
Article 47 of the Swiss Banking Law puts journalists in the country at risk of being prosecuted for merely possessing, much less publishing, private banking data. For that reason, Tamedia, a Swiss newspaper that was approached as a partner, chose not to participate in the Suisse Secrets investigation.
https://www.occrp.org/en/suisse-secrets/
#36 AM in MN
I’ll never get all of this left vs right tribal nonsense. Sadly a fair number of politicians from any party in any country are not in it for Dog and Country.
Those on the right that complain about Hunter Biden are likely correct.
Those on the left that complain about Trump and family enriching themselves are likely correct.
Neither seem to be able to figure out that both sides are correct.
Only that the other side is blind. Does that make it double blind?
What are the odds that one year from now; the Ukraine war, inflation, the economy, the environment, or all of them, creates an emergency that we will be hard pressed to deal with?
I think it is almost a certainty.
#4 Apocalypse 2023 on 03.15.23 at 2:25 pm
“Russia shooting down US drones.”
I’ll believe that when I see the video. Remember, this claim is coming from the same people who are the only ones left on the planet who don’t seem to know who blew up Nord Stream.
I just finished liquidating my TFSA & all U.S. holdings. Plus a few driplets of paper equities. Into money market fund at 4.5%. Kept my Canadian Gartho type portfolio intact. I’m as good as it gets as far as advice if you want to kill fish. As far as a killing on the market through sell/buy timing? Not so much. This move was on a gut feeling. Bring the money home to mama, small town B.C. R/E, a few Maples in the safety deposit box, a little cash. All that soothes my restless soul. I know, I know, don’t try to time the market. But couldn’t help myself. A tide taken on the high slack gives one a shot at fame & fortune. Missed, forever mired in mud & misery. Get down the river to the sea. Away from the flies & bugs & rats & cockroaches. There’ll come another high tide to go upriver.
So much for “don’t fight the FED”. Now, it’s “the FED don’t fight the market”. A week ago it was a different story. Could the story be different again in a week?
#63 Senator Bluto on 03.15.23 at 5:47 pm
#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
+++++++++++++++++++++++++
Really?
I’m betting you still believe that Trump told everyone to drink/snort/inject bleach too.
I’ve come to the conclusion that to Leftists, Trump has a lot in common with Climate Change.
There’s nothing that can’t be blamed on either, including cats sleeping with dogs.
————————————-
It’s a form of scapegoating. The Catholic Church long recognized the need for a scapegoat in human psychology which is where we got the western idea of Satan. But since Satan died with God, we need a new scapegoat. Since Trump attempted to point out some of the accepted corruption, he became the scapegoat.
Maybe Trump did change some regulations, although I am not sure there is a direct connection or line to be drawn from those changes to today’s problems, which have deep, long developed roots. But either way morality exists without the law. Things are not good because they are legal, and they are not always bad because they are illegal. Where possible, things are made legal because they are good. The law is for the one-sigma’s who would take too long to figure out what’s right for themselves, and possibly hurt a lot of other people in the process.
Remember, moral people don’t need laws, and immoral people don’t follow laws. All a law does is keep the honest people honest. And when the lawmakers themselves are immoral, you get kind of what we have today. We corrupt even the value of money itself as a regular course of business, as if we have some sort of right to do that, and then we wonder why the banks fail.
Why we should care about Credit Suisses problems
https://www.axios.com/2023/03/15/why-we-should-care-about-credit-suisses-problems
#63 Senator Bluto on 03.15.23 at 5:47 pm
#15 kommykim on 03.15.23 at 3:15 pm
Trump loosened banking regulations in 2018 which helped to bring this about. Can’t fix stupid.
+++++++++++++++++++++++++
Really?
I’m betting you still believe that Trump told everyone to drink/snort/inject bleach too.
=======================================
Well, he did suggest that:
“I see the disinfectant that knocks it out in a minute, one minute. And is there a way we can do something like that by injection inside or almost a cleaning? As you see, it gets in the lungs, it does a tremendous number on the lungs, so it would be interesting to check that.”
