"Canada's three largest banks posted healthy profits last fiscal quarter while many of their U.S. counterparts struggled to survive. The key has been their limited exposure to toxic assets and conservative mortgage lending. The banks could yet weather the recession with a chance of staying profitable." -WSJ, O Canada: Banks Look Healthier
Brush up on your Canadian banks, because when the bottom finally is in they will come roaring south with a vengeance to fill the void left by the eventual death of Citigroup (C) and so many (17 so far for 2009) other US banks... and they will make FISTFULS of money.
TD Bank (TD), arguably the most adventurous of the Canadian banks has already commenced acquiring SOLID us banks and financial firms.
This is not an immediate endorsement of Canadian banks. To be sure they will feel pain. However, unlike their US and European counterparts, they will not only survive but prosper.
"Canada’s banks are a different beast. While the U.S. banking system is made up of thousands of banks serving certain communities, states, or regions, Canada’s banking system is made up five large chartered banks with branches in every province. In decreasing order of size by market capitalization, these are the Royal Bank (RY), TD Bank (TD), Bank of Nova Scotia (BNS), CIBC (CM), and Bank of Montreal." -Seeking Alpha, Why Canada's Big 5 Bakns Won't Go Bankrupt
The Canadian banks trade both on the TSX and the NYSE. The easiest vehicle to trade of course is the iShares CDN Financial Sector Index Fund (XFN). The index includes the five chartered banks and of course a large number of insurance and 'near bank' financial firms. There are a total of 26 holdings in the index.
The question then is when do you get long for the LONG TERM?
1) Wait for a clear break of the down trend before building a position for the long term. Patience. This bottoming process will take YEARS.
2) There will be many trend breaks on the backs of vicious short covering rallies. WAIT for the pullpack. WAIT for a higher lower. Only then can you trust that the trend has turned and BEGIN to ease into a position.
3) The consolidation along the bottom will be a long one. It will consist of a large, volatile trading range and it will last YEARS.
4) The bottom will be accompanied by several major catalysts. While it is difficult to define exactly what these will look like, you will know them when they occur. Of that, you can be certain. For example, the eventual nationalization of Citigroup (C) would be just one such catalyst. The complete destruction and dismantling of AIG would be another.
So watch and wait. Patience.
Brush up on your Canadian banks, because when the bottom finally is in they will come roaring south with a vengeance to fill the void left by the eventual death of Citigroup (C) and so many (17 so far for 2009) other US banks... and they will make FISTFULS of money.
TD Bank (TD), arguably the most adventurous of the Canadian banks has already commenced acquiring SOLID us banks and financial firms.
This is not an immediate endorsement of Canadian banks. To be sure they will feel pain. However, unlike their US and European counterparts, they will not only survive but prosper.
"Canada’s banks are a different beast. While the U.S. banking system is made up of thousands of banks serving certain communities, states, or regions, Canada’s banking system is made up five large chartered banks with branches in every province. In decreasing order of size by market capitalization, these are the Royal Bank (RY), TD Bank (TD), Bank of Nova Scotia (BNS), CIBC (CM), and Bank of Montreal." -Seeking Alpha, Why Canada's Big 5 Bakns Won't Go Bankrupt
The Canadian banks trade both on the TSX and the NYSE. The easiest vehicle to trade of course is the iShares CDN Financial Sector Index Fund (XFN). The index includes the five chartered banks and of course a large number of insurance and 'near bank' financial firms. There are a total of 26 holdings in the index.
The question then is when do you get long for the LONG TERM?
1) Wait for a clear break of the down trend before building a position for the long term. Patience. This bottoming process will take YEARS.
2) There will be many trend breaks on the backs of vicious short covering rallies. WAIT for the pullpack. WAIT for a higher lower. Only then can you trust that the trend has turned and BEGIN to ease into a position.
3) The consolidation along the bottom will be a long one. It will consist of a large, volatile trading range and it will last YEARS.
4) The bottom will be accompanied by several major catalysts. While it is difficult to define exactly what these will look like, you will know them when they occur. Of that, you can be certain. For example, the eventual nationalization of Citigroup (C) would be just one such catalyst. The complete destruction and dismantling of AIG would be another.
So watch and wait. Patience.
Posts
5 comments:
Agreed. I hope the Cdn banks also deploy patience and prudence as to their Stateside acquisitions.
I have yet to hear that one of the big five have cut their dividend: this too counts for some of us.
It's also becoming clear how the Republicans were far from being "conservative": their policies were/are dangerously radical innovations, across the entire board, from foreign policies to financial (de)regulation: they sure did change a lot of laws rules regs and customs, for "conservatives", eh?
The deceptive bastards....just like the Soviet elites, IMO.
The Canadian banks are on the verge of a massive real estate disaster in Canada, and it is only the hope of the projected US rebound sometime this year that is helping them survive. If RE in Canada turns (and the possiblity is there indeed), Canada and its dollar will be dragged further down.
If you invest in Canadian banks and are an American, consider the dual risk of the collapse of Canadian bank stocks and the real risks in the Canadian dollar; remember if $CDN sinks, it will kill any modest Canadian bank investment gains.
That said, *if* the US can mount a convincing turnaround, and you believe oil is forming a sustained bottom here (which will bolster $CDN), there is a chance that this highly speculative strategy could pay off. However, remember, Canadian bank conservatism that has tempered losses (and the stock losses are huge right now, hello!), will tend to temper their recovery. Don't expect the profitability of TD to turn into the heyday at Lehman.
Disclosure: I am long on Canadian Banks, but underwater too.
A warning on Cdn banks from Bloomberg:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aX4Mnpl5yPeQ&refer=news
To the extant that they are dependent on high-interest charge cards for their profits, they are as vulnerable as anybody else to the condition of Mr. Average Joe Debtor's pocketbook.
Die Zeitmessung hat ein Ziel des Menschen von thomas sabo online Anfang an und eine Zeitleiste wurde Ihnen beim Verständnis helfen, wie wir wo sind wir mit Uhren bekam. Uhren haben so viele neue thomas sabo schmuck günstig Funktionen. Sie haben das Datum, die Zeit, mal über Zeitzonen hinweg, und angebote thomas sabo einige haben Stoppuhren. Die meisten Uhren haben eine Art von Alarm in ihnen. Die Möglichkeiten sind unbegrenzt und anhänger kette ich kann wirklich einen Dick Tracy Art zu sehen sein echt.Hier eine Chronologie der Geschichte zu sehen. Einige kette thomas sabo der Jahre möglicherweise nicht in chronologischer Reihenfolge aufgeführt werden, aber ich habe sie so nah wie thomas sabo kette möglich. Es ist sehr interessant zu erfahren, wie Uhren entwickelt haben. Es ist erstaunlich, wenn ich an den Köpfen der Menschen, die ihre Hand bei der Schaffung von Uhren, wie klug und schmuck thomas sabo ketten technische sie gewesen sein musste denken!Vor Das Hauptproblem war die thomas sabo ohrschmuck treibende Kraft der Uhren liefen wurden Gewichtungen. Dies machte es angebote thomas sabo ohrschmuck schwierig, sie herumtragen. Henlien war fünfzehn Gulden für eine vergoldete Moschus-Apfel thomas sabo ohrringe mit einer Uhr gezahlt.
Post a Comment