Dangerous Yield: Canadian Banks

Comments (27)

  1. REALLY? says:

    do you gus even have aclue, or is this written this way on purpose based on an agenda? Anyone that has ever peeked at the canadian mortgage industry knows that all Canadian mortgages are backed and secured by the Canadian government, so in reality the banks are covered and are exposed to zero mortgage risk ZERO!


    Adam M. Reply:

    This is not entirely true. Only a portion on Canadian bank’s mortgages are insured by the government. Toronto-Dominion Bank, for example, had about 68% of their residential mortgages insured in Q1 2015, and this level of insurance is high relative to its five major competitors.

    In TD’s case, the 32% of their mortgage portfolio that is uninsured has a LTV ratio of about 70%, meaning that theoretically if a 30% drop in housing prices occurred (not entirely unreasonable given some analysts suspect the Canadian housing market is 30-50% overvalued), TD would be in a position where it would need to write down some of its loans.

    You also need to remember that a downturn in housing also means less new loans issued, lower net interest margins from potential defaults, a slowing property construction sector, and potential job losses which influence other areas of the banks retail operations


  2. Barry eastwood says:

    Right on Really, the more I read on this reinforces my initial reaction that almost every article is written with an agenda!


  3. Phil says:

    Wow could you be any more off then this article is saying. Do you know anything about the Canadian banking system? If this is the kind of reporting you normally do then maybe you should look into a new job. Really? A hidden agenda is for sure the only reason you would put out such garbage.


  4. Don Baron says:

    The Canadian banking system is proven to be the best in the world, have you forgotten the Fanny May fiasco a few short years ago! The Canadian dollar is being unfairly pounded again by world traders believing that the US dollar is safe which couldn’t be farther from the truth. Have you noticed the out of control US debt lately???!!!!


    Alex Reply:

    Is this a joke? Unfairly pounded? US debt? You do know that Canadian debt to income figures are over 60% higher than the US right? Nothing like the pot calling the kettle black..


  5. Chris Rivers says:

    Missing one key point unlike US Banks which invest extensively in derivatives markets. Cdn banks do not invest in as heavily and thus are less exposed
    Another key point Cdn employment is not tied to oil industry like US
    You make no mention of cdn employment rates
    Seems like faulty analysis. Do you have positions in these investments


  6. Tom Murphy says:


    The Canadian banking system is the safest in the world and is usually punished unfairly by events in the US. You would do yourself a favor by educating yourself about the Canadian banking system and the sensible regulation in Canada to protect all concerned. You creditability has taken a serious hit with me and I’ll be sure to view future articles with a more jaundiced view.


  7. Danny K says:

    Your reporting on this matter of Canadian Banks is quite scary. It all seems tied to the ridiculous report by (the formerly respected) Deutsche Bank about a 63% (!!!!!) overvaluation of real estate in this country. The ONLY real estate market in the country that is tied to oil prices is Calgary. Yes it will suffer in the short term, but to call the entire country’s market overvalued to this extent is irresponsible and your analysis of Cdn Banks only serves as a buying opportunity for those of us who’ve stuck with Canadian Banks over the last 20 years. What is your Agenda ???
    I will be reading future reports from your site through a different lens…..


  8. Sherin Gauvin says:

    Hogwash! There is no mention of the US derivative market …there is no doubt in my mind that they are unsustainable & will collapse …The manipulation of the world economy is very apparent to those of us paying attention! Trouble ahead! Very soon!


    R. Elser Reply:

    I agree with your statement. But how is one supposed to position themselves for the inevitable in the U.S.? Any books or resources you can send my way would be most appreciated. Thanks!


  9. Garvy says:

    It seems that the only two countries that have failed to sign on to the global warming BS are the same ones targeted here. The new world order has to destroy their resistance to establish complete control.


    Jeff Reply:

    You may be RIGHT!!!!


  10. Denys Picard says:

    Dear Alan,
    It is easy to extrapolate from the posting Board that your readership is heavily tilled towards a Canadian Audience.

    I won’t apologize for my co-citizens, I will simply explain that Canada suffers from a deep narcissistic wound and to be appreciated by Canadian you must persist in telling them that they are The Most Perfect Country and People in the World.

    Outside of that, I do agree with much of your analysis. The thing is that Oil prices will probably rebound. Much of the Supply/Demand argument is rubbish. It is a temporary sell to stimulate the economy, to allow for politicians the opportunity to create a federal gas tax, and make sure nobody asks for a raise, since they all saw their purchasing power go up because of the falling oil prices.

    As for the Canadian residential real estate market, it is highly valued and extremely bubblish mostly in the Toronto and Vancouver areas. On the other hand this bubble is mostly maintained by drug laundering money, which has no real connection to the official economy. The Alberta housing market will obviously suffer a correction if Oil prices remain under70$ for an extended period of time, but the remainder of Canada on average should live through a 5 to 10% correction and then flat years for a few years.