Trump supporters were so dumb that the FDA had to issue a statement not to drink or inject “disinfectant”…
Then there was the Florida company “Genesis II Church of Health and Healing” that marketed such a product to gullible Trumpers:
https://www.justice.gov/usao-sdfl/pr/florida-family-indicted-selling-toxic-bleach-fake-miracle-cure-covid-19-and-other
“GTFO, beatch” …
Avril Lavigne displaying her backwoods, hicksville charm in all of its glory, for all the world to see. Such a sweet girl. Her and Chad were meant for each other.
I think I’m going to start watching he Junos from now on… I wants to get ma hands on some of them there trophies on display.
https://www.fsb.org/2022/11/2022-list-of-global-systemically-important-banks-g-sibs/
RBC and TD are part of it. Crédit Suisse and Deutsche Bank also. So Crédit Suisse should survive in the coming weeks and months. I hope…
The domino’s are falling. The Fed is in a vice – between inflation and the domino effect.
On the bright side some great bargains are beginning to show up.
To properly develop a bird dog, it’s absolutely critical that it get lots and lots of freedom in the early years to fully develop the bird drive, learn to use its nose, and learn the habits of the game without being yarked at. The best trainers are mostly silent, and let the dogs get into and out of trouble on their own.
Early training and the first few hunting seasons are largely encouraging instinct and passion. It’s only after the passion is at fever pitch and can never be removed that you add the steering, remote control and brakes.
That’s where we are with the 3yo pointer. Commands are few and far between, but since he’s never been allowed to ignore a command, he doesn’t even realize that such a thing is possible. This makes training much much easier than with a dog who’s learned selective hearing. The next six months will be spent steadying on point, staying steady to flush and shot, and following hand signals on retrieve. The enthusiasm is a sight to see.
So good.
Bank assets are their loans, reserves and marketable securities. Liabilities are equity and deposits. Basically SVP’s securities went underwater, they couldn’t cover with excess reserves, so deposits evaporated. Voila, insolvency.
Biden says he’ll cover any deposits, first with FDIC then with helicopter money. Shareholders equity (should) end up virtually wiped out.
That leaves a loan book, which has tangible value to other banks. Whatever the auction yields should go back to the government, which covered the forlorn depositors. That’s how bank failures work, roughly 20 a year. This one’s just bigger than most.
Credit Suisse is different. They botched a transition to becoming a wealth manager, trying to emulate many of their European peers, partly because they got stalled unloading a rancid loan book. Probably more layers to this one, it is Europe after all, and greater prospect of minor contagion due to interconnectedness in the EU.
Systemic contagion? No, but some puckered-up traders and central bankers for sure. Fed should still bump rates 25 bps just to send a message and stay on course. Inflation is still the bogeyman.
Member when you were coming of age … and you stumbled across those girly magazines with all those incredulous stories of lustful experiences and adventures you could only dream of. Specially the “Forum ….”I never thought this would happen to me…”
But, as time went by, you soon realized that they all seemed very repetitive… as if they were written by the same person. Maybe even the editor …
Just sayin ….. hmmmm. Makes you wonder.
#66 jess on 03.15.23 at 5:48 pm
Diamond Sports Group, the largest owner of regional sports networks, filed for Chapter 11 bankruptcy protection on Tuesday.
===============================
Thanks….
This issue may grow many MANY legs….
Pro Sports teams rely VERY heavily on media revenue.
https://www.reuters.com/markets/deals/broadcaster-diamond-sports-group-files-bankruptcy-protection-2023-03-15/
There is no way that pro- athletes excessive/exorbitant salaries would could be sustained without TV etc. (aka media)revenue.
This could start a domino effect that could result in major contraction of Pro Athletes salaries.
