ZeroHedge is wrong on Canadian Banks claims Fuqua Duke School of Business

Published under Fair Dealings. Current economic crisis expands to blogs that everyone in Wallstreet reads, but is wrong.. that is the BNN premise.

ZeroHedge article on Canadian Banks causes a lot of stir. Article was published in Globe and Mail, then BNN picked up the story. The MSM wants to reassure you all that Canadian Banks are safe. You choose who you want to believe. Place your bets.

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

BNN link
http://watch.bnn.ca/business-day/august-2011/business-day-august-19-2011/#cli...

ZH Article
http://www.zerohedge.com/news/next-domino-fall-canada

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Category:

News & Politics

Tags:

• zerohedge
• marc faber
• tyler durden
• canadian banks
• canada
• banking crisis
• TCE ratios
• Fuqua too
• School of Business
• corporate interests

[2011rcm]

Really....I am supposed to trust someone from a School Called FUQ U A(ll)? So the Canadian Banks can set their own Tangilbe Common Equity/Total Assest Ratios in their favor, regardless Lehmans TCE was 2.5% and Tier 1 Loan Ratio was 11% WHEN IT FAILED! So 4% is safe? I don't think so....and John Paulson was the one that pointed out that the TCE is the LEAST fungible as an indicator of safety.

Thanks for posting this shouldnotinterrupt.

[shouldnotinterrupt]

@2011rcm Exactly... no problem..

[gerrslack22]

Zero Hedge is correct - how do you know government bonds are safe? Remember AAA rated MBS's? Government always claim they are fine - until they're not! And no one even knows about the debt in the shadow banking system.....

The professor even says the banks are uncertain about what their risks are....so who would you believe?.

[2011rcm]

@Knepperify1 LOL, that's a mouth full, I tripped up about 4 times trying to say hypothecation. Fully understand what you're saying though, seriously thinking about cashing out everything.

[Knepperify1]

@2011rcm

The problem now is counter-party re-hypothecation seizure risk.

One's ratios can be fine, and in one day all of your collateralised assets are seized by JPM, wires are reversed, and customer accounts are seized.

[bmay1000]

myth- canadian banks didnt require a bailout. WRONG!!! the govt took mortgages off of the balance sheets and transferred the risk onto CMHC to the tune of roughly $40B for the next four years according to the 2010 budget.

your a moron if you dont think that canada isnt tied to the daisy chain that is about to get yanked one by one due to europe.

[email4timothy]

Ha Ha. How Now Brown Cow? 12-8-11

[robotsweat]

hahha, he starts to panic a bit at the end there....

[puppetjaw]

You just have to look at the real estate prices in Canada to know the banks' are in deep trouble if (when) housing prices adjust. But the banks have protected themselves against further real estate loses by widening the FDIC insurance coverage

[choobie12]

This is very possible if you take a look at the way the Canadian PR industry is trying to hide the activities of the banks in particular. As of 2009 Canadian banks were running on 25-30x leverage which is definitely not good, the government also insured a large amount of liabilities the banks held at the time. It is likely that the leveraging is even higher now as there is more inclination to smear over the poor economic numbers with some fancy book work. 4% is likely a conservative number.

[summermadness1984]

This Cambell guy is a shmuck. When he claims only 7% of homes in Canada are underwater and therefore banks are safer in Canada. In Canada we have not had a housing correction yet.

He is right about the leveraging though. In the US the 35:1 ratio they allow the banks is insane. Anyone know what it is in Canada?

[GANEVMUSIC]

Guys Canada has only 5% of their own money the rest 95 % is borrowed form the international bankers with big interest