    As for the Canadian dollar, one of the commentators infer that it is international currency traders that are pushing it down, but in fact it is Canadian currency traders doing this with the juxtaposition of excessively fabricated negative macro statistics. The idea is to shift economic growth towards the center provinces (Ontario and Quebec), and away from the petroleum industry; the lower dollar making manufactured goods and services from ON and QC more attractive.
    Denys (US and Canadian citizen, as you can guess, it is often difficult to reconcile these 2 identities…)


  11. Altaf says:

    It is difficult which forecast by economists will come true & which will not. As per Mr. Celente’s gold price forecast I did hold gold and lose a lot of money and I do not see him to say what next. He said that America would collapse. Now again some economists said it will collapse by 28th January 2015. Let’s wait & see !
    Let Canada or Australia not collapse either!


  12. Andy says:

    This article is slanderous and complete rubish . Canada is busting with activity. The oil slump is temporary , only one facet of our economy , and won’t last given the worlds continuing thurst for oil related products .


  13. Dr. Randl J. Spear says:

    The richest and wisest man on the earth-king Solomon, said it best “vanity, vanity, all is vanity.” In other words, money has no value in God’s economy. Tis one life, will soon be past; only what’s done for Christ will last.
    As much as I would hate to see any economy/nation fail, I do want to fire off a clarion call to readers that the economy is only PART of the total picture of a nation/people. Each person needs to be sure his/her heart is right with The Creator God as offered through the redemptive work of His Son Jesus. Give your life to Christ today because this is the only investment with eternal dividends.


  14. frank says:

    as usual the American media talk/printing is something different than reality, meantime they keep printing $$$$$$$$$$$$$$$$$$$$ to deceive the whole financial world.


  15. Steven says:

    “CANADA ON THE VERGE OF COLLAPSE” wow…..is this guy serious writing this garbage……Gula is pure trash.


  16. Barry eastwood says:

    One further observation about Canada on verge of a collapse, Canada’s per capita debt is approx. $ 16,000.00 vs the USA at $ 52,000.00. Why the diff. In our $ value?


  17. Avery Mac says:

    No point in adding any further comments to this nonsense-ALL of the prior posts have accurately stated the real facts. However, I’m curious; does this publication actually have an editor with a somewhat higher education than kindergaten as the journalist (???) who wrote this crap?


  18. A. FORTIER says:

    totally insane. Canada has the best banking system. all Canadian banks have gone through the 2007/2009 Financial meltdown and recovered. the 5 big banks have seen their share price double from a mid 20 price which very few us banks have done.
    i think you should stop writing about business, finance and go into drama, horror or fiction or other writing it seem to be more up your alley


  19. mark says:

    Vancouver where we reside may be overvalued but Canada on the verge of collapse is rubbish, why then did we flourish in the collapse of the US economy in 2008 ? we purchased many properties in Arizona and Florida penny’s on the dollar while our house and rental properties went up in value in Vancouver? we think of Americans as our very friendly poor cousins to the south with no medical coverage out of control racism and gun culture all on borrowed printed money!


  20. John says:

    OK There is an impending financial crisis coming. It will happen when it is realized the US dollar collapses…or rather is revalued to close to its real worth. This means the US dollar will go through a period of extreme devaluation in relation to other currencies. It is inevitable…the stage is set.
    The real question is how will this play out. There will be a shift in the balance of world power with the US declining and the Chinese increasing. This has happened repeatedly as dominant economies such as England and Spain went through readjustments. Control of resources (commodities) and the technology to exploit the resources will become relatively more important. The decline of the influence of the nation state (country) will occur.
    Where does an individual investor hide to preserve and increase wealth during this period. The answer is obvious.
    The financially healthy companies which control the resources. International companies not subject to control by individual countries. They will have the ability to access investment sources and sell to markets as conditions evolve.


    asaruludu Reply:

    good one , what is the total derevitives exposion in Canada and what happens to it


  21. Ray says:

    One example of how far off base the author and the German bank are is in Toronto, the major market in Canada. Check Toronto Real Estate Board Historical Stats.
    Between 1969 and 1989 prices increased 10 fold, fell for 8 years and took 13 years to recover to 1989 levels. It might have been sooner but the Condo market came on the scene. However there was no crash, very few foreclosures and NO BANK PROBLEMS.
    Single family home prices have likely doubled or more in the past ten years to approx. $1 million simply because of the limited supply.
    On an individual basis, I understand that in the U.S. that 43% of the personal bankruptcy have a medical factor or issue; I personally have never heard of this in Canada.
    As a Canadian I enjoy seeing the U.S. coming roaring back, good on you.
    You might check the name Gordon Sinclair, a well known Cdn. news commentator who in the 80’s gave an inspiring speech on the U.S.


  22. Workopolis says:

    Wonderful article. I am a Canadian and was under the delusion just like the rest of your commentators that our banks are better and stronger than the U.S. banks. I would invite your readers to go to Youtube and punch in “Canadian Bank Bailouts.” It is very informative article. Our big five got 120 billion in bailouts. In Canada we call it a backstop. In the U.S. they call it a bailout. How Canadian can you get? Three of them got more money than their market cap at the time. Very shortly after they asked for – and got – bail in legislation.
    It is now legal to confiscate all our bank accounts during the next crisis.
    But not to worry, we all know that the 2008 crisis could never happen again.


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