I don’t begrudge pro -athletes their contracts per se…but in many ways I thought of them as massive ponzi -schemes…..which implies judgement day would ultimately unfold…. eventually and inevitably… as it would hit a wall of fiscal reality.
As an aside..many of the original NFL teams owners were bookies and gamblers. Hmmmm.
Stay tuned !!!!
Our Forum Host permits me two posts daily.
Unlike some of the Preferred shares these are not cumulative but are callable.
———-
How bad is Life in Kanada? We have forced scaracity/unavilability due to Kommunist price controls over the basic items.
Yes. Citizens will travel to USA — crossing the barbed wire and past the guard dogs — and they return here with what?? Eggs, Milk. Cigarettes, Alcohol, Cars, even. The sweet freedom of fully stocked and inexpensive items lures. Expensive Luxuries here.
Controlled by the food/banking/import cartels.
Crossing back into Kanada is a risky proposition. You will be grilled by the Commissar, car and person stripped. Comrade are you over quota of goods? Have you paid Your Fair Share in Taxes?
If your answers do not not please, you will be flagged into the system as The Underclass, no longer allowed easy travel to the USA and freedom.
Actually, Yellen, Bernake,and Greenspan, should be charged with Crimes Against the Economy and Poloz and Carney as accomplices .
#92 To properly develop a bird dog..
———
Completely off topic here (perhaps as usual), but received the bad news that our 4.5 year old Chocolate Lab has osteoarthritis in one of his elbows owing to elbow dyspalsia. Other elbow is sort of okay, but will likely go the same way. We knew there was a problem with limping the last 18 months, off-and-on, but finally the X-rays confirmed after mis-diagnosis.
No surgery is useful (we were told), but there are some things we can do to manage the situation…. still walking okay, but with a head-bobbing limp at times. His bird-dogging days are over I’m afraid, but he was super-important in keeping everyone sane in this household when COVID hit with all the lockdowns and social restrictions… we will do as we need to going forward…
#82 conan
Throw in Pandemic part deux and we gotz a Carnevil House of Horrors lol
Apparently realtors are telling people to buy and get into the market right now because landing rules are changing soon and they won’t be able to buy. Go figure
#10 DON on 03.15.23 at 2:54 pm
Did no one take heed of Powell’s warnings??
————–
What an asinine comment! I wasn’t sure of the spelling so I looked it up. When I saw your picture, I knew I had it right.
No, Don …. I imagine lots of Canadians are probably still reeling from this ….
“and on November 26, 2020, the governor of the Bank of Canada delivered the words that seemed to light the touchpaper for further borrowing.
Speaking to the House of Commons standing committee on finance, Tiff Macklem addressed the issue of rock-bottom interest rates, which had spurred a homebuying boom across the country, head on. “We want to be very clear,” he said. “Canadians can be confident that borrowing costs are going to remain very low for a very long time.”
Macklem described inflation – sitting the previous month at 0.7% – as “unusually weak,” indicating that the Bank expected it to increase gradually, but remain at less than 2%, entering into 2023.”
#79 Alois on 03.15.23 at 6:51 pm
Natural News is a fake news site:
https://en.m.wikipedia.org/wiki/Natural_News
Don’t worry about medical schools: unlike online posters, they do teach their student to question their sources of knowledge
Fake news sites spread on online forums and comment section by those who don’t questions their sources, enough because it fits their political mindset.
Our 3.5% 7 year GICs, maturity dates 2026-March in RRSPs, RRIFs, TFSAs, RESPs, non-registered $900,000 all fully deposit insured generating $35,000 compound interest looks good to us. After 26 years of saving, putting in fully deposited insured GICs. We have a gross income of $70,000 a year so having 6 months of yearly back up income works for us.
So Monday was SVB and Signature bailed out by the nanny state and today it’s Credit Suisse at $54b. If anyone asks, we call it capitalism. Don’t forget now.
#102 Joseph R on 03.15.23 at 9:18 pm
#79 Alois on 03.15.23 at 6:51 pm
Natural News is a fake news site:
=============================
Diagnosing “fake news” ?!?
I don’t tend to kneejerk “judge” per se…..I opt to absorb info and make ” critical thinking” deductions.
That stated….I may suggest one research Rockefeller Medicine and moreso “Flexner Report”….
Maybe report back….
I’m just a bad old perma bear.
TSX 0.3% down YTD,
0.03% down 6 mos.
9.73% down 12 mos.
+/- 1500 points above the 12 mo low.
+/- 2800 points below the 12 mo high
What’s the big hairy deal?
Buy 50/50 of dividend equities & Gic’s (this year) exclusively, sheeple!
Or, tangible things that hold value as replacement values go up.
Or both, in balance, with paid for RE on the side.
Bonds? Well who’s going to collect the debt when it is due?
Your Cousin Vinny?
I know no one wants to hear from me.
I am the one who prognosticated all of this years ago and the advice was to buy when blood was running in the streets. Hopefully you heeded my words and have been accumulating US dollars.
So now the million dollar question is how you go about deploying your cash [don’t forget to keep a cash reserve].
I say you start now and begin allocating 10% per month over the next 10 months.
What to purchase?
That I will leave to Mr. Lowenza on Saturday.
I don’t mind your criticisms, take all the shots you want, it’s open season. Just reread my posts and the truth will set you free.
@#91 BS
“The domino’s are falling. The Fed is in a vice – between inflation and the domino effect.
On the bright side some great bargains are beginning to show up.”
+++
I kinda wondered a few years back where this was all going.
Japan in the 1990’s comes to mind.
Lower and lower interest rates.
People piling in to credit card debt, line of credit debt, mortgage debt….and the rates kept dropping.
Insanity.
Now?
Rates bump up to deal with inflation and the economy fills its own diaper.
Inflation vs rate rises.
With a grotesquely indebted, voting public, wanting relief.
Pandering politicians and the sheeple that expect more more more.
Eventually…..
I guess the people with no debt….will do better than most.
:)
Did Credit Suisse accept the “it’s not a bailout fund proceeds” from the SNB, in the same room where Jeffrey Epstein did not hang himself ?
Forgot to mention Principal Trust the other day, as well as National Trust, where I worked from 82-84. They had a funds mismatch and instead of going under we got taken out by Vic+Grey Trust.
DELETED
OLDERDRAFTER
#86 NONPLUSED
RE:SCAPEGOAT
You hit the nail right on the head!!! I have followed this blog for years, always meaning to comment, and when I read your comment, it had to respond.
Congrats, what you stated about using scapegoats is one of the most cohesive and well stated comments I have ever read just about anywhere. Thank you.
2 Realtors have been charged with multiple counts of mortgage fraud:
https://saskatoonpolice.ca/news/2023129
@ #84 fishman on 03.15.23 at 7:02 pm
“This move was on a gut feeling. Bring the money home to mama, small town B.C. R/E, a few Maples in the safety deposit box, a little cash. All that soothes my restless soul. I know, I know, don’t try to time the market. But couldn’t help myself. A tide taken on the high slack gives one a shot at fame & fortune. Missed, forever mired in mud & misery. Get down the river to the sea. Away from the flies & bugs & rats & cockroaches. There’ll come another high tide to go upriver.” +++
https://www.youtube.com/watch?v=xFpGbCtrzy0
It’s all just a ‘ruse’ kiddo. Just grab hold of that bit of driftwood coming at you. After all, “tomorrow is another day”, …. These words, Scarlett’s personal motto, conclude Gone with the Wind. It’s always worked for the Jaguar too….
#103 Terry
Yeah Terry no one gives a…….
What’s with you people, all you do is brag on this blog. Does this help anyone in this period of time. NO. Go work for these banks, seems you have the skills.
I’m smarter than everyone else, eh?
Just like when the BoE bailed out British pension funds for their high stakes gambling, any upcoming bank bailout (Credit Suisse), will unlike 2009 be medium term inflationary for the country that does it as their currency floods the market. It socializes the losses, I’m neutral on what the US with SVB.
The Trudeau-Freeland response: Raise taxes. Sure, great time to play silly buggers with the balance sheet.
https://www.bnnbloomberg.ca/if-ottawa-wants-to-tighten-its-purse-spending-rules-and-more-taxes-could-help-experts-1.1895495
The “bank run”, what a panic, and I mean that in the funny way. Wells Fargo was an internal fraud issue. SVB was an internal stupid issue. Credit Suisse was an internal idiot issue. All knee jerk – get a grip issues. This is a brilliant opportunity to start snacking on what the margin calls are puking up. If not….. me rich…. You dumb. The above are tempest in a teapot issues.
Armstrong and others, have been talking about this months and months ago. In regards to Japan. Totally different market in every aspect from average age, cost of real estate and trade.
Keep cranking up those rates higher and higher – we subsidized home moaners for 20 years with cheap rates Uppa Uppa to the moon. Ka-ching!!!
#101 The Groovy Guru on 03.15.23 at 9:15 pm
#10 DON on 03.15.23 at 2:54 pm
Did no one take heed of Powell’s warnings??
————–
What an asinine comment! I wasn’t sure of the spelling so I looked it up. When I saw your picture, I knew I had it right.
No, Don …. I imagine lots of Canadians are probably still reeling from this ….
“and on November 26, 2020, the governor of the Bank of Canada delivered the words that seemed to light the touchpaper for further borrowing.
Speaking to the House of Commons standing committee on finance, Tiff Macklem addressed the issue of rock-bottom interest rates, which had spurred a homebuying boom across the country, head on. “We want to be very clear,” he said. “Canadians can be confident that borrowing costs are going to remain very low for a very long time.”
Macklem described inflation – sitting the previous month at 0.7% – as “unusually weak,” indicating that the Bank expected it to increase gradually, but remain at less than 2%, entering into 2023.”
*********
I will put you down for a hard NO…I didn’t heed J Powell’s warning.
Mortgages are what 25 – 30+ years. Did Tiff M tell you that rates would be low forever?? Buying at peak price?
Hopefully your response was sarcastic in nature, otherwise you are competing for the Greater Fool Award.
So…are you extremely stupid or just foolish?
I agree with Ed. Powell should have increased .50 last time and .25 this time. Now he’s forced to raise .25 but what Ed says here: “He’s (Powell) got a front row seat to watch the cockroaches show up.” Powell bought that front seat a year and a half a go or more when he watched core inflation pop to 7% and held fast at zero.
(thank you, flaky SVB execs) – Garth
Did you hear De Santis’s cut concerning SVB? “In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans,'” he wrote. “I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.” – Desantis
“I’m not saying, but I’m saying”. It’s so tone deaf, I don’t know where to begin with that. Let’s try SVB is headquartered in California where the majority of the people there are not white, with some of the best public and post secondary education in the world? Even so, SVB didn’t come close to representing the diversity of California.
I hear this theme a great deal from Republicans these days. “We should be hiring people most qualified for the job”. Translated, they need to be white, straight, male, too smart to serve the military and vote Republican. Do we need to spell out what that means? It goes right to the heart of the woke movement which was born out of blacks trying to end discrimination in the workplace being systematically passed up for jobs they qualify for. 1 black was too much for DeSantis, apparently:
https://en.wikipedia.org/wiki/Woke
Desantis thinks 12 white Republican males in a room is going to prevent SVB’s greed show, no. No one was complaining when SVB’s shares hit $700 15 months ago. SVB’s portfolio wasn’t diverse, they sunk their money into startups that went to the moon and crash landed and held their cards too long, end of story.
I do find myself somewhat triggered by Desantis, not so much by his racist tropes, that’s commonplace. Still. But to follow it up on what he said on Monday concerning Ukraine:
https://www.cbsnews.com/news/ron-desantis-american-support-for-ukraine-war-russia-not-a-vital-national-interest/
“While the U.S. has many vital national interests — securing our borders, addressing the crisis of readiness within our military, achieving energy security and independence, and checking the economic, cultural, and military power of the Chinese Community Party — becoming further entangled in a territorial dispute between Ukraine and Russia is not one of them,” DeSantis said in a statement to Fox News host Tucker Carlson.
The U.S. did $1.1 trillion in trade with Europe in 2021. 64% of foreign investment into U.S. markets comes from Europe. There are trillions of U.S. dollars and decades invested in Europe, not to mention that the U.S. became a superpower through security and trade. Globalization, love it or hate it, world trade wouldn’t exist as it does today without U.S. security. How soon we forget history (if we ever learned it) and how the world works.
https://en.wikipedia.org/wiki/Budapest_Memorandum
When I hear Desantis speak, I expect to hear stupid things come from his mouth because that’s what he does, says stupid things. Desantis is, how shall we put it, high on someone else’s supply because he’s too stupid to come up with his own. Desantis shouldn’t be a governor, never mind mind lead the largest nation on earth. This man fills a chair. He’s as creative as a fence post. I wouldn’t trust him with a haircut with clippers. Dumb as.
So basically no-one knows what the short or long term will be, so there is no sense listening to any financial advice. Got it. The only two techniques to follow right now is to have a lot of eggs in a lot of different baskets and be glad that Spring is here again and that each day is a blessing for each of us. No sense in panicking over matters you have no control over.
Day three of the kitchen reno and I am already sorry that I started it.
#84 fishman on 03.15.23 at 7:02 pm
Get down the river to the sea.
__________________________________
Meh, even though my small abode is heavily insulated, the not very distant roar of surf delivered by howling wind, made it difficult to sleep right through this night.
Figuratively and actually!
@#1
If they do, that will be the final nail in the economic coffin.
I pray that CBs have the stones to push through with higher rates.
And I don´t buy Mr. Pennocks comment: ¨ “Powell should have gone 50 bps last time. If he does it now, he will deep six the market.¨ Boo, hoo……..
If there´s one economic sector that threatens and whines after endless, soporific exaggerated swagger, it´s finance and investment. It has more wherewithal, creativity and ability to survive than almost any other. It´s high time to permanently modify investment parameters and RE with higher rates.
Go Jerome.
@#122 Jane 24
“Day three of the kitchen reno and I am already sorry that I started it.”
++++
Did you hire Mr O’Reilly?
https://www.youtube.com/watch?v=aaDjSiuKO-o
@#83 NonPlus = Minus
You can’t handle the proof.
https://www.reuters.com/world/pentagon-releases-video-black-sea-drone-incident-2023-03-16/
Seems the Rooskis intercepted the US Done flying over international airspace in the Black Sea.
They tried various tactics to bring it down ( dumping fuel on it was one) before intentionally colliding with its propeller.
Just another escalation by an increasingly desperate Russian dictator.
Has China’s dictator Xi visited Moscow and embraced Putin this week?
Are they discussing Taiwan?
Only US spies know for certain.
:)
How do our Rulers get away with it?
Easy. We keep believing their word.
They own all the “news” outlets via handful of big corps. (The local, community newspaper is dead). Groupthink is here.
In 1914 our Rulers told us it was “The war to end all wars”. That, if tens of millions of us would just fight and perish then, then we would have World Peace. Mmmkay…
How’s the “Middle East Peace Process” working out? It’s been dangled over our heads for SEVEN decades now. Fool me once.
In 2008 we were told that harsh and immediate new laws would protects us from a Banking Crisis.
In March 2020 we were told it was only Two Weeks. To give up all out rights and close business. Then, THEN we would enjoy World Health. The World Health Organization told us so!! Oh no there was much much more planned.
And the Pronoun Backlash begins….
https://twitter.com/RitaPanahi/status/1635909851980369920
A self described ” good friend of the Trudeau family”, a bureaucrat with zero history of investigation, and a self described ” I feel like I’m at home” in a speech to Chairman Xi, is now Mr Trudeaus choice as ‘ special rapporteur’.
I have scanned dozens of media outlets and web site comment sections today, I can’t find a single voice supporting this idea of ‘independant’. I really don’t agree that ex GG David Johnson is the right choice or the fair choice. Especially , after sitting on the board of The Trudeau Foundation while appointing a questionable WE player now disgraced to wrangle questionable donations?
When did Liberals become the party of Trudeau and against the interest of Canada?
The blog stated that there would be no contagion of banks from Silicon Valley Bank, the blog also stated that Credit Suisse would have no effect on financial markets.
The biggest expansion of Canadian banks has been into regional US banks and more contagion can make it here.
Will Canadian banks take a hit to shore up the southern exposure is yet to be seen and how will that effect lending to consumers here, higher rates or more scrutiny on loan applications possible, not a true liquidity issue but more prudent lending.
What happens to the US banks who are wobbling a bit and their real estate lending might also get tighter standards to protect the system as well.
Lots of unintended consequences from one little bank collapsing.
Looks like another once in a lifetime financial collapse may happen again, who is breeding all these black swans?
Kommy Kim:
Your response to my statement about the Trump Bleach Hoax is to post and unrelated story. I’m not sure if you’re aware, but that is a classic signal of cognitive dissonance.
Here’s a list of 20 Hoaxes that the Leftist media has been circulating. Please note that all of these have been proven false once the “editing” and “context adjustments” made by the media have been removed. Anyone who wants to take the time to view the original source documents/videos and not rely on someone else’s interpretation will be more than a little shocked by the media manipulation.
https://twitter.com/OwenGregorian/status/1633653987281973248
A class action lawsuit has been launched against the Freedom Convoy participants and their supporters.
I wonder if a class action lawsuit should be launched by the Freedom Convoy and their supporters against the anti-Freedom lawyers for Human Rights violations?
This anti-Freedom lawsuit is clearly a political tool intended to intimidate, silence and oppress. Nothing more. Canadians want this whole sad story to go away, but some very powerful, very entitled people want to keep stoking the fires of hatred and exploit it to send a message.
Maybe these evil, wicked, hateful people should get a message of their own and end up under the microscope of the Human Rights Commission??
#121 Diamond Dog on 03.16.23 at 1:39 am
Did you hear De Santis’s cut concerning SVB? “In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans,’” he wrote. “I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.” – Desantis
—————
False
DeSantis did not say, or write, that.
But you just misattributed it to cast shade. Who’s the baddie?
#122 jane24 on 03.16.23 at 2:49 am
So basically no-one knows what the short or long term will be, so there is no sense listening to any financial advice. Got it. The only two techniques to follow right now is to have a lot of eggs in a lot of different baskets and be glad that Spring is here again and that each day is a blessing for each of us. No sense in panicking over matters you have no control over.
Day three of the kitchen reno and I am already sorry that I started it.
————
Pretty well sums it up with respect to investments. So why do you even bother coming here?
As for renovations… they are just the opposite. You do hold the wild card here since I presume you are the customer. Also, for the most part, you get what you pay for, and less.
From Lyn Alden:
US Banks have approx. $ 17.6 Trillion in deposits
of which $3.1 Trillion is backed by cash
of which less than $100 Billion($ .1 Trillion) is backed by physical cash.
=============================
Ouch….
The recent happenings should not come as a surprise to anyone in the retail/passive consumer investment community.
These things should be expected and anticipated.
That’s the reason for diversification.
The bank employees and directors bend rules and take risks? Ohhhhhhh….REALLLLLY?
Duh.
Don’t put all your eggs in one basket. (I made that up.)
Good time to buy banks, though.
They have short memories, and once the dust settles, they will be up to their shady risky shenanigans again, and their share values will soar.
Happened before.
It’ll happen again.
The wheels on the bus go ’round and ’round.
From Gabor Gurbacs:
There is more than $22 Trillion in US banking system.
The FDIC has $124.5 Billion on its balance sheet and $100 Billion line of credit from the US Treasury
FDIC assets cover only 1.26% of deposits
About the size of SVB…..just ONE bank.
Let that sink in.
========================
Again….
……OUCH !!!
Watching Warren grill Yellen on SVB
Stress tests rules weakened – why?
Stress tests dont focus on liquidity – why?
Changes are a comin’
I guess I can forget everything I learned in biology class.
https://cancer.ca/en/cancer-information/find-cancer-early/screening-in-lgbtq-communities/as-a-trans-woman-do-i-need-to-get-screened-for-cervical-cancer?utm_source=substack&utm_medium=email
…and so: following SVB, the Bond Maths has come for Signature Bank, Credit Suisse – and now First Republic. And now, more can be expected now that the ECB has raised rates 50bp and the USD falls in response.
Central banks can either 1) beat inflation by raising rates, saving the currency and punishing asset markets (real estate, stocks, bonds) or 2) bail out governments by inflating away the debt.
History has shown that their clear bias is towards #2.
However…even the Central Banks cannot defeat Bond Maths.
Please expect inflation to kill the economy while Bond Maths punishes the asset markets.
That is the out-of-consensus view: Bear Market Stagflation.
TGIG
#133 Sail Away on 03.16.23 at 9:59 am
CBS ran it, NBC, CNN, NY Post, yahoo, vanity fair, business insider, try FOX or whatever they are these days:
https://www.foxnews.com/media/lindsey-graham-rebukes-ron-desantis-ukraine-stance-vitally-important-us-interests
He said it, dude. He said it because he’s dumb as. I doubt that I could trust him to shop with a list or drive a car. I’d compare him to a nob or a tool, but they’re useful. :/
#141 Diamond Dog on 03.16.23 at 4:23 pm
#133 Sail Away on 03.16.23 at 9:59 am
CBS ran it, NBC, CNN, NY Post, yahoo, vanity fair, business insider, try FOX or whatever they are these days:
https://www.foxnews.com/media/lindsey-graham-rebukes-ron-desantis-ukraine-stance-vitally-important-us-interests
He said it, dude. He said it because he’s dumb as. I doubt that I could trust him to shop with a list or drive a car. I’d compare him to a nob or a tool, but they’re useful. :/
——–
???
That’s completely irrelevant to my comment #133
Peter Schiff was right, except for his views on bitcoin. Max Keiser is a dude
Thanks for the thoughts you have provided here. Additionally, I believe there are numerous factors which really keep your auto insurance premium all the way down. One is, to think about buying cars and trucks that are inside the good list of car insurance companies. Cars which can be expensive are usually more at risk of being stolen. Aside from that insurance coverage is also using the value of your truck, so the more costly it is, then higher the particular premium you spend.
The regulations rolled back (with bipartisan support) in 2018 did not make any difference to SVB, they would have passed the stress test if they were subject to it.
You have to be pretty dumb not to know that, and not to realize SVB, like all other banks in both Canada and the USA are heavily regulated.
The managers of SVB were atrocious and supervisors who were supposedly watching over them did not do their job.
SVB is one bank in thousands, so if the rollback was the issue you might ask why so few problems have occurred despite the rapid wiping out of value in the fixed income portfolios that banks were REQUIRED to hold?
But to the Trump deranged facts don’t matter.
I can hardly wait to hear them squeal in delight as the NY AG arrests Trump on a misdemeanor campaign finance charge that everyone else pays a mere fine for.
Let’s see all the police state supporters out themselves.
“But Trump is an authoritarian!”
Funny that it is Trump’s opponents who go to extremes to jail political opponents.